ENGI.L Regulatory News (ENGI)

14 Feb 2005 10:48

Billam PLC14 February 2005 BILLAM PLC (AIM) FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004 The Board of Billam Plc ("Billam" or "the Company"), the investment company specialising in technology for thefuture, is pleased to announce its Final Results for the year to 31 December 2004. Achievements * Four flotations of investee companies during the year * At year end majority of portfolio held in quoted shares * Further commercial progress by investee companies * New investee companies have performed well Commenting on the results Billam's Chairman, Victor Beamish, said: "Billam made significant progress throughout the year; with the flotation of four of its investee companies, theCompany has achieved its stated objective of holding a greater proportion of its investments in quoted companies.Your Board anticipates that further progress will be made in 2005." The above summary should be read in conjunction with the full text of the following announcement --ENDS-- Enquiries Billam Plc 020 7336 1300 Angus Forrest Bishopsgate Communications 020 7430 1600 Maxine Barnes / Dominic Barretto BILLAM PLC CHAIRMAN'S STATEMENT For the year ended 31 December 2004 Chairman's statement 2004 has seen significant change in your Company's asset base. The business model, which was formulated in 2000 andbacked by many of the current shareholders, is completing its objective of turning its unquoted investments intoquoted ones. More than 50% of the portfolio (measured both by number and value including those quoted investmentsheld by Eirx Pharma Limited) was quoted by the year end (2003: 25% and 33% respectively). Further, many of the companies have advanced the commercial development of their businesses, particularly through newcontracts with major customers. Many of the investments are exploiting world-leading technologies and, in some cases, are market leaders. However,the market value of two of the quoted investments has fallen in the year and this has had an immediate impact onBillam's net asset value. We believe that as these companies evolve further, there will be an upward re-rating oftheir valuations. Billam's philosophy has been to identify and back, with both funding and management support, companies seeking toexploit rapidly growing markets. Your Company's portfolio has proved to be resilient despite the difficulties causedby economic and stock market conditions from 2001 through 2003. Company During 2004, the objectives I identified in my report last year have to a great extent been achieved: Following the consolidation, the bid/offer spread has reduced from approximately 100% to 25%. However, this stillremains larger than is desirable. The Company is taking steps to achieve further reductions through a combination ofincreased and improved communications with shareholders, market professionals and commentators. Administrative costs have been reduced from £871,000 to £622,000. I would like to thank all the staff including my fellow directors for their hard work during the year. Shareholders We welcome the support of all existing shareholders and new investors who became shareholders during the year. YourBoard is continuing its efforts to create awareness of Billam's achievements. We have entered a period of change when the valuation of the Company's existing portfolio is becoming increasinglytransparent, through market prices. Whilst this makes our portfolio vulnerable to stock market fluctuation over theshort term we believe that over the longer term it will lead to capital growth. The free share-dealing scheme for small shareholders was well received in 2004. A similar scheme will be offered inMarch 2005. This year eligible shareholders - those with holdings of 500 or less Ordinary 10 pence shares - willreceive a personal letter and details of the scheme allowing them to sell or buy shares. As I explained in my 2004 interim statement, it is the intention of the Board to have a further consolidation in2005. Details will be circulated with the Report and Accounts and notice of the AGM. Outlook Billam made progress during 2004 - your Company's investments are developing well and further progress is anticipatedin 2005. This will be achieved by commercial development within investee companies, and through more companies beingfloated. Many good investment proposals are being received by the Company and it is the Board's intention to take advantage ofselected investment opportunities. Victor BeamishChairman BILLAM PLC CHIEF EXECUTIVE'S REPORT For the year ended 31 December 2004 Executive Report I am pleased to report that the portfolio companies have developed well in 2004 and many have been transformedcommercially by winning new and valuable contracts with blue chip customers. This has increased the credibility oftheir technologies and value of product offerings, which further bolsters their capital value and makes flotation (orsale) a viable expectation. As Victor Beamish, our Chairman, has already identified there has been a transformationof the portfolio from unquoted to quoted over the past year. Investment Policy The investee companies are no longer reliant on Billam Plc as their sole or major source of finance. This developmenthas been assisted by the flotation of three existing portfolio companies in 2004, and one new investee company inwhich Billam invested at flotation. Investment Activity We continued to support two investee companies prior to flotation: EiRx Therapeutics plc and Physiomics plc, both ofwhich floated in 2004; and we have made three new investments: Sareum plc, TMO Biotec Ltd and Intellego Holdings plc.Two of these had Initial Public Offerings (IPOs) on AIM in 2004. Valuations The increasing proportion of the portfolio which is held in quoted shares makes the valuation of your Company'sassets more transparent as these are valued at market value at the year end. Two of Billam's quoted investments,Physiomics and EiRx Therapeutics are held via an unquoted holding company, Eirx Pharma Limited, EiRx Pharma'sdirectors intend to distribute the quoted shares to the shareholders at which time Billam's investment portfolio willbe adjusted. The impact of this will be to increase the value of the quoted portfolio by £4,389,000 and decrease thevalue of the unquoted by a corresponding amount. Value of Investments The number and maturity of the quoted investments can lead to volatility in values, which are measured at aparticular moment. It is anticipated that as the business develops, and the number of quoted investments increases,so the portfolio volatility should reduce. Our target is for Net Asset Value per share to outperform the benchmark indices shown below over the longer term: Net assets per share have fallen by 47% in the year. FTSE Techmark All Share Index 9.7 %FTSE All Share Index 9.2 %FTSE AIM 20.4 % However, over the four year period from 1 June 2000 they have grown 74%, which compares favourably with the FTSE AllShares Index : -20% and FTSE AIM Index : -39%. Outlook for the Portfolio In 2004, more investee businesses began to demonstrate their potential. Whilst this has facilitated four flotationsin 2004, so far it has not been fully recognised by the Stock Market in terms of increased values. Rises in the values of the investments in the quoted portfolio and further transfers of investments from unquoted toquoted share portfolio should occur in 2005 subject to Stock Market conditions not deteriorating significantly. The greater value and number of the quoted investments should allow Billam's management increased flexibility in thefuture, by giving more options for asset reallocation, broader security for any borrowings and less reliance on anyone shareholding. The flexibility should continue to develop as more investments become quoted. Communications Billam continues to develop the information and data provided to its shareholders and others, and to offer regularupdates using the London Stock Exchange RNS service, the Company's website: www.billamplc.co.uk, emails toindividuals who register on the website and through brokers' notes and press releases.Angus ForrestChief ExecutivePORTFOLIO REVIEW For the year ended 31 December 2004 QUOTED PORTFOLIO Cybit Holdings plc (AIM) Telematic Service Provider Equity Ownership 11.3% Cybit is one of the UK's leading telematics Valuation (£'000) 1,644 service providers. In 2004 Cybit announced Cost (£'000) 415 significant developments of its business Valuation based on market value with the introduction of new services Cost - Original cost net of realisations including the industry's first fully modular internet based telematics solution and the acquisition of Mapamobile mobile location service. New business wins include Sainsbury Home Delivery, Alfred McAlpine and Marshalls Plc, appointment of new resellers and a partnership with Norwich Union Insurance EiRx Therapeutics plc (AIM) Pre-Clinical Therapeutics Equity Ownership