INTEGRATED LEGAL HOLDINGS LIMITED

ACN 120 394 194

ASX Appendix 4E
RESULTS FOR ANNOUNCEMENT TO THE MARKET
Current reporting period:
Previous corresponding period:

Year ended 30 June 2012

Year ended 30 June 2011
Percentage change
UP(+)/DOWN(-)

Amount
$A

+11%

31,690,208

+14%

32,406,865

Profit from ordinary activities after tax attributable to

members

-13%

1,116,006

Net profit for the period attributable to members

-13%

1,116,006

Percentage change
UP(+)/DOWN(-)

30 Jun 2012
/share

-22%
-22%

1.10
1.10

EARNINGS

Revenue from ordinary activities

Revenue and other income from ordinary activities

EARNINGS PER SHARE

Basic earnings per share

Diluted earnings per share

DIVIDENDS

Percentage
change
UP(+)/DOWN(-)

Amount
per share

Franked
amount per
share at 30%
Australian
tax rate

0.8 cents
0.6 cents

0.8 cents
0.6 cents

2012 FINAL

2012 final dividend (fully entitled shares)

Previous corresponding period

+33%

Record date for determining entitlements to the 2012 final dividend

Payment date for 2012 final dividend

12 October 2012
2 November 2012

DIVIDEND REINVESTMENT PLAN

The Company operates a dividend reinvestment plan (DRP). Further details are disclosed in the
dividend details section of this report.
DRP discount rate
Date for receipt of DRP election notices

5%
19 October 2012

INTEGRATED LEGAL HOLDINGS LIMITED

ACN 120 394 194

ASX Appendix 4E
RESULTS FOR ANNOUNCEMENT TO THE MARKET
Following is a brief explanation of directional and percentage changes to revenue and profit. For
a full analysis please refer to the Companys ASX release dated 16 August 2012.
The Company achieved a full year net profit after tax of $1,116,006 for 2011/12. This
compared with a net profit after tax of $1,286,670 for the full year 2010/11, a decrease of
13%. The net profit after tax result represented earnings per share of 1.10 cents per share,
compared to 1.41 cents last year.
The profit result was achieved on a strong Revenue and Other Income increase of 14% to
$32.41m, up from $28.48m in 2010/11. Growth in revenue was a combination of some
organic growth and growth through acquisitions in particularly.
After a solid first half, the Company experienced exceptionally difficult trading conditions in
May and June 2012 which affected the performances of all member firms and substantially
accounted for the reduced profit result. However, the Directors are pleased to note that
trading conditions improved considerably in July 2012 and into August 2012 with revenues
picking up strongly to expected levels.
The Directors note that the PLN Lawyers acquisition which was effective 1 August 2011,
performed well during the year.
Final Dividend 2011/12
The Directors have declared a fully franked final dividend in respect of 2011/12 of 0.8 cents
per share, up from 0.6 cents fully franked in the previous corresponding period.
The dividend will have a record date of 12 October 2012 and a payment date of 2 November
2012.
The dividend reinvestment plan will operate with respect to the final dividend.
2011/12
$m

2010/11
$m

% Change

Revenue and Other

Income

32.41

28.48

14%

Net Profit after Tax

1.12

1.29

-13%

Earnings per Share

1.10 cents

1.41 cents

-22%

Dividends Declared
2011/12
Dividends

Interim 0.0 cents

Final 0.8 cents
Total 0.8 cents

Interim 0.3 cents

Final 0.6 cents
Total 0.9 cents

AUDIT REPORT

The preliminary final report is based on accounts which are in the process of being audited.
2

INTEGRATED LEGAL HOLDINGS LIMITED

APPENDIX 4E - PRELIMINARY FINAL REPORT
FOR THE YEAR ENDED 30 JUNE 2012
ACN 120 394 194

Statement of Financial Position

Note

ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Work in progress
Income tax receivable
Total Current Assets

CONSOLIDATED
30 June
30 June
2012
2011
$
$

1,312,035
10,789,460
2,288,190
31,063
14,420,748

2,460,760
7,826,873
2,499,220
12,782
12,799,635

1,342,820
14,590,139
167,540
2,862
16,103,361
30,524,109

1,170,294
12,900,557
29,700
14,614
3,435
14,118,600
26,918,235

LIABILITIES
Current Liabilities
Trade and other payables
Interest bearing loans and borrowings
Provisions
Other liabilities
Total Current Liabilities

3,941,157
676,225
1,074,147
404,072
6,095,601

3,813,598
2,536,259
986,593
255,769
7,592,219

Non-Current Liabilities
Trade and other payables
Interest bearing loans and borrowings
Provisions
Deferred tax liabilities
Other liabilities
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS

4,794,054
347,625
106,733
118,205
5,366,617
11,462,218
19,061,891

37,554
143,325
306,092
137,038
689,344
1,313,353
8,905,572
18,012,663

33,917,382
(16,926,589)
2,071,098
19,061,891

33,397,152
(16,926,589)
1,542,100
18,012,663

Non-Current Assets
Plant and equipment
Goodwill
Intangible assets
Prepayments
Other assets
Total Non-Current Assets
TOTAL ASSETS

EQUITY
Issued Capital
Accumulated Losses
Reserves
TOTAL EQUITY

6
7
8

The above Statement of Financial Position should be read in conjunction with the accompanying notes

INTEGRATED LEGAL HOLDINGS LIMITED

APPENDIX 4E - PRELIMINARY FINAL REPORT
FOR THE YEAR ENDED 30 JUNE 2012
ACN 120 394 194

Statement of Comprehensive Income

Note

Professional fees
Total revenue

CONSOLIDATED
2012
2011
$
$
31,690,208
28,313,125
31,690,208
28,313,125

Movement in fair value of financial liabilities

Interest revenue
Other income
Total other income
Total revenue and other income

559,861
112,781
44,015
716,657
32,406,865

153,015
9,336
162,351
28,475,476

(2,814,989)
(22,105,248)
(530,198)
(459,652)
(3,849,582)
(836,018)
(350,513)
(41,644)
(30,987,844)
1,419,021
(303,015)
1,116,006
1,116,006

(2,338,627)
(18,579,646)
(412,841)
(359,123)
(3,335,793)
(1,351,267)
(143,193)
(41,415)
(26,561,905)
1,913,571
(626,901)
1,286,670
1,286,670

(574)

792

(574)
1,115,432

792
1,287,462

1.10
1.10

1.41
1.41

Occupancy expenses
Salaries and employee benefits expenses
Depreciation and amortisation expenses
Advertising and marketing expenses
Administrative expenses
Other expenses
Finance costs
Share based payments expense
Total expenses
Profit before income tax
Income tax expense
Profit after income tax
Net profit for the year
Other comprehensive income
Net (losses)/gains on available-for-sale financial assets
Other comprehensive (losses)/income for the year,
net of tax
Total comprehensive income for the year

Basic earnings per share (cents)

Diluted earnings per share (cents)

3(a)

3(b)

3(c)
3(d)

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes

INTEGRATED LEGAL HOLDINGS LIMITED

APPENDIX 4E - PRELIMINARY FINAL REPORT
FOR THE YEAR ENDED 30 JUNE 2012
ACN 120 394 194

Statement of Cash Flows

Note

Cash flows from operating activities

Receipts from customers
Interest received
Other revenue
Payments to suppliers and employees
Interest and other costs of finance paid
Income tax paid
Net cash flows (used in)/from operating activities
Cash flows from investing activities
Purchase of plant and equipment
Proceeds from the disposal of plant and equipment
Payment for the acquisition of businesses net of
cash acquired
Net cash flows used in investing activities

Cash flows from financing activities

Proceeds from loans received
Repayment of borrowings
Payments for share issue expenses
Dividends paid
Net cash flows from financing activities
Net (decrease)/increase in cash held
Cash and cash equivalents at the beginning of the
financial year
Cash and cash equivalents at the end of the financial
year

CONSOLIDATED
2012
2011
$
$
32,026,219
112,781
44,015
(32,924,236)
(250,222)
(346,897)
(1,338,340)

30,069,018
153,015
9,336
(28,365,293)
(81,891)
(552,446)
1,231,739

(829,767)
1,491

(209,596)
-

(1,253,580)
(2,081,856)

(979,148)
(1,188,744)

5,583,027
(2,857,058)
(13,017)
(448,735)
2,264,217

1,546,545
(643,929)
(17,389)
(441,556)
443,671

(1,155,979)

486,666

2,435,615

1,948,949

1,279,636

2,435,615

The above Statement of Cash Flows should be read in conjunction with the accompanying notes

INTEGRATED LEGAL HOLDINGS LIMITED

APPENDIX 4E - PRELIMINARY FINAL REPORT
FOR THE YEAR ENDED 30 JUNE 2012
ACN 120 394 194

Statement of Changes in Equity

CONSOLIDATED
Balance as at 1 July 2010

Issued
Capital
$
32,160,426

Accumulated
Losses
$

Net
Unrealised
Gains/(Losses)
Reserve
$

(16,688,184)

(1,441)
-

General
Reserve
$

Total
Equity
$

727,113

16,197,914

1,286,670

1,286,670

Profit for the year

Other comprehensive income

Total comprehensive income for the
year

792

792

1,286,670

Transfer to general reserve

(238,405)

238,405

Dividends paid

(709,439)

(709,439)

41,415

41,415

1,207,483

1,207,483

(17,389)

(17,389)

5,217

5,217

792
1,287,462

Transactions with owners in their

capacity as owners

Share based payments

Issue of shares
Transaction costs on issue of shares
Income tax on items taken directly to or
transferred from equity
Balance as at 30 June 2011

CONSOLIDATED
Balance as at 1 July 2011

33,397,152

Issued
Capital
$
33,397,152

(16,926,589)

Accumulated
Losses
$
(16,926,589)

(649)
Net
Unrealised
Losses
Reserve
$

1,542,749

General
Reserve
$

18,012,663

Total
Equity
$

(649)

1,542,749

18,012,663

1,116,006

1,116,006

Profit for the year

Other comprehensive losses

Total comprehensive (losses)/income for
the year

(574)

(574)

1,116,006

1,115,432

(586,434)

(586,434)

41,644

41,644

Issue of shares

487,700

487,700

Transaction costs on issue of shares

(13,017)

(13,017)

3,903

3,903

(574)

Transactions with owners in their

capacity as owners
Dividends paid
Share based payments

Income tax on items taken directly to or

transferred from equity
Balance as at 30 June 2012

33,917,382

(16,926,589)

(1,223)

2,072,321

19,061,891

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes

INTEGRATED LEGAL HOLDINGS LIMITED

APPENDIX 4E - PRELIMINARY FINAL REPORT
FOR THE YEAR ENDED 30 JUNE 2012
ACN 120 394 194

Notes to the Financial Statements

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These preliminary consolidated financial statements relate to Integrated Legal Holdings Limited and
the entities it controlled during the year ended 30 June 2012.

2) SEGMENT INFORMATION
Operating segments
The Integrated Legal Holdings Group has identified its operating segments based on the internal
management reporting that is used by the executive management team (the chief operating
decision maker) in assessing performance and allocating resources.
Integrated Legal Holdings Limiteds operating segments have been identified based on how the
financial and operating results of the Group are monitored and presented internally to the executive
management team. The reportable segments are based on aggregated operating segments
determined by the similarity of the products sold and the services provided, as these are the sources
of the Groups major risks and have the most effect on the rates of return.
For the year ended 30 June 2011, management identified a Legal Services Division and Information
Technology Division as operating segments. Changes to how the financial and operating results of
the Group are monitored and presented internally during the year ended 30 June 2012 have resulted
in these Divisions being dissolved and the Group is now segmented into one reportable segment.
Argyle Lawyers, Civic Legal, Signet Lawyers, Talbot Olivier and Integrated Legal Holdings Limiteds
Head Office Division are operating segments within the legal services sector in the Australian market
and have been aggregated to one reportable segment given the similarity of the services provided,
method in which services are delivered, types of customers and regulatory environment.
As the Group is aggregated into one reportable segment, there are no inter-segment transactions.

INTEGRATED LEGAL HOLDINGS LIMITED

APPENDIX 4E - PRELIMINARY FINAL REPORT
FOR THE YEAR ENDED 30 JUNE 2012
ACN 120 394 194

Notes to the Financial Statements

3) REVENUE AND EXPENSES
Consolidated
2012
2011
$
$
Revenue and expenses from continuing operations
a) Other income
Dividends received
Sundry income

b) Depreciation and amortisation expenses

Depreciation of plant and equipment
Amortisation of:
o Equipment under finance lease
o Identified intangible assets

c) Other expenses
Author royalty fees
Consulting fees
Bad and doubtful debts
Bank fees
Other expenses

d) Finance costs
Interest other entities
Interest accretion

133
43,882
44,015

126
9,210
9,336

500,498

371,633

29,700
530,198

5,568
35,640
412,841

55,308
118,812
431,034
210,830
20,034
836,018

84,032
119,503
930,772
202,143
14,817
1,351,267

307,694
42,819
350,513

128,718
14,475
143,193

INTEGRATED LEGAL HOLDINGS LIMITED

APPENDIX 4E - PRELIMINARY FINAL REPORT
FOR THE YEAR ENDED 30 JUNE 2012
ACN 120 394 194

Notes to the Financial Statements

4) DIVIDENDS DECLARED
2012
Cents
per share
a) Dividends declared, recognised
and paid
Interim dividend (fully franked)
b) Dividends declared and not
recognised
Final dividend (fully franked)(c)

0.8

c) Final Dividend Details

Amount per share
Amount franked
Record date to determine entitlements to the dividend
Date the final dividend is payable

2011
Total
$

Cents
per share

Total
$

0.3

267,883

816,276

0.6

582,986

0.8 cents
Fully franked at a 30% tax rate
12 October 2012
2 November 2012

d) Unrecognised dividends
A 2012 final dividend of 0.8 cents per ordinary fully paid share, fully franked at 30% was announced
on 16 August 2012 and is payable on 2 November 2012 to shareholders registered on 12 October
2012. The 2012 final dividend has not been recognised in the financial report because it was
determined, declared and publicly announced subsequent to year end.
The final dividend amount of $816,276 has been determined based on the number of eligible
ordinary shares on issue at the date of this financial report. No further shares are expected to be
issued which will be entitled to participate in the dividend.
The Groups DRP will apply to the 2012 final dividend.
e) Dividend Reinvestment Plan
The Company operates a dividend reinvestment plan (DRP) which offers eligible shareholders the
opportunity to reinvest all or part of their dividends in additional shares in the Group. The Shares
are issued at a 5% discount to the volume weighted average price of shares sold on the ASX during a
period of 10 trading days (rounded to the nearest half cent), with the period commencing on the
second trading day after the dividend record date.
The last date for receipt of an election notice for participation in the DRP with respect to the above
final dividend is 19 October 2012.

INTEGRATED LEGAL HOLDINGS LIMITED

APPENDIX 4E - PRELIMINARY FINAL REPORT
FOR THE YEAR ENDED 30 JUNE 2012
ACN 120 394 194

Notes to the Financial Statements

5) CASH AND CASH EQUIVALENTS
CONSOLIDATED
2012
2011
$
$
Cash at bank and in hand

1,312,035

2,460,760

Cash at bank earns interest at floating rates based on daily bank deposit rates. The carrying amounts
of cash and cash equivalents approximate fair value.
CONSOLIDATED
2012
2011
$
$
Reconciliation to statement of cash flows
For the purposes of the statement of cash flows, cash and cash
equivalents comprise the following at 30 June:
Cash at bank and in hand
Short-term deposits
Bank overdrafts

1,308,285
3,750
(32,399)
1,279,636

1,532,538
928,222
(25,145)
2,435,615

10

INTEGRATED LEGAL HOLDINGS LIMITED

APPENDIX 4E - PRELIMINARY FINAL REPORT
FOR THE YEAR ENDED 30 JUNE 2012
ACN 120 394 194

Notes to the Financial Statements

6) ISSUED CAPITAL
a) Ordinary shares
Consolidated
2012
Shares

Fully paid shares

Partly paid shares
Forfeited shares held in trust

Consolidated
2011
Shares

100,203,515
2,131,000
(300,000)
102,034,515

95,908,111
1,256,217
97,164,328

Consolidated
2012
$

Consolidated
2011
$

33,800,242
129,589
(12,449)
33,917,382

33,321,656
75,496
33,397,152

Shares
86,484,666

$
32,160,426

Issue of shares to The Argyle Partnership in final satisfaction of

deferred consideration payable on 22 September 2010

1,800,000

180,000

Issue of shares in part satisfaction of 2010 Principal profit share

entitlement on 16 December 2010

125,000

15,000

Issue of shares to vendors of Wojtowicz Kelly Legal on 1 February

2011

5,727,000

744,600

Issue of shares under Dividend Reinvestment Plan on 2 May 2011

2,143,112

267,883

a) Movements in ordinary share capital

Opening balance as at 1 July 2010

Costs associated with shares issued on the acquisition of Wojtowicz

Kelly Legal, net of tax
Issue of shares under the Deferred Employee Share Plan

(12,172)

884,550

41,415

Balance as at 30 June 2011

97,164,328

33,397,152

Opening balance as at 1 July 2011

Shares
97,164,328

$
33,397,152

Issue of shares at 11.50 cents per share to vendors of PLN Lawyers

in part satisfaction of consideration payable on 1 August 2011

3,043,478

350,000

Issue of shares under the Dividend Reinvestment Plan

1,251,926

137,700

Costs associated with issuing shares

Income tax on items taken directly to or transferred from equity
Issue of shares under the Deferred Employee Share Plan
Forfeited shares under the Deferred Employee Share Plan
Balance as at 30 June 2012

(13,017)

874,783
(300,000)

3,903
54,093
(12,449)

102,034,515

33,917,382

11

INTEGRATED LEGAL HOLDINGS LIMITED

APPENDIX 4E - PRELIMINARY FINAL REPORT
FOR THE YEAR ENDED 30 JUNE 2012
ACN 120 394 194

Notes to the Financial Statements

7) ACCUMULATED LOSSES
Consolidated
2012
2011
$
$
Accumulated losses

(16,926,589)

(16,926,589)

Balance at beginning of year

Transfer to general reserve (refer note 8)
Balance at end of the year

(16,926,589)
(16,926,589)

(16,688,184)
(238,405)
(16,926,589)

8) RESERVES

Net losses on available-for-sale financial assets

General reserve(1)
Balance at end of the year
(1)

Consolidated
2012
2011
$
$
(1,223)
(649)
2,072,321
1,542,749
2,071,098
1,542,100

Due to accumulated losses incurred prior to the listing of the company on 17 August 2007,
the Directors resolved to isolate profits derived from trading activities since listing through
the establishment of a General Reserve.
During the period, $nil was transferred to the General Reserve from Accumulated Losses
(2011: $238,405).

12

INTEGRATED LEGAL HOLDINGS LIMITED

APPENDIX 4E - PRELIMINARY FINAL REPORT
FOR THE YEAR ENDED 30 JUNE 2012
ACN 120 394 194

Notes to the Financial Statements

9) BUSINESSES COMBINATIONS
Acquisition of PLN Lawyers Pty Ltd
Effective 1 August 2011, Integrated Legal Holdings Limited acquired the legal business of PLN
Lawyers Pty Ltd under tuck-in arrangements with the existing member firm Argyle Lawyers Pty Ltd.
The acquisition supports the Companys business strategy to identify quality legal businesses to join
the Group through acquisition, and support these businesses as part of a network towards above
market growth, improved business performance and Group synergies.
The consideration for the acquisition was a combination of cash plus 3,043,478 shares at 11.5 cents
per share, and includes a deferred cash component payable in September 2012 subject to the PLN
business achieving revenue and profitability targets for the period to 30 June 2012. The acquisition
is structured with significant employment restraints and conditions. The cash component of the
purchase consideration has been funded from surplus cash reserves.
The following constitutes the calculation of the consideration given and the fair value of net assets
acquired:
$
Consideration
Cash
1,100,000
Deferred cash consideration
232,653
Total cash consideration
1,332,653
Shares issued at fair value
350,000
Total acquisition cost
1,682,653

Net assets acquired

Assets
Plant and equipment
Accumulated depreciation
Net deferred tax asset
Total assets acquired
Liabilities
Provision for employee entitlements
Net deferred tax liability
Total liabilities acquired
Net liabilities acquired
Goodwill on acquisition

Fair
Value
$

Carrying
Amount
$

34,860
(22,573)
6,005
18,292

34,860
(22,573)
12,287

20,017
5,204
25,221
(6,929)
1,689,582

20,017
20,017
(7,730)

13

INTEGRATED LEGAL HOLDINGS LIMITED

APPENDIX 4E - PRELIMINARY FINAL REPORT
FOR THE YEAR ENDED 30 JUNE 2012
ACN 120 394 194

Notes to the Financial Statements

The acquirees contribution to the net profit of the Group cannot be determined as this business has
been incorporated into Argyles business, and it is impracticable to disclose the total revenue and
profit for the combined entity as though the acquisition had taken place at the beginning of the
period.
Cash outflows acquired legal practices
Cash outflows during the year ended 30 June 2012 relating to acquisitions were as follows:
$
PLN Lawyers Pty Ltd (1 August 2011):
- Cash Consideration
Wojtowicz Kelly Legal (1 February 2011):
- Deferred cash consideration
- Contingent cash consideration
Net consolidated cash outflow

1,100,000
125,000
28,580
1,253,580

10) SUBSEQUENT EVENTS

Investment in Rockwell Bates Pty Ltd
On 2 July 2012 the Company entered into a Share Purchase Agreement to acquire a 25% interest in
the legal practice of Rockwell Bates.
The Company will have the option to increase its interest to a 49% investment over the next two
years.
The consideration for the initial transaction is a combination of the issue of 3,152,958 shares at the
Volume Weighted Average Price on acquisition date and cash.
The Company will acquire a further investment of 12% on each of 1 July 2013 and 1 July 2014 at fair
value.
The acquisition is structured with the usual ILH employment restraints and conditions, consistent
with the Companys disciplined acquisition model and strict criteria.
Final Dividend 2011/12
The Directors have declared a fully franked final dividend in respect of 2011/12 of 0.8 cents per
share, up from 0.6 cents fully franked in the previous corresponding period.
The dividend will have a record date of 12 October 2012 and a payment date of 2 November 2012.
The dividend reinvestment plan will operate with respect to the final dividend.

14