Preliminary Results

IP2IPO Group PLC
14 March 2006




For immediate release                                              14 March 2006

                                IP2IPO Group plc

            Preliminary results for the year ended 31 December 2005

IP2IPO Group plc (AIM: IPO), the intellectual property commercialisation
company, today announces its audited preliminary results for the year ended 31
December 2005.

Highlights

  • Value of shares in spin-outs at 31 December 2005: £44 million (2004: £36
    million)
  • Six university partners at year end (2004: four)
  • 37 Spin-out companies at 31 December 2005 (2004: 20)
  • Successful flotation of two portfolio companies during 2005 (2004: three)
  • Realisation from the sale of shares in a spin out company of £0.8m (2004:
    £0.8m)
  • Profit after tax of £5.6m (2004: £21.0m)
  • Cash balance at 31 December 2005 of £40 million (2004: £35 million)
  • Acquisition of Techtran Group Limited in January 2005
  • Successful launch of Modern Biosciences
  • 25 Year partnership signed with The University of Bristol

Post year end highlights

  • 25 Year partnership signed with The University of Surrey
  • Modern Biosciences entered into a Memorandum of Understanding with the
    University of Manchester
  • Partnership with the University of York extended to span the entire
    university

Commenting on the Group's preliminary results, Alan Aubrey, Chief Executive
Officer of IP2IPO, said:

'2005 has been a year of expansion for IP2IPO. At 31 December 2005 the Group had
six university partnerships and 37 spin-out businesses, of which five are quoted
on AIM. The total value of the Group's equity stakes now exceeds £44m.  During
2005 the Group has expanded beyond its existing university partnership business
with the formation of Modern Biosciences which has established a promising
pipeline of opportunities and an experienced management team.

'The first quarter of 2006 has seen IP2IPO enter into a 25 year
commercialisation partnership with the University of Surrey and an extension of
IP2IPO's University of York partnership to cover the entire University. In
addition, Modern Biosciences has entered into a Memorandum of Understanding with
the University of Manchester allowing Modern Biosciences to invest in
life-science based IP generated by the university.'


For more information contact:

IP2IPO (www.ip2ipo.com)                                            020 7489 5210
Alan Aubrey, Chief Executive Officer

Buchanan Communications
Tim Anderson, Mark Court, Mary-Jane Johnson                        020 7466 5000





IP2IPO Group plc
Chairman's statement



I am pleased to report that your company has made considerable progress in the
year ended 31 December 2005.



University partnerships

IP2IPO began 2005 with four university partners. By the end of 2005, the Group
had six partnerships, and since the year end your company has entered into its
seventh long term partnership agreement.



In January 2005, the Group completed the acquisition of Techtran Group Limited.
The acquisition brought a number of benefits to the Group, including an
additional long term partnership with the University of Leeds, an exciting
portfolio of ten spin out companies and an exceptional management team. The
integration of Techtran with IP2IPO has been extremely successful, with Dr
Alison Fielding appointed as Director of Technology Transfer and Alan Aubrey
becoming Chief Executive Officer of IP2IPO with effect from 1 January 2006.



In December 2005 the Group entered into a long term partnership with the
University of Bristol. Subsequent to year end the Group announced its first spin
out investment and is working on a promising pipeline of further spin out
opportunities.



Since 31st December 2005, IP2IPO has entered into a partnership with the
University of Surrey. This is IP2IPO's seventh university partnership and the
third IP2IPO university partner from the SETSquared group of universities.
Surrey enjoys a strong reputation for innovation and enterprise.  Since 31
December 2005 the Group has announced an extension of its partnership with the
University of York to the cover the whole university.



IP2IPO will continue to assess further opportunities and to enter into long term
partnerships with leading research universities on a selective basis where it
identifies institutions with sufficient breadth and depth of research and the
right innovative culture to build a diversified portfolio of high growth spin
out companies over the lifetime of a partnership.



Modern Biosciences

In May 2005 the Group raised £13.7m through a placing. This enabled the Group to
launch Modern Biosciences, a company formed to in-licence life science
intellectual property on a selective basis not only from IP2IPO's seven existing
university partnerships but any other university or research group.  Modern
Biosciences will develop further the intellectual property and then either
out-licence the IP to industry or form a spin out company. This enables IP2IPO
to generate value from intellectual property which either addresses too narrow a
market and/or is at too early a stage at the time that we identify it to support
the formation of a company.



The progress of Modern Biosciences to date has been encouraging with the
development of a promising pipeline of opportunities, and I am delighted to
report that Dr Ian Wilding has been appointed to the Board as the Chief
Scientific Officer. Dr Wilding is recognised globally as an innovator in early
drug development with extensive experience of scientific and commercial
solutions to problem issues in early drug development.



Subsequent to year end Modern Biosciences has signed a Memorandum of
Understanding with the University of Manchester. Under the terms of the
agreement, Modern Biosciences will work with the University of Manchester to
identify and assess drug related investment opportunities

IP2IPO Group plc
Chairman's statement (Continued)



arising from research carried out across the University. Modern Biosciences will
provide investment for suitable opportunities and also take on responsibility
for the development and commercialisation of the IP.



Board changes

In January 2006 I assumed the role of Executive Chairman. Professor Graham
Richards remains on the Board of IP2IPO as Senior Non-Executive Director. Alan
Aubrey has been appointed as Chief Executive Officer of the Group, and I would
like to welcome Alan to his new role and thank him for his contribution to the
Group to date.  I am also delighted to welcome Stephen Brooke to the Board as
Director of Business Development.  Stephen has played an important role in the
strategy and direction of the Group to date, and I wish him well in his new
position.





Outlook for 2006

I am confident that 2006 will prove to be another good year in the development
of IP2IPO. The pipeline of spin-outs looks very promising. Potential
opportunities include technologies as diverse as diagnostic tests for
debilitating and currently incurable diseases, to novel fuel technologies for
efficient and clean energy production.



UK universities continue to be a source of world-leading scientific innovation
and achievement, but in the past have sometimes floundered in the exploitation
of those ideas.  I believe that the IP2IPO business model can create first class
businesses from UK science, for the benefit of our university partners, the
wider community and our shareholders.



I would like to conclude by thanking our shareholders, our University partners,
the mangers of our portfolio companies and our staff for their support in what
has been an important year in the growth and development of IP2IPO.













DAVID NORWOOD
Executive Chairman
14 March 2006



IP2IPO Group plc
Chief Executive's Statement



The year ended 31 December 2005 has proven to be a year of expansion for IP2IPO.
With healthy cash reserves, a promising portfolio of 37 spin-out companies and
an encouraging pipeline of new spin-out opportunities, your company is extremely
well positioned.



Results for the year ended 31 December 2005

During the year ended 31 December 2005 the Group made a profit after taxation of
£5,605,000 (2004: £21,046,000).  This profit, in the most part, can be
attributed to net fair value gains of £5,737,000 (2004: £24,014,000). Gross fair
value gains and losses are shown in the following table:


                                                                                        2005              2004
                                                                                       £'000             £'000
Fair value gains                                                                      14,107            24,249
Fair value losses                                                                    (8,370)             (235)
                                                                                       5,737            24,014



There were a number of encouraging fair value gains during the year. The IPO of
Proximagen Neurosciences plc resulted in a gain of £5,990,000. In October 2005
the University of Leeds spin-out GETECH Group plc floated on AIM valuing the
Group's stake at £1,983,000 on an initial investment of £480,000.  In 2005 we
announced a multi-million dollar collaboration between ReOx Limited and a major
bio-pharmaceutical company.  In addition, IP2IPO received a dividend of £209,000
from ReOx in the year.  These factors led to a fair value gain of £2,300,000.
Your company also realised £762,000 from the acquisition of Toumaz Technology
Limited by Nanoscience Inc and its subsequent sale of Nanoscience consideration
shares.



The fall in the share price of Offshore Hydrocarbon Mapping plc ('OHM plc') led
to a full year loss on IP2IPO's holding of OHM plc stock of £4,700,000. Since 31
December 2005 the OHM plc share price has recovered.  It is in the nature of
IP2IPO's business that its portfolio companies, as well as having breakthroughs
and successes, will also have setbacks from time to time and that when these
companies are quoted and IP2IPO still has a material shareholding the impact on
the Group will be greater. Over time as the number of quoted companies
increases, individual gains and losses will have a reduced proportional effect
on total portfolio performance.



Portfolio

At the beginning of the year the Group had a portfolio of 20 companies. During
the year ended 31 December 2005 the Group added 17 spin-out businesses to its
portfolio taking the total number of spin-outs to 37. The movement in the number
of spin-outs is set out below:


                                                                           Unquoted spin-outs  Quoted spin-outs
                                                                                     (number)          (number)
At 1 January 2005                                                                          17                 3
New spin-out businesses                                                                    17                 -
Companies floated during the year                                                         (2)                 2
At 31 December 2005                                                                        32                 5



At 31 December 2005, your Company had 32 unquoted investments. These 32
investments are recorded on the balance sheet at fair value and total
£18,252,000 (2004: £8,415,000). The Group invested a total of £4,209,000 (2004:
£3,728,000) in spin-out companies during the year.



IP2IPO Group plc
Chief Executive's Statement (Continued)



The Group expects to establish approximately 10 to 15 new spin out companies per
year from its existing university partnerships.



Three companies in the portfolio raised a total of £6.6 million in private
equity finance from third parties during the year and subsequent to year end
Perpetuum Limited announced the completion of a £2.2 million financing.





Cash

Your Company's cash position remains strong. Cash at the end of the year stood
at £39,947,000 (2004: £34,801,000).  Your Company has outstanding commitments to
invest significant sums in university spin out companies under the terms of its
university partnerships. As at 31 December 2005, these commitments totalled
£19,570,000.  Since the year end the Company has entered into a partnership with
the University of Surrey and extended the terms of its partnership with the
University of York to cover the entire university. These two new arrangements
have resulted in a combined cash commitment of up to £10,000,000.  In addition a
further commitment of £1,155,000 is payable in deferred consideration, due as a
result of the acquisitions during 2005.  The acquisition of Techtran in January
2005 resulted in net cash outflows of approximately £5,400,000.



IP2IPO continues to control costs carefully. In the year ended 31 December 2005
administrative expenses amounted to £4,529,000 (2004: £6,594,000).  IP2IPO has
continued to generate income from the management of venture capital funds
through its subsidiary, Top Technology Ventures Ltd, and revenues through the
provision of advisory and private placement services to portfolio companies. The
Group generated operating revenues during the year of £1,682,000 (2004:
£1,183,000) and received interest income during the period of £1,744,000 (2004:
£1,616,000).



Outlook for 2006

The Group has recorded significant unrealised gains to date, and we will seek to
unlock this value through disposals of equity stakes when prudent to do so. The
Group will continue to seek to control costs where possible, and cover operating
costs with revenues from advisory services and interest on cash balances.



Your company has made progress to date in 2006. I am confident in both the
strength of the current portfolio and pipeline of new intellectual property
opportunities available to IP2IPO and the ability of the IP2IPO business model
and management team to turn these opportunities into value for the Group.







ALAN AUBREY
Chief Executive Officer



14 March 2006





IP2IPO Group plc
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2005


                                                                           Note             2005             2004
                                                                                           £'000            £'000

Turnover                                                                                   1,682            1,183

Equity investments
   Fair value gains                                                                       14,107           24,249
   Fair value losses                                                                     (8,370)            (235)
   Surplus on disposal of equity investments                                                 762              790
   Dividends                                                                                 209                -
                                                                                           6,708           24,804


Administrative expenses
   Accrual for employee bonuses                                                          (1,174)          (4,202)
   Other administrative expenses                                                         (3,355)          (2,392)
                                                                                         (4,529)          (6,594)

Operating profit                                                                           3,861           19,393

Finance income - interest receivable                                                       1,744            1,616

Profit before taxation                                                                     5,605           21,009

Taxation                                                                                       -               37

Profit attributable to equity holders of the parent                        3               5,605           21,046
                                                                           4               12.58            51.61

Basic earnings per ordinary share
Diluted earnings per ordinary share                                        4               12.27            49.90









CONSOLIDATED BALANCE SHEET
As at 31 December 2005


                                                                                           2005              2004
                                                                           Note           £'000             £'000
ASSETS
Non-current assets
Property, plant and equipment                                                                91                55
Intangible assets:
   Goodwill                                                                              18,403             2,091
   Acquired intangible assets                                                               605               757
   Investment in patents                                                                     14                15
Equity rights and related contract costs                                                 20,202            20,170
Equity investments                                                                       44,255            35,536
Financial asset                                                                           1,337                 -
Investment in limited partnerships                                                           84                87
Total non-current assets                                                                 84,991            58,711

Current assets
Trade and other receivables                                                               1,957             2,271
Cash and cash equivalents                                                                39,947            34,801
Total current assets                                                                     41,904            37,072

Total assets                                                                            126,895            95,783

EQUITY AND LIABILITIES
Equity attributable to equity holders
Called up share capital                                                                   4,575             4,129
Share premium account                                                                    73,294            59,605
Merger reserve                                                                           12,797               783
Retained earnings                                                                        29,113            23,264
Total equity                                                                            119,779            87,781
Non-current liabilities
Trade and other payables                                                                  3,564             3,534
Provisions                                                                                  539             1,123
Total equity and non-current liabilities                                                123,882            92,438

Current liabilities
Trade and other payables                                                                  3,013             3,345
Total equity and liabilities                                                            126,895            95,783





CONSOLIDATED CASHFLOW STATEMENT
For the year ended 31 December 2005


                                                                                             2005             2004
                                                                                            £'000            £'000
Operating activities
Operating profit                                                                            3,861           19,393
Depreciation of property, plant and equipment                                                  37               35
Fair value movements in equity investments                                                (5,737)         (24,014)
Amortisation and impairment of intangible non-current assets                                  216               96
Decrease / (Increase) in trade and other receivables                                          262            (736)
(Decrease) / Increase in trade and other payables and provisions                          (1,689)            3,689
Profit on disposal of equity investments                                                    (762)            (790)
Dividends                                                                                   (209)                -
Profit on disposal of property, plant and equipment                                             -                6
Share-based payment charge                                                                    282              300
Net cash from operating activities                                                        (3,739)          (2,021)

Investing activities
Purchase of property, plant and equipment                                                    (65)             (34)
Purchase of equity investments                                                            (4,209)          (3,728)
Financial asset                                                                           (1,400)                -
Purchase of subsidiary undertaking                                                        (3,545)            (911)
Net cash acquired with subsidiary                                                           1,838              230
Proceeds from sale of equity investments                                                      762              965
Dividends                                                                                     209                -
Interest received                                                                           1,346            1,374
Net cash used in investing activities                                                     (5,064)          (2,104)

Financing activities
Proceeds from issue of share capital                                                       13,949              681
Net increase / (decrease) in cash and cash equivalents                                      5,146          (3,444)
Cash and cash equivalents at the beginning of the period                                   34,801           38,245
Cash and cash equivalents at the end of the period                                         39,947           34,801









IP2IPO Group plc
Notes



1.  The preliminary results for the year ended 31 December 2005 have been
extracted from audited accounts which have not yet been delivered to the
Registrar of Companies. The financial information set out in this announcement
does not constitute statutory accounts for the year ended 31 December 2005 or 31
December 2004. The financial information for the year ended 31 December 2005 is
derived from the statutory accounts for that year, except that comparative
information has been restated as a result of the adoption of International
Financial Reporting Standards (IFRS). The report of the auditors on the
statutory accounts for the year ended 31 December 2005 was unqualified and did
not contain a statement under Section 237 of the Companies Act 1985.  The
statutory accounts for the year ended 31 December 2004 have been delivered to
the registrar, while the statutory accounts for the year ended 31 December 2005
will be delivered to the registrar following the company's Annual General
Meeting.  This financial information has been prepared on the basis of the
accounting policies set out in the interim financial statements dated 30 June
2005.



2.  Availability of statutory accounts

Copies of this announcement and the full statutory accounts will be available in
the week commencing 27 March 2006 from the registered office at Warwick Court, 5
Paternoster Square, London EC4M 7BP, and from the offices of the Group's
nominated advisor, KBC Peel Hunt, 111 Old Broad Street, London, EC2N 1PH.



3.  Basic and diluted profit per ordinary share

The basic and diluted profit (loss) per ordinary share is based on profits
attributable to ordinary shareholders for the year of £5,605,000 (2004:
£21,046,000).  The basic profit (loss) per share is based on the weighted
average number of ordinary shares of 44,562,701 in issue during the year (2004
40,777,614).  The diluted profit (loss) per ordinary share in 2005 is based on
the weighted average number of ordinary shares plus the potentially dilutive
options over ordinary shares of 45,676,327 (2004: 42,171,821).



Consolidated statement of changes in shareholders' equity


                                                         Total       Share        Retained     Merger        Share
                                                        Equity     capital        earnings    reserve      premium
                                                         £'000       £'000           £'000      £'000        £'000
At 1 January 2004 (restated)                            64,954       4,064           1,918          -       58,972

Consolidated profit for the year to 31 December         21,046           -          21,046          -            -
2004

Employee share option charge in the year to 31             300           -             300          -            -
Dec 2004

Issue of share capital in the year to 31 December        1,481          65               -        783          633
2004

At 31 December 2004 (restated)                          87,781       4,129          23,264        783       59,605

Consolidated profit for the year to 31 December          5,605           -           5,605          -            -
2005

Employee share option charge in the year to 31             282           -             282          -            -
Dec 2005

Pre-acquisition reserves attributable to the              (38)           -            (38)          -            -
Group

Issue of share capital in the year to 31 December       26,149         446               -     12,014       13,689
2005

At 31 December 2005                                    119,779       4,575          29,113     12,797       73,294



5. Notice of AGM

The Annual General Meeting will be held at 3pm on 25 April 2006 at Buchanan
Communications, 45 Moorfields, London EC2Y 9AE.


                      This information is provided by RNS
            The company news service from the London Stock Exchange