Interim Management Statement

RNS Number : 1643C

IP Group PLC

09 November 2009

 

FOR RELEASE ON

9 NOVEMBER 2009

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

IP Group: Interim Management Statement

IP Group plc (LSE: IPO), the 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 in the period from 30 June 2009 to date.

Alan Aubrey, Chief Executive of IP Group, said: 

"I am pleased to be able to report continued positive progress across the portfolio with further announced commercial collaborations, achievement of technical milestones and completed financings since our half-yearly results. These demonstrate the potential for strong intellectual property based businesses to generate growth in what remains a constrained operating environment. The strategic investment in Fusion, also announced today, consolidates our market leading position in the UK intellectual property commercialisation sector and we look forward to working closely with Fusion's management team and portfolio." 

Corporate update

The Group has today announced that it has today conditionally agreed to subscribe for a 19.8 per cent shareholding in Fusion IP plc ("Fusion").  Fusion is an AIM traded UK public company which owns the exclusive commercialisation rights to 100 per cent of university-owned intellectual property generated at two of the UK's leading universities - the University of Sheffield and Cardiff University. 

Concurrent with the acquisition of this holding, the Group has entered into a co-investment agreement with Fusion. This agreement will grant the Group the right to acquire 20 per cent of Fusion's interest in each new spin-out company created from Cardiff University and the University of Sheffield at a pre-determined valuation. The agreement further provides that, should the Group choose to exercise this right, it will also invest a minimum of 20 per cent of the initial seed capital provided to each such company. Fusion will also appoint an IP Group representative to its board.

Full details of the transaction, including further information on Fusion, the University of Sheffield and Cardiff University, are set out in the Group's placing announcement also made today.

Portfolio update

At 6 November 2009, the Group's portfolio of investments was valued at £98.8m compared to £97.1m at 30 June 2009, representing a net increase in fair value, excluding net investment, of £1.7m (1.7%) since 30 June 2009. This increase was primarily attributed to the 14 companies in the Group's portfolio which are quoted on either AIM or PLUS Markets recording a net fair value gain of £1.4m (3.9%) during the period to 6 November 2009. 

The Group has increased its rate of investment compared to the first half of this year. During the period from 1 July 2009 to 6 November 2009, the Group invested a total of £1.1m into 10 portfolio companies as compared to £1.6m into 13 portfolio companies during the first half of this year. During the equivalent period in 2008, the Group invested £3.2m into 20 companies. The Group has also realised proceeds of £0.4m during the period (proceeds for the equivalent period in 2008: £nil).

Examples of key commercial and technical developments made by the Group's portfolio businesses include those set out below: 

• Avacta Group plc ("Avacta"), the company providing innovative technologies and services to the pharmaceutical and diagnostics markets, announced in October that it is raising up to £2m through a placing with new and existing shareholders. Avacta had previously announced initial orders from global biopharmaceutical developers for its recently launched flagship product Optim. Optim is an analytical technology designed to reduce risk in biopharmaceutical development and help drug companies bring optimised products to market quicker and at lower cost.

• In July 2009, Tracsis plc, a provider of operational planning software and consultancy services for transport industries, continued its consolidation of complementary technologies through the acquisition of Peeping Limited, a company which provides research based services to train operating companies. In its pre-close trading update, Tracsis reported that it had continued to trade in line with plan, delivering substantial growth in profits and revenue both organically and through acquisition.

• Oxford Catalysts Group plc ("OCG"), a technology innovator for clean synthetic fuels, announced that it had signed a Joint Development Agreement with SGC Energia, SGPS, S.A. for the demonstration and commercialisation of OCG's Fischer-Tropsch technology, primarily for biomass-to-liquid and waste-to-liquid applications. The JDA provides $5.9m (£3.6m) of further funding to OCG over the balance of 2009 and 2010.

• Proximagen Neuroscience plc announced the acquisition of Cambridge Biotechnology Limited from Biovitrum AB. The acquisition is the company's first since its successful £50m placing in June, which is enabling the company to pursue its strategy of acquiring a number of the exciting drug programmes and commercial prospects in its preferred therapeutic area of the central nervous system.

• Tissue Regenix Limited, the York-based developer of regenerative medical devices, announced in October that its core dCELL® technology will be at the centre of the "50 after 50" research initiative launched by the University of Leeds' Institute of Medical and Biological Engineering.

Private financings

During the period, two companies in the Group's unquoted portfolio successfully completed significant equity financings.

In August 2009, Surrey NanoSystems Limited secured funding of £2.5 million to help commercialize an innovative low-temperature growth process for carbon nanotubes. The funds are intended to help silicon circuit manufacturers overcome a critical problem threatening the evolution to next-generation geometry sizes, speeds and power conservation.

Retroscreen Virology Limited ("Retroscreen"), a global leader in anti-viral research, clinical trials and experimental challenge studies also announced in October 2009 that it had successfully raised £2.6 million of funding. Retroscreen has experienced an increased interest in its services from the biotechnology and Pharma industries and this capital will allow it to grow the capacity of the business to meet future demand. Retroscreen's sales have grown by over 66% in the last three years, generating over £5m in revenue in the last year alone, and was included in the 2009 Tech Track 100 which ranks the fastest-growing private technology companies in Britain.

Fund Management

Investment from the fund managed by the Group was also increased, with IP Venture Fund ("IPVF") making £1.6m of investment during the period to 6 November 2009 (Q3 2008: £0.8m).  IPVF is a £30.9m venture capital fund that is dedicated to follow on investments in IP Group portfolio businesses which has invested a total of £13.1m into 22 IP Group portfolio companies since its launch in July 2006. The Group considers that management of further venture capital funds has the potential to continue to benefit portfolio companies and continues to explore opportunities in this area.

Balance sheet update

At 6 November 2009, the Group had net cash of £29m, a diversified portfolio valued at £99m and net assets of £169m, representing 68p 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 2009 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, eleven portfolio companies have listed on the AIM market of the London Stock Exchange, one on PLUS Markets and there have been four trade sales. 

 

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