Final Results
Billam PLC
14 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 the
future, 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, the
Company 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 and
backed by many of the current shareholders, is completing its objective of turning its unquoted investments into
quoted ones. More than 50% of the portfolio (measured both by number and value including those quoted investments
held 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 new
contracts 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 on
Billam's net asset value. We believe that as these companies evolve further, there will be an upward re-rating of
their valuations.
Billam's philosophy has been to identify and back, with both funding and management support, companies seeking to
exploit rapidly growing markets. Your Company's portfolio has proved to be resilient despite the difficulties caused
by 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 still
remains larger than is desirable. The Company is taking steps to achieve further reductions through a combination of
increased 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. Your
Board 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 increasingly
transparent, through market prices. Whilst this makes our portfolio vulnerable to stock market fluctuation over the
short 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 in
March 2005. This year eligible shareholders - those with holdings of 500 or less Ordinary 10 pence shares - will
receive 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 in
2005. 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 anticipated
in 2005. This will be achieved by commercial development within investee companies, and through more companies being
floated.
Many good investment proposals are being received by the Company and it is the Board's intention to take advantage of
selected investment opportunities.
Victor Beamish
Chairman
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 transformed
commercially by winning new and valuable contracts with blue chip customers. This has increased the credibility of
their technologies and value of product offerings, which further bolsters their capital value and makes flotation (or
sale) a viable expectation. As Victor Beamish, our Chairman, has already identified there has been a transformation
of 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 development
has been assisted by the flotation of three existing portfolio companies in 2004, and one new investee company in
which Billam invested at flotation.
Investment Activity
We continued to support two investee companies prior to flotation: EiRx Therapeutics plc and Physiomics plc, both of
which 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's
assets 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's
directors intend to distribute the quoted shares to the shareholders at which time Billam's investment portfolio will
be adjusted. The impact of this will be to increase the value of the quoted portfolio by £4,389,000 and decrease the
value 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 a
particular 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 All
Shares 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 flotations
in 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 to
quoted 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 the
future, by giving more options for asset reallocation, broader security for any borrowings and less reliance on any
one 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 regular
updates using the London Stock Exchange RNS service, the Company's website: www.billamplc.co.uk, emails to
individuals who register on the website and through brokers' notes and press releases.
Angus Forrest
Chief Executive
PORTFOLIO 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 <1% EiRx Therapeutics discovers and validates
Valuation (£'000) 3 genes involved in apoptosis (a regulated
Cost (£'000) 2 series of events that occur in human cells
Valuation based on market value for shares and results in their death) which is a
held direct and excluding major factor in the control of many
held via EiRx Pharma Ltd illnesses including cancers and
Cost - Original cost net of realisations inflammatory diseases. In doing so, EiRx
Therapeutics creates intellectual property
that it out-licenses or otherwise exploits.
In the year EiRx Therapeutics announced the
first success milestone in its contract
with OSI Pharmaceuticals Inc, also an
agreement with Biofocus Plc, a world leader
in collaborative drug discovery to help
accelerate the discovery of anti-cancer
drugs by EiRx Therapeutics.
In January 2004 EiRx Therapeutics floated
on AIM
Intellego Holdings plc (AIM) e-Learning Solutions Provider
Equity Ownership 4% Intellego is a workforce training and support
Valuation (£'000) 67 services business and retailer of e-learning
Cost (£'000) 60 computer software. It provides solutions to
Valuation based on market value facilitate in-house clearing on IT related
Cost - Original cost projects, as well as non-IT such as regulation,
compliance, product information and demonstration.
The target market is large commercial and
governmental organisations. In its first year of
operation Intellego secured business from 48
different organisations spread across a wide
range of markets
IVU Traffic Technologies AG Telematic Software Developer
(Frankfurt Stock Exchange)
Equity Ownership <1% IVU is a leading, Berlin based, developer of
Valuation (£'000) 25 software for telematic solutions and logistics.
Cost (£'000) 407 2004 has seen continued consolidation and
Valuation based on market value concentration on financial performance of the
Cost - Original cost business. In the year new versions of existing
products were introduced and IVU increased its
share in its market. Its directors anticipate the
return to profitable trading in 2005
Physiomics plc (AIM) Computer Simulation of Cells - Systems Biology
Equity Ownership 1.7% Physiomics has developed computer
Valuation (£'000) 184 software that allows it to supply
Cost (£'000) 159 simulations customised to proprietary
Valuation based on market value for pharmaceutical development projects.
shares held direct and excluding This should lead to improved
shares held via EiRx Pharma Ltdd productivity and substantially reduced
Cost - Original cost costs of drug development and faster
time to market. Ultimately, the use of
systems biology and simulations could
enable truly personalised medicine.
In July 2004 Physiomics entered into a
technology and technology alliance with
Bayer Technology Services Gmbh, which
has developed a highly sophisticated
Physiology-based Pharmaceutical
modelling system.
On 20 December 2004 Physiomics shares
were floated on AIM.
Sareum plc (AIM) Drug Discovery Service
Equity Ownership 1.9% Sareum has developed a fast-track pre-clinical drug
Valuation (£'000) 154 discovery process using a combination of skills in
Cost (£'000) 55 biology, combination of chemistry and high-throughput
Valuation based on market value chemical synthesis. Also by using its expertise in the
Cost - Original cost structure-based drug discovery to develop high-value
clinical candidates for partnering with pharmaceutical
companies.
Sareum announced five collaboration agreements in
November and December. Sareum's shares were admitted to
AIM in October 2004.
UNQUOTED PORTFOLIO
Arakis Limited Developer of Performance Enhanced Medicine
Equity Ownership <1% In March Arakis acquired Sirus
Valuation (£'000) 164 Pharmaceuticals Ltd in a share for
Cost (£'000) 480 share exchange. Arakis is an emerging
Valuation based on merger March 2004 speciality pharmaceutical company, with
a commercial focus in inflammatory
diseases and oncology adjunctive
therapy. It possesses a unique research
capability specialising in cytokine and
receptor mediated mechanisms of
disease. Arakis identifies, develops
and commercialises product
opportunities based upon new clinical
uses for known drugs, or known drug
templates, termed Performance Enhanced
Medicines (PEMs). It has three drugs in
Phase II trials. In September 2004
Arakis announced it had raised £29
million from a syndicate of existing
and new investors.
Autonomics Limited Financial Modelling and Database Management
Equity Ownership 10% Autonomics was formed in 2000 to
Valuation (£'000) 50 develop and commercialise financial
Cost (£'000) 506 software products for multinational
Valuation based on directors' valuation companies and investment banks.
EiRx Pharma Limited Holding Company
Equity Ownership 39% EiRx Pharma owned 100% of EiRx Therapeutics
Valuation (£'000) 4,389 Limited and Physiomics Limited prior to those
Cost (£'000) 2,700 companies shares being admitted to trading on
Valuation based on value of underlying AIM. It is EiRx Pharma's intention to distribute
investments its shareholding to its own shareholders,
(including Billam Plc).
A description of each investee is shown in the
quoted portfolio section.
Inaplex Limited Database and Integration Tools
Equity Ownership 6% Inaplex signed its first contract with a leading CRM
Valuation (£'000) 67 software vendor to bundle Inaplex software with a market
Cost (£'000) 67 leading product. This should lead to further
Valuation based on cost opportunities for bundling Inaplex software. The
royalties from the first contract should provide finance
for the next stage of Inaplex's development.
TMO Biotec Limited Bio-ethanol and Bio-diesel Production Technology
Equity Ownership 2% TMO Biotec plans to prove its world leading
Valuation (£'000) 114 technology in a commercial pilot plant by
Cost (£'000) 114 the end of March 2005. The technology using
Valuation based on cost thermophiles is predicted to be up to 50%
more efficient than current technologies at
producing bio-ethanol and bio-diesel. It
can be retrofitted to existing plants to
provide an instant turnkey solution
offering major gains in efficiency for
current operators in these fast expanding
markets.
Trimex Group Limited Telematics - Security
Equity Ownership 2% Trimex signed its first deal with a car maker, Mercedes Benz.
Valuation (£'000) 1,001 Mercedes are rolling out the services throughout Europe starting
Cost (£'000) 1,001 in Poland. The commercial vehicle service has entered its second
Valuation based on cost year and is achieving renewal rates of 80% whilst also winning
new customers. Trimex top-end product EFS was discontinued in
July because the newer lower cost services had effectively made
this premium service redundant. Development on the new part
load-monitoring product continues with leading industrial
partners.
BILLAM PLC
CONSOLIDATED STATEMENT OF TOTAL RETURN
For the year ended 31 December 2004
2004 2004 2004 2003 2003 2003
Note £'000 £'000 £'000 £'000 £'000 £'000
Capital Revenue Total Capital Revenue Total
(Losses)/gains on investments (4,071) - (4,071) 2,193 - 2,193
Income - 60 60 - 239 239
Gross revenue and capital (deficit)/return 60 239 2,432
(4,071) (4,011) 2,193
Administrative expenses - (622) (622) - (871) (871)
Net (deficit)/return before exceptional items, (562) (4,633) (632) 1,561
finance costs and taxation
(4,071) 2,193
Loss on sale of subsidiary - - - (116) - (116)
Interest payable and similar charges (3) (3) (6) (6)
- -
(Deficit)/return on ordinary activities before (565) (4,636) (638) 1,439
taxation (4,071) 2,077
Tax on ordinary activities 2 764 (428) 336 (339) 121 (218)
(Deficit)/return attributable to equity (993) (4,300) (517) 1,221
shareholders (3,307) 1,738
(Deficit)/return per ordinary share
Basic and fully diluted 3 (18.4p) (5.6p) (24.0p) 12.7p (3.8p) 8.9p
The return per ordinary share is based on the weighted average number of ordinary shares in issue during the year of
17,945,924 ordinary shares of 10 pence (2003: 13,624,235 ordinary shares of 10 pence).
All of the above results arise from continuing activities.
There are no recognised gains and losses for the year other than those reflected in the above Statement of Total
Return.
BILLAM PLC
CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2004
Group
2004 2003
£'000 £'000
Fixed assets
Investments 7,864 11,798
Current assets
Debtors 201 137
Cash at bank and in hand 47 158
248 295
Creditors: amounts falling due within one year (57) (143)
Net current assets 191 152
Total assets less current liabilities 8,055 11,950
Creditors: amounts falling due after more than one year (912) (899)
Provision for liabilities and charges - (336)
7,143 10,715
Capital and reserves
Called up share capital 2,170 1,775
Share premium account 5,389 5,056
Other reserves
Capital reserve realised (957) (886)
Capital reserve unrealised 1,614 4,850
Merger reserve 1,736 1,736
Revenue account (2,809) (1,816)
Shareholders' funds 7,143 10,715
Total shareholders' funds are attributable to:
Equity shareholders 6,985 10,557
Non-equity shareholders 158 158
7,143 10,715
Net asset value per share
Ordinary shares 34.7p 65.3p
Deferred shares 0.1p 0.1p
The net asset value per ordinary share is based on net assets at the year end and on 20,119,680 ordinary shares of 10
pence (2003: 16,172,312 ordinary shares of 10 pence) being the number of ordinary shares in issue at the year end.
BILLAM PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2004
2004 2004 2003 2003
Note £'000 £'000 £'000 £'000
Net cash outflow from operating activities 4 (699) (817)
Returns on investment and servicing of finance
Interest paid (3) (6)
Net cash outflow from returns on investment and servicing of finance
(3) (6)
Capital expenditure and financial investment
Purchase of investment in subsidiary - (17)
Purchase of investments (929) (1,027)
Sale of investments 792 776
Net cash outflow from capital expenditure and financial investment
(137) (268)
Net cash outflow before financing (839) (1,091)
Financing
Issue of share capital 728 846
Receipt of borrowings - 397
Net cash inflow from financing 728 1,243
(Decrease)/increase in cash in the year 5 (111) 152
BILLAM PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2004
1. BASIS OF PREPARATION
The preliminary announcement has been prepared under the historical cost convention, as modified by the revaluation
of investment assets.
The Group's accounts have been prepared in accordance with the Statement of Recommended Practice for investment
trusts.
The significant accounting policy of the Group is as follows;
INVESTMENTS Quoted investments are valued at mid market prices. Unquoted investments are valued at cost or with
reference to available information including market prices of similar companies, latest dealings, accounting
information and professional advice as appropriate in accordance with the guidelines issued by the British Venture
Capital Association.
Realised surpluses or deficits on the disposal of investments and permanent impairments in the value of investments
are taken to capital reserve - realised, and unrealised surpluses and deficits on the revaluation of investments are
taken to capital reserve - unrealised, as explained in the capital reserve policy below.
2. TAX ON ORDINARY ACTIVITIES
The tax credit / (charge) for the year is made up as follows:
2004 Capital 2004 Revenue 2004 2003 2003 2003
£'000 £'000 Total Capital Revenue Total
£'000 £'000 £'000 £'000
Deferred tax 764 (428) 336 (339) 121 (218)
3. (DEFICIT) / RETURN PER ORDINARY SHARE
The (deficit) / return per ordinary share is based on the weighted average number of ordinary shares in issue during
the year of 17,945,924 ordinary shares of 10 pence (2003 13,624,235 ordinary shares of 10 pence) and the following
figures:
2004 Capital 2004 Revenue 2004 2003 2003 2003
£'000 £'000 Total Capital Revenue Total
£'000 £'000 £'000 £'000
(Deficit) / return attributable to
equity shareholders (3,307) (993) (4,300) 1,738 (517) (1,221)
(Deficit) / return per
ordinary share (18.4p) (5.6p) (24.0p) 12.7p (3.8p) 8.9p
All options outstanding during the year and at the year end were anti-dilutive.
4. RECONCILIATION OF OPERATING (DEFICIT)/ RETURN TO NET CASH FLOW FROM OPERATING ACTIVITIES
2004 2003
£'000 £'000
Operating (deficit)/return (4,633) 1,561
Depreciation - 24
Release of negative goodwill - (94)
Loss on sale of subsidiary - (116)
Loss/(gain) on sale of investments 192 (132)
Unrealised decrease/(increase) in investment appreciation 3,879 (2,061)
(Increase)/decrease in debtors (64) 69
Decrease in creditors (73) (68)
Net cash outflow from operating activities (699) (817)
5. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2004 2003
£'000 £'000
(Decrease)/increase in cash in the year (111) 152
Loan note issued in the year - (397)
Change in net funds resulting from cash flows (111) (245)
Net (debt)/funds at 1 January 2004 (239) 6
Net debt at 31 December 2004 (350) (239)
6. PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined
in section 240 of the Companies Act 1985.
The summarised balance sheet at 31 December 2004 and the summarised profit and loss account, summarised cash flow
statement and associated notes for the year then ended have been extracted from the Group's 2004 statutory financial
statements upon which the auditors' opinion is unqualified.
Those financial statements have not yet been delivered to the Registrar.
7. ANNUAL GENERAL MEETING
The Company's Annual General Meeting will be held at 11.00 am on 23 March 2005 at the offices of KBC Peel Hunt, 111
Old Broad Street, London, EC2N 1PH.
This information is provided by RNS
The company news service from the London Stock Exchange
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