REG - Intuitive Invests.Gp - Final Results and Notice of AGM
06/12/2021 07:00
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RNS Number : 5953U Intuitive Investments Group plc 06 December 2021
6 December 2021
Intuitive Investments Group plc
Final Results
Notice of Annual General Meeting
Intuitive Investments Group plc (AIM: IIG) ("IIG" or the "Company"), a
closed-end investment company focussed on the life sciences sector, announces
its final results for the period from incorporation to 30 September 2021.
This has been a period of substantial progress for the Company in which it has
executed on its pipeline plan outlined at admission, with considerable growth
across a number of investee companies in its portfolio of fast growing and
high potential life sciences businesses.
The inaugural report (the "Report") for Intuitive Investments Group plc, which
covers the period from incorporation on 11 June 2020 to 30 September 2021, can
be viewed by clicking on the following link:
https://iigplc.com/financial-reports/ (https://iigplc.com/financial-reports/)
Annual General Meeting
The Report also includes the notice of the Company's Annual General Meeting,
which will be held at the Parklands Hotel & Country Club, Crookfur Park,
Ayr Road, Newton Mearns, Glasgow G77 6DT on 30 December 2021 at 10:30 am.
Financial highlights
· Successful launch on AIM on 14 December 2020:
o opening net assets at launch £7.58 million after the costs of admission
to AIM;
o net asset at period end of £8.14 million as at 30 September 2021; and,
o net asset of £8.99 million as at 30 November 2021.
· Investments valued at £6.74 million as at 30 September 2021 in a
diversified portfolio of high growth life sciences companies.
· Cash:
o £2.57 million as at 30 September 2021; and,
o £2.69 million as at 30 November 2021
· NAV per share price increase from flotation:
o 10 per cent. to 30 September 2021; and,
o 19 per cent. to 30 November 2021.
Operational highlights
· Reviewed over 145 potential investee companies.
· Investment in 16 companies of which;
o eight publicly traded at a cost of £1.77 million (and exited from one
publicly traded company);
o two later stage/pre-IPO companies at a cost of £1.73 million; and,
o six private companies which are in the main series A and B investments at
a cost of £1.55 million.
Post-period highlights
· Investment in Light Science Technologies Holdings plc which
successfully floated on AIM on 15 October 2021, with initial investment of £1
million, and reinvesting interest and non-executive directors' fees of
£78,000, is valued at £2.91 million as at 30 November 2021, an unrealised
2.9x return on investment.
David Evans, Chairman of Intuitive Investments Group plc, commented: "The
Company's performance for the period under review has been encouraging. The
first stages of our journey have been successfully achieved with a flotation
and executing on the investment strategy as set out at admission.
"We have executed on our pipeline plan, investing in eight unquoted, eight
publicly traded companies and exiting from one publicly traded company. The
flotation of Light Science Technologies, post period end, was an excellent
example of how our business both supports its investee companies and delivers
value for our shareholders. I look forward to providing further updates for
our investors as we continue to grow our portfolio of exciting high potential
life sciences businesses."
Regulatory Information
This Announcement contains inside information for the purposes of the UK
version of the market abuse regulation (EU No. 596/2014) as it forms part of
United Kingdom domestic law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR").
For further information, please contact:
Intuitive Investments Group plc www.iigplc.com (http://www.iigplc.com/)
David Evans, Executive Chairman Via Walbrook PR
Robert Naylor, CEO
SP Angel Corporate Finance LLP - Nominated Adviser +44 (0) 20 3470 0470
Jeff Keating / David Hignell / Kasia Brzozowska
Turner Pope Investments (TPI) Ltd - Broker +44 (0) 20 3657 0050
Andrew Thacker / James Pope
Walbrook PR Limited - Media & Investor Relations +44 (0)20 7933 8780 or intuitive@walbrookpr.com
(mailto:intuitive@walbrookpr.com)
Paul McManus/ Sam Allen +44 (0) 7980 541 893 / +44 (0) 7502 558 258
About Intuitive Investments Group plc
The Company is a newly established investing company, seeking to provide
investors with exposure to a portfolio concentrating on fast growing and/or
high potential Life Sciences businesses operating predominantly in the UK,
continental Europe and the US, utilising the Board's experience and in
particular that of the Chairman, David Evans, to seek to generate capital
growth over the long term for shareholders.
Chairman and Chief Executive's Report
We are pleased to present the inaugural report for Intuitive Investments Group
plc, which covers the period from incorporation on 11 June 2020 to 30
September 2021. The Company's shares were admitted to trading on AIM on 14
December 2020 ("Admission"), which is when we commenced investing. We would
particularly like to thank the investors who supported the flotation.
Strategic focus
The nine-month operating period has been one of substantial progress as we
successfully executed our pipeline plan at the time of Admission. During the
period from Admission, we have invested £3.28 million in eight unquoted
companies and £1.77 million in eight publicly traded companies, exited from
one publicly traded company and were a key driving force in the successful
flotation of Light Science Technologies Holdings plc ("LST") in October 2021.
The flotation of LST is one data point, a single swallow does not make a
summer, but that transaction is testament to the key values of IIG: honesty,
integrity and doing what it takes without compromising principles, to support
our investee companies. In this instance, to achieve LST's goal of a
successful flotation.
At a macro level we believe there is an opportunity to strengthen life science
public markets by establishing a crossover fund, but as a country we lack the
necessary vision to break the false dichotomy between private and public
equity.
The year has not been without its challenges, and we would like to highlight
two in particular.
Firstly, the impact of Covid-19 ("Covid") on the nature and value of
opportunities crossing our desk. In particular for two of our publicly traded
investments, Yourgene Health plc and Evgen Pharma plc, we underestimated the
market's perception of value attributable to the Covid elements of those
companies' respective businesses. Both companies' share prices have been
negatively impacted, Yourgene Health plc due to a reduction in PCR testing and
Evgen Pharma plc due to the failure of a clinical trial. We bought into the
companies based on their long-term strategic value ex-Covid. Time will tell if
our premiss at the time of investment was right.
Secondly, we have found that the interpretation of aspects of the regulatory
framework in which we are required to operate has constrained our ability to
take advantage of certain opportunities that we believe would have enhanced
shareholder value. This is the key reason why we are looking to shift the
Company's strategic focus and are now seeking shareholder approval to make a
material amendment to the Company's Investing Policy.
IIG will look to take larger positions in investee companies and to do this,
as set out in our existing Investing Policy, "by offering IIG's ordinary
shares in exchange for shares in investee businesses." To that end we are in
advanced discussions with a company which we believe will add significant
long-term value. This will allow us to judiciously expand our balance sheet
and our overall offering.
Detailed reasons for the proposed changes to the Investing Policy are set out
in the Report. These changes include, allowing investment into a larger number
of portfolio companies, permitting the Company to be appointed as an
investment adviser or manager to third party funds and amending the investment
restriction in relation to investment in a single company.
Overall, we believe these changes will allow the Board more flexibility in
generating shareholder returns. We recognise the challenges of being a
micro-cap company at present, but we believe we have the skills necessary to
exploit this niche for the benefit of IIG's shareholders.
Identifying and capitalising on trends in life sciences sector
The Investment Team perceive there are compelling opportunities in both public
and private markets and there are two identifiable trends, which were detailed
in our interim report, which we believe are exploitable.
Lack of continuity of funding
Early-stage companies (seed and series A investment rounds) are able to
attract investment which is due to tax driven schemes such as EIS and VCT,
angel groups and the relatively small amounts of investment for life science
companies to get started. However, many life science companies find it harder
to attract further substantial capital. This can be for several reasons, but
include milestones having been missed, particularly those in relation to
partnering with large life science companies, over ambitious valuations at a
previous round, scarcity of providers of substantial tranches of investment,
particularly series B and beyond. This is an area which the Investment Team
perceives there is potential for the attractive risk adjusted returns by
providing investee companies the capital to allow them to succeed.
An example of such investments is Momentum Bioscience Limited ("Momentum"),
whereby IIG's investment of £125,000 has resulted in IIG having a 2.4%
interest in Momentum's share capital. Momentum's valuation is very much below
the total cash invested in previous rounds.
Crossover funding
The other stage of investment where the Investment Team perceive there are
attractive risk adjusted returns is later stage and pre-IPO investment, where
the wider team has a proven track record of taking companies to public
markets. There is the possibility of exploiting the difference in valuation
between private and public markets.
An example of such an investment is Light Science Technology Holdings plc
which successfully floated on 15 October 2021, with initial investment of £1
million, and reinvesting interest and non-executive director's fees of
£78,000, is valued at £2.91 million as at 30 November 2021, an unrealised
2.9x return on investment.
Financial performance
The Company raised £8.08 million at flotation with advisers' fees of
£507,000, therefore there was £7.58 million for investment and the ongoing
costs of the Company. From the proceeds of the flotation, at 30 September
2021, we have invested a total of £4.81 million with cash of £2.57 million.
NAV per share has increased by 10% from flotation to 30 September 2021; and
19% to 30 November 2021.
There is income of £1,055,518, comprising unrealised gains of £821,214,
realisation of publicly traded companies of £89,876, interest from the
convertible loan notes in aggregate of £110,344 and fees of £34,084. The
structure of the Company is purposefully simple, and the administrative costs
of the business were £324,153 for the period. These are mainly fixed costs,
and we anticipate these becoming proportionally smaller as a percentage of the
NAV as the assets under management grow. Overall retained profit was
£560,918. Given the size of the Company, the Board does not propose to
declare a dividend.
People
We have an excellent Board and Advisory Panel, which we believe have the
necessary skills to substantially grow the Company. We wish to take this
opportunity to thank the team for their commitment and hard work during this
initial period.
Outlook
Performance has been good for the period under review. The first stages of our
journey have been successfully achieved with a flotation and executing on the
investment strategy as set out at Admission.
The next stages will present challenges, particularly the need to grow the
Company. To this end we are seeking shareholder approval to make a material
amendment to the Company's Investing Policy so IIG can take larger positions
in investee companies. We fundamentally believe we have the team in place to
meet these challenges head on and we look forward to providing you with
further updates as our journey progresses.
Statement of Comprehensive Income
For the period ended 30 September 2021
From
11 June 2020 to
30 September
2021
£
Investment income
Finance income 110,344
Gains on realised investments 89,876
Gains on Investments at fair value 821,214
Management Fees 34,084
───────
1,055,518
Total administrative expenses (324,153)
───────
Profit before tax 731,365
───────
Corporation tax (170,447)
───────
Profit for the period 560,918
Other comprehensive income -
───────
Total comprehensive income for the period attributable to owners of the 560,918
company
═════
Earnings per share from continued operations
Basic profit/(loss) per share - pence 2.2p
Diluted profit/(loss) per share - pence 2.2p
═════
All activities relate to continuing operations
Statement of Financial Position
As at 30 September 2021
As at
30 September
2021
ASSETS £
Non-current assets
Investments 5,737,353
Deferred tax asset 10,221
───────
5,747,574
───────
CURRENT ASSETS
Trade and other receivables 42,345
Cash and cash equivalents 2,566,793
───────
2,609,138
───────
TOTAL ASSETS 8,356,712
═════
EQUITY
Shareholders' Equity
Called up share capital 404,418
Deferred shares 47,500
Share premium 6,985,736
Other reserves 144,399
Retained Earnings 560,918
───────
Total Equity 8,142,971
───────
LIABILITIES
Current liabilities
Trade and other payables 33,073
Non current liabilities
Deferred tax liabilities 180,668
───────
213,741
───────
───────
TOTAL EQUITY AND LIABILITIES 8,356,712
═════
Net asset value per share 0.2014
Statement of Cash Flows
For the period ended 30 September 2021
Period ended
30 September 2021
£
Profit/(loss) before tax from continuing operations 731,365
Adjusted by:
Interest income (110,344)
Gain on disposal (89,876)
Fair value movement (821,214)
──────
(290,069)
Changes in working capital
(lncrease)/decrease in trade and other receivables (42,345)
lncrease/(decrease) in trade and other payables 33,073
──────
Cash generated from continuing operations (299,341)
──────
Net cashflow from operating activities (299,341)
Cash flows from investing activities
Purchase of investments (5,055,770)
Proceeds from sale of investments 339,851
──────
Net cash flows from investing activities (4,715,919)
Cash flows from financing activities
Net proceeds from share issues 7,582,053
──────
Net cash inflow from financing activities 7,582,053
──────
Net increase/(decrease) in cash and equivalents 2,566,793
Cash and cash equivalents at beginning of period -
──────
Cash and cash equivalents at end of period 2,566,793
══════
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