Year-end report july 1, 1999 - june 30, 2000

PRESS RELEASE REGARDING Year-end Report July 1, 1999 - June 30, 2000 AB Novestra (publ.) The Novestra Group's result after tax for the fiscal year 1999/2000 amounted to 90,825 KSEK (2,567) corresponding to 5.0 SEK per share (0.2). The result has been affected by a non-recurring cost of 5 MSEK in connection with the listing on the OM Stockholm Exchange O List. The value of Novestra's portfolio has had a positive development over the period as a whole, as well as during Novestra's fourth quarter. The aggregate value of the portfolio companies, based on last transaction in accordance with the rules stipulated by the EVCA, amounted to 564 MSEK. Net asset value as per June 30, 2000, based on the same valuation, amounted to 888 MSEK (84) corresponding to a value of 38.2 SEK per share (6.2). The positive development has continued after the end of the fiscal year with a substantial increase in the value of the portfolio companies in accordance with the above-mentioned EVCA rules. The Group's cash and cash equivalents, including interest bearing investments, amounted to 341,942 KSEK (640). For more detailed information reference is made to the attached year-end report. For further information, please contact Thomas Åkerman, President, or Theodor Dalenson, chairman, tel +46 8 545 01 750. Novestra is one of the leading venture capital investment firms in the Nordic countries, primarily with a focus on companies providing enabling services to the network economy. Novestra's portfolio of companies includes B2 Bredband AB, Continuum Group Ltd, Fanglobe Inc, IQUITY Systems Inc, Mobilestop.com Inc, Netsurvey Bolinder AB, PowerNet AB and Qbranch AB. Novestra's shares are listed on the O list of the OM Stockholm Exchange. FOR IMMEDIATE RELEASE Year-end Report July 1, 1999 - June 30, 2000 for AB Novestra (publ.), company reg. No. 556539-7709 Result and Financial Position - the Group Novestra reports a profit for the fiscal year of 90,825 KSEK (2,567 for the fiscal year 98/99). The result includes profits from sales of securities totalling 103,391 KSEK (6,280) and from other operations 8,610 KSEK (1,126). Profit per share, prior to full conversion of outstanding options, amounted to 5.0 SEK (0.2). Book value on financial assets amounted to 543,418 KSEK (58,448) of which interest bearing investments constituted 199,999 (0). Shareholders' equity, prior to full conversion of outstanding options, amounted to 664,447 KSEK (51,117) which corresponds to a value of 28.6 SEK per share (3.8). Net asset value, prior to full conversion of outstanding options, amounted to 887,751 KSEK (84,321) which corresponds to a value of 38.2 SEK per share (6.2). Solidity was 88.9 % (82.1). The Group's cash and cash equivalents, including interest bearing investments shown under financial assets, amounted to 341,942 KSEK (640). Investments during the year amounted to 566,568 KSEK of which the greater part, 565,529 KSEK (53,304), consisted of investments in fixed financial assets. Investments in intangible fixed assets and tangible fixed assets amounted to 302 KSEK (1,216) and 737 KSEK (-) respectively. The total number of shareholders as per June 30, 2000 was approx. 3,300 (1,290 as per December 31, 1999). Significant events during the year During the year, Novestra has made several new investments in portfolio companies, in total 365,530 KSEK (53,304), such as Qbranch AB and Dallas Sthlm AB, which are profitable companies. Novestra has also made investments in Continuum Group Ltd, Recollections Inc., Fanglobe Inc., Mobilestop Inc., Netsurvey AB and PowerNet AB and participated in a new share issue for the shareholders in B2 Bredband AB. Disposals have been made for in total 183,949 KSEK (22,163). Furthermore, Novestra concluded a directed new share issue adding 476 MSEK to the company after issuing costs. The issue was primarily subscribed for by international institutions. Alfred Berg Fondkommission AB acted as the company's advisor in this transaction. As from June 21, 2000, AB Novestra is listed on the O-list of the OM Stockholm Exchange. The cost for the listing has affected the profit by approx. 5 MSEK. In May, AB Novestra received notice from the Office of the Council for Advance Tax Rulings, granting Novestra investment company tax status for the 1999/2000 fiscal year. Furthermore, in May, Nils Bengtsson was recruited as CFO and Executive Vice President and Thomas Åkerman was recruited as the new President as from August 2000. Peter Ekelund and Göran Strandberg joined Novestra as Executive Directors during the spring. SIGNIFICANT DEVELOPMENTS AFTER THE END OF THE FINANCIAL YEAR In July, Delphi Finansanalys AB acquired Novestra's 55% holding in NetCap AB in lieu of shares in Delphi corresponding to 10% of the share capital. Furthermore, Novestra acquired 15% of NetCap AB from a previous owner. Novestra has invested in a to Novestra directed new issue in Comintell Holding AB corresponding to 12% of the capital for 2.5 MSEK, with an option to acquire an additional 12% during the fall on the same conditions. Novestra's investment in Run Media Inc., has been revoked due to the fact that conditions which the investment decision was based upon were changed. This has no effect on Novestra's result. Novestra's holding in E-Trade was written down to the market value as per June 30, 2000. Novestra's agreement with Peter Ekelund regarding payment for Novestra shares by shares in B2 Bredband AB, has been renegotiated and Peter Ekelund now subscribes for 440,000 new shares in AB Novestra at a price of 280 SEK per share. Payment can be made in cash or by payment in shares in B2 Bredband AB valued at the market price at the time of issue. The issue takes place between October 1, 2001 and March 31, 2002. The agreement is conditional on that the transaction and the issue is approved by a general shareholders' meeting in Novestra. A Letter of Intent with B2 Bredband AB has been signed by Novestra with the aim to further strengthen the collaboration and to accelerate the development of broadband and corresponding services in Sweden and Europe. Initially, the collaboration will focus on finding projects and companies which engage in new services in relation to wireless and fixed broadband. FUTURE DEVELOPMENTS For various reasons Novestra's third financial year has been the company's most interesting and eventful up till now. Having spent the first two years with relatively limited means building up a portfolio and working with the individual companies, in the past year Novestra has had an opportunity to inject into the company the additional management and capital resources required for the next phase in its development. Looking back on the past financial year, it is clear that Novestra was right in its assessment of the market. The new tougher market situation within the IT sector has only to a limited extent affected Novestra's portfolio companies. In many of the portfolio companies, Novestra has seen a very positive development of the business and several have succeeded in increasing both turnover and profit by between 50 and 100 per cent over the first six months of the year. At present, only two of the companies in Novestra's portfolio have an immediate need for capital. The value of Novestra's portfolio, based on the last transaction in accordance with the rules stipulated by the EVCA, has developed positively even after the end of the fiscal year, and Novestra has high hopes that its investments within the broadband sector - B2 Bredband, Continuum and PowerNet - will contribute to the positive development over the coming twelve months. In the short term, the new market situation has resulted in more limited exit opportunities and this is likely to remain the case for some time to come; it has also resulted in that valuations of the type of investment in which Novestra is interested have become more advantageous. This has already created some interesting investment opportunities and Novestra is convinced that this development will continue and will create a favourable environment for the company, which enjoys a good liquidity situation. Novestra's investment focus will continue to lie within the area that is defined as enabling services and technologies within the network economy. It is not unlikely that Novestra will also attempt to develop separate business areas that invest in broadband services and broadband technology for both fixed and mobile broadband applications. Novestra will continue to work to find the right investments and to make the right analyses without being distracted by the fact that the market is tending to put a premium on trends and buzz words. Parent company The Parent company reported a profit after tax amounting to 86,709 KSEK (1,861). Investments during the year amounted to 567.821 KSEK of which the greater part, 567,139 KSEK (54,904), consisted of investments in fixed financial assets. Investments in tangible fixed assets amounted to 682 KSEK (-). Dividend The Board and the President propose that no dividend is declared for the fiscal year 1999/2000. OTHER INFORMATION The Annual Report, inclusive of associated companies reported according to the equity method, will be available at the office of AB Novestra, Norrlandsgatan 16, Stockholm, Sweden as from September 21, 2000. The General shareholders' meeting will be held in Stockholm, Sweden on October 5, 2000. The interim report for the period July - September 2000 will be published on October 31, 2000. The interim report for the period July - December 2000 will be published on January 31, 2001. The number of outstanding shares as per June 30, 2000 is 23,240,980. Profit per share has been calculated on the basis of an average number of 17,997,535 shares. The number of outstanding shares as per June 30, 1999 was 13,590,975. There are two series of debenture loans with detachable warrants issued. The first series comprises a total of 150,000 warrants with a right to subscribe for an equal number of shares and with two different strike periods (75,000 warrants expire on September 30, 2000 and 75,000 warrants expire on September 30, 2001) at a strike price of 10 SEK per share. The other series comprises a total of 2,500,000 warrants with a right to subscribe for an equal number of shares at a strike price of 90 SEK per share and the strike period expires on June 30, 2001. Upon conversion these options would increase the share capital by SEK 2,650,000 and the share premium reserve would increase by SEK 223,850,000. The dilution effect on the share capital and votes is estimated to be approximately 10.2 per cent. When calculating the net asset value, shares and holdings in unlisted companies have been valued in accordance with the rules stipulated by the EVCA. Listed companies have been valued based on the market value as per June 30, 2000. This report has not been subject to any audit by the company's auditors. STOCKHOLM IN AUGUST 2000 Theodor Dalenson/Thomas Åkerman CHAIRMAN/PRESIDENT For further information, please contact Thomas Åkerman, President, or Theodor Dalenson, chairman, tel +46 8 545 01 750. NOVESTRA holdings per June 30, 2000 Ownership before Number of Share of Book value portfolio conversion, % shares % (KSEK) Strategic holdings B2 Bredband AB 5.3 3 778 007 10.4 56 614 Continuum Group Ltd 12.3 10 000 000 16.8 91 545 Dallas Sthlm AB 40.0 1 000 000 1.0 5 647 Fanglobe Inc. 14.5 2 910 480 3.8 20 487 Iquity Systems Inc. 5.4 1 221 876 3.4 18 505 Mobilestop.com Inc. 3.9 250 000 0.6 3 005 Netsurvey AB 30.0 5 250 000 3.1 16 740 PowerNet AB 40.0 666 000 1.0 5 175 Qbranch AB 15.0 1 500 000 4.8 26 344 Recollections Inc. 13.4 22 419 3.2 17 412 Total 48.1 261 474 Other holdings Boxman.com plc 1.7 853 533 2.5 13 718 DCM AB 5.7 320 800 2.5 13 506 E*Trade Group Inc. 0.0 98 672 2.7 14 462 Jupiter Communications Inc 0.5 81 630 0.8 4 381 Klick Data AB 7.1 145 000 0.5 2 779 Skandia Mäklarna Holding AB 27.0 59 400 0.9 4 750 Evestra Intressenter AB 0.0 1 0.0 10 Run Media Inc. 12.0 284 333 2.8 15 098 Interest bearing fund - - 36.8 199 999 Other holdings - - 2.4 13 241 Total 51,9 281 944 Totalt financial fixed 100,0 543 418 assets Stock securities and cash 189 938 CONSOLIDATED INCOME STATEMENTS, KSEK 1999 07 01 1998 07 01 (Purchase method) 2000 06 30 1999 06 30 Capital gains, investment activity 103,391 6,280 Income from other operations 56,647 4,700 Cost of goods sold, other operations - 48,037 - 3,574 Gross Profit 112,001 7,406 Administrative expenses - 23,521 - 3,025 Other operating income Operating income 88,480 4,561 RESULT FROM FINANCIAL INVESTMENTS Interest and similar income 3,540 15 Interest expense and similar charges - 366 - 306 Income after financial items 91,654 4,270 Income taxes - 1,789 -1,703 Minority interests _ 960 __ - Net Income for the year 90,825 2,567 CONSOLIDATED BALANCE SHEETS, KSEK 2000 06 30 1999 06 30 ASSETS Fixed assets: Intangible fixed assets Capitalised development expenditures 1,290 1,216 Goodwill 1,679 __ - 2,969 1,216 Tangible fixed assets: Equipment 731 17 Financial fixed assets: Shares and participations 543,418 58,448 Total fixed assets 547,118 59,681 Current assets: Inventories: Stock securities 47,995 667 Current receivables: Other receivables 9,724 594 Prepaid expenses and accrued income __ 724 _ 691 10,448 1,285 Cash and bank 141,943 Total current assets 200,386 2,592 TOTAL ASSETS 747,504 62,273 CONSOLIDATED BALANCE SHEETS, KSEK (cont.) 2000 06 30 1999 06 30 (Purchase method) SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' Equity Restricted equity: Share capital 23,241 5,792 Share issue not yet registered - 460 Restricted reserves 548,915 41,973 572,156 48,225 Non-restricted equity: Unrestricted reserves 1,466 325 Net income for the year 90,825 2,567 92,291 2,892 Total shareholders' equity 664,447 51,117 Minority interests 1,155 - Provisions Provisions for deferred income taxes 2,318 1,925 Long-term liabilities Bank overdraft facility - 5,308 Other liabilities 700 _ - 700 5,308 Current liabilities Accounts payable 4,718 249 Income tax liability 1,292 2,154 Other liabilities 60,174 1,007 Accrued expense and deferred income 12,700 _ 513 78,884 3,923 Total liabilities 79,584 9,231 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 747,504 62,273 CONSOLIDATED CASH FLOW STATEMENTS, KSEK 1999 07 01 1998 07 01 2000 06 30 1999 06 30 Cash flow from operations -48,768 2,663 Cash flow from investing activities -327,127 -30,597 Cash flow from financial activities 517,198 22,708 Total cash flow 141,303 - 5,226 Cash and bank at the beginning of year 640 5,866 Cash and bank at the end of year 141,943 640 INCOME STATEMENTS, PARENT COMPANY, KSEK 1999 07 01 1998 07 01 2000 06 30 1999 06 30 INVESTMENT ACTIVITY Capital gains, investment activity 103,391 6,280 Income from other operations 1,825 - Gross Profit 105,216 6,280 Administrative expenses - 20,307 - 3,024 Other operating income _ - _180 Operating Income 84,909 3,436 RESULT FROM FINANCIAL INVESTMENTS Result from participation in group companies - 1,300 - Interest and similar income 3,458 13 Interest expense and similar charges - 223 - 299 Income after financial items 86,844 3,150 APPROPRIATIONS AND TAX Appropriations -135 137 Income taxes __ - - 1,426 Net Income for the year 86,709 1,861 BALANCE SHEETS PARENT COMPANY, KSEK 2000 06 30 1999 06 30 ASSETS Fixed assets: Tangible fixed assets: Equipment 637 17 Financial fixed assets: Investment in group companies 2,010 1,800 Stocks and participations 543,418 58,448 545,428 60,248 Total fixed assets 546,065 60,265 Current assets: Current receivables: Receivables from group companies 46,563 - Other receivables 9,379 481 Prepaid expenses and accrued income __ 467 691 56,409 1,172 Cash and bank 134,412 __ 3 Total current assets 190,821 1,175 TOTAL ASSETS 736,886 61,440 BALANCE SHEETS PARENT COMPANY, KSEK (cont.) 2000 06 30 1999 06 30 SHAREHOLDERS' EQUITY AND LIABILITIES Equity Restricted equity: Share capital 23,241 5,792 Share issue not yet registered - 460 Share premium reserve 546,180 40,664 569,421 46,916 Non-restricted equity: Retained earnings 2,230 369 Net income for the year 86,709 1,861 88,939 2,230 Total Shareholders' Equity 658,360 49,146 Provisions Provisions for deferred taxes 1,426 1,426 Untaxed reserves 135 - Long-term liabilities Bank overdraft facilities - 5,308 Current liabilities Accounts payable 4,504 53 Liabilities to group companies - 4,061 Income tax liability - 155 Other liabilities 60,067 892 Accrued expenses and deferred income 12,394 _ 399 76,965 5,560 Total liabilities 76,965 10,868 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 736,886 61,440 CASH FLOW STATEMENTS PARENT COMPANY, KSEK 1999 07 01 1998 07 01 2000 06 30 1999 06 30 Cash flow from operations -54,364 2,609 Cash flow from investing activities -328,425 -30,981 Cash flow from financial activities 517,198 22,708 Total cash flow 134,409 - 5,664 Cash and bank at the beginning of year 3 5,667 Cash and bank at the end of year 134,412 3 ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/08/25/20000825BIT00750/bit0001.doc http://www.bit.se/bitonline/2000/08/25/20000825BIT00750/bit0002.pdf