TIDMCHRY
RNS Number : 4353Y
Chrysalis Investments Limited
04 May 2023
The information contained in this announcement is restricted and
is not for publication, release or distribution in the United
States of America, any member state of the European Economic Area
(other than to professional investors in Belgium, Denmark, the
Republic of Ireland, Luxembourg, the Netherlands, Norway and
Sweden), Canada, Australia, Japan or the Republic of South
Africa.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 which forms part of
domestic law in the United Kingdom pursuant to The European Union
Withdrawal Act 2018, as amended by The Market Abuse (Amendment) (EU
Exit) Regulations 2019.
4 May 2023
Chrysalis Investments Limited ("Chrysalis" or the "Company")
Quarterly NAV Announcement and Trading Update
Net Asset Value
The Company announces that as at 31 March 2023 the unaudited net
asset value ("NAV") per ordinary share was 130.02 pence.
The NAV calculation is based on the Company's issued share
capital as at 31 March 2023 of 595,150,414 ordinary shares of no
par value.
March's NAV represents a 1.76 pence per share (1.4%) increase
since 31 December 2022.
Movements in fair values of the portfolio accounted for
approximately 3.1 pence per share, with foreign exchange generating
an adverse movement of approximately 1.2 pence per share.
Investment Adviser Comments
Richard Watts and Nick Williamson (co-portfolio managers)
comment:
"We remain fully confident in our diverse portfolio of
well-funded, attractively valued and fast-growing assets, and in
the significant opportunity that they represent for our
shareholders.
"It is encouraging to see a modest increase in the Company's NAV
over the recent quarter. Many listed peers have fared favourably
since the turn of the year, and this is reflected in the valuation
uplifts within the Chrysalis portfolio.
"We have worked hard alongside our portfolio companies to
address their ability to navigate the retrenchment in growth
valuations seen over the last 15 months, and the subsequent
decrease in investor appetite to consider growth stocks. Major
progress has been made in this regard, with companies such as
Klarna altering investment plans, raising capital and setting out a
path to profitability. As a result, we have seen a significant
improvement in the funding profile of Chrysalis, with 74% of the
portfolio either profitable or funded to profitability as of March
2023, up from 42% a year earlier (and versus 67% as of the Capital
Markets Day in November 2022).
"Despite the focus on profitability the weighted average revenue
growth rate of the portfolio to 31 March 2023 remained robust at
approximately 50%. "
Portfolio Activity
As previously articulated, the Investment Adviser remains
focused on the current portfolio and has not been actively pursuing
new investment opportunities, albeit the origination process
continues to generate leads. Over the period, the following
transactions occurred:
-- In February 2023, the Company invested EUR4 million in wefox
in an extension of its US$400 million Series D funding round, which
had valued wefox at US$4.5 billion post money.
-- As announced in February 2023, the Company purchased GBP20
million of equity in Starling via a secondary market transaction
led by an existing, third-party shareholder.
In November 2022, the Investment Adviser set out an expected
primary portfolio funding requirement of approximately GBP20
million. Being secondary, the Starling transaction did not form
part of this capital requirement.
Portfolio Update
Revenue growth and the move towards profitability are key
priorities, but the portfolio continues to mature in other ways,
with a focus on strengthening governance.
wefox
wefox generated approximately EUR600m of revenue in FY22, making
it one of the largest Insurtech assets globally. The company's
strong momentum has continued through Q1, and we believe that the
company is on track to reach profitability by the end of FY23, a
milestone that few listed peers have been able to achieve.
Featurespace
Featurespace has announced the appointment of John Shipsey as
Chief Financial Officer (CFO). John was CFO at Smiths Group from
2017 to 2022 and the CFO of Dyson, the global technology group,
from 2005 to 2017.
Starling
In March, Starling announced the location of its new northern
base in St. Peter's Square, Manchester, creating up to 1,000 roles
in the north of England across its operations, engineering, data
science and cybersecurity functions. Starling already employs 2,500
across its London, Cardiff, Southampton, and Dublin locations.
Smart
Smart continues to grow strongly, both in the UK through Smart
Pension, and globally through its Keystone technology platform.
Smart Pension has become a signatory to the Stewardship Code,
highlighting its commitment to high standards of stewardship,
engagement, and responsible investing. To become a signatory to the
Code, organisations must submit to the FRC a Stewardship Report
demonstrating how they have applied the Code's 12 Principles in the
previous 12 months. The Smart Pension Master Trust has grown AUM by
more than 2,000% over four years, and now serves one million
members and 70,000 employers.
Deep Instinct
Deep Instinct has announced its inclusion in the 2022 Gartner
Magic Quadrant for Endpoint Protection Platforms (EPP); the only
new vendor to be recognised for EPP. Magic Quadrants compare
vendors based on Gartner's standard criteria and methodology,
influencing the buying decisions of companies of all sizes
globally.
Klarna
February saw the release of Klarna's FY22 results, with Gross
Merchandise Value ("GMV") up 22% year-on-year. Adjusted operating
losses improved 44% in H2 vs H1, demonstrating Klarna's continued
progress towards profitability; reducing credit losses and costs,
whilst continuing to drive growth. The credit loss rate improved by
30% versus the same quarter last year to 0.58%.
In April Klarna was assigned an investment grade credit rating
by S&P Global, reflecting its 'ability to defend its robust
e-commerce position in its key markets', 'rebuild profitability'
and 'maintain a strong capital buffer'.
Cash Update
As of 31 March, the Company had net cash of approximately GBP43
million and a position in Wise of GBP12 million, to give a total
liquidity position of approximately GBP55 million.
The Investment Adviser believes that its guidance of likely
primary follow-on capital of approximately GBP20 million is still
appropriate, of which circa EUR4 million has been invested into
wefox. As a result, the Investment Adviser believes the Company
remains in a strong liquidity position.
Portfolio composition
As of 31 March 2023 the portfolio composition was as
follows:
31-Mar
Carrying
Portfolio Company Value (GBP % of portfolio
millions)
------------ -----------------
wefox 166.5 21.5%
------------ -----------------
Starling 124.0 16.0%
------------ -----------------
Brandtech 95.0 12.2%
------------ -----------------
Smart Pension 76.6 9.9%
------------ -----------------
Deep Instinct 70.8 9.1%
------------ -----------------
Klarna 52.0 6.7%
------------ -----------------
Featurespace 42.2 5.4%
------------ -----------------
Tactus 34.8 4.5%
------------ -----------------
InfoSum 28.2 3.6%
------------ -----------------
Graphcore 16.3 2.1%
------------ -----------------
Secret Escapes 13.3 1.7%
------------ -----------------
Wise 12.0 1.5%
------------ -----------------
Sorted 1.3 0.2%
------------ -----------------
Gross cash 43.3 5.6%
------------ -----------------
Source: Jupiter Investment Management Limited. Due to rounding,
the figures may not add up to 100%. The above percentages are based
on an aggregate portfolio value (including cash) of approximately
GBP776 million for 31 March 2023.
Outlook
The Investment Advisor has spent a considerable amount of time
over the past twelve months working with portfolio companies to
enhance their profitability, and where necessary, to raise capital.
As a result of this, the Investment Adviser believes the "funding
risk" in the portfolio has been substantially reduced.
As of 31 March 2022, approximately 42% of the portfolio was
profitable, with none of the remaining 58% funded to profitability.
As of 31 March 2023, 38% of the portfolio was profitable (the
composition of this cohort being affected by changes in asset
weightings, as well as the realisation of certain profitable
positions, such as THG), but of the remainder, 36% was funded to
profitability.
This has increased the total portfolio weighting of those
companies that were either profitable or funded to profitability
from 42% to 74% over the course of the last twelve months. The
Investment Adviser continues to work with the remaining portfolio
companies that fall outside this group and has good visibility over
funding options and cash runways for a number of these
holdings.
As a result of this work, the Investment Adviser believes the
Company has a portfolio of assets that are growing strongly, are
well-funded and attractively valued versus listed peers.
The IPO market, at least in the UK, remains very subdued: over
the year to March 2023, only 27 IPOs have occurred on the LSE Main
Market and AIM, and the market is now entering its sixth successive
quarter of low issuance. It is easy to extrapolate past events into
the future, but this lack of activity is now almost on a par with
the hiatus post the Great Financial Crisis, when economic
conditions were much less certain. The Company has a number of
later-stage assets that the Investment Adviser believes are capable
of floating, and a successful exit, whether an IPO or trade sale,
could materially enhance the liquidity profile of the Company and
provide a mark-to-market underpin for that holding, and by
implication, the Company's wider valuation approach.
Factsheet
An updated Company factsheet will shortly be available on the
Company's website: https://www.chrysalisinvestments.co.uk
-ENDS-
For further information, please
contact:
Media
Montfort Communications 44 (0) 7976 098 139
Charlotte McMullen / Toto Reissland chrysalis@montfort.london
/ Lesley Kezhu Wang
Jupiter Asset Management:
James Simpson +44 (0) 20 3817 1696
Liberum:
Chris Clarke / Darren Vickers
/ Owen Matthews +44 (0) 20 3100 2000
Numis:
Nathan Brown / Matt Goss +44 (0) 20 7260 1000
Maitland Administration (Guernsey)
Limited:
Chris Bougourd +44 (0) 20 3530 3109
LEI: 213800F9SQ753JQHSW24
A copy of this announcement will be available on the Company's
website at https://www.chrysalisinvestments.co.uk
The information contained in this announcement regarding the
Company's investments has been provided by the relevant underlying
portfolio company and has not been independently verified by the
Company. The information contained herein is unaudited.
This announcement is for information purposes only and is not an
offer to invest. All investments are subject to risk. Past
performance is no guarantee of future returns. Prospective
investors are advised to seek expert legal, financial, tax and
other professional advice before making any investment decision.
The value of investments may fluctuate. Results achieved in the
past are no guarantee of future results. Neither the content of the
Company's website, nor the content on any website accessible from
hyperlinks on its website for any other website, is incorporated
into, or forms part of, this announcement nor, unless previously
published by means of a recognised information service, should any
such content be relied upon in reaching a decision as to whether or
not to acquire, continue to hold, or dispose of, securities in the
Company.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCSSLSALEDSEII
(END) Dow Jones Newswires
May 04, 2023 05:00 ET (09:00 GMT)
Merian Chrysalis Investm... (LSE:MERI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Merian Chrysalis Investm... (LSE:MERI)
Historical Stock Chart
From Apr 2023 to Apr 2024
