Investors in Axiomlab, the technology business builder, were told yesterday that the company had made a loss of £2.43m in its first year since floating on Aim.

But the news that they want to hear – that some of its investments are starting to pay off – could come within six months.

The maiden results, which included a provision of £1.75m against the values of its investments in Internet businesses, are largely meaningless.

Over the last 18 months it has defied stock market sentiment to raise £16m, put together a strong management and advisory team – including Chris Gorman, the e-business entrepreneur, and a leading venture capital manager, David McLellan – and has made its first investments.  Most investees are early-stage businesses, which benefit from the Axiomlab blend of equity plus intensive management support and high-powered networking.

Three are internet-based, and Ray Ingleby, the chairman, said that in view of the stock market’s view of e-business generally, the board had made a provision of £1.75m against the value of these investments.

He stressed that this was a general provision, not related to any of the individual firms.

The company’s long-term focus is on capital growth, which will arise either in two ways.  When a new investor comes in to one of its investees at a higher price, that increases the value of Axiomlab’s stake, at least on paper.

But the real payback comes when Axiomlab realises its investment, selling all or part of its stake – most likely to a trade buyer or a long-term private equity investor.  The traditional venture capital exit – a flotation – is unlikely without a big improvement in stock market conditions.

Fred Mendelsohn, the chief executive, told Business AM that he expected the first revaluation gains within six months – with the first realization likely in 9-12 months. 

One of these is likely to be Auctions2Business, which began life as an online auctioneer specialising in used industrial plants and machinery.

It is now in talks with a number of firms of industrial auctioneers, which could lead to the creation of a combined online and traditional business.

Axiomlab initially took a 45% stake in A2B for £1m and has since lifted its stake to 89% through a share swap.

Last night Axiomlab shares were down 0.25p at 3.75p.  They peaked at 15.25p last year.