073.ASX IAW March 22 2010 14.40 Presentation by Man.Dir. Fowler

8/9/2019 073.ASX IAW March 22 2010 14.40 Presentation by Man.Dir. Fowler

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Presentation by Mr Graeme FowlerManaging Director

March 2010

publicly available information, as disclosed by the Company to the Australian Securities Exchange from time to time.


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Disclaimer

This presentation has been prepared by Integrated Legal Holdings Limited (IAW). The information in this presentation is

.

This presentation is not an offer or invitation for subscription or purchase of securities or a recommendation with respect to

any security. Information in this presentation should not be considered advice and does not take into account the investment

objectives, financial situation and particular needs of an investor. Before making an investment in IAW, any investor should

consider whether such an investment is appropriate to their needs, objectives and circumstances and consult with an

investment adviser if necessary. Past performance is not a reliable indication of future performance.

IAW has prepared this presentation based on information available to it. No representation or warranty, express or implied, is

, , ,

presentation. To the maximum extent permitted by law, none of IAW, its directors, employees or agents, nor any person

accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any

other person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

This presentation may contain forward looking statements that are subject to a range of risk factors and uncertainties. Whilst

the statements are considered to be based on reasonable assumptions, the statements themselves and the assumptions upon

which they are based may be affected by a range of circumstances which could cause actual results to differ significantly from

the results expressed or implied in these forward looking statements.

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A enda

The Last 12 Months

Financial Performance

Business Overview & Strate

Priorities & Outlook

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The Last 12 Months

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The Last 12 Months

Difficult & Challenging Year

Global Financial Crisis (GFC)

Small Company with New Business Model/Strategy

Large Acquisitions Relative to Size

Consolidation

Pleasing 1H10

Improved performance

Continued operational improvement

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Financial Performance

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Revenue Stron l Hi her

51%Growth

2H08$m

10.5 mths 08$m

1H09$m

2H09$m

FY09$m

1H10$m

Operating Revenue 6.18 10.69 7.59 9.36 16.95 11.59

Organic and acquisition driven growth

FY10 revenue guidance of at least $21m

Develo in a track record of stron & consistent revenue rowth

Growth

Fastest growing legal firm by fee income in Australia 2009(Source: Australian Legal Business December 2009)

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Continued Profitabilit

2H08$000s

10.5 months

2008$000s

1H09$000s

2H09$000s

FY09$000s

1H10$000s

Reported Net Profit 649 1,544 897 (303) 594 711

Reported EPS 1.12 cents 2.66 cents 1.38 cents(0.45)cents

0.89 cents1.03

cents

2008 comparatives reflect abnormal trading

Initial trading period; new corporate management appointed May 2008

FY09

Part year effect of foundation Principal remuneration changes & Perth rent increases

Impact of GFC June 2009 quarter revenues below expectations; increases in bad debts

Law Central accounting impairment charge 2H09 $450,000

Immaterial 2H09 contribution from new acquisitions as expected

1H10 - includes 2008 tax refund $325k

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O eratin Cash Outflows1H10

$m

FY09

$m .

Includes: Working capital impact of new acquisitions Maiden tax a ment

(1.53)0.96

FY09

+ 2008 tax refund 0.32

Acquisitions Organic growth

GFC

FY09 acquisit ions very material New business acquisitions adversely impact short term operating cash flows

FY10 Room for continued improvement of cash flow management

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Dividends

Dividend Policy

Dividends declared after consideration of Company performance & investment opportunities

Recommencement of dividends to shareholders

Interim dividend 0.25 cents per share fully franked 1H10

Record Date - 10 March 2010

-

Dividend Reinvestment Plan

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Detailed O eratin Performance

1H10 FY09

Operating Revenue $m 11.59 16.95

Revenue from Firms $m 11.58 16.79

Total Net Contribution from Firms $m 1.30 3.13

Contribution Margin from Firms 11.2% 18.6%Less: Corporate Expenses $m (0.64) (1.52)

Less: Finance Costs $m (0.09) (0.06)

Less: Impairments $m (0.00) (0.45)

Net Profit Before Tax $m 0.57 1.10

Less: Taxation $m 0.14 (0.51)

Net Prof it After Tax $m 0.71 0.59

EPS cps 1.03 0.89

DPS (ful ly f ranked) cps 0.25 0.0

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Balance Sheet Extract

31 Dec 2009 30 Jun 2009

$000s $000s

Cash 250 600

Trade & other receivables 5,447 4,965NAB Working Capital Facility

or n rogress , ,

Total current assets 8,365 7,587

Goodwill 10,241 10,372

Up to $3.35m Drawn to $1.85m

(March 2010) Gearing 13%

- , ,

Total assets 20,542 19,281

Total current liabilities 4,317 3,799

-

Capital Structure

, ,

Total liabilities 5,960 5,419

Net Assets 14,582 13,862

NTA er share c s 5.87 4.89

Shares outstanding - 69.4m Board/employees own 60%

approx. Approx. 950 shareholders

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Business Overview & Strategy

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The Australian Le al Industr

Big 6-10 firms dominate large company market IMPLICATIONS No market leader in mid market, SME & HNW

client segments

Medium sized law fi rms headcount 30-60

Opportunity to develop and

grow a national network of

Difficult to attract and retain good lawyers

Hard to provide broad services to clients

Hard to achieve growth (capital)

Over 11,000 law firmsIn Australia.

Opportunity for leadership

of mid, SME & HNW

oung awyers re uc an o uy n opartnership

Some owners seeking a value for their

business

.sized firms

markets

Pipeline of tuck-in

acquisitions Small sized fi rms headcount < 20

Hard to compete staff, training, resources,growth

Opportunity to improve

from cottage industry

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Top 30 Australian Law Firms by Revenue 2009

Rank Firm Revenue

1 Mallesons 553

2 Freehills 493

10 Baker McKenzie 15515 Slater & Gordon 103

oray gnew

25 Thomson Playford 48

30 Ho oodGanim 29

Source BRW October 2009

ILH (current run rate) 21

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Business Overview

IAW listed on ASX in August 2007 with the goal of developing a national network ofleading law firms in the capital cities and other key centres across Australia

,specialist areas including superannuation, tax and estate planning, and employment law

Presently:

4 legal services businesses

55 lawyers 4 offices

Shares on issue 69.4m

Share price (19 March 2010) 13.5

Market capitalisation $9.4m

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.

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Developing a National Network

Law Central(Internet Based)

Talbot Olivier(Perth WA)

e rgy e ar ners p(Sydney NSW &Melbourne - VIC)

Brett Davies Lawyers(Perth WA)

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Range of services

Corporate & Commercial

Commercial Litigation

Wealth Management/Protection

Su erannuation

Insurance Services

Media & Defamation

Taxation Litigation

Taxation Adviceisory

ts

Banking & Finance

Franchising

Government Services

Taxation Audits

Estate Planning & Wills

Succession PlanningsAd

v

teCli

e

Insolvency

Workplace Relations

Family

Property

u

sine

Priva

Business Succession

Taxation Litigation

Taxation Advice

Employment/Workplace

Criminal

On-line legal document publishing

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Strate

Consolidate a national footprint through key geographic centres

Network of leading

Target the mid market, SME and high net worth client markets

legal servicesbusinesses

1. ACQUIRE 2. GROW 3. DEVELOP15-20 member firms Above market rates Improvement

Broadl based firms rovide some resilience to economic c cle

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Ac uisition Tem late

Cultural fit

Attitude & objectives of Principals (Partners)

Commitment to growth, improvement & working together

and

incrementalapproach to

Multiple of maintainable earnings

Net of ongoing Principal (Partner) base salary

Acquisition Cash and shares

Employment conditions/restraints

ransac onstructure

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Business Model

Freedom within boundaries Firms retain brand

Firms continue to develop strategy & manage the business

Focus on revenue growth and margin improvement; not cost cutting or centralisation

Performance based remuneration Profit share to incentivise growth in revenue & earnings

Corporate

Provides boundaries strategic, financial, risk Support in management improvement & best practices

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Value Proposition building a better law firm

Traditional Law Firm Model Integrated Model (ILH)

Goodwill value of the business Locked in the business Unlocked for the benefit of the Partners; multiple of maintainable earnings

Working capital Locked in the business Released to the Partners capital for growth & investment funded by ILH going

Professional liability Joint liability for the Partners Partners are employees, professional liability assumed by ILH

Other personal financialobligations, commitments, andrisks of Partners

Can be substantial Absorbed by ILH

Business ownership Equity Partnership Freedom within boundaries provides continued ownership of the business,without financial obligation & risksListed company share ownership

Partner - remuneration & Partner drawings Employee base salaryncen ve ro are ncen v ses grow , mprovemen wor ng oge er

Growth & improvement Limited by management resources& financial commitment of Partners

ILH provides profit share incentive, focus, improved processes & best practices

Staff opportunities,develo ment trainin

Limited by personal financialresources of Partner

Availability of resources & funding, and the focus on growth & scale providesenhanced career & develo ment ros ects,

Difficult to attract & retain goodlawyers

Culture, network, knowledge sharing, secondments & transfers

Scale Limited by personal financialresources of Partners

ILH funding provides the opportunity for scale advantage size, range ofservices, procurement

National Network Only as part of a nationalpartnership

Benefits of National Network whilst maintaining firm brand &management/ownership

Benchmarking, National relationships , tenders, cross selling

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2010 PRIORITIES & OUTLOOK

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2 Years on ... we are well laced

Good businesses with strong positions in local markets

Building a strong culture like-minded people; common aspirations

Model is starting to work

Scope for business improvement

Growth opportunities

Achieve scale to drive profi t growth

Strategy delivery will take time slowed by GFC

Good medium to long term prospects

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Priorities

Continued growth & improvement of existing member firms

Build scale in member firms

Improve cash flow management

Expansion of services

Extend geographic coverage

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Outlook

Continuing effects of GFC is tempering FY10 Full year effect of cost base changes

Last years acquisitions performing well

FY10 revenues at least $21m

24% growth

Assumes no acquisitions

Opportunities for organic & acquisition growth

Prevailing industry issues creating opportunities

arge m acqu re ee ncome p.a.

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Contact Details

Graeme FowlerManaging Director

Level 22, 1 Market Street

Sydney NSW 2000

Phone (02) 8263 6601

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073.ASX IAW March 22 2010 14.40 Presentation by Man.Dir. Fowler

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