Murgitroyd

European patent and trademark attorney Murgitroyd, backed by Growth Company Investor at 127.5p back in 2002, continues to flourish. The company, which smashed forecasts at the full year with a 42% pre-tax profits leap, has filed a 98% pre-tax profits surge to £665,000 for the half to November, on turnover lifted 51% to £9.5m.

Chief executive and finance director Keith Young said the top line vault reflected ongoing organic growth, as well as acquisition and smooth integration of South London-based Castles (a deal which helped balance activities across a wider range of sectors and brought aggressive new-business winner David Castle onto the Murgitroyd board). The greater percentage leap in profits reflected Castles-inspired scale economy gains, as well and a strong control of overheads â“ gross margins eased off from 68.2% to 60.3%, as predicted, reflecting 'the short-term dilution effect of Castles', which charges lower up-front prices than Murgitroyd.

Encouragingly, Young says both the patent and trademark markets continue to grow, and in the wake of the successful acquisitions of both Cabinet Bonneau and Castles, further deals will be considered. 'At any one time, we are looking at 3 or 4, and they are coming to us', he commented. Not that Murgitroyd has to chase deals, enjoying good organic growth.

'We are growing faster than our competitors and faster than the market, and everything we do is geared towards growth', says Young.

Forecasts for the year to May were upgraded on the strong interims. Investors can expect pre-tax profits of £1.75m and earnings of 14.6p, placing the tightly-held shares on a forward rating of 17.6. Not screamingly cheap, but this is a quality stock well worth holding.