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Recession, what recession? As I have been worrying about how any economic downturn might affect the IP community, in the real world British-based IP service providers seem to be going from strength to strength. One may be heading towards a $1 billion float, while two more are reporting record turnover and profit figures, and forecasting rosy futures.
It looks like the CPA – the IP management company with its base in the Channel Islands – could be about to go public. Well, that is what is being claimed in an article published by the UK’s Sunday Telegraph newspaper last week. The sum involved could be as much as £500 million, says the report; which is close to $1 billion on current exchange rates. If this does happen, it is going to make quite a few patent and trademark attorneys exceptionally wealthy (or, maybe more accurately, even wealthier than they are now).
Although it started as a patent and trademark renewal business, over recent times CPA has expanded quite dramatically, moving into areas such as outsourcing. Over recent months, its PR and marketing function has also been reorganised, something which may indicate a new direction is on the way. However, what will make CPA attractive to investors if a float does occur is its renewals business. This is predictable, high-value income. If a publicly owned CPA can improve its market share by just a few percentage points it is basically a licence to print money as the nature of the beast is that once you have a client, you need to give them a very good reason for walking away; after all, such a move is something that brings the client an awful lot of work and expense. What price a bid from Thomson I wonder? Though whether competition authorities would allow it through is certainly open to question.
As CPA stakeholders rub their hands together in anticipation of fortunes to come, two other UK-based patent businesses have released their latest financial reports; and both are doing well.
The only British publicly-quoted firm of patent and trademark attorneys Murgitroyd & Co last week announced a 9% increase in turnover to around £12 million for the six months to the end of November 2007 and a 10% rise in gross profits to just over £8 million. After tax, interest and overheads, such as payments to staff and office costs, are deducted, this gross figure becomes a net profit of £873,000 - which goes to show that it costs a lot to run a patent and trademark attorney firm these days! Looking forwards, Murgitroyd does not give the impression of being worried about the outlook. The only major problem seems to be the difficulty it has in finding top class staff.
Meanwhile, the translation company RWS has published its annual report for 2007. This shows profits before tax up by over 22% to £11.1 million, on sales of £46.2 million; these grew by 13.3% on the 2006 amount. Again, if you look at what the company is saying about how things will go in the next year, there appears to be very little concern. Even the coming into force of the London Agreement, which it is forecast will cost RWS £1 million in year one and £2 million in year two, will be offset by predicted organic and acquisition-based growth. “Our markets remain strong in the face of more challenging economic conditions. We are, therefore, encouraged by our future prospects which are underpinned by the pressing need for corporates to protect intellectual property throughout the economic cycle,” says executive chairman Andrew Bode. He will be hoping that his words do not come back to haunt him this time next year.