IP Group plc (LON:IPO), which invests in breakthrough science and innovation companies with the potential to create a better future for all, has announced its financial results for the six months ended 30 June 2023.
Half-year 2023 highlights
Portfolio well-funded, continued significant progress in key themes & companies
· Portfolio companies well-funded; total funds raised by portfolio approximately £300m (HY22: c.£350m; FY22: £1.0bn) including Quantum Motion (£42m), AccelerComm (£22m), OXCCU (£18m), Garrison (£16m) and Mixergy (£9m)
· Only 16% of our portfolio by value need to raise financing before the second half of 2024
· Private portfolio company funding round valuations remained robust with 86% of the 14 portfolio funding rounds completed in the period taking place at or above previous funding round valuations
· Healthier future (Life Sciences): Istesso’s Phase 2b trial for its lead drug MBS2320 in rheumatoid arthritis continues to recruit to plan and remains on target to read out in H1 2024. Approval received to start additional Phase 2 trial in idiopathic pulmonary fibrosis (IPF) in H2 2023. Group completed a £15m investment and further £10m commitment to fully fund both trials. Pulmocide – recruitment into Phase 3 efficacy study underway
· Tech-enriched future (Deeptech): Featurespace, Garrison and Ultraleap all posted double-digit revenue growth in H1, significant fundraisings completed for Quantum Motion, AccelerComm & Garrison
· Regenerative future (Cleantech): Strong technical progress at Hysata, key milestones achieved, triggering release of second tranche of Series A funding, OXCCU completed £18m Series A financing led by Clean Energy Ventures
Strong balance sheet maintained
· Strong balance sheet and liquidity to support new and follow-on investment in the portfolio with gross cash and deposits at 30 June 2023 of £250.0m (HY22: £235.7m; FY22: £241.5m); total potential liquidity including quoted shares of over £450m
· Cash proceeds in line with expectations at £32.2m, mainly from the second tranche of consideration from the sale of WaveOptics (HY22: £2.1m; FY22 £28.1m)
· Investment into portfolio maintained: £59.8m into 23 companies across all three thematic areas (HY22: £52m; FY22: £93.5m) including significant allocation to Istesso (£15.0m)
· Loss in the period of £54.5m (HY22: Loss of £309.8m; FY22: Loss of £344.5m), partly driven by a reduction in the value of Oxford Nanopore, which reduced by £27.8m, and negative portfolio foreign exchange movements of £11.2m
· Interim dividend of 0.51p per share (2022 interim dividend of 0.50pps; final dividend of 0.76pps)
Post period-end update
The fair value of the Group’s holdings in listed companies experienced a net fair value increase of £45m in the period since 30 June, including ONT increasing by £42m.
Summary financials
| HY to 30 June 2023 (unaudited) | HY to 30 June 2022(unaudited) | FY 2022(audited) | |
| Net Asset Value (NAV) | £1,313.6m; 126.7pps | £1,414.0m; 136.7pps | £1,376.1m; 132.9pps |
| Loss | (£54.5m) | (£309.8m) | (£344.5m) |
| Loss/profit excluding ONT (i) | Loss of (£26.7m) | Profit of £35.7m | Profit of £25.2m |
| Total portfolio (i) | £1,276.1m | £1,265.5m | £1,258.5m |
| Net portfolio loss (i) | (£44.4m) | (£291.1m) | (£309.1m) |
| Gross cash and deposits (i) | £250.0m | £235.7m | £241.5m |
| Cash proceeds(i) | £32.2m | £2.1m | £28.1m |
| Portfolio investment (i) | £59.8m | £52.0m | £93.5m |
| Dividend | 0.51 pps | 0.50pps | 1.26pps(ii) |
(i) Note 12 details the Alternative Performance Measures (“APM”)
(ii) Amount shown for FY 2022 is total dividend including final dividend approved and paid in 2023
Greg Smith, Chief Executive of IP Group, said: “IP Group is a long-term investor in breakthrough science and innovation companies that are addressing many of the world’s unmet needs and, while the current economic environment remains challenging, I am pleased with portfolio progress in the period. The successful raising of more than £300m of financing by our companies in the first half, including £60m from the Group, is testament to their quality.
The Group has maintained its financial strength during the period, the result of £32m cash realisations and having taken pre-emptive action in light of the challenging investment environment. This financial strength was highlighted as a strategic asset as our portfolio navigated events such as the failure of Silicon Valley Bank. We have also continued our approach of dedicating a proportion of all cash realisations to supporting capital returns for shareholders through an interim dividend.
The opportunity for value creation in our portfolio remains compelling. Double-digit revenue growth in our largest deeptech and healthcare companies is evidence of continued strong demand for their products and services. Our therapeutics portfolio includes twelve companies with products in clinical trials, seven of which are targeting key inflection points in the next 18 months. Breakthrough cleantech businesses, such as Hysata, have delivered technical milestones and commercial demand. The Group is well-positioned to support these businesses and deliver strong, impactful returns for all stakeholders over time.“
