Last close As at 05/08/2026
GBP0.69
▲ 1.40 (2.08%)
Market capitalisation
GBP607m
Research: TMT
IP Group reported broadly stable private portfolio values in H124, assisted by the positive revaluation of Featurespace, an AI-powered fraud and financial crime detection business, which delivered strong top-line growth of 46.5% in 2023 to £50.4m. This helped offset a further carrying value reduction of First Light Fusion and a partial write-down of Ultraleap Holdings, a human-machine interface business. The de-rating of listed Oxford Nanopore (ONT) was therefore the major driver behind IP Group’s 9% NAV fall in total return (TR) terms in H124. Roughly half of ONT’s share price decline has reversed post reporting date, supported by its half-year trading update and the Novo Holdings investment. Across other life sciences holdings, there were four positive clinical trial results and only one failure. Importantly, IP Group has seen an uptick in exits in the year to date, with cash proceeds of £44.6m (c 4% of opening portfolio value, with £30m from the sale of Garrison Technology). This encouraged the company to increase the current buyback programme by £10m to £30m.
IP Group |
Management sees positive portfolio momentum |
H124 results |
Investment companies/TMT Listed venture capital |
19 September 2024 |
Share price performance
Business description
Analysts
IP Group is a research client of Edison Investment Research Limited |
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IP Group reported broadly stable private portfolio values in H124, assisted by the positive revaluation of Featurespace, an AI-powered fraud and financial crime detection business, which delivered strong top-line growth of 46.5% in 2023 to £50.4m. This helped offset a further carrying value reduction of First Light Fusion and a partial write-down of Ultraleap Holdings, a human-machine interface business. The de-rating of listed Oxford Nanopore (ONT) was therefore the major driver behind IP Group’s 9% NAV fall in total return (TR) terms in H124. Roughly half of ONT’s share price decline has reversed post reporting date, supported by its half-year trading update and the Novo Holdings investment. Across other life sciences holdings, there were four positive clinical trial results and only one failure. Importantly, IP Group has seen an uptick in exits in the year to date, with cash proceeds of £44.6m (c 4% of opening portfolio value, with £30m from the sale of Garrison Technology). This encouraged the company to increase the current buyback programme by £10m to £30m.
Period end |
Net cash* |
Portfolio fair value** (£m) |
NAV |
NAV/share |
Price/NAV |
12/22 |
160.1 |
1,259 |
1,376 |
132.9 |
(58) |
06/23 |
111.7 |
1,276 |
1,314 |
126.7 |
(55) |
12/23 |
91.7 |
1,165 |
1,190 |
114.8 |
(49) |
06/24 |
29.2 |
1,111 |
1,072 |
104.7 |
(60) |
Note: *Includes restricted cash but not funds held on behalf of Enterprise Investment Scheme/venture capital trust investors. **Portfolio fair value includes US platform and other limited partner interests. ***Based on share price at respective period ends.
The percentage of down-rounds has recently increased across the venture capital market, and IP Group reported eight new funding rounds across its holdings in H124 (vs 14 in H123), three of which were down-rounds. However, these down-rounds had a limited £11m impact on H124 portfolio valuations, as IP Group proactively reduced the carrying value of these holdings in FY23. IP Group is experiencing strong investor interest in its assets and a robust pipeline of further exits through to end 2025 (some of which are at an advanced stage), which it expects to conduct at or above the end-2023 carrying values. All of the above illustrates IP Group’s fairly prudent valuation approach and should be viewed in the context of the current wide c 56% discount to NAV, which is above the 20% threshold for conducting further NAV-accretive buybacks. IP Group could receive an additional capital return from Intelligent Ultrasound Group following the sale of its clinical AI business to GE HealthCare at an enterprise value of £40.5m.
IP Group’s pro forma gross cash and deposits (after accounting for received exit proceeds) as of end August 2024 was £183.7m. This provides the company with a solid base to further support its portfolio companies, which in H124 raised a total of £380m (including Hysata’s oversubscribed US$111m round) versus £298m in H123 and £667m in FY23. We note that 34% of its portfolio was funded to break-even as of end June 2024 (including ONT, which made up 16% of the portfolio), while c 35% had a cash runway to 2026 and beyond and only 2% to H224. We also note IP Group’s efforts to reduce overheads net of income to £8.7m in H124 (0.8% of end-June 2024 NAV) versus £10.3m in H123. IP Group aims to reduce the net overheads run rate by 25% by end-2024.
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Research: Healthcare
Creo Medical has announced the sale of a majority (51%) stake in its European consumable business to Chinese medical-device manufacturer Micro‐Tech for an enterprise value of €72m (2.3x EV/sales; 20x EV/EBIT). The deal is expected to complete in Q125 and will net the company c €30m (£25m) in dry powder. We see the sale of this mature business as a strategic move, providing liquidity as Creo accelerates its effort to launch its core suite of electrosurgical devices and partner its proprietary Kamaptive technology, both areas of higher growth potential. The European consumables business, which primarily includes Albyn Medical (acquired by Creo in July 2020), will likely be accounted as an investment in associates, requiring adjustments to our forecasts, following deal closure. We keep our estimates unchanged for now.