Patent and trademark specialist Murgitroyd (MUR) delivered its 12th successive year of growth, thanks mainly to a successful drive to win more large corporate work, notably in the US. However, competition remains tough and customers are pressing for a better service from patent experts. As a result, management has decided to attract business by marketing its services on a more competitive basis - which pushed the full-year gross margin down from 67 per cent to 58 per cent.
However, after having secured clients, Murgitroyd is more likely to handle a greater amount of downstream work as companies seek to register patents outside the US. To facilitate this, Murgitroyd has set up an IP Portal Patent service, which allows customers to leave any further patenting work to Murgitroyd to process. Indeed, sales to US clients rose 19 per cent and US revenue in the last five years has risen from £3.1m to £10.2m. The group has also kept a tight lid on costs by recruiting and training more paralegals to take on selected work that's normally carried by more expensive attorneys.
Broker N+1 Singer is forecasting adjusted pre-tax profit of £4.7m for the end of May 2014, giving EPS of 37.1p (from £4.5m and 36.2p in 2013).
| MURGITROYD (MUR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 510p | MARKET VALUE: | £45.4m | |
| TOUCH: | 510-520p | 12-MONTH HIGH: | 530p | LOW: 402p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 273p* | NET DEBT: | 8% | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 28.9 | 3.09 | 24.2 | 9.50 |
| 2010 | 29.4 | 3.83 | 31.8 | 10.0 |
| 2011 | 33.2 | 4.04 | 31.1 | 10.8 |
| 2012 | 35.7 | 4.43 | 36.8 | 12.0 |
| 2013 | 36.0 | 4.61 | 38.2 | 12.5 |
| % change | +1 | +4 | +4 | +4 |
Ex-div: 9 Oct Payment: 4 Nov *Includes intangible assets of £14.9m, or 168p a share | ||||
