Shares in home safety products company FireAngel SafetyTech (FA.:AIM) shot up 80% to 26p on Wednesday after signing a significant partnership to develop a new generation of smoke alarm.
The partner is a German energy and efficiency supplier to the real estate sector which provides services to around 12 million apartments worldwide.
FireAngel has agreed to supply the partner with a new 10-year connected smoke alarm with innovative safety and environmental features based on the firm’s Gen6 platform.
Executive chairman John Conoley said, ‘This is the most significant development for FireAngel for several years and is expected to be transformational for the group.’
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The partner will fund the development phase of the next generation of the smoke alarm while also providing the company with a £1.4 million fee for use of its background intellectual property.
In total FireAngel said the company should earn up to €21 million in royalty, management and support fees over the life of the partnership.
Under the agreement the firm will receive a royalty fee per product with a multi-million volume fee agreed for the initial 30 months. Seven million new devices are forecast to be produced with a minimum of 3.5 million.
The company will be responsible for producing the new fire alarm and will select a manufacturing partner during the development stage. It will be paid a manufacturing and support fee for each device delivered, which is expected to start in early 2024.
Today’s announcement is significant in relation to the company’s existing revenues, which are expected to be £39.9 million for the year ended 31 December 2020 compared with £45.5 million in 2019.
Full year audited results are expected to be released this month.
