Interim Management Statement

RNS Number : 1223G

IP Group PLC

17 October 2008

 



FOR RELEASE ON

17 OCTOBER 2008

('IP Group' or 'the Group' or 'the Company')

IP Group: Interim Management Statement

IP Group plc (LSE: IPO), the UK's leading university intellectual property commercialisation company, 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 30th June 2008 to date.

Alan Aubrey, Chief Executive of IP Group, said: 'The Group's portfolio has experienced a challenging period since the turbulence in the financial and credit markets accelerated in September leading to share price falls in a number of companies in our quoted portfolio, particularly over the last week. This is clearly against a background of significant falls across all major indices, in particular in the small company environment.  

However, across the portfolio, our companies have continued to make strong technical and commercial progress and a number of major commercial deals have been completed during the period with a number of others in negotiation. The Group has a strong cash position and funds under management and continues to broaden its access to sources of funding. This, combined with the breadth, depth and increasing maturity of our portfolio as well as our prudent cash management policy, enables the Directors to remain confident of delivering long term shareholder value.'

Portfolio update

During the period from 1 July 2008 to 16 October 2008, the Group invested a total of £3.2m into 20 new and existing portfolio companies. During the equivalent period in 2007, the Group invested £1.2m into 6 companies. The Group has not made any realisations during this three month period but received dividend payments of £0.2m.

During the period from 1 July 2008 to 16 October 2008, the FTSE AIM All-Share index declined in value by 50.3%. Against this backdrop, the 14 companies in the Group's portfolio which are listed on either AIM or PLUS Markets recorded a net fair value loss of £17.4m (22.0%).

The unquoted portfolio has recorded a net fair value loss of £5.2m (7.5%) during this same period. This loss has arisen mainly as a result of the Directors considering it prudent to reduce the carrying values of a limited number of our unquoted investments.

Despite the current market conditions and the reductions in fair values since 30 June 2008, at 16 October 2008 the Group's portfolio of investments was valued at £128.9m compared to £126.1m at 31 December 2007 and £148.4m at 30 June 2008. The net fair value movement in the portfolio for the year to date, excluding investment, is a decline of £4.1m (3.3%).

The Group's portfolio businesses have continued to make significant technological and commercial progress during this period. By way of example:

• Proximagen Neuroscience announced that it had received positive pre-clinical results ahead of schedule for its PRX-1 programme, triggering a $6m equity investment in the company at c£2.27 per share, as part of its $232m worldwide licensing agreement with Upsher Smith;

• Modern Water plc announced in September that it had agreed to install a Manipulated Osmosis Desalination proving plant in Oman, at the heart of the company's Middle Eastern target market;

• Oxford Catalysts Group plc announced the signing of an agreement with the Thai state controlled oil and gas company, PTT Public Company Limited, to specify and supply know-how and materials, including catalysts, for a system for the production of synthetic liquid fuels using small scale Fischer-Tropsch ('FT'); and

• Oxford Nanopore Technologies Ltd announced agreements with both Harvard University and University of California, Santa Cruz to further develop or exclusively licence nanopore science developed at these institutions.

Corporate update

On the fund management side, IP Venture Fund ('IPVF') invested £0.8m into two IP Group portfolio companies during the period from 1 July 2008 to 16 October 2008 (Q3 2007: £1.8m, 3 companies) and has invested a total of £10.2m into 17 IP Group portfolio companies since its launch in July 2006. IPVF is a £30.9m venture capital fund that is dedicated to follow on investments in IP Group portfolio businesses. At 16 October 2008, the total uncalled amount was £19.9m.

Balance sheet update

At 16 October 2008, the Group had net cash of £35m, a diversified portfolio valued at £129m and net assets of £206m (82p 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 2008 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, Healthcare & Life Sciences: Non-therapeutics, Healthcare & Life Sciences: Therapeutics, IT & Communications and Chemicals & Materials. To date, ten portfolio companies have listed on the AIM market of the London Stock Exchange, one on PLUS Markets and there have been two trade sales. IP Group also established three 'Modern-themed' subsidiaries - Modern Biosciences, Modern Water and Modern Waste. Modern Water was the first of these subsidiaries to float on AIM in June 2007.

 

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