IPH Limited (IPHLF) Shareholder/Analyst Call Transcript

2025-11-20 04:33:31 ET

IPH Limited (IPHLF) Shareholder/Analyst Call November 19, 2025 6:30 PM EST

Company Participants

Peter Warne
Andrew Blattman - CEO, MD & Director
John Atkin
Vicki Carter
Kate Mason

Presentation

Peter Warne ...

And welcome to the IPH Limited 2025 Annual General Meeting. I'm Peter Warne, Chairman of the company, and I'll be chairing the meeting today. I would like to welcome those shareholders that are present in the room today and those who have joined us online. I advise that today's meeting is being live streamed on the company's website. Shareholders have also had the opportunity to submit questions prior to the meeting.

I would also like to acknowledge the Gadigal people of the Eora Nation. I pay my respects to elders past, present and emerging. I'd like to take this opportunity to introduce you to members of our Board of Directors, senior executives and auditors. Our Non-Executive directors, John Atkin, Vicki Carter, David Wiadrowski, Kate Mason; and Jingmin Qian. Our CEO and Managing Director, Dr. Andrew Blattman. In the front row here, we have our Chief Financial Officer, Brendan York. Put your hand up, Brendan, so people come and see you later. Our Company Secretary, Tamsyn Hoff; and representing our auditors, Deloitte, Xenia Delaney, our engagement partner. I'd also like to thank EY again for hosting our AGM.

The Notice of Meeting has been circulated and a copy of the Notice of Meeting and annual report are available on the IPH website. I take the Notice of Meeting as read. I'll be keeping to the order set out in the Notice of Meeting, and shareholders are requested to keep their questions until the particular resolution is dealt with by the meeting. Please note, there will be a general discussion period at the end of the meeting. I'll be calling a poll on each of the resolutions, and I declare the polls open now.

Before moving to the formal business of today's meeting, the Managing Director and I will first provide you with an update of the group's highlights for the year. These addresses were lodged with the ASX prior to the commencement of the meeting today.

In my Chairman's address, I will briefly discuss our financial results for FY '25 and how we are responding to the current market challenges in FY '26. I'll also discuss enhancements to our remuneration framework following shareholder feedback last year and an update on the Board renewal and CEO succession.

In a challenging operating environment, IPH reported statutory net profit after tax of $68.8 million compared to $60.8 million in the prior year. Underlying EBITDA lifted by 6% to $207.2 million as a result of increased earnings in Canada from acquisitions. Underlying NPAT, an important measure given the material amortization profile of acquired intangible assets in IPH each year, increased by 7.3% to $120.6 million, which delivered underlying earnings per share of $0.453.

Net debt at 30 June 2025 was $356.3 million, slightly down on the 30 June 2024 number of $359.9 million with a leverage ratio of 1.9x, which remains within the company's maximum target leverage ratio of up to 2x. Given the company's highly cash-generative operations and low capital requirements, the Board will continue its active capital management program by utilizing free cash flows to increase returns to shareholders, including through buybacks while remaining cognizant of the target leverage ratio.

The Board declared a final dividend of $0.195 per share, 30% franked at the corporate tax rate, bringing the FY '25 total dividends to $0.365 per share, up 4% on the prior year. IPH remains focused on improving shareholder returns through the continued dividend stream. Andrew will provide further detail on the financial results in his CEO address.

Like all shareholders, we're obviously disappointed with the decline in the IPH share price over the last year. External factors, including the significant downturn in U.S. PCT filings, causing a corresponding decline in filings into secretary markets where IPH operates and delayed revenue from the disruption caused by systems issues in the Canadian Intellectual Property Office or CIPO, have impacted our business.

Pleasingly, the disruptions in Canada have started to abate, and we are seeing improved performance both in terms of CIPO activity and subsequent revenue. While we can't afford -- can't control the share price, I can assure shareholders that the company is working hard to respond to these challenges in FY '26.

That includes targeting additional jurisdictions beyond the U.S., including Western Europe, Japan, South Korea and China for incoming filings into key secondary markets to diversify our revenue base, driving new business development activities at the member firm level to grow market filings and market share, together with a focus on additional activities to drive other forms of revenue such as case transfers, reducing our cost base to align to the operating environment and driving further operational efficiencies and implementing a fresh group-wide set of incentive program to focus on driving member firm performance, business development and improved working capital management.

Andrew will provide further details on our progress in FY '26, including trading results and metrics for the first 4 months of the year. The Board carefully considered feedback from shareholders and proxy advisers on our executive remuneration framework received prior to last year's AGM. In response, we conducted a thorough review of our remuneration framework and have implemented a number of changes from FY '26 to enhance the alignment of executive reward with shareholder value.

These include an increase in the proportion of STI delivered in equity and the introduction of a relative total shareholder return as an additional vesting condition for the LTI program. KPIs have also been restructured in FY '26 to reflect the organic growth ambitions of the company. Further details on these changes are outlined in the FY '25 remuneration report.

Over the past year, we continue to progress Board renewal. Kate Mason joined the Board on the 1st of September 2025 and is standing for election at this AGM. Kate brings extensive executive experience across human resources, business transformation and information technology and is a welcome addition to the Board.

Having served on the Board since 2019, Jingmin Qian will retire from the Board at the conclusion of today's AGM. On behalf of the Board, the executive team and our shareholders, I extend our sincere thanks to Jingmin Qian for her contribution to IPH and wish her every continued success in the future.

Before closing, I want to make special mention of Andrew Blattman, who has announced his intention to retire as MD and CEO during the second half of calendar year 2026. I want to acknowledge and thank Andrew for his exceptional leadership and contribution to IPH through a remarkable 30-year career with the group, including nearly 9 years as Managing Director and CEO.

Under Andrew's guidance, IPH has grown its platform significantly through acquisitions in Australia and New Zealand, expanding throughout Asia and more recently, building the market-leading presence in Canada. Andrew's vision, dedication and commitment have been instrumental in positioning IPH as a global market leader in secondary IP markets. We are deeply grateful for Andrew's continued leadership during the transition period to ensure a smooth handover to our next CEO.

In closing, I want to acknowledge Andrew, his leadership team and all our people across the IPH Group for their contribution over the last 12 months. I'd also like to thank my fellow directors for their diligence and commitment to IPH. Let me conclude by thanking you, our shareholders, for your continued support of IPH and look forward to sharing more progress with you next year.

I now ask Andrew to deliver his Managing Director's address.

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