IBIS Media VCT 1 plc Half Yearly Report -3-

IBIS' valuation at the half-year has increased by GBP97,074 (+5%) to reflect the increased valuations of transactions and public trading involving comparable companies.

 
 Ginx TV 
--------------------------------------------------- 
 Date of initial         24 August 2010 
  investment: 
----------------------  --------------------------- 
 Investment to date:     GBP985,000 ordinary shares 
                          and loan notes 
----------------------  --------------------------- 
 Valuation as at         GBP1,401,695 
  31 January 2013: 
----------------------  --------------------------- 
 Investment in Period:   GBP0 
----------------------  --------------------------- 
 Valuation as at         GBP1,679,884 
  31 July 2013: 
----------------------  --------------------------- 
 Change in valuation:    +GBP278,189; +20% 
----------------------  --------------------------- 
 

Ginx TV produces a 24/7 video games TV channel as well as individual review and insight programmes on the latest in video games. Ginx TV programming is available on TV and online and the TV shows are targeted at international audiences in English language and localised versions. Ginx TV is now aired in 44 territories and in over 10 languages.

Recent Updates

Ginx TV's recent deal flow has been strong with 16 new international platform launches, adding over GBP780,000 in annualised revenues to the business. By way of a comparison, Ginx TV secured 14 new platforms in the whole of 2012. Following the successful launch of its show "The Blurb" on Sky in January 2013, Ginx TV launched a free-to-air 24/7 channel on Virgin Media in June, doubling its viewership reach to approximately 7 million homes. The company's first UK platform channel launch has already provided a boost to Ginx TV's international credibility, improved relationships with video game publishers and laid the foundations for an international advertising sales effort.

In July 2013, Ginx TV launched a Rights Issue targeting a GBP750,000 equity fundraising in order to acquire a pan-European thematic television channel introduced to the company by IBIS' Investment Adviser. The principal purpose of the acquisition, which is scheduled to complete in September, is to switch the acquired company's channel to Ginx TV's 24/7 video gaming channel, providing Ginx TV with viewership reach of up to 26 million incremental European homes. Post-acquisition, Ginx TV will operate a free-to-air model in France and the UK, while aiming to convert the remaining homes to Ginx TV's paid-for subscription model.

Ginx TV is on the verge of reaching operating break even and expects to be profitable for the 2013 financial year on its current business model, while the imminent acquisition provides an exciting opportunity for the company's further development.

The recent Rights Issue is raising equity at a 25% premium to the price per share of Ginx TV's last fundraising that took place in October 2012. As a result, the fair value of IBIS' investment in Ginx TV at the half-year has increased by a further GBP278,189 (+20%).

 
 Get Me Media 
------------------------------------------------------- 
 Date of initial         22 January 2007 
  investment: 
----------------------  ------------------------------- 
 Investment to date:     GBP806,442 ordinary shares and 
                          unsecured loan notes 
----------------------  ------------------------------- 
 Valuation as at         GBP999,938 
  31 January 2013: 
----------------------  ------------------------------- 
 Investment in period:   GBP0 
----------------------  ------------------------------- 
 Valuation as at         GBP999,938 
  31 July 2013: 
----------------------  ------------------------------- 
 Change in valuation:    GBP0; 0% 
----------------------  ------------------------------- 
 

Investment Overview

Get Me Media, which trades as Getmemedia.com, is an online directory of marketing and media spend ideas. The company helps marketers and their agencies find relevant and up-to-date marketing opportunities for their brands. The company serves two needs: 1) for media owners, it gives them a shop window to promote their inventory of media opportunities to advertisers and their agencies, from whom the media owners hope to attract a share of marketing spend; and 2) for advertisers and their agencies, it gives them an easily navigable and searchable database of alternative media and ideas for their marketing campaigns.

Recent Developments

Get Me Media had an excellent start to the year with some major client wins, including bespoke training programmes for Diageo, Homebase and Co-Op and marketing packages for eBay, Yahoo!, Guardian Media Group, News International and Mirror Group, amongst others.

With help from IBIS' Investment Adviser, the company placed the final tranche of a GBP325,000 equity fundraising in May 2013 as part of its plan to develop the business further prior to achieving an exit for shareholders. Get Me Media is now making a number of key hires to support the company's growth and is particularly active in the promotion of its Briefing Service, through which the company receives a commission on the value of an agency or client brief it matches with media owners.

The company's turnover in the first six months was 50% up year-on-year. If Get Me Media can continue to execute on its business plan and maintain the recent sales momentum, the company will expect to breakeven in the last quarter of 2013.

IBIS' valuation at the half-year is unchanged from the beginning of the period.

 
 Masher Technologies 
---------------------------------------------------------- 
 Date of initial         14 July 2008 
  investment: 
----------------------  ---------------------------------- 
 Investment to date:     GBP564,333 ordinary and preferred 
                          ordinary shares 
----------------------  ---------------------------------- 
 Valuation as at         GBP354,587 
  31 January 2013: 
----------------------  ---------------------------------- 
 Investment in period:   GBP0 
----------------------  ---------------------------------- 
 Valuation as at         GBP354,587 
  31 July 2013: 
----------------------  ---------------------------------- 
 Change in valuation:    GBP0; 0% 
----------------------  ---------------------------------- 
 

Investment Overview

Masher produces an online video editing and messaging tool designed to be used in conjunction with online social networking communities; it is a B2C widget and application with simple and intuitive drag and drop functionality. Masher is a spin-off from BBC Worldwide. Through a content licensing agreement with the BBC, it offers its users access to a catalogue of video and audio content.

Recent Developments

Masher continues to attract 50,000 visitors per month and signs up approximately 400 new users per day via its website and application on Facebook at no direct cost to the company. Masher's access to BBC Worldwide content combined with its proprietary video editing application are seen as key assets in an environment where there is an increasing use of video content in online social media.

IBIS' Investment Adviser is working with Masher's management team and other shareholders to identify strategic partners or potential acquirers for the business' next stage of growth. As part of a strategy to improve the Masher product offering prior to a trade sale, the company launched its new website with enhanced video editing features in July 2013, with plans to launch a mobile video editing application in September. Masher has received preliminary acquisition interest and its technology is currently undergoing extensive product testing as part of an anticipated sale process.

IBIS' valuation at the half-year is unchanged from the beginning of the period.

 
 Freshwater 
--------------------------------------------------- 
 Date of initial         18 July 2007 
  investment: 
----------------------  --------------------------- 
 Investment to date:     GBP864,499 ordinary shares 
----------------------  --------------------------- 
 Valuation as at         GBP322,484 
  31 January 2013: 
----------------------  --------------------------- 
 Investment in period:   GBP0 
----------------------  --------------------------- 
 Valuation as at         GBP329,972 
  31 July 2013: 
----------------------  --------------------------- 
 Change in valuation:    +GBP7,488; +2% 
----------------------  --------------------------- 
 

Investment Overview

Freshwater is a public relations led marketing group with teams operating in the UK and Ireland across five specialisms. The company has four support divisions offering: marketing, graphic design and media buying, conferences, training and coaching, and, interactive and online media.

Recent Developments

Freshwater is making encouraging progress in restoring profits to pre-recession levels and strengthening its financial position. In the company's financial half-year to 28 February 2013, Freshwater increased its operating profit by 82% year-on-year to GBP80,000 and EBITDA by 37% to GBP280,000. At the same time, the company has continued efforts to improve its balance sheet, with negative net current assets falling by 53%. The company made its final deferred payment in August 2013 relating to its Scottish agency acquisition and management has renegotiated more favourable terms on its bank borrowings. With the company's cost reduction programme now largely complete, Freshwater expects administrative expenses in the second half of its financial year to be more than GBP120,000 lower than in the first, giving every prospect of a further boost to profitability.