Forum Archive Index - June 2000

["Christian Mair" <product@adidas-ep.co.nz>]

FLLYR: ITC: FLLYR TO 31/03/2000 LOSS $2.505M (LOSS $1.792M)

Extract from announcement received:
CONSOLIDATED OPERATING STATEMENT FOR THE 12 MONTHS
ENDED
Audited (NZ$'000)
Current Previous
Period Corresponding
Period
OPERATING REVENUE
Sales revenue 1,249 0
Other revenue 1,058 103
Total operating revenue 2,307 103
OPERATING SURPLUS (DEFICIT)
BEFORE UNUSUAL ITEMS AND TAX (2,505) (1,792)
Unusual Items for separate
disclosure
OPERATING SURPLUS (DEFICIT)
BEFORE TAX (2,505) (1,792)
Less tax on operating profit
Operating surplus (deficit)
After tax but before
Minority interest (2,505) (1,792)
Less minority interests
Equity earnings
OPERATING SURPLUS (DEFICIT)
AFTER TAX ATTRIBUTABLE
TO MEMBERS OF LISTED
ISSUER (2,505) (1,792)
Extraordinary items after tax
Less minority interests
Extraordinary items after tax
attributable to members of the
Listed Issuer
TOTAL OPERATING SURPLUS
(DEFICIT) AND
EXTRAORDINARY ITEMS
AFTER TAX (2,505) (1,792)
Operating Surplus (Deficit) and
Extraordinary Items after
Tax attributable to Minority
Interest
Operating Surplus (Deficit)
and Extraordinary Items after
Tax attributable to Members
of the Listed Issuer (2,505) (1,792)
EPS - Diluted (0.017) (0.074)
SHAREHOLDERS' EQUITY
ATTRIBUTABLE TO MEMBERS
OF THE HOLDING COMPANY 21,767 588
IT Capital is strongly positioned for growth after spending its first year in
operation building a solid investment platform, bolstering its balance sheet
and extending its geographic reach to include the People's Republic of China
(PRC), Singapore, Australia and the United States," said IT Capital Chief
Executive Officer, Jeff Dittus. "During the course of the year, we raised
$23 m of capital from leading American and Australasian institutions,
invested in five partner companies deploying $13.65 m of capital, completed
strategic alliances with Ernst and Young and the Science Center
International, and exited our first investment achieving an IRR on the
invested funds of 380%. It has been quite a remarkable start."
Since year end, ITC reached an agreement to form a $43.5 m (US$20 m)
investment company in China, leveraging its strategic alliance with the
Science Center International. Upon the closing of this transaction which is
expected in the forth quarter of this year, ITC will triple its capital under
management. ITC will act as the investment manager for this company and
will control 51% of the venture. This partnership with the Tianjin Venture
Capital Preparatory Group (TVCPG) is aimed at funding innovative Chinese
companies with global application and accelerate the growth of ITC's partner
companies in China. In addition to its ownership interests, the investment
company will pay ITC a management fee, which will provide a steady source of
revenue going forward.
During the year, IT Capital invested an aggregate of $13.65 m in 5 partner
companies, and since its year end, has closed on two additional investments
deploying a further $1.55 m. Included in these numbers are ITC's follow on
investments in Virtual Spectator and Exo-Net, reflecting ITC's commitment to
these businesses. Further each of these companies attracted additional
outside funds from investors at significantly higher valuations for the
follow on rounds, reflecting the progress that both of these early stage
companies are making in increasing their customer bases and providing
innovative solutions to their markets.
IT Capital reported a loss of $2.5 m or US$1.15 m for the year ended
31/03/2000. Basic Earnings Per Share was a negative $0.017 based on a
capital base of 145,963,354 common shares and equivalents outstanding.
Net Operating Cashflow for the year was a negative $1.8 m reflective of the
Company's cash burn rate from operations.
Revenues grew to NZ$2.3 m from $103,000 thousand in the prior year,
reflecting $1.25 m of revenue from the 100% acquisition of Terabyte
Interactive, which was accounted for using the purchase method of accounting
for acquisitions for the 75 day period from 15 January through 31 March.
Additional revenues of $1.06 m came from interest income from cash on
deposit, and a gain on the sale of its BMC Media investment.
Contributing to the loss was a number of one-time start-up expenses for the
year. These include $1.1 m of legal, accounting and investment banking fees
relating to the restructuring of Iddison and the formation of IT Capital. A
large portion of this expense was underwriting and investment-banking fees
associated with four private placements, which raised approximately $23 m of
capital during the period. In addition, the company's venture capital a
administrative staff increased from 3 to 8 year on year, increasing its
general and administrative expenses.
Subject to IRD approval, IT Capital will carry forward $1.1 m of tax losses
to offset future income. Under New Zealand accounting practice, this loss is
not applied towards current earnings, but only utilized when future income is
received.
The Company's total assets increased $26.3 m to $27.4 m at year end, from
$1.1 m at 31 March 1999 and its book value increased to $21.7 m from $.588
m. This increase reflects the capital raised by ITC in the past twelve
months.
Cash balances ended the year at $14.7 m, an increase of $14.5 m from the
prior year end.
IT Capital Chairman, John Robertson, said "IT Capital is in its early stages
of development as a venture capital firm. The first two to three years of a
traditional private equity fund are spent deploying the capital under
management. In line with this practice, ITC is currently investing to create
the opportunity for growth and to secure the services of managers with the
necessary skills to take the company forward. The later years are when we
would expect to see the large capital gains as the Company's portfolio
develops."
Expansion of Global Network and Institutional Shareholder Base to Continue:
Mr Dittus said "IT Capital is well on its way towards achieving its goal of
becoming the leading publicly traded venture capital in Australasia.
"We have expanded out institutional shareholders and strategic partners to
include Armstrong Jones (ING Group), NZ Guardian Trust and Royal Sun Alliance
in New Zealand, Newport Capital in Australia, Plan B Technologies in
Singapore and Cross Atlantic Capital Partners, Snider Capital and Science
Center International in the United States," Mr Dittus said. "This network was
further strengthened in April 2000 by the strategic alliance with Ernst &
Young to focus on fast-tracking overseas business-to-business e-commerce
solutions into New Zealand and Australia and our recent partnership with
TVCPG in China," he said.
Mr Dittus remarked "sharemarket volatility had dampened confidence in the
public technology sector; as a result IT Capital is now in a strong position
to make a series of investments at lower valuations than previously possible.
This correction is advantageous to venture capital companies like IT Capital
with uninvested cash in the early stages of portfolio development."

End CA:00056998 For:ITC Type:FLLYR Time:2000-06-15:09:29:38 Encrypt:Y