Freesteel Blog » Just my £143,805.33 and 2p

Just my £143,805.33 and 2p

Wednesday, April 9th, 2008 at 10:19 am Written by:

I’d recently read the following paragraph in the glossy accounts of VI Group plc:

The Department of Trade & Industry awarded a grant of £81,000 for the development of modelling technologies particularly applicable to areas of mould design that are not easily accessible to users of current precise modelling techniques. It is anticipated that this project will come to fruition in late 2006.[1]

when a friend of mine was building a Freedom of Information webpage and needed some examples to test it with. After a bit of messing around with the fact that the DTI has been replaced by the BERR,[2] and anyway it wasn’t awarded by them in the first place, we received the following reply about the grant from the Southwest Regional Development Agency:

I can confirm that Vero International Software were awarded a SMART award on 7 May 2003 for the development of modelling technologies particularly applicable to areas of mould design that are not easily accessible to users of current precise modelling techniques. In total they received £143,805.35 between 7 May 2003 and 8 Feb 2005. The South West Regional Development Agency holds a project file concerning this SMART award.

SMART (now re-branded as Grant for Research and Development) was a national Department of Trade and Industry product to help individuals starting up businesses and small and medium sized enterprises already based in England carry out research and development work on technologically innovative products and processes. By offering a grant towards the costs of carrying out the research and development work, the scheme encouraged businesses to carry out projects that they would not necessarily undertake without the grant.

The work carried out in SMART projects is often genuinely confidential and may lead to patentable ideas. In other cases the know-how developed is a trade secret. Following your request, Vero Software were contacted to see if they would agree to the release of any of the project information that we hold. They considered all the information to be commercially confidential. Our Freedom of Information (FOI) Decisions & Appeals Board then met to consider whether or not an exemption applied to this information… [and] decided that it is not in the public interest to release the information we hold about this project.[3]

So where did the £81k number originate? Now nothing in the Vero accounts has ever made any sense to me,[4] but I am starting to notice the liberty with which the money men are willing throw around totally meaningless figures like confetti. For example, in the preliminary results released last week:

Net debt increased to £2.7 million from £2.3 million. £2.6m of this relates to term loans from UK and Italian Banks repayable over 5 years. The company has total short term borrowing facilities of £1.4m in Italy and the UK to cover its working capital requirements. Interest payments during the year were £211,000 (2006: £81,000) and were covered 6 times (2006: 13 times) by profits.[5]

That’s a lot of increase in interest for a small increase in debt, don’t you think? The good news about debt levels that were touted six months ago totally vanished:

Net debt has reduced since the year end to £1.7m (31 December 2006: £2.3m).[6]

Whatever. The debt may have something to do with random acts of acquisition.[7] Just imagine the difference I could make to the world with that kind of money.

As far as I can see, all this gibberish is for one purpose and one purpose only– to persuade investors to buy shares in their company. That is, if they aren’t mind-bogglingly bored by the whole exercise first. For a software company in this day and age, they’ve managed to make their business appear exceptionally dull.

I have observed the steady increase in shareholding by a one Peter Gyllenhammar and his Union Discount Company of London Ltd[8] who, according to the 100% PR flim-flam that is the excuse for a business press, is a “Swedish activist investor”

specialis[ing] in companies trading at substantial discounts to net asset value or in need of restructuring, often through his investment vehicles, Erudite, F�rvaltnings AB and Silverslaggen. He often seeks board representation and works closely with management. Gyllenhammar has a background as an analyst and corporate finance advisor to several major Swedish corporations. He has interests in a number of UK public companies, and is chairman of British Mohair Holdings, and a director of Browallia International. Current significant holdings include Densitron Technologies, European Colour, The Jarvis Porter Group, Lonrho Africa and The Sherwood Group.[9]

This has been going on for about a year, and I’m still waiting for something interesting to happen.

Anyways, back to the FOI request. The answer is not good enough because communications between Vero and the Regional Development Agency about the extent of their proof that the money was actually used to carry out a project Vero would not necessarily undertake without a grant must be disclosed. They can give me the documents, but with all the trade secrets blotted out.

Unfortunately, this requires a complaint to be made through a different email address, and the FOI system doesn’t handle that yet. So there will be a delay. Hopefully a short one because my contacts are with the programmers rather than through a no-nothing manager in charge of the project who’s only option is to fob me off.

(Actually, the guy in charge of the FOI project, knows what he is doing. But that’s not my point– or maybe it is… That being if no one with any influence is interested in the software, then the software will probably wind up being uninteresting. See?)


  • 1. Debt Management on The Fi&hellip replies at 9th April 2008, 8:31 pm :

    […] ookmark”> Just my £143805.33 and 2p Just my £143805.33 and 2p Net debt increased to £2.7 million from £2. […]

  • 2. Harry Morse replies at 15th April 2008, 1:02 pm :

    This looks like a case of get a grant add it to the bottom line so it looks like we made a profit. Do they do anything in their modeling that is now unique from this development?. Viewing their website there does not appear that anything was derived from this expenditure so maybe it was just money for jam to make it look good for the shareholders.

  • 3. Just my £143,805.33 and &hellip replies at 30th April 2008, 12:26 am :

    […] iew all posts in Uncategorized” rel=”category tag”>Uncategorized with No Comments Just my £143,805.33 and 2p …loans from UK and Italian Banks repay […]

  • 4. Freesteel&hellip replies at 28th September 2009, 11:41 am :

    […] Freesteel blog has a history of being interested in the Vero Software company, among […]

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