RNS Number:5994N
Axiomlab PLC
16 July 2003

Strictly Embargoed for release at 07.00, 16 July 2003


                                  AXIOMLAB PLC

              PRELIMINARY RESULTS FOR THE YEAR ENDED 30 APRIL 2003


Axiomlab plc and its subsidiaries ("Axiomlab" or the "Group"), the regional
provider of capital and business building expertise, are pleased to report the
preliminary results for the year ended 30 April 2003.



Results and Finances



For the year ended 30 April 2003, Axiomlab recorded a loss on ordinary
activities before taxation of #3.12 million (2002: loss #3.34 million). This
figure is stated after interest receivable of #0.28 million (2002: #0.38
million) and an impairment charge of #2.00 million (2002: #2.25 million) against
the carrying value of certain investments in the Group's portfolio. At 30 April
2003, the net book value of the Group's investments, all of which are unlisted,
stood at #4.32 million and the Group's cash position stood at #6.44 million,
which included #0.89 million held in the name of, and contractually committed
to, Techtran Group Limited.



Key Points



  * Current portfolio of thirteen investments covering a spectrum of early
    stage businesses, reducing the Group's exposure to any one particular
    sector.

  * #2.64 million invested during the year, principally in three companies:
    BraddaHead Limited, Tenison Technology EDA Limited and Techtran Group
    Limited.

  * Techtran Group Limited, established to focus on the commercialisation of
    university research and development, completed its first outsourcing deal
    with the University of Leeds.

  * Uncommitted cash available of #4.97 million as at 30 June 2003, after
    deducting commitments in respect of investments in the amount of #0.25
    million and excluding cash held by Techtran Group Limited.



Ray Ingleby, Executive Chairman, commented: "Trading conditions for early stage
venture capital backed companies have continued to prove very challenging during
the period.  As a consequence, and in order to preserve our cash, we
significantly slowed the rate of investment in the second half of the year.  In
addition, we have also significantly reduced our own overhead burn rate.  We
have continued to selectively provide hands-on support to our portfolio
companies during the year and I am pleased to report that in a number of cases
this has proved to be successful."



"A major development in the year was our investment in Techtran Group Limited
and its subsequent agreement with the University of Leeds.  There is currently
significant interest on how the excellent research base that exists within the
UK's Universities can be best leveraged, for commercial benefit.  We believe
that, through Techtran Group Limited, Axiomlab has an opportunity to be a
significant player in the university intellectual property commercialisation
market."



For further details please contact:


Axiomlab plc (www.axiomlab.com)
Ray Ingleby, Executive Chairman                                   0870 909 6333
Fred Mendelsohn, Managing Director


Altium Capital Limited
Phil Adams
Mike Fletcher                                                     0161 831 9133


Tavistock Communications Limited
John West                                                         0207 600 2288







Preliminary results for the year ended 30 April 2003



Introduction



Axiomlab plc and its subsidiaries ("Axiomlab" or the "Group"), the regional
provider of capital and business building expertise, are pleased to report the
preliminary results for the year ended 30 April 2003.



Results and Finances



For the year ended 30 April 2003, Axiomlab recorded a loss on ordinary
activities before taxation of #3.12 million (2002: loss #3.34 million).  This
figure is stated after interest receivable of #0.28 million (2002: #0.38
million) and an impairment charge of #2.00 million (2002: #2.25 million) against
the carrying value of certain investments in the Group's portfolio. At 30 April
2003, the net book value of the Group's investments, all of which are unlisted,
stood at #4.32 million, and the Group's cash position stood at #6.44 million,
which included #0.89 million held in the name of, and contractually committed to
Techtran Group Limited.



Overview



The investment climate for early stage businesses has been difficult in the last
twelve months and in the autumn of 2002, the Group took the decision to slow the
rate of investment in order to preserve cash.  Accordingly, three new
investments were made in the year, two of which, Tenison Technology EDA and
BraddaHead, were completed in the summer of 2002 and the third, Techtran Group
Limited, was completed in December 2002.



Trading conditions have affected all our portfolio companies and we have
undertaken significant efforts in the year in order to assist our investments
adapt to these conditions, which has helped to demonstrate the advantages of our
hands-on approach.  This help has included assisting four companies to raise
third party funding (CSols, Get Real Systems (recently named PROACTIS Group),
Image-metrics and Netlet) as well as helping a number of portfolio companies
with interim management support as well as strategic and sales assistance.
Despite these efforts, certain of our investments have been unable to secure
either sustainable revenues or further investment and as a result we have
considered it prudent to increase the level of our provisions in the period by
#2.00 million.



In December 2002, Techtran Group Limited completed its first deal with the
University of Leeds, and became the University's preferred technology transfer
partner.  The investment by Axiomlab of #1.0 million has enabled Techtran Group
Limited to build technology transfer expertise. As part of the agreement with
the University, Techtran Group Limited will receive a minority stake in all
spin-outs coming from the University and also in licensing income generated from
the University's intellectual property.



Portfolio Review



Auctions2Business

www.auctions2business.com. Auctions2Business was originally established as an
online auctioneering business. Because of slow take-up of the business model by
auctioneers, the model was changed and the company made an attempt to implement
a buy-and-build plan and consolidate a number of traditional off-line
auctioneering businesses. Despite successfully negotiating terms with a number
of these businesses, there proved to be insufficient support in the financial
markets to fund such a strategy and therefore we believe that it is prudent to
make full provision against this investment.



Axiomlab has an 89% stake in Auctions2Business at a cost of #1.41 million.



The last audited accounts for the year ended 30 September 2001 show turnover of
#4,000, loss before tax of #1,018,000 and net liabilities of #18,000.



Netlet Holdings

www.netlet.com. Netlet was set up to provide a portal to offer student
accommodation services. It has subsequently enhanced this offering by targeting
the universities themselves to license its technology and to enable the matching
of students to available accommodation. Universities will pay a licence fee and
share the revenue generated by third party listings of accommodation. As part of
this approach, Netlet has signed an exclusive partnership arrangement with
Unipol, a market leader in student housing services and training. This
partnership will enable the national roll-out of regional portals for
universities and educational establishments throughout the UK.



In March 2003, Netlet accepted an offer of third party funding for #175,000 at a
pre-money valuation of #1 million.  The directors of Netlet believe this latest
funding round will be sufficient to take the company through to profitability.
Axiomlab has a 55% stake in Netlet at a total cost of #324,000.



The last audited accounts for the year ended 30 April 2002 show turnover of
#nil, loss before tax of #103,000 and net liabilities of #100,000.



Casmir

www.casmir.net. Casmir developed an intelligent knowledge management system,
based on software agent technology and incorporating neural network
architecture.



Unfortunately, the company has failed to secure any ongoing reference sites and
the cost base has been reduced to virtually zero.  An agreement was reached with
founder shareholders, whereby Axiomlab increased its equity stake to 67% from
19% in return for a nominal payment. Axiomlab has continued to work with
Casmir's other shareholders with a view to recovering some value from this
investment.



Heads of terms have been signed with a third party IT consultancy business
Azolve Limited, (www.azolve.com) whereby they have agreed to manage the code and
will seek to re-energise the company. Under the terms of the proposed agreement,
Azolve will be incentivised for generating revenue and returning cash to
shareholders.



The total cost of Axiomlab's investment in Casmir is #723,000.



The last accounts available for the year ended 30 June 2002, which are
abbreviated accounts, show net assets of #38,000.



Image-metrics

www.image-metrics.com. Image-metrics is a specialist software company providing
solutions for the automated interpretation of images and video.  The technology
can be used in a range of markets, including animation, medical, imaging,
surveillance and security and media asset management. The company's focus is
currently on the animation and medical sectors. The company has identified the
market opportunities that its core technology can most readily address and has
developed the necessary applications to take to market for both short and medium
term revenue growth.



In June 2002, the company secured an investment round of approximately #3.0
million at a higher valuation than that at which Axiomlab invested.



Axiomlab has a stake of 9.8% in Image-metrics and has invested a total of
#610,000.



The last audited accounts for the year ended 30 September 2002 show turnover of
#434,000, loss before tax of #1,306,000 and net assets of #1,631,000.



CSols

www.csols.com.  CSols has developed software, which automates manual and
paper-based processes common in most laboratories.  It integrates certain
analytical instruments with business systems such as Laboratory Information
Management Systems (LIMS).  This not only saves significant time (as currently
this is often done manually), but also reduces transcription errors. In-built
functionality allows the technician to perform algorithms on that data, and
helps the technician assess the quality of results.



In recent months, the company has been represented at a number of shows around
the world, the results of which have been encouraging. Agilent signed a co
marketing agreement during March and this is viewed as an important step forward
by the company. The company is in discussions with other potential partners.



The company has recently completed a funding round of #850,000.



Axiomlab has a 32% stake in CSols and has invested #880,000.



The last audited accounts for the year ended 28 February 2002 show turnover of
#654,000, loss before tax of #605,000 and net liabilities of #167,000.



Empiricom

www.empiricom.com. Empiricom has developed proprietary technology that allows
the rapid construction and deployment of expert based computer systems.



During the year, the company has carried out pilots for a number of large
corporates, including Prudential, Morgan Stanley and the Inland Revenue.
Initially, these pilots looked very exciting, but the company has found it very
difficult to convert promising pilots into sustainable revenues.  As a result,
Empiricom's cost base has been significantly reduced and the company is now
focussed on delivering niche projects into smaller organisations.



Axiomlab has a stake of 80% in Empiricom and has invested a total of #1.33
million.



The last audited accounts for the year ended 31 March 2002 show turnover of
#485,000, loss before tax of #786,000 and net assets of #153,000.



PROACTIS Group (formerly Get Real Systems Limited)

www.proactis.com. PROACTIS Group develops software that helps large
organisations control spending and streamline complex purchasing procedures. The
company's software is used by the likes of the NSPCC, the University of
Birmingham, Easycar, Cox Insurance and Hoyer UK to co-ordinate corporate
purchasing, secure financial control and achieve major cost savings.



The last twelve months have seen significant progress for PROACTIS Group both in
terms of technical innovation and commercial success. March 2002 saw the launch
of PROACTIS 3, the first entirely web-delivered procurement control system built
using Microsoft .NET framework. In June 2002, the company radically changed its
sales strategy, focusing its attention on selling through value added resellers
rather than selling directly into the market. Since that date, it has recruited
several channel partners and is in discussions with several other major
resellers.



Axiomlab has a stake of 30% in PROACTIS Group and has invested a total of
#992,000.



The last audited accounts for the year ended 31 July 2002 show turnover of
#610,000, loss before tax of #811,000 and net assets of #179,000.



Energetix Group

www.energetixgroup.com. Energetix Group ("Energetix") develops products aimed at
the alternative, distributed energy markets. Intellectual property rights for
these products are either developed in-house or sourced from corporates at no
cost. To date, the company has focused its efforts primarily on two
product-based subsidiary companies:



  * Energetix Micro Power, which has acquired a micro CHP Organic Rankin
    Engine from the Batelle Institute in the US; and
  * Thermetica, which has developed a Thermal Ice Slurry energy storage
    device.



Axiomlab's original investment was made directly into Thermetica in May 2001.
However, in November 2001, a follow on investment was made into Energetix, which
itself holds equity in Thermetica.  Commercially, both investments are operated
as a single group.  Therefore, Axiomlab has an effective economic interest in
both Energetix and Thermetica of 38% and has invested a total of #1.33 million.



Although progress with the roll-out of the product has fallen behind schedule
during the year, principally as a result of technical issues, the company is now
expecting to generate initial revenues later this year.



Progress with the Micro Power CHP unit is in line with expectations.



Energetix Group is currently fund raising and Axiomlab has provisionally
allocated #75,000 towards this. However, a successful outcome to this exercise
cannot be estimated with any degree of certainty.



The last audited accounts of Energetix Group Limited for the year ended 31
December 2002 show turnover of #80,000, loss before tax of #468,000 and net
liabilities of #312,000.



The last audited accounts of Thermetica Limited for the year ended 31 December
2002 show turnover of #8,000, loss before tax of #243,000 and net liabilities of
#6,000.



iBASE Image Systems

www.ibase.com. iBASE Image Systems is a specialist in complete solutions for the
storage, organisation and retrieval of media files - still and moving images,
sound and graphic displays.



In March 2003, iBASE Image Systems had a rights issue in which Axiomlab chose
not to participate, but which was fully subscribed by the company's
institutional shareholders.  In recent months, the company has operated in line
with budget and the prospects look increasingly promising over the medium term.



Axiomlab has a stake of 12% in iBASE Image Systems and has invested a total of
#250,000.



The last audited accounts for the 17 month period ended 31 March 2003 show
turnover of #1,204,000, loss before tax of #1,467,000 and net liabilities of
#337,000.



Tenison Technology EDA

www.tenison.com. Tenison Technology EDA, based in Cambridge, designs software
that enables hardware and software engineers to work together when developing
microchips. Tenison Technology EDA has developed proprietary software, "Tenison
VTOC TM", which is targeted at reducing the cost and time to market for
semiconductor design by allowing embedded software groups to work closely with
hardware design teams.



Tenison Technology EDA is currently in line with budget and expectations, with
good progress being made on product and leads. Tenison Technology EDA expects to
complete a further funding round within the next 1-2 months.



Axiomlab has a stake of 23% in Tenison Technology EDA and holds an option over
3% of the equity and has invested a total of #260,000.



The last audited accounts for the year ended 31 January 2002 show turnover of
#10,000, loss before tax of #51,000 and net liabilities of #24,000.



BraddaHead

www.braddahead.com. BraddaHead was a start-up in August 2002. The company aims
to develop technology and products in the closed circuit television (CCTV)
sector. The management team of John Humphrey, Peter Diamond and Mike Fawcett has
previously operated successfully in this sector.



The company successfully completed its first funding milestone in March 2003 and
is currently over halfway through the development of its first product. Four
patent opportunities have been identified, of which two have been prepared and
submitted and two are in progress. The product is still on target to be launched
in September 2003 at the ASIS trade show in New Orleans.



Axiomlab has a 25% stake in BraddaHead and has invested a total of #267,000.
Under the original investment agreement, Axiomlab will be required to invest up
to a further #100,000, subject to certain milestones being achieved.



The last audited accounts for the 4 months ended 31 March 2002 show turnover of
#16,000, loss before tax of #46,000 and net liabilities of #38,000.



Techtran Group Limited

www.techtrangroup.com. Axiomlab set up Techtran Group Limited as a vehicle for
its investment in the UK's university sector. The company was formed to take on
the role of helping to identify ideas and inventions with potential commercial
application from UK universities and then turn these ideas into successful
businesses or licensing deals. Hands-on help, available from both Axiomlab and
Techtran Group Limited, provides development and support to spin out companies.



The company's first deal was signed in December 2002 with the University of
Leeds and consequently is currently based at the University's Innovation Centre.
To the best of our knowledge it is understood that this pioneering partnership
represents the first time that a top ten UK university has outsourced the
technology transfer process to a corporate.  The University of Leeds is among
the top ten research universities in the UK with over 3,000 researchers,
including postgraduates and attracts annual research income of more than #60
million. The University also has 35 departments rated internationally or
nationally "excellent" for their research activity.



Equity in new spin-outs or revenues from the new licensing deals will be shared
between the inventor, the University and Techtran Group Limited.  In addition,
as part of the deal, Techtran Group Limited has acquired an economic interest in
the realisation proceeds from a number of existing spin-out companies. These
companies are involved in a wide range of activities at various stages of
development, including therapeutics, drug delivery mechanisms and software.



Techtran Group Limited is a wholly owned subsidiary of Axiomlab, in which
Axiomlab has invested #1.0 million.  In line with UK accounting requirements,
the company has been consolidated within the Group's financial statements.
However, this company is treated, for management and internal reporting
purposes, as an investment and, therefore information about the company has been
included within this portfolio review.



There are no audited accounts yet available for this company.



Board



In February 2003, Senator George Mitchell and Margaret Morrison resigned as
non-executive directors.  We are delighted that Senator Mitchell is continuing
his relationship with Axiomlab through his position as Honorary President of
Techtran Group Limited.





Post Balance Sheet Events



Axiomlab has separately announced today a recommended proposal for a return of
cash to shareholders and cancellation of Axiomlab's AIM trading facility to be
effected by means of a scheme of arrangement under section 425 of the Companies
Act 1985 (the "Proposals").  Under the Proposals, for every Axiomlab share
owned, shareholders will be offered 0.85p per share in cash and one limited
participation share, entitling them to participate in the future proceeds of the
existing Axiomlab portfolio insofar as these exceed #4 million, in aggregate,
and are realised in cash during the 15 months from the effective date of the
scheme (or by 31 December 2004, whichever is later) or such period has expired
but where the transaction to which the realisation relates has been commenced by
such date. Shareholders who do not wish to receive a return of cash now may
elect to roll over their Axiomlab shares in exchange for shares in a newly
formed private company, New Axiomlab.



Full details regarding the Proposals, including the background to, and reasons
for, the Proposals, are explained in a circular sent to shareholders today.



Outlook



The year has seen difficult trading conditions in all market sectors, and has
been particularly hard for early stage investments, as has been evidenced by the
lack of availability of funds for new investment. Our hands-on approach has
provided important support to our portfolio companies and we will ensure that
investments continue to benefit in the future from the range of skills our team
can offer.



We have been actively focused on the university sector and are very excited
about its potential. We are particularly looking forward to working with the
University of Leeds and its academics in what is seen as a pioneering venture in
the UK.  We believe that there are significant opportunities in new technologies
within the UK's universities and aim to build our reputation in the
commercialisation of these.



We continue to feel cautiously optimistic about the future, having a broad focus
of investments in a wide range of businesses and markets. Although the timescale
for realisation of our investments has lengthened beyond our original
expectations, we believe that significant shareholder value can be realised over
the longer term.



We would like to thank all our personnel, our board and our advisors for their
continued efforts and support.


Ray Ingleby                          Fred Mendelsohn                Alan Aubrey



16 July 2003







REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2003

CONSOLIDATED PROFIT AND LOSS ACCOUNT

                                                                        Year ended             Year ended
                                                                     30 April 2003          30 April 2002
                                                                              #000                   #000

Turnover                                                                       422                    303

Operating expenses  - normal                                               (1,526)                (1,772)
                    - exceptional                                            (300)                      -

                                                                           (1,826)                (1,772)

Operating loss before impairment provision                                 (1,404)                (1,469)

Impairment provision                                                       (2,000)                (2,250)

Operating loss after impairment provision                                  (3,404)                (3,719)

Interest receivable                                                            282                    383

Loss on ordinary activities before taxation                                (3,122)                (3,336)

Taxation on loss on ordinary activities                                          -                      -

Loss for the financial year                                                (3,122)                (3,336)

Loss per share

Basic loss per share (pence)                                                (0.63)                 (0.70)


The profit and loss account has been prepared on the basis that all operations
are continuing.  There are no recognised gains or losses in either year other
than the loss for that financial year.



CONSOLIDATED AND COMPANY BALANCE SHEETS


                                                                      Group                         Company
                                                      2003             2002           2003             2002
                                                      #000             #000           #000             #000
Fixed assets
Tangible assets                                         18               30             17               30
Investments                                          4,317            4,674          5,316            4,674

                                                     4,335            4,704          5,333            4,704
Current assets
Debtors                                                368              510            357              510
Cash at bank                                         6,442            8,724          5,555            8,724

                                                     6,810            9,234          5,912            9,234
Creditors: amounts falling due within
  one year                                           (470)            (141)          (460)            (141)

Net current assets                                   6,340            9,093          5,452            9,093

Net assets                                          10,675           13,797         10,785           13,797

Share capital and reserves
Called up share capital                              1,247            1,247          1,247            1,247
Share premium account                               16,416           16,416         16,416           16,416
Merger reserves                                      1,909            1,909          1,909            1,909
Profit and loss account                            (8,897)          (5,775)        (8,787)          (5,775)

Equity shareholders' funds                          10,675           13,797         10,785           13,797



CONSOLIDATED CASH FLOW STATEMENT

                                                                        Year ended                Year ended
                                                                     30 April 2003             30 April 2002
                                                                              #000                      #000
Reconciliation of operating loss to net cash outflow
  from operating activities
Operating loss after impairment provision                                  (3,404)                   (3,719)
Profit on sale of investments                                                 (17)                         -
Depreciation                                                                    17                        17
Impairment provision                                                         2,000                     2,250
Decrease/ (Increase) in debtors                                                142                     (448)
Increase in creditors                                                          329                        12

Net cash outflow from operating activities                                   (933)                   (1,888)

Returns on investments and servicing of finance
- interest receivable                                                          282                       383
Capital expenditure
- purchase of tangible fixed assets                                            (5)                       (6)
- purchase of fixed asset investments                                      (1,689)                   (3,130)
- sale of investments                                                           63                         -

Net cash outflow from Capital Expenditure and
  financial investment                                                     (1,631)                   (3,136)

Cash outflow before financing                                              (2,282)                   (4,641)

Financing
Issue of ordinary share capital                                                  -                    12,000
Expenses of share issue                                                          -                     (365)

(Decrease)/ Increase in cash in year                                       (2,282)                     6,994


RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS


                                                                        Year ended                Year ended
                                                                     30 April 2003             30 April 2002
                                                                              #000                      #000


Net funds at start of year                                                   8,724                     1,730
Movement in net funds                                                      (2,282)                     6,994

Net funds                                                                    6,442                     8,724


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.         Nature of financial information

The financial information contained in this preliminary announcement does not
constitute statutory accounts under section 240 of the Companies Act 1985.  The
results for the year ended 30 April 2003 have been extracted from the company's
annual report and financial statements on which the auditors have issued an
unqualified audit report.

2.         Basis of preparation

The financial statements have been prepared in accordance with applicable
accounting standards and in accordance with the historical cost convention.

3.         Loss per share

The basic loss per share of 0.63p (2002: loss 0.70p) is calculated by reference
to the loss for the financial year of #3,121,699 (2002: loss #3,335,637) and to
the weighted average of 498,845,652 (2002: 474,831,358) ordinary shares in issue
during the year.  The fully diluted loss per share gives a lower figure than
this basic loss per share and so accordingly has not been disclosed.

4.         Annual report and financial statements

Copies of Axiomlab's annual report and financial statements will be sent to
shareholders and may be obtained from the registered office of Axiomlab, at City
Wharf, New Bailey Street, Manchester, M3 5ER.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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