Currency in GBP
Last close As at 25/03/2023
GBP0.57
▲ 0.85 (1.51%)
Market capitalisation
GBP584m
Research: Financials
IP Group’s NAV per share came in at 132.9p at end 2022, down 20% year-on-year in total return terms but only 2% below the end-June 2022 level. The NAV decline during 2022 was primarily due to the £428.5m loss from listed holdings (before FX changes, mostly Oxford Nanopore Technologies, ONT), while private holdings contributed gains before FX of c £101.4m (or 5.8% of opening NAV). Excluding ONT, IP Group posted a £25.2m profit in 2022. The company will focus on driving short- to medium-term returns from its more developed holdings and devote resources to its ‘priority companies’, which it believes will underpin its self-sustaining model (its top 20 holdings make up 71% of portfolio value).
IP Group |
Focus on high-conviction plays to drive returns |
FY22 results |
Listed venture capital |
21 February 2023 |
Share price performance Business description
Analysts
IP Group is a research client of Edison Investment Research Limited |
IP Group’s NAV per share came in at 132.9p at end 2022, down 20% year-on-year in total return terms but only 2% below the end-June 2022 level. The NAV decline during 2022 was primarily due to the £428.5m loss from listed holdings (before FX changes, mostly Oxford Nanopore Technologies, ONT), while private holdings contributed gains before FX of c £101.4m (or 5.8% of opening NAV). Excluding ONT, IP Group posted a £25.2m profit in 2022. The company will focus on driving short- to medium-term returns from its more developed holdings and devote resources to its ‘priority companies’, which it believes will underpin its self-sustaining model (its top 20 holdings make up 71% of portfolio value).
Period |
Net cash* |
Portfolio fair |
NAV |
NAV/share |
(Discount)/premium |
06/21 |
249.4 |
1,246 |
1,440 |
135.4 |
(14) |
12/21 |
270.1 |
1,508 |
1,738 |
167.0 |
(26) |
06/22 |
191.6 |
1,266 |
1,414 |
136.7 |
(49) |
12/22 |
160.1 |
1,259 |
1,376 |
132.9 |
(58) |
Note: *Includes restricted cash but not funds held on behalf of EIS/VCT investors. **Includes US platform and other LP interests. ***Based on share price at respective period end.
While ONT’s share price fell by 65% in 2022, in its January 2023 trading update it said that it expects revenue of £147m from Life Science Research Tools in FY22, within guidance of £145–160m issued in March 2022, which implies 25% y-o-y underlying growth (excluding FX, the Emirati genome programme and COVID-19 sequencing). IP Group has already realised £106m from ONT (more than the £77m it invested in total). Meanwhile, several of IP Group’s private holdings saw valuation uplifts in 2022: First Light Fusion (£57.3m after achieving fusion), Oxbotica (£45.4m on its Series C round in December 2022), Hysata and Nexeon (£8.4m each, following funding rounds in August 2022). We also note that Istesso commenced its Phase IIb trial for rheumatoid arthritis.
IP Group has built a sizeable liquidity buffer, with gross cash and deposits of £241.5m at end 2022 (£160.1m net of debt) and total liquidity (including listed holdings and £60m in undrawn debt) of more than £500m. Its portfolio companies raised £1.0bn in funding in 2022 (of which 9% was from IP Group), less than the £2.4bn in 2021 but similar to 2020 and above the level of earlier years.
IP Group now trades at a c 54% discount to end-2022 NAV versus 26% and 21% at end 2021 and end 2020, respectively. This likely reflects the recent pressure on VC deal volumes and valuations from macroeconomic headwinds. That said, we note that 18% of IP Group’s holdings at end 2022 are listed. Another 23% closed funding rounds in the last 12 months (some even in the tougher conditions in H222). Only 10% of these were down rounds (62% were carried out at higher valuations and 28% at flat prices). Another 36% of its portfolio are nine of its top 20 holdings valued externally at end 2022. IP Group noted that the fair values of several later-stage holdings (eg Hinge Health) were marked down at end 2022.
Click here to enter text.
|
|
Research: TMT
4iG’s FY22 results reflect the changing profile of the group as it has transitioned via a series of acquisitions from a business focused on IT services in Hungary to a regional technology-infocommunications provider in Hungary and the West Balkans. The post year-end acquisition of Vodafone Hungary reshapes the business further, which when included results in telecoms making up 87% of revenue and 94% of EBITDA on an FY22 pro forma basis. The group now has all the building blocks in place to take advantage of digitalisation and telecoms convergence trends in its chosen markets.
Get access to the very latest content matched to your personal investment style.