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
Written by Graeme Wearden, Contributor

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.

Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet news forums.

Let the editors know what you think in the Mailroom. And read other letters.

Editorial standards