IPH (IPH) H2 2024 earnings summary

Executive summary

• Achieved strong FY 2024 results with underlying EBITDA of $195.5m, up 15%, and underlying NPAT of $112.4m, up 13.5%, supported by robust cash flow and a 9% higher final dividend.

• Revenue grew 22.9% to $609.9m, with strong organic growth in ANZ and both organic and acquisitive growth in Canada.

• Expanded Canadian presence through acquisitions of Ridout & Maybee, ROBIC, and announced acquisition of Bereskin & Parr, building a market-leading IP business in Canada.

• Returned leverage ratio below 2x ahead of schedule, supported by strong cash flow and $70.4m debt repayment, setting up for the next growth phase with a new regional operating model and leadership appointments.

• Significant turnaround in ANZ, strong Canadian performance, and improved second half in Asia.

Financial highlights

• Underlying EBITDA: $195.5m (up 15%), underlying NPAT: $112.4m (up 13.5%), and revenue: $609.9m (up 22.9%), driven by Canadian acquisitions and organic growth in Canada and ANZ.

• Statutory NPATA up 4%, underlying NPATA up 14% year-over-year.

• Cash flow from operations rose 44% to AUD 93 million, with a 100% cash conversion ratio; normalized cash conversion ratio at 107% post-cyber incident.

• Final dividend up 9% to AUD 0.19 per share, 30% franked, representing 83% of cash NPAT, to be paid on 20 September.

• Net debt at 30 June was AUD 370 million, leverage ratio at 1.9x, with AUD 70.4 million debt repaid in H2.

Outlook and guidance

• FY 2025 priorities: organic growth in Australia, successful integration of Canadian firms, restoring growth in Asia, and maintaining strong cash flow.

• Focus on organic growth, closing filings gap, and integrating Canadian acquisitions for cost synergies; continued investment in AI tools and global client programs.

• Asia expected to deliver 3-4% EBITDA growth in FY 2025, with sales growth slightly lower.

• Finance cost guidance for FY 2025 is AUD 26 million, reflecting recent debt repayments.

• Recovery in US PCT applications expected to improve pipeline in secondary markets in 2H CY25.