Frontier IP Group plc Alusid raises £1.34m to scale up manufacturing (1499B)

TIDMFIPP

RNS Number : 1499B

Frontier IP Group plc

18 September 2018

RNS / RNS

AIM: FIPP

18 September 2018

Frontier IP Group Plc

("Frontier IP" or the "Group")

Portfolio news - Alusid raises GBP1.34 million to scale up manufacturing of innovative, sustainable building materials

Frontier IP, which specialises in commercialising university intellectual property, today announces that portfolio company, Alusid Limited (the "Company" or "Alusid"), has raised GBP1.34 million through a private funding round to support the design, planning and location of a new factory to transform its production capacity.

The fundraising has been supported by new and existing investors, including Frontier IP. The Group has converted a GBP348,000 loan into new equity in Alusid.

The fundraising values the Company at GBP4.86 million, meaning Frontier IP's 35.6 per cent stake is worth GBP1.73 million, up from the previous valuation of GBP700,000 for the 39 per cent held pre-fundraising. The funding round remains open for further investment up to a total of GBP1.75 million until 31 December 2018.

University of Central Lancashire spin-out Alusid uses a patented process to manufacture sustainable, high-quality building materials by recycling industrial waste ceramics and glass, which would otherwise go to landfill. Products are sold under the brand name SilicaStone.

Currently, the company makes table tops, tiles and other surfaces through a batch process using three kilns at its plant in Preston, Lancashire.

The proceeds of the fundraising will be invested in developing a new factory based on a continuous flow process, where products are fired by being fed onto a conveyer belt system, called a roller hearth tunnel kiln, in a steady stream.

The move follows the successful testing of a pilot production line with world-leading Italian ceramic -equipment company, Sacmi Group, which will also help to design the new factory. The Alusid process means the factory will be much more energy efficient than those used for making conventional tiles.

The plant is expected to start production in 2020. Once it is in operation, Alusid's capacity will rise from 4,000m(2) a year to 30,000m(2) a month, based on a single line producing tiles. Currently, it is estimated the cost of building a factory is about GBP10 million. Options being explored to finance the build include an initial public offering.

Alusid is attracting strong interest, and currently has more than 100 projects in its pipeline. 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 won this year's Jonathan Hindle Prize for outstanding design in 2D materials, awarded by The Furniture Makers' Company.

The Company is also actively exploring opportunities for international expansion, either through licensing or establishing joint ventures. Initial interest has been expressed by organisations in the United States, China and Portugal.

Allenby Capital Limited acted as broker to Alusid in connection with the funding round.

Alusid co-founder and chief operating officer Dr Alasdair Bremner said: "The building industry is increasingly looking for innovative sustainable products such as SilicaStone. This successful fund-raising will enable Alusid to move to the next stage in development where we can really capitalise on the economies of scale coupled with lower energy and material costs."

Frontier IP chief executive Neil Crabb said: "We're delighted with the success of the Alusid funding round and the belief shown by investors in the potential of the Company. With consumers increasingly focused on sustainability and the impact of waste on the environment, we are confident that Alusid has a very bright future."

ENQUIRIES

 
                                               T: 0131 240 1251 
 
   Frontier IP Group Plc 
 Neil Crabb, Chief Executive 
  Andrew Johnson, Communications and             M: 07464 546 025 
  Investor Relations 
  [e-mail] 
  Company website: www.frontierip.co.uk 
 Cenkos Securities plc (Nominated Adviser      T: 0131 220 6939 
  and Joint Broker) 
 Neil McDonald / Beth McKiernan 
 Peterhouse Corporate Finance Limited          T: 020 7469 0935 
  (Joint Broker) 
 Lucy Williams 
 Kreab (Financial PR)                          T: 020 7074 1800 
 Robert Speed / Matthew Jervois 
  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 material 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. 
 

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September 18, 2018 08:56 ET (12:56 GMT)