July 2008 Viewpoint
Welcome to our monthly email newsletter for
clients and investor contacts.
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July has been a very successful month with regard to fund raising for our client companies. Since last month’s issue of Viewpoint we have closed the funding for SPDG/Aquario having raised well over the target amount of £1m and Sales-i is in final negotiations on amounts well in excess of the £525,000 it was seeking.
Current Investment Opportunities
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This existing Endven client’s business is the topical issue of prevention of data leakage. As already reported, after a slow first year the company is poised to grow strongly and is now looking to raise £500,000. Terms for the majority of this are now in negotiation but there is scope for other investors to join.
The business is EIS qualifying. Interested investors should contact Richard Hargreaves, Richard@endven.com.
This company seeks to develop a portfolio of local radio stations by acquisition of existing companies and new licences. Its founder, Nigel Reeve, was one of the founders of Classic FM. The strategy is to use their minimal overhead local radio model to drive sales to the group’s web and publishing activities. In July it acquired 3 new stations which brings the group‘s total to 9 stations.
Laser Chief Executive Nigel Reeve said, “I am delighted to add these three stations to the Laser group. It demonstrates clearly our continued commitment to our business plan and our growth strategy”….”I look forward now to embracing Brunel, Bath and 3TR within the Laser family and taking them, and the rest of our group, forward.” Laser also owns the two Quay West stations in Somerset, the Sunshine brand stations in Herefordshire, Monmouthshire, Worcestershire and Ludlow, and Fresh Radio in Yorkshire.
There is a continuing opportunity to invest at the current price to complete the Lite and Connect FM station acquisitions. Once these acquisitions are completed EIS relief will no longer be available.
If you would like to learn more please contact Bill Cunningham at Bill@endven.com.
The company makes patented plastic tube that is used to protect fibre optic cable from the degradation in performance that results from crushed or kinked cables. It sells its products to the cable, aircraft and automotive industries and sales are beginning to develop encouragingly.
The company is raising a further round of finance totalling £500,000. It is in negotiation with a sophisticated syndicate of investors who can add value as well as money but this is expected to take some time to complete. The company is about to offer the chance to participate in an attractively priced bridging round to existing shareholders.
If you would like to learn more, please contact Guy Macpherson-Grant at Guymg@endven.com. EIS relief is available.
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Prospective Investment Opportunities
We have a strong pipeline of opportunities and will be circulating these as they become available for investment. If you want to register interest on any opportunity – with no commitment – please email Bozena Ilencikova, Bozena@endven.com.
Portfolio News
The following in a selection of news from the portfolio.
Rainbow Rewards (Holdings) Ltd www.rainbowrewards.com
The Citibank letter of implementation has been signed. Like many other banks, Citibank put all new projects under review following the credit crisis. Rainbow Rewards operate a retailer-funded reward scheme which has come through this review with flying colours and Citibank has now appointed a project manager and extended the territories for the pilot programme. This means that we should know by the end of 2008 if Citibank will adopt the Rainbow Rewards approach in a major way. Bank of America is also showing interest in going to trial with the system but is less advanced. We are approaching the stage where the business will require institutional funding, but continue to raise money for the time being from private individuals for the trial and subsequent roll-out.
We reported last month that the last flat has been sold. The plan is to make a capital distribution from the company before formally liquidating it. This needs HMRC approval but we hope distributions can be made by early August. This would be a pleasing result in today’s climate as investors will realise a profit of over 50%.
A fundraising round has closed at £1.3m which is pleasing as it represents a 30% oversubscription to the £1m sought. The company is now well placed to achieve its short and medium term objectives as it becomes an operating water company.
This company will be re-named Aquario Plc at its AGM reflecting its nature as a water technology business.
The property market is in turmoil and Convex sees itself as well positioned to benefit from the shakeup. The business is profitable on a monthly basis, and the majority of its cases relate to re-mortgage work rather than from sale and purchases. In July Convex signed agreements with two major new sources of business: PSG and Orbiter Group. PSG are one of the major HIP providers in the UK, distributing their product across some 80 franchised offices employing about 1,000 staff. They sell some 10,000 HIPs per month to their customer base of Estate Agents and Developers, which is an estimated 15% of the total market. Convex are now providing a conveyancing service that the franchisees can sell alongside the HIP. Roll out of the product has begun to the first franchisees, and is already resulting in leads coming through.
The agreement with Orbiter Group is that they will guarantee a minimum of 150 deals pcm generated by the “free legals” product where Convex’ margin is in the disbursements (searches, and bank transfer fees) and additional work required (deeds of postponement, transfers of equity, restrictions on the register, etc) - apart from the second of these categories the work is handled either by Orbiter staff on Convex systems or through its outsourcing relationship in India. Convex will be the “default” conveyancer on Orbiter’s procurement system for both re-mortgage and purchase work. The challenge for the management is now to effect the roll-out of these two relationships as quickly and efficiently as possible, to drive volumes up. Convex would continue to accept a modest amount of investment at the price of the last round so that it can roll out fast and effectively.
If you are not a Client
If you have received this email and are not a client but would like to become one all you have to do is fill in a Client Form, certifying yourself as either a High Net Worth Individual or a Sophisticated Investor. It costs nothing and we can send you the Investment Summaries for the investee companies that we are working with. You will find the Client Form on the Client Criteria page of the website www.endven.comor email Bozena Ilencikova, Bozena@endven.com.
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