Frontier IP (LON:FIPP), which specialises in commercialising university intellectual property, is pleased to announce that it has raised approximately £2.49 million before expenses through a placing of 3,827,852 new ordinary shares of 10 pence each at an issue price of 65 pence per share.
Transaction highlights
· Placing to raise approximately £2.49 million before expenses
· Strong support from existing and new investors
· The net proceeds of the Placing are intended to be used to build out the core Frontier IP team and strengthen the working capital of the Company
· The Placing Shares will represent approximately 9.09 per cent. of the enlarged issued share capital of the Company
Andrew Richmond, Chairman of Frontier IP Group plc, said:
“I am delighted to announce the successful completion of this fundraising, which was over-subscribed. The support shown by both existing and new shareholders in this placing is very pleasing and a clear endorsement of our business model. I would like to thank our advisers and investors for their support as we enter an exciting period for Frontier IP.”
Neil Crabb, CEO of Frontier IP Group plc, commented:
“Frontier IP is going from strength to strength. There is strong evidence that our distinctive approach to intellectual property commercialisation, designed to address the needs of both universities and industry, is gaining traction. This fundraising will ensure we can take advantage of future opportunities as they arise. We are confident we are set to make significant progress as the Group and its portfolio companies develop.”
Summary of and reasons for the Placing
The Company has raised approximately £2.49 million before expenses by means of a Placing with certain new and existing investors of 3,827,852 Placing Shares at 65 pence per share.
The net proceeds of the Placing, estimated to be £2.34 million, are intended to be used to build out the core Frontier IP team and strengthen the working capital of the Company. The Directors believe that the fundraising will help support the Company’s growth by enabling it to continue to develop and grow its portfolio and key relationships.
Results
The Company has today announced results for the 12 months ended 30 June 2018. The key financial highlights for this financial period are as follows:
• Fair value of portfolio companies increased by 34% to £9,041,000 (2017: £6,729,000)
• Total revenue increased by 2% to £2,363,000 (2017: £2,309,000) – reflecting an unrealised profit on the revaluation of investments of £2,064,000 (2017: £2,045,000)
• Revenue from services increased by 13% to £299,000 (2017: £264,000)
• Profit before tax decreased by 27% to £902,000 (2017: £1,229,000)
• Basic earnings per share decreased to 2.36p (2017: 3.73p)
• Cash balances at 30 June 2018 of £1,111,000 (2017: £2,329,000)
• Net assets per share as at 30 June 2018 of 33.2p (2017: 30.7p)
Current trading and outlook
Frontier IP has made highly encouraging progress since its year end. We have grown our portfolio with the addition of three new spinouts, our industry and public-sector partnerships have developed and funding activity within the portfolio continues to pick up pace.
We welcomed our first two spin outs in Portugal, both resulting from our formal relationship with the NOVA University Lisbon – NOVA School of Science and Technology, Portugal. NTPE develops novel technology to print electronic circuits, sensors and semiconductors onto paper and with a team of over 65 researchers it has already been backed with substantial funding. Des Solutio develops safer and greener alternatives to chemicals currently used to make beauty, pharmaceutical and personal care products and the technology has already attracted keen interest from these industries. We are excited by the technologies we are seeing from our university partnerships, both formal and informal, and expect to announce further additions during the year.
Industry partnerships are an important part of our business model, enabling our portfolio companies to validate their technologies to ensure they meet real-world demands. Since our year end, we have continued to see a high level of collaboration with industry across our portfolio companies. This has included Molendotech adding to its industry partnership with Palintest by signing a collaboration agreement with G’s Group, a leading fresh produce company, and Tarsis Technology’s agreement with a global crop protection company to research the use of its metal-organic frameworks technology. We continue to work with our portfolio companies on a number of industry partnerships potentially key to their success.
Ensuring our portfolio companies are appropriately funded is essential to their growth and we are seeing our portfolio attracting funding from both private and public sources. Highlights have included Alusid raising £1.34m of equity finance from new and existing investors to support the planning for a factory to transform its production capacity, and Pulsiv and The Vaccine Group securing grant awards from Innovate UK and the global Bacterial Vaccine Network respectively. We are working on further funding in our portfolio from both private and public sources.
Beyond our work directly with universities as sources of commercialisable IP, our links with the public sector, most recently with our partnership with UK Department for International Trade in Portugal, are valuable to us and our portfolio. We expect to see our engagement across the public sector gaining momentum.
We continue to strengthen our team to support our progress and to enable us to meet demand. In September this year, we were very pleased to welcome Matthew White, former Head of Innovation at AB Sugar, who joined us in a non-board role as Director of Commercialisation.
We are delighted to report continued strong interest from industry, investors, universities and the public sector in the work of our portfolio companies and in Frontier IP itself. Activity and engagement levels with existing and potential partners are rising significantly as we position ourselves for future growth.
