The Board is grateful for the support of the Company's
shareholders and would encourage them (or their advisers) to
contact the company secretary 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 at www.ibismediavct.com.
Sir Robin Miller
Chairman
30 September 2013
Investment Adviser's Review
Investment Overview
IBIS' Investment Adviser has been actively working with investee
companies at both the operational and corporate level to help
develop each business in the portfolio and identify exits that have
the potential to add significant value to IBIS shareholders.
Investee companies where we increased the carrying value of our
investments at 31 July 2013 were Steel River Media, the holding
company for Contagious, Ginx TV and Freshwater.
During the period under review, Contagious has continued to
expand its business both domestically and internationally, Ginx TV
has accelerated its deal flow to the point of being on the verge of
reaching operating break even and Freshwater has restored profits
to pre-recession levels. The increase in the carrying value of
Contagious and Freshwater reflects the increased valuations of
transactions and public trading involving comparable companies,
while the uplift in Ginx TV is the result of the company's recent
Rights Issue in relation to a significant acquisition opportunity,
raising equity at a 25% premium to the price per share of its last
fundraising.
We maintained the carrying value of our investments in Get Me
Media, Masher Technologies and Riva Digital Media. Get Me Media is
trading up 50% year-on-year, Masher has received preliminary
acquisition interest and Riva Digital Media continues to be held at
nil value.
We reduced the carrying value of our investment in Futurelex due
to a restructuring of IBIS' debt in an effort to support the
company's fundraising efforts.
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 2013 we have seen an increase of
0.1% in the Company's net asset value per share, from 56.80p to
57.26p. The increase in value of GBP38,792 over the period under
review can be attributed to a decrease in the share capital and
share premium account of GBP21,891 (arising primarily from the
Company's SRRP) and the Company's return attributable to
shareholders of GBP60,683. The Company's return attributable to
shareholders is made up of a capital return of GBP222,064
comprising an unrealised gain of GBP260,875, arising primarily from
the increase in valuation of the Company's investments in
Contagious, Ginx TV and Freshwater set off against the decrease in
the valuation of Futurelex and a realised loss of GBP38,810
representing the Investment Adviser's fee for the period allocated
to capital and a revenue loss of GBP161,382, including GBP190,805
of accrued loan note interest due from Futurelex written off, as
detailed later in this review.
The table below summarises the changes in fair value at 31 July
2013 as compared to the year-end carrying values at 31 January
2013, including and excluding the impact of new investment by
IBIS.
Change in
Fair Value
Change in between
Fair Value 31 Jan 2013 Percentage
between 31 and 31 Jul Change
Jan 2013 and New Investment 2013 (excluding (excluding
31 Jul 2013 in Period new investment) new investment)
--------------------- ------------------ ---------------- ------------------ -----------------
Steel River
Media (Contagious) +GBP97,074 GBP0 +GBP97,074 +5%
--------------------- ------------------ ---------------- ------------------ -----------------
Ginx TV +GBP278,189 GBP0 +GBP278,189 +20%
--------------------- ------------------ ---------------- ------------------ -----------------
Get Me
Media GBP0 GBP0 GBP0 0%
--------------------- ------------------ ---------------- ------------------ -----------------
Masher GBP0 GBP0 GBP0 0%
--------------------- ------------------ ---------------- ------------------ -----------------
Freshwater +GBP7,488 GBP0 +GBP7,488 +2%
--------------------- ------------------ ---------------- ------------------ -----------------
Futurelex -GBP121,876 GBP0 -GBP121,876 -38%
--------------------- ------------------ ---------------- ------------------ -----------------
Riva Digital
Media GBP0 GBP0 GBP0 0%
--------------------- ------------------ ---------------- ------------------ -----------------
Total +GBP260,875 GBP0 +GBP260,875 +5%
--------------------- ------------------ ---------------- ------------------ -----------------
As the above table illustrates, we have seen an increase in the
overall value of the IBIS investment portfolio on a like-for-like
basis of approximately 5.0% in the six month period to 31 July
2013. Due to loan note interest being accounted for separately in
the calculation of the Company's net asset value, the table above
excludes GBP161,818 in accrued loan note interest due to IBIS at 31
July 2013 from Ginx TV and Get Me Media set off against GBP190,805
of accrued loan note interest written off via the Futurelex
restructuring.
Portfolio Review
The portfolio of IBIS 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 GBP1,842,683
31 January 2013:
---------------------- ---------------------------
Investment in period: GBP0
---------------------- ---------------------------
Valuation as at GBP1,939,757
31 July 2013:
---------------------- ---------------------------
Change in valuation: +GBP97,074; +5%
---------------------- ---------------------------
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 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
Contagious' trading is ahead year-on-year but is marginally
behind its revenue budget, which has been partly offset by a lower
operating cost base than projected. In aggregate, renewal rates for
its printed quarterly magazine and digital feed are in line with
targets. During the period under review, Contagious has won a
number of contracts with major global brands, including consultancy
projects with Mondelez and Google. In addition to tightly managed
costs, cash flow has been excellent and in April 2013, IBIS
received the first tranche of a GBP52,000 dividend payment it will
receive in respect of the company's 2012 financial year.
As a result of a successful launch into the US through its New
York office, the company is pursuing joint ventures with local
partners in other international locations, including South America
and Asia. Contagious is also undergoing a major redevelopment of
its technology, which will enable the company to streamline its
suite of digital services. The successful launch of its content
delivery platform later this year will provide Contagious with a
more comprehensive offering for new business and the opportunity to
increase both service offering and price to existing clients.
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