LONDON (Alliance News) - AIM-listed tech investor MXC Capital Ltd on Wednesday reported a narrowed annual loss, despite a fall in net assets, as the company shifted focus towards third-party partnerships.
For the year that ended August 31, MXC Capital's pretax loss narrowed to GBP7.9 million from GBP11.8 million, with the company's central operations contributing GBP7.3 million to the loss.
MXC Capital's net assets decreased 7.1% to GBP63.9 million from GBP68.8 million.
The company's revenue decreased slightly to GBP1.0 million from GBP1.1 million.
The fair value of the company's investments decreased 20% in the period to GBP40.2 million from GBP50.5 million the year before.
"Aside from our underperforming investments in IDE and Adept4, this has been a positive year for MXC. The Company has significant cash resources, has developed a proven way to leverage its balance sheet whilst also generating strong, recurring fee income and has delivered yet another profitable exit," said Chief Executive Officer Ian Smith.
The fair value of the company's investment in Adept4 PLC decreased to GBP965,000 from GBP2.8 million in the period. MXC's investment in IDE Group Holdings PLC decreased to GBP6.3 million from GBP14.4 million. Both are AIM-listed companies.
MXC said it learned that being a minority investor in a public market company it has "insufficient ability to influence the strategy of investments and maximise value".
As a result, the company has taken a "much stronger operational position within these businesses".
MXC also "shifted" its focus from investing in publicly listed companies to working alongside third parties in the unlisted sector, to "achieve a higher return on capital".
Examples of this include its partnership with Liberty Global PLC, and then with Ravenscroft Ltd in relation to GIF Technology & Innovation Cell.
Smith added: "The MXC board believes that additional partnerships like the ones entered into this year will become available to us in the future. I am confident that the continuing development of our strategy and the efforts of the MXC team will deliver real shareholder returns from this point forwards."
Shares in MXC Capital were down 3.1% at 1.26 pence each.
