REG - IP Group PLC - Final Results <Origin Href="QuoteRef">IPO.L</Origin> - Part 4
01/03/2016 07:12
- Part 4: For the preceding part double click ID:nRSA5517Qc
the Group's capital markets team and its brokers.Six-monthly budget and
capital allocation process and monitoring against agreed budget.Regular
oversight of upcoming capital requirements of portfolio from both the
Group and 3rd parties.
6)
There may be changes to, impacts from, or failure to comply with, legislation, government policy and regulation.There may be unforeseen changes in, or impacts from, government policy, regulation or legislation (including taxation legislation). This could include changes to funding levels or to the terms upon which public monies are made available to universities and research institutions and the ownership of any resulting intellectual property. Changes could result in universities and researchers no longer being able to own, exploit or protect intellectual property on attractive terms.Changes to tax legislation or the nature of the Group's activities, in particular in relation to the substantial shareholder exemption, may adversely affect the Group's tax position and accordingly its value and operations.Regulatory changes or breaches could ultimately lead to withdrawal of regulatory permissions for the Group's FCA-authorised subsidiary resulting in loss of fund management contracts, reputational damage or fines.A material adverse event could occur during an MBS clinical trial.A data security or cyber breach could occur or the Group could otherwise fail to adhere to data protection regulations. University partners are incentivised to protect their IP for exploitation Unchanged Ongoing focus on regulatory compliance including third party reviews.UK and US Governments have emphasised their ongoing support for scientific research with UK funding ring-fenced to 2021.Specialist therapeutics advisory panel continually consulted.Increased focus on cyber security including further development of the Group's controls using the UK Government's 'ten steps' approach and review of the Cyber Essentials regime and how this applies to the Group. Create, Deliver Total equity ("net assets").
as the partnership agreements share returns between universities,
academic founders and the Group. The Group utilises professional advisers
as appropriate to support its monitoring of, and response to changes in,
tax, insurance or other legislation. The Group has internal policies and
procedures to ensure its compliance with applicable FCA regulations and
these are subject to external review.MBS utilises an experienced
specialist advisory panel covering all aspects of clinical trial design
and delivery.The Group maintains D&O, professional indemnity and clinical
trial insurance policies.The Group reviews its data and cyber-security
processes with its external outsourced IT provider and applies the UK
Government's 'ten steps' framework.
There may be changes to, impacts from, or failure to comply with, legislation, government policy and regulation.There may
be unforeseen changes in, or impacts from, government policy, regulation or legislation (including taxation legislation).
This could include changes to funding levels or to the terms upon which public monies are made available to universities
and research institutions and the ownership of any resulting intellectual property.
Changes could result in universities and researchers no longer being able to own, exploit or protect intellectual property
on attractive terms.Changes to tax legislation or the nature of the Group's activities, in particular in relation to the
substantial shareholder exemption, may adversely affect the Group's tax position and accordingly its value and
operations.Regulatory changes or breaches could ultimately lead to withdrawal of regulatory permissions for the Group's
FCA-authorised subsidiary resulting in loss of fund management contracts, reputational damage or fines.A material adverse
event could occur during an MBS clinical trial.A data security or cyber breach could occur or the Group could otherwise
fail to adhere to data protection regulations.
University partners are incentivised to protect their IP for exploitation as the partnership agreements share returns
between universities, academic founders and the Group. The Group utilises professional advisers as appropriate to support
its monitoring of, and response to changes in, tax, insurance or other legislation. The Group has internal policies and
procedures to ensure its compliance with applicable FCA regulations and these are subject to external review.MBS utilises
an experienced specialist advisory panel covering all aspects of clinical trial design and delivery.The Group maintains
D&O, professional indemnity and clinical trial insurance policies.The Group reviews its data and cyber-security processes
with its external outsourced IT provider and applies the UK Government's 'ten steps' framework.
Unchanged
Ongoing focus on regulatory compliance including third party reviews.UK and US Governments have emphasised their ongoing
support for scientific research with UK funding ring-fenced to 2021.Specialist therapeutics advisory panel continually
consulted.Increased focus on cyber security including further development of the Group's controls using the UK Government's
'ten steps' approach and review of the Cyber Essentials regime and how this applies to the Group.
Create, Deliver
Total equity ("net assets").
Board approval
The Strategic Report as set out above has been approved by the Board.
ON BEHALF OF THE BOARD
Mike Humphrey
Chairman
29 February 2016
Consolidated statement of comprehensive income
For the year ended 31 December 2015
Note 2015£m 2014£m
Portfolio return and revenue
Change in fair value of equity and debt investments 14 86.4 20.7
Profit/(loss) on disposal of equity investments (0.2) 1.6
Change in fair value of limited and limited liability partnership interests 22 0.4 0.5
Other portfolio income 0.2 0.2
Licensing income 8.1 3.0
Revenue from services and other income 3.4 2.4
98.3 28.4
Administrative expenses
Research and development costs (2.0) (1.5)
Share-based payment charge 21 (1.5) (0.9)
Change in fair value of Oxford Equity Rights asset (1.3) (1.8)
Amortisation of intangible assets (6.0) (4.9)
Acquisition costs - (1.1)
Other administrative expenses (13.7) (9.3)
(24.5) (19.5)
Operating profit 7 73.8 8.9
Finance income - interest receivable 1.3 0.6
Profit before taxation 75.1 9.5
Taxation 9 - -
Profit for the year 75.1 9.5
Other comprehensive income
Exchange differences on translating foreign operations 0.1 -
Total comprehensive income for the period 75.2 9.5
Attributable to:
Equity holders of the parent 73.9 9.1
Non-controlling interest 1.3 0.4
75.2 9.5
Earnings per share
Basic (p) 10 13.66 1.97
Diluted (p) 10 13.63 1.96
Consolidated statement of financial position
As at 31 December 2015
Note 2015£m 2014£m
ASSETS
Non-current assets
Intangible assets:
Goodwill 11 57.1 57.1
Acquired intangible assets 12 10.5 16.5
Property, plant and equipment 0.2 0.2
Oxford Equity Rights asset and related contract costs - 1.3
Portfolio:
Equity investments 14 543.1 345.9
Debt investments 14 9.1 4.0
Limited and limited liability partnership interests 22 4.4 4.6
Other financial asset - -
Contingent value rights 16 1.4 1.4
Total non-current assets 625.8 431.0
Current assets
Trade and other receivables 15 3.2 4.8
Deposits 70.0 30.0
Cash and cash equivalents 108.8 67.3
Total current assets 182.0 102.1
Total assets 807.8 533.1
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 19 11.3 9.6
Share premium account 504.7 327.6
Merger reserve 12.8 12.8
Retained earnings 251.6 176.2
Total equity attributable to equity holders 780.4 526.2
Non-controlling interest 1.5 -
Total equity 781.9 526.2
Current liabilities
Trade and other payables 17 3.9 2.1
Non-current liabilities
EIB debt facility 18 14.9 -
Loans from limited partners of consolidated funds 18 7.1 4.5
Contingent loans from university partners - 0.3
Total equity and liabilities 807.8 533.1
Registered number: 4204490
Approved by the Board of Directors and authorised for issue on 29 February 2016 and signed on its behalf by:
Greg Smith
Chief Financial Officer
Alan Aubrey
Chief Executive Officer
Consolidated statement of cash flows
For the year ended 31 December 2015
Note 2015£m 2014£m
Operating activities
Profit before taxation 75.2 9.5
Adjusted for:
Finance income - interest receivable (1.3) (0.6)
Change in fair value of equity and debt investments 14 (86.4) (20.7)
Change in fair value of limited and limited liability partnership interests (0.4) (0.5)
Loss/(profit) on disposal of equity investments 0.2 (1.6)
Depreciation of property, plant and equipment 0.1 0.1
Amortisation of intangible non-current assets 12 6.0 4.9
Change in fair value of Oxford equity rights asset 1.3 1.8
Fees settled in the form of equity (0.7) -
Share-based payment charge 1.5 0.9
Other portfolio income classified as investing activities cash flows (0.1) (0.2)
Changes in working capital
Decrease/(increase) in trade and other receivables 2.2 (3.2)
Increase/(decrease) in trade and other payables 1.9 (0.5)
Increase in non-current liabilities 2.2 3.2
Net cash flow to deposits (40.0) (25.0)
Other operating cash flows
Interest received 0.7 0.5
Net cash outflow from operating activities (37.6) (31.4)
Investing activities
Purchase of property, plant and equipment - (0.1)
Purchase of equity and debt investments 14 (115.9) (46.8)
Investment in limited and limited liability partnerships - (0.3)
Acquisition of subsidiary undertakings - -
Proceeds from sale of equity investments 0.6 9.7
Distributions from limited and limited liability partnerships 0.6 1.1
Proceeds from other financial asset - 0.8
Other portfolio income received 0.1 0.2
Net cash outflow from investing activities (114.6) (35.4)
Financing activities
Proceeds from the issue of share capital 178.8 97.4
Proceeds from drawdown of EIB facility 18 14.9 -
Proceeds from acquisition of subsidiary - 17.6
Net cash inflow from financing activities 193.7 115.0
Net increase in cash and cash equivalents 41.5 48.2
Cash and cash equivalents at the beginning of the year 67.3 19.1
Cash and cash equivalents at the end of the year 108.8 67.3
Consolidated statement of changes in equity
For the year ended 31 December 2015
Attributable to equity holders of the parent
Share capital£m Share premium(i)£m Merger reserve(ii)£m Retained earnings(iii)£m Total£m Non-controllinginterest(iv)£m Total equity£m
At 1 January 2014 7.5 150.4 12.8 166.3 337.0 (0.4) 336.6
Comprehensive income - - - 9.1 9.1 0.4 9.5
Issue of equity 2.0 177.2 - - 179.2 - 179.2
Issue of shares in connection with LTIP 0.1 - - (0.1) - - -
Equity settled share based payments - - - 0.9 0.9 - 0.9
At 1 January 2015 9.6 327.6 12.8 176.2 526.2 - 526.2
Comprehensive income - - - 73.9 73.9 1.3 75.2
Issue of equity 1.7 177.1 - - 178.8 0.2 179.0
Issue of shares in connection with LTIP - - - - - - -
Equity-settled share-based payments - - - 1.5 1.5 - 1.5
At 31 December 2015 11.3 504.7 12.8 251.6 780.4 1.5 781.9
i. Share premium - Amount subscribed for share capital in excess of nominal value, net of directly attributable issue
costs.
ii. Merger reserve - Amount subscribed for share capital in excess of nominal value in relation to the qualifying
acquisition of subsidiary undertakings.
iii. Retained earnings - Cumulative net gains and losses recognised in the consolidated statement of comprehensive income
net of associated share-based payments credits.
iv. Non-controlling interest - Share of profits attributable to the Limited Partners of IP Venture Fund II LP - a
consolidated fund which was created in May 2013, as well as the equity invested in partially owned subsidiaries that is
held by third parties.
Notes to the consolidated financial statements
1. Accounting Policies
Basis of preparation
The Annual Report and Accounts of IP Group plc ("IP Group" or the "Company") and its subsidiary companies (together, the
"Group") are for the year ended 31 December 2015. The principal accounting policies adopted in the preparation of the
financial statements are set out below. The policies have been consistently applied to all the years presented, unless
otherwise stated. These financial statements have been prepared in accordance with International Financial Reporting
Standards, International Accounting Standards and Interpretations (collectively "IFRS") issued by the International
Accounting Standards Board ("IASB") as adopted by the European Union ("adopted IFRSs").
The preparation of financial statements in compliance with IFRS requires the use of certain critical accounting estimates.
It also requires Group management to exercise judgement in the most appropriate selection of the Group's accounting
policies. The areas where significant judgements and estimates have been made in preparing the financial statements and
their effect are disclosed in note 3.
The financial statements are prepared on a going concern basis, as the directors are satisfied that the Group and parent
Company have the resources to continue in business for the foreseeable future. In making this assessment, the directors
have considered a wide range of information relating to present and future conditions, including future projections of
profitability, cash flows and capital resources.
Changes in accounting policies
(i) New standards, interpretations and amendments effective from 1 January 2015
No other new standards, interpretations and amendments effective for the first time from 1 January 2015 have had a material
effect on the Group's financial statements.
(ii) New standards, interpretations and amendments not yet effective
The following new standards, which have not been applied in these financial statements, will or may have an effect on the
Group's future financial statements:
IFRS 15 Revenue from Contracts with Customers: IFRS 15 was issued on 28 May 2014 and provides a single global standard on
revenue recognition which aligns the IFRS and US GAAP guidance. It replaces existing revenue recognition guidance,
including IAS 18 revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes. The Group has assessed
the potential impact on its consolidated financial statements resulting from the application of IFRS 15 and does not
foresee any material effect when the Standard is applied. While early adoption is permitted, IFRS 15 has an effective date
of 1 January 2018 with the year ending 31 December 2018 being the first annual financial statements to which the standard
applies.
IFRS 9 Financial Instruments: IFRS 9 will eventually replace IAS 39 in its entirety. The process has been divided into
three main components, being classification and measurement; impairment; and hedge accounting. The Group provisionally
assesses the potential effect to be immaterial given the majority of its financial assets are currently held at fair value
through profit or loss. The current proposed effective date is 1 January 2018.
None of the other new standards, interpretations and amendments not yet effective are expected to have a material effect on
the Group's future financial statements.
Basis of consolidation
(i) Business Combinations
The Group accounts for business combinations using the acquisition method from the date that control is transferred to the
Group (see (ii) Subsidiaries below). Both the identifiable net assets and the consideration transferred in the acquisition
are measured at fair value at the date of acquisition and transaction costs are expensed as incurred. Goodwill arising on
acquisitions is tested annually for impairment. In instances where the Group owns a non-controlling stake prior to
acquisition the step acquisition method is applied, and any gain or losses on the fair value of the pre-acquisition holding
is recognised in the consolidated statement of comprehensive income.
(ii) Subsidiaries
Where the Group has control over an entity, it is classified as a subsidiary. As per IFRS 10, an entity is classed as under
the control of the Group when all three of the following elements are present: power over the entity; exposure to variable
returns from the entity; and the ability of the Group to use its power to affect those variable returns. Control is
reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.
In situations where the Company has the practical ability to direct the relevant activities of the investee without holding
the majority of the voting rights, it is considered that de facto control exists. In determining whether de facto control
exists the Group considers all relevant facts and circumstances, including:
· The size of the Company's voting rights relative to both the size and dispersion of other parties who hold voting
rights;
· Substantive potential voting rights held by the company and by other parties;
· Other contractual arrangements; and
· Historic patterns in voting attendance.
The consolidated financial statements present the results of the Company and its subsidiaries as if they formed a single
entity. Intercompany transactions and balances between Group companies are therefore eliminated in full. The consolidated
financial statements incorporate the results of business combinations using the acquisition method. In the statement of
financial position, the acquiree's identifiable assets and liabilities are initially recognised at their fair values at the
acquisition date. Contingent liabilities dependent on the disposed value of an associated investment are only recognised
when the fair value is above the associated threshold. The results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is obtained. They are consolidated until the date on which
control ceases.
(iii) Associates
Associates are entities over which the Group has significant influence, but does not control, generally accompanied by a
shareholding of between 20% and 50% of the voting rights.
No associates are presented on the consolidated statement of financial position as the Group elects to hold such
investments at fair value in the consolidated statement of financial position. This
- More to follow, for following part double click ID:nRSA5517QeRecent news on IP
See all newsREG - IP Group PLC - Transaction in Own Shares
AnnouncementREG - IP Group PLC - Transaction in Own Shares
AnnouncementREG - IP Group PLC - Transaction in Own Shares
AnnouncementREG - IP Group PLC - Transaction in Own Shares
AnnouncementREG - IP Group PLC - Transaction in Own Shares
Announcement