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Oxford Nanopore boosts IP Group

The valuation of IP Group's portfolio is on the rise after a well timed investment in Oxford Nanopore Technologies.
August 5, 2015

Investors considering a stake in IP Group (IPO) have to treat it as a fund. That, along with the nature of the companies IP Group invests in - small, start-up science-based ventures - means earnings aren't the best measure of success. Instead, it's better to look at the growth of the group's net assets and the fair value of the portfolio.

IC TIP: Hold at 214p

On both counts, IP Group made good progress during the first half of the financial year. Net assets grew by 56 per cent to £701m year on year, while a net unrealised gain of £73.7m helped boost the fair value of the group's 96 portfolio companies to £478m (from £320m in 2014). Specifically, that reflects a £50.3m increase in the value of IP Group's holding in Oxford Nanopore Technologies, a company which made "significant commercial and technical progress" during the period. However, the portfolio also benefited from share price rises at Xeros (XSG), Avacta (AVCT) and hVIVO (HVO).

IP Group has raised over £200m since the start of the year through a mix of new equity and debt, and has invested £55m in its portfolio companies. Of that, £40m went towards buying a stake in Oxford Sciences Innovation, another research and technology company spun out of Oxford University.

IP GROUP (IPO)
ORD PRICE:214pMARKET VALUE:£1.21bn
TOUCH:213-216p12-MONTH HIGH:277pLOW: 174p
DIVIDEND YIELD:nilPE RATIO:18
NET ASSET VALUE:137pNET CASH:£170m

Half-year to 30 JuneTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201420.512.62.8nil
201578.966.412.9nil
% change+285+427+357-

Ex-div: na

Payment: na