StartIT.com PLC - Final Results
29 June 2000 - 12:42AM
UK Regulatory
RNS Number:9854M
StartIT.com PLC
28 June 2000
Final Results for year ended 31st December 1999
Following the admission to AIM and the two private placements, funds available
for investment amounted to approximately #3.3m.
Your Company has at the date of this announcement completed four investments:
GLS Software Limited; Convex Software Limited; enterpriseAsia.com plc; and
Metalsonline Limited.
StartIT has launched a shareholder information section on its website
(www.startit.com).
Report and Accounts will be posted to shareholders on 28th June 2000. Copies
are available for collection from the Company's head office: Parklands
Business Centre, Greengates, Bradford, West Yorkshire BD10 9TQ and English
Trust Company Limited, 12a Charterhouse Square, London EC1M 6NA for a period
of 14 days from Wednesday 28th June 2000.
FULL STATEMENT ATTACHED
Enquiries:
Phillip Brown StartIT.com plc 01274 623 478
John Simpson English Trust Company Limited 020 7608 0888
Richard Armstrong Fiske & Co Ltd 020 7448 4700
Chairman's Statement
The Starting Point
I have pleasure in presenting my report for the financial period to 31st
December 1999, your Company's first reporting period. We were pleased with the
success of our flotation in August of 1999 not least because, at that time,
there were very few companies in the UK seeking to provide seed capital for
start-up businesses in the IT and internet sectors. Looking back even over
this short space of time, this now seems difficult to believe!
Funds Available to Invest
We were encouraged that, in December 1999, we were able to secure
shareholders' approval for a private placing of 6,000,000 Ordinary Shares at
14.5p which raised #870,000 (before expenses) for the Company. In January 2000
shareholders approved a further placing of 5,000,000 Ordinary Shares at 17.5p
raising #875,000 (before expenses) for the Company. Following flotation and
the two private placements, funds available for investment amounted to
approximately #3.3m.
Marketing
When we launched the Company, we regarded marketing as a key component of our
strategy so as to attract a sufficient number of investment proposals. In
retrospect, our main task in terms of "deal flow" has been to separate the
wheat from the chaff within the half dozen proposals we receive in a typical
day.
Investments to Date
In the period to 31st December 1999, we made an investment of #100,000 in GLS
Software Limited, a company which specialises in the development and marketing
of booking and invoicing systems in the healthcare and hotel markets. Your
Company owns 45% of the equity of GLS.
Current Trading
Since 31st December 1999 we have made three further investments. In January,
we invested #70,000 in RTBS (now Convex Software Limited), a company which
specialises in developing and marketing resource management systems in the
local authority and leisure sectors. Your Company owns 30% of the equity in
Convex.
In February, we were instrumental in the formation and successful flotation
(raising approx #12m) of enterpriseAsia.com plc whose focus is on start-up
businesses in Asia and the Far East. We invested #500,000 in
enterpriseAsia.com and your Company owns 4.2% of the equity. In May we
invested #150,000 in Metalsonline Limited, a company which offers directory
and e-commerce services to the ferrous and non-ferrous metals market in the
UK. Your Company owns 35% of the equity in Metalsonline.
Results
For the period to 31st December 1999 the Company incurred an operating loss of
#31,622 (0.105p loss per share).
Future Investments
Not unnaturally, shareholders are always keen to hear news of further
investments. Your Company is bound by the provisions of confidentiality
agreements with potential investee companies until such time as deals are
completed. Shareholders will also be aware that your Company must adhere to
Stock Exchange regulations so that we give no indication of investments prior
to an announcement in an approved manner.
Turning to the business proposals which we receive, we do not have a formulaic
approach to appraisal nor do we believe that the best-presented business plans
are necessarily the best proposals; consequently, we focus on trying to
understand the key idea in any proposal which we are asked to consider. This
takes time and sometimes leads us down blind alleys. Nevertheless, I believe
it is worth the effort if we are to secure the best returns for our
shareholders. What it does mean, however, is that our investment programme
will not consist of investments spaced at precise and regular intervals. There
will be months when we make no investments and, equally, months where we make
more than one.
There has been considerable adverse publicity recently about the market
conditions for the sector in which we operate. We believe, however, that high
interest rates coupled with a more realistic view of valuation of IT and
Internet projects offer a good opportunity to be highly selective when
considering candidates for investment.
Shareholder Information
At the request of a number of our shareholders we have launched a shareholder
information section on our web site (www.startit.com) which will be updated
whenever there is any news. I would ask shareholders, however, to bear in mind
the comments made earlier in my report about the need to respect
confidentiality and regulatory provisions.
Share Price
No report from a "dot.com" company would be complete at this time without some
mention of the volatility of share prices. Naturally, I am disappointed when
our share price falls and I have every sympathy for any shareholders who
bought on the rise and who see the short term value of their holding decline.
From the very start, however, your Company has stressed the values of sound
business principles and has aimed to communicate those values to investee
companies (as our section on our web site entitled "oh, no, not another dot
com" clearly shows). We have never made any apology for believing in the
virtues of sustainable growth and profitability because it is adherence to
these principles which will deliver long term value to our shareholders.
Despite the recent volatility in the markets we firmly believe that the sector
in which we operate continues to offer enormous potential. I am very
encouraged by the proposals which we receive and, whilst there will be those
who do not prove to be suitable candidates for investment by us, I have no
doubt about the pipeline of opportunity available. I look forward to
exploiting those opportunities for the benefit of your Company.
Valuation of Unlisted Investments
Valuation of the Company's unlisted investments has been carried out by the
Directors in accordance with the guidelines as set out by the British Venture
Capital Association.
Operations
We have a very firm belief that as little as possible should be spent on
administrative overheads so as to maximise the proportion of shareholders'
funds which is available for investment. We operate our business with two full
time staff only (our Chief Executive and his PA) with considerable part time
support from our IT Director. I am grateful to them for their hard work and
the contribution they have made to the development of the company so far.
Dividend
The Directors do not recommend the payment of a dividend for the period under
review.
Peter So
Chairman
Profit and Loss Account
For the period ended 31st December 1999
Period
Ended
31 December
1999
#
Administrative expenses (65,541)
----------
Operating loss (65,541)
Other interest receivable and similar income 33,919
----------
Loss on ordinary activities before taxation (31,622)
Tax on loss on ordinary activities -
----------
Loss on ordinary activities after taxation (31,622)
----------
1999
pence
Basic loss per share 0.106
==========
Diluted loss per share 0.105
==========
The profit and loss account has been prepared on the basis that all operations
are continuing operations.
There are no recognised gains and losses other than those passing through the
profit and loss account.
Balance Sheet
As at 31st December 1999
As at
31 December 1999
# #
Fixed assets
Tangible assets 1,842
Investments 20,000
----------
21,842
Current assets
Debtors 89,135
Cash at bank and in hand 2,396,062
----------
2,485,197
Creditors: amounts falling due within one year (15,470)
----------
Net current assets 2,469,727
----------
Total assets less current liabilities 2,491,569
==========
Capital and reserves
Called up share capital 420,000
Share premium account 2,103,191
Profit and loss account (31,622)
----------
Shareholders' funds - equity interests 2,491,569
==========
The financial statements were approved by the Board on 14th June 2000
Cash Flow Statement
For the period ended 31st December 1999
Period
Ended
31 December
1999
#
Net cash outflow from operating activities (130,355)
Returns on investments and servicing of finance
Interest received 25,918
----------
Net cash inflow/(outflow) for returns on
investments and servicing of finance 25,918
Capital expenditure and financial investment
Payments to acquire tangible assets (2,692)
Payments to acquire investments (20,000)
----------
Net cash outflow for capital expenditure (22,692)
----------
Net cash outflow before management of liquid
resources and financing (127,129)
Financing
Issue of ordinary share capital 2,670,000
Cost of share issue (146,809)
----------
Issue of shares 2,523,191
----------
Decrease in debt -
----------
Net cash inflow/(outflow) from financing 2,523,191
----------
Increase/(decrease) in cash in the period 2,396,062
==========
Notes to the Financial Statements for the year ended 31st December 1999
1. The Directors are not recommending the payment of a dividend.
2. Earnings per share
1999
#
Loss before taxation 31,622
==========
1999
Weighted average number of shares in issue 29,641,304
Dilution effect of share options 316,177
----------
Diluted effect of share options 29,957,481
==========
Basic loss per share (pence) 0.106
==========
Diluted loss per share (pence) 0.105
==========
3. Reconciliation of operating loss to net cash outflow from operating
activities 1999
#
Operating (loss)/profit (65,541)
Depreciation of tangible assets 850
Increase in debtors (81,134)
Increase in creditors within one year 15,470
----------
Net cash outflow from operating activities (130,355)
==========
4. Post balance sheet events
In January 2000, the Company purchased 3000 'B' shares of Convex Software
Limited, an unlisted company, for #70,000. This represented a 30% equity
holding.
On 1st February 2000, the Company issued 5,000,000 ordinary shares of #0.01
each, which were allotted and fully paid for at 17.5p each, for cash
consideration of #875,000.
In February 2000, the Company invested #500,000 in the ordinary share capital
of enterpriseAsia.com plc, a company listed on the Alternative Investment
Market. This represents a 4.2% holding in the ordinary share capital of
enterpriseAsia.com plc.
In May 2000, an investment of #150,000 was made by the Company to purchase 35%
of the ordinary share capital of Metalsonline Limited, an unlisted company.
5. Results for the year ended 31st December 1999 are abridged from the 1999
Annual Report and Accounts, which received an unqualified auditor's report
which will be filed with the Registrar of Companies following the Annual
General Meeting.
6. The Annual Report will be posted to shareholders on 28th June 2000. Copies
are available from the Company's head office: Parklands Business Centre,
Greengates, Bradford, West Yorkshire BD10 9TQ.
7. The Annual General Meeting will be held at Taylor Joynson Garrett,
Carmelite, 50 Victoria Embankment, Blackfriars, London EC4Y 0DY on 31st July
2000 at 11.00 a.m. Notices will be posted to shareholders on 30th June 2000.
END
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