IP Group's half year pre-tax losses narrows

Technology venture capital company IP Group’s half year pre-tax losses narrowed and while it remained cautious about the short-term impact of the Brexit vote, it was confident about the long-term prospects.

For the six months ended 30 June, adjusted loss before tax narrowed by 56% to £31.1m compared to the same period last year.

Net assets, excluding intangibles, fell by 2.4% to £683.5m. Portfolio realisations increased to £14.5m from £400,000.

Net cash and deposits at 30 June were £174.7m, a decrease of 20.4% compared to the same period last year. This reflects a net fair value decrease of £24.5m largely as a result of a reduction in the value of holdings in three of its AIM-listed portfolio companies, Avacta (£7.1m), Xeros Technology (£7.1m) and hVIVO (£4.4m). These were partially offset by contributions from other companies in the portfolio including, Ceres Power Holdings for £4.2m.

The fair value of IP Group’s portfolio increased by about 10% to £525.7m compared to the same period a year ago.

The company strengthened its partnerships with several US universities and also signed agreements with the University of Washington and Johns Hopkins University. Both universities have large research and development budgets as for 2016 it is $2.1bn and $1.1bn respectively.

Capital provided to portfolio companies and projects was £12.8m and IP Group's portfolio companies raised about £38m of new capital during the half year. One of its companies, Oxford Nanopore Technologies reported significant technical and commercial progress, including the launch of a number of new products and services, and its first promethlon instrument.

The FTSE 250 listed company said that following the country’s decision to leave the European Union the UK, it is facing a period of uncertainty. In the short-term the company said there may be some impact on specific portfolio companies, but in the long-term the company said the fundamentals of the business are strong and maintained the commercialisation of science remains compelling.

Chief executive Alan Aubrey, said: "It is pleasing to report that a number of our portfolio companies have made excellent commercial progress during the period across all four of our sectors - healthcare, technology, cleantech and biotech - although broader economic conditions have had an impact on the value of some of our AIM-quoted holdings.

“IP Group has partnerships with 14 of the UK's and 5 of the US's leading research universities, a portfolio worth £525.7m, a strong cash balance of £174.7m, an experienced management team and a healthy pipeline of new opportunities. This leaves the group well positioned to respond effectively to, and capitalise on, opportunities in the second half of the year."

Shares in IP Group were down 4.31% to 153.29p at 0926 BST.