Frontier IP (LON:FIPP), a specialist in commercialising university intellectual property, is pleased to announce its interim results for the six month period ended 31 December 2018.
Chief Executive Neil Crabb said: “Our business model is based on proving the commercial value of intellectual property by working closely with universities, academics and industry. Only when we are confident the technology works, can be scaled up, and meets a market need or demand, will we ask investors to make significant commitments to the portfolio companies.
The first half of the year provides further evidence our approach is gaining traction with stakeholders.
Four companies announced collaboration agreements with industrial partners, all of whom are among the leaders in their respective sectors.
Three new spin outs joined our portfolio, including the first two in Portugal, a market where we aim to be the market leader. Palintest, a subsidiary of FTSE 100 Group Halma, has started the commercial roll out of bathing water testing kit SirenBW, based on Molendotech’s IP, while Alusid gained strong support for its £1.34 million fund raising to support planning for manufacturing scale up.
We are mindful of the risks in the Group. The nature of the early and development stage companies in our portfolio means their rate of progress or eventual success cannot always be assured.
However, these are strong results. We have generated momentum on all fronts – new spin outs, industry partnerships, and raising funds from private and public sector sources – during the first half. The momentum has gathered pace into the second half of the year. That’s why, based on trading for the year to date and what we see coming down the line, we anticipate that the outcome for the full financial year, ending 30 June 2019, will be ahead of management expectations.”
The Group enjoyed a very strong first half to the year. Three new spin outs were incorporated, including the first two in Portugal, and four portfolio companies announced collaboration agreements with major industry partners. These agreements represent significant steps towards proving the commercial viability of their technology. Further validation came from the success of portfolio companies in winning public sector and private sector funding support.
The fair value of the portfolio rose by 27 per cent. to £11.5 million at 31 December 2018 (30 June 2018: £9.1 million). Total revenues rose by 83 per cent. to £2.2 million (2017: £1.2 million) and pre-tax profits by 138 per cent. to £1.2 million (2017: £0.5 million). A successful placing raised £2.3 million (net of expenses) for the Group in November 2018.
· Fair value of the portfolio increased by 27 per cent. to £11,508,000 at 31 December 2018 (30 June 2018: £9,060,000), an increase of 43 per cent. year on year (31 December 2017: £8,020,000)
· Total revenue increased 83 per cent. to £2,176,000 (2017: £1,188,000) – the increase reflecting a higher gain on the revaluation of investments of £1,983,000 (2017: £1,068,000)
· Revenue from services increased 61 per cent. to £193,000 (2017: £120,000)
· Profit before tax increased 138 per cent. to £1,247,000 (2017: £524,000) – the increase reflecting the higher gain on revaluation of investments and accounting for greater administrative costs, which rose to £939,000 (2017: £667,000)
· Basic earnings per share increased by 172 per cent.to 3.18p (2017: 1.17p)
· Net assets per share increased to 38.8p as at 31 December 2018 (30 June 2018: 33.2p; 31 December 2017: 32.0p)
· Cash balances stood at £2,528,000 as at 31 December 2018 (30 June 2018: £1,111,000; 31 December 2017: £1,849,000) following a placing in November 2018 which raised £2,333,000 (net of expenses)
PORFOLIO AND OPERATIONAL HIGHLIGHTS:
The six months to 31 December 2018 saw highly encouraging commercial progress with momentum continuing strongly after the period end.
· Tarsis Technology, Fieldwork Robotics, Molendotech and new University of Plymouth spin-out Amprologix announced collaboration agreements with major industry partners. Further details below
· Full commercial launch of the SirenBW bathing water test kit, based on Molendotech’s IP, by Palintest, a subsidiary of FTSE 100 group Halma
· First spin outs in Portugal, NTPE and Des Solutio, from NOVA University Lisbon – NOVA School of Science and Technology
· Alusid raised £1.34 million to support planning for manufacturing scale up
· Government-backed grants awarded to Pulsiv Solar and The Vaccine Group to accelerate technology development
· Oversubscribed placing for Frontier IP raised £2.33 million (net of expenses) for the Group from existing and new investors
· Former AB Sugar Head of Innovation Matthew White joined as Director of Commercialisation
· Strategic partnership with UK Department for International Trade in Portugal
· Post period end:
o Exscientia signed AI drug discovery collaboration agreement with Celgene Corporation, which included initial payment of US$25 million. Exscientia has also raised US$26 million in a Series B funding round and signed Roche collaboration agreement worth up to CHF 67 million
o The US Defense Advanced Research Project Agency named The Vaccine Group as an integral part of $9.67 million project to combat Ebola, Lassa fever and other deadly viruses. TVG also won Department of Health and Social Care grant as part of Anglo-Chinese project
o UK government funding from Department of Health and Social Care to Amprologix and Innovate UK to Nandi Proteins
o Third Portuguese spin out, Insignals Neurotech, from the Institute for Systems and Computer Engineering, Technology and Science
o Director of Commercialisation Matthew White joined the board as an executive director, as separately announced today