The collapse in small company markets over the past few months has taken its toll on IP Group, with the massive swing into the red the result of significant falls in the value of its largely illiquid investment portfolio.
IP invests in early-stage companies before seeking a trade sale or flotation. Last year, tough market conditions meant no flotations, although its portfolio companies did raise £55m. Of this money, £30m came from private financing, with the balance derived from public markets.
The group's most significant stake is a £20m investment in Oxford Nanopore, a low-cost developer of DNA mapping which received an $18m (£12.7m) cash injection from US giant Illumina in the period. Other concepts in the stable include a waterless washing machine and a non-stick chewing gum. IP also runs a fund management arm with £31m under management to provide seed finance to new investments, and is now seeking new third-party mandates.
The group has close links with 10 leading universities including Oxford and Leeds. IP argues that its exposure to a number of sectors through 74 investments in areas such as life sciences, chemicals and therapeutics shields it from the difficulties faced in more tricky fields. IP has also trimmed its cost base in a move that should deliver £1m of savings this year.
IP GROUP (IPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 33p | MARKET VALUE: | £82.6m | |
| TOUCH: | 31-33p | 12-MONTH HIGH: | 113p | LOW: 32p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 70p | NET CASH: | £33.3m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 8.4 | 5.6 | 2.5 | nil |
| 2006 | 42.0 | 40.1 | 16.8 | nil |
| 2007 | 37.0 | 30.5 | 12.3 | nil |
| 2008* | na | -40.5 | -16.1 | nil |
| % change | - | - | - | - |
*The change in value of equity and debt instruments is negative, hence no turnover line | ||||
