TIDMIPO
RNS Number : 1138V
IP Group PLC
05 August 2015
FOR RELEASE ON 5 August 2015
("IP Group" or "the Group" or "the Company")
Half-yearly results
IP Group plc (LSE: IPO), the developer of intellectual
property-based businesses, today announces its half-yearly results
for the six months ended 30 June 2015.
HALF YEAR HIGHLIGHTS
Financial and operational update
- Net assets excluding intangibles and the Oxford equity rights
asset increased to GBP700.6m (HY14: GBP449.4m; FY14: GBP451.3m)
- Adjusted profit before tax of GBP70.1m (HY14: GBP15.0m; FY14:
GBP16.2m), excluding amortisation of intangible assets and
reduction in fair value of Oxford Equity Rights asset of GBP3.7m
(HY14: GBP2.4m; FY14: GBP6.7m)
- GBP178.8m (net of expenses) raised through the issue of new equity capital
- Acquisition of a strategic holding in Oxford Sciences
Innovation plc, broadening the Group's exposure to spin-out
companies from the University of Oxford
- Modern Biosciences plc reached the first development-related
milestone in its agreement with Janssen Biotech, Inc.
- Two further spin-out companies created in the US; the Group
has now formed its first spin-out company from each of Columbia,
Pennsylvania and Princeton universities
- Net cash and deposits at 30 June 2015: GBP219.6m (HY14: GBP122.6m; FY14: GBP97.3m).
Portfolio update
- Fair value of portfolio: GBP478.2m (HY14: GBP319.6m; FY14: GBP349.9m)
- Capital provided to portfolio companies and projects: GBP55.1m
(HY14: GBP14.9m; FY14: GBP46.8m)
- Portfolio realisations: GBP0.4m (HY14: GBP3.3m; FY14: GBP9.7m)
- Group's portfolio companies raised approximately GBP80m of new capital during the half year
- Oxford Nanopore Technologies Limited held well-received
"London Calling" conference and launched PromethION Early Access
Programme
- Diurnal Limited made significant progress with its primary
lead products for the treatment of chronic endocrine diseases
- Tissue Regenix Group plc and Actual Experience plc completed
funding rounds of GBP20m and GBP15.2m respectively.
Post-period-end update
- GBP30m, 8-year debt facility secured from the European
Investment Bank, representing an additional source of long-term
capital and an evolution in the Group's capital structure
- Oxford Nanopore Technologies Limited and Avacta Group plc
completed funding rounds of GBP70m and GBP22m respectively
- Elaine Sullivan, appointed as Non-executive Director, brings
further life sciences expertise to the Board.
Commenting on the Group's half-yearly results, Alan Aubrey,
Chief Executive Officer of IP Group, said:
"The Group has had an extremely active and successful first half
with a number of our portfolio companies having made significant
advances. We were particularly proud to be a cornerstone investor
in Oxford Sciences Innovation plc while Modern Biosciences plc
reached the first development-related milestone in its agreement
with Janssen Biotech, Inc. The Group is also making solid progress
in the US and has now formed its first spin-out company from each
of the three universities we are working with there.
Having strengthened the Group's balance sheet with more than
GBP200m of available capital, IP Group is well placed to continue
its strategy of supporting compelling opportunities both in the UK
and the US. Our performance during the year so far, combined with
the Group's pipeline of exciting opportunities and strong cash and
financial position, means we are able to look to the second half of
the year with confidence."
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
FTI Consulting
James Melville-Ross/Simon Conway/
Victoria Foster Mitchell +44 (0)20 3727 1000
Further information on IP Group is available on our website:
www.ipgroupplc.com
This half-yearly results release 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 results release the Group's holdings
in portfolio companies reflect the undiluted beneficial equity
interest excluding debt, unless otherwise explicitly stated.
INTERIM MANAGEMENT REPORT
SUMMARY
IP Group is passionate about evolving great ideas into
world-changing businesses and we achieve this by systematically
helping to create, build and support outstanding intellectual
property-based companies. Our aim is to provide attractive returns
over the long term for our shareholders and other stakeholders. The
Group has had an active year so far in 2015 and many companies
within its portfolio have made positive progress during this
period.
At 30 June 2015, the fair value of the Group's 96 portfolio
companies increased to GBP478.2m (HY14: GBP319.6m), reflecting a
net unrealised fair value gain of GBP73.7m. This includes an
increase in the fair value of the Group's holding in Oxford
Nanopore Technologies Limited (GBP50.3m) based on the significant
commercial and technical progress made by the company during 2015
corroborated by its GBP70m financing round that completed shortly
after the period end. Many of the Group's portfolio companies
continued to achieve significant milestones during the period, as
detailed in the portfolio review. Modern Biosciences plc ("MBS"),
the Group's drug-discovery subsidiary, also performed well and
achieved the first development-related milestone in its agreement
with Janssen Biotech, Inc., triggering the associated gross
milestone payment of GBP3m. The goal of the collaboration is to
develop new drugs for the treatment of rheumatoid arthritis and the
agreement could be worth up to GBP176m in milestone payments plus
royalties.
The Group regularly reviews its capital structure to ensure that
it is able to continue to support its existing portfolio and new
opportunities in all of its sectors in both the UK and the US.
During the first half of the year, the Group completed two
significantly oversubscribed issues of new equity capital: the
first, in March, raised GBP124.9m (net of expenses) and the second,
in May, raised net proceeds of approximately GBP53.9m. The majority
of the proceeds from the second capital raise were used to acquire
a strategic shareholding in Oxford Sciences Innovation plc, as
described further below. In addition, in July, the Group secured a
GBP30m, 8-year debt facility from the European Investment Bank
("EIB"), having fulfilled a number of criteria set by the EIB in
order to obtain this funding. This additional long-term capital
will allow the Group to continue to work with leading UK
universities and commercialise the outstanding intellectual
property that emanates from their scientific research.
In May, the Group announced that it had acquired a strategic
shareholding in Oxford Sciences Innovation plc ("OSI"), thereby
broadening the Group's exposure to spin-out companies from the
University of Oxford. OSI is a newly formed company that, for a
minimum of 15 years, will be the contractually preferred partner of
the University of Oxford and its wholly owned subsidiary, Isis
Innovation Limited, to provide capital to, and develop, spin-out
companies based on research from the University of Oxford's
Mathematical, Physical and Life Sciences Division and its Medical
Sciences Division. In June, OSI completed the second round of its
fundraising and announced that it had raised a total amount of
GBP320m. IP Group participated in the initial round, along with
other cornerstone investors, committing GBP40m of funding for an
undiluted beneficial equity holding of 11.8%. Alan Aubrey, the
Group's Chief Executive Officer, is a non-executive director of
OSI.
For the six months to 30 June 2015, the Group deployed a total
of GBP55.1m of capital (HY14: GBP14.9m) into its portfolio
companies and projects, including the GBP40m committed to OSI.
During the first half of 2015, a number of quoted and unquoted
companies in the Group's portfolio announced financing rounds and
this fundraising activity has continued since the period end.
Excluding OSI, the Group deployed GBP15.1m of capital into 31
portfolio companies and projects during the period (HY14: GBP14.9m
capital; 29 opportunities).
In the US, the Group continued to make good progress and it has
now formed spin-out companies from each of the three universities
with which it has a pilot commercialisation agreement. During the
period, the Group took significant minority stakes in Uniformity
Labs, Inc. (Princeton University), which is developing equipment,
materials and software for 3D printing; and in AptaCo, Inc.
(Columbia University), which is developing an aptamer-based
biosensing platform that is capable of providing rapid and accurate
diagnostic information essential to the management of a wide range
of conditions. The Group agreed to provide initial capital of up to
$1.5m and $1.0m to each company respectively; this capital will be
provided in tranches subject to successful attainment of commercial
and technical milestones. Exyn Technologies Inc., which is the
Group's first spin-out company from the University of Pennsylvania
and has developed software to control multi-sensory including
rotorcraft micro aerial vehicles as well as communication between
flying vehicles, received seed financing from the Group in
2015.
In March, Mike Humphrey, who has been a member of the Group's
Board since 2011, was appointed as Non-executive Chairman of the
Board, replacing Dr Bruce Smith CBE who stepped down after 12 years
with the Group. In July, Dr Elaine Sullivan was appointed to the
Board as Non-executive Director. Dr Sullivan has over 25 years'
international experience in the pharmaceutical industry, including
roles with Eli Lilly and AstraZeneca, and is currently chief
executive officer of Carrick Therapeutics, a specialist oncology
company that she founded in early 2015.
Outlook
In the UK, the sector in which the Group operates has continued
to attract a number of new entrants resulting in more available
capital, and therefore competition, to fund and support innovation
and commercialisation opportunities. The Group has partnerships
with 15 of the UK's and 3 of the US's leading research universities
and a sector-balanced portfolio valued at GBP478.2m that has grown
and evolved as a result of IP Group's proven ability to source and
develop innovation into successful businesses over the long term.
The Group continues to see opportunities for increased capital
deployment within its existing portfolio and has a healthy pipeline
of new and potential businesses. These factors, combined with a
strong cash position of GBP219.6m, mean the Group is
well-positioned to respond effectively to, and capitalise on,
opportunities in the second half of the year.
Portfolio review
Overview
During the six months ended 30 June 2015, the value of the
Group's portfolio increased to GBP478.2m (HY14: GBP319.6m; FY14:
GBP349.9m), reflecting a net unrealised fair value gain of
GBP73.7m, and consisted of interests in 96 companies (HY14: 86;
FY14: 90). During the period, the Group provided capital to
portfolio companies totalling GBP55.1m (HY14: GBP14.9m; FY14:
GBP46.8m) and made total cash realisations of GBP0.4m (HY14:
GBP3.3m; FY14: GBP9.7m).
A summary of the gains and losses across the portfolio is as
follows:
For the For the For the
six months six months year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
------------------------------------------------- ----------- ----------- ------------
Unrealised increases in fair value of equity
and debt investments 84.2 30.8 63.2
Unrealised decreases in fair value of equity
and debt investments (10.5) (13.0) (42.5)
------------------------------------------------- ----------- ----------- ------------
Net unrealised fair value gains 73.7 17.8 20.7
(Loss)/profit on disposals of equity investments (0.1) 1.3 1.6
Change in fair value of limited and limited
liability partnership interests 0.9 0.2 0.5
------------------------------------------------- ----------- ----------- ------------
Total 74.5 19.3 22.8
------------------------------------------------- ----------- ----------- ------------
Unrealised increases in the fair value of equity and debt
investments principally arose from an increase in the fair value of
unquoted Oxford Nanopore Technologies Limited (GBP50.3m), which was
recorded in recognition of a number of key commercial and technical
developments corroborated by the financing round that closed on 21
July 2015, as well as the increases in the share prices of
AIM-listed Xeros Technology Group plc (GBP8.3m), Avacta Group plc
(GBP8.0m) and hVIVO plc(1) (GBP7.2m). These unrealised gains were
partially offset by the fair value reductions in the Group's
interests in unquoted companies Oxtox Limited (GBP2.0m) and Azuri
Technologies Limited (GBP1.2m), as well as the decrease in the
share price of AIM-listed Modern Water plc (GBP1.0m).
1 Formerly known as Retroscreen Virology Group plc
Investments and realisations
During the first half of 2015, the Group deployed GBP55.1m of
capital into 32 portfolio companies and projects (HY14: GBP14.9m,
29; FY14: GBP46.8m, 51). The majority of the capital (GBP40.0m) was
invested in the newly-formed OSI. The Group provided initial seed
or incubation capital to six opportunities (HY14: five; FY14: ten).
The Group exited its interest in two companies (HY14: three; FY14:
four) and realised total cash proceeds during the period of GBP0.4m
(HY14: GBP3.3m; FY14: GBP9.7m).
The Group continues to support its most promising businesses,
while identifying and backing new opportunities, and in so doing
has deployed an average level of capital per company of GBP0.5m
during the period (HY14: GBP0.4m; FY14 GBP0.8m) excluding the
Group's participation in the OSI financing. Including OSI, the
average level of capital deployed per company is GBP1.7m.
Portfolio analysis - by sector
The Group's portfolio consists of companies operating in four
key sectors, being Healthcare, Technology, Cleantech and Biotech,
as well as companies operating across all of these sectors. An
analysis of the portfolio by sector is as follows:
As at 30 June 2015 As at 31 December 2014
-----------------
Fair value Number Fair Value Number
Sector GBPm % % GBPm % %
----------------- ------- ----- ---- ---------- ----- --- ----
Healthcare(1) 264.8 55% 31 32% 204.7 59% 30 33%
Technology 71.8 15% 27 28% 58.6 17% 25 28%
Cleantech 62.0 13% 20 21% 56.2 16% 18 20%
Biotech(1) 34.2 7% 14 15% 24.8 7% 14 16%
Multiple sectors 45.4 10% 4 4% 5.6 1% 3 3%
----------------- ------- ----- ---- ---------- ----- --- ----
478.22 100% 96 100% 349.9(2) 100% 90 100%
----------------- ------- ----- ---- ---------- ----- --- ----
(1) Avacta Group plc reclassified from Healthcare to Biotech;
2014 comparatives have been restated.
(2) Total fair value includes GBP4.5m (FY14: GBP4.2m)
attributable to minority interests represented by third party
limited partners in the consolidated fund, IPVFII.
Healthcare
Six months to
30 June 2015
---------------- ------------------------- ---------- -------- ------------ ---------
Fair
Fair value value
Group of Group of Group
stake holding holding
at at Net at
30 June 31 December investment/ Fair value 30 June
Quoted/ 2015 2014 (divestment) movement 2015
Company name Description Unquoted % GBPm GBPm GBPm GBPm
---------------- ------------------------- ---------- -------- ------------ ------------- ---------- ---------
Single-molecule
detection. 1st
application in
Oxford Nanopore 3rd generation
Technologies DNA sequencing
Limited ("$1000 genome") Unquoted 19.9% 128.3 0.4 50.3 179.0
---------------- ------------------------- ---------- -------- ------------ ------------- ---------- ---------
Viral challenge
and "virometrics"
specialist ("conquering
hVIVO plc(1) viral disease") Quoted 17.4% 28.4 - 7.2 35.6
---------------- ------------------------- ---------- -------- ------------ ------------- ---------- ---------
Regenerative
Tissue Regenix dCELL(R) soft
Group plc tissue body parts Quoted 13.6% 18.0 2.5 (0.9) 19.6
---------------- ------------------------- ---------- -------- ------------ ------------- ---------- ---------
Medical devices
to improve the
safety and efficiency
Alesi Surgical of laparoscopic
Limited surgery Unquoted 58.9% 3.9 1.4 1.2 6.5
---------------- ------------------------- ---------- -------- ------------ ------------- ---------- ---------
Platform for analysis
and interpretation
Genomics of genomic sequence
plc data Unquoted 18.6% 4.8 - - 4.8
---------------- ------------------------- ---------- -------- ------------ ------------- ---------- ---------
Other companies (26 companies) 18.6 1.1 (3.4) 16.3
------------------------------------------- ---------- -------- ------------ ------------- ---------- ---------
Value not attributable
to equity holders 2.7 0.3 - 3.0
------------------------------------------- ---------- -------- ------------ ------------- ---------- ---------
Total(2) 204.7 5.7 54.4 264.8
------------------------------------------------------- -------- ------------ ------------- ---------- ---------
(1) Formerly known as Retroscreen Virology Group plc.
(2) Avacta Group plc reclassified from Healthcare to Biotech;
2014 comparatives have been restated.
The value of the Group's holdings in healthcare companies
significantly increased during the period, with the value of the 31
companies increasing to GBP264.8m (FY14: GBP204.7m - restated
following the reclassification of Avacta Group plc to the Biotech
Sector). Significant developments included:
Oxford Nanopore Technologies Limited ("Oxford Nanopore"), a
spin-out company from the University of Oxford specialising in
nanopore-based electronic molecular analysis systems, announced on
21 July 2015 that it had closed a significantly oversubscribed
GBP70m fundraising. Funds from the financing will be used to
support improvements to Oxford Nanopore's existing range of
products and services and to further develop and expand its
innovative pipeline. Manufacturing and commercial activities will
also be expanded. Oxford Nanopore's handheld device, MinION, is
commercially available and registration has opened to access its
high throughput/high sample number PromethION.
During the period, Oxford Nanopore announced a number of key
commercial and technical developments, including the publication by
MinION users of a number of applications, methods and tools;
pricing for products and services aimed at low
total-cost-of-ownership DNA sequencing (or other analyses); and the
development and provision of products and services to simplify all
parts of the nanopore-based molecular analysis workflow. These
include VolTRAX for automated, programmable sample preparation and
Metrichor for cloud-based analyses. The significance of these
developments, coupled with the advanced status of the financing as
at the period end that included final-form legal documentation
having been circulated to new and existing investors, led the Group
to revalue its holding in Oxford Nanopore to GBP179.0m, a net
increase of GBP50.3m. Subsequent to the completion of the July 2015
financing round, the Group's interest in Oxford Nanopore will
remain 19.9% and will have a fair value of GBP192.9m.
In January, Tissue Regenix Group plc ("Tissue Regenix"), the
regenerative medical devices company, raised approximately GBP20m
(before expenses) through a placing of new ordinary shares with
both new and existing institutional shareholders. Tissue Regenix
has patented "dCELL" technology that uses animal and human tissue
to create a tissue scaffold, which can be used to repair diseased
or worn out body parts. The proceeds of the placing will be
primarily used for the development and launch of new products,
including applications for meniscus repair, ligament repair and
heart valve replacement, and to expand the direct salesforce for
DermaPure in the US. The Group committed GBP2.5m to the placing and
its resultant 13.6% interest had a fair value of GBP19.6m at 30
June 2015.
In March, Genomics plc, the Oxford-based genome analytics
company, announced it had won GBP2m in the Small Business Research
Initiative competition "Enabling Technologies for Genomics Sequence
Data Analysis and Interpretation". This represents the third and
largest award to Genomics plc under this scheme and it is the only
company to have received three such awards. In April, Genomics plc
announced a collaborative agreement with Eisai Co., Ltd, a
research-based pharmaceutical company, to use Genomics plc's
sophisticated statistical analyses of large-scale multi-phenotype
genetic association data to inform Eisai's drug discovery process,
including target selection, target validation, indication selection
and repositioning.
Technology
Six months to
30 June 2015
------------------ ----------------------- ---------- -------- ------------ ---------
Fair
Fair value value
Group of Group of Group
stake holding holding
at at Net at
30 June 31 December investment/ Fair value 30 June
Quoted/ 2015 2014 (divestment) movement 2015
Company name Description Unquoted % GBPm GBPm GBPm GBPm
------------------ ----------------------- ---------- -------- ------------ ------------- ---------- ---------
Optimising the
human experience
Actual Experience of networked
plc applications Quoted 25.2% 14.1 1.5 3.1 18.7
Resource optimisation
software for
the transport
Tracsis plc industry Quoted 10.5% 11.3 - 0.1 11.4
Applied Graphene
Materials Producer of speciality
plc graphene materials Quoted 20.3% 6.2 - 2.3 8.5
Gravitational
and magnetic
data services
for the oil,
Getech Group gas and mining
plc industries Quoted 23.4% 2.7 - 1.1 3.8
Preservation
and management
Arkivum Limited of digital data Unquoted 44.9% 2.7 0.7 0.2 3.6
Other companies (22 companies) 21.3 3.5 0.5 25.3
------------------------------------------- ---------- -------- ------------ ------------- ---------- ---------
Value not attributable
to equity holders 0.3 0.2 - 0.5
------------------------------------------- ---------- -------- ------------ ------------- ---------- ---------
Total 58.6 5.9 7.3 71.8
------------------------------------------------------- -------- ------------ ------------- ---------- ---------
The fair value of the Group's holdings in technology companies
saw a solid increase during the period, with the value of the 27
companies increasing to GBP71.8m (FY14: GBP58.6m). Significant
developments included:
Actual Experience plc, an "analytics-as-a-service" spin-out from
Queen Mary University of London which listed on AIM in February
2014, raised a further GBP15.2m (before expenses) through a placing
in June. Actual Experience has developed a proprietary cloud
analytics offering, which can provide both historical and real-time
analysis to customers to enable them to pinpoint quality issues
within their digital supply chain and subsequently improve the
digital quality of their product or service, and thus improve their
digital brand. The proceeds of the placing will be primarily used
to establish client-facing teams in Europe and North America,
including channel development and support; to increase the size and
skill base of the company's technology development team; to
strengthen the company's balance sheet; and to fund the company's
working capital requirements for the foreseeable future. The Group
committed GBP1.5m to the June placing.
Applied Graphene Materials plc ("AGM"), the producer of
speciality graphene materials, announced positive preliminary
results in two separate independent trials; one testing the
performance of graphene-reinforced polyurethane coatings, using
graphene produced by AGM, and one testing the performance of base
oils enhanced using graphene, also produced by AGM. In addition,
AGM announced in June that it had received patent approval from the
Japanese Patent Office in respect of its graphene production
process.
Getech Group plc ("Getech"), the geoscience business
specialising in the provision of data, studies and services to the
oil, gas and mining exploration sectors, announced its interim
results for the six months to 31 January 2015, which included a 16%
increase in revenue and a 200% increase in profit before tax. In
April, Getech completed its acquisition of the entire issued share
capital of ERCL Limited, an upstream oil and gas consultancy, for
an initial cash payment of GBP1.8m and issue of 2,176,630 ordinary
shares. Getech also announced during the period a further
significant multi-year contract with a major national oil
company.
Cleantech
Six months to
30 June 2015
----------------- ------------------------- ---------- -------- ------------ ---------
Fair
Fair value value
Group of Group of Group
stake holding holding
at at Net at
30 June 31 December investment/ Fair value 30 June
2015 2014 (divestment) movement 2015
Quoted/
Company name Description Unquoted % GBPm GBPm GBPm GBPm
----------------- ------------------------- ---------- -------- ------------ ------------- ---------- ---------
Xeros Technology Polymer bead
Group plc cleaning systems Quoted 11.9% 13.8 - 8.3 22.1
Ceramic fuel
Ceres Power cell technology
Holdings for distributed
plc generation Quoted 23.5% 16.4 - (0.2) 16.2
Seren Photonics Ultra high brightness
Limited LEDs Unquoted 66.3% 3.7 0.6 (0.1) 4.2
Development of
new materials
for energy and
Ilika plc electronics applications Quoted 7.5% 4.8 - (1.0) 3.8
Contactless,
lubricant-free
Magnomatics magnetic gear
Limited systems Unquoted 51.9% 3.5 - 0.1 3.6
Other companies (15 companies) 12.8 1.1 (2.9) 11.0
-------------------------------------------- ---------- -------- ------------ ------------- ---------- ---------
Value not attributable
to equity holders 1.2 0.1 (0.2) 1.1
-------------------------------------------- ---------- -------- ------------ ------------- ---------- ---------
Total 56.2 1.8 4.0 62.0
-------------------------------------------------------- -------- ------------ ------------- ---------- ---------
The Group's holdings in cleantech companies experienced a modest
unrealised increase in fair value during the period, with the value
of these 20 companies increasing to GBP62.0m (FY14: GBP56.2m).
Significant developments included:
Xeros Technology Group plc ("Xeros"), the developer of an
innovative patented polymer bead cleaning technology, announced in
April that it had completed 54 installations of its commercial
laundry system with a further 69 committed installations, had
signed 13 incentive programmes with US utility firms for the energy
and water savings achieved using Xeros' systems, and had signed 61
forward channel partners in North America, significantly expanding
its sales and service capabilities. The company also announced
plans for the release of a 15kg smaller machine prototype by the
end of 2015 and a joint development programme with LANXESS
Deutschland GmbH, a global speciality chemicals business, for
leather bead processing technology.
Ceres Power Holdings plc has highlighted a number of significant
operational developments during the first half of 2015, including
that early test results have shown an increase of greater than 40%
in the overall power density of its Steel Cell technology; that
ongoing testing in South Korea with partner KD Navien is nearing
completion and meeting all targets; and that the results from its
joint development agreement with a leading Japanese power system
company had met initial performance targets, leading to discussions
on extending the relationship further.
Biotech
Six months to
30 June 2015
------------------- ----------------------- ---------- -------- ------------ ---------
Fair
Fair value value
Group of Group of Group
stake holding holding
at at Net at
30 June 31 December investment/ Fair value 30 June
2015 2014 (divestment) movement 2015
Quoted/
Company name Description Unquoted % GBPm GBPm GBPm GBPm
------------------- ----------------------- ---------- -------- ------------ ------------- ---------- ---------
Avacta Group Bio-therapeutic
plc(1) affimer technology Quoted 26.9% 8.4 - 8.0 16.4
Novel treatments
Diurnal Limited of hormone deficiency Unquoted 51.7% 10.1 1.1 - 11.2
Vaccines and
therapeutic
antibodies based
Absynth Biologics on bacterial
Limited antigens Unquoted 45.0% 1.8 - - 1.8
Biological therapeutics
development
using glycosylation
Glythera Limited technologies Unquoted 32.2% 1.3 0.2 - 1.5
Inflammatory
Karus Therapeutics disease and
Limited cancer Unquoted 8.6% 1.5 - - 1.5
Other companies (9 companies) 1.7 - 0.1 1.8
-------------------------------------------- ---------- -------- ------------ ------------- ---------- ---------
Value not attributable
to equity holders - - - -
-------------------------------------------- ---------- -------- ------------ ------------- ---------- ---------
Total(1) 24.8 1.3 8.1 34.2
-------------------------------------------------------- -------- ------------ ------------- ---------- ---------
(1) Avacta Group plc reclassified from Healthcare to Biotech;
2014 comparatives have been restated.
The fair value of the Group's holdings in biotech companies
experienced a modest unrealised increase in fair value during the
period, with the value of these 14 companies increasing to GBP34.2m
(FY14: GBP24.8m, restated following the reclassification of Avacta
Group plc from Healthcare to Biotech). Significant developments
included:
In February, Avacta Group plc ("Avacta") announced the
completion of the sale of the trade and selected assets of its
Optim product to Unchained Labs Inc., for up to $5m in cash, with
$3.5m being received as an initial consideration and the remainder
dependent on future sales performance. In March, the company
announced that it had entered into a commercial partnership with
PhoreMost Limited, to discover and commercialise new drug targets,
Affimer reagents and therapeutics. Following the period end, Avacta
announced a GBP22m placing (before expenses) to fund the
accelerated development of its new bio-therapeutic Affimers
platform to potentially address a c.$85bn market opportunity.
Diurnal Limited ("Diurnal") continued to make progress with both
its primary lead products, Chronocort(R) and Infacort(R) .
Chronocort is being developed to treat the rare disease Congenital
Adrenal Hyperplasia ("CAH"). CAH occurs when the body is unable to
produce cortisol, an essential hormone for regulating metabolism
and responding to stress. In March 2015, Diurnal was granted Orphan
Drug designation by the US Food and Drug Administration for
Chronocort, which affords Diurnal seven years of market exclusivity
after the award of marketing authorisation in the US, and follows a
similar designation already granted by the European Medicines
Agency. In the same month, Diurnal commenced a Phase 3 trial of its
paediatric product, Infacort, which is being developed for the
treatment of paediatric adrenal insufficiency. Following these
announcements, the Group exercised its option to instigate a
further GBP2.0m financing round in Diurnal, in which the Group
contributed GBP1.1m.
Portfolio analysis - by investment stage
At 30 June 2015, the Group's portfolio fair value of GBP478.2m
comprises holdings in businesses that are distributed across stages
of maturity as follows:
As at 30 June 2015 As at 31 December 2014
--------------------
Fair value Number Fair Value Number
Company stage GBPm % % GBPm % %
-------------------- ------- ----- ---- ---------- ----- --- ----
Incubation projects 2.3 1% 18 19% 0.9 - 13 13%
Seed businesses 17.1 4% 25 26% 16.0 5% 25 29%
Post-seed unquoted
businesses 289.3 60% 34 35% 194.8 56% 33 37%
Post-seed quoted
businesses 169.5 35% 19 20% 138.2 39% 19 21%
-------------------- ------- ----- ---- ---------- ----- --- ----
All portfolio
businesses 478.21 100% 96 100% 349.9(1) 100% 90 100%
-------------------- ------- ----- ---- ---------- ----- --- ----
(1) Total fair value includes GBP4.5m (FY14: GBP4.2m)
attributable to minority interests represented by third party
limited partners in the consolidated fund, IPVFII.
Incubation opportunities comprise businesses or
pre-incorporation projects that are generally at a very early stage
of development. Opportunities at this stage usually involve capital
of less than GBP200,000 from IP Group, predominantly allowing for
proof of concept work to be carried out. Incubation projects
generally have a duration of nine to eighteen months, following
which the opportunity is progressed to seed financing, terminated
or retained at the pre-seed stage for a further period to allow
additional proof of concept work to be carried out. Seed businesses
are those that have typically received financing of up to GBP1m in
total, primarily from the Group, in order to continue to progress
towards agreed commercial and technology milestones and to enable
the recruitment of management teams and early commercial
engagement.
Post-seed businesses are those that have received some level of
further funding from co-investors external to the Group, with total
funding received generally in excess of GBP1m. Although each
business can vary significantly in its rate and manner of
development, such additional funding is generally used to progress
towards key milestones and commercial validation, to build senior
level capability in the business and to attract experienced
non-executive directors to their boards. This category is further
broken down into post-seed private and post-seed quoted companies.
Post-seed quoted companies consist of companies quoted on either
AIM or the ISDX markets.
For the
For the six For the six year ended
months ended months ended 31 December
Cash investment analysis by company 30 June 2015 30 June 2014 2014
stage GBPm GBPm GBPm
------------------------------------ ------------- ------------- ------------
Incubation projects 1.1 1.0 0.8
Seed businesses 2.4 3.5 8.2
Post-seed unquoted businesses 47.5 5.0 22.3
Post-seed quoted businesses 4.1 5.4 15.5
------------------------------------ ------------- ------------- ------------
Total 55.1 14.9 46.8
------------------------------------ ------------- ------------- ------------
Cash proceeds from sales of equity
investments 0.4 3.3 9.7
------------------------------------ ------------- ------------- ------------
Financial and operational review
Consolidated statement of comprehensive income
A summary analysis of the Group's performance is provided
below:
For the For the For the
six months six months year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
----------------------------------------------- ----------- ----------- ------------
Net portfolio gains 74.5 19.3 22.8
Licensing income 3.1 - 3.0
Other income 1.3 1.2 2.6
Change in fair value of Oxford Equity Rights
asset (0.7) (0.9) (1.8)
Amortisation of intangible assets (3.0) (1.5) (4.9)
Administrative expenses - Modern Biosciences (1.8) (0.3) (1.9)
Administrative expenses - all other businesses (7.6) (4.4) (9.8)
Cost incurred in the acquisition of subsidiary - (1.0) (1.1)
Finance income 0.6 0.2 0.6
Profit and total comprehensive income for the
period 66.4 12.6 9.5
----------------------------------------------- ----------- ----------- ------------
Net portfolio gains consist primarily of realised and unrealised
fair value gains and losses from the Group's equity and debt
holdings in spin-out businesses, which are analysed in detail in
the portfolio analysis above, as well as movements in the fair
value of the Group's interests in limited and limited liability
partnerships.
In June, Modern Biosciences plc ("MBS") achieved the first
milestone of GBP3.0m as specified in its alliance and global option
and licence agreement with Janssen Biotech, Inc. for its OsteoRX
programme (GBP2.1m net of sub-licensing and other costs). During
July, the MBS team achieved the second and third developmental
milestones, triggering further gross payments totalling GBP5.0m
that will be received by the Group during the second half of the
year. The increased clinical activity being undertaken for the
OsteoRX programme has resulted in increased R&D expenditure,
with costs of GBP1.8m being incurred by MBS during the first half
(HY14: GBP0.3m; FY14: GBP1.8m), and this is expected to continue as
the programme develops further. MBS was established to source
late-stage discovery projects from academia, conduct early
proof-of-principle clinical studies and subsequently out-license
the resulting programmes to the pharmaceutical industry. IP Group
holds an undiluted beneficial interest of 61.1% in MBS and, as a
result, its income and expenses are consolidated into those of the
Group.
Other income for the first half remained relatively consistent
with the equivalent period in 2014 at GBP1.3m (HY14: GBP1.2m; FY14:
GBP2.6m). Other income comprised fund management fees, as well as
consulting and similar fees, typically chargeable to its portfolio
companies for services including executive search and selection as
well as legal and administrative support. Fund management fees are
received from the Group's three managed funds, two of which, IP
Venture Fund ("IPVF") and North East Technology Fund ("NETF"), also
have the potential to generate performance fees from successful
investment performance. As a result of an extension by its limited
partner during the period, NETF's investment period continues until
the end of 2015. The fund management fees for the Group's managed
funds reduce following the cessation of their investment periods.
The results of the Group's third managed fund, IP Venture Fund II
("IPVFII"), are consolidated into those of the Group and
accordingly the fund management fees received are not reflected in
the statement of comprehensive income.
Other administrative expenses increased to GBP7.6m during the
period (HY14: GBP4.4m; FY14: GBP9.9m). This was predominantly
driven by the full-period impact of staff costs following the
acquisition of Fusion IP plc in March 2014 and the Group's
increased operational presence in the US. In addition, based on the
Group's return on hard net assets to 30 June 2015, an accrual has
been recognised for potential bonuses of up to GBP1.6m under the
Group's annual incentive scheme.
Consolidated statement of financial position
Net assets in the period increased significantly to GBP771.8m
(HY14: GBP528.6m; FY14: GBP526.2m) as a result of the GBP178.8m
proceeds from the placings carried out by the Group in the first
quarter and the GBP73.7m net fair value increase in the Group's
holdings in portfolio companies. These increases were offset to a
limited degree by the Group's operating expenses, the reduction in
fair value of the Oxford Equity Rights asset and the amortisation
of intangible assets in the period.
The Group's diversified portfolio of holdings in private and
publicly listed companies is valued at GBP478.2m (HY14: GBP319.6m;
FY14: GBP349.9m). "Hard" net assets, i.e. total net assets less
intangibles and the Oxford Equity Rights asset, totalled GBP700.9m
at 30 June 2015 (HY14: GBP449.8m; FY14: GBP451.3m).
Subsequent to the period end, the Group announced that it had
secured a GBP30m, 8-year debt facility from the European Investment
Bank. The facility is intended to be disbursed in two tranches and
the Group expects to draw down the first tranche during the third
quarter of 2015. The facility provides IP Group with an additional
source of long-term capital and represents an evolution in the
Group's capital structure to support its future growth and
development. The Group will use the proceeds to continue to fund UK
university spin-out companies as they develop and mature.
Cash, cash equivalents and short-term deposits ("Cash")
The principal constituents of the movement in Cash during the
period are as follows:
For the For the For the
six months six months year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
-------------------------------------- ----------- ----------- ------------
Net Cash used in operating activities (2.4) (4.9) (6.4)
Net Cash used in investing activities (54.1) (11.8) (35.4)
Net Cash from financing activities 178.8 115.2 115.0
-------------------------------------- ----------- ----------- ------------
Movement during period 122.3 98.5 73.2
-------------------------------------- ----------- ----------- ------------
At 30 June 2015, the Group's Cash totalled GBP219.6m, an
increase of GBP122.3m from a total of GBP97.3m at
31 December 2014, predominantly due to a net GBP178.8m increase
from the issue of new equity capital, as noted above.
Cash used in operations has decreased from the comparable period
in 2014, largely due to one-off costs directly associated with the
acquisition of Fusion IP plc of approximately GBP1.0m in 2014, and
the receipt of the initial GBP3.0m payment under MBS's agreement
with Janssen Biotech in early 2015 that was recognised in debtors
at 31 December 2014.
As described in the Portfolio review, GBP55.1m of capital was
committed to new and existing portfolio companies (HY14: GBP14.9m;
FY14: GBP46.8m), partially offset by cash realisations of GBP0.4m
(HY14: GBP3.3m; FY14: GBP9.7m) and distributions from investments
in limited partnerships of GBP0.6m (HY14: GBPnil; FY14:
GBP1.1m).
Taxation
Since the Group's activities are predominantly trading in
nature, the Directors continue to believe that the Group qualifies
for the Substantial Shareholdings Exemption ("SSE") on chargeable
gains arising on the disposal of qualifying holdings and, as such,
the Group has continued not to recognise a provision for deferred
taxation in respect of uplifts in value on those equity holdings in
portfolio businesses that meet the qualifying criteria.
Principal risks and uncertainties
A detailed explanation of the principal risks and uncertainties
faced by the Group, and the steps taken to manage them, is set out
in the Corporate Governance section of the Group's 2014 Annual
Report and Accounts. The principal risks and uncertainties are
summarised as follows:
-- the returns and cash proceeds from the Group's early-stage companies can be very uncertain;
-- it may be difficult for the Group and its early-stage companies to attract capital;
-- universities or other research-intensive institutions may
terminate their partnerships or other collaborative relationships
with the Group;
-- the Group may lose key personnel or fail to attract and integrate new personnel; and
-- there may be changes to, or impacts from, legislation, government policy and regulation.
There have been no significant changes in the nature of these
risks that will affect the next six months of the financial year,
and thus the risks noted above are applicable to the forthcoming
six months.
Periodic reporting
Following the abolition of the requirement for Interim
Management Statements towards the end of 2014, and given the
long-term nature of its business, the Group does not intend to
publish quarterly updates in the future. However, it will continue
to publish relevant and material information on the Group and its
portfolio companies, as and when appropriate, in addition to its
annual and interim results, and seek to maintain its open and
constructive approach to dialogue with its major stakeholders.
Condensed consolidated statement of comprehensive income
For the six months ended 30 June 2015
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Note GBPm GBPm GBPm
------------------------------------------------ ---- ----------- ----------- ------------
Portfolio return and revenue
Change in fair value of equity and debt
investments 73.7 17.8 20.7
(Loss)/profit on disposal of equity investments (0.1) 1.3 1.6
Change in fair value of limited and limited
liability partnership interests 0.9 0.2 0.5
Other portfolio income - - 0.2
Licensing income 3.1 - 3.0
Revenue from services and other income 1.3 1.2 2.4
------------------------------------------------ ---- ----------- ----------- ------------
78.9 20.5 28.4
------------------------------------------------ ---- ----------- ----------- ------------
Administrative expenses
Research and development expenses (1.4) (0.3) (1.5)
Share-based payment charge (0.4) (0.2) (0.9)
Change in fair value of Oxford Equity
Rights asset 3 (0.7) (0.9) (1.8)
Amortisation of intangible assets 6 (3.0) (1.5) (4.9)
Acquisition costs - (1.0) (1.1)
Other administrative expenses (7.6) (4.2) (9.3)
------------------------------------------------ ---- ----------- ----------- ------------
(13.1) (8.1) (19.5)
------------------------------------------------ ---- ----------- ----------- ------------
Operating profit 65.8 12.4 8.9
Finance income - interest receivable 0.6 0.2 0.6
------------------------------------------------ ---- ----------- ----------- ------------
Profit before taxation 66.4 12.6 9.5
Taxation - - -
------------------------------------------------ ---- ----------- ----------- ------------
Profit and total comprehensive income
for the period 66.4 12.6 9.5
------------------------------------------------ ---- ----------- ----------- ------------
Attributable to:
Equity holders of the parent 66.7 12.6 9.1
Non-controlling interest (0.3) - 0.4
------------------------------------------------ ---- ----------- ----------- ------------
66.4 12.6 9.5
------------------------------------------------ ---- ----------- ----------- ------------
Earnings per share
Basic (p) 2 12.92 2.83 1.97
Diluted (p) 2 12.89 2.81 1.96
------------------------------------------------ ---- ----------- ----------- ------------
Condensed consolidated statement of financial position
As at 30 June 2015
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
Note GBPm GBPm GBPm
-------------------------------------------- ---- --------- --------- ------------
ASSETS
Non-current assets
Intangible assets:
- goodwill 7 57.1 57.1 57.1
- acquired intangible asset 6 13.5 19.9 16.5
Property, plant and equipment 0.2 0.2 0.2
Oxford Equity Rights asset and related
contract costs 3 0.6 2.2 1.3
Portfolio:
- equity investments 4 473.0 315.3 345.9
- debt investments 4 5.2 4.3 4.0
Limited and limited liability partnership
interests 4.9 5.3 4.6
Other financial asset - 0.7 -
Contingent value rights 1.4 1.4 1.4
-------------------------------------------- ---- --------- --------- ------------
Total non-current assets 555.9 406.4 431.0
-------------------------------------------- ---- --------- --------- ------------
Current assets
Trade and other receivables 5.6 3.3 4.8
Deposits 50.0 15.0 30.0
Cash and cash equivalents 169.6 107.6 67.3
-------------------------------------------- ---- --------- --------- ------------
Total current assets 225.2 125.9 102.1
-------------------------------------------- ---- --------- --------- ------------
Total assets 781.1 532.3 533.1
-------------------------------------------- ---- --------- --------- ------------
EQUITY AND LIABILITIES
Equity attributable to equity holders
Called up share capital 11.3 9.6 9.6
Share premium account 504.7 327.6 327.6
Merger reserve 12.8 12.8 12.8
Retained earnings 243.3 179.0 176.2
-------------------------------------------- ---- --------- --------- ------------
Total equity attributable to equity
holders 772.1 529.0 526.2
-------------------------------------------- ---- --------- --------- ------------
Non-controlling interest (0.3) (0.4) -
-------------------------------------------- ---- --------- --------- ------------
Total equity 771.8 528.6 526.2
-------------------------------------------- ---- --------- --------- ------------
Current liabilities
Trade and other payables 4.0 1.4 2.1
-------------------------------------------- ---- --------- --------- ------------
Non-current liabilities
Loans from limited partners of consolidated
funds 5.1 2.0 4.5
Contingent loans from university partners 0.2 0.3 0.3
-------------------------------------------- ---- --------- --------- ------------
Total equity and liabilities 781.1 532.3 533.1
-------------------------------------------- ---- --------- --------- ------------
Condensed consolidated statement of cash flows
For the six months ended 30 June 2015
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
---------------------------------------------------- ----------- ----------- ------------
Operating activities
Profit before taxation 66.4 12.6 9.5
Adjusted for:
Finance income - interest receivable (0.6) (0.2) (0.6)
Change in fair value of equity and debt investments (73.7) (17.8) (20.7)
Change in fair value of limited and limited
liability partnership interests (0.9) (0.2) (0.5)
Loss/(profit) on disposal of equity investments 0.1 (1.3) (1.6)
Depreciation of property, plant and equipment - - 0.1
Amortisation of intangible assets 3.0 1.5 4.9
Change in fair value of Oxford Equity Rights
asset 0.7 0.9 1.8
Share-based payment charge 0.4 0.2 0.9
Other portfolio income - - (0.2)
Changes in working capital:
Increase in trade and other receivables (0.5) (0.3) (3.2)
Increase/(decrease) in trade and other payables 1.9 (1.1) (0.5)
Increase in non-current liabilities 0.5 0.6 3.2
Net cash flow from deposits (20.0) (10.0) (25.0)
Operating cash flows:
Interest received 0.3 0.2 0.5
---------------------------------------------------- ----------- ----------- ------------
Net cash (outflow)/inflow from operating
activities (22.4) (14.9) (31.4)
---------------------------------------------------- ----------- ----------- ------------
Investing activities
Purchase of property, plant and equipment - - (0.1)
Purchase of equity and debt investments (55.1) (14.9) (46.8)
Investment in limited and limited liability
partnerships - (0.2) (0.3)
Proceeds from sale of equity investments 0.4 3.3 9.7
Distributions from limited and limited liability
partnerships 0.6 - 1.1
Proceeds from other financial asset - - 0.8
Other portfolio income received - - 0.2
---------------------------------------------------- ----------- ----------- ------------
Net cash outflow from investing activities (54.1) (11.8) (35.4)
---------------------------------------------------- ----------- ----------- ------------
Financing activities
Proceeds from the issue of share capital 178.8 97.6 97.4
Acquisition of subsidiary, net of cash acquired - 17.6 17.6
---------------------------------------------------- ----------- ----------- ------------
Net cash inflow from financing activities 178.8 115.2 115.0
---------------------------------------------------- ----------- ----------- ------------
Net increase in cash and cash equivalents 102.3 88.5 48.2
Cash and cash equivalents at the beginning
of the period 67.3 19.1 19.1
---------------------------------------------------- ----------- ----------- ------------
Cash and cash equivalents at the end of the
period 169.6 107.6 67.3
---------------------------------------------------- ----------- ----------- ------------
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2015
Attributable to equity holders of
the parent
Share Share Merger Retained Non-controlling Total
capital premium reserve earnings Total interest equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------- -------- -------- -------- --------- ----- --------------- -------
At 1 January 2014 (audited) 7.5 150.4 12.8 166.3 337.0 (0.4) 336.6
Share-based payment charge - - - 0.2 0.2 - 0.2
Issue of ordinary shares
in connection with the
Group's LTIP 0.1 - - (0.1) - - -
Issue of equity 2.0 177.2 - - 179.2 - 179.2
Profit and total comprehensive
income for the period
to
30 June 2014 - - - 12.6 12.6 - 12.6
------------------------------- -------- -------- -------- --------- ----- --------------- -------
At 30 June 2014 (unaudited) 9.6 327.6 12.8 179.0 529.0 (0.4) 528.6
Share-based payment charge - - - 0.7 0.7 - 0.7
Profit and total comprehensive
income for the period
to
31 December 2014 - - - (3.5) (3.5) 0.4 (3.1)
------------------------------- -------- -------- -------- --------- ----- --------------- -------
At 31 December 2014 (audited) 9.6 327.6 12.8 176.2 526.2 - 526.2
Share-based payment charge - - - 0.4 0.4 - 0.4
Issue of equity 1.7 177.1 - - 178.8 - 178.8
Profit and total comprehensive
income for the period
to
30 June 2015 - - - 66.7 66.7 (0.3) 66.4
------------------------------- -------- -------- -------- --------- ----- --------------- -------
At 30 June 2015 (unaudited) 11.3 504.7 12.8 243.3 772.1 (0.3) 771.8
------------------------------- -------- -------- -------- --------- ----- --------------- -------
Notes to the half-yearly condensed set of financial
statements
1. Operating segments
For both the period ended 30 June 2015 and the year ended 31
December 2014, the Group's revenue and profit/loss before taxation
were derived almost entirely from its principal activities within
the UK. Though the Group has nascent operations in the US, the
associated revenues and costs are currently immaterial and
accordingly no additional geographical disclosures are given. For
management reporting purposes, the Group is currently organised
into three operating segments: (i) the commercialisation of
intellectual property via the formation of long-term partner
relationships with universities; (ii) the management of venture
funds focusing on early-stage UK technology companies; and (iii)
the in-licensing of druggable intellectual property from
research-intensive institutions.
University Venture
partnership capital fund In-licensing
business management activity Consolidated
Six months ended 30 June 2015 (unaudited) GBPm GBPm GBPm GBPm
------------------------------------------- ------------ ------------- ------------ ------------
STATEMENT OF COMPREHENSIVE INCOME
Portfolio return and revenue
Change in fair value of equity and
debt investments 73.7 - - 73.7
Loss on disposal of equity investments (0.1) - - (0.1)
Change in fair value of limited and
limited liability partnership investments 0.9 - - 0.9
Other portfolio income - - - -
Licensing income 0.1 - 3.0 3.1
Revenue from advisory services and
other income 0.5 0.1 - 0.6
Revenue from fund management services - 0.7 - 0.7
Change in fair value of Oxford Equity
Rights asset (0.7) - - (0.7)
Amortisation of intangible assets (3.0) - - (3.0)
Administrative expenses (7.2) (0.4) (1.8) (9.4)
------------------------------------------- ------------ ------------- ------------ ------------
Operating profit 64.2 0.4 1.2 65.8
Finance income - interest receivable 0.6 - - 0.6
------------------------------------------- ------------ ------------- ------------ ------------
Profit before taxation 64.8 0.4 1.2 66.4
Taxation - - - -
------------------------------------------- ------------ ------------- ------------ ------------
Profit and total comprehensive income
for the year 64.8 0.4 1.2 66.4
------------------------------------------- ------------ ------------- ------------ ------------
STATEMENT OF FINANCIAL POSITION
Assets 767.2 9.8 4.1 781.1
Liabilities (9.2) - (0.1) (9.3)
------------------------------------------- ------------ ------------- ------------ ------------
Net assets 758.0 9.8 4.0 771.8
------------------------------------------- ------------ ------------- ------------ ------------
Other segment items
Capital expenditure - - - -
Depreciation - - - -
------------------------------------------- ------------ ------------- ------------ ------------
University Venture
partnership capital fund In-licensing
business management activity Consolidated
Six months ended 30 June 2014 (unaudited) GBPm GBPm GBPm GBPm
------------------------------------------ ------------ ------------- ------------ ------------
STATEMENT OF COMPREHENSIVE INCOME
Portfolio return and revenue
Change in fair value of equity and
debt investments 17.8 - - 17.8
Profit on disposal of equity investments 1.3 - - 1.3
Change in fair value of limited and
limited liability
partnership investments 0.2 - - 0.2
Other portfolio income - - - -
Licensing income - - - -
Revenue from advisory services and
other income 0.4 0.1 - 0.5
Revenue from fund management services - 0.7 - 0.7
Change in fair value of Oxford Equity
Rights asset (0.9) - - (0.9)
Amortisation of intangible assets (1.5) - - (1.5)
Administrative expenses (4.8) (0.5) (0.4) (5.7)
------------------------------------------ ------------ ------------- ------------ ------------
Operating profit/(loss) 12.5 0.3 (0.4) 12.4
Finance income - interest receivable 0.2 - - 0.2
------------------------------------------ ------------ ------------- ------------ ------------
Profit/(loss) before taxation 12.7 0.3 (0.4) 12.6
Taxation - - - -
------------------------------------------ ------------ ------------- ------------ ------------
Profit/(loss) and total comprehensive
income for the year 12.7 0.3 (0.4) 12.6
------------------------------------------ ------------ ------------- ------------ ------------
STATEMENT OF FINANCIAL POSITION
Assets 525.2 6.7 0.4 532.3
Liabilities (3.6) - (0.1) (3.7)
------------------------------------------ ------------ ------------- ------------ ------------
Net assets 521.6 6.7 0.3 528.6
------------------------------------------ ------------ ------------- ------------ ------------
Other segment items
Capital expenditure - - - -
Depreciation - - - -
------------------------------------------ ------------ ------------- ------------ ------------
University Venture
partnership capital fund In-licensing
business management activity Consolidated
Year ended 31 December 2014 (audited) GBPm GBPm GBPm GBPm
----------------------------------------- ------------ ------------- ------------ ------------
STATEMENT OF COMPREHENSIVE INCOME
Portfolio return and revenue
Change in fair value of equity and
debt investments 20.7 - - 20.7
Gain on disposal of equity investments 1.6 - - 1.6
Change in fair value of limited and
limited liability partnership interests 0.5 - - 0.5
Other portfolio income 0.2 - - 0.2
Licensing income - - 3.0 3.0
Revenue from services and other income 0.8 0.3 - 1.1
Revenue from fund management services - 1.3 - 1.3
Change in fair value of Oxford Equity
Rights asset (1.8) - - (1.8)
Amortisation of intangible assets (4.9) - - (4.9)
Administrative expenses (9.5) (1.4) (1.9) (12.8)
----------------------------------------- ------------ ------------- ------------ ------------
Operating profit 7.6 0.2 1.1 8.9
Finance income - interest receivable 0.6 - - 0.6
----------------------------------------- ------------ ------------- ------------ ------------
Profit before taxation 8.2 0.2 1.1 9.5
Taxation - - - -
----------------------------------------- ------------ ------------- ------------ ------------
Profit and total comprehensive income
for the year 8.2 0.2 1.1 9.5
----------------------------------------- ------------ ------------- ------------ ------------
STATEMENT OF FINANCIAL POSITION
Assets 520.6 9.4 3.1 533.1
Liabilities (5.8) (0.1) (1.0) (6.9)
----------------------------------------- ------------ ------------- ------------ ------------
Net assets 514.8 9.3 2.1 526.2
----------------------------------------- ------------ ------------- ------------ ------------
Other segment items
Capital expenditure (0.1) - - (0.1)
Depreciation (0.1) - - (0.1)
----------------------------------------- ------------ ------------- ------------ ------------
2. Earnings per share
Unaudited Unaudited Audited
six months six year ended
ended months ended 31 December
30 June 2015 30 June 2014 2014
Earnings GBPm GBPm GBPm
--------------------------------------- ------------- ------------- ------------
Earnings for the purposes of basic and
dilutive earnings per share 66.7 12.6 9.1
--------------------------------------- ------------- ------------- ------------
Unaudited Unaudited Audited
six months six year ended
ended months ended 31 December
30 June 2015 30 June 2014 2014
Number of Number of Number of
Number of shares shares shares shares
-------------------------------------------- ------------- ------------- ------------
Weighted average number of ordinary shares
for
the purposes of basic earnings per share 516,340,803 445,126,771 462,466,944
Effect of dilutive potential ordinary
shares:
Long-Term Incentive Plan 1,188,606 2,070,860 2,523,968
-------------------------------------------- ------------- ------------- ------------
Weighted average number of ordinary shares
for
the purposes of diluted earnings per share 517,529,409 447,197,631 464,990,912
-------------------------------------------- ------------- ------------- ------------
The Group has two classes of potentially dilutive ordinary
shares. There are the contingently issuable shares arising under
the Group's LTIP and the Former Fusion IP LTIP, and the options
issued as part of the Group's Share-Save Scheme and Deferred Bonus
Share Plan (for annual bonuses deferred under the terms of the
Group's annual incentive scheme). Based upon information available
at the end of the reporting period, an element of the performance
criteria for vesting of awards under the LTIP has been
satisfied.
3. Equity rights and related acquisition costs
Equity rights represent consideration paid to the University of
Oxford between December 2000 and June 2001.
In return for the non-refundable, non-interest bearing advance
totalling GBP20.1m, the Group has the right to receive from the
University the following over its 15-year term:
3/4 50% of the University's equity shares in any spin-out
company that is formed based on intellectual property created by
academics that are considered to be part of the Department of
Chemistry (i.e. equity instruments in unlisted companies); and
3/4 50% of the University's share of any cash payments received
by the University from parties who have licensed intellectual
property created by academics that are considered to be part of the
Department of Chemistry.
The contract expires on 23 November 2015.
The Directors make use of a valuation model to seek to determine
the fair value of the asset. However, there is a range of
reasonably possible values for each key variable within the model
and this in turn results in a wide range of reasonably possible
alternative fair values for the asset. None of these estimates of
fair value are considered more appropriate or relevant than any
other. In order to calculate a more accurate valuation figure,
given the multitude of possible scenarios generated when altering
the discounted cash flows ("DCF") variables, a probability
weighting expected return method is utilised. Having applied
probabilities to the various possible scenarios, the method
returned an estimated asset value of GBP0.6m at 30 June 2015.
Additional details can be located in the Group's Annual Report and
Accounts for the year ended
31 December 2014.
Equity Contract
rights costs Total
GBPm GBPm GBPm
------------------------------------------------ ------- -------- ------
Cost
------------------------------------------------ ------- -------- ------
At 1 January 2014, 30 June 2014, 31 December
2014 and 1 January 2015 19.9 0.5 20.4
------------------------------------------------ ------- -------- ------
Aggregate amortisation and change in fair value
of contract costs
At 1 January 2014 (17.0) (0.3) (17.3)
Change in fair value during the period (0.9) - (0.9)
------------------------------------------------ ------- -------- ------
At 30 June 2014 (17.9) (0.3) (18.2)
Change in fair value during the period (0.9) - (0.9)
------------------------------------------------ ------- -------- ------
At 31 December 2014 (18.8) (0.3) (19.1)
Change in fair value during the period (0.7) - (0.7)
------------------------------------------------ ------- -------- ------
At 30 June 2015 (19.5) (0.3) (19.8)
------------------------------------------------ ------- -------- ------
Net book value
------------------------------------------------ ------- -------- ------
At 31 December 2013 2.9 0.2 3.1
------------------------------------------------ ------- -------- ------
At 30 June 2014 (Unaudited) 2.0 0.2 2.2
------------------------------------------------ ------- -------- ------
At 31 December 2014 1.1 0.2 1.3
------------------------------------------------ ------- -------- ------
At 30 June 2015 (Unaudited) 0.4 0.2 0.6
------------------------------------------------ ------- -------- ------
4. Investment portfolio
The accounting policies in regards to valuations in these
half-yearly results are the same as those applied by the Group in
its audited consolidated financial statements for the year ended 31
December 2014 and which will form the basis of the 2015 Annual
Report and Accounts. Investments are designated as fair value
through profit or loss and are initially recognised at fair value
and any gains or losses arising from subsequent changes in fair
value are presented in profit or loss in the statement of
comprehensive income in the period in which they arise.
The Group classifies financial assets using a fair value
hierarchy that reflects the significance of the inputs used in
making the related fair value measurements. The level in the fair
value hierarchy within which a financial asset is classified is
determined on the basis of the lowest level input that is
significant to that asset's fair value measurement. The fair value
hierarchy has the following levels:
Level Quoted prices in active markets.
1 -
Level Inputs other than quoted prices that are observable, such as prices
2 - from market transactions. These are mainly based on prices determined
from recent investments in the last twelve months.
Level One or more inputs that are not based on observable market data.
3 -
Level Level
1 Level 2 3
------------ -------------------------------
Equity Equity Equity
investments investments Unquoted investments
in quoted in unquoted debt investments in unquoted
spin-out spin-out in spin-out spin-out
companies companies companies companies Total
GBPm GBPm GBPm GBPm GBPm
------------------------------------- ------------ ------------ ----------------- ------------ ------
At 1 January 2014 135.1 131.0 2.8 17.0 285.9
Investments during the period 5.5 8.9 0.5 - 14.9
Acquired with Fusion IP - 11.1 2.4 11.4 24.9
Fusion IP reclassified as subsidiary (20.5) - - - (20.5)
Transaction-based reclassifications
during
the period - 1.2 (1.2) - -
Other transfers between hierarchy
levels during the period 9.2 (3.9) 0.2 (5.5) -
Disposals during the period (1.2) (2.2) - - (3.4)
Change in fair value of equity and
debt investments in the period 18.8 1.5 (0.3) (2.2) 17.8
------------------------------------- ------------ ------------ ----------------- ------------ ------
At 30 June 2014 (unaudited) 146.9 147.6 4.4 20.7 319.6
Investments during the period 5.9 23.9 2.1 - 31.9
Transaction-based reclassifications
during
the period - 1.9 (1.9) - -
Other transfers between hierarchy
levels during the period 11.2 (8.4) (0.2) (2.6) -
Disposals during the period (4.5) - - - (4.5)
Change in fair value of equity and
debt investments in the period (21.3) 28.2 (0.4) (3.6) 2.9
------------------------------------- ------------ ------------ ----------------- ------------ ------
At 31 December 2014 138.2 193.2 4.0 14.5 349.9
Investments during the period 4.0 48.7 2.3 0.1 55.1
Transaction-based reclassifications
during
the period - 0.2 (0.2) - -
Other transfers between hierarchy
levels during the period - (13.3) - 13.3 --
Disposals during the period - - (0.2) (0.3) (0.5)
Change in fair value of equity and
debt investments in the period 27.2 50.9 (0.7) (3.7) 73.7
------------------------------------- ------------ ------------ ----------------- ------------ ------
At 30 June 2015 (unaudited) 169.4 279.7 5.2 23.9 478.2
------------------------------------- ------------ ------------ ----------------- ------------ ------
Fair values of unquoted spin-out companies classified as Level 3
in the fair value hierarchy have been determined in part or in full
by valuation techniques that are not supported by observable market
prices or rates. Investments in 30 companies have been classified
as Level 3 and the individual valuations for each of these have
been arrived at using the following valuation method:
Where fair values are based upon the most recent market
transaction, but that transaction occurred more than twelve months
prior to the balance sheet date, the investments are classified as
Level 3 in the fair value hierarchy. The fair values of investments
categorised as Level 3 are analysed on a monthly basis to consider
indicators which may make the most recent investment no longer a
representation of fair value. Due to the nature of the investments,
observable market inputs are not commonly available therefore
consideration of indicators of a change in fair value focus on the
companies' performance and achievement of technical and commercial
milestones.
Where indicators of a change in fair value against the most
recent market transaction are identified, any adjustment to arrive
at fair value is based on objective data from the company and the
experience and judgement of the Group.
If the fair value of all Level 3 investments were to decrease by
10%, the net assets figure would decrease by GBP2.4m, with a
corresponding increase if the unobservable inputs were to increase
by 10%.
For assets and liabilities that are recognised at fair value on
a recurring basis, the Group determines whether transfers have
occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant
to the fair value measurement as a whole) at the end of each
reporting period. Transfers between tiers are then made as if the
transfer took place on the first day of the period in question.
If the assumptions used in the valuation techniques for the
Group's holding in each company are varied by using a range of
possible alternatives, there is no material difference to the
carrying value of the respective spin-out company. The effect on
the consolidated statement of comprehensive income for the period
is also not expected to be material.
Transfers between Level 2 and 1 occur when a previously unquoted
investment undertakes an initial public offering, resulting in its
equity becoming quoted on an active market. In the current period
there were no transfers of this nature.
Transfers between Level 1 and Level 2 would occur when a quoted
investment's market becomes inactive. There have been no such
instances in the current period.
Transfers between Level 3 and Level 2 occur when an investment,
for which the penultimate funding round occurred more than twelve
months before the prior period end, undertakes an investment round
during the period that results in an observable market price. In
the current period, transfers of this nature amounted to
GBP0.9m.
Transfers between Level 2 and Level 3 occur when the balance
sheet date becomes more than twelve months after an investment's
most recent funding round, at which point the price is deemed to be
unobservable. In the current period transfers of this nature
amounted to GBP14.2m.
The fair value changes in Level 3 investments have amounted to a
loss of GBP3.7m in the period, recognised as change in fair value
of equity and debt investments in the condensed consolidated
statement of comprehensive income.
5. Share capital
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
---------------------------------------- --------- --------- ------------
Issued and fully paid:
564,619,369 ordinary shares of 2p each
(HY14: 479,524,397; FY14: 479,524,397) 11.3 9.6 9.6
---------------------------------------- --------- --------- ------------
In March 2015, the Group raised GBP128m (before expenses)
through the issuance of 56,888,888 shares at a price of GBP2.25 per
share.
Additionally, in March 2015, the Company issued 1,552,144 new
ordinary shares in order to settle conditional awards made under
the Group's LTIP in 2012 that achieved their vesting conditions and
consequently became issuable to the Group's employees.
In May 2015, the Group raised GBP55m (before expenses) through
the issuance of 26,500,000 shares at a price of GBP2.08 per
share.
Additionally, in May 2015, the Company issued 153,940 new
ordinary shares following the exercise of nil-cost options awarded
under the Company's Deferred Bonus Share Plan by certain of the
Company's Executive Directors and other employees.
The Company has one class of ordinary shares, each with a par
value of 2p and carrying equal voting rights, equal rights to
income and distributions of assets on liquidation, or otherwise,
and no right to fixed income.
6. Acquired intangible assets
Total
GBPm
--------------------------------------------------- -----
Cost
At 1 January 2014 -
Additions through acquisition of subsidiary 21.4
At 30 June 2014, 31 December 2014 and 30 June 2015 21.4
--------------------------------------------------- -----
Accumulated amortisation
At 1 January 2014 -
Charge for the period (1.5)
--------------------------------------------------- -----
At 30 June 2014 (1.5)
Charge for the period (3.4)
--------------------------------------------------- -----
At 31 December 2014 (4.9)
Charge for the period (3.0)
--------------------------------------------------- -----
At 30 June 2015 (7.9)
--------------------------------------------------- -----
Net book value
--------------------------------------------------- -----
At 31 December 2013 -
--------------------------------------------------- -----
At 30 June 2014 19.9
--------------------------------------------------- -----
At 31 December 2014 16.5
--------------------------------------------------- -----
At 30 June 2015 13.5
--------------------------------------------------- -----
The intangible assets represent contractual arrangements and
memorandums of understanding with four UK universities acquired
through acquisition of a subsidiary. The contractual arrangements
have fixed terms and, consequently, the intangible assets have
finite lives that align with the remaining terms which, at the end
of the period, range from 17 months to 38 months. The individual
contractual arrangements are amortised in a straight line over the
remainder of their terms with the expense being presented directly
on the primary statements.
7. Goodwill
GBPm
---------------------------------------- ----
At 1 January 2014 18.4
Recognised on acquisition of subsidiary 38.7
---------------------------------------- ----
At 30 June 2014 57.1
At 1 January 2015 57.1
At 30 June 2015 57.1
---------------------------------------- ----
Goodwill represents the excess of the cost of an acquisition
over the fair value of the net identifiable assets of acquired
subsidiaries at the date of acquisition. Included in the balance
sheet of the Group, at 30 June 2015, is goodwill of GBP57.1m. This
arose from the Group's acquisition of Top Technology Ventures
Limited in June 2004 (GBP2.1m), Techtran Group Limited in January
2005 (GBP16.3m) and the acquisition of Fusion IP plc in March 2014
(GBP38.7m). Goodwill is allocated from the acquisition date to each
of the Group's cash-generating units ("CGUs") that are expected to
benefit from the business combination. Goodwill may be allocated to
CGUs in both the acquired business and in the existing
business.
The Group conducts annual impairment tests on the carrying value
of goodwill, based on the recoverable amount of the CGUs to which
the goodwill has been allocated. The goodwill allocated to each CGU
is summarised in the table below. A number of both value-in-use and
fair-value-less-costs-to-sale calculations are used to assess the
recoverable values of the CGUs, details of which are specified in
the audited consolidated financial statements for the year ended 31
December 2014.
University
partnership Fund management
CGU CGU Total
GBPm GBPm GBPm
-------------------- ------------ --------------- -----
At 1 January 2014 16.3 2.1 18.4
-------------------- ------------ --------------- -----
At 30 June 2014 55.0 2.1 57.1
-------------------- ------------ --------------- -----
At 31 December 2014 55.0 2.1 57.1
-------------------- ------------ --------------- -----
At 30 June 2015 55.0 2.1 57.1
-------------------- ------------ --------------- -----
During the period to 30 June 2015, no factors indicating
potential impairment of goodwill were noted and, as a result, no
impairment review was deemed necessary.
8. Related party transactions
a) Limited partnerships
The Group manages a number of investment funds structured as
limited partnerships. Group entities act as the general partners of
these limited partnerships and, while unable to exert significant
influence over them, do perform the day-to-day operational tasks.
The following amounts have been included in respect of these
limited partnerships:
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
2015 2014 2014
Income statement GBPm GBPm GBPm
---------------------- ----------- ----------- ------------
Revenue from services 0.7 0.7 1.3
---------------------- ----------- ----------- ------------
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
Statement of financial position GBPm GBPm GBPm
----------------------------------- --------- --------- ------------
Investment in limited partnerships 3.6 4.0 3.2
----------------------------------- --------- --------- ------------
b) Key management transactions
The following key management held shares in the following
spin-out companies as at 30 June 2015:
Number
Number of shares Number
of shares acquired/ of shares
held at (disposed) held at % of
1 January in the 30 June issued
Director Company name 2015 period 2015 capital
------------- --------------------------------- ---------- ----------- ---------- --------
Alan Aubrey Alesi Surgical Limited(1) - 18 18 0.2%
Amaethon Limited - A Shares 104 - 104 3.1%
Amaethon Limited - B Shares 11,966 - 11,966 1.0%
Amaethon Limited - Ordinary
shares 21 - 21 0.3%
Avacta Group plc 20,276,113 - 20,276,113 0.4%
Capsant Neurotechnologies
Limited 11,631 - 11,631 0.8%
Chamelic Limited 26 - 26 0.4%
Cloud Sustainability Limited 19 7 26 0.5%
Crysalin Limited 1,447 - 1,447 0.1%
Diurnal Limited - 30 30 <0.1%
EmDot Limited 15 - 15 0.9%
Evocutis plc 767,310 - 767,310 0.1%
Getech Group plc 15,000 - 15,000 <0.1%
Green Chemicals plc 108,350 - 108,350 0.8%
Ilika plc 69,290 - 69,290 0.1%
Karus Therapeutics Limited 223 - 223 <0.1%
Mode Diagnostics Limited -
Ordinary shares 3,226 - 3,226 0.4%
Mode Diagnostics Limited -
A shares 229 - 229 0.5%
Modern Biosciences plc 1,185,150 - 1,185,150 1.7%
Modern Water plc 519,269 - 519,269 0.7%
Oxford Advanced Surfaces Group
plc 2,172,809 - 2,172,809 1.1%
Oxford Nanopore Technologies
Limited 115,666 - 115,666 0.5%
Oxtox Limited 25,363 - 25,363 0.1%
Plexus Planning Limited 1,732 - 1,732 0.6%
hVIVO plc(2) 37,160 - 37,160 <0.1%
Revolymer plc 88,890 - 88,890 0.2%
Salunda Limited 53,639 - 53,639 <0.1%
Structure Vision Limited 212 - 212 1.0%
Surrey Nanosystems Limited 453 - 453 0.3%
Sustainable Resource Solutions
Limited(3) 30 - 30 1.3%
Tissue Regenix Group plc 2,389,259 - 2,389,259 0.3%
Tracsis plc 121,189 - 121,189 0.5%
Xeros Technology Group plc 40,166 - 40,166 <0.1%
----------------------------------------------- ---------- ----------- ---------- --------
Mike Townend Amaethon Limited - A Shares 104 - 104 3.1%
Amaethon Limited - B Shares 11,966 - 11,966 1.0%
Amaethon Limited - Ordinary
shares 21 - 21 0.3%
Avacta Group plc 931,367 - 931,367 <0.1%
Capsant Neurotechnologies
Limited 11,282 - 11,282 0.8%
Chamelic Limited 23 - 23 0.4%
Cloud Sustainability Limited 18 7 25 0.5%
Crysalin Limited 1,286 - 1,286 0.1%
Diurnal Limited - 30 30 <0.1%
EmDot Limited 14 - 14 0.8%
Getech Group plc 20,000 - 20,000 <0.1%
Green Chemicals plc 113,222 - 113,222 0.8%
Ilika plc 10,000 - 10,000 <0.1%
Mode Diagnostics Limited 1,756 - 1,756 0.1%
Modern Biosciences plc 1,185,150 - 1,185,150 1.7%
Modern Water plc 575,000 - 575,000 0.7%
Oxford Advanced Surfaces Group
plc 932,994 - 932,994 0.5%
Oxford Advanced Surfaces Limited 5,000 - 5,000 0.2%
Oxford Nanopore Technologies
Limited 35,280 111 35,391 0.2%
Oxtox Limited 25,363 - 25,363 0.1%
hVIVO plc(2) 37,160 - 37,160 <0.1%
Revolymer plc 35,940 - 35,940 <0.1%
Structure Vision Limited 212 - 212 1.0%
Surrey Nanosystems Limited 404 - 404 0.2%
Sustainable Resource Solutions
Limited(3) 28 - 28 1.2%
Tissue Regenix Group plc 1,950,862 - 1,950,862 0.3%
Tracsis plc 25,430 - 25,430 <0.1%
Xeros Technology Group plc 35,499 - 35,499 3.1%
----------------------------------------------- ---------- ----------- ---------- --------
Greg Smith Alesi Surgical Limited(1) - 2 2 <0.1%
Avacta Group plc 390,407 - 390,407 <0.1%
Capsant Neurotechnologies
Limited 896 - 896 <0.1%
Chamelic Limited 3 - 3 <0.1%
Cloud Sustainability Limited 6 2 8 0.1%
Crysalin Limited 149 - 149 <0.1%
Diurnal Limited - 30 30 <0.1%
EmDot Limited 4 - 4 0.2%
Encos Limited 5,671 - 5,671 0.3%
Getech Group plc 8,000 - 8,000 <0.1%
Green Chemicals plc 4,830 - 4,830 <0.1%
Mode Diagnostics Limited -
Ordinary shares 361 - 361 <0.1%
Mode Diagnostics Limited -
A shares 28 500 528 <0.1%
Modern Biosciences plc 313,425 - 313,425 0.5%
Modern Water plc 7,250 - 7,250 <0.1%
Oxford Nanopore Technologies
Limited 1,500 81 1,581 <0.1%
hVIVO plc(2) 61,340 - 61,340 <0.1%
Revolymer plc 4,500 - 4,500 <0.1%
Summit Therapeutics plc 798 - 798 <0.1%
Surrey Nanosystems Limited 88 - 88 <0.1%
Sustainable Resource Solutions
Limited(3) 9 - 9 0.4%
Tissue Regenix Group plc 175,358 - 175,358 <0.1%
Xeros Technology Group plc 5,499 - 5,499 <0.1%
----------------------------------------------- ---------- ----------- ---------- --------
David Baynes Alesi Surgical Limited(1) - 4 4 <0.1%
Arkivum Limited - 377 377 <0.1%
Diurnal Limited 118 28 146 0.2%
Oxford Nanopore Technologies
Limited - 144 144 <0.1%
----------------------------------------------- ---------- ----------- ---------- --------
Angela Leach Alesi Surgical Limited(1) - 2 2 <0.1%
Avacta Group plc 74,152 - 74,152 <0.1%
Capsant Neurotechnologies
Limited 1,858 - 1,858 0.1%
Chamelic Limited 3 - 3 <0.1%
Cloud Sustainability Limited 6 4 10 0.2%
Diurnal Limited - 23 23 <0.1%
Evocutis plc 7,990 - 7,990 <0.1%
Getech Group plc 2,083 - 2,083 <0.1%
Mode Diagnostics Limited -
Ordinary Shares 606 - 606 <0.1%
Mode Diagnostics Limited -
A Shares 102 149 251 <0.1%
Modern Water plc 29,800 - 29,800 <0.1%
Oxford Advanced Surfaces Group
plc 68,101 - 68,101 <0.1%
Oxford Nanopore Technologies
Limited 1,516 81 1,597 <0.1%
hVIVO plc(2) 25,903 - 25,903 <0.1%
Revolymer plc 4,500 - 4,500 <0.1%
Structure Vision Limited 21 - 21 0.1%
Surrey Nanosystems Limited 90 - 90 <0.1%
Sustainable Resource Solutions
Limited(3) 9 - 9 0.4%
Tissue Regenix Group plc 329,172 - 329,172 <0.1%
Xeros Technology Group plc 5,666 - 5,666 <0.1%
----------------------------------------------- ---------- ----------- ---------- --------
(1) Formerly known as Asalus Medical Instruments Limited.
(2) Formerly known as Retroscreen Virology Group plc.
(3) Company dissolved on 14 July 2015.
c) Portfolio companies
The Group earns fees from the provision of business support
services and corporate finance advisory to portfolio companies in
which the Group has an equity stake. The following amounts have
been included in respect of these fees:
Unaudited Unaudited
six months six months Audited
ended ended Year ended
30 June 30 June 31 December
2015 2014 2014
Statement of comprehensive income GBPm GBPm GBPm
---------------------------------- ----------- ----------- ------------
Revenue from services 0.5 0.5 0.9
---------------------------------- ----------- ----------- ------------
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
Statement of financial position GBPm GBPm GBPm
-------------------------------- --------- --------- ------------
Trade receivables 1.3 0.4 0.6
-------------------------------- --------- --------- ------------
d) Subsidiary companies
Subsidiary companies that are not 100% owned either directly or
indirectly by the parent company have intercompany balances with
other Group companies totalling as follows:
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
--------------------------------------- --------- --------- ------------
Intercompany balances with other Group
companies 8.4 8.4 8.5
--------------------------------------- --------- --------- ------------
These intercompany balances represent funding loans provided by
Group companies that are interest free, repayable on demand and
unsecured.
General information
The comparative financial information presented herein for the
year ended 31 December 2014 does not constitute full statutory
accounts within the meaning of the Companies Act 2006. The Group's
Annual Report and Accounts for the year ended 31 December 2014 have
been delivered to the Registrar of Companies. The Group's
independent auditor's report on those accounts was unqualified, did
not include references to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and
did not contain a statement under Section 498(2) or 498(3) of the
Companies Act 2006.
Accounting policies
Basis of preparation
The financial information presented in these half-yearly results
constitutes the condensed consolidated financial statements of IP
Group plc, a company incorporated in Great Britain and registered
in England and Wales, and its subsidiaries (together, the "Group")
for the six months ended 30 June 2015.
The condensed consolidated financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting and
should be read in conjunction with the Annual Report and Accounts
for the year ended 31 December 2014, which have been prepared in
accordance with International Financial Reporting Standards as
adopted for use in the EU ("IFRS"). The financial information in
these half-yearly results, which were approved by the Board and
authorised for issue on 4 August 2015, is unaudited but has been
subject to a review by the Group's independent auditor.
Accounting estimates and judgements
The preparation of the half-yearly results requires management
to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expenses. Estimates and
judgements are continually evaluated and are based on historical
experience and other factors, such as expectations of future
events, and are believed to be reasonable under the circumstances.
Actual results may differ from these estimates. In preparing these
half-yearly results, the significant judgements made by management
in applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those applied to the
audited consolidated financial statements for the year ended 31
December 2014.
Going concern
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing the
condensed consolidated half year financial statements.
Accounting policies
The accounting policies applied by the Group in these
half-yearly results are the same as those applied by the Group in
its audited consolidated financial statements for the year ended 31
December 2014 and which will form the basis of the 2015 Annual
Report and Accounts. No new standards that have become effective in
the period have had a material effect on the Group's financial
statements.
Statement of Directors' responsibilities
The Directors confirm to the best of their knowledge that:
a. the half-yearly results have been prepared in accordance with
IAS 34 as adopted by the European Union; and
b. the interim management report includes a fair review of the
information required by the FCA's Disclosure and Transparency Rules
(4.2.7 R and 4.2.8 R).
The Directors of IP Group plc and their functions are listed
below.
By order of the Board
Mike Humphrey Alan Aubrey
Chairman Chief Executive Officer
4 August 2015
Independent review report
To IP Group plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2015 which comprises the condensed
consolidated statement of comprehensive income, condensed
consolidated statement of financial position, condensed
consolidated statement of cash flows, condensed consolidated
statement of changes in equity and the related explanatory notes.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the Company in accordance with the
terms of our engagement to assist the Company in meeting the
requirements of the Disclosure and Transparency Rules ("the DTR")
of the UK's Financial Conduct Authority ("the UK FCA"). Our review
has been undertaken so that we might state to the Company those
matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company
for our review work, for this report, or for the conclusions we
have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in the accounting policies note, the annual
financial statements of the Group are prepared in accordance with
IFRSs as adopted by the EU. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with IAS 34 Interim Financial Reporting as
adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2015 is not prepared, in all material respects, in accordance
with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Jonathan Mills
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London
E14 5GL
4 August 2015
Company information
Company registration number
4204490
Registered office
24 Cornhill
London
EC3V 3ND
Directors
Mike Humphrey
(Non-executive Chairman)
Alan John Aubrey
(Chief Executive Officer)
Michael Charles Nettleton Townend
(Chief Investment Officer)
Gregory Simon Smith
(Chief Financial Officer)
David Baynes
(Chief Operating Officer)
Douglas Brian Liversidge CBE
(Senior Independent Director)
Jonathan Brooks
(Non-executive Director)
Professor Lynn Faith Gladden CBE
(Non-executive Director)
Dr Elaine Sullivan
(Non-executive Director)
Company secretary
Angela Leach
This information is provided by RNS
The company news service from the London Stock Exchange
END
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