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Listed companies let Imperial down

Earnings have plunged at Imperial Innovations after the value of several listed investments nose-dived.
March 30, 2015

Valuing a company like Imperial Innovations (IVO) on the basis of its profits - which collapsed last year - isn't as meaningful as looking at the value of the company's portfolio, or even the volume of funds invested during the year. That's because Imperial invests in various early-stage technology groups, leaving its income statement at the mercy of market sentiment.

IC TIP: Hold at 466p

Most of its holdings are in the therapeutics sector, including the group's largest asset Circassia (CIR), of which it owns 14 per cent. Of the top 20 investments Imperial has made, more than a fifth are in the engineering and materials sector, while med-tech and medical devices companies represent 15 per cent of their £243m gross carrying value. The total portfolio is worth £262m.

It was the group's quoted portfolio which let its numbers down in the first six months of the financial year. The value of its investments in private companies grew by £5.6m, but this was more than offset by a 12 per cent or £13m fall in the stock-market valuation of its listed assets. Last year's figures were also hugely boosted by the IPOs of Circassia and Oxford Immunotec (US:OXFD).

Analysts at N+1 Singer expect pre-tax profits of £1.6m this year, giving EPS of 1.2p, down from £27.4m and 26.7p.

IMPERIAL INNOVATIONS (IVO)
ORD PRICE:476pMARKET VALUE:£653m
TOUCH:466-485p12-MONTH HIGH:520pLOW: 365p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:290pNET CASH:£104m

Half-year to 31 JanTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20141.624.424.7nil
20152.8-7.0-5.2nil
% change+75---

Ex-div: na

Payment: na