TIDMIBSA

RNS Number : 7152S

IBIS Media VCT 1 plc

26 September 2014

IBIS Media VCT 1 plc

Half-Yearly Report

for the period ended 31 July 2014

Incorporated in England and Wales

with registered number: 5660269

Financial Summary

 
 Period ended                       Six months     Six months           Year 
                                         ended          ended          ended 
                                       31 July        31 July     31 January 
                                          2014           2013           2014 
-------------------------------  -------------  -------------  ------------- 
 
 Net assets                       GBP5,949,643   GBP5,957,111   GBP6,013,888 
-------------------------------  -------------  -------------  ------------- 
 Net asset value per share              55.08p         57.26p         57.11p 
-------------------------------  -------------  -------------  ------------- 
 Investment income                   GBP40,152     GBP101,361     GBP165,327 
-------------------------------  -------------  -------------  ------------- 
 
 Return on ordinary activities 
  before tax 
 - Revenue                         GBP(22,910)   GBP(161,382)   GBP(159,664) 
 - Capital                        GBP(196,110)     GBP222,065     GBP369,782 
 - Total                          GBP(219,020)      GBP60,683     GBP210,118 
-------------------------------  -------------  -------------  ------------- 
 
 Return per share 
 - Revenue                             (0.21)p        (1.55)p        (1.52)p 
 - Capital                             (1.83)p          2.13p          3.53p 
 - Total                               (2.04)p          0.58p          2.01p 
-------------------------------  -------------  -------------  ------------- 
 
 Dividend per share declared 
  in respect of the period 
 - Revenue                                 Nil            Nil            Nil 
 - Capital                                 Nil            Nil            Nil 
 - Total                                   Nil            Nil            Nil 
-------------------------------  -------------  -------------  ------------- 
 
 Share price at end of period            0.20p          0.50p          0.20p 
-------------------------------  -------------  -------------  ------------- 
 

Investment Policy

The objective of IBIS Media VCT 1 plc ("IBIS" or the "Company") is to make investments in unquoted companies within the media sector that have the potential to grow and to achieve capital appreciation on a subsequent exit.

Whilst the Company's directors ("Directors") and the Company's investment committee ("Investment Committee") are primarily targeting investments in privately owned companies, suitable opportunities to acquire VCT qualifying investments in smaller AIM-quoted stocks will also be considered where there is potential to achieve the level of return targeted by the Company's board of directors ("Board"). It is also the intention of the Directors to build a balanced portfolio with interests in a mixture of cyclical and non-cyclically exposed media companies operating both in mature and high growth areas of the market. IBIS is, however, unlikely to invest in all media sub-sectors as factors such as growth prospects, the competitive environment and valuations may mean that the prospective investment performance of certain of those sub-sectors would be unlikely to provide satisfactory rates of return.

Investments in business start-ups will generally be avoided unless the management team has a strong profile in the media sector and a track record of value creation for shareholders.

IBIS Private Equity Partners LLP is the Company's investment adviser ("Investment Adviser").

Chairman's Statement

Company Overview

The IBIS portfolio of private equity investments contains six investee companies (excluding Riva Digital Media which is held at nil value). Steel River Media, the holding company for Contagious, Ginx TV and Get Me Media collectively account for 86% of the portfolio net asset value and have the potential to add significant value to IBIS shareholders as a result of their continued development. All three companies expect to report profitable full year results in due course. Management at Freshwater UK, Masher Technologies and Futurelex commenced formal sale processes during IBIS' last financial year and continue to actively explore shareholder exits in the short-term. In the meantime, we are particularly encouraged by the recent performance of Freshwater and it is possible that the company will declare a dividend before IBIS' year-end.

Financial Performance

During the 6 month period ending 31 July 2014 we have seen a decrease of GBP64,245 or 3.5% in the Company's net asset value and a corresponding decrease of 2.03p in the net asset value per share from 57.11p to 55.08p. The decrease can be attributed to an increase in the share capital and share premium account of GBP154,775 arising from the issuance of new shares under the private placing, offset by the Company's loss attributable to shareholders of GBP219,020. The Company's loss attributable to shareholders is made up of a capital loss of GBP196,110, comprising an unrealised loss of GBP150,000 arising from the decrease in valuation of the Company's equity investment in Futurelex and a cost of GBP46,110, representing the Investment Adviser's fee for the period allocated to capital, and a revenue loss of GBP22,910.

Investment Performance

As reported to shareholders in the Annual Report and Financial Statements for the year ending 31 January 2014, IBIS wrote down its equity value in Futurelex from GBP150,000 to zero following the year-end, pending the outcome of any transaction for Futurelex or its assets. There have been no other changes to the carrying value of the Company's investments at 31 July 2014 and, as a result, we have seen a decrease in the overall value of the IBIS portfolio of private equity investments on a like-for-like basis of approximately 2.7% during the six month period under review.

The main developments reported by IBIS' investee companies were:

-- Contagious launched operations in Singapore and will launch a joint venture in Brazil in the second half of the year, the terms of which are such that Contagious will receive an up-front payment from its joint venture partner that places a significant value on the South American joint venture from the outset

-- Ginx TV won a number of programming deals and is now receiving a steady flow of in-bound commercial enquiries. The company generated its first ever profitable month in June 2014 and expects to report profitable full year results in due course.

-- Get Me Media traded EBITDA profitably during the first six months of the year and also hopes to achieve its first ever profitable full year. The company has made the first of a planned number of appointments of respected industry figures to its board of directors and will launch a new website product in the second half of the year

-- Freshwater achieved annual revenue growth of 7% and substantial profitability. The company is in a better financial position than at any time since before the recession and the outlook for the business is encouraging

-- Masher Technologies is pursuing possible investment from third parties, the proceeds from which would be used to validate alternative revenue streams in an effort to strengthen its position to market the business for sale

-- Futurelex has made progress with its legal events business in parallel to management's efforts to complete a major transaction with the support of a new financial sponsor, the result of which might present the opportunity for IBIS and other shareholders to exit the business

More detail of the performance of the Company's portfolio is given in the Investment Adviser's Review.

Corporate Developments

In the last financial year, IBIS launched a private placing targeting approximately GBP650,000 of new shareholder funds to provide continuing support to existing portfolio companies as they prepare for exit. As at 05 April 2014, new shares with a total value in aggregate of GBP230,000 had been issued in the 2013/14 tax year, with a further GBP50,000 subscribed for and a further GBP75,000 committed at the time of writing. IBIS expects to complete the private placing by the year-end.

At the Company's AGM held on 02 July 2014, the Board did not propose that the Company pay a dividend for the year ending 31 January 2014.

Outlook

Despite a slow start to the year, trading at Contagious has since improved and the company expects to accelerate its growth in subsequent years driven in part by its activities in new overseas territories. There have been some promising developments at Ginx TV and Get Me Media, with each company now targeting its first full year of profitability. Following the difficult years of the recession, Freshwater is now in a strong financial position and it is possible that the company will declare a dividend. Meanwhile, IBIS' Investment Adviser will continue to work closely with Masher towards identifying a possible exit in the short-term. Management at Futurelex continues to work with a new financial sponsor towards achieving a major transaction; notwithstanding, we have taken steps to reduce the carrying value of our shareholding in the company until the outcome of any transaction for Futurelex or its assets is known.

It is the Investment Adviser's intention to complete the current private placing and to continue supporting the ongoing development and initiatives of all IBIS' investee companies, including playing an active role alongside management teams towards achieving exits for IBIS' shareholders.

The Board is grateful for the support of the Company's shareholders and would encourage them (or their advisers) to contact the company secretary, Robin Smeaton, on 0131 243 7210 with any questions which they may have about either the Company or their shareholdings in it. The Investment Adviser also maintains a website for the Company which may be accessed via www.ibiscapital.co.uk.

Sir Robin Miller

Chairman

26 September 2014

Investment Adviser's Review

Investment overview

Investments which have the potential to significantly increase the carrying value of the IBIS portfolio are Contagious, Ginx TV and Get Me Media, which collectively account for 86% of the portfolio net asset value, while the other three investee companies, Freshwater UK, Masher Technologies and Futurelex (excluding Riva Digital Media which is held at nil value) are actively exploring shareholder exits in the short-term.

During the period under review, Contagious launched in Asia (Singapore) and has been preparing for the launch of a joint venture in South America (Brazil), the terms of which are such that Contagious will receive an up-front cash payment that places a significant value on the South American joint venture from the outset. Ginx TV has won a number of high-profile programming deals and generated its first ever profitable month in June 2014. The company is now accelerating the monetisation of its UK and pan-European advertising inventory on its 24/7 free-to-air channels and is targeting a profitable full year. In the first six months of the year, Get Me Media traded EBITDA profitably and also hopes to achieve its first ever profitable year. The company has engaged with a number of respected industry figures to join the company's board as part of a strategy to increase awareness of the services it offers and facilitate deals with larger customers.

Freshwater, whose financial year-end is 31 August, is in a stronger financial position than at any time since 2008. The company has achieved organic revenue growth of 7% and is profitable to the point at which it is now possible that Freshwater will declare a dividend. Masher's video editing application is generating sustained online use despite no paid-for marketing. The company is pursuing possible investment from third parties, the proceeds from which would be used to validate alternative revenue streams as part of the company's ongoing efforts to maximise value at a potential trade sale. Management at Futurelex has been working towards a significant transaction with the backing of a new financial sponsor. In the meantime, Futurelex has made progress with its legal events business, which now represents the company's principal source of income, although the company's future remains uncertain.

The table below summarises the changes in fair value at 31 July 2014 as compared to the year-end carrying values at 31 January 2014, including and excluding the impact of new investment by IBIS.

 
                                                                   Change in 
                                Change in                         Fair Value 
                               Fair Value                         between 31 
                               between 31                       Jan 2014 and 
                                 Jan 2014            New         31 Jul 2014           Percentage 
                               and 31 Jul     Investment          (excluding    Change (excluding 
                                     2014      in Period     new investment)      new investment) 
---------------------  ------------------  -------------  ------------------  ------------------- 
 Steel River 
  Media (Contagious)                 GBP0           GBP0                GBP0                   0% 
---------------------  ------------------  -------------  ------------------  ------------------- 
 Ginx TV                             GBP0           GBP0                GBP0                   0% 
---------------------  ------------------  -------------  ------------------  ------------------- 
 Get Me Media                        GBP0           GBP0                GBP0                   0% 
---------------------  ------------------  -------------  ------------------  ------------------- 
 Freshwater 
  UK                                 GBP0           GBP0                GBP0                   0% 
---------------------  ------------------  -------------  ------------------  ------------------- 
 Masher Technologies                 GBP0           GBP0                GBP0                   0% 
---------------------  ------------------  -------------  ------------------  ------------------- 
 Futurelex                    -GBP150,000           GBP0         -GBP150,000                 -75% 
---------------------  ------------------  -------------  ------------------  ------------------- 
 Riva Digital 
  Media                              GBP0           GBP0                GBP0                   0% 
---------------------  ------------------  -------------  ------------------  ------------------- 
 Total                        -GBP150,000           GBP0         -GBP150,000                -2.7% 
---------------------  ------------------  -------------  ------------------  ------------------- 
 

As the above table illustrates, we have seen a decrease in the overall value of the IBIS investment portfolio on a like-for-like basis of approximately 2.7% in the six month period to 31 July 2014. As reported to shareholders in the Annual Report and Financial Statements for the year ending 31 January 2014, IBIS wrote down its equity value in Futurelex from GBP150,000 to zero following the year-end pending the outcome of any transaction for Futurelex or its assets. There have been no other changes to the carrying value of the Company's investments at 31 July 2014.

The portfolio company valuations and recent trading updates are explained in more detail later in this review.

IBIS' investments are valued in accordance with the International Private Equity and Venture Capital Guidelines. During the 6 month period ending 31 July 2014 we have seen a decrease of GBP64,245 or 3.5% in the Company's net asset value and a corresponding decrease of 2.03p in the net asset value per share from 57.11p to 55.08p. The decrease can be attributed to an increase in the share capital and share premium account of GBP154,755 arising from the issuance of new shares under the private placement, offset by the Company's loss attributable to shareholders of GBP219,020. The Company's loss attributable to shareholders is made up of a capital loss of GBP196,110, comprising an unrealised loss of GBP150,000 arising from the decrease in valuation of the Company's equity investment in Futurelex and a cost of GBP46,110, representing the Investment Adviser's fee for the period allocated to capital, and a revenue loss of GBP22,910.

Portfolio Review

The portfolio of IBIS Media VCT 1 plc comprises investments in Steel River Media, the holding company for Contagious, Ginx TV, Get Me Media, Masher Technologies, Freshwater, Futurelex and Riva Digital Media.

The following is a review of the current portfolio.

 
 Steel River Media (being the holding company 
  of Contagious) 
--------------------------------------------------- 
 Date of initial         12 January 2010 
  investment: 
 Investment to date:     GBP850,000 ordinary shares 
 Valuation as at         GBP2,092,746 
  31 January 2014: 
 Investment in period:   GBP0 
 Valuation as at         GBP2,092,746 
  31 July 2014: 
 Change in valuation:    GBP0; 0% 
----------------------  --------------------------- 
 

Investment Overview

Contagious, which was launched in 2004, is a respected global intelligence resource reporting on innovative marketing techniques and the impact of emerging technologies on brands. Contagious' clients include some of the world's leading advertisers such as Google, Heineken, Kraft and Louis Vuitton as well as a range of advertising agencies including Draftfcb, Havas, JWT and McCann Worldgroup.

Contagious' offering includes a magazine, app, consultancy and online information resources, covering topics such as: branded content, mobile marketing, social networking, user-generated content, video games and emerging technologies. Contagious complements its core offering with a bespoke online intelligence resource and alerts service for advertisers and agencies. Separately, Contagious also provides interactive workshops and briefings on developments in the wider communications sector.

The overall proposition of the business is to identify ideas, insight and innovation behind the world's most revolutionary marketing strategies.

Recent Updates

Over the course of 2013, Contagious undertook a major redevelopment of its technology in order to streamline its suite of digital services to clients. The platform launched in Q4 2013 and has provided Contagious with a more comprehensive offering for new business and the opportunity to increase both service offering and price to existing clients as they renew.

Meanwhile, Contagious has launched in Asia (Singapore) and has been preparing to launch a joint venture in South America (Brazil). The terms of the joint venture are such that Contagious will receive an up-front cash payment that places a significant value on the South American joint venture from the outset.

Due to an unexpected slow start to the year, Contagious' revenue for the first six months was down 11% year-on-year. In response, management implemented cost-saving measures commensurate with a reduction in reported revenue at the half-year. Trading has since improved with July sales well ahead of forecast and, despite a disappointing first six months to the year in terms of reported financials, Magazine publishing and I/O online new business are trading up 69% and 98% respectively on the same period last year and renewal rates are on target. The company expects to end FY2014 with revenue flat on the previous year, followed by accelerated growth driven in part by its new overseas activities coming online.

IBIS' valuation at the half-year is unchanged from the beginning of the period.

 
 Ginx TV 
--------------------------------------------------- 
 Date of initial         24 August 2010 
  investment: 
 Investment to date:     GBP985,000 ordinary shares 
                          and loan notes 
 Valuation as at         GBP1,679,883 
  31 January 2014: 
 Investment in Period:   GBP0 
 Valuation as at         GBP1,679,883 
  31 July 2014: 
 Change in valuation:    GBP0; 0% 
----------------------  --------------------------- 
 

Investment Overview

Ginx TV produces a 24/7 video games TV channel as well as individual review and insight programmes on the latest in video games. Ginx programming is available on TV and online and the TV shows are targeted at international audiences in English language and localised versions. Ginx TV is now aired in over 50 territories and in more than 10 languages.

Recent Updates

During the period under review, Ginx TV launched two new commissioned shows on Challenge TV, Video Game Nation and Power Up, and secured a content partnership with GAME Retail, the UK's largest video game retailer, to provide GAME with in-store and online video game programming.

In terms of channel sales, Ginx launched a number of smaller European channel deals and has continued its efforts to convert free-to-air channel contracts inherited from The Poker Channel acquisition in 2013 to paid-for channels. Ginx's application for a licence to televise within Russia was approved and the company has been in discussions with two major Russian national broadcasters. In addition to the incremental revenue this would bring to Ginx, it will allow the company to localise the channel and sell Ginx into other cable and satellite platforms in the former CIS region at virtually no additional cost.

Following the launch on Virgin Media in the UK in 2013, Ginx recently subscribed to the UK audience measurement service, BARB, and started receiving ratings from June 2014, the result of which has been a step change in monthly advertising revenue from the UK channel. In July 2014, Ginx hired an International Advertising Director from Fox International in order to reinforce its efforts to monetise UK and pan-European advertising inventory on its 24/7 free-to-air channels.

The Company generated its first ever profitable month in June 2014 and is targeting a profitable full year. Pleasingly, the company is receiving a steady flow of in-bound commercial enquiries from video gaming console manufacturers and publishers as well as major TV, OTT and digital media brands.

IBIS' valuation at the half-year is unchanged from the beginning of the period.

 
 Get Me Media 
------------------------------------------------------- 
 Date of initial         22 January 2007 
  investment: 
 Investment to date:     GBP806,442 ordinary shares and 
                          unsecured loan notes 
 Valuation as at         GBP999,938 
  31 January 2014: 
 Investment in period:   GBP0 
 Valuation as at         GBP999,938 
  31 July 2014: 
 Change in valuation:    GBP0; 0% 
----------------------  ------------------------------- 
 

Investment Overview

Get Me Media, which trades as Getmemedia.com, is an online directory of marketing and media spend ideas. The company helps marketers and their agencies find relevant and up-to-date marketing opportunities for their brands. The company serves two needs: 1) for media owners, it gives them a shop window to promote their inventory of media opportunities to advertisers and their agencies, from whom the media owners hope to attract a share of marketing spend; and 2) for advertisers and their agencies, it gives them an easily navigable and searchable database of alternative media and ideas for their marketing campaigns.

Recent Developments

Over the past six months, Get Me Media has focused on achieving profitability via an efficiency drive and cash flow management has been a priority. The company was trading EBITDA profitably at its half-year and hopes to achieve its first ever profitable full year.

Minimum subscription pricing for media owners has increased by 67%, from GBP1,500 in FY2013 to GBP2,500 in the current year. Pleasingly, big brand clients such as Homebase, Royal Mail and Argos have renewed their annual contracts at 50% price increases. Get Me Media has also revamped its briefing service, through which the company receives a commission on the value of an agency or client brief it "matches" with media owners, in response to user feedback. The company has received briefs with a cumulative briefing value of GBP10.0m, including recent briefs from Green Flag, Initiative and First Group.

As a strategy to increase awareness of Get Me Media and facilitate new business from larger brand advertisers and their agencies, Get Me Media has engaged with a number of respected industry figures to join the company's board of directors. In July 2014, Roy Jeans was appointed as an Executive Director. Mr Jeans has extensive media agency experience, having been the Global CEO of Rapport and the MD of IPG media agencies Magna and Initiative. Mr Jeans has also invested in Get Me Media as part of a GBP100,000 new equity round in which a number of existing shareholders also participated. As a result, the company intends to launch a new website product in the second half of the year which will significantly improve the user experience, increase repeat usage and automate the curation and communication of targeted marketing and sponsorship ideas to brand managers and agency planners.

IBIS' valuation at the half-year is unchanged from the beginning of the period.

 
 Masher 
---------------------------------------------------------- 
 Date of initial         14 July 2008 
  investment: 
 Investment to date:     GBP564,333 ordinary and preferred 
                          ordinary shares 
 Valuation as at         GBP354,587 
  31 January 2014: 
 Investment in period:   GBP0 
 Valuation as at         GBP354,587 
  31 July 2014: 
 Change in valuation:    GBP0; 0% 
----------------------  ---------------------------------- 
 

Investment Overview

Masher Technologies produces an online video editing and messaging tool designed to be used in conjunction with online social networking communities; it is a B2C widget and application with simple and intuitive drag and drop functionality. Masher is a spin-off from BBC Worldwide. Through a content licensing agreement with the BBC, it offers its users access to a catalogue of video and audio content.

Recent Developments

Masher continues to attract 50,000 visitors per month and signs up 2,100 new users per week to its website with no paid-for marketing. Over 10,000 videos are now being created each month, of which 50% are shared online (and which carry Masher branding). Masher's access to BBC content combined with its proprietary video editing application are still seen as valuable assets in an environment where there is an increasing use of video content in online social media.

Masher is currently generating revenue from display advertising that is sufficient to cover the cost of hosting the website (now the company's principal operating overhead). The company's chairman is pursuing possible investment from third parties, the proceeds from which would be used to validate alternative revenue streams, such as subscriptions for premium content and the ability to download each video file, as part of Masher's ongoing efforts to maximise value at a potential trade sale.

IBIS' valuation at the half-year is unchanged from the beginning of the period.

 
 Freshwater 
--------------------------------------------------- 
 Date of initial         18 July 2007 
  investment: 
 Investment to date:     GBP864,499 ordinary shares 
 Valuation as at         GBP371,968 
  31 January 2014: 
 Investment in period:   GBP0 
 Valuation as at         GBP371,968 
  31 July 2014: 
 Change in valuation:    GBP0; 0% 
----------------------  --------------------------- 
 

Investment Overview

Freshwater UK is a former AIM-listed public relations led marketing group with teams operating in the UK and Ireland across five specialisms. The company has four support divisions offering: marketing, graphic design and media buying, conferences, training and coaching, and interactive and online media.

Recent Developments

Freshwater, whose financial year-end is 31 August, expects to achieve GBP4.0m in turnover, representing organic revenue growth of more than 7%, and profitability in line with UK marketing sector benchmarks. The group's year-end financial position will be stronger than at any time since 2008 with trading converting into strong operating cash flows and a balance sheet showing positive net current assets.

Freshwater's growth has come from both an expansion of work with existing clients and new business. New clients over the period include University of South Wales, League Against Cruel Sports, Lancashire Care NHS Foundation Trust and Buckinghamshire Healthcare NHS Trust. Meanwhile, Freshwater's training and conference division, Waterfront, has had its best year since the business was acquired in December 2007.

Following the difficult years of the recession and unforeseen challenges of integrating some legacy acquisitions, the outlook for the business now looks encouraging. It is possible that Freshwater could declare a dividend and the company's board continues to review strategic options to realise value for shareholders in the short-term.

IBIS' valuation at the half-year is unchanged from the beginning of the period.

 
 Futurelex (formerly known as Polyview) 
--------------------------------------------------- 
 Date of initial         17 November 2008 
  investment: 
 Investment to date:     GBP950,000 ordinary shares 
                          and loan notes 
 Valuation as at         GBP200,000 
  31 January 2014: 
 Investment in period:   GBP0 
 Valuation as at         GBP50,000 
  31 July 2014: 
 Change in valuation:    -GBP150,000; -75% 
----------------------  --------------------------- 
 

Investment Overview

Futurelex, which was launched in 2006, provides both online and offline information to the international legal market. The group comprises The Global Legal Post, an online legal news digest, and the legal lead generation business TakeLegalAdvice.com. The company also organises events and conferences catering to specialist areas within the legal market.

Recent Developments

Futurelex hosted its second annual "Luxury Law Summit" at The Savoy hotel in May 2014 in partnership with the International New York Times. The one-day event brought together global counsel and C-suite executives from the luxury market to discuss issues facing the luxury industry, including technology, geopolitics and the consumer. Following on from this profitable event, Futurelex commenced sponsorship and ticket sales for next May's Luxury Law Summit and has plans of hosting a version in Asia in due course.

Futurelex is also hosting a "Future of Law Summit" in September 2014. This exclusive event will look at what lies ahead for the legal profession and will be attended by law firm senior management, company C-suite executives, general counsel, thought leaders from outside the legal sector and management from technology and legal services companies.

Since Q4 2013, the company's management has been working towards a significant transaction. At the time of writing, due diligence on the target and discussions with the new financial sponsor are ongoing. In the meantime, Futurelex intends to develop its schedule of UK and international legal events as its principal revenue channel and means by which to generate cash into the business, although the company's future remains uncertain.

As stated in the Annual Report and Financial Statements for the year ending 31 January 2014, IBIS wrote down its equity value in Futurelex from GBP150,000 to zero following the year-end, although it has maintained its remaining GBP50,000 loan note at face value until the outcome of any transaction for Futurelex or its assets is known.

 
 Riva Digital Media 
----------------------------------------------------- 
 Date of initial         03 May 2007 
  investment: 
 Investment to date:     GBP345,015 ordinary shares 
                          and GBP4,500 unsecured loan 
                          note 
 Valuation as at         GBP0 
  31 January 2014: 
 Investment in period:   GBP0 
 Valuation as at         GBP0 
  31 July 2014: 
 Change in valuation:    GBP0; 0% 
----------------------  ----------------------------- 
 

Investment Overview

Riva Digital Media's core activity is the design, production and distribution of Epacs. Each Epac is a bundled collection of premium content which is digitally wrapped in a unique branded skin and is downloadable to a customer's personal computer. The components of an Epac can include video clips, MP3 files, ring tones, digital wall paper and customised information.

Since launch, Riva Digital Media has struggled to establish Epacs as a widely used consumer application for the consumption of mixed digital media. The company's business model, which required significant web traffic to generate advertising income as well as charging for premium content, has not worked as originally envisaged. In response the management cut costs significantly while the business model was redeveloped.

Recent Developments

It continues to remain difficult to assess the future prospects of Riva Digital Media and, as a consequence, the fair value was written down to zero in the 2011/12 financial year. Nevertheless, the company has a number of projects included in its development pipeline that once launched may allow for a positive revision to the fair value of the IBIS investment.

Investment Portfolio Summary

as at 31 July 2014

 
                                As at 31 July 2014                  As at 31 January 
                                                                          2014 
                                                 % of net                           % of net 
                              Cost   Valuation     assets        Cost   Valuation     assets 
                               GBP         GBP   by value         GBP         GBP   by value 
----------------------  ----------  ----------  ---------  ----------  ----------  --------- 
 Venture capital 
  investments 
 Steel River Media 
  Limited                  850,000   2,092,746      35.17     850,000   2,092,746      34.80 
 Ginx TV Limited           985,000   1,679,883      28.24     985,000   1,679,883      27.93 
 Get Me Media Limited      806,442     999,938      16.81     806,442     999,938      16.63 
 Freshwater UK 
  plc                      864,499     371,968       6.25     864,499     371,968       6.18 
 Masher Technologies 
  Limited                  564,333     354,587       5.96     564,333     354,587       5.90 
 Futurelex (formerly 
  Polyview Media 
  Limited)                 950,000      50,000       0.84     950,000     200,000       3.33 
 Riva Digital Media 
  Limited                  349,515           0       0.00     349,515           0          0 
 
 Total venture 
  capital investments    5,369,789   5,549,122      93.27   5,369,789   5,699,122      94.77 
----------------------  ----------  ----------  ---------  ----------  ----------  --------- 
 
 Total fixed asset 
  investments            5,369,789   5,549,122      93.27   5,369,789   5,699,122      94.77 
----------------------  ----------  ----------  ---------  ----------  ----------  --------- 
 
 Net current assets                    400,521       6.73                 314,766       5.23 
----------------------  ----------  ----------  ---------  ----------  ----------  --------- 
 
 Net assets                          5,949,643     100.00               6,013,888     100.00 
----------------------  ----------  ----------  ---------  ----------  ----------  --------- 
 

Statement of the Directors' Responsibilities in respect of the Half-Yearly Financial Report

We confirm that to the best of our knowledge:

-- The condensed set of financial statements which has been prepared in accordance with the Statement "Half-Yearly Financial Reports" issued by the UK Accounting Standards Board gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company.

-- The Chairman's Statement (constituting the interim management report) includes a fair review of the information required by DTR 4.2.7R of the "Disclosure and Transparency Rules", being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements.

-- The "Statement of Principal Risks and Uncertainties" on page 15 is a fair review of the information required by DTR 4.2.7R, being a description of the principal risks and uncertainties for the remaining six months of the year.

-- The financial statements include a fair review of the information required by DTR 4.2.8R of the "Disclosure and Transparency Rules", being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

By Order of the Board

The City Partnership (UK) Limited

Company Secretary

26 September 2014

Statement of Principal Risks and Uncertainties

The Company's assets consist of equities and fixed interest investments, cash and liquid resources. Its principal risks are economic, investment, financial and regulatory risk. These risks, and the way in which they are managed, are described in more detail in the Directors' Report, the Statement of Corporate Governance and Note 18 to the Financial Statements in the Company's Annual Report & Financial Statements for the year ended 31 January 2014. The Company's principal risks and uncertainties have not changed materially since the date of that report.

Related Parties

IBIS Private Equity Partners LLP ("Investment Adviser") has been appointed as the Company's investment adviser. The Investment Adviser receives an annual advisory fee of 2.25% of the net asset value of the Company. The Investment Adviser also bears any excess of the total modified annual running costs over a cap of 3.5% of the Company's average net asset value. These arrangements are described in more detail in Note 3 to the Financial Statements in the Company's Annual Report & Financial Statements for the year ended 31 January 2014. During the period the Company has incurred investment advisory fees of GBP67,687 (exclusive of VAT) and it is estimated that the Investment Adviser owes the Company GBP6,207 (exclusive of VAT) in respect of the cap on the Company's annual running costs. Under the Company's agreement with the Investment Adviser, this sum is paid by deduction from the Investment Adviser's fee for the year ending 31 January 2016.

Income Statement (unaudited)

for the six months ended 31 July 2014

 
                                           Six months ended 31                      Six months ended                 Year ended 31 January 
                                                     July 2014                          31 July 2013                                  2014 
                           Revenue       Capital         Total       Revenue     Capital       Total       Revenue     Capital       Total 
                               GBP           GBP           GBP           GBP         GBP         GBP           GBP         GBP         GBP 
---------------------  -----------  ------------  ------------  ------------  ----------  ----------  ------------  ----------  ---------- 
 
 Realised/unrealised 
  movements on 
  investments                    -     (150,000)     (150,000)             -     260,875     260,875             -     455,859     455,859 
 Income                     40,152             -        40,152       101,361           -     101,361       165,327           -     165,327 
 Investment 
  adviser's fees          (15,370)      (46,110)      (61,480)      (12,937)    (38,810)    (51,747)      (28,692)    (86,077)   (114,769) 
 Other expenses           (47,692)             -      (47,692)     (249,806)           -   (249,806)     (296,299)           -   (296,299) 
---------------------  -----------  ------------  ------------  ------------  ----------  ----------  ------------  ----------  ---------- 
 
 Return on ordinary 
  activities 
  before tax              (22,910)     (196,110)     (219,020)     (161,382)     222,065      60,683     (159,664)     369,782     210,118 
---------------------  -----------  ------------  ------------  ------------  ----------  ----------  ------------  ----------  ---------- 
 Taxation on 
  ordinary activities            -             -             -             -           -           -             -           -           - 
---------------------  -----------  ------------  ------------  ------------  ----------  ----------  ------------  ----------  ---------- 
 
 Return attributable 
  to 
  equity shareholders     (22,910)     (196,110)     (219,020)     (161,382)     222,065      60,683     (159,664)     369,782     210,118 
---------------------  -----------  ------------  ------------  ------------  ----------  ----------  ------------  ----------  ---------- 
 
 Transfer to 
  reserves                (22,910)     (196,110)     (219,020)     (161,382)     222,065      60,683     (159,664)     369,782     210,118 
---------------------  -----------  ------------  ------------  ------------  ----------  ----------  ------------  ----------  ---------- 
 
 Return per 
  ordinary share           (0.21)p       (1.83)p       (2.04)p       (1.55)p       2.13p       0.58p       (1.52)p       3.53p       2.01p 
---------------------  -----------  ------------  ------------  ------------  ----------  ----------  ------------  ----------  ---------- 
 
 

The total column of this statement represents the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits. The Company has no gains and losses other than those recognised in the Income Statement above and has not therefore prepared a separate statement of total recognised gains and losses.

Balance Sheet (unaudited)

as at 31 July 2014

 
                                     31 July       31 July    31 January 
                                        2014          2013          2014 
                                         GBP           GBP           GBP 
------------------------------  ------------  ------------  ------------ 
 Fixed assets 
 Investments                       5,549,122     5,504,138     5,699,122 
------------------------------  ------------  ------------  ------------ 
 
 Current assets 
 Debtors                             405,570       299,356       353,455 
 Liquidity funds and cash 
  at bank                             57,926       201,049        82,419 
------------------------------  ------------  ------------  ------------ 
                                     463,496       500,405       435,874 
 
 Creditors: amounts falling 
  due within one year               (62,975)      (47,432)     (121,108) 
------------------------------  ------------  ------------  ------------ 
 
 Net current assets                  400,521       452,973       314,766 
------------------------------  ------------  ------------  ------------ 
 
 Net assets                        5,949,643     5,957,111     6,013,888 
------------------------------  ------------  ------------  ------------ 
 
 Capital and reserves 
 Called up share capital             108,009       104,039       105,310 
 Share premium account             4,458,096     4,241,985     4,306,020 
 Special reserve                   4,474,481     4,632,445     4,474,481 
 Capital reserve - realised      (2,887,418)     (402,422)   (2,841,308) 
 Capital reserve - unrealised        179,333   (2,257,270)       329,333 
 Revenue reserve                   (382,858)     (361,666)     (359,948) 
 
 Total equity shareholders' 
  funds                            5,949,643     5,957,111     6,013,888 
------------------------------  ------------  ------------  ------------ 
 
 Net asset value per share            55.08p        57.26p        57.11p 
------------------------------  ------------  ------------  ------------ 
 

Registered in England and Wales, No. 5660269

Reconciliation of Movements in Shareholders' Funds (unaudited)

for the six months ended 31 July 2014

 
                            Six months   Six months   Year ended 
                                 ended        ended 
                          31 July 2014      31 July   31 January 
                                               2013         2014 
                                   GBP          GBP          GBP 
-----------------------  -------------  -----------  ----------- 
 
 Opening shareholders' 
  funds                      6,013,888    5,918,319    5,918,319 
 Capital per share 
  issue                        155,000            -       75,000 
 Expenses of offer               (225)     (13,120)     (22,813) 
 Expenses of SRRP                    -      (8,771)      (8,772) 
 Dividend                            -            -    (157,964) 
 Return for the period       (219,020)       60,683      210,118 
-----------------------  -------------  -----------  ----------- 
 
 Closing shareholders' 
  funds                      5,949,643    5,957,111    6,013,888 
-----------------------  -------------  -----------  ----------- 
 

Cash Flow Statement (unaudited)

for the six months ended 31 July 2014

 
                                                                                      31 January 
 Period ended                       31 July 2014          31 July 2013                      2014 
                                 GBP         GBP        GBP        GBP         GBP           GBP 
-------------------------  ---------  ----------  ---------  ---------  ----------  ------------ 
 Operating activities 
 Investment income 
  received - qualifying            -                 26,780                 26,808 
 Deposit and similar 
  interest received 
  - non qualifying                26                     60                     91 
 Investment adviser's 
  fees paid                 (67,687)               (15,920)               (25,717) 
 Company secretarial 
  fees paid                  (4,125)                (8,800)               (17,050) 
 Cash paid to 
  and on behalf 
  of directors              (17,000)               (25,770)               (41,436) 
 Other cash payments        (15,707)               (29,903)               (51,800) 
 Net cash outflow 
  from operating 
  activities                           (104,493)              (53,553)                 (109,104) 
-------------------------  ---------  ----------  ---------  ---------  ----------  ------------ 
 
 Financial investment 
 Purchase of investments           -                      -                      - 
 Sale of investments               -                      -                      - 
 Loans made                        -               (15,000)               (25,000) 
 Loans repaid                      -                 15,000                      - 
 Net cash outflow 
  from financial 
  investment                                   -                     -                  (25,000) 
-------------------------  ---------  ----------  ---------  ---------  ----------  ------------ 
 
 Dividends 
 Equity dividends 
  paid                             -                      -              (157,964) 
-------------------------  ---------  ----------  ---------  ---------  ----------  ------------ 
 Net cash outflow 
  from dividends                               -                     -                 (157,964) 
-------------------------  ---------  ----------  ---------  ---------  ----------  ------------ 
 
 Net cash outflow 
  before financing                     (104,493)              (53,553)                 (292,068) 
 
 Financing 
 New share issue              80,000                      -                 75,000 
 Commission - 
  current year 
  share issue                      -                      -                (2,812) 
 Prior year share 
  issue                            -                      -               (13,120) 
 Other costs relating 
  to issue of shares               -                (1,470)                (6,881) 
 Expenses of SRRP                  -                      -                (8,772) 
 Cash held for 
  allotment                        -                      -                 75,000 
 Net cash inflow 
  from financing                          80,000               (1,470)                   118,415 
-------------------------  ---------  ----------  ---------  ---------  ----------  ------------ 
 Increase in cash                       (24,493)              (55,023)                 (173,653) 
-------------------------  ---------  ----------  ---------  ---------  ----------  ------------ 
 
 

Notes to the Interim Financial Statements

 
 1.   Accounting Policies 
      The unaudited interim financial statements 
       which cover the six months ended 31 July 2014 
       have been prepared in accordance with applicable 
       accounting standards and adopting the accounting 
       policies set out in the statutory financial 
       statements of the Company for the year ended 
       31 January 2014. 
 
 2.   Return per Share 
      The return per share has been calculated based 
       on a weighted average number of shares in 
       issue for the six months ended 31 July 2014 
       of 10,706,927 (31 July 2013: 10,408,825). 
 
 3.   Net Asset Value per Share 
      The net asset value per share has been calculated 
       based on 10,800,865 shares being the number 
       of shares in issue as at 31 July 2014 (31 
       July 2013: 10,403,906). 
 
 4.   During the six months ended 31 July 2014 the 
       Company issued 269,884 ordinary shares under 
       a private placing. 
 
 5.   The financial information for the period ended 
       31 July 2014 has not been audited and does 
       not comprise full financial statements within 
       the meaning of Section 434 of the Companies 
       Act 2006. Statutory accounts for the year 
       ended 31 January 2014 were unqualified. No 
       statutory accounts in respect of any period 
       after 31 January 2014 have been reported on 
       by the Company's auditors or delivered to 
       the Registrar of Companies. 
 
 6.   Copies of this half-yearly report will be 
       mailed to shareholders and are available to 
       the public at the Company's registered office. 
 
 

Corporate Information

 
 Directors (all non-executive)         IBIS Media VCT 1 plc 
                                       Incorporated in England 
                                        and Wales 
 Independent                           with registered number: 
                                        5660269 
 Sir Robin W Miller (Chairman) 
 Peter D English                       Reporting Calendar 
 Lucy H Macdonald                      For the year ending 31 January 
                                        2015 
 John P Williams (resigned 
  25 September 2014) 
 Simon D A Jamieson (resigned          Results announced: 
  25 September 2014) 
                                       Interim - September 2014 
 Not independent                       Annual - May 2015 
 David C K Forster 
 Charles A McIntyre 
 
 All of the registered 
  office and principal 
  place of business of 
  IBIS Media VCT 1 plc 
 22 Soho Square 
  London 
  W1D 4NS 
 VCT web site: www.ibiscapital.co.uk 
 
 Investment Adviser                    Bankers 
 IBIS Private Equity Partners          Barclays Bank plc 
  LLP 
 22 Soho Square                        1(st) Floor 
 London                                99 Hatton Garden 
 W1D 4NS                               London 
                                       EC1N 8DN 
 
 Secretary                             Registrars 
 The City Partnership                  Share Registrars Limited 
  (UK) Limited 
 Thistle House                         Suite E, First Floor 
 21 Thistle Street                     9 Lion and Lamb Yard 
 Edinburgh                             Farnham 
 EH2 1DF                               Surrey 
 Telephone: 0131 243 7210              GU9 7LL 
 
 Auditors 
 Scott-Moncrieff 
 Chartered Accountants 
 Exchange Place 3 
 Semple Street 
 Edinburgh 
 EH3 8BL 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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