TRICAPITAL LTD – FIFTH ANNUAL GENERAL MEETING – MARCH 2ND 2010

CHAIRMAN’S REPORT

INVESTMENT HIGHLIGHTS

During the past year TRI Cap continued to expand its investment activities, albeit at a slower rate than in 2008. For the first time TC follow-on funding (£618k) exceeded investment in new businesses (£265k).  This investment by TC members supported follow on funding totalling £4.3m, and £1.5m into three new businesses.

TC members have now contributed some £3.9m to an existing portfolio of 17 different companies as part of an overall investment of £14.6m by various investors: importantly, the Scottish Co-investment fund has contributed some £6.3m. We were pleased to welcome Dundee based IRT Surveys and Glasgow based Centeo Biosciences in February and Aberdeen based Novabiotics in July to the TC portfolio. Follow on funding was provided for GSS in January and again in October, for Lamellar in April, Lab 901 and PowerPhotonic in August and Syntropharma in November.

Generally, and in line with current industry experience, investee company deal sizes and members’ investment offerings have been at lower levels than in previous years. However we have been heartened by the continued support by TRI Cap members for both new investment and follow on fundings, and this activity is expected to continue into the current year with two new company deals and several follow on fundings already in the pipeline.

ORGANISATION

In her first full year as Investment Manager, Kathy Greenwood has been kept very busy as the number of companies looking for funds has increased, partly as a result of the lack of available bank facilities.  As a consequence the need for the professional pre-selection process has required to be ever more rigorous.  TRI Cap has been fortunate to acquire somebody with the industry knowledge and communication skills which Kathy constantly exhibits and her support, creativity and hard work throughout the year has been both needed and appreciated. We continue to be grateful for KINC Scotland’s financial contribution in support of Kathy’s salary and expenses – something we cannot take for granted indefinitely.

Alongside Kathy, Andy Purves and his colleagues have continued to provide quite invaluable administrative support across the whole spectrum of issues such as taxation, corporate governance, and investor information services to name but a few.

LINKAGES AND ADVISORS

We continued during the year to develop our relationships with several other Angel and Venture Capital organisations and are grateful for the cooperative spirit in which discussions with such organisations are invariably held. There is also much helpful interaction between TRI Cap and LINC Scotland. We, and our investee companies, also continue to benefit hugely from the support funding provided by the Scottish Co-investment Fund, and welcome their generally relaxed approach to conducting their deal business.

We also continued to enjoy our close relationship with MBM Commercial which has been involved in providing much deal based and administrative issue advice during the past year.

INTERACTION WITH INVESTEE COMPANIES

Last year’s AGM was held alongside a TRI Cap Open Day when, in front of an audience of invited guests, we had presentations from a number of our investee companies – a process we shall be continuing in 2010 with a further group of companies and guests. One of the intentions of these sessions was to focus on the way we could best support these businesses as they progressed towards a profitable exit. In November we held our first Exit Workshop, ably masterminded by Jamie Andrew and addressed by Sandy Finlayson from MBM, Clovis Younger, Alan Walker and Tom Hart amongst other contributors. That successful exercise provided the spring board for the setting up of the TRI Cap ‘Exit Assessment and Support Group’ (‘EAS Group’) and we hope that the EAS team will, over a period of time, have a real impact on the timing and profitability of investor exits from investee companies. We wish the EAS team, Jamie Andrew, Walter Riddell-Carre and Douglas Needham. every success in their important endeavours

THE YEAR AHEAD

Some might think that TRI Cap and its investee companies have survived relatively well through a year of deep recession and turmoil in the financial and banking sectors. But that has not been without its stresses and strains as a number of our investee companies have felt the impact of delayed decision making by their customers, and cash flow problems caused by a lack of availability of normal banking facilities. This has led to increased demands on members for additional funds beyond what may have been originally planned.

At the same time the demand for funding for new companies continues unabated. As forecast in our Investment Intention Survey, members have shown great support for these follow on fundings whilst at the same time they, supported by our growing band of new members, have also shown remarkably consistent support for new deals. Looking ahead it is hard to see much immediate change to our ‘angel’ market place, and in particular a rapid increase in buy-out enthusiasm by large companies in the bio-medical sector where we have most involvement. However we would congratulate Syntropharma on concluding at the year end a licensing deal for their primary product – hopefully a sign of better things to come, and if that is so, TRI Cap has the strength of its organisation and some excellent investee companies to take advantage of any sustained upturn.  

END

March 2010

Issued on behalf of TRI Cap by Prior PR.
For further information contact Eileen Prior on 01721 729322 or 07802 180 412, or email eileen.prior@priorpr.co.uk


Visit www.tricapital.co.uk for more information.


 

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