Doubling down on the winners

Allied Minds 26 April 2019 Update
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Allied Minds

Doubling down on the winners

FY results update

Investment companies

26 April 2019

Price

64.1p

Market cap

£154m

US$1.29/£

Parent cash ($m) as at 31 December

50.6

Shares in issue

240.7m

Free float

91%

Code

ALM

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

27.6

8.6

(45.7)

Rel (local)

22.8

0.0

(45.9)

52-week high/low

129.2p

37.3p

Business description

Allied Minds is an IP commercialisation company with a concentrated investment portfolio focused on early-stage companies within life sciences and technology. Its portfolio companies are spin-outs from US federal government laboratories and universities.

Next events

AGM

28 June 2019

Analysts

Richard Williamson

+44 (0)20 3077 5700

Victoria Pease

+44 (0)20 3077 5700

Allied Minds is a research client of Edison Investment Research Limited

Following its latest strategic review, Allied Minds has further concentrated its strategy around its three most promising investments (Federated Wireless, Spin Memory and Hawkeye 360). Each expects an important value inflection point in 2019 and anticipates further funding rounds in 2019/20. New investment for the group is on indefinite hold and HQ cash costs are being cut by a further $1.5–2.5m to ensure the group can follow its initial investments. Our estimate of FY18 NAV falls by c 33% to $277m (assuming a write-down of the healthcare assets SciFluor and Precision Biopsy pending external funding) - no major surprise given the lack of positive news on funding. The shares still trade at a 28% discount to FY18 NAV and, with clear milestones for the core assets in 2019, we are hopeful that the long downgrade cycle may now be set to reverse.

Period end

Ownership adjusted value (OAV) (US$m)

Parent-level net cash (US$m)

NAV
(US$m)

NAV/share
(p)

P/NAV
(x)

12/16

415.8

136.7

552.9

208.0

0.31

12/17

395.6

84.2

479.8

150.0

0.43

06/18

350.1

66.0

416.1

132.4

0.48

12/18

226.7*

50.6

277.3*

89.3

0.72

Note: NAV is calculated as OAV plus net cash at parent level. *FY18 NAV is based on Edison’s estimate of FY18 OAV as this is no longer disclosed by the company.

Conclusions from the strategic review

Following the portfolio rationalisation over 2017/18 to focus the business on its principal companies, together with the cash management measures announced in February 2019, management has now enacted further measures to deliver value creation: 1) focusing cash resources on key assets in the current portfolio; 2) putting new investment on indefinite hold; and 3) $1.5–2.5m of additional cuts to HQ cash costs, reducing these to $5–6m pa. Without further recourse to the markets, management wants to ensure the financial flexibility to follow-on from current investments and participate in future funding rounds. Management believes this is the optimal strategy to maximise shareholder returns in the medium term.

Portfolio rebased: Estimated NAV down by c 33%

Management recognises that it needs to be highly selective in where it allocates cash (FY18: $50.6m net cash). By our calculation, portfolio fair value falls from $350.1m at H118 to $226.7m at FY18 (a c 35% reduction), and NAV from $416.1m (H118) to $277.3m (33% lower) assuming a write-down in value of the healthcare assets, SciFluor and Precision Biopsy, given the lack of positive news on funding. Allied Minds shares now trade at a 28% discount to FY18 NAV.

Looking ahead to commercialisation

With clear milestones for the core assets in 2019 (Hawkeye 360 – multiple product launches; Federated Wireless – FCC approval; Spin Memory – foundry contracts), we are hopeful that the long downgrade cycle may now be set to reverse. Given the significant rebasing of the portfolio and the NAV, we believe there is scope for Allied Minds’ NAV to rise over a 12-month horizon as commercialisation of the portfolio companies is realised.

Investment summary

Strategic review

Following the portfolio rationalisation over 2017/18 to focus the business on its principal portfolio companies, together with the cash management measures announced in February 2019, management has now enacted further measures to deliver value creation:

1.

focus remaining cash resources on key assets in the current portfolio;

2.

new investment on indefinite hold; and

3.

further cuts to central costs (opex to be reduced further from $7.5m to $5–6m pa).

Together, these measures are intended to give Allied Minds the best opportunity to deliver on the promise of its investment model, without further recourse to the financial markets, to maximise shareholder returns over the medium term.

Allied Minds has stated that key shareholders have expressed support for these measures.

1) Focus on key assets in the current portfolio

Allied Minds has further concentrated its strategy around the three technology investments most likely to deliver commercial revenues in the short term and shareholder value in the medium term. These businesses have all been validated by recent external funding rounds: Spin Memory (Arm, Applied Materials); HawkEye 360 (Raytheon); and Federated Wireless (Charter, Arris, American Tower).

Each of these companies has an important value inflection point expected in 2019 and each anticipates further funding rounds in 2019/20. Without further recourse to the markets, management wants to ensure the financial flexibility to follow-on from current investments and participate in later rounds. Management believes that these will be large funding rounds, and though Allied Minds may not be able to participate pro rata, the company wants to ensure the flexibility to protect its current investment position to the extent possible. The alternative would be to exit these investments following initial commercialisation, which management believes would be premature and would not maximise shareholder value.

In the event of portfolio company monetisation, management has confirmed that it expects to return net proceeds to shareholders subject to potential follow-on investment opportunities within the existing portfolio and working capital requirements.

BridgeSat remains a core holding for Allied Minds, also recently validated by external investors and performing to plan, but is not expected to achieve commercialisation in a similar timeframe, and, as such, is not an immediate focus for the company.

Given the company’s limited financial resources ($50.6m at FY18), management recognises that it needs to be highly selective with its cash reserves. Allied Minds, together with certain key shareholders, provided bridge financing to Precision Biopsy and SciFluor, but the values of these investments have now been substantially written down to the cash value of Allied Minds’ latest investment ($2.5m and $2.0m, respectively), pending a successful external funding round.

Other than the six assets set out above, Allied Minds also has early-stage investments in four businesses: TableUp, Orbital Sidekick, QuayChain and Spark Insights. As recent investments, these are all held at the value of the latest funding round.

2) New investment on indefinite hold

As part of the review, Allied Minds has also determined to suspend new investment activities for an indefinite period. This will allow the company to focus investment on the current portfolio as well as allowing the company to cut the size of its investment team and reduce central costs. Management believes that through its ongoing portfolio activities, it will be able to retain key relationships with federal authorities in sectors of interest to Allied Minds. Once management has delivered returns from existing investments and returned surplus cash to shareholders, it will then be well positioned to restart new investment activities.

3) Further cash management initiatives

As at FY18, Allied Minds reported net cash at the parent level of $50.6m (FY17: $84.2m). As discussed in our initiation report, Allied Minds announced cuts to central costs (7 February 2019) to extend its cash runway to 2021. These cuts had the effect of reducing the central overhead to $7.5m pa. However, through the further measures announced with the FY results (cessation of new investment, cuts to personnel), Allied Minds intends to reduce central costs by a further $1.5–2.5m (to between $5–6m) to ensure the group can follow-on from its initial investments in future funding rounds.

The intention behind these initiatives is to allow Allied Minds to marshal its cash resources to focus on delivering value from its existing investment portfolio (particularly focused on its three most promising investments: Federated Wireless, Spin Memory and Hawkeye 360). This should afford management a degree of flexibility on the timing and level of participation in future funding rounds in order to maximise value to shareholders. Management wants to avoid being forced to exit investments prematurely, or to be diluted unnecessarily, due to a lack of follow-on funding.

Portfolio update

We provide below a summary of each of Allied Minds’ 10 ongoing investment holdings, together with 2018 progress reviews and 2019 milestone targets for the four principal technology companies.

Spin Memory: A $52m Series B funding round was announced in November 2018, together with a commercial agreement with ARM for the licensing of its Endurance Engine design IP to address static random-access memory (SRAM) applications, and a commercial agreement with Applied Materials to create a comprehensive embedded MRAM solution. Commercialisation for Spin Memory entails negotiation and signing of contracts with semiconductor foundries.

Exhibit 1: Spin Memory progress and objectives

Progress in 2018

2019 key operational management objectives

$52m Series B financing round (November 2018).

Licensing agreement with ARM.

Commercial agreement with Applied Materials.

Both agreements include a competitive revenue share over future sales.

Demonstrated efficiency gains of 40–70% when applying STT’s Spin Polarizer to any MRAM device, improving data retention (>10,000x) with reduced power consumption.

Demonstrated up to six orders of magnitude endurance enhancement.

Appointed John Kispert as independent director and chairman.

Create proofs of concept in silicon that demonstrate the superior performance of Spin Memory’s technologies.

Leverage exclusive licensing agreements with Applied Materials and ARM Limited to bring technology IP into the mainstream.

Build strong commercial and government customer backlog for new use cases in AI, ADAS, 5G, IoT and more.

Source: Allied Minds

Hawkeye 360: following the $15m Series A funding round in September 2018, Hawkeye 360 successfully commissioned its Pathfinder satellite cluster launched in December 2018. On the back of this important milestone, HawkEye 360 becomes the first commercial enterprise to independently detect and geolocate sources of diverse RF signals. Now that its initial satellite cluster has been commissioned, Hawkeye 360 will go to market with a full suite of commercially available RF analytics products over the course of 2019.

Exhibit 2: Hawkeye 360 progress and objectives

Progress in 2018

2019 key operational management objectives

Pathfinder cluster of satellites successfully launched and deployed in December 2018 via SpaceX Falcon 9 Rocket.

Post period end, pathfinder cluster successfully commissioned.

Continued backlog build – across government and commercial clients.

Beta testing completed for first maritime domain awareness (MDA) product.

$14.9m Series A-3 funding round completed in September 2018, led by Raytheon with participation from Sumitomo et al.

Successfully launch three core analytic products in the Spectrum Awareness product line, RF Geo, RF Survey and Emitter Data Base.

Complete development of next cluster and ready for launch.

Commence development of follow-on clusters two, three and four, for launch in 2020.

Source: Allied Minds

Federated Wireless: following its $42m Series B funding round in September 2017, Federated Wireless submitted a formal application to participate in the Initial Commercial Deployment (ICD) of CBRS spectrum alongside 20 named partner end-users including wireless operators, cable operators, tower companies, managed service providers (MSPs) and original equipment manufacturers (OEMs). ICD approval followed by FCC certification, both anticipated in 2019, would be major milestones for Federated Wireless.

Exhibit 3: Federated Wireless progress and objectives

Progress in 2018

2019 key operational management objectives

In May 2018, Federated Wireless jointly announced with Verizon, Ericsson and Qualcomm the first successful test of CBRS spectrum sharing.

Verizon, Google, Sierra Wireless and Samsung confirmed product launches to include CBRS compliant chipsets.

FCC announced it was seeking proposals to permit CBRS spectrum access system (SAS) administrators to operate in specified geographies.

On 10 September 2018, Federated Wireless announced that it had submitted a formal application to participate in ICD alongside 15 named partners (subsequently amended to include 20 partner end-users).

Nationwide ESC network installed and nearing completion ahead of full FCC approval – expected to be the first commercially available network.

In November 2018, Federated Wireless, in partnership with Amazon Web Services (AWS), Athonet and Ruckus Networks, launched a fully cloud-native private mobile network solution for industrial IoT applications.

ICD approval, followed by FCC certification.

Complete build out of nationally available ESC network to meet customer requirements.

Build infrastructure and capacity to support scale of the business.

Source: Allied Minds

BridgeSat: completed a $10m Series B round led by Boeing HorizonX Ventures, with proceeds used to accelerate the build out of BridgeSat's optical ground station (OGS) network as well as broadening the relationship between the two companies. The Network Operations Centre is now operational alongside its first ground station.

Exhibit 4: BridgeSat progress and objectives

Progress in 2018

2019 key operational management objectives

Denver NOC completed and operational in January 2018.

First optical ground station installed and operable at Sierra Nevada site.

In May 2018, announced agreements to provide space laser terminals and data services to ICEYE – the world’s first commercial microsatellite synthetic-aperture radar (SAR) constellation.

NICT (Japanese state funding IT institute) contract progressing.

Progressed development of advanced optical communications.

Signed five US government revenue contracts.

Successfully demonstrate one-to-many communications solution and end-to-end service for ICEYE.

Develop strategic partnership program with Boeing and others.

Expand the capacity of the global ground network through industry partnerships and ground station installations.

Build strong commercial and government customer backlog.

Source: Allied Minds

Precision Biopsy: secured $5.0m of bridge financing from existing investors to support the company to completion of a financing round to fund its pivotal SCORE study. Completion of the SCORE study is dependent on a successful external fund-raising round. The valuation is substantially impaired due to a prolonged inability to attract new external financing, and limited cash available to fund its future operations. Pending a successful external financing, the investment is held at the cash cost of Allied Minds’ investment in the bridge financing ($2.0m) announced in February 2019.

SciFluor: secured $4.0m of bridge financing from existing investors to refocus its strategy on ophthalmology and support the company to completion of a Series B round to fund Phase II trials for its SF0166 topical eye drop treatment for retinal disease. Phase II trials are dependent on a successful external fund-raising round. The valuation is substantially impaired due to a prolonged inability to attract new external financing, and limited cash available to fund its future operations. Pending a successful external financing, the investment is held at the cash cost of Allied Minds’ investment in the bridge financing ($2.5m) announced in February 2019.

TableUp: a software provider enabling end-to-end transparency through the restaurant supply chain to enable more effective inventory and operations management. Allied Minds led the Series A round with an investment of $4.0m for a significant minority stake.

Orbital Sidekick: developing capabilities in aerial and space-based hyperspectral imaging and analytics, initially for the oil and gas industry. Orbital Sidekick’s Spectral Intelligence platform is designed to enable efficient monitoring of natural resource assets and infrastructure integrity.

QuayChain: developer of CBRS-enabled Smart Industrial Hubs in multi-user industrial locations such as ports, airports, rail and inland transport hubs and large industrial real estate complexes, enabling operators and users to secure efficiencies in supply chain management using real-time data. Allied Minds invested $0.5m in a seed funding round in September 2018, giving Allied Minds a 72.22% holding. Post period end, Allied Minds invested an additional $350,000 in convertible notes.

Spark Insights: Spark Insights is an advanced analytics company developing data products for the rapidly growing property insurance analytics market. Allied Minds formed Spark Insights in late 2018 and completed a $3.2m seed financing post period end in April 2019.

Financial review

In 2018, Allied Minds invested $84.9m (FY17: $81.1m) into new and existing portfolio companies, including $51.4m (FY17: $35.1m) from third-party investors.

The business recorded FY18 revenues of $5.6m (FY17: $5.0m) mainly from non-recurring engineering (NRE) and service contracts, with the low revenues reflecting the early stage nature of the portfolio, largely pre-commercialisation.

FY18 net profit of $47.3m (FY17: loss of $111.1m) reflects finance income of $92.9m (FY17: loss of $6.5m) from the fair value accounting adjustment of the portfolio company preferred shares liability balance, together with $42.8m (FY17: $0.0m) from the deconsolidation of two of the company’s existing portfolio companies, HawkEye 360 and Spin Memory (as Allied Minds’ holding has fallen below 50%), and finally a net gain of $3.9m from the disposal of assets at Percipient Networks. This is offset by SG&A and R&D spending of $49.3m (FY17: $55.2m) and $44.9m (FY17: $49.0m), respectively, to support portfolio development activities.

Valuation

Revised valuation policy

Allied Minds has indicated that it will no longer provide fair value updates (OAV) for portfolio companies. The rationale is that this has been detrimental to Allied Minds in recent portfolio company negotiations and, given that the portfolio companies are pre- or early-revenue stage companies, management does not believe that DCF-based valuations are useful to investors.

Instead, Allied Minds will report “qualitative and quantitative disclosure”, together with details of the latest funding round as well as its fully-diluted equity interest in each investment.

This new disclosure framework has been applied in the FY18 results, meaning that we have had to build our own fair value calculation based on disclosures offered in the results statement.

Portfolio rebased: estimated NAV down by c 33%

Given the company’s financial resources (FY18: $50.6m net cash), management recognises that it needs to be highly selective in where it allocates cash. By our calculation, portfolio fair value falls from $350.1m at H118 to $226.7m at FY18 (c 35% reduction), and NAV from $416.1m (H118) to $277.3m (33% lower) assuming a write-down in value of the healthcare assets, SciFluor and Precision Biopsy. Allied Minds shares now trade at a 28% discount to our estimate of FY18 NAV ($277.3m).

We break down the fair value by investment in Exhibit 5 below:

Exhibit 5: Investment portfolio valuation

Company

Business description

Edison
estimated value
26/2/19 (US$m)

31/12/18
post-money valuation (100%)

AM holding 31/12/18

Adjusted value* 31/12/18 (US$m)

AM fully diluted holding
31/12/18

Basis of estimate for 31/12/18 fair value

Spin Memory

MRAM Semiconductor memory

72.0

172.0

43%

73.4

34%

Valuation of last round

HawkEye 360

RF data analytics company

43.0

89.9

48%

43.4

39%

Valuation of last round

Federated Wireless

Cloud-based SaaS business

63.0

121.5

52%

63.5

43%

Valuation of last round

BridgeSat

Optical communications service provider

28.0

38.0

81%

30.9

63%

Valuation of last round

Precision Biopsy

Medical device and analytics company

52.0

95.4

65%

2.5

55%

Cash value of bridge round

SciFluor

Developer of a topical eye droplet treatment

63.0

130.7

70%

2.0

60%

Cash value of bridge round

TableUp

Restaurant supply chain software provider

4.3

12.0

36%

4.3

30%

Valuation of last round

Orbital Sidekick

Space-based hyperspectral imaging and analytics

3.9

11.7

33%

3.9

30%

Valuation of last round

QuayChain

Developer of CBRS-enabled Smart Industrial Hubs

0.6

0.8

72%

0.6

65%

Valuation of last round

Spark Insights

Property insurance analytics

2.3

3.2

71%

2.3

60%

Valuation of last round

Other investments

18.1

Fair value (OAV)

 

350.1

 

 

226.7

 

Net cash held at the parent company

66.0

50.6

NAV

416.1

277.3

Source: Allied Minds, Edison Investment Research. Note *Based on valuation in latest funding round except for SciFluor and Precision Biopsy which have been substantially written down pending successful external financing rounds.

Technology investment company

Following the changes announced in its FY18 results, Allied Minds has focused its portfolio on 10 investments: three of these (Spin Memory, Hawkeye 360 and Federated Wireless) have been validated by external investment and are moving towards commercialisation in 2019; BridgeSat has also been validated by external investment but with a longer path to commercialisation; four are early-stage (TableUp, Orbital Sidekick, QuayChain and Spark Insights); and two have been seeking external investors for some time (SciFluor and Precision Biopsy) and as such are held at an impaired value.

Given its narrowed portfolio, Allied Minds now starts to look less like its IP commercialisation peers and could increasingly be viewed as a technology holding company, with look-through to a small number of interesting technology businesses.

Based on its rebased portfolio, Allied Minds trades at a 28% discount to our estimate of FY18 NAV, more closely in line with its immediate peer group of IP commercialisation companies (Exhibit 6).

Exhibit 6: Peer group comparison

 

Price

Currency

Market cap (m)

NAV (m) (last reported)

Cash/(debt) (m)

NAV premium/ discount

Allied Minds

64.1

GBP

154.3

215

39

0.72

Arix Bioscience

154

GBP

207.8

270

91

0.77

IP Group

99.1

GBP

1,050

1218

219

0.86

Malin Corporation

5.40

246.7

392

(12)

0.63

Mercia Technologies

36

GBP

109.2

125

38

0.87

Source: Refinitiv data; Edison Investment Research. Note: Priced as at 25 April 2019.

Looking ahead to commercialisation

With clear milestones for the three most promising assets in 2019 (Hawkeye 360 – multiple product launches; Federated Wireless – FCC approval; Spin Memory – foundry contracts), we are hopeful that the long downgrade cycle may now be set to reverse. Given the significant rebasing of the portfolio and the NAV, we believe there is scope for Allied Minds’ NAV to rise over a 12-month horizon as commercialisation of the portfolio companies is realised.


Exhibit 7: Financial summary

$'000

2014

2015

2016

2017

2018

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

7,715

3,300

2,664

5,001

5,561

Cost of Sales

(5,416)

(3,925)

(5,563)

(5,242)

(2,827)

Gross Profit

2,299

(625)

(2,899)

(241)

2,734

Normalised operating profit

 

 

(47,510)

(89,372)

(103,925)

(94,542)

(83,583)

Amortisation of acquired intangibles

0

0

0

0

0

Exceptionals

(1,479)

(309)

(1,365)

(2,363)

(545)

Share-based payments

(8,939)

(7,041)

(8,385)

(7,562)

(7,413)

Reported operating profit

(57,928)

(96,722)

(113,675)

(104,467)

(91,541)

Net Interest

222

670

2,318

305

1,313

Joint ventures & associates (post tax)

0

0

0

0

(1,301)

Fair value changes

0

(1,937)

(17,585)

(6,953)

138,841

Profit Before Tax (norm)

 

 

(47,288)

(90,639)

(119,192)

(101,190)

55,270

Profit Before Tax (reported)

 

 

(57,706)

(97,989)

(128,942)

(111,115)

47,312

Reported tax

0

0

0

0

0

Profit After Tax (norm)

(47,288)

(90,639)

(119,192)

(101,190)

55,270

Profit After Tax (reported)

(57,706)

(97,989)

(128,942)

(111,115)

47,312

Minority interests

12,228

20,192

32,609

35,337

(7,990)

Discontinued operations

0

0

0

0

0

Net income (normalised)

(35,060)

(70,447)

(86,583)

(65,853)

47,280

Net income (reported)

(45,478)

(77,797)

(96,333)

(75,778)

39,322

Basic average number of shares outstanding (m)

186

215

217

236

240

EPS - basic normalised ($)

 

 

(0.19)

(0.33)

(0.40)

(0.28)

0.20

EPS - diluted normalised ($)

 

 

(0.19)

(0.33)

(0.40)

(0.28)

0.20

EPS - basic reported ($)

 

 

(0.24)

(0.36)

(0.44)

(0.32)

0.16

Dividend ($)

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

n/a

(57.2)

(19.3)

87.7

11.2

Gross Margin (%)

29.8

-18.9

-108.8

-4.8

49.2

Normalised Operating Margin

n/a

n/a

n/a

n/a

n/a

BALANCE SHEET

Fixed Assets

 

 

44,039

92,784

38,232

28,369

86,096

Intangible Assets

3,409

4,384

2,762

1,074

1,221

Tangible Assets

16,330

34,173

31,882

26,627

5,997

Investments & other

24,300

54,227

3,588

668

78,878

Current Assets

 

 

248,991

158,427

232,007

184,792

107,034

Stocks

2,919

1,511

2,551

0

0

Debtors

6,305

7,342

5,900

15,642

6,400

Cash & cash equivalents

224,075

105,555

209,151

158,075

100,234

Cash at parent*

 

 

n/a

n/a

136,700

84,200

50,600

Other

15,692

44,019

14,405

11,075

400

Current Liabilities

 

 

(62,480)

(108,974)

(155,402)

(200,202)

(69,557)

Creditors

(11,339)

(14,268)

(13,941)

(14,276)

(13,030)

Tax and social security

(947)

(395)

(458)

(4,296)

(2,333)

Short term borrowings

(213)

(228)

(115)

0

0

Subsidiary preferred shares

(49,981)

(94,083)

(140,888)

(181,630)

(54,194)

Long Term Liabilities

 

 

(717)

(863)

(720)

(867)

(436)

Long term borrowings

(338)

(112)

0

0

0

Other long term liabilities

(379)

(751)

(720)

(867)

(436)

Net Assets

 

 

229,833

141,374

114,117

12,092

123,137

Minority interests

4,946

10,631

20,797

59,241

4,490

Shareholders' equity

 

 

234,779

152,005

134,914

71,333

127,627

CASH FLOW

Op Cash Flow before WC and tax

(44,618)

(85,286)

(97,290)

(88,440)

(77,525)

Working capital

(981)

2,652

468

(2,477)

6,033

Exceptional & other

0

0

0

0

(283)

Tax

0

0

0

0

0

Net operating cash flow

 

 

(45,599)

(82,634)

(96,822)

(90,917)

(71,775)

Capex

(1,764)

(23,213)

(4,087)

(1,522)

(9,110)

Acquisitions/disposals

(38,967)

(51,786)

74,816

5,853

(18,884)

Net interest

222

716

1,602

138

896

Equity financing

154,408

2,443

79,319

1,595

1,594

Dividends

0

0

0

0

0

Other

54,473

36,165

48,993

33,892

39,438

Net Cash Flow

122,773

(118,309)

103,821

(50,961)

(57,841)

Opening net debt/(cash)

 

 

NA

(223,524)

(105,215)

(209,036)

(158,075)

FX

0

0

0

0

0

Other non-cash movements

0

0

0

0

0

Closing net debt/(cash)

 

 

(223,524)

(105,215)

(209,036)

(158,075)

(100,234)

Source: Company accounts. Note: *For clarity, cash at parent has been broken out as a separate line from cash & cash equivalents. As a line item, it does not form part of the calculation for current assets.

General disclaimer and copyright

This report has been commissioned by Allied Minds and prepared and issued by Edison, in consideration of a fee payable by Allied Minds. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the Edison analyst at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a) (11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Allied Minds and prepared and issued by Edison, in consideration of a fee payable by Allied Minds. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the Edison analyst at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a) (11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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