TIDMEVT
19 September 2012
Eurovestech plc
("Eurovestech" or the "Company")
Unaudited Final Results for the year ended 30 June 2012
Eurovestech, the pan-European development capital fund, is pleased to announce
its unaudited final results for the year ended 30 June 2012.
HIGHLIGHTS
* Sale of 40 per cent stake in KSS Fuels for GBP7.2m, a 38% premium to carrying
value
* Dentsu, one of the world's largest media companies, invests in Maxifier and
announces a strategic partnership to drive Maxifier's expansion in Asia
Pacific
* GBP13.3m (4 pence per share) returned in October 2011; a further GBP4.4m (1.32
pence per share) to be returned to shareholders, taking total returns above
GBP27 million (7.5 pence per share)
* Maxifier successfully raised additional growth capital from several
investors at a premium that resulted in a GBP3.0m increase in carrying value
* Underlying net assets continue to grow
* Balance sheet remains strong, portfolio companies deliver further growth
* AIM delisting approved by shareholders
* Charitable share gifts help 107 charities
Richard Bernstein, Chief Executive of Eurovestech, commented:
"We are pleased to have announced our third cash return to shareholders
following the sale of part of our stake in KSS Fuels. This will take the total
realised profits from our core investments since 2008 above GBP43 million and the
total returned to investors to 7.5 pence per share. Both the sale of a minority
stake in KSS Fuels and investment capital raised by Maxifier were achieved at a
premium to book value. Our balance sheet remains strong and we are confident
that our portfolio can deliver further growth and returns for shareholders".
FURTHER ENQUIRIES
Eurovestech plc
Richard Bernstein Tel: 020 7478 9070
Chief Executive www.eurovestech.com
Merchant Securities Limited
David Worlidge/Simon Clements Tel: 020 7628 2200
CHAIRMAN'S STATEMENT
I am pleased to report another year of significant progress for Eurovestech and
its portfolio of investments which has delivered further realisations and
another distribution of cash to our shareholders. We are also pleased to
announce that our shareholders have approved the delisting of our shares.
Progress was achieved against an international economic background that
remained challenging. A resilient performance was achieved in the face of
persistent weakness in the major markets in which our companies operate. The
technological strength of our companies and our strong balance sheet enabled us
to continue delivering shareholder value.
During the year the Company provided a return of cash of GBP13.3 million (4 pence
per share) in October 2011. At the end of the year, following this return, the
Company balance sheet shows shareholders' funds of GBP57.4 million, (GBP65.6
million at 30 June 2011), equivalent to a net asset value per share of 17.3
pence (after the cash return of 4 pence per share), compared with 19.8 pence
per share a year earlier, growth of 1.5 pence per share after taking into
account the cash return.
Net assets per share are a measure of our progress. When the Company was listed
on the AIM market in March 2000 the net asset value was 5 pence per share. Over
the last two years we have returned 6.18 pence per share. Adjusted to add back
these cash returns, net asset value at 30 June 2012 would have been 23.5 pence
per share which evidences the value delivered by the Company. This significant
ability to realise profits from investee company investments and return surplus
cash to shareholders has not been recognised in the share price which has
recently traded at a substantial discount to asset value.
Considering the trading discount, excessive costs and administrative time
required to comply with the AIM rules and after having consultations with our
major shareholders regarding our strategy to deliver long-term value to
shareholders, the Company asked shareholders to approve the cancellation of
admission of its Ordinary Shares to trading on AIM. At a General Meeting on 6
September 2012, the shareholders approved the cancellation of admission.
Details on this are set out later in this statement. I will report first on the
progress of our portfolio companies.
ITWP ACQUISITIONS LTD (TOLUNA)
ToLuna has been a private company since it was acquired by ITWP Acquisitions in
April 2011. Earlier this year, ToLuna's growth was recognised in Investec's
"Top 100 fastest-growing private companies" in the UK, in which ToLuna was
ranked fourth. The rankings were based on compound annual growth rates of sales
over a four year period, based on accounts filed up to February 2012.
With the help of ITWP, the business continues to broaden and enhance its
product offering and its technological strength to drive its long-term growth.
One such new product released in April is Toluna.com, the market research
industry's first social voting community, which enables members to connect more
easily with others in new ways to enhance user engagement. ToLuna's online
panel and community software platform, PanelPortal Connect, has been improved
to enable businesses to create a social community within a Facebook fan page.
Following the conversion on 30 June 2012 of the outstanding loan notes issued
by ITWP in connection with the acquisition of ToLuna, Eurovestech is now
interested in 16.7 per cent of the issued share capital of ITWP, which owns the
entire issued share capital of ToLuna, at a valuation of GBP23.8 million.
KSS LTD (KSS FUELS)
KSS Fuels made further progress, too. The company won a series of orders both
from new and existing customers. This was helped by the integration of Market
Planning Solutions Inc. (MPSI), acquired in May 2011.
For fuel retailers who wish to enhance their pricing capabilities without
significant upfront cost or IT effort, KSS Fuels launched PriceNet Cloud, a new
retail fuels pricing solution. Using the latest cloud technology, this has
sufficient scale to support thousands of sites and can be fully integrated with
existing systems.
In January 2012, 7-Eleven Australia implemented PriceNet in its 400 site
network. This significant deal in Australia helped drive strong growth for the
company in the Asia-Pacific region.
In May 2012 MOL Hungarian Oil and Gas, a leading Central European petroleum
retailer, implemented PriceNet across its retail network of more than 300 sites
in Hungary.
In June 2012 Rontec, a leading UK independent fuel retailer, implemented
PriceNet across its retail network of more than 200 sites, which operate mostly
under the Total brand. A major Canadian grocer also selected PriceNet to manage
its growing wholesale and retail fuels business. The latest update of KSS
Fuels' MPSI TrafficMetrix provides traffic forecasts for more than 790,000 US
locations.
Though some significant deals moved more slowly than expected, KSS Fuels
achieved revenues of $21.0 million (GBP13.2 million) and underlying EBITDA of
$1.2 million (GBP728,000) for the year before exceptional integration costs and
business combination amortisation of GBP1.6 million.
Subsequent to the year end, MRH Retail, a UK independent retailer, implemented
KSS Fuels' fuel pricing application across its UK network of more than 300
locations.
On 17 August 2012 Eurovestech announced the sale of a 40 per cent interest in
KSS Fuels to Invesco Asset Management for approximately GBP7.2 million cash. This
values KSS Fuels at GBP18 million, compared to its previous GBP13 million carrying
value in Eurovestech's 31 December 2011 interim report.
At 30 June 2012 Eurovestech owned 100 per cent of KSS Fuels. Following the sale
to Invesco, Eurovestech owns 60 per cent.
MAXIFIER LIMITED
Maxifier's online advertising technology solutions enable premium publishers
and advertising networks to increase their advertising effectiveness, maximise
campaign performance and drive toward a greater inventory value, giving
customers improved financial performance and a competitive advantage.
In May 2012 Martini Media, the digital media and content platform, selected
Maxifier's ADMAX platform to improve campaign performance across more than
1,000 sites. This followed earlier wins from Forbes.com, one of the world's
most influential business media brands, and from WPP's 24/7 Real Media.
Contracts were also signed with two leading telecoms companies and the
company's pipeline continues to expand.
Maxifier opened its first office in Japan in January 2012 and signed its first
local contract, with Recruit, a major Japanese publisher. Maxifier's global
presence and success has attracted growing recognition and support in the
industry and was instrumental in securing an investment from one of the leading
innovators in global advertising, Dentsu Digital Holdings, Inc. (DDH). DDH
announced that it had made a strategic investment in Maxifier on 30 August
2012, which followed additional funding rounds earlier in the year with other
third party investors. DDH actively invests in emerging digital companies, and
intends to collaborate with Maxifier on business development plans across the
Asian market. Also occurring in August 2012, Maxifier and MediaMath, the
leading digital media-buying platform company, announced a partnership to bring
a combined end-to-end buying platform to the Japanese market.
At 30 June 2012 Eurovestech owned 46.3 per cent of Maxifier, at a carrying
value of GBP6.5 million. Following DDH's investment, Eurovestech owns 44.2 per
cent of Maxifier.
LOGNET INFORMATION SYSTEMS PLC
LogNet also enjoyed contract wins during the year and notable recognition in
the 2012 IDC MarketScape vendor report. LogNet's product and service offerings
are now serving a broader range of industries with its multi-play customer care
and billing solutions. In July 2011, LogNet implemented a customer management
and billing solution for a new Internet Service Provider in Southeast Asia.
This followed wins earlier in 2011 from Derech Eretz, the Israeli toll road
group, and from First Utility, a leading independent UK energy and telecoms
company. In February 2012 it was selected by Tango, a leading mobile and
internet services provider in Luxembourg, to deploy a multiple play customer
management and billing solution. Tango, part of the Belgacom group, has more
than 260,000 clients.
LogNet's has also reported encouraging progress in the Asia Pacific region and
in April 2012 announced the opening of a regional office in Bangkok, Thailand
to support its expansion in Southeast Asia.
Though LogNet did not ultimately reach overall profitability for calendar year
2011, its 15% sales growth was encouraging and revenues for the six months
ended 30 June 2012 were slightly ahead of the prior year.
At 30 June 2012 Eurovestech held 26.5 per cent of LogNet at a carrying value of
GBP1.3 million.
AUDIONAMIX SA
Audionamix's sound separation technologies continue to attract interest from
the film, television and music industries for its innovative approach to
solving some of these industries' challenging problems. In December 2011
Audionamix reported that its audio engineers had been asked to use its
proprietary ADX technology for film music composer Hans Zimmer's soundscape for
the film Sherlock Holmes; A Game of Shadows. Audionamix's proprietary Voice
Isolation Technology was also used to help Warner Bros. Animation to create new
3D cartoons based on the mono recordings of Mel Blanc, who wrote songs for
Looney Tunes characters Sylvester and Tweety.
Its music removal ("music disassociation") service has won a steady stream of
repeat business for classic TV series and additional projects. It signed a
number of reseller agreements with music licensing companies and continues to
widen its sales channels. Although revenues grew promisingly for most of the
calendar year 2011, performance in 2012 has been disappointing. The company is
addressing its challenges to unlock the undoubted potential of its technology.
Nevertheless, we feel it prudent to write down Eurovestech's holding in
Audionamix to GBP0.875 million.
At 30 June 2012 Eurovestech held 45.5 per cent of Audionamix.
MAGENTA CORPORATION LTD
During the year, Magenta strengthened its management and took action to align
its cost base to revenues. It completed the development of a new generation of
Software as a Service (SaaS) products and started to implement them for new
industry sectors, such as the transport of patients, cash-in-transit, and for
field service engineers.
It won an important contract from Rosinkas, the leading cash transit group in
Russia (number three worldwide). This service has been operating since May
2012. It has also won other new business in Russia.
Magenta needs to win further contracts to maintain its momentum. It has an
annual outsourcing contract which continues to be a valuable contributor.
At 30 June 2012 Eurovestech owned 49.6 per cent of Magenta at a valuation of GBP
1.2 million.
ARKEX LTD
ARKeX's airborne and marine gravity gradiometry technology continues to win
business from oil, gas and mineral explorers. The technology can also deliver
accurate images of sub-surface geology for the search for shale oil and gas,
now a major focus of the energy industry. For example, in 2011 and in
partnership with Global Geophysical Services, ARKeX completed a survey of the
Marcellus shale in Pennsylvania. Since completing this, ARKeX has been asked by
other potential customers to conduct other surveys.
In October 2011 it completed an extensive airborne survey around Lake Turkana
in Kenya for Tullow Oil. The success of this prompted further interest in the
Rift Valley countries of East Africa.
Since 2011, ARKeX has placed increasing emphasis on multi-client surveys, which
make its technology available to a wider customer base.
In April 2012, ARKeX and ION Geophysical Corporation undertook the largest
multi-client FTG (Full Tensor Gravity) airborne survey ever undertaken, off
Greenland. The survey, covering 50,000 square kilometres, was completed
successfully in August 2012.
At 30 June 2012 Eurovestech owned 2.5 per cent of ARKeX at a value of GBP1.2
million.
Let me now report on other important developments for your Company.
CENKOS
In March 2012 Eurovestech signed a co-operation agreement with Cenkos
Securities plc in which each party aims to benefit from the other's expertise
and networks to help companies raise money.
The agreement focuses on the Middle East, where Cenkos will work with
Eurovestech on any suitable opportunities for clients to raise funds on NASDAQ
Dubai, and also covers Eurovestech's introduction of other investors to Cenkos.
The agreement has the potential to generate income for Eurovestech via shared
revenues or commissions. To secure these terms, Eurovestech paid a cash
consideration of GBP0.9 million. The agreement also provides for special fee
rates for corporate transactions, from which the Company has already
benefitted.
BOARD
On 13 March 2012 we announced the appointment of David Ristow to the Board as
Director of Investments. He joined Eurovestech from KSS Retail, Inc., a former
investee subsidiary, where he had been Chief Financial Officer since 2007.
David succeeded Jean-Michel Petit, who resigned from the board with effect from
31 March 2012 to pursue his other business interests. Jean-Michel played a
major role at Eurovestech for nine years in managing the investments which have
created substantial value for shareholders. We wish him every success in his
future projects.
CHARITIES
From the beginning of its life as a quoted company, Eurovestech set out a
commitment to support charities by issuing and gifting shares.
In March 2012, at the time of its interim results, the Company issued 1,100,000
new ordinary shares divided equally between eleven charities. Including these
shares, Eurovestech has created and gifted 12 million shares to 107 charitable
organisations since its flotation on AIM in 2000. Including the cash returns to
shareholders in 2010 and 2011, charities have been gifted cash and shares
currently valued at more than GBP1.9 million.
CASH RETURN
As reported above, Eurovestech has sold a 40 per cent interest in KSS Fuels to
Invesco Asset Management for approximately GBP7.2 million. Following the sale,
the Company will hold cash and liquid assets of approximately GBP9 million.
Accordingly, it has obtained shareholder approval to return approximately GBP4.4
million to shareholders.
The return of cash represents 1.32 pence per share. Following the return of
2.18 pence per share in April 2010 and 4 pence per share in October 2011, this
brings the total returns of capital to shareholders to 7.5 pence per share. In
addition, the Company completed an on-market share buyback of GBP2.5 million
between March and June 2010.
DELISTING
Eurovestech floated on AIM in March 2000 and made a number of investments in
growing technology companies. Thereafter, it used its remaining funds,
augmented by placings in 2003, 2004 and 2008, to invest further. In March 2010,
it completed the sale of KSS Retail Limited for GBP11 million and made its first
cash return of 2.18 pence per share to shareholders. A further return of 4
pence per share was made in October 2011 in conjunction with the sale of
ToLuna. As outlined above, a third return is under way.
A number of the Company's major shareholders have questioned the merits of
maintaining its listing on AIM. Following this, the Board undertook a review of
the advantages and disadvantages of retaining the listing.
Notwithstanding a track record over the last five years of disposing of
investee companies at a significant multiple to the cost of investment and in
excess of their book value, the Company's shares have historically traded at a
significant discount to net asset value. At 16 August 2012 the mid-market share
price of 8.25 pence represented a discount of 50.3 per cent to the unaudited
net asset value at 31 December 2011 of 16.6 pence per share. The Board believes
this discount is in part a consequence of limited liquidity in the shares.
Further, the Board calculated the direct and indirect costs of maintaining our
standing on AIM to be in excess of GBP125,000 per annum, approximately 12.5 per
cent of the Company's current annualised costs.
Moreover, though, one of the main reasons for having a public listing is to
provide access to capital. The Company does not at this time currently intend
to raise any further funds through the public markets. This may change, but its
inherent uncertainty does not justify the maintenance of the Company's quoted
status. The directors expect that more realisations will occur in the near to
mid-term, and some anticipated funding requirements would be met by them.
Therefore, after careful consideration, the Board concluded that it was in the
best interests of the Company and its shareholders to seek cancellation of the
admission of its ordinary shares to trading on AIM.
The Board has made arrangements for shareholders who wish to acquire or dispose
of shares to do so through a Matched Bargain Facility through London Matched
Markets (LMM) Limited, following the delisting. Shareholders will be able to
contact LMM through a stockbroker, and shareholders who do not have their own
broker will need to register with a broker to be able to deal.
The delisting proposal was approved by shareholder vote at a General Meeting on
6 September 2012. The last day of dealing for the Ordinary Shares is expected
to be 21 September 2012, and the admission to trading is expected to be
cancelled at 7.00 a.m. on 24 September 2012.
Following the delisting, the Company will continue to hold Annual General
Meetings, supply shareholders with copies of the annual report and accounts,
maintain good standards of corporate governance, and post significant business
announcements on its website.
OUTLOOK
The global economic outlook remains uncertain and, while we continue to hope
for an improvement, we cannot rely on external conditions to help our investee
companies. We will continue to rely on the strength of the companies'
technology and of our own balance sheet to advance in challenging conditions.
Looking ahead, your Board's strategy remains unchanged. It is the strategy that
has served us well: to drive growth and release value from our portfolio. We
still intend to deploy our surplus short-term cash resources opportunistically
and to return surplus cash from realisations to our shareholders.
The policy on investee company realisations will be to retain only sufficient
funds to cover ongoing costs, expected future funding rounds and to enable
participation in new investment opportunities when deemed appropriate. The
directors expect that more realisations will occur in the near to mid-term.
Richard Grogan
Chairman
19 September 2012.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year Year
ended ended
30 June 30 June
2012 2011
(unaudited)
Continuing operations Note GBP000 GBP000
Revenue 2 13,273 7,769
Investment income 57 165
Net gains on financial assets at fair value 2,068 49
Profit on disposal of financial assets - 10,973
Operating expenses (18,365) (13,680)
Underlying operating (loss)/profit (2,967) 5,276
Exceptional items and business combination 3 (1,643) (394)
amortisation
Operating (loss)/profit (4,610) 4,882
Finance income 18 5
Finance costs (261) (212)
(Loss)/profit before tax (4,853) 4,675
Income tax credit 328 54
(Loss)/profit for the year (4,525) 4,729
Foreign exchange movements 40 20
Total comprehensive income and expense (4,485) 4,749
recognised in the year
Attributable to:
Owners of the Company (4,485) 4,749
Earnings per share
Basic earnings per share (pence):
- from continuing operations (1.36) 1.43
4 (1.36) 1.43
Diluted earnings per share (pence):
- from continuing operations (1.36) 1.42
4 (1.36) 1.42
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June
2012 2011
(unaudited)
Note GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 255 202
Goodwill 1,724 1,671
Other intangible assets 1,091 1,690
Financial assets at fair value through profit or 6 34,919 21,775
loss
Deferred tax asset 1,511 1,317
Trade and other receivables 60 77
39,560 26,732
Current assets
Trade and other receivables 3,798 4,115
Financial assets at fair value through profit or 5 6,299 15,051
loss
Cash and cash equivalents 1,880 23,261
11,977 42,427
Liabilities
Current liabilities
Trade and other payables (7,474) (8,803)
Borrowings - (17)
(7,474) (8,820)
Net current assets 4,503 33,607
Non-current liabilities
Deferred tax liability (164) (164)
Provisions for liabilities and charges (5,164) (3,782)
(5,328) (3,946)
Net assets 38,735 56,393
Equity
Capital and reserves attributable to the equity
holders of the Company
Share capital 7 3,325 3,314
Share premium 261 135
Capital redemption reserve 4,438 4,432
Other reserves (56) (97)
Retained earnings 30,767 48,609
Total equity 38,735 56,393
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Year
ended ended
30 June 30 June
2012 2011
(unaudited)
GBP000 GBP000
Cashflows from operating activities
(Loss)/profit for the year before taxation (4,853) 4,675
Adjustments for:
Net finance cost 243 207
Depreciation of property, plant and equipment 112 79
Amortisation of intangible assets 664 89
Gains on financial assets (2,068) (49)
Profit on disposal of non-current assets - (10,973)
Movement on provision 1,382 107
Investment income (57) (165)
Share-based payments 28 71
Increase in trade and other receivables 423 (768)
Increase in trade and other payables (1,329) 813
Net cash used in operations (5,455) (5,914)
Finance costs (261) (212)
Income tax (paid)/received (29) 120
Net cash used in operating activities (5,745) (6,006)
Cashflows from investing activities
Finance income 18 5
Purchase of subsidiary undertakings (net of - (1,996)
cash acquired)
Purchase of property, plant and equipment (178) (85)
Purchase of intangible assets (54) (5)
Dividends received 57 165
Disposal of financial assets 47,548 41,274
Purchase of financial assets (49,857) (14,389)
Net cash (used in)/generated from investing (2,466) 24,969
activities
Cashflows from financing activities
Finance lease capital repayments (17) (17)
D share dividend paid (13,262) -
Purchase of own shares (55) -
Proceeds from issue of equity shares 14 10
Net cash used in financing activities (13,320) (7)
Net (decrease)/increase in cash and cash (21,531) 18,956
equivalents
Exchange movements 150 (8)
Cash and cash equivalents at the start of the 23,261 4,313
year
Cash and cash equivalents at the end of the 1,880 23,261
year
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital Foreign
Share Share redemption Other exchange Retained Total
capital premium reserve reserve reserve earnings Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 July 2010 3,304 - 4,432 186 (305) 43,880 51,497
Charitable 10 135 - - - - 145
donation of
shares
Share-based - - - 2 - - 2
payment charge
Transactions with 10 135 - 2 - - 147
owners
Profit for the - - - - - 4,729 4,729
year
Foreign exchange - - - - 20 - 20
movements
Total - - - - 20 4,729 4,749
comprehensive
income
At 30 June 2011 3,314 135 4,432 188 (285) 48,609 56,393
Charitable 14 129 - - - - 143
donation of
shares
Issue of D shares 3 (3) - - - - -
D share dividend - - - - - (13,262) (13,262)
Purchase of own (6) 6 - - (55) (55)
shares
Share-based - - - 1 - - 1
payment charge
Transactions with 11 126 6 1 - (13,317) (13,173)
owners
Loss for the year - - - - - (4,525) (4,525)
Foreign exchange - - - - 40 - 40
movements
Total - - - - 40 (4,525) (4,485)
comprehensive
income
At 30 June 2012 3,325 261 4,438 189 (245) 30,767 38,735
NOTES TO THE PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2012
1. BASIS OF PREPARATION
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 30 June 2011 and the year ended 30 June
2012, but is derived from those accounts. Statutory accounts for 2011 have been
delivered to the Registrar of Companies and those for 2012 will be delivered
following completion of those accounts and the Company's Annual General
Meeting. The Auditors have reported on the accounts for the year ended 30 June
2011; their report was unqualified and did not contain statements under the
Companies Act 2006, sections 498(2) or (3).
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union
(IFRSs as adopted by the EU), IFRIC Interpretations and the Companies Act 2006
applicable to companies reporting under IFRS. The consolidated financial
statements have been prepared under the historical cost convention as modified
by the revaluation of certain financial instruments and share based payments.
The Group has also elected to designate all associate sized investments as at
fair value through profit or loss, thereby adopting the exemption in IAS 28
`Investments in associates' for venture capital organisations. The Company
balance sheet and related notes have been prepared in accordance with UK
generally accepted accounting standards.
2. SEGMENTAL ANALYSIS
The chief operating decision maker has been identified as the board of
Directors. The board reviews the Group's internal reporting in order to make
strategic decisions. The board considers the business from both an operational
and geographic perspective.
The segment results for the year ended 30 June 2012 are as follows:
Venture Software Total
Capital development (unaudited)
GBP000 GBP000 GBP000
Revenue 34 13,239 13,273
Investment income 57 - 57
Net gains on financial assets at fair value 2,068 - 2,068
Other operating expenses (5,732) (12,633) (18,365)
Underlying operating (loss)/profit (3,573) 606 (2,967)
Exceptional items and business combination - (1,643) (1,643)
amortisation
Operating loss (3,573) (1,037) (4,610)
Net finance cost (243)
Loss before tax (4,853)
Income tax credit 328
Loss for the year (4,525)
The segment results for the year ended 30 June 2011 are as follows:
Venture Software
Capital Development Total
GBP000 GBP000 GBP000
Revenue 94 7,675 7,769
Investment income 165 - 165
Net gains on financial assets at fair value 49 - 49
Profit on disposal of financial assets 10,973 - 10,973
Other operating expenses (6,597) (7,083) (13,680)
Underlying operating profit 4,684 592 5,276
Exceptional items and business combination - (394) (394)
amortisation
Operating profit 4,684 198 4,882
Net finance cost (207)
Profit before tax 4,675
Income tax credit 54
Profit for the year 4,729
The segment assets and liabilities at 30 June 2012 are as follows:
Venture Software Unallocated Total
capital development items (unaudited)
GBP000 GBP000 GBP000 GBP000
Assets 41,554 8,744 1,239 51,537
Liabilities (8,061) (4,741) - (12,802)
Net assets 33,493 4,003 1,239 38,735
Capital expenditure - 232 - 232
Depreciation and amortisation 7 769 - 776
Unallocated assets and liabilities comprise certain deferred taxation assets.
The segment assets and liabilities at 30 June 2011 are as follows:
Venture Software Unallocated
capital development items Total
GBP000 GBP000 GBP000 GBP000
Assets 58,243 9,871 1,045 69,159
Liabilities (5,880) (6,886) - (12,766)
Net assets 52,363 2,985 1,045 56,393
Capital expenditure 5 80 - 85
Depreciation and amortisation 6 162 - 168
The parent company is domiciled in the UK. The Group's main business segments
are based in the following locations:
* Venture capital - UK
* Software development - UK, Europe, North America, Rest of the World
The geographical segments are based on an analysis of revenue by the location
of the Group's customers as follows:
Year Year
ended Ended
30 June 30 June
2012 2011
(unaudited)
GBP000 GBP000
UK 373 500
Rest of Europe 1,977 2,727
North America 7,663 4,542
Rest of the World 3,260 -
Revenue 13,273 7,769
One customer, based in North America, contributed 12 per cent of the Group's
revenue; no other customer contributed greater than 8 per cent of the Group's
revenue.
3.EXCEPTIONAL ITEMS AND BUSINESS COMBINATION AMORTISATION
Year Year
ended Ended
30 June 30 June
2012 2011
(unaudited)
GBP000 GBP000
Exceptional items 1,011 327
Business combination amortisation 632 67
1,643 394
Exceptional items include GBP1.0 million of post-acquisition integration related
costs inclusive of staff restructuring expenses, integration consultant fees,
re-branding costs and one-off integration incentives. Comparative items include
GBP0.2 million of acquisition related costs expensed through the income statement
in accordance with IFRS 3 and GBP0.1 million for a one-off catch up from
undercharged utility costs from prior years.
Business combination amortisation arises from the intangible assets recognised
(other than goodwill) from the acquisition of MPSI.
4. EARNINGS PER SHARE
Year Year
ended Ended
30 June 30 June
2012 2011
(unaudited)
GBP000 GBP000
(Loss)/profit for the year attributable to (4,525) 4,729
continuing operations
(Loss)/profit for the year attributable to equity (4,525) 4,729
shareholders
Basic earnings per share (pence):
- from continuing operations (1.36) 1.43
(1.36) 1.43
Diluted earnings per share (pence):
- from continuing operations (1.36) 1.42
(1.36) 1.42
Shares Shares
Issued ordinary shares at start of the year 331,250,000 330,250,000
Net movement in ordinary shares during the year 800,000 1,000,000
(note 7)
Issued ordinary shares at end of the year 332,050,000 331,250,000
Weighted average number of shares in issue for the 331,750,000 330,700,000
year
Dilutive effect of options 1,191,863 2,570,209
Weighted average shares for diluted earnings per 332,941,863 333,270,209
share
5. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS: CURRENT
30 June 30 June
2012 2011
(unaudited)
GBP000 GBP000
Financial asset loan notes - 11,286
Financial assets held for trading 6,299 3,765
6,299 15,051
Financial asset loan notes arose as part of the consideration payable to
Eurovestech following the successful completion of the Scheme of Arrangement
whereby ToLuna plc was taken private by ITWP. The loan notes were non-interest
bearing and converted into equity in ITWP at 30 June 2012.
30 June 30 June
2012 2011
GBP000 GBP000
Financial assets held for trading 6,299 3,765
Historical cost 5,990 3,651
Financial assets held for trading primarily consist of UK listed Sterling
investments and marketable securities.
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS: NON-CURRENT
%
interest in
ordinary
Country of shares at
Subsidiary companies incorporation 30 June Principal activity
consolidated in these accounts 2012
Knowledge Support Systems UK 100 Price optimisation
Limited software
Knowledge Support Systems Inc. US 100 Price optimisation
software
Market Planning Solutions Inc. US 100 Network planning
solutions
MPSI K.K. Japan 100 Network planning
solutions
MPSI Systems Limited UK 100 Network planning
solutions
Equity
Investments
Non-current GBP000
At 1 July 2010 47,813
Additions 12,294
Net loss on investments at fair value (1,808)
Disposals (36,524)
At 30 June 2011 21,775
Additions 13,487
Net loss on investments at fair value (343)
Disposals -
At 30 June 2012 34,919
The additions primarily relate to ITWP Acquisitions Limited where the
convertible loan notes converted into equity, together with additional
fundraising in Maxifier Limited and ARKeX. The loss on revaluation arises from
the increase in valuation of Maxifier Limited offset by a write down in value
of Audionamix SA following weaker than expected performance.
Included within non-current financial assets are the following companies for
the year ended 30 June 2012:
% Fair value
interest in at 30 June
ordinary 2012
shares
Country of at 30 June (unaudited)
Portfolio company name incorporation 2012 GBP000
ITWP Acquisitions Limited (previously UK 16.7 23,782
ToLuna plc)
Magenta Corporation Limited UK 46.9 1,209
Maxifier Limited UK 46.3 6,482
Audionamix SA France 45.5 875
LogNet Information Systems plc UK 26.5 1,325
ARKeX Limited UK 2.5 1,196
Ecodata Limited UK 0.2 50
Group investments carrying value 34,919
Included within non-current financial assets are the following companies for
the year ended 30 June 2011:
%
interest in Fair value
ordinary at 30 June
shares
Country of at 30 June 2011
Portfolio company name incorporation 2011 GBP000
ITWP Acquisitions Limited (previously UK 10.0 11,581
ToLuna plc)
Magenta Corporation Limited UK 46.9 1,209
Maxifier Limited UK 49.9 2,300
Audionamix SA France 45.5 4,213
LogNet Information Systems plc UK 26.5 1,325
ARKeX Limited UK 2.5 1,147
Group investments carrying value 21,775
7. SHARE CAPITAL
Shares GBP000
Authorised share capital
At 1 July 2011 and 30 June 2012
Ordinary shares of GBP0.01 each 570,000,000 5,700
B shares of GBP0.00001 each 383,722,801 4
C shares of GBP0.0218 each 383,722,801 8,365
D shares of GBP0.00001 each 340,950,000 3
Issued, called up and fully paid
Ordinary shares of GBP0.01 each
At 1 July 2011 331,250,000 3,312
Issue of charity shares 1,400,000 14
Purchase of own shares (600,000) (6)
At 30 June 2012 332,050,000 3,320
B shares
At 1 July 2011 and 30 June 2012 152,518,623 2
D shares
Issue of D shares 331,550,000 3
At 30 June 2012 331,550,000 3
At 30 June 2012 816,118,623 3,325
Shares donated to charity are subscribed for in cash to the extent of the
nominal value and the difference between the nominal and market value at the
time of the donation is charged to the income statement and forms an addition
to share premium.
A summary of the changes in the issued share capital of the Company during the
year is as follows:
(i) On 29 September 2011, the Company issued 300,000 new ordinary shares of one
penny each at par, divided between three charitable organisations.
(ii) On 29 March 2012, the Company issued 1,100,000 new ordinary shares of one
penny each at par, divided equally between eleven charitable organisations.
(iii) On 14 October 2011, the authorised share capital of the Company was
increased by 340,950,000 D shares.
(iv) On 14 October 2011, following receipt of elections from shareholders
through the Return of Cash scheme, 331,550,000 D shares of ?0.00001 each were
issued to existing shareholders. The D shares were issued out of existing share
premium.
(v) On 21 October 2011, a dividend of 4 pence per share was paid on the D
shares.
Both the GBP0.00001 B Shares and D shares confer no voting rights or entitlement
to future dividends and cannot be traded on any stock exchange.
8. COMPANY BALANCE SHEET
30 June 30 June
2012 2011
(unaudited)
Note GBP000 GBP000
Fixed assets
Tangible assets 5 12
Investments 9 52,919 31,275
52,924 31,287
Current assets
Debtors 2,375 2,604
Investments 5 6,299 15,051
Cash at bank and in hand 52 20,683
8,726 38,338
Creditors: amounts falling due within one year (4,279) (3,980)
Net current assets 4,447 34,358
Net assets 57,371 65,645
Capital and reserves
Called up share capital 7 3,325 3,314
Share premium account 261 135
Capital redemption reserve 4,438 4,432
Other reserve 100 100
Profit and loss account 49,247 57,664
Shareholders' funds 57,371 65,645
9. COMPANY FIXED ASSET INVESTMENTS
GBP000
Valuation
At 1 July 2010 57,313
Additions 12,294
Net loss on revaluation at fair value through profit and loss (1,808)
Disposals (36,524)
At 30 June 2011 31,275
Additions 13,487
Net gain on revaluation at fair value through profit and loss 8,157
Disposals -
At 30 June 2012 52,919
The additions primarily relate to ITWP Acquisitions Limited where the
convertible loan notes converted into equity, together with additional
fundraising in Maxifier Limited and ARKeX. The gain on revaluation arises from
the increase in valuation of both Maxifier Limited and KSS Limited, partially
offset by a write down in value of Audionamix SA following weaker than expected
performance.
Included within fixed asset investments are the following companies at 30 June
2012:
% Fair value
interest in at 30 June
ordinary 2012
shares
Country of at 30 June (unaudited)
Portfolio company name Incorporation 2012 GBP000
Principal subsidiary
Knowledge Support Systems Limited (and UK 100 18,000
its subsidiaries)
Other investments
ITWP Acquisitions Limited (previously UK 16.7 23,782
ToLuna plc)
Magenta Corporation Limited UK 46.9 1,209
Maxifier Limited UK 46.3 6,482
Audionamix SA France 45.5 875
LogNet Information Systems plc UK 26.5 1,325
ARKeX Limited UK 2.5 1,196
Ecodata Limited UK 0.2 50
Investments' carrying value 52,919
Included within fixed asset investments are the following companies at 30 June
2011:
%
interest in Fair value
ordinary at 30 June
shares
Country of at 30 June 2011
Portfolio company name Incorporation 2011 GBP000
Principal subsidiary
Knowledge Support Systems Limited (and UK 100 9,500
its subsidiaries)
Other investments
ITWP Acquisitions Limited (previously UK 10.0 11,581
ToLuna plc)
Magenta Corporation Limited UK 46.9 1,209
Maxifier Limited UK 46.3 2,300
Audionamix SA France 45.5 4,213
LogNet Information Systems plc UK 26.5 1,325
ARKeX Limited UK 2.5 1,147
Investments' carrying value 31,275
10. COPIES OF THE REPORT & ACCOUNTS
Copies of the Report and Accounts will be posted to shareholders in due course
and will be available from the Company's registered office 29 Curzon Street,
London W1J 7TL, and on the Company's website www.eurovestech.com.
END
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