116.asx iaw feb 25 2011 08.20 half yearly report and accounts

8/9/2019 116.ASX IAW Feb 25 2011 08.20 Half Yearly Report and Accounts

1/31

INTEGRATEDLEGALHOLDINGSLIMITED

ACN120394194

ASXAppendix4D

RESULTSFORANNOUNCEMENTTOTHEMARKET

Currentreportingperiod: Halfyearended31December2010

Previouscorrespondingperiod: Halfyearended31December2009

EARNINGS

Percentage

change

UP(+)/DOWN()

Amount

$A

Revenuefromordinaryactivities +18% 13,616,834

Profitfromordinaryactivitiesaftertaxattributable

tomembers+96% 755,906

Netprofitfortheperiodattributabletomembers +96% 755,906

DIVIDENDS

Amount

pershare

Frankedamount

pershareat30%

2011Interimdividend 0.30cents 0.30cents

Correspondingperiod 0.25cents 0.25cents

Recorddatefordeterminingentitlementstothe

2011interimdividend 11April2011

Paymentdate

for

the

2011

interim

dividend

2May

2011

TheCompanyoperatesadividendreinvestmentplan(DRP). Furtherdetailsaredisclosedin

theinterimdividenddetailssectionofthisreport.

DRPdiscountrate 5%

LastdateforreceiptofDRPelectionnoticesforthe

2011interimdividend 18April2011

EARNINGS

PER

SHARE

Percentage

change

UP(+)/DOWN(

)

31Dec2010

31Dec2009

Basicanddilutedearningspershare +54% 0.86 0.56

NETTANGIBLEASSETBACKING

Percentage

change

UP(+)/DOWN()

31Dec2010

31Dec2009

Nettangibleassetbackingper

security+19% 6.98 5.87


2/31


ACN120394194

ASXAppendix4D

RESULTSFORANNOUNCEMENTTOTHEMARKET

Consolidated operating revenues of $13,616,834 were 18% higher than the previous

correspondinghalfyearperiodof$11,588,400operatingrevenues. Revenuefromordinary

activitiesincreasedduetoorganicgrowthwithinexistingmemberfirms.

Thefollowingtablesummarisesresultsfortheperiod,theFullYear2010,andeachofthe

halfyearsof2010.

RESULTSSUMMARY

FirstHalf

2011

$m

FullYear

2010

$m

SecondHalf

2010

$m

FirstHalf

2010

$m

Operatingrevenue 13.62 23.87 12.28 11.59

Netprofitaftertax 0.76 0.85 0.47 0.38

Earningspershare 0.86cents 1.18cents 0.62cents 0.56cents

Dividendpershare 0.30cents 0.75cents 0.50cents 0.25cents

Operatingcashinflows 1.03 1.45 1.26 0.19

Nettangibleassetbackingpershare 6.98cents 6.54cents 6.54cents 5.87cents

Debt/equityratio 8% 11% 11% 18%

Forthe

half

year

ended

31

December

2010,

the

consolidated

entity

generated

anet

profit

after tax of $755,906 compared to a full year 2010 net profit after tax of $853,494,

$467,731 forthehalfyearended30 June2010andahalfyearended31December2009

netprofitaftertaxof$385,763.

Earningspersharefortheperiodwere0.86centspershare,comparedtotheyearended

30 June 2010 of 1.18 cents (30 June 2010 halfyear: 0.62 cents; 31 December 2009 half

year:0.56cents).

TheGrouphasdeclaredafully franked interimdividendof0.30centswithrespecttothe

financialyearended30 June2011 (2010 interimdividend:0.25cents). Thedividendwill

have

a

record

date

of

11

April

2011

and

a

payment

date

of

2

May

2011.

The

Group

operatesadividendreinvestmentplan.

Thegroupdoesnothaveanyinterestsinassociatesoutsidethegroup,nordoesithaveany

interestinjointventures.

Further information is included in the Directors Report within the HalfYear Financial

Report.


3/31


ACN120

394

194

(ASX:IAW)

HalfYearFinancialReport

forthehalfyearended31December2010


4/31


FINANCIALREPORTFORTHEHALF-YEARENDED

31DECEMBER2010

ACN120394194

Contents

Corporateinformation.............................................................................................................1

Directorsreport......................................................................................................................2

Consolidatedstatementoffinancialposition..........................................................................6

Consolidatedstatementofcomprehensiveincome................................................................7

Consolidatedstatementofcashflows.....................................................................................8

Consolidatedstatementofchangesinequity.........................................................................9

Notesto

the

consolidated

financial

statements

....................................................................

10

Directorsdeclaration............................................................................................................24

Auditorsindependencedeclaration.....................................................................................25

Independentauditorsreviewreport....................................................................................26


5/31



31DECEMBER2010

ACN120394194

CorporateInformation

1

ABN20

120

394

194

Directors

TheHonJohnDawkins,Chairman

AnneTregonning,NonexecutiveDirector

GraemeFowler,ManagingDirector/ChiefExecutive

CompanySecretary

JeanMarieRudd

Registeredoffice

Level8,

Wesfarmers

House

40TheEsplanade

Perth WA 6000

Principalplaceofbusiness

HeadOffice

Level22

1MarketStreet

Sydney NSW 2000

Tel: (02)82636600

Share

Register

ComputershareInvestorServicesPtyLimited

Level2

45StGeorgesTerrace

Perth WA 6000

Tel: (08)93232000

IntegratedLegalHoldingsLimitedsharesarelistedontheAustralianStockExchange.

Solicitors

TalbotOlivier ArgyleLawyers

Level

8,

Wesfarmers

House

Level

22

40TheEsplanade 1MarketStreet

Perth WA 6000 Sydney NSW 2000

Bankers

NationalAustraliaBankLimited

50StGeorgesTerrace

Perth WA 6000

Auditor

Ernst&Young

11

Mounts

Bay

Road

Perth WA 6000


6/31



31DECEMBER2010

ACN120394194

DirectorsReport

2

The

directors

of

Integrated

Legal

Holdings

Limited

(the

Company)

submit

the

halfyear

financial

reportforthehalfyearended31December2010.

DIRECTORS

ThenamesoftheCompanysdirectorsinofficeduringthehalfyearanduntilthedateofthisreport

aresetoutbelow. Directorswereinofficeforthisentireperiodunlessotherwisestated.

TheHonJohnDawkinsAO(NonexecutiveChairman)

AnneTregonning(NonexecutiveDirector)

GraemeFowler(ManagingDirector)

REVIEWAND

RESULTS

OF

OPERATIONS

Consolidatedoperatingrevenuesof$13,616,834were18%higherthanthepreviouscorresponding

halfyearperiodof$11,588,400operatingrevenues. Revenuefromordinaryactivitiesincreaseddue

toorganicgrowthwithinexistingmemberfirms.

Thefollowingtablesummarisesresultsfortheperiod,theFullYear2010,andeachofthehalfyears

of2010.

RESULTSSUMMARY

FirstHalf

2011$m

FullYear

2010$m

SecondHalf

2010$m

FirstHalf

2010$m

Operatingrevenue 13.62 23.87 12.28 11.59

Netprofitaftertax 0.76 0.85 0.47 0.38

Earningspershare 0.86cents 1.18cents 0.62cents 0.56cents

Dividendpershare 0.30cents 0.75cents 0.50cents 0.25cents

Operatingcashinflows 1.03 1.45 1.26 0.19

Nettangibleassetbackingpershare 6.98cents 6.54cents 6.54cents 5.87cents

Debt/equityratio 8% 11% 11% 18%

Forthehalfyearended31December2010,theconsolidatedentitygeneratedanetprofitaftertax

of$755,906

compared

to

afull

year

2010

net

profit

after

tax

of

$853,494,

$467,731

for

the

half

yearended30June2010andahalfyearended31December2009netprofitaftertaxof$385,763.

Earningspershare fortheperiodwere0.86centspershare,comparedtotheyearended30 June

2010of1.18cents(30June2010halfyear:0.62cents;31December2009halfyear:0.56cents).

Operating cash flows for the period were positive at $1,029,230, compared with operating cash

inflowsof$1,448,173forthefullyear2010and$190,150forthe31December2009halfyear.

The Company has maintained a strong balance sheet with bank loans of $0.95m at 31 December

2010(30June2010:$0.95m;31December2009:$1.85m). Thisrepresentsadebttoequityratioof

8%

(30

June

2010:

11%;

31December

2009:

18%).

The

Companys

existing

working

capital

bank

facilityhasalimitofupto$3.15m.


7/31



31DECEMBER2010

ACN120394194

DirectorsReport

3

TheGroup

has

declared

afully

franked

interim

dividend

of

0.30

cents

with

respect

to

the

financial

yearended30June2011(2010interimdividend:0.25cents). Thedividendwillhavearecorddateof

11April2011andapaymentdateof2May2011. TheGroupoperatesadividendreinvestmentplan.

The dividend policy of the Company is that dividends will be declared after consideration of the

performanceoftheCompanyincludingcashflowsandfutureinvestmentopportunities.

TheDirectorsarepleasedwiththefirsthalfresultsandwiththecontinuedstrategicandoperational

progressthathasbeenmade.

Theperiodwashighlightedbycontinuedstrongorganicgrowthgeneratedbythememberfirms.

ACQUISITIONOFWOJTOWICZKELLYLEGAL

InDecember2010theCompanyannouncedtheacquisitionofWojtowiczKellyLegal (WK)under

merger arrangements with the existing member firm Brett Davies Lawyers (incorporating Law

Central)(BDL).

WKisanestablishedandwellregardedPerthCBDbasedcommerciallawfirmdeliveringservicesto

commercial enterprises and private individuals predominantly in Western Australia, but also to

enterprisesbasedinSoutheastAsiawithAustralianinterests.

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).

WKalsohasanofficeinRockinghamsouthofPerth,andarepresentativeofficeinSingapore.

ThefirmconsistsofthreePartners,GavanKelly,AnthonyQuaheandJohnWojtowicz,with40staff,

andannualfeeincomeofapproximately$5.3m.

WK will merge with existing member firm BDL, with the merged firm having four Principals,

approximately54staffandannualfeeincomeofmorethan$7.5m.

The

Directors

expect

the

transaction

to

be

materially

EPS

positive

in

the

2012

financial

year

and

will

enhancetheCompanysgrowthprospects.

InaccordancewiththeCompanysacquisitionmodel,debtorsandworkinprogressarenotacquired

aspartoftheacquisition.Consequently,theDirectorsnotethattheCompanywillinvestfundsfrom

operations in the build up of working capital (including debtors and work in progress) to normal

levelspostacquisition.

OUTLOOK

TheDirectorsconsidertheCompanytobewellplacedforthefuture,inparticularnoting:

The

Company

has

good

businesses

with

strong

market

positions

and

growth

prospects.

The Company is successfully building a strong culture of likeminded people with common

aspirationsforabovemarketgrowth,businessimprovementandworkingtogether.


8/31



31DECEMBER2010

ACN120394194

DirectorsReport

4

TheCompanyhasdemonstratedanabilitytoachievestrongandconsistentrevenuegrowth.

IntegratedLegalHoldingsLimitedwasnominatedthefastestgrowinglegalfirmbyfeeincomein

Australia in2009andthesecond fastestgrowing legal firm in2010 (source:AustralasianLegal

Business). Additionally,theGroupwasrankedfifthinBRWsThe2010FastStartersList.

OrganicandacquisitiongrowthopportunitiesfortheGroupandformemberfirms.

TheCompanyhasastrongbalancesheetandavailablefundingforfurtheracquisitions.

Scopefor

business

performance

improvement

in

all

member

firms,

providing

an

opportunity

for

theCompanytoincreaseprofitabilityovertime.

Inparticular,anopportunityexiststoincreaseprofitabilitybyachievingincreasedscaleatbotha

Groupandmemberfirmlevel.

Atagrouplevelthismeanssecuringmorememberfirmstosharethefixedoverheadburdenof

Corporate. And,atamemberfirmlevel,thismeansachievingorganicandacquisitiongrowthto

utiliseexistingpremises,andtosharethemanagementandinfrastructurecoststhatthesefirms

nowhaveinplace.

TheDirectors

consider

that

long

term

competitive

advantage

can

be

achieved

by

the

Company

in

supportingmemberfirmsindevelopingscaletounderpinfuturegrowthandprofitability.

TheeffectivedeliveryoftheCompanysstatedstrategyofdevelopinganationalnetworkofleading

medium sized law firms will take time. The Company remains focused on incrementally and

selectivelybuyinggoodbusinesseswithlikemindedpeopleandworkingwiththemtowardsquality

andsustainablegrowthandimprovement.

Consistent with this position, the outlook for the Group is positive and the Directors expect the

Companytoachieveearningspersharegrowth for2011,providingreasonablebusinessconditions

continueforthesecondhalf.


9/31



31DECEMBER2010

ACN120394194

DirectorsReport

5

AUDITORSINDEPENDENCEDECLARATION

A copy of the auditors independence declaration in relation to the review for the halfyear is

providedonpage25andformspartofthisreport.

Signedinaccordancewitharesolutionofthedirectors.

GFowler

ManagingDirector

Perth,24February2011


10/31



31DECEMBER2010

ACN120394194

ConsolidatedStatementofFinancialPosition

TheaboveConsolidatedStatementofFinancialPositionshouldbereadinconjunctionwiththe

accompanyingnotes.

6

Consolidated Consolidated

Note

Asat

31Dec2010

Asat

30June2010

ASSETS $ $

Currentassets

Cashandcashequivalents 5 2,118,898 2,151,449

Tradeandotherreceivables 6 6,888,519 7,538,870

Workinprogress 1,669,072 1,353,354

Totalcurrentassets 10,676,489 11,043,673

Noncurrent

assets

Plantandequipment 1,152,899 1,181,314

Prepayments 29,230 29,230

Goodwill 7 10,470,600 10,470,600

Intangibleassets 8 47,520 65,340

Deferredtaxassets 149,420 101,089

Availableforsalefinancialassets 3,274 2,642

Totalnoncurrentassets 11,852,943 11,850,215

TOTALASSETS 22,529,432 22,893,888

LIABILITIES

Currentliabilities

Tradeandotherpayables 2,903,394 3,317,157

Interestbearingloansandborrowings 9 1,212,205 1,573,325

Incometaxpayable 341,864 177,524

Provisions 727,217 687,057

Otherliabilities 10 82,489 279,933

Totalcurrentliabilities 5,267,169 6,034,996

Noncurrentliabilities

Tradeandotherpayables 37,554 75,107

Interestbearingloansandborrowings 9 176,082 260,913

Provisions

240,198

197,350Otherliabilities 10 86,364 127,608

Totalnoncurrentliabilities 540,198 660,978

TOTALLIABILITIES 5,807,367 6,695,974

NETASSETS 16,722,065 16,197,914

EQUITY

Issuedcapital 11 32,369,596 32,160,426

Accumulatedlosses (16,612,239) (16,688,184)

Reserves 12 964,708 725,672

TOTALEQUITY 16,722,065 16,197,914


11/31



31DECEMBER2010

ACN120394194

ConsolidatedStatementofComprehensiveIncome

TheaboveConsolidatedStatementofComprehensiveIncomeshouldbereadinconjunctionwith

theaccompanyingnotes.

7


Note

Halfyear

ended

31Dec2010

Halfyear

ended

31Dec2009

$ $

Professionalfeesrevenue 13,537,017 11,566,053

Interestrevenue 78,756 11,996

Dividendsreceived 72 50

Otherrevenue 4 989 10,301

Totalrevenue 13,616,834 11,588,400

Occupancyexpenses (1,091,440) (1,054,668)

Salariesandemployeebenefitsexpenses (8,716,908) (7,788,993)

Depreciationandamortisationexpenses (193,400) (151,887)

Officeexpenses (1,492,467) (1,769,227)

Advertisingandmarketingexpenses (160,364) (118,382)

Otherexpenses (774,690) (36,192)

Interestexpenses (55,198) (87,360)

Sharebasedpaymentsexpense 16 (17,844) (9,702)

Totalexpenses (12,502,311) (11,016,411)

Profitbeforeincometax 1,114,523 571,989

Incometax

expense

(358,617)

(186,226)

Profitafterincometax 755,906 385,763

Netprofitfortheperiod 755,906 385,763

Othercomprehensiveincome

Netgains/(losses)onavailableforsalefinancialassets 631 102

Othercomprehensiveincomefortheperiod,netoftax 756,537 385,865

Totalcomprehensiveincomefortheperiod 756,537 385,865

Basicearningspershare(cents) 0.86 0.56

Dilutedearnings

per

share

(cents)

0.86

0.56


12/31



31DECEMBER2010

ACN120394194

ConsolidatedStatementofCashFlows

TheaboveConsolidatedStatementofCashFlowsshouldbereadinconjunctionwiththe

accompanyingnotes.

8


Note

Halfyear

ended

31Dec2010

Halfyear

ended

31Dec2009

$ $

Cashflowsfromoperatingactivities

Receiptsfromcustomers 15,171,446 11,408,374

Paymentstosuppliersandemployees (13,950,215) (11,371,200)

Interestreceived 78,756 11,996

Sundryincome 1,061 10,337

Interestand

other

costs

of

finance

paid

(29,210)

(58,718)

Incometax(paid)/refund (242,608) 189,361

Netcashflowsfromoperatingactivities 1,029,230 190,150

Cashflowsfrominvestingactivities

Purchaseofplantandequipment (147,166) (743,040)

Proceedsfromthedisposalofplantandequipment - 3,150

Netcashflowsusedininvestingactivities (147,166) (739,890)

Cashflowsfromfinancingactivities

Paymentforshareissueexpenses (3,674) (1,694)

Proceedsfrom

borrowings

-674,664

Repaymentsofborrowings (293,065) (410,767)

Paymentofdividends (441,556)

Netcashflows(usedin)/fromfinancingactivities (738,295) 262,203

Netincrease/(decrease)incashheld 143,769 (287,537)

Cashandcashequivalentsatthebeginningofthe

period 1,948,949 465,875

Cashandcashequivalentsattheendoftheperiod 5 2,092,718 178,338


13/31



31DECEMBER2010

ACN120394194

ConsolidatedStatementofChangesinEquity

TheaboveConsolidatedStatementofChangesinEquityshouldbereadinconjunctionwiththe

accompanyingnotes.

9

CONSOLIDATED

Issued

Capital

Accumulated

Losses

Net

Unrealised

GainsReserve

General

Reserve

Total

Equity

$ $ $ $ $

At1July2009 30,504,813 (16,641,034) (1,373) 13,862,406

Profitfortheperiod 385,763 385,763

Othercomprehensive

income 102 102

Totalcomprehensive

incomefor

the

period

385,763 102

385,865

Transactionswithowners

intheircapacityasowners

Transfertogeneralreserve (727,113) 727,113

Transactioncostsonshare

issue (1,694) (1,694)

Sharebasedpayments 9,702 9,702

Balanceasat31December

2009 30,512,821 (16,982,282) (1,271) 727,113 14,256,279

CONSOLIDATED

Issued

Capital

Accumulated

Losses

Net

Unrealised

GainsReserve

General

Reserve

Total

Equity

$ $ $ $ $

At1July2010 32,160,426 (16,688,184) (1,441) 727,113 16,197,914

Profitfortheperiod 755,906 755,906

Othercomprehensive

income 631 631

Totalcomprehensive

incomefortheperiod 755,906 631 756,537

Transactions

with

owners

intheircapacityasowners

Dividendspaid (441,556) (441,556)

Transfertogeneralreserve (238,405) 238,405

Sharesissued 195,000 195,000

Transactioncostsonshare

issue (3,674) (3,674)

Sharebasedpayments 17,844 17,844

Balanceasat31December

2010 32,369,596 (16,612,239) (810) 965,518 16,722,065


14/31



31DECEMBER2010

ACN120394194

NotestotheConsolidatedFinancialStatements

10

1)

CORPORATEINFORMATION

ThegeneralpurposecondensedfinancialreportofIntegratedLegalHoldingsLimited(theCompany)

forthehalfyearended31December2010wasauthorisedforissueinaccordancewitharesolution

oftheDirectorson24February2011. IntegratedLegalHoldingsLimitedisacompanyincorporated

inAustraliaandlimitedbyshares,whicharepubliclytradedontheAustralianStockExchange(ASX).

2)

BASISOFPREPARATIONANDACCOUNTINGPOLICIES

Basisofpreparation

This general purpose condensed financial report for the halfyear ended 31 December 2010 has

beenprepared

in

accordance

with

AASB

134

Interim

Financial

Reporting

and

the

Corporations

Act

2001.

The halfyear financial report does not include all notes of the type normally included within the

annualfinancialreportandthereforecannotbeexpectedtoprovideasfullanunderstandingofthe

financial performance, financial position and financing and investing activities of the consolidated

entityasthefullfinancialreport.

Itisrecommendedthatthehalfyearfinancialreportbereadinconjunctionwiththeannualreport

fortheyearended30June2010andconsideredtogetherwithanypublicannouncementsmadeby

IntegratedLegalHoldingsLimitedanditscontrolledentities(theGroup)duringthehalfyearended

31December

2010

in

accordance

with

the

continuous

disclosure

obligations

under

the

ASX

Listing

Rules.

Thehalfyearfinancialreport isprepared inAustraliandollarsandonahistoricalcostbasis,except

foravailableforsaleinvestments,whichhavebeenmeasuredatfairvalue.

For the purposes of preparing the halfyear financial report, the halfyear has been treated as a

discretereportingperiod.

Significantaccountingpolicies

Apart fromthechanges inaccountingpolicynotedbelow,theaccountingpoliciesandmethodsof

computationare

the

same

as

those

adopted

in

the

most

recent

annual

financial

statements.

Changesinaccountingpolicy

From1 July2010, theGrouphasadoptedallAustralianAccountingStandardsand Interpretations,

mandatoryforannualperiodsbeginningonorafter1July2010. Adoptionofthesestandardsand

interpretationsdidnothaveaneffectonthefinancialpositionorperformanceoftheGroup.

TheGrouphaselectednottoearlyadoptanynewstandardsoramendmentsthatareissuedbutnot

yeteffective.

Basisofconsolidation

The halfyear consolidated financial statements comprise the financial statements of IntegratedLegalHoldingsLimitedanditssubsidiariesasat31December2010.


15/31



31DECEMBER2010

ACN120394194


11

Subsidiariesare

all

those

entities

(including

special

purpose

entities)

over

which

the

Group

has

the

power togovern the financialandoperating policiessoas toobtainbenefits from theiractivities.

Theexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleare

consideredwhenassessingwhetheragroupcontrolsanotherentity.

3)

SEGMENTINFORMATION

Identificationofreportablesegments

TheGrouphasidentifieditsoperatingsegmentsbasedontheinternalreportsthatarereviewedand

used by the executive management team (the chief operating decision maker) in assessing

performanceand

in

determining

the

allocation

of

resources.

The operating segments are identified by management based on how the financial and operating

resultsoftheGrouparemonitoredandpresentedinternallytotheexecutivemanagementteam.

Thereportablesegmentsareidentifiedbymanagementbasedonthenatureofthebusinessandthe

similarities of services provided, method of delivery and type of clients as the Groups risks and

returnsareaffectedpredominantlybydifferencesinlegalproductsandservicesperformed.

Theoperatingbusinessesareorganisedandmanagedseparatelyaccordingtothenatureofthelegal

productsandservicesprovided,witheachsegmentrepresentingastrategicbusinessunitthatoffers

differentlegal

products

and

serves

different

markets.

Thefollowingreportablesegmentshavebeenidentifiedbymanagement:

LegalServicesDivision

OperatoroflegalpracticesthroughoutAustralia

InformationTechnologyDivision

Provides an internet portal designed to provide easy access to a range of legal and other

documentstothe legalprofessionandpublicalikeand informationaboutvariousareasof

law.

Accountingpoliciesandintersegmenttransactions

TheaccountingpoliciesusedbytheGroup inreportingsegments internallyarethesameasthose

containedinnote1totheaccountsandinthepriorperiodexceptasdetailedbelow:

Intersegmentsales

Intersegmentsalesarerecognisedatcostwithnomarginbuiltintotheintersegmenttransactions,

andaimstoencourageintersegmentworkreferrals.

Unallocatedrevenueandassets

Corporateitemsarenotallocatedtooperatingsegmentsastheyarenotconsideredpartofthecore

operationsof

any

segments.


16/31



31DECEMBER2010

ACN120394194


3)SEGMENT

INFORMATION

(continued)

12

Reportablesegments

The following table presents revenue and profit information for reportablesegments for the half

yearsended31December2010and31December2009.

Halfyearended31December2010

Legal

Services

$

Information

Technology

$

Total

$

Revenue

Professionalfees 13,116,222 420,795 13,537,017

Interestrevenue

40,501

40,501

Otherrevenue:

Advertisingrevenue 989 989

Intersegmentrevenue

Totalsegmentrevenue 13,156,723 421,784 13,578,507

Unallocatedrevenue:

Interestreceived 38,255

Dividendsreceived 72

Totalunallocatedrevenue 38,327

Intersegmentelimination

Totalrevenueperstatementof

comprehensiveincome

13,616,834

Result

Segmentresult 1,804,293 133,203 1,937,496

Reconciliationofsegmentnetprofitbeforetax

tonetprofitaftertax

Incometaxexpenseat30%(2009:30%) (358,617)

Unallocateditems:

Interestrevenue 38,255

Salariesandemployeebenefits

expenses (465,639)

Administrativeexpenses

(304,109)

Otherunallocateditems (36,282)

Financecosts (55,198)

Netprofitaftertaxperthestatementof

comprehensiveincome 755,906


17/31



31DECEMBER2010

ACN120394194


3)SEGMENT

INFORMATION

(continued)

13

Totalassetshavedecreasedby3% since the last annual report. Segment assets for thehalfyear

ended31December2010areasfollows:

Asat31December2010

Legal

Services

$

Information

Technology

$

Total

$

Segmentassets

Segmentoperatingassets 19,008,828 2,144,635 21,153,463

Unallocatedassets:

Cashand

cash

equivalents

2,066,246

Deferredtaxassets 131,863

Prepayments 40,558

Investmentinassociates 4

Availableforsalefinancialassets 3,274

Plantandequipment 3,901

Totalunallocatedassets 2,245,846

Intersegmenteliminations (869,877)

Totalassetsperstatementoffinancialposition 22,529,432

Totalassetsforthehalfyearended31December2010hadnotmateriallychangedfromthe30June

2010annual

report

and

therefore

comparatives

for

segment

assets

have

not

been

provided.


18/31



31DECEMBER2010

ACN120394194


3)SEGMENT

INFORMATION

(continued)

14

Halfyearended31December2009

Legal

Services

$

Information

Technology

$

Total

$

Revenue

Professionalfees 11,176,517 389,536 11,566,053

Interestrevenue 526 526

Otherrevenue:

Advertisingrevenue 7,372 7,372

Sundryrevenue 954 1,975 2,929

Intersegment

revenue

5,765

5,765

Totalsegmentrevenue 11,183,762 398,883 11,582,645

Unallocatedrevenue:

Interestreceived 11,470

Dividendsreceived 50

Totalunallocatedrevenue 11,520

Intersegmentelimination (5,765)

Totalrevenueperstatementof

comprehensiveincome 11,588,400

Result

Segmentresult

1,191,118 110,045

1,301,163

Reconciliationofsegmentnetprofitbeforetax

tonetprofitaftertax

Incometaxexpenseat30%(2008:30%) (186,226)

Unallocateditems:

Salariesandemployeebenefits

expenses (406,361)

Officeexpenses (238,379)

Otherunallocateditems 2,926

Financecosts (87,360)

Netprofitaftertaxperthestatementof

comprehensiveincome

385,763

Segmentassets

Segmentoperatingassets 17,843,553 2,155,205 19,998,758

Unallocatedassets:

Cashandcashequivalents 176,256

Deferredtaxassets 245,740

Prepayments 118,723

Investmentinassociates 712,888

Availableforsalefinancialassets 2,794

Plantandequipment 4,161

Totalunallocated

assets

1,260,562

Intersegmenteliminations (717,537)

Totalassetsperstatementoffinancialposition 20,541,783


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31DECEMBER2010

ACN120394194


15

4)

OTHERREVENUE


Halfyear

ended

31Dec2010

Halfyear

ended

31Dec2009

$ $

Sundryincome 989 10,301

5) CASHANDCASHEQUIVALENTS


At31Dec2010

At

30Jun2010

$ $

Cashatbankandinhand 2,118,898 2,151,449


Halfyear

ended

31Dec2010

Halfyear

ended

31Dec2009

$ $

Reconciliation

to

statement

of

cash

flows

Forthepurposesofthestatementofcashflows,cashandcash

equivalentscomprisethefollowingat31December:

Cashatbankandinhand 2,118,898 249,796

Bankoverdrafts (26,180) (71,458)

2,092,718 178,338

6)

TRADEANDOTHERRECEIVABLES


At

31Dec

2010

At

30Jun

2010

CURRENT $ $

Tradereceivables 6,573,069 6,854,442

Allowanceforimpairmentloss(a) (512,018) (133,006)

6,061,051 6,721,436

Unbilledclientdisbursements 257,942 190,847

Prepayments 548,150 589,361

Otherreceivables 21,376 37,226

6,888,519 7,538,870


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31DECEMBER2010

ACN120394194


16

a)

Allowanceforimpairmentloss

Trade receivables are generally noninterest bearing and are generally on 3060 day terms. An

allowance for impairment loss is recognised when there is objective evidence that an individual

trade receivable is impaired. An impairment loss of $551,497 (30 June 2010: $274,365 and 31

December2009:$159,851)hasbeenrecognisedbytheGroupinthecurrentperiodwhich includes

bad debts expense recognised of $172,485 (30 June 2010: $246,197 and 31 December 2009:

$47,241). Theseamountshavebeenrecognised inthestatementofcomprehensive income inthe

lineitemotherexpenses.

Movementsintheallowanceforimpairmentlosswereasfollows:

Consolidated

ConsolidatedAt

31Dec2010

At

30Jun2010

$ $

Openingbalanceatthebeginningoftheperiod 133,006 104,839

Chargefortheperiod 379,012 28,167

Closingbalanceattheendoftheperiod 512,018 133,006

7) GOODWILL

Consolidated Consolidated Consolidated

At31Dec2010 At30Jun2010 At31Dec2009

$ $ $

Openingbalance 10,470,600 10,372,263 10,372,263

Acquisitionofsubsidiary 48,976

Deferredconsideration 98,337

Closingbalance 10,470,600 10,470,600 10,421,239

a)

DescriptionoftheGroupsgoodwill

After initial recognition,goodwillacquired ina businesscombination is measured atcost less any

accumulated impairment losses. Goodwill isnotamortisedbut issubjectto impairmenttestingon

anannualbasisorwheneverthereisanindicationofimpairment.


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31DECEMBER2010

ACN120394194


17

8)

INTANGIBLEASSETS

a) Reconciliationofcarryingamountsatthebeginningandendoftheperiod


At

31Dec2010

At

30Jun2010

At

31Dec2009

$ $ $

Openingbalance

(netofaccumulatedamortisation) 65,340 100,980 136,620

Amortisation

(17,820)

(35,640)

(53,460)Closingbalance

(netofaccumulatedamortisation) 47,520 65,340 83,160


At

31Dec2010

At

30Jun2010

At

31Dec2009

$ $ $

Cost(grosscarryingamount) 163,254 163,254 163,254

Accumulatedamortisation (115,734) (97,914) (80,094)

Netcarrying

amount

at

the

end

of

the

period

47,520

65,340

83,160

b) DescriptionoftheGroupsidentifiedintangibleassets

Intangibleassetsrepresentthevalueof leasedpremisesacquiredupontheacquisitionofthe legal

practiceofPeterMarks in the30 June2008 financial yearand iscarriedatcost lessaccumulated

amortisation. This intangibleassethasbeenassessedashavingafinite lifeand isamortisedusing

the straight line method over the remaining term of the lease. The amortisation has been

recognised in the statement of comprehensive income in the line item depreciation and

amortisationexpenses.

9)

INTERESTBEARING

LOANS

AND

BORROWINGS


At

31Dec2010

At

30Jun2010

$ $

CURRENT

Bankoverdraft 26,180 202,500

Obligationsunderfinanceleasesandhirepurchasecontracts 167,649 176,811

Insurancepremiumfunding(unsecured) 68,376 244,014

Bankloan(secured) 950,000 950,000

1,212,205

1,573,325

NONCURRENT

Obligationsunderfinanceleasesandhirepurchasecontracts 176,082 260,913


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31DECEMBER2010

ACN120394194


18

10)

OTHERLIABILITIES


At

31Dec2010

At

30Jun2010

$ $

CURRENT

Deferredconsiderationpayable 197,444

Leaseincentiveobligation(1) 82,489 82,489

82,489 279,933

NONCURRENT

Leaseincentiveobligation(1) 86,364 127,608

(1) Operating lease incentives are recognised as a liability when received and subsequently reduced by allocating lease

paymentsbetweenrentalexpenseandreductionofthe liabilitytoensurerentalexpense isrecognisedonastraight

linebasisovertheleaseterm.

11)

ISSUEDCAPITAL

a) Ordinaryshares

Consolidated Consolidated Consolidated Consolidated

31Dec2010 30Jun2010 31Dec2010 30Jun2010

Shares Shares $ $

Fullypaidshares 88,037,999 86,139,666 32,317,671 32,126,345

Partlypaidshares(1) 856,217 371,667 51,925 34,081

Forfeitedsharesheldintrust(2) (26,667)

88,894,216 86,484,666 32,369,596 32,160,426

(1)SharesissuedundertheDeferredEmployeeSharePlanthatvestoverthreeyears(note16).

(2)SharesissuedbutforfeitedundertheDeferredEmployeeSharePlan,heldintrust(note16).

b)

Movementsinordinarysharecapital

Consolidated Shares $

Openingbalanceasat1July2010 86,484,666 32,160,426

IssueofsharesundertheDeferredEmployeeSharePlan

(refernote16) 484,550 17,844

Issue of shares at 10 cents per share to vendors of The

Argyle Partnership Lawyers in final satisfaction of

deferredconsiderationpayableon22September2010 1,800,000 180,000

Issueofsharesat12centspershare inpartsatisfaction

of2010

Principal

profit

share

entitlement

125,000

15,000

Costsassociatedwithissuingshares (3,674)

Balanceasat31December2010 88,894,216 32,369,596


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31DECEMBER2010

ACN120394194


19

Consolidated Shares $

Openingbalanceasat1July2009 69,346,178 30,504,813

Costsassociatedwithissuingshares (1,694)

IssueofsharesundertheDeferredEmployeeSharePlan

(refernote16) 66,667 9,702

Balanceasat31December2009 69,412,845 30,512,821

12)RESERVES


At

31Dec2010

At

30Jun2010

$ $

Netgains/(losses)onavailableforsalefinancialassets(a) (810) (1,441)

Generalreserve(b) 965,518 727,113

964,708 725,672

a)

Netunrealisedgainsreserve

Thisreserverecordsmovementsinthefairvalueofavailableforsalefinancialassets.

b)

Generalreserve

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

establishmentofaGeneralReserve.

During the period, $238,405, representing trading profits for the year ended 30 June 2010 less

dividendspaid,wastransferredtotheGeneralReservefromAccumulatedLosses.

AccumulatedlossesincurredpriortolistingoftheCompanyandcommencementoftradingactivities

arosefrom

the

following

transactions:

(a)

impairment losses incurredonshares issuedtovendorsofTalbotOlivierBusinessAssets,Brett

DaviesLawyersBusinessAssetsandLawCentralCoPtyLtdshareholderson29August2006;and

(b)

Sharebasedpaymentsexpenses forshares issuedatadeemedvalueof50centspershareto

directorsandsupporterson29August2006and28February2007.

13)

CONTINGENTLIABILITIESANDCONTINGENTASSETS

Therearenocontingentliabilitiesorassetsasat31December2010.


24/31



31DECEMBER2010

ACN120394194


20

14)

SUBSEQUENTEVENTS

a) AcquisitionoflegalpracticeofWojtowiczKellyLegal

On1February2011theCompanyacquiredthelegalpracticeofWojtowiczKellyLegal(incorporating

CivicLegal,theSimpsonKellyGroup,GibsonTovey&Associates,AllPropertyConveyancingandJan

Simpson Settlements) under merger arrangements with the existing member firm Tax Lawyers

AustraliaPtyLtdtradingasBrettDaviesLawyers.

The merged business will trade as Civic Legal. The four Principals (Anthony Quahe, Brett Davies,

Gavan Kelly, and John Wojtowicz), all of whom are committed to growing the merged business

withinthe

Integrated

Group,

will

act

as

the

senior

management

team

for

the

business.

Underthemergerplans,theCompanysexistingBDLbusinesswillberelocatedandintegratedinto

thenearbyofficesofWojtowiczKellyLegal.

TheDirectorsexpectthetransactiontobemateriallyEPSpositiveinthe2012financialyearandwill

enhancetheCompanysgrowthprospects.

The consideration for the transaction is a combination of the issue of 5.7m shares on 1 February

2011 and an upfrontcash paymentof$924,000 (funded from surpluscash reserves). $125,000 in

deferredcashconsiderationispayableinJuly2011.

Additionally, under the merger agreement, a maximum of $600,000 and minimum of nil in

contingentcashconsiderationmaybepayable inSeptember2013subject tothemergedbusiness

achieving agreed profitability (NPBT) targets in the financial years ended 2012 and 2013. The

contingentconsiderationwillbesettledincashorsharesatthediscretionoftheBoard.

TheDirectorsconsiderthatthecontingentconsiderationwillsupportandfosteraunitedPrincipal

group environment for the merged firm, by incentivising teamwork in the realisation of merger

revenueandcostsynergies.

The contingent consideration has been formulated using Integrated Legal Holdings Limiteds

minimum

expectations

as

a

base

(ie

the

deferred

consideration

is

only

payable

on

outperformance

abovetheseminimumexpectations).

Furthermore, any contingent consideration will only be payable following the achievement of

minimumexpectedlockup(WIPanddebtors)performancebythefirm.

Theacquisitionisstructuredwithsignificantemploymentconstraintsandconditions,consistentwith

theCompanysdisciplinedacquisitionmodelandstrictcriteria.

Atthedateofthisreport,initialaccountingforthebusinessacquisitionhasnotyetbeendetermined

withthefairvalueassessmentoftheidentifiedassetsandliabilitiesacquiredatacquisitionandthe

estimateofthefairvalueofthecontingentconsiderationtobefinalised.Asaresult,itisnotpossible

todisclosethefairvalueoftheidentifiedassetsandliabilitiesthatwillberecognisedat1February

2011, the acquisition date, fair value of consideration transferred or to calculate the value of

goodwill.


25/31



31DECEMBER2010

ACN120394194


21

b)

Interimdividend

The directors have declared an interim dividend in respect of the year ended 30 June 2011, as

discussedinnote15.

15)

INTERIMDIVIDENDDETAILS

Amountpershare 0.30cents

Amountfranked Fullyfrankedata30%taxrate

Recorddatetodetermineentitlementstothedividend 11April2011

Datethe

interim

dividend

is

payable

2May

2011

DividendReinvestmentPlan

The Company operates a dividend reinvestment plan (DRP) which offers eligible shareholders the

opportunitytoreinvestallorpartoftheirdividends inadditionalshares intheGroup. TheShares

areissuedata5%discounttotheweightedaveragemarketpriceofsharessoldontheASXduringa

period of10 tradingdays (rounded to the nearesthalf cent),with theperiodcommencingon the

secondtradingdayafterthedividendrecorddate.

ThelastdateforreceiptofanelectionnoticeforparticipationintheDRPwithrespecttotheabove

interimdividendis18April2011.

16)

SHAREBASEDPAYMENTS

a) Recognisedsharebasedpaymentsexpense

Theexpense recognised foremployeeservices receivedduring thehalfyear isshown in the table

below:


31Dec2010 31Dec2009

$ $

Expensearising

from

equity

settled

share

based

transactions

17,844

9,702

b) Typesofsharebasedpaymentplans

Taxexemptemployeeshareplan(TEESP)

AllemployeesareeligibletoparticipateintheTEESPiftheymeetthefollowingcriteria:

i. TheyareapermanentfulltimeorpermanentparttimeemployeeoftheGroup;

ii.

Theyhavemettheprobationperiodunderthetermsoftheiremploymentcontract;

iii.

Theyareatleast18yearsofage;and

iv.

TheyareanAustralianresidentfortaxpurposes.


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31DECEMBER2010

ACN120394194


22

Employeeswho

participate

in

the

TEESP

can

nominate

to

contribute

up

to

$1,000

per

annum

from

their pretax wages or salary by way of an effective salary sacrifice towards acquiring fully paid

ordinarysharesintheCompany.

InaccordancewiththerulesoftheTEESP,sharesacquiredundertheplanmustnotbewithdrawnor

otherwise dealt with, commencing from the date the employee acquires a beneficial interest in

thosesharesuntiltheearliestofthedatethat:

i. Isthreeyearsaftertheacquisitiondate;or

ii. TheemployeeceasestobeanemployeeoftheGroup.

The

rules

of

the

TEESP

do

not

contain

any

provisions

that

could

result

in

an

employee

forfeitingownershipofsharesundertheplan.

Deferredemployeeshareplan(DESP)

Shares are granted to key employees and directors of the Group. The DESP is designed to align

participantsinterestswiththoseofshareholdersbyincreasingthevalueoftheCompanysshares.

EmployeesareeligibletoparticipateintheDESPiftheymeetthefollowingcriteria:

i.

TheyareapermanentfulltimeorpermanentparttimeemployeeoftheGroup;

ii. Theyhavemettheprobationperiodunderthetermsoftheiremploymentcontract;

iii.

They

are

at

least

18

years

of

age;

and

iv.

TheyareanAustralianresidentfortaxpurposes.

UndertheDESP,senioremployeesare invitedtoreceivefullypaidordinaryshares intheCompany

subject to the achievement of a number of key performance indicators such as contribution to

earningspersharefortheGroup.

SharesmayeitherbeacquiredonmarketbytheGrouporissuedbytheParent. Duringthehalfyear

ended31December2010,484,550shares(30June2010:40,000shares)weregrantedbytheParent

withthecostbeingexpensedoveravestingperiodofthreeyears. Thefairvalueofthesharesisset

atthemarketpriceofthesharesonthedateofgrant. Theimpactontheprofitandlossforthehalf

year

ended

31

December

2010

is

$17,844

(31

December

2009:

$9,702).

Whenaparticipantceasesemploymentpriortothevestingoftheirshares,thesharesareforfeited

in full unless otherwise determined by the Board. In the event of a change of control, the

performance period end date will be brought forward to the date of the change of control and

awardswillvestsubjecttoperformanceoverthisshortenedperiod.

Therearenocashsettlementalternatives.


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31DECEMBER2010

ACN120394194


23

c)

Summaryof

shares

granted

under

TEESP

and

DESP

arrangements

NosharesweregrantedundertheTEESPduringthehalfyearended31December2010.

The following table illustrates the number ofandmovements in sharesgranted during theperiod

undertheTEESPandtheDESP:


31Dec2010 31Dec2009

No. No.

TEESP:

Openingbalanceat1July 252,672 255,842

Transferred

to

departed

employees

during

the

period

(1)

Closingbalanceasat31December 252,672 255,842

DESP:

Openingbalanceat1July 371,667 331,667

Grantedduringtheperiod 484,550 40,000

Closingbalanceasat31December 856,217 371,667

(1) Sharesare transferredout ofanemployee trust into theemployeesnameon terminationof

employment.

d)

Weightedaverageremainingvestingperiod

Theweightedaverageremainingvestingperiodasat31December2010forthesharesissuedis1.73

years(30June2010:1.23years).

e)

Weightedaveragefairvalue

Theweightedaveragefairvalueofsharesgrantedduringtheperiodwas12.4cents(30June2010:

15.5cents).


28/31



31DECEMBER2010

ACN120394194

DirectorsDeclaration

24

InaccordancewitharesolutionoftheDirectorsofIntegratedLegalHoldingsLimited,Istatethat:

Intheopinionofthedirectors:

a.

Thefinancialstatementsandnotesoftheconsolidatedentityareinaccordancewiththe

CorporationsAct2001,including:

i. Givingatrueandfairviewoftheconsolidatedentitysfinancialpositionasat31

December2010andtheperformanceforthehalfyearendedonthatdateofthe

consolidatedentity

ii. ComplyingwithAccountingStandardAASB134 InterimFinancialReportingand

theCorporationsRegulations2001

b.

Therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebts

asandwhentheybecomedueandpayable.

OnbehalfoftheBoard

GFowler

Director

Perth,24February2011


29/31

Liability limited by a scheme approved

under Professional Standards LegislationGHM:NR:ILH057

Auditor's Independence Declaration to the Directors of Integrated Legal

Holdings Limited

In relation to our review of the financial report of Integrated Legal Holdings Limited for the half-year ended

31 December 2010, to the best of my knowledge and belief, there have been no contraventions of the

auditor independence requirements of the Corporations Act 2001or any applicable code of professional

conduct.

Ernst & Young

G H Meyerowitz

Partner

Perth

24 February 2011


30/31

Liability limited by a scheme approved

under Professional Standards LegislationGHM:NR:ILH056

To the members of Integrated Legal Holdings Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Integrated Legal Holdings Limited (the

company), which comprises the consolidated statement of financial position as at 31 December 2010,

and the consolidated statement of comprehensive income, consolidated statement of changes in equity

and consolidated statement of cash flows for the half-yearended on that date, other selected explanatory

notes and the directors declaration of the consolidated entity comprising the company and the entities it

controlled at the half-year end or from time to time during the half-year.

Directors Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that givesa true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001.

The directors are also responsible for such internal controls that the directors determine are necessary to

enable the preparation of the half-year financial report that is free from material misstatement, whether

due to fraud or error.

Auditors Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We

conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 R eview of

Interim and other Financial Reports Performed by the Independent Auditor of the Entity, in order to state

whether, on the basis of the procedures described, we have become aware of any matter that makes us

believe that the financial report is not in accordance with the Corporations Act 2001including: giving a

true and fair view of the consolidated entitys financial position as at 31 December 2010 and itsperformance for the half-year ended on that date; and complying with Accounting Standard AASB 134

Interim Financial Reportingand the Corporations Regulations 2001. As the auditor of Integrated Legal

Holdings Limited and the entities it controlled during the half-year, ASRE 2410 requires that we comply

with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for

financial and accounting matters, and applying analytical and other review procedures. A review is

substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and

consequently does not enable us to obtain assurance that we would become aware of all significant matters

that might be identified in an audit. Accordingly, we do not express an audit opinion.

IndependenceIn conducting our review, we have complied with the independence requirements of the Corporations Act

2001. We have given to the directors of the company a written Auditors Independence Declaration a copy

of which is included in the Directors Report.


31/31

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe

that the half-year financial report of Integrated Legal Holdings Limited is not in accordance with:

a. the Corporations Act 2001, including:

i) giving a true and fair view of the consolidated entitys financial position as at 31 December

2010 and of its performance for the half-year ended on that date; and

ii) complying with Accounting Standard AASB 134 Interim Financial Reportingand the

Corporations Regulations 2001.

Ernst & Young

G H Meyerowitz

Partner

Perth

24 February 2011

116.asx iaw feb 25 2011 08.20 half yearly report and accounts

Documents