www.fusionip.co.uk
Fusion IP owns the rights to 100% of the university-owned research generated at two of the UK's leading universities – The University of Sheffield and Cardiff University. These exclusive partnerships enable us to invest in some the world's most advanced and exciting science, turning world class research into business through the creation of a growing portfolio of companies, in fields as varied as drug discovery, alternative energy and engineering.
Fusion IP shares soar after expectation beating results
Fusion IP (LON:FIP) shares were among the top risers on London’s AIM market this morning after it unveiled expectation beating results for the full year.
The technology commercialisation specialist swung to a pre-tax profit in the twelve months, ended July 31 2011, on the back of a 35 percent year-on-year rise in revenue and portfolio returns to £5.9 million. The firm, which turns university-derived intellectual property into businesses, reported that EBITDA soared to £3 million from £0.4 million previously, and it made a pre-tax profit of £1 million, compared with a £1.6 million loss.
Investors were delighted with the news as Fusion shares shot up 5 pence, about 17.5 per cent, to change hands at 33.5 pence each.
City analysts also welcomed the news. In light of the result broker Seymour Pierce repeated a 'buy' recommendation and increased its target price for the stock from 47 to 50 pence.
“Fusion IP’s full-year results come in ahead of our expectations,” said Seymour Pierce analyst Dr Mike Mitchell.
He added: “The opportunity within Fusion’s model is based upon its ability to deliver exits, either through trade sale or IPO. This is perhaps the most significant forecasting challenge for any of the listed IP development vehicles, but our assumption of at least one exit per year for Fusion remains.”
According to Mitchell the Fusion’s business remains well-positioned to crystallise more value from its investment portfolio, and importantly he highlights that the stock continues to trade at a discount to its 2011 net asset value of 50p.
This morning Fusion chief executive David Baynes said: "We are pleased to announce another successful year for the group, one in which we have increased revenue, portfolio returns, and EBITDA. The value of our portfolio has continued to grow and we anticipate we will be able to demonstrate this further in the current financial year, and remain focused on achieving our first cash realisation. We look forward with confidence."
Fusion said its priority in the year ahead is to continue to focus on the growth of the portfolio and maximise value realisation, through trade sales or flotations, as appropriate.
The group anticipates it will need to raise additional funds during the year, and believes it can achieve this either through trade sale exits or dividends, however the directors continue to review all financing and resourcing options. As at July 31, Fusion had a cash balance of £2 million, compared with £4.6 million a year earlier.
Apart from its established portfolio companies, where six firns are in a trading phase of growth, of which three are trading profitably, Fusion IP has identified several potential rising stars. They are either fast growing, on the cusp of or already breaking through into profit, or with innovative technologies that are meeting development milestones and proving successful in the marketplace.
Among them is Cardiff-based i2L Research, a fast-growing product testing and development centre for the pest control industry and agrochemicals industry across Europe. The company, which has offices in Newcastle and Cardiff, is expanding its operations into Europe, through its new offices in the Czech Republic and Spain.
During the year, i2L increased its turnover by 40 percent to £1.1 million and its profits by 300 percent to £150,000. Fusion has a 31 percent stake shareholding in i2L Research.
It also holds 38 percent in MedaPhor, also based in Cardiff, an ultrasound simulation business, specialising in the development and sale of advanced, virtual ultrasound training systems for the healthcare service.
The company's new ScanTrainer simulator is designed to teach all the core and advanced obstetrics and gynaecology ultrasound skills in a non-clinical environment. Launched in 2010, the award winning ScanTrainer system has been sold into 12 UK hospitals and the company has recently made its first sales into the all-important US and European market. With distributors covering an additional eight countries in the Far East, the company's sales pipeline is expected to grow in 2012.
Sheffield-based Absynth was founded in 2007 and is developing vaccine and therapeutic antibody candidates for the prevention and treatment of bacterial infections. The Company's lead program focuses on infections caused by the bacterium Staphylococcus Aureus and the Methicillin-resistant form, MRSA. Fusion has a 52 percent stake in Absynth.
A further ‘potential star’ is Mesuro, which focuses on providing performance improvements in the design and manufacture of RF (radio frequency) devices, microwave devices and amplifiers.
The Cardiff-based group started generating its first sales in 2011 and has raised an additional £440,000 during this calendar year to support its sales efforts. Fusion has a 47 percent share in Mesuro.
