IP Group news 2012
IP Group plc - Interim management statement
08 May 2012
IP Group plc (LSE: IPO), the developer of intellectual property based businesses, today issues its Interim Management Statement in accordance with FSA Disclosure and Transparency Rule 4.3.
This statement provides an update on the Group's progress since 31 December 2011.
Alan Aubrey, Chief Executive of IP Group, said: "The Group's portfolio has made significant progress since the start of 2012. Material developments across a number of companies have contributed to a net fair value increase of more than £40m, including fair value gains arising from the £15m placing and admission to AIM of Retroscreen Virology and Oxford Nanopore's £31m private financing. The Group has again significantly increased its rate of capital deployment into its most promising portfolio companies, and remains financially strong with net cash of £44m and a diversified portfolio valued at £179m."
At 4 May 2012, the Group's portfolio of investments was valued at £178.6m compared to £123.8m at 31 December 2011, representing a net increase in fair value, excluding net investment, of £40.3m. This overall increase was largely driven by the £26.4m fair value gain as a result of Oxford Nanopore Technologies Limited's financing announced last week.
During the period from 1 January 2012 to 4 May 2012, the Group deployed £14.5m across 18 portfolio companies. During the equivalent period in 2011, the Group invested £4.3m into 15 companies. The Group made no realisations during the first four months of the year (equivalent period in 2011: £0.2m).
The Group's portfolio now consists of holdings in 66 companies, diversified by sector compared to 64 companies at 31 December 2011. The Group has created three new companies during the period, while Aptuscan Limited, a spin-out from the University of Leeds, was acquired by Avacta Group plc. The three new companies included TheySay Limited, the first start-up that the Group has backed from Oxford University's Computer Science Department and Isis Innovation's Software Incubator. TheySay is developing "sentiment analysis" software that can be used to help a broad set of organisations to develop competitive advantage by understanding emotion expressed in passages of text.
Significant developments in the Group's portfolio companies since 31 December 2011 have included:
· In May, University of Oxford spin-out Oxford Nanopore Technologies Limited ("Oxford Nanopore"), developer of revolutionary technology for direct electrical detection and analysis of single molecules, announced a £31.4m further financing, nearly all from existing investors. Following completion of the round, the Group's 21.3% beneficial interest in Oxford Nanopore is valued at £66.5m. The round followed Oxford Nanopore's presentation at February's AGBT conference of DNA sequencing data using its novel nanopore "strand sequencing" technique and proprietary high performance electronic devices GridION and MinION, which it intends to commercialise directly to customers during 2012.
· Also in May, Retroscreen Virology Group plc ("Retroscreen"), a spin-out from Queen Mary, University of London, announced its admission to AIM and a placing raising £15m (before expenses). Retroscreen has pioneered the commercialisation of the Viral Challenge Model which enables research into viral infection and enables pharmaceutical companies to accelerate and reduce the cost of bringing antiviral therapeutics and vaccines to market. At the admission price of 80p per share, the Group's 22.7% beneficial interest in Retroscreen was valued at £7.4m, which resulted in a £5.3m fair value increase for the Group.
· Fusion IP plc ("Fusion"), which has commercialisation partnerships with University of Sheffield and Cardiff University, announced in February that Certara LP had acquired portfolio company Simcyp for $32m. The sale of Simcyp, a modelling and simulation platform for predicting the fate of drugs in virtual populations, generated a return of £4m for Fusion, a 200-fold return on their investment. The Group's 26.0% interest in Fusion has seen a fair value increase of £0.9m to 4 May 2012.
· Synairgen plc ("Synairgen"), a spin-out company from the University of Southampton, announced positive data in April from its Phase II clinical trial that has been described by Asthma UK as having the potential to be one of the biggest breakthroughs in asthma treatments in the past 20 years. Synairgen's trial investigated the potential for SNG001 (inhaled interferon beta) to protect asthmatics from respiratory virus infections (principally the common cold) that can spread to the lung, which are a major cause of worsening asthma symptoms. IP Group's beneficial holding in Synairgen is 10.8%, which was valued at £3.2m at 4 May 2012.
· A number of the Group's maturing portfolio businesses have announced positive results and trading updates during the first four months of the year, including GETECH Group plc ("GETECH"), Avacta Group plc ("Avacta") and Tracsis plc. GETECH, provider of gravity and magnetic data analysis for the oil and gas industry, announced revenue growth in its half-year results of 20% to £3.2m and a 22% increase in profit before tax to £0.4m. Avacta, which develops detection and analysis technology and services, announced in April that its half-year revenues to 31 January 2012 were £1.7m, a 72% increase on the comparative period, with its reported loss narrowing to £0.5m. Tracsis plc, provider of operational planning software to passenger transport industries, was awarded a significant contract with one of the UK's major rail operating groups and released a positive trading update indicating that its year-end results to 31 July are again expected to exceed analyst expectations. The Group's holdings in these portfolio companies have seen a net fair value increase of £3.3m year-to-date, excluding net investment.
Balance sheet update
At 3 May 2012, the Group had net cash of £44m, a diversified portfolio valued at £179m and net assets of £260m, representing 71p per share. Excluding intangible assets and the Oxford Equity Rights asset, the Group's net assets were £229m or 63p per share.
For more information, please contact:
IP Group plc
Alan Aubrey, Chief Executive Officer +44 (0) 20 7444 0050
Greg Smith, Chief Financial Officer +44 (0) 20 7444 0050
Liz Vaughan-Adams, Communications +44 (0) 20 7444 0062 / +44 (0) 7979 853 802
FTI Consulting +44 (0) 20 7831 3113
Ben Atwell, John Dineen
This statement is intended to give an indication of material transactions and events that have taken place since 31 December 2011 and their impact on the financial position of the Group. These indications reflect the Board's current view, are subject to a number of material risks and uncertainties and could change in the future. Factors which could cause or contribute to such changes include, but are not limited to, the general economic climate and market conditions, as well as specific factors relating to the financial or commercial prospects or performance of individual portfolio companies with the Group's portfolio.
Notes for editors
About IP Group
IP Group is a leading UK intellectual property ("IP") commercialisation company, developing technology innovations primarily from its research intensive partner universities. The Group offers more than traditional venture capital, providing its companies with access to business building expertise, networks, recruitment and business support.
The Company's portfolio comprises holdings in over 60 companies including Oxford Nanopore Technologies, the DNA sequencing development company, Revolymer, best known for its removable chewing gum and Xeros, which has received many accolades for its revolutionary clothes washing techniques with a much reduced requirement for water.
The portfolio includes early stage to mature businesses and has exposure to five main sectors - Energy & Renewables, Medical Equipment & Supplies, Pharma & Biotech, IT & Communications and Chemicals & Materials. To date, fourteen of the portfolio companies IP Group has backed have listed on the AIM market of the London Stock Exchange and one on PLUS Markets.
Founded in 2001, IP Group listed on AIM in October 2003 and moved to the Official List in June 2006. The Group now has long-term partnerships with twelve universities including those under its commercialisation agreement with Fusion IP plc.
For more information, please visit our website at www.ipgroupplc.com.