IPH: Positive Change in Capital Allocation Focus

No-moat IPH’s pivot toward organic growth, as indicated at its annual general meeting, is a positive shift from its prior acquisitive growth focus. Its long-standing roll-up strategy failed to deliver shareholder value accretion. Over the seven years to fiscal 2024, underlying EBIT margins have been flat, and returns on invested capital have fallen. These factors contribute to our Poor Capital Allocation Rating.