News: IPH IPH Says Robic Will Join Iph Group For Consideration Of AUD 124M, page-7

Correct, exchange rate movements will impact A$ accounts and ultimately return to shareholders. There are predictions for stronger US$ and also for stronger A$. Predictions vary and tend to change over time. The exchange rate itself (US$) has been trading in a relatively tight range.

Exchange rate movements are currently impacting IPH across Asian and NZ income streams. The move to North America brings in a new exchange rate factor. With the experiences to date this company should be on top of this.

There are opportunities for businesses to mitigate this risk. For example, borrow in US$ to buy a US business, so cash flow is first directed to repay borrowings (same currency) rather than repatriated to OZ taking any exchange rate impact. These approaches can also have tax advantages.

IMO the bigger issue for shareholders is that the price paid in any expansion is EPS positive and the business and operating risks are understood and reflected in the total deal price. IPH have shown strong skills so far and my investment is based on continued expansion of the business in a very fragmented market. On that basis the current price reflects good value and the prospects of ongoing capital growth.