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ACN 120 394 194

Level 22, 1 Market Street


Sydney, New South Wales, 2000
Phone (02) 8263 6601
www.ilh.com.au
ASX Code - IAW

Thursday, 24th February 2011

Integrated Legal Holdings Limited


2010/11 First Half Results Announcement
Profit up 96% and earnings per share up 54%
0.30 cent fully franked interim dividend for shareholders
Positioned for continued growth
Highlights

Net profit after tax increased by 96% to $755,906.


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Earnings per share increased by 54% to 0.86 cents per share.


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Full year 2009/10 1.18 cents.

20% increase in interim dividend to 0.30 cents per share fully franked.
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First half 2009/10 $385,763, full year 2009/10 $853,494.

Record Date 11 April 2011; Payable 2 May 2011.


Dividend reinvestment plan will operate.

Operating revenue increased by 18% to $13.6m.


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Fastest growing legal firm in Australia 2009 by fee income, 2nd fastest in 2010
(Source: Australasian Legal Business).

Operating cash inflows of $1,029,230.

Strong balance sheet, cash reserves and conservative borrowings.

Announced acquisition of Wojtowicz Kelly Legal and merger with existing firm Brett Davies
Lawyers.

Expect growth in earnings per share in 2010/11.

1.

Executive Summary

Integrated Legal Holdings Limited (the Company and Integrated) has today announced a net profit after tax
of $755,906 for the half year ending 31 December 2010.
This compared to a net profit after tax of $853,494 for the full year 2009/10, $467,731 for the half-year ended 30
June 2010, and $385,763 for the half year ended 31 December 2009.
Earnings per share for the period were 0.86 cents per share, compared to the year ended 30 June 2010 of 1.18
cents (30 June 2010 half-year: 0.62 cents; 31 December 2009 half-year: 0.56 cents).

Operating revenue increased 18% to $13.6m as a result of continued organic growth generated by member
firms.
Operating cash inflows for the period were $1,029,230, compared to $1,448,161 for the full year 2010, and
$190,150 for the first half 2009/10.
The Directors are pleased with the first half results and with the continued progress that has been made during
the period.
Full Year Results Summary

Operating Revenue
Net Profit after Tax
Earnings per Share

First Half
2010/11
$000s
13,617
756
0.86 cents

First Half
2009/10
$000s
11,588
386
0.56 cents

Dividend per Share (Interim)

0.30 cents

0.25 cents

20%

Operating Cash Inflows


Net Tangible Asset Backing per Share
Debt/Equity Ratio

1,029
6.98 cents
8%

190
5.87 cents
18%

Large
19%
-56%

%
Growth
18%
96%
54%

Full Year
2009/10
$000s
23,874
853
1.18 cents
Final - 0.50 cents
Interim - 0.25 cents
Full Year - 0.75 cents
1,448
6.54 cents
11%

Balance Sheet
The Company has maintained a strong balance sheet during the period and is well placed to continue organic
and acquisition growth. The following points are highlighted:

Cash position (including overdrafts) at 31 December 2010 of $2.09m.


Bank loans of $0.95m at 31 December 2010 compared with $1.85m at 31 December 2009 (debt to equity
ratio of 8%).
The Companys existing bank facility has a limit of up to $3.15m (drawn to $0.95m at 31 December 2010).

Dividend Announcement
The Company declared a fully franked interim dividend of 0.30 cents.
This represents a 20% increase on the previous interim dividend of 0.25 cents per share.
The dividend will have a record date of 11 April 2011 and a payment date of 2 May 2011. The Group operates a
dividend reinvestment plan.
Acquisition of Civic Legal
In December 2010 the Company announced the acquisition of Wojtowicz Kelly Legal (WK) under merger
arrangements with the existing member firm Brett Davies Lawyers (incorporating Law Central) (BDL).
WK is an established and well regarded Perth CBD based commercial law firm delivering services to
commercial enterprises and private individuals predominantly in Western Australia, but also to enterprises based
in Southeast Asia with Australian interests.
WK was established in 1994 and has developed a range of legal services including corporate and commercial,
property, litigation, family, migration advice, local government law and settlements (conveyancing).
WK also has an office in Rockingham south of Perth, and a representative office in Singapore.
The firm consists of three Partners, Gavan Kelly, Anthony Quahe and John Wojtowicz, with 40 staff and annual
fee income of approximately $5.3m.

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WK has merged (completion 1 February 2011) with existing member firm BDL, with the merged firm having
four Principals, approximately 54 staff and annual fee income of more than $7.5m.
BDL has operated in the Perth CBD for over 15 years and is a specialist in tax, succession planning, estate
planning and superannuation. BDL has a national client base and focuses on accountants, financial planners and
lawyers.
BDL incorporates the Companys Law Central division, an internet based business providing on line purchase
of legal documents since 2000. Law Central provides preparation and publishing of documents as well as an
information service, predominantly for do it yourself users.
The merged business will trade as Civic Legal while Law Central will retain its brand. The four Principals
(Anthony Quahe, Brett Davies, Gavan Kelly, and John Wojtowicz), all of whom are committed to growing the
merged business within the Integrated Group, will act as the senior management team for the business.
Under the merger plans, the Companys existing BDL business has been relocated and integrated into the nearby
offices of WK.
The transaction is consistent with Integrateds strategy of supporting the growth and expansion of a limited
number of core member firms into major businesses with competitive advantages through the scope and scale of
their operations, as part of a listed group.
WK is a quality business with strong growth prospects and that the merger will provide a platform for further
growth. In particular, the Company expects to generate earnings improvements through cross referral of client
matter opportunities.
The transaction is expected to be materially earnings per share positive in the 2012 financial year and will
enhance the Companys growth prospects.
The transaction will not add materially to earnings per share in the second half 2010/11. Generally, the initial
trading period of an acquisition will not provide a material profit contribution. Specifically, this initial trading
period will involve an element of acquisition cost including stamp duty, audit and legal costs, integration
expenses and include accounting adjustments on acquisition.
Under the Integrated model, the Company does not acquire debtors and work in progress as part of the
acquisition. Consequently, the Company will invest funds from operations in the build-up of working capital
(including debtors and work in progress) post acquisition to normal levels. As a result, net operating cash flows
of the Company are expected to be significantly lower in the second half of 2010/11.
Outlook
The Directors consider that the Company is well placed for the future, in particular noting:

The Company has good businesses with strong market positions and growth prospects.

The Company is successfully building a strong culture of like-minded people, with common aspirations for
above market growth, business improvement and working together.

The Company has demonstrated an ability to achieve strong and consistent revenue growth.
Integrated was nominated the fastest growing legal firm by fee income in Australia in 2009 and second
fastest growing in 2010 (Source: Australasian Legal Business), and ranked 5th in the 2010 BRW Magazine
Fast Starters.

Organic and acquisition growth opportunities for the Group and for member firms. There are strong tail
winds helping to drive the advancement of the Company.

The Company has a strong balance sheet and available funding for further growth.

Scope for business performance improvement in all member firms, providing an opportunity for the
increased profitability over time.

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In particular, an opportunity exists to increase profitability by achieving increased scale at both a Group and
member firm level.
At a Group level this means securing more member firms to share the fixed overhead burden of the
Corporate office.
And at a member firm level, this means achieving organic and acquisition growth to utilise existing
premises, and to share the management and infrastructure costs that these firms now have in place.
The Directors believe that long-term competitive advantage can be achieved by the Company in supporting
member firms in developing scale to underpin future growth and profitability.
The Companys priorities for the period ahead remain unchanged:

Working with existing member firms for continued growth and development.
This includes organic revenue growth and continued business improvement, specifically with a focus on
business leadership and management, best practice development and working capital management.

Extending the Groups geographic coverage to build scale selectively adding to the network as
opportunities present.

The Directors remain confident in the outlook for the Company given the strength and underlying quality of its
member firms, the significant opportunity for organic growth and improved performance in these firms, and the
significant potential to grow by selective acquisition as part of the strategy of developing a national network of
legal services businesses.
The effective delivery of the Companys stated strategy of developing a national network of leading medium
sized law firms will take time. The Company remains focused on incrementally and selectively acquiring good
businesses with like-minded people and working with them towards quality and sustainable growth and
improvement.
The outlook for the Group is positive and the Directors expect the Company to achieve earnings per share
growth for 2010/11, providing reasonable business conditions continue for the second half.

For further information contact:


Graeme Fowler - Managing Director
Mobile - 0419 746 618
Office - 02 8263 6601
Email Graeme@ilh.com.au

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