TIDMFIPP
RNS Number : 4693R
Frontier IP Group plc
09 March 2016
9 March 2016
AIM: FIPP
Frontier IP Group plc
("Frontier IP" or "the Group")
Frontier IP Group plc is focused on the commercialisation of
intellectual property
Half-yearly results for the six months to 31 December 2015
Financial Highlights
-- Group revenue quadrupled to GBP992,000 (2014: GBP244,000) -
principally reflecting a higher gain on the revaluation of
investments of GBP883,000 (2014: GBP160,000)
-- Revenue from services increased 30% to GBP109,000 (2014: GBP84,000)
-- Profit before tax of GBP549,000 (2014: loss of GBP242,000)
-- Fair value of the portfolio up 31% to GBP3,745,000 at 31
December 2015 (30 June 2015: GBP2,859,000),an increase of 138% year
on year (31 December 2014: GBP1,574,000)
-- Basic earnings per share of 2.07p (2014: basic loss per share of 1.07p)
-- Cash balances as at 31 December 2015 of GBP264,000 (30 June
2015: GBP636,000; 31 December 2014: GBP184,000)
-- Net assets per share increased to 23.0p as at 31 December
2015 (30 June 2015: 20.9p; 31 December 2014: 17.0p)
Operational Highlights
-- Further progress in funding the portfolio including:
- PulsiV Solar announced its first fundraising
- Nandi Proteins fundraising successfully completed post period-end
-- First milestone achieved in our strategy of developing
relationships internationally with the announcement, in January
2016, of our agreement with Évora University in Portugal
Andrew Richmond, Chairman, commented,
"I am pleased to report that we made excellent progress over the
first half of the financial year. We continued to actively pursue
the growth of our portfolio and this was reflected in a 31%
increase in the fair value of our portfolio compared to 30 June
2015 and in a 138% increase compared to 31 December 2014. We have
been successful in securing investment in our portfolio with the
completion of fundraisings in PulsiV Solar and Nandi Proteins and
look forward to seeing further progress within the portfolio. In
line with our aim to extend our sources of exploitable IP, we were
pleased to announce our agreement with Évora University in Portugal
in January this year, our first relationship to be established by
the Group with a university outside of the UK. We remain encouraged
by the opportunities for growth in our portfolio."
Enquiries
Frontier IP Group plc T: 0131 240 1251
Neil Crabb, Chief Executive
Company website: www.frontierip.co.uk
Cantor Fitzgerald Europe T: 020 7894 7000
(Nominated Adviser and Joint Broker)
David Foreman, Catherine Leftley, Corporate
Finance
David Banks, Corporate Broking
Peterhouse Corporate Finance Limited T: 020 7469 0935
(Joint Broker)
Lucy Williams
Kreab T: 020 7074 1800
Robert Speed, Matthew Jervois
Notes to Editors:
Frontier IP specialises in assisting institutions and companies
in the commercialisation and exploitation of their intellectual
property. It establishes formal and informal relationships with
sources of exploitable IP, principally universities. Its core
business is building and growing a portfolio of equity stakes in
spin-out companies by taking an active involvement in the
commercialisation and funding of these businesses. Frontier IP
currently has seventeen companies in its portfolio, which exploit
IP from a range of institutions. www.frontierip.co.uk
Interim Management Statement
Summary
Frontier IP's core strategy is to generate value by providing
best practice IP commercialisation services to institutions and
start-ups, by developing a portfolio of companies capable of
commercial success and by providing access to capital for these
portfolio companies.
I am pleased to report that we made excellent progress in each
of these areas in the first half of the financial year. We
continued to actively pursue the growth of our portfolio and this
was reflected in a 31% increase in the fair value of our portfolio
compared to 30 June 2015 and a 138% increase compared to 31
December 2014. We provided access to capital for portfolio
companies Pulsiv Solar Limited ("PulsiV Solar") and Nandi Proteins
Limited ("Nandi Proteins"), which significantly contributed to
increasing total revenue in the half-year.
PulsiV Solar, which provides a pioneering technology which
significantly improves the energy efficiency of photovoltaic solar
panels, completed its first fundraising and has continued to make
good progress since. Its operation is expanding and results from
early testing continue to show significant increases in energy
generation when compared with conventional inverter technology.
Post period-end, Nandi Proteins completed a further fundraising
at a significantly higher valuation - twice the price per share of
the previous fundraising announced in November 2014. Interest in
its ingredient-replacement technology is growing, as it offers the
food industry the potential to address increasing obesity
levels.
Our access to sources of intellectual property ("IP") is
expanding, and we were pleased to announce in January 2016 our
agreement with Universidade de Évora, Portugal ("Évora"), the first
such agreement to be established by the Group with a university
outside of the UK. Frontier IP has been engaged to accelerate the
commercial value of IP developed within or owned by Évora and will
receive a share of the equity in each spin-off company created by
the university, as well as a share in the licensing revenue it
receives.
Opportunities continue to be encouraging and, looking ahead, we
expect to see further progress in our portfolio over the remainder
of the financial year.
Results
Financial assets at fair value through profit and loss at 31
December 2015 increased to GBP3,745,000 (30 June 2015:
GBP2,859,000; 31 December 2014: GBP1,574,000). Revenue from
services over the first half increased by 30% to GBP109,000 (2014:
GBP84,000) while the 306% increase in total revenue to GBP992,000
(2014: GBP244,000) reflected higher investment revaluations
(unrealised) of GBP883,000 (2014: GBP160,000). The profit before
tax was GBP549,000 (2014: loss GBP242,000). Administrative expenses
decreased by 9% to GBP443,000 (2014: GBP487,000) primarily
reflecting reduced consultancy fees. Basic earnings per share was
2.07p (2014: loss per share of 1.07p).
Cash balances stood at GBP264,000 as at 31 December 2015 (30
June 2015: GBP636,000; 31 December 2014: GBP184,000). Net assets
per share as at 31 December 2015 were 23.0p (30 June 2015: 20.9p;
31 December 2014: 17.0p).
Operational Review
We are pleased to report good progress in a number of our
portfolio companies during the period, contributing to significant
growth in total revenue for the half-year.
The fundraising in PulsiV Solar has enabled it to accelerate the
development of its solar inverter technology, with the latest
prototype well-advanced. Existing and new IP has been secured and
the PulsiV Solar team is expanding with the appointment of its
first full time employee. The global solar inverter market is
forecast to be valued at approximately $7 billion in 2015 and
PulsiV Solar's technology can be integrated into new systems or
retrofitted to existing solar panels.
Post period-end, we completed a further fundraising in Nandi
Proteins, which will enable it to take advantage of the current
high level of interest in its technology from multi-national food
companies. In particular, the sugar, fat and additive replacement
properties of its technology are very relevant at a time when food
companies are under increasing legislative pressure to reduce the
level of these ingredients in their products. Nandi Proteins is
working to scale up its technology to meet this potential demand in
the coming year.
Following its first fundraising in early 2015, Alusid Limited
("Alusid") has established a pilot plant, produced its first sample
product, SilicaStone, which won Product of the Year - Surfaces at
Mixology North, a prestigious interior design awards event and
reached the final three in the Innovation category at the Homes
& Gardens magazine Designer Awards. Discussions with both
suppliers of recyclable raw materials and potential customers are
well underway and Alusid will shortly be seeking to raise further
funds to enable it to meet projected demand.
Cambridge Sensor Innovation Limited ("CSI"), which exploits a
novel sensor technology developed by Dr. Mark Williamson at the
Department of Chemical Engineering and Biotechnology at the
University of Cambridge, made good progress in developing its next
generation sensor technology during the period and a first order
for this new generation technology has been received from a global
speciality chemicals company. The next challenge for CSI will be to
create the capacity to manufacture in larger volumes and it will
shortly be seeking third party funding to achieve this goal.
In order to maintain the growth in our portfolio we continue to
work with new and existing partners to source and identify new
opportunities and are working on a range of pipeline projects.
As stated in the Group's Annual Report & Financial
Statements 2015 we anticipate undertaking an equity placing during
this second half, using the authorities granted at our most recent
Annual General Meeting. This funding will provide ongoing working
capital for the Group and support delivery of the strong growth
opportunities available to us.
Outlook
Frontier IP has made encouraging progress over the first half
and the continuing growth in value of our portfolio is especially
pleasing. We remain very positive about the opportunities within
our portfolio and from our sources of exceptional IP and look
forward to reporting on further progress over the second half of
the financial year.
Neil Crabb
Chief Executive Officer
9 March 2016
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
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March 09, 2016 02:00 ET (07:00 GMT)
For the six months ended 31 December 2015
Six months Six months Year
ended ended ended
31 December 31 December 30 June
Notes 2015 (unaudited) 2014 (unaudited) 2015
(audited)
GBP'000 GBP'000 GBP'000
Revenue
Revenue from services 109 84 170
Other operating income
Unrealised profit on the
revaluation of
investments 7 883 160 1,421
Total revenue 992 244 1,591
Administrative expenses (443) (487) (945)
Profit/(loss) from operations 549 (243) 646
Interest income on short-term
bank deposits - 1 1
Profit/(loss) before tax 549 (242) 647
Taxation 5 - - -
Profit/(loss) and total
comprehensive income/(expense)
attributable to the equity
holders of the parent 549 (242) 647
================== =================== ===========
Profit/(loss) per share
attributable to the equity
holders of the parent
Basic earnings/(loss) per
share 6 2.07p (1.07)p 2.76p
Diluted earnings/(loss)
per share 6 2.05p (1.05)p 2.71p
All of the Group's activities are classed as continuing and
there were no comprehensive gains or losses in any period other
than those included in the statement of comprehensive income.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2015
As at As at As at
31 December 31 December 30 June
2015 2014 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
ASSETS Notes
Non-current assets
Tangible fixed assets 1 2 2
Goodwill 1,966 1,966 1,966
Financial assets at fair
value through profit and
loss 7 3,745 1,574 2,859
Trade receivables 117 84 29
-------------- -------------- -----------
5,829 3,626 4,856
-------------- -------------- -----------
Current assets
Trade receivables and other
current assets 154 145 188
Cash and cash equivalents 264 184 636
-------------- -------------- -----------
418 329 824
Total assets 6,247 3,955 5,680
LIABILITIES
Current liabilities
Trade and other payables (128) (119) (123)
-------------- -------------- -----------
(128) (119) (123)
-------------- -------------- -----------
Net assets 6,119 3,836 5,557
============== ============== ===========
EQUITY
Called up share capital 2,660 2,253 2,660
Share premium account 5,200 4,794 5,200
Reverse acquisition reserve (1,667) (1,667) (1,667)
Share based payment reserve 58 134 45
Retained earnings (132) (1,678) (681)
-------------- -------------- -----------
Total equity 6,119 3,836 5,557
============== ============== ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 31 December 2015
Share-
Share Reverse based Profit
Share premium acquisition payment and
capital account reserve reserve loss Total
account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1st July
2014 2,253 4,794 (1,667) 125 (1,436) 4,069
Share-based
payments - - - 9 - 9
(Loss)/comprehensive
expense for
the period - - - - (242) (242)
At 31 December
2014 2,253 4,794 (1,667) 134 (1,678) 3,836
---------- ---------- -------------- --------- ---------- --------
Issue of shares 407 406 - - - 813
Share-based
payments - - - 19 - 19
Transfer on
expiry of warrants
in prior year - - - (108) 108 -
Profit/comprehensive
income for
the period - - - - 889 889
---------- ---------- -------------- --------- ---------- --------
At 30 June
2015 2,660 5,200 (1,667) 45 (681) 5,557
---------- ---------- -------------- --------- ---------- --------
Share-based
payments - - - 13 - 13
Profit/comprehensive
income for
the period - - - - 549 549
At 31 December
2015 2,660 5,200 (1,667) 58 (132) 6,119
========== ========== ============== ========= ========== ========
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 31 December 2015
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2015 2014 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Cash used in operations (369) (315) (730)
Taxation paid - - -
------------- ------------- -----------
Net cash used in operating
activities (369) (315) (730)
------------- ------------- -----------
Cash flows from investing activities
Purchase of tangible fixed
assets - - (1)
Purchase of financial assets
at fair value through profit
and loss (3) (89) (33)
Interest received - 1 -
------------- ------------- -----------
Net cash used in investing
activities (3) (88) (34)
------------- -------------
Cash flows from financing activities
Proceeds from issue of equity
shares - - 854
Costs of share issue - - (41)
------------- ------------- -----------
Net cash generated from financing
activities - - 813
------------- ------------- -----------
Net (decrease)/increase in
cash and cash equivalents (372) (403) 49
Cash and cash equivalents at
(MORE TO FOLLOW) Dow Jones Newswires
March 09, 2016 02:00 ET (07:00 GMT)