IP Group news 0

Focused and well positioned for the future; significant inflection points expected over the short term.

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 annual financial results for the year ended 31 December 2023.

Highlights

Maturing portfolio with multiple near-term value creation opportunities

• Significant portfolio inflection points, including over 10 companies now in clinical studies and expecting key data by the end of 2025, expected to evidence strong value creation
• Capital allocation prioritised to high-growth sectors where we have deep expertise and experience
  • Healthier future (Life Sciences): Istesso on track to deliver Phase 2b data for Leramistat (MBS2320) in rheumatoid arthritis in H1 2024; Pulmocide Phase 3 study of novel anti-fungal for invasive pulmonary Aspergillus underway
  • Tech-enriched future (Deeptech): Featurespace posts double-digit revenue growth; significant fundraisings completed for Quantum Motion, Accelercomm & Garrison, portfolio poised to benefit from growth in 2024
  • Regenerative future (Cleantech): Significant capital ($15m) committed to Hysata Series B fund raise, which will complete in 2024. Technical milestone achieved in 2023
• £0.7bn of total capital raised by portfolio in 2023 alongside leading co-investors including Bosch Ventures, BP Ventures, Clean Energy Ventures, L&G, M&G, Merck Ventures, Morningside, Pfizer, Roche and Sofinnova (2022 £1.0bn)
• Decisive action to focus on the highest-growth opportunities, deprioritising future investment in our US platform and cessation of plans for China growth fund

Financial strength maintained during challenging markets

• Strong balance sheet and liquidity with gross cash of £226.9m (2022: £241.5m)
• £73.2m portfolio investment into 33 companies across our three high-growth sectors (2022: £93.5m, 46 companies) representing around 10% of capital raised by our portfolio (2022: 9% of total capital raised)
• Cash proceeds in line with expectations at £38.6m (2022 £28.1m)
• NAV per share declined to 114.8p (-13%), driven primarily by adjustments to the carrying values of First Light Fusion, our US platform, Hinge Health and Akamis Bio and reflecting a fair value decrease of listed holding Oxford Nanopore, Since year-end, further reduction in listed portfolio of £45.4m.
• Third party managed funds of £650m (2022: £700m), with more than £100m available for investment

Continued commitment to shareholder returns

• Launched further £20m share buyback fulfilling our commitment to regular cash returns from realisations
• As announced on 18 December 2023, future cash returns are expected to be in the form of share buybacks when the share price discount to NAV exceeds 20%
• Over £75m of total cash returned to shareholders through dividends and share buybacks since 2021

Summary financials

	FY 2023	FY 2022
Net Asset Value (NAV)(i)	£1,190.3m; 114.8pps	£1,376.1m; 132.9pps
Return on NAV (i)	-13%: (£172.2m)	-20%; (£341.1m)
Loss for the year	(£174.4m)	(£344.5m)
Total portfolio(i)	£1,164.9m	£1,258.5m
Gross cash and deposits(i)	£226.9m	£241.5m
Cash proceeds(i)	£38.6m	£28.1m
Portfolio investment (i)	£73.2m	£93.5m

(i)  Note 29 details the Alternative Performance Measures ("APM")

Greg Smith, Chief Executive of IP Group, said:

“The market environment for early-stage investing remained challenging in 2023. In response, we have prioritised and heavily focused our activities and capital on developing leading portfolio opportunities in the high-growth sectors where our teams have deep expertise. The Group’s portfolio successfully raised a total of £0.7bn, with the Group investing £73m alongside more than fifty co-investors. Having appropriately managed our level of portfolio investment, the Group finished the year in a strong financial position with £227m gross cash – an important strategic asset in the current environment.

The Board remains committed to delivering shareholder returns that include a regular cash component from realisations. This is now anticipated to be solely in the form of share buybacks while the share price discount to NAV exceeds 20%.

I believe the Group is well positioned for 2024. We have an excellent team that combines university relationships with deep sector experience and networks, allowing us to access highly differentiated dealflow. We are one of the companies most closely aligned with the UK’s ‘science superpower’ ambition, which we intend to build on this year. In pursuing our purpose to accelerate the power of science for a better future by starting and growing businesses driving the energy transition, the digital transformation and improved health outcomes, we can make a significant dent in some of society’s biggest needs and deliver compelling financial returns for our shareholders.”

Webinar

IP Group will host a webinar for analysts and investors today, 13 March, at 09:00am. 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 and Operating Officer Liz Vaughan-Adams, Communications	+44 (0) 20 7444 0050 +44 (0) 20 7444 0062/+44 (0) 7967 312125
Portland
Tristan Peniston-Bird Alex Donaldson	+44 (0) 7772 031886 +44 (0) 7516 729702

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 13 March 2024.

The financial information set out in this Annual Results Release does not constitute the Company's statutory accounts for 2023 or 2022. Statutory accounts for the years ended 31 December 2023 and 31 December 2022 have been reported on by the Independent Auditor. The Independent Auditor’s Reports on the Annual Report and Financial Statements for 2023 and 2022 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 2022 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 December 2023 will be delivered to the Registrar following the Company's Annual General Meeting.

The 2023 Annual Report and Accounts will be published in April 2024 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 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 companies within the Group’s portfolio.

Annual Results can be viewed in the PDF file format.