Interim Results

NewMedia SPARK PLC 20 December 2000 20 December 2000 NewMedia SPARK Plc Interim Results for the six months ended 30 September 2000 NewMedia SPARK Plc ('SPARK') today announces its interim results for the six months ended 30 September 2000: * Total assets: £172.7m - 23% cash (£39m) - 70% (£120.8m in 49 companies) * Consolidated net asset value per share 54p (77p as at 31 March 2000) * Total issued share capital increased to 321.3m shares * Pre-tax losses: £1.4m (pre-tax profits £2.8m for period 26 July 1999 to 31 March 2000) * Acquisitions of Softtechnet.com PLC and NewMedia Investors Ltd completed * International expansion: - Operations commenced in Germany and Spain - Presence established in India * Since 30 September 2000, SPARK has acquired Internet Indirect plc which will contribute approximately £70m in cash and 6 investments Michael Whitaker, Chief Executive Officer said: 'Over the past six months, SPARK has consolidated its European presence and continued to build its portfolio. Nevertheless, in view of the severe turmoil in TMT markets worldwide in recent months, the Board has taken a conservative view of the carrying value of the portfolio. We remain optimistic about the long term future of many areas of the TMT sector and will continue to pursue our strategy of investment in early stage technology companies. SPARK is now a leading investor in this sector in Europe with a balanced portfolio of TMT investments which we believe will deliver substantial returns to our shareholders in the medium to long term.' For further information, please contact: Michael Whitaker Tel: 020 7851 7600 NewMedia SPARK Isabel Petre Buchanan Communications Tel: 020 7466 5000 Chief Executive Officer's Statement Introduction In our first Annual Report I highlighted the importance to SPARK of growing the scale of our organisation as well as increasing our presence in Europe in order to harness the tremendous opportunities for early stage investing in the technology sector. I am pleased to report that, over the past six months, SPARK has opened offices in Berlin and Madrid and established a presence in India. SPARK has also completed the acquisitions of Softtechnet.com PLC, NewMedia Investors Ltd and, since 30 September 2000, of Internet Indirect plc. These events will ensure that SPARK has sufficient financial and human capital to develop and expand its portfolio in a balanced and diversified manner - enabling us to strengthen our leading position in early stage technology investment. Clearly the last six months, and in particular the last few weeks, have been a period of extraordinary turmoil in the technology, media and telecoms ('TMT') markets worldwide. We regard this as an inevitable reaction to the equally extraordinary period of speculative excess that preceded it. In the short term, it is difficult to judge when TMT markets will experience a sustained recovery. However, we remain optimistic about the long term future of many areas of the TMT markets. In particular we continue to concentrate our investments on core software applications, communications infrastructure businesses and certain areas of digital media such as music and financial products. However we do not share the blanket pessimism of many commentators over the prospects for the 'dotcom' sector - indeed several of our 'dotcom' investments are making considerable progress and are beginning to develop into meaningful businesses. Results Total net assets as at 30 September 2000 amounted to £172.7 million of which 23% represented cash (£39 million) and 70% investments (£120.8 million in 49 companies). The total number of issued shares has increased to 321.3 million. In the six months to 30 September 2000, pre-tax losses amounted to £1.4 million compared to pre-tax profit of £2.8 million in the period 26 July 1999 to 31 March 2000. Unrealised losses arising principally from the revaluation of the investment portfolio have led to the decline in the consolidated net asset value per share of 30% from 77p to 54p, and by 25% from 71p to 53p taking into account unexercised warrants. Current activities SPARK has strengthened its human and financial capital through three transactions. In June 2000 SPARK successfully completed the acquisition of Softtechnet.com PLC for SPARK shares and warrants. The acquisition gave SPARK a portfolio of five early-stage technology companies, approximately £23 million of cash and an established vehicle through which to make investments in India. In September SPARK completed the acquisition of New Media Investors Ltd for SPARK shares. SPARK has gained full control over the valuable deal origination and extensive investment management and corporate finance skills held by NewMedia Investors Ltd. Finally, in November 2000, SPARK acquired Internet Indirect plc for a combination of SPARK shares and warrants as well as EO shares held by SPARK. The Internet Indirect plc acquisition will bring six high technology and internet-related investments to SPARK as well as approximately £70 million of cash. The goodwill arising on acquisitions will be written off over 5 years on a straight-line basis from the dates of acquisition. In the period to 30 September staff numbers rose by 10 to 50 employees based in London, Stockholm, Berlin, Madrid and India. Portfolio review In the period to 30 September 2000 SPARK made 19 follow-on investments in existing portfolio companies and 12 new investments. Core software, B2B infrastructure and digital television companies now represent 70% of the portfolio in value and 45% in number. Geographically, investments by number are spread as to 55% in the UK, 31% in Sweden, 8% in India, 4% in other European countries and 2% in the USA. Overall, we believe that our portfolio remains well balanced and is in a strong position to benefit from any sustained market upturn. Many of our investee companies continue to make substantial progress and several show strong cash flow and are now well placed to achieve flotations or disposals once market conditions allow. SPARK values its portfolio of investments on a conservative and realistic basis. As was detailed in our Annual Report as at 31 March 2000, listed investments are valued at mid-market price. Unlisted investments are incorporated at Directors' valuations. In the case of unquoted investments where a significant third party event has taken place that signifies a new value for the investment, the Directors use this value. All other valuations are the cost of the investment subject to any decline in value. In the light of the severe turmoil in TMT markets worldwide in recent months, the Board of SPARK has taken a conservative view of the carrying value of our unquoted portfolio. In consequence and taken together with the impact of changes in the prices of listed investments, we have written down the book value of our portfolio by £45.5 million to £120.8 million. Of this reduction £39.1 million relates to reductions in the carrying value of our Swedish portfolio following our decision to make substantial provisions in our Swedish B2C, auction and Internet services investments. The value of our quoted investments has fallen by £3.1 million and the Directors estimates of our remaining unquoted investments has given rise to a reduction of £3.2 million. The non-Swedish portion of our portfolio has been helped by its relatively heavy concentration in core technology and software investments and several positive funding events during the period. The book valuation of our two largest investments, eTV and DX3, both of which are majority owned by SPARK, has been left unchanged at an aggregate £52.3 million. Both have made considerable progress during the period and we expect that future funding events will substantiate our decision. Conclusion SPARK is now a leader in European early stage technology investment. Following our acquisition of Internet Indirect plc the group will have cash balances of approximately £100 million and investments in approximately 55 portfolio companies are valued, based on current estimates, at £124 million. This places us in a strong position to negotiate attractive terms for further investments, both in successful portfolio companies and in new companies. Our network of contacts and reputation amongst later stage venture capitalists and corporate investors is strong and we are currently discussing further funding rounds for several of our portfolio companies at valuations in excess of the cost of investment. We continue to work closely with all our portfolio companies to develop them and maximise their value. However we will not invest further funds into unsuccessful businesses and the write downs included in our results to 30 September 2000 reflect the possibility that some of our investee companies may fail to obtain further funding in the coming months. Unlike other players in the sector, we have not radically shifted away from early stage TMT investment merely because the market has temporarily become more difficult. We have maintained and developed our core business - which is venture capital investment at the seed and first round stage in new technology companies. We continue to believe that the long term rewards to our shareholders from this strategy will be significant and that shareholders invest in SPARK to obtain a broad exposure to a balanced, substantial portfolio of early stage unquoted TMT investments. Michael Whitaker 20 December 2000 NewMedia Spark PLC Interim Financial Information Six months to 30 September 2000 Consolidated Statement of Total Recognised Gains and Losses Six months 26 July 1999 to to 30 September 31 March 2000 2000 £'000 £'000 Unaudited Audited (Loss) / Profit for the financial period (1,272) 1,971 Unrealised (loss) / gain on financial fixed assets (38,649) 18,064 Unrealised exchange differences (432) Total recognised gains / (losses) relating to the period (40,353) 20,035 NewMedia Spark PLC Interim Financial Information Six months ended 30 September 2000 Six months to 26 July 1999 to 30 September 31 March 2000 2000 £'000 £'000 Unaudited Audited Consolidated Profit and Loss Account Administrative expenses (2,612) (1,072) Other operating income 422 126 Operating loss (2,190) (946) Profit on disposal of fixed asset investments - 3,173 Interest receivable and similar income 805 624 Interest payable and similar charges - (3) (Loss) / profit on ordinary activities before taxation (1,385) 2,848 Tax on (loss) / profit on ordinary activities - (898) (Loss) / profit on ordinary activities after taxation (1,385) 1,950 Equity minority interests 113 21 Retained (loss) / profit for the period (1,272) 1,971 (Losses) / earnings per ordinary share (0.53p) 1.22p Diluted (losses) / earnings per ordinary share (0.47p) 1.12p NewMedia Spark PLC Interim Financial Information Six months ended 30 September 2000 Consolidated Balance Sheet 30 September 2000 30 September 31 March 2000 2000 £'000 £'000 Unaudited Audited Fixed assets Intangible assets 13,920 - Tangible assets 1,114 469 Investments 120,775 151,787 135,809 152,256 Current assets Debtors 3,109 2,581 Cash at bank and in hand 39,022 33,531 Creditors: amounts falling due within one year (2,390) (5,263) Net current assets 39,741 30,849 Total assets less current liabilities 175,550 183,105 Equity minority interest (2,862) (9,693) Net assets 172,688 173,412 Capital and reserves Called up share capital 7,984 5,630 Capital reserve 2,428 - Share premium account 182,594 109,155 Shares to be issued - 38,592 Revaluation reserve (20,585) 18,064 Profit and loss account 267 1,971 Equity shareholders funds 172,688 173,412 NewMedia Spark PLC Consolidated Cash Flow Statement Six months to 30 September 2000 Six months to 26 July 30 1999 to September 31 March 2000 2000 £'000 £'000 Unaudited Audited Net cash inflow / (outflow) from operating activities 111 (562) Return on investments and servicing of finance Interest received 805 624 Interest paid - (3) Net cash inflow / (outflow) from returns on investments and servicing of finance 805 621 Capital expenditure and financial investment Payments to acquire tangible fixed assets (676) (458) Payments to acquire investments (16,887) (32,235) Receipts from sales of investments - 3,851 Net cash inflow /(outflow) from investing activities (17,563) (28,842) Acquisitions and disposals Purchase of subsidiary undertakings (2,000) (27,743) Net cash acquired with subsidiaries 24,138 459 Net cash inflow / (outflow) from acquisitions and disposals 22,138 (27,284) Net cash inflow / (outflow) before financing 5,491 (56,067) Financing Issue of ordinary share capital - 91,015 Expenses paid in connection with share issues - (1,417) Net cash inflow from financing - 89,598 Increase in cash in the period 5,491 33,531 INTERIM ANNOUNCEMENT - Notes 1. The information relating to the six month periods ended 30 September 2000 is unaudited. The information relating to the period ended 31 March 2000 is extracted from the audited accounts of the Company which have been filed at Companies House and on which the auditors issued an unqualified opinion. 2. The above financial information does not constitute statutory accounts within the meaning of Section 240 Companies Act 1985. 3. Loss (31 March 2000: Earnings) per share is based on the weighted average number of shares in issue during the six months ended 30 September 2000 of 238,605,347 (31 March 2000: 161,622,000). The diluted loss (31 March 2000: Earnings) per share is based on the weighted average number of shares in issue during the six months ended 30 September 2000 of 272,846,800 (31 March 2000: 176,606,000).

Companies

Rockwood Strategic (RKW)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today