By PETER GRIFFIN
Venture capital firm IT Capital yesterday delivered the bad news its management forecast at the start of the year.
The company reported a loss of $21.5 million compared with the $20 million loss originally expected.
Revenue was $2.7 million, down 80 per cent on last year's $13.4 million boosted by
proceeds from the sale of IT Capital's stake in accounting software company Exo-net.
The dismal result included the writedown of investments and loans of nearly $10 million.
Chief executive David McKee Wright said the balance of the loss was largely made up of costs in restructuring, getting rid of expensive executives and keeping the company afloat as management tried to bring monthly expenses under control.
The successful Exo-net sale is a rapidly fading memory for IT Capital which has a thin portfolio of technology investments after its withdrawal from animation software start-up Virtual Spectator.
Last month, IT Capital pulled the plug on Virtual Spectator telling the market it was divesting its 23 per cent stake after pouring $7 million into the company.
IT Capital is left with investments in web developer Terabyte, ebusiness venture Golden Orb and Hamilton-based 3D screen developer Deep Video Imaging. IT Capital wrote down the value of Golden Orb and Terabyte to zero.
"It reflects the fact that they're losing money. It's hard out there," said McKee Wright.
Deep Video Imaging shapes as IT Capital's sole hope for another successful investment exit. Last week it won a licence agreement in the United States that could sell its screens in the avionics and defence markets.
IT Capital's investment plans are unclear, but it is looking to raise $3 million to $5 million through a share placement.
Shareholders will have the chance to quiz the new management team of former Exo-net executives McKee Wright and Maurice Bryham at the annual meeting next month.
