REG - IP Group PLC - Half-year Report <Origin Href="QuoteRef">IPO.L</Origin> - Part 2
18/07/2017 07:07
- Part 2: For the preceding part double click ID:nRSR3123La
(0.4) (1.0)
Carried interest plan charge (2.7) - -
Share-based payment charge (0.7) (0.4) (1.5)
Amortisation of intangible assets 6 (2.2) (2.8) (5.6)
Acquisition costs (1.0) - (0.4)
Other administrative expenses (8.8) (6.6) (14.5)
(16.3) (10.2) (23.0)
Operating profit/(loss) 18.2 (34.3) (15.4)
Finance income - interest receivable 0.4 0.6 1.1
Finance income - interest payable (0.2) (0.2) (0.5)
Profit/(loss) before taxation 18.4 (33.9) (14.8)
Taxation - - -
Profit/(loss) for the period 18.4 (33.9) (14.8)
Other comprehensive income
Exchange differences on translating foreign operations - 0.1 0.1
Total comprehensive income for the period 18.4 (33.8) (14.7)
Attributable to:
Equity holders of the parent 14.9 (33.4) (13.5)
Non-controlling interest 3.5 (0.4) (1.2)
18.4 (33.8) (14.7)
Earnings per share
Basic (p) 2 2.56 (5.92) (2.39)
Diluted (p) 2 2.56 (5.92) (2.39)
Condensed consolidated statement of financial position
As at 30 June 2017
ASSETS
Non-current assets
Intangible assets:
Goodwill 7 72.6 57.1 57.1
Acquired intangible asset 6 5.0 7.9 5.1
Property, plant and equipment 1.6 0.2 0.2
Portfolio:
Equity investments 3 649.9 516.6 594.9
Debt investments 3 13.1 9.1 19.1
Limited and limited liability partnership interests 4.4 4.3 4.2
Contingent value rights - 1.4 -
Total non-current assets 746.6 596.6 680.6
Current assets
Trade and other receivables 5.4 2.2 2.6
Deposits 85.0 25.0 -
Cash and cash equivalents 178.1 149.7 112.3
Total current assets 268.5 176.9 114.9
Total assets 1,015.1 773.5 795.5
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Called up share capital 13.9 11.3 11.3
Share premium account 682.4 504.7 504.7
Merger reserve 12.8 12.8 12.8
Retained earnings 255.2 218.6 239.6
Total equity attributable to equity holders 964.3 747.4 768.4
Non-controlling interest 3.8 1.1 0.3
Total equity 968.1 748.5 768.7
Current liabilities
Trade and other payables 11.3 2.5 2.1
Non-current liabilities
EIB debt facility 14.9 14.9 14.9
Carried interest plan liability 2.7 - -
Loans from limited partners of consolidated funds 12.7 7.6 9.8
Deferred and contingent consideration payable on acquisition 5.4 - -
Total equity and liabilities 1,015.1 773.5 795.5
Total equity and liabilities
1,015.1
773.5
795.5
Condensed consolidated statement of cash flows
For the six months ended 30 June 2017
Operating activities
Operating profit/(loss) 18.2 (34.3) (15.4)
Adjusted for:
Change in fair value of equity and debt investments (28.5) 24.5 (7.0)
Change in fair value of limited and limited liability partnership interests (0.2) 0.2 0.3
Change in fair value of contingent value right - - 1.4
Gain/(loss) on disposal of equity investments (0.2) 0.4 0.5
Depreciation of property, plant and equipment 0.1 - 0.1
Long term incentive carry scheme plan charge 2.7 - -
Amortisation of intangible non-current assets 2.2 2.8 5.6
Fees settled in the form of equity (0.4) - (0.4)
Share-based payment charge 0.7 0.4 1.5
Changes in working capital:
(Increase)/decrease in trade and other receivables (2.6) 0.7 0.2
Increase/(decrease) in trade and other payables 5.1 (1.6) (1.8)
Increase in non-current liabilities - 0.5 2.7
Net cash flow (to)/from deposits (85.0) 45.0 70.0
Other operating cash flows:
Net interest received - 0.6 0.9
Net cash (outflow)/inflow from operating activities (87.9) 39.2 58.6
Investing activities
Purchase of property, plant and equipment (1.6) - (0.1)
Purchase of equity and debt investments (20.1) (12.8) (69.7)
Acquisition of subsidiary undertaking (5.2) - -
Investment in limited and limited liability partnerships - (0.1) (0.1)
Proceeds from sale of equity investments 0.3 14.5 14.7
Net cash (outflow)/inflow from investing activities (26.6) 1.6 (55.2)
Financing activities
Proceeds from the issue of share capital 180.3 - -
Net cash inflow from financing activities 180.3 - -
Net increase in cash and cash equivalents 65.8 40.8 3.4
Cash and cash equivalents at the beginning of the period 112.3 108.8 108.8
Effect of foreign exchange rate changes - 0.1 0.1
Cash and cash equivalents at the end of the period 178.1 149.7 112.3
Cash and cash equivalents at the end of the period
178.1
149.7
112.3
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2017
At 31 December 2015 (audited) 11.3 504.7 12.8 251.6 780.4 1.5 781.9
Share-based payments - - - 0.4 0.4 - 0.4
Comprehensive income - - - (33.4) (33.4) (0.4) (33.8)
At 30 June 2016 (unaudited) 11.3 504.7 12.8 218.6 747.4 1.1 748.5
Share-based payment charge - - - 1.1 1.1 - 1.1
Comprehensive income - - - 19.9 19.9 (0.8) 19.1
At 31 December 2016 (audited) 11.3 504.7 12.8 239.6 768.4 0.3 768.7
Issue of equity 2.6 177.7 - - 180.3 - 180.3
Share-based payment charge - - - 0.7 0.7 - 0.7
Comprehensive income - - - 14.9 14.9 3.5 18.4
At 30 June 2017 (audited) 13.9 682.4 12.8 255.2 964.3 3.8 968.1
14.9
3.5
18.4
At 30 June 2017 (audited)
13.9
682.4
12.8
255.2
964.3
3.8
968.1
Notes to the half-yearly condensed set of financial statements
1. Operating segments
For each of the periods referenced below, the Group's revenue and profit/loss
before taxation were derived almost entirely from its principal activities
within the UK. Though the Group has initiated operations in the US, the
associated revenues and costs are currently immaterial and accordingly, no
additional geographical disclosures are given. For management reporting
purposes, the Group is currently organised into three operating segments: (i)
the commercialisation of intellectual property via the formation of long-term
partner relationships with universities; (ii) the management of EIS and
venture funds focusing on early-stage UK technology companies; and (iii) the
in-licensing of drugable intellectual property from research intensive
institutions.
STATEMENT OF COMPREHENSIVE INCOME
Portfolio return and revenue
Change in fair value of equity and debt investments 28.5 - - 28.5
Gain on disposal of equity investments 0.2 - - 0.2
Change in fair value of limited and limited liability partnership investments 0.2 - - 0.2
Licensing income - - 3.0 3.0
Revenue from services and other income 0.1 - - 0.1
Revenue from fund management services - 2.5 - 2.5
Amortisation of intangible assets (2.2) - - (2.2)
Carried interest plan charge (2.7) - - (2.7)
Acquisition costs (1.0) - - (1.0)
Administrative expenses (8.5) (1.0) (0.9) (10.4)
Operating profit 14.6 1.5 2.1 18.2
Net finance income 0.2 - - 0.2
Profit before taxation 14.8 1.5 2.1 18.4
Taxation - - - -
Profit for the period 14.8 1.5 2.1 18.4
Exchange differences on translating foreign operations - - - -
STATEMENT OF FINANCIAL POSITION
Assets 990.7 15.6 8.8 1,015.1
Liabilities (37.3) (0.4) (9.3) (47.0)
Net assets 953.4 15.2 (0.5) 968.1
Other segment items
Capital expenditure (1.6) - - (1.6)
Depreciation (0.1) - - (0.1)
Depreciation
(0.1)
-
-
(0.1)
STATEMENT OF COMPREHENSIVE INCOME
Portfolio return and revenue
Change in fair value of equity and debt investments (24.5) - - (24.5)
Loss on disposal of equity investments (0.4) - - (0.4)
Change in fair value of limited and limited liability partnership investments (0.2) - - (0.2)
Other portfolio income - - - -
Licensing income 0.1 - - 0.1
Revenue from services and other income 0.4 - - 0.4
Revenue from fund management services - 0.5 - 0.5
Change in fair value of Oxford Equity Rights asset - - - -
Amortisation of intangible assets (2.8) - - (2.8)
Administrative expenses (5.7) (1.0) (0.7) (7.4)
Operating profit (33.1) (0.5) (0.7) (34.3)
Net finance income 0.4 - - 0.4
Profit before taxation (32.7) (0.5) (0.7) (33.9)
Taxation - - - -
Loss for the period (32.7) (0.5) (0.7) (33.9)
Exchange differences on translating foreign operations 0.1 - - 0.1
STATEMENT OF FINANCIAL POSITION
Assets 755.3 11.5 6.7 773.5
Liabilities (24.9) (0.1) - (25.0)
Net assets 730.4 11.4 6.7 748.5
Other segment items
Capital expenditure - - - -
Depreciation - - - -
Depreciation
-
-
-
-
Year ended 31 December 2016 (audited) University partnership business £m Venture capital fund management £m In-licensing activity £m Consolidated £m
STATEMENT OF COMPREHENSIVE INCOME
Portfolio return and revenue
Change in fair value of equity and debt investments 7.0 - - 7.0
Loss on disposal of equity investments (0.5) - - (0.5)
Change in fair value of limited and limited liability partnership interests (0.3) - - (0.3)
Change in value of contingent value right (1.4) - - (1.4)
Licensing income 0.2 - - 0.2
Revenue from services and other income 0.8 0.9 - 1.7
Revenue from fund management services - 0.9 - 0.9
Amortisation of intangible assets (5.6) - - (5.6)
Acquisition costs (0.4) - - (0.4)
Administrative expenses (14.9) (0.7) (1.4) (17.0)
Operating loss (15.1) 1.1 (1.4) (15.4)
Finance income - interest receivable 0.6 - - 0.6
Loss before taxation (14.5) 1.1 (1.4) (14.8)
Taxation - - - -
Loss for the year (14.5) 1.1 (1.4) (14.8)
STATEMENT OF FINANCIAL POSITION
Assets 778.4 10.9 6.2 795.5
Liabilities (26.5) (0.1) (0.2) (26.8)
Net assets 751.9 10.8 6.0 768.7
Other segment items
Capital expenditure 0.1 - - 0.1
Depreciation (0.1) - - (0.1)
2. Earnings per share
Earnings for the purposes of basic and dilutive earnings per share 14.9 (33.4) (13.5)
Earnings for the purposes of basic and dilutive earnings per share
14.9
(33.4)
(13.5)
Weighted average number of ordinary shares forthe purposes of basic earnings per share 581,197,034 564,897,747 565,056,171
Effect of dilutive potential ordinary shares:Options or contingently issuable shares 1,022,809 - -
Weighted average number of ordinary shares forthe purposes of diluted earnings per share 582,219,843 564,897,747 565,056,171
Weighted average number of ordinary shares forthe purposes of diluted earnings
per share
582,219,843
564,897,747
565,056,171
Potentially dilutive ordinary shares include contingently issuable shares
arising under the Group's LTIP arrangements, and options issued as part of the
Deferred Bonus Share Plan (for annual bonuses deferred under the terms of the
Group's annual incentive scheme).
3. Investment portfolio
The accounting policies in regards to valuations in these half-yearly results
are the same as those applied by the Group in its audited consolidated
financial statements for the year ended 31 December 2016 and which will form
the basis of the 2017 Annual Report and Accounts. Investments are designated
as fair value through profit or loss and are initially recognised at fair
value and any gains or losses arising from subsequent changes in fair value
are presented in profit or loss in the statement of comprehensive income in
the period in which they arise.
The Group classifies financial assets using a fair value hierarchy that
reflects the significance of the inputs used in making the related fair value
measurements. The level in the fair value hierarchy within which a financial
asset is classified is determined on the basis of the lowest level input that
is significant to that asset's fair value measurement. The fair value
hierarchy has the following levels:
Level 1 - Quoted prices in active markets.
Level 2 - Inputs other than quoted prices that are observable, such as prices from market transactions. These are mainly based on prices determined from recent investments in the last twelve months.
Level 3 - One or more inputs that are not based on observable market data.
At 31 December 2015 (audited) 201.3 308.6 9.1 33.2 552.2
Investments during the period 3.0 7. 2 2.6 - 12.8
Transaction-based reclassifications during the period - 0.6 (0.6) - -
Other transfers between hierarchy levels during the period - (3.6) - 3.6 -
Disposals during the period (14.6) (0.1) (0.1) - (14.8)
Change in fair value in the period (21.8) (0.7) 0.1 (2.1) (24.5)
At 30 June 2016 (unaudited) 167.9 312.0 11.1 34.7 525.7
Investments during the period 7.9 43.7 3.6 1.7 56.9
Transaction-based reclassifications during the period - 0.1 (0.1) - -
Other transfers between hierarchy levels during the period - (36.2) 6.7 29.5 -
Disposals during the period (0.4) (0.1) - - (0.5)
Fees settled via equity - 0.4 - - 0.4
Change in fair value in the period (14.3) 48.1 (2.2) (0.1) 31.5
Exchange differences on translating foreign currency investments - - -
At 31 December 2016 (audited) 161.1 368.0 19.1 65.8 614.0
Investments during the period 1.5 15.2 2.9 0.5 20.1
Transaction-based reclassifications during the period - 4.1 (8.6) 4.5 -
Other transfers between hierarchy levels during the period - 2.6 - (2.6) -
Disposals during the period - - - - -
Fees settled via equity - 0.4 - - 0.4
Change in fair value in the period 10.3 23.9 (0.3) (4.8) 29.1
Exchange differences on translating foreign currency investments - (0.6) - - (0.6)
At 30 June 2017 (audited) 172.9 413.6 13.1 63.4 663.0
(0.6)
-
-
(0.6)
At 30 June 2017 (audited)
172.9
413.6
13.1
63.4
663.0
Fair values of unquoted spin-out companies classified as Level 3 in the fair
value hierarchy have been determined in part or in full by valuation
techniques that are not supported by observable market prices or rates.
Investments in 52 companies have been classified as Level 3 and the individual
valuations for each of these have been arrived at using the following
valuation method:
Where fair values are based upon the most recent market transaction, but that
transaction occurred more than twelve months prior to the balance sheet date,
the investments are classified as Level 3 in the fair value hierarchy. The
fair values of investments categorised as Level 3 are analysed on a monthly
basis to consider indicators which may make the most recent investment no
longer a representation of fair value. Due to the nature of the investments,
observable market inputs are not commonly available, therefore consideration
of indicators of a change in fair value focus on the companies' performance
and achievement of technical and commercial milestones.
Where indicators of a change in fair value against the most recent market
transaction are identified, any adjustment to arrive at fair value is based on
objective data from the company and the experience and judgement of the
Group.
If the fair value of all Level 3 investments were to decrease by 10%, the net
assets figure would decrease by £6.3m, with a corresponding increase if the
unobservable inputs were to increase by 10%.
For assets and liabilities that are recognised at fair value on a recurring
basis, the Group determines whether transfers have occurred between levels in
the hierarchy by reassessing categorisation (based on the lowest level input
that is significant to the fair value measurement as a whole) at the end of
each reporting period. Transfers between tiers are then made as if the
transfer took place on the first day of the period in question.
If the assumptions used in the valuation techniques for the Group's holding in
each company are varied by using a range of possible alternatives, there is no
material difference to the carrying value of the respective spin-out company.
The effect on the consolidated statement of comprehensive income for the
period is also not expected to be material.
Transfers between Level 2 and 1 occur when a previously unquoted investment
undertakes an initial public offering, resulting in its equity becoming quoted
on an active market. In the current period, there were no transfers of this
nature.
Transfers between Level 1 and Level 2 would occur when a quoted investment's
market becomes inactive. There have been no such instances in the current
period.
Transfers between Level 3 and Level 2 occur when an investment, for which the
penultimate funding round occurred more than twelve months before the prior
period end, undertakes an investment round during the period that results in
an observable market price. In the current period, transfers of this nature
amounted to £17.6m.
Transfers between Level 2 and Level 3 occur when the balance sheet date
becomes more than twelve months after an investment's most recent funding
round, at which point the price is deemed to be unobservable. In the current
period, transfers of this nature amounted to £15.0m.
The fair value changes in Level 3 investments have amounted to a loss of £4.8m
in the period, recognised as change in fair value of equity and debt
investments in the condensed consolidated statement of comprehensive income.
4. Share capital
Issued and fully paid:
696,727,321 ordinary shares of 2p each (HY16: 565,207,667; FY16: 565,221,967) 13.9 11.3 11.3
696,727,321 ordinary shares of 2p each (HY16: 565,207,667; FY16: 565,221,967)
13.9
11.3
11.3
In June 2017, the Group raised £183.9m (before expenses) through the issuance
of 131,357,140 shares at a price of £1.40 per share.
Additionally, the Group issued 148,214 new ordinary shares in June 2017
following the exercise of nil-cost options awarded under the Group's Deferred
Bonus Share Plan by certain of the Group's employees.
The Company has one class of ordinary shares, each with a par value of 2p and
carrying equal voting rights, equal rights to income and distributions of
assets on liquidation, or otherwise, and no right to fixed income.
5. Acquisition of Parkwalk Advisors Ltd
On 31 January 2017, the Group acquired 100% of the share capital of Parkwalk
Advisors Limited ("Parkwalk"), the UK's leading university spin-out focused
EIS fund manager. The maximum consideration payable is £20.0m over a
three-year period with additional cash compensation of £1.7m, equivalent to
the net cash within the business on acquisition, being paid shortly after
completion. The initial consideration comprises £5.0m payable in cash, £2.5m
payable in the form of newly-issued IP Group ordinary shares and £2.5m of cash
payable in two equal tranches over two years, subject to certain conditions.
The remaining £10m consideration is payable as £5m in cash and £5m in IP Group
ordinary shares over a three-year period, subject to Parkwalk achieving
certain business performance targets.
The Parkwalk acquisition generated goodwill of £14.9m, which relates to the
anticipated value of the business to the Group. The acquisitionreinforces IP
Group's access to a diversified pool of capital for co-funding the earlier
stages of the portfolio while providing a profitable and growing platform to
develop closer links with institutional investment platforms. The goodwill has
been apportioned across the group's University partnerships CGU and the
Parkwalk Advisors CGU.
Since the acquisition, Parkwalk has continued to increase its assets under
management and realise investment opportunities.
The acquisition has been accounted for using the acquisition method and the
interim condensed consolidated financial statements include the results of
Parkwalk for the five-month period from the acquisition date.
6. Intangible assets
Cost
At 30 June 2016 (unaudited), 31 December 2016 (audited) 21.6
Additions: acquisition of Parkwalk Advisors (see note 5) 2.1
At 30 June 2017 (audited) 23.7
2.1
At 30 June 2017 (audited)
23.7
Accumulated amortisation
At 1 January 2016 (audited) 10.9
Charge for the period 2.8
At 30 June 2016 (unaudited) 13.7
Charge for the period 2.8
At 31 December 2016 (audited) 16.5
Charge for the period 2.2
At 30 June 2017 (audited) 18.7
Net book value
At 30 June 2016 (unaudited) 7.9
At 31 December 2016 (audited) 5.1
At 30 June 2017 (audited) 5.0
The existing intangible assets represent contractual arrangements and
memorandums of understanding with four UK universities acquired through
acquisition of a subsidiary. The contractual arrangements have fixed terms
and, consequently, the intangible assets have finite lives that align with the
remaining terms which, at the end of the period, range from 11 months to 32
months. The individual contractual arrangements are amortised in a straight
line over the remainder of their terms with the expense being presented
directly on the primary statements. Additional intangible assets recognised in
the period represent the present value of future funded annual management fees
on the acquisition of Parkwalk Advisors in the period. The individual
contractual arrangements are amortised in a straight line over the remainder
of their terms with the expense being presented directly on the primary
statements.
7. Goodwill
At 30 June 2016 (unaudited), 31 December 2016 (audited) 57.1
Recognised on acquisition of subsidiary undertaking (see note 5) 14.9
Other additions 0.6
At 30 June 2017 (audited) 72.6
0.6
At 30 June 2017 (audited)
72.6
Goodwill represents the excess of the cost of an acquisition over the fair
value of the net identifiable assets of acquired subsidiaries at the date of
acquisition. Included in the balance sheet of the Group, at 30 June 2017, is
goodwill of £72.6m. This arose from the Group's acquisition of Top Technology
Ventures Limited in June 2004 (£2.1m), Techtran Group Limited in January 2005
(£16.3m), Fusion IP plc in March 2014 (£38.7m) and more recently the
acquisition of Parkwalk Advisors in January 2017 (£14.9m). Goodwill is
allocated from the acquisition date to each of the Group's cash-generating
units ("CGUs") that are expected to benefit from the business combination.
Goodwill may be allocated to CGUs in both the acquired business and in the
existing business.
The Group conducts annual impairment tests on the carrying value of goodwill,
based on the recoverable amount of the CGUs to which the goodwill has been
allocated. The goodwill allocated to each CGU is summarised in the table
below. A number of both value-in-use and fair-value-less-costs-to-sale
calculations are used to assess the recoverable values of the CGUs, details of
which are specified in the audited consolidated financial statements for the
year ended 31 December 2016.
Audited30 June 2017£m Unaudited30 June 2016£m Audited31 December 2016£m
University partnership CGU 61.1 55.0 55.0
Fund management CGU 2.1 2.1 2.1
Parkwalk Advisors CGU 9.4 - -
72.6 57.1 57.1
During the period to 30 June 2017, no factors indicating potential impairment
of goodwill were noted and, as a result, no impairment review was deemed
necessary.
8. Related party transactions
The Group has various related parties arising from its key management,
subsidiaries, equity stakes in portfolio companies and management of certain
Limited Partnership funds.
a) Limited partnerships
The Group manages a number of investment funds structured as Limited
Partnerships. Group entities have a Limited Partnership interest (see note 1)
and act as the general partners of these Limited Partnerships. The Group
therefore has power to exert significant influence over these Limited
Partnerships. The following amounts have been included in respect of these
Limited Partnerships:
Revenue from services 0.5 0.5 0.9
Revenue from services
0.5
0.5
0.9
Investment in limited partnerships 3.0 2.9 2.8
Amounts due from related parties 0.5 - 0.2
Amounts due from related parties
0.5
-
0.2
8. Related party transactions (continued)
b) Key management transactions
The following key management held shares in the following spin-out companies
as at 30 June 2017:
Alan Aubrey Accelercomm Limited 333 - 333 0.3%
Alesi Surgical Limited 18 - 18 0.2%
Amaethon Limited - A Shares 104 - 104 3.1%
Amaethon Limited - B Shares 11,966 - 11,966 1.0%
Amaethon Limited - Ordinary shares 21 - 21 0.3%
Avacta Group plc 202,761 - 202,761 0.3%
Boxarr Limited 1,732 - 1,732 0.3%
Capsant Neurotechnologies Limited 11,631 - 11,631 0.8%
Cloud Sustainability Limited(i) 26 (26) - -
Crysalin Limited 1,447 - 1,447 0.1%
Diurnal Group plc 15,000 - 15,000 <0.1%
EmDot Limited 15 - 15 0.9%
Ditto AI Limited(i)(II) - Ordinary Shares 21,557,957 - 21,557,957 5.9%
Ditto AI Limited(ii) - B Shares 98,407,767 468,801 98,876,568 21.9%
Getech Group plc 15,000 - 15,000 <0.1%
Gunsynd plc 767,310 - 767,310 <0.1%
hVivo plc 37,160 - 37,160 <0.1%
Ilika plc 69,290 - 69,290 <0.1%
Istesso Limited(iii) 1,185,150 - 1,185,150 1.7%
Karus Therapeutics Limited 223 - 223 <0.1%
Microbiotica Limited 3,750 - 3,750 <0.1%
Mirriad Advertising Limited 33,333 - 33,333 <0.1%
MDL 2016 Limited - Ordinary shares 3,226 - 3,226 0.4%
MDL 2016 Limited - A shares 229 - 229 0.5%
Modern Water plc 519,269 - 519,269 0.7%
Cronin Group plc 2,172,809 - 2,172,809 0.4%
Oxford Nanopore Technologies Limited 101,208 - 101,208 0.4%
Perachem Holdings plc 108,350 - 108,350 0.8%
Revolymer plc 88,890 - 88,890 0.1%
Salunda Limited 53,639 - 53,639 <0.1%
Structure Vision Limited 212 - 212 1.0%
Surrey Nanosystems Limited 453 - 453 0.3%
Tissue Regenix Group plc 2,389,259 - 2,389,259 0.3%
Xeros Technology Group plc 40,166 - 40,166 <0.1%
Zeetta Networks Limited 424 - 424 <0.1%
Mike Townend Amaethon Limited - A Shares 104 - 104 3.1%
Amaethon Limited - B Shares 11,966 - 11,966 1.0%
Amaethon Limited - Ordinary shares 21 - 21 0.3%
Applied Graphene Materials plc 7,619 - 7,619 <0.1%
Avacta Group plc 20,001 - 20,001 <0.1%
Capsant Neurotechnologies Limited 11,282 - 11,282 0.8%
Cloud Sustainability Limited(i) 25 (25) - -
Creavo Technologies Limited 117 - 117 <0.1%
Crysalin Limited 1,286 - 1,286 0.1%
Ditto AI Limited(i)(II) - 613,048 613,048 0.2%
Diurnal Group plc 15,000 - 15,000 <0.1%
EmDot Limited 14 - 14 0.8%
Getech Group plc 20,000 - 20,000 <0.1%
hVivo plc 37,160 - 37,160 <0.1%
Ilika plc 10,000 - 10,000 <0.1%
Istesso Limited(iii) 1,185,150 - 1,185,150 1.7%
Mirriad Advertising Limited 25,000 - 25,000 <0.1%
Mode Diagnostics Limited 1,756 - 1,756 0.1%
Modern Water plc 575,000 - 575,000 0.7%
Cronin Group plc 932,944 - 932,944 0.2%
Oxford Advanced Surfaces Limited 5,000 - 5,000 0.2%
Oxford Nanopore Technologies Limited 30,967 - 30,967 0.1%
Perachem Holdings plc 128,067 - 128,067 0.8%
Revolymer plc 64,940 - 64,940 <0.1%
Structure Vision Limited 212 - 212 1.0%
Surrey Nanosystems Limited 404 - 404 0.2%
Tissue Regenix Group plc 1,950,862 - 1,950,862 0.3%
Ultrahaptics Holdings Ltd 3,500 1,189 4,689 <0.1%
Xeros Technology Group plc 35,499 - 35,499 <0.1%
Greg Smith Alesi Surgical Limited 2 - 2 <0.1%
Avacta Group plc(v) 3,904 - 3,904 <0.1%
Capsant Neurotechnologies Limited 896 - 896 <0.1%
Cloud Sustainability Limited(i) 8 (8) - -
Crysalin Limited 149 - 149 <0.1%
Ditto AI Limited(i)(II) - 144,246 144,246 <0.1%
Diurnal Group plc 15,000 - 15,000 <0.1%
EmDot Limited 4 - 4 0.2%
Encos Limited 5,671 - 5,671 0.3%
Getech Group plc 8,000 - 8,000 <0.1%
hVivo plc 61,340 - 61,340 <0.1%
Istesso Limited(iii) 313,425 - 313,425 0.5%
Mirriad Advertising Limited 16,667 - 16,667 <0.1%
MDL 2016 Limited - Ordinary shares 361 - 361 <0.1%
MDL 2016 Limited - A shares 28 - 28 <0.1%
Modern Water plc 7,250 - 7,250 <0.1%
Oxford Nanopore Technologies Limited 1,581 - 1,581 <0.1%
Perachem Holdings plc 4,830 - 4,830 <0.1%
Revolymer plc 4,500 - 4,500 <0.1%
Summit Therapeutics plc 798 - 798 <0.1%
Surrey Nanosystems Limited 88 - 88 <0.1%
Tissue Regenix Group plc 50,000 - 50,000 <0.1%
Xeros Technology Group plc 1,392 - 1,392 <0.1%
David Baynes Alesi Surgical Limited 4 - 4 <0.1%
Arkivum Limited 377 - 377 <0.1%
Creavo Technologies Limited 46 - 46 <0.1%
Diurnal Group plc 73,000 - 73,000 0.1%
Mirriad Advertising Limited 16,667 - 16,667 <0.1%
Oxford Nanopore Technologies Limited 174 - 174 <0.1%
Ultrahaptics Holdings Ltd 2,600 - 2,600 <0.1%
Zeetta Networks Limited 424 - 424 <0.1%
Angela Leach Alesi Surgical Limited 2 - 2 <0.1%
Avacta Group plc 1,897 - 1,897 <0.1%
Boxarr Limited 102 - 102 <0.1%
Capsant Neurotechnologies Limited 1,858 - 1,858 0.1%
Cloud Sustainability Limited(i) 10 (10) - -
Creavo Technologies Limited 23 - 23 <0.1%
Cronin Group plc 68,101 - 68,101 <0.1%
Ditto AI Limited(i)(II) - 180,308 180,308 <0.1%
Diurnal Group plc 11,500 - 11,500 <0.1%
Gunsynd plc 7,990 - 7,990 <0.1%
First Light Fusion Limited 17 - 17 <0.1%
Getech Group plc 2,083 - 2,083 <0.1%
hVivo plc 25,903 - 25,903 <0.1%
Istesso Limited(iii) 322,923 - 322,923 0.5%
Mirriad Advertising Limited 16,667 - 16,667 <0.1%
MDL 2016 Limited - Ordinary Shares 606 - 606 <0.1%
MDL 2016 Limited - A Shares 102 - 102 0.2%
Modern Water plc 15,570 - 15,570 <0.1%
Oxford Nanopore Technologies Limited 1,782 - 1,782 <0.1%
Revolymer plc 4,500 - 4,500 <0.1%
Structure Vision Limited 21 - 21 0.1%
Surrey Nanosystems Limited 90 - 90 <0.1%
Tissue Regenix Group plc 276,791 (73,334) 203,457 <0.1%
Ultrahaptics Holdings Ltd 500 - 500 <0.1%
Xeros Technology Group plc 5,666 (3,971) 1,695 <0.1%
<0.1%
Xeros Technology Group plc
5,666
(3,971)
1,695
<0.1%
(i) Cloud Sustainability Limited was purchased by Ditto AI Limited in
June 2017. Existing shareholders in Cloud Sustainability Limited were issued
new shares in Ditto AI in consideration for their shares.
(ii) Previously known as Empiricom Technology Limited
(iii) Shares in Modern Biosciences plc were exchanged for shares in
Istesso Limited, a newly-formed holding company, during the period
c) Portfolio companies
The Group earns fees from the provision of business support services and
corporate finance advisory to portfolio companies in which the Group has an
equity stake. Through the lack of control over portfolio companies these fees
are considered arm's length transactions. The following amounts have been
included in respect of these fees:
Revenue from services 1.0 0.4 1.6
Revenue from services
1.0
0.4
1.6
Trade receivables 0.5 1.3 0.7
Trade receivables
0.5
1.3
0.7
d) Subsidiary companies
Subsidiary companies that are not 100% owned either directly or indirectly by
the parent company have intercompany balances with other Group companies
totalling as follows:
Intercompany balances with other Group companies 10.7 10.5 10.7
Intercompany balances with other Group companies
10.7
10.5
10.7
These intercompany balances represent funding loans provided by Group
companies that are interest free, repayable on demand and unsecured.
General information
The comparative financial information presented herein for the year ended 31
December 2016 does not constitute full statutory accounts within the meaning
of the Companies Act 2006. The Group's Annual Report and Accounts for the year
ended 31 December 2016 have been delivered to the Registrar of Companies. The
Group's independent auditor's report on those accounts was unqualified, did
not include references to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and did not contain a
statement under Section 498(2) or 498(3) of the Companies Act 2006.
Accounting policies
Basis of preparation
The financial information presented in these half-yearly results constitutes
the condensed consolidated financial statements of IP Group plc, a company
incorporated in Great Britain and registered in England and Wales, and its
subsidiaries (together, the "Group") for the six months ended 30 June 2017.
The condensed consolidated financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting and should be read in
conjunction with the Annual Report and Accounts for the year ended 31 December
2016, which have been prepared in accordance with International Financial
Reporting Standards as adopted for use in the EU ("IFRS"). The financial
information in these half-yearly results, which were approved by the Board and
authorised for issue on 17 July 2017, is unaudited but has been subject to a
review by the Group's independent auditor.
Accounting estimates and judgements
The preparation of the half-yearly results requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expenses. Estimates and judgements are continually evaluated and are based
on historical experience and other factors, such as expectations of future
events, and are believed to be reasonable under the circumstances. Actual
results may differ from these estimates. In preparing these half-yearly
results, the significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those applied to the audited consolidated financial statements for the
year ended 31 December 2016.
Going concern
After making enquiries, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going concern
basis in preparing the condensed consolidated half-year financial statements.
Accounting policies
The accounting policies applied by the Group in these half-yearly results are
the same as those applied by the Group in its audited consolidated financial
statements for the year ended 31 December 2016 and which will form the basis
of the 2016 Annual Report and Accounts. No new standards that have become
effective in the period have had a material effect on the Group's financial
statements.
Statement of Directors' responsibilities
The Directors confirm to the best of their knowledge that:
a. the half-yearly results have been prepared in accordance with IAS 34 as
adopted by the European Union; and
b. the interim management report includes a fair review of the information
required by the FCA's Disclosure and Transparency Rules (4.2.7 R and 4.2.8
R).
The Directors of IP Group plc and their functions are listed below.
By order of the Board
Mike Humphrey Alan Aubrey
Chairman Chief Executive Officer
17 July 2017
Independent auditor's report to IP Group plc
Opinion
We have audited the condensed set of financial statements in the half-yearly
report of IP Group plc ("the Company") for the six months ended 30 June 2017
which comprise the condensed consolidated statement of comprehensive income,
condensed consolidated statement of financial position, condensed consolidated
statement of cash flows, condensed consolidated statement of changes in equity
and the related explanatory notes.
In our opinion the condensed set of financial statements in the half-yearly
report of the Company for the six months ended 30 June 2017 have been properly
prepared, in all material respects, in accordance with IAS 34 as adopted by
the EU and the Disclosure and Transparency Rules ("the DTR") of the UK's
Financial Conduct Authority ("the UK FCA") and the accounting policies
disclosed in the 31 December 2016 financial statements, which are the
accounting policies expected to be applied in preparing the 31 December 2017
financial statements.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) ("ISAs (UK)"), and the terms of our engagement letter dated 12 July 2017.
Our responsibilities are described below. We believe that the audit evidence
we have obtained is a sufficient and appropriate basis for our opinion. Our
opinion is consistent with our report to the audit committee.
We were appointed as auditor by
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