TIDMFIPP
RNS Number : 4672H
Frontier IP Group plc
15 November 2018
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
15 November 2018
Frontier IP Group plc
("Frontier IP" or the "Company")
Placing to raise approximately GBP2.49 million
Frontier IP, which specialises in commercialising university
intellectual property, is pleased to announce that it has raised
approximately GBP2.49 million before expenses through a placing of
3,827,852 new ordinary shares of 10 pence each ("Placing Shares")
at an issue price of 65 pence per share (the "Placing").
Transaction highlights
-- Placing to raise approximately GBP2.49 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 GBP2.49 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 GBP2.34
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 GBP9,041,000 (2017: GBP6,729,000)
-- Total revenue increased by 2% to GBP2,363,000 (2017:
GBP2,309,000) - reflecting an unrealised profit on the revaluation
of investments of GBP2,064,000 (2017: GBP2,045,000)
-- Revenue from services increased by 13% to GBP299,000 (2017: GBP264,000)
-- Profit before tax decreased by 27% to GBP902,000 (2017: GBP1,229,000)
-- Basic earnings per share decreased to 2.36p (2017: 3.73p)
-- Cash balances at 30 June 2018 of GBP1,111,000 (2017: GBP2,329,000)
-- 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 GBP1.34m 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.
Further details of the Placing
The Company has conditionally raised, in aggregate,
approximately GBP2.49 million (approximately GBP2.34 million net of
expenses) by way of a Placing of 3,827,852 Placing Shares with
certain new and existing investors. The Placing Shares are to be
issued pursuant to the Company's existing share authorities. All
Placing Shares will be issued at the Placing Price of 65 pence per
new ordinary share.
Application will be made to the London Stock Exchange for the
Placing Shares to be admitted to trading on AIM ("Admission"),
which is expected to occur on or around 21 November 2018 at 8.00
a.m.. The Placing Shares will rank, pari passu, in all respects
with the Existing Ordinary Shares, including the right to receive
all dividends and other distributions declared, made or paid in
respect of the Ordinary Shares following Admission.
Allenby Capital Limited ("Allenby Capital") has entered into the
Placing Agreement with the Company under which Allenby Capital has,
on the terms and subject to the conditions set out therein
(including Admission), undertaken to act as settlement agent for
the Placing. The Placing Agreement contains certain warranties and
indemnities from the Company in favour of Allenby Capital. The
Placing is not being underwritten by Allenby Capital or any other
person.
The Placing is conditional, inter alia, on:
- Admission becoming effective by no later than 8.00 a.m. on 21
November 2018 (or such later time and/or date, being no later than
8.00 a.m. on 14 December 2018, as the Company and Allenby Capital
may agree); and
- the Placing Agreement not being terminated prior to Admission.
Accordingly, if any of such conditions are not satisfied, or, if
applicable, waived, the Placing will not proceed.
Directors' participation in the Placing
Mike Bourne, a Non-Executive Director, has conditionally
subscribed to 32,932 Placing Shares. Accordingly, on Admission,
Mike Bourne will hold 303,170 ordinary shares in the Company,
representing 0.72 per cent. of the enlarged issued share
capital.
Proposed grant of options
It is anticipated that the Company's remuneration committee will
shortly approve the grant of options to certain Executive Directors
and members of senior management. The options will be granted
pursuant to the Company's share option scheme, the Frontier IP
Group plc Employee Share Option Scheme 2011 as adopted by the Board
of Directors of the Company on 30 November 2012 and amended by the
Board of Directors of the Company on 26 March 2018. Further details
will be announced in due course.
Related party transactions
710,067 Placing Shares were conditionally subscribed by
Canaccord Genuity Group Inc. ("Canaccord"), 1,283,052 Placing
Shares were conditionally subscribed by Miton Group plc ("Miton")
and 972,691 Placing Shares were conditionally subscribed by Quilter
Cheviot Limited ("Quilter"). Canaccord, Miton and Quilter are
substantial shareholders in the Company, as defined in the AIM
Rules for Companies ("AIM Rules") and accordingly their
participation in the Placing is deemed to be a related party
transaction under the AIM Rules. In addition, as Mike Bourne is a
Director of the Company, his participation is deemed to be a
related party transaction under the AIM Rules. The Directors
(excluding Mike Bourne), having consulted with Allenby Capital
Limited, the Company's nominated adviser, consider that the
participation of Canaccord, Miton, Quilter and Mike Bourne in the
Placing is fair and reasonable insofar as the shareholders of
Frontier IP are concerned.
Total Voting Rights
Upon Admission, the Company's issued share capital will consist
of 42,106,372 Ordinary Shares with one voting right each. The
Company does not hold any ordinary shares in treasury. Therefore,
the total number of ordinary shares and voting rights in the
Company will be 42,106,372. With effect from Admission, this figure
may be used by Shareholders as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change to their interest in, the share capital of
the Company under the FCA's Disclosure Guidance and Transparency
Rules.
Market Abuse Regulation (MAR)
MAR came into effect from 3 July 2016. Market soundings, as
defined in MAR, were taken in respect of the Placing with the
result that certain persons became aware of inside information, as
permitted by MAR. That inside information is set out in this
announcement has been disclosed as soon as possible in accordance
with paragraph 7 of article 17 of MAR. Therefore, those persons
that received inside information in a market sounding are no longer
in possession of inside information relating to the Company and its
securities.
Information for Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the
"Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the Product Governance
Requirements) may otherwise have with respect thereto, the
Subscription Shares have been subject to a product approval
process, which has determined that the Subscription Shares are: (i)
compatible with an end target market of retail investors and
investors who meet the criteria of professional clients and
eligible counterparties, each as defined in MiFID II; and (ii)
eligible for distribution through all distribution channels as are
permitted by MiFID II (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, investors should note
that: the price of the Subscription Shares may decline and
investors could lose all or part of their investment; Subscription
Shares offer no guaranteed income and no capital protection; and an
investment in Subscription Shares is compatible only with investors
who do not need a guaranteed income or capital protection, who
(either alone or in conjunction with an appropriate financial or
other adviser) are capable of evaluating the merits and risks of
such an investment and who have sufficient resources to be able to
bear any losses that may result therefrom. The Target Market
Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Subscription. Furthermore, it is noted that, notwithstanding
the Target Market Assessment, only investors who have met the
criteria of professional clients and eligible counterparties have
been procured. For the avoidance of doubt, the Target Market
Assessment does not constitute: (a) an assessment of suitability or
appropriateness for the purposes of MiFID II; or (b) a
recommendation to any investor or group of investors to invest in,
or purchase, or take any other action whatsoever with respect to
Subscription Shares.
Enquiries:
Frontier IP Group plc T: 0131 240 1251
Neil Crabb, Chief Executive
Andrew Johnson, Communications & Investor M: 07464 546
Relations 025
www.frontierip.co.uk
Allenby Capital Limited (Nominated Adviser T: 0203 328 5656
and Broker)
Nick Athanas / Nicholas Chambers (Corporate
Finance)
Amrit Nahal (Equity Sales)
Notes to Editors:
Frontier IP unites science and commerce by identifying strong
intellectual property and accelerating its development through a
range of commercialisation services. 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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