IP Group H1 2025 Earnings Report

IP Group EPS Results

• Actual EPS: -GBX 4.55
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

IP Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

IP Group Announcement Details

• Quarter: H1 2025
• Date: 9/17/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, September 17, 2025
• Conference Call Time: 5:00AM ET

IP Group (LON:IPO) accelerates the impact of science for a better future. As the most active UK based, early-stage science investor, we develop and support some of the world’s most exciting businesses in deeptech, life sciences and cleantech (led by Kiko Ventures). Through Parkwalk, the UK's largest growth EIS fund manager, we also back world-changing innovation emerging in leading universities and research institutions. Our specialist investment team combines sector expertise with an international approach. Together we have a strong track record of success, having backed high-profile companies including Oxford Nanopore Technologies plc, First Light Fusion, Hysata, and Oxbotica. IP Group is listed on the Main Market of the London Stock Exchange under the code IPO.

IP Group H1 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: In H1 IP Group recorded £30m cash proceeds, nine-times H1 2024 levels and reaffirmed confidence in its £250m exit target by 2027.
• Positive Sentiment: Net asset value per share has stabilized during the period and risen to around £1 per share post half-year, driven by public market uplifts and share buybacks.
• Positive Sentiment: Public portfolio highlights include the Hinge Health IPO (up c. 80% since May) and Oxford Nanopore’s stronger-than-expected H1 revenues with improved EBIT loss across sectors and regions.
• Neutral Sentiment: IP Group is advancing efforts to secure at least one new private scale-up capital mandate ahead of FY 2025 results amid slower-than-expected market movement.
• Positive Sentiment: Disciplined capital return policy has led to a 15% share count reduction via buybacks, with £20m added under the current £75m program and 50% of exit proceeds allocated to repurchases.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to the IP Group Plc Half Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and will cover those responses where it's appropriate to do so on the Investor Meet company platform. Before we begin, as usual, we would just like to submit now like to hand you over to the Executive Management team from IP Group plc. Greg, good morning,

[Greg Smith, CEO & Director at IP Group]

Good morning, and thank you Jake. And as always, thanks to everyone at Investor Me Company for, again, hosting our half year results webinar. I was reflecting a bit I was reading my Feet on Saturday, and I almost choked my yogurt. I guess, these days, I sort of had to move on from cornflakes for longevity reasons. But I I saw the headline, The US market for IPOs has exploded back to life with the busiest week for four years and that's not something I've seen for a few years, guess, maybe obviously based on the title.

[Greg Smith, CEO & Director at IP Group]

But it was an interesting reflection that the public markets have had quite a positive impact on the portfolio in more than one so far in 2025 and hopefully there is more opportunity that arises for us in future as a result. I'm Greg Smith and as CEO, I have the honor of leading IP Group and our excellent team on our mission to accelerate the power of science for a better future. And with me on today's call, we have our Managing Partner, Mark Reilly, and our CFO, Dave Baines, both in room, really and virtually. As usual, this presentation will be uploaded onto the IR section our website with a few appendices. Before we start, please note all the usual disclaimers and read back from the time I'm going spend on the slides and good luck.

[Greg Smith, CEO & Director at IP Group]

But this covers all the information and particularly any forward looking statements that we may make during the course of the next hour or so. So in terms of what we're going to cover, I'll provide an overview of the group's performance in the first half, then I'll pass on to Mark and he'll give an update on a number of our key balance sheet holdings and then another notable development actually. Then Dave is going to run us through a summary of the numbers, and then we'll head into Q and A. As Dave said, as always, please post your questions up in the Q and A section. And as always, we'll endeavor to cover them all either live in the session or afterwards via platform if we run out of time.

[Greg Smith, CEO & Director at IP Group]

So for the half year, I think the main message is overall we made strong progress in the first half. We saw a number of encouraging developments in the portfolio and indeed the pipeline of significant milestones remains good through the 2027. The public markets were more of a contributor in terms of fair value and then there were a number of other positive developments in the private portfolio. That public side included the successful IPO in shelf in May and strong half year results from Austin Nanaboard, who beat city expectations. We recorded total cash proceeds of £30,000,000 nine times what we saw in the 2024.

[Greg Smith, CEO & Director at IP Group]

And as a reminder, I said at the full year that we were targeting £250,000,000 of exits by the 2027. So what we've seen year to date means that we remain confident in achieving that target. We had a small overall loss for the first six months. However, NAV per share essentially stabilized in the reporting period and has subsequently increased since the period end to about GBP a share. We continue to be in a strong balance sheet position and good liquidity and we still have gross cash of GBP $237,000,000 and obviously, that's significantly up from this time last year when we had the feature space exit and others during the period.

[Greg Smith, CEO & Director at IP Group]

And then a final note is we're seeing increasing momentum in our efforts to add to our private scale up capital under management. And the market hasn't necessarily moved as quickly as we hoped or expected on this front. However, we have good confidence of securing at least one new mandate by the time that I talked to you at the time of our full year results. So on the portfolio, coming into the year, four out of our top five holdings have seen encouraging developments in the year to date. As Mark and DB will cover briefly later, fifth officer, while it's making encouraging underlying progress, is yet to close its latest funding round, and so our revised valuation has been pegged back to reflect that position.

[Greg Smith, CEO & Director at IP Group]

On Hinge, we were delighted for Dan and Gabe and the team to have the opportunity to ring the New York Stock Exchange opening bell on May 22. And Pitch Book described their successful IPO as a pivotal moment for digital health, signaling the reopening of the health tech public markets after a three year drag, and Mark will cover more on this shortly. But in summary, the company has traded very well since IPO and is up about 80% off the back of strong Q2 numbers. Oxford Nanopore, they delivered a strong first half of trading. They beat analyst expectations on both revenue and on a lower EBIT loss.

[Greg Smith, CEO & Director at IP Group]

I think our observation was that growth was strong across all sectors and geographies. By customer category, they grew in academic and in all of the three sort of applied sectors. And then by regions, even despite the sort of some of the headwinds in America, Americas was up, APAC was up, EMEA was up. So we are confident in the outlook for that company. By way of context, we are now the second largest holder behind EIC, the Ellison Institute of Technology, which is backed by Larry Ellison, as many of you will know.

[Greg Smith, CEO & Director at IP Group]

Of course, Larry recently became briefly the world's richest man, and and he obviously has quite an incredible track record of delivering value through Oracle. I thought it was, you know, quite interesting that The UK press has started to pick up more recently on EHDIT and its Oxford ambitions and Nanafor is very relevant. If you go to the website, you can see how relevant it is to their focus on two of their big themes, one around health, medical science and generative biology and the other around food security and sustainable agriculture. In terms of our position, as a reminder, we invested about £80,000,000 into the company over time. We've realized about 110,000,000 to date, so we've already covered our cost in full.

[Greg Smith, CEO & Director at IP Group]

And as you'll have seen in our portfolio data for this year and last year, we've taken a small amount of liquidity on a couple of occasions. And as you'd expect, we continue to very actively monitor the company against where we consider fair value to be at any given time. But as I we remain really confident in the medium term outlook for the business. And we our feeling was that their full year 2025 guidance was maybe a bit conservative given the strong first half update. So we're confident in our holding.

[Greg Smith, CEO & Director at IP Group]

We look forward to further commercial updates from the company. There's clearly a number of interesting commercial relationships brewing there in biopharma and in clinical and also the deeper dive on their refined commercial strategy, which will be coming out in Q4, particularly around how they intend to exploit the sort of £13,000,000,000 to £14,000,000,000 of TAM that they've identified in what they call the higher priority segments. And then on ESTETO, following the news that their most recent trial didn't meet its primary endpoint back in February, the management team has worked hard to progress that program through to value and the company published a peer reviewed paper in the Journal of Pharmacology and Experimental Therapeutics, JPET, to his friends. And that was outlining the impact of its compounds on various chronic diseases where tissue damage occurs. So rheumatoid arthritis, as you'll know, but also things like osteoporosis, fibrosis, and interestingly, sarcopenia or muscle loss.

[Greg Smith, CEO & Director at IP Group]

And that last bit, I think, led to the paper being picked up by some of the longevity publications because muscle loss is particularly relevant at the moment around the weight loss drugs, very common side effects of some of the good ones. During the period, the company also added a very experienced non exec, Doctor Mike Owen, who delighted to have Doctor Owen join the board. You might recognize the name. He was a co founder of Kymab, which sold to Sanofi back in 2021 for, I think, was £1,100,000,000 upfront. And when he joined, he said, know, asbestos old approach to reversing tissue damage could fundamentally change the treatment paradigm for chronic diseases and therefore hold enormous clinical and commercial potential.

[Greg Smith, CEO & Director at IP Group]

As I mentioned a few months ago, at the full year results, the company stopped funding to carry out a further trial and the location and design of which is well underway and we anticipate that will commence before the end of the year. On exits, we had a good period for cash realizations. We set an internal target of £50,000,000 for full year 'twenty five coming into the year. And the momentum into half two and some more elevated level of inbound interest in the portfolio gives us a high degree of confidence that we'll achieve that and likely exceed it. Of the examples shown here, two companies were outright company acquisitions and one, Centessa, with a partial realization.

[Greg Smith, CEO & Director at IP Group]

For our remaining holding in Centessa, the company recently gave a positive update at the Morgan Stanley Global Healthcare Conference, and we anticipate the readout of their Phase II in narcolepsy is pretty imminent, and that will be the next catalyst for our remaining holding. In addition to these examples, also worth mentioning, we realized a small amount of our hinge holding at the time of the IPO. And as I mentioned, the balance has gone up by around 80%, so our lockup expires on that in November. On what we've done with that cash, as a reminder, our policy is a commitment to deliver cash returns to supplement capital growth using a proportion of the excess that we make in any given year. At the moment, we are using buybacks and we said that we'll do that until the discount gets to a lower level than 20%.

[Greg Smith, CEO & Director at IP Group]

And given that persistent discount at the time of our full year results back in March, we announced the intention to use a greater proportion of our realizations in 2025 and we will again review that towards the end of this year based on our capital forecast for going into 2026. The current program is 75,000,000 and that includes GBP 20,000,000 that we announced in June. At today's date, as of yesterday, we've got about GBP 9,000,000 left to run on that program. And so as we make further realizations, we'll look to add to that total. And I think it's worth noting the acceleration this year has been quite significant.

[Greg Smith, CEO & Director at IP Group]

In fact, yesterday, was looking at the numbers, our share count fell below 900,000,000 shares for the first time, which means that we've now retired 15% of our capital in issue. We've focused lots of our capital in the last couple of years on the buyback and on existing portfolio and getting those with the highest value potential through to their milestones and value realization. And we're starting to see as sort of performance and market appetite continues to return, we'll start to selectively add a few more new holdings to the balance sheet portfolio, including from Hartwalk and the wider ecosystem. Before I hand on to Mark, I just want to briefly look forward quickly a reminder of the IB Group investment case. Three things to believe.

[Greg Smith, CEO & Director at IP Group]

The first is that there is significant value potential in UK science and technology. I talked about this and exemplified this at our Capital Markets Day back in June. The second is that IP Group is well positioned to exploit this given the team, the track record, the sourcing and the portfolio and that this represents an attractive shareholder opportunity, particularly given the discount to NAV against which we currently trade. To reiterate again, this is something that I've covered in the past few updates. This, in a single slide, I guess, depicts the capital strategy that we are following to be able to exploit that opportunity.

[Greg Smith, CEO & Director at IP Group]

And from the from the perspective of a a developing science and technology business, we're one of the few investors that can support development from the very earliest stages to relative maturity at the sort of venture growth end of the journey And complementary private funds are strategically important in terms of pipeline, particularly in the case of Hartwalk, but also development capital for our businesses, and they also contribute fees to mitigate our net overheads. In terms of scale and ambition, Hartwalk, we're aiming to maintain around GBP 500,000,000.0 of assets there, successful exits of balancing off against new subscriptions. On the balance sheet, we're focused on NAV per share delivery, and that obviously includes about £140,000,000 of cash that we've returned to shareholders over the last couple of years and appropriate for where we are in the cycle. And then on the scale up fund side, under which you'll remember, Hostplus increased their commitment by a further 125,000,000 last year, and that's where there is a real growth opportunity to scale available capital to ensure strong returns from our balance sheet and our sources for our various investors. On the first bit of that, just a quick update on our differentiated UK sourcing platform, Parkwalk.

[Greg Smith, CEO & Director at IP Group]

The business here, as you'll see from the numbers I mentioned, has about GBP $05,000,000,000 of assets under management there, which are all EIS tax advantaged capital, and we partnered with many of The UK's leading universities to source new spin out opportunities. I'll just put a couple of highlights out from the first half. So one, in addition to the alumni funds that we have with Oxford and Cambridge and Imperial and Bristol, we were very pleased to add a new fund in collaboration with Northern Bristowe, which covers Leeds, Liverpool, Manchester and Sheffield. And then similar to the theme that we're seeing on the balance sheet side, last week, we were delighted to announce the acquisition of one of our portfolio companies in the funds, Cytora, which gave a good return to our EIS investors and for our PLC shareholders, that generates additional fund management fees that contribute to lowering our net overheads. And then at the other end of that sort of capital strategy is our objective to add further scale capital.

[Greg Smith, CEO & Director at IP Group]

I mean, the context here continues to move in our favor. Our overall observation is that the public and private sectors are starting to align in terms of their policy and their approach. And during the first half, there have been quite a lot of important points of progress and there's things like updated mandates and increased funding for the British Business Bank and National Wealth Fund, which you can see there on the left hand side. A lot of that is highly aligned with the industrial strategy in The UK and the sectors that we focus on in turn aligns with those. And the pensions bill is currently passing through the commons, how long that's going to take, that removes some of the widely cited barriers to pension funds and similar long term capital investing more in private productive assets in The UK.

[Greg Smith, CEO & Director at IP Group]

And the management has record, which is about 17 of the largest workplace pension providers in The UK and committed to a voluntary commitment to have 10% of their default schemes in private markets by 02/1930, including half of that capital going into The UK. There's been quite a lot of sort of sector activity. Our experience and probably that of the wider market when you look at mandates is that there haven't been very many VC commitments perhaps with the notable exception of the Phoenix Schroders joint venture, Buchsgrove Capital. But there's not been much that's really at scale and our view is ultimately that's what's needed and where the big opportunity lies. I would say encouragingly, number and the stage of conversations with potential funders has seen quite an increase since the time the match has, of course, and we've added some additional experience resource to our team to help exploit that.

[Greg Smith, CEO & Director at IP Group]

As I said at the start, we've got a good degree of confidence in securing at least one new mandate by the time I next talk to you for the full year results. And then, clearly, before I hand on to Mark, thought I'd just cover a few of the companies or trail a few of the companies that we are excited about and particularly those that have either presented or are going to present at our events this year. So Ops CCU, our sustainable airline fuel business, Mark can talk about that one shortly. Andrew, the Co Founder and CEO, will be at our flagship scale up event in October. Intrinsyc, you might remember that the cofounder and CTO Adman presented at our Capital Markets event.

[Greg Smith, CEO & Director at IP Group]

There's a video on our YouTube channel if you like a lot of technical detail. That's quite a technical one. They are producing the world's smallest nonvolatile memory, and they have what's called a tape out coming towards the back end of this year. That does have very significant commercial potential given the company's initially targeting a segment of the memory market that's worth more than GBP 50,000,000,000. And then genomics at the Capital Markets Day back in June again, Dave Thornton, who is the President there, gave a very compelling overview of the technology and its commercial applications.

[Greg Smith, CEO & Director at IP Group]

He also saved right till the end to update everyone that revenues will grow by more than 100% this year, and we'll do so again in 2026, taking them to 70,000,080 million dollars He said that will be EBITDA positive by the end this year, so that's another of our top 20 companies to watch. And then on the therapeutics, our current clinical stage portfolio is worth about 23p per share, and there's a good number of clinical milestones coming up between now and the '7. Again, Mark can cover a couple of those shortly. And then just one other quick thing to mention, just briefly on our licensing portfolio. We don't speak much about this.

[Greg Smith, CEO & Director at IP Group]

We have a licensing portfolio of IP predominantly from Imperial and that contributes a few 100,000 to our net overheads. There are three main projects in that portfolio. But I mentioned at the start that the public markets have contributed in more ways than one this period. And back in January, Metcira, a therapeutics business IPO ed in The U. And actually, we licensed the core IP to Metcira.

[Greg Smith, CEO & Director at IP Group]

And of course, it's early days, but if successful, there could be quite a meaningful source of royalty income over time. So we'll keep you updated on that one. So with that, I will hand on to Mark to talk bit more about portfolio.

[Mark Reilly, Managing Partner at IP Group]

Thank you, Greg. Good morning, everybody.

[Mark Reilly, Managing Partner at IP Group]

So there's been a few notable events over the course of the first half. Perhaps arguably the standout one, certainly for me personally, having sort of witnessed the whole journey of Inchelft. I recall, I think it was twenty twelve, twenty thirteen, when its founder, Dan Perrott, who remains the Chief Executive of Intel, walked into our office and very confidently said, I'm going to make you guys a lot of money. And I think he can put some confidence that, that was accurate now with a 50x overall return on our investment so far on asset. So the company, of course, we were the first investor when Dan was still a PhD student at the University of Oxford. It went on to rate substantial sums in some of the top Silicon Valley investors, doing very impressive growth and had that successful IPO in May. We were able to sell a small amount for the IPO, and we did sell a larger chunk of our holding price that had very good valuation in the private markets two or three years ago. But we still have the remaining holdings that was worth just under GBP 40,000,000 at the half year. And share price continues to trend up since then, which is good news.

[Mark Reilly, Managing Partner at IP Group]

So that holding is locked in now until November, but we still have that holding in shelf. And the company has since put out some announcements to date its results. It's a Q2 announcement. And again, exceeded expectations, did very well. Revenue reported is increasing at 55% year over year, and they're now at $140,000,000 of revenue in that period.

[Mark Reilly, Managing Partner at IP Group]

And they're projecting 40% of the year on year growth going forward, so still very strong commercial progress there. I saw there was a question in the Q and A. The first question that came in, in the Q and A was why sell Hinchelk when there were lots of other smaller holdings in the portfolio that described as non listed and non relevant in the question. So I would first of all highlight that Hinge was one of those non relevant, non listed holdings until relatively recently. And so we think there is value in holding stuff that has potential that could hit that inflection curve.

[Mark Reilly, Managing Partner at IP Group]

I think also the reason why you as investors have upholding shares on your behalf is that there are some rationale for doing that, which is that we have this technical expertise internally that we can kind of arbitrage technical risk, we can judge that better than others. We have influence on these companies. We have extra visibility of a lot of these companies that others don't. And when those things become less true, the company is mature, less of a rationale for us to hold them. So where that liquidity exists, that's where we start to consider divesting those positions. So just running through some of the other the top assets by value in the portfolio to update you on what's been happening in some of those assets. Greg spoke quite a bit about NanoCore, so I won't spend too long on that one other than to reiterate the fact that it continues to outperform its peers. They had a positive set of results that beat the market expectations, 28% rising revenue, up to £105,000,000 now. And a key thing that we were looking for in those results was diversification of revenue, demonstrating that they're moving into applied markets, into clinical markets, as well as this strong base of research revenue that they've already demonstrated over the past several years. And we really saw that this time, the revenue grew by over 50% in the clinical domain and 27% in the applied domain.

[Mark Reilly, Managing Partner at IP Group]

So that's really showing that they're moving into those big market opportunities. It's very encouraging. On Obsceta, as Greg said, this was frustrating that they missed the endpoints in the first Phase two trial but frustrating because it also demonstrated there's so much potential in this drug and as Fred said there was some data from that trial published in the Journal of Pharmacology and Experimental Therapeutics that demonstrated the ability to elicit tissue repair, not just sort of preventing degrading the tissue, but actually showing that it's repairing the tissue, which has a lot of implications, but it showed these improvements in bone erosion and disability and fatigue. And so that has a lot of implications to sort of slowing aging and to just slow the progress and even reverse the progress of some of these really detrimental conditions that people suffer from it like this stuff. Their focus is currently on rheumatoid arthritis. That publication certainly increased market confidence that there's a mechanism of action here that's really interesting the efficacy of this drug is real, that there's a range of clinical indications and diseases where it could be used. So it's sort frustrating because of this potential and of course, that benefit didn't manifest in particular primary endpoint chosen over the time scale and over the cohort of this first trial.

[Mark Reilly, Managing Partner at IP Group]

But we've learned a lot from that. They're going to do another trial now that implements those learnings and focuses on the things that they think can really create a difference with, and they're well funded to do that trial. So remain optimistic about the long term prospects of that company. And finally, on this slide amongst our most valuable assets on the side. So they not a huge amount to report there because things are going well.

[Mark Reilly, Managing Partner at IP Group]

Their trial is on track. We're getting the bodies to plan. This is developing these respiratory treatments, inhaled treatments for respiratory infections like invasive pulmonary vasculitis, a very nasty thing that you expecting that to read out in sort of H2 of '36 and have some results from that next year. So The final nod on this slide, but Greg also mentioned Oktur. So Oktur, have taken a impairment on the holding there.

[Mark Reilly, Managing Partner at IP Group]

It continues to make good technical progress. It's got very encouraging commercial progress. Company is doing well. It has been hard than we hoped to raise money for the company. A bit frustrating because we have sort of built the building blocks around, but it's we're just not quite over the line with that yet.

[Mark Reilly, Managing Partner at IP Group]

But we are quite advanced now in discussions with the major center cornerstones, so I hope to have some good news on that asset soon. So that's the sort of the higher value stuff in the portfolio. That's the kind of top end. But another just picked out another handful of assets to mention because of so many quite some developments in in those assets. Artyos, you may recall, is a company that's developing DNA damage response based cancer therapies, and they are focused on how to treat solid tumors.

[Mark Reilly, Managing Partner at IP Group]

It's now public that they're targeting pancreatic and colorectal cancers, both of which have a huge, unfortunately, unmet clinical need. So big market opportunity for the company, big market opportunity. They did publish some of the sort of early data from their current trial, the Phase III trial at the American Society of Cancer Research Conference, and that data was very well received. They're funded to continue that trial and to explore the indications that they're seeing. And so we expect to see results from that end of next year, early as well, early twenty twenty seven the most likely time we would expect to.

[Mark Reilly, Managing Partner at IP Group]

I have to sort of qualify all of these clinical trial expectations, but there are always things that can go off track and that can be delayed. But at the moment, it's probably most important by both the On Track and Expectation take time scales that we've already guided. Then finally, there's two assets to mention in our CleanTech portfolio. So, OXTTU, I don't know, we maybe haven't spoken huge amount about this company in the last few presentations, but this is a company in Oxford, it's been out of Oxford University, that's developing the world's lowest cost, lowest emission methods of making sustainable aviation fuel. So you use a waste of carbon and you turn it into fuel for airplanes.

[Mark Reilly, Managing Partner at IP Group]

And good news for those of us who would like to continue traveling without any impact on the environment that it currently has. So that company raised GBP 28,000,000 in a Series B round during the period. And the exciting thing about that is the sort of incredibly impressive list of strategic investors who came in to really validate the proposition that obviously, CU is working on. So was round was led by Safran, which is the world's second largest aircraft equipment manufacturer. The energy company, all of came into the round.

[Mark Reilly, Managing Partner at IP Group]

IAG, which is the parent company of British Airways, came into that round. So a real kind of validation of their proposition based on the strategic interest that they've had in strategic financial support that they've got. They've built a demonstration plant that's down the tarmac up there in Oxford Airport that's kicking out jet fuel. It's working. It's producing jet fuel now, and they've started the process to develop a full scale commercial project in The UK.

[Mark Reilly, Managing Partner at IP Group]

So that will be the sort of next scale up of their project. And finally, HystaFta. We've talked about HystaFta in these presentations before. Very compelling proposition. They have a hydrogen electrolyzer, a machine that produces hydrogen at 95% efficiency, which is well above anything that you will achieve if you buy a hydrogen electrolyzer off yourself today.

[Mark Reilly, Managing Partner at IP Group]

So their 100 kilowatt system, it is slightly delayed, but we anticipate that there was possibility that there will be a delay on this 100 kilowatt system. So that's built into their funding roadmap, which is money that we raised with the last time that field funders used that system. And we're still expecting it to be commissioned during Q3 and in this quarter of this year. They've also got a field trial going on a machine running on a customer premises in Saudi Arabia. So this is not set in the Hiragasta facility.

[Mark Reilly, Managing Partner at IP Group]

It's that halfway around the world, and that is working and they've reproduced that world leading efficiency at that customer site to have demonstrated the ability to put the machine in different places to grow that world leading efficiency. And with that, I will hand back to David now.

[David Baynes, CFO & COO at IP Group]

Thank you very much. Thanks so much. Yeah. Financial results. Nice to review again as always.

[David Baynes, CFO & COO at IP Group]

I'm going go through this fairly quickly. It pretty much just pulls together all the freights and links we've been talking about. Overall, very strong again, £237,000,000 cash. That's actually up 47% from this time last year. That's because of a very successful exit feature phase at the end of last year, which, of course, generated significant amount of cash.

[David Baynes, CFO & COO at IP Group]

We are, of course, slightly down from the year end if we made investments. And I'll give you the cash flow in a minute to talk you through that. There was a small loss for the period, that 1.5%, about £43,000,000 loss. It is worth making the point that we've already heard that since year end, any order that has reversed actually through improvements in Nanticore and Hinge about GBP 35,000,000 that's come back. And it means combined with share buyback, our NAV per share is now actually up.

[David Baynes, CFO & COO at IP Group]

So it's briefly down at the half year from GBP 97 to 96, now about GBP share. So that's a combination of improvements at the year end and also the share buyback improves and that's the share as we go along. And net overheads are down about 14% period on period. I'll do a slide on those in a minute and tweak through it. This next slide could be long, could be short.

[David Baynes, CFO & COO at IP Group]

We're certainly going to the short option. Increase and that's preferred within the entering results. There's a number of kind of uplifts over five to six companies and a number of write downs over a similar number of companies and a foreign exchange loss of £14,000,000 which relates to the pound being strong when we convert some of our American denominated assets in particular. That may or may not reverse at some stage depending on currency. But those elements just eliminate quite frankly.

[David Baynes, CFO & COO at IP Group]

And then you've got really just to do with two funding rounds really, RTS and Okta. But actually, as you've already heard, the company is performing well, but actually we've not either completed or haven't started a full funding and as such we have no choice but to actually make some kind of provision against both. And those that accounts for sort of £39,000,000 of that. So pretty much that is the story of the half, but just adjustments made to assets in that small loss. That loss has now been eliminated between the year end and today.

[David Baynes, CFO & COO at IP Group]

That's why when we now look at the assets there, assets are down a small amount from about 1,000,000,000 to GBP 900,000,000, those are rounded down about GBP 60,000,000. So a combination of that small loss and shares we bought back because of course buyback does actually it's actually slightly smaller if you buy back shares. The concentration hasn't changed. So that's the next bit of the slide telling you there is no news. It was about exactly 56% of the top 10 at the year end and it is now.

[David Baynes, CFO & COO at IP Group]

It's pretty much the same sort of ratio of how the portfolio looks. And actually, the next slide is also no change. This is the slide I always do that talks about how well the portfolio itself is funded. Of course, that's very important. And actually, we're increasingly seeing this passing whereby about a third that it's funded.

[David Baynes, CFO & COO at IP Group]

It's a possibility. Don't need to worry about that. And then there's about a third, which over the next year, a year and a half, needs funding and then another third that doesn't need funding until '27 beyond. So much of the portfolio is fairly well funded, but there will always be funding challenges and companies require funding at any point in time. So that kind of one third one third one third rule is beginning to come, yeah, pretty well well, solid as a rule. And now this just pulls it all together. So here's the cash flows of what happened and you've heard, I think, all of these numbers now. We've invested 35,000,000 in the period. It's heard of a number of assets.

[David Baynes, CFO & COO at IP Group]

Mostly current assets, only about 12%. That's over investing into new assets as a single new company in a series. Realisations we've talked about at length £30,000,000 Share repurchases 25,000,000 It hampers almost exactly what we realized we've used on buybacks at that. We are this year committed to 50% of our realizations to be done in the form of buybacks. It just so happens that some of the buybacks we've done relate to last year, so it doesn't quite work out the math.

[David Baynes, CFO & COO at IP Group]

But in short, we will be during the course of the year, I think, 50% of our realizations and buybacks. OVAD is down as we've heard. The net debt, actually, we generated about 2.6% net income on interest, but we've made some repayments on the debt in the period, which means the actual total room is just a small reduction overall. And then there's relatively large working capital movement that relates to the licensing, which we just started talking about a bit. What happens on the licensing, we own certain licensing assets apart from Imperial College.

[David Baynes, CFO & COO at IP Group]

We're responsible for them. We often collect in the proceeds and then actually keep some, somebody to dispute to other parties, for example, College itself. And that means sometimes I think working capital is where we're paying out money and receipts on behalf of others. And that's where it gets a very, large move. But but that's the story of cash.

[David Baynes, CFO & COO at IP Group]

Cash is still very, very strong. And overheads, I'm very glad to pay pretty much exactly what we said that day. So that 15% this time compared to this time and after, but we're going to do what we said we'd do. When we did the cost reduction in the second half of last year, said we we'd reduce the '23 number which is about 22,500,000.0 net to about 16,500,000.0 net. That's what we're going to do.

[David Baynes, CFO & COO at IP Group]

23 reduction that still looks like what we'll achieve to the year end. So I think without further ado, I'll pass back to Greg.

[Greg Smith, CEO & Director at IP Group]

Thank you, Dave. You're welcome. So leaving some good time for questions. So a summary of the half year results. So we made good progress in the first half.

[Greg Smith, CEO & Director at IP Group]

We saw a number of encouraging developments in the portfolio, many of which Mark has touched on. And the public markets were a particular fair value contributor, including that Hinchel IPO and Oxford's strong trading. And we made good progress on exits of £30,000,000 and that momentum into Part two means we remain confident of our target of achieving £250,000,000 of exits by the 2027. As Dave just mentioned, our NAV per share essentially stabilized over the period and has subsequently increased since the period end to pound a share, about £1 a share. And on the scale of capital and expanding our resources as a group, our capital resources as a group, we continue to see a big opportunity.

[Greg Smith, CEO & Director at IP Group]

And while the market hasn't necessarily moved as quickly as we hoped or expected, good confidence in securing at least one new mandate by the time we next see you all on the IMC platform for our full year results. I'll just quickly remind you, looking forward, our investment case is based on these three sort of hypotheses. The first is that there's significant value in UK science and technology, given our world leading position there. And the LifeV Group is one of the pioneers in this space and with a long track record is well positioned to exploit that and that we hope we've set out an attractive shareholder opportunity in the next six months and indeed out to 2027. And then just because I think this is good form, these were the priorities and future areas of focus that I set out at the full year, which we are aiming to achieve over the course of the the the time between now and and the end of the year in 2027 on the excess.

[Greg Smith, CEO & Director at IP Group]

And I think on all of those, we're we're making good progress. So I won't go through them each in turn, and I'll cover them all off when we report to you our full year results. So thank you, everyone, for listening, we will now turn to questions. Great thank

[David Baynes, CFO & COO at IP Group]

you very much. Well that's gone well so far we said we'd be forty minutes and we're thirty eight so we've got quite a lot of questions but maybe not quite as many as normal so we may get through this now. Lauren's Ed if you don't mind I think we've answered George you had a question about why you're selling Hinge and keeping some of the smaller positions. I think Mark answered that while he was presenting. So I'll move on to next.

[David Baynes, CFO & COO at IP Group]

Kane, nice to have you. Analyst from Deutsche. Nice to have you here, Kane. You've got three questions. I'm gonna do them one at a time.

[David Baynes, CFO & COO at IP Group]

Mark, I'll do the first one with you. Might the adverse uncertain conditions research in The US, for example, funding like the NIH, create opportunities in The UK?

[Greg Smith, CEO & Director at IP Group]

Maybe. And there are headwinds as well, and there's some pharma investments being withdrawn from The UK, I think, a of weeks or so ago. So I think we frequently see remember a few years ago, this question was about Brexit and time before that, it was about the recession. And so there are lots of these kind of ebbs and flows of funding. I think it takes time to have an impact on us because it takes time to then filter through for the funding of science, and that takes time to filter through for the commercialization that's coming out of those research outside, I would say, not in the short term, but maybe in the moment.

[David Baynes, CFO & COO at IP Group]

You. Kane, second question, I'm going point that to you, Reg. Why do you think Larry Ellison is so keen on LNG? I think looking at

[Greg Smith, CEO & Director at IP Group]

the time the question came in, it might have been before I said why I think he's keen. I think the commercial answer is that the technology is is incredibly well suited to two of those big themes that they're trying to solve, the big global challenges they're trying to solve and through the Allison Institute of Technology, particularly around sort of the human health and genetics, but also on the sort of sources of food and agriculture. Clearly, they're they're building a a significant position there, which is which is interesting. So I haven't spoken to him directly. So I I I could say definitively, but it's it's a good sign if you you he's he's had such an incredible track record in, like, forty years of delivering value through being able to not necessarily be ahead of the curve on technology adoption, but certainly delivering real cash value.

[Greg Smith, CEO & Director at IP Group]

So I think it's good sign, but also it's one to watch. Yep.

[David Baynes, CFO & COO at IP Group]

I got a point next from you, Mark, you know it's coming. Hinge Health up strongly post period end. Will you be inclined to take some profits?

[Mark Reilly, Managing Partner at IP Group]

Well, we're locked in at the moment and we'll take some of the IPO. Then, as I said earlier, it's an evaluation of the the liquidity and the value available to us and given by Michael.

[David Baynes, CFO & COO at IP Group]

Thank you very much.

[Mark Reilly, Managing Partner at IP Group]

And as you'd expect, obviously, we don't want to tell you about our intentions on our brokerage companies because there's smart people out there that can do things with that information. We're pleased with that holding and it's a good source of liquidity over time.

[David Baynes, CFO & COO at IP Group]

The next one, Sam. Nice to have you here to have another analyst. I'm very good to have you here, Sam. I mentioned in this because people in the past have said, can you make it clear when some of them are now? So I'm doing that.

[David Baynes, CFO & COO at IP Group]

I'm gonna split this question. I'll do the first bit, Mark, and then maybe give you the second if that's alright. First, it's one sentence, but would you be able to provide more detail on your IP licensing portfolio? And then secondly, and therapeutic programs, when do you expect licensing income to ramp up? I'll talk to you a little bit on the licensing.

[David Baynes, CFO & COO at IP Group]

Licensing traditionally has been a relatively small part of our business. We inherited the licensing as part of the acquisition when we bought Touchstone. They as part of Berry that used to do the licensing for Imperial College. A very large number of patents, some of what we call active ones at actuarial, whether we had a degree in terms of and some of the ones that were just exploratory and still waiting for make some delights. And we retained all of those active licenses.

[David Baynes, CFO & COO at IP Group]

So there's definitely a big portfolio of 80 different licenses. The actual strength of the the actual strength of the reg is small traditionally. We've been recognizing something like 500, 700,000 per year. That tends to be the patent license if you have ever large number. Those can generate very small amounts.

[David Baynes, CFO & COO at IP Group]

And at the time to time, you can sometimes get some really big licenses. A single license can do 95%, 99% sometimes. Have got a free license without Greg already referred to the next zero one. It's early. It's early.

[David Baynes, CFO & COO at IP Group]

We're not gonna start making claims about their value. We're not recognizing in the book. Actually, in accordance of accounting standards, unlikely we will recognize in the book until such time an actual life of income is recognized. You know, you can't kind of recognize it like a potential intangible or something. But any of the top three have the potential to, in time, generate significant revenues.

[David Baynes, CFO & COO at IP Group]

NetZero now about a 3,800,000,000.0 CAD company, a GLP one agonist, and it's promising event for phase two trial. There are some notes out there. If that got through a phase two trial, if that then became an effective drug, they may in time be some decent license income that come to us and some bit we would be associated with the peer college.

[David Baynes, CFO & COO at IP Group]

So that's probably what I'd say at the moment. At the moment, no impact on the financial, no significant impact on financials but maybe in time and I'm thinking maybe two to three years time, you may start seeing if some of these came well some decent licensing income, and we'll talk about that at the time. It's a bit of a wide one to talk about all of our programs. Ben, want to touch on, Mark, or whether we might treat that question as dealt with. I don't know if any of you over and above what we've already talked about there.

[Mark Reilly, Managing Partner at IP Group]

Yeah.

[Mark Reilly, Managing Partner at IP Group]

I wonder whether that was that was a the NAC as well. So a couple Yeah.

[David Baynes, CFO & COO at IP Group]

I think that is.

[Mark Reilly, Managing Partner at IP Group]

It's worth saying in in the appendices in our in our results presentation, we do do a, you know, sort of a summary of the the main holdings and where they are in their clinical development and our valuation. And and so what was sort of what we're seeing is milestones coming up. So that's that's sort of a ready back, know, and then very happy to sort that in more detail. And any the others we haven't covered when we next see you, Sam.

[David Baynes, CFO & COO at IP Group]

I've got another one for you, Sam. I'll give it to you, Greg. Given the current cash position and potential exits over the next couple of years, is there any change in your thinking around buybacks?

[Greg Smith, CEO & Director at IP Group]

Well, hope we've got a pretty clear policy out there. While the discount is greater than 20%, the proportion of cash that we allocate to returning to shareholders is being done by way of a buyback. We think that's most accretive way to do that at the moment. And at the moment, for this year, we're doing we're using 50% of our realizations and to that end, we will, as always, look at that number for next year. Historically, it's been around 20% of realizations as we've returned, which we see as sort of a more sustainable and steady state.

[Greg Smith, CEO & Director at IP Group]

But obviously, we'll look at the relative opportunities to buy back to our own shares versus portfolio opportunities and some small number of new opportunities. So no real change in the policy. The application changes each year based on certain requirements.

[David Baynes, CFO & COO at IP Group]

Next, Josh L, not an analyst, I'll bet you I'm aware. I'll probably take this. How has there been no first bite fusion sales value movement despite the complete change of strategy during the period? Has been a significant change in strategy and actually some very potent technical developments, which I won't try to talk to. You can ask Mark about those if you're interested.

[David Baynes, CFO & COO at IP Group]

But actually, reviewing the valuation, one of the main considerations which is like the the probability of funding, the likely valuation of funding. And when we reviewed it, we came to conclusion that actually the kind of value we carried at looks pretty robust around what we'd expect to value that.

[Greg Smith, CEO & Director at IP Group]

I like my recollection of this new chapter was fairly well advanced at the time of the full year valuation so that one

[David Baynes, CFO & COO at IP Group]

Pretty much factored in, yeah exactly. And at the moment I think from where I'm sitting just the technical side of value Mitch I think that actually we carry it where we sort of think it may be valid. We may be wrong but we will see. But we after quite a lot of discussion, we felt it was fairly valued and the movement in its actual carrying value that's just related to money we've invested in the business. That's next, Who would this be?

[David Baynes, CFO & COO at IP Group]

From from MV. Hi, IT group team. Nice momentum in portfolio. Thank you. Any plans on the partial or full sold down in Manipur?

[David Baynes, CFO & COO at IP Group]

Particularly given the IT initiatives. Greg's already mentioned, we're unlikely to come to that. I don't if you want to say anything further, but we're unlikely to come to ourselves and to other companies. Anyone answer that, Greg, at all?

[Greg Smith, CEO & Director at IP Group]

I I don't mean anything to to to add to what we've we've said on that front. We we know we do look at it all the time. It's not, I've said in the past, it's not our strategy to have big holdings in in large, quite significant companies that that our shareholders can access directly. So it's it's a a matter of time that we're very a happy holder given the progress in the portfolio, and we always look at liquidity.

[David Baynes, CFO & COO at IP Group]

Thank you. Next question from Bill H. Probably, Mark, what is the role of IT Group's managing partner?

[Mark Reilly, Managing Partner at IP Group]

Would you like to well, the shareholder value to to increase the value of our existing portfolio and to make exciting new investments into companies that will be future well changing company. So I have responsibility across the portfolio. I'm the person that chairs our investment committee, so I sort of decision making is sound and good as it can be. And some the older decisions around transactions of investment and exit.

[David Baynes, CFO & COO at IP Group]

Thank you. Again, think one for you Mark on how much you want to talk about this. Can you this is Milos, so another analyst. Edithan this time. Hello, Milos.

[David Baynes, CFO & COO at IP Group]

Nice to have you. Can you give us an update on the monetization of ultra elite patents? You're able to talk about on that, Mark? Think.

[Mark Reilly, Managing Partner at IP Group]

The CEO. He's told me that I know they did a significant vote on Monday, actually, this, that the transaction, you might recall, we had an

[Greg Smith, CEO & Director at IP Group]

Mark, agreement to sell the patent portfolio to a company called CIM IP, a specialist in monetizing the patent portfolios. And we were when we closed that transaction when we lost spoke publicly about this. That transaction has now closed, and so that's very positive. And the company has received an approval for that initial part of the transaction. There's an earn out agreement.

[Greg Smith, CEO & Director at IP Group]

So it might be monetized that portfolio, a bunch of places as well, please. So it's very positive. We believe in the value of that portfolio. There's a lot of places where we've seen those patents are valuable. So we're optimistic about future fund flows from that.

[David Baynes, CFO & COO at IP Group]

Thanks. Next one, there's more questions coming in actually. Questions are picking up, please. Robin M, I'll give it to you, Greg. Think maybe you can talk a little bit about cash raised in private market secondary sales both in the past and going forward.

[David Baynes, CFO & COO at IP Group]

Is this becoming an easier way to raise capital? I think possibly it's a small deal we did last year. I'll let you know.

[Greg Smith, CEO & Director at IP Group]

So we yeah. We did we did do a small secondary last year. I think there's another question further down that asked about how did how did the how did the assets mark and all that sort of stuff. I and I think at the time, we said that on average across the on the various holdings on the balance sheet, it was a slight premium. It was a was a bad naps, maybe a tiny premium to naps on the balance sheet.

[Greg Smith, CEO & Director at IP Group]

And it was across and secondly, it was across a few companies on the part wall funds a few companies on the balance sheet side. They were they were just exact total was around 23,000,000, I think, across the two folds. And we also said that there were things like preemption rights and all that sort of stuff, which which we which meant we couldn't complete the pool and transfers that we plan to. I think we did just over two thirds of the of the 23,000,000, I think. So that that transaction is all played through, and we do look at other options like that.

[Greg Smith, CEO & Director at IP Group]

You know, we've we've explored all the time that I've been at IV Group, which is sort of fifteen plus years. We've always looked at other ways that we can accelerate value through these sort of structured transactions. Think the secondary markets are interesting at the moment, they're interesting potentially for us, potentially, as we think about how we access scale up capital and build strategic relationships. But also, the secondary market is quite interesting because we have a permanent balance sheet and our liquidity position is reasonably strong, relatively speaking. And there is clearly an opportunity where in companies that we're existing shareholders of that we particularly like or even potentially companies that we've tracked over the last few years that have made significant developments, but perhaps the cap table isn't as strong as it could be then clearly there's secondary opportunities for us.

[Greg Smith, CEO & Director at IP Group]

So yes, we look at it on both sides and we'll always consider those opportunities.

[David Baynes, CFO & COO at IP Group]

Next one, I'll point towards you, Marcus, from the loss again. And it's one that both of are generally back on. What appetite for M and A and licensing deals do see if that's a lifestyle sector at present? Quite a wide reaching question.

[Greg Smith, CEO & Director at IP Group]

Mean, seems good. The my context is perhaps lacking a bit because I've been responsible for life sciences until a year or so ago, but I don't have a full history of staying close to this market and whether those might, but it's that we've had quite a lot of interest in, particularly one of our portfolio companies that's been some inbound interest from potential sort of license strike acquirers. So in the small sample set that we have, it's maybe not representative, but it seems positive.

[David Baynes, CFO & COO at IP Group]

Great. Thank you. I'll have a go at the next one. Congratulations. This is David R.

[David Baynes, CFO & COO at IP Group]

Congratulations on a good set of results. Thank you for that. On what basis is the optimistic view of exit of £250,000,000 for the period through to '27? Well, it's basically on our internal projections. So you can imagine we're running this on capital allocation process all the time.

[David Baynes, CFO & COO at IP Group]

So I'm updating estimates of how much you need to bet, how much you think we're gonna realize, therefore, what's closing cash balance gonna be. And in that process, we're always running out three year objections, what our realizations can be. And we do feel relatively optimistic in the period at end twenty seven, we will generate that level of realizations. And to be clear, that doesn't include auction of NANAPOR. That's not there's no plan for selling that.

[David Baynes, CFO & COO at IP Group]

Nanopore is not in that. So one would hope Nanopore itself, if that's the numbers they're talking about, could easily grow to a £200,000,000 asset on its own, our share at least, by that time. So that's separate. We do think looking particularly at the numbers of therapeutic programs, which we think will come through in that timeline reporting both in '26 and '27, which we feel if they are successful could generate really quite sizable realizations for us. So when you look at our numbers, I mean, when you look at our estimates for what we think we're going to realize, we have weighted probabilities, all types of complexity to try and estimate it. But we're increasingly finding the relatively accurate of it. Although it's a balance in day with 10% probability that and 40% probability that actually, seems to work out relatively well, which is why we've been able manage our cash rent to do well. So in short, it's based upon our current expectations of the portfolio as it stands and there are quite a number of, as you can see, benefits of therapeutic readouts, therapeutic quite big programs reading out which, if any one of those work, could make a serious dent in that number. And we are certainly as we've already said on target to do the number we plan to do this year already.

[David Baynes, CFO & COO at IP Group]

Next one, Haran, hope you don't think I'm ignoring you I think this is a good question around the secondary we did last year to Greg putting so to and I think we've answered. I'll have a next question which could have answered the last one I haven't read but I will read it out with you what we've got. This is from David R. S. Your ambition is simply to increase NAV rather than achieve a more typical target of say 15% which might be expected for VC investing should shareholders have seen either that you're very cautious or simply don't believe you can create critical value on this risk or asset class in The UK.

[Mark Reilly, Managing Partner at IP Group]

Great. How about you? That way. We'd all have a view on that.

[David Baynes, CFO & COO at IP Group]

Yeah. We would be glad to get to that.

[Greg Smith, CEO & Director at IP Group]

We've got to be realistic with the the current environment that we're operating in. However, it's fair to say that our our ambition or our objective is to deliver compelling financial returns that are consistent with that risk profile. And certainly, when the IC needs to consider any investment in a portfolio company, we're not looking at will we keep this holding flat. We're looking at VC type multiples and VC type IRRs. And so the objective is to have more of those successful returns, and we focus the investment strategy more into those areas where we've seen that, those success returns in the past, but also, importantly, where we think there is returns we have in the future in surging against this this sort of side back investing environment.

[Greg Smith, CEO & Director at IP Group]

I don't know if you'd add anything particular to that. I agree with that. No. We're moving into a period where, you know, that that the environment is a bit more accommodative. You know, we're seeing good pickup in in m and a interest.

[Greg Smith, CEO & Director at IP Group]

I wouldn't say it's sort of like, you know, a a wall of m and a interest, but certainly compared to the last couple of years as of this quite marked increase in in inquiries. So that's obviously what it's it's the sort of cash on cash returns, ultimately, which are important. And I think if you look at the track record of things we've had, including feature stage recently and others, the cash on cash record there is very good. It's sort of five, six times and and I think it's sort of 30% IRR. So that's that's what we're targeting.

[Greg Smith, CEO & Director at IP Group]

The NAV gives you an idea of how it's going over time, but sometimes we have NAV setbacks and that doesn't necessarily mean that the company is not going to deliver strong cash on cash returns in the future.

[David Baynes, CFO & COO at IP Group]

I agree. I think this is something we certainly can achieve. Certainly, when you look at some the areas we now focus on, it's good. Being said, actually, mathematically, you can see the past no proof in the future, you can see in fact, we know that in the past we have achieved those returns. So it's certainly a number we aspire to and believe we will achieve.

[David Baynes, CFO & COO at IP Group]

Andrew M next. Talking about the falling value of Oktur which has been partially explained by Greg. He has mentioned there's some good technical progress. Could we perhaps, Mark, have a little bit more about how we feel the technical progress despite the foreign

[Mark Reilly, Managing Partner at IP Group]

value? Yeah. Yeah. I get an email from the CTO once every couple of weeks talking about some exciting technical progress. And most of it's in the context of deployment of actual vehicles as real world applications.

[Mark Reilly, Managing Partner at IP Group]

They're doing a lot of work. So, Mehret, I don't want to go into too much detail because this is sort of commercially sensitive information, but they're doing a lot of work deploying their software onto real world vehicles. One is in Jacksonville in The U. S, where I got an email from the CTO the other day saying that now 1,000 journeys and over 4,000 kilometers traveled autonomously. And I believe all those passengers survived the experience, so that seems to be going very well.

[Mark Reilly, Managing Partner at IP Group]

And the sort of equivalent proof point in the off road domain. They're currently fitting out the trucks that transport big containers around ports. And CEO has been sending me videos of these trucks that we've now got two of these things and they can drive around without driving into each other. And so it's very rapid progress being made of deploying this software on unusual vehicles, accommodating all the parameters of those vehicles and the different requirements of their environment and operating effectively in those environments. So yes, I think from a technical perspective, they move at great pace at Oxford. It's very impressive.

[David Baynes, CFO & COO at IP Group]

Thanks very much. I appreciate that. Going to next one, Haran again. You do get your question at this time. There were reports from the press three Hinge Health that some shareholders sold shares at the time of their most recent results. Could IP Group have sold at the time?

[Mark Reilly, Managing Partner at IP Group]

Yes. I think that may refer to the stock sale. I guess, there was some provisions which allowed them to sell in that period, which other shareholders couldn't I'm in contact with the bankers and with the company pretty regularly. I spoke to them a couple of times around that time that the stock sales occurred.

[David Baynes, CFO & COO at IP Group]

Yeah. No. We can confidently say we couldn't have done that. We're aware that we've tested the market. We know what can and can't do and we couldn't do.

[David Baynes, CFO & COO at IP Group]

Next one Andrew M with 5,000,000 investment in First Light. I think I answered that marker on. It was effectively bridge funding, the standard way we often fund our company.

[Mark Reilly, Managing Partner at IP Group]

Operating capital is paying the salaries of the people that are continuing with the research developing this product that they're selling to people who are showing the fusion and the people who are selling that product.

[David Baynes, CFO & COO at IP Group]

But I should warn everybody by the way that we are exactly at 11:00. So those of you who only had an hour, won't be offended if you leave. But we're going to carry on. I think I've got about five more questions, so we will carry on. So for those that are engaged, stay with us.

[David Baynes, CFO & COO at IP Group]

I'll be guessing about another ten minutes. But thank you for those that to leave. I'm going hand this to you, Craig. Slightly unusual, but interesting question. Which competitors do you use as internal benchmarks?

[David Baynes, CFO & COO at IP Group]

Or rather, are there any public or private funding vehicles you view as best in class that you draw inspiration from?

[Greg Smith, CEO & Director at IP Group]

Good question. Good question. Competitors or or comparators in The UK, I mean, that that a reasonably well developed market in The UK for certainly the early stage fix of commercializing UK science and and a lot of the comparators. And and we don't really compete with them significantly more more often because of it because there's more opportunities for capital generally at the moment. And you're often looking to collaborate rather than and compete. You do compete if it's competitive deal.

[Greg Smith, CEO & Director at IP Group]

So on The UK side, there's also a size enterprise, we've got a small holding in that. We were a founder of shareholders setting that business up, same with Cambridge Innovation Capital. And Northern Britsdon, we work reasonably closely with. We just launched that fund I was talking about for early stage EIS investing alongside them in the portfolio. We also work with some of the other well known MBCs in in The UK, Amadeus.

[Greg Smith, CEO & Director at IP Group]

And then I suppose some of the the people that I have looked up to in terms of scale of business, I guess, it's businesses like ICG who very successfully used their flagship credit product to build out a very scaled asset management business, bringing in private capital to support their existing portfolio and and indeed to to then build that out. So that I I often look at those comparators as as sort of being ambitious directions of travel for the group. It certainly does feel that there is a a large amount of capital that wants to allocate to this space. And so clearly, being in a position where we're a public listed entity, we've got the professional valuations and the systems and the reporting and the track record puts us in a hopefully in an attractive position for those partners who are looking and sort of reputationally at working with people that have been around for a period of time. So yes, it's probably those sorts of businesses.

[Greg Smith, CEO & Director at IP Group]

And of course, there are some world leading VCs who are focused in particular areas and we look at those as best practice and various of the team have their favorite bloggers in VC space that we track their thought leadership. There's some very well resourced VCs on the West Coast, some of whom are increasingly moving into the VTech space of where where we are. And so looking at their pronouncements and how they're seeing the world is is is all, you know, useful information for us.

[David Baynes, CFO & COO at IP Group]

Thank you. I'm gonna move on to Ian Hart. I'm gonna point you from your direction, Mark, if that's alright. The question is to get from time to time. How are you finding The UK universities at present?

[David Baynes, CFO & COO at IP Group]

Are their funding issues making much difference to the way they're approaching Tech Transfer? And from separately, the Connected, are any of the government funded schemes being impacted by budget constraints never affected you at all? I

[Mark Reilly, Managing Partner at IP Group]

would say yes, but I would say that's been the case for the past fifteen years. They've always had these constraints budgets and that has always manifested in their approach to tech transfer. And it's got a very slight university based on recent success or lack of in the domain of commercializing innovation. I think there's some universities that have had one standout success. They're much more kind of ready to invest in the area of tech transfer than others who put their fingers burned by it.

[Mark Reilly, Managing Partner at IP Group]

So I wouldn't say that I've observed a huge sort of sea change or big fluctuation in the last period, but there is definitely always a budgeting pressure on test transfer activity. And if the government funded scheme is being impacted by budget constraint, Again, it's a little bit foggy everlasting. There is definitely you will hear that if you walk the corridors of universities that the project constraints are impacting their research. But I think in some of the exciting areas that we're focused on in areas like quantum computing and emerging AI research work. There is still good money flowing into those areas and some of the exciting research.

[Mark Reilly, Managing Partner at IP Group]

UK has always done a lot with a little with good research with the.

[David Baynes, CFO & COO at IP Group]

Thank you very much. It's very helpful. I'll go on next. I think I'll probably take this one. It looks like my direction is.

[David Baynes, CFO & COO at IP Group]

Andrew M. Thank you for this. Is it really accurate the share buyback program has accelerated? It's up compared to 24%, but pretty stable in 25%. But I'm gonna guess the answer is yes and yes to that.

[David Baynes, CFO & COO at IP Group]

It certainly accelerated compared with what what it did historically. I mean, certainly, the amount we bought, I think, about 75,000,000 shares just in the last year compared with sort of 88, you know, I think ever. So it has, yes, accelerated. But it's a fair point within the year. It hasn't been buying back at a relatively constant rate during the year.

[David Baynes, CFO & COO at IP Group]

Why the chart program increased further? Well, it should, obviously, but that's that's the correct balance. I think you see, we think we're buying at about the right rate, meaning about the right proportion of our proceeds on that buyback program. We've seen it's been relatively successful. I wonder if you help by very low share price, got quite a large amount of shares in the first half year at an average of about 47 p.

[David Baynes, CFO & COO at IP Group]

So we think we've got the balance right. We've already made the commitment within half of the proceeds this year. So I think we feel that we've got the balance about right. Of course, one could always do more. There are some people saying I need you less.

[David Baynes, CFO & COO at IP Group]

So it is about trying to get a balance fairly. Next one, I'll probably do that as well. So I'll study accounting teed upness from Haran. The cash generated in half on from sales, what was the cash value into the holding value? Well, ironically they were all actually there was about five sales over the period and they're pretty much all public company so in terms of we haven't talked about whether we've gone up or down because it was just the market price at the time And a number of them went, I think, in terms of our example, went for about double as the main one.

[David Baynes, CFO & COO at IP Group]

I think we got about 8,800,000.0. I think at the year end, that's cabin books at about 4,400,000.0. So we haven't though doesn't really make sense to look at whether we sold them up or down at the time because they were public market shares in annual case. Let's have a quick look at the next one. Sorry.

[David Baynes, CFO & COO at IP Group]

Coming down to cell n. Would say we've had this before Phil N if you don't mind asking a question about whether we could sell Hinge or not I think we've answered that fairly comprehensively This one is a tricky one. I'll ask Phil, it's Ed. Mean, probably I'll point this to you, Greg. Always difficult but for the shares to ride, you need happy existing shareholders and new buyers.

[David Baynes, CFO & COO at IP Group]

So who are the people who are selling? Is there a pattern, a trend or what? And now is there an excess being dribbled out by a certain style of owners? Yeah. Quite a lot in that question. You have a go at that?

[Greg Smith, CEO & Director at IP Group]

Yeah. Well, the the overall backdrop, probably, you'll have seen the same sort of data that we see around net flows in and out of UK focused equities, which, you continues to be negative and quite significantly negative. Global equities, actually, the flows have started to become negative overall, but particularly The UK has been negative. So there there has been certainly, in my experience over the last ten, fifteen years, the number of humans that we go and talk to in the in The UK who are managing small, mid cap capital has definitely decreased, and the number of funds has definitely decreased. When you look at the we we get a monthly register analysis each month we go through that and try and get some clues as to who's buying and selling off and there's changes period to period on the tracker funds and sometimes from month to month you get some of the larger or middle sized holdings either reducing the position a bit or increasing the position a bit.

[Greg Smith, CEO & Director at IP Group]

There's not really a huge factor that I could talk to if I'm honest. Our job is to deliver on the strategy, to be able to communicate that strategy we seek to do that as actively as we can do. We've got a number of capital markets events we've done over the course of the year to attract new investors. Dave, maybe you just want to talk a little bit about efforts we've done with brokers this year and the other sort of given The UK has been more net reduction in capital available where the other relationships have been.

[David Baynes, CFO & COO at IP Group]

Yes. We're very proactive actually. We have quite a wide range of brokers. Our primary brokers are extremely supportive and very good, Numis and Berenberg. But we do also get some help with an asset called TKDY in New York, small team of five, who have been they've sort of identified about 200 American investors who are interested in UK stocks, and they've been getting at meetings.

[David Baynes, CFO & COO at IP Group]

I probably have a meeting on average about once a week. Then if they're interested enough, then Greg joins me and we do a joint meeting. And we think we think it it wasn't actually hard to tell. I know it sounds funny. We get a full shareholder register every month.

[David Baynes, CFO & COO at IP Group]

We're paying down that trying to analyze. Sometimes, we can't even identify who is what because they get all three nominees, for example. We think some of those American presentations are beginning to bear fruit. Cantor's have also been helping us as well. We're finding some meeting in Western America and we've got some road shows in Europe coming up.

[David Baynes, CFO & COO at IP Group]

Rothschild has helped us. They took us on a road show in Switzerland recently. So we're actually extremely active and you will find that in the year our Head of Global Capital will send some presentations in The Middle East And North End Spires. So it's definitely not due to a lack of energy and we are trying to get out and see people and we think that is to begin to pay dividends. We think we've done that part of sector in the share price.

[David Baynes, CFO & COO at IP Group]

We are getting people to find out how interesting the story is and find out how extraordinary the discount is and what the opportunity is which is pretty much what we're telling people. Our next one is from Lucas, a shareholder. Good to have you there, Rivers. And you've written just thinking out loud. You're giving an additional 200,000,000 in exits in private holdings till 02/1927.

[David Baynes, CFO & COO at IP Group]

So you add that on to sort of manifold, which sort of hoping by then something like a 170,000,000. Are you saying that there's 70 to 80% of current market cap might be achieved? I think the answer is yes. That was pretty much what I said earlier. Yeah.

[David Baynes, CFO & COO at IP Group]

That is about right. Obviously, we've got an estimate, but if we achieve that, which we believe we will on the on the for non NanoFore holding. If NanoFore still forms as it should, we believe it will. Yes. There's something in the 150,000,000, 200,000,000 NanaPOR on top of that number. We will hope. We will see. Last one,

[Greg Smith, CEO & Director at IP Group]

She's got a planted question.

[David Baynes, CFO & COO at IP Group]

Why are you so good? I know. It's not right. David P. I'm interested in you, Mark.

[David Baynes, CFO & COO at IP Group]

Hello. Do you think the start of US drug pricing and tariffs by the US administration is affecting pricing in the biotech market for ultimately successful innovation? It's fair. Does that mean the model needs to be revisited so it's sufficiently profitable given a huge development cost? I think so a few good questions. Thank you for being a political question.

[Mark Reilly, Managing Partner at IP Group]

From our perspective, yes, I think we've got to assume that there are an impact. This a quite impressive impact. It's something that the team is factoring into the evaluation work that we do every time we make a transaction in the portfolio. And so since the model needed to be revised, I think it's about making sure that we're putting money in at the right price to reflect the ultimate terminal value of the company. And so that's the of the model on a macro basis.

[Mark Reilly, Managing Partner at IP Group]

We're doing it from the ground up of the unique transaction the value that's delivered in the context of the current market. But judging ourselves, I don't think we're really seeing this in the conversations we're having with pharma in the portfolio yet. I don't think I haven't heard that we've had pharma coming to us and saying, we can possibly engage with you at least or pay this much for this company on the basis that the ground has shifted to lead us for that nature.

[David Baynes, CFO & COO at IP Group]

And the last question is not a question, thank you. Philippine. Thank you. Thank you, Philip Ng. We appreciate it.

[David Baynes, CFO & COO at IP Group]

Thank you, everybody, who stayed with us this long, and thanks for all the questions. That's the twenty ninth and last question, James.

[Operator]

Perfect, guys. That's great. And thank you as usual for being so generous of your time there and addressing all of those questions that came in from investors this morning. And of course, if there are any further questions that do come through, we'll make these available to you after the presentation. But Greg, perhaps before really now, just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company.

[Operator]

If I could please just ask you for a few closing comments just to wrap up with, that would be great.

[Greg Smith, CEO & Director at IP Group]

Thanks, Dave. Yes. So to summarize again, we've made strong progress in 2025 year to date, good progress cash proceeds, and that gives us good confidence around that £250,000,000 of active target to the 2027. I think the standout in performance for the first half or standout transaction was that successful in shelf IPO, which we're very pleased to see and delighted for the team and, of course, for our financial returns, and that's helped NAV per share now get up to about GBP 1 a share and hopefully, we go up from here. And then on the share price, we've done, we continue to do two things that we think we can to close the discount, convert more portfolio into cash and return that excess capital with discipline.

[Greg Smith, CEO & Director at IP Group]

At today's price, we still think that buybacks are an accretive tool. And so we've been using that tool more aggressively that year, as David said, to good effect, and we'll continue to weigh buybacks against new investments strictly on a return basis. And so we are one of the world's most experienced university science investors. And so we remain uniquely positioned to to capitalize on the sort of the fiscal reform that we're seeing and, hopefully, this rising demand for high growth innovation. So thank you all for for listening, and then look forward to updating you on progress for the rest of the year and into 2026.

[Operator]

Perfect, Greg. That's great. Thank you once again for updating investors this morning. Could I please ask investors not to close this session as you will now be automatically redirected to the opportunity to provide your feedback order the management team can really better understand your views and expectations. This may only take a few moments to complete, but I'm sure it'll be greatly valued by the company.

[Operator]

On behalf of management team of IP Group plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.

Participants

Executives

• Greg Smith, CEO & Director
• Mark Reilly, Managing Partner
• David Baynes, CFO & COO