Earnings at Murgitroyd soar after US expansion

City Editor

Tuesday 11 September 2012

GLASGOW-based patent and trademark attorney Murgitroyd has seen earnings soar 10.3% after expansion in the United States helped it to win business.

CONFIDENT: Chief executive Keith Young said the continuing eurozone crisis 'has not really impacted' the company as yet. Picture: Steve Cox

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tim sharp city editor

Turnover at the firm increased by 7.5% to £35.7 million in the year to May 31 as it benefited from the first full year of operation of its new business development office in San Francisco.

Murgitroyd has also opened a London office and expanded its presence in Munich as it aims to be a one-stop shop for companies with needs for intellectual property services on the continent.Profit before income tax and the impact of property revaluations increased from £4m to £4.4m. Investors responded by sending its shares up 22.5p, or 5.8%, to 406.25p, their highest level since the end of 2008.Chief executive Keith Young told The Herald: "People are still doing research and development work. They do not stop when a recession comes along. If they are innovating they are still looking to an intellectual property system to protect their innovation."He said that the building of a presence in the US has allowed it to win business with companies that want assistance with European intellectual property work without the inconvenience and delays of dealing with an office on the other side of the Atlantic.Sales to US clients were up by 20.3% year on year, contributing just under 60% of the total increase in sales. Around a quarter of European patent applications are filed by applicants in the United States, Murgitroyd said.It has upped its headcount by four to 234, hiring more paralegals to free up its attorneys and keep the wage bill under control. The company reported an increasingly price-sensitive market and said cost control would continue to be a priority.Mr Young said that the eurozone crisis is "not controllable" for the firm but said "it has not really impacted us as yet." The company said it was open to acquisition opportunities but Mr Young said few had come to market that met its criteria of being immediately earnings enhancing.Around 105 of Murgitroyd's employees are based in Glasgow, but Mr Young said: "I do not think we see huge expansion in Glasgow. We are very committed to Glasgow. But most of the growth has been driven by sales to the US and expansion of the footprint in Europe."After launching into Tokyo two years ago, Murgitroyd has reviewed its business and decided to no longer directly employ its own business development staff in Tokyo but instead work closely with a local associate to develop this market.Chairman Ian Murgitroyd said: "While we remain cautious, due to the uncertain macro-economic environment, we continue to invest and the board remains confident that Murgitroyd can continue on this growth trajectory to deliver value to shareholders."The company announced a final dividend of 8.5p, taking the total to 12p, an increase of 11.6% on last year.Analyst Roger Hardman wrote in a note for clients: "We believe that the steady growth in patent and trademark filing should continue, and that Murgitroyd will at least maintain its market share. "The company is well aware of the obvious pressures on its cost base, and has proved adept at containing them by improving internal efficiencies in the past."

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Earnings at Murgitroyd soar after US expansion

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