Fusion dips to £1.2m pre-tax loss but value of its investments on the increase

The Sheffield-based company said it has a number of “exciting companies” moving towards maturity and it looks forward to 2014 with confidence.

The group reported a 26 per cent increase in the value of its investments to £25m thanks to strong performances from drug development company Diurnal, engineer Phase Focus and medical simulator MedaPhor.

Chief executive David Baynes said: “We’re trying to run with our winners. It’s not always about selling. I’d like to see us holding and growing rather than selling out early.”

Earlier this year the group raised £20m in a placing with new and existing investors. It plans to spend the cash on its current portfolio and on some new investments.

“The current portfolio is maturing pretty nicely,” said Mr Baynes.

“I hope things continue to do well at Diurnal. Then we’ll look at new companies. We took on five new companies last year and we’ll do a similar number this year.”

Fusion holds a 43 per cent shareholding in Diurnal, which reported successful recent drug trials.

The group recently signed new agreements with the University of Nottingham and Swansea University to add to its existing agreements with the University of Sheffield and Cardiff University.

Mr Baynes said there are no immediate plans to tie up with more universities as it wants to bed down Nottingham and Swansea first, but it probably will sign up one or two more in time.

In the year to July 31, total revenue and portfolio returns fell to £3.04m, compared with £4.75m the year before, due to a reduction in revenue and fewer funding rounds.

The group generated an operating profit, excluding subsidiary spin-out costs and amortisation, of £1.25m, compared with £3.04m the year before.

At the pre-tax level, the group made a loss of £1.2m compared with £500,000 profits the previous year.

“We’ve done slightly better than analysts thought we would,” said Mr Baynes.

“It’s not a disappointment.

“We had less funding rounds, less raising money for companies.”