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ILH announces 51% increase in profit

By ALB | Aug 19, 2011
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ASX-listed Integrated Legal Holdings (ILH) has announced a 50% increase in net profit after tax compared to the previous financial year, reaching
A$1.29m.
Consolidated operating revenues were 19% higher than the previous year, reaching A$28.5m. Revenue from ordinary activities increased due to a
combination of organic growth and the acquisition of Wojtowicz Kelly Legal (WK) in February 2011, said the firms statement. WK has since merged
with existing member firm BDL, with the merged firm now having four principals, approximately 54 staff and annual fee income of more than A$7.5m.
Since the end of the financial year ILH has also announced the acquisition of PLN Lawyers under tuck-in arrangements with the existing member firm
Argyle Lawyers. The transaction was funded through surplus cash reserves. Cash flows from operations were A$1.23m during the period, compared
with A$1.45m for the period ended 30 June 2010.
The full revenue and profit impact of the WK and PLN acquisitions will be achieved in the next financial year, according to the statement. The
directors believe that the effect of both acquisition transactions will be materially positive in terms of earnings per share in the 2011/12 financial year
and will enhance the companys growth prospects, it stated.
The directors added in the statement that there were approximately 150 medium sized firms in Australia within the companys target group, indicating
that the firm would continue to acquire firms in the coming year. For medium sized legal firms, it is difficult to attract and retain good senior lawyers
and it is hard to provide broad services to meet client needs, the directors said. IHL also believes growth is difficult for these businesses, due to a
lack of available capital.
Additionally, the statement says that the Australian legal industry is currently undergoing an internationalisation with the entry of a number of foreign
law firms into key Australian markets.
While the directors are watchful of these developments, these changes are generally seen as positive for the company with the associated
fragmentation, consolidation and evolution in Australian law firms providing further opportunities for ILH for expansion through acquisition and new
hiring of lawyers.
Related stories:
ILH buys Pacific-focused law firm 3 August 2011
ILH acquires KW Legal through BDL 3 December 2010

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