News blog
Sigma Capital
- BY: Andrew Hore |
- POSTED: 31/01/2011 |
Property and cleantech asset manager Sigma Capital’s stake in Frontier IP has been reduced from 77.4% to 46.7% following the latter’s move from Plus-quoted to Aim.
Frontier IP is an intellectual property developer with relationships with the University of Dundee and Robert Gordon University in Aberdeen. It has raised £1m gross from a placing at 50p a share and started trading on Aim on 31 January 2011. The shares closed the first day at 60p each.
Sigma’s 46.7% stake in Frontier IP is valued at £1.6m at the placing price of 50p a share. At the closing price on the first day the stake is valued at £1.95m.
Frontier IP is no longer a subsidiary of Sigma so its figures will not be consolidated from now on. There will be a £1.36m goodwill write-off relating to the Frontier IP flotation. The original Plus-quoted flotation price was 100p a share – 1p a share prior to a 100-for-one consolidation in December 2010.
IP Group has taken a 7% stake in Frontier IP.
Sigma sold some existing shares in Frontier IP to two directors, Neil Crabb and Jackie McKay, and IP Group and used the cash raised to buy back £327,000 of its own shares from those investors at 9.7p each. These shares are being cancelled and the Sigma share capital will be reduced by 7.2%.
There is a net cash reduction of £30,000 after these transactions. Unencumbered cash balances were £1.82m at the end of 2010 – that figure excludes a £1.25m bank guarantee that is being written off. The guarantee relates to Sigma’s SI Limited Partnership No 6 and RBS is expected to call upon the guarantee by 2012.
Neil Crabb still owns 13.3% of Sigma.
Sigma says that its second half revenues were 11% higher than the first half revenues. It made a small profit in the second half after a 5% reduction in costs.
However, the write-offs, including the bank guarantee, plus a £270,000 loss on the sale of its Frontier IP shares mean Sigma will report a 2010 loss of £3.9m. The loss on continuing operations is around £200,000.
At 9.5p a share, Sigma is valued at £4.44m.
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