In this Research Note, we examine FireAngel Safety Technology Group plc, a UK AIM-listed company, founded in 1998, with a product portfolio of smoke alarms, CO alarms, heat alarms and accessories. Based on their 2022 Annual Report, investor presentations and press releases, this analysis covers their product portfolio, 2022 financial results and the June 2023 strategic review with Memoori’s view of possible outcomes.
With a growing emphasis on IoT technology, the group provides safety-critical connected home technology, for housing authorities, landlords and homeowners alike.
FireAngel Connected is a purpose‐built solution for home safety. Using Connected, social landlords can remotely monitor interlinked alarms and environmental sensors, access real‐time status and compliance updates, and view diagnostic reports in a more intelligent way to manage properties and protect residents.
FireAngel Predict is built as standard into FireAngel’s Connected smoke and heat alarms and runs an algorithm, with a patented application, that spots trends of behaviours logged by devices, creating a map of fire safety triggers and categorising properties as high or low risk. When paired with effective interventions Predict aims to stop preventable fires happening in the first instance, providing an increased level of fire safety in social housing.
The company believes that FireAngel’s cloud based patented technology extends their ability from saving lives to potentially preventing fires in the future. It is a source of behavioural data unique to FireAngel and can include data from other sources.
FireAngel’s Home Environment Gateway delivers a resident safety solution, encompassing fire safety, AI‐driven risk stratification and background environmental monitoring with temperature and humidity sensors incorporated to identify properties at risk of developing damp and mould. Through additional Zigbee sensors, the solution future-proofs social housing properties and enables providers to adapt and scale the networks as legislation or needs evolve.
FireAngel has delivered in excess of 80 million safety products, protecting over 25 million homes in the European home safety products market. FireAngel manufactures CO alarm sensors at its Canadian subsidiary, Pace Sensors. All other manufacturing is outsourced to Flex in Poland and Siterwell in China. The Company has an extensive portfolio of over 80 patents in Europe, the US and other selected territories.
FireAngel Financial Results
In 2022, the Group delivered strong revenue growth, of 32% to £57.5 million (2021: £43.5 million), despite being constrained by supply chain issues and macro‐economic challenges. 69% of revenues were generated in the UK, the remainder were international sales, particularly the Netherlands, Germany, Hungary and Singapore.
The Group’s adjusted EBITDA for the year amounted to £1.7 million (2021: £0.3 million). The underlying operating loss for the year amounted to £4.8 million (2021: £3.4 million). After taking account of non‐underlying items of £1.1 million (2021: £0.3 million) and finance charges of £0.2 million (2021: £nil), as a result of interest on borrowings in the year, the Group reported a loss before tax of £6.1 million (2021: loss before tax £3.7 million).
An extensive review of the Group’s operations and cost base took place in Q2 2023 to help ensure that the Group is best positioned to return to profitable growth as soon as possible.
On 5th June 2023, The Group approved the details of a placing, subscription and open offer to raise £6.1 million (gross), £5.4 million net, in order to reduce net debt (excluding lease liabilities) and support the increased working capital and investment requirements for its growth and strategic ambitions.
Following completion of the fundraising, the Board committed on the 6th June to undertake a strategic review to explore options to realize value for all shareholders as soon as reasonably practicable which may or may not involve a sale of the Company.
While the strategic review may not necessarily result in an acquisition, Memoori believes that this company could be a target for leading fire safety companies such as Halma, Honeywell or Johnson Controls.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.