Former Neil Woodford stock IP Group has announced its first ever dividend after a boost from underlying portfolio company Oxford Nanopore.
Analysts at Jefferies noted IP Group’s portfolio gains during 2020 of £225m were well ahead of its forecast. The largest difference, it said, was an increase in the fair value of the Oxford Nanopore stake of £77m. This meant NAV was £155m, or 14p a share above forecast.
Jeffries said IP Group’s 15% holding in Oxford Nanopore is now valued at £340m as the company itself is worth £2.3bn.
But investors trapped in the LF Equity Income fund will see no benefit from Oxford Nanopore’s success after Link sold off the former Woodford Equity Income fund’s stake in the unquoted company to Acacia Research, which snagged 19 stocks at the discounted price of £223.9m in June.
It will be more positive, however, for Woodford’s former investment trust, Patient Capital, which is now being managed by Schroders as the Schroder UK Public Private investment trust. Oxford Nanopore is the second largest holding in the Schroders trust, at 13.7% of the portfolio, according to Trustnet’s factsheet.
See also: Former Woodford biotech stock on the frontlines of Covid raises £84m
For the year ended 31 December 2020, IP Group reported pre-tax profit as £186.1m compared with a loss of £78.8m the year before. The fair value of portfolio increased to £1.2bn from £1.0bn the year before, boosting its net assets to £1.3bn.
The company recommended a maiden dividend of 1p per share. Its share price is up 104% over the past year.
Woodford offloaded his stake in IP Group for a cut price in September 2019, three months after his Equity Income fund was frozen. The Financial Times reported at the time that he had shed 142 million shares in the FTSE 250 intellectual property incubator for about £76m.
Around the same time, Bloomberg reported that Woodford lost around £43.5m after losing money on eight out of 10 positions offloaded in a fire sale of Equity Income holdings.
Woodford was booted from the Equity Income mandate a month later and Link started the fund wind-up process.
