REG - IP Group PLC - Final Results <Origin Href="QuoteRef">IPO.L</Origin> - Part 3
01/03/2016 07:12
- Part 3: For the preceding part double click ID:nRSA5517Qb
company failure or sector demise.The Group maintains significant cash
balances and seeks to employ a capital efficient process deploying low
levels of initial capital to enable identification and mitigation of
potential failures at the earliest possible stage.
3)
Universities or other research intensive institutions may terminate their partnerships or other collaborative relationships with the Group.The Group's business, results of operations and prospects are at least partially dependent on competitive advantage gained from access to leading scientific research through partnerships and other collaborative arrangements with research intensive institutions and commercial partners such as Oxford Sciences Innovation plc, Technikos LLP and Cambridge Innovation Capital. The Group may be unable to recreate these elements of its competitive advantage in other geographies in which it may seek to operate (such as the US). Termination or non-renewal of arrangements through failure to perform obligations may result in the loss of exclusive rights. The loss of exclusive rights may limit the Group's ability to secure attractive IP opportunities to commercialise. This could potentially have a material adverse effect on the Group's long-term business, results of operations, performance and prospects. With several new entrants to our market, this may reduce our opportunities to create new spin-out businesses. Dedicated new business & partnerships team to service existing Unchanged New business and Partnerships team established to service existing partnerships and source new opportunities.Completed investments with all three US Ivy League partner universities.Oxford Chemistry contract expired in November 2015 but broadened exposure to Oxford through the acquisition of a strategic shareholding in Oxford Sciences Innovation plc. Group re-branding, website and communications updated during the year to increase awareness of the Group. Create Number of new portfolio companies.
partnerships and source new opportunities.The Group continues to consider
and, where appropriate, enter into new and innovative partnerships and
collaborations with research institutions.The Group has been able to
source opportunities through non-exclusive relationships and other
sources. Members of the Group's senior team work closely with partner
institutions to ensure that each commercial relationship is mutually
beneficial and productive.The Group's track record in IP
commercialisation may make the Group a partner of choice for other
institutions, acting as a barrier to entry to competitors.
4)
The Group may lose key personnel or fail to attract and integrate new personnel.The industry in which the Group operates is a specialised area and the Group requires highly qualified and experienced employees. There is a risk that the Group's employees could be approached and solicited by competitors or other technology-based companies and organisations, or could otherwise choose to leave the Group. Given the relatively small size of the Group, its operations are reliant on a small number of key individuals. Scaling the team, particularly into foreign jurisdictions such as the US, presents an additional potential risk. Loss of key executives and employees of the Group or an inability to attract, retain and integrate appropriately skilled and experienced staff could have an adverse effect on the Group's competitive advantage, business, financial condition, operational results and/or future prospects. Senior team succession plans are in place and updated regularly.The Unchanged The Group continues to dedicate resources to remuneration and incentivisation.Staff attrition remained low and the Group recruited seven new members to the team. Approximately 40% of staff have been with the Company for at least five years.Deepening of sector expertise and increased autonomy through divisional approach.Optimal organisation planning and structuring ongoing, including the recruitment of a full-time HR director during the year. Develop, Deliver Total equity ("net assets")Number of new portfolio companies
Group's corporate culture and values are well-articulated and
consistently promoted.The Group carries out regular market comparisons
for staff and executive remuneration and seeks to offer a balanced
incentive package comprising a mix of salary, benefits, performance-based
long-term incentives and benefits such as flexible working and salary
sacrifice arrangements.The Group encourages staff development and
inclusion through coaching and mentoring and carries out regular
objective setting and appraisal.
5)
Macro-economic conditions may negatively impact the Group's ability to achieve its strategic objectives.Adverse macroeconomic conditions could reduce the opportunity to deploy capital into opportunities or may limit the ability of such portfolio companies to raise third party funds, develop profitable businesses or achieve increases in value or exits.Political uncertainty, including impacts from Brexit or similar scenarios, could have a number of potential impacts including changes to the labour market available to the Group for recruitment or regulatory environment in which the Group operates. The UK's recession has had (and may continue to have) an adverse effect on trading conditions and availability of capital in the UK, particularly for smaller businesses.The success of those portfolio companies which require significant external funding may be influenced by the market's appetite for investment in early stage companies, which may not be sufficient.A significant proportion of the Group's portfolio value is held in companies quoted on the AIM market and decreases in values to this market could result in a material fair value impact to the portfolio as a whole. Management team receives regular capital market and economic updates from Increase Macroeconomic and geopolitical conditions remain uncertain in the UK, Europe and the rest of the world. Post year end bear market performance in the UK and numerous other stock exchanges have heightened concern. This has caused a flight to historically safe Primary drivers for this are a slowdown in Chinese economic growth and low commodity prices. Political stability in the UK has increase since the 2015 elections. However, this is expected to become more uncertain as we near the 2017 referendum over Britain's EU membership. Develop, Deliver Change in fair value of equity and debt investmentsTotal equity ("net assets").Profit/loss attributable to equity holders.
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