Fusion sees the value of investments grow to £20m

The Sheffield-based group, which turns university research into business, said the value of its investments grew by 18 per cent to almost £20m in the year to the end of July.

That was despite selling one of its most valuable assets, a stake in Sheffield spin-out Simcyp, for £3.5m in February.

“We believe the future of UK plc lies in technology and that much of this new potential technology lies in the UK’s leading research universities,” said chairman Doug Liversidge.

Fusion has exclusive tie-ups with Sheffield and Cardiff universities, and is 26 per cent owned by bigger rival IP Group. The group ended July with cash and deposit balances almost three times higher at £5.9m.

Its portfolio comprises about 20 companies of varying degrees of maturity. Magnomatics, its Sheffield-based electric motor company which makes high-torque magnetic gearboxes, now has 20 development contracts with some of the world’s largest transport and engineering firms.

Phase Focus, a Sheffield-based microscopy firm, is being used in commercial contact lens measurement and lab-based cell measurement.

Sheffield lighting firm Seren Photonics raised £1.8m in March to develop its low-power, high-output LED technology with manufacturers.

Despite pre-tax profits almost halving to £505,000, Fusion chief executive David Baynes said it was “another good year for the group”.

“The exit of Simcyp, which generated $6.4m for the company, validates our commercialisation model and clearly demonstrates the tremendous potential of our university pipeline agreements,” said Mr Baynes.

“Our priority in the year ahead is to continue to focus on the development of the portfolio companies, whilst creating a number of new spin-outs to add to our portfolio. We look forward to the year with confidence.”

Selling Simcyp netted Fusion a 200-fold return on investment.

Fusion ploughed £2.9m into its companies in the year, up from £1.6m a year earlier.

The group also attracted £10.5m from external parties to invest in its portfolio companies, up from £6.1m.

Fusion said having raised and invested more than £13m in its portfolio through 15 funding rounds, the majority of its key companies are either funded or in the process of being funded.

The group therefore expects fewer fundings this year, and Mr Liversidge said its priority is to “continue to focus on the growth of the portfolio”.

During the year Fusion paid Sheffield University £105,000 and Cardiff University £210,000, based on the terms of its exclusive agreements.