IP Group news 0

IP Group plc (LSE: IPO), the developer of intellectual property-based businesses, today announces its annual financial results for the year ended 31 December 2019.

Portfolio highlights

• Fair value of portfolio: £1,045.6m (2018: £1,128.2m)
• 169% increase in cash realisations to £79.5m, which exceeded investment into portfolio for the first time since 2007 (2018: £29.5m)
• Investment into portfolio: £64.7m (2018: £100.9m)
• Net portfolio fair value reduction1 of £43.9m, approximately 4% (2018: £48.4m, 4%)
• Oxford Nanopore announced investment and secondary share sales totalling £109.5m, having more than doubled revenue and orders in 2018 to $43.7m and $60.6m respectively
• Istesso announced positive outcome from Phase 2a study of MBS2320 for rheumatoid arthritis
• Significant commercial progress at Ceres Power including first product launch with Japan’s Miura and further £8m licence and joint development agreement with Korea’s Doosan
• Total funds raised by portfolio companies of £430m (2018: £717m) including financing rounds for Inivata (£40.0m), Featurespace (£25.0m) and Azuri Technologies (£20.0m)

Financial and operational highlights

• Hard NAV¹ £1,141.5m or 108 pence per share (2018: £1,217.5m, 115 pence per share)
• Net assets £1,141.9m (2018: £1,218.2m)
• Strong liquidity with gross cash and deposits at 31 December 2019 of £194.9m (2018: £219.0m) and net cash of £112.4m (2018: £121.2m)
• Return on Hard NAV¹ of negative £73.7m (2018: negative £75.6m)
• Loss for the year of £78.9m (2018: £293.8m loss)
• Net overheads reduced by 13% to £22.6m (2018: £26.0m)
• Parkwalk Advisors, the Group’s specialist EIS subsidiary, grew assets under management to £300m (2018: £220m)
• Further encouraging progress made in developing the Group’s businesses in the US and Australia
• Board strengthened through appointment of two additional independent non-executive directors

Post period end highlights

• Ceres Power announces Bosch to increase stake to 18% from 4% with £38m strategic investment, which included a £22m partial realisation by IP Group
• Total further cash realisations from the portfolio of £55.4m in 2020

¹ Alternative performance measure, see Note 27 for definition and reconciliation to IFRS primary statements

Alan Aubrey, Chief Executive of IP Group, said: “In 2019 realisations from our portfolio hit a record £79.5m and exceeded investment into the portfolio for the first time since 2007. This strong cash generation has continued into 2020, with realisations to date now totalling more than £55m. Realisations from our maturing companies, the ongoing focusing and rationalisation of the portfolio as well as tight cost control has placed the Group in a strong financial position and these remain three areas of focus for the Group in 2020.

During 2019 the Group’s portfolio saw a net fair value reduction of £43.9 or 4%, and, whilst disappointing, this reflects ongoing rationalisation in the portfolio and significant headwinds, particularly in the UK market. However, our three most valuable holdings, Oxford Nanopore, Istesso and Ceres Power, made excellent progress during the year with Oxford Nanopore and Ceres Power also announcing positive developments since the year end. Consequently, we remain confident in the prospects of our portfolio, which we continue to believe includes world-changing businesses that will deliver impact and significant benefits for multiple stakeholders.”

For more information, please contact:

IP Group plc	www.ipgroupplc.com
Alan Aubrey, Chief Executive Officer Greg Smith, Chief Financial Officer Liz Vaughan-Adams, Communications	+44 (0) 20 7444 0050 +44 (0) 20 7444 0062/+44 (0) 7979 853802
Charlotte Street Partners
David Gaffney Andrew Wilson	+44 (0) 7854 609998 +44 (0) 7810 636995

Further information on IP Group is available on our website: www.ipgroupplc.com

Notes

(i) Nature of announcement

This Annual Results Release was approved by the directors on 10 March 2020.

The financial information set out in this Annual Results Release does not constitute the company's statutory accounts for 2019 or 2018. Statutory accounts for the years ended 31 December 2019 and 31 December 2018 have been reported on by the Independent Auditor. The Independent Auditor’s Reports on the Annual Report and Financial Statements for 2019 and 2018 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. Statutory accounts for the year ended 31 December 2016 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 December 2019 will be delivered to the Registrar following the Company's annual general meeting.

The 2019 Annual Report and Accounts will be published in April 2020 and a copy will be posted on the Group's website (www.ipgroupplc.com). In accordance with Listing Rule 9.6.1 a copy of the Annual Report and Accounts will also be submitted to the National Storage Mechanism on or around this date and will be available for inspection at: www.Hemscott.com/nsm.do from that time.

Throughout this Annual Results Release the Group’s holdings in portfolio companies reflect the undiluted beneficial equity interest excluding debt, unless otherwise explicitly stated.

(ii) Forward looking statements

This Annual Report and Accounts may contain forward looking statements. These statements 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 companies within the Group’s portfolio.

Annual Results can be viewed in the PDF file format