ITC on profit side of ledger

By DANIEL RIORDAN

IT Capital (ITC) has moved into the black for the first time, and plans to make four or five new investments over the next six months.

ITC chief executive Jeff Dittus said the company was doing due diligence on 10 to 15 potential investments in New Zealand and Australia, flush with $15.8 million in cash and no debt.

The listed venture capitalist yesterday reported a net after-tax profit of $4.85 million in the six months to September 30, boosted by the sale of its 33 per cent stake in Exo-net International and a $2.9 million share placement to a technology fund of Australia's Gresham Partners.

ITC lost $1 million in the same period last year, its first six months since changing corporate direction and name from Iddison Vietnam.

August's sale of its Exo-net stake, to Australian company Solution 6, brought ITC $9.6 million in cash and $3.1 million in Solution 6 shares. ITC took its first piece of Exo-net in May of last year, ultimately paying $1.5 million for its 35 per cent stake.

The company's share price may be languishing at 23c, well off its 12-month high of $1.05, but managing director Keith Phillips said the cause of the slump, autumn's bursting of the high-tech market bubble, had its upside in the more realistic valuations of potential investee companies.

"We've been sifting through the ashes left from the dot.com crash. The more we wait the more opportunities arise. Values are still sliding sideways."

Mr Dittus said he expected the company's burn rate of $2.1 million for the half year (the amount of money the company consumes in excess of its income) to decline.

One negative factor in an otherwise upbeat six months was the slow progress of Chinese companies in setting up a Chinese venture capital fund to be managed by ITC, although Mr Dittus expected that to be completed within the next six months.

One of ITC's portfolio properties, computer simulation company Virtual Spectator (owned 18 per cent by ITC), had generated $2.3 million in subscription revenues from the America's Cup. was broadcasting live sports events in 130 countries and had a significant new deal pending, said Mr Phillips.

Virtual Spectator, along with Hamilton-based 3D screen company Direct Video Imaging (41.8 per cent owned by ITC) and Australian internet company Golden Orb (35 per cent owned) were likely to raise funds from outside parties over the next six months as they looked to expand internationally.