IP Group news .

Continued progress in key portfolio companies, strong balance sheet maintained, portfolio well-funded

IP Group plc (LSE: IPO), which invests in breakthrough science and innovation companies with the potential to create a better future for all, today announces its financial results for the six months ended 30 June 2023.

Half-year 2023 highlights

Portfolio well-funded, continued significant progress in key themes & companies

• Portfolio companies well-funded; total funds raised by portfolio approximately £300m (HY22: c.£350m; FY22: £1.0bn) including Quantum Motion (£42m), Accelercomm (£22m), OxCCU (£18m), Garrison (£16m) and Mixergy (£9m).
• Only 16% of our portfolio by value need to raise financing before the second half of 2024
• Private portfolio company funding round valuations remained robust with 86% of the 14 portfolio funding rounds completed in the period taking place at or above previous funding round valuations
• Healthier future (Life Sciences): Istesso’s Phase 2b trial for its lead drug MBS2320 in rheumatoid arthritis continues to recruit to plan and remains on target to read out in H1 2024. Approval received to start additional Phase 2 trial in idiopathic pulmonary fibrosis (IPF) in H2 2023. Group completed a £15m investment and further £10m commitment to fully fund both trials. Pulmocide – recruitment into Phase 3 efficacy study underway
• Tech-enriched future (Deeptech): Featurespace, Garrison and Ultraleap all posted double-digit revenue growth in H1, significant fundraisings completed for Quantum Motion, Accelercomm & Garrison
• Regenerative future (Cleantech): Strong technical progress at Hysata, key milestones achieved, triggering release of second tranche of Series A funding, OXCCU completed £18m Series A financing led by Clean Energy Ventures

Strong balance sheet maintained

• Strong balance sheet and liquidity to support new and follow-on investment in the portfolio with gross cash and deposits at 30 June 2023 of £250.0m (HY22: £235.7m; FY22: £241.5m); total potential liquidity including quoted shares of over £450m
• Cash proceeds in line with expectations at £32.2m, mainly from the second tranche of consideration from the sale of WaveOptics (HY22: £2.1m; FY22 £28.1m)
• Investment into portfolio maintained: £59.8m into 23 companies across all three thematic areas (HY22: £52m; FY22: £93.5m) including significant allocation to Istesso (£15.0m)
• Loss in the period of £54.5m (HY22: Loss of £309.8m; FY22: Loss of £344.5m), partly driven by a reduction in the value of Oxford Nanopore, which reduced by £27.8m, and negative portfolio foreign exchange movements of £11.2m
• Interim dividend of 0.51p per share (2022 interim dividend of 0.50pps; final dividend of 0.76pps)

Post period-end update

The fair value of the Group’s holdings in listed companies experienced a net fair value increase of £45m in the period since 30 June, including ONT increasing by £42m.

Summary financials

	HY to 30 June 2023 (unaudited)	HY to 30 June 2022 (unaudited)	FY 2022 (audited)
Net Asset Value (NAV)	£1,313.6m; 126.7pps	£1,414.0m; 136.7pps	£1,376.1m; 132.9pps
Loss	(£54.5m)	(£309.8m)	(£344.5m)
Loss/profit excluding ONT (i)	Loss of (£26.7m)	Profit of £35.7m	Profit of £25.2m
Total portfolio (i)	£1,276.1m	£1,265.5m	£1,258.5m
Net portfolio loss (i)	(£44.4m)	(£291.1m)	(£309.1m)
Gross cash and deposits (i)	£250.0m	£235.7m	£241.5m
Cash proceeds (i)	£32.2m	£2.1m	£28.1m
Portfolio investment (i)	£59.8m	£52.0m	£93.5m
Dividend	0.51 pps	0.50pps	1.26pps(ii)

(i)  Note 12 details the Alternative Performance Measures (“APM”)

(ii)  Amount shown for FY 2022 is total dividend including final dividend approved and paid in 2023

Greg Smith, Chief Executive of IP Group, said: “IP Group is a long-term investor in breakthrough science and innovation companies that are addressing many of the world’s unmet needs and, while the current economic environment remains challenging, I am pleased with portfolio progress in the period. The successful raising of more than £300m of financing by our companies in the first half, including £60m from the Group, is testament to their quality.

The Group has maintained its financial strength during the period, the result of £32m cash realisations and having taken pre-emptive action in light of the challenging investment environment. This financial strength was highlighted as a strategic asset as our portfolio navigated events such as the failure of Silicon Valley Bank. We have also continued our approach of dedicating a proportion of all cash realisations to supporting capital returns for shareholders through an interim dividend.

The opportunity for value creation in our portfolio remains compelling. Double-digit revenue growth in our largest deeptech and healthcare companies is evidence of continued strong demand for their products and services. Our therapeutics portfolio includes twelve companies with products in clinical trials, seven of which are targeting key inflection points in the next 18 months. Breakthrough cleantech businesses, such as Hysata, have delivered technical milestones and commercial demand. The Group is well-positioned to support these businesses and deliver strong, impactful returns for all stakeholders over time.”

Webinar 

IP Group will host a webinar for analysts and investors today, 02 August, at 10:00am. For more details or to register as a participant please visit https://www.investormeetcompany.com/ip-group-plc/register-investor.

For more information, please contact:

IP Group plc	www.ipgroupplc.com
Greg Smith, Chief Executive Officer David Baynes, Chief Financial & Operating Officer Liz Vaughan-Adams, Communications	+44 (0) 20 7444 0050   +44 (0) 20 7444 0062/+44 (0) 7967 312125
Portland
Vic Wallin Alex Donaldson	+44 (0) 7973 823119 +44 (0) 7516 729702

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

This half-yearly report 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 that 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 within the Group’s portfolio of investments. Throughout this Half-Yearly Report, the Group’s holdings in portfolio companies reflect the undiluted beneficial equity interest excluding debt, unless otherwise explicitly stated.

Half-yearly results can be viewed in the PDF file format.