REG - Frontier IP Group - Unaudited Half Year Results
15/03/2023 07:00
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RNS Number : 9900S Frontier IP Group plc 15 March 2023
15 March 2023
Frontier IP Group plc
("Frontier IP", the "Group" or the "Company")
UNAUDITED HALF-YEAR RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2022
Frontier IP, a specialist in commercialising intellectual property, is pleased
to announce its unaudited interim results for the six month period ended 31
December 2022.
KEY POINTS
· Pre-tax loss of £0.5 million (31 December 2021: profit of £10.3
million)
· Cash balances of £5.8 million at 31 December 2022 (30 June 2022:
£4.4 million; 31 December 2021: £0.3 million)
· Basic earnings per share fell by 97 per cent to 0.49p (31 December
2021: 14.54p)
· Net assets per share of 88.2p as at 31 December 2022 (30 June 2022:
88.5p; 31 December 2021: 84.7p)
· Unrealised profit on the revaluation of investments fell by 97 per
cent to £0.4 million (31 December 2021: £11.9 million)
· Fair value of portfolio fell by 9 per cent to £36.1 million at 31
December 2022 (30 June 2022: £39.7 million; 31 December 2021: £43.9 million)
reflecting disposals of £3.1 million, additions of £0.6 million and fair
value decreases of £1.1 million
· Significant commercial and technical progress across the portfolio
· Appointment of two new Non-Executive Directors announced today
Frontier IP made solid progress during the first half of the financial year.
The Group sold a further tranche of Exscientia shares for general working
capital purposes and to provide further support to portfolio companies. Our
balance sheet and cash position are strong, and we are well placed to weather
the current uncertain market and economic climate.
There were several important commercial and technical developments across the
portfolio during the first half of the year. Several companies attracted
significant industry interest and are gaining commercial traction as a result.
We continue to strengthen management teams: two new chief executive officers
were appointed to portfolio companies during the period. Two new portfolio
companies, Enfold Health and GraphEnergyTech, were incorporated and joined the
portfolio.
Post period end, the Group added further expertise and experience to its own
leadership team. We are delighted to welcome Nigel Grierson and Dr David
Holbrook to the Board of Directors as independent Non-Executive Directors.
Dame Julia King, Baroness Brown of Cambridge DBE FREng FRS FMedSci has also
been appointed Senior Independent Director. The changes take place with
immediate effect. Campbell Wilson will be stepping down in April 2023, having
served nine years as a non-executive director, but will continue to assist the
Group with selected portfolio companies. Further details are in the separate
announcement published today.
PORTFOLIO AND OPERATIONAL HIGHLIGHTS
The six months to 31 December 2022 saw several companies gather momentum,
achieving commercial, technical and funding milestones:
· Pulsiv raised £1.6 million through an equity funding round to
develop and scale up its technology to improve the energy efficiency of power
supplies, battery chargers, LED lighting and photovoltaic solar cells. The
company has announced distribution agreements with a number of partners
globally.
· CamGraPhIC's novel graphene-based photonics technology is now being
tested with potential customers after the company raised £1.26 million
through an equity funding round to complete fabrication and testing of
demonstration devices. Sir Michael Rake, former chair of BT Group plc, has
agreed to join the board of directors in due course.
· The Vaccine Group successfully completed two government-funded
projects to develop vaccine candidates for zoonotic diseases, including a
transmissible animal vaccine to tackle Lassa fever.
· During the period, Nandi Proteins signed heads of terms with a
commercial partner for a meat/fat replacer and successfully completed trials
of an egg white replacer on commercial production equipment. Post period end,
the company commenced trials, which are now approaching completion, with a
potential customer for the egg white replacer.
· Celerum and Elute appointed chief executive officers to strengthen
their management teams. Following the launch of Truck Logistics System last
year, Celerum is now winning customers.
· Two new portfolio companies, GraphEnergyTech and Enfold Health, were
incorporated.
· Frontier IP generated net cash proceeds of £3.4 million through the
sale of a further tranche of Exscientia shares to provide working capital and
to enable the Group to support portfolio companies.
Post period end:
· Alusid announced the results of a successful collaboration with
Imerys, a global leader in speciality minerals, to make floor tiles. Floor
tiles are estimated to constitute about 60 per cent of the UK tile market.
· Nigel Grierson and Dr David Holbrook were appointed to the Frontier
IP Board of Directors and Dame Julia King is appointed Senior Independent
Director. The changes take place with immediate effect. Campbell Wilson is to
step down from the Board of Directors in April 2023 but will continue to work
with selected portfolio companies thereafter in an advisory capacity.
FINANCIAL HIGHLIGHTS
· Pre-tax loss of £0.5 million (31 December 2021: profit of £10.3
million)
· Post-tax profit fell by 97 per cent to £0.3 million (31 December
2021: £8.0 million)
· The Group sold part of its holding in Exscientia for net proceeds of
£3.4 million, realising profits of £0.3 million. The Group's remaining
investment in Exscientia decreased in value by £3.5 million during the six
months to 31 December 2022.
· Cash balances stood at £5.8 million as at 31 December 2022 (30 June
2022: £4.4 million; 31 December 2021: £0.3 million)
· Basic earnings per share fell by 97 per cent to 0.49p (31 December
2021: 14.54p)
· Net assets per share decreased to 88.2p as at 31 December 2022 (30
June 2022: 88.5p; 31 December 2021: 84.7p) following the exercise of 652,607
share options by directors
· Unrealised profit on the revaluation of investments fell by 97 per
cent to £0.4 million (31 December 2021: £11.9 million)
· Fair value of portfolio fell by 9 per cent to £36.1 million at 31
December 2022 (30 June 2022: £39.7 million; 31 December 2021: £43.9 million)
reflecting disposals of £3.1 million, additions of £0.6 million and fair
value decreases of £1.1 million
Chief Executive Neil Crabb said: "The first half of the year can be summed up
as a time of significant commercial and technical progress across our
portfolio, while the overarching financial results reflected difficult market
conditions for technology firms and early-stage companies, as anticipated at
our year-end results. We supported our portfolio in developing the industry
partnerships they need to prosper, strengthened management teams, and ensured
our pipeline of opportunities remains attractive by incorporating two new
portfolio companies.
In particular, I would like to highlight three companies which took
significant strides forward commercially during the period. They are moving
beyond their inflection points and towards fulfilling their potential.
We believe Pulsiv's ground-breaking technology to make power conversion much
more efficient has near universal applicability across a vast range of
everyday devices - from power supplies and LED lighting to battery chargers
and solar panels. The on-chip technology has the potential to lower cost
because it uses fewer system components and can be fitted into smaller form
factors. The benefits to consumers include reduced energy consumption and
lower bills.
During the period, Pulsiv OSMIUM was launched for almost all mains-powered
devices. The company has now put in place a series of distribution agreements
with leading electronic component suppliers around the world to address
different segments of the very broad target markets. A collaboration was also
announced with a leading global manufacturer of power supplies, Salom, which
has described the technology as "game changing".
Alusid's collaboration with Imerys, a global leader in speciality minerals,
saw the company make an important technical breakthrough seeking to fill a gap
in its product range - high-quality, hard-wearing floor tiles. Floor tiles
constitute about 60 per cent of the UK tile market, but as yet there are few,
if any, sustainable alternatives to those made by conventional methods. Alusid
entered into the collaboration, announced post the period end, after being
named as one of two winners of the Imerys Start-Up Innovation Factory
competition, in which 65 companies globally were selected to participate. The
tiles were made from Imerys' waste, and Alusid is now trialling different
techniques for mass manufacture.
The company is also close to launching a range of wall tiles with one of the
UK's leading tile retailers, and I look forward to updating you soon.
Nandi Proteins is also striding forwards in terms of commercial development
and scale up. The company signed heads of terms with a commercial partner for
a meat/fat replacement product during the period, and successfully
manufactured a fava bean based egg-white replacer on commercial production
equipment in trials with a subcontractor. The egg-white replacer is now at an
advanced stage of application trials with a potential customer, a major
company in the meat alternative sector.
As our portfolio companies mature and move beyond validation to commercial
scale up, we seek to strengthen their management teams. So, I am delighted
that we were able to appoint two high-calibre Chief Executive Officers to run
Elute Intelligence and Celerum. Steve Cable at Elute has more than 25 years'
experience in building businesses at start-ups, mid-sized firms and large
companies, and has worked with software solutions across a spectrum of
applications, including artificial intelligence, search and professional
services automation. David Gladding joined Celerum and will be overseeing the
company's commercial and technical development following the launch of its
first commercial product, Truck Logistics System. This is already winning
customers, and David's experience in software and IT services companies,
including those in the fleet management industry, will prove invaluable as the
company grows.
We are also adding broader expertise and experience to our own Board of
Directors. I am delighted that Nigel Grierson and Dr David Holbrook are
joining us as Non-Executive Directors with immediate effect. Both have
wide-ranging experience in technology investment and with spin-out and
early-stage companies in sectors very relevant to our portfolio companies:
Nigel in engineering and semiconductors, and David in life sciences. Dame
Julia King, who joined the Board in October 2021, is becoming Senior
Independent Director.
Sadly, Campbell Wilson will be standing down from the Board in April. During
the nine years he has served as a Non-Executive Director, his support and
experience have proved invaluable, and we look forward to continuing to work
with him as he continues to support the Group and its portfolio companies.
I warned at the time of our annual results in November that the market outlook
in the short term was uncertain. The environment was highly unpredictable,
with the war in the Ukraine compounding existing risks, such as supply chain
pressures, energy prices, inflation and rising interest rates, all likely to
have an impact on investor risk appetite. This has proved especially so for
technology stocks, and the main driver of our pre-tax loss is the fall in the
value of our remaining shares in Exscientia. Exscientia is already established
as a world leader in using artificial intelligence in drug discovery and we
are confident about its future potential. There was also a slowdown in new
funding activity, which impacted the overall portfolio valuation.
While it was encouraging, and indeed important for the sector, to see the
speed with which the uncertainty around Silicon Valley Bank was resolved, the
situation has served to highlight the danger rising interest rates pose to the
financial system.
However, our balance sheet remains strong. A further sale of Exscientia shares
during the period means our cash position is robust. Our portfolio is
positioned to help solve fundamental problems around climate, energy, food,
water and health. None of these challenges have dissipated, and we expect them
to provide a continuing spur to innovation and its adoption in the months and
years to come.
To take full advantage, it is vital we do not rest in seeking new
opportunities and ensure we have the right pipeline in place. Two new
portfolio companies were incorporated during the half which exemplify our
approach. Enfold Health is focused on developing its innovative DNA Origami
technology for making antibacterial treatments more effective, developed by Dr
Ioanna Mela, an Associate Professor in the Department of Pharmacology at the
University of Cambridge. GraphEnergyTech is developing highly conductive
graphene electrodes to make solar cells more efficient, cost-effective and
environmentally friendly.
Our other two spin outs from the Cambridge Graphene Centre, CamGraPhIC and
Cambridge Raman Imaging, are also progressing well, and we believe materials
technology advances are ready to enable a wave of opto-electronic innovation.
Graphene and other 2D materials are ready to move on from the many years of
promise into applications that can make a tangible impact. These, along with
developments at our other portfolio companies, lead us to expect further
positive updates. We remain confident about our business and its prospects."
Enquiries
Frontier IP Group Plc T: 020 3968 7815 neil@frontierip.co.uk
Neil Crabb, Chief Executive M: 07464 546 025
Andrew Johnson, Communications and Investor Relations
andrew.johnson@frontierip.co.uk
Company website: www.frontierip.co.uk (http://www.frontierip.co.uk/)
Allenby Capital Limited (Nominated Adviser) T: 0203 328 5656
Nick Athanas / George Payne
Singer Capital Markets (Broker) T: 0207 496 3000
Sandy Fraser / Harry Gooden / George Tzimas
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 in developing portfolio
companies and creating value for shareholders by:
· Realising funds from the portfolio. During the half year the Group
generated approximately £3.4 million of net proceeds by selling part of its
stake in Exscientia to ensure financial strength for the foreseeable future.
· Supporting portfolio company fundraisings. Pulsiv completed a £1.6
million equity funding round, while CamGraPhIC raised £1.26 million.
· Strengthening the board of directors with two key appointments in
Nigel Grierson and Dr David Holbrook.
· Helping to support industry partnerships across the portfolio. Pulsiv
has signed distribution agreements with major electronic component suppliers,
Alusid has started supplying a major tile retailer, and CamGraPhIC is testing
devices with potential customers.
Operational Review
The Group and its portfolio companies made good commercial and technical
progress during the half year to 31 December 2022. Our portfolio continues to
grow and mature with several companies now gaining significant commercial
traction. We further developed our relationships with university, government
and industry partners. Further positive newsflow is expected in the coming
months.
Portfolio developments included:
CamGraPhIC: Frontier IP stake 20.8 per cent
CamGraPhIC is developing 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 who believe the company's technology could
prove an important enabler for the 5G and 6G networks of the future. There is
also potential for applications in other sectors. Current versions of the
technology have indicated speeds of up to 100Gbps per lane, operations across
multiple wavebands and very low energy loss. Their speed is about twice that
achieved by equivalent technologies, and they consume 70 per cent less energy.
During the period, CamGraPhIC raised a further £1.26 million to complete
fabrication and testing of demonstration devices, and customers are now
testing the technology. Sir Michael Rake, the former chair of BT Group plc,
invested as part of the funding round, and will be joining the board of
directors in due course. His previous roles include chair of WorldPlay Group
plc, EasyJet plc, and President of the Confederation of British Industry.
Celerum: Frontier IP stake 33.8 per cent
Celerum's innovative artificial intelligence, based on metaheuristics such as
nature-inspired computing, has the potential to improve operational efficiency
across a broad range of industrial sectors. Initial applications are focused
on logistics, where the company has launched its first commercial product,
Truck Logistics System (TLS), to cut road haulage costs, carbon emissions and
delivery times for small-to-medium sized truck fleets. The first customer was
Colin Lawson Transport, a haulage firm based in Aberdeen, and a second
customer has since started using the technology. Further potential
applications have been identified in the maritime, energy and
telecommunications sectors. To capitalise on growing interest in the
technology, Celerum appointed a chief executive officer, David Gladding,
during the period. David has more than 30 years' experience at senior levels
in software and IT services companies, including those specialising in fleet
management. He was senior vice president global sales for Chevin Fleet
Services, and also worked for Civica and Fleet Clear.
Elute Intelligence: Frontier IP stake 41.2 per cent
Elute's software allows computers to read millions of documents in seconds to
identify those of the greatest relevance. The technology is based on encoding
forensic linguistic principles in software, which allows documents to be read
in a manner similar to humans but by a computer at great speed. The software
can clearly show why documents are relevant, a marked difference to the
semantic search approaches used by competing products. It can also allow for
rapid detailed comparison of text in documents, authorship detection for
plagiarism and collusion, and automatic document summaries. Current products
are based on English, but the functionality is not language dependent and
could be applied to other languages, including Russian, Arabic and Chinese.
Existing customers for the company's CopyCatch software to detect plagiarism
are UCAS and the Open University . During the half year, the company appointed
Steve Cable as chief executive officer. Steve has more than 25 years'
experience building businesses at start-ups, mid-sized firms and larger
companies.
Nandi: Frontier IP stake 20.1 per cent
Nandi's protein technology transforms commodity proteins into functional food
ingredients. Nandi is currently focused on bringing two lead products to
market. The first is a collagen-based meat/fat replacer for use in processed
meat products, such as sausages, burgers and meatballs, reducing fat content
and cost. Heads of terms have been signed with a commercial partner who is
intending to license Nandi's technology to produce and sell the meat replacer,
creating a royalty stream for Nandi. The second product is a fava bean-based
egg white replacer that has been successfully tested in a range of
applications including meringues, alternative meat products and multiple
bakery products. During the period, Nandi successfully completed the first
production run of the egg white replacer on commercial production equipment
with a subcontract manufacturing partner. Nandi is in late-stage application
trials with a major food producer looking to eliminate the use of egg white
powder in their products. Successful completion of the trials would see Nandi
use a subcontract manufacturer to supply ingredients to this first major
customer.
Pulsiv: Frontier IP stake 18.2 per cent
Pulsiv's ground-breaking 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. The company raised £1.6 million during the period to develop
and scale up the technology and launched Pulsiv Osmium for power supplies and
battery chargers. Commercial traction is strong and growing: the company is in
advanced discussions with major manufacturers and has put in place a series of
distribution agreements globally to cover different geographies and
applications of the technology. These include strategic agreements with Astute
Electronics, Digikey Electronics, the world's fifth largest electronic
components distributor, ISMOsys and Pankaj Electronics. The company also
entered into a collaboration with Salom, one of the world's major
manufacturers of power supplies, which described Pulsiv's technology as "game
changing". Post period end, Pulsiv announced further distribution agreements
with CATS S.A.S, Fortec Electronik, Bescom Global and EPS Global.
The Vaccine Group: Frontier IP stake 17 per cent
The potential for The Vaccine Group's novel herpesvirus-based vaccine
technology to be applied flexibly depending on the nature of the disease and
animal reservoirs targeted was demonstrated by the successful completion of
two government-funded projects. The first involved developing a transmissible
candidate vaccine against a virus, Lassa fever, for use in the rats that
spread the disease. A small-scale trial showed the candidate could be
transmitted between rats, significantly improve their immunity to Lassa fever
and reduce its spread between them. Technology to scale up for commercial
production was also developed as part of the project, and the company is now
in discussion with potential partners about further development. The work was
funded by the US Defense Advanced Research Projects Agency, led by the
University of California Davis, and involved TVG collaborating with academic
partners from around the world. The second project, funded by the UK and
Chinese governments, developed a vaccine candidate for Streptococcus suis, a
bacterial disease carried by pigs. However, it can cause meningitis and other
symptoms in humans. The disease is currently treated by antibiotics but is
showing signs of resistance. A Chinese commercial partner, the Pulike
Biological Engineering Company has started work to make the candidate vaccine
at pilot scale.
Two new portfolio companies were incorporated. Enfold Health (Frontier IP
stake 75.8 per cent) is commercialising the unique DNA Origami IP developed by
Dr Ioanna Mela, Associate Professor in the Department of Pharmacology at the
University of Cambridge, for making antibacterial treatments more effective,
with an initial focus on P.gingivalis, considered to be the main risk factor
for periodontal disease. GraphEnergyTech (Frontier IP stake 32.1 per cent) is
developing highly conductive graphene inks. Initial application is for use in
solar cells to make them more efficient, affordable and environmentally
friendly.
Other post period end portfolio developments
Alusid: Frontier IP stake 38.9 per cent stake
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. After the period end,
the company announced the results of a successful collaboration with Imerys, a
world leader in speciality minerals, to make hard-wearing floor tiles. The
collaboration resulted after Alusid was named as one of two winners in the
inaugural Imerys Start-Up Innovation Factory competition from 65 companies
from around the world selected to participate. Floor tiles comprise 60 per
cent of the total UK tile market, according to MTW Research, and the products
are generating industry interest. The company has started supplying a major
tile retailer with wall tiles and a further announcement is expected soon.
Corporate developments
The Group realised approximately £3.4 million through the further sale of
part of its equity stake in Exscientia. Two new portfolio companies were
incorporated. After the period close, Frontier IP strengthened the board by
appointing Nigel Grierson and Dr David Holbrook to its Board of Directors and
made Dame Julia King, Baroness Brown of Cambridge, Senior Independent
Director.
Outlook
Frontier IP faces the future with confidence. However, we are mindful that the
uncertain and challenging market conditions experienced during the first half
of the year, driven by global factors such as the Russian invasion of Ukraine,
could continue. The money raised through the partial sale of our Exscientia
equity holding means our balance sheet remains strong and ensures we have the
capital to support the Group and its portfolio companies for the foreseeable
future.
We are seeing growing industry traction across the portfolio after several
companies made important commercial and technical breakthroughs. Others are
now reaching inflection points. We expect this progress to be reflected by
strong positive news flow in the months to come.
Neil Crabb
Chief Executive Officer
Results Summary
Financial assets at fair value through profit and loss at 31 December 2022
decreased to £41,065,000 (30 June 2022: £42,693,000; 31 December 2021:
£46,665,000). This reflects the partial disposal of the Group's investment in
Exscientia of £3,125,000 and investments in other portfolio companies of
£1,098,000. Unrealised profit on the revaluation of investments over the
first half decreased by 97 per cent to £400,000 (2021: £11,914,000) with an
increase in the value of unquoted equity and debt investments of £3,943,000
offset by a decrease in the value of the remaining holding in Exscientia by
£3,543,000. Revenue from services increased to £203,000 (2021: £163,000).
The Group sold part of its holding in Exscientia for net proceeds of
£3,433,000, realising profits of £307,000 in the period under review. A loss
before tax of £469,000 was incurred (2021: £10,281,000) reflecting the lower
profit on the revaluation of investments while profit after tax decreased by
97 per cent to £269,000 (2021: £7,998,000). Administrative expenses
decreased by 18 per cent to £1,429,000 (2021: £1,733,000) with prior year
numbers reflecting a bonus paid to directors and staff in 2021. Excluding the
2021 bonus, administrative expenses increased by 21 per cent due to additional
personnel resource and professional and financial expenses. The share-based
payment charge decreased to £70,000 (2021: £161,000). Basic earnings per
share were 0.49p (2021: 14.54p).
Cash balances stood at £5,850,000 as at 31 December 2022 (30 June 2022:
£4,368,000; 31 December 2021: £346,000). Net assets per share as at 31
December 2022 were 88.2p (30 June 2022: 88.5p; 31 December 2021: 84.7p) the
marginal reduction reflecting the exercise of 652,607 share options by
directors.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 December 2022
Six months ended 31 December 2022 (unaudited) Six months ended 31 December 2021 (unaudited) Year ended 30 June 2022 (audited)
Notes
£'000 £'000 £'000
Revenue
Revenue from services 203 163 329
Other operating income
Unrealised profit on the revaluation of
investments 7 400 11,914 10,908
Realised profit on disposal of investments 307 - 2,867
910 12,077 14,104
Administrative expenses (1,429) (1,733) (3,104)
Share based payments (70) (161) (329)
Other income 107 97 207
(Loss)/profit from operations (482) 10,280 10,878
Interest income on short-term bank deposits 13 1 1
(Loss)/profit from operations and before tax (469) 10,281 10,879
Taxation 5 738 (2,283) (649)
Profit and total comprehensive income attributable to the equity holders of the Company
269 7,998 10,230
Profit per share attributable to the equity
holders of the parent
Basic earnings per share 6 0.49p 14.54p 18.60p
Diluted earnings per share 6 0.47p 13.67p 17.53p
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 2022
As at As at As at
31 December 31 December 30 June
2022 (unaudited) 2021 (unaudited) 2022 (audited)
£'000 £'000 £'000
ASSETS Notes
Non-current assets
Tangible fixed assets 9 9 6
Goodwill 1,966 1,966 1,966
Financial assets at fair value through profit and loss
Equity investments 7 36,098 43,892 39,712
Debt investments 7 4,967 2,773 2,981
43,040 48,640 44,665
Current assets
Trade receivables and other current assets
942 924 1,051
Cash and cash equivalents 5,850 346 4,368
6,792 1,270 5,419
Total assets 49,832 49,910 50,084
LIABILITIES
Non-current liabilities
Deferred taxation (484) (2,507) (1,167)
(484) (2,507) (1,167)
Current liabilities
Trade and other payables (270) (809) (218)
(270) (809) (218)
Total liabilities (754) (3,316) (1,385)
Net assets
49,078 46,594 48,699
EQUITY
Called up share capital 5,566 5,501 5,501
Share premium account 14,627 14,576 14,576
Reverse acquisition reserve (1,667) (1,667) (1,667)
Share based payment reserve 1,318 1,451 1,324
Retained earnings 29,234 26,733 28,965
Total equity
49,078 46,594 48,699
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six-months ended 31 December 2022
Share-
Share Reverse acquisition based Profit
Share premium reserve payment and loss
capital account reserve account Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1st July 2021 5,501 14,576 (1,667) 1,276 18,735 38,421
Share-based payments - - - 175 - 175
Profit/comprehensive income for the period
- - - - 7,998 7,998
At 31 December 2021 5,501 14,576 (1,667) 1,451 26,733 46,594
Share-based payments - - - (127) - (127)
Profit/comprehensive income for the period
- - - - 2,232 2,232
At 30 June 2022 5,501 14,576 (1,667) 1,324 28,965 48,699
Share-based payments 65 51 - (6) - 110
Profit/comprehensive income for the period
- - - - 269 269
At 31 December 2022 5,566 14,627 (1,667) 1,318 29,234 49,078
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 31 December 2022
Six months ended 31 December Six months ended 31 December Year ended 30 June
2022 (unaudited) 2021 (unaudited) 2022 (audited)
£'000 £'000 £'000
Cash flows from operating activities
Cash used in operations (954) (1,196) (3,006)
Taxation paid (3) - -
Net cash used in operating activities (957) (1,196) (3,006)
Cash flows from investing activities
Purchase of tangible fixed assets (7) (2) (3)
Purchase equity investments (573) (69) (614)
Disposal of equity investments 3,433 - 6,525
Purchase of debt investments (525) (380) (527)
Interest received 13 1 1
Net cash from/(used in) investing activities 2,341 (450) 5,382
Cash flows from financing activities
Proceeds from issue of equity shares 98 - -
Net cash generated from financing activities 98 - -
Net increase/(decrease) in cash and cash equivalents 1,482 (1,646) 2,376
Cash and cash equivalents at beginning of period 4,368 1,992 1,992
Cash and cash equivalents at end of period 5,850 346 4,368
Cash used in operations
Profit/(loss)before tax (469) 10,281 10,879
Adjustments for:
Share-based payments 70 161 329
Depreciation 4 4 8
Interest received (13) (1) (1)
Fair value (gain) on financial assets at fair value through profit or loss
(400) (11,914) (10,908)
Realised profit on disposal of investments (307) - (2,867)
Changes in working capital:
Trade and other receivables 109 (329) (456)
Trade and other payables 52 602 10
(954) (1,196) (3,006)
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 14(th) March 2023.
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 2022 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 2022, which have
been prepared in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU.
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 2022 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 unqualified and did not contain a
statement under sections 498(2) or 498(3) of the Companies Act 2006.
3. 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 2022 as described in the Group's Annual Report for
that year and as available on our website www.frontierip.co.uk
(http://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.
4. 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.
5. Taxation
The taxation income for the six months to 31 December 2022 of £738,000 (31
December 2021: expense of £2,283,000) represents the part reversal of the
deferred tax liability on unrealised fair value gains less the reversal of the
deferred tax asset of available tax losses.
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.
6. Earnings per share
The calculation of the basic earnings per share for the six months ended 31
December 2022 and 31 December 2021 and for the year ended 30 June 2022 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 Weighted average number of shares
Earnings attributable to shareholders Basic earnings
per share
£'000 Number Pence
Six months ended 31 December 2022 269 55,108,403 0.49
Six months ended 31 December 2021 7,998 55,005,546 14.54
Year ended 30 June 2022 10,230 55,005,546 18.60
Weighted average number of shares
Diluted earnings per share Earnings attributable to shareholders Diluted earnings
per share
£'000 Number Pence
Six months ended 31 December 2022 269 57,319,284 0.47
Six months ended 31 December 2021 7,998 58,509,845 13.67
Year ended 30 June 2022 10,230 58,339,949 17.53
7. 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 1(st) July 2021 31,982 - 31,982
Additions 69 - 69
Conversion of debt 135 - 135
Reclassification (13,211) 13,211 -
Fair value increases 2,044 9,695 11,739
Fair value decreases (33) - (33)
At 31(st) December 2021 20,986 22,906 43,892
Additions 545 - 545
Fair value increases
Disposals - (3,659) (3,659)
Conversion of debt 629 - 629
Fair value increases 7,629 - 7,629
Fair value decreases (209) (9,115) (9,324)
At 30(th) June 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 31(st) December 2022 32,634 3,464 36,098
The valuation of the Group's investment in Pulsiv at 31 December 2022 was
£9,520,000, 26 per cent of the Group's total equity investments and 19 per
cent of its net assets at 31 December 2022. The valuation of the Group's
investment in CamGraPhIC increased by £1,884,000 during the six months to 31
December 2022, 76 per cent of the net fair value increase in unquoted equity
investments.
During the six months to 31 December 2022 the Group sold 349,020 American
Depositary Shares of Exscientia for net proceeds of £3,433,000 resulting in a
realised gain of £307,000. The Group's remaining investment in Exscientia,
782,400 American Depositary Shares, decreased in value by £3,543,000 during
the six months to 31 December 2022. The valuation of the Group's investment in
Exscientia at 31 December 2022 was £3,464,000, 10 per cent of the Group's
total equity investments and 7 per cent of its net assets at 31 December 2022.
Debt investments comprise the following:
Unquoted Debt Instruments
£'000
At 1(st) July 2021 2,320
Additions 380
Conversion of debt (135)
Fair value increases 246
Fair value decreases (38)
At 31(st) December 2021 2,773
Additions 147
Fair value increases
Conversion of debt (629)
Fair value increases 690
Fair value decreases -
At 30(th) June 2022 2,981
Additions 525
Fair value increases 1,507
Fair value decreases (46)
At 31(st) December 2022 4,967
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 loans made during the six months to 31 December 2022 were
to Alusid (£200,000) and Elute Intelligence Holdings (£125,000). The most
significant debt investments at 31 December 2022 were loans to CamGraPhIC
(£3,380,000), Nandi Proteins (£723,000) and Elute Intelligence (£546,000).
The valuation of the Group's debt investment in CamGraPhIC increased by
£1,492,000 during the six months to 31 December 2022, 99 per cent of the fair
value increases in unquoted debt instruments.
8. Copies of Half Yearly Report
Copies of the Half Yearly Report will be available on the Company's website,
www.frontierip.co.uk (http://www.frontierip.co.uk/) , and on request from the
Company's offices at 93 George Street, Edinburgh EH2 3ES no later than 21(st)
March 2023.
9. Equity holdings
All Group equity holdings in portfolio companies in the interim management
statement are as at 31 December 2022.
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