Shares of Glasgow-based intellectual property law firm Murgitroyd Group fell about 20% after it said in a trading update that its full year results will fall short of market forecasts.

Murgitroyd shares fell to around 407p, giving the firm a current stock market value of around £36 million.

Murgitroyd said its earnings for the first half of the financial year were, given the impact of a previously announced acquisition completed in June 2016, always expected to be lower than last year’s equivalent level.

However, it said the combination of the acquisition, a significant increase in the level of investment in business development, sales and marketing, and lower than anticipated revenue growth meant that interim earnings were also behind management’s budgeted level.

Murgitroyd said last June it completed the acquisition of certain trade and assets from Dallas-based MDB Capital Group, LLC and Managua-registered Patentvest S.A. for about $2.43 million.

“The board, cognisant of current macro-economic uncertainty, has also concluded that the implied improvement in operating performance during the remainder of the financial year necessary to meet current market forecasts is unlikely to be delivered and, as a result, that the outcome for the full year will fall short of market forecasts, and likely see reduced full-year 2017 earnings,” said Murgitroyd.

“Operating cash flow, however, remains strong.

“Accordingly, the board expects to announce a modest increase in dividend at the interim stage, consistent with its commitment to a progressive dividend policy. 

“The group will provide a detailed update on the current trading position and outlook within the interim results statement expected to be released on 30 January 2017.”