IP Group plc - AGM statement

IP Group plc (LSE: IPO) ("IP Group" or "the Company" or "the Group"), which develops world-changing science and technology businesses across life sciences, technology and cleantech, issues the following statement ahead of its Investor Update event and Annual General Meeting ("AGM") taking place this morning.

This statement provides an update on the Group's progress for the period since 31 December 2021. No material new information will be released by the Company during the event or AGM. The Group anticipates releasing its results for the six months to 30 June in early August.

Business and operational update

IP Group remains well financed and, as at 31 May 2021, had gross cash and deposits of £251 million (FY21: £322 million), having deployed £45.9m of capital in the year to date. The Group has made notable investments into existing portfolio companies Istesso Ltd (£10m) and Bramble Ltd (£9.5m) as well as a number of smaller size investments into current and new opportunities across all three of our thematic focus areas of life sciences, cleantech and deeptech.

As at 31 May, the Group's Net Asset Value was approximately £1,436m, or 139 pence per share, compared with £1,738m, or 167pps, at 31 December 2021. The fall in value in the year to date is largely attributable to the reduction in value of the Group's public portfolio which has been impacted by the correction in global stock markets, particularly by the rotation out of growth and technology stocks.

IP Group's public portfolio recorded a fair value reduction of £360m in the period to 31 May 2022, of which £309m related to the fall in the share price of Oxford Nanopore. Technologies plc. In the private portfolio, the Group has seen fair value gains of over £60m, the majority of which is attributable to an initial uplift in the fair value of portfolio company First Light Fusion Ltd after it confirmed it had achieved fusion in April. There has been no significant impact on private portfolio funding rounds to date.

The Group continues to believe that the prospects for our portfolio are strong and the scale of the opportunity remains significant and is therefore focussing on its leading assets while planning for reduced realisations given the current market backdrop.

Shareholder returns

The Board remains focussed on shareholder value creation, having introduced a share buyback programme and dividends.

During 2021, the Group paid its maiden dividend, a final 2020 dividend of 1 pence per share, in June 2021. Additionally, the Group paid an interim dividend of 0.48 pence per share in September 2021. A final 2021 dividend of 0.72 pence per share has been proposed, with the Directors offering shareholders the opportunity to elect to receive dividends in the form of fully paid shares in IP Group plc in lieu of cash under the Scrip Dividend Scheme. Subject to its approval at the 2022 AGM later today, this will be paid on 30 June 2022 to shareholders on the register on 27 May 2022.

The Board continues to consider that shareholder returns will be driven primarily by long-term capital appreciation. The Board remains committed to delivering a regular dividend income, which is intended to comprise a relatively small component of total shareholder return. We will also continue to consider share buyback programmes and other capital return tools as we generate realisations from our portfolio.

The Board will seek shareholder approval to renew the authority to purchase up to 10% of the Ordinary Shares in issue from the date of grant of the authority to the date of the Annual General Meeting in 2023. Such purchases will only be made at a discount to the prevailing NAV per share. Any such shares that are bought back may be held in treasury and may subsequently then either be sold for cash or cancelled.

Portfolio update

The Group's portfolio includes holdings in 49 'focus' companies across life sciences, deeptech and cleantech, representing over 80% of the portfolio value of £1.3bn at 31 May 2022.

Significant developments in the Group's portfolio since 31 December 2021 include:

·    First Light Fusion Ltd, which is researching energy generation via inertial fusion, completed its Series C fund raise in February, raising c.£33m from both existing and new investors. IP Group committed £5m to the funding round and, following completion, has an undiluted beneficial holding of 27.4%. IP Group has recorded a net unrealised fair value gain of £27.2m or 3p per share. In April, First Light confirmed that it had achieved fusion, independently validated by the UK Atomic Energy Authority (UKAEA). IP Group believes achieving this world-first will at least result in an initial doubling of the value of the Company with recent comparatives and third-party valuation work suggesting a doubling to quadrupling may be achieved at the next funding round. Our preliminary assessment, based upon the lower end of the range, implies a carrying value of the asset that will generate an initial net fair value gain of at least £57m (or approximately 5 pence per share). As at 31 December 2021, IP Group's undiluted beneficial holding of 27.4% in First Light was valued at £57.3m.

·    IP Group and Parkwalk co-led an £8.4m Series A round into GripAble Ltd, a digital healthcare start-up delivering rehabilitation programmes to people with neurological and musculoskeletal conditions. IP Group committed £3.5m to the funding round and, following completion, has an undiluted beneficial holding of 25.4% in GripAble. Parkwalk, IP Group's wholly owned EIS fund manager, also committed £3.5m to the round.

·   Microbiotica Ltd, a leading player in discovering and developing microbiome-based therapeutics and biomarkers, completed a £50m Series B financing round, the largest microbiome-related financing in Europe to date. IP Group committed £4m to the funding round and, following completion, has an undiluted beneficial holding of 18.2% in Microbiotica, valued at £16.1m. IP Group recorded a net unrealised fair value gain of £2.2m.

·    Bramble Energy Ltd, a London-based fuel cell company, completed a £35m Series B investment round. IP Group committed approximately £10m to the round and, following completion, has an undiluted beneficial holding of 32.3% in Bramble, valued at £20.7m, representing a net unrealised fair value gain to the Group of approximately £6.6m.

This announcement 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 which 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 companies within the Group's portfolio.

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Notes for editors

About IP Group

IP Group develops world-changing science and technology businesses across life sciences, technology and cleantech. The Group has a strong track record of success, having been the founder investor in a number of high-profile companies including Oxford Nanopore Technologies plc, and has one of the most exciting portfolios of high-growth businesses in Europe. The Group also owns Parkwalk, the UK's largest growth EIS fund manager which backs world-changing technologies emerging from the UK's leading universities and research institutions. IP Group is listed on the Main Market of the London Stock Exchange under the code IPO.

For more information, please visit our website at www.ipgroupplc.com.

ENDS