TIDMFIPP
RNS Number : 9900S
Frontier IP Group plc
15 March 2023
15 March 2023
Frontier IP Group plc
("Frontier IP", the "Group" or the "Company")
UNAUDITED HALF-YEAR RESULTS FOR THE SIX MONTHS TO 31 DECEMBER
2022
Frontier IP, a specialist in commercialising intellectual
property, is pleased to announce its unaudited interim results for
the six month period ended 31 December 2022.
KEY POINTS
-- Pre-tax loss of GBP0.5 million (31 December 2021: profit of GBP10.3 million)
-- Cash balances of GBP5.8 million at 31 December 2022 (30 June
2022: GBP4.4 million; 31 December 2021: GBP0.3 million)
-- Basic earnings per share fell by 97 per cent to 0.49p (31 December 2021: 14.54p)
-- Net assets per share of 88.2p as at 31 December 2022 (30 June
2022: 88.5p; 31 December 2021: 84.7p)
-- Unrealised profit on the revaluation of investments fell by
97 per cent to GBP0.4 million (31 December 2021: GBP11.9
million)
-- Fair value of portfolio fell by 9 per cent to GBP36.1 million
at 31 December 2022 (30 June 2022: GBP39.7 million; 31 December
2021: GBP43.9 million) reflecting disposals of GBP3.1 million,
additions of GBP0.6 million and fair value decreases of GBP1.1
million
-- Significant commercial and technical progress across the portfolio
-- Appointment of two new Non-Executive Directors announced today
Frontier IP made solid progress during the first half of the
financial year. The Group sold a further tranche of Exscientia
shares for general working capital purposes and to provide further
support to portfolio companies. Our balance sheet and cash position
are strong, and we are well placed to weather the current uncertain
market and economic climate.
There were several important commercial and technical
developments across the portfolio during the first half of the
year. Several companies attracted significant industry interest and
are gaining commercial traction as a result. We continue to
strengthen management teams: two new chief executive officers were
appointed to portfolio companies during the period. Two new
portfolio companies, Enfold Health and GraphEnergyTech, were
incorporated and joined the portfolio.
Post period end, the Group added further expertise and
experience to its own leadership team. We are delighted to welcome
Nigel Grierson and Dr David Holbrook to the Board of Directors as
independent Non-Executive Directors. Dame Julia King, Baroness
Brown of Cambridge DBE FREng FRS FMedSci has also been appointed
Senior Independent Director. The changes take place with immediate
effect. Campbell Wilson will be stepping down in April 2023, having
served nine years as a non-executive director, but will continue to
assist the Group with selected portfolio companies. Further details
are in the separate announcement published today.
PORTFOLIO AND OPERATIONAL HIGHLIGHTS
The six months to 31 December 2022 saw several companies gather
momentum, achieving commercial, technical and funding
milestones:
-- Pulsiv raised GBP1.6 million through an equity funding round
to develop and scale up its technology to improve the energy
efficiency of power supplies, battery chargers, LED lighting and
photovoltaic solar cells. The company has announced distribution
agreements with a number of partners globally.
-- CamGraPhIC's novel graphene-based photonics technology is now
being tested with potential customers after the company raised
GBP1.26 million through an equity funding round to complete
fabrication and testing of demonstration devices. Sir Michael Rake,
former chair of BT Group plc, has agreed to join the board of
directors in due course.
-- The Vaccine Group successfully completed two
government-funded projects to develop vaccine candidates for
zoonotic diseases, including a transmissible animal vaccine to
tackle Lassa fever.
-- During the period, Nandi Proteins signed heads of terms with
a commercial partner for a meat/fat replacer and successfully
completed trials of an egg white replacer on commercial production
equipment. Post period end, the company commenced trials, which are
now approaching completion, with a potential customer for the egg
white replacer.
-- Celerum and Elute appointed chief executive officers to
strengthen their management teams. Following the launch of Truck
Logistics System last year, Celerum is now winning customers.
-- Two new portfolio companies, GraphEnergyTech and Enfold Health, were incorporated.
-- Frontier IP generated net cash proceeds of GBP3.4 million
through the sale of a further tranche of Exscientia shares to
provide working capital and to enable the Group to support
portfolio companies.
Post period end:
-- Alusid announced the results of a successful collaboration
with Imerys, a global leader in speciality minerals, to make floor
tiles. Floor tiles are estimated to constitute about 60 per cent of
the UK tile market.
-- Nigel Grierson and Dr David Holbrook were appointed to the
Frontier IP Board of Directors and Dame Julia King is appointed
Senior Independent Director. The changes take place with immediate
effect. Campbell Wilson is to step down from the Board of Directors
in April 2023 but will continue to work with selected portfolio
companies thereafter in an advisory capacity.
FINANCIAL HIGHLIGHTS
-- Pre-tax loss of GBP0.5 million (31 December 2021: profit of GBP10.3 million)
-- Post-tax profit fell by 97 per cent to GBP0.3 million (31 December 2021: GBP8.0 million)
-- The Group sold part of its holding in Exscientia for net
proceeds of GBP3.4 million, realising profits of GBP0.3 million.
The Group's remaining investment in Exscientia decreased in value
by GBP3.5 million during the six months to 31 December 2022.
-- Cash balances stood at GBP5.8 million as at 31 December 2022
(30 June 2022: GBP4.4 million; 31 December 2021: GBP0.3
million)
-- Basic earnings per share fell by 97 per cent to 0.49p (31 December 2021: 14.54p)
-- Net assets per share decreased to 88.2p as at 31 December
2022 (30 June 2022: 88.5p; 31 December 2021: 84.7p) following the
exercise of 652,607 share options by directors
-- Unrealised profit on the revaluation of investments fell by
97 per cent to GBP0.4 million (31 December 2021: GBP11.9
million)
-- Fair value of portfolio fell by 9 per cent to GBP36.1 million
at 31 December 2022 (30 June 2022: GBP39.7 million; 31 December
2021: GBP43.9 million) reflecting disposals of GBP3.1 million,
additions of GBP0.6 million and fair value decreases of GBP1.1
million
Chief Executive Neil Crabb said: " The first half of the year
can be summed up as a time of significant commercial and technical
progress across our portfolio, while the overarching financial
results reflected difficult market conditions for technology firms
and early-stage companies, as anticipated at our year-end results.
We supported our portfolio in developing the industry partnerships
they need to prosper, strengthened management teams, and ensured
our pipeline of opportunities remains attractive by incorporating
two new portfolio companies.
In particular, I would like to highlight three companies which
took significant strides forward commercially during the period.
They are moving beyond their inflection points and towards
fulfilling their potential.
We believe Pulsiv's ground-breaking technology to make power
conversion much more efficient has near universal applicability
across a vast range of everyday devices - from power supplies and
LED lighting to battery chargers and solar panels. The on-chip
technology has the potential to lower cost because it uses fewer
system components and can be fitted into smaller form factors. The
benefits to consumers include reduced energy consumption and lower
bills.
During the period, Pulsiv OSMIUM was launched for almost all
mains-powered devices. The company has now put in place a series of
distribution agreements with leading electronic component suppliers
around the world to address different segments of the very broad
target markets. A collaboration was also announced with a leading
global manufacturer of power supplies, Salom, which has described
the technology as "game changing".
Alusid's collaboration with Imerys, a global leader in
speciality minerals, saw the company make an important technical
breakthrough seeking to fill a gap in its product range -
high-quality, hard-wearing floor tiles. Floor tiles constitute
about 60 per cent of the UK tile market, but as yet there are few,
if any, sustainable alternatives to those made by conventional
methods. Alusid entered into the collaboration, announced post the
period end, after being named as one of two winners of the Imerys
Start-Up Innovation Factory competition, in which 65 companies
globally were selected to participate. The tiles were made from
Imerys' waste, and Alusid is now trialling different techniques for
mass manufacture.
The company is also close to launching a range of wall tiles
with one of the UK's leading tile retailers, and I look forward to
updating you soon.
Nandi Proteins is also striding forwards in terms of commercial
development and scale up. The company signed heads of terms with a
commercial partner for a meat/fat replacement product during the
period, and successfully manufactured a fava bean based egg-white
replacer on commercial production equipment in trials with a
subcontractor. The egg-white replacer is now at an advanced stage
of application trials with a potential customer, a major company in
the meat alternative sector.
As our portfolio companies mature and move beyond validation to
commercial scale up, we seek to strengthen their management teams.
So, I am delighted that we were able to appoint two high-calibre
Chief Executive Officers to run Elute Intelligence and Celerum.
Steve Cable at Elute has more than 25 years' experience in building
businesses at start-ups, mid-sized firms and large companies, and
has worked with software solutions across a spectrum of
applications, including artificial intelligence, search and
professional services automation. David Gladding joined Celerum and
will be overseeing the company's commercial and technical
development following the launch of its first commercial product,
Truck Logistics System. This is already winning customers, and
David's experience in software and IT services companies, including
those in the fleet management industry, will prove invaluable as
the company grows.
We are also adding broader expertise and experience to our own
Board of Directors. I am delighted that Nigel Grierson and Dr David
Holbrook are joining us as Non-Executive Directors with immediate
effect. Both have wide-ranging experience in technology investment
and with spin-out and early-stage companies in sectors very
relevant to our portfolio companies: Nigel in engineering and
semiconductors, and David in life sciences. Dame Julia King, who
joined the Board in October 2021, is becoming Senior Independent
Director.
Sadly, Campbell Wilson will be standing down from the Board in
April. During the nine years he has served as a Non-Executive
Director, his support and experience have proved invaluable, and we
look forward to continuing to work with him as he continues to
support the Group and its portfolio companies.
I warned at the time of our annual results in November that the
market outlook in the short term was uncertain. The environment was
highly unpredictable, with the war in the Ukraine compounding
existing risks, such as supply chain pressures, energy prices,
inflation and rising interest rates, all likely to have an impact
on investor risk appetite. This has proved especially so for
technology stocks, and the main driver of our pre-tax loss is the
fall in the value of our remaining shares in Exscientia. Exscientia
is already established as a world leader in using artificial
intelligence in drug discovery and we are confident about its
future potential. There was also a slowdown in new funding
activity, which impacted the overall portfolio valuation.
While it was encouraging, and indeed important for the sector,
to see the speed with which the uncertainty around Silicon Valley
Bank was resolved, the situation has served to highlight the danger
rising interest rates pose to the financial system.
However, our balance sheet remains strong. A further sale of
Exscientia shares during the period means our cash position is
robust. Our portfolio is positioned to help solve fundamental
problems around climate, energy, food, water and health. None of
these challenges have dissipated, and we expect them to provide a
continuing spur to innovation and its adoption in the months and
years to come.
To take full advantage, it is vital we do not rest in seeking
new opportunities and ensure we have the right pipeline in place.
Two new portfolio companies were incorporated during the half which
exemplify our approach. Enfold Health is focused on developing its
innovative DNA Origami technology for making antibacterial
treatments more effective, developed by Dr Ioanna Mela, an
Associate Professor in the Department of Pharmacology at the
University of Cambridge. GraphEnergyTech is developing highly
conductive graphene electrodes to make solar cells more efficient,
cost-effective and environmentally friendly.
Our other two spin outs from the Cambridge Graphene Centre,
CamGraPhIC and Cambridge Raman Imaging, are also progressing well,
and we believe materials technology advances are ready to enable a
wave of opto-electronic innovation. Graphene and other 2D materials
are ready to move on from the many years of promise into
applications that can make a tangible impact. These, along with
developments at our other portfolio companies, lead us to expect
further positive updates. We remain confident about our business
and its prospects."
Enquiries
Frontier IP Group Plc T: 020 3968 7815
Neil Crabb, Chief Executive neil@frontierip.co.uk
Andrew Johnson, Communications and Investor M: 07464 546 025
Relations
andrew.johnson@frontierip.co.uk
Company website: www.frontierip.co.uk
Allenby Capital Limited (Nominated Adviser) T: 0203 328 5656
Nick Athanas / George Payne
Singer Capital Markets (Broker) T: 0207 496 3000
Sandy Fraser / Harry Gooden / George Tzimas
ABOUT FRONTIER IP
Frontier IP unites science and commerce by identifying strong
intellectual property and accelerating its development through a
range of commercialisation services. A critical part of the Group's
work is involving relevant industry partners at an early stage of
development to ensure technology meets real world demands and
needs.
The Group looks to build and grow a portfolio of equity stakes
and licence income by taking an active involvement in spin-out
companies, including support for fund raising and collaboration
with relevant industry partners at an early stage of
development.
Interim Management Statement
Summary
Frontier IP made strong progress during the period in developing
portfolio companies and creating value for shareholders by:
-- Realising funds from the portfolio. During the half year the
Group generated approximately GBP3.4 million of net proceeds by
selling part of its stake in Exscientia to ensure financial
strength for the foreseeable future.
-- Supporting portfolio company fundraisings. Pulsiv completed a
GBP1.6 million equity funding round, while CamGraPhIC raised
GBP1.26 million.
-- Strengthening the board of directors with two key
appointments in Nigel Grierson and Dr David Holbrook.
-- Helping to support industry partnerships across the
portfolio. Pulsiv has signed distribution agreements with major
electronic component suppliers, Alusid has started supplying a
major tile retailer, and CamGraPhIC is testing devices with
potential customers.
Operational Review
The Group and its portfolio companies made good commercial and
technical progress during the half year to 31 December 2022. Our
portfolio continues to grow and mature with several companies now
gaining significant commercial traction. We further developed our
relationships with university, government and industry partners.
Further positive newsflow is expected in the coming months.
Portfolio developments included:
CamGraPhIC: Frontier IP stake 20.8 per cent
CamGraPhIC is developing graphene-based photonics for scalable,
faster and cheaper optical transceivers, devices at the heart of
high-speed data and telecommunication networks. Partners include
leading multinationals from the telecoms and semiconductor sectors
who believe the company's technology could prove an important
enabler for the 5G and 6G networks of the future. There is also
potential for applications in other sectors. Current versions of
the technology have indicated speeds of up to 100Gbps per lane,
operations across multiple wavebands and very low energy loss.
Their speed is about twice that achieved by equivalent
technologies, and they consume 70 per cent less energy. During the
period, CamGraPhIC raised a further GBP1.26 million to complete
fabrication and testing of demonstration devices, and customers are
now testing the technology. Sir Michael Rake, the former chair of
BT Group plc, invested as part of the funding round, and will be
joining the board of directors in due course. His previous roles
include chair of WorldPlay Group plc, EasyJet plc, and President of
the Confederation of British Industry.
Celerum: Frontier IP stake 33.8 per cent
Celerum's innovative artificial intelligence, based on
metaheuristics such as nature-inspired computing, has the potential
to improve operational efficiency across a broad range of
industrial sectors. Initial applications are focused on logistics,
where the company has launched its first commercial product, Truck
Logistics System (TLS), to cut road haulage costs, carbon emissions
and delivery times for small-to-medium sized truck fleets. The
first customer was Colin Lawson Transport, a haulage firm based in
Aberdeen, and a second customer has since started using the
technology. Further potential applications have been identified in
the maritime, energy and telecommunications sectors. To capitalise
on growing interest in the technology, Celerum appointed a chief
executive officer, David Gladding, during the period. David has
more than 30 years' experience at senior levels in software and IT
services companies, including those specialising in fleet
management. He was senior vice president global sales for Chevin
Fleet Services, and also worked for Civica and Fleet Clear.
Elute Intelligence: Frontier IP stake 41.2 per cent
Elute's software allows computers to read millions of documents
in seconds to identify those of the greatest relevance. The
technology is based on encoding forensic linguistic principles in
software, which allows documents to be read in a manner similar to
humans but by a computer at great speed. The software can clearly
show why documents are relevant, a marked difference to the
semantic search approaches used by competing products. It can also
allow for rapid detailed comparison of text in documents,
authorship detection for plagiarism and collusion, and automatic
document summaries. Current products are based on English, but the
functionality is not language dependent and could be applied to
other languages, including Russian, Arabic and Chinese. Existing
customers for the company's CopyCatch software to detect plagiarism
are UCAS and the Open University . During the half year, the
company appointed Steve Cable as chief executive officer. Steve has
more than 25 years' experience building businesses at start-ups,
mid-sized firms and larger companies.
Nandi: Frontier IP stake 20.1 per cent
Nandi's protein technology transforms commodity proteins into
functional food ingredients. Nandi is currently focused on bringing
two lead products to market. The first is a collagen-based meat/fat
replacer for use in processed meat products, such as sausages,
burgers and meatballs, reducing fat content and cost. Heads of
terms have been signed with a commercial partner who is intending
to license Nandi's technology to produce and sell the meat
replacer, creating a royalty stream for Nandi. The second product
is a fava bean-based egg white replacer that has been successfully
tested in a range of applications including meringues, alternative
meat products and multiple bakery products. During the period,
Nandi successfully completed the first production run of the egg
white replacer on commercial production equipment with a
subcontract manufacturing partner. Nandi is in late-stage
application trials with a major food producer looking to eliminate
the use of egg white powder in their products. Successful
completion of the trials would see Nandi use a subcontract
manufacturer to supply ingredients to this first major
customer.
Pulsiv: Frontier IP stake 18.2 per cent
Pulsiv's ground-breaking technology significantly improves the
energy efficiency of power supplies, battery chargers and LED
lighting, cutting energy consumption and customer bills. The
technology also extracts more energy from photovoltaic solar cells.
Because it uses fewer components, it can be incorporated into more
compact designs and is cost effective for manufacturers. The
company raised GBP1.6 million during the period to develop and
scale up the technology and launched Pulsiv Osmium for power
supplies and battery chargers. Commercial traction is strong and
growing: the company is in advanced discussions with major
manufacturers and has put in place a series of distribution
agreements globally to cover different geographies and applications
of the technology. These include strategic agreements with Astute
Electronics, Digikey Electronics, the world's fifth largest
electronic components distributor, ISMOsys and Pankaj Electronics.
The company also entered into a collaboration with Salom, one of
the world's major manufacturers of power supplies, which described
Pulsiv's technology as "game changing". Post period end, Pulsiv
announced further distribution agreements with CATS S.A.S, Fortec
Electronik, Bescom Global and EPS Global.
The Vaccine Group: Frontier IP stake 17 per cent
The potential for The Vaccine Group's novel herpesvirus-based
vaccine technology to be applied flexibly depending on the nature
of the disease and animal reservoirs targeted was demonstrated by
the successful completion of two government-funded projects. The
first involved developing a transmissible candidate vaccine against
a virus, Lassa fever, for use in the rats that spread the disease.
A small-scale trial showed the candidate could be transmitted
between rats, significantly improve their immunity to Lassa fever
and reduce its spread between them. Technology to scale up for
commercial production was also developed as part of the project,
and the company is now in discussion with potential partners about
further development. The work was funded by the US Defense Advanced
Research Projects Agency, led by the University of California
Davis, and involved TVG collaborating with academic partners from
around the world. The second project, funded by the UK and Chinese
governments, developed a vaccine candidate for Streptococcus suis,
a bacterial disease carried by pigs. However, it can cause
meningitis and other symptoms in humans. The disease is currently
treated by antibiotics but is showing signs of resistance. A
Chinese commercial partner, the Pulike Biological Engineering
Company has started work to make the candidate vaccine at pilot
scale.
Two new portfolio companies were incorporated. Enfold Health
(Frontier IP stake 75.8 per cent) is commercialising the unique DNA
Origami IP developed by Dr Ioanna Mela, Associate Professor in the
Department of Pharmacology at the University of Cambridge, for
making antibacterial treatments more effective, with an initial
focus on P.gingivalis, considered to be the main risk factor for
periodontal disease. GraphEnergyTech (Frontier IP stake 32.1 per
cent) is developing highly conductive graphene inks. Initial
application is for use in solar cells to make them more efficient,
affordable and environmentally friendly.
Other post period end portfolio developments
Alusid: Frontier IP stake 38.9 per cent stake
Alusid makes beautiful, premium-quality tiles, tabletops and
other surfaces by recycling industrial waste, ceramics and glass,
much of which would otherwise go to landfill. The company's
patented formulations and processes use less energy and water than
conventional tile manufacturing. After the period end, the company
announced the results of a successful collaboration with Imerys, a
world leader in speciality minerals, to make hard-wearing floor
tiles. The collaboration resulted after Alusid was named as one of
two winners in the inaugural Imerys Start-Up Innovation Factory
competition from 65 companies from around the world selected to
participate. Floor tiles comprise 60 per cent of the total UK tile
market, according to MTW Research, and the products are generating
industry interest. The company has started supplying a major tile
retailer with wall tiles and a further announcement is expected
soon.
Corporate developments
The Group realised approximately GBP3.4 million through the
further sale of part of its equity stake in Exscientia. Two new
portfolio companies were incorporated. After the period close,
Frontier IP strengthened the board by appointing Nigel Grierson and
Dr David Holbrook to its Board of Directors and made Dame Julia
King, Baroness Brown of Cambridge, Senior Independent Director.
Outlook
Frontier IP faces the future with confidence. However, we are
mindful that the uncertain and challenging market conditions
experienced during the first half of the year, driven by global
factors such as the Russian invasion of Ukraine, could continue.
The money raised through the partial sale of our Exscientia equity
holding means our balance sheet remains strong and ensures we have
the capital to support the Group and its portfolio companies for
the foreseeable future.
We are seeing growing industry traction across the portfolio
after several companies made important commercial and technical
breakthroughs. Others are now reaching inflection points. We expect
this progress to be reflected by strong positive news flow in the
months to come.
Neil Crabb
Chief Executive Officer
Results Summary
Financial assets at fair value through profit and loss at 31
December 2022 decreased to GBP41,065,000 (30 June 2022:
GBP42,693,000; 31 December 2021: GBP46,665,000). This reflects the
partial disposal of the Group's investment in Exscientia of
GBP3,125,000 and investments in other portfolio companies of
GBP1,098,000. Unrealised profit on the revaluation of investments
over the first half decreased by 97 per cent to GBP400,000 (2021:
GBP11,914,000) with an increase in the value of unquoted equity and
debt investments of GBP3,943,000 offset by a decrease in the value
of the remaining holding in Exscientia by GBP3,543,000. Revenue
from services increased to GBP203,000 (2021: GBP163,000). The Group
sold part of its holding in Exscientia for net proceeds of
GBP3,433,000, realising profits of GBP307,000 in the period under
review. A loss before tax of GBP469,000 was incurred (2021:
GBP10,281,000) reflecting the lower profit on the revaluation of
investments while profit after tax decreased by 97 per cent to
GBP269,000 (2021: GBP7,998,000). Administrative expenses decreased
by 18 per cent to GBP1,429,000 (2021: GBP1,733,000) with prior year
numbers reflecting a bonus paid to directors and staff in 2021.
Excluding the 2021 bonus, administrative expenses increased by 21
per cent due to additional personnel resource and professional and
financial expenses. The share-based payment charge decreased to
GBP70,000 (2021: GBP161,000). Basic earnings per share were 0.49p
(2021: 14.54p).
Cash balances stood at GBP5,850,000 as at 31 December 2022 (30
June 2022: GBP4,368,000; 31 December 2021: GBP346,000). Net assets
per share as at 31 December 2022 were 88.2p (30 June 2022: 88.5p;
31 December 2021: 84.7p) the marginal reduction reflecting the
exercise of 652,607 share options by directors.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 December 2022
Six months Six months Year ended
ended 31 ended 31 30 June
December December 2022 (audited)
Notes 2022 (unaudited) 2021 (unaudited)
GBP'000 GBP'000 GBP'000
Revenue
Revenue from services 203 163 329
Other operating income
Unrealised profit on the revaluation
of
investments 7 400 11,914 10,908
Realised profit on disposal
of investments 307 - 2,867
910 12,077 14,104
Administrative expenses (1,429) (1,733) (3,104)
Share based payments (70) (161) (329)
Other income 107 97 207
(Loss)/profit from operations (482) 10,280 10,878
Interest income on short-term
bank deposits 13 1 1
(Loss)/profit from operations
and before tax (469) 10,281 10,879
Taxation 5 738 (2,283) (649)
Profit and total comprehensive
income attributable to the equity
holders of the Company 269 7,998 10,230
================== =================== ================
Profit per share attributable
to the equity
holders of the parent
Basic earnings per share 6 0.49p 14.54p 18.60p
Diluted earnings per share 6 0.47p 13.67p 17.53p
All 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 2022
As at As at As at
31 December 31 December 30 June
2022 (unaudited) 2021 (unaudited) 2022 (audited)
GBP'000 GBP'000 GBP'000
ASSETS Notes
Non-current assets
Tangible fixed assets 9 9 6
Goodwill 1,966 1,966 1,966
Financial assets at fair
value through profit
and loss
Equity investments 7 36,098 43,892 39,712
Debt investments 7 4,967 2,773 2,981
43,040 48,640 44,665
------------------- ------------------- ----------------
Current assets
Trade receivables and
other current assets 942 924 1,051
Cash and cash equivalents 5,850 346 4,368
------------------- ------------------- ----------------
6,792 1,270 5,419
Total assets 49,832 49,910 50,084
LIABILITIES
Non-current liabilities
Deferred taxation (484) (2,507) (1,167)
------------------- ------------------- ----------------
(484) (2,507) (1,167)
------------------- ------------------- ----------------
Current liabilities
Trade and other payables (270) (809) (218)
------------------- ------------------- ----------------
(270) (809) (218)
------------------- ------------------- ----------------
Total liabilities (754) (3,316) (1,385)
------------------- ------------------- ----------------
Net assets 49,078 46,594 48,699
=================== =================== ================
EQUITY
Called up share capital 5,566 5,501 5,501
Share premium account 14,627 14,576 14,576
Reverse acquisition reserve (1,667) (1,667) (1,667)
Share based payment reserve 1,318 1,451 1,324
Retained earnings 29,234 26,733 28,965
------------------- ------------------- ----------------
Total equity 49,078 46,594 48,699
=================== =================== ================
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six-months ended 31 December 2022
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 2021 5,501 14,576 (1,667) 1,276 18,735 38,421
Share-based payments - - - 175 - 175
Profit/comprehensive
income for the
period - - - - 7,998 7,998
At 31 December
2021 5,501 14,576 (1,667) 1,451 26,733 46,594
---------- ---------- -------------- --------- ---------- --------
Share-based payments - - - (127) - (127)
Profit/comprehensive
income for the
period - - - - 2,232 2,232
---------- ---------- -------------- --------- ---------- --------
At 30 June 2022 5,501 14,576 (1,667) 1,324 28,965 48,699
---------- ---------- -------------- --------- ---------- --------
Share-based payments 65 51 - (6) - 110
Profit/comprehensive
income for the
period - - - - 269 269
At 31 December
2022 5,566 14,627 (1,667) 1,318 29,234 49,078
========== ========== ============== ========= ========== ========
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 31 December 2022
Six months Six months Year ended
ended 31 ended 31 30 June
December December 2022 (audited)
2022 (unaudited) 2021 (unaudited) GBP'000
GBP'000 GBP'000
Cash flows from operating
activities
Cash used in operations (954) (1,196) (3,006)
Taxation paid (3) - -
------------------ ------------------ ----------------
Net cash used in operating
activities (957) (1,196) (3,006)
------------------ ------------------ ----------------
Cash flows from investing
activities
Purchase of tangible fixed
assets (7) (2) (3)
Purchase equity investments (573) (69) (614)
Disposal of equity investments 3,433 - 6,525
Purchase of debt investments (525) (380) (527)
Interest received 13 1 1
Net cash from/(used in) investing
activities 2,341 (450) 5,382
------------------ ------------------
Cash flows from financing
activities 98 - -
Proceeds from issue of equity
shares
------------------ ------------------ ----------------
Net cash generated from financing 98 - -
activities
------------------ ------------------ ----------------
Net increase/(decrease) in
cash and cash equivalents 1,482 (1,646) 2,376
Cash and cash equivalents
at beginning of period 4,368 1,992 1,992
------------------ ------------------ ----------------
Cash and cash equivalents
at end of period 5,850 346 4,368
================== ================== ================
Cash used in operations
Profit/(loss)before tax (469) 10,281 10,879
Adjustments for:
Share-based payments 70 161 329
Depreciation 4 4 8
Interest received (13) (1) (1)
Fair value (gain) on financial
assets at fair value through
profit or loss (400) (11,914) (10,908)
Realised profit on disposal
of investments (307) - (2,867)
Changes in working capital:
Trade and other receivables 109 (329) (456)
Trade and other payables 52 602 10
(954) (1,196) (3,006)
================== ================== ================
NOTES
1. General information
The Company is a limited liability company incorporated in
England and with its registered office at c/o CMS Cameron McKenna
Nabarro Olswang LLP, 78 Cannon Street, London EC4N 6AF. The
Company's main trading office is situated at 93 George Street,
Edinburgh, EH2 3ES.
The Company is quoted on the AIM market.
This condensed consolidated interim financial information was
approved and authorised for issue by a duly appointed and
authorised committee of the Board of Directors on 14(th) March
2023.
This condensed interim financial information has not been
audited or reviewed by the Company's auditor.
2. Basis of preparation
This condensed consolidated interim financial information for
the six months ended 31 December 2022 has been prepared in
accordance with International Accounting Standard 34 "Interim
Financial Reporting". The condensed consolidated interim financial
information should be read in conjunction with the annual financial
statements for the year ended 30 June 2022, which have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU.
This condensed consolidated interim financial information does
not constitute statutory accounts within the meaning of section 434
of the Companies Act 2006. The comparatives for the full year ended
30 June 2022 are not the Company's full statutory accounts for that
year. A copy of the statutory accounts for that year has been
delivered to the Registrar of Companies. The auditor's report on
those accounts was unqualified and did not contain a statement
under sections 498(2) or 498(3) of the Companies Act 2006.
3. Accounting policies
The accounting policies applied by the Group in these unaudited
half year results are consistent with those applied in the annual
financial statements for the year ended 30 June 2022 as described
in the Group's Annual Report for that year and as available on our
website www.frontierip.co.uk . No new standards that have become
effective in the period have had a material effect on the Group's
financial statements.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
4. Segmental information
The chief operating decision-maker has been identified as the
Group's board of directors. The board reviews the Group's internal
reporting to assess performance and allocate resources. Currently
the board considers that the Group has one operating activity, the
commercialisation of intellectual property. The Group's revenue and
profit before taxation were derived almost entirely from its
principal activities within the UK. Though the Group has a
Portuguese subsidiary as well as partnerships and spin outs in
Portugal the associated revenues and costs are currently immaterial
and, accordingly, no additional geographical disclosures are
given.
5. Taxation
The taxation income for the six months to 31 December 2022 of
GBP738,000 (31 December 2021: expense of GBP2,283,000) represents
the part reversal of the deferred tax liability on unrealised fair
value gains less the reversal of the deferred tax asset of
available tax losses.
A deferred tax asset in respect of trading losses arising before
1 April 2017 has not been recognised in view of the uncertainty as
to the level of future taxable trading profits.
6. Earnings per share
The calculation of the basic earnings per share for the six
months ended 31 December 2022 and 31 December 2021 and for the year
ended 30 June 2022 is based on the earnings attributable to the
shareholders of Frontier IP Group Plc in each period divided by the
weighted average number of shares in issue during the period.
Basic earnings per share Weighted
Earnings average Basic
attributable number of earnings
to shareholders shares per share
GBP'000 Number Pence
Six months ended 31 December
2022 269 55,108,403 0.49
Six months ended 31 December
2021 7,998 55,005,546 14.54
Year ended 30 June 2022 10,230 55,005,546 18.60
Weighted
Diluted earnings per share Earnings average Diluted
attributable number of earnings
to shareholders shares per share
GBP'000 Number Pence
Six months ended 31 December
2022 269 57,319,284 0.47
Six months ended 31 December
2021 7,998 58,509,845 13.67
Year ended 30 June 2022 10,230 58,339,949 17.53
7. Financial assets at fair value through profit and loss
Equity investments comprise the following:
Unquoted Quoted Total
Equity Investments Equity
Investments
GBP'000 GBP'000 GBP'000
At 1(st) July 2021 31,982 - 31,982
Additions 69 - 69
Conversion of debt 135 - 135
Reclassification (13,211) 13,211 -
Fair value increases 2,044 9,695 11,739
Fair value decreases (33) - (33)
-------------------- ------------- --------
At 31(st) December
2021 20,986 22,906 43,892
-------------------- ------------- --------
Additions
Fair value increases 545 - 545
Disposals - (3,659) (3,659)
Conversion of debt 629 - 629
Fair value increases 7,629 - 7,629
Fair value decreases (209) (9,115) (9,324)
-------------------- ------------- --------
At 30(th) June 2022 29,580 10,132 39,712
-------------------- ------------- --------
Additions 573 - 573
Disposals - (3,125) (3,125)
Fair value increases 2,505 - 2,505
Fair value decreases (24) (3,543) (3,567)
-------------------- ------------- --------
At 31(st) December
2022 32,634 3,464 36,098
==================== ============= ========
The valuation of the Group's investment in Pulsiv at 31 December
2022 was GBP9,520,000, 26 per cent of the Group's total equity
investments and 19 per cent of its net assets at 31 December 2022.
The valuation of the Group's investment in CamGraPhIC increased by
GBP1,884,000 during the six months to 31 December 2022, 76 per cent
of the net fair value increase in unquoted equity investments.
During the six months to 31 December 2022 the Group sold 349,020
American Depositary Shares of Exscientia for net proceeds of
GBP3,433,000 resulting in a realised gain of GBP307,000. The
Group's remaining investment in Exscientia, 782,400 American
Depositary Shares, decreased in value by GBP3,543,000 during the
six months to 31 December 2022. The valuation of the Group's
investment in Exscientia at 31 December 2022 was GBP3,464,000, 10
per cent of the Group's total equity investments and 7 per cent of
its net assets at 31 December 2022.
Debt investments comprise the following:
Unquoted Debt Instruments
GBP'000
At 1(st) July 2021 2,320
Additions 380
Conversion of debt (135)
Fair value increases 246
Fair value decreases (38)
--------------------------
At 31(st) December 2021 2,773
--------------------------
Additions
Fair value increases 147
Conversion of debt (629)
Fair value increases 690
Fair value decreases -
--------------------------
At 30(th) June 2022 2,981
--------------------------
Additions 525
Fair value increases 1,507
Fair value decreases (46)
--------------------------
At 31(st) December 2022 4,967
==========================
Debt investments are loans to portfolio companies to fund
early-stage costs, provide funding alongside grants and bridge to
an equity fundraise. Certain debt investments carry warrants
granting the option to purchase shares.
The most significant loans made during the six months to 31
December 2022 were to Alusid (GBP200,000) and Elute Intelligence
Holdings (GBP125,000). The most significant debt investments at 31
December 2022 were loans to CamGraPhIC (GBP3,380,000), Nandi
Proteins (GBP723,000) and Elute Intelligence (GBP546,000). The
valuation of the Group's debt investment in CamGraPhIC increased by
GBP1,492,000 during the six months to 31 December 2022, 99 per cent
of the fair value increases in unquoted debt instruments.
8. Copies of Half Yearly Report
Copies of the Half Yearly Report will be available on the
Company's website, www.frontierip.co.uk , and on request from the
Company's offices at 93 George Street, Edinburgh EH2 3ES no later
than 21(st) March 2023.
9. Equity holdings
All Group equity holdings in portfolio companies in the interim
management statement are as at 31 December 2022.
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END
IR FFFEFVIISLIV
(END) Dow Jones Newswires
March 15, 2023 03:00 ET (07:00 GMT)
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