IP sees value of portfolio rise as it looks to new spin-outs

The IP Group is supporting the development of the Magnetometer, a device which measures the heart’s magnetic field. The scanner, which has been developed at the University of Leeds, could dramatically improve the process of diagnosing heart conditions.

The IP Group, which published its half year results yesterday, is also supporting eTect, a spin-out business that can improve the speed and accuracy of disease diagnosis.

Yesterday, Alan Aubrey, the chief executive of IP Group, confirmed that the funding environment had improved over the last six months. The highlights for the group included the launch of a £30m intellectual property (IP) Venture Fund, in partnership with the European Investment Fund (EIF).

The group’s portfolio companies raised around £55m of new capital over the half year.

In the six months ended June 30, the adjusted profit before tax was £500,000, compared with £31.2m in the same period last year.

Net assets at June 30 were £261.6m compared with £250.7m in the same period last year.

During the six months ended June 30, 2013, the value of the group’s portfolio increased to £191.9m, compared with £171.5m in the same period last year.

Mr Aubrey added: “It has been another productive first half for both the group and its portfolio companies.

“At group level, we were pleased to have reached agreement with the EIF on a second fund and to have signed a commercialisation agreement with The University of Manchester.

“The group continues to see an excellent pipeline of opportunities which, coupled with the overall maturing of our portfolio across investment stages, gives us increasing confidence in our ongoing ability to deliver significant shareholder value.”

IP Group has backed a number of successful Yorkshire-based university spin-outs, including Avacta, from Wetherby, which designs and makes devices to speed up and reduce the cost of drug development and sample analysis. In July, Avacta Group announced that it had raised gross proceeds of £4.7m, of which the IP Group, together with its managed funds, contributed £1m.

Avacta recently announced that it had extended its commercial collaboration with ForteBio, a division of Pall Life Sciences. Avacta has also entered into a distribution agreement with ForteBio for the sale of Optim, the company’s protein analysis product, in China, Hong Kong and Taiwan.

Fusion IP, a university IP commercialisation company in which IP Group has a 20.1 per cent holding, raised gross proceeds of £20m through a placing in March.

IP Group’s business model is built around establishing exclusive long-term partnerships with UK universities. It now has agreements covering 12 of the UK’s top universities, including the University of Leeds and the University of York.

Commenting on the outlook, the company said: “While sources of capital for, and the risks inherent in, early-stage businesses are challenges facing the group and its spin-out companies, the board remains confident that intellectual property and its commercialisation remain important factors in the economic development of the UK and other mature Western economies.”

The directors said they were confident the group remained well placed to deliver medium to long-term value for shareholders. Founded in 2001, it listed on AIM in October 2003, and moved to the official list in June 2006.

[email protected]