UK venture capital firm NewMedia SPARK has published its annual results for the year to March 2002, highlighting a massive fall in the valuation of its portfolio companies. The firm’s portfolio now has a total value of £38.8m, compared with a figure of £109.7m for the previous year.
SPARK has written down to zero the book value of its holding in eTV, following a decision by Spark to cease further funding of the digital television firm. Similarly, the value of the firm's 39 per cent stake in EO plc has been written down to £1.6m, as has the firm’s investment in DX3. At the time of Spark’s original investment in EO in 2000, the firm had a valuation of E50m.
In a statement to the London Stock Exchange, company CEO Mike Whitaker said the firm had implemented a number of measures to reduce costs at the company. “We are reducing staff levels by over 50 per cent to approximately 16 employees and are seeking substantial reductions in office and other central overhead costs. Remaining senior staff have agreed to take salary cuts of up to 30 per cent and I will continue to draw no salary. The effect of this re-organisation process, once complete, will be to reduce costs to approximately £2m per annum.”
Whitaker attributed the firm’s poor performance to the continuing weakness in technology and IPO markets. 'It is clear that in present market conditions SPARK must adjust its course and that radical action is required to maximise shareholder value.'
He added that the firm was pleased with the performance of a number of its portfolio companies, with fourteen having received further investment from external third parties during the last twelve months. A further six companies were exited by the firm.
Earlier this year, the group made £23m on the sale of its 0.83 per cent stake in Deutsche Börse, acquired as part of the purchase of a 54 per cent stake in Spütz, the German brokerage house.