Ip Share Discussion Threads

[craigso] 09/12/2024 08:58

I have no problem with selling £!5m of illiquid assets at a premium and using all of that money for buybacks.

But there's a substantially larger amount of money on the way (Featurespace) - and substantial cash on the balance sheet already - and I don't believe that anything has been said about that.

[bamboo2] 09/12/2024 08:35

For the first time since Autumn 2021 [daily chart] we have all the main sma's turning up below a rising share price. The current pattern has a tp around 58p.

[bamboo2] 09/12/2024 07:52

FOR RELEASE ON

9 December 2024





Secondary sale of minority holdings in portfolio companies

- Includes nine companies across balance sheet & managed funds

- Balance sheet proceeds of up to c.£15m at small overall premium to carrying value

- Intention for all proceeds to be used to increase ongoing share buyback programme



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 announce that it has agreed the sale of minority holdings in nine portfolio companies across its balance sheet and managed funds to a new fund managed by Lexham Partners.

The Group expects to generate up to approximately £15m of cash proceeds from the 6 balance sheet holdings included in the transaction. These sales are expected to be at a small overall premium to the HY24 balance sheet value. On completion of the sales, some of which are subject to customary private company transfer conditions, all proceeds received are intended to be used to further increase the Group's current share buyback programme. If these sales complete as planned, this will increase the buyback programme by a further £15m to a total of £45m.

IP Group remains a committed and supportive shareholder to the portfolio companies included in this sale and the shares sold represent, on average, less than 10% of the Group's holding in each company.

Greg Smith, Chief Executive of IP Group, said: "This transaction creates new relationships with a group of long-term investors and further validates the quality of the Group's portfolio and our valuation approach. IP Group has performed strongly in generating cash from exits this year at or above carrying values and we remain compelled by our portfolio and the opportunity to deliver impact and returns for shareholders. The Board believes the current share price significantly undervalues the Group's portfolio and has decided it will allocate all cash proceeds received from this secondary sale to our ongoing buyback."

Dominic Perks, Managing Partner of Lexham Partners, said: "Lexham is delighted to become shareholders alongside IP Group in some of the most exciting British innovation companies. We look forward to deepening our partnership with IP Group and supporting the portfolio companies to fulfil their growth potential."

In the year to date, IP Group has received £57m of cash proceeds from exits, compared with £38.6m received in 2023. Since the current share buyback programme was announced in December 2023, the Group has bought back 60.5m shares, approximately 6% of the opening shares in issue, for a total of £26.7m. Since 2021, the Group has delivered more than £100m of cash returns to shareholders via dividends and share buybacks.

The Group anticipates receiving an additional £134m of cash, of which £15m is subject to deferral, for its holding in Featurespace once that transaction completes. In addition, the Group anticipates receiving additional cash proceeds after Intelligent Ultrasound Group plc affirmed its intention to make a 'material return of capital to shareholders'.

As of 30 November 2024, IP Group had £176m gross cash and deposits, and the Group's holdings in listed companies were £167m, which together represented approximately 80% of the Group's market capitalisation at that date.

[p1nkfish] 09/12/2024 07:17

Look reasonable to me, will allow management to reduce distraction.
Soon very cashed up.

[palisz] 09/12/2024 07:11

IPO announce..
Secondary sale of minority holdings in portfolio companies
- Includes nine companies across balance sheet & managed funds
- Balance sheet proceeds of up to c.£15m at small overall premium to carrying value
- Intention for all proceeds to be used to increase ongoing share buyback programme

[bamboo2] 07/12/2024 15:49

palisz, the co runs the buyback on slightly different volumes compared to those you suggested [from memory] earlier in the thread. There's a maximum of 25% of 20 day rolling volumes in any day.

The total volume for the past 20 days was 97.74m, including eod UT's

97,740,000/20 days = 4,887,000 av per day

4,887,000 x 25% = 1,221,750 [max buyback allowed is currently 1,221,750 shares]

The last 20 days have had exceptionally high volumes on some days, so it's likely that the maximum buyback limit will fall over the next month.

I have put the calcs up so that they can hopefully be checked. Let me know if I have arrived at this total incorrectly.

I have an idea that UT volumes are usually excluded from the total, but can't find where I read this, so unable to check.

[palisz] 06/12/2024 17:28

As a percentage of days volume the buy back looks to be the highest yet!
Only a guess, not sure.

[bamboo2] 06/12/2024 17:26

We got today's later buyback RNS.

================================

Date of purchase: 06/12/2024

Number of ordinary shares purchased: 500,000

Volume weighted average price paid per ordinary share (GBp): 48.3981

[craigso] 06/12/2024 16:01

Is TRX potentially one of the assets sold to Lexham? If so, we might see another RNS after the markets close? Odd timing though...

[palisz] 06/12/2024 14:31

Wow...your right bamboo...missing!
I've always used the LSE for all my news.
shows as a normal RNS.
I guess a ADVFN issue.

[bamboo2] 06/12/2024 14:18

Appears that IPGroup has sold 2,069,008 TRX shares at £0.58

This income is approx £1.2m

[Please check]

[bamboo2] 06/12/2024 14:10

palisz, I don't seem to have today's holding rns appearing on advfn. Is that the same for others?

[bamboo2] 06/12/2024 13:59

Hi palisz, I forgot to add to the post, that they can pay up to 5% above the averages I just calculated. Thanks for checking.

Post 3428 edited.

=======================
RNS added. [For some reason I had not noticed this RNS from earlier today]

Date of purchase: 05/12/2024

Number of ordinary shares purchased: 492,993

Volume weighted average price paid per ordinary share (GBp): 48.0807

[palisz] 06/12/2024 13:51

Sure?
But they bought back yesterday, 5th Dec!!
492k shares at 48???

[bamboo2] 06/12/2024 13:43

nigel, agree.

Because the current share price is "5 per cent above the average of the middle market quotations taken from the London Stock Exchange Daily Official List for the five business days preceding any Ordinary Shares being purchased", the co is barred from buying back shares, irrespective of any other conditions, such as closed period.

I just did the calcs using figures from the last market price based chart on Tradingview. Today the price has to drop to around 46.225p [+5%], before IPGroup can buyback.

Assuming todays price remains in the current range, from Monday this rises to approx 47.225p[+5%], then, assuming similar price action on Monday, Tuesdays average will arrive at approx 48.50p [+5%].

If over the next few sessions the price were to drop, the buyback could recommence sooner.


==============

Edit added, IPGroup is allowed to pay up to 5% above the prices mentioned above.

[nigelpm] 05/12/2024 10:15

crikey! No buyback because the price is >105% of recent price I'd imagine - it really is that simple.

[bamboo2] 05/12/2024 09:43

craig, buybacks are controlled by management, I checked.
All, please email and check for yourselves.

No buyback could mean the price has risen beyond their current ceiling, it is complete, or they are in a closed period for some reason.

It looks like the shorter is going to have another try.

Do they not read the news?

[craigso] 05/12/2024 09:31

No buyback RNS means that we start arguing about whether share buybacks are truly arms-length, done-only-by-the-broker or whether they are paused ahead of upcoming news. :)

[bamboo2] 05/12/2024 08:02

No buyback RNS.

Could mean...

[crooked_vulture] 04/12/2024 13:49

Would be good to know if the companies in question date back prior to the acquisition of Parkwalk Advisors (and were invested in by Parkwalk) then there might a conflict of interest impacting decisions...*if* the Parkwalk deal preserved rights to carried interest in 'Parkwalk' companies...that wouldn't be a surprise/industry standard.

[donald pond] 04/12/2024 13:06

For unlisted companies in disruptive areas the NAV is really just guesswork. If you look at CHRY, you can compare Klarna to Affirm, which is listed in the US, or Starling to an alternative listed challenger bank in the UK. But I don't think you can for IPOs investments. Most of them are pretty unique with no obvious comparators.
So selling at NAV is a pretty significant event, as clearly the market is valuing the company at less than half of NAV. Having said that, the reality is also that the market does not trust IPO to invest any proceeds wisely. I'm not sure how that friction works itself out. A very substantial return of capital is clearly the sensible approach. The market has lost faith in the ability of growth trusts (GROW is at an even bigger discount), and imo no investment trust that is trading at a discount wider than 20% should be doing anything with surplus cash other than distributing it back to shareholders asap.

[craigso] 04/12/2024 12:43

It's not "value accretive" to sell something worth 100p for 100p. And IPO is cash rich... why sell private assets at NAV? They already have enough dry powder for investments and/or to juice the share price with a proper buyback / tender. If selling Featurespace at a premium didn't send the share price rocketing, selling part of Istesso near NAV certainly won't do it on its own...

A sale at a premium followed by a major capital return to shareholders is the only thing that makes sense to me. I know that they don't necessarily need to spend the existing £10m of buybacks before announcing more, but that might help explain why the pace has been picked up recently.

[bamboo2] 04/12/2024 09:29

Istesso and Perks have history. Dominic Perks was CEO at Hambro Perks until he suddenly left, then set up Lexham Partners in late 2023. In the latter days of his tenure at HPerks he tried to put together a deal to buy Istesso [Jan 2023].

It looks like Lexham have approx £300m in cash [needs double checking]. They could presumbly gear up with borrowings, or release more equity. Their recent purchase of a stake in Atom Bank was £3.5m

IPGroup currently hold 56.5% of Istesso. Valued at £127.6m, it's one of the larger constituents. It would be good to see a reduction in concentration and some sharing of risk.

[p1nkfish] 04/12/2024 06:50

It is bizarre. Thought experiment only.
Purely a rambling thought.
Shame to sell assets at a discount to fair value.

[nigelpm] 03/12/2024 23:57

That doesn't make sense.. why would ipo relinquish their assets for a company to go into the market and buy their stock presumably for their own benefit?? I've heard of odd ideas but that's truly bizarre