REG - Intuitive Invests.Gp - Final Results
21/12/2022 07:00
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RNS Number : 3779K Intuitive Investments Group plc 21 December 2022
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 year to 30 September 2022. The full report and
accounts (the "Report") 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 17 January 2023 at 10.30 am.
Financial highlights
30 September 2022 31 March 2022 31 March 2021 14 December 2020
Flotation
30 September
2021
Net Assets (£) 12.93 million 12.33 million 7.90 million 7.59 million
8.14 million
Investments (£) 11.16 million 10.40 million 3.93 million NA
5.74 million
Cash (£) 1.55 million 1.91 million 3.90 million 7.59 million
2.57 million
18.00p 18.73p 19.55p 18.78p
NAV per share 20.14p
Increase/(decrease) from previous period end (3.90)% (6.96)% 4.12% NA
2.99%
Operational highlights
· Acquisition of Touchless Innovation Ltd, including its wholly owned
subsidiary Touch-Less Hygiene UK Ltd and the business and assets of Sanoserv
International Franchising Ltd (trading as Sanondaf).
· Subscription to raise £607,000 by the issue of 2.76 million new
ordinary shares at a price of 22 pence per share, principally subscribed for
by directors of IIG.
· Investment in Ocutec Ltd, a private company in the late-stage
portfolio, at a cost of £250,000.
· The follow-on investment in Pneumowave Ltd resulting in an uplift in
valuation of £454,000.
For further information, please contact:
Intuitive Investments Group plc www.iigplc.com (http://www.iigplc.com/)
Julian Baines, 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
Intuitive Investments Group plc is an investment 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 of the Investment Committee, David Evans, to
seek to generate capital growth over the long term for shareholders.
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").
Intuitive Investments Group Plc
Chairman and Chief Executive's Report
Background
We are pleased to report the year end results to 30 September 2022. Julian
Baines replaced David Evans as Chairman of the Company in February 2022 with
David becoming Chair of the Investment Committee at that time.
Market commentary
The macro-environment continues to be challenging in the small cap healthcare
sector. During the year under review the AIM All-Share (AXX) index fell by
35.0%. By comparison, the Company's NAV fell 10.6%.
As we noted in our interim statement, a handful of small cap healthcare
companies were overvalued, often driven by anticipation of COVID-related
revenues, but we had not invested in these companies. The subsequent mark down
in small-cap healthcare has been indiscriminate and not driven by
fundamentals.
Another notable trend in the healthcare sector has been the relative
underperformance of the share prices of small cap companies compared to large
cap companies. This is partly a function of generalist investors seeking
defensive and liquid characteristics of large cap healthcare companies. This
differential in performance is unsustainable, not least as we believe the
large cap companies will begin to exploit this relative valuation gap by
acquiring small and mid-sized companies. We have begun to see some M&A
activity in the sector.
Opportunity
Rather than viewing the small cap healthcare sector's performance with
dejection, we view this as an opportunity to invest in companies, both private
and publicly traded, which are below their long-term value. Moreover, we
perceive there is unmet medical need and the need for innovation in hygiene,
sanitisation and healthcare-associated infection prevention sector. Therefore,
we will look to capitalise on this opportunity around infection prevention,
building on the foundation we have in our investment in Sanondaf. We also
recognise that overheads in many publicly traded small cap companies is too
high and not an efficient use of capital, therefore we will look to acquire or
merge if there is a strategic logic.
Reliable statistics as to the cost of healthcare-associated infections are
difficult to source as the impacts are multifaceted, for example, the
additional length of stay in hospital, further interventions needed as
management of infection invariably involves use of broad-spectrum antibiotics
and attributing mortality. However, there is reporting of certain infections.
For example, The UK Health Security Agency (UKHSA) reported that in the year
to March 2022 compared to year to March 2020, the year prior to the COVID
pandemic, E. coli and meticillin resistant Staphylococcus aureus cases were
lower, Klebsiella spp., Pseudomonas aeruginosa and meticillin sensitive
Staphylococcus aureus were similar and Clostridioides difficile infection
counts were at a nine-year high.
The resulting recommendation of the UKHSA is that control efforts in the
hospital setting must be maintained or strengthened, while increasing
attention on healthcare interventions in the community and the interface
between hospital and community infection control teams improved.
Sanondaf has a technology which provides excellent disinfection capability
with very quick turnaround times, particularly when compared to competitor
products. The company's service and machines are cost effective and can be
used in both community and hospital settings - truly disinfection for all.
Corporate performance review
Sanondaf has a diverse customer base with over 60 customers, including the
NHS, serviced through its head office. It has an extensive network of 25
franchisees in the UK and operates across ten countries. Management accounts
for Sanondaf, to 30 September 2022 show revenue of £1,893,000 and profit
before tax of £518,000.
There has been a reduction in revenues in a post-COVID environment which was
exacerbated by Sanondaf's major customer going through a change of ownership
with this followed by industrial action, resulting in significantly reduced
revenues. We and the management team had anticipated an element of this
reduction in revenue due in a post-COVID environment, but anticipated this
would be more than matched by the opportunity in international master
franchise sales.
However, we have found these international sales lead times are extending,
again in part due to a post-COVID related malaise. We remain confident about
the growth prospectus for the international business in the medium-term, but
in the short-term these opportunities are yet to be realised, we are therefore
having constructive discussions with the vendors regarding the deferred
consideration.
In addition, Sanondaf has evolved its business model to include the sale of
machines and consumable supply direct to customers, including the NHS,
allowing Sanondaf to capture sales at a higher margin.
Unquoted investments
The unquoted portfolio continues, in the main, to be held either at cost, plus
accrued interest if applicable, or the valuation of the most recent investment
round. Both Axol Bioscience Ltd and Momentum Ltd have raised additional
capital. This is at the same valuation as the round in which IIG participated
and therefore there is no change in valuation. Three investments were made
during the year, Sanondaf, Ocutec Ltd and a follow-on investment into
Pneumowave Ltd. The follow-on investment in Pneumowave Ltd has resulted in an
uplift in valuation of £454,124. Further details of the companies in the
unquoted portfolio are contained at the end of this statement.
Listed portfolio at 30 September 2022
Valuation as at
Valuation as at
30 September 2022 30 September 2021 Unrealised loss
£ £ £
Evgen Pharma plc 65,625 126,955 (61,330)
Light Science Technologies Holdings plc 863,200 1,328,000 (464,000)
Microsaic Systems plc 88,400 500,000 (411,600)
Midatech Pharma plc 26,250 91,000 (64,750)
Polarean Imaging plc 175,000 429,166 (254,166)
Shield Therapeutics plc 75,000 325,078 (250,078)
Trellus Health plc 29,750 375,000 (345,250)
Yourgene Health plc 71,321 221,888 (150,567)
Closing fair value 1,394,546 3,397,087 (2,002,541)
The publicly traded portfolio has not performed well. As noted above we do not
perceive that any of our investments achieved excessive valuations, but have
been marked down indiscriminately in the post-COVID small cap healthcare sell
off. We believe volatility will be a feature in the small cap healthcare
sector and as quickly as companies de-rated there is the potential to
appreciate, particularly with good stock specific news such as FDA approvals
for Polarean Imaging plc, further licensing deals in other disease states for
Evgen plc, roll-out of innovative diagnostic tests in Yourgene plc and
customer wins with improved efficiency and cost savings through telemedicine
in Trellus Health plc. Light Science Technologies plc has made progress,
although there have been significant headwinds, as seen by their latest
trading update.
Financial performance
NAV per share has decreased by 10.6% from the previous year end. Net Assets
were £12,934,00, including investments of £11,160,000 and cash of
£1,553,000
There is net deficit income of £1,073,000, comprising unrealised losses of
£1,493,000, realisation of publicly traded companies of £76,000, interest
from the convertible loan notes in aggregate of £148,000 and management fees
received of £31,000. The administrative costs of the business were £494,000
for the year, which included one off costs of £94,000 in relation to the
acquisition of Touchless Innovation. Overall retained loss was £1,158,000.
Given the cash and liquid investments compared to the administrative costs,
the Company has adequate working capital for a number of years. The Board does
not propose to declare a dividend.
Change to investment policy
We are proposing, as part of the Notice of Annual General Meeting, at the end
of the report and accounts, to remove the investment restriction that no
investment or group of investments in the same company or group of companies
will represent more than 45% of NAV. We believe this change will allow the
Board more flexibility in generating shareholder returns.
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
Although COVID appears to be in the distant past, it highlights the need for
effective products and services in hygiene, sanitisation and hospital acquired
infection prevention sector. We perceive we have an opportunity to exploit
this need by building an infection prevention business on the foundation we
have in our investment in Sanondaf. This presents a real opportunity of
providing shareholders excellent returns in the medium term.
Julian Baines Robert Naylor
Chairman Chief Executive Officer
21 December 2022
Later stage investments
BioQ Pharma Incorporated ("BioQ") (www.bioqpharma.com
(http://www.bioqpharma.com/) )
Investment of US$1 million by way of unsecured convertible loan notes and
warrants, valued at cost plus accrued interest.
BioQ has raised more than $30 million in subscription for the CLN and is
looking to prepare for a fundraising in the Series E ordinary shares. A
further update is expected by the company before the calendar year end.
BioQ is a commercial-stage, medical device and pharmaceutical company,
addressing the infusible drugs market. BioQ's proprietary Invenious(TM)
platform comprises a "connect-and-go" drug-device system combination, which
can be utilised to improve the delivery of infusible medicines. BioQ's
platform includes a bespoke unit-dose delivery solution for infusible drugs,
whereby a diluent delivery system and administration line are combined in one
self-contained, ready-to-use presentation. The key benefits of the platform
include reduced cost and complexity compared to current infusion techniques.
Touchless Innovations Ltd ("Sanondaf") (www.sanondaf.co.uk
(http://www.sanondaf.co.uk/) )
Investment of £6.36 million to acquire the entire issued share capital, held
at fair value, for which cost is deemed the most appropriate basis of
measurement.
Sanondaf is a market-leading provider of specialist disinfection and
decontamination services operating in 10 countries and has 25 regional sites
in the UK. Treatments are non-corrosive, contain no toxic ingredients and
Sanondaf's application methods ensure they are not harmful to people, animals
or the environment. It is safe for use in all settings, including operating
theatres, critical care units, and is CASA (Civil Aviation Safety Authority)
approved. Sanondaf's disinfection formula has proven efficacy against
pathogens, included, viruses, mould, bacteria and fungi.
Series A and B investments
Axol Bioscience Ltd ("Axol") (www.axolbio.com (http://www.axolbio.com/) )
Investment of £249,092 in A ordinary shares, held at fair value, for which
cost is deemed the most appropriate basis of measurement. The company
undertook a fundraising in April 2022 at the same valuation as IIG's
investment.
Axol produces high quality human cell products, particularly in relation to
pluripotent stem cell and critical reagents such as media and growth
supplements, which are sold to medical research and drug discovery
organisations. Axol also provides contract research for example customising
cell lines for customers, such as reprogramming and differentiation. The
Chairman of Axol is Jonathan Milner, who was previously deputy chairman of
Abcam plc.
CardiNor AS ("CardiNor") (www.cardinor.com (http://www.cardinor.com/) )
Investment of £122,260 in ordinary shares, held at fair value, for which cost
is deemed the most appropriate basis of measurement.
CardiNor has made excellent progress particularly with the amount of money
raised, which includes:
· Elisa test CE marked with clear route to market in the Europe and
next generation magnetic test being developed.
· RuO in the US, but distribution deal done with IBL and talking to
Labcorp. Going for full FDA approval.
Valuation is 80 million NOK c.£7 million. CardiNor is a Norwegian biotech
company established in June 2015 to commercialise the development of
secretoneurin ("SN"), an important new biomarker for cardiovascular disease
("CVD"). SN is the only biomarker shown to be associated with biological
processes linked to cardiomyocyte handling. This unique biological function
explains why SN presents as an independent and strong predictor of mortality
in all major patient cohorts, including ventricular arrhythmia, acute heart
failure, acute respiratory failure patients with CVD and severe sepsis.
CardiNor has completed development of a research assay based on immunoassay
technology to measure SN in blood and the assay is under further clinical
development, allowing it to obtain a CE mark.
The Electrospinning Company Ltd ("TECL") (www.electrospinning.co.uk
(http://www.electrospinning.co.uk/) )
Investment of £500,000 in ordinary shares, held at fair value, for which cost
is deemed the most appropriate basis of measurement.
Held at cost, TECL is trading in line with management expectations. TECL has a
technology platform built around the process of electrospinning, a technique
for production of micro and nano-fibre biomaterials from a variety of natural
and synthetic polymers, and a suite of post-processing technologies to convert
the biomaterials into medical device components. The core business is the sale
of product development and manufacturing services to medical device companies.
TECL is also using its know-how to develop proprietary materials for targeted
out-licensing opportunities, aiming to capture more of the end-market value
created by its innovations and expertise.
Micrima Ltd ("Micrima") (www.micrima.com (http://www.micrima.com/) )
Investment of £200,000 by way of convertible loan note held at fair value,
for which cost is deemed the most appropriate basis of measurement.
Micrima is a commercial stage company which has developed a new imaging
method, the MARIA® system, based on radiofrequency technology to improve
early diagnosis of breast cancer. Micrima continues to make progress, but has
suffered some delays in its commercial launch due to not achieving the
requisite sensitivity.
Momentum Bioscience Ltd ("Momentum") (www.momentumbio.co.uk
(http://www.momentumbio.co.uk/) )
Investment of £125,000 in preferred A ordinary shares, held at fair value,
for which cost is deemed the most appropriate basis of measurement. Momentum
undertook an additional subscription in September 2022 at the same valuation
as IIG's investment.
Momentum is developing a revolutionary rapid diagnostic test for patients
suspected of sepsis, an infection of the blood stream resulting in symptoms
including a drop in a blood pressure, increase in heart rate and fever.
Momentum's SepsiSTAT® system enables reporting of the presence or absence and
'pan gram identification' of viable organisms in just two hours, helping
direct the right antimicrobials. The system also provides a pure concentrate
of growing organisms for further analysis. Faster testing in suspected sepsis
patients can reduce mortality, accelerate hospital discharge, lower hospital
costs, and reduce the incidence of antimicrobial resistance. SepsiSTAT® is a
diagnostic test that runs from a sample of whole blood before any culturing
steps are taken and is currently being studied in clinical practice with
highly encouraging early results indicating competitive sensitivity versus the
current standard of care. Over 120 million blood tests for sepsis are run
annually representing a market potential of over £1 billion.
Ocutec Ltd ("Ocutec") (www.ocutec.com (http://www.ocutec.com/) )
Investment of £250,000 in ordinary shares, held at fair value, for which cost
is deemed the most appropriate basis of measurement.
Ocutec has patented technology covering the formulation of novel contact lens
products, contact lens comfort solutions and injection moulding technology for
rapid manufacturing. Ocutec is based in Glasgow, and has been operating since
2006, having been spun out of the University of Strathclyde.
PneumoWave Ltd ("PneumoWave") (www.pneumowave.com (http://www.pneumowave.com/)
)
Investment of £904,124 in new ordinary shares, held at fair value, for which
last investment round is deemed the most appropriate basis of measurement.
IIG invested £100,000 by way of convertible loan notes which converts at a
15% discount to the Series A and £350,000 in the pre-series A funding round.
The Series A round has completed leading to an increase in valuation of
£454,124.
PneumoWave, which was incorporated in February 2018, is developing an
innovative remote respiratory monitoring platform comprising a small,
chest-worn biosensor and AI-driven data analysis/alerting software for the
early detection, prediction, and prevention of adverse events in respiratory
patients, both in hospitals and at home. In 2020, PneumoWave was awarded
Breakthrough Medical Device designation from the U.S. Food and Drug
Administration for the development of the device, which is designed to monitor
breathing in real-time to a clinical standard of care.
The specially designed wireless biosensor is one of the smallest available and
transmits data to the cloud using a data hub or smartphone, alerting the
patient, their household members, doctor, nurse, or emergency services where
life-threatening changes occur. PneumoWave's technology will be able to
accurately monitor large numbers of patients in any location at any time.
Intuitive Investments Group Plc
Statement of Comprehensive Income
For the year ended 30 September 2022
Year ended Period ended
30 September 30 September
2022 2021
£ £
Investment income
Interest Income realised 55,181 -
Interest income unrealised 92,841 110,344
Unrealised gains/(losses) due to FX 165,831 -
Gains on realised investments 75,831 89,876
Gains/(losses) on Investments at fair value (1,493,204) 821,214
Management Fees 30,642 34,084
─────── ───────
(1,072,878) 1,055,518
Total administrative expenses (494,291) (324,153)
─────── ───────
Profit/(Loss) before tax (1,567,169) 731,365
Corporation tax 408,686 (170,447)
─────── ───────
Profit/(loss) for the year (1,158,483) 560,918
Other comprehensive income - -
─────── ───────
Total comprehensive income for the year attributable to owners of the company (1,158,483) 560,918
═══════ ═══════
Earnings per share from continued operations
Basic profit/(loss) per share - pence (2.01)p 2.22p
Diluted profit/(loss) per share - pence (2.01)p 2.22p
═══════ ═══════
Intuitive Investments Group Plc
Statement of Financial Position
As at 30 September 2022
As at As at
30 September 30 September
2022 2021
ASSETS £ £
Non-current assets
Investments 11,159,530 5,737,353
Deferred tax asset 238,239 10,221
─────── ───────
11,397,769 5,747,574
─────── ───────
CURRENT ASSETS
Trade and other receivables 23,791 42,345
Cash and cash equivalents 1,553,100 2,566,793
─────── ───────
1,576,891 2,609,138
─────── ───────
TOTAL ASSETS 12,974,660 8,356,712
═══════ ═══════
EQUITY
Shareholders' Equity
Called up share capital 720,646 404,418
Deferred shares 47,500 47,500
Share premium 12,619,428 6,985,736
Other reserves 144,399 144,399
Retained Earnings (597,565) 560,918
─────── ───────
Total Equity 12,934,408 8,142,971
─────── ───────
LIABILITIES
Current liabilities
Trade and other payables 40,252 33,073
Non current liabilities
Deferred tax liabilities - 180,668
─────── ───────
40,252 213,741
─────── ───────
─────── ───────
TOTAL EQUITY AND LIABILITIES 12,974,660 8,356,712
═══════ ═══════
Net asset value per share 0.1800 0.2014
Intuitive Investments Group Plc
Statement of Changes in Equity
As at 30 September 2022
Called up Deferred
Share capital Shares Share Other reserves Retained Earnings Total
Premium equity
£ £ £ £ £ £
Balance at 11 June 2020 - - - - - -
Profit for the period - - - - 560,918 560,918
Issue of shares during the period 451,918 - 7,130,135 - - 7,582,053
Subdivision of share capital (47,500) 47,500 - - - -
Warrants issued on admission - - (144,399) 144,399 - -
────── ────── ────── ────── ─────── ───────
Balance at 30 September 2021 404,418 47,500 6,985,736 144,399 560,918 8,142,971
Loss for the year - - - - (1,158,483) (1,158,483)
Issue of shares during the year 316,228 - 5,633,692 - - 5,949,920
────── ────── ────── ────── ─────── ───────
Balance at 30 September 2022 720,646 47,500 12,619,428 144,399 (597,565) 12,934,408
══════ ══════ ══════ ══════ ══════ ══════
Intuitive Investments Group Plc
Statement of Cash Flows
For the year ended 30 September 2022
Year ended Period ended
30 September 2022 30 September 2021
£ £
(Loss)/Profit before tax from continuing operations (1,567,169) 731,365
Adjusted by:
Interest income (92,841) (110,344)
Gain on disposal (73,831) (89,876)
Fair value movement 1,325,371 (821,214)
────── ──────
(408,470) (290,069)
Changes in working capital
(lncrease)/decrease in trade and other receivables 18,554 (42,345)
lncrease/(decrease) in trade and other payables 7,180 33,073
────── ──────
Cash generated from continuing operations (382,736) (299,341)
────── ──────
Net cashflow from operating activities (382,736) (299,341)
Cash flows from investing activities
Purchase of investments (1,449,805) (5,055,770)
Proceeds from sale of investments 211,847 339,851
────── ──────
Net cash flows from investing activities (1,237,958) (4,715,919)
Cash flows from financing activities
Net proceeds from share issues 607,001 7,582,053
────── ──────
Net cash inflow from financing activities 607,001 7,582,053
────── ──────
Net increase/(decrease) in cash and equivalents (1,013,693) 2,566,793
Cash and cash equivalents at beginning of period 2,566,793 -
────── ──────
Cash and cash equivalents at end of period 1,553,100 2,566,793
══════ ══════
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