Interim Management Statement

RNS Number : 5903V

IP Group PLC

04 November 2010

 



 

FOR RELEASE ON

4 NOVEMBER 2010

("IP Group" or "the Group" or "the Company")

IP Group: Interim Management Statement

IP Group plc (LSE: IPO), the developer of intellectual property based businesses, today issues its Interim Management Statement in accordance with FSA Disclosure and Transparency Rule 4.3.

This statement provides an update on the Group's progress since 30 June 2010 to date.

Alan Aubrey, Chief Executive of IP Group, said:

"I am pleased to report a £4.3m fair value increase in our portfolio which now stands at £107.2m and which represents a further improvement from the position reported for the first half of the year. Further, following the sale of the Group's stake in COE Group plc, realisations for the year to date are significantly ahead of 2009 at £2.6m. The Group continues to be financially strong with cash of £22m, no borrowings and a net asset value excluding intangibles of £132m or 52p per share.

It has been particularly encouraging to note further significant developments in the commercial and technical progress of the Group's portfolio businesses in the third quarter. The announcement of product launches and partnerships with major global companies serves to highlight the significant potential value in these companies' technologies."

Portfolio update

At 3 November 2010, the Group's portfolio of investments was valued at £107.2m compared to £101.3m at 30 June 2010, representing a net increase in fair value, excluding net investment, of £4.3m (4.2%). This increase was largely attributable to the 16 companies in the Group's portfolio that are quoted on either AIM or PLUS Markets which saw a net fair value gain of £3.9m (9.0%) during the period to 3 November 2010.

During the period from 1 July 2010 to 3 November 2010, the Group invested a total of £3.5m into 17 portfolio companies, bringing the total for the year to date to £6.6m. During the equivalent period in 2009, the Group invested £1.1m into 10 companies (2009 year to date equivalent: £2.7m).

The Group has realised £1.9m cash from the portfolio since 30 June 2010, a total of £2.6m for the year to date, compared to £0.4m for the equivalent period in 2009 (2009 year to date equivalent: £0.5m). These 2010 figures include £1.2m received by the Group from the sale of COE Group plc to Digital Barriers plc.

Significant developments in the Group's portfolio companies during the quarter have included:

·      Revolymer Limited ("Revolymer"), a spin-out company from the University of Bristol, announced the US launch of its revolutionary removable¹ chewing gum, Rev7^TM. The gum was launched to consumers and attendees at the National Association of Convenience Stores Show in Chicago in October, making it the world's first commercially available environmentally friendly gum¹. The US is the world's largest chewing gum market with it being estimated that over 300,000 tons of chewing gum will be sold this year in this market alone. Revolymer expects Rev7^TM to be available in US retail stores early in 2011.

·      Tissue Regenix Group plc ("Tissue Regenix"), the regenerative medical devices company that joined AIM by way of a reverse takeover of Oxeco plc at the end of June, announced in August that it had received European CE Marking for its first product. The approval allows Tissue Regenix to commence sales of its dCELL^® Vascular Patch, for which the company is also seeking FDA approval.

·      Avacta Group plc ("Avacta"), a spin-out company from the University of Leeds serving the pharmaceutical and diagnostics markets, announced the completion of a gross £1.4m placing in the quarter and that sales momentum for its Optim 1000 diagnostics machine was growing, including a sale to the "world's largest biopharmaceutical developer". Avacta announced revenues of £2.1m for the year to 31 July 2010, an increase of 120% from the previous year.

·      Proximagen Group plc ("Proximagen"), a spin-out from King's College, London focused on diseases of the central nervous system, announced in August the completion of the partnering of the second programme owned through its acquisition of Minster Pharmaceuticals plc earlier this year. The company also announced that its US pharmaceutical partner, Upsher-Smith Laboratories Inc, which has licensed two programmes from Proximagen to date, had increased its shareholding in the business to 7.6%.

·      Syntopix Group plc ("Syntopix") from the University of Leeds, which specialises in topical antimicrobials for the medical and consumer healthcare markets, announced in November the signing of its second agreement with Sinclair Pharma plc ("Sinclair"), the international speciality Pharma company, to work on further development of a number of Sinclair's compounds. Earlier in the quarter, Syntopix also announced the signing of an exclusive agreement with "a world leader in marketing home, health and personal care brands" in relation to a compound which is currently under clinical evaluation.

·      Oxford Nanopore Technologies Limited ("Oxford Nanopore"), a spin-out from the University of Oxford that is developing revolutionary technology for direct electrical detection and analysis of single molecules, announced the strengthening of its collaboration with the University of Oxford and the publication of key research by another of its technological collaborators, the University of California Santa Cruz. The research published in Nature Nanotechnology describes method of enzyme-controlled movement of a single strand of DNA through a protein nanopore, which represents a key step towards nanopore sequencing of DNA strands.

Fund Management

IP Venture Fund ("IPVF"), the £30.9m venture capital fund dedicated to follow-on investments in the Group's portfolio companies, invested a total of £0.5m across 3 companies during the period from 1 July 2010 to  3 November 2010 (Q3 2009: £1.6m, 4 companies).  As at 3 November 2010, IPVF had invested a total of £15.1m into 25 IP Group portfolio companies since its launch in July 2006 and its portfolio was valued at £18.2m.

During the third quarter, The North East Technology Fund, a £25m venture capital fund managed by the Group, which invests in technology companies in the North East region of England, announced the completion of its second investment, bringing the fund's total investment to date to £1.0m. The investment into Onyx Group Limited, a provider of outsourced IT and cloud computing solutions which earlier this year won North East Company of the Year, is reflective of the promising pipeline of opportunities being assessed by the Group's North East team.

Balance sheet update

At 3 November 2010, the Group had net cash of £22m, a diversified portfolio valued at £107m and net assets of £171m, representing 67p per share. Excluding intangible assets and the Oxford Equity Rights asset, the Group's net assets were £132m or 52p per share.

For more information, please contact:

IP Group plc

Alan Aubrey, Chief Executive Officer                    020 7444 0050

Greg Smith, Group Financial Controller                020 7444 0050

Liz Vaughan-Adams, Communications    020 7444 0062 / 07979 853 802

Financial Dynamics                                         020 7831 3113

Ben Atwell, John Dineen

This statement is intended to give an indication of material transactions and events that have taken place since 30 June 2010 and their impact on the financial position of the Group. These indications reflect the Board's current view, are subject to a number of material risks and uncertainties and could change in the future. Factors which could cause or contribute to such changes include, but are not limited to, the general economic climate and market conditions, as well as specific factors relating to the financial or commercial prospects or performance of individual portfolio companies with the Group's portfolio of investments.

About IP Group

IP Group is an intellectual property ("IP") commercialisation company that specialises in commercialising university technology. Founded in 2001, IP Group listed on AIM in October 2003 and moved to the Official List in June 2006. It has made two acquisitions to date - Techtran, a company set up to commercialise university intellectual property under a long term contract with the University of Leeds, in 2005 and Top Technology Ventures, an investment adviser to early stage technology venture capital funds, in 2004.

IP Group has formed long-term partnerships with ten universities - the University of Oxford, King's College London, CNAP/University of York, the University of Leeds, the University of Bristol, the University of Surrey, the University of Southampton, Queen Mary (University of London), the University of Bath and the University of Glasgow.

The Company's portfolio is diverse with exposure to five main sectors - Energy & Renewables, Medical Equipment & Supplies, Pharma & Biotech, IT & Communications and Chemicals & Materials. To date, thirteen portfolio companies have listed on the AIM market of the London Stock Exchange, one on PLUS Markets and there have been five trade sales.

Notes

¹In testing Revolymer found that its confectionery gum removes readily from a range of surfaces (including paved sidewalks, carpets, textiles, transport fabrics and clothing materials), and disintegrates into a fine powder within 6 months using mild agitation in water.

 

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