IP Group net asset value falls, but losses narrow

Intellectual property-focussed investor IP Group reported a net asset value of £1.19bn in its results for 2023 on Wednesady, or 114.3p per share, down from £1.38bn and 132.9p per share in 2022.

The FTSE 250 company said despite the decrease, the return on net asset value still improved to -13% from -20% year-on-year, while the loss for the year narrowed significantly to £174.4m from £344.5m.

Total portfolio value stood at £1.16bn, down from £1.26bn in the previous year, while gross cash and deposits increased to £336.9m from £241.5m.

The firm made portfolio investments of £73.2m in 33 companies across its three high-growth sectors, slightly lower than the £93.5m invested in 46 companies in 2022.

IP Group launched a £20m share buyback programme, and announced future cash returns in the form of share buybacks when the share price discount to net asset value exceeds 20%.

It said that over £75m in total cash had been returned to shareholders through dividends and share buybacks since 2021.

The company said its portfolio was maturing, with multiple near-term value creation opportunities.

Over 10 companies were now in clinical studies, with key data expected by the end of 2025.

Capital allocation remained focussed on high-growth sectors such as life sciences, deeptech, and cleantech.

The portfolio raised £0.7bn in total capital in 2023, with leading co-investors including Bosch Ventures, BP Ventures, Clean Energy Ventures, and others.

However, the firm said it had decided to deprioritise future investment in its US platform and cease plans for a China growth fund.

“The market environment for early-stage investing remained challenging in 2023,” said chief executive officer Greg Smith.

“In response, we have prioritised and heavily focused our activities and capital on developing leading portfolio opportunities in the high-growth sectors where our teams have deep expertise.

“The group's portfolio successfully raised a total of £0.7bn, with the group investing £73m alongside more than fifty co-investors.”

Smith said that, having appropriately managed its level of portfolio investment, the group finished the year in a strong financial position with £227m gross cash, describing that as “an important strategic asset” in the current environment.

“We have an excellent team that combines university relationships with deep sector experience and networks, allowing us to access highly differentiated dealflow,” he said of IP Group’s outlook.

“We are one of the companies most closely aligned with the UK's 'science superpower' ambition, which we intend to build on this year.

“In pursuing our purpose to accelerate the power of science for a better future by starting and growing businesses driving the energy transition, the digital transformation and improved health outcomes, we can make a significant dent in some of society's biggest needs and deliver compelling financial returns for our shareholders.”

At 0815 GMT, shares in IP Group were down 1.03% at 51.07p.

Reporting by Josh White for Sharecast.com.