IP Group (IPO) invests in early-stage science-linked businesses, including Aim-traded entities such as Applied Graphene Materials (AGM) and Tissue Regenix (TRX). The group also funds smaller start-ups, which typically form partnerships with universities to help turn their ideas into commercial propositions. That process can take a while and is naturally a higher-risk investment strategy. It's therefore pointless to judge IP Group simply by looking at its earnings. Instead, such metrics as 'growth in the value of the portfolio' or 'the rate of investment growth' provide more meaningful indicators.
On that basis, things look reasonable. The fair value of the group's portfolio rose by a third to £350m. That was thanks to a combination of factors. An equity fundraising in the first quarter brought in £100m, which was used to invest in both existing and new early-stage companies. The funds also allowed IP Group to acquire Fusion IP, a complementary business. Portfolio realisations added another £9.7m and the value of the companies in which it invests grew by £20.7m, although that was down from £82.4m last year. Capital deployment rose to £46.8m from £27.5m, as the group expanded in the US, partnering with three Ivy League schools, and initiating its first spin-out across the Atlantic. The group now hopes to raise a further £128m by issuing fresh equity.
| IP GROUP (IPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 235p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 234-236p | 12-MONTH HIGH: | 276p | LOW: 163p |
| DIVIDEND YIELD: | nil | PE RATIO: | 119 | |
| NET ASSET VALUE: | 110p | NET CASH: | £97.3m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 7.0 | 1.8 | 0.7 | nil |
| 2011 | 5.9 | -5.5 | -1.8 | nil |
| 2012 | 52.5 | 40.7 | 11.1 | nil |
| 2013 | 85.4 | 72.6 | 19.6 | nil |
| 2014 | 28.4 | 9.5 | 2.0 | nil |
| % change | -67 | -87 | -90 | - |
Ex-div: na Payment: na | ||||
