Fusion IP posts first profit in H1, says IP pipelines look strong

Fusion IP (AIM: FIP), the university commercialisation company which turns university research into business, reported its first interim profit of £0.9 million as revenues were up from £0.1 million to £0.8 million after the company secured its first major IP licensing deal from the agreement with Sheffild University during the first half.

Fusion IP generated its first profit of £0.9 million after posting a loss of £0.5 million, excluding subsidiary spin-out costs and amortisation, which, if included, make for a loss of £1.2 million compared to a £2.2 million loss for the previous first half.

The group said that the increase in revenues was due to its focus on generating license revenue form the agreement with the University of Sheffield combined with maximizing its consultancy charges. The licensing contract that accounted for £0.4 million of the revenues was with a global orthopaedic company, for the use of orthopaedic planning software that originated from Sheffield's medical physics team and was worth a total £0.8 million.

The cash position was maintained at about the same level as last year at £6.8 million compared to £6.5 million after raising £3 million in November and singing a co-investment agreement with IP Group (AIM: IPO), which took a 19.8% stake in the company.

Three more spin-out companies were created, comprising Asalus Medical Instruments, Seren Photonics and Progenteq, while the fair value of investments rose from £0.5 million to £0.8 million.

“This has been a good period for the company, one in which we have raised funds, broadly progressed the portfolio, signed agreements with key new investors and importantly moved towards profitability. Our relationships with our universities remain as positive as ever and our IP pipelines continue to look very strong. We look forward to the rest of the financial year,” said chief executive of Fusion IP David Baynes.

The co-investment agreement with IP Group gives it the right to acquire at a predetermined portfolio company valuation of £500,000, 20% of Fusion's equity in any new portfolio company formed from its agreements with Cardiff University and Sheffield University, which normally equates to a 12% stake in the new portfolio company's share capital. IP Group’s chief technology officer Alison Fielding has joined Fusion IP’s board as a non-executive director.

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