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Startup shutdowns force NewMedia Spark into the red

Internet incubator has had to write off 11 of its dot-com investments as the tech slump bites

Internet investment company NewMedia Spark announced on Wednesday that it had made a loss in its last financial year, and admitted to writing off nearly one fifth of its portfolio.

The company lost £46.3m in the twelve months to 31 March 2001, compared to a profit of nearly £3m the year before. NewMedia Spark had increased the number of companies in which it held investments to 56, from 32 a year ago. However, the total value of its investments fell by 46 percent to £109.7m, compared to £151.8m in the year to March 2000.

NewMedia Spark has written off 11 of its 56 investments. The company now has a net asset value of 42p per share, compared to 77p per share a year ago.

NewMedia Spark made its biggest losses in Sweden. It recently bought local incubator Cell IDC, only to see a sharp decline in the value of many of the B2B dot-coms it acquired through the deal. This resulted in a loss of £49.2m.

Chief executive Mike Whitaker blamed the decline in company fortunes on the decline in the technology sector since March 2000. " The last year has been an extremely eventful and challenging one for SPARK. The decline in our net asset value is disappointing," Whitaker said in a statement, but added that the company had still outperformed the technology market as a whole.

Whitaker added that the company planned to make more investments in the months ahead. It has cash reserves of £76.6m.

NewMedia Spark's portfolio includes investments in digital media companies eTV and DX3, B2B site Travelstore.com and crocus.co.uk, the gardening e-commerce and community Web site.

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