Final Results

Eurovestech PLC 06 September 2002 EMBARGOED - NOT TO BE RELEASED UNTIL 07.00 A.M. 6th September, 2002 EUROVESTECH PLC ('Eurovestech' or 'the Company') Preliminary Results for the year ended 31st March, 2002 Summary of Results • Strong growth in consulting income with turnover of £230,000 against £91,000 in previous period. • Loss after tax £330,000, an improvement against budget. • Net asset value £9.3 million (4.2p per share) with cash and liquid funds in excess of £2.6 million. Net asset value reflects £3.6 million write-down in carrying value of investment portfolio. • Boxmind received £300,000 third party funding in August 2002 from an existing shareholder at a post-money value of £10 million. Eurovestech currently holds 41 per cent of Boxmind's fully diluted share capital. At 31st March 2002, the Company's investment in Boxmind had a carrying value of £3.6 million. Richard Bernstein, Chief Executive of Eurovestech plc, commenting on the results, said: 'Despite a progressively tougher business and funding environment, we have continued to make progress in developing a portfolio of businesses operating in high growth markets. Our continuing sound financial position also allows us to take advantage of selective investment opportunities at lower price levels.' Enquiries: Eurovestech plc Richard Bernstein, Chief Executive Tel: 0207 491 0770 Chairman's Statement I write to you at a difficult time, in an extraordinary investment climate. General market values have fallen to five year lows and technology market indices have fallen as much as 85 per cent from the peak. Investors have become significantly more risk averse. Their appetite for investment in innovative technology businesses has been dramatically reduced. As a result, the previous uplift in the value of our investment portfolio has been eroded as we have revalued our holdings to take account of the savage reduction in values seen in the TMT sectors and the general decline in business conditions. The development capital business is cyclical by nature, of course: whilst portfolios are built and developed over a long period of time, there is a shorter period towards the end of the cycle when the benefits can be reaped. The negative investor sentiment that we see today is an inherent part of this cycle, and springs from the complex interaction of over-investment and heightened expectations. Since Eurovestech was admitted to AIM in March 2000, the Techmark 100 has slumped by more than 85 per cent. Against this backdrop, we see our five per cent reduction in net asset value over the same period as a creditable performance, given that it includes all costs of running the fund and ongoing listing expenses. Portfolio Review The period under review was particularly difficult. A progressively tougher business and funding environment continued to bear heavily on investor sentiment. We have reduced the carrying value of our investment portfolio to reflect declining valuations of quoted peer companies. We have reduced the carrying value of five of our investee companies: ITM Communications Ltd, Lynx Photonic Networks Inc., Cjudge Ltd, Easy Business Ltd and mykindaplace.com. We have written down the value of our holding in Easy Business by 50 per cent to reflect the decline in value of software enterprises. We have reduced the carrying value of our holding in mykindaplace.com by 57 per cent to reflect the decline in values in the media sector. This is despite mykindaplace.com having achieved profitability. In the case of ITM, Lynx and Cjudge, we have reduced the carrying values of our holdings by between 80 per cent and 90 per cent to reflect the very severe declines in values in the telecoms and market research sectors. The Directors have been mindful of the general decline in business conditions in making their assessment. Our overall write-down of the investment portfolio for the year was £3.6m, leaving audited net assets at £9.3 million. This compares with an initial £9.8 million available for investment following Eurovestech's AIM listing in March 2000. Our cash position remains sound, with in excess of £2.6 million in cash and liquid funds at 31 March. The loss after tax for the year was £330,000, which was an improvement against budget and was achieved as a result of strong growth in our advisory income, which rose to £230,000 against £91,000 in the previous period. We are pleased to announce that in August 2002, Boxmind received third-party funding from an existing investor of £300,000 at a post-money value of £10 million. Following this investment, in which Eurovestech also invested £260,000, the Company holds 41 per cent of Boxmind's fully diluted share capital. Boxmind has continued to develop its product range and market positioning as well as strengthening its salesforce in order to meet its anticipated demand. At 31st March 2002, the Company's investment in Boxmind had a carrying value of £3.6 million. Overall, despite the current business and funding climate and the difficulty of young companies to deliver revenue growth regardless of the quality of their products, many of our investee companies achieved significant operational and funding milestones. Charitable donations Eurovestech made a commitment in its prospectus issued in March 2000 to donate 4,000,000 shares to charitable organisations. An initial 600,000 shares were issued in March 2001, 1,600,000 shares were then issued in September 2001 and in December 2001, a further 1,000,000 shares were issued. The Company announces that it has today issued 800,000 new ordinary shares divided equally between eight benevolent organisations, pursuant to the authority granted by a resolution dated 21 February 2000. The nominated charities are: Vaccine Research Trust Motor Neurone Disease Association The Life Neurological Research Trust Cancer Research UK The Good Rock Foundation University College London Hospitals Charity The Richard House Children's Hospice The Samara Orphanage The Company hopes its policies and actions will encourage other companies to support charities in this way. Application has been made for 800,000 new ordinary shares of the Company to be admitted to AIM and it is expected that dealings in these shares will commence on 16 September 2002. Richard Bernstein, Chief Executive of the Company, has paid the £8,000 nominal value of the ordinary shares to facilitate their issue. In addition, following his own commitment in the prospectus, Richard Bernstein has gifted 800,000 existing ordinary shares from his personal shareholding divided equally between the same charitable organisations. As a result, he now owns 57,350,000 ordinary shares, representing 25.4 per cent of the issued share capital of the Company. Prospects Our objective is to build a maturing portfolio of quality investments, of exceptional value. They will be characterised by the quality of their technology, their management and their market position. Therefore we remain focussed on adding value to our investee companies, so that as many of them will demonstrate these characteristics and be ready to benefit from the ultimate and inevitable recovery in stock markets and business conditions. Richard Grogan Chairman Profit and Loss Account for the year ended 31 March 2002 Note Year ended Period ended 31 31 March March 2002 2001 £ £ Turnover 230,063 90,585 -------- -------- Gross profit 230,063 90,585 Net operating expenses (729,718) (538,248) -------- -------- Operating loss (499,655) (447,663) Net interest 170,035 350,271 -------- -------- Loss on ordinary activities after taxation transferred to reserves (329,620) (97,392) ======== ======== Loss per Ordinary Share 2 (0.147p) (0.044p) There were no recognised gains or losses other than the loss for the financial year. Balance Sheet as at 31 March 2002 Year ended Period ended 31 31 March March 2002 2001 £ £ Fixed assets Tangible assets 26,463 46,333 Investments 6,533,189 8,463,652 -------- -------- Current assets Debtors 580,714 157,824 Investments 309,422 960,335 Cash at bank and in hand 2,312,468 3,930,671 -------- -------- 3,202,604 5,048,830 Creditors: amounts falling due within one year (422,628) (348,205) -------- -------- Net current assets 2,779,976 4,700,625 -------- -------- Total assets less current liabilities 9,339,628 13,210,610 ======== ======== Capital and reserves Called up share capital 2,241,887 2,213,000 Share premium account 7,622,412 7,614,799 Revaluation reserve 5,654 3,480,203 Profit and loss account (530,325) (97,392) -------- -------- Shareholders' funds 9,339,628 13,210,610 ======== ======== Cash Flow Statement for the year ended 31 March 2002 Note Year ended Period ended 31 31 March March 2002 2001 £ £ Net cash outflow from operating activities i (885,146) (242,456) Returns on investments and servicing of finance Interest received and similar income 172,066 353,059 Interest paid (2,031) (2,788) -------- -------- Net cash inflow from returns on investments and servicing of finance 170,035 350,271 -------- -------- Capital expenditure and financial investment Purchase of tangible fixed assets (15,925) (61,159) Purchase of fixed asset investments (1,843,605) (4,983,449) Receipts from sale of fixed asset investments 269,025 - -------- -------- Net cash outflow from capital expenditure and and financial investment (1,590,505) (4,055,608) -------- -------- Management of liquid resources Sale of current asset investments 5,308,372 5,046,597 Purchase of current asset investments (4,497,201) (5,797,214) Gain on disposal of current asset investments (160,258) (209,718) -------- -------- (1,654,703) (5,897,128) ======== ======== Financing Issue of shares 36,500 10,220,992 Expenses paid in connection with share issue - (393,193) -------- -------- Net cash inflow from financing 36,500 9,827,799 -------- -------- (Decrease)/increase in cash ii & iii (1,618,203) 3,930,671 ======== ======== i. RECONCILIATION OF OPERATING LOSS TO NET CASH FLOW FROM OPERATING ACTIVITIES Year ended 31 Period ended March 31 March 2002 2001 £ £ Operating loss (499,655) (447,663) Depreciation 20,454 14,826 Loss on sale of tangible fixed assets 15,341 - Gain on disposal of fixed asset investments (72,819) - Increase in debtors (422,890) (157,824) Increase in creditors 74,423 348,205 -------- -------- Net cash outflow from operating activities (885,146) (242,456) ======== ======== ii. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Year ended 31 Period ended March 31 March 2002 2001 £ £ (Decrease)/Increase in cash in the year / period (1,618,203) 3,930,671 Cash (outflow) / inflow from decrease/increase in liquid (650,913) 960,335 resources Net funds at 1 April 2001 4,891,006 - -------- -------- Net funds at 21 March 2002 2,621,890 4,891,006 ======== ======== iii. ANALYSIS OF CHANGE IN NET FUNDS At At 1 April 31 March 2001 Cash flow 2002 £ £ £ Cash in hand 3,930,671 (1,618,203) 2,312,468 Liquid resources 960,335 (650,913) 309,422 -------- -------- -------- 4,891,006 (2,269,116) 2,621,890 ======== ======== ======== Notes to the financial statements 1. Taxation There is no tax on the loss for the year Year ended Period ended 31 March 31 March 2002 2001 £ £ Potential deferred tax asset based on loss made in 98,886 29,218 Year/period at 30 per cent. ======== ======== 2. Loss per share The calculations of loss per share are based on the following results and numbers of shares: 2002 2001 £ £ Loss for the financial year/period (329,620) (97,392) ======== ======== Weighted average number of shares Number of Number of shares shares For basic earnings per share 222,403,632 220,701,639 The options and warrants do not give rise to any material dilution. 3. Dividends No dividends were paid or proposed during either 2002 or 2001. 4. The results for the year ended 31 March, 2002 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, 2002 will be filed with the Registrar of Companies following the Annual General Meeting. The financial information for the year ended 31 March, 2002 has been prepared on the basis of the accounting policies set out in the accounts for the year ended 31 March, 2002. The comparative figures for the period ended 31 March, 2001 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. 5. 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 W1Y 7AE. This information is provided by RNS The company news service from the London Stock Exchange

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