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IP’s portfolio value escalates

The intellectual property investor benefitted from last year’s acquisition of Touchstone Innovations
April 4, 2018

The fair value of IP Group's (IPO) portfolio rose from £614m to a whopping £1.13bn in 2017, largely thanks to its £490m acquisition of Touchstone Innovations. Touchstone’s integration is going to plan, bringing the intellectual property investor additional partnerships and a more balanced portfolio. Other transactions included the acquisition of enterprise investment scheme fund manager Parkwalk in February 2017, which provided a net contribution of £1.6m.

IC TIP: Buy at 121pp

Return on net assets, excluding goodwill, intangible assets and acquisition/restructuring costs, came in at £73.2m, against a loss of £7.6m in 2016. IP’s net portfolio gains totalled £94.2m, up from just £6.5m in the prior year – although these figures are susceptible to fluctuations. Istesso Ltd was the chief contributor, as it moved from a subsidiary to a portfolio company, resulting in a £45.1m profit on deconsolidation.

The group remains strongly capitalised. In May, it generated £181m in net placing proceeds, which drew in "significant new shareholders" from China, Australia, Singapore and the UK, while the group's portfolio companies also garnered third-party capital of around £315m, against £230m in 2016.

Prior to these results, broker Stifel had forecast net asset value (NAV) of 139p a share at December 2018 (from 132p in 2017).

IP GROUP (IPO)   
ORD PRICE:121pMARKET VALUE:£1.28bn
TOUCH:120-121p12-MONTH HIGH:158pLOW: 100p
DIVIDEND YIELD:nilPE RATIO:17
NET ASSET VALUE:142pNET CASH:£127m
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201385.472.619.6nil
201428.49.52.0nil
201598.375.113.7nil
20167.6-14.8-2.4nil
201710453.47.1nil
% change+1262---
Ex-div:na   
Payment:na