TIDMTMT
RNS Number : 1236I
TMT Investments PLC
31 March 2020
31 March 2020
TMT INVESTMENTS PLC
("TMT" or the "Company")
Update re COVID-19 and Annual Accounts
TMT Investments PLC (AIM: TMT.L), the venture capital company
investing in high-growth technology companies, today provides the
following business update in light of COVID-19 as well as an update
on the timing of its final results for the year ended 31 December
2019.
In respect of COVID-19, TMT confirms:
-- No disruption to the Company's activities;
-- Strong balance sheet with cash reserves of approximately
US$10.7 million and no financial debt;
-- Increased engagement with the Company's portfolio companies
to assess impact of COVID-19 and providing advice and support where
needed;
-- Majority of TMT's portfolio companies are well positioned to
weather the impact of COVID-19; and
-- Selective investment approach given COVID-19, will likely
mean no significant new investments in the coming months.
TMT's own team has always been internationally based and are
therefore used to working remotely. As a result, there has not been
any disruption to our operations.
Our top five portfolio companies (Bolt, Backblaze,
Depositphotos, Pipedrive and Scentbird), accounting for
approximately 75% of the Company's NAV, are well-established, more
mature businesses, with globally diversified revenues, strong cash
reserves and tens of thousands of customers. They are operationally
nimble, cost conscious companies that have grown rapidly, without
undertaking large funding rounds to support expanded cost bases
compared to some of their peers, which TMT believes should
therefore enable them to better adapt to the current environment.
As technology-driven companies, their staff are also used to
working remotely.
Bolt is active in over 150 cities globally. Whilst turnover for
the core ride-hailing business has been negatively affected as a
result of COVID-19, the drop in variable costs is resulting in
lower cash burn rates for Bolt. On 26 March 2020, Bolt announced
the launch of its Bolt Business Delivery service. This service can
be used by all kinds of businesses, from restaurants and
supermarkets to florists, with same-day or even same-hour B2C
delivery. Although this was not in direct response to COVID-19, the
development underlines Bolt's ability to scale up and make best use
of its existing infrastructure and resources, which is a feature
that we always seek to identify as one of our key investment
criteria. In light of COVID-19, Bolt will be refining and expanding
its delivery service to capitalise on the opportunities
created.
Backblaze is operationally profitable, with significant cash
reserves and over 600,000 customers globally. Backblaze offers a
low-cost cloud storage product that is well positioned for growth
in the current cost saving environment.
Depositphotos entered this period operationally profitable, with
sizeable cash reserves and a well-diversified international
customer base. TMT believes that the short-term impact on
Depositphotos' revenues is likely to be neutral with the
longer-term outlook potentially negative if the COVID-19 effect
deepens.
Pipedrive is operationally profitable, with very significant
cash reserves and a well-diversified customer base of over 90,000
companies worldwide. TMT believes that the short-term impact on
Pipedrive's revenues is likely to be neutral.
Scentbird is currently operationally profitable, with sizeable
cash reserves. TMT believes that the short-term impact on
Scentbird's revenues is likely to be neutral with the longer-term
outlook potentially negative if the COVID-19 effect deepens.
The remainder of our portfolio consists of over 25 companies and
is diversified across our four core investment sectors: Big
Data/Cloud, SaaS (software-as-a-service), Marketplaces and
E-commerce. While some of the portfolio companies most exposed to
sectors immediately affected (such as event management software
company Attendify and fashion rental platform Le Tote) will have to
face some important and potentially serious challenges, a notable
number of our portfolio companies (such as remote learning company
MEL Science and game coaching service Legionfarm) have experienced
an increase in demand for their products. The effect on other
portfolio companies is therefore mixed, and a lot will depend on
how the situation develops in the coming months.
As previously noted, even before the recent negative
developments caused by COVID-19 and oil price volatility, the
venture capital community was becoming more focused on start-ups'
ability to achieve underlying profitability, or at least to control
the cost of their growth. The 'growth at any cost' mentality that
had often prevailed among start-ups and venture capital investors,
was gradually being replaced with a more pragmatic approach of
seeking to achieve more cost-efficient growth. As this balanced
approach has always been one of TMT's key selection criteria, we
are pleased to see that the majority of our portfolio companies are
seeing the fruits of having adopted this approach early on.
Especially in turbulent times like these, this approach now allows
them to efficiently control their burn rates and cash liquidity
levels.
A more detailed update on COVID-19 will be provided in the
Company's final results for the year 2019, which were originally
planned to be announced in the week of 30 March 2020, but will now
be delayed due to the availability of some of our professional
advisers as a result of COVID-19.
Alexander Selegenev, Executive Director of TMT Investments PLC,
said: " TMT has now invested in over 50 companies since its
admission to AIM in December 2010 and has a diversified portfolio
of over 30 investments, focused primarily on Big Data/Cloud, SaaS,
Marketplaces and E-commerce. With a strong cash balance, TMT's
current strategy is to be extremely selective in identifying any
new investment opportunities, and we do not expect to deploy any
significant funds towards new investments in the next few
months."
This announcement is inside information for the purposes of
Article 7 of EU Regulation 596/2014.
For further information contact:
TMT Investments PLC +44 (0)1534 281 800
Alexander Selegenev (Computershare - Company Secretary)
Executive Director
www.tmtinvestments.com alexander.selegenev@tmtinvestments.com
Strand Hanson Limited
(Nominated Adviser)
Richard Tulloch / James Bellman +44 (0)20 7409 3494
Hybridan LLP
(Broker)
Claire Louise Noyce +44 (0)20 3764 2341
Kinlan Communications +44 (0)20 7638 3435
David Hothersall davidh@kinlan.net
About TMT Investments PLC
TMT Investments PLC invests in high-growth technology companies
across a number of core specialist sectors and has a significant
number of Silicon Valley investments in its portfolio. Founded in
2010, TMT has invested in over 50 companies to date and has net
assets of US$107m as of 30 June 2019. The Company's objective is to
generate an attractive rate of return for shareholders,
predominantly through capital appreciation. The Company is traded
on the AIM market of the London Stock Exchange.
www.tmtinvestments.com .
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END
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