Frontier IP Group PLC (AIM:FIPP) faced uncertain market conditions head on this financial year, successfully revitalising its investment portfolio with early-stage growth companies in the science and commerce sectors while leveraging existing investments.
Though chairman Andrew Richmond (who, after 11 years, has decided not to put himself up for reelection) said he was “disappointed” to report Frontier IP’s first pre-tax loss, he stressed the group’s resilient performance “when placed in the context of exceptionally difficult markets, particularly for early-stage technology companies, and continued economic uncertainty, high inflation and interest rates”.
Furthermore, a raft of portfolio companies have moved beyond inflection points and are now generating decent commercial contracts, with revenue generation increasing at Alusid, Celerum and Fieldwork Robotics.
The Vaccine Group successfully completed two government-funded projects; CamGraPhIC is now gaining industry traction from beyond the telecoms industry and Elute Intelligence is beta testing a product aimed at investment professionals.
Following the disposal of US-listed Exscientia shares for a £4.94 million cash realisation, Frontier IP introduced two new companies into its portfolio, Enfold Health and GraphEnergyTech.
Post period, the group took an equity stake in early-stage company Deakin Bio-Hybrid Materials.
All in all, Frontier IP penned basic losses per share of 5.85p for the year ending 30 June 2023, compared to earnings per share of 18.6p in 2022.
Net assets decreased by 8% to 8p per share, while the fair value of its equity portfolio decreased by 17% to £32.96 million.
Total cash at the end of the period was £4.6 million, compared to £4.37 million in the same period in 2022.
Going forward, Frontier IP intends to further divest its existing £2.3 million stake in Exscientia in order to reinforce its cash pile to cover operating expenses for the following 12 months.
“Our companies are striving towards creating technologies with the potential to make material impacts in the areas in which they operate,” stated Richmond. “The pipeline of innovation remains fruitful, as shown by the three new companies added during the year and after.”
He added: “Our strong relationships with industry partners and their engagement with the portfolio gives us confidence that companies are meeting market needs and demands. For all the challenges, I remain upbeat about the group's future prospects."