Headline figures from Imperial Innovations (IVO) don't tell the real story because the previous year's profit was boosted by the flotation of the group's largest asset, Circassia (CIR), in which it still holds a 9.3 per cent stake. Stripping out this one-off gain left gross profit up by a quarter at £3.33m.
Imperial's business model is based on having priority rights to unencumbered intellectual property, principally from research at London's Imperial College but also from three other universities. These technologies are licensed and then transferred into new companies. Total investment almost doubled to £60.8m, including in six new unquoted companies. This and a net portfolio valuation uplift increased the value of the portfolio by £75.2m to £327m. Total realisations raised £6.9m, mainly through the sale of a data analytics business for £4.1m.
Imperial's finances remain in pretty good shape, with £178m available for further investment, including a £50m loan agreed with the European Investment Bank. It is also building up its activities in the information and communications technology sector, which currently represents just under 10 per cent of the portfolio by value, to complement its historic strength in biotechnology.
Analysts at Cenkos have upgraded their forecasts for the year to July 2016, and now expect pre-tax profit of £14.2m, giving an EPS of 10.4p.
| IMPERIAL INNOVATIONS (IVO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 498p | MARKET VALUE: | £685m | |
| TOUCH: | 475-515p | 12-MONTH HIGH: | 540p | LOW: 435p |
| DIVIDEND YIELD: | nil | PE RATIO: | 45 | |
| NET ASSET VALUE: | 305p | NET CASH: | £81m | |
| Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 4.5 | 0.6 | 0.9 | nil |
| 2012 | 4.3 | 5.1 | 8.1 | nil |
| 2013 | 3.3 | 3.8 | 4.6 | nil |
| 2014 | 3.6 | 27.4 | 26.8 | nil |
| 2015 | 5.1 | 15.1 | 11.1 | nil |
| % change | +40 | -45 | -59 | - |
