TIDMIPO
RNS Number : 9947H
IP Group PLC
02 August 2023
FOR RELEASE ON 2 August 2023
("IP Group" or "the Group" or "the Company")
Half-yearly results
Continued progress in key portfolio companies, strong balance
sheet maintained, portfolio well-funded
IP Group plc (LSE: IPO), which invests in breakthrough science
and innovation companies with the potential to create a better
future for all, today announces its financial results for the six
months ended 30 June 2023.
Half-year 2023 highlights
Portfolio well-funded, continued significant progress in key
themes & companies
-- Portfolio companies well-funded; total funds raised by
portfolio approximately GBP300m (HY22: c.GBP350m; FY22: GBP1.0bn)
including Quantum Motion (GBP42m), AccelerComm (GBP22m), OXCCU
(GBP18m), Garrison (GBP16m) and Mixergy (GBP9m)
-- Only 16% of our portfolio by value need to raise financing before the second half of 2024
-- Private portfolio company funding round valuations remained
robust with 86% of the 14 portfolio funding rounds completed in the
period taking place at or above previous funding round
valuations
-- Healthier future (Life Sciences): Istesso's Phase 2b trial
for its lead drug MBS2320 in rheumatoid arthritis continues to
recruit to plan and remains on target to read out in H1 2024.
Approval received to start additional Phase 2 trial in idiopathic
pulmonary fibrosis (IPF) in H2 2023. Group completed a GBP15m
investment and further GBP10m commitment to fully fund both trials.
Pulmocide - recruitment into Phase 3 efficacy study underway
-- Tech-enriched future (Deeptech): Featurespace, Garrison and
Ultraleap all posted double-digit revenue growth in H1, significant
fundraisings completed for Quantum Motion, AccelerComm &
Garrison
-- Regenerative future (Cleantech): Strong technical progress at
Hysata, key milestones achieved, triggering release of second
tranche of Series A funding, OXCCU completed GBP18m Series A
financing led by Clean Energy Ventures
Strong balance sheet maintained
-- Strong balance sheet and liquidity to support new and
follow-on investment in the portfolio with gross cash and deposits
at 30 June 2023 of GBP250.0m (HY22: GBP235.7m; FY22: GBP241.5m);
total potential liquidity including quoted shares of over
GBP450m
-- Cash proceeds in line with expectations at GBP32.2m, mainly
from the second tranche of consideration from the sale of
WaveOptics (HY22: GBP2.1m; FY22 GBP28.1m)
-- Investment into portfolio maintained: GBP59.8m into 23
companies across all three thematic areas (HY22: GBP52m; FY22:
GBP93.5m) including significant allocation to Istesso
(GBP15.0m)
-- Loss in the period of GBP54.5m (HY22: Loss of GBP309.8m;
FY22: Loss of GBP344.5m), partly driven by a reduction in the value
of Oxford Nanopore, which reduced by GBP27.8m, and negative
portfolio foreign exchange movements of GBP11.2m
-- Interim dividend of 0.51p per share (2022 interim dividend of
0.50pps; final dividend of 0.76pps)
Post period-end update
The fair value of the Group's holdings in listed companies
experienced a net fair value increase of GBP45m in the period since
30 June, including ONT increasing by GBP42m.
Summary financials
HY to 30 June 2022 FY 2022
HY to 30 June
2023 (unaudited) (unaudited) (audited)
----------------------- ---------------------- ---------------------- ----------------------
Net Asset Value (NAV) GBP1,313.6m; 126.7pps GBP1,414.0m; 136.7pps GBP1,376.1m; 132.9pps
----------------------- ---------------------- ---------------------- ----------------------
Loss (GBP54.5m) (GBP309.8m) (GBP344.5m)
----------------------- ---------------------- ---------------------- ----------------------
Loss/profit excluding
ONT (i) Loss of (GBP26.7m) Profit of GBP35.7m Profit of GBP25.2m
----------------------- ---------------------- ---------------------- ----------------------
Total portfolio (i) GBP1,276.1m GBP1,265.5m GBP1,258.5m
----------------------- ---------------------- ---------------------- ----------------------
Net portfolio loss
(i) (GBP44.4m) (GBP291.1m) (GBP309.1m)
----------------------- ---------------------- ---------------------- ----------------------
Gross cash and deposits
(i) GBP250.0m GBP235.7m GBP241.5m
----------------------- ---------------------- ---------------------- ----------------------
Cash proceeds(i) GBP32.2m GBP2.1m GBP28.1m
----------------------- ---------------------- ---------------------- ----------------------
Portfolio investment
(i) GBP59.8m GBP52.0m GBP93.5m
----------------------- ---------------------- ---------------------- ----------------------
Dividend 0.51 pps 0.50pps 1.26pps(ii)
----------------------- ---------------------- ---------------------- ----------------------
(i) Note 12 details the Alternative Performance Measures ("APM")
(ii) Amount shown for FY 2022 is total dividend including final
dividend approved and paid in 2023
Greg Smith, Chief Executive of IP Group, said: "IP Group is a
long-term investor in breakthrough science and innovation companies
that are addressing many of the world's unmet needs and, while the
current economic environment remains challenging, I am pleased with
portfolio progress in the period. The successful raising of more
than GBP300m of financing by our companies in the first half,
including GBP60m from the Group, is testament to their quality.
The Group has maintained its financial strength during the
period, the result of GBP32m cash realisations and having taken
pre-emptive action in light of the challenging investment
environment. This financial strength was highlighted as a strategic
asset as our portfolio navigated events such as the failure of
Silicon Valley Bank. We have also continued our approach of
dedicating a proportion of all cash realisations to supporting
capital returns for shareholders through an interim dividend.
The opportunity for value creation in our portfolio remains
compelling. Double-digit revenue growth in our largest deeptech and
healthcare companies is evidence of continued strong demand for
their products and services. Our therapeutics portfolio includes
twelve companies with products in clinical trials, seven of which
are targeting key inflection points in the next 18 months.
Breakthrough cleantech businesses, such as Hysata, have delivered
technical milestones and commercial demand. The Group is
well-positioned to support these businesses and deliver strong,
impactful returns for all stakeholders over time. "
Webinar
IP Group will host a webinar for analysts and investors today,
02 August, at 10:00am. For more details or to register as a
participant please visit
https://www.investormeetcompany.com/ip-group-plc/register-investor.
For more information, please contact:
IP Group plc www.ipgroupplc.com
Greg Smith, Chief Executive Officer +44 (0) 20 7444 0050
David Baynes, Chief Financial and Operating Officer
Liz Vaughan-Adams, Communications +44 (0) 20 7444 0062/+44 (0) 7967 312125
Portland
Tristan Peniston-Bird +44 (0) 7772 031 886
Alex Donaldson +44 (0) 7516 729702
Further information on IP Group is available on our website:
www.ipgroupplc.com
This half-yearly report may contain forward-looking statements.
These statements reflect the Board's current view, are subject to a
number of material risks and uncertainties and could change in the
future. Factors that could cause or contribute to such changes
include, but are not limited to, the general economic climate and
market conditions, as well as specific factors relating to the
financial or commercial prospects or performance of individual
portfolio companies within the Group's portfolio of investments.
Throughout this Half-Yearly Report, the Group's holdings in
portfolio companies reflect the undiluted beneficial equity
interest excluding debt, unless otherwise explicitly stated.
Interim Management Report
Summary
The Group, one of the largest investors in university and other
innovation-based companies in the world, has continued to make
excellent progress in its purpose of accelerating the impact of
science for a better future, building on our strong track record of
having helped create several billion-dollar companies (Oxford
Nanopore, Ceres Power, Hinge Health). We believe that an increased
focus of capital and resource on our thematic areas, where we have
experienced and specialist investment teams, will enable us to
replicate that success in supporting more businesses to values in
excess of $1bn.
Despite what continues to be a challenging macroeconomic
backdrop for early-stage and growth companies, our portfolio has
made good progress in the period, raising GBP300m of funding of
which IP Group contributed GBP59.8m (HY22: GBP52m; FY22: GBP93.5m)
. This compares with total capital raised of GBP350m in the same
period in 2022, a decline of 17% which compares favourably with
market data suggesting broader venture deal activity declined
significantly year on year. Notable transactions included a GBP42m
fundraise by Quantum Motion, the largest ever UK quantum funding, a
GBP22m Series B financing for wireless communications company
AccelerComm, a GBP18m Series A at e-fuel company OXCCU and
financings for Garrison (GBP16m) and Mixergy (GBP9m).
Our portfolio's continued success in raising capital in this and
earlier periods means it is well funded. Among the larger holdings
in our portfolio, a third are fully funded to planned
profitability, and 51% are funded until the second half of 2024 or
later, with only 16% of the portfolio needing to raise financing
before the second half of 2024.
In terms of other progress within the portfolio, we are pleased
to report that recruitment into Istesso's Phase 2b trial for its
lead drug MBS2320 in rheumatoid arthritis is on schedule and we
continue to expect the trial to readout in the first half of 2024.
We are also delighted that the company has received regulatory
approval to start a second Phase 2 trial in IPF, which is scheduled
to start recruiting during the second half of 2023. Our novel
electrolyser company Hysata continues to make excellent progress,
demonstrating larger stacks operating at exceptionally high 95%
efficiency levels.
The Group has taken proactive steps to maintain financial
strength through the prevailing challenging economic environment
and geopolitical uncertainty by securing a private market debt
issue last year to provide additional funding flexibility and
reducing our planned investment level. In the current period, the
Group also benefited from GBP32.2m of cash proceeds, predominantly
from the second tranche of cash consideration from the sale of
WaveOptics. This allowed the Group to finish the first half of the
year with gross cash and deposits of GBP250.0m.
We see our financial strength as particularly important given
the difficult economic backdrop. This was highlighted during the
short period of heightened volatility around the failure of Silicon
Valley Bank, where a small number of our portfolio companies were
directly impacted and we were rapidly able to offer additional
liquidity in support. Fortunately, this support was not ultimately
required however it serves as a reminder of the importance of
capital availability to protect value and, more broadly in the
current environment, potentially access opportunities for future
value creation at attractive prices.
We also remain committed to narrowing the discount to our NAV
per share and maintained our approach of employing a proportion of
cash realisations to support capital returns, which, for this
period, will be in the form of an interim dividend. We have also
increased our investor relations activities by introducing
additional investor-focussed events as well as our flagship 'Scale
it up' event at London's Science Museum in May where we hosted a
debate on how the UK can help support more UK innovation to become
world-leading companies, showcasing a number of our portfolio
companies. We have also increased the number of roadshows the Group
undertakes, meeting with holders and non-holders in the UK and
Europe in the first half of the year with meetings planned in the
US, Middle East and Europe in the second half. To help raise the
Group's profile, we also refreshed our brand identity in the first
half of the year. This brand refresh, aimed at highlighting our
expertise and clearly aligning around our impactful purpose, has
been received positively by stakeholders.
Financial results: macroeconomic headwinds, strong cash
balance
As at 30 June 2023, IP Group had gross cash and deposits of
GBP250.0m (HY22: GBP235.7m; FY22: GBP241.5m), having invested
GBP59.8m in the period including notable investments into portfolio
companies Istesso Ltd (GBP15m), our North American platform
(GBP6.6m) and Hysata Pty Ltd (GBP4.7m) as well as a number of
smaller size investments into current and new opportunities across
all three of our thematic areas. Cash proceeds increased in line
with expectations at GBP32.2m, mainly from the second tranche of
consideration from the sale of WaveOptics (HY22: GBP2.1m; FY22
GBP28.1m).
As at 30 June 2023, the Group's Net Asset Value was GBP1,313.6,
or 126.7 pence per share (HY22: GBP1,414.0m, or 136.7pps; FY22:
GBP1,376.1m, or 132.9pps), a decline of 5.4pps (excluding the
impact of the 0.76pps final dividend paid in June 2023) resulting
from the loss of GBP54.5m (HY22: Loss of GBP309.8m; FY22: Loss of
GBP344.5m) in the period.
The Group's portfolio recorded a net fair value reduction of
GBP44.4m in the period, consisting of a GBP29.4m reduction in the
value of the quoted portfolio, GBP11.2m of portfolio foreign
exchange losses and an GBP8.3m reduction in the value of investment
in Limited Partnerships, offset by a GBP4.5m gain in the value of
private portfolio companies. The reduction in the quoted portfolio
was driven by Oxford Nanopore, which fell in value by GBP27.8m in
the period but which has recovered significantly since the period
end. Net overheads totalled GBP10.3m in the period (HY22: GBP10.9m;
FY22: GBP20.1m).
Overview of business performance including thematic focus &
holdings
The performance of the Group's business units is summarised
below with further detail on the performance of each in the
Portfolio Review.
Net portfolio Fair value Simple return on
All GBPm unless stated Invested Cash proceeds gain/(loss) at 30 June 2023 capital (%)
---------------------- ------------- ------------- --------------------- ---------------- ---------------------
Healthier future:
Oxford Nanopore - - (27.8) 177.7 (14%)
Healthier future: Life
Sciences 22.8 0.1 (7.9) 411.9 (2%)
Tech-enriched future:
Deeptech 10.6 31.0 (3.2) 206.4 (2%)
Regenerative future:
Kiko Ventures
(Cleantech) 12.8 - 6.1 262.4 3%
North America 6.6 - (12.6) 81.1 (14%)
Australia and New
Zealand 6.2 - 4.1 52.9 10%
Platform investments 0.4 0.7 0.7 44.0 2%
Organic and De minimis - 0.4 (2.5) 15.4 (14%)
---------------------- ------------- ------------- --------------------- ---------------- ---------------------
Subtotal 59.4 32.2 (43.1) 1,251.8 (3%)
---------------------- ------------- ------------- --------------------- ---------------- -----------------------
Attributable to third
parties 0.4 - (1.3) 24.3 (5%)
---------------------- ------------- ------------- --------------------- ---------------- ---------------------
Total Portfolio 59.8 32.2 (44.4) 1,276.1 (4%)
---------------------- ------------- ------------- --------------------- ---------------- ---------------------
Third-party fund management
The Group continues to view the management of third-party funds
as an important element of our business model, and we manage or
advise GBP690m in third-party capital across our Parkwalk,
Australian and UK business units.
Shareholder returns, interim dividend
Delivering returns for shareholders is the Group's financial
purpose and narrowing the discount to our NAV per share remains a
focus. The Board remains focussed on shareholder value creation and
has declared an interim dividend of 0.51 pence per share (HY22:
0.50pps). A final 2022 dividend of 0.76 pence per share was paid in
the period, bringing total dividend payments in respect of 2022 to
1.26 pence per share.
The Group aims to deliver returns to shareholders primarily in
the form of long-term capital appreciation. Subject to the Group's
capital allocation policy, the majority of cash proceeds will be
typically reinvested with a smaller proportion used to deliver a
cash return to shareholders. Since the introduction of this
approach in 2021, the Group has now delivered more than GBP70m of
cash returns to our shareholders.
Board changes
We were delighted to welcome Anita Kidgell to the Board with
effect from 18 January 2023. Anita brings a wealth of experience
gained at GSK plc, one of the leading global biopharma companies.
From her position as Head of Corporate Strategy at GSK, Anita
brings to the Board a rare combination of a scientific background
together with strategic, investor relations and communication
experience. Following her appointment, the Board comprises two
executive directors, five NEDs and the Chairman: equal
representation of both male and female.
Outlook
While the current macro environment remains challenging, IP
Group continues to be well financed and we are confident that our
portfolio will deliver strong returns with a number of key
milestones anticipated over the next 12-18 months. In Life
Sciences, seven companies are targeting key clinical milestones,
including Istesso, Akamis, Pulmocide and Crescendo. In Deeptech, a
number of companies, including Featurespace, Teya and Garrison are
targeting continued double-digit revenue growth, while in
Cleantech, through Kiko Ventures, the focus remains on driving
value from core holdings including First Light Fusion, Oxa and
Hysata, and investing for the future . We continue to believe that
IP Group is well placed to deliver value for shareholders through
capital appreciation supported by cash returns and is
well-positioned for a return of investor appetite towards growth
companies.
PORTFOLIO REVIEW
Overview
As of 30 June 2023, the value of the Group's portfolio was
GBP1,276.1m (HY22: GBP1,265.5m; FY22: GBP1,258.5m) reflecting a net
portfolio loss of GBP44.4m (HY22: loss GBP291.1m; FY22: loss
GBP309.1m). Cash invested during the period totalled GBP59.8m
(HY22: GBP52.0m; FY22: GBP93.5m) and cash proceeds totalled
GBP32.2m (HY22: GBP2.1m; FY22: GBP28.1m).
The portfolio consists of interests in 93 companies (excluding
de minimis and organic holdings), of which the top 20 by value
comprise 70% of the portfolio value (HY22: 103, 70%; FY22: 95,
76%).
Fair value movements
A summary of the unrealised and realised fair value gains and
losses is as follows:
Six months Year ended
Six months ended 31 December
ended 30 June 2022 2022
30 June 2023 GBPm GBPm GBPm
------------------------------------ ------------------ ------------- ------------
Quoted equity investments (29.4) (397.5) (428.5)
Private equity & debt investments 4.5 82.2 101.4
Investments in Limited Partnerships (8.3) 8.8 (6.4)
Foreign exchange movements (11.2) 15.4 24.4
------------------------------------ ------------------ ------------- ------------
Net portfolio losses (44.4) (291.1) (309.1)
------------------------------------ ------------------ ------------- ------------
A summary of the largest unrealised and realised fair value
gains and losses by portfolio investment (excluding fx movements)
is as follows:
Gains GBPm Losses GBPm
------------------------- ---- ---------------------------- ------
Oxford Nanopore Technologies
Hysata Pty Ltd 9.2 plc (27.8)
Centessa Pharmaceuticals North American Platform
plc 6.2 (Longview Innovation) (9.1)
Athenex, Inc. (realised
Istesso Limited 3.1 loss) (6.5)
AMSL Innovations Pty
Ltd 2.6 Oxehealth Limited (5.2)
OXCCU Tech Limited 2.0 Teya Holdings Ltd (2.7)
Other quoted 1.0 Other quoted (2.3)
Other private 6.6 Other private (10.3)
------------------------- ---- ---------------------------- ------
Total 30.7 Total (63.9)
------------------------- ---- ---------------------------- ------
Investments and cash proceeds
The Group deployed a total of GBP59.8m across 23 new and
existing investments during the period (HY22: GBP52.0m, 22, FY22:
GBP93.5m, 46), versus cash proceeds of GBP32.2m (HY22: GBP2.1m,
FY22: GBP28.1m).
Largest investments and cash proceeds by portfolio company :
Investments GBPm Cash proceeds GBPm
---------------------------- ---- ------------------------ ----
Istesso Limited 15.0 Wave Optics Limited(1) 30.8
North American Platform
(Longview Innovation) 6.6 UCL Technology Fund L.P. 0.7
Hysata Pty Ltd 4.7 Lixea Limited 0.3
Tado GmbH 4.4 Athenex, Inc 0.1
Garrison Technology Limited 3.9 Perpetuum Limited 0.1
Other 25.2 Other 0.2
---------------------------- ---- ------------------------ ----
Total 59.8 Total 32.2
---------------------------- ---- ------------------------ ----
1 Deferred consideration in relation to exit in 2021.
Deferred consideration estimated at GBP12.5m was outstanding at
30 June 2023 (HY22: GBP44.3m, FY22: GBP48.2m), relating to the
Group's realisation of Enterprise Therapeutics (GBP11.4m, exited in
2020) and Reinfer (GBP1.1m, exited in 2022).
Number of Investments
United Kingdom North America Australia & New Zealand Total
--------------------------- -------------- ------------- ----------------------- -----
1 January 2023 81 1 13 95
Additions 1 - 1 2
Exited (1) - - (1)
Being closed/liquidated - - (1) (1)
Reclassified to de minimis (2) - - (2)
--------------------------- -------------- ------------- ----------------------- -----
30 June 2023 79 1 13 93
--------------------------- -------------- ------------- ----------------------- -----
Co-investment analysis
Including the GBP59.8m of primary capital invested by the Group
(the Group invested GBPnil via secondary purchases (HY22: GBP0.3m,
FY22: GBP3.7m), the Group's portfolio raised approximately GBP300m
during the half year to 30 June 2023 (HY22: approx. GBP350m, FY22:
approx. GBP1.0bn). Co-investment from parties or funds with a
greater than 1% shareholding in IP Group plc was GBPnil (HY22:
GBP9.5m, FY22: GBP24.9m). An analysis of this co-investment by
source is as follows:
Six months ended Six months ended
30 June 2023 30 June 2022
Portfolio capital raised GBPm % GBPm %
IP Group(1) 59.8 20% 51.6 14%
IP Group managed funds(2) 9.9 3% 19.6 5%
IP Group plc shareholders (>1% holdings) - 0% 9.5 3%
Institutional investors 69.9 24% 90.3 25%
Corporate, other EIS, individuals, universities and other 158.7 53% 186.8 53%
Total 298.3 100% 357.8 100%
--------- --------- -------
(1) Reflects primary investment only; during the six months to
30 June 2023 the Group invested GBPnil via secondary purchase of
shares (HY22: GBP0.3m, FY22: GBP3.7m).
(2) Includes Parkwalk Advisors and other funds managed by IP Group.
Portfolio funding position
The following table lists information on the expected cash-out
dates for portfolio companies with an IP Group investment holding
value greater than GBP4m
Fair value of
Group holding %
at 30 June 2023
Company name GBPm
----------------------------------------------- ---------------- ----
Trade to profitability 354.2 33%
2023 59.5 6%
2024 H1 109.4 10%
2024 H2 292.3 27%
2025 240.2 22%
2026 18.1 2%
----------------------------------------------- ---------------- ----
Total companies > GBP4m value 1,073.7 100%
----------------------------------------------- ---------------- ----
Companies < GBP4m value 83.7
----------------------------------------------- ---------------- ----
Interest in Limited Partnerships and Platforms 118.7
----------------------------------------------- ---------------- ----
Total portfolio 1,276.1
----------------------------------------------- ---------------- ----
Portfolio analysis by sector
The Group splits its core opportunity evaluation, investment and
business-building team into specialist divisions, Life Sciences,
Deeptech and Cleantech within the UK, with geographically focused
investment teams based in the United States and Australia. A small
number of investments are categorised as platform investments,
which are portfolio companies which also invest in other
opportunities.
As at 30 June 2023 As at 31 December 2022
------------------------ ----------------------------
Fair value Number Fair value Number
-------------- ----------------- ---------
Sector GBPm % % GBPm % %
--------------------------- -------- ---- ---- ---------- ----- -----
Healthier future:
Oxford Nanopore 177.7 14% 1 1% 205.5 17% 1 1%
Healthier future:
Life Sciences 411.9 33% 31 34% 390.8 32% 33 35%
Tech-enriched future:
Deeptech 206.4 17% 29 31% 201.0 17% 28 29%
Regenerative future:
Kiko Ventures (Cleantech) 262.4 21% 14 15% 243.8 20% 15 16%
North America 81.1 7% 1 1% 87.1 7% 1 1%
Australia and New
Zealand 52.9 4% 13 14% 42.8 3% 13 14%
Platform investments 44.0 4% 4 4% 43.6 4% 4 4%
--------------------------- -------- ---- ---- ---------- ----- -----
Subtotal 1,236.4 100% 93 100% 1,214.6 100% 95 100%
De minimis and
organic holdings 15.4 17.0
--------------------------- -------- ---- ---- ---------- ----- -----
Subtotal 1,251.8 1,231.6
--------------------------- -------- ---- ---- ---------- ----- -----
Attributable to
third parties(1) 24.3 26.9
--------------------------- -------- ---- ---- ---------- ----- -----
Total portfolio 1,276.1 1,258.5
--------------------------- -------- ---- ---- ---------- ----- -----
1 Amounts attributable to third parties consist of GBP12.8m
attributable to minority interests represented by third-party
limited partners in the consolidated fund, IP Venture Fund II
(HY22: GBP14.9m, FY22: GBP13.9m), GBP10.7m attributable to Imperial
College London (HY22: GBP12.6m, FY22: GBP12.2m) and GBP0.8m
attributable to other third parties (HY22: GBP1.5m, FY22:
GBP0.8m).
Portfolio Review: Healthier future: Oxford Nanopore
Following the disappointing share price performance at the end
of 2022, Oxford Nanopore's share price continued to underperform in
the first half, trading as low as 176p in March 2023. This was due
to the poor performance of Life Sciences Research Tools ("LSRT")
companies and some specific disappointment around the company's
reduced 2023 revenue guidance. That said, Oxford Nanopore's growth
remains amongst the strongest in the LSRT space and this was
reflected in the post-results share price rally. The company's
recent trading update for the first half of 2023 underlined this,
with expected 22% revenue growth falling in the middle of its FY
2023 guidance range (16-30% growth). The company continues to
target adjusted EBITDA breakeven by the end of 2026.
In addition to delivering double-digit revenue growth, Oxford
Nanopore made a number of updates to its core technology platform
and launched a number of new products. It also announced a number
of significant collaborations in various applied and clinical
markets, which potentially offer upside from a growth perspective.
We remain bullish on the company's long-term prospects, and it
therefore remains a core, strategic holding.
Fair value
of Group
Net holding
Group Unrealised
Stake at + realised
30 June investment/ fair value at 30
2023 (divestment) movement June 2023
Company name Description % GBPm GBPm GBPm
-------------------------------- ------------------------------- --------- -------------- ----------- -----------
Enabling the analysis of any
living thing, by any person,
Oxford Nanopore Technologies plc in any environment 10.1% - (27.7) 177.7
-------------------------------- ------------------------------- --------- -------------- ----------- -----------
Portfolio Review: Healthier future: Life sciences
IP Group's Life Sciences portfolio comprises holdings in 31
companies valued at GBP411.9m at 30 June 2023.
Fair value
of Group
Net holding
Group Stake at 30 June 2023 (1) investment/ (divestment) Unrealised + realised fair value movement at 30 June 2023
Company name Description % GBPm GBPm GBPm
---------------- ------------------- --------------------------------- -------------------------- ------------------------------------------ ------------------
From disease
modification to
disease
Istesso Limited resolution 56.5% 15.0 3.1 113.8
The world's first
digital clinic
Hinge Health, for back and
Inc. joint pain 1.8% - (2.2) 51.4
Digital
Ieso Digital therapeutics for
Health Limited psychiatry 32.1% - - 21.8
Gene and viral
Akamis Bio therapies for
Limited(2) cancer 24.5% - - 21.2
Targeting
deubiquitylating
enzymes for the
Mission treatment of CNS
Therapeutics and mitochondrial
Limited disorders 18.4% 2.0 - 20.2
Treatments and
delivery
technology for
sight-threatening
Oxular Limited diseases 25.4% 2.9 - 18.8
Biologic
therapeutics
eliciting the
Crescendo immune system
Biologics against solid
Limited tumours 14.5% - - 18.7
Artios Pharma Novel oncology
Limited therapies 7.1% - (0.2) 18.1
Gut-microbiome
based
Microbiotica therapeutics and
Limited diagnostics 17.7% - - 16.1
Novel inhaled
treatment for
life-threatening
Pulmocide fungal lung
Limited infections 12.2% - (0.4) 14.3
Other companies (21 companies) - 1.7 (8.2) 97.5
------------------------------------- --------------------------------- -------------------------- ------------------------------------------ ------------------
Total - 21.6 (7.9) 411.9
------------------------------------- --------------------------------- -------------------------- ------------------------------------------ ------------------
1 Represents the Group's undiluted beneficial economic equity
interest (excluding debt), including only the Group's portion of
IPVF II. Voting interest is below 50%.
2 Previously called PsiOxus Therapeutics Limited.
The largest transaction in the first half of 2023 was a GBP15.0m
investment into Istesso, primarily by way of a convertible note. We
continue to see good progress at Istesso with its Phase 2b study of
MBS2320 in rheumatoid arthritis ("RA") running according to plan
and the start of a Phase 2 study in idiopathic pulmonary fibrosis
due in the second half of the year.
In terms of performance, the value of the portfolio declined by
2% in the first half, driven by a realised loss at NASDAQ-listed
Athenex (GBP(6.6)m including de-recognition of deferred
consideration), which eventually went into administration during
the period, and a GBP(5)m write-down in the holding value of
Oxehealth Ltd following a financing round at a depressed price
despite good progress at the business. On the positives, we saw
some appreciation in the Centessa share price, providing for a
GBP5.8m uplift.
We continue to see good fundamental progress across the
portfolio with each of Artios, Kynos and Oxular announcing the
initiation of important clinical studies for their lead assets.
Moreover, Mission Therapeutics and Akamis announced positive safety
data from Phase 1 studies, with some evidence of effect for Akamis'
novel gene therapy agent.
Hinge Health continues to significantly grow revenues and expand
its customer base. As for the full-year 2022 valuation process, we
engaged a third-party valuation specialist to assess the company's
current value, which resulted in no change in the value of our
holding with the fair value movement in the period relating only to
FX.
Our companies continue to make good clinical, regulatory and
commercial progress, some of which cannot be disclosed for
competitive reasons, and we believe that 2023 will lay the
foundations for significant NAV and liquidity outperformance during
the coming few years.
Portfolio Review: Tech-enriched future: Deeptech
IP Group's Technology portfolio comprises holdings in 29
companies valued at GBP206.4m at 30 June 2023.
Deeptech Portfolio
The IP Group Deeptech portfolio covers a breadth of areas aimed
at delivering value through growing innovative companies that
enable and secure the digital economy, create new human capability
and generate prosperity for all in four key focus areas: Applied
Artificial Intelligence, Next Generation Networks, Human-Machine
Interfaces and Future Computing.
Fair value
of Group
Net holding
Group Unrealised
Stake at + realised
30 June investment/ fair value at 30
2023 (1) (divestment) movement June 2023
Company name Description % GBPm GBPm GBPm
--------------------- ----------------------- --------- -------------- ----------- -----------
Leading predictive
Featurespace Limited analytics company 20.4% - - 64.1
Anti-malware solutions
Garrison Technology for enterprise cyber
Limited defences 23.6% 3.9 - 31.6
Contactless haptic
technology
Ultraleap Holdings "feeling without
Limited touching" 17.0% - - 31.0
Other companies (26
companies) - 6.7 (3.2) 79.7
---------------------------------------------- --------- -------------- ----------- -----------
Total - 10.6 (3.2) 206.4
---------------------------------------------- --------- -------------- ----------- -----------
(1) Represents the Group's undiluted beneficial economic equity
interest (excluding debt), including only the Group's portion of
IPVF II. Voting interest is below 50%.
The first half of 2023 has been a busy period with several key
transactions completing.
The top three assets by value in the Deeptech portfolio -
Featurespace, Ultraleap, and Garrison - which account for more than
60% of the Deeptech portfolio value, all progressed well in the
first half of the year. Featurespace continues to deliver
attractive revenue growth on the back of its strong customer value
proposition, exemplified by the recent revelation that the high
street bank Natwest has improved its scam detection rate by 135%
using Featurespace's technology. Ultraleap launched the next
generation of its hand tracking camera product, the Leap Motion 2,
which elicited an enthusiastic response from customers at the
Augmented World Expo in June. Ultraleap has seen a notable increase
in interest as the eXtended Reality (XR) market 'heats up' and we
envisage good commercial progress for the asset this year.
Garrison Technologies, which eliminates cyber threats whilst
delivering full web access without putting an organisation's
sensitive data and systems at risk, hit its revenue targets to the
year ended March 2023 and raised GBP15.5m of new investment from
Legal and General and British Patient Capital, alongside existing
investors including IP Group. The company has grown rapidly over
the last 4 years, compounding revenues at 64% YoY over this period,
with continued attractive growth expected this year.
We were delighted to see University of Oxford spin-out Quantum
Motion Technologies close a GBP42m funding round, the largest ever
single investment into a quantum computing startup in the UK. The
investment, which the company will use to develop its silicon-based
approach to building a cost-effective and scalable quantum
computer, was provided by Robert Bosch Venture Capital alongside
Porsche SE and British Patient Capital. All of the company's
existing investors (Inkef, IP Group, NSSIF, Octopus Ventures,
Oxford Sciences Enterprises and Parkwalk Advisors) also
participated.
In a similar vein, we were equally pleased to see the completion
of a GBP21.5m series B investment round at our portfolio company
AccelerComm, which is supercharging the world's wireless
infrastructure. The round was led by Swisscom Ventures and Parkwalk
Advisors alongside Hostplus with follow-on funding providing by all
the existing investors. AccelerComm's technology, which can halve
the cost of spectrum and power in 5G networks by increasing
throughput and reducing latency, is already being used by several
of the world's largest corporates, and the company continues to
grow through evolving partnerships with the likes of Intel, AMD and
Xilinx.
The Deeptech team has backed one brand new opportunity so far
this year, a GBP3m investment into DeepRender which is developing
the next generation of image and video compression technology using
an AI-first approach. This investment was made alongside existing
investor Pentech, our fourth deal with this fund. Previous
investments include Acunu and Semetric, both sold to Apple, and
existing portfolio company Monolith.ai. DeepRender already has
commercial engagement with several of the world's top technology
companies and we have high hopes for rapid progress in that
asset.
On the less positive side, we have taken an impairment in the
value of our holding in Navenio after slower than hoped for
commercial progress, and our holding in Mirriad has continued to
lose value as its share price declined, albeit the company raised
GBP6.3 million through a placing and open offer during the
period.
Portfolio Review: Regenerative future: Kiko Ventures
(Cleantech)
Fair value
of Group
Net holding
Group Unrealised
Stake at + realised
30 June investment/ fair value at 30
2023 (1) (divestment) movement June 2023
Company name Description % GBPm GBPm GBPm
----------------------- ------------------------- --------- -------------- ----------- -----------
Solving fusion with
First Light Fusion the simplest possible
Limited machine 27.5% - - 114.5
Software to enable
Oxa Autonomy Ltd every vehicle to become
(2) autonomous 12.1% - (0.2) 65.7
The fuel cell company
Bramble Energy Limited with Gigafactories 31.5% - - 20.7
Silicon anodes for
next generation
Nexeon Limited lithium-ion batteries 5.5% - - 16.3
Other companies (10
companies) - 12.9 6.3 45.2
-------------------------------------------------- --------- -------------- ----------- -----------
Total - 12.9 6.1 262.4
-------------------------------------------------- --------- -------------- ----------- -----------
(1) Represents the Group's undiluted beneficial economic equity
interest (excluding debt), including only the Group's portion of
IPVF II. Voting interest is below 50%.
(2) Previously called Oxbotica Limited.
The Kiko Ventures portfolio comprises holdings in 14 companies
valued at GBP262.4m as at 30 June 2023.
In the first half of 2023, there have been signs that the wider
venture market slowdown has started to impact Cleantech. While
First Light Fusion has seen good interest in its post-fusion Series
C round (launched last year with UBS) the fund raise has not yet
completed, impacted by this softening of the funding environment.
We still believe, however, that it will be possible to complete the
round this year and have therefore not altered the valuation of our
holding in the company. As part of our normal valuation process, we
will review this position at year end. First Light continues to
progress plans for its gain scale device, Machine 4, and in June
2023 entered into an agreement with the UKAEA Centre for Fusion
Energy at Culham to construct Machine 4 on the Culham campus, with
UKAEA jointly developing a new building to house the facility.
Electrolyser company Hysata, which is backed jointly by Kiko and
IP Group Australia, made good technical progress this year,
achieving its Series A technical milestone several months ahead of
schedule, which triggered the second tranche of last year's Series
A investment, bringing the total invested by Kiko into the company
to GBP6.2m. The technical progress was impressive, with Hysata
demonstrating stacks operating at the same exceptionally high 95%
efficiency as the single cell experiment reported in Nature in
2021. It is normally difficult to repeat 'hero' single cell data in
larger systems, making this a significant achievement. Hysata has
now launched a Series B funding round, which could complete this
year. Given the technical progress and input from Hysata's advisors
on funding valuation we have taken a c50% uplift in our holding
value for the asset.
Despite the weaker funding environment, there were good funding
rounds in two earlier stage businesses, both Oxford University
spin-outs. In January, smart home heating company Mixergy completed
a GBP9m Series B raise, led by OSE, with new investors Nesta and
EDP Ventures, joining the share register. Mixergy has continued to
make good progress and has doubled revenue for the past two years.
The new funding will help the company with international expansion
(supported by EDP, one of the biggest energy suppliers in Southern
Europe) and to develop heat pump products. In May, OXCCU, which has
breakthrough technology for the catalytic synthesis of sustainable
aviation fuels (SAFs), raised an oversubscribed GBP18m Series A.
The round was led by well-established US cleantech VC Clean Energy
Ventures and was their first investment in a UK company. Attracting
a wider diversity of high quality cleantech co-investment was one
of the brand objectives for Kiko, and this deal, the first time we
have had a US venture fund lead a deal in the cleantech portfolio,
provides validation of that benefit. OXCCU was founded by academics
behind Oxford Catalysts Group, IP Group's first cleantech
investment in 2004. That company successfully floated on AIM, and
it has been great to work again with an experienced and successful
founding team. The company's CEO and chair also come from the IP
Group stable, with Andrew Symes leaving the Kiko investment team to
become CEO and Alan Aubrey joining as chair. OXCCU thus has a very
high-quality team, and its breakthrough new technology, published
in Nature, has the potential to halve the cost of so called
'e-fuels' produced from power and CO(2) .
We have also continued marketing development of the Kiko brand,
building the reputation as the leading cleantech venture investor
in the UK. A highlight for the year was the role we played in
establishing Cleantech for UK, in partnership with Bill Gates'
Breakthrough Energy and the Cleantech Group. Cleantech for UK is a
policy body with the aim of advocating for support for climate
technology development and deployment. We were invited by Cleantech
Group to help establish the founding membership, using our network
to bring in other leading cleantech accelerators and investors, and
achieved a group with combined funds of over GBP6 billion.
Cleantech for UK was launched on 15th February at a ceremony
attended by Bill Gates and Prime Minister Rishi Sunak. The body
published its first report in June: "Building the Next Generation
of Cleantech Champions" a landscape overview which highlighted both
the opportunities and current challenges for the sector in the UK.
We continue to be closely involved, alongside other thought
leadership work with the Energy Transitions Commission and regular
interviews in the media.
Portfolio Review: North America (Longview Innovation)
The Group's activities in North America are carried out through
a 58% strategic holding in a dedicated evergreen fund, Longview
Innovation (previously IP Group, Inc. prior to its rebranding in
March 2023). In the first half of 2023, the Longview Innovation
portfolio continued to make progress, achieving operational and
financial milestones despite economic headwinds.
Carisma Therapeutics, a company focused on developing novel
cancer immunotherapies, completed the merger with Sesen Bio and
commenced trading on the NASDAQ market under the symbol CARM. Exyn
Technologies closed its Series B round adding two additional
strategic investors across the mining and inspection market
verticals. Optimeos Life Sciences successfully raised a seed round
led by JRS Life Sciences and 7G Bioventures. The funds will be used
to further drive validating engagements, expand the platform and
build out the team. Taktos Therapeutics closed an external Seed
financing with a new investor Washington Research Foundation.
Advanced diagnostics company MOBILion announced partnerships with
Rilas Technologies and Switzerland-based TOFWERK AG to expand the
capabilities and reach of its MOBIE analytics platform.
As it looks to the remainder of 2023, Longview Innovation is
seeking further funding for its platform from institutional
investors and continues to identify transformative technologies at
their partners.
Fair value
of Group
holding
at 30 June 2023(1)
Company name Description GBPm
------------------------------- ---------------------------------------------------------------- -------------------
A platform technology for conducting ion mobility separations
with lossless ion transfer and
MOBILion Systems, Inc. manipulation 19.5
Uniformity Labs, Inc. Equipment, materials, and software for additive manufacturing 13.7
Exyn Technologies, Inc. Unmanned aerial systems 12.8
Carisma Therapeutics, Inc. Cancer immunotherapy treatments 10.9
Other companies (26 companies) 24.2
------------------------------------------------------------------------------------------------- -------------------
Total 81.1
------------------------------------------------------------------------------------------------- -------------------
Portfolio Review: Australia and New Zealand
Our portfolio in Australia and New Zealand continues to scale
and make significant progress. The portfolio now stands at 15
companies valued at GBP52.9m. In the first half, the portfolio
delivered a net fair value uplift of GBP4.1m which included
follow-on funding at Hysata and AMSL Aero. The pipeline of
opportunities from our university partners at the Group of Eight
and Auckland universities continues to be strong, positioning the
platform well for growth and returns over the coming 3-5 years.
Joint Australian/Kiko investment Hysata continues to be a
highlight in the portfolio. As described in further detail in the
Kiko section, the company is making strong progress on its mission
to deliver the world's most efficient, simple and reliable
electrolyser.
Canopus Networks announced an investment from Konvoy Ventures in
March, as it continues to grow commercial traction for its
terabit-scale encryption-proof customer insights platform.
In our life sciences portfolio, RAGE Biotech is making strong
progress with the development of its lead RNA therapeutic for the
treatment of chronic respiratory disease. Alimetry announced the
appointment of Erik Engelson as Chair, and was named in the top 16
of New Zealand's Callaghan 100 report. We welcomed Resseptor
Therapeutics to the portfolio, a new company developing new
technologies aimed at revolutionising the treatment of autoimmune
diseases and cancer.
Portfolio review: Platform Investments
IP Group's Platform Investments portfolio comprises holdings in
two companies and two interests in Limited Partnerships, valued at
GBP44.0m at 30 June 2023.
The Platform Investments portfolio contains holdings in
multi-sector platform companies that operate in a similar way to IP
Group, but focus on a specific university, such as OSE and CIC, and
the UCL Technology Fund ("UCL") all three of which IP Group is a
founding investor of. As at 30 June 2023, IP Group has a 1.8%
holding in OSE valued at GBP20.6m and a 1.0% holding in CIC valued
at GBP3.4m (HY22: 2.3%, GBP20.6m, 1.0%, GBP4.0m, FY22: 1.8%,
GBP20.6m, 1.0%, GBP3.5m), and a 46.4% stake in the UCL fund, valued
at GBP17.1m (HY22: 46.7%, GBP17.7m, FY22: 46.7%, GBP16.9m).
Fair value
of Group
Net holding
Group Unrealised
Stake at + realised
30 June investment/ fair value at 30
2023(1) (divestment) movement June 2023
Company name Description % GBPm GBPm GBPm
--------------------------- ------------------------- --------- -------------- ----------- -----------
University of Oxford
preferred IP partner
Oxford Science under 15-year framework
Enterprises plc agreement 1.8 - - 20.6
Commercialising
Interest in UCL Technology world class research
Fund L.P. from UCL 46.4 (0.3) 0.5 17.1
Other companies (2
companies/LPs) - - 0.2 6.3
------------------------------------------------------ --------- -------------- ----------- -----------
Total - (0.3) 0.7 44.0
------------------------------------------------------ --------- -------------- ----------- -----------
(1) Represents the Group's undiluted beneficial economic equity
interest (excluding debt), including only the Group's portion of
IPVF II. Voting interest is below 50%.
Third-party fund management
We are aiming to continue growing the level of funds under
management in the coming years. As of 1 January 2023, we appointed
Joyce Xie as Managing Director, Global Capital, to lead the Group's
strategic capital initiatives with global capital partners and
further build our third-party funds platform.
PARKWALK ADVISORS
Parkwalk, the Group's specialist EIS fund management subsidiary,
now has assets under management of GBP497m (HY22: GBP450m; FY22:
GBP477m) including funds managed in conjunction with the
universities of Oxford, Cambridge, Bristol and Imperial College
London. In May 2023 Parkwalk received their FCA approval to be a
full-scope AIFM (alternative investment fund manager) as assets
passed EUR500m in 2022.
Parkwalk invested GBP24.0m in the first six months of 2023
(HY22: GBP38.0m; FY22: GBP57.4m) in the university spin-out sector
across 16 companies (HY21: 19 investments). Again, market data
provider Beauhurst named Parkwalk as the most active investor in
the sector.
Six new companies joined the Parkwalk portfolio, and one partial
exit was achieved at a modest uplift in value. Six portfolio
companies closed funding rounds at uplifts in valuation, three
unchanged and none at lower valuations than the previously held
value. These companies raised c.GBP95m in funding in H1 this year.
We expect some further uplifts and some write-downs in the second
half of the year.
Parkwalk liaised closely with BEIS, the newly formed DSIT, HMT
and HMRC on the financial ecosystem for knowledge-intensive spinout
companies and the UK Government's 'science superpower' agenda.
Within Parkwalk, and more broadly, the Group continues to
explore further fund management opportunities.
AUSTRALIA
In Australia, the IP Group Hostplus Innovation Fund now totals
A$310M (GBP163m) and has invested in several of IP Group's
portfolio companies around the world including Oxford Nanopore,
Wave Optics, Oxa and Hysata, providing additive growth capital for
companies as they scale. TelstraSuper is also investing alongside
IP Group through a co-investment mandate.
GREATER CHINA
In China, the first close of Fund I from ICCV, our Joint Venture
with China Everbright, has been delayed due to ongoing negotiations
with limited partners.
FINANCIAL REVIEW
-- Loss for the period of 54.5m (HY22: Loss of (GBP309.8m), 2022: Loss of (GBP344.5m))
-- Net assets were GBP1,313.6m (HY22: GBP1,414m, FY22: GBP1,376.1m)
-- Net assets per share were 126.7p (HY22: 136.7p, FY22: 132.9p)
-- Final 2022 dividend of 0.76pps paid and 2023 interim dividend proposed of 0.51pps
-- Second tranche debt funding of GBP60m drawn in the period.
Consolidated statement of comprehensive income
A summary analysis of the Group's performance is provided
below:
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBPm GBPm GBPm
------------------------------------------------- ----------- ----------- ------------
Net portfolio loss (1) (44.4) (291.1) (309.1)
Net overheads (2) (10.3) (10.9) (20.1)
Non-portfolio foreign exchange gains and losses 1.2 (0.2) (0.1)
Administrative expenses - consolidated portfolio
companies - - (0.1)
Administrative expenses - share-based payments
charge (1.0) (1.4) (2.9)
Carried interest plan provision charge (0.5) (6.0) (12.0)
Net finance income/(expense) 1.6 (0.2) 0.8
Taxation (1.1) - (1.0)
------------------------------------------------- ----------- ----------- ------------
Loss after tax for the period (54.5) (309.8) (344.5)
------------------------------------------------- ----------- ----------- ------------
Other comprehensive income (0.8) (0.1) 0.5
------------------------------------------------- ----------- ----------- ------------
Total comprehensive loss for the period (55.3) (309.9) (344.0)
------------------------------------------------- ----------- ----------- ------------
Exclude:
Share-based payment charge 1.0 1.4 2.9
------------------------------------------------- ----------- ----------- ------------
Return on NAV (1) (54.3) (308.5) (341.1)
------------------------------------------------- ----------- ----------- ------------
(1) Defined in note 12 Alternative Performance Measures.
(2) See net overheads table below and definition in note 12
Alternative Performance Measures.
Net portfolio gains/(losses) 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.
Net overheads
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBPm GBPm GBPm
---------------------------------------------- ----------- ----------- ------------
Other income 3.1 3.1 7.1
Administrative expenses - all other expenses (12.3) (12.3) (24.2)
Administrative expenses - annual incentive
scheme (1.1) (1.7) (3.0)
---------------------------------------------- ----------- ----------- ------------
( 10 (20.
Net overheads (10.3) .9) 1 )
---------------------------------------------- ----------- ----------- ------------
Other income comprises fund management fees and licensing and
patent income. In the current period other income totalled GBP3.1m
(HY22: GBP3.1m, FY22: GBP7.1m), and was largely unchanged from the
first half of the previous year.
Other central administrative expenses, excluding
performance-based staff incentives, share-based payments charges
and the impact of foreign exchange movements, have remained in line
with the prior year at GBP12.3m (HY22: GBP12.3m, FY22:
GBP24.2m).
The charge of GBP1.1m in respect of the Group's Annual Incentive
Scheme reflects a provisional assessment of performance against
2023 AIS targets which include Group, Team, and Individual
performance elements (HY22: GBP1.7m, FY22: GBP3.0m).
Other income statement items
The share-based payments charge of GBP1.0m (HY22: GBP1.4m, FY22:
GBP2.9m) reflects the accounting charge for the Group's Restricted
Share Plan, Long-Term Incentive Plan and Deferred Bonus Share Plan.
This non-cash charge reflects the fair value of services received
from employees, measured by reference to the fair value of the
share-based payments at the date of award, but has no net impact on
the Group's total equity or net assets.
Carried interest plan charge
The carried interest plan charge of GBP0.5m (HY22: GBP6.0m
charge, FY22: GBP12.0m charge) relates to the recalculation of
liabilities under the Group's carry schemes. As at 30 June 2023,
70% of the Group's equity & debt investments were included
within carry scheme arrangements (HY22: 63%, FY22: 67%). The
liabilities are calculated based upon any excess of current fair
value above cost and hurdle rate of return within each scheme or
vintage. Any payments will only be made following the full
achievement of cost and hurdle via cash proceeds and are only paid
on the event of a cash realisation.
Consolidated statement of financial position
A summary analysis of the Group's assets and liabilities is
provided below:
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
GBPm GBPm GBPm
------------------------------------ ----------- ----------- ------------
Portfolio 1,276.1 1,265.5 1,258.5
Other non-current assets 5.3 9.2 7.7
Other net current assets 4.0 24.8 33.2
Cash and deposits 250.0 235.7 241.5
Borrowings (138.3) (44.1) (81.4)
Other non-current liabilities (83.5) (77.1) (83.4)
------------------------------------ ----------- ----------- ------------
Total Equity or Net Assets ("NAV") 1,313.6 1,414.0 1,376.1
------------------------------------ ----------- ----------- ------------
NAV per share 126.7p 136.7 132.9p
------------------------------------ ----------- ----------- ------------
The composition of, and movements in, the Group's portfolio are
described in the portfolio review above.
Portfolio valuations
Given continued volatility in public markets and uncertainty
over the extent of the impact on private valuations, we have
continued to seek third party valuation advice across a number of
the larger companies in our portfolio which were assessed as having
a higher degree of valuation uncertainty. These were First Light
Fusion, Featurespace, Hinge Health, Ultraleap, and MOBILion.
In a continuation of the trend observed in 2022, the first half
of 2023 saw a relatively low level of capital raised by the
portfolio of just under GBP300m (HY22: GBP350m). As in 2022, the
majority of these funding transactions took place at or above
previous funding round prices indicating that we are not yet seeing
evidence of reductions in private valuations from financing
transactions in our portfolio:
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2023 30 June 2022 31 December 2022
GBPm GBPm GBPm
--------------------------------- --------------------- ---------------------
No. % No. % No. %
------------------ ------- ---------- ---------- ---------- ------- ---------
Up round 10 72% 7 59% 18 62%
Flat round 2 14% 4 33% 8 28%
Down round 2 14% 1 8% 3 10%
------------------ ------- ---------- ---------- ---------- ------- ---------
Total 14 100% 12 100% 29 100%
------------------ ------- ---------- ---------- ---------- ------- ---------
Most of our portfolio remains well funded, with many of our more
mature companies evidencing commercial progress or anticipating
technical or funding milestones in the next 12-18 months, therefore
we remain confident around the resilience of our portfolio.
The table below summarises the valuation basis for the Group's
portfolio. Further details on the Group's valuation policy and
approach can be found in notes 3 and 4.
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
GBPm GBPm GBPm
------------------------------------------- ----------- ----------- ------------
Quoted 206.4 269.2 228.7
Funding transaction (<12 months) 268.1 285.3 289.8
Funding transaction (>12 months) 191.0 112.2 117.8
Other: Future market/commercial events 15.8 37.8 40.7
Other: Adjusted financing price based on
past performance - upwards 178.3 128.4 151.8
Other: Adjusted financing price based on
past performance - downwards 129.2 123.4 154.5
Other: DCF 115.8 99.1 97.7
Other: Revenue Multiple 76.8 105.5 77.9
Statements from LP 94.7 104.6 99.6
------------------------------------------- ----------- ----------- ------------
Total Portfolio 1,276.1 1,265.5 1,258.5
------------------------------------------- ----------- ----------- ------------
Other assets
The majority of other long-term and short-term assets relate to
amounts receivable on sale of equity and debt investments,
representing deferred and contingent consideration amounts to be
received in more than one year.
Other long-term liabilities relate to carried interest and
revenue share payables, and loans from LPs of consolidated funds.
The Group consolidates the assets of a fund in which it has a
significant economic interest, IP Venture Fund II LP. Loans from
third parties of consolidated funds represent third-party loans
into this partnership. These loans are repayable only upon these
funds generating sufficient cash proceeds to repay the Limited
Partners.
Borrowings
On 2 August 2022, the Group signed a Note Placing Agreement
("NPA") to issue a GBP120m debt private placement to London-based
institutional investors (primarily Phoenix Group). GBP60m of this
was drawn in December 2022 and the balance was drawn in June 2023,
with three equal maturities in December in 2027, 2028 and 2029. The
interest rate is fixed at an average of 5.25%. Approximately GBP15m
of the proceeds was used to repay early the shorter-dated portion
of our EIB debt, leaving GBP22m of EIB debt to be progressively
repaid between now and January 2026 (GBP6.3m of the EIB debt will
be repaid within twelve months of the period end).
Under the terms of the NPA, the Group is required to maintain a
minimum cash balance of GBP25m at any time, equity must be at least
GBP500m and gross debt less restricted cash must not exceed 25% of
total equity as at the Group's 30 June and 31 December reporting
dates. The NPA also includes 'Cash Trap' provisions which stipulate
that the Group is required to maintain cash and cash equivalents of
no less than GBP50m at any time equity must be at least GBP750m,
gross debt less restricted cash must not exceed 20% of total equity
as at the Group's 30 June and 31 December reporting dates. In the
event of the Cash Trap being triggered, the Group is not permitted
to pay or declare a dividend or purchase any of its shares. In
addition, investments are restricted to GBP2.5m per calendar
quarter other than those legally committed to. The Group is also
required to place the net proceeds of all cash proceeds (over a
threshold of GBP1m) into a blocked bank account. Entering a Cash
Trap does not constitute a default under the NPA.
For further details of the Group's loans including covenant
details see note 18 to the 2022 Annual Report.
Cash and deposits
At 30 June 2023, the Group's cash and deposits totalled
GBP250.0m, an increase of GBP8.5m from a total of GBP241.5m at 31
December 2022, predominantly due to outflows of investing
activities of GBP59.9m, a GBP12.0m net cash outflow from operations
and a GBP3.1m cash outflow from the repayment of debt, GBP7.7m of
dividend payments, offset by a drawdown of loan notes of GBP60m and
cash proceeds of GBP32.2m.
It remains the Group's policy to place cash that is surplus to
near-term working capital requirements on short-term and overnight
deposits with financial institutions that meet the Group's treasury
policy criteria or in low-risk treasury funds rated prime or above.
The Group's treasury policy is described in detail in note 2 to the
2022 Group financial statements alongside details of the credit
ratings of the Group's cash and deposit counterparties.
The principal constituents of the movement in cash and deposits
during the period are as follows:
Unaudited Unaudited
six months six months ended Audited
ended 30 June 2022 year ended
30 June 2023 GBPm 31 December 2022
GBPm GBPm
------------------------------------------------------ ------------- ----------------- -----------------
Net cash (used)/generated in operating activities (12.2) (12.4) (23.5)
Investments (59.8) (52.0) (93.5)
Cash proceeds 32.2 2.1 28.1
Other investing (0.6) (0.5) (0.3)
Cash disposed via disposal of subsidiary undertaking - - -
------------------------------------------------------ ------------- ----------------- -----------------
Net cash (outflow)/inflow from investing activities (28.2) (62.7) (65.7)
------------------------------------------------------ ------------- ----------------- -----------------
Dividends paid (7.7) (7.1) (12.3)
Purchase of treasury shares - (8.5) (8.0)
Repayment of debt facility (3.1) (7.7) (30.4)
Drawdown of loan notes 60.0 - 60.0
Other financing activities (0.3) - (0.5)
Net cash inflow/(outflow) from financing activities 48.9 (86.0) 8.8
------------------------------------------------------ ------------- ----------------- -----------------
Effect of foreign exchange rate changes - (0.1) -
------------------------------------------------------ ------------- ----------------- -----------------
Movement during period 8.5 (86.1) 8.8
------------------------------------------------------ ------------- ----------------- -----------------
Dividend
During the period the Group paid a final 2022 dividend of 0.76p
per share, bringing total dividends paid in respect of FY22 to
1.26p per share. The Board has declared an interim dividend in
respect of the period from 1 January 2023 to 30 June 2023 of 0.51p
per ordinary share (the "Interim Dividend").
The Interim Dividend will be payable on or around 4 September
2023. The ex-dividend date will be 10 August 2023 with a record
date of 11 August 2023. The proposed dividend has not been included
as a liability as at 30 June 2023, in accordance with IAS 10
"Events after the reporting period".
Taxation
The Group's business model seeks to deliver long-term value to
its stakeholders through the commercialisation of fundamental
research carried out at its partner universities. To date, this has
been largely achieved through the formation of, and provision of
services and development capital to, spin-out companies formed
around the output of such research. The Group primarily seeks to
generate capital gains from its holdings in spin-out companies over
the longer term but has historically made annual net operating
losses from its operations from a UK tax perspective. Capital gains
achieved by the Group would ordinarily be taxed upon realisation of
such holdings; however, since the Group typically holds more than
10% in its portfolio companies and those companies are themselves
trading, the majority of the portfolio will qualify for the
Substantial Shareholdings Exemption ("SSE") on disposal.
This exemption provides that gains arising on the disposal of
qualifying holdings are not chargeable to UK corporation tax 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 that meet the qualifying criteria. Gains arising on sales
of holdings which do not qualify for SSE will ordinarily give rise
to taxable profits for the Group, to the extent that these exceed
the Group's ability to offset gains against current and brought
forward tax losses (subject to the relevant restrictions on the use
of brought-forward losses). In such cases, a deferred tax liability
is recognised in respect of estimated tax amount payable.
The Group complies with relevant global initiatives including
the US Foreign Account Tax Compliance Act ("FATCA") and the OECD
Common Reporting Standard.
Alternative Performance Measures ("APMs")
The Group discloses alternative performance measures, such as
NAV per share and Return on NAV, in this Half-Yearly Report. The
Directors believe that these APMs assist in providing additional
useful information on the underlying trends, performance, and
position of the Group. Further information on APMs utilised by the
Group is set out in note 12.
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 2022 Annual
Report and Accounts. The principal risks and uncertainties are
summarised as follows:
-- it may be difficult for the Group to maintain the required
level of capital to continue to operate at optimum levels of
investment, activity and overheads;
-- it may be difficult for the Group's portfolio companies to attract sufficient capital;
-- the returns and cash proceeds from the Group's early-stage companies can be very uncertain;
-- universities or other research-intensive institutions may
terminate the collaborative relationships with the Group;
-- the Group may lose key personnel or fail to attract and integrate new personnel;
-- macroeconomic conditions may negatively impact the Group's
ability to achieve its strategic objectives;
-- there may be changes to, impacts from, or failure to comply
with, legislation, government policy and regulation;
-- the Group may be subjected to Phishing and Ransomware attacks, data leakage and hacking;
-- the Group may be negatively impacted operationally as a
result of its recent international expansion.
The Group reviewed its operational, strategic and principal risk
registers in the period and has concluded that it is not aware of
any significant changes in the nature of the principal risks that
would result in a change to the Group's principal risks as set out
above in the forthcoming six months.
Consolidated statement of comprehensive income
For the six months ended 30 June 2023
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
Note GBPm GBPm GBPm
-------------------------------------------- ---- ----------- ----------- ------------
Portfolio return and revenue
Change in fair value of equity and
debt investments 3 (27.5) (304.1) (303.4)
(Loss)/gain on disposal of equity
and debt investments 3 (5.7) 4.2 (7.8)
Change in fair value of limited partnership
interests 4 (11.2) 8.8 2.1
Revenue from services and other income 3.1 3.1 7.1
-------------------------------------------- ---- ----------- ----------- ------------
(41.3) (288.0) (302.0)
Administrative expenses
Carried interest plan charge 9 (0.5) (6.0) (12.0)
Share-based payment charge (1.0) (1.4) (2.9)
Other administrative expenses (12.2) (14.2) (27.4)
-------------------------------------------- ---- ----------- ----------- ------------
(13.7) (21.6) (42.3)
Operating loss (55.0) (309.6) (344.3)
Finance income 3.8 0.6 2.2
Finance costs (2.2) (0.8) (1.4)
-------------------------------------------- ---- ----------- ----------- ------------
Loss before taxation (53.4) (309.8) (343.5)
Taxation (1.1) - (1.0)
-------------------------------------------- ---- ----------- ----------- ------------
Loss after taxation for the period (54.5) (309.8) (344.5)
-------------------------------------------- ---- ----------- ----------- ------------
Other comprehensive income
Exchange differences on translating
foreign operations (0.8) (0.1) 0.5
-------------------------------------------- ---- ----------- ----------- ------------
Total comprehensive loss for the period (55.3) (309.9) (344.0)
-------------------------------------------- ---- ----------- ----------- ------------
Attributable to:
Equity holders of the parent (53.9) (308.7) (341.5)
Non-controlling interest (1.4) (1.2) (2.5)
-------------------------------------------- ---- ----------- ----------- ------------
(55.3) (309.9) (344.0)
Loss per share
Basic (p) 2 (5.20) (29.85) (33.01)
Diluted (p) 2 (5.20) (29.85) (33.01)
-------------------------------------------- ---- ----------- ----------- ------------
The accompanying notes form an integral part of the financial
statements.
Consolidated statement of financial position
As at 30 June 2023
Unaudited
six months Unaudited Audited
ended six months ended year ended
30 June 2023 30 June 2022 31 December 2022
Note GBPm GBPm GBPm
--------------------------------------------------- ----- -------------- ------------------ ------------------
ASSETS
Non-current assets
Goodwill 0.4 0.4 0.4
Property, plant and equipment 0.3 0.5 0.4
Investment in Joint venture 0.6 -- --
Portfolio:
Equity investments 3 1,123.8 1,123.4 1,120.8
Debt investments 3 57.6 37.5 38.1
Limited partnership interests 4 94.7 104.6 99.6
Receivable on sale of debt and equity investments 6 4.0 8.3 6.9
--------------------------------------------------- ----- -------------- ------------------ ------------------
Total non-current assets 1,281.4 1,274.7 1,266.2
--------------------------------------------------- ----- -------------- ------------------ ------------------
Current assets
Trade and other receivables 7.3 5.7 8.8
Receivable on sale of debt and equity investments 6 8.5 36.0 41.3
Deposits 166.8 141.3 152.8
Cash and cash equivalents 83.2 94.4 88.7
--------------------------------------------------- ----- -------------- ------------------ ------------------
Total current assets 265.8 277.4 291.6
--------------------------------------------------- ----- -------------- ------------------ ------------------
Total assets 1,547.2 1,552.1 1,557.8
--------------------------------------------------- ----- -------------- ------------------ ------------------
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Called up share capital 8 21.3 21.3 21.3
Share premium account 102.5 102.4 102.5
Retained earnings 1,196.8 1,294.6 1,257.9
--------------------------------------------------- ----- -------------- ------------------ ------------------
Total equity attributable to equity holders 1,320.6 1,418.3 1,381.7
--------------------------------------------------- ----- -------------- ------------------ ------------------
Non-controlling interest (7.0) (4.3) (5.6)
--------------------------------------------------- ----- -------------- ------------------ ------------------
Total equity 1,313.6 1,414.0 1,376.1
--------------------------------------------------- ----- -------------- ------------------ ------------------
Current liabilities
Trade and other payables 11.7 16.9 16.9
Borrowings 7 6.3 15.4 6.3
--------------------------------------------------- ----- -------------- ------------------ ------------------
Total current liabilities 18.0 32.3 23.2
--------------------------------------------------- ----- -------------- ------------------ ------------------
Non-current liabilities
Borrowings 7 132.0 28.7 75.1
Carried interest plan liability 9 44.4 38.1 44.1
Deferred tax liability 7.9 5.8 6.8
Loans from limited partners of consolidated funds 19.8 19.1 19.5
Revenue share liability 11.5 14.1 13.0
--------------------------------------------------- ----- -------------- ------------------ ------------------
Total non-current liabilities 215.6 105.8 158.5
--------------------------------------------------- ----- -------------- ------------------ ------------------
Total liabilities 233.6 138.1 181.7
--------------------------------------------------- ----- -------------- ------------------ ------------------
Total equity and liabilities 1,547.2 1,552.1 1,557.8
--------------------------------------------------- ----- -------------- ------------------ ------------------
Registered number: 4204490
The accompanying notes form an integral part of the financial
statements. The financial statements were approved by the Board of
Directors and authorised for issue on 1 August 2023 and were signed
on its behalf by:
Greg Smith
Chief Executive Officer
David Baynes
Chief Financial & Operating Officer
Consolidated statement of cash flows
For the six months ended 30 June 2023
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
Note GBPm GBPm GBPm
------------------------------------------- ---- ----------- ----------- ------------
Operating activities
Loss before taxation for the period (53.4) (309.8) (343.5)
Adjusted for:
Change in fair value of equity and
debt investments 3 27.5 304.1 303.4
Loss/(gain) on disposal of equity
investments 5 5.7 (4.2) 7.8
Change in fair value of limited and
limited liability partnership interests 4 11.2 (8.8) (2.1)
Depreciation of right of use asset,
property, plant and equipment 0.3 0.3 0.6
Long term incentive carry scheme charge 9 0.5 6.0 12.0
Corporate finance fees settled in
the form of portfolio company equity (0.1) (0.4) (0.5)
Finance income (3.8) (0.6) (2.2)
Finance costs 2.2 0.8 1.4
Share-based payment charge 1.0 1.4 2.9
Changes in working capital
Carried interest scheme payments 9 (0.1) (1.0) (1.0)
(Increase)/decrease in trade and other
receivables 2.9 2.3 (0.5)
(Decrease) in trade and other payables (8.0) (2.5) (2.8)
Drawdowns from limited partners of
consolidated funds 0.3 0.4 0.8
Other operating cash flows
Net interest received/(paid) 1.6 (0.4) 0.2
Net cash outflow from operating activities (12.2) (12.4) (23.5)
------------------------------------------- ---- ----------- ----------- ------------
Investing activities
Purchase of property, plant and equipment - (0.1) (0.3)
Purchase of equity and debt investments 3 (52.8) (49.0) (88.9)
Investment in limited and limited
liability partnership funds 4 (7.0) (3.0) (4.6)
Investment in joint venture (0.6) - -
Distribution from limited partnership
funds 4 0.7 - -
Cash flow to deposits (146.7) (114.0) (208.7)
Cash flow from deposits 132.7 188.9 272.1
Proceeds from sale of equity and debt
investments 5 31.5 2.1 28.1
Net cash (outflow)/inflow from investing
activities (42.2) 24.9 (2.3)
------------------------------------------- ---- ----------- ----------- ------------
Financing activities
Dividends paid 11 (7.7) (7.1) (12.3)
Repurchase of own shares - treasury
shares 8 - (8.5) (8.0)
Lease principal payment (0.3) (0.4) (0.5)
Repayment of EIB facility (3.1) (7.7) (29.8)
Drawdown of loan facility (net of
costs) 60.0 - 59.4
Net cash inflow/(outflow) from financing
activities 48.9 (23.7) 8.8
------------------------------------------- ---- ----------- ----------- ------------
Net decrease in cash and cash equivalents (5.5) (11.2) (17.0)
Cash and cash equivalents at the beginning
of the period 88.7 105.7 105.7
Effect of foreign exchange rate changes - (0.1) -
Cash and cash equivalents at the end
of period 83.2 94.4 88.7
------------------------------------------- ---- ----------- ----------- ------------
The accompanying notes form an integral part of the financial
statements.
Consolidated statement of changes in equity
For the six months ended 30 June 2023
Attributable to equity holders of the parent
Share Share Retained Total Non-controlling Total
capital premium earnings GBPm interest equity
GBPm GBPm GBPm GBPm
------------------------------------ -------- -------- --------- ------- --------------- --------
At 1 January 2022 (audited) 21.3 102.4 1,617.5 1,741.2 (3.1) 1,738.1
------------------------------------ -------- -------- --------- ------- --------------- --------
Loss for the period - - (308.6) (308.6) (1.2) (309.8)
Issue of shares - - (8.2) (8.2) - (8.2)
Equity-settled share-based payments - - 1.4 1.4 - 1.4
Ordinary dividends - - (7.4) (7.4) - (7.4)
Currency translation - - (0.1) (0.1) - (0.1)
------------------------------------ -------- -------- --------- ------- --------------- --------
At 30 June 2022 (unaudited) 21.3 102.4 1,294.6 1,418.3 (4.3) 1,414.0
------------------------------------ -------- -------- --------- ------- --------------- --------
Loss for the period - - (33.4) (33.4) (1.3) (34.7)
Issue of shares - 0.1 - 0.1 - 0.1
Purchase of treasury shares - - 0.2 0.2 - 0.2
Equity-settled share-based payments - - 1.5 1.5 - 1.5
Ordinary dividends - - (5.3) (5.3) - (5.3)
Currency translation - - 0.1 0.1 - 0.1
------------------------------------ -------- -------- --------- ------- --------------- --------
At 1 January 2023 (audited) 21.3 102.5 1,257.9 1,381.7 (5.6) 1,376.1
Loss for the period - - (53.9) (53.9) (1.4) (55.3)
Equity-settled share-based payments - - 1.0 1.0 - 1.0
Ordinary dividends - - (7.7) (7.7) - (7.7)
Currency translation - - (0.5) (0.5) - (0.5)
------------------------------------ -------- -------- --------- ------- --------------- --------
At 30 June 2023 (unaudited) 21.3 102.5 1,196.8 1,320.6 (7.0) 1,313.6
------------------------------------ -------- -------- --------- ------- --------------- ----------
The accompanying notes form an integral part of the financial
statement
1. Operating segments
For both the year ended 31 December 2022 and the period ended 30
June 2023 and 30 June 2022, the Group's revenue and profit before
taxation were derived largely from its principal activities within
the UK. As updated in the second half of 2022 for management
reporting purposes, the Group has been organised into five
operating segments:
Venture Capital investing within our Life Sciences thematic
i) area
ii) Venture Capital investing within our Deeptech thematic area
iii) Venture Capital investing within our Cleantech thematic area
Venture Capital investing: Other, representing investments
not included within our three thematic areas above, including
iv) platform investments, and our US and Australian investments
the management of third-party funds and the provision of corporate
v) finance advice
Reporting line items within Venture Capital investing which are
not allocated by thematic sector are presented in the 'Venture
Capital investing': other segment.
Six months ended 30 June 2023 (unaudited)
STATEMENT OF Venture Of which Venture Venture Venture Venture Third Consolidated
COMPREHENSIVE capital Oxford capital capital capital capital party
INCOME investing: Nanopore investing: investing: investing: investing: fund
Life Deeptech Cleantech Other Total management
sciences
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Portfolio
return
and revenue
Change in fair
value of
equity
and debt
investments (27.9) (27.8) (5.1) 6.1 (0.6) (27.5) - (27.5)
(Loss)/gain on
disposal of
equity
and debt
investments (7.6) - 1.9 - - (5.7) - (5.7)
Change in fair
value of
limited
and limited
liability
partnership
interests - - - - (11.2) (11.2) - (11.2)
Revenue from
services
and other
income - - - - 0.7 0.7 2.4 3.1
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
(35.5) (27.8) (3.2) 6.1 (11.1) (43.7) 2.4 (41.3)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Administrative
expenses
Carried
interest
plan charge - - - - (0.5) (0.5) - (0.5)
Share-based
payment
charge - - - - (0.9) (0.9) (0.1) (1.0)
Other
administrative
expenses - - - - (9.6) (9.6) (2.6) (12.2)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
- - - - (11.0) (11.0) (2.7) (13.7)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Operating loss (35.5) (27.8) (3.2) 6.1 (22.1) (54.7) (0.3) (55.0)
Finance income - - - - 3.7 3.7 0.1 3.8
Finance costs - - - - (2.2) (2.2) - (2.2)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Loss before
taxation (35.5 (27.8) (3.2) 6.1 (20.6) (53.2) (0.2) (53.4)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Taxation - - - - (1.1) (1.1) - (1.1)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Loss for the
period (35.5) (27.8) (3.2) 6.1 (21.7) (54.3) (0.2) (54.5)
STATEMENT OF
FINANCIAL
POSITION
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Assets 601.0 177.7 207.4 262.4 458.5 1,529.3 17.9 1,547.2
Liabilities - - - - (227.7) (227.7) (5.9)) (233.6)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Net Assets 601.0 177.7 207.4 262.4 230.8 1,301.6 12.0 1,313.6
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Other segment
items:
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Portfolio
Investment (22.8) - (10.6) (12.8) (13.6) (59.8) - (59.8)
Proceeds from
sale of equity
and debt
investments 0.1 - 31.0 - 0.4 31.5 - 31.5
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Six months ended 30 June 2022 (unaudited)(1)
STATEMENT OF Venture Of which Venture Venture Venture Venture Third Consolidated
COMPREHENSIVE capital Oxford capital capital capital capital party
INCOME investing: Nanopore investing: investing: investing: investing: fund
Life Deeptech Cleantech Other Total management
sciences
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- --------------
Portfolio
return
and revenue
Change in fair
value of
equity
and debt
investments (386.6) (345.5) 1.3 69.2 12.0 (304.1) - (304.1)
(Loss)/gain on
disposal of
equity
and debt
investments 1.2 - 2.6 - 0.3 4.2 - 4.2
Change in fair
value of
limited
and limited
liability
partnership
interests - - - - 8.8 8.8 - 8.8
Revenue from
services
and other
income - - - - (0.6) (0.6) 3.7 3.1
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
(385.3) (345.5) 3.9 69.2 (20.7) (291.7) 3.7 (288.0)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Administrative
expenses
Carried
interest
plan charge - - - - (6.0) (6.0) - (6.0)
Share-based
payment
charge - - - - (1.4) (1.4) - (1.4)
Other
administrative
expenses - - - - (11.6) (11.6) (2.6) (14.2)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
- - - - (19.0) (19.0) (2.6) (21.6)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Operating loss (385.3) (345.5) 3.9 69.2 1.7 (310.7) 1.1 (309.6)
Finance income - - - - 0.6 0.6 - 0.6
Finance costs - - - - (0.8) (0.8) - (0.8)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Loss before
taxation (385.3) (345.5) 3.9 69.2 1.3 (310.9) 1.1 (309.8)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Taxation - - - - 0.3 0.3 (0.3) -
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Loss for the
period (385.3) (345.5) 3.9 69.2 1.6 (310.6) 0.8 (309.8)
STATEMENT OF
FINANCIAL
POSITION
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Assets 647.9 226.5 254.6 196.2 436.6 1,535.3 16.8 1,552.1
Liabilities - - - - (134.4) (134.4) (3.7) (138.1)
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Net Assets 647.9 226.5 254.6 196.2 (302.2) 1,400.9 13.1 1,414.0
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Other segment
items:
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
Portfolio
Investment (31.1) - (4.1) (13.1) (3.7) (52.0) - (52.0)
Proceeds from
sale of equity
and debt
investments 1.8 - 0.1 - 0.2 2.1 - 2.1
--------------- ---------- --------- ----------- ----------- ----------- ----------- ---------- ------------
(1) The figures previously reported for the six months ended 30
June 2022 have been re-presented into the current segmental split
in the table above.
Year ended 31 December 2022 (audited)
STATEMENT OF Venture Of which Venture Venture Venture Venture Third Consolidated
COMPREHENSIVE capital Oxford capital capital capital capital party
INCOME investing: Nanopore investing: investing: investing: investing: fund
Life Deeptech Cleantech Other Total management
sciences
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
Portfolio
return
and revenue
Change in fair
value of
equity
and debt
investments (399.4) (369.7) (21.0) 114.6 2.4 (303.4) - (303.4)
(Loss)/gain
on disposal
of equity and
debt
investments (12.1) - 4.0 - 0.3 (7.8) - (7.8)
Change in fair
value of
limited
and limited
liability
partnership
interests - - - - 2.1 2.1 - 2.1
Loss on - - - - - - - -
disposal
of subsidiary
Revenue from
services and
other income - - - - 1.1 1.1 6.0 7.1
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
(411.5) (369.7) (17.0) 114.6 5.9 (308.0) 6.0 (302.0)
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
Administrative
expenses
Carried
interest
plan charge - - - - (12.0) (12.0) - (12.0)
Share-based
payment charge - - - - (2.6) (2.6) (0.3) (2.9)
Other
administrative
expenses - - - - (22.1) (22.1) (5.3) (27.4)
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
(411.5) (369.7) (17.0) 114.6 (36.7) (36.7) (5.6) (42.3)
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
Operating loss (30.8) (344.7) 0.4 (344.3)
Finance income - - - - 2.1 2.1 0.1 2.2
Finance costs - - - - (1.4) (1.4) - (1.4)
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
Loss before
taxation (411.5) (369.7) (17.0) 114.6 (30.1) (344.7) 0.5 (343.5)
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
Taxation - - - - (1.0) (1.0) - (1.0)
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
Loss for the
period (411.5) (369.7) (17.0) 114.6 (31.1) (345.0) 0.5 (344.5)
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
STATEMENT OF
FINANCIAL
POSITION
Assets 613.8 205.5 230.5 243.8 451.9 1,540.0 17.8 1,557.8
Liabilities - - - - (176.0) (176.0) (5.7) (181.7)
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
Net Assets 613.8 205.5 230.5 243.8 275.9 1,364.0 12.1 1,376.1
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
Other segment
items
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
Portfolio
Investment (38.9) (3.2) (20.4) (22.3) (11.9) (93.5) - (93.5)
Proceeds from
sale of equity
and debt
investments 15.6 - 8.7 3.5 0.3 28.1 - 28.1
---------------- ----------- --------- ----------- ----------- ----------- ----------- ----------- -------------
2. Earnings per share
Unaudited Unaudited Audited
six months six months ended year ended
ended 30 June 2022 31 December 2022
30 June 2023 GBPm GBPm
Earnings GBPm
----------------------------------------------------------------- ------------- ----------------- -----------------
Earnings for the purposes of basic and dilutive earnings per
share (53.9) (308.7) (341.5)
----------------------------------------------------------------- ------------- ----------------- -----------------
Unaudited Unaudited Audited
six months ended six months year ended
30 June 2023 ended 31 December 2022
Number of shares 30 June 2022 Number of
Number of shares
Number of shares shares
Weighted average number of ordinary shares for the purposes of
basic
earnings per share 1,035,891,3111 1,034,323,1533 1,034,483,2788
Effect of dilutive potential ordinary shares:
Options or contingently issuable shares -- -- --
--------------------------------------------------------------- ----------------- --------------- -----------------
Weighted average number of ordinary shares for the purposes of
diluted
earnings per share 1,035,891,3111 1,034,323,1533 1,034,483,2788
--------------------------------------------------------------- ----------------- --------------- -----------------
Unaudited Unaudited Audited
six months six months ended year ended
ended 30 June 2022 31 December 2022
30 June 2023 GBPm GBPm
GBPm
--------- ------------- ----------------- -----------------
Basic (5.20) (29.85) (33.01)
Diluted (5.20) (29.85) (33.01)
--------- ------------- ----------------- -----------------
No adjustment has been made to the basic loss per share in the
period ended 30 June 2023, as the exercise of share options would
have the effect of reducing the loss per ordinary share, and
therefore is not dilutive.
Potentially dilutive ordinary shares include contingently
issuable shares arising under the Group's LTIP arrangements, and
options issued as part of the Group's Sharesave schemes and
Deferred Bonus Share Plan (for annual bonuses deferred under the
terms of the Group's Annual Incentive Scheme).
3. Portfolio: Equity and debt investments
Top 20 Equity and Debt Investments by holding value
The following table lists information on the 20 most valuable
portfolio company investments, which represent 70% of the total
portfolio value (HY22: 70%, FY22: 71%). Detail on the performance
of these companies is included in the Life Sciences, Deeptech and
Cleantech portfolio reviews.
The Group engages third-party valuation specialists to provide
valuation support where required; during the period we commissioned
third-party valuations on four out of the top 20 holdings (HY22:
five, FY22: nine).
Fair value
of Group
holding
at 30 June
2023
Company name Primary valuation basis GBPm
----------------------------- --------------------------------- -----------
Oxford Nanopore Technologies
plc Quoted bid price 177.7
First Light Fusion Limited *Adjusted funding - upwards 114.5
Istesso Limited DCF 113.8
Funding transaction < 12 months,
Oxa Autonomy Ltd PWERM 65.7
Featurespace Limited *Revenue multiple 64.1
Hinge Health, Inc. *Adjusted funding - downwards 51.4
Ultraleap Holdings Limited *Adjusted funding - downwards 37.9
Garrison Technology Limited Funding transaction < 12 months 31.6
Hysata Pty Ltd Adjusted funding - upwards 31.3
Funding transaction > 12 months,
Ieso Digital Health Limited PWERM 21.8
Akamis Bio Limited Adjusted funding - upwards 21.3
Funding transaction > 12 months,
Bramble Energy Limited PWERM 20.9
Oxford Science Enterprises
plc Funding transaction < 12 months 20.6
Funding transaction > 12 months,
Mission Therapeutics Limited PWERM 20.2
Funding transaction > 12 months,
Oxular Limited PWERM 18.8
Funding transaction > 12 months,
Crescendo Biologics Limited PWERM 18.7
Funding transaction > 12 months,
Artios Pharma Limited PWERM 18.1
Nexeon Limited Funding transaction < 12 months 16.6
Funding transaction > 12 months,
Microbiotica Limited PWERM 16.1
Funding transaction < 12 months,
Pulmocide Limited PWERM 14.3
Total 895.4
---------------------------------------------------------------- -----------
(* Third-party valuation specialists used for 30 June 2023
valuation. In these instances, the valuation basis is management's
assessment of the primary valuation input used by the third-party
valuation specialist.)
Level
1 Level 3
------------- ---------------------------- --------
Equity Unquoted Debt
investments equity investments
in quoted investments in unquoted
spin-out in spin-out spin-out
companies companies companies Total
GBPm GBPm GBPm GBPm
--------------------------------------- ------------- ------------- ------------- --------
At 1 January 2022 662.7 729.1 22.8 1,414.6
Investments during the period 2.7 30.5 15.8 49.0
Transaction-based reclassifications
during the period - 5.9 (5.9) -
Other transfers between hierarchy - - - -
levels during the period
Disposals during period - - - -
Fees settled via equity - 0.4 - 0.4
Change in revenue share - 1.0 - 1.0
Change in fair value in the period(1) (398.3) 74.4 4.4 (319.5)
Change in FX 2.1 12.9 0.4 15.4
--------------------------------------- ------------- ------------- ------------- --------
At 30 June 2022 (unaudited) 269.2 854.2 37.5 1,160.9
Investments during the period 4.6 30.9 4.4 39.9
Transaction-based reclassifications
during the period - 2.5 (2.5) -
Other transfers between hierarchy - - - -
levels during the period
Disposals during period (27.5) (14.2) - (41.7)
Fees settled via equity - 0.1 - 0.1
Change in revenue share - (1.0) - (1.0)
Change in fair value in the period(1) (17.7) 19.2 (1.3) 0.2
Change in FX 0.1 0.4 - 0.5
At 1 January 2023 (audited) 228.7 892.1 38.1 1,158.9
--------------------------------------- ------------- ------------- ------------- --------
Investments during the period - 30.1 22.7 52.8
Transaction-based reclassifications
during the period - 7.6 (7.6) -
Other transfers between hierarchy
levels during the period 2.2 (2.2) - -
Disposals during period (1.1) (0.1) (0.3) (1.5)
Fees settled via equity - 0.2 - 0.2
Change in revenue share - (1.5) - (1.5)
Change in fair value in the period(1) (22.8) (2.3) 5.8 (19.3)
Change in FX (0.5) (6.6) (1.1) (8.2)
At 30 June 2023 (unaudited) 206.5 917.3 57.6 1,181.4
--------------------------------------- ------------- ------------- ------------- --------
(1) The total unrealised change in fair value and FX in respect
of Level 3 investments was a loss of GBP4.2m (HY22: gain of
GBP92.1m, FY22: gain of GBP110.4m).
Unquoted equity and debt investment are measured in accordance
with IPEV guidelines with reference to the most appropriate
information available at the time of measurement. Where relevant,
several valuation approaches are used in arriving at an estimate of
fair value for an individual asset.
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 levels are then made as if the
transfer took place on the first day of the period in question,
except in the cases of transfers between tiers based on an initial
public offering ("IPO") of an investment wherein the changes in
value prior to the IPO are calculated and reported in level 3, and
those changes post are attributed to level 1.
Transfers between level 3 and level 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, transfers of this nature amounted to GBP2.2m (HY22:
no instances, FY22: no instances). Transfers between level 1 and
level 3 would occur when a quoted investment's market becomes
inactive, or the portfolio company elects to delist. There has been
one instance in the current period totalling GBPnil (HY22: no
instances, FY22: no instances).
Transfers between level 3 debt and level 3 equity occur upon
conversion of convertible debt into equity. In the current period,
transfers of this nature amounted to GBP7.6m (HY22: GBP5.9m, FY22:
GBP8.4m).
Valuation inputs and sensitivities
Unobservable inputs are typically portfolio company-specific
and, based on a materiality assessment, are not considered
significant either at an individual company level or in aggregate
where relevant for common factors such as discount rates.
The sensitivity analysis table below has been prepared in
recognition of the fact that some of the valuation methodologies
applied by the Group in valuing the portfolio investments involve
subjectivity in their significant unobservable inputs. The table
illustrates the sensitivity of the valuations to these inputs. The
inputs of investments are valued using techniques which involve
significant subjectivity have been flexed by +/- 10%.
Valuation Fair Variable inputs Variable Positive Negative Fair value Fair value
Technique value input impact impact of investments of
of sensitivity investments
investments
------------------ ----------- ---------------- ----------- ----------- -------- ---------------- -----------
HY23 HY22 FY22
% of % of
GBPm % GBPm NAV GBPm NAV GBPm GBPm
------------------ ----------- ---------------- ----------- ----- ---- -------- ------ -------- -----------
Quoted 206.5 n/a +/-10 20.7 1.6% (20.7) (1.6%) 269.2 228.7
Funding
transaction
<12 months 268.0 n/a +/-10 26.8 2.0% (26.8) (2.0%) 285.3 289.8
Funding
transaction
>12 months 191.0 n/a +/-10 19.1 1.5% (19.1) (1.5%) 112.2 117.8
-- Estimated
impact of future
event
-- Execution
risk discount
applied to
future
event (where
positive)
-- Scenario
probabilities
-- Discount
rates
-- Extent to
which future
event
is indicative
of facts and
circumstances
in existence at
Other: Future the balance
market/commercial sheet
events 15.8 date +/-10 1.6 0.1% (1.6) (0.1%) 37.8 40.7
Other: Adjusted
financing
price based --
on past Company-specific
performance milestone
- Upwards* 178.3 analysis +/-10 17.8 1.4% (17.8) (1.4%) 128.3 151.8
Other: Adjusted
financing
price based --
on past Company-specific
performance milestone
- Downwards* 129.2 analysis +/-10 12.9 1.0% (12.9) (1.0%) 123.5 154.5
-- Estimate of
future recurring
revenues
-- Selection
Other: Revenue of comparable
multiple* 76.8 companies +/-10 7.7 0.6% (7.7) (0.6%) 105.5 77.9
-- Discount rate
-- Clinical
trial
and drug
approval
success rates
-- Estimate of
value and
structure
of a potential
pharmaceutical
partnership
-- Estimate of
addressable
market
-- Market share
and royalty
rates
-- Probability
estimation of
Other: DCF* 115.8 liquidity event +/-10 11.6 0.9% (11.6) (0.9%) 99.1 97.7
Total 1,181.4 118.2 (118.2) 1,160.9 1,158.9
------------------ ----------- ---------------- ----------- ----- ---- -------- ------ -------- -----------
*Due to the large number of inputs used in the valuation of
these assets, unobservable inputs are below a size threshold that
would warrant disclosure under IFRS 13, paragraph 93(d). Due to the
large number of inputs, any range of reasonably possible
alternative assumptions does not significantly impact the fair
value and hence no valuation sensitivity is required under IFRS 13
paragraph 93(h)(ii).
Within the 'Other: DCF' category above is Istesso Limited, whose
equity is valued at GBP86.7m as at 30 June 2023 (HY22: GBP80.8m,
FY22: GBP80.8m). Our estimated range for the value of the Group's
equity investment in Istesso based on this DCF model, which was
provided by external valuation advisors as at 31 December 2022 and
updated internally as at 30 June 2023, is GBP66.0m to GBP103.0m
(HY22: GBP75.0m to GBP112.0m, FY22: GBP65.0m to GBP105.0m).
Within the 'Adjusted valuation' category above is First Light
Fusion Limited, whose equity is valued at GBP114.5m as at 30 June
2023 (HY22: GBP114.5m, FY22: GBP114.5m). The valuation of this
company involves an assessment against comparable companies and
involves certain key assumptions around their comparability and
First Light's assumed maturity value. Our estimated range for the
value of the Group's equity investment in First Light Fusion based
on this model as at 30 June 2023 is GBP62.1m to GBP123.5m (HY22:
GBP84.0m to GBP203.0m, FY22: GBP92.5m to GBP185.8m).
In addition to First Light Fusion Limited, four other assets
were reviewed by external valuers. The aggregate of the range of
valuations they concluded upon for these assets and our internal
valuation range assessment for Istesso was GBP298m to GBP433m, and
we have selected points within these ranges which in aggregate
total GBP385m.
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
Change in fair value and FX in the period GBPm GBPm GBPm
------------------------------------------ ----------- ----------- ------------
Fair value gains 25.3 118.2 183.3
Fair value losses (52.8) (422.3) (486.7)
------------------------------------------ ----------- ----------- ------------
(27.5) (304.1) (303.4)
------------------------------------------ ----------- ----------- ------------
4. Portfolio: Limited and limited liability partnership
interests
Fund interests are valued on a net asset basis, estimated based
on the managers' NAVs. Manager's NAVs apply valuation techniques
consistent with IFRS and are subject to audit (received in arrears
of the publication of the Group's results hence marked as unaudited
in the table below). Managers' NAVs are usually published
quarterly, two to four months after the quarter end. The below
table analyses the fund valuations with reference to manager NAV
dates used at the period end.
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
Functional 2023 2022 2022
Limited & Limited Liability Partnerships currency Status GBPm GBPm GBPm
----------------------------------------- ----------- ------------ ----------- ----------- ------------
Unaudited
IPG Cayman Fund L.P. USD & Adjusted 74.6 85.7 80.0
UCL Technology Fund L.P. GBP Unaudited 17.2 16.2 16.9
Technikos LLP GBP Unaudited 2.9 2.7 2.7
----------------------------------------- ----------- ------------ ----------- ----------- ------------
Total 94.7 104.6 99.6
-------------------------------------------------------------------- ----------- ----------- ------------
We reviewed the underlying valuation methodologies adopted by
our Fund managers for all Fund investments of material value. In
the Cayman Fund L.P. this includes two investments in which the
Group also holds direct shareholdings outside the fund: MOBILion,
Inc. and Carisma Therapeutics, Inc.
Following our review of valuation methodologies we were
satisfied that the techniques utilised were appropriate, other than
in one instance where our own valuation estimates resulted in a
lower valuation. We have therefore adjusted the value of the
Group's NAV in the IPG Cayman Fund L.P. to reflect this revised
valuation, and bring it in line with the valuation applied to the
Group's direct interest in the company.
Limited & Limited Liability Partnerships movements in the period GBPm
----------------------------------------------------------------- -----
At 1 January 2022 92.9
Investments during the period 3.0
Distribution from Limited Partnership funds (0.1)
Change in fair value during the period 8.4
Currency revaluation 0.4
----------------------------------------------------------------- -----
At 30 June 2022 104.6
----------------------------------------------------------------- -----
Investments during the period 1.6
Distribution from Limited Partnership funds 0.1
Change in fair value during the period 0.1
Currency revaluation (6.8)
----------------------------------------------------------------- -----
At 1 January 2023 99.6
----------------------------------------------------------------- -----
Investments during the period 7.0
Distribution from Limited Partnership funds (0.7)
Change in fair value during the period (8.3)
Currency revaluation (2.9)
----------------------------------------------------------------- -----
At 30 June 2023 94.7
----------------------------------------------------------------- -----
The Group considers interests in limited and limited liability
partnerships to be level 3 in the fair value hierarchy throughout
the current and previous financial years.
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.
5. (Loss)/Gain on disposal of equity investments
Unaudited Unaudited
six six months Audited
months ended year
ended 30 June ended
30 June 2022 31 December
2023 GBPm 2022
GBPm GBPm
------------------------------------------- ---------- -------------- ---------------
Disposal proceeds 31.5 2.1 28.1
Movement in amounts receivable on sale of
debt and equity investments (35.7) 2.1 5.8
Carrying value of investments (1.5) - (41.7)
------------------------------------------- ---------- -------------- ---------------
(Loss)/profit on disposal (5.7) 4.2 (7.8)
------------------------------------------- ---------- -------------- ---------------
(Loss)/profit on disposal of investments is calculated as
disposal proceeds plus deferred and contingent consideration
receivable in respect of the sale, less the carrying value of the
investment at the point of disposal.
The subsequent receipt of deferred and contingent consideration
amounts is reflected in the above table as a positive amount of
disposal proceeds and a negative movement in amounts receivable on
sale of debt and equity investments, resulting in no overall
movement in profit on disposal.
6. Receivable on sale of debt and equity investments
Unaudited Unaudited
six months six months ended Audited
ended 30 June 2022 year ended
30 June 2023 GBPm 31 December 2022
GBPm GBPm
Deferred and contingent consideration (non-current) 4.0 36.0 6.9
Deferred and contingent consideration (current) 8.5 8.3 41.3
----------------------------------------------------- ------------- ----------------- -----------------
Total deferred and contingent consideration 12.5 44.3 48.2
----------------------------------------------------- ------------- ----------------- -----------------
The following table summarises the primary valuation basis used
to value the deferred consideration:
Unaudited Unaudited
six months six months ended Audited
ended 30 June 2022 year ended
30 June 2023 GBPm 31 December 2022
Investment Primary Valuation Basis GBPm GBPm
-------------------------------- ------------------------------- ------------- ----------------- -----------------
WaveOptics Limited Discounted sale amount - 26.4 28.8
Enterprise Therapeutics Holdings
Limited Probability-weighted DFC model 11.4 12.7 12.5
Athenex, Inc. Probability-weighted DFC model - 5.1 5.6
Reinfer Limited Discounted sale amount 1.1 - 1.1
Perpetuum Limited Discounted sale amount - 0.1 0.2
Total 12.5 44.3 48.2
----------------------------------------------------------------- ------------- ----------------- -----------------
During the period GBP30.9m (HY22: GBP1.9m, FY22: GBP1.9m) of
cash was received in respect of amounts recognised as deferred
consideration, resulting in a realised fair value gain of GBP1.9m
(HY22: GBP0.4m, FY22: GBP0.4m). Additionally, deferred
consideration of GBP5.6m relating to portfolio company Athenex,
Inc. was written off, and no cash received in relation to this
amount (HY22: GBPnil, FY22: GBPnil).
7. Borrowings
Unaudited Unaudited Audited
six months six months ended year ended
ended 30 June 2022 31 December 2022
30 June 2023 GBPm GBPm
Current liabilities GBPm
--------------------- -------------- ------------------ ------------------
Borrowings 6.3 15.4 6.3
--------------------- -------------- ------------------ ------------------
Total 6.3 15.4 6.3
--------------------- -------------- ------------------ ------------------
Unaudited Unaudited
six months six months ended Audited
ended 30 June 2022 year ended
30 June 2023 GBPm 31 December 2022
Non-current liabilities GBPm GBPm
-------------------------------------------- ------------- ----------------- -----------------
Loans drawn down from the Limited Partners
of consolidated funds 19.8 19.1 19.5
Borrowings 132.0 28.7 75.1
-------------------------------------------- ------------- -----------------
Total 151.8 47.8 94.6
-------------------------------------------- ------------- -----------------
8. Share capital
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2023 30 June 2022 31 December 2022
-------------------- -------------------- --------------------
Issued and fully paid: Number GBPm Number GBPm Number GBPm
------------------------ ------------- ----- ------------- ----- ------------- -----
Ordinary shares of
2p each
At 1 January 1,063,188,005 21.3 1,063,033,287 21.3 1,063,033,287 21.3
Issued in respect
of scrip dividend - - - - 154,718 -
------------------------ ------------- ----- ------------- ----- ------------- -----
Share capital at period
end 1,063,188,005 21.3 1,063,033,287 21.3 1,063,188,005 21.3
------------------------ ------------- ----- ------------- ----- ------------- -----
Existing treasury
shares at 1 January (28,110,373) (0.6) (22,279,127) (0.4) (22,279,127) (0.4)
Purchase of treasury
shares - - (7,429,494) (0.1) (7,429,494) (0.1)
Transfer of shares
in respect of scrip
dividend - - 330,851 - 330,851 -
Shares transferred
out of treasury for
SAYE 285,335 - - - 497,249 -
Settlement of employee
share-based payments 1,551,820 - 770,148 - 770,148 -
------------------------ ------------- ----- ------------- ----- ------------- -----
Outstanding at period
end 1,036,914,787 20.7 1,034,425,665 20.8 1,035,077,632 20.8
------------------------ ------------- ----- ------------- ----- ------------- -----
The Company has one class of ordinary shares with a par value of
2p ("Ordinary Shares") which carry equal voting rights, equal
rights to income and distributions of assets on liquidation, or
otherwise, and no right to fixed income.
During 2023 no treasury shares have been purchased. During 2022,
the Company purchased 7,429,494 ordinary shares, with an aggregate
value of GBP8.0m, and they are held in treasury. Retained profits
have been reduced by GBP7.9m, being the net consideration paid for
these shares, including the expenses directly relating to the
treasury share purchase. At 30 June 2023 the company had 26,273,218
treasury shares (HY22: 28,607,622, FY22: 28,110,373).
9. Long-term incentive carry scheme - Carried interest plan
liability
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
GBPm GBPm GBPm
---------------------------- ----------- ----------- ------------
At 1 January 44.1 33.1 33.1
Charge for the period 0.5 6.0 12.0
Payments made in the period (0.1) (1.0) (1.0)
Forex (0.1) - -
At period end 44.4 38.1 44.1
---------------------------- ----------- ----------- ------------
10. Related party transactions
The Group has various related parties arising from its key
management, subsidiaries and equity stakes in portfolio
companies.
A) Key management transactions
(i) Key management personnel transactions
The following key management held shares in the following
spin-out companies as at 30 June 2023:
Number of Number of
shares held at Number of shares shares held at
31 December acquired/ (disposed 30 June
Director/ PDMR Company name 2022 of) in the period 2023 %
------------------------ ------------------------ --------------- ---------------------- --------------- ------
Greg Smith Alesi Surgical Limited 2 - 2 <0.1%
Crysalin Limited (1) 149 - 149 <0.1%
EmDot Limited (1) 4 - 4 0.23%
Istesso Limited 313,425 - 313,425 0.37%
Itaconix plc 4,500 - 4,500 <0.1%
Mirriad Advertising plc 16,667 - 16,667 <0.1%
Oxa Autonomy Limited (2) 8 - 8 <0.1%
Oxford Nanopore Technologies plc 27,008 - 27,008 <0.1%
Rio AI Limited 144,246 - 144,246 <0.1%
Surrey Nanosystems Limited 88 - 88 <0.1%
Tissue Regenix Group plc 50,000 - 50,000 <0.1%
Xeros Technology plc 13 - 13 <0.1%
David Baynes Alesi Surgical Limited 4 - 4 <0.1%
Arkivum Limited 377 - 377 <0.1%
Creavo Medical Technologies Limited (1) 46 - 46 <0.1%
Mirriad Advertising plc 16,667 - 16,667 <0.1%
Oxford Nanopore Technologies plc 2,784 - 2,784 <0.1%
Ultraleap Holdings Limited 2,600 - 2,600 <0.1%
Zeetta Networks Limited 424 - 424 0.11%
Mark Reilly Actual Experience plc 28,000 - 28,000 <0.1%
AudioScenic Limited 53 - 53 <0.1%
Bramble Energy Limited 16 - 16 <0.1%
Diffblue Limited 8,038 - 8,038 <0.1%
Itaconix plc 377,358 - 377,358 <0.1%
Mirriad Advertising plc 66,666 - 66,666 <0.1%
Mixergy Limited - 126 126 <0.1%
Oxa Autonomy Ltd (2) 8 - 8 <0.1%
Ultraleap Holdings Limited 1,700 - 1,700 <0.1%
------------------------------------------------- --------------- ---------------------- --------------- ------
Sam Williams AccelerComm Limited 127 - 127 <0.1%
Alesi Surgical Limited 1 - 1 <0.1%
Centessa Pharmaceuticals plc 3,247 - 3,247 <0.1%
Creavo Medical Technologies Limited (1) 23 - 23 <0.1%
Genomics plc 333 - 333 <0.1%
Ibex Innovations Limited 1,701 - 1,701 <0.1%
Istesso Limited Ordinary Shares 7,048,368 - 7,048,368 8.89%
Microbiotica Limited 7,000 - 7,000 <0.1%
Mirriad Advertising plc 3,333 - 3,333 <0.1%
Oxa Autonomy Ltd (2) 3 - 3 <0.1%
Oxehealth Limited 33 32 65 <0.1%
Oxford Nanopore Technologies plc 18,540 - 18,540 <0.1%
Topivert Limited (1) 1,000 - 1,000 <0.1%
Ultraleap Holdings Limited 558 - 558 <0.1%
Joyce Xie Bramble Energy Limited 88 - 88 <0.1%
Creavo Medical Technologies Limited (1) 21 - 21 <0.1%
Istesso Limited 4,504 - 4,504 <0.1%
Mirriad Advertising plc 4,839 - 4,839 <0.1%
Ultraleap Holdings Limited 1,585 - 1,585 <0.1%
------------------------------------------------- --------------- ---------------------- --------------- ------
Elizabeth Vaughan-Adams Amaethon Limited (1) 939 - 939 <0.1%
Bramble Energy Limited - A Ordinary Shares 2 - 2 <0.1%
Creavo Medical Technologies Limited (1) 23 - 23 <0.1%
Crysalin Limited (1) 100 - 100 <0.1%
DeepMatter Group plc (4) - 9,110 9,110 <0.1%
EmDot Limited (1) 3 - 3 <0.1%
First Light Fusion Limited 77 - 77 <0.1%
Istesso Limited 218,448 - 218,448 0.26%
Mirriad Advertising plc 4,941 - 4,941 <0.1%
Oxford Nanopore Technologies plc 4,500 - 4,500 <0.1%
Rio AI Limited 16,244,199 - 16,244,199 <0.1%
Surrey Nanosystems Limited 53 - 53 <0.1%
Tissue Regenix Group plc 75,599 - 75,599 <0.1%
Ultraleap Holdings Limited 400 - 400 <0.1%
Angela Leach Amaethon Limited (1) 1,408 - 1,408 <0.1%
Alesi Surigcal Limited 2 - 2 <0.1%
AudioScenic Limited 53 - 53 <0.1%
Barocal Limited 1,010 - 1,010 <0.1%
Boxarr Limited 102 - 102 <0.1%
Bramble Energy Limited - A Ordinary Shares 13 - 13 <0.1%
Creavo Medical Technologies Limited (1) 23 - 23 <0.1%
Crysalin Limited (1) 149 - 149 <0.1%
DeepMatter Group plc (4) - - - 0.0%
Diffblue Limited 644 - 644 <0.1%
EmDot Limited (1) 4 - 4 0.23%
Featurespace Limited 240 - 240 <0.1%
First Light Fusion Limited 27 - 27 <0.1%
Ieso Digital Health Limited - B2 Preferred
Shares 29 - 29 <0.1%
Istesso Limited - A Shares 322,923 - 322,923 0.38%
Itaconix plc 4,500 - 4,500 <0.1%
Mixergy Limited 206 - 206 <0.1%
Mirriad Advertising plc 16,667 - 16,667 <0.1%
Oxa Autonomy Ltd (2) 3 - 3 <0.1%
Oxford Nanopore Technologies plc 37,909 (178) 37,731 <0.1%
Lumai Limited (3) 20,000 - 20,000 <0.1%
Rio AI Limited 180,308 - 180,308 <0.1%
Sunborne Systems Limited 2 - 2 <0.1%
Surrey Nanosystems Limited 78 - 78 <0.1%
Tissue Regenix Group plc 146,791 - 146,791 <0.1%
Ultraleap Holdings Limited 500 - 500 <0.1%
Xeros Technology plc 16 - 16 <0.1%
Chris Glasson 8Power Limited 400 - 400 <0.1%
Audioscenic Limited 967 - 967 <0.1%
Creavo Medical Technologies Limited (1) 105 - 105 <0.1%
Istesso Limited 9,009 - 9,009 <0.1%
Mirriad Advertising plc 8,064 - 8,064 <0.1%
Oxa Autonomy Limited (2) 34 - 34 <0.1%
Oxehealth Limited 328 319 647 <0.1%
Topivert Limited (1) 3,000 - 3,000 <0.1%
Ultraleap Holdings Limited 1,585 - 1,585 <0.1%
------------------------------------------------- --------------- ---------------------- --------------- ------
Moray Wright Mirriad Advertising plc 73,664 - 73,664 <0.1%
OxSyBio Limited (1) 20 - 20 <0.1%
Anthony York Diffblue Limited 179 - 179 <0.1%
------------------------ ------------------------ --------------- ---------------------- --------------- --------
Number Number Number
of of shares of
shares acquired/ shares
held at (disposed held at
Individuals who ceased to be key management 31 December of) in 30 June
personnel on 19(th) April 2023 2022 the period 2023 %
Lisa Patel Alesi Surgical Limited 1 - 1 <0.1%
Creavo Medical Technologies
Limited (1) 23 - 23 <0.1%
Istesso Limited 3,477,833 - 3,477,833 4.09%
Microbiotica Limited 3,000 - 3,000 <0.1%
Mirriad Advertising plc 3,333 - 3,333 <0.1%
Oxford Nanopore Technologies
plc 9,453 - 9,453 <0.1%
Topivert Limited (1) 1,000 - 1,000 <0.1%
Ultraleap Holdings Limited 1,317 - 1,317 <0.1%
---------------------------------------------- ------------ ----------- --------- -----
(1) Company being closed down.
(2) Previously called Oxbotica Limited.
(3) Previously called OxONN Limited.
(4) Opening position restated to reflect 1,000,000,000:1 share
consolidation during the period
B) Portfolio companies
(i) Services
The Group earns fees from the provision of business support
services and corporate finance advisory services to portfolio
companies in which the Group has an equity stake. Given the lack of
control over portfolio companies these fees are considered arm's
length transactions. 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
2023 2022 2022
Statement of comprehensive income GBPm GBPm GBPm
---------------------------------- ----------- ----------- ------------
Revenue from services - 0.1 0.2
---------------------------------- ----------- ----------- ------------
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
Statement of financial position GBPm GBPm GBPm
-------------------------------- ----------- ----------- ------------
Trade receivables - 0.1 -
-------------------------------- ----------- ----------- ------------
(ii) Investments
The Group makes investments in the equity and debt of unquoted
and quoted investments where it does not have control but may be
able to participate in the financial and operating policies of that
company. It is presumed that it is possible to exert significant
influence when the equity holding is greater than 20%. The Group
has taken the Venture Capital Organisation exception as permitted
by IAS 28 and not recognised these companies as associates, but
they are related parties. The total amounts included for
investments where the Group has significant influence but not
control are as follows:
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
Statement of comprehensive income GBPm GBPm GBPm
---------------------------------- ----------- ----------- ------------
Net portfolio gains 7.3 50.1 75.0
---------------------------------- ----------- ----------- ------------
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
Statement of financial position GBPm GBPm GBPm
-------------------------------- ----------- ----------- ------------
Equity and debt investments 632.1 522.6 651.6
-------------------------------- ----------- ----------- ------------
C) 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
six months six months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
GBPm GBPm GBPm
------------------------------------------------- ----------- ----------- ------------
Intercompany balances with other Group companies 2.5 2.5 2.1
------------------------------------------------- ----------- ----------- ------------
These intercompany balances represent funding loans provided by
Group companies that are interest free, repayable on demand and
unsecured.
11. Dividends
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2023 30 June 2022 31 December 2022
---------------------------------------------- ------------------- ------------------- -------------------
Declared and paid during the year per share GBPm per share GBPm per share GBPm
---------------------------------------------- ------------ ----- ------------ ----- ------------ -----
Ordinary shares:
Interim dividend paid - - - - 0.50 5.3
Prior financial year final dividend paid 0.76 7.7 0.72 7.4 0.72 7.4
---------------------------------------------- ------------ ----- ------------ ----- ------------ -----
Dividends paid to equity owners in the period 0.76 7.7 0.72 7.4 1.22 12.7
---------------------------------------------- ------------ ----- ------------ ----- ------------ -----
Proposed interim dividend at half
year 0.51 5.3 0.5 5.3 0.5 5.3
Proposed final dividend at financial
year end - - - - 0.76 7.9
------------------------------------- ---- --- --- --- ---- ---
Of the GBP7.7m dividends paid in 2023, GBP7.7m was settled in
cash, of the GBP12.7m dividends paid in 2022, GBP12.3m was settled
in cash and GBP0.4m was settled via the issue of equity under the
Group's scrip programme. Due to the limited take up of scrip
dividends the scheme has been discontinued.
The proposed 0.51p dividend has not been included as a liability
as at 30 June 2023, in accordance with IAS 10 "Events after the
reporting period", it will be paid in September 2023.
12. Alternative performance measures ("APM")
IP Group management believes that the alternative performance
measures included in this document provide valuable information to
the readers of the financial statements as they enable the reader
to identify a more consistent basis for comparing the business'
performance between financial periods and provide more detail
concerning the elements of performance which the managers of the
Group are most directly able to influence or are relevant for an
assessment of the Group. They also reflect an important aspect of
the way in which operating targets are defined and performance is
monitored by the directors. These measures are not defined by IFRS
and therefore may not be directly comparable with other companies'
APMs, including those in the Group's industry. APMs should be
considered in addition to, and are not intended to be a substitute
for, or superior to, IFRS measurements.
The directors believe that these APMs assist in providing
additional useful information on the underlying trends, performance
and position of the Group. Consequently, APMs are used by the
directors and management for performance analysis, planning,
reporting and incentive-setting purposes.
Calculation
---------------- ----------------------------------------------
APM Reference for Definition and Unaudited Unaudited Audited
reconciliation purpose six months six months year ended
ended ended 31 December
30 June 2023 30 June 2022 2022
GBPm GBPm GBPm
--------------- ---------------- ------------------- ---------------- -------------- -------------- --------------
NAV per share Primary NAV per share is NAV GBP1,313.6m GBP1,414.0m GBP1,376.1m
statements defined as Net
Assets divided by
the number of
outstanding
shares.
The measure shows
net assets managed
on behalf of
shareholders by
the Group per
outstanding
share.
NAV per share is a
standard measure
used within our
peer group and can
be directly
compared
with the Group's
share price.
--------------- ---------------- -------------------
Shares in issue 1,036,914,787 1,034,425,665 1,035,077,632
--------------------------------------------------------------------- -------------- -------------- --------------
NAV per share 126.7p 136.7p 132.9p
--------------------------------------------------------------------- -------------- -------------- --------------
Return on NAV is
defined as the
total
comprehensive
income or loss
for the period
excluding
charges which do
not impact on net
assets,
specifically
share-based
payment charges.
The measure shows
a summary of the
income statement
gains and losses
which directly Total
Primary impact comprehensive
Return on NAV statements NAV. income (55.3) (309.9) (344.0)
--------------- ---------------- -------------------
Excluding:
--------------- ---------------- -------------------
Share-based
payment charge 1.0 1.4 2.9
--------------------------------------------------------------------- -------------- -------------- --------------
Return on NAV (54.3) (308.5) (341.1)
--------------------------------------------------------------------- -------------- -------------- --------------
Net portfolio
gains are defined
as the movement
in the value of
holdings in the
portfolio
due as a result
of realised and
unrealised gains
and losses.
The measure shows
a summary of the
income statement
gains and losses
which are
directly
attributable
to the Total
Portfolio (see
definition
below), which is
a headline
measure for the
Group's
portfolio
performance.
This is a key
driver of the
Return on NAV
which is a
performance Change in fair
metric for value
directors' and of equity and
Net portfolio Primary employees' debt
gains statements incentives. investments (27.5) (304.1) (303.4)
--------------- ---------------- -------------------
(loss)/Gain on disposal of equity investments (5.7) 4.2 (7.8)
Change in fair value
of LP interests(2) (11.2) 8.8 2.1
--------------------------------------------------------------------- -------------- -------------- --------------
Net portfolio (loss)/gains (44.4) (291.1) (309.1)
--------------------------------------------------------------------- -------------- -------------- --------------
Total portfolio is
defined as the
total of equity
investments, debt
investments and
investments
in LPs.
This measure
represents the
aggregate balance
sheet amounts
which the Group
considers to be
its investment
portfolio, and
which is
described in
further detail
Consolidated within the
statement of portfolio review
Total financial section of the Equity
portfolio position strategic report. investments 1,123.8 1,123.4 1,120.8
Debt investments 57.6 37.5 38.1
LP interests 94.7 104.6 99.6
--------------------------------------------------------------------- -------------- -------------- --------------
Total Portfolio 1,276.1 1,265.5 1,258.5
--------------------------------------------------------------------- -------------- -------------- --------------
Portfolio
investment is
defined as the
purchase of
equity and debt
investments plus
investments
into limited
participation
interests.
This gives a
combined measure Purchase of
of investment equity and
Portfolio Primary into the Group's debt
investment statements portfolio] investments (52.8) (49.0) (88.9)
--------------- ---------------- -------------------
Investment in limited and limited liability partnerships (7.0) (3.0) (4.6)
--------------------------------------------------------------------- -------------- -------------- --------------
Portfolio investment (59.8) (52.0) (93.5)
--------------------------------------------------------------------- -------------- -------------- --------------
Cash proceeds is
defined as the
proceeds from the
disposal of
equity and debt
investments
plus
distributions
received from
limited
participation
interests.
This gives a
combined measure Proceeds from
of cash received the sale of
Cash Primary from the Group's equity
proceeds(1) statements portfolio. investments 31.5 2.1 28.1
Distributions 0.7 - -
from limited
partnership
funds
---------------- -------------- -------------- --------------
Cash proceeds 32.2 2.1 28.1
--------------------------------------------------------------------- -------------- -------------- --------------
Net overheads are
defined as the
Group's core
overheads less
operating income.
The measure
reflects the
Group's
controllable net
operating
"cash-equivalent"
central cost
base.
Net overheads
exclude items
such as
share-based
payments and
consolidated
Net Financial portfolio company
overheads(2) review costs. Other income 3.1 3.1 7.1
Other administrative expenses (12.2) (14.2) (27.4)
Excluding:
Non-portfolio foreign exchange movements (1.2) 0.2 0.1
Administrative expenses: consolidated portfolio companies - - 0.1
--------------------------------------------------------------------- -------------- -------------- --------------
Net overheads (10.3) (10.9) (20.1)
--------------------------------------------------------------------- -------------- -------------- --------------
Cash and deposits
is defined as
cash and cash
equivalents plus
deposits.
The measures give
a view of the
Group's liquid
resources on a
short-term
timeframe. The
Group's
Treasury Policy
has a maximum
maturity limit of
Gross Cash and Primary 13 months for Cash and cash
deposits statements deposits. equivalents 83.2 94.4 88.7
--------------- ---------------- -------------------
Deposit 166.8 141.3 152.8
--------------------------------------------------------------------- -------------- -------------- --------------
Cash 250.0 235.7 241.5
--------------------------------------------------------------------- -------------- -------------- --------------
Loss/profit
excluding ONT is
defined as the
Group's
(loss)/profit for
the period (after
tax)
excluding the
(loss)/profit on
the investment
held in Oxford
Nanopore publicly
quoted shares
(Loss)/profit Primary both realised and (Loss) for the
excluding ONT statements unrealised. period (54.5) (309.8) (344.5)
Excluding:
Change in fair value of equity investment in Oxford Nanopore 27.8 345.5 369.7
--------------------------------------------------------------------- -------------- -------------- --------------
(Loss)/profit excluding ONT (26.7) 35.7 25.2
--------------------------------------------------------------------- -------------- -------------- --------------
.
(1.) For consistency with how were report investments as the
purchase of equity and debt investments plus investment in limited
and limited liability partnerships, the directors believe that this
new measure showing cash proceeds is defined as the proceeds from
the disposal of equity and debt investments plus distributions
received from limited participation interests profit represents a
useful additional measure for users of the accounts.
(2.) For clarity non-portfolio foreign exchange movements have
been removed from net overheads, these exchange movements are on
intercompany loans and other balance sheet items.
13. Post balance sheet events
As at 31 July 2023, unrealised fair value gains subsequent to
the reporting date in respect of the Group's quoted portfolio
totalled GBP44.7m, largely in respect of Oxford Nanopore
Technologies plc, which has seen a fair value gain of GBP42.0m
since 30 June 2023.
Statement of Directors' responsibilities
General information
The comparative financial information presented herein for the
year ended 31 December 2022 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 2022 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
This condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for
use in the UK.
The annual financial statements of the Group are prepared in
accordance with UK-adopted international accounting standards. As
required by the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority, the condensed set of financial
statements has been prepared applying the accounting policies and
presentation that were applied in the preparation of the Company's
published consolidated financial statements for the year ended 31
December 2022.
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 relating to
the valuation of unquoted equity and debt investments and limited
participation interests were the same as those applied to the
audited consolidated financial statements for the year ended 31
December 2022.
The significant accounting judgments made in preparing these
half-yearly results relating to the application of IFRS 10 in
respect of Istesso Limited and IPG Cayman LP were updated to
reflect events during the period as follows:
-- For Istesso Limited, the investment of GBP15m in the period,
primarily via convertible loan notes ('CLN'). Given that, inter
alia, the CLN conferred no substantive control rights prior to a
long stop date of 1 January 2025, and that IP Group's voting
interest in Istesso reduced in the period as a result of the
conversion of a third party CLN into voting shares, the Directors
concluded that IP Group continues not to control Istesso Limited
under IFRS 10.
-- For IPG Cayman LP, the commitment to invest $10m in the
period via a Simple Agreement for Future Equity ('SAFE') did not
confer additional substantive rights and therefore that IP Group
plc continues not to control IPG Cayman LP under IFRS 10.
Going concern
The Directors are required to satisfy themselves that it is
reasonable to presume that the Group is a going concern. The Group
had Cash and Deposits of GBP250.0m as at 30 June 2022. In light of
the Group's forecast net overhead costs, debt repayment obligations
and other committed spend, the Directors are satisfied that in
taking account of reasonably possible downsides, the Group has
adequate access to resources to enable it to meet its obligations
and to continue in operational existence for at least the next 12
months.
Statement of Directors' responsibilities
The Directors confirm to the best of their knowledge that: the
half-yearly results have been prepared in accordance with IAS 34 as
adopted by the European Union; and 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
Sir Douglas Flint Greg Smith
Chairman Chief Executive Officer
1 August 2023
INDEPENDENT REVIEW REPORT TO IP GROUP PLC
1. Conclusion
We have been engaged by IP Group plc ("the Company") to review
the condensed set of financial statements in the half-yearly
results for the six months ended 30 June 2023 which comprises
Consolidated Statement of Comprehensive Income, Consolidated
Statement of Financial Position, Consolidated Statement of Cash
Flows, consolidated Statement of Changes in Equity and the related
explanatory notes.
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 results for the six months ended 30 June 2023 is
not prepared, in all material respects, in accordance with IAS 34
Interim Financial Reporting as adopted for use in the UK and the
Disclosure Guidance and Transparency Rules ("the DTR") of the UK's
Financial Conduct Authority ("the UK FCA").
2. Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410 Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity ("ISRE (UK) 2410") issued 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. We
read the other information contained in the half-yearly financial
report and consider whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed
set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) 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.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report , nothing has come to our
attention that causes us to believe that the directors have
inappropriately adopted the going concern basis of accounting, or
that the directors have identified material uncertainties relating
to going concern that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the Group to cease to continue as a going
concern, and the above conclusions are not a guarantee that the
Group will continue in operation.
3. 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.
The annual financial statements of the Group are prepared in
accordance with UK-adopted international accounting standards.
The directors are responsible for preparing the condensed set of
financial statements included in the half-yearly financial report
in accordance with IAS 34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the
directors are responsible for assessing the Group's ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but
to do so.
4. 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. Our conclusion, including our
conclusions relating to going concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for conclusion section of this report.
5. The purpose of our review work and to whom we owe our responsibilities
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 DTR of 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.
Jonathan Martin
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London
E14 5GL
1 August 2023
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END
IR PBMJTMTJMTIJ
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August 02, 2023 02:00 ET (06:00 GMT)
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