Currency in GBP
Last close As at 24/03/2023
GBP0.57
▲ 0.85 (1.51%)
Market capitalisation
GBP584m
Research: TMT
IP Group has released its H122 interim results, which are in line with guidance given at the end of May. They show an NAV per share of 136.7p, an 18% fall over the six months since FY21 year-end that reflects broader market declines. The reduced NAV was largely driven by falls in the quoted portfolio, principally Oxford Nanopore (87% of £395m decline), with the value of the private portfolio rising by £104m to partially offset the quoted decline. To reassure investors over its valuation approach, management obtained external valuations for five of its largest holdings. IP Group held gross cash and deposits of £236m at 30 June 2022 (net cash of £192m). After the period end, management agreed terms on a £120m debt private placement at an average rate of 5.25%, providing £105m of increased liquidity after repaying £15m of short-dated European Investment Bank debt (of £44m outstanding EIB debt at 30 June 2022). IP Group will draw down 50% of the loan notes in December 2022, with the rest in June 2023.
IP Group |
Public market falls largely priced in
Listed venture capital |
QuickView
4 August 2022 |
Share price graph Share details
Business description
Bull
Bear
Analysts
IP Group is a research client of Edison Investment Research Limited |
IP Group has released its H122 interim results, which are in line with guidance given at the end of May. They show an NAV per share of 136.7p, an 18% fall over the six months since FY21 year-end that reflects broader market declines. The reduced NAV was largely driven by falls in the quoted portfolio, principally Oxford Nanopore (87% of £395m decline), with the value of the private portfolio rising by £104m to partially offset the quoted decline. To reassure investors over its valuation approach, management obtained external valuations for five of its largest holdings. IP Group held gross cash and deposits of £236m at 30 June 2022 (net cash of £192m). After the period end, management agreed terms on a £120m debt private placement at an average rate of 5.25%, providing £105m of increased liquidity after repaying £15m of short-dated European Investment Bank debt (of £44m outstanding EIB debt at 30 June 2022). IP Group will draw down 50% of the loan notes in December 2022, with the rest in June 2023.
H122: £50m of net investment as realisations slow
In H122, IP Group invested £52m across 22 new and existing investments (H121: £71m, 42; FY21: £107m, 67), with £2m of realisations (H121: £112m; FY21: £214m), resulting in net investment of £50m (H121: net realisations of £41m; FY21: net realisations of £107m). Given the market backdrop, management is anticipating reduced levels of cash realisations in FY22, with investment lower than originally envisaged.
Portfolio demonstrates continued progress
Several of IP Group’s lead assets showed continuing progress in H122, with Istesso preparing to commence a Phase IIb trial for its lead drug MBS2320 in rheumatoid arthritis, and First Light Fusion achieving first fusion, externally validated by the UK Atomic Energy Authority. After the period end, another portfolio company, Hysata, raised A$43m (£24m) to help develop a pilot manufacturing facility for low-cost green hydrogen. IP Group committed £11m to the funding round, split between IP Group Australia and Kiko Ventures, its cleantech platform. On completion, IP Group's stake is valued at £19m, a net gain of £8m (0.8pps).
Attractive entry point for longer-term investors
Despite its broad deep-tech portfolio, IP Group trades at 0.64x H122 net asset value versus peers trading at 0.7x P/NAV on average, with a wide range of 0.4–1.0x NAV. At these levels, with much of the market’s bad news already priced in and underpinned by management’s target of a 20% prospective five-year NAV CAGR, IP Group is potentially an attractive proposition for longer-term investors.
Historical financials
Source: Company accounts. Note: *Excludes funds held on behalf of EIS/VCT investors. |
|
|
Research: Healthcare
Creo Medical announced its H122 trading update ahead of full interim results in September. H122 revenue was around £13.5m, a c 5% y-o-y increase compared to H121 (£12.9m) and a 10% increase over H221 (£12.3m). The uptick was driven by the improving traction of Speedboat Inject and initial revenues from the May 2022 licensing agreement with Intuitive Surgical. The underlying EBITDA loss improved by more than 20% from H221, driven by higher gross margins and reduced operating expenses, which translated into a lower cash burn for the period. Creo continues to seek other licensing partners and potential strategic investors to support future growth. We await the announcement of the interim results to update our estimates and valuation of the company.
Get access to the very latest content matched to your personal investment style.