REG - Frontier IP Group - Final Results

Frontier IPAnnouncement

15/11/2018 09:25

RNS Number : 4669H
Frontier IP Group plc
15 November 2018
 


Prior to publication, the information contained within this announcement was 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, this information is now considered to be in the public domain.
 
15 November 2018
 
 
Frontier IP Group plc
("Frontier IP", the "Group" or "the Company")
Audited final results for the year ended 30 June 2018
Frontier IP Group Plc is focused on the commercialisation of intellectual property
 
Financial Highlights
 
·      Fair value of portfolio companies increased by 34% to £9,041,000 (2017: £6,729,000)
·      Total revenue increased by 2% to £2,363,000 (2017: £2,309,000) - reflecting an unrealised profit on the revaluation of investments of £2,064,000 (2017: £2,045,000)
·      Revenue from services increased by 13% to £299,000 (2017: £264,000)
·      Profit before tax decreased by 27% to £902,000 (2017: £1,229,000)
·      Basic earnings per share decreased to 2.36p (2017: 3.73p)
·      Cash balances at 30 June 2018 of £1,111,000 (2017: £2,329,000)
·      Net assets per share as at 30 June 2018 of 33.2p (2017: 30.7p)
 
 
Corporate Highlights
·      London office opened and team strengthened with appointment of communications and investor relations director, executive assistant and engineering and software development specialist. Post-period end, we announced Matthew White has joined as director of commercialisation from AB Sugar, where he was Head of Innovation
·      Capital Markets Day at the British Ambassadors' residence in Lisbon attracted more than 70 investors, academics and business people to witness technology in action
·      Post-period end, grew presence in Portugal through strategic partnership with the UK Department for International Trade
·      Post-period end, the Group appointed Allenby Capital Limited as Nominated Adviser (Nomad) and sole broker to the Group
·      Expecting to announce a placing later today to raise £2.49 million
 
 
Portfolio
 
·      Key additions to the portfolio in the year include Cambridge Raman Imaging and Amprologix
·      Post-period end we announced our first two Portuguese spin outs NTPE and Des Solutio
·      Good commercial progress within the portfolio overall, reflected in the increase in fair value
·      Exscientia secured a EUR15 million strategic investment from German pharmaceutical group Evotec and collaboration agreement with GSK
·      Recent portfolio addition Molendotech, started work with Palintest, raised £500,000 and saw first commercial products based on its IP launched
·      Increased stake in Fieldwork Robotics from 21 to 27.5 per cent. Post-period end, the company secured a collaboration agreement with leading soft fruit grower Hall Hunter Partnership
·      Pulsiv Solar granted two US patents and post-period end awarded £130,000 by Innovate UK
·      Post-period end, Alusid Limited successfully concluded further investment of £1.34 million and Tarsis Technology started work with a world-leading crop-protection group
 
 
Neil Crabb, Chief Executive Officer of Frontier IP, said:
 
"I am pleased to report on another year of progress as we continue to develop our portfolio and lay the foundations for future value creation."
 
 
Enquiries
 




Frontier IP Group Plc


T: 0131 240 1251




Neil Crabb, Chief Executive
Andrew Johnson, Communications & Investor Relations
Company website: www.frontierip.co.uk


 
M: 07464 546 025




Allenby Capital Limited (Nominated Adviser and Broker)


T: 0203 328 5656




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.
 
Chairman's Statement
Performance and Key Events
This year saw further good progress, reflecting the hard work put in by the team and our partners. We again materially increased the value of our portfolio, added three new spin outs and built on the strong relationships we enjoy with our partner institutions and academics.  In line with building a strong platform for future growth, we saw a decrease in profit before tax, primarily due to higher  people  and premises costs.  Increased investment  in these areas has allowed us to grow our level of activity and accelerate value creation in the portfolio.  Two of our core portfolio companies succeeded in raising the capital needed to support their growth during the year, joined post-period end by a third.
 
I was delighted to see growing evidence that our approach and strategy is gaining traction with industry.
For the time being, I'll draw your attention to Exscientia's success in striking deals with GSK and Evotec, and the commercial launch of water-testing kits based on Molendotech's intellectual property by Palintest, a subsidiary of FTSE 100 group Halma plc. Molendotech's product launch happened less than a year after we incorporated the company. After the year end, Tarsis Technology signed a collaboration agreement with a world-leading crop technology company and Fieldwork Robotics joined forces with Hall Hunter Partnership, the UK's biggest raspberry grower.
 
Another highlight post-year end was seeing the first results from our work in Portugal. We are now a strategic partner of the UK Department for International Trade, which will provide invaluable support for our work in the country, and we announced our first two Portuguese spin outs.
 
Value continues to grow in our core portfolio. We saw both the fair value and number of portfolio companies increase. Fair value rose significantly by 34 per cent to £9 million. Significant contributions came from successful agreements with industry and funding for Nandi, Molendotech and, post-year end, Alusid.
 
Of the three new companies added to our core portfolio in the year, we welcomed one from the University of Plymouth and two based in Cambridge. Post-period end, we added NTPE and Des Solutio, our first two spin outs from Portugal. We are hugely excited about the potential of all our new companies.
 
As these events show, we have strong formal and informal relationships with the universities and academics we work with. When you consider our portfolio company achievements it is clear that we have access to very high-quality intellectual property. In line with our strategy, we will be looking to add new portfolio companies and IP sources in the coming year.
 
Other developments included adding a London office and strengthening our team. These moves reflect growing demand for our services and a recognition that as our business grows, we need to step up our engagement with existing and new investors, and ensure we have the boots on the ground to properly support our portfolio businesses.
 
I am also very pleased to update that we expect to shortly announce a placing of new ordinary shares in the Company to raise £2.49 million from new and existing shareholders.
 
All this is further evidence our strategy is creating value for our stakeholders and we are optimistic about the prospects of generating further value as the business continues to gain momentum.
 
Results
For the year to 30 June 2018, total revenue increased by 2% to £2,363,000 (2017: £2,309,000) as a result of booking an unrealised profit of £2,064,000 (2017: £2,045,000) on the revaluation of investments, principally due to the movement in fair value of Exscientia and Alusid. Revenue from services, principally board retainers, technical development services and licence income, increased by 13 per cent to £299,000 (2017: £264,000).
 
The fair value of our portfolio increased by 34% to £9,041,000 (2017: £6,729,000).
 
Profit before tax decreased by 27% to £902,000 (2017: £1,229,000). The fall reflected  the rise in administrative expenses to £1,465,000 (2017: £1,082,000) - primarily due to increased investment in staff, salaries and the associated costs.  The basic earnings per share were 2.36p (2017: 3.73p).
 
Outlook
We have seen a very encouraging start to the new financial year with a high level of activity. While technology development is an inherently uncertain process, we are optimistic our core portfolio will show another year of good progress and growth. We continue to develop further partnerships with industry.
 
We also expect to continue seeing strong, commercialisable IP arising from our formal partnership with the University of Plymouth, and our developing relationships in Cambridge and Portugal.
 
As we continue to build a solid platform for growth, we expect to see further strong progress in our maturing portfolio.
 
 
Andrew Richmond
Chairman
 
 
 
 
Our Performance
 
Chief Executive Officer's Statement
I am very pleased to report on a year of strong progress and underlying growth within the business.
 
Across our core portfolio, companies enjoyed significant commercial and technical progress, attracting active interest and engagement from industry.
 
Examples include Evotec's strategic investment in Exscientia and the commercial launch of water-testing kits based on Molendotech's intellectual property (IP) by Halma-subsidiary Palintest. More recently, Fieldwork Robotics entered into a collaboration agreement with a leading UK soft fruit farmer, Hall Hunter Partnership.
 
We continued to grow our portfolio, adding three spin outs during the year, and a further one after the period end. The latter was our first spin out in Portugal, a country alive with opportunity - it has a strong research and industrial base, and yet is under-served by IP commercialisation specialists.
 
Because of these developments, we are increasingly confident of delivering value to our shareholders through our distinctive approach to the business of turning the best ideas from universities into companies with exciting growth potential.
 
There is growing evidence our approach is gaining traction. Our formal relationship with the University of Plymouth continues to bear fruit with the addition of Amprologix to our core portfolio. We are also building strong links to departments and academics in the University of Cambridge, with two further spinouts based on IP developed at the university.
 
We are also seeing increased interest from industry: it wants to benefit from the strong research from academics in this country and elsewhere, but often struggles to find a way through the plethora of IP generated to find technology that works.
 
We are committed to building our business and have added offices in London to our bases in Cambridge and Edinburgh. We have increased the size and depth of our team, most recently post-period end with the appointment of Matthew White who leads the commercialisation team. Within the Group we continue to encourage innovation through our internship program.
 
For these reasons, we are excited by the prospects for next year and thank you for your continued support.
 
Key Performance Indicators
The key performance indicators for the Group are:
 




KPI


Description


2018 Performance




Fair value of the portfolio


Movement in the value of equity in the portfolio


£9,041,000 (2017: £6,729,000)




Total revenue


Growth in the aggregate of revenue from services and change in fair value of the portfolio


£2,363,000 (2017: £2,309,000)




Profit


Profit before tax for the year


£902,000 (2017: £1,229,000)




Net assets per share


Value of the Group's assets less the value of its liabilities per share outstanding


33.2p (2017: 30.7p)




Total initial equity in new portfolio companies


Aggregate percentage equity earned from new portfolio companies during the year


67% (2017: 80%)




 
The Group achieved increases in three of its five Key Performance Indicators. Profit before tax is £327,000 below prior year due to greater administrative expenses. The increased investment in resources is not immediately reflected in the portfolio valuation during the current year. While total initial equity in new portfolio companies was less than achieved in 2017, since  the year end there has been a significant pick up. The Chairman's Statement and Operational Review contain further information on progress in the business during the year.
 
The Group's services revenue for the year to 30 June 2018 increased to £299,000 (2017: £264,000) and, with administrative expenses of £1,465,000 (2017: £1,082,000), the Group continues to consume significant cash from operating activities. However, the Directors continue to pursue opportunities that will assist in reducing the gap.
 
 
Operational Review
Corporate
Frontier IP Group made significant progress over the year to further underpin the foundations of future growth and value creation. Following strong commercial progress, we opened an office in the City of London in April 2018 to be closer to investors and other stakeholders.
We also strengthened our team. Former Daily Express deputy City editor Andrew Johnson joined as director of communications and investor relations in March. Executive assistant Flavia Vessoni, a native Portuguese speaker, started in May to provide administrative support in London.
In Cambridge, we recruited Ignacio Requena to provide engineering and software development support to our portfolio companies. Ignacio is a graduate from the Group's internship programme and has a degree in computer science from the University of Granada, where he specialised in machine learning and computer vision.
Post-period end, we were delighted to appoint Matthew White as director of commercialisation. His immediate role before joining the Group was Head of Innovation for AB Sugar, one of the world's biggest sugar producers and a wholly-owned subsidiary of FTSE 100 multinational Associated British Foods. He has more than 23 years' experience in technology, product and service innovation, business development and marketing. He is based in our Cambridge office.
At the end of January, we held a very successful Capital Markets Day at the British Ambassadors' residence in Lisbon.  More than 70 investors, academics and business people saw demonstrations of technology in action. We built on our strong relationship with the British Embassy in Portugal by announcing strategic partnership with the Department for International Trade in the country after the year end, followed by our first two spin outs.
Sources of IP
In line with our business model, our strategy is to seek to increase both the size of equity stakes we receive from our sources of IP and our portfolio pipeline for sources of high-quality IP. We continually review our partnerships, both formal and informal, for quality of deal flow and economic viability. This approach ensures that effort is focused where it is most effective and there is most potential value.
 
We continue to see a good flow of intellectual property with strong commercial potential from the University of Plymouth with the addition of Amprologix to our portfolio during the year.
 
Opening an office in Cambridge has allowed us to strengthen our relationships with the university's academics and departments, including the Group's first spin out from the world-leading Cambridge Graphene Centre, part of the University of Cambridge.
We're also developing very good relationships in Portugal. We announced the incorporation of NTPE and Des Solutio post-period end, a result of our formal relationship with the NOVA University Lisbon, NOVA School of Science and Technology. We continue to explore opportunities with the Universidade de Évora.
 
There is strong interest in Portugal in what we do from a number of Portuguese research-intensive institutions. Our strategic partnership with the UK Department for International Trade will help us continue to grow our business there.
 
Portfolio - Key Developments
Alusid: Frontier IP stake 39.2 per cent
Alusid took a significant step towards scaling up its patented technology that recycles ceramics and glass industrial waste into high-quality tiles and other surfaces, sold under the name SilicaStone. Post-period end, the University of Central Lancashire spin out completed a £1.34 million fundraising to support the design and planning of a new factory that will raise production capacity from 4,000m² a year to 30,000m² a month.
The move followed successful work with Italian ceramic-equipment maker Sacmi  Group and a year when the company won both plaudits and orders. It won the distinguished Jonathan Hindle Prize for outstanding design in 2D materials awarded by The Furniture Makers' Company. SilicaStone buyers include Amazon, Four Seasons Hotels, Nando's and Wells Fargo bank, which is using the material in its prestigious new London HQ. The company has more than 100 projects in its pipeline.
Amprologix: Frontier IP stake 10 per cent
Amprologix is a recent spin out from the Group's partnership with the University of Plymouth. The company has been established to introduce new antibiotics, helping to tackle antimicrobial resistance, a major threat to human health globally. It will develop and commercialise the work of Dr Mathew Upton, Professor in Medical Microbiology at the University's School of Biomedical Sciences.
No new classes of antibiotics have been introduced into clinical use for the past 30 years, and the company is aiming to meet a growing need for new antibiotics as harmful microbes become increasingly drug resistant.
The first product from the company is expected to be a cream containing epidermicin, one of the new antibiotics being developed to combat infections caused by antibiotic-resistant bacteria. Epidermicin can rapidly kill harmful bacteria including MRSA (methicillin resistant Staphylococcus aureus), Streptococcus and Enterococcus at very low doses, even if they are resistant to other antibiotics.
Amprologix has already secured industry involvement through a partnership with world-leading industrial biotechnology and synthetic biology company Ingenza.
Cambridge Raman Imaging: Frontier IP stake 33.3 per cent
Cambridge Raman Imaging, the Group's first spin out from the world-leading Cambridge Graphene Centre, part of the University of Cambridge, has been created to develop and commercialise the work on ultra-fast lasers of professors Andrea Ferrari, head of the Cambridge Graphene Centre, and Giulio Cerullo of the Politecnico di Milano.
Cambridge Simulation Solutions: Frontier IP stake 40 per cent
The company is developing advanced software to simulate and control complex, discontinuous processes, such as the way neural transmitters work in the brain. There is a huge range of potential industrial and medical applications for the University of Cambridge spin out to explore.
Exscientia: Frontier IP stake 4.1 per cent
Exscientia, a spin out from the University of Dundee, now based in Oxford, is at the forefront of Artificial Intelligence drug discovery. It continued to go from strength to strength during the year. In July 2017, the company signed a strategic drug discovery collaboration agreement with GSK, a move followed by a €15 million investment from German pharmaceutical group Evotec AG in September. "Our investment in Exscientia represents Evotec's single biggest equity placement to date in what we feel is the world leading AI technology company," said chief executive Dr Werner Lanthaler at the time.
Fieldwork Robotics: Frontier IP stake 27.5 per cent
In April, we increased our stake in Fieldwork Robotics from 21 per cent to 27.5 per cent in return for providing engineering support to accelerate development of its agricultural robots. The move followed strong industry interest in its system to harvest soft fruit and vegetables.
Post-period end, Fieldwork announced a collaboration agreement, the company's first, with Hall Hunter Partnership, the UK's biggest raspberry grower to field-test a soft fruit harvesting system.
Molendotech: Frontier IP stake 17 per cent
Molendotech shows that university intellectual property commercialisation need not take years. The company, incorporated in June 2017, has developed patented methods to test for faecal matter in water. In January 2018, the company announced a collaboration agreement with Palintest, a subsidiary of FTSE 100 life protection and hazard protection group Halma plc to develop and licence water testing products.
The company raised £500,000 in February to support further development. In May, Palintest launched the first commercial kits to test for faecal matter in bathing water based on Molendotech's IP. The response from customers has been highly encouraging. After the year end, the company announced a collaboration agreement with fresh produce grower and supplier G's Group to develop tests for bacteria in irrigation and washing water, produce and in food contact areas.
Nandi Proteins: Frontier IP stake 20.7 per cent
The spin out from Heriot Watt, Edinburgh, completed a £1 million fundraising from new and existing investors in July 2017 to further commercialise and scale up its patented protein technology designed to reduce sugar, fat and additive content in processed food.
Progress since then has been solid. Nandi has been working with Devro plc, a world-leading supplier of collagen casings for food, to create ingredients for lower-fat sausages and processed meats. Nandi has started to explore potential scale up in this market.
The company is also working closely with a major multinational food group to develop cakes and icing lower in fat, sugar and additives. Results to date have been highly encouraging.
Nandi is also in discussions with two other major companies about rice protein-based sports nutrition drinks. There are also potential applications in chocolate confectionery and Nandi plans to raise additional funding in the near future.
PoreXpert: Frontier IP stake 15 per cent
PoreXpert's software and consultancy services provide highly accurate information about the void spaces in porous materials and how gases and liquids behave within them. Customers include a major player in the nuclear industry, but there are applications in the oil and gas sector too.
Pulsiv Solar: Frontier IP stake 18.9 per cent
Pulsiv Solar gained two patents in the United States and one in Europe to protect its novel technology which improves the energy efficiency of photovoltaic cells and power converters used in laptops, mobile phones, televisions and many other devices.
Post-period end, Pulsiv Solar won a £130,000 Innovate UK grant towards a £290,000 project to complete the technological development of its solar technology. The aim is to have a solar micro-inverter ready for scale up and commercialisation providing energy efficiency improvements of at least 5 per cent over current market leaders. The technology and early results have attracted strong interest from major industrial and consumer groups.
Tarsis Technology: Frontier IP stake 18 per cent
A spin out from the University of Cambridge, Tarsis Technology entered into a collaboration agreement with a world-leading manufacturer of crop-protection products after the year end. The collaboration will research the use of the company's patent-pending technology to deliver chemical pesticides and fungicides in a more precise and controlled way using particles called metal-organic frameworks.
We have agreed to lend Tarsis up to £150,000 to meet working capital requirements in return for equity options - an example of our efficient capital model in action.
The Vaccine Group: Frontier IP stake 19.2 per cent
In August 2017, we announced the incorporation of The Vaccine Group, a spin out from the University of Plymouth. The company is developing a novel vaccine technology designed to prevent the spread of dangerous diseases, such as Ebola, Sars, Marburg viruses, swine and bird flu, and Lassa fever, from animals to humans. Initial work is focused on herpesvirus-based platforms for use in animals.
After the year end, the company announced it had received a grant from the global Bacterial Vaccinology Network, BactiVac, to run a proof-of-concept study on vaccines to combat E.coli, one of three main bacteria causing bovine mastitis.
Post-period end: new portfolio companies
We announced two new core portfolio companies after the year end.
NTPE LDA: Frontier IP stake 31.6 per cent
NTPE is our first spin out in Portugal. The company is developing novel technology called Paper-E to print electronic circuits, sensors and semiconductors onto any cellulose-based paper and is a result of the Group's formal relationship with the NOVA University, Lisbon, NOVA School of Science and Tecnology (FCT NOVA). Paper-E replaces the silicon used in electronics with eco-friendly metal oxides and cellulose. Applications include paper-based diagnostic kits, smart packaging, logistics and many others.
The company is developing and commercialising the work of a team of more than 65 researchers led by Professors Elvira Fortunato and Rodrigo Martins of FCT Nova.
Des Solutio LDA: Frontier IP stake 25 per cent
Des Solutio develops safer and greener alternatives to the chemicals currently used in the personal care, pharmaceutical, personal care and food industries. It was established to develop and commercialise the research of Associate Professor Ana Rita Duarte and Dr Alexandre Pavia of Portugal's NOVA University Lisbon, NOVA School of Sience and Technology.
 
 
Financial Review
Key Highlights
The value of the Group's investments increased to £9,060,000 (2017: £6,751,000) with net assets increasing to £12,717,000 (2017: £11,759,000).
 
Profit after tax for the Group for the year to 30 June 2018 was £902,000 (2017: £1,229,000). This result includes a net unrealised profit on the revaluation of investments of £2,064,000 (2017: £2,045,000) and reflects an increase in services revenue to £299,000 (2017: £264,000) and greater administrative expenses of £1,465,000 (2017: £1,082,000) as the Group invested in people and premises. The additional administrative expenses was not offset by growth in unrealised profit on revaluation of investments.
 
Revenue
Total revenue for the year to 30 June 2018 increased 2% to £2,363,000 (2017: £2,309,000). Revenue from services increased 13% to £299,000 (2017: £264,000). The Group's net unrealised profit on the revaluation of investments increased 1% to £2,064,000 (2017: £2,045,000). Unrealised gains on revaluation of investments of £2,396,000 (2017: £2,069,000) were offset by impairments of £332,000 (2017: £24,000). £1,006,000 of the gain relates to Exscientia Limited and £691,000 to Alusid Limited.
 
Administrative Expenses
Administrative expenses increased by 35% to £1,465,000 (2017: £1,082,000). The increase is primarily due to increased staff, salaries and associated costs.
 
Earnings Per Share
Basic earnings per share was 2.36p (2017: 3.73p). Diluted earnings per share was 2.25p (2017: 3.63p)
 
Statement of Financial Position
The principal items in the statement of financial position at 30 June 2018 are goodwill £1,966,000 (2017: £1,966,000) and financial assets at fair value through profit and loss, principally holdings in portfolio companies, £9,060,000 (2017: £6,751,000). The carrying value of these items is determined by the Directors using their judgement when applying the Group's accounting policies.  The considerations taken into account by the Directors when reviewing the carrying value of goodwill are detailed in Note 9.  The matters taken into account when assessing the fair value of the portfolio companies are detailed in the accounting policy on investments.
 
The Group had net current assets at 30 June 2018 of £1,523,000 (2017: £2,716,000). The current assets at 30 June 2018 include trade receivables of £224,000 which are more than 90 days overdue, of which £34,000 is due from Nandi and £28,000 is due from Alusid.  The non-current trade receivables of £161,000 comprise £71,000 due from Nandi and £90,000 due from Alusid. Other debtors include an unsecured interest free loan to Alusid of £378,000. After the year end, Alusid completed a fundraising at which the Group converted £338,000 of the loan into shares in Alusid and Alusid paid all overdue trade receivables. The directors are confident that Nandi will be able to raise sufficient funds to finance its business plan and commence payment of the debt.
 
Net assets of the Group increased to £12,717,000 at 30 June 2018 (30 June 2017: £11,759,000) resulting in net assets per share of 33.2p (2017: 30.7p).
 
Cash
The Group's cash balances decreased during the year by £1,218,000 to £1,111,000 at 30 June 2018.  Operating activities consumed £970,000 (2017: £1,216,000) and financial assets at fair value were purchased at £245,000 (2017: £33,000).
 
 
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2018
 




 


 


2018


 


2017




 


Notes


£'000


 


£'000




Revenue


 


 


 


 




Revenue from services
 
Other operating income
Unrealised profit on the revaluation of investments


 
 
 
5


299
 
 
2,064


 


264
 
 
2,045




 


 


 


 


 




Total revenue


 


2,363


 


2,309




 


 


 


 


 




Administrative expenses


 


(1,465)


 


(1,082)




 


 


 


 


 




Profit from operations


 


898


 


1,227




 


 


 


 


 




Interest income on short term deposits


 


4


 


2




 


 


 


 


 




Profit from operations and before tax


 


902


 


1,229




 


 


 


 


 




Taxation


3


-


 


-




 


 


 


 


 




Profit and total comprehensive income attributable to


 


 


 


 




the equity holders of the Company


 


902


 


1,229




 
 


 


 


 


 
 




Profit per share attributable to the equity holders of the Company:


 


 


 


 




Basic earnings per share


4


2.36p


 


3.73p




Diluted earnings per share


4


2.25p


 


3.63p




 
All of the Group's activities are classed as continuing.
 
There is no other comprehensive income in the year (2017: nil).
 
consolidated Statement of Financial Position
At 30 June 2018




 


 


2018


 


2017




 


Notes


£'000


 


£'000




Assets


 


 


 


 




Non-current assets


 


 


 


 




Tangible fixed assets


 


7


 


5




Goodwill


 


1,966


 


1,966




Financial assets at fair value through profit and loss


5


9,060


 


6,751




Trade receivables


 


161


 


321




 


 


11,194


 


9,043




Current assets


 


 


 


 




Trade receivables and other current assets


 


617


 


537




Cash and cash equivalents


 


1,111


 


2,329




 


 


1,728


 


2,866




Total assets


 


12,922


 


11,909




 


 


 


 


 




Liabilities


 


 


 


 




Current liabilities


 


 


 


 




Trade and other payables


 


(205)


 


(150)




 


 


(205)


 


(150)




 


 


 


 


 




Net assets


 


12,717


 


11,759




 


 


 


 


 




Equity


 


 


 


 




Called up share capital


 


3,828


 


3,828




Share premium account


 


7,789


 


7,789




Reverse acquisition reserve


 


(1,667)


 


(1,667)




Share based payment reserve


 


186


 


130




Retained earnings


 


2,581


 


1,679




 
Total equity


 


 
12,717


 


 
11,759




 
 
Consolidated Statement of Changes in Equity
For the year ended 30 June 2018
 




                                    


 
 
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 2016


3,078


5,729


(1,667)


78


450


7,668




 


 


 


 


 


 


 




Issue of shares


750


2,060


-


-


-


2,810




Share-based payments


-


-


-


52


-


52




Profit/total comprehensive income for the year


 
-


 
-


 
-


 
-


 
1,229


 
1,229




 


 


 


 


 


 


 




At 30 June 2017


3,828


7,789


(1,667)


130


1,679


11,759




 


 


 


 


 


 


 




Share-based payments


-


-


-


56


-


56




Profit/total comprehensive income for the year


 
-


 
-


 
-


 
-


 
902


 
902




 


 


 


 


 


 


 




At 30 June 2018


3,828


7,789


(1,667)


186


2,581


12,717




 
 
Consolidated Statement of Cash Flows
For the year ended 30 June 2018




 


2018


 


2017




 


£'000


 


£'000




 


 


 


 




Cash flows from operating activities


 


 


 




Cash used in operations


(970)


 


(1,216)




Taxation paid


-


 


-




 
Net cash used in operating activities


 
(970)


 


 
(1,216)




 


 


 


 




Cash flows from investing activities


 


 


 




Purchase of tangible fixed assets


(7)


 


(5)




Purchase of financial assets at fair value through profit and loss


 
(245)


 


 
(33)




Interest received


4


 


2




 
Net cash used in investing activities


 
(248)


 


 
(36)




 


 


 


 




Cash flows from financing activities


 


 


 




Proceeds from issue of equity shares


-


 


3,000




Costs of share issue


-


 


(190)




 


 


 


 




 
Net cash generated from financing activities


 
-


 


 
2,810




 


 


 


 




 
Net (decrease) / increase in cash and cash equivalents


 
(1,218)


 


 
1,558




 


 


 


 




Cash and cash equivalents at beginning of year


2,329


 


771




 


 


 


 




 
Cash and cash equivalents at end of year


 
1,111


 


 
2,329




 
 
Notes
 
1.   General Information
This preliminary announcement was approved for issue by a duly appointed and authorised committee of the Board of Directors on 14 November 2018.
 
2.   Basis of preparation
The financial information set out in this announcement does not constitute statutory financial statements for the year ended 30 June 2018 or 30 June 2017. 
 
The report of the auditor on the statutory financial statements for each of the years ended 30 June 2018 and 30 June 2017 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 2017 have been delivered to the Registrar of Companies.  The financial statements for the year ended 30 June 2018 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
 
The Directors continue to adopt the going concern basis in preparing the group's financial statements.
 
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.   Taxation
There is no charge to taxation for the year ended 30 June 2018 (2017: 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.
 
4.   Earnings per share
(a)  Basic
 
Basic earnings per share is calculated by dividing the profit attributable to the shareholders of Frontier IP Group Plc by the weighted average number of shares in issue during the year.
 




 


Profit attributable to shareholders
£'000


Weighted average number of shares


Basic earnings per share amount in pence




 


 


 


 




Year ended 30 June 2018


902


38,278,520


2.36




 


 


 


 




Year ended 30 June 2017


1,229


32,983,190


3.73




 
 
(b)  Diluted
 
Diluted earnings per share is calculated by adjusting the weighted number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has only one category of dilutive potential ordinary shares: share options. A calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market value share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
 




 


Profit attributable to shareholders
£'000


Weighted average number of shares adjusted for share options


Diluted earnings per share amount in pence




 


 


 


 




Year ended 30 June 2018


902


40,114,559


2.25




 


 


 


 




Year ended 30 June 2017


1,229


33,897,226


3.63




 
 
5.   Financial assets at fair value through profit and loss




 


2018


2017




 


£'000


£'000




At 1 July 2017


6,751


4,673




Additions


245


33




Fair value increase


2,064


2,045




At 30 June 2018


9,060


6,751




 
The investments held are valued individually at fair value in accordance with the Group's accounting policy on investments and have been categorised as being level 3, that is, valued using unobservable inputs. All gains and losses relate to assets held at the year end, and the fair value movement has been shown in the income statement as other operating income.
 
          Financial assets at fair value through profit and loss comprise the following:
 




 


2018


2017




 


£'000


£'000




Limited partnership interests


19


22




Unquoted equity investments


9,041


6,729




 


9,060


6,751




 
          The movement during the year is set out below:
         




Limited Partnership Interests


2018


2017




 


£'000


£'000




At 1 July


22


22




Additions during the year


4


2




Fair value decreases during the year


(7)


(2)




At 30 June


19


22




 




Unquoted Equity Investments


2018


2017




 


£'000


£'000




At 1 July


6,729


4,651




Additions during the year


241


31




Fair value increases during the year


2,396


2,069




Fair value decreases during the year


(325)


(22)




At 30 June


9,041


6,729




 
6.   Availability of statutory financial statements
 
Copies of the full statutory financial statements will be available from the Company's offices at 93 George Street, Edinburgh EH2 3ES no later than 23 November 2018 and are available on its website at www.frontierip.co.uk.




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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