Kingswood H. Regulatory News (KWG)

25 Sep 2008 07:00

25 September 2008 EQUITY PRE IPO INVESTMENTS LIMITED ("Pre IPO" or "the Company") UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2008

Equity Pre Ipo Investments Limited (AIM: EIL), the strategic Pre-IPO investment company, today announces its unaudited results for the six months ended 30 June 2008.

DIRECTORS' REVIEW

We are pleased to present the Company's interim results for the six months to 30 June 2008 to shareholders.

Background

In the annual report and accounts issued earlier this year, westated that the environment for smaller companies has been unfavourable formany months. As has been well documented elsewhere, the environment forfloating smaller companies has worsened further as evidenced by the lowestnumber of new companies being admitted to AIM in the first half of 2008 foralmost 10 years. In the first eight months of 2008, only 85 companies joinedAIM, compared to 284 during 2007, 462 in 2008 and 519 in 2005. In addition thecurrent economic environment has meant that it is proving very difficult forsmaller companies to raise new funds. Banks are generally unwilling to providedebt finance and there are few investors interested in providing equityfinance.We took the prudent view to write down a significant proportion ofthe carrying value of our portfolio at the end of 2007 (‚£4.1 million). Ourportfolio companies have continued to operate successfully and, therefore,whilst we have struggled to achieve realisations from our investments we havetaken the view that there should be no material changes to the valuations at30 June 2008 (‚£4.0 million).

Financial review and net asset value

The Company's unaudited net asset value per share ("NAV") as at 30 June 2008 stood at 27.18 pence, down marginally from 28.56 pence at 31 December 2007. The fall is primarily due to exchange rate differences on conversions of euro investments and the ongoing running costs incurred in the first half year of ‚£0.19 million.

Despite the lack of exit opportunities currently available due tothe current difficulties in the financial markets, we remain confident of thecurrent carrying value of the investment portfolio as each of the businessescontinue to trade in line with their management's expectations.Loss for the period was ‚£0.18 million (2007: ‚£0.15 million),resulting in a loss per share of 1.38 pence (2007: 1.09 pence). We managedonly a small partial exit from one investment during the period and, as aconsequence, the Company's ongoing overheads have been primarily paid throughan increase in the value of loans payable at the year end to ‚£0.54 million(2007: ‚£0.50 million). One of our goals for the second half of the year is toreduce the value of the Company's borrowings through further partialrealisations or loan conversions.

Investee Companies

The Company continues to hold investments in six companies (31December 2007: six), although shortly after the period end, one of thecompanies, Pinnacle Plus Limited, was sold to an AIM listed company, CreonCorporation plc ("Creon") in an all paper deal. Accordingly, we today havefive unquoted investments and one quoted investment in the portfolio. Inaddition we continue to have a loan outstanding with Pinnacle Plus Limited andare in conversations with Creon and Pinnacle about the most appropriate way toachieve its repayment.

Lorega Limited, a provider of loss recovery insurance products continues to trade well with record profits recorded in the period to March 2008. Altair Financial Services Plc, the prepaid card processer, remains on course to deliver significant uplifts in revenues during 2009 as a number of key international contracts begin to be rolled out.

Of the remaining three investments, we are currently innegotiations to dispose of one, which could realise a potential return of morethan 50% on the original amount invested of ‚£185,000. (It should be noted,however, that Pre-IPO made its first investment in this company in early2005.) We continue to hold our positions in Radioscape plc and Fashion BrandsCollections B.V.OutlookWe anticipate that stock market conditions will remain verydifficult for smaller companies in the foreseeable future. We will howevercontinue to work closely with our investee companies with the aim ofextracting value over the coming months from our investments. Since the periodend, we have continued negotiations to dispose of parts of the portfolio and,as a result, we remain confident that we will be able to reduce our loanbalances by the year end.

UNAUDITED STATEMENT OF TOTAL RETURN

FOR THE SIX MONTHS ENDED 30 JUNE 2008

For the six month period For the six month period For the year ended ended 30 June 2008 ended 30 June 2007 31 December 2007 (unaudited) (unaudited) (audited) Revenue Capital Total Revenue Capital Total Revenue Capital Total ‚£ ‚£ ‚£ ‚£ ‚£ ‚£ ‚£ ‚£ ‚£

GAINS ON INVESTMENTSNet (losses)/gains oninvestmentsat fair value throughprofit or loss - (10,252) (10,252) - 11,254 11,254 - (3,279,261) (3,279,261)Unrealised gain on foreignexchange - - - - - - 14,163 - 14,163 - (10,252) (10,252) - 11,254 11,254 14,163 (3,279,261) (3,265,098) INCOMECommission received - - - 1,200 - 1,200 1,200 - 1,200Interest income 20,858 - 20,858 1,724 - 1,724 22,219 - 22,219 20,858 - 20,858 2,924 - 2,924 23,419 - 23,419 EXPENDITUREDirectors' fees 10,000 - 10,000 10,000 - 10,000 20,000 - 20,000Administration fees 32,189 - 32,189 28,016 - 28,016 43,530 - 43,530Professional fees - 14,040 14,040 - 65,848 65,848 26,738 10,667 37,405Consultancy fees - 75,011 75,011 - 39,343 39,343 - 183,768 183,768Audit fee 1,500 - 1,500 6,555 - 6,555 12,930 - 12,930Bank charges andinterest 202 - 202 800 - 800 - - -Interest charged 16,892 - 16,892 - - - 20,418 - 20,418Commission paid - - - - - - 3,256 - 3,256Regulatory andregistration fees 11,238 - 11,238 3,110 - 3,110 19,097 - 19,097Loss on exchange 32,807 - 32,807 7,594 - 7,594 - - - 104,828 89,051 193,879 56,075 105,191 161,266 145,969 194,435 340,404NET LOSS ON ORDINARYACTIVITIES FOR THEFINANCIALPERIOD/YEAR (83,970) (99,303) (183,273) (53,151) (93,937)

(147,088) (108,387) (3,473,696) (3,582,083)

Basic earnings per share (pence per share) (0.63) (0.75) (1.38) (0.40) (0.69) (1.09) (0.82) (26.24) (27.06)

All revenue and capital items in the above statement derive from continuing operations.

No operations were acquired or discontinued during the period.

UNAUDITED BALANCE SHEET30 JUNE 2008 30 June 2008 30 June 2007 31 December 2007 (unaudited) (unaudited) (audited) FIXED ASSETSInvestments at fair value throughprofit or loss 4,037,543 7,077,739 4,093,423 CURRENT ASSETSLoans receivable 230,000 80,000 230,000Other debtors and prepayments 39,970 -

21,202Cash equivalents 1,664 85,130 6,651 271,634 165,130 257,853 CREDITORS - AMOUNTS FALLINGDUE WITHIN ONE YEARLoans payable (541,257) - (496,269)Other creditors and accruals (170,010) (52,794)

(73,824) (711,267) (52,794) (570,093) NET CURRENT ASSETS (439,633) 112,336 (312,240) TOTAL ASSETS LESS CURRENTLIABILITIES ‚£ 3,597,910 ‚£ 7,190,075 ‚£ 3,781,183 CAPITAL AND RESERVES

CALLED UP SHARE CAPITAL 132,372 132,372 132,372SHARE PREMIUM ACCOUNT 4,254,872

4,254,872 4,254,872CAPITAL RESERVE REALISED 527,566 452,906 520,093 UNREALISED (613,470) 2,853,967 (595,745)

SHARE OPTION RESERVE 33,680 4,811 33,680REVENUE RESERVE (737,110) (508,853) (564,089) SHAREHOLDERS' FUNDS ‚£ 3,597,910

‚£ 7,190,075 ‚£ 3,781,183

Net asset value per share(pence per share) 27.18 54.32 28.56

APPROVED BY THE BOARD OF DIRECTORS

P M Schreibke M ShiresDirector Director Date: 25 September 2008UNAUDITED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2008

Six month Six month Year ended period ended period ended 31 December 30 June 2008 30 June 2007 2007 (unaudited) (unaudited) (audited) Net cash outflow from operatingactivities

(95,603) (199,394) (235,176)

Investing activities:Purchase of quoted investments - - -Purchase of unquoted investments - (731,910) (1,466,394)Proceeds from disposals of quoted investments - 938,930 985,498Proceeds from disposals of unquoted investments 45,628 - 378,950Loans receivable advanced - - (230,000) Net cash inflow/(outflow) from financial investment 45,628 207,020 (331,946) Financing:Loans payable received 44,988 - 496,269 Net cash inflow from financing 44,988 - 496,269 (Decrease)/increase in cash for the period/year ‚£

(4,987) ‚£ 7,626 ‚£ (70,853)

RECONCILIATION OF NET CASHFLOWTO MOVEMENT IN CASHAND CASH EQUIVALENTS (Decrease)/increase in cash resources for the year

(4,987) 7,626 (70,853)

Cash inflow from increase in debt finance (44,988) - (496,269) Change in net debt resulting from cash flows

(49,975) 7,626 (567,122)

Opening funds brought forward

(489,618) 77,504 77,504

Closing net (debt)/funds carried forward ‚£

(539,593) ‚£ 85,130 ‚£ (489,618)

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

30 JUNE 20081. ACCOUNTING POLICIES(a) CONVENTION

These unaudited interim financial statements have been prepared using the same accounting policies, presentation and

methods of computation adopted in the last audited financial statements, which were prepared in accordance with applicable

United Kingdom Accounting Standards.

2. EARNINGS PER SHARE

The calculation of basic earnings per share is based on the net return on ordinary activities after tax for the year and on 13,237,235 shares being the weighted average number of shares in issue during the period/year.

FRS 22: "Earnings Per Share" defines dilution as a reduction in earnings per share or as an increase in loss per share. When

calculating the dilutive earnings per share for the year the loss per share decreased. Accordingly the diluted loss per share is not

disclosed as per FRS 22. The company has 800,000 share options in issue which could potentially dilute basic earnings per share

in the future.

3. NET ASSET VALUE PER SHARE

The calculation of net asset value per share is based on the net assets of ‚£3,597,910 and on the ordinary shares in issue of

13,237,235 at the balance sheet date.

The report is available to view and download from the Company's website at www.equitypreipo.com

For further information please contact:

Equity Pre-IPO Investments Limited

Paul Schreibke +44 (0)1481 751 000Jonathan Freeman +44 (0) 20 752 0215Daniel Stewart & Company PlcOliver Rigby +44 (0)207 776 6550GTH CommunicationsToby Hall +44 (0)20 7153 8039Christian Pickel +44 (0)20 7153 8036