Report on financial performance

IP Australia recorded an operating surplus of just under $24 million for the financial year, driven byrevenue results that were 14% higher than budgeted.

Due to the potential economic impacts of the worldwide pandemic, IP Australia worked to constrain costs during the financial year, managing the risk that revenues could fall with a focus on maintaining financial sustainability. IP Australia’s expenses came in under budget and fell by $3 million from the previous financial year. Revenues did not fall as expected, demand grew with significant increases in patent and trade marks applications, and together with the impact of fee changes, this accounts for revenue rising in 2020–21.

IP Australia reduced capital expenditures, reflecting the end of the investment peak in 2020–21 (having finalised the new trade marks system and accommodation fitout projects), and together with the higher operating surplus, cash reserves have grown during the financial year, improving the agency’s balance sheet and reinforcing financial sustainability.

The budget focus in the new financial year is to complete detailed ICT investment planning to ensure that our cash reserves are sufficient for known asset replacement requirements while maintaining a reasonable buffer for sustainable operations. Once this work is completed, following on from the improved financial position for 2020–21, IP Australia will be well placed for longer-term strategic financial planning to ensure we can balance our obligations as a cost recovery agency for efficient operations while delivering outcomes for stakeholders in an environment of increasing demand for our services.

Demand forecast and actual performance

Each year, we forecast the expected demand for IP Australia’s services based on historical application trends. We use this information to determine the workforce profile and capacity we will need to meet our Customer Service Charter requirements, in line with our cost-recovery framework. Table 80 reports our actual performance against the estimated demand for examination and registration services for the year.

Table 5: Program 1 results