I've been piling in over the last few days. Looks crazy cheap thanks to a big seller exiting into a market seller.
We all know the basic - % net cash, 5 available cash, ONT stake and NAV looks solid on available info (see Oak Bloke).
And share buybacks at this discount to NAV is a no brainer.
Blaming the management is like kicking the cat. There's nothing they can do when a big seller exits....
Lots of other small funds in the same boat eg LABs, SOHO, DGI9 - Investec and Rathbones merger has caused a lot of damage |
I've been piling in over the last few days. Looks crazy cheap thanks to a big seller exiting into a market seller.
We all know the basic - % net cash, 5 available cash, ONT stake and NAV looks solid on available info (see Oak Bloke).
And share buybacks at this discount to NAV is a no brainer.
Blaming the management is like kicking the cat. There's nothing they can do when a big seller exits....
Lots of other small funds in the same boat eg LABs, SOHO, DGI9 - Investec and Rathbones merger has caused a lot of damage |
 FOR RELEASE ON
08 August 2024
IP Group plc - Cash proceeds from exits tracking higher than 2023; intention to increase share buyback programme; notice of results
IP Group plc (LSE: IPO) ("IP Group" or "the Group"), which invests in breakthrough science and innovation companies with the potential to create a better future for all, is pleased to provide the following updates.
The Group announces that it intends to publish its results for the six months ended 30 June 2024 on Tuesday 17 September 2024. In the meantime, the Group is updating shareholders on portfolio exits achieved to date and consequential return of capital in line with its policy.
Following strong performance on portfolio realisations during the year to date, cash proceeds from exits confirmed or completed now total over £43m, a level that already exceeds the total for the whole of 2023.
The previously announced sale of Garrison Technology Ltd ("Garrison") to US-based cybersecurity firm Everfox is expected to complete during August. This accounts for the majority of the £43m proceeds noted above, with the balance received from the sale of holdings in a small number of portfolio companies, all of which have been completed at or above carrying values.
In addition to the above, the Group notes that Intelligent Ultrasound Group plc plans to make a 'material return of capital' following the announced sale of its Clinical AI business to GE HealthCare for an enterprise value of £40.5m. IP Group has a 20.8% holding in Intelligent Ultrasound.
As a result, in line with guidance given, the Directors plan to increase the Group's current share buyback programme by a further £10m. This will increase the current programme to a total of £30m. Since this programme was announced in December 2023, the Group has bought back 29m shares, approximately 3% of the shares in issue, for a total of £13m.
The Group also advises that it has yet to receive an update from portfolio company Istesso with regard to the outcome of its Phase 2b trial for Leramistat (MBS2320) in rheumatoid arthritis. Although receipt of this data is later than the Group had anticipated, this is not at all uncommon in complex clinical trials. The Group looks forward to updating shareholders when it is in a position to do so.
Further information on the publication of half-yearly results
IP Group's half-yearly results will be available via the London Stock Exchange's Regulatory News Service (RNS) and on the Investor Relations section of the company's website at www.ipgroupplc.com.
Members of IP Group's leadership team will provide a live presentation via the Investor Meet Company platform on 17 September 2024 at 09:00am.
Questions can be submitted pre-event via the Investor Meet Company dashboard up until 9am the day before the meeting or at any time during the live presentation. Investors can sign up to Investor Meet Company for free via:
Investors who already follow IP Group on the Investor Meet Company platform will be invited automatically. |
I'm struggling with the concept that buybacks are not helpful. Isnt it a matter of fact that if shares are repurchased and cancelled that the NAV/share increases. OK if you can't get the share price up then so does the discount but if that discount is unwarranted then why is it not a good option for the company to acquire shares at that discount?
Any further comments welcome. |
Fingers crossed for Istesso |
TU reads well, increased buyback by £10M.
What about some cash?
Carry values most likely good so have little NAV concern currently.
Question is how best to reduce the discount? Same old question. |
I thought they had consulted with major shareholders and agreed to the buyback program to try and address the NAV discount and return capital to them at the same time..
I have to say their website looks pretty good and informative to me
Maybe one step would be to get more broker coverage..
Palisz said that they had pointed out 8 actions to them. It woukd be good to see those. |
I belive the NAV to be reasonable, the market may not.
My beef is with accepting the discount and not fighting to market the company to investors to help close it but rather sitting back or hiding until sentiment changes. Any one can do that. |
Could you point me in the direction of the evidence for the NAVs being materially overstated? The last exit was at NAV. Are there notable exits below NAV? And I assume the audit processes at year end are not thought to be worth the paper they are written on? |
BP, "The bigger the discount the lower the payout to management."
If they close the discount they get more bonus. |
Bagpuss, it'd be good, if you can make sense of it.
Management have lost some entitlements over recent years, but just granted themselves more in new arrangements! |
Just taken a quick look at the share based payments section of the annual report. I don't think it could be possible to make remuneration more complicated. I will need to spend some time on that to work out exactly how much the execs are making if the NAV is say 25% over inflated.. |
Thanks both. Pink don't you mean the lower the discount? |
The share price says it all. Very little confidence in the board on show here. |
Change management incentives to align with shareholders - possibly related to reducing discount to NAV. The bigger the discount the lower the payout to management.
Return capital directly - some recipients will buy IPO stock, some will have better homes for it. Not everyone wants to see their capital used to buy more of IPO.
Current buyback is to assist volume holders to exit. Does little to reduce discount.
More proactively market the fund.
It's a boys club, very nice people, well educated, they love deep rich, cosy but no f'in use to shareholders that own the capital. |
Bagpuss, I am a bit short of time, but briefly, one of the fundamental problems with management is the conflict of interest between them and the ordinary shareholders.
Management incentives are linked to NAV, over which they have a sizeable influence. Shareholders are stuck with the market valuation, ie the share price.
Which is correct?
I'd say they need to look at their valuation methods in the light of the true valuation based on what constituents might be worth in the case of a complete liquidation.
The current official NAV is a management lie.
What can they do about it?
Accept the market valuation at regular intervals.
Share price can then find a premium/discount based on the last true valuation. |
Pink. They do regularly update on the website investment and company news and to the market at the usual times and they say they have engagement with major shareholders who wanted buy backs not dividends. The portfolio looks to be progressing well
Could you/ others spell out what are the major gripes with management? Sorry I'm new here and trying to get a grip of why sentiment is so bad. Clearly I get that the share price decline is pretty poor but what would you have them do about it? |
Comfy gravy train. |
Interesting. What would account for this lack of engagement? I looked at the profile for the CEO on the web site which has a space for insights and it appears his last one was over a year ago.... |
I missed this years AGM, too busy gardening! But last year in 2023, the CEO talked about communication and marketing, saying IPO was spending more time and effort on this. It was an important focus.
Well, excluding this years AGM the company has done NOTHING since Oct 2023 when it held a poorly attended ESG presentation, not a single report, article, promotion!
Where is the CEO ? Explain this please! Oh, and remind IR what IR stands for! Investor relations! |
A few further observations on this from Oak Bloke which some may find interesting. I did. |
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