Shore Capital reckons Frontier IP Group PLC (LSE:FIPP, FRA:8WT), the intellectual property commercialisation group, is finally reaching the harvest stage after years of patient capital deployment.
What stands out is the gap between Frontier IP's 17p share price and what Shore sees as a conservative read on the underlying assets.
Six core holdings make up around 70% of the last reported net asset value.
Shore argues each could be worth at least 20p per Frontier IP share on realisation.
Even one successful exit at that level would lift net asset value from roughly 50p to 70p.
A base case across all six implies 170p, with better and best cases reaching 230p and 290p, respectively.
The Exscientia precedent gives the thesis its credibility.
Frontier IP turned a sub-£2,000 stake in the artificial intelligence drug discovery business into roughly £14 million of cash between 2022 and 2024.
The crucial difference now is the scale of ownership. Frontier IP held just 2.4% of Exscientia at its Series C round, but holds materially larger stakes across its current core six.
Pulsiv, the power conversion specialist, was valued at £60 million in its most recent round, with Shore flagging it as an initial public offering candidate.
Tile-maker Alusid is openly exploring an AIM flotation. 2D Photonics, where Frontier IP holds 9.1%, secured €211 million in approved Italian state aid for its CamGraPhIC subsidiary in April. Shore says that a single grant alone implies 22p of value per Frontier IP share.
The broker's central concern is balance sheet capacity to see these realisations through.
A planned equity raise of at least £4 million, accompanied by up to £2 million of debt, is designed to extend the runway without forcing premature exits.
Beyond the next round of exits, Shore Capital sees scope for share buybacks and potentially a venture capital fund seeded from realised proceeds.
The discount to net asset value has widened over five years despite operational progress within the portfolio.
Shore argues the entry point looks conservative even before any single realisation lands.
