RNS
AIM: FIPP
14
March 2024
Frontier IP Group plc
("Frontier IP" or
the "Group")
UNAUDITED HALF-YEAR RESULTS FOR THE SIX
MONTHS TO 31 DECEMBER 2023
Frontier IP, a specialist in
commercialising intellectual property, is pleased to announce its
unaudited interim results for the six month period ended 31
December 2023.
KEY
POINTS
·
Pre-tax profit of £1.4 million (31 December 2022:
pre-tax loss of £0.5 million)
·
Basic earnings per share of 2.67p (31 December
2022: 0.49p)
·
Net assets per share of 84.2p as at 31 December
2023 (30 June 2023: 81.8p; 31 December 2022: 88.2p)
·
Unrealised profit on the revaluation of
investments increased to £2.8 million (31 December 2022: unrealised
profit of £0.4 million)
·
Fair value of the equity portfolio increased by
c.6 per cent to £35.1 million at 31 December 2023 (30 June 2023:
£33.0 million; 31 December 2022: £36.1 million) reflecting
disposals of £0.8 million, additions of £0.1 million and fair value
increases of £2.8 million
·
Part disposal of holding in Exscientia generated
cash of £0.8 million in the period under review (30 June 2023: £4.9
million; 31 December 2022: £3.4 million)
·
Cash balances of £2.7 million at 31 December 2023
(30 June 2023: £4.6 million; 31 December 2022: £5.8
million)
·
Significant commercial and technical progress
across the portfolio
Frontier IP enjoyed a good first half
of the financial year, overcoming difficult market and economic
conditions to return to profitability. Basic earnings per share
rose, reflecting an increase in the fair value of the equity
portfolio.
Several portfolio companies achieved
important commercial, technical and financial developments both
during the six-month period under review and post the period close;
bringing closer the opportunity for potential exits within the
portfolio. Significant experience was recruited to strengthen
boards of directors and management teams, companies raised funds
and it was announced that one new spin-out company had joined the
portfolio.
Frontier IP also announced changes to
the Group's Board of Directors. Dame Julia King, Baroness Brown of
Cambridge, DBE FREng, FRS, FMedSci, became independent
Non-Executive Chair at the annual general meeting in December. She
replaced Andrew Richmond, who stepped down from the Board of
Directors after 11 years of service. Julia brings a very wide range
of experience to the board and chairs the House of Lords Science
and Technology Committee. The Company also announced in November
2023 that Jim Fish is to step down as Chief Financial Officer no
later than the end of May 2024.
PORTFOLIO AND OPERATIONAL HIGHLIGHTS
The six months to 31 December 2023
saw companies across the portfolio either achieve or make strong
progress towards meeting commercial, technical and funding goals.
Developments included:
·
Pulsiv appointed Dr Mark Gerhard as Chairman and
Dr Tim Moore as Chief Product Officer. Mark is a serial
entrepreneur and technology pioneer with a long history of growing
and exiting businesses. Tim joined the company full time from his
role as Chief Technology Officer for SharkNinja, a Nasdaq-listed
consumer electronics group. Post period end, the company announced
plans to launch a highly efficient 65W USB C for adapters, chargers
and in-wall sockets
·
Alusid raised £500,000 through equity funding from
Octopus Investments via the Octopus AIM VCT plc and Octopus AIM VCT
2 plc funds as part of wider funding round raising £1.13 million
from existing and new investors. The company is exploring options
for an initial public offering
·
One company joined the portfolio. Deakin
Bio-Hybrid Materials ("DeakinBio") makes sustainable materials from
natural materials such as organic waste and inorganic powders.
Initial applications provide alternatives to traditional ceramic
tiles. Frontier IP took a 33.3 per cent equity stake in the
company
·
CamGraPhIC put in place a new loan facility to
provide funding of up to £1.5 million to support progress. The
company has since strengthened existing industry relationships,
developed new partnerships and is actively seeking to raise further
funds
·
Fieldwork Robotics completed a fundraising of
£2.1m with Elbow Beach Capital investing £1.5 million and the
remainder being procured from Seedrs and existing shareholders.
They also won a UK government grant and appointed David Fulton as
the new Chief Executive Officer
·
GraphEnergyTech was selected as part of the Swiss
National Start-up Team as one of the 10 most promising Swiss
start-ups. Strengthened team with two expert hires, one post period
end
·
The Vaccine Group created an Advisory Board to
support scale up of its novel herpesvirus-based vaccine platform.
This board consists of three high-ranking veterinary experts with
strong business experience and connections to major companies and
other organisations in the animal health sector
·
Nandi Proteins signed a commercial license with a
leading global food ingredients business who will take Nandi's
meat/fat replacer to market worldwide
·
Jim Fish is to step down as Chief Financial
Officer by the end of May 2024 after 10 years of service. Following
the appointment of a new Group CFO and his resignation from the
Board, Jim will take up a new position in the Group as Portfolio
Finance Director to support portfolio companies. Discussions on the
appointment of a new Group CFO are at an advanced stage and we
anticipate a successor will be announced shortly
Post period end:
·
The Group sold the remaining 324,991 American
Depositary Shares in Exscientia plc for net proceeds of
approximately £1.7 million. In total, the Group sold 1,564,800
Exscientia ADSs between 10 January 2022 and 29 February 2024 for
net proceeds of approximately £14.0 million. The original cost for
these shares was less than £2,000
Chief Executive Neil Crabb said: "I
was delighted to see us return to profitability during the first
half of the year. The improved performance comes in the teeth of
the cold gales created by the prevailing market, economic and
geopolitical conditions, and reflects the solid progress made
across the portfolio during the period and beyond. Alusid,
CamGraPhIC, Fieldwork Robotics, Nandi Proteins, Pulsiv and The
Vaccine Group are among the companies picking up pace as they
stride towards commercial viability and futures replete with
success.
After the period end, we sold our remaining stake in
Exscientia. Exscientia has been an excellent exemplar of our
business model, based on founding equity in companies originating
from universities with world leading technology, realising that
equity as its value builds and becomes clearer. We realised a total
of approximately £14 million in Exscientia and we look forward to
demonstrating further success with companies in the current
portfolio.
Alusid recently took investment from Octopus Investments via
two AIM VCT funds, as it progresses plans on its proposed initial
public offering.
To
win the support of one of Europe's leading venture funds validates
Alusid's green technology, its capital efficient business model and
its potential for growth. Alusid is exploring international
opportunities in northern Europe to build on the success it has
enjoyed in the UK with Topps Tiles and further afield with
Starbucks EMEA. On the new product front, work on the floor tiles
is developing well and Alusid is experimenting with glazes made
from recycled materials. This would take the recycled content of
its tiles from more than 90 per cent to close to 100 per
cent.
Other companies are also beginning to gain significant
industrial traction. Nandi Proteins achieved a commercial
breakthrough, signing an agreement to provide its meat and fat
replacement ingredients to a major manufacturer. The company is
also involved in promising talks about its egg white replacers -
ideal for companies looking to make vegetarian products vegan
friendly. I am also excited by the possibilities for a
methylcellulose replacer Nandi is currently developing.
Methylcellulose is a synthetic compound widely used as an
emulsifier in highly processed foods and as a bulk-forming
laxative.
As
companies mature, prove their technology, and build the industry
engagement needed to prosper, it is important they have the right
management teams, directors, and advisers in place. Pulsiv has
scaled its technology, established a global distribution network,
and is in discussions with potential customers. Therefore, I was
delighted to see Mark Gerhard and Tim Moore appointed respectively
as Chairman and Chief Product Officer during the
period.
Mark is a serial entrepreneur and technology pioneer with
substantial experience of growing and exiting businesses. Most
famously, he was CEO of Jagex, the developer of Runescape, when it
was sold for $250 million in 2010. Tim has extensive experience
developing innovative products, and was Chief Technology Officer of
SharkNinja and ghd, both global consumer technology
brands.
The
Vaccine Group is another now moving forward to commercialisation
having built up a strong pipeline of vaccine candidates. To help
through the next stage, it has appointed an Advisory Board of three
high-ranking experts with exceptional business experience and
industry connections. They include a senior figure in Merck Life
Sciences, an advisor to Kela Pharma and board director for GALVmed,
and a former senior manager at Zoetis. To attract such candidates
to the TVG Advisory Board shows the high quality of the company's
technology.
A
new Chief Executive joined Fieldwork Robotics during the period.
David Fulton has more than 30 years' experience in business, and
the company now aims to have more than 100 robots available for
harvesting as a service by 2025.
I
would also draw attention to CamGraPhIC, whose graphene photonics
technology has the potential to revolutionise data and
telecommunications. The company is now attracting serious interest
and the Board are excited by its future
prospects.
As
one company, Exscientia, leaves the portfolio, so another one
joins. It is important to maintain our pipeline of new portfolio
companies, so it was good to see Deakin Bio-Hybrid Materials
joining the Frontier family. The company is developing new and
advanced materials based on organic waste and inorganic powders,
with initial applications aimed at replacing ceramics. It's a good
demonstration of our clusters approach, with clear affinities to
Alusid and others in our Materials cluster; with its use of organic
waste, such as chickpea broth, it is also able to call on expertise
and contacts within our Food and Agritech
cluster.
I
am optimistic there will be many other companies to follow
Exscientia and to provide us with successful exits. Our business
model is of course based on delivering such exits. It is
important we deliver one to fund any unplanned investments in our
portfolio companies and cover operating expenditure beyond the next
12 months. Our portfolio is addressing some of the major challenges
we face today, from food and energy to climate and water. We are a
deep technology commercialisation company. This means progress can
take time - maybe a decade or more - as research is validated,
scaled up and then commercialised before realisation is possible.
It is not an easy process: problems arise and must be solved. But
this only raises the barriers to entry for anyone looking to
follow. Although not all our companies might prove successful, our
model does, I believe, maximise our chances of
success.
Finally, I would like to thank Jim Fish who, as previously
announced, is stepping down as Chief Financial Officer after 10
years on our Board of Directors. Jim has played a crucial role in
building Frontier IP as we have grown. Although he is stepping down
from the Board, he will remain involved in a new role supporting
our portfolio companies, and so we will be working together for a
while yet.
Despite the difficult market conditions we are facing, we
remain confident about our business and its
prospects."
ENQUIRIES
Frontier IP Group Plc
Neil Crabb, Chief
Executive
Andrew Johnson, Communications &
Investor Relations
Company website: www.frontierip.co.uk
|
T: 020
3968 7815 neil@frontierip.co.uk
M: 07464
546 025
andrew.johnson@frontierip.co.uk
|
Allenby Capital Limited (Nominated
Adviser)
Nick Athanas / George
Payne
|
T: 0203
328 5656
|
Singer Capital Markets
(Broker)
Harry Gooden / James
Fischer
|
T: 0207
496 3000
|
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 and post period close in developing portfolio
companies and creating value for shareholders by:
·
Supporting Alusid as the company started exploring
options for an initial public offering. During the period, Alusid
attracted a £500,000 investment from Octopus Investments as part of
a larger funding round.
·
Strengthening the board of directors with Dame
Julia King, Baroness Brown of Cambridge, DBE, FREng FRS FMedSci
assuming the role as Chair of Frontier IP having previously been
the senior independent non-executive on the board.
·
Helping portfolio companies strengthen their
boards of directors and management teams.
·
Bringing one new company into the portfolio,
Deakin Bio-Hybrid Materials.
·
Post period end, the Group raised £1.7 million by
selling its remaining equity stake in Exscientia.
Operational Review
The Group and its portfolio companies
made good commercial and technical progress during the half year to
31 December 2023. Our portfolio is maturing and several companies
are moving closer to the stage where they could provide a potential
exit for the Group. We further developed our relationships with
university, government and industry partners. Further positive
newsflow is expected in the coming months as the portfolio
continues to mature.
Portfolio developments included:
CamGraPhIC: Frontier IP stake 20.8
per cent
CamGraPhIC is developing
ground-breaking 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. They
believe the company's technology could prove an important enabler
for the 5G and 6G telecoms networks of the future and for advanced
computing applications. There is also potential for uses in other
sectors. Current versions of the technology have achieved speeds
about twice that of equivalent technologies, and they consume 70
per cent less energy. During the period, CamGraPhIC announced it
had put in place a new loan facility to provide funding of up to
£1.5 million to support progress. The company is attracting serious
commercial interest from organisations across multiple
sectors and is exploring its funding
options.
Fieldwork Robotics: Frontier IP stake
19.2 per cent
Fieldwork Robotics has developed
advanced AI-supported harvesting robots, initially focused on soft
fruits, such as raspberries, to help solve the problem of worker
shortages, increase farm efficiency and reduce food wastage. During
the period, the company completed a
fundraising of £2.1 million with Elbow Beach Capital investing £1.5
million and the remainder being procured from Seedrs and existing
shareholders. It also appointed a new Chief
Executive Officer, David Fulton.
GraphEnergyTech: Frontier IP stake
30.4 per cent
GraphEnergyTech is developing
advanced high-conductivity graphene inks. Initial applications are
to create graphene electrodes to replace expensive silver
electrodes in solar cells. Silver is the most commonly used
material for solar cell electrodes, but the rising popularity of
solar power means global reserves could be exhausted by 2050,
according to research from the University of New South Wales,
Australia. The company was incorporated in the UK during the first
half of the last financial year with operations in Switzerland and
was co-founded by Professor Michael Grätzel of the Ecole
Polytechnique Federale de Lausanne. He is one of the world's most
cited academics. Since incorporation, the company was selected
during the period to represent the Swiss National Start-up Team in
the 4YFN section of the Mobile World congress in Barcelona.
This means the company is one of 10 most promising start-ups in
Switzerland. It has also recruited its first two employees: a
graphene manufacturing specialist in the UK during the period, and,
post period end, a materials deposition expert in
Lausanne.
Pulsiv: Frontier IP stake 18.2 per
cent
Pulsiv's 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.
Commercial traction is strong and growing: the company is in
advanced discussions with major manufacturers and has put in place
a global distribution network. During the period, serial
entrepreneur and technology pioneer Dr Mark Gerhard joined as
chairman and Dr Tim Moore full time as Chief Product Officer. Mark
has extensive experience growing and exiting businesses in the
video games, artificial intelligence and cyber security sectors.
They include Jagex, developer of Runescape, which was sold for $250
million when Mark was Chief Executive Officer. Tim, a Pulsiv
non-executive director, joined full time as Chief Product Officer
from his post as Chief Technology Officer for Nasdaq-listed
consumer electronics group SharkNinja. Post period end the company
announced plans to launch a 65W USB C for adapters, chargers and
wall sockets able to operate at 95 per cent efficiency.
The Vaccine Group: Frontier IP stake
17 per cent
The Vaccine Group is developing a
novel herpesvirus-based vaccine technology able to form a platform
for a wide range of vaccines targeted at diseases in livestock and
companion animals. The company has developed a strong vaccine
pipeline: diseases targeted include porcine reproductive and
respiratory syndrome, streptococcus suis, African swine fever and
bovine tuberculosis. During the period, TVG created an Advisory
Board to support scale up. The three high-ranking members have
extensive veterinarian and industry expertise and networks. They
are: Christophe Barnier-Quer, who works for Merck Life Sciences in
a senior role; Johan Dreesen, a member of the Advisory Council to
Kela Pharma and GALVmed board member; and Vaughn Kubiak, who brings
40 years' experience in global animal health.
Nandi: Frontier IP stake 19.8 per
cent
Nandi's protein technology transforms
commodity proteins into functional food ingredients. The company
signed a commercial agreement with a global food ingredients
company who will manufacture and take to market Nandi's first
commercial ingredients once scale up and final application tests
have been completed successfully. The ingredients are
collagen-based meat and fat replacers for use in processed meat
products, such as sausages and burgers, reducing calories and cost.
The company is also advanced in developing a second product, a
vegetable protein-based egg white replacer that has been
successfully tested in a range of applications including meringues,
alternative meat products and multiple bakery products. Other
products include vegetable proteins to replace methylcellulose, a
widely used binder in plant-based meat, and whey proteins to
replace chemical emulsifiers in baked products.
Alusid: Frontier IP stake 35.4 per
cent
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.
During the period, the company concluded a funding round raising
£1.13 million. The company is scaling up a hard-wearing floor tile
for mass manufacture and is investigating the use of glazes made
from recycled materials to further increase the amount of recycled
content in its tiles, currently at industry-leading levels of 90
per cent or more.
Deakin Bio: Frontier IP stake 33.3
per cent
One company joined the portfolio.
Frontier IP took an equity stake in Deakin Bio-Hybrid Materials, a
company developing advanced bio-based materials from organic waste
such as chickpea broth and widely available non-organic
powders.
Corporate developments
Dame Julia King, Baroness Brown of
Cambridge, DBE FREng FRMedSci, previously the Company's senior
independent non-executive director, became independent
Non-Executive Chair at the annual meeting in December 2023,
replacing Andrew Richmond. Andrew stepped down from the Board of
Directors having served on the Frontier IP board for 11 years. Jim
Fish is to step down from the Board of Directors as Chief Financial
Officer by the end of May 2024. He will remain with the Group in a
new role as Portfolio Finance Director to continue supporting
portfolio companies.
Post period end, the Group completed
its exit of Exscientia, realising a further £2.54 million to
support its balance sheet. In return for a nominal investment, the
Group has realised a total of approximately £14 million from
Exscientia.
Outlook
Frontier IP faces the future with
confidence. There are a number of highly promising developments
within the portfolio as companies gain industry traction, scale up
and achieve commercial viability. Others are at or approaching
inflection points. We continue to add companies to the portfolio to
ensure we have a broad spread of maturity throughout.
Despite the difficult market and
economic conditions, we are optimistic about the longer-term
prospects for the Group.
Neil
Crabb
Chief Executive Officer
Results Summary
Financial assets at fair value
through profit and loss at 31 December 2023 increased to
£41,530,000 (30 June 2023: £37,589,000; 31 December 2022:
£41,065,000). This reflects an unrealised profit on the revaluation
of investments of £2,849,000, the partial disposal of the Group's
investment in Exscientia of £784,000 and investments in other
portfolio companies of £1,876,000. Unrealised profit on the
revaluation of investments over the first half increased by c.600
per cent to £2,849,000 (2022: unrealised profit of £400,000), the
profit deriving from unquoted equity investments £2,697,000, the
remaining holding in quoted company Exscientia £123,000 and debt
investments of £29,000. Revenue from services remained level at
£203,000 (2022: £203,000). The Group sold part of its holding in
Exscientia for net proceeds of £839,000, realising profits of
£54,000 in the period under review. The remaining holding in
Exscientia was sold post period end for net proceeds of £1,708,000,
realising profits of £72,000 post period end and £195,000 in the
current financial year. A profit before tax of £1,415,000 (2022:
loss £469,000) reflected the increase in the unrealised profit on
the revaluation of investments offset by a lower realised profit on
disposal of investments and increased administrative expenses while
profit after tax increased by c.450 per cent to £1,488,000 (2022:
£269,000). Administrative expenses increased by 26 per cent to
£1,803,000 (2022: £1,429,000) of which personnel expenses accounted
for 19% of the increase. The share-based payment charge increased
to £122,000 (2022: £70,000). Basic earnings per share were 2.67pp
(2022: 0.49p).
Cash balances stood at £2,737,000 as
at 31 December 2023 (30 June 2023: £4,603,000; 31 December 2022:
£5,850,000). Post 31 December 2023, the Group disposed of its
remaining holding in Exscientia for net proceeds of £1,708,000. Net
assets per share as at 31 December 2023 were 84.2p (30 June 2023:
81.8p; 31 December 2022: 88.2p).
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the six months ended 31
December 2023
|
Notes
|
Six months ended 31 December
2023 (unaudited)
|
Six months ended 31
December 2022 (unaudited)
|
Year ended 30 June 2023
(audited)
|
|
|
£'000
|
£'000
|
£'000
|
Revenue
|
|
|
|
|
Revenue from services
|
|
203
|
203
|
372
|
Other operating income
|
|
|
|
|
Unrealised profit/(loss) on the
revaluation of
|
|
|
|
|
investments
|
8
|
2,849
|
400
|
(966)
|
Realised profit/(loss) on disposal
of investments
|
|
54
|
307
|
(786)
|
|
|
3,106
|
910
|
(1,380)
|
|
|
|
|
|
Administrative expenses
Share based payments
Interest income on debt
investments
Other income
|
|
(1,803)
(122)
188
18
|
(1,429)
(70)
102
5
|
(3,130)
(155)
232
13
|
Profit/(loss) from operations
|
|
1,387
|
(482)
|
(4,420)
|
|
|
|
|
|
Interest income on short-term bank
deposits
|
|
28
|
13
|
50
|
Profit/(loss) from operations and before tax
|
|
1,415
|
(469)
|
(4,370)
|
|
|
|
|
|
Taxation
|
6
|
73
|
738
|
1,126
|
|
|
|
|
|
Profit/(loss) and total
comprehensive income/(expense) attributable to the equity holders
of the Company
|
|
1,488
|
269
|
(3,244)
|
|
|
|
|
|
|
|
|
|
|
Profit per share attributable to the equity
|
|
|
|
|
holders of the parent
|
|
|
|
|
Basic earnings/(loss) per
share
|
7
|
2.67
|
0.49p
|
(5.85)p
|
Diluted earnings/(loss) per
share
|
7
|
2.60
|
0.47p
|
(5.64)p
|
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 2023
|
|
As at
31 December
2023
(unaudited)
£'000
|
As at
31 December
2022
(unaudited)
£'000
|
As at
30 June
2023
(audited)
£'000
|
ASSETS
|
Notes
|
|
|
|
Non-current assets
|
|
|
|
|
Tangible fixed assets
|
|
10
|
9
|
13
|
Goodwill
|
|
1,966
|
1,966
|
1,966
|
Financial assets at fair value
through profit and loss
|
|
|
|
|
Equity
investments
|
8
|
35,068
|
36,098
|
32,964
|
Debt
investments
|
8
|
6,462
|
4,967
|
4,625
|
|
|
43,506
|
43,040
|
39,568
|
|
|
|
|
|
Current assets
|
|
|
|
|
Trade receivables and other current
assets
|
|
1,532
|
942
|
1,026
|
Advances
|
|
-
|
-
|
793
|
Cash and cash equivalents
|
|
2,737
|
5,850
|
4,603
|
|
|
4,269
|
6,792
|
6,422
|
Total assets
|
|
47,775
|
49,832
|
45,990
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Deferred taxation
|
|
(138)
|
(484)
|
(211)
|
|
|
(138)
|
(484)
|
(211)
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
(351)
|
(270)
|
(241)
|
|
|
(351)
|
(270)
|
(241)
|
Total liabilities
|
|
(489)
|
(754)
|
(452)
|
Net assets
|
|
47,286
|
49,078
|
45,538
|
|
|
|
|
|
EQUITY
|
|
|
|
|
Called up share capital
Share premium account
Reverse acquisition
reserve
Share based payment
reserve
Retained earnings
|
|
5,617
14,792
(1,667)
1,335
27,209
|
5,566
14,627
(1,667)
1,318
29,234
|
5,566
14,627
(1,667)
1,291
25,721
|
Total equity
|
|
47,286
|
49,078
|
45,538
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For
the six-months ended 31 December 2023
|
Share
capital
|
Share
premium
account
|
Reverse
acquisition
reserve
|
Share-
based
payment
reserve
|
Profit
and loss
account
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
At 1st July
2022
|
5,501
|
14,576
|
(1,667)
|
1,324
|
28,965
|
48,699
|
Issue of shares
|
65
|
51
|
-
|
(18)
|
-
|
98
|
Share-based payments
|
-
|
-
|
-
|
12
|
-
|
12
|
Profit/comprehensive income for the
period
|
-
|
-
|
-
|
-
|
269
|
269
|
At 31 December 2022
|
5,566
|
14,627
|
(1,667)
|
1,318
|
29,234
|
49,078
|
Share-based payments
|
-
|
-
|
-
|
(27)
|
-
|
(27)
|
Profit/comprehensive income for the
period
|
-
|
-
|
-
|
-
|
(3,513)
|
(3,513)
|
At 30 June 2023
|
5,566
|
14,627
|
(1,667)
|
1,291
|
25,721
|
45,538
|
Issue of shares
|
51
|
165
|
-
|
(78)
|
-
|
138
|
Share-based payments
|
-
|
-
|
-
|
122
|
-
|
122
|
Profit/comprehensive income for the
period
|
-
|
-
|
-
|
-
|
1,488
|
1,488
|
At 31 December 2023
|
5,617
|
14,792
|
(1,667)
|
1,335
|
27,209
|
47,286
|
CONSOLIDATED STATEMENT OF CASH FLOWS
For
the six months ended 31 December 2023
|
Six months ended 31
December
2023
(unaudited)
£'000
|
Six months ended 31
December
2022
(unaudited)
£'000
|
Year ended 30
June
2023
(audited)
£'000
|
Cash flows from operating activities
|
|
|
|
Cash used in operations
|
(993)
|
(954)
|
(3,248)
|
Taxation paid
|
-
|
(3)
|
-
|
Net
cash used in operating activities
|
(993)
|
(957)
|
(3,248)
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
Purchase of tangible fixed
assets
|
(2)
|
(7)
|
(16)
|
Purchase equity
investments
|
(68)
|
(573)
|
(691)
|
Disposal of equity
investments
|
839
|
3,433
|
4,926
|
Purchase of debt
investments
|
(1,808)
|
(525)
|
(884)
|
Interest received
|
28
|
13
|
50
|
Net
cash from/(used in) investing activities
|
(1,011)
|
2,341
|
3,385
|
Cash flows from financing activities
Proceeds from issue of equity
shares
|
138
|
98
|
98
|
Net
cash generated from financing activities
|
138
|
98
|
98
|
Net
(decrease)/increase in cash and cash equivalents
|
(1,866)
|
1,482
|
235
|
|
|
|
|
Cash and cash equivalents at
beginning of period
|
4,603
|
4,368
|
4,368
|
Cash and cash equivalents at end of period
|
2,737
|
5,850
|
4,603
|
|
|
|
|
Cash used in operations
|
|
|
|
Profit/(loss)before tax
|
1,415
|
(469)
|
(4,370)
|
Adjustments for:
|
|
|
|
Share-based
payments
|
122
|
70
|
155
|
Depreciation
|
5
|
4
|
9
|
Interest received
|
(28)
|
(13)
|
(50)
|
Unrealised (profit)/loss on
revaluation of investments
|
(2,849)
|
(400)
|
966
|
Realised (profit) on disposal
of investments
|
(54)
|
(307)
|
786
|
Changes in working
capital:
|
|
|
|
Trade and other
receivables
|
(507)
|
109
|
26
|
Advances
|
793
|
-
|
(793)
|
Trade and other
payables
|
110
|
52
|
23
|
|
|
|
|
|
(993)
|
(954)
|
(3,248)
|
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 13 March
2024.
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 2023 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 2023,
which have been prepared in accordance with UK adopted
International Financial Reporting Standards (IFRS).
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 2023 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
qualified on the basis that they were unable to obtain sufficient
appropriate audit evidence in respect of the valuation of certain
early stage equity investments valued at £1.2 million.
3. Going
Concern
The accounts for the full year ended
30 June 2023 drew attention to the existence of a material
uncertainty that cast significant doubt on the Group's ability to
continue as a going concern. The material uncertainty was the
dependence on the timing and amount of exit proceeds from the
Group's sole quoted investment in Exscientia valued at £2.3 million
at 30 June 2023. Since 30 June 2023 the Group has sold its
remaining shares in Exscientia for over £2.5 million and the Group
has sufficient cash to cover its operating expenditure for the next
12 months. However, to fund any unplanned investments and to cover
operating expenditure beyond the next 12 months the Group needs to
realise cash through further portfolio exits, the timing and amount
of which is subject to material uncertainty.
4. 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 2023 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.
5. 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.
6. Taxation
The taxation income for the six
months to 31 December 2023 of £73,000 (31 December 2022: income of
£738,000) represents movements in deferred tax on unrealised fair
value gains, available tax losses and share-based
payments.
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.
7. Earnings per share
The calculation of the basic
earnings per share for the six months ended 31 December 2023 and 31
December 2022 and for the year ended 30 June 2023 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
|
Earnings attributable to
shareholders
|
Weighted average number of
shares
|
Basic
earnings
per share
|
|
£'000
|
Number
|
Pence
|
|
|
|
|
Six months ended 31 December
2023
|
1,488
|
55,807,325
|
2.67
|
|
|
|
|
Six months ended 31 December
2022
|
269
|
55,108,403
|
0.49
|
|
|
|
|
Year ended 30 June 2023
|
(3,244)
|
55,409,606
|
(5.85)
|
|
|
|
|
Diluted earnings per share
|
Earnings attributable to
shareholders
|
Weighted average number of
shares
|
Diluted
earnings
per share
|
|
£'000
|
Number
|
Pence
|
|
|
|
|
Six months ended 31 December
2023
|
1,488
|
57,271,415
|
2.60
|
|
|
|
|
Six months ended 31 December
2022
|
269
|
57,319,284
|
0.47
|
|
|
|
|
Year ended 30 June 2023
|
(3,244)
|
57,542,781
|
(5.64)
|
8. Financial assets at fair value through profit
and loss
Equity investments comprise the
following:
|
Unquoted Equity
Investments
|
Quoted Equity
Investments
|
Total
|
|
£'000
|
£'000
|
£'000
|
At 1st July
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 31st December
2022
|
32,634
|
3,464
|
36,098
|
Additions
Fair value increases
|
172
|
-
|
172
|
Disposals
|
-
|
(2,588)
|
(2,588)
|
Fair value increases
|
315
|
1,421
|
1,736
|
Fair value decreases
|
(2,454)
|
-
|
(2,454)
|
At 30th June
2023
|
30,667
|
2,297
|
32,964
|
Additions
|
68
|
-
|
68
|
Disposals
|
-
|
(784)
|
(784)
|
Fair value increases
|
2,944
|
123
|
3,067
|
Fair value decreases
|
(247)
|
-
|
(247)
|
At 31st December
2023
|
33,432
|
1,636
|
35,068
|
The valuation of the Group's
investment in GraphEnergyTech
increased by £1,230,000 during the six months to
31 December 2023, 44 per cent of the net fair value increase in
unquoted equity investments. The valuation of the Group's
investment in Pulsiv at 31 December 2023 increased by £862,000 over
the six months to December 2023, 31 per cent of the net fair value
increase in equity investments. Pulsiv's valuation at 31 December
2023 was £10,365,000, 30 per cent of the Group's total equity
investments and 22 per cent of its net assets at 31 December
2023.
During the six months to 31 December
2023 the Group sold 168,559 American Depositary Shares of
Exscientia for net proceeds of £839,000 resulting in a realised
profit of £54,000. The Group's remaining investment in Exscientia,
324,991 American Depositary Shares, increased in value by £123,000
during the six months to 31 December 2023. The valuation of the
Group's investment in Exscientia at 31 December 2023 was
£1,636,000, 5 per cent of the Group's total equity investments and
3 per cent of its net assets at 31 December 2023.
Debt investments comprise the
following:
|
Unquoted Debt
Instruments
|
|
£'000
|
At 1st July
2022
|
2,981
|
Additions
|
525
|
Fair value increases
|
1,507
|
Fair value decreases
|
(46)
|
At 31st December
2022
|
4,967
|
Additions
Fair value increases
|
359
|
Conversion of debt
|
(54)
|
Fair value decreases
|
(647)
|
At 30th June
2023
|
4,625
|
Additions
|
1,808
|
Fair value increases
|
216
|
Fair value decreases
|
(187)
|
At 31st December
2023
|
6,462
|
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 loan made
during the six months to 31 December 2023 was to CamGraPhIC
(£1,457,000). £170,000 was loaned to Celerum and £150,000 to The
Vaccine Group. The most significant debt investments at 31 December
2023 were loans to CamGraPhIC (£4,252,000), Nandi Proteins
(£911,000) and Elute Intelligence (£483,000). The valuation of the
Group's debt investments in CamGraPhIC increased by £183,000
during the six months to 31 December 2023, 85 per cent of the fair
value increases in unquoted debt instruments; the valuation of the
debt investment in Elute decreased by £139,000 in the same period,
74 per cent of the fair value decreases in debt
investments.
9. 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 20th March
2024.
10.
Equity holdings
All Group equity holdings in portfolio companies in the
interim management statement are as at 31 December 2023.