IP Group calls itself a university intellectual property commercialisation company, which basically means investing in early-stage companies before seeking a trade sale or flotation. Under normal circumstances, this has been shown to be a successful business model, but the current investment climate is far from normal, and the value of the 65 companies that make up the group's portfolio fell from £148.8m at this stage 12 months ago to £97.1m.
The tough financial climate meant that it managed no flotations in the first half, although its portfolio companies did manage to raise over £70m through placings on the Alternative Investment Market (Aim) and private financing from sources such as venture capital. Investment gains totalled £9.8m and included share price rises in Oxford Advanced Surfaces and Modern Water, but these were more than offset by investment losses of £12.4m.
Still, the group continues to invest in new opportunities, but at a lower rate than in 2008. There was only a nominal amount of cash raised from the portfolio, although early in the second half Luto Research, a spin-out from Leeds University and in which IP Group has a 24.2 per cent stake, was sold to Mawdsley Brooks, an international pharmaceutical logistics business.
KBC Peel Hunt expects full-year adjusted pre-tax losses of £4.7m and a loss per share of 1.9p (£40.5m loss and -16.1p in 2008).
| IP GROUP (IPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 41p | MARKET VALUE: | £103m | |
| TOUCH: | 40-42p | 12-MONTH HIGH: | 111p | LOW: 27p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 68p | NET CASH: | £30.6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 20.1 | 15.8 | 6.34 | nil |
| 2009 | na* | -4.9 | -1.84 | nil |
| % change | - | - | - | - |
*The change in fair value of equity and debt investments is negative, hence no turnover line | ||||
