Imperial Innovations — Update 3 November 2016

Imperial Innovations — Update 3 November 2016

Imperial Innovations

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Imperial Innovations

Strength builds in unquoted portfolio

Year-end results

Pharma & biotech

3 November 2016

Price

374p

Market cap

£603m

Net cash and equivalents (£m) at 31 July 2016

148.3

Shares in issue

161.2m

Free float

9%

Code

IVO

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(13.7)

(10.2)

(22.8)

Rel (local)

(11.6)

(12.8)

(27.6)

52-week high/low

516.50p

341.25p

Business description

Imperial Innovations is a technology transfer, incubation and venture investment company. It invests in ventures from Imperial College London, Cambridge and Oxford universities and UCL. Over 99% of its portfolio value is in its 45 accelerated growth companies.

Next events

Cell Medica: Phase II Citadel data

2016/17

Circassia: Phase IIb house dust mite

H117

Nexeon: move to pre-production quantities

2017

PsiOxus: Phase I data (SPICE & OCTAVE)

2017

Analysts

Lala Gregorek

+44 (0)20 3681 2527

Daniel Wilkinson

+44 (0)20 3077 5734

Imperial Innovations is a research client of Edison Investment Research Limited

A strong year for Imperial Innovations (IVO) was defined by continued momentum in the unquoted portfolio, a strengthened balance sheet and the extension of connections to university IP. The net portfolio value (£335.1m) grew over FY15 (£327.2m), but was affected by the disappointing Phase III Cat SPIRE results from Circassia. Multiple inflection points approach in FY17 and IVO is in a strong position to continue to drive value across its entire portfolio.

Year
end

Net portfolio value* (£m)

Cash**
(£m)

Net fair value
gain (£m)

Net asset
value (£m)

NAV/share
(p)

DPS
(p)

07/15

327.2

128.1

21.3

420.1

306

0.0

07/16

335.1

148.3

(56.2)

455.9

283

0.0

07/17e

436.2

94.4

30.0

476.5

296

0.0

07/18e

537.4

36.0

30.0

495.3

307

0.0

Note: *Net value, excludes provisions. **Cash, cash equivalents and short-term investments.

Strong growth in unquoted portfolio

Six major funding rounds were achieved in FY16 raising £168.0m in total, with IVO committing £42.2m (25%). The growing number of collaborations and technical partnerships continues to provide validation for the unquoted portfolio as the companies progress towards major near-term inflection points. The continued diversification of the portfolio, with the increased number and size of investments in ICT/digital and engineering & materials, provides alternative opportunities for future growth outside the traditional investments in healthcare.

Nexeon takes the lead

Nexeon is now the largest component of IVO’s portfolio (12.5%). Following the negative Phase III readout and the drop in its share price, Circassia represents 7.4% of portfolio value, down from 21.8% (31 January 2016). IVO currently holds 9.3% of the issued share capital of Circassia. With a strong cash balance (c £133m + £15m short-term liquidity investments), Circassia is now focused on the respiratory business, including the NIOX asthma management franchise, generic respiratory products and novel formulations.

IP pipeline strengthens

Two major strategic developments have been announced in 2016: the £50m University College London (UCL) technology fund (IVO committed £25m) and Apollo Therapeutics, a £40m collaboration (IVO committed £3.3m) between some of the world’s top universities and global pharmaceutical companies. Additionally, a five-year deal to run an incubator at I-HUB, located at Imperial College’s new White City Campus, was recently announced.

Valuation: NAV premium justified

IVO’s shares trade at a c 26% premium to our estimated FY17e NAV of 296p/share (at 2 November 2016). We believe this is a relatively modest premium based on historical performance and there are prospects for significant value uplifts over the next few years.

A tale of two portfolios

FY16 was defined by the contrasting performance of the quoted and unquoted portfolios. Net portfolio value increased to £335.1m for FY16 from £327.2m in FY15. However, this is a decrease from H116 results, where IVO reported a portfolio value of £355.1m. A negative Phase III cat allergy readout in June 2016 at Circassia, formerly IVO’s largest portfolio company, was the main contributor to this decline in portfolio value (£54.8m of the £67.1m). Nevertheless, Circassia remains IVO’s largest quoted company and value inflection points over the next 12 months could see it recover some of its lost value. The unquoted portfolio continues to gather momentum, with significant funding rounds, clinical success and business partnerships throughout FY16.Below we outline key points from FY16 in the unquoted and quoted portfolios.

Unquoted portfolio: the unquoted portfolio generated a net fair value gain of £10.7m in FY16. Multiple funding rounds in FY16, the majority of which involved other leading investors, indicate the promise that the wider investor community sees in these private companies. Funding rounds of note are highlighted in Exhibit 1. Since IVO’s admission to AIM in 2006, it has invested a total of £306.7m across its portfolio companies, which have collectively raised c £1.5bn in total investment. Approximately 85% of IVO’s investments have been in the last three years, indicating the increased momentum in the portfolio. In FY16, £69.9m was invested across 33 companies compared with £60.8m across 30 companies in 2015. This included the addition of seven accelerated growth companies to the investment portfolio. The strengthening of IVO’s balance sheet with the £100m February 2016 placing has enabled investment to accelerate. The current cash balance of £133.3m, £15m in short-term liquidity investments plus an undrawn second loan facility (£50m) from the EIB, provides IVO with sufficient funds to implement its strategy.

Exhibit 1: Significant funding rounds for unquoted portfolio in FY16

Portfolio company

Funds raised (£m) / date / type

Cash invested by IVO (£m)

IVO commitment
(£m)

Stake in company (%)

Total funds raised to date (£m)

Kesios Therapeutics

19.0/Dec 2015/Series A

3.3

6.0

42.0

20.8

Inivata Therapeutics

31.5/Jan 2016/Series A

4.8

10.0

27.3

35.5

MISSION Therapeutics

60.0/Feb 2016/Series C

3.9

11.3

11.6

87.0

Nexeon Limited

30.0/May 2016/Series D

5.0

5.0

33.7

85.0

Storm Therapeutics

12.0/June 2016/Series A

0.2

3.0

22.3

12.6

Precision Ocular

15.5/July 2016/Series A

-

6.9

-

-

Source: Edison Investment Research, Imperial Innovations

Quoted portfolio: the £67.1m loss on the quoted portfolio – of which £54.8m was attributed to Circassia, £9.6m to Abzena and £2.5m to Oxford Immunotec – had a significant negative effect on overall net portfolio value. In June, Circassia announced that it had missed the primary endpoint of its Phase III cat allergy trial.1 At its full year results in September Circassia outlined its new strategy in the wake of the detailed review of the Phase III Cat-SPIRE results. The focus will now be on the respiratory business, including the NIOX asthma management franchise, generic respiratory products and novel formulations. The strategy for the allergy portfolio will be finalised once results from the ongoing Phase IIb house dust mite study are available (expected spring 2017) and two-year follow-up data from Cat-SPIRE could also influence this. IVO has invested £25.5m into Circassia, representing 9.3% of the issued share capital. Circassia’s current market capitalisation is £236.5m, representing a current net carrying value of £22.0m (at 2 November 2016).

  While the treatment arm demonstrated a greatly improved combined score (combined total rhinoconjunctivitis symptom score [TRSS] and rescue medication use score) compared to baseline (58.2% for 4 x 6nmol dose, 59.8% for 8 x 6nmol dose), the placebo arm also generated a comparable response (58.5%), something that was not observed in the earlier Phase II trial.

Other quoted companies in the portfolio with material newsflow include Abzena and Oxford Immunotec. Key partnerships with Halozyme Therapeutics and Faron Pharmaceuticals underscore a year of significant business progress for Abzena, although this has not been mirrored by stock performance, which has supressed its net carrying value. IVO has invested £13.0m, representing 19.8% of the issued share capital; with a current market capitalisation of £47.3m, this represents a current net carrying value of £9.37m (at 2 November 2016). Oxford Immunotec (OXFD) has recovered from a July low of $7.73/share and is now trading c 77% higher at $13.66. At its Q3 results, revenues exceeded company’s expectations with solid growth from the US, China and Japan. It reported total revenues in the three months ending 30 June 2016 of $19.2m, a 34% increase over the same period in 2015. IVO has invested £7.6m, representing 4.6% of share capital, which at a current market capitalisation of $308.7m is valued at a current net carrying value of $14.2m (at 1 November 2016).

Healthcare portfolio approaching maturity

A range of development and business milestones have been achieved across the unquoted portfolio in addition to significant funding rounds. Therapeutics and medtech companies could be a major value driver in the next 12-36 months as key trial readouts and potential public listings/private follow-ons come into view. Oncology companies, which represent c 25% of the total portfolio value (£86m) and on average a 1.5x increase in value on cash invested, exemplify this. Our recently published in-depth look at seven of the eight oncology companies (excluding the recently formed Artios Pharma) provides more information on the scope and breadth of the oncology portfolio (see report). Artios Pharma, a company focused on therapeutics for DNA damage, raised £25m in a Series A round in September, of which IVO committed £5.1m.

Key oncology achievements in 2016 include: the collaboration between Cell Medica and Baylor College of Medicine to develop next-generation cell-based immunotherapy products; a deal, including a $10m upfront payment, between PsiOxus and Bristol Myers Squib to test its oncolytic adenovirus therapeutic enadenotucirev in combination with BMY’s Opdivo (nivolumab) (a recent Edison TV interview with Dr John Beadle, the CEO of PsiOxus, can be found on our website); and a collaboration between Crescendo Biologics and Takeda, worth potentially up to $790m, to develop Humabody candidates against multiple targets (a recent interview with Dr Peter Pack, the CEO of Crescendo, can be found on our website).

Progress remains strong within the rest of the healthcare portfolio as key clinical and commercial milestones were achieved:

TopiVert: Founded in 2011 as a spin-out from RespiVert (now part of Janssen Biotech), TopiVert is focused on the development of narrow spectrum kinase inhibitors (NSKIs) for inflammatory diseases of the gut and the eye. In March its lead candidate TOP1288 was successful in a Phase I ulcerative colitis (UC) trial, demonstrating an “excellent safety and tolerability profile”. TopiVert has since dosed the first patient (October 2016) in a Phase II, TOP1288 UC. IVO’s total investment of £8.5m represents a 29.5% shareholding, which, as of 31 July, has a carrying value of £12.7m, with an implied value for TopiVert of £43.1m.

Abzena: A number of key deals and partnerships signed in 2016 provide further validation of Abzena’s service offering. Key partnerships include a licensing deal worth up to $150m with Halozyme Therapeutics to develop antibody drug conjugates, and a manufacturing agreement with Faron Pharmaceuticals (AIM: FARN) to manufacture Clevegen, a therapeutic antibody used to reduce immune suppression in cancer. Abzena is an Edison research client and our ongoing coverage can be located here. A net fair value loss of £9.6m was realised by IVO for Abzena in FY16. IVO’s £13.0m investment had a net carrying value of £10.7m as of 31 July and represents 19.8% of the issued share capital.

Abingdon Health: Progress continues to be made with Abingdon Health’s range of medical diagnostics. A multiyear global distribution agreement has been signed with Sebia for its Seralite product range including the recently CE mark approved Seralite-FLC urine and Seralite-FLC ELISA. Its devices are focused on B cell dyscrasias in the context of rapid multiple myeloma diagnosis. IVO has invested £11.0m with a net carrying value as of 31 July of £10.4m, representing 33.7% of the issued share capital, with an implied value for Abingdon Health of £31.0m.

Ieso Digital Health: A rising star in treating mental health

At IVO’s FY16 results, it showcased one of its ‘rising star’ portfolio companies: Ieso Digital Health. Ieso was launched in July 2011 with seed investment from Cambridge Angels; IVO joined as an investor in 2013. IVO has invested £1.4m to date, representing a 28.8% share with a carrying value of £1.5m, which gives Ieso an implied valuation of £5.2m. Ieso aims to address the “treatment, affordability and accountability” of mental health treatment through a digital platform that is focused on cognitive treatment behaviour. It offers a web-based platform that enables the real time one-to-one treatment of people dealing with depression and anxiety.

Ieso has seen threefold year-on-year growth with a focus on the UK market. It believes it can continue to build and learn from its experience with the NHS as it looks to make inroads in the US. In readying its approach to the US, Ieso has developed a detailed US market access strategy with Navigant. Partnerships within the UK, for example with Beacon Health Options, continue to validate the platform. Ieso predicts that patients treated to completion will rise from about 11,000 in 2016 to around 180,000 by 2021. Approximately 30,000 will come from the UK, but Ieso predicts that the majority of its patients treated will be US-based. The US behavioural health ecosystem is changing dramatically with an array of start-ups with significant backing each looking to address problems in both the management and provision of care.

Exhibit 2: Percentage of patients who recovered from a mental disorder utilising the Ieso platform in comparison with other providers in the same period (2013/14)

Source: Ieso Digital Health, Edison Investment Research, NHS Digital – national statistics

To date Ieso has treated more than 7,000 patients within the UK and captured over 75m individual pieces of data. It utilises this data to improve the care provided to patients, in particular monitoring the effectiveness of clinicians in delivering care, something that is difficult in conventional mental health treatment. Notably if a clinician does not deliver the standard of care required, they are no longer utilised, ensuring a consistently high standard of care. Ieso has benchmarked its care against NHS Digital national statistics for other providers in 2013/14 as shown in Exhibit 2. In ever-constrained healthcare systems, the ability to deliver treatment cost effectively is vital. An analysis by the York Health Economics Consortium in October 2014 predicted that if Ieso Digital health was rolled out to 50% of the available UK market it would result in cost savings of £108m a year. Ieso plans to accelerate the uptake of its platform in the UK and US markets and hopes to treat over forty thousand patients by 2018. Key to this will be continuing to prove the effectiveness of its technology at a cost that payers can accommodate.

Portfolio diversification on track

Significant progress is also being made in both the engineering & materials and ICT & digital portfolio companies. At end-FY16 Nexeon (net carrying value: £41.9m) had overtaken Circassia as IVO’s largest holding within the entire portfolio (representing 11.25% of the portfolio). A £30m funding round in May provides the funds for refinement of Nexeon’s silicon material technology for use in batteries, a technology that outperforms current available systems. Nexeon has advanced significantly over the last 12 months and is now able to provide potential clients with product samples. It recently opened a new office and development laboratory in Yokohama to be closer to its key clients. In the next 12-18 months it expects to move from sampling to pre-production quantities and remains on the lookout for complementary technology and IP.

Featurespace, a technology company focused on adaptive behavioural analytics for fraud detection, has also made significant progress in the last 12-18 months including adding a number of major clients, including but not limited to TSYS, William Hill and Camelot. For more information on Featurespace please see our recently published ICT and digital portfolio update report and a recent interview with CEO Martina King. IVO has invested £3.9m, representing a 37.5% shareholding and a last reported carrying value of £6.8m.

Of the seven new companies added to the portfolio in FY16, five are in ICT & digital (Garrison Technology, Import.io, Telectic, WaveOptics and SAM labs) and one each in engineering & materials (Silicon Microgravity) and therapeutics (Precision Ocular), demonstrating IVO’s continued drive to diversify its portfolio. Of new companies added in the last five years, 38% have been in ICT & digital, compared with 29% for therapeutics, 18% for engineering & materials and 15% for medtech & diagnostics. Five technology companies have been sold in the last three years and the technology franchise has generated c $25m to date from exits.

While the top 10 portfolio companies comprise mostly healthcare companies, Nexeon (11.25%) is now the biggest holding. Major funding rounds and revaluations have caused changes in the portfolio composition, as seen in Exhibit 3.

Exhibit 3: Top 10 portfolio companies (as at 31 July 2016)

Company

Fair value
movement (£m)

Net investment
carrying value (£m)

Cumulative cash
invested (£m)

% issued share
capital held

Value
added (£m)

Multiplier
(x)

Nexeon

2.8

41.9

27.4

33.7%

14.5

1.53

Cell Medica

-

28.5

19.8

25.5%

8.7

1.44

Veryan Holdings

-

26.5

19.3

46.1%

7.2

1.37

Circassia Pharmaceuticals

-54.8

24.9

25.5

9.3%

-0.6

0.98

PsiOxus Therapeutics

-

22.6

13.7

27.8%

8.9

1.65

Mission Therapeutics

4.1

14.1

9.8

11.6%

4.3

1.44

TopiVert Pharma

4.0

12.6

8.5

29.5%

4.1

1.49

Abzena

-9.6

10.7

13.0

19.8%

-2.3

0.82

Abingdon Health

-

10.4

11.0

33.7%

-0.6

0.95

Econic Technologies

1.5

10.2

6.9

53.7%

3.3

1.48

Other companies

-4.3

132.6

119.6

-

13.0

1.11

Net total

-56.2

335.1

274.4

-

47.6

1.22

Value of quoted investments (in top 10)

-64.4

35.6

38.5

-

-2.9

0.93

Value of unquoted investments (in top 10)

12.5

166.9

116.4

-

50.5

1.43

Source: Imperial Innovations, Edison Investment Research

Building and improving relationships

IVO continues to expand its access to IP. Two major strategic developments have been announced this year: the £50m University College London (UCL) technology fund and Apollo Therapeutics, a £40m collaboration between some of the world’s top universities and global pharmaceutical companies. IVO has committed £25m over five years to the UCL fund and is joined by UCL, UCLB, Albion Ventures and the European Investment Fund. The fund will have access to all UCLB projects and IVO has co-investment and step-in pre-emption rights. Of the £50m, £5m is earmarked for proof-of-concept projects and the fund has already backed a spin out from the department of computer science and has provided later stage funding to two therapeutic companies.

Apollo Therapeutics is a collaboration between UCL, University of Cambridge and Imperial College London and three global pharmaceutical companies: AstraZeneca, GSK and J&J. The company has launched with £40m in investment, £3.3m of which is committed by IVO, and is focused on translational research. The company has visibility of IP from all three universities and has appointed Dr Richard Butt as CEO. Dr Butt joined from Pfizer where he was most recently a senior director and research project leader of clinical research at Pfizer Neusentis within the Neuroscience and Pain Research Unit. Additionally he recently led Pfizer Neusentis’s translational medicine strategy through a series of collaborative clinical trials.

Sensitivities

Imperial Innovations’ investment case rests on the success of its investment strategy, in particular its ability to achieve increases in portfolio value (and hence NAV) over and above net new investment. The company is exposed to the business success of its larger portfolio holdings, especially as its investment portfolio includes two publicly listed companies within the top 10 valued assets. The recent significant decrease in the net carrying value of Circassia exemplifies this and as the unquoted portfolio continues to progress, possibly with future IPOs, increased exposure to the public markets is likely to occur.

Imperial Innovations is also very tightly held, with four shareholders accounting for a total of 90% of the equity, including Invesco (39.0%), Woodford (23.8%), Imperial College (15.3%) and Lansdowne (12.7%). This contributes to limited free float (9.2%) in the stock, which may increase volatility even on low trading volumes.

Valuation

Imperial Innovations’ shares (at 374p) currently trade at a c 26% premium to our estimated FY17e NAV of 296p/share (at 2 November 2016). IVO has historically traded at a premium to its NAV, which can be ascribed to the unrecognised value of its portfolio assets (many of which are valued at cost or the valuation of their last financing) and its technology pipeline agreement with Imperial College and collaborations with other leading UK universities (Oxford, Cambridge, UCL) and research organisations (eg Babraham Institute). We note that the current premium remains substantially lower than the >50% premium typically observed over the last two years. We continue to ascribe this to ongoing weakness in the wider stock market, which has had an impact on healthcare stocks in particular. This could now provide a more favourable entry point, particularly as IVO seeks to accelerate investment into a maturing portfolio with increasing visibility of upcoming catalysts as presented in our recent analysis of ICT & digital (report) and oncology (report) portfolio companies.

We believe a premium is justified, based on the strong historical portfolio performance and the prospect of significant uplift in the next couple of years from a number portfolio companies. Assuming some of these companies are successful in delivering on their near-term strategic objectives (eg, positive clinical data, deals, pipeline development, etc) we would expect portfolio value to significantly outstrip the cash invested. Ultimately this will determine the return on investment for both IVO in its portfolio and investors in IVO shares.

Importantly, IVO has substantial financial resources (c £148.3m + £50m second tranche of EIB loan) to make the required investment in its maturing portfolio companies, which could deliver significant returns in the long run.

Financials

As of 31 July 2016, IVO’s portfolio consisted of 45 “accelerated growth” companies (39 in 2015), which collectively account for 99% of the overall net portfolio value of £335.1m (vs £327.2m at end FY15). £69.9m was invested across 33 portfolio companies (2015: £60.8m across 30 companies), which is more than double the investment rate of two years ago (FY14). The growing maturity of the portfolio is evidenced by 79% of investments being directed towards existing portfolio companies.

The February 2016 capital raise, which grossed £100m (£98.6m net) through the placing of 23.5m new shares at 425p, primarily to IVO’s major institutional shareholders (Woodford 56%, Invesco 25%, Lansdowne 7%), significantly increased IVO’s financial position. With £133.3m held in cash at 31 July 2016 (as reported by IVO), £15m in short-term liquidity investments and the £50m EIB loan facility (currently undrawn), IVO has c £198.3m available for future investments.

We predict an investment rate of £71.1m in FY17 (£71.2m in 2018) and assume that £30m of the total £50m EIB loan is drawn-down in FY17. This second EIB loan was granted to IVO in July 2015 and can be drawn in £10m minimum tranches until July 2017. We note that IVO drew down the full £30m from its first EIB loan (in two £15m tranches in FY14 and FY15).

Our FY17 revenue forecast of £4.4m (revenues from licensing/royalties, services and corporate finance) is maintained in line with FY16 (£4.3m) at this stage. With relatively stable operating expenses, IVO’s profitability is dependent on the level of fair value gains/losses in specific periods taken through the P&L. Gains and losses are inherently difficult to predict.

Our change in net fair value estimate for FY17 now reflects an estimated gain of £30.0m (vs a £56.3m loss in 2016). £54.8m is attributable to the net fair value loss of Circassia (a one-off event related to the Phase III Cat-SPIRE failure). While net portfolio gain/loss is inherently difficult to predict, we believe FY17 gain is conservative in the context of a maturing company portfolio approaching numerous important catalysts.

Exhibit 4: Financial summary

£'000s

2014

2015

2016

2017e

2018e

Year end 31 July

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

 

 

 

 

 

 

 

Revenue

 

 

3,636

5,099

4,257

4,359

4,463

Cost of sales

 

 

(1,005)

(1,769)

(1,395)

(1,396)

(1,438)

Gross profit

 

 

2,631

3,330

2,862

2,963

3,025

EBITDA

 

 

(8,385)

(8,223)

(9,758)

(10,289)

(10,890)

Operating profit (before GW and except.)

(8,418)

(8,237)

(9,772)

(10,303)

(10,904)

Fair value gains/losses

 

 

40,549

21,324

(56,249)

30,000

30,000

Impairments

 

 

0

0

0

0

0

Share-based payment

 

 

(4,821)

1,161

2,972

(3,000)

(3,000)

Operating profit

 

 

27,310

14,248

(63,049)

16,697

16,096

Net interest

 

 

106

817

(64)

(180)

(1,205)

Profit before tax (norm)

 

 

(8,312)

(7,420)

(9,836)

(10,483)

(12,109)

Profit before tax (FRS 3)

 

 

27,416

15,065

(63,113)

16,517

14,891

Tax

 

 

0

0

0

0

0

Profit after tax (norm)

 

 

(8,312)

(7,420)

(9,836)

(10,483)

(12,109)

Profit after tax (FRS 3)

 

 

27,416

15,065

(63,113)

16,517

14,891

Average number of shares outstanding (m)

 

102.4

136.2

146.1

161.2

161.2

EPS - normalised (p)

 

 

(8.1)

(5.4)

(6.7)

(6.5)

(7.5)

EPS - reported (p)

 

 

26.8

11.1

(43.2)

10.2

9.2

Dividend per share (p)

 

 

0.0

0.0

0.0

0.0

0.0

BALANCE SHEET

 

 

 

 

 

 

 

Fixed assets

 

 

258,327

333,936

345,615

446,956

548,155

Tangible assets

 

 

26

29

18

29

40

Intangible assets

 

 

0

0

0

0

0

Investment Portfolio

 

 

257,105

333,268

345,146

446,263

547,451

UCSF (University Challenge Seed Fund) investments

543

460

163

163

163

UCSF loans

 

 

0

0

0

0

0

Other

 

 

653

179

288

501

501

Financial asset

 

 

0

0

0

0

0

Current assets

 

 

177,800

130,506

152,792

98,987

40,731

Cash and cash equivalents

 

 

176,462

128,097

148,306

94,394

36,028

Financial asset

 

 

0

0

0

0

0

Accounts receivable, net

 

 

1,338

2,409

4,486

4,593

4,703

Current liabilities

 

 

(4,900)

(5,732)

(7,333)

(7,333)

(7,333)

Trade accounts payable

 

 

(4,900)

(4,232)

(4,166)

(4,166)

(4,166)

Short-term borrowings

 

 

0

(1,500)

(3,167)

(3,167)

(3,167)

Long-term liabilities

 

 

(26,445)

(38,639)

(35,184)

(62,103)

(86,263)

Long-term borrowings

 

 

(14,830)

(27,222)

(24,089)

(51,680)

(76,512)

UCSF

 

 

(640)

(666)

(477)

(477)

(477)

Provisions

 

 

(10,975)

(10,751)

(10,618)

(9,946)

(9,274)

Net assets

 

 

404,782

420,071

455,890

476,507

495,290

NAV/share (p)

 

 

295

306

283

296

307

CASH FLOW

 

 

 

 

 

 

 

Operating cash flow

 

 

(6,523)

(9,331)

(10,799)

(10,182)

(10,780)

Net Interest

 

 

44

875

(24)

(180)

(1,205)

Tax

 

 

0

0

0

0

0

Capex

 

 

(23)

(17)

0

(25)

(25)

Purchase of trade investments

 

 

(32,826)

(59,957)

(71,046)

(71,117)

(71,188)

Proceeds from sale of trade investments

 

 

3,370

7,179

4,979

0

0

Revenue share paid on asset realisations in trade investments

 

 

0

(989)

0

0

0

Equity financing

 

 

146,823

0

98,599

0

0

Short term liquidity investments

 

 

0

0

0

0

0

Net cash flow

 

 

110,865

(62,240)

21,709

(81,504)

(83,198)

Opening net debt/(cash)

 

 

(50,783)

(161,632)

(99,375)

(121,050)

(39,546)

Other

 

 

(16)

(17)

(34)

0

0

Closing net debt/(cash)

 

 

(161,632)

(99,375)

(121,050)

(39,546)

43,651

Source: Edison Investment Research, Imperial Innovations accounts

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals work with leading companies, fund managers and investment banks worldwide to support their capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Frankfurt, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2016 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Imperial Innovations and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2016. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

Thin Film Electronics — Update 2 November 2016

Thin Film Electronics

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