I would now like to hand the conference over to Dr. Andrew Blattman, Managing Director and CEO. Please go ahead.
Thank you, Jacob. Good morning and welcome to the IPH results presentation for the half-year ended 31 December 2024. My name is Andrew Blattman. I'm the CEO and Managing Director of IPH. With me today is John Wadley, Group CFO. Thank you for joining us for today's presentation and for your continuing interest in IPH. Before commencing the formal presentation, I want to welcome our new Canadian team members from Bereskin and Parr, who joined IPH on 28 September last year. Let me also thank the broader IPH team across all of our regions for their efforts and contribution to delivering a solid result for the first half. Moving to slide three, the contents of today's presentation, I'll provide an overview of the operational highlights for the half. John will discuss the financial results in more detail before handing back to me.
We have changed the format of the presentation slightly to reflect the increased global scale of our operations. As such, I will provide an update on the performance of our three segments, ANZ, Asia, and Canada, which will include information on financial performance and filing commentary for each segment. You can find the typical pattern filing performance charts in the appendix to this presentation. I'll conclude with a summary of our priorities for the full year, and as always, we'll be happy to answer your questions at the end. So moving to slide four about the IPH group, first, a reminder of the continued growth in diversity and scale of IPH. As I just mentioned, we completed our fourth transaction in Canada with the acquisition of Bereskin & Parr in September, which enhances our market-leading presence in Canada and further strengthens our global network.
We now have seven brands and over 1,800 employees servicing some 26 IP jurisdictions. Slide five, we continue to evolve our mission to reflect the global scale and expertise of our group. Our long-term strategy is anchored in our new vision for the group, which is to be the partner of choice enabling global IP protection for the world's innovators. Our purpose is all about driving innovation through IP protection, underscored by our commitment to provide world-class IP services for our clients. Now, turning to our results and the summary for the first half, we delivered a solid result in a challenging market. Despite a backdrop of lower market filings and the significant disruption to our Canadian business from the Canadian Intellectual Property Office, I'll call that SIPO for going forward, systems issues, we delivered solid growth.
That includes an 11% lift in underlying EBITDA and a corresponding 20% lift in underlying net profit. That increase in earnings, combined with our strong cash flow, delivered enhanced returns for shareholders with underlying diluted EPS up 7% and the interim dividend up 6%. The half-year 2025 result represents the third consecutive period of organic growth in our Australian and New Zealand businesses, despite lower market filings. As I foreshadowed at the AGM in November, we're also starting to see positive signs of a recovery in our Asian business, which is very pleasing to me. We achieved solid growth in patent filings across the region, particularly towards the end of the period, with IPH Asian filings up 10% for the half. This growth also includes translation revenue, which is creating positive momentum into the second half.
While our Asian like-for-like earnings were down slightly for the first half, this compares to a 9% decline for a prior corresponding half and a 6% decline for the full year. Capital management remains a focus for the group. We continue to deliver strong cash with cash generation of 100%, which has helped to deliver the increase in the interim dividend. Meanwhile, we commenced to share buyback in December, which is targeting up to AUD 75 million. Finally, the integration of Bereskin & Parr is proceeding on plan, with cost synergies above our initial estimates. Moving to slide eight, I'm very pleased with our progress during the half. As I mentioned earlier, we continue to generate organic growth in Australia and New Zealand, despite a decline in overall filings.
In Asia, as I say, we're seeing positive signs of recovery, of promising filing activity, and as the market leader in this region, we remain well placed to return to sustainable growth as markets recover further. In Canada, we are seeing an encouraging recovery in patent workflow, following the CIPO systems, the issues in the CIPO systems we experienced in the first half, and as I just mentioned, the integration of Bereskin & Parr is proceeding on plan, with cost synergies above our initial estimates. We continue to implement our new corporate model, while that also includes some additional investment. As we've outlined previously, we're also removing some roles, such as the Chief Operating Officer position. Following an internal review, we have decided not to proceed with the IPH Way in its current form.
Instead, our transformation function is expected to provide enhanced returns with a focus on earnings-accretive projects across the entire group, including those which are originally part of the IPH Way. And finally, the group maintains a strong financial position with an increase in interim dividend and the buyback commenced. I remain very positive on our outlook. We build a world-leading IP services company, and while we have experienced some challenges in the first half, we've demonstrated that we can still deliver good growth and returns to shareholders. As I say, I'm particularly encouraged by our recovery in Asia. Across a wider macro level, we expect to benefit from an improving U.S. economy, and the recent international trend towards deglobalization may well be a positive catalyst in terms of increased requirement for IP protection. I'll now hand over to John, who will discuss the financial results in more detail.
Thank you, Andrew, and good morning, everyone. Looking first at an overview of the financial results. Results for the half include three months' contribution from Bereskin & Parr acquired on 28 September 2024. They also include an incremental five and a half months from ROBIC acquired on 15 December 2023, and three months from Ridout & Maybee acquired on 29 September 2023, compared to the half-year of 2024. Increase in underlying revenue and EBITDA reflect the contribution from these acquisitions, but also continued organic growth in the ANZ business. The significant increase in net profit after tax of 78% was driven by a substantial reduction in the quantum of non-underlying items, particularly acquisition costs, which were non-deductible for tax purposes in that half. The absence of those non-deductible items also lowered the effective tax rate from 32.3%- 21.3% in the first half.
As always, IPH results should be reviewed with an understanding of the foreign exchange effects. Underlying earnings were partially impacted by the average Australian U.S. exchange rate of 66.1 cents in half-year 2025, compared to 65.3 cents in half-year 2024. As indicated previously, one cent weakening in the U.S. dollar equates to an approximate 2.8% reduction in service charge revenue. You might recall that the Australian dollar weakened quite significantly versus the U.S. dollar towards the end of the reporting period. This impacts the P&L from the revaluation of U.S. denominated cash and receivables at the lower Australian dollar rate. That resulted in a net foreign exchange gain of AUD 1.3 million in half-year 2025, compared to net foreign exchange loss of AUD 1 million for the prior corresponding half.
Underlying impact was up 20% to AUD 61 million, reflecting the Canadian acquisitions and the growth in ANZ, partially offset by a previously flagged increase in corporate cost. The company's strong cash generation of 100% enabled a further increase in the interim dividend, which was up 6% to AUD 0.17 per share and 20% franked. The dividend will be paid on the 21st of March. Looking at slide 11, the like-for-like earnings. Like-for-like basis eliminates the impact of acquisitions and foreign exchange. Looking first at Australia and New Zealand, we had continued organic growth in this segment, despite the overall decline in market filings for the period. Like-for-like margin was down slightly, mainly due to an increase in disbursements revenue and increased cost allocation to this segment. Like-for-like revenue in Asia was steady, while like-for-like EBITDA decreased by 1%.
However, this represents a significant trend improvement from half-year 2024, where revenue declined 3% and EBITDA was down 9%. Next, to Canada. It's important to note here that the 8% increase in like-for-like revenue includes a 32% fee increase from the Canadian Patent Office for patent processing from the 1st of January. IPH firms directly recover this from clients, and therefore, while it inflates revenue, there's no contribution to earnings and thus impacts margin. Like-for-like service charge revenue, excluding these disbursement recoveries, was flat. I'll go into detail shortly, the like-for-like result in Canada was impacted by the delay in revenue associated with disruption from the CIPO systems upgrade and lower litigation revenue due to cases settling. This was partially offset by an increase in trademark revenue. The group like-for-like EBITDA decline reflects the increase in corporate costs that I mentioned earlier.
As we previously advised, these include implementation of the new operating model, reflecting the increased geographic scale and scope of IPH following acquisitions, and continued investment in corporate capability, fulfilling the transformation function. While this initial investment has impacted the current EBITDA margin, benefits are anticipated in future reporting periods. Looking at slide 12 and the underlying result, this slide shows the calculation of the underlying result, which is on a consistent basis with prior periods, and reconciles these to the half-year statutory 2025 results. The main adjustments, which I mentioned earlier, are significantly less than the prior corresponding period, relate to costs associated with the Bereskin & Parr acquisition. These acquisition costs were AUD 3.2 million. Restructuring expenses of AUD 1.4 million include costs related to the rollout of the regional model, including one-off redundancy costs.
Amortization of acquired intangibles of AUD 26.2 million, or tax-affected AUD 18.9 million, are excluded from underlying results. Slide 13, in the cash flow statement, the group continues to generate strong cash flow with a cash conversion ratio of 100%. Working capital for half-year 25 reflects a more normalized pattern. You'll recall that the significant change in working capital in the prior corresponding half reflected the impact of the cyber incident in March 2023, which caused disruption in operations and delaying cash collections for the second half of the 2023 period. As a result, working capital in half-year 24 included a reversal of the working capital outflow from the cyber incident in the preceding half. Net interest paid of AUD 11.4 million reflects the reduction in net debt as part of the refinancing in December 2024. Slide 14, in the balance sheet, IPH maintains a strong balance sheet.
The main movements in the balance sheet are due to the acquisition accounting of Bereskin & Parr. These include customer relationships, which were amortized over 10 years, and goodwill, which will not be amortized but subject to impairment testing. The reduced borrowings reflect debt repayments and completion of the refinancing of the Canadian dollar facility due to mature in August 2025. Net debt is down 16% to AUD 300 million, with the leverage ratio under our banking definition of 1.6 times. We've outlined the breakdown of finance costs and other items below EBITDA in the appendix. The increase in share capital was largely driven by shares issued to Bereskin & Parr vendors and the capital raising, including the share purchase plan, to fund the Bereskin & Parr acquisition. This was partially offset by the subsequent on-market buyback of 2.1 million shares. Slide 15, our progress on capital management.
IPH has a disciplined capital allocation framework, which is based upon our predictable cash flows and a commitment to maintaining a strong balance sheet with flexibility to support our growth strategy. We have a clear strategic focus on maximizing shareholder returns through this framework. During the half, we made solid progress regarding capital management. These include a 16% reduction in net debt with a corresponding reduction in leverage ratio of 1.6 times, which remains well within our target of ratio of up to 2 times. As mentioned earlier, we continue to generate strong cash flows, which support a 6% lift in the interim dividend. We commenced the on-market buyback of ordinary shares in December of up to $75 million. By year-end, we had bought back 2.1 million shares, representing $10.4 million.
The board of IPH believes that the buyback is an efficient use of capital and is consistent with our focus on ensuring an effective mix of continued investment in the business to support earnings growth while returning excess cash to shareholders. Slide 16, in our foreign currency sensitivity, the group's exposure to U.S. dollars has reduced slightly post the Bereskin & Parr acquisition. 36% of the group's invoicing is denominated in U.S. dollars. As most of you know, we currently do not undertake foreign currency hedging on our operating transaction exposure. We continue to monitor this position. The group's balance sheet is also exposed to FX on the level of foreign denominated cash receivables and debt, the largest of which is USD. 31 December 2024, net exposure to USD movements was $39.9 million.
To mitigate the impact of the P&L of revaluations as a result of USD movements, we entered into approximately $32 million of FX with contracts. I'll now hand back to Andrew.
Thanks, John. Over the next three slides, I'll provide an update on our three operating segments. As I indicated earlier, more detailed patent filing performance charts are contained within the appendix. So moving to slide 18, our first segment, which is Australia and New Zealand. Our domestic business continues to deliver growth in revenue and earnings despite an overall decline in market patent filings for the period. Indeed, this is the third consecutive reporting period of growth for this segment. Underlying revenue and earnings were 7% and 9% ahead of the prior corresponding period, respectively. On a like-for-like basis, ex-currency revenue increased by 4%, with an increase in like-for-like EBITDA of 2%. That was despite the lower market filings, which reflects the long-term annuity style nature of our business, where current period filings represent just one of several factors contributing to our ongoing financial performance.
Like-for-like margin was down slightly, which was mainly due to an increase in disbursement revenue, which does not contribute to earnings, and an increase in shared services costs, which are allocated to the ANZ segment. In terms of filings, Australian patent filings declined by 4.4% for half-year 2025, compared to the prior corresponding period of IPH group filings, declining by 7.6% for the same period. As we've said previously, IPH has a significant proportion of U.S. clients and continues to be impacted by the decrease in market filings from U.S. applicants, which were down 6.9% for the period. Notwithstanding this decline, IPH remains the market leader in Australia with a combined group market share of 30.4% for half-year 2025. Slide 19 is Asia. As I mentioned earlier, we are seeing some real signs of recovery in our Asian business, which is fantastic.
Underlying revenue and EBITDA were steady, with margin retained at 43%. On a like-for-like basis, revenue was steady, while EBITDA decreased by 1%. However, this represents a significant trend improvement from half-year 2024, where revenue declined by 3% and EBITDA was down 9%. Patent filings recovered strongly towards the end of the first half, with IPH patent filings increasing by 10% across Asia for half-year 2025, compared to the corresponding period. We had filing growth in key sectors, including 5G and 6G telecommunications, mining services, AI, and machine learning software.
We had double-digit filing growth across five countries in Asia. Importantly, many of these filings come with associated translation revenue, which is creating positive momentum into the second half. Turning now to Canada, Slide 20, the underlying results include the incremental contribution from ROBIC and Ridout & Maybee, compared to the prior corresponding period, and the three-month contribution from Bereskin & Parr.
As John mentioned, revenue also includes the impact of the 32% fee increase that the Canadian IP Office implemented for patent processing from 1 January 2024. It's important to point out that IPH firms directly recover these fee increases from clients, and therefore it is no contribution to earnings. While it inflates revenue, it does not contribute to EBITDA, and you can see this has negatively impacted the EBITDA margin on both an underlying and like-for-like basis. You will recall at the AGM in mid-November, we called out two factors impacting like-for-like performance. First, we experienced significant disruption from SIPO systems issues following the launch of its new patent filing system in July 2024. The backlog, rather, of workflow linked to these systems and issues caused delays in revenues in the first half. We are now seeing a very encouraging recovery as these systems issues are being addressed.
Secondly, litigation revenue, which is always variable and dependent on case flow, was lower in the first half due to cases being settled. Pleasingly, we recorded strong growth in trademarks, with revenue increasing 27%, which helped mitigate the earnings decline in patents. Interestingly, our trademark business was also impacted by SIPO processing issues in a prior period, and accordingly, we expect a similar recovery in patents as the SIPO issues are resolved. Slide 21 is some further commentary about our Canadian businesses. In September, we completed our fourth transaction in Canada with the acquisition of Bereskin & Parr. This acquisition has further consolidated our presence in the Canadian market. We are very pleased with how the business is performing and its integration into Smart & Biggar.
As I mentioned earlier, cost synergies are above our initial target, and we expect annualized synergies of CAD 4.5 million, compared to our initial estimate of CAD 3.7 million at acquisition. These include savings and premises, insurance, staff costs, etc. Of course, some of the rent savings fall below the EBITDA line due to accounting standards. We have recently restructured and streamlined back office and administrative functions, with 30 full-time equivalent roles being taken out of the business in February. We have also consolidated office locations and halved our office footprint in Toronto. IPH has successfully integrated a number of acquisitions to generate efficiencies and create value, and Bereskin & Parr will be no different.
In addition to cost synergies, we also create value through cross-selling opportunities and leveraging the IPH network effect, particularly in relation to supporting Bereskin & Parr's local clients, which are excellent at IP ahead, to filing to other IPH jurisdictions. We continue to generate client referrals from our Canadian businesses into IPH Asia Pacific firms, and as at the end of December, we have delivered a cumulative total of nearly 650 referrals. Slide 22 is a summary of our priorities for FY25. We continue to build towards our vision to be the leading IP services group in secondary IP markets. Our key priorities in FY25 to support that vision include delivering organic growth in our domestic market and restoring organic growth in Asia, building on the momentum in Asian filings and translating this into revenue and EBITDA growth.
The SIPO backlog processing represents a tailwind for our Canadian segment, completing the full integration of Bereskin & Parr into Smart & Biggar, continued focus on strong cash generation and returns to shareholders, and continuing to implement a transformation plan to improve efficiency and effectiveness through streamlining, automating, and leveraging AI tools. In closing, I would like again to acknowledge the hard work and contribution of all our people across IPH. As a group, we've navigated some market challenges, and we still delivered a 20% improvement in underlying net profit for the half. That reflects the increased diversity and scale of our business. I remain very confident that we're exceptionally well placed to build on this scale and deliver further returns to shareholders. Many thanks to all of you for your continued interest and support.
Over to our moderator, Jacob, and as always, John and I are happy to take questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Tim Lawson from Macquarie. Please go ahead.
Hi, guys. Thanks for taking my questions. Just a few on Canada to start. Can you just quantify the timing of the system issue at SIPO and what that might mean in sort of dollar revenue terms and margin impact?
Thanks, Tim. Yeah, look, it's been a challenge because it really started to impact us midway through the first half, and we had a number of discussions with SIPO, including myself having a number of discussions with SIPO directly, and I guess what we've seen, particularly this month and even the beginning of this month, was a release. I wouldn't say floodgate release, but certainly a very improved release on their processing, so we're always able to file the patent applications throughout the period, but we weren't getting the subsequent notifications or other patent office actions that come typically through the examination cycle. So whilst we were filing, we weren't getting that flow on work, and it was impacting both Smart & Biggar, and particularly Smart & Biggar given the size, and also ROBIC. So I think it will be.
Now, they're not fully back, but thank goodness it's a hell of an improvement on what it was, and I'm hoping that by next March, we're going to be pretty much back to normal operating systems there. I was hoping to give you an update from SIPO for this presentation, but in the end, I think it's they're having a general webinar yesterday. It might be tomorrow, Canadian time, so Friday or Monday we'll get some further details from SIPO on what that looks like, but it will be a tailwind into the Canadian scene.
Are you able to quantify it at all? And with the sort of impact it has on the mix of work that you're doing, it sounds like what you're saying is that certain work is impacted, others not. How does it affect the margin as well? Is there some costs that you effectively can't get rid of until that activity comes back, and therefore it should be high margin in the second half?
It's difficult to quantify. If I was to put a number to it, it may be up to AUD 500,000 per month in terms of the revenue loss. So in doing that, you can't really get rid of the cost base. The cost base remains the same. So to the extent that this revenue does come back in the second half, we should have increased margin in the second half on that. In terms of your question on the different types of work, so we've definitely said that, or Andrew reflected that the trademarks has been very promising in these six months, and to some extent that has offset the revenue lost in the patent side of the business.
It's a funny one, Tim, because trademarks, I think I said it was up 27%, and a lot of that was dealing with a backlog caused by another SIPO upgrade some year or so earlier. So it does all go well in the context of what will come through, and the 500,000 is probably just in Smart & Biggar alone. It will be a little bit more with ROBIC added to it. So it is reasonably significant, and that release will, as I say, be a good story for us.
Yeah. And then just staying on Canada, you've called out the synergies. I think it's AUD 4.5 million. You've obviously called out the headcount change in February. Can you sort of, assuming that's not included in the AUD 4.5 million, and then how much was actually delivered in the first half of 2025? Because it sounds like that AUD 4.5 million is sort of like an annualized run rate number.
Correct. The 4.5 is an annualized number. Probably not much was delivered. We had keys on the 1st of October, so not so much in the first half. Those 30 people departed the business just in the last couple of weeks, and we have the full integration of the businesses as of 1st of March. So we would expect it to start contributing. Obviously, with those 30 people leaving, we'll have some employee benefits savings, but the majority will come through next full financial year.
Just to clarify, the 30 people is not included in the 4.5, or is included in the 4.5?
It is included.
It is included.
Okay. Maybe just a quick question on Asia. Obviously, a good sort of 10% filing growth. Can you just tell what you think's happening in the market?
Oh, it's an interesting one, Tim. I love it. I mean, I did say Asia would turn, whether anyone believed me or not. I'm not sure, but my waters are telling me even in the ATM that we're on the brink of something, and it came through towards late November and certainly steadily through December, and again, it's continued on nicely. Look, I think it's a technology piece that we're seeing some, particularly in the ICT space, and particularly in countries, I mean, that's engineering and information communication stuff, that they're not seeing the same growth, good growth, but still not the same growth in chemical life sciences. It's very much in the ICT and very much in countries like Indonesia and Thailand, Philippines. I think I've even got a slide in there, China, with the double-digit growth we're seeing.
And the beauty about that, of course, as you will know, is there's translation kick of a little follow with that, and because it only came through in December and it continues now, I expect to see a bit of that kick come through into the second half nicely. So I'm very pleased with Asia. The team up there has done a great job servicing some very good clients. You've got some new clients that have entered the space, a combination of traditional clients we've had for generations and some new ones from other emerging markets and Europe and other places like that. So interesting times in Asia.
Yeah. And just thanks for that. Just a quick question on Australia, and I'll finish on one on adjustments. Just the shared services allocation, can you just talk us through what that relates to, given a bigger group with a Canadian acquisition and that sort of following through? Just interested in why that allocation has increased to ANZ.
So I think it'll be flagged last year, certainly at the AGM, our increase in corporate costs across the whole group. Some of those corporate costs will be retained in corporate, but things like IT licenses or other IT investments, correspondingly, they get charged out to the business. So we would see across all of our regions, all of them would have an increased corporate cost share allocated to them.
Okay. That's clear. And then just the sort of outlook for adjustments, they're very closely aligning between the sort of stat and underlying EBITDA. You've got sort of four items there. Just sort of thinking on those, obviously, there might be some more restructuring expenses with those headcount going, but just trying to understand the outlook for EBITDA upgrade, etc.
Yes. I think acquisition costs for the near term, those should be relatively minimal in the second half. You're right in terms of the restructuring costs. I'd expect them to be some of those in the second half, particularly with those 30 people departing the business and other costs related to the integration of Bereskin & Parr and Smart & Biggar. I think elsewhere in the presentation, we referred to the Cyber project costing about AUD 1.5 million over a three-year period.
So a little bit of the second half and then something continuation into FY2026?
Certainly, yes. But you would say that they're substantially reduced from the prior period, which has helped our overall statutory impact.
Yeah. Okay. Thanks for my questions.
Thank you. Your next question comes from Russell Gill from J.P. Morgan. Please go ahead.
Just to clarify in Canada, the 32% price rise that went through on 1 January, is there a timing of when that flows through your accounts? Because the margin held up relatively okay, I guess, in the second half of the year, the six months to 30 June, but then has fallen quite substantially just in the next six months. So is there a timing difference around that, or is litigation also causing some of that margin decline, I guess, sequentially?
Certainly, the litigation and the SIPO issues are causing some of the margin decline in the first half. I think that factor would have been there last year, but perhaps because it only happened in 1st January and only affected the second half, and we only report the full year results, maybe that impact was perhaps lost or spread over a much higher base last year. Certainly a big impact in this particular half. Yes, the other factors in Canada, being the SIPO and litigation, would also contribute to a margin decline there for the moment.
If you're just looking half on half sequentially, the margins only went backwards 140 basis points, I guess, first half and second half last year, but then they've fallen almost 600 sequentially, or 500 sequentially. So it looks like litigation is a significant margin driver rather than just this 32% price increase. Is that fair?
Yes. So certainly, they all contribute to the margin. Litigation, we've said, is a little bit difficult to provide any guidance on in terms of what it should be when cases are on and the attorneys working multiple hours a day, but the margin can be quite high. Whereas when they don't have cases, which has been the issue in this particular half, we have a higher cost base because those attorneys tend to be paid a little bit more, a higher cost base, but there's no revenue coming through. So I think your point is valid.
If we're thinking through the second half in Canada, you're talking about SIPO hopefully being fully recovered by March. You've got Bereskin & Parr essentially for you only have to get it for two months in the first half. If we're using this first half, I guess, as a base, I mean, how much margin uplift or revenue uplift are you expecting to come through in that second half through both those dynamics? There's a lot of moving parts because of Bereskin & Parr coming in for only two months and then the revenue coming through from the 32% price increase. So is there a bit of a better guide on what the second half actually looks like in Canada?
The first element of the impact of the SIPO coming back is more difficult. The introduction of Bereskin & Parr, I think looking at how we're positioned and how the acquisition business case is probably an incremental AUD 6 million in EBITDA coming through in the second half from its initial business case and run rate, as well as some of those initial synergies coming through. So happy to provide a number there. Difficult to provide until we get some level of clarity on the SIPO issue to give a number to that. Now, I quoted earlier kind of a 500 per month, maybe over three months that we've lost in the first half. So that could be a number if it all came back immediately in the second half.
Great. Just switching to Asia, just to understand the filing dynamics being up 10%, but like-for-like revenue flat. I guess it's the timing of the filings towards back-ended and when you guys actually realize revenue on here? Just to understand that mismatch between, I guess, activity in the market and your own revenue.
Yes. A good point, Russell, and you're right. I mean, we hadn't at the AGM. I had a sniff of it, but it really didn't come through till December, markedly through December, which was great, but still it was December and came at a good rush. In terms of the translation piece, there is a delay in between accepting instructions to open a file and actually translating a large patent specification in the Bahasa Indonesia or Mandarin or whatever it might be. So that will account for some of the differential in timing, but we are seeing some good revenue coming through in the second half, and that should only continue given that we haven't seen any real slowdown yet on the filings. The filings are good.
Great. And just you made comments about, I guess, the IPH Way strategy being parked and then, I guess, a refocus. Can you just maybe give a few comments about what changes there are in the strategy in the business and why the IPH Way was parked aside and what the new strategy is and what the decision behind that actually drove it?
Yeah. I guess we approached IPH Way in a way where we had our own people doing a combination of IPH Way matters and a day job and seemed to me that we couldn't get the best out of either of those scenarios. And we indicated last year that we're putting into the transformation function. We've got a full transformation team now, and I'd rather let the transformation team do their role rather than the rest of us. From an enthusiastic amateur approach, it's better served, I think, with letting the transformation function with the full team do what they do best. And we've got a CTO in place, his team is in place really this second half, and they're away. So I think that's why we did, I'll call it a bit of a reset on the IPH Way away from the existing business into a specialized function.
Great. And then just a final question on capital management, just to understand how you guys are thinking about, I guess, capital allocation going forward. Franking is relatively low in the business, so you're only franking your dividends at 20%, but your payout ratio is still quite high. You've also got this buyback, and obviously, your share price is where it is. Is the need to keep that payout ratio quite high because there's a lot of, I guess, employees that maintain stock that see it as essentially a form of remuneration, or would shareholders be better served by, I guess, lowering the payout ratio, increasing the franking essentially percentage, and then deploying more back into buying stock on market?
I think you'll notice that this particular dividend is now at the lower end of that particular payout ratio. I think it's about 81%, so at the lower end. Certainly, our ideas are all valid, and they're all under consideration. Certainly, we're taking that feedback from the market into account by the announcement of the buyback program, which we started before Christmas and have already acquired some shares. Yes. We need to get that balance right between our dividend and our return to shareholders through the buyback.
Okay. Thanks, guys.
Thank you. In order to ensure that the management will be able to address questions from all participants, please limit your question to one per participant. The next question is from Elizabeth Miliatis from Jarden. Please go ahead.
Good morning, gentlemen, and thank you for taking my one question. Just regarding the Australian business, you sort of just able to touch on just the price increases that you saw in the period. Apologies if you mentioned it previously. We're just straddling a few calls, but it seems like there was some pretty robust price being pushed through. And if I can ask a very sneaky extra one, just around the outlook to the market share, I mean, we've continued to see decreases for quite some time. It did look like there was a bit of stability from first half and second half last year, but it's obviously deteriorated again. So what's being done there, and can we see some stability in that in the medium term? Thank you.
In terms of the pricing, I think we're probably more back to a more normalized level of increase. For a couple of the years there, perhaps our increases were 5%-10% across the whole range of activities and rates. So it wasn't a standard 7.5% applied to everything. There were different pricing increases applied to different services and different tasks. And that really, during that high inflation environment, was necessary. So it's come off a little bit. So probably that's a more normalized 3%-4% increase. Again, not one particular rate across our whole book of work. It's across different services and different tasks within that. Also remembering, when we always talk about price, that a price increase doesn't affect our whole book at once due to some of our customers, and particularly some of our larger customers, perhaps on two and three-year fixed price agreements.
It takes a while for those price increases to work through the books. Obviously, this year, some of those larger clients would have been having those larger price increases from the prior years finally catch up with them. So that certainly would have assisted.
In terms of the overall market share, I guess we're pointed to that really the IPH group is more susceptible to U.S. inbound filings, and U.S. inbound filings are probably those which have been most down recently. I think the IPH group, approximately 48% of our in the Australian New Zealand context is inbound from the U.S., whereas probably the market as a whole is probably around 39%-40% marks. So when the U.S. is down, IPH suffers more comparatively than our competitors. So I think we've briefly talked about potential tailwinds in the U.S. or through other macro factors.
It's then really that we need to see the U.S. turn around, and therefore that'll address our market share issue.
Thank you.
I think just to add to that, Liz, the whole market was down 4.4%, and the filings from U.S. applicants were down almost 7%. So if we are the greatest exposed from the U.S., then that's the kind of outcome you would expect. But I think there's a graph in the pack that should imply that the U.S. position in terms of incoming starts to improve in the latter half of the second half.
Thank you.
Thank you. Your next question comes from Apoorv Sehgal from UBS. Please go ahead.
Hey, good morning, Andrew and John. I'm sorry, I jumped on the call quite late, so apologies if this has been asked. I guess my one question just on your expectations for Asia's second half like-for-like revenue growth, just how we should think about that. And if we sort of look beyond also sort of into FY2026, I mean, is it too ambitious for Asia to kind of return to its historical revenue growth rates in that high single-digit range maybe in 12 months' time?
Well, I'd love it to return to that age, but I can certainly say that it's in much better shape than this time last year. And the filings we're seeing through December, January, and even last month, there was an excellent number of filings coming through. So that's a big driver of that business, particularly ex-Singapore and countries. And that's where we're seeing most of the growth, actually, in countries ex-Singapore. And some of those ex-Singapore countries do have that nice high margin translation revenue attached to it. So without getting too bullish, it's in good shape. I know John wants to add something to it as well.
I think we can expect to see some growth in the second half. So a report of flat and minus one in this particular half, I think given these tailwinds, a few percentage points of growth in the second half is not unreasonable. I think then to return to perhaps where we were by FY2026 might be a little bit ambitious. I think it's linked back to the question on these U.S. filers. So they are even more susceptible in Asia than in the ANZ region to the inbound U.S. filing. So to the extent that they return, I think that'll really govern when we can come back to those previous levels of growth in Asia.
Yep. I understood. Thanks, guys. Appreciate it.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced.
Sounds like that's it, Jacob, but.
Yes. There are no further questions at this time. Yep. I now hand back to Dr. Blattman for closing remarks. Please go ahead, sir.
Thanks again, James. Thanks, everyone. I know we'll see some of you in the next few days, and I appreciate your support. I'm pleased with these results. It's good to see the third consecutive half of growth in Australia and New Zealand. As I say, my daughter's telling me good things about Asia, and I reckon there's a tailwind coming out of Canada with Sidebird back on board. I think that litigation may also have a few more moves in it yet. Thanks for that, and we'll catch up with you.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.