Murgitroyd profits hit by strength of sterling

PATENT attorney Murgitroyd has blamed the strong pound for a fall in annual profits, which it warned will continue to be held back by bigger clients demanding “more for less”.

One pound coins. Picture: PA
One pound coins. Picture: PA

However, the Glasgow-based firm said shareholders were in line for a 6 per cent hike in their full-year dividend and pledged to pursue an “aggressive” payout policy, while continuing to seek out takeover opportunities.

Chief executive Keith Young told The Scotsman: “We remain happy to look at acquisitions and see them as good ways to produce earnings enhancement.”

For the year to the end of May, the Aim-quoted firm posted a pre-tax profit of £4.1 million, and chairman Ian Murgitroyd described the 9 per cent fall on a year earlier as “disappointing”.

He added: “Whilst the market as a whole remains buoyant as measured by the numbers of patents and trademarks being filed, price pressures remain. Clients, in particular the larger corporate clients with significant intellectual property portfolios, continue to demand more for less from their professional advisers.”

Turnover at the firm, which has 15 offices across Europe and the US, rose to £38.4m, from £36m a year ago. Almost £13m of sales were generated in the US, which Young said was its “single largest target area for growth”.

He added that Murgitroyd could also open an office in Paris once the European unified patent court gets up and running, although this is not expected to happen before 2017.

The firm proposed a final dividend of 9.5p, to be paid on 14 November, giving a total payout for the year of 13.25p a share.

Analysts at house broker N+1 Singer have pencilled in a pre-tax profit of £4.2m for the current year and expect the dividend for 2015 to grow to 13.8p.

Shares ended the day down 27.5p, or 5.1 per cent, at 507.5p.