Profits at Imperial Innovations were down at the halfway stage, but the technology investment group still delivered a solid underlying performance, investing £10.4m in 14 companies and a further £15.3m in eight more since the half-year-end. And with a potential £109.5m funds still available, Imperial has plenty of room for expansion, giving the shares considerable long-term potential.
The fall in profits reflected a smaller rise in fair-value gains on the investment portfolio - £2.86m down from £3.38m - and also a decision to offer support to older holdings by increasing the period of investment. This raises the prospect of higher returns, but also meant that gross realisations were a modest £0.9m.
However, the group is extending its reach by investing in opportunities from intellectual property developed at universities in Cambridge, Oxford and University College of London through its relationships with Cambridge Enterprise.
Developments in its own portfolio are showing considerable promise, notably Nexeon, which is developing advanced battery materials for use in electric vehicles, and anti-allergy specialist Circassia. At the half-year, Imperial's investment portfolio was up £12.9m at £117.4m.
JPMorgan Cazenove has revised its forecast £2m pre-tax loss for the year to break-even.
| IMPERIAL INNOVATIONS (IVO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 348p | MARKET VALUE: | £218m | |
| TOUCH: | 340-360p | 12-MONTH HIGH: | 410p | LOW: 262p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 359p | NET CASH: | £72.5m* | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.80 | 1.26 | 2.09 | nil |
| 2012 | 1.61 | 0.93 | 1.49 | nil |
| % change | -10 | -26 | -29 | - |
Ex-div: na Payment: na *Includes £51m of short-term liquidity investments | ||||
