IPH does it again – FY21 results

IPH Limited – intellectual property services – annual results for the financial year 2020/21

When it comes to financial results, there are companies that need excuses and companies that don’t. IPH has so far proved to be of the latter type.

When some professional services firms buy other professional services firms their earnings plummet. You’ll hear excuses such as there were higher than expected integration costs; revenue wasn’t up to expectations; there were staff losses and the economy etc.

IPH has completed numerous acquisitions and all that happens is that they consistently add to the company’s revenue and earnings.

Some companies’ revenue and earnings caught Covid in the last two years. Not IPH which has displayed a strong degree of natural immunity.

What has FY2021 produced for the shareholders of ASX-listed IPH? Another consistent year of money-making.

Revenue (after agent expenses) was $259m in FY2021 compared to a very close $265m in FY2020. Staff costs were almost unchanged at $115m – which is an impressive 44% of revenue – and is one of the reasons why earnings are so high.

As a professional services business, the 900+ people at IPH are highly productive assisted by processes and technology.

IPH produced an EBITDA of $113m – almost the same as last financial year. It represents an earnings to revenue (after agent expenses) percentage of 44% which should be the envy of most professional services businesses.