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Angle

  • BY: Andrew Hore |
  • POSTED: 31/01/2008 |

Technology company developer Angle believes that it could sell one of its businesses and return cash to shareholders in the next 18 months. 

It is always difficult to assess when all or part of a stake in an early stage business can be sold but Angle believes it has candidates where it could realise at least some of its investment. It could even happen within a year but it is better to be cautious.

The restructuring of the Angle business, through cutting costs and concentrating on recurring revenues in the management services operations, is paying dividends. The turnover of the management services division, which is almost the same as Angle’s turnover, was flat at £1.83m but it moved from loss to a £500,000 profit in the six months to October 2007. This was ahead of expectations. Some of the technology companies developed by Angle are consolidated but their turnover is small.

However, there are cash outflows into the developing businesses. Just over £2.4m of costs related to investment controlled companies or other ventures. This was more than offset by net gains on investments of £4.84m more than covered those costs. Nearly £4m of the gain relates to a gain on the value of Angle’s investment in computer graphics firm Geomerics. This was a non-cash item. That is why there was a cash outflow from operations of £1.86m event though the stated pre-tax profit was £2.8m.

Angle believes that its underlying business, before investment in its developing companies, should start to generate cash during the second half of the financial year.

Angle has around £1.1m in cash following the sale of part of its stake in Aim-quoted health ingredients company Provexis.

The businesses that Angle could generate significant cash from disposals include 48%-owned Geomerics, 82%-owned IVF efficiency technology developer Novocellus and 81%-owned graphic technology developer Aguru Images. These have reached the stage of their development where revenues should start to come through. In the case of Aguru that could be in the next few months.

Angle added one new company during the year even though it had said that it was putting new investments on hold. It felt that Mogility was too good an opportunity. The business uses US military technology for agile mobile telecoms. Angle has not put significant cash into this business but it is already near to sales.

The agreement with Reading University has been changed to a non-exclusive basis. Angle hasn’t had the funds to develop any of the ideas from Reading and felt it was fairer to change it from an exclusive contract.

The shares rose1p to 29p following the release of the interim figures. That is still less than half the share price one year ago.

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