Jellyworks ebbs for Shore Capital

JELLYWORKS, sold for £60m to investment bank Shore Capital by Jonathan Rowland, son of property developer David 'Spotty' Rowland, at the height of the internet bubble, has proved to be a dog for the bankers.

Shore chairman Howard Shore revealed today that in the six months to June the group had to write-down £940,000 of investment bought by Jellyworks, knocking turnover down to £2m against £3.3m previously. Pre-tax profits have slumped to £33,000 against £1.5m last time. There is no interim dividend and the final could be in doubt.

Shore shares had anticipated the problems and added 1/4p at 10 1/4p. Shore says current trading conditions deteriorated in July and that it may prove difficult to match the poor first-half earnings figure unless business picks up. He said the banking boutique's balance sheet is strong with £35m of liquid resources and £48.5m in net assets.

Brought to the Alternative Investment Market in 1999, Jellyworks was described as an incubator for internet stocks. In the scramble to get aboard, Jellyworks' share price rose tenfold on the first day to make it worth £90m and in subsequent days £276m. Shareholders put up a further £31m through new share issues before it was sold to Shore Capital.