Last checked at 31 Oct 2013 07:00
FIPP
Frontier IP Group Plc
("Frontier IP", "the Group" or "the Company")
Audited final results for the year ended 30 June 2013
Frontier IP Group Plc is focused on the commercialisation of intellectual property
Key Points
· Encouraging progress over the year
· Portfolio companies:
- three new spin-out companies added
- Nandi Proteins secured licence agreement with Tate & Lyle
· University partnerships:
- first licensing contribution and first equity stake from Plymouth University partnership
· Fund management operations:
- collaboration agreement signed with the University of Dundee to exploit commercial drug development opportunities
- MOU signed for energy sector collaboration with Iberdrola and Narec Capital
· Revenue from services increased to £174,000 (2012: £162,000)
· Total revenue reduced to £117,000 (2012: £223,000) - reflecting an unrealised loss on the revaluation of investments of £57,000 (2012: unrealised profit of £61,000)
· Loss before tax reduced to £368,000 (2012: loss of £380,000)
· Loss per share reduced to 3.5p (2012: loss of 5.5p)
· Cash balances at 30 June 2013 of £155,000 (2012: £44,000)
· Net assets per share as at 30 June 2013 of 21.1p (2012: 36.0p)
· Post year-end share placing raised £392,000 (gross)
· Board remains encouraged about prospects for further progress with portfolio companies and partnerships
Andrew Richmond, Chairman of Frontier IP, said,
"I am pleased to report that the Group has made good progress over the year across a number of fronts.
We acquired equity in three new spin-out companies, taking the total number of companies in our portfolio to 13. We have also seen encouraging developments in a number of our portfolio companies. We received our first equity stake and licensing revenue from our partnership with Plymouth University and entered into a collaboration agreement with the University of Dundee designed to exploit opportunities in commercial drug development. Our fund management activities are also moving forward and we are making good progress with our partners.
As we look ahead, we expect to see further positive momentum across our activities over the new financial year."
Enquiries
Frontier IP Group Plc | Neil Crabb, Chief Executive
| T: 0131 220 9491
|
Biddicks
| Katie Tzouliadis / Alexandra Shilov | T: 020 3178 6378 |
Cantor Fitzgerald Europe (Nominated Adviser and Joint Broker) | Mark Percy / Catherine Leftley David Banks / Paul Jewell | T: 020 7894 7000 |
Peterhouse Corporate Finance Limited (Joint Broker) | Jon Levinson / Lucy Williams | T: 020 7469 0935 |
Company website: www.frontierip.co.uk
Chairman's Statement
Introduction
Frontier IP's strategy is to develop its portfolio of companies, generate value from its existing university partnerships and expand its fund management activities. I am pleased to report that the Group has made progress in all three areas over the year.
We have seen encouraging developments in a number of our portfolio companies and have acquired equity in three new spin-outs. We also received our first share of licensing revenue from our partnership with Plymouth University. Our fund management activities are progressing encouragingly and we are exploring a number of specific opportunities with our partners.
As we look ahead, we expect to see further positive momentum across our activities over the new financial year.
Results
For the year to 30 June 2013, revenue from services showed a 7% increase to £174,000 (2012: £162,000). However total revenue was adversely affected by the booking of an unrealised loss of £57,000 (2012: unrealised profit of £61,000) on the revaluation of investments, principally due to the adjustment to the holding value of one portfolio company following a significant fundraising. As a result, total revenue showed a reduction to £117,000 (2012: £223,000). Due to the commercial progress made by Nandi Proteins Ltd ("Nandi"), the provision of £119,000 made in prior periods against monies due from Nandi was released in the year. Frontier IP has commenced a fundraising for Nandi for its ongoing working capital needs and the Directors are confident of a successful outcome.
The loss before tax position improved slightly to £368,000 (2012: loss of £380,000) and, excluding the impact of unrealised losses or profit on the revaluation of investments, the adjusted loss before tax reduced by 29% to £311,000 (2012: £441,000). The loss per share reduced by 36% to 3.51p (2012: 5.45p).
Cash balances stood at £155,000 at 30 June 2013 (2012: £44,000), principally reflecting the share placing completed in December 2012 as previously reported. Net assets per share as at 30 June 2013 were 21.1p (2012: 36.0p).
Post period-end, the Group concluded a further placing, which was over-subscribed, of 6,325,212 ordinary shares at a price of 10p per share, raising £392,000 (before expenses) using existing authorities.
Operational Review
Over the period, we acquired equity in three new spin-out companies, PoreXpert Ltd, Ex Scientia Ltd and Tissue Repair Technologies Ltd. PoreXpert is a spin-out from Plymouth University, the other two portfolio companies were spin-outs from the University of Dundee. The largest of these holdings is in PoreXpert Ltd at 15% and these three new holdings take the total number of companies in our portfolio to 13.
We have also seen encouraging developments in a number of our portfolio companies. Nandi in particular made a major step forward concluding a licensing agreement with Tate & Lyle PLC for the use of its innovative protein technology. I am also pleased to highlight Counterweight Ltd's successful second fundraising which was completed in the period, with Counterweight Ltd now working very closely with a key industry partner.
We continue to engage strongly with our university partnerships and received our first equity stake and share of licensing revenue from our partnership with Plymouth University. We also entered into a collaboration agreement with the University of Dundee designed to exploit opportunities in commercial drug development.
Our fund management activities are progressing with a number of partners. In particular, as part of our collaboration agreement with the University of Dundee, we are exploring the establishment of a funding vehicle for its Drug Discovery Unit. In addition, as part of our work with Narec Capital to establish its Accelerated Renewable Deployment Portfolio, together with Narec Capital we entered into a Memorandum of Understanding in August, with Spanish power group Iberdrola, to establish a framework for closer engagement.
The Board
As previously reported, at the end of 2012 the Board was reorganised, with Neil Crabb, previously Chairman, taking up the position of Chief Executive and Executive Directors Jackie McKay and David Cairns being appointed as Chief Operating Officer and Portfolio Director respectively. I moved from my non-executive Director position to Non-executive Chairman. At the same time, we made a new appointment to the Board with Marcus Yeoman joining as a Non-executive Director. Marcus, who has a wealth of experience in advising young growth companies, replaced Graham Barnet who stood down as a Non-executive Director.
Outlook
The Group continues to make encouraging progress and there are clear opportunities for further development across all our activities as we continue to engage productively with our partners and portfolio companies. We are working with our university partners on a number of new spin-out opportunities and we expect to see further growth in the number of portfolio companies during the current financial year. We also hope to make further progress in particular on raising new sources of funding for partners and portfolio companies and we are exploring a number of specific opportunities.
Andrew Richmond
Chairman
30th October 2013
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2013
|
| 2013 |
| 2012 |
| Notes | £'000 |
| £'000 |
Revenue |
|
|
|
|
Revenue from services
Other operating income Unrealised (loss)/profit on the revaluation of investments |
| 174
(57) |
| 162
61 |
|
|
|
|
|
Total revenue |
| 117 |
| 223 |
|
|
|
|
|
Administrative expenses |
| (604) |
| (603) |
Release of bad debt provision |
| 119 |
| - |
|
|
|
|
|
Loss from operations and before tax |
| (368) |
| (380) |
|
|
|
|
|
Taxation | 4 | - |
| - |
|
|
|
|
|
Loss/total comprehensive expense for the year |
| (368) |
| (380) |
|
|
|
|
|
Loss per share attributable to the equity holders of the Company: |
|
|
|
|
Basic and diluted loss per share | 5 | 3.51p |
| 5.45p |
All of the Group's activities are classed as continuing and there were no comprehensive gains or losses in either year other than those included in the statement of comprehensive income.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2013
| 2013 |
| 2012 | |
|
| £'000 |
| £'000 |
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Tangible fixed assets |
| - |
| - |
Goodwill |
| 1,966 |
| 1,966 |
Financial assets at fair value through profit and loss |
| 494 |
| 532 |
|
| 2,460 |
| 2,498 |
Current assets |
|
|
|
|
Trade receivables and other current assets |
| 222 |
| 80 |
Cash and cash equivalents |
| 155 |
| 44 |
|
| 377 |
| 124 |
Total assets |
| 2,837 |
| 2,622 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
| (86) |
| (115) |
|
| (86) |
| (115) |
|
|
|
|
|
Net assets |
| 2,751 |
| 2,507 |
|
|
|
|
|
Equity |
|
|
|
|
Called up share capital |
| 1,305 |
| 697 |
Share premium account |
| 4,457 |
| 4,457 |
Reverse acquisition reserve Share based payment reserve |
| (1,667) 119 |
| (1,667) 115 |
Retained earnings |
| (1,463) |
| (1,095) |
Total equity |
|
2,751 |
|
2,507 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2013
|
Share capital |
Share premium account |
Reverse acquisition reserve |
Share- based payment reserve |
Retained earnings |
Total equity attributable to equity holders of the Company |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
At 1 July 2011 | 697 | 4,457 | (1,667) | 114 | (715) | 2,886 |
|
|
|
|
|
|
|
Share-based payments | - | - | - | 1 | - | 1 |
Loss/total comprehensive expense for the year |
- |
- |
- |
- |
(380) |
(380) |
|
|
|
|
|
|
|
At 30 June 2012 | 697 | 4,457 | (1,667) | 115 | (1,095) | 2,507 |
|
|
|
|
|
|
|
Issue of shares | 608 | - | - | - | - | 608 |
Share-based payments | - | - | - | 4 | - | 4 |
Loss/total comprehensive expense for the year |
- |
- |
- |
- |
(368) |
(368) |
At 30 June 2013 | 1,305 | 4,457 | (1,667) | 119 | (1,463) | 2,751 |
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2013
| 2013 | 2012 |
| £'000 | £'000 |
| ||
Cash flows from operating activities | ||
Cash used in operations | (434) | (466) |
Taxation paid | - | - |
Net cash used in operating activities |
(434) |
(466) |
| ||
Cash flows from investing activities | ||
Purchase of financial assets at fair value through profit and loss | (19) | (72) |
| ||
Net cash used in investing activities |
(19) |
(72) |
Cash flows from financing activities |
|
|
Proceeds from issue of equity shares | 608 | - |
Cost of share issue | (44) | - |
| Net cash generated from financing activities |
564 |
- |
| Net increase/(decrease) in cash and cash equivalents |
111 |
(538) |
| Cash and cash equivalents at beginning of year |
44 |
582 |
| Cash and cash equivalents at end of year |
155 |
44 |
Cash used in operations
Loss before tax | (368) | (380) |
Adjustments for: | ||
Share-based payments Depreciation Fair value (gain)/loss on financial assets through profit and loss Cost of share issue Changes in working capital: | 4 - 57 44 | 1 1 (61) - |
Trade and other receivables Trade and other payables | (142) (29) | (30) 3 |
Cash flows from operating activities | (434) | (466) |
NOTES
1. General information
This preliminary announcement was approved for issue by a duly appointed and authorised
committee of the Board of Directors on 30 October 2013.
2. Basis of preparation
The financial information set out in this announcement does not constitute statutory financial statements for the year ended 30 June 2013 or 30 June 2012. The report of the auditor on the statutory financial statements for each of the years ended 30 June 2013 and 30 June 2012 were (i) unqualified; (ii) did not include references to any matters to which the auditor drew attention by way of emphasis without modifying their report; and (iii) did not contain statements under section 498(2) or (3) of the Companies Act 2006. The statutory financial statements for the year ended 30 June 2012 have been delivered to the Registrar of Companies. The financial statements for the year ended 30 June 2013 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) as adopted by the European Union, this announcement does not itself contain sufficient information to comply with IFRS.
3. Segmental information
The chief operating decision-maker has been identified as the Group board of directors. The board reviews the Group's internal reporting in order to assess performance and allocate resources. Currently the Group has one operating activity, the commercialisation of University IP. All of the Group's activities are carried out in the UK.
4. Taxation
There is no charge to taxation for the year ended 30 June 2013 (2012: Nil) due to the Group making a taxable loss.
The Group's deferred tax assets, other than those relating to short term timing differences, are not recognised in accordance with Group policy.
5. Loss per share
The calculation of the basic loss per share for the year ended 30 June 2013 and 30 June 2012 is based on the losses attributable to the shareholders of Frontier IP Group Plc divided by the weighted average number of shares in issue during the year.
| Losses attributable to shareholders £'000 | Weighted average number of shares | Basic loss per share amount in pence |
|
|
|
|
Year ended 30 June 2013 | 368 | 10,470,247 | 3.51 |
|
|
|
|
Year ended 30 June 2012 | 380 | 6,972,165 | 5.45 |
No warrant or option is potentially dilutive as the average market price of the ordinary shares during the year was less than the exercise price of the warrants and options, hence basic and diluted loss per share are the same.
6. Availability of statutory financial statements
Copies of the full statutory financial statements will be available from the Company's offices at 41 Charlotte Square, Edinburgh EH2 4HQ no later than 8 November 2013 and are available on its website at www.frontierip.co.uk.