Final Results

Eurovestech PLC 18 September 2003 Embargoed not to be released until 7.00 am on 18th September, 2003 EUROVESTECH PLC ('Eurovestech' or 'the Company') Preliminary Results for the year ended 31 March, 2003 Chairman's Statement I wrote to you last in December 2002 and commented on the progressively tougher business and funding environment that was bearing heavily on investor sentiment. These conditions persisted through the period to 31 March 2003, as slowing world economies and further weakness in stock markets continued to impact the performance, valuation and funding of private equity and development capital technology businesses. It was against this backdrop that last September we decided to write down three unquoted investments, resulting in a charge of £1.29 million. In March 2003, we announced that we felt it prudent to reduce the carrying value of our investment in Boxmind Limited ('Boxmind'), the e-learning publisher and consultancy, to cost and this resulted in a write down of £3.01 million. These reductions were largely responsible for the decline over the full year in shareholders' funds of £4.58 million. At our year end, shareholders' funds were £4.76 million, equivalent to 2.1p per share. Since Eurovestech was admitted to AIM in March 2000, our net asset value has fallen by just under 52 per cent. This compares with a fall of 77 per cent in the Techmark All Share Index over the same period. Portfolio Review Despite our decision to write down the carrying value of our unquoted portfolio, we are encouraged by its overall performance. We believe that in the year under review, several of our companies succeeded in reaching their 'tipping points' and are now emerging as strong businesses operating in high growth markets. Cjudge, the Paris based online market research company, has delivered a particularly impressive performance. Eurovestech owns 73 per cent of Cjudge's share capital. New clients won during the year include Aventis, Amgen Corporation, Christian Dior, Egg France, l'Oreal, Taylor Nelson Sofres and T-Online. Since our year end, the pace of client wins at Cjudge has accelerated and as a result, the company achieved profitability ahead of our expectations. We are currently in discussions with Cjudge's management in order to assess how best to fully capitalise on Cjudge's growing success. Magenta Corporation Limited ('Magenta') develops intelligent software agent technology, which enables automation of real-time negotiating and scheduling processes. In February we announced that Magenta had successfully completed a £1 million investment round, with Eurovestech committing to £500,000 of this investment. Following completion of this investment Eurovestech will hold 33 per cent. of Magenta's share capital. In March 2003, we announced both that we felt it prudent to reduce the carrying value of our 48 per cent shareholding in Boxmind to cost and that Boxmind was in discussions with a major media organisation to produce substantial e-learning material for the UK education market. These discussions are continuing. In recent months the relevance of the existing GCSE and A-level structures within higher education has given rise to significant uncertainty and Boxmind is keen to ensure that it is positioned to capitalise on any change in the higher education structure or syllabus. It is seeking commissions to develop content that will remain relevant to those in higher level education. Nevertheless, the delay in targeting this relevant content is impacting our revenue expectations for Boxmind. Mykindaplace ('MKP'), is the UK's leading online magazine for teenage girls. Eurovestech owns 5.3 per cent. of MKP's share capital. MKP reached profitability in June 2003 and is forecasting continuing strong revenue growth. New clients won in the year under review, include GlaxoSmithKline, l'Oreal and Vodafone. In August we announced that MKP had secured a substantial two year deal with BSkyB, to provide content and other services to assist BSkyB to commercialise its interactive platforms. Tevet Process Control Technologies ('Tevet'') has developed a measurement system for measuring, monitoring and controlling production parameters for the manufacture of silicon wafers. Eurovestech owns 4.5 per cent. of Tevet's share capital. In the year under review, Tevet completed a $3 million strategic investment round. Eurovestech invested $100,000 in this round of funding, which follows an initial $300,000 investment in October 2000. Our holdings in Lynx Photonic Networks Limited ('Lynx') and D-Pharm Limited ('D-Pharm') are modest both in terms of value as a proportion of our fund and in terms of an equity interest. Lynx has a carrying value of £139,000 and D-Pharm of £112,000. Both companies enjoy strong cash balances and, we believe, are fulfilling their potential. Transaction During the year we acquired a 9.1 per cent. interest in Knowledge Support Systems Group PLC ('KSSG') at an average cost of 15.3p per share. We believed that the KSSG share price was at a significant discount to its prospective net cash position. As substantial shareholders we held several meetings with KSSG's management and technology personnel and we also met with potential bidders for KSSG. In May 2003, we announced that we had agreed to acquire the principal trading subsidiary of KSSG for £1.0 million (payable in cash) and the assumption of certain indemnities in relation to claims brought by a former director for loss of office and employment and in relation to compensation for loss by a current director up to a maximum of £384,000, in the event of him not transferring to the trading subsidiary, Knowledge Support Systems Limited ('KSSL'). This transfer has subsequently taken place and hence is no longer applicable. KSSL was KSSG's main operating subsidiary and provides pricing and revenue management systems for the petroleum and retail sectors. KSSG warranted that at 30 April 2003, KSSL had net cash balances of £6.0 million. On 18 June, 2003 we announced that we had disposed of our entire shareholding in KSSG, selling our holding of 6,742,273 shares to raise £1.14 million. Charitable Donations In June 2002, the Company issued 800,000 new ordinary shares divided equally between eight charitable organisations, which had a total value at the date of issue of £30,000 and in January 2003, the Company issued 200,000 new ordinary shares divided equally between two charitable organisations, which had a total value at the date of issue of £6,000. The Company hopes its policies and actions will encourage other companies to support charities in this way. Prospects In December 2002, I wrote that opportunities abound in uncertain times and that we had maintained and protected our ability to pursue them. The investment in KSSG and subsequent acquisition of KSSL were such opportunities. Whilst we are actively engaged in ensuring that this and our other significant investments deliver their substantial potential to our shareholders as speedily as possible, we continue to monitor other suitable opportunities, which we believe can add to these returns. We have spent the last three years surviving an extremely adverse environment - one that proved to be too severe for many of our peers. We believe our efforts are today focused on maximising the value of existing investments whilst continuing to be alert to other investment opportunities. RICHARD GROGAN Chairman 17 September 2003 Profit and Loss Account for the year ended 31 March 2003 Note Year ended Year ended 31 March 31 March 2003 2002 £ £ Turnover 93,466 230,063 ---------- ----------- Gross profit 93,466 230,063 Administrative expenses (653,631) (802,537) Other operating income 9,360 - ---------- ----------- Operating loss (550,805) (572,474) (Loss)/gain on disposal of fixed asset (330,251) 72,819 investments Amounts written off fixed asset investment (3,751,460) - Net interest 11,323 170,035 ---------- ----------- Loss on ordinary activities after taxation transferred to reserves (4,621,193) (329,620) ========== =========== Loss per Ordinary Share 1 (2.055p) (0.147p) ========== =========== The company has no recognised gains or losses other than the result for the year. Balance Sheet as at 31 March 2003 At At 31 March 31 March 2003 2002 £ £ Fixed assets Tangible assets 9,565 26,463 Investments 2,906,929 6,533,189 --------- ---------- 2,916,494 6,559,652 Current assets Debtors 155,381 580,714 Investments 1,718,657 309,422 Cash at bank and in hand 370,507 2,312,468 --------- ---------- 2,244,545 3,202,604 Creditors: amounts falling due within one year (397,354) (422,628) --------- ---------- Net current assets 1,847,191 2,779,976 --------- ---------- Total assets less current liabilities 4,763,685 9,339,628 ========= ========== Capital and reserves Called up share capital 2,266,225 2,241,887 Share premium account 7,643,324 7,622,412 Revaluation reserve - 5,654 Profit and loss account (5,145,864) (530,325) --------- ---------- Shareholders' funds 4,763,685 9,339,628 ========== ========== Cash Flow Statement for the year ended 31 March 2003 Note Year ended Year ended 31 March 31 March 2003 2002 £ £ Net cash outflow from operating activities (i) (285,262) (1,008,904) Returns on investments and servicing of finance Interest received and similar income 35,216 172,066 Interest paid (23,893) (2,031) ---------- ----------- Net cash inflow from returns on investments and servicing of finance 11,323 170,035 ---------- ----------- Capital expenditure and financial investment Purchase of tangible fixed assets (3,912) (15,925) Purchase of fixed asset investments (1,119,366) (1,843,605) Receipts from sale of fixed asset 663,915 269,025 investments ---------- ----------- Net cash outflow from capital expenditure and and financial investment (459,363) (1,590,505) ---------- ----------- Management of liquid resources Sale of current asset investments 11,587,966 5,308,372 Purchase of current asset investments (12,796,625) (4,497,201) ---------- ----------- Net cash (outflow)/inflow from management of (1,208,659) 811,171 liquid resources (ii) ---------- ----------- Decrease in cash (ii) (1,941,961) (1,618,203) ========== =========== i. NET CASH OUTFLOW FROM OPERATING ACTIVITIES Year ended Year ended 31 March 31 March 2003 2002 Operating loss (550,805) (572,474) Depreciation 20,810 20,454 Loss on sale of tangible fixed assets - 15,341 (Gain) on disposal of fixed asset investments (174,717) (160,258) Decrease/(increase) in debtors 425,333 (422,890) (Decrease)/increase in creditors (25,274) 74,423 Other non-cash movements 19,391 36,500 --------- ------------ Net cash outflow from operating activities (285,262) (1,008,904) ========= ============ ii. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS ---------- ----------- Year ended Year ended 31 March 31 March 2003 2002 ---------- ----------- £ £ Decrease in cash in the year / period (1,941,961) (1,618,203) Cash outflow / (inflow) from decrease/increase in 1,409,235 (650,913) liquid resources Net funds at 1 April 2002 2,621,890 4,891,006 ---------- ----------- Net funds at 31 March 2003 2,089,164 2,621,890 ========== =========== iii. ANALYSIS OF CHANGE IN NET FUNDS At Cash flow At 1 April 31 March 2002 2003 £ £ £ Cash in hand 2,312,468 (1,941,961) 370,507 Liquid resources 309,422 1,409,235 1,718,657 ---------- ----------- ------------ 2,621,890 (532,726) 2,089,164 ========== =========== ============ Notes to the financial statements 1. Loss per share The calculation of loss per share is based on the loss attributable to ordinary shareholders of £4,621,193 (2002:£329,620) divided by the weighted average number of shares in issue during the year, being 224,915,248 (2002: 222,403,632) shares. Warrants outstanding at the year end were anti-dilutive. 2. Dividends No dividends were paid or proposed during either 2003 or 2002. 3. The results for the year ended 31 March, 2003 and the balance sheet at that date have been extracted from the statutory accounts of the Group for that year, upon which the Group's auditors, Grant Thornton, have confirmed they will issue an unqualified audit report under Section 235 of the Companies Act 1985. The accounts for the year ended 31 March, 2003 will be filed with the Registrar of Companies following the Annual General Meeting. The financial information for the year ended 31 March, 2003 has been prepared on the basis of the accounting policies set out in the accounts for the year ended 31 March, 2003. The comparative figures for the period ended 31 March, 2002 have been extracted from the statutory accounts for the Group for the period, filed with the Registrar of Companies, which carried an unqualified audit report. 4. A copy of the Annual Report and Accounts will be sent to all shareholders shortly and will be available from the Company's registered office, 29 Curzon Street, London W1J 7TL. This information is provided by RNS The company news service from the London Stock Exchange

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