Final Results

Billam PLC 21 March 2001 BILLAM PLC PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENED 31 DECEMBER 2000 FINANCIAL HIGHLIGHTS MANAGEMENT COMMENTARY Chairman's statement Summer 2000 brought a watershed in the history of Billam Plc, your company. Resurrected, refinanced and repackaged, we re-entered the arena as an investment company. Our intention is to become a serious direct investor in digital technologies, and to invest in life sciences through our associated company World Life Sciences plc. In the seven months under the current management, I am proud to say that we have made strong progress, exceeding expectations, and emerging among the best performing small investment companies over that period. On our return to market in June 2000, we had just 217 shareholders. Today there are over 5000. I would like to thank those who have stayed with us, and to welcome our newer investors. At the last Annual General Meeting, my fellow directors and I pledged to deliver growth in net assets in order to create shareholder value. Much of the infrastructure to help achieve that is now in place. There has been a dramatic change in the stock market perception of technology companies over the past year. Despite sharp falls in share prices, many excellent technologies and ideas have been developed over that period. We are positioning the company to exploit some of the opportunities they offer. A comprehensive understanding of the relevant technology and of the potential applications for it in our chosen areas is crucial. Our early progress has demonstrated that our executive team has it. Already, we have succeeded in selecting a number of investments which should come to market in the short to medium term. Two of the companies we have backed have already floated. IVU Traffic Technologies AG is now listed on the Neuer Markt in Germany, and World Life Sciences plc has come to the Alternative Investment Market of the London Stock Exchange. These were followed on 16 March 2001 by an initial public offering on AIM of shares in CybIT Holdings plc. Wherever possible, it is our intention to give shareholders the opportunity to participate in the flotation of the companies we have invested in. We are operating in exciting areas of growth. We are pleased to have been able to help create low priced opportunities for our shareholders to invest alongside us with the flotation of World Life Sciences and CybIT Holdings. We hope to provide further such opportunities in the future. Your executives are determined to develop Billam's portfolio, building a strong asset value and a regular stream of income over time. Our company has never been in a better position to deliver the promises we have made. I would like to take this opportunity to thank our founders Angus Forrest and Peter Hoskins for their sterling work on behalf of our company. I would also like to thank our new directors Juliet Hoskins and Mark Lorimer. I am aware that some shareholders have been concerned by fluctuations in our share price, and worry that they might reflect upon the company's performance. Trading in penny shares is often volatile and sometimes appears frustratingly illogical. Your directors are constantly addressing new ways of presenting proper information to shareholders, using our website, our discussion forum, news alerts via email and accessibility by telephone. We hope that by keeping investors in touch with our progress we can encourage greater shareholder understanding, confidence and loyalty. Executive Report Since 1 June 2000, Billam has made significant progress. The company has become established as a successful direct investor in serious digital technology and software platforms, and as an investor in life sciences through an associated company World Life Sciences plc. Two of the companies we have backed have floated - IVU Traffic Technologies AG and World Life Sciences plc. A third, CybIT Holdings plc floated on the Alternative Investment Market of the London Stock Exchange on 16 March 2001. Investment activity Telematics, the monitoring of remote sensing instrumentation using a combination of global positioning systems, public access radio systems and/or telephony in conjunction with computers to provide real time information which can be used to facilitate control mechanisms, has significant opportunities for growth and offers obvious and substantial benefits to prospective users. We have invested in three telematics companies with complementary skills. We have gone on to invest in software products, including a health information database and communication tool for doctors, a financial modelling application, and a platform for seamless trading and settlement in financial markets. Our Swiss subsidiary, Billam AG, has backed World Life Sciences plc, which will develop investments in life sciences. All of the companies we have invested in, except for World Life Sciences, operate in growth markets delivering business to business services with quantifiable and sustainable benefits for their customers. Our executive team believes it is crucial that the managers of any company we support should have an absolute understanding of the applications and value offered by their products or services. Performance in the period 1 June - 31 December 2000 Our objective is to increase net asset value faster than the benchmark indices of the FTSE Techmark Index, the FTSE All-Share Index, and the FTSE AIM index. Net assets per share increased by 300% in the period. During the same period: FTSE Techmark All share index fell - 1% FTSE All share index fell - 13% FTSE AIM Index fell - 13% Outlook for the portfolio Exciting and enthusiastic are terms rarely used by investment fund managers. We think the year ahead is exciting, and we are enthusiastic about Billam's ability to continue to establish itself as a serious investment company able to identify growth sectors, and market opportunities. We have pledged to deliver growth in net assets in order to drive growth in our share price. In the short to medium term, Billam has never been in a better position to deliver that pledge. Corporate status The Company is registered as Public Limited Company in terms of the Companies Act 1985. The company's shares of 0.1p each are listed on the Alternative Investment Market (AIM) of the London Stock Exchange. Subsidiary undertaking The Company has a 100% interest in Billam AG, a company registered in Switzerland. Billam AG's business is to make investments in unquoted and quoted companies. In the period to 31 December 2000 Billam AG was founded, commenced trading and made a profit before tax of £2,007,000 including an unrealised capital gain of £2,000,000. Results and dividends The net return of the Group for the year before taxation amounted to £ 4,114,000 (1999: loss £3,404,000). The directors do not recommend a dividend for the year ended 31 December 2000. Assets The net assets of the Group at 31 December 2000 totalled £6,277,000 (1999: liabilities £2,614,000). The net assets per ordinary share as at 31 December 2000 were 0.72p. Post balance sheet event On 16 March 2001 the shares of CybIT Holdings plc were admitted to trading on the Alternative Investment Market. The placing price was 3.5p and the directors estimate that this would give Billam Plc net assets of £15.6 million and net assets per share of 1.84p at that date. Communication Billam's website (www.billamplc.co.uk) provides shareholders with regular news about the company and the companies we invest in. Please register on the website to receive further news bulletins. Conclusion I would like to thank all my colleagues for their hard work, enthusiasm and support. The contribution Peter Hoskins has made to our understanding of technology platforms and analysing investment opportunities has been a major factor in the success of the business and in generating shareholder value since Spring 2000. The preliminary announcement was approved by the Board on 20 March 2001. PORTFOLIO REVIEW The directors have reviewed below the portfolio of investments currently held. The review focuses on the exciting possibilities that exist for those companies. It is the directors' intention when deciding upon investments to apply significant due diligence to the investment procedures in order to reduce risks arising from its investment. Autonomics Limited Autonomics Limited is developing its first product, Transaccs, a financial modelling tool, under the guidance of Chief Executive John Taylor. Transaccs targets the multi-million dollar worldwide market for financial planning software. We have agreed to invest £3 million against defined technology milestones in exchange for a 32.5% shareholding. This investment has attracted significant worldwide interest, notably from a number of American investment corporations. Billam AG Billam AG, a wholly owned subsidiary, is based in Bern, Switzerland. Formed to help handle investments in mainland Europe, its first holding is in World Life Sciences plc. Our original investment was £800,000. Following flotation in November, Billam AG's 42% shareholding was valued at £3 million on 31 December 2000. World Life Sciences intends to invest in life science companies with an emphasis on proteomics, genomics and combinational chemistry. CybIT Limited CybIT is the UK's first dedicated telematics Application Service Provider and Internet Service Provider. It has access to leading technology, a comprehensive range of products, and offers a first class service. Growth prospects are exponential. Billam agreed to invest a total of £1 million for 50.22% of the share capital. At the time of this report CybIT is negotiating contracts with several leading companies, and floated on the Alternative Investment Market of the London Stock Exchange on 16 March 2001. IntegriSys Limited IntegriSys, which trades as Fizz Informatics, is the fastest growing medical infomediary in the UK and is set to become an industry standard. Fizz offers doctors and nurses access to biomedical information, and allows pharmaceutical companies to deliver and retrieve information directly to and from GPs. The company is generating expanding revenue streams to take it through to profitability in 2002. Proven success in the UK will be followed by further development in Australasia, Europe and North America. Billam has invested £ 500,000 for 6.66% of the share capital. IVU Traffic Technologies AG Berlin, Germany IVU develops intelligent software which offers innovative and efficient solutions to the varied demands of a mobile society. It is one of the world's leading suppliers of IT Systems for optimising logistic processes, and has extensive expertise and a quarter of a century of experience. It is undertaking research into key technologies like traffic telematics, mobile communications and the internet, and has created an extreme information platform elogistically addressing solutions for a world on the move. Elogistics takes what appears to us to be obvious - our actual location - and incorporates this into an innovative solution to create a new dimension of fast and comprehensible information. Billam has acquired at 1% shareholding at a cost of 692,000 Euros. TigerEx.net Limited TigerEx was founded in March 2000 by Paul Barnes and Michael Waller-Bridge, formerly senior officers of the Tradepoint Stock Exchange. TigerEx aims to become the principal service company to a series of associated joint venture companies planned around the world. They will bring together stock exchanges, institutional banking houses and broker-dealers in an internet-based order routing system. Initially the proposed service will operate in the Pacific/ Oceania Region. It is designed to allow on-line investors to trade, clear and settle in any major market, including their home market, through a single consolidated account with their local broker. TigerEx can enable partners to create new financial products. It also offers institutional partners a reliable, low cost, liquid cross-border trading platform in association with participating Stock Exchanges. By extending the reach of participating markets and aggregating transactions, TigerEx aims to add liquidity and reduce total trading costs. TigerEx plans to commence service operations in the first quarter of 2001. Billam has invested $890,000 for a 3.0% shareholding. Tri-Mex Group Limited Tri-mex is a global telematic solutions provider which uniquely monitors vulnerable, valuable, perishable or hazardous cargoes in real time. It focuses on tracking and monitoring the actual cargoes, rather than just the transport vehicles, in complex global supply chains. Tri-mex systems reduce the risks and costs of movements arising from theft, poor environmental control or inefficient supply chain management. It addresses a global market in which $30 billion of cargo is stolen each year. Billam believes this investment is totally complementary with those in CybIT and IVU Traffic Technologies AG. Billam acquired a 2.75% shareholding for £1 million. CONSOLIDATED STATEMENT OF TOTAL RETURN (Incorporating The Revenue Account) FOR THE YEAR ENDED 31 DECEMBER 2000 2000 2000 2000 2000 2000 1999 Note £'000 £'000 £'000 £'000 £'000 £'000 Continuing Continuing Discontinued Discontinued operations Operations operations Total Total operations Capital Revenue Revenue Revenue Revenue Gains on 1,820 - - - 1,820 - investments Income - 287 - 287 287 637 Gross revenue and capital return 1,820 287 - 287 2,107 637 Administrative - (229) - (229) (229) (2,468) expenses Net return before exceptional 1,820 58 - 58 1,878 (1,831) items Exceptional items: Loss on 2 - - - - - (472) disposal of fixed assets Provision against subsidiary undertakings 2 - - - - - (1,044) Surplus arising on fundamental reorganisation 2 - - 2,237 2,237 2,237 - Net return before finance costs and 1,820 58 2,237 2,295 4,115 (3,347) taxation Interest payable and similar charges - (1) - (1) (1) (57) Return on ordinary activities before taxation 1,820 57 2,237 2,294 4,114 (3,404) Tax on ordinary activities 3 (500) - - - (500) 1 Return attributable to equity shareholders 1,320 57 2,237 2,294 3,614 (3,403) Return per ordinary share Basic 4 0.30p 0.01p 0.52p 0.53p 0.83p (2.1p) The total revenue column of this statement is the profit and loss of the Group. CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2000 Group 2000 1999 £'000 £'000 Fixed assets Tangible assets 1 - Investments 5,902 - 5,903 - Current assets Debtors 307 - Investments - 425 Cash at bank and in hand 751 524 1,058 949 Creditors: amounts falling due within one year (184) (3,563) Net current assets/(liabilities) 874 (2,614) Total assets less current liabilities 6,777 (2,614) Provision for liabilities and charges (500) - 6,277 (2,614) Capital and reserves Called up share capital 1,005 162 Share premium account 4,595 161 Capital reserve unrealised 1,320 - Revenue account (643) (2,937) Shareholders' funds 6,277 (2,614) CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2000 2000 2000 1999 1999 Note £'000 £'000 £'000 £'000 Net cash (outflow)/inflow from operating 5 (475) 1,434 activities Returns on investments and servicing of finance Interest received - 2 Interest paid (1) (52) Interest paid on finance leases - (7) Net cash outflow from returns on investments (1) (57) and servicing of finance Capital expenditure and financial investment Purchase of tangible fixed assets (2) (146) Sale of tangible fixed assets - 676 Purchase of investments (4,082) - (4,084) 530 Net cash (outflow)/inflow before financing (4,560) 1,907 Financing Capital element of finance lease rentals - (98) Repayment of borrowing (490) (842) Repayment of debt due within one year - (64) Issue of share capital 5,277 - Net cash inflow/(outflow) from financing 4,787 (1,004) Increase in cash in the year 6 227 903 NOTES TO THE PRELIMINARY ANNOUNCEMENT For the YEAR ended 31 December 2000 1. BASIS OF PREPARATION The preliminary announcement has been prepared under the historical cost convention, as modified by the revaluation of investment assets. The Group's accounts have been prepared in accordance with the Statement of Recommended Practice for investment trusts. The significant accounting policy of the Group is as follows; INVESTMENTS Listed investments are valued at mid market prices. Unlisted investments are valued at the Board's estimate of net realisable value. Unlisted investments are valued with reference to available information including market prices of similar companies, latest dealings, accounting information and professional advice as appropriate in accordance with the guidelines issued by the British Venture Capital Association. Realised surpluses or deficits on the disposal of investments and permanent impairments in the value of investments are taken to capital reserve - realised, and unrealised surpluses and deficits on the revaluation of investments are taken to capital reserve - unrealised. 2. EXCEPTIONAL ITEMS 2000 1999 £'000 £'000 Discontinued Discontinued operations operations Revenue Revenue Loss on disposal of fixed assets - 153 Loss on restatement of asset values transferred to - 319 current asset investments - 472 Elimination of the net assets of subsidiary undertakings from the Group financial statements and associated provisions - 1,044 Surplus arising on fundamental reorganisation 2,237 - 2,237 1,516 3. TAX ON ORDINARY ACTIVITIES The taxation for the year is made up as follows: 2000 2000 2000 2000 2000 1999 £'000 £'000 £'000 £'000 £'000 £'000 Continuing Continuing Discontinued Discontinued operations operations operations Total Total operations Capital Revenue Revenue Revenue Revenue Deferred tax 500 - - - 500 - Irrecoverable - - - - - (1) ACT 500 - - - 500 (1) 4. RETURN PER ORDINARY SHARE The return per ordinary share is based on the weighted average number of ordinary shares in issue during the year of 435,654,217 (1999: 162,000,000) and the following figures: 2000 2000 2000 2000 2000 1999 £'000 £'000 £'000 £'000 £'000 £'000 Continuing Continuing Discontinued Discontinued operations operations operations Total Total operations Capital Revenue Revenue Revenue Revenue Return after 1,320 57 2,237 2,294 3,614 (3,403) taxation Return per ordinary 0.30p 0.01p 0.52p 0.53p 0.83p (2.1p) shares The comparative figures have been restated to take account of the restructuring of share capital which took place in the year. 5. RECONCILIATION OF OPERATING RETURNS TO NET CASH FLOW FROM OPERATING ACTIVITIES 2000 1999 £'000 £'000 Operating return 1,878 (1,831) Surplus on fundamental reorganisation 2,237 - Depreciation and amortisation 1 49 Unrealised increase in investment appreciation (1,820) - Decrease in debtors 118 680 (Decrease)/increase in creditors (652) 2,536 Exceptional loss on disposal of fixed assets 123 - Exceptional gain arising on CVA (2,360) - (475) 1,434 6. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT) 2000 1999 £'000 £'000 Increase in cash in the year 227 903 Cash inflow from financing 490 1,004 Change in net debt resulting from cash flows 717 1,907 Other non-cash items 238 - Net debt at 1 January 2000 (204) (2,111) Net funds/(debt) at 31 December 2000 751 (204) 7. PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The balance sheet at 31 December 2000 and the profit and loss account, cash flow statement and associated notes for the year then ended received an unqualified audit opinion and have been extracted from the Group's 2000 statutory financial statements. However, the 1999 comparative figures for the profit and loss account only were qualified arising solely from limitation in audit evidence as a result of the administrative receivership of the former subsidiaries in that year. Those financial statements have not yet been delivered to the Registrar.

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