Murgitroyd, the patent and trademark attorney based in Glasgow, has reported improved profits and earnings in its first half-year despite a strong comparative period 12 months earlier.
The AIM-listed group, chaired by 28% shareholder Ian Murgitroyd, has seen its shares hit five-year highs in recent weeks as it continues to grow its business in the US, and looks to profit from a bigger office in the German patent capital of Munich as a new unitary European patent regime gets under way.
Although fee income declined by 2% to £17.6 million in the six months to November 30, the more meaningful gross profit (net fee income) was up by 2% at £10.6m, and the gross margin rose from 58% to 60%.
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The improvement came from a lower proportion of work referred to attorneys in countries where Murgitroyd does not have offices, and it drove pre-tax profit up from £2.21m to £2.27m, a rise of 3%.
Earnings per share were up by 7.9% at 18.68p, due to falling UK corporation tax, and the interim dividend rises 0.25p to 3.75p.
Debt was cut sharply from £4.25m to £3.18m and finance charges fell by 29% to £41,000.
Keith Young, chief executive, said: "The big picture is we are still seeing growth despite the macro-economic difficulties, and we have continued to invest in new people, new space and offices."
He added: "We have to be critical internally in assessing what we spend the available pounds on, but it is about cost control, not cost-cutting, because we are still looking to spend and to see whether it will produce the end game – which is sustainable growth."
Recent statistics show European trademark applications, after a record year in 2011, rose by another 3% last year, while patent applications were up by 5.7%, also a new record.
Murgitroyd said both figures "are used as bellwethers for the market for new filings of intellectual property rights and are considered good indicators of wider market conditions".
Mr Young said the eurozone difficulties had not impacted directly on Murigtroyd, which was working in stronger economies such as Germany, France and Finland, while demand for 25% of all European patent ser-vices came from the US, where sentiment had strengthened.
Murgitroyd, which employs 105 in Glasgow, operates 15 offices in eight countries.
It recruited two new attorneys into its expanded Munich offices in the first half to take the total to five, and is also looking to recruit in its recently opened office in central London, which serves primarily as a client ser-vice centre along with Glasgow and Munich.
In the US, where one of its two offices opened last year, sales rose by 9.5%.
Murigtroyd shares, which rose from 330p in early June to a high of 480p in early November, edged up 2.5p at 462.5p, valuing it at £40m. Current trading is said to be in line with expectations.
Mark Fleetwood, at house broker N+1 Singer, said market indicators looked favourable and Murgitroyd looked on track to "continue its hugely impressive long-term growth record".