The uncertain pace of realisations within the portfolio of IP Group (IPO), which invests in early-stage intellectual property businesses, makes for volatile earnings. But that's not the way to judge this company. Such metrics as the growth in value of the portfolio, or the rate at which IP is investing, are more important, and progress on this basis looks good.
The value of IP's technology-focused portfolio at the mid-year point rose two-thirds year on year to nearly £320m. That reflected not just upwards revaluations, but also January's acquisition of intellectual property peer Fusion IP, which was funded by a £100m placing and open offer. As well as bulking up the portfolio, the deal added four partner universities to IP's total, so that it now boasts 15 university partnerships in the UK and three in the US.
Increased scale and greater capital resources have also helped drive more investment activity. Capital deployed in the half reached £30m, which is more than the £27.5m deployed during the whole of 2013.
Meanwhile, key developments within the portfolio include three Aim flotations - Xeros Technology, Medaphor and Actual Experience - as well as a £35m fundraising at DNA sequencing specialist Oxford Nanopore. Overall, the group's portfolio companies raised £93m of new capital in the half.
Broker Numis Securities expects full-year EPS of 4.37p (19.6p in 2013).
IP GROUP (IPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 217p | MARKET VALUE: | £1.04bn | |
| TOUCH: | 215-217p | 12-MONTH HIGH: | 242p | LOW: 125p |
| DIVIDEND YIELD: | nil | PE RATIO: | 9 | |
| NET ASSET VALUE: | 110p* | NET CASH: | £123m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 3.8 | -2.0 | -0.51 | nil |
| 2014 | 20.5 | 12.6 | 2.83 | nil |
| % change | +439 | - | - | - |
Ex-div:- Payment:- | ||||
