IBIS Media VCT 1 Plc Annual Report & Financial Statements
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IBIS Media VCT 1 plc Annual Report & Financial Statements for the year ended 31 January 2015 Incorporated in England and Wales with registration number 5660269 Contents Financial Summary 1 Strategic Report Chairman’s Statement 2 Investment Adviser’s Review 4 Investment Portfolio 12 Venture Capital Investments 13 Objectives and Key Policies 15 Other Matters 16 Reports from the Directors The Board, Investment Committee 17 & Investment Adviser Directors’ Report 18 Statement of Corporate Governance 21 Statement of Directors’ Responsibilities 25 Directors’ Remuneration Report 26 Report of the Independent Auditor 29 Financial Statements Income Statement 31 Balance Sheet 32 Cash Flow Statement 33 Reconciliation of Movements in Shareholders’ Funds 34 Notes to the Financial Statements 35 Information for Shareholders Notice of Annual General Meeting 45 Form of Proxy 47 Corporate Information IBIS Media VCT 1 plc 1 Financial Summary Year ended 31 January 2015 2014 Net assets £5,593,882 £6,013,888 Net asset value per share 51.47p 57.11p Investment income £104,854 £165,327 Return on ordinary activities before tax - Revenue £4,551 £(159,664) - Capital £(617,771) £369,782 - Total £(613,220) £210,118 Return per share - Revenue 0.04p (1.52)p - Capital (5.73)p 3.53p - Total (5.69)p 2.01p Dividend per share declared in respect of the year - Revenue Nil Nil - Capital Nil Nil - Total Nil Nil Share price at end of year 21.5p 20.0p 2 IBIS Media VCT 1 plc Strategic Report Chairman’s Statement The aim of the Strategic Report is to provide shareholders with the ability to assess how the Directors have performed their duty to promote the success of the Company for shareholders’ collective benefit. This report has been prepared by the Directors in accordance with the requirements of Section 414 of the Companies Act 2006. Company Overview sales pipeline that it hopes will take the The net asset value total return per There have been a number of positive company into profitability. Get Me Media share comprises the net asset value developments to report at Freshwater, focused on improving cost efficiency plus cumulative dividends paid per Contagious, Ginx TV and Get Me Media and almost achieved break-even in share. Net asset value is calculated at during the year under review. Freshwater 2014. The company is showing signs of least quarterly with investments valued and Contagious reported a profitable set improving performance and is now in accordance with the International of trading results, while Ginx TV and Get targeting its first profitable trading year. Private Equity and Venture Capital Me Media are now at a level close to As stated in the Annual Report and Valuation Guidelines. As at 31 January profitability. These four investee Financial Statements for the year ending 2015, the Company’s net asset value companies now account for the entire 31 January 2014, IBIS wrote down its total return per share was 60.47p. IBIS Media VCT 1 plc (“IBIS” or the investment in Futurelex by £150,000 to During the year under review, the “Company”) portfolio of venture capital £50,000 following the year-end. Faced Company’s net assets decreased by investments by net asset value. with a challenging legal market in which £420,006. This decrease comprised a This was the year when all the hard to monetise its digital assets, Futurelex loss for the year of £613,220 – an years of the recession began to pay off experienced a number of years of unrealised capital loss of £516,784 due for Freshwater. I am pleased to report deteriorating trading which culminated in to an increase in the fair value of that the company achieved its best set the company entering administration in Freshwater offset by a larger decrease of trading results for six years. December 2014. IBIS has now written in the fair value of Futurelex and Freshwater is now a strong, profitable down its investment in Futurelex to nil. Masher Technologies, a realised capital and growing business that should Since then, a new company, Global City loss of £100,987 and a revenue gain of benefit from the improving economic Media, has been established to acquire £4,551 – set off with a net amount of outlook. Indeed, the company’s the majority of assets from Futurelex. £193,214, which was raised from substantially improved trading and Masher Technologies’ attempts to several share allotments. Therefore, the financial position allowed the board to secure separate sales of the business in net asset value per share decreased resume dividend payments to 2013 and 2014 were ultimately from 57.11p to 51.47p, a decrease of shareholders, with IBIS receiving unsuccessful. Although there are 5.64p per share or 9.88%, and the net £22,074 in dividends in January 2015 prospects to achieve value from its asset value total return per share and an interim dividend announced consumer website, user database and decreased from 66.11p to 60.47p, a since the Company’s year-end. licence agreement with BBC Worldwide, decrease of 5.64p per share or 8.53%. Contagious continued along the path of we believe that it is prudent to write The net cash outflow during the year international expansion with the launch down our investment in the company was £39,665 reflecting a cash outflow of operations in Singapore and a joint until there is more visibility on the of £157,879 due to operating activities venture in Brazil, the terms of which are company’s prospects. and a net inflow of £118,214 as a result such that Contagious received an up- of new shares allotted and share front cash payment that places a Financial Performance buybacks. significant value on the South American The Board, in consideration of the Over the same period, the FTSE All- joint venture from the outset. The Company’s performance and taking Share Media Index increased by company reported strong trading account of the comparatively long-term 13.01%. A graph comparing the momentum in the second half of the nature of the Company’s investments, Company’s share price total return, the year, culminating in new business and pays particular attention to the net Company’s net asset value total return renewals of its print and digital products asset value total return per share per share and the total return from a in the final quarter being significantly performance against the FTSE All- notional investment of 100p in the ahead of the same period in the prior Share Media Index (which IBIS Private FTSE All-Share Media Index over the year. Ginx TV also reported a better Equity Partners LLP (the “Investment period from 5 April 2006 to 31 January second half of the year and traded close Adviser”) considers to be the most 2015 is presented on page 28. to profitability over the final quarter. The appropriate broad equity market index The ongoing charges ratio, calculated company has a number of advertising for comparative purposes) and the as the year’s expenses (as disclosed in and channel sales deals in its short-term ongoing charges ratio. the profit and loss account) divided by IBIS Media VCT 1 plc 3 the average net asset value across the Investment Performance Outlook year, was 3.43% (2014: 6.94% – the No new or follow-on investments in Freshwater, Contagious, Ginx TV and ongoing charges ratio for the year IBIS portfolio companies were made Get Me Media now account for the ended 31 January 2014 takes into during the year and no investments entire IBIS investment portfolio net consideration £190,805 of accrued were directly realised. The carrying asset value between them. These four loan interest from Futurelex that was value of the Company’s venture capital companies are either profitable or on written off as part of the restructuring of investments decreased by £516,784, the verge of profitability and each has IBIS’ investment and was thereby taking the fair value of the portfolio to improving prospects of generating accounted for as an exceptional cost £5,182,338 as at 31 January 2015. The realisations for shareholders. to the Company. Excluding this Company increased the carrying value Freshwater is now in a stronger exceptional cost, the Company’s of its investment in Freshwater by financial position than at any time since ongoing charges ratio for the year £37,803. This was offset by a larger before the recession and has resumed ended 31 January 2014 was 3.7%). reduction in the carrying value of the payment of dividends to Under the terms of the Investment Futurelex by £200,000 and Masher shareholders. Profitable trading at Adviser agreement, the running costs Technologies by £354,587. A full report Contagious gained momentum in the of the Company (excluding the of the performance of the Company’s second half of 2014 and the company Investment Adviser’s performance investments is given in the Investment now expects to accelerate its growth related incentive fee, irrecoverable VAT, Adviser’s Review. with the addition of new overseas trail commission and costs of any The Company’s cash was invested in a territories in Asia and South America. significant corporate activity) are number of liquid funds with the Ginx TV has a short-term sales pipeline restricted to a maximum of 3.5% of the emphasis on capital preservation. that it hopes will take the company into average value of the Company’s net profitability and Get Me Media is also assets. Any excess will be paid by the targeting its first profitable year as a Investment Adviser. Corporate Activity result of improving performance at the With the Company fully invested and operating level.