IPH increased its full-year dividend by 5.5% to 38.5 cents per share despite reported underlying EBITDA declining 0.6% to $205.9m. This apparent contradiction reveals management confidence in the underlying business and its cash-generation capabilities. The company’s ability to increase distributions while flat on reported metrics suggests operational improvements were being masked by external factors.
Foreign exchange headwinds provide the key explanation. AUD appreciation against both USD and CAD during FY26 depressed reported results across the board. Stripping out FX impacts, group underlying EBITDA actually grew 2.9% on a like-for-like basis, a more encouraging picture than headline numbers suggest. Canada delivered the strongest performance with like-for-like EBITDA expanding 11.8% to $83.6m, now representing 37% of group EBITDA. The continued recovery in Canadian IP Office workflow and successful integration of the B&P acquisition positioned Smart & Biggar to maintain its standing as the number-one patent and trademark filer in Canada.
The business benefited from geographic diversification as challenges in one region were offset by strength elsewhere. Asia returned to growth with like-for-like revenue up 2.6%, while ANZ faced a tougher environment from declining US PCT filings into the region. ANZ’s like-for-like EBITDA declined 7.2%, though the company secured 5,674 case transfers, including over 4,500 trademarks, that should generate revenue in future periods.
Cash generation underpinned the improved shareholder distributions. Free cash flow rose 18.3% year-on-year to $135.9m while EBITDA converted to operating cash at 110.1%, reflecting disciplined working capital management. The company reduced net debt by $39m, with leverage remaining at 1.8x within its 2.0x target, and refinanced $210m of facilities at improved pricing with December 2028 maturities.
The board adopted a new dividend policy targeting a 70-90% payout ratio of statutory earnings per share on an amortisation-adjusted basis. This formulaic approach signals a commitment to consistent distributions while retaining flexibility for investment and debt management.
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Become an AR or CARInvestors should watch for evidence that ANZ stabilisation is taking hold, as the market-share gap narrowed from 6.7 percentage points in H1, and whether Asia can sustain momentum. The expected clearance of the Canadian IP Office backlog over the next 12 months offers visibility for revenue recognition. Monitoring whether operational leverage improves when FX conditions normalise will indicate whether the group can expand margins despite geographic headwinds.
View the full ASX announcement (PDF)
About IPH Limited (ASX: IPH)
IPH Limited is an intellectual property services company providing filing, prosecution, enforcement, and management services for patents, designs, trademarks, and legal matters. The company operates through subsidiaries across Australia, New Zealand, Canada, and Asia, serving Fortune Global 500 companies, multinationals, research organizations, SMEs, and individual clients. Founded in 1887 and headquartered in Sydney, IPH operates global IP brands including AJ Park, Griffith Hack, Smart & Biggar, and Spruson & Ferguson.
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