Currency in GBP
Last close As at 26/05/2023
GBP0.55
▲ −2.50 (−4.33%)
Market capitalisation
GBP572m
Research: TMT
IP Group trades at 0.54x its rebased end-May NAV of 139p per share, down 17% from the year end NAV/share of 167p. This prices in the public market fall in Oxford Nanopore Technologies (29p off IP Group’s NAV per share in FY22 to date), while the private company portfolio saw fair value gains over the period. First Light Fusion mitigated the fall in NAV per share, with a valuation increase on achieving first fusion and management’s expectation of a substantial up-round still ahead. Critically, IP Group remains well funded, with £251m of cash and deposits, providing comfort that it can support key investee companies, drive value from its portfolio and take advantage of the downcycle for new investments. Management recognises that realisations are likely to be few and far between if the current market backdrop persists.
IP Group |
Impact + innovation at a compelling discount
Listed venture capital |
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16 June 2022 |
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IP Group is a research client of Edison Investment Research Limited |
IP Group trades at 0.54x its rebased end-May NAV of 139p per share, down 17% from the year end NAV/share of 167p. This prices in the public market fall in Oxford Nanopore Technologies (29p off IP Group’s NAV per share in FY22 to date), while the private company portfolio saw fair value gains over the period. First Light Fusion mitigated the fall in NAV per share, with a valuation increase on achieving first fusion and management’s expectation of a substantial up-round still ahead. Critically, IP Group remains well funded, with £251m of cash and deposits, providing comfort that it can support key investee companies, drive value from its portfolio and take advantage of the downcycle for new investments. Management recognises that realisations are likely to be few and far between if the current market backdrop persists.
Trading update from the AGM
The group deployed £46m of capital over the first five months of H122, with notable investments into Istesso (£10m) and Bramble (£9.5m), as well as other smaller investments, leaving the group with gross cash and deposits as at 31 May 2022 of £251m (FY21: £322m). IP Group’s public portfolio saw a fair value reduction of £360m in the period, of which £309m related to Oxford Nanopore. The group saw fair value gains of over £60m in its private portfolio, principally, but not exclusively, from First Light Fusion.
At the AGM, although management’s strategic priority is to conserve cash in the current straitened environment, IP Group renewed its approval to acquire up to 10% of its shares up to its AGM in 2023. Shareholders also approved a final dividend of 0.72p per share, payable to shareholders on 30 June 2022.
Attractive entry-point for longer-term investors
Despite IP Group’s broad deep tech portfolio with no B2C exposure, IP Group trades at 0.54x NAV versus peers trading at 0.7x NAV on average. At these levels, underpinned by management’s target of a 20% prospective five-year NAV CAGR, IP Group is potentially an attractive proposition for the longer-term impact investor.
Historical financials
Source: Company accounts. Note: *Excludes funds held on behalf of EIS/VCT investors. |
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Research: Consumer
Games Workshop Group’s (GAW’s) trading update for the year ending May 2022 indicates ongoing good demand following the standout performance of the prior year. The lower profitability (profit before tax margin) for FY22 versus FY21 reflects the already-flagged economy-wide inflationary cost pressures and internal investment, offset by a notable improvement in royalties income (£28m versus £16.3m FY21). The royalties income was the highest ever generated by the company, indicating the success it is having in leveraging its intellectual property. We trim our FY22 and FY23 profit before tax (PBT) estimates by c 2%. The prospective P/E multiple of 15.9x is below recent average multiples (17.2x FY17-21).
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