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Fusion IP PLC (FIP)

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Tuesday 16 April, 2013

Fusion IP PLC

Half Yearly Report

RNS Number : 3851C
Fusion IP PLC
16 April 2013
 



 

 16 April 2013



FUSION IP PLC

 

("Fusion", "the Company" or "the Group")

 

Interim RESULTS FOR THE Six MONTHS ENDED 31 January 2013

 

Fusion IP plc (AIM: FIP), the university IP commercialisation company that turns world class research into business, is pleased to announce its unaudited Interim Results for the six months ended 31 January 2013.

 

Period highlights:

·      £1.2m funding round and 'first in man' trials for Asalus;

·      £2.5m funding for Magnomatics;

·      i2L purchase of US based, ICR Baltimore;

·      Increase in the carrying value of our investments to £21.0m (Jul 12: £19.8m);

·      Excluding intangibles, the Group reported an operating loss of £946k, a similar amount for the same time last year when a loss of £765k was shown for the same period; and

·      Closing cash and deposit balances of £4.1m (Jul 12: £5.9m).

 

Post period end highlights:

·      £20m raised in a placing with new and existing investors;

·      New university partnership agreements signed with the University of Nottingham and Swansea University;

·      Phase Focus signed a major licence agreement with Gatan for its Virtual Lens product; and

·      Fusion representatives invited to join the board and investment committee of the new Welsh £100 million life sciences investment fund, Arthurian Life Sciences.

 

 

Commenting on these Interim Results, David Baynes, Chief Executive Officer of Fusion, said:

 

"Our portfolio continues to gather strength and we expect a number of new companies to be created over the course of 2013.

 

Clearly the months post period end have been important for the Company; we have raised new funds, obtained a number of new investors and, perhaps most importantly of all, started 2 new university partnerships.

 

This is an exciting time for our Company and we very much look forward to the future and to working with our university partners."

 

For further information please contact:

 

Fusion IP plc                                                                                                                             +44 (0) 114 275 5555

David Baynes, CEO

Stuart Gall, Press Relations            

 

Cenkos Securities plc                                                                                                            +44 (0) 20 7397 8900

Elizabeth Bowman, Bobbie Hilliam (Corporate Finance)

Julian Morse (Sales)         

 

A copy of this document will be available on the company's website at www.fusion.co.uk

 

 

 

 

 

 

Chairman and Chief Executive's Statement

 

We are delighted to present our interim results for the period ended 31 January 2013. During the period we have continued to build an exciting portfolio of companies, with a number of these companies now reaching material value inflection points. Post period end, we raised £20m through a placing with new and existing shareholders; as well as signing agreements with two new universities:

 

·      Nottingham University, which is the UK's 7th ranked research-intensive university; and

·      Swansea University the second most research-intensive university in Wales after Cardiff.

 

The £20m placing will provide Fusion with the funds to invest in new start-up companies from the two new university partners and will also fund a number of our existing key companies in their late stage funding rounds, as they move up their valuation curves.

 

 

Key highlights in the period:

 

·      £1.2m funding round and 'first in man' trials for Asalus;

·      £2.5m funding for Magnomatics;

·      i2L purchase of US based, ICR Baltimore;

·      Increase in the carrying value of our investments to £21.0m (Jul 12: £19.8m);

·      Excluding intangibles, the Group reported an operating loss of £946k, a similar amount for the same time last year when a loss of £765k was shown for the same period; and

·      Closing cash and deposit balances of £4.1m (Jul 12: £5.9m).

 

 

Post-period end highlights, included:

 

·      £20m raised in a placing with new and existing investors;

·      New university partnership agreements signed with the University of Nottingham and Swansea University;

·      Phase Focus signed a major licence agreement with Gatan for its Virtual Lens product; and

·      Fusion representatives invited to join the board and investment committee of the new Welsh £100 million life sciences investment fund, Arthurian Life Sciences.

 

 

Key portfolio updates in the period:

 

Magnomatics

Our Sheffield-based electric motor company, Magnomatics, develops high torque magnetic transmissions and ultra-compact magnetically-geared motors and generators. The technology uses magnetic fields with high-powered permanent magnets to replace the meshed teeth that normally transmit mechanical power in gear systems. The magnetic fields eliminate the friction of contacting parts. As such, the super quiet, compact technology requires minimal maintenance; no oil lubrication and the gears can't be "stripped" through miss-use. The product has the potential to offer new engineering possibilities ranging from efficient, gearless generators for wind turbines, to lighter and more compact motors for hybrid vehicles.

 

In November 2012, Magnomatics successfully raised £2.5m to develop its novel Pseudo Direct Drive (PDD) system for the hybrid and electric vehicle market. It is active in a range of industries, including renewable energy, automotive, aerospace and defence, and has had over 100 industrial development contracts to date, including some of the world's largest transportation/engineering companies for its PDD system.

 

Fusion IP currently has a 32 per cent. (undiluted) shareholding in Magnomatics.

 

Phase Focus

Based in Sheffield, Phase Focus has developed a novel 'Virtual Lens' which is a digital replacement for the conventional image-forming optics used in imaging and microscopy. As well as eliminating the limitations and aberrations of conventional lens-based instruments, it can be exploited to visualise and quantify numerous specimen attributes such as surface topography, thickness and refractive index variations, or electric and magnetic field phenomena.

 

Its current products include an Ophthalmic Lens Profiler that can measure soft contact lenses with unprecedented levels of resolution and accuracy; and an optical microscope used for stain-free imaging of biological cells.

Post period end, in February 2013, Phase Focus announced that it had entered into a Licence Agreement with Gatan, Inc. ("Gatan"). Gatan is the world's leading manufacturer of instrumentation and software used to enhance and extend the operation and performance of electron microscopes. The Licence Agreement provides for joint development of a range of products, including a Phase Focus Virtual Lens "add-on" product for existing electron microscopes. Once fully developed, Gatan will market the product through its worldwide sales and distribution network. The financial terms of the agreement are undisclosed.

 

Fusion IP has a 35 per cent. (undiluted) shareholding in Phase Focus.

 

Seren Photonics

Based in Sheffield, Seren Photonics ("Seren") is developing a revolutionary new processing technique that greatly increases the efficiency at which an HB LED converts an applied voltage into light, which significantly reduces heat generation under normal running conditions. In simple terms, Seren's technology means that either for a given power consumption, much brighter LED lamps can be manufactured, or that for equivalent light output, the power consumption of LED lamps can be significantly reduced.

 

HB LEDs are set to replace incandescent lamps as governments around the world bring in legislation banning the manufacture and sale of incandescents and concerns increase about the poor light quality and environmental contamination fears from compact fluorescents. The rate of adoption is expected to accelerate as the brightness of HB LEDs increases and the cost of manufacture reduces.

 

Seren's technology is targeted at the fast growing $8bn white light HB LED markets, such as back lighting for laptops and TVs, signs and displays, as well as domestic, architectural and street lighting. This market is expected to grow to $11bn by 2015.

 

Following its £1.8m fundraising in March 2012, Seren is developing its technology for market and is in early stage licensing discussions with a number of major global HB LED companies for its technology.

 

Fusion IP has a 40 per cent. (undiluted) stake in Seren.

 

Diurnal

Cardiff-based Diurnal, a University of Sheffield spin-out, is developing a novel approach to drug delivery that will help patients suffering from reduced levels of the key hormone cortisol (hydrocortisone). Chronocort® is a modified release therapy that delivers hydrocortisone in a manner that mimics the body's normal circadian rhythm (the body's natural 24 hour hormone cycle). This circadian formulation has the potential to help patients suffering from diseases due to cortisol deficiency: congenital adrenal hyperplasia and adrenal insufficiency. Each of these rare diseases requires life-long treatment and Diurnal's novel approach to drug delivery has the potential to significantly improve patients' lives.

 

In January 2013, Diurnal announced that it had successfully enrolled the first patient into the CATCH (Chronocort® As Treatment for Congenital Adrenal Hyperplasia) trial. CATCH trial is a Phase 2 study in patients suffering from Congenital Adrenal Hyperplasia and is being run by the National Institute of Health (NIH), Maryland, US under a Cooperative Research and Development Agreement (CRADA) with an estimated completion of Part A of the study in mid-2013.

 

Chronocort® has already received two related Orphan Drug designations from the European Medicines Agency, which affords ten years of market exclusivity after the grant of marketing authorisation in Europe.

 

The Diurnal directors expect to complete the Phase 2 trial in 2013, at which point the company will either license the drug or take the drug through a Phase 3 trial.

 

Fusion IP has a 42 per cent. (undiluted) stake in Diurnal.

 

Medaphor

MedaPhor's lead product is ScanTrainer, a virtual-reality, ultrasound training simulator, which combines 'real-feel' haptic simulation with real patient scans and curriculum-based interactive learning, to provide fast and effective ultrasound training in a non-clinical environment.

 

These educationally driven training systems relieve the pressure and costs on service delivery within hospitals and training schools, by allowing doctors to learn ultrasound scanning skills on 'real' patients in their own time, through self-directed learning.

 

The company has had extremely encouraging growth as it expands its sales in the US and Europe, with over 50 hospitals now using the system in seven countries around the world.

 

In July 2012 the company raised over £1m in funding to complete the development of its second ScanTrainer platform, the TransAbdominal ScanTrainer, which launched to the UK and US markets at the end of March 2013. This system is expected to open up the large, general medical ultrasound training market.

 

 

 

In November 2012 MedaPhor announced that Riccardo Pigliucci (ex President of Perkin-Elmer and Director of Oxford Nanopore) had joined the company as Chairman.

 

Fusion IP has a 39 per cent. (undiluted) shareholding in Medaphor.

 

Asalus Medical Instruments

Cardiff based Asalus Medical Instruments ("Asalus"), is developing a range of innovative medical devices that aim to improve the safety and efficiency of laparoscopic surgery. Laparoscopic surgery is a modern surgical technique in which operations in the abdomen are performed through small incisions, as compared to the larger incisions needed in traditional surgical procedures. There are several benefits to conducting laparoscopic surgery and, as a result, the number of procedures conducted using this technique has grown rapidly over recent years.

 

Over two million laparoscopic operations per year are now performed in the USA alone and the market for laparoscopic surgery products is estimated at approximately $18 billion worldwide, growing 7-8 per cent. annually. Asalus currently has three projects in development, which it is looking to commercialise through partnerships with leading medical device companies.

 

Its lead product is Ultravision, the company's revolutionary surgical smoke clearing system for use in laparoscopic surgery, which successfully completed its 'first-in-man' trial in January 2013.

 

This was a key milestone for the company, that combined with its December 2012 fund raising of £1.2m, will enable the company to complete product development and apply for regulatory approval to launch the product in 2013.

 

The randomised, controlled, comparative study was the first use of the Ultravision device in patients, with the dual aims of assessing safety and performance. The trial assessed the use of Ultravision in thirty participants undergoing scheduled laparoscopic gallbladder removal at University Hospital Llandough (Cardiff and Vale University Health Board, Wales, UK). The results demonstrated that Ultravision was effective in maintaining a clear visual field throughout the laparoscopic procedure. This was achieved without the need to deflate the abdomen or release smoke produced during surgery into the operating theatre environment. In addition 77% of the procedures were completed without interruption compared to less than 1% in the control group that did not use Ultravision. There were no adverse events.

 

Fusion IP holds a 44 per cent. (undiluted) stake in Asalus.

 

 

New Universities

 

In line with the Board's long term strategy to expand the Fusion IP business model, the Company has entered into agreements with The University of Nottingham and Swansea University.

 

The new agreements complement Fusion IP's existing equity based university agreements by providing the Company with access to IP, but without having to make on-going or equity-based payments. The Directors believe this structure provides a flexible partnership for both parties, and enables the university to access Fusion IP's management and funds while Fusion IP gains access to such university's IP without tying up equity or contractual service fees. It also enables Fusion IP to generate more start-up companies per annum and utilise its central overhead more effectively.

 

The University of Nottingham

 

The University of Nottingham has over 40,000 students on its three campuses in the UK, Malaysia and China and as a member of the Russell Group is recognised as one of the UK's leading research intensive universities. In 2012 it generated over £100m in research grants and after the most recent RAE results in 2008, it was ranked 7th in the UK for its research excellence, according to the research power rankings produced by Research Fortnight.

 

Following the RAE results, 90 per cent. of all research at University of Nottingham was classified as of an 'international standard' and 60 per cent. as 'world-leading' or 'internationally excellent'. In 2008 the University of Nottingham was named Entrepreneurial University of the Year.

 

The University of Nottingham has a well-established technology transfer office, with close links with its academic community. To date the university has been involved in over 40 spin-out related companies and has a current portfolio of 30 spin-outs, of which 16 have products in the marketplace.

 

Swansea University

 

Established in 1920, Swansea University is a research led university, that following the latest RAE, 85 per cent. of its submitted research, was classified as of an "international standard" and almost 50 per cent. as "world-leading" or "internationally excellent". It has a number of excellent research departments, including the College of Engineering, which received a 5 QS star rating, for the excellence of its teaching, the highest achievable. Its newly built, Institute of Life Sciences, is one of the premier research facilities in Wales and the largest university campus investment by the Welsh Government.

 

The university has an established technology transfer office with an existing pipeline of potential portfolio company projects.

 

 

Change of broker

Post-period end, Fusion appointed Cenkos Securities plc as its Nominated Adviser and Broker.

 

 

Current trading

The combination of our current agreements and portfolio companies, combined with the post period placing of £20m and signing of two new university agreements, is a significant advance for the Company.

 

Many of the Company's portfolio companies are now well funded and therefore only limited uplifts are expected in the second half of the year as NAV is based primarily on the last funding round. However the Directors believe that a number of companies are increasing in value, which will be reflected in results in the longer term. The Directors are looking forward to continuing to develop the Group's existing portfolio and identifying new opportunities and are now well placed to do so.

 

We remain fully committed to the commercialisation of the UK's leading university generated IP and believe we are well placed to further increase our pipeline and maximize the returns from our increasingly mature portfolio.

  

 

 

 

Doug Liversidge CBE                                                                         David Baynes

Chairman                                                                                              Chief Executive

 

 

 

 

Financial Review

 

Results

Excluding the amortisation of intangible assets, the Group achieved an underlying loss from operating activities of £946k compared to a loss of £765k for the six months ended 31 January 2012.

 

The Group's reported loss from operating activities for the period increased to £1.9m, compared to a loss of £1.8m for the six months ended 31 January 2012.

 

The movement in reported losses mainly arose from additional spin out expenses due to new subsidiary companies.

 

 

Revenue and portfolio returns

The first half of the year shows revenue and portfolio return of £307k (31 January 2012: £376k).

 

The movement can be explained as follows:

 

·           Gain on disposal of investments of £10k (31 January 2012: £54k), this gain relates to a part disposal  of a subsidiary during the period;

 

·           Net change in fair value of investments in spin-out companies of £nil (31 January 2012: £nil), the current period result reflects an uplift in fair value of £615k arising from increased valuations in spin-out companies, mainly Asalus at £598k, offset by unrealised losses and a provision against loans to Asterion. These movements are as shown in note 2 to the interim financial statements; and

 

·           Revenue and dividend income of £297k (31 January 2012: £322k), resulting from management services provided to non subsidiary spin-out companies, licence income and development grants received.

 

 

Investments

At 31 January 2013, the Group had investments and loans in 20 spin-out companies amounting to £21.0m (31 July 2012: £19.8m). The investments are all classified as financial assets and are held at fair value under IAS 39 "Financial Instruments: Recognition and Measurement".

 

During the period the Group invested £1,189k in follow-on funding (31 January 2012: £705k), this included equity investments of £354k in Diurnal, £330k in Magnomatics, £351k in Asalus. In addition the Group has two trading spin-out subsidiaries (31 January 2012: two) and three new start up companies which are consolidated (31 January 2012: nil). During the half year the Group provided funding of £187k to these subsidiaries (31 January 2012: £5k).

 

 

Intangible assets

At 31 January 2013, the Group had intangible assets of £8.5m (31 July 2012: £9.4m) which represents the IP rights over the IP pipelines with Cardiff University and the University of Sheffield. The Group's view is that these assets have a finite life of ten years, being the length of the IP pipelines, and to that extent they are being amortised over their respective unexpired periods with provision made for any impairment if required.

 

 

Cash and deposit balances

Cash and deposit balances of the Group as at 31 January 2013 were £4.1m (31 July 2012: £5.9m). The Directors believe these balances, along with the £20m additional funds raised in the post period end placing, are sufficient to support the current portfolio of companies, planned creation of new portfolio companies and corporate operating expenses for at least the next twelve months.

 

The net decrease in cash and cash equivalents of £1.9m is primarily summarised as outflows on operating activities of £0.8m and outflows on investing activities of £1.1m.

 

The Group continues to have no borrowings or foreign currency deposits.

 

 

 

 

 

 

 

Consolidated statement of comprehensive income

for the six months ended 31 January 2013

 



Unaudited

Unaudited

Audited



Six months

Six months

Year



ended

ended

Ended



31 January

31 January

31 July



2013

 2012

 2012


Note

£000

£000

£000

Revenue and portfolio return


 

 

 

Revenue


288

313

705

Dividend income


9

9

19

Change in fair value of investments

2

-

-

3,567

Gain on disposal of investments


10

54

459

 


307

376

4,750

Operating expenses


 

 

 

- corporate operating expenses


(875)

(866)

(1,708)

- subsidiary spin-out operating expenses


(378)

(275)

(656)

- amortisation of intangible assets


(994)

(995)

(1,996)

 


(2,247)

(2,136)

(4,360)

Results from operating activities


(1,940)

(1,760)

390

Finance income


118

89

177

Finance expenses


(31)

(30)

(62)

(Loss)/profit before taxation


(1,853)

(1,701)

505

Taxation


-

-

-

(Loss)/profit and total comprehensive income for the period


(1,853)

(1,701)

505

 


 

 

 

Attributable to:


 

 

 

- owners of the parent


(1,724)

(1,623)

669

- non-controlling interests


(129)

(78)

(164)

 


(1,853)

(1,701)

505

 


 

 

 

Basic and fully diluted (loss)/profit per share

3

(2.37)p

(2.69)p

1.00p


Consolidated statement of financial position

as at 31 January 2013





Unaudited

Unaudited

Audited



As at

As at

As at



31 January

31 January

31 July



2013

 2012

 2012


Note

£000

£000

£000

Assets


 

 

 

Non-current assets


 

 

 

Property, plant and equipment


13

16

12

Intangible assets


8,452

10,447

9,446

Investments

2

20,952

17,473

19,763

Total non-current assets


29,417

27,936

29,221

Current assets


 

 

 

Trade and other receivables


975

701

1,055

Deposits


2,000

-

2,000

Cash and cash equivalents


2,065

5,204

3,923

Total current assets


5,040

5,905

6,978

Total assets


34,457

33,841

36,199

Equity


 

 

 

Called up share capital


729

728

728

Share premium


44,517

44,476

44,486

Other reserves


125

125

125

Retained earnings


(13,711)

(14,060)

(11,848)

Equity attributable to equity holders of the parent


31,660

31,269

33,491

Non-controlling interests


-

-

-

Total equity


31,660

31,269

33,491

Non-current liabilities


 

 

 

Amounts owed to related parties


2,446

2,245

2,337

Current liabilities


 

 

 

Trade and other payables


351

327

371

Total liabilities

 

2,797

2,572

2,708

Total equity and liabilities

 

34,457

33,841

36,199

 


Consolidated statement of cash flows

for the six months ended 31 January 2013

 


Unaudited

Unaudited

Audited


Six months

Six months

Year


Ended

Ended

Ended


31 January

31 January

31 July


2013

 2012

2012


£000

£000

£000

Cash flows from operating activities

 

 

 

(Loss)/profit for the period

(1,853)

(1,701)

505

Adjustments for:

 

 

 

  Depreciation of property, plant and equipment

3

6

12

  Amortisation of intangible assets

994

995

1,996

  Net finance income

(87)

(59)

(115)

  Share-based payments

-

26

32

  Dividend income

(9)

(9)

(19)

  Gain on disposal of investments

(10)

(54)

(459)

  Fair value movement on investments

-

-

(3,567)

Changes in working capital:

 

 

 

   Decrease/(Increase) in trade and other receivables

80

(89)

(442)

   Increase/(decrease) in trade and other payables

58

(54)

(9)

Net cash outflow from operating activities

(824)

(939)

(2,066)

Cash flows from investing activities

 

 

 

Purchase of property, plant and equipment

(4)

(5)

(8)

Purchase of investments

(1,189)

(705)

(2,885)

Proceeds from sale of investments

-

16

3,937

Cash transfers to longer-term bank deposits

-

-

(2,000)

Dividend income

9

9

19

Interest received

118

89

177

Net cash outflow from investing activities

(1,066)

(596)

(760)

Cash flows from financing activities

 

 

 

Proceeds from issue of share capital

32

5,016

5,026

Share issue costs

-

(239)

(239)

Net cash inflow from financing activities

32

4,777

4,787

Net (decrease)/increase  in cash and cash equivalents

(1,858)

3,242

1,961

Cash and cash equivalents at the beginning of the period

3,923

1,962

1,962

Cash and cash equivalents at the end of the period

2,065

5,204

3,923


Consolidated statement of changes in equity

for the six months ended 31 January 2013

 





Attributable to equity holders of the Group



Share capital

Share premium

Other reserves

Retained earnings

Total

Non-controlling interests

Total


£000

£000

£000

£000

£000

£000

£000

At 1 August 2011

542

39,034

3

(12,347)

27,232

-

27,232

Loss and total comprehensive loss for the period

-

-

-

(1,623)

(1,623)

(78)

(1,701)

Non-controlling interest attributable to the Group

-

-

-

(116)

(116)

116

-

Issue of share capital

186

4,773

-

-

4,959

-

4,959

Share-based payments

-

-

-

26

26

-

26

Part disposal of subsidiaries

-

-

-

-

-

(38)

(38)

Movement in shares to be issued

-

669

122

-

791

-

791

At 31 January 2012

728

44,476

125

(14,060)

31,269

-

31,269

Profit and total comprehensive profit for the period

-

-

-

2,292

2,292

(86)

2,206

Non-controlling interest attributable to Group

-

-

-

(86)

(86)

86

-

Issue of share capital

-

10

-

-

10

-

10

Share based payments

-

-

-

6

6

-

6

At 31 July 2012

728

44,486

125

(11,848)

33,491

-

33,491

Loss and total comprehensive loss for the period

-

-

-

(1,724)

(1,724)

(129)

(1,853)

Non-controlling interest attributable to Group

-

-

-

(139)

(139)

139

-

Issue of share capital

1

31

-

-

32

-

32

Part disposal of subsidiaries

-

-

-

-

-

(10)

(10)

At 31 January 2013

729

44,517

125

(13,711)

31,660

-

31,660

 

 

 

 


 

 

 

 

Notes to the consolidated financial statements

for the six months ended 31 January 2013

 

1 Accounting policies

Basis of preparation and accounting policies

The interim results of Fusion IP plc (the "Group") are for the six months ended 31 January 2013.

 

These unaudited consolidated interim financial statements have been prepared in accordance with the AIM Rules. These comprise the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated cash flow statement, the consolidated statement of changes in equity and the related notes ("the interim financial statements"). The Group has chosen not to adopt IAS 34 "Interim Financial Reporting" in the preparation of these interim financial statements.

 

These interim financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets at fair value, as required by IAS 39 "Financial Instruments: Recognition and Measurement". These interim financial statements are presented in Sterling, rounded to the nearest thousand.

 

These interim financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006 and are unaudited. The comparative information for the six months ended 31 January 2012 is also unaudited. Statutory accounts for the year ended 31 July 2012 were approved by the Board of Directors on 15 October 2012 and delivered to the Registrar of Companies. The report of the auditors was: (i) unqualified; (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report; and (iii) did not contain a statement under Section 498 of the Companies Act 2006.

 

The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 July 2012, as described in those financial statements. The consolidated financial information does not comply with the full disclosure requirements of all applicable IFRS.

 

Going concern

The Group has cash including deposit balances as at 31 January 2013 of £4,065,000 (31 July 2012: £5,923,000, 31 January 2012: £5,204,000). The Directors have prepared and review on a regular basis financial forecasts based upon assumptions as to funding, investments in new and existing spin-out companies and the realisation of assets, along with other factors known to have a significant impact on results. Based upon these the Directors have concluded that the Group has adequate working capital and cash balances to operate for the foreseeable future and that it is appropriate to use the going concern basis of preparation for this financial information.

 

Critical accounting estimates and judgements

Preparing the interim financial report requires Management to make judgements, estimates and assumptions that effect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparing this condensed interim financial report, significant judgements made by Management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as applied to the consolidated financial statements as at and for the year ended 31 July 2012.

 

2 Investments - designated at fair value through profit and loss


Spin-out




Companies

Loans

Total


£000

£000

£000

Fair Value

 

 

 

At 1 August 2012

18,930

833

19,763

Additional investments/loans

979

210

1,189

Change in fair value in the period

298

(298)

-

At 31 January 2013

20,207

745

20,952

Change in fair value in the period

 

 

 

Fair value gains

615

-

615

Fair value losses

(317)

(298)

(615)

 

298

(298)

-

Notes to the consolidated financial statements continued

for the six months ended 31 January 2013

 

3 Loss per share

The basic loss per share is calculated on the basis of the losses attributable to equity shareholders of the parent company and the average number of shares in issue being 72,842,850 for the period ended 31 January 2013 (66,626,200 for 31 July 2012 and 60,429,517 for 31 January 2012). Share options are non-dilutive for the period because of the loss. There were no dividends for the period ended 31 January 2013.

 

 

4 Share capital

During the period the Company issued a further 95,000 Ordinary shares of 1p each following the exercise of share options, the total consideration for these shares amounted to £32,000.

 

The Company's issued share capital as at 31 January 2013 amounted to 72,927,850 Ordinary shares of 1p each.

 

 

5 Related party transactions

During the period, the Group purchased administrative and other services from Sheffield University Enterprises Limited (SUEL), a wholly owned subsidiary of the University of Sheffield, totalling £18,490 (6 month period ended 31 January 2012: £15,680). At 31 January 2013 the balance due to SUEL was £4,286 (31 July 2012: £3,459).

Under the terms of the agreement dated January 2007 Fusion IP Cardiff Limited paid Cardiff University £105,000 (6 month period ended 31 January 2012:  £105,000) as payments to support the management of the IP pipeline.

Under the terms of the agreement dated January 2009 Fusion IP Sheffield Limited paid Sheffield University £43,750 (6 month period ended 31 January 2012: £52,500).

Fusion IP Sheffield Limited leased office premises from the University of Sheffield, payments of £10,820 were made during the period (6 month period ended 31 January 2012: £10,223).

During the period Fusion IP Sheffield Limited made payments of £13,085 (6 month period ended 31 January 2012: £13,062) to the University of Sheffield under a secondment agreement for services from personnel.

Fusion IP Sheffield Limited purchased IP from the University of Sheffield during the period with a total value of £978 (6 month period ended 31 January 2012: £12,682).

At 31 January 2013 the total balance due to the University of Sheffield in respect of the above transactions was £2,059 (31 July 2012: £16,428).

During the period Fusion IP has continued to accrue interest due on loans in respect of the purchase of the original portfolio companies from both the University of Sheffield and Cardiff University. At 31 January 2013, Fusion owed University of Sheffield £761,000 (31 July 2012: £751,000) and Cardiff University £1,545,000 (31 July 2012: £1,526,000).

During the period a subsidiary company, Absynth Biologics Limited, increased their loan from the University of Sheffield to £140,000 (31 July 2012: £60,000). Interest of £1,736 (6 month period ended 31 January 2012: £nil) was due in the period. At 31 January 2013 the balance due to the University of Sheffield was £140,436 (31 July 2012: £60,212), the loan is repayable in three years.

During the period, Fusion IP supplied management services to companies in which it held a participating interest totalling £187,915 (6 month period ended 31 January 2012:  £174,816). At 31 January 2013 the amount owed to Fusion IP was £26,734 (31 July 2012: £171,134).

During the period, companies in which Fusion IP held a participating interest contracted for £449,477 (6 month period ended 31 January 2012:  £237,810) of research services combined from the University of Sheffield and Cardiff University. At 31 January 2013 the combined amount owed to the universities for these contracted research services was £198,853 (31 July 2012: £202,764).

During the period, IP Group plc invested £1,057,009 (6 month period ended 31 January 2012: £nil) in companies in which Fusion IP held a participating interest.

 

6 Post balance sheet events

On 11th April 2013, following the successful completion of a placing for new shares, the Company issued 36,499,246 Ordinary shares of 1p each. The total consideration for these shares amounted to £20m (excluding costs).

 

 


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

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