Final Results

RNS Number:7503X
StartIT.com PLC
26 June 2002

                          STARTIT.COM PLC ("startIT")

            Preliminary Results for the Year Ended 31 December 2001

 (startIT is a venture capital firm which invests in start-up internet related

                               and IT companies)

                                   Key Points

  • The Board is taking action to address difficult sector issues for internet
    incubators

  • Potential partners with existing income streams are currently being
    researched. The Board is hopeful that work in this area will come to
    fruition as quickly as possible

  • Net asset value per share at 5.64p

Phill Brown, Chief Executive of startIT commented:-

"Shareholders will note that it has been a difficult year and most of our
investee companies have had to make significant changes to their mode of
operation to reflect changes in their market place. These changes have taken
place with our active encouragement and support and, whilst the pace of
development is sometimes frustratingly slow, we remain confident in the
potential of the overall mix to deliver value. We are currently focusing on
potential partners with existing income streams and where there might be some
synergy with the skills and resources within your Company. Shareholders will be
informed of any progress in due course. "

Press enquiries:-

Phill Brown                                                       01274 623 478

Chief Executive, startIT.com

Shane Dolan                                                       020 7448 1000

Biddicks                                                          07947 118 383



CHAIRMAN'S STATEMENT

For the year ended 31 December 2001

RESULTS

The audited results for the year ended 31 December 2001 after deducting
management expenses and taxation show a deficit of £473,150 (2000 deficit
£209,812). The value of net assets per share at 31 December 2001 was 5.64p (2000
6.71p).

FUTURE PROSPECTS

Your directors are of the view that the market in our sector will recover
relatively slowly. Not only might this continue to have an adverse effect on the
Company's share price but our existing investments may well take more time to
reach a successful conclusion i.e. a stage where we could take a profitable
exit. We believe that such a situation offers little cheer for our shareholders
in the short term. Given that situation, your Board is unwilling simply to sit
out the current conditions and hope that the climate will gradually improve. A
more positive option, we think, is to seek out a potential partner with whom we
might create reasonable expectations for both an uplift in our share price and
prospects of a dividend.

Initially (and like others in the "internet incubator" sector), we thought that
consolidation was the probable answer and we have held tentative discussions
with a number of parties with a view to merger. We have not been persuaded of
the benefits of this approach, however, and are not convinced that 1 internet
incubator plus 1 internet incubator equals 3 (or even maintains the status quo
at 2).

Consequently, we have shifted our focus to potential partners with existing
income streams and where there might be some synergy with the skills and
resources within your Company. We hope that our work in this area will come to
fruition as quickly as possible.

Any such move, however, should not discount our existing investment portfolio
and, as is customary in these reports, there follows a summary of that
portfolio. Shareholders will note that it has been a difficult year and most of
our investee companies have had to make significant changes to their mode of
operation to reflect changes in their market place. These changes have taken
place with our active encouragement and support and, whilst the pace of
development is sometimes frustratingly slow, we remain confident in the
potential of the overall mix to deliver value.

PORTFOLIO REVIEW

GLS Software Limited


  • Based in Bradford

  • £110K (£20K equity and £90K loan) invested for 45 % of the equity

  • Develops and markets booking and invoicing systems for the private
    healthcare market.

I am pleased to report substantial progress from GLS. Although they still need
to achieve further growth to secure their future, their market penetration is
increasing and they have begun to repay the debt finance which we provided. The
GLS board decided to delay the launch of their potential NHS product for six
months and, in view of the progress being made in existing markets, this
decision not to divert resources was probably a wise one. We remain confident in
the long term potential of this investment.

enterpriseAsia.com plc


  • Based in Hong Kong

  • £500K (all equity - company floated on AIM)

  • Provides venture capital for start-up projects in Hong Kong and Mainland
    China.

enterpriseAsia's progress has, to a great extent, mirrored what has happened to
startIT. They, too, have been adversely affected by market sentiment although
their investment portfolio continues to show promise. Like startIT, they have
investigated ways in which they can secure an income stream outside of their
existing business model whilst still taking advantage of the skills and
resources within the company. Whilst this

strategic shift is ongoing and currently subject to confidential discussions,
your directors fully support the positive stance taken by the company and look
forward to enhancement of the value of our shareholding.

Metalsonline Limited


  • Based in Manchester

  • £306K (£150K equity, £156K loan) invested for 45% of the equity

  • e-commerce and direct sales in the UK metals market.

There is little question that Metalsonline's original business plan has been
severely affected by the less than rapid take-up in e-commerce, especially in
the relatively conservative sector in which they operate. As mentioned in our
previous report, the company decided on a very significant move into direct
metals supply, albeit retaining (although not exclusively relying on) their
web-based service. The direct sales service is now up and running and early
results suggest some success in this "old economy/new economy" merger. Given
that the company has, to some extent at least, "reinvented itself", there is
much to do to put it on a firm footing. In the meantime, there appears to be
significant potential in the e-commerce software which the company has developed
and a market study is currently under way to explore its commercial
exploitation.

iAsia Technology Limited

Shareholders will recall that we had made an investment of £300,000 in a
start-up company called CFN (UK) Limited. This company was seeking to provide
online broker-related services, specialising in China and the Far East. In view
of the development of services in this sector, however, your Board took the view
that size would be a critical success factor and looked for a potential partner
so that a combined operation might more easily achieve critical mass. This
exploration led to talks with iAsia Technology Limited who provide online
trading services to brokers and financial institutions in the Far East. iAsia is
listed on the Growth Enterprise Market (GEM) of the Hong Kong Stock Exchange.
iAsia made an offer for all of your company's interests in CFN (UK) Limited
which was accepted.

startIT now hold 5,256,429 shares in iAsia which represents approximately 0.93%
of the current share capital of iAsia. Half of these shares are subject to a
lock up until 8 May 2002 and the other half for a lock up until 8 November 2002.

Yorkshire Place Limited


  • Based in Boston, USA

  • US$550K (US$500K equity, US$50K loan) for 37.5% of the equity

  • Online recruitment services in the insurance sector.

Like Metalsonline, Yorkshire Place's development has been hindered by the
relatively slow growth in e-commerce and, again, much has had to change to offer
reasonable prospects of a profitable future. Added to this, of course, has been
the impact of September 11, not least on the US insurance business. Your company
(along with other shareholders) provided a small amount of further funding and
Yorkshire Place have now launched their "Insurance Job Channel" service, being
essentially a portal for jobs in the US insurance market. Early indications are
positive.

TVtoBE Limited


  • Based in London

  • £250K (£180K equity and £70K debenture) for 45% of the equity

  • Matches TV programme producers with those who commission programmes.

The company has developed a viable working model with over 650 producers
registered with the company's service. The news is less positive, however, on
the other side of the equation i.e. with programme commissioners who are proving
slow to move away from their traditional commission/tender process.
Nevertheless, there is some movement and the company is currently exploring
partnership/licensing opportunities both within the UK and overseas, an approach
which your directors believe will have the greatest chance of delivering a
return.

DIVIDEND

The directors are not recommending the payment of a dividend for the year under
review.

Peter So

Chairman

PROFIT AND LOSS ACCOUNT

For the year ended 31 December 2001
                                                               Year Ended 31                     Year Ended 31
                                                               December 2001                     December 2000
                                      Notes               £                £                £                £
Turnover                                                              25,859                             7,754
Administrative expenses                                                                                      -
Provision for diminution in value                   200,000                            70,000
of investment
Loans to investment written off in                  100,182                                 -
the year
Other administrative expenses                       269,206                           278,035
                                                                   (569,388)                         (348,035)
                                                                   (543,529)                         (340,281)
Other operating income                                                 8,470                                 -
Operating loss                                                     (535,059)                         (340,281)
Other interest receivable and                                         61,909                           130,469
similar income
Loss on ordinary activities before                                 (473,150)                         (209,812)
taxation
Tax on loss on ordinary activities                                         -                                 -
Loss on ordinary activities after                                  (473,150)                         (209,812)
taxation
                                                                        2001                              2000
                                                                       Pence                             Pence
Basic loss per share                  2                                1.007                             0.450
Diluted loss per share                2                                1.007                             0.448

The profit and loss account has been prepared on the basis that all operations
are continuing.

There are no recognised gains and losses other than those passing through the
profit and loss account.

 BALANCE SHEET

As at 31 December 2001
                                                      2001                               2000
                                                    £                  £                  £                  £
Fixed assets
Intangible assets                                                  4,122                                 4,580
Tangible assets                                                    4,188                                 5,600
Investments                                                    1,776,806                             1,712,555
                                                               1,785,116                             1,722,735
Current assets
Debtors                                        25,958                                11,314
Investments                                   100,222                                     -
Cash at bank and in hand                      760,618                             1,416,685
                                              886,798                             1,427,999
Creditors: amounts falling due               (21,507)                              (27,177)
within one year
Net current assets                                               865,291                             1,400,822
Total assets less current                                      2,650,407                             3,123,557
liabilities
Capital and reserves
Called up share capital                                          470,000                               470,000
Share premium account                                          2,894,991                             2,894,991
Profit and loss account                                        (714,584)                             (241,434)
Shareholders' funds - equity                                   2,650,407                             3,123,557
interests

  CASH FLOW STATEMENT

For the year ended 31 December 2001
                                                                   Year Ended 31                 Year Ended 31
                                                                   December 2001                 December 2000
                                                                               £                             £
Net cash outflow from operating activities                             (261,636)                     (259,326)
Returns on investments and servicing of finance
Interest received                                          61,909                       130,469
Net cash inflow for returns on investments and                            61,909                       130,469
servicing of finance
Capital expenditure and financial investment
Payments to acquire intangible assets                           -                       (4,580)
Payments to acquire tangible assets                         (156)                       (5,185)
Payments to acquire investments                          (70,275)                   (1,642,555)
Advance of loan to investments                          (385,909)                      (40,000)
Net cash outflow for capital expenditure                               (456,340)                   (1,692,320)
Net cash outflow before management of liquid                           (656,067)                   (1,821,177)
resources and financing
Financing
Issue of ordinary share capital                                 -                       887,500
Cost of share issue                                             -                      (45,700)
Issue of shares                                                 -                       841,800
Decrease in debt                                                -                             -
Net cash inflow from financing                                                 -                       841,800
(Decrease) in cash in the year                                         (656,067)                     (979,377)



NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2001

1    Accounting policies

     The financial statements have been prepared under the historical cost convention and are in accordance with
     applicable accounting standards. There has been no change in the accounting policies during the current year and
     they are consistent with those set out in the financial statements for the period ended 31st December 2000:

2         Earnings per share
                                                                                                2001                2000
          Loss before taxation                                                               473,150             209,812
                                                                                          ==========        ============
          Weighted average number of shares in issue                                      47,000,000          46,575,342
          Dilution effect of share options                                                         -             268,347
                                                                                           ---------        ------------
          Diluted weighted average number of shares                                       47,000,000          46,843,689
                                                                                           =========        ============

          Basic loss per share (pence)                                                         1.007               0.450
                                                                                           =========        ============
          Diluted loss per share (pence)                                                       1.007               0.448
                                                                                           =========        ============

3         Net asset value per share

          The net asset value per share and the net asset value attributable to ordinary shareholders were as follows:

                                         Net Asset Value per share                 Net Asset Value Attributable

          Ordinary shares            31 December 2001     31 December 2000      31 December 2001        31 December 2000
          (Basic)
                                                5.64p                6.71p             2,650,407               3,123,557
                                         ============         ============          ============            ============

          Basic net asset value per Ordinary Share at 31 December 2001 is 5.64p which is based on net assets at the year
          end and on 47,000,000 Ordinary Shares, being the number of Ordinary Shares in issue at the year end.

4    Publication of non-statutory accounts

     The financial information set out in this preliminary announcement does not constitute statutory accounts as
     defined in Section 240 of the Companies Act 1985.

     The balance sheet, profit and loss account, cash flow statement and associated notes have been extracted from the
     Company's financial statements for the year ended 31 December 2001. Those financial statements have not yet been
     delivered to the Registrar of Companies. The auditors have reported on these financial statements, their report was
     unqualified and did not contain a statement under s237(2) or (3) of the Companies Act 1985.

     The financial statements for the year ended 31 December 2000 have been delivered to the Registrar of Companies and
     were reported on by the auditors. Their report was unqualified and did not contain a statement under s237(2) or (3)
     of the Companies Act 1985.
     The Annual Report and Accounts will be posted to all shareholders on 27th June, 2002 and will be available at the
     Company's registered office thereafter.





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