IP Group is smart cookie

It's been a busy six months for IP Group. The intellectual property (IP) commercialisation business has bought smaller rival Fusion IP, raised £100 million and developed relationships with new universities both here and in the US. Its share price is up three-quarters over the past 12 months, too, and progress at a number of portfolio companies gives reason for further optimism.

IP, which already has tie-ups with universities in Oxford, Bristol, King's College London and Southampton, extended its agreement with the University of Manchester and agreed a collaboration with Princetown University - expect a first spin-out in the US soon. Portfolio companies like Retroscreen, Ceres and Oxford Nanopore Technologies - a DNA and protein analyser- also enjoyed significant developments, while Actual Experience and Xeros Technology listed on AIM followed by Medaphor in August.

"An increased pipeline of opportunities, and a strong cash and financial position, provide us with a solid platform from which to continue to generate significant value for shareholders over the long-term," said boss Alan Aubrey.

Adjusted pre-tax profit rose from £500,000 last year to £15 million in the half-year to June. The Fusion purchase, fundraising and net fair value increase in portfolio companies beefed up net assets to almost £529 million, and net cash and deposits nudging £123 million. IP currently has a stake in 86 companies, with the value of its ten largest holdings now worth £234 million.

In fact, IP has grown so large, it has established four specialist sector teams; healthcare, biotech, cleantech and tech.

Strip out intangible assets and Numis Securities estimates a net asset value of about £468 million for IP, or 98p per share. But the broker believes the shares could be worth 273p, with a significant premium over net assets justified by the company's track record of high returns on its investments.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.