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THIS year, more than 560,000 people have applied to study at British universities, including in excess of 100,000 from overseas. Our higher education is particularly highly prized at postgraduate level – and it is well funded too.
Every year, about £ 8 billion is spent on university research, two thirds of which comes from the Government. Much of that research is world- class, but far too little evolves from theory into practice.
This creates a serious problem. Companies are constantly looking for clever ideas, academics are full of them, but there is a mismatch between the two and, along the way, large amounts of money are put to little use.
Frontier IP aims to bridge the gap between academia and commerce. Its shares are 82p and should increase in value as the company is involved in several highly promising young businesses.
A number of listed firms tour the university circuit l ooking for research opportunities that they can invest in and commercialise. Frontier is rather different. Instead of throwing money at promising ideas, chief executive Neil Crabbe and his team offer advice, support and industry contacts to academics. In return, Frontier receives a stake, as clever theories turn into start-up companies.
The group also takes academics’ work to industry partners at an early stage so researchers can tailor their work to what companies really need. This makes a huge difference, saving time, money and effort on both sides.
Fieldwork, for example, started out when an academic from Plymouth University started thinking about developing a robotic arm that could pick soft fruit. Frontier introduced the idea to the largest raspberry grower in the UK, supplying Tesco and all the big supermarkets. They are now working together to create a fully-fledged automated picking system, which could significantly reduce the need for human fruit-pickers.
Another firm Frontier works with, Molendotech, has patented a way to test the cleanliness of water for bathing and irrigation, and is now working with FTSE 100 group Halma to develop the technology.
Alusid, spun out of the University of Central Lancashire, recycles ceramics and industrial glass into high quality tiles. Supported by Frontier, it is already supplying Nando’s, Four Seasons Hotels and Resorts and Amazon.
Overall, Crabbe and his team have stakes in about 15 companies, spun out of universities, including Cambridge, Dundee and Heriot-Watt in Edinburgh. They have even started working with Lisbon University, as the link between academia and commerce is considerably more fractured in southern Europe than it is here.
At the same time, Frontier is establishing a reputation in industry, so companies are increasingly turning to the business when they want access to academic ideas with genuine potential.
Within Frontier’s portfolio, some firms have made such progress that they are considering floating on the stock exchange. Others may be acquired or receive serious injections of cash from deep-pocketed partners.
Crabbe, a former fund manager and 6 per cent shareholder, is highly focused on delivering returns to investors, so share buybacks and special dividends are likely in the future.
MIDAS VERDICT: Frontier is an interesting company performing a valuable service for business and academia. The stock is certainly not risk-free, but at 82p the shares should deliver rewards to the more adventurous investor.