Sir Alan Sugar yesterday made a paper profit of more than £100m when the value of shares in Viglen Technology, the computer software and hardware company he took over 15 months ago, almost doubled.
The stock, worth 24p when Sir Alan bought it outright in October 1998, rose 185p to close at 366p after Viglen confirmed it was setting up a subsidiary to invest in e-commerce companies.
The Spurs chairman, who was knighted in the new year's honours, owns 73% of Viglen's equity and calculated he had made £115m on the day. "Well, it was £163m during one hour, but then I lost £450m on one day in the October 1987 crash on that basis," he said. "You don't make any money until you crystallise it."
Sir Alan - "Mr Sugar, I can't get used to being knighted" - said the purpose of the new unit was to take strategic shareholdings in existing e-commerce companies rather than to support start-ups.
In the first year the new unit will invest anything from £3m to £20m in half a dozen such companies. But the founder and chairman of the consumer electronics group Amstrad said : "We are not to be viewed in this initiative as being simply venture capitalists with too much money who will invest in anything with a dot.com.
"We will thoroughly scrutinise the companies which need our infrastructure expertise and the synergies to the technology businesses we are already in."
One analyst said of Viglen's star performance among large numbers of fallers in the FTSE small cap index: "You just have to mention e-commerce with these stocks and off they go."
Sir Alan said the aim could be to float off Viglen Internet as a separate entity but for now the goal was to build on the expertise developed by its parent in expanding the business from making and directly selling PCs into offering services such as installation, networks and training.
Viglen is now said to be knee-deep in applications to run the unit which was originally due to be unveiled with the half-year results on February 24.
The subsidiary, according to Sir Alan, will put in cash to help new e-commerce and internet-related companies pay their staff and acquire equipment.
"About 15 or 20 years ago, investment in hi-tech, growing companies meant a massive spend on capital and now it's in the salaries of employees who are developing and writing the systems," he said. Others would get help to buy capital equipment.
Sir Alan added: "Viglen has the financial resources to deal with up to five or six of these in phase one - that is, the first year." He had no intention of taking control of the new companies but nurturing them to the point when they could go to market.
Viglen, once worth £17m after a disastrous year in the run-up to Sir Alan's assuming full control, last year declared £4.3m pre-tax earnings while Amstrad surged back into the black with £9.08m.
Amstrad, which is 29% owned by Sir Alan, was dragged back into profit last year on the back of strong demand for digital television set-top boxes.
Sir Alan bought Viglen through his private company, Amshold, last October when he topped a purchase of 10m shares for £2.4m with an offer worth a further £17m.
Viglen was demerged from Amstrad in July last year after which shares fell to 14p.
With Spurs back in the top flight of the Premiership - and his knighthood - Sir Alan, written off more than once in his career, says it has been a good new year. "So far."
