Business Weekly - Cambridge, UK

The Net Asset Value of its portfolio at period-end was down from £54m to £48.9m year-on-year following the return of £5 million to shareholders in a share buy-back. This is the equivalent to 143.2p per share – again down, from 147.3p per share)

Prelude had cash of £12.3m with £1.7 million committed for further investment in the portfolio. During the period under review, the company invested £3.8m in three new businesses – Xanadu BV, Newnham Technology Inc. and Xmos Limited.

A further £2.9m was invested in four existing portfolio companies while £4m was realised from the residual deferred proceeds received from the sale of Alphamosaic and DNA Research Innovations in 2004.

Chairman Mike Brooke said it had been a period of considerable activity for the Trust. “With the addition of three new companies during the period covered by this review, the Trust portfolio now includes 15 active companies, nine of which are revenue generating with a further three companies expecting to achieve early revenues in 2007.

“Looking forward, I share the manager’s confidence that this combination of early stage and more mature investments will provide shareholders with substantial growth in Net Asset Value.

“The manager is continuing to see many attractive investment opportunities and will continue to invest as cash resources allow as well as exploring exit opportunities for some of its more mature portfolio companies.”

New investments during the period totalled £6.7m and the Trust portfolio includes 15 active investments.

Some of the notable investments were:-

• Just over £1m in ZBD Displays Limited in the form of convertible loans. The Trust’s 27.7 per cent shareholding is valued at £5.6m.

• £1.25m in Xanadu BV, a semiconductor company developing industry leading products for the emerging ZigBee wireless sensor networking market.

• £480,000 in Kiadis BV to exploit the oncology market. The Trust now owns 24.7 per cent, which is valued at £1.7 million.

• £1.9 million for a 13.5 per cent shareholding in its second new portfolio company, Newnham Technology Inc, which develops semiconductor based products that enable computers to drive multiple high resolution monitors via a USB connection or Ethernet network, using cable or wireless technology. Newnham recently changed its name to DisplayLink.

• £184,000 in De Novo Pharmaceuticals Limited in the form of a convertible loan. The Trust’s 16 per cent shareholding is included at a fair value of £973,000.

• £700,000 as a convertible loan to SiConnect Limited, increasing its total investment to £2.1 million. SiConnect is a semiconductor company developing products that enable mains power cabling to be used for providing multimedia home networking and broadband services around the home or office. It has produced chips that are currently being sampled by potential customers and SiConnect expects to ship in volume in 2007.

• £180,000 in a loan to Cambridge Positioning Systems.

• £625,000 in Xmos Limited, another early-stage semiconductor business. The company is developing products that emulate hardware functionality to provide a new way of implementing hardware designs in the microcontroller market.

• £150,000 in m-spatial Limited.

• £175,000 in Lime Microsystems.

Post-balance sheet, Prelude has committed £2.5m to a new £5m venture capital fund in partnership with Cambridge Consultants Limited to provide seed and early stage finance to a new generation of CCL spin-out companies.