IP Group PLC (LSE:IPO) CEO Greg Smith talked with Proactive about the company’s first half performance and outlook through to 2027. Smith said the group delivered £30.3 million of cash realisations in the first half, compared with just £3.3 million in the same period last year. He noted that this puts IP Group on track to meet its £50 million FY25 target and its longer-term goal of more than £250 million in cash exits by 2027.
Smith highlighted portfolio progress, including the IPO of Hinge Health on the New York Stock Exchange and Oxford Nanopore beating guidance with its first half results. He said: “We made strong progress in the first half. We were pleased with some encouraging portfolio developments and also that this pipeline of significant milestones that are building through to the end of 2027.”
He added that NAV per share has stabilized and ticked up post-period due to recovery in public holdings. Smith also pointed to increased M&A interest across the portfolio and ongoing progress in securing new private scale-up capital mandates.
Looking ahead, milestones include Istesso’s phase two trial, Oxford Nanopore’s full year results, Hysata’s hydrogen rollout in Saudi Arabia, and developments at First Light Fusion.
Proactive: Greg, great to speak with you this morning. You are out with your first half results, could you give us a brief overview of your performance?
Greg Smith: We had a good period, good first half. The cash realisations, at the beginning of the year we set an internal target about £50 million for FY25. And so obviously the first half performance and our momentum going into half two gives us a high degree of confidence of achieving that and possibly even exceeding it.
Yes, we made strong progress in the first half. We were pleased with some encouraging portfolio developments and also that this pipeline of significant milestones that are building through to the end of 2027. A couple of standout examples were the IPO of Hinge Health on the New York Stock Exchange and Oxford Nanopore beating guidance with its first half results.
Secondly, we remain confident in our target to deliver over £250 million of cash exits by the end of 2027, and we achieved £30 million of realisations in the first half, about nine times what we achieved in the equivalent period in 2024. From a shareholder point of view, our NAV per share stabilized. It was down a little at the half year, but by the time of these results it was up at about £1, mainly due to recovery in public company shares. We are also seeing increasing momentum around our efforts to add to our private scale-up capital and have good confidence of securing at least one new mandate by full-year results.
Proactive: Just drilling into the detail Greg, you mentioned your NAV per share has stabilized and even ticked up post period. What gives you confidence in sustained recovery?
Greg Smith: I was reading my FT on Saturday morning and was surprised to see the headline that the US IPO market has exploded back to life — the busiest week in four years. For us, the rewarding thing was the Hinge Health IPO, which has released a fantastic set of second quarter results and traded up about 80% since the IPO. That was very good.
So, some improvement in the IPO window directly helps our performance but also brings more liquidity for private investors. This means more private capital comes back into the system. Also, scaling quoted businesses can be acquisitive as they bolt on technology, which can benefit our portfolio. We've also seen more M&A interest in our portfolio over the first six months. That gives us confidence for the next 6–18 months.
Proactive: You mentioned that you generated £30.3 million of cash proceeds so far. Your target is £250 million by 2027. How achievable is that?
Greg Smith: I hope I have a reputation for setting targets and then delivering against them. We had a good first half, with cash realisations ahead of plan. We set an internal target of £50 million for FY25 and we are confident of achieving or exceeding it. Of those exits, two were outright company exits, we traded down in Centessa, and we realized a small amount at the Hinge Health IPO. The balance of Hinge has since increased about 80%. Our six-month lock-up expires in November, so we are confident about the second half and how it supports our 2027 ambitions.
Proactive: With 14% of share capital retired to date, how do you balance buybacks with reinvestment into the portfolio?
Greg Smith: It’s a very good question. At a big discount to NAV, it is hard to argue there is anything more compelling than investing in our own shares. We are confident of delivering returns on a NAV per share basis. So far, buybacks have contributed about £0.04 per share. Since we started, we have retired around 14–15% of share capital. Over time, that will be accretive for long-term shareholders.
The balance comes from new investments. Most sourcing at the moment is through Parkwalk off-balance-sheet capital. The pipeline is healthy. But for now, we prioritise existing portfolio support and buybacks. As performance improves, we can look at adding to the portfolio.
Proactive: With capital availability still challenging, how well funded are your key holdings to reach their next milestones?
Greg Smith: The portfolio raised about £370 million in the first half, close to last year’s level. Almost two-thirds of the portfolio is financed through to 2026, so no significant funding needs before 2027. That’s a good position.
On milestones, Istesso will start its next phase two trial before year-end. Oxford Nanopore looks set for a strong full-year. Hysata should deliver first hydrogen in Saudi Arabia with a commercial partner. We also expect updates from Oxa and potentially from First Light Fusion.
Proactive: Greg, I hope you'll continue to keep us updated with your progress as well. Thank you very much for speaking with us today.