Trading Update

RNS Number : 3934N

Frontier IP Group plc

28 September 2012

 



AIM: FIPP

FRONTIER IP GROUP PLC

("Frontier IP" or "the Group")

Trading update

The Directors of Frontier IP announce a trading update ahead of the full year results for the year ending 30 June 2012.

Since the announcement of the Group's Interim Results for the six months ended 31 December 2011, the Company has made good progress with helping its existing portfolio companies to deploy their technologies and with deepening and extending its relationships within its three university partnerships. The Company has also continued to develop new opportunities including a fund management agreement with Narec Capital Limited ("Narec Capital") and a collaboration with the University of Central Lancashire ("UCLan"), both announced in June. However, due to the slippage in the receipt of equity from several new spin-outs, which were not received until the new financial year, and also in the completion of two licence agreements, the anticipated IFRS gain will be less than market expectations and the Company is expected to report a loss for the year to 30 June 2012 of approximately £380,000.

The new financial year to 30 June 2013 has started well and the Company is benefiting from a high level of activity across its business, with a number of developments, which were originally anticipated in the second half to 30 June 2012, coming to fruition. Specifically, in the new financial year, the Company has added three new spin-out companies to its portfolio and, in particular, we are very pleased to be able to report a new collaboration agreement with the University of Dundee which is described below, alongside the existing long term partnership. The completion of the delayed licence agreements with two portfolio companies remains underway and, if concluded, would result in an uplift in valuation under the new accounting policy.

We are currently undertaking a fundraising, which is in its final stages, with the net proceeds intended to provide for the ongoing working capital needs of the business and in support of the development and growth of existing relationships, allied advisory roles, and commitments to existing funds and the establishment of sector specific funds.  The new monies raised are fundamental to the future of the business and we are making good progress and will update the market in due course.

Developments in the progress of the Company's business since the start of the new financial year include:

University of Dundee

Collaboration Agreement.  In addition to its existing spin-out commercialisation Relationship Agreement, in August 2012, Frontier IP Limited (a wholly owned subsidiary of the Company) entered into a Collaboration Agreement with University of Dundee. The objective of this collaboration is for Frontier IP and the University of Dundee to work together to define, agree and, as appropriate, establish a vehicle which funds the exploitation of commercial drug development opportunities arising from the Drug Discovery Unit at University of Dundee ("DDU"). The DDU was founded in 2006 in the university's College of Life Sciences, with the aim of translating basic science into lead compounds to validate putative drug targets, to use as tools to investigate disease pathways and, when appropriate, advance to pre-clinical drug candidates.

Tissue Repair Technologies.  In July 2012, Frontier IP was allotted equity in Tissue Repair Technologies Limited ("Tissue Repair Technologies"), a spin-out from the University of Dundee.  Tissue Repair Technologies develops novel wound healing agents based on migration stimulating factor, a naturally occurring protein, which Tissue Repair Technologies believes has particular application in patients with impaired healing, such as diabetics. Frontier IP Limited currently holds approximately 5% of the issued share capital of Tissue Repair Technologies.

Ex Scientia.  In July 2012, Frontier IP was allotted equity in Ex Scientia Limited ("Ex Scientia"), a spin-out from the University of Dundee.  Ex Scientia has been formed to exploit novel informatics and experimental methods to enable new, more effective ways of conducting drug discovery. Frontier IP Limited currently holds approximately 5.75% of the issued share capital of Ex Scientia.

Plymouth University

PoreXpert.  In September 2012, Frontier IP was allotted equity in Porexpert Limited ("PoreXpert"), a new spin-out from Plymouth University.  PoreXpert has been formed to accelerate the commercialisation activity of the Environmental and Fluid Modelling Group at Plymouth which provides software and consultancy for modelling porous systems. PoreXpert is now establishing distribution channels for a new version of its software released this month. The Company currently holds approximately 15% of the issued share capital of PoreXpert.

Outlook

While the wider economic backdrop continues to be challenging, we are encouraged by the level of activity since the start of the new financial year.  Our additional collaboration with University of Dundee has extended that relationship and we are excited by the potential opportunity this offers in the longer term.

The recent growth in the number of portfolio companies represents an opportunity for us to take on advisory roles and we expect to extend this approach to a number of our portfolio companies.

We are also seeing developments in our historic portfolio.  In particular, Heriot Watt University spin-out, Nandi Proteins Limited ("Nandi"), has recently made significant progress with a number of major food companies towards the licensing and adoption of its protein technology. Subject to it concluding licence terms, we expect to recover the significant ongoing advisory fees that are being accrued, which have been provided for to date, as well as an uplift in valuation, and we continue to work with the company to assist in the development of its business.

In addition, we are looking forward to continuing to work with Narec Capital and UCLan during the current financial year.

In summary, we believe that dependent on the successful outcome of the fundraising which is in its final stage and progressing well, Frontier IP should be well placed to make further progress and the Board remains confident about the opportunities for growth in the new financial year and beyond.

Enquiries

Company website: www.frontierip.co.uk

Frontier IP Group Plc		T: 0131 220 9491
Neil Crabb, Executive Chairman
Fairfax IS PLC		T: 020 7598 5368
(Nominated Adviser and Broker)
Stuart Gledhill / Katy Birkin
Biddicks		T: 020 3178 6378
Katie Tzouliadis / Sophie McNulty

Notes to Editor:

Frontier IP Group Plc ("Frontier IP") specialises in the commercialisation of Intellectual Property.  It establishes partnerships with individual universities and research institutions to assist with their spin-out and licensing activities and helps to maximise the commercial value of technologies emerging from their research programmes.

 

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