IT Capital books half-year profit

Although it's the first operating profit for the tech venture capitalist, the result was expected by the market following the company's sell-off of its 33% interest in exo-net International in August.

That deal raised $12.3 million in cash and securities and, along with a $3 million share placement to an Australian tech fund in September, has helped to fill ITC's coffers.

CEO Jeff Dittus says the company's total assets increased to $33.6 million at the end of September and its book value increased to $30 million. These amounts include more than $20 million of available cash and equivalents for further investment.

"The exo-net sale is IT Capital's second successful exit following an earlier realisation associated with BMC Media in January 2000. Together these exits have generated a greater than 1,000 percent return on invested shareholder funds as we converted $1.8 million of capital into $13.2 million," says Mr Dittus

The performance may sound good but it has not been supported by the market, which has marked the stock down from around 38 cents before the exo-net sale to recent trades of 22-23 cents.

Perhaps this can be partly attributed to a lack of understanding of where the company is coming from -- as a venture capitalist it looks to get in and out of investments at a profit rather than looking for a long-term income stream.

The price has also had to battle against the overall fall in market sentiment for tech stocks since April's tech-wreck, although Jeff Dittus points out his company didn't get burned by dot.com fever.

"We were careful to avoid investing in 'me too' dot-com companies, but rather have focused on funding innovative Australasian businesses with defensible technology that are poised for growth."

In fact, Mr Dittus says IT Capital is looking at the shake-out in the tech sector as an opportunity.

"With the correction of technology company valuations to more reasonable levels, we now are ideally positioned to make new investments".

Last week the company committed another $2.5 million over the next 12 months to Hamilton-based display technology company, Deep Video Imaging.

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