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Tekcapital on the rise as market starts to recognise IP value

Snapshot

  • Tekcapital PLC commercialises university intellectual property (IP), a process known as technology transfer
  • Its university IP network incorporates some 80% of university-developed IP
  • Portfolio companies include medical device company Belluscura, advanced eyewear specialist Lucyd, food tech company Salarius and autonomous vehicle IP specialist Guident
Tekcapital PLC -

Quick facts: Tekcapital PLC

Price: 14.44 GBX

LSE:TEK
Market: LSE
Market Cap: £12.68 m
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What Tekcapital does

IP development: Tekcapital PLC’s (LON:TEK) core business is to commercialise innovations developed in universities.

A related services business helps companies find, evaluate, and license university technologies.
 

Portfolio companies

Salarius (97.5%) produces a proprietary low sodium natural salt called MicroSalt, whose crystals deliver the same sensation of saltiness with 50% less sodium. Salarius has a fair value of $2.7mln. Food ingredient broker, Accurate Ingredients markets it in the US.

Lucyd (100% owned by Tekcapital) is an online manufacturer and retailer of augmented reality eyewear.  Lucyd has just launched a  new product ‘Sherman Shades by Lucyd’ endorsed by the cornerback of the San Francisco 49ers Richard Sherman.

Guident (100%) is an owner of IP for technology used in apps to control autonomous vehicles (AVs). The autonomous vehicle market in the US alone is projected to reach $35bn by 2033 for autonomous vehicles and drones,

Belluscura (19.2%) has developed a patented portable oxygen concentrator. Set for an AIM listing later this according to press reports.
 

How is it doing

For the year ended November 30, 2019, the intellectual property investment group saw its net assets increase by 40% to US$22.25mln, while net asset value (NAV) per share rose to 35 US cents from 30 US cents.

The firm’s portfolio valuation, meanwhile, increased by 48% to US$20.3mln.

Inflexion points

  • Belluscura and its research partner Separation Design Group have filed a patent on an oxygen enrichment system that could be used to treat coronavirus patients
  • Salarius has inked a partnership deal for its MicroSalt product with US ingredients supplier Hanks Brokerage
  • Lucyd launched the third edition of its Loud range of Bluetooth-enabled glasses

 

Interview 

 

 

What the broker says

In a note in March initiating coverage of Tekcapital, analysts at house broker SP Angel said the company provided investors with “significant potential upside returns” and that the shares were trading at a discount to net asset value (NAV) of around 70%.

The broker also said the company’s portfolio was “well diversified” and “comprised of assets with near-term commercial potential to drive NAV higher”.

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