Despite a strong H2 a poor first half performance impacted the Group's year.

Companies: Murgitroyd Group

Patent and trademark attorneys Murgitroyd (LON: MUR) have put out their preliminary full year results for 2017 today, which has led to shares in the Group falling 8% in early trading.

The results, which note the well documented poor first half of the year, also outline the recovery the Group has seen in the second half of the Full Year to May 2017.

The year as a whole saw marginal revenue growth, up from FY 16's £42.2m to £44.3m. Profit Before Tax fell from £4.3m to £3.8m and EPS decreased to 28.3p (2016: 35.4p).

A full year dividend of 17p will be issued, slightly up from the 16p dividend issued in 2016.

The Group's H1 figures suffered due to a combination of factors, including several non-recurring costs associated with an acquisition in Nicaragua, an increase in business development and marketing spend, and lower than expected revenue growth.

An increase in H2 PBT and a weaker Sterling helped counter the slump in H1.

Singers note today regarding the Group outlines their forecasts for FY18 and FY19....

"After the strong conclusion to FY17, we expect a return to PBT growth in the current year. We assume 9% growth in FY18 to £4.2m, which looks highly achievable in the context of £2.3m in H2’17. We introduce FY19 and FY20 forecasts showing 7% and 5% PBT growth to £4.4m and £4.6m respectively."

After the significant drop in share price in January off the back of the Group's profit warning in H1, shares have bounced back to be currently trading at 460p (500p in January before profit warning).

Murgitroyd's revenue has been growing slowly but steadily year-on-year in the five years to 2016, but margins have fluctuated (average operating margin of 12% during the period). The Group's PE ratio is currently on par with the industry median of c. 14-15x.

The information contained within this post is based on personal experience and opinion and should not be considered as a recommendation to trade nor financial advice.