Chrysalis Investments (CHRYL) H1 2024 earnings summary

Executive summary

• NAV per share increased 9.5% in H1 2024 to 147.46p, with share price up 33.4% to 83.0p, narrowing the discount to NAV from 53.8% to 43.7%.

• Portfolio delivered over 40% revenue growth and about 170% improvement in profitability, with weighted average PBT improving from -£15.3m to £10.8m year-over-year.

• Starling Bank and Klarna were primary NAV growth drivers; Tactus Group was written off and wefox's valuation declined.

• AGM approved continuation until March 2027, a revised investment adviser agreement, and a new capital allocation policy.

• Focus remains on reducing the share price discount to NAV and exploring liquidity options.

Financial highlights

• Net gains before taxation for the six months were £76.3m, compared to a loss of £105.8m in the prior year period.

• NAV per share rose 9.5% in H1 2024 and 13.4% year-over-year; since inception, NAV per share is up 47.4%.

• Cash and cash equivalents stood at £16.5m, with total liquidity (including listed investments) at £27.6m.

• Management fee reduced from 0.5% to 0.15% for the period, with new advisory and performance fee terms effective from April 2024.

• No interim dividend declared for the period.

Outlook and guidance

• Core portfolio expected to progress towards profitability, supported by increased M&A and secondary market liquidity.

• Focus on maximising investee company value and closing the share price discount to NAV.

• Ongoing processes for a potential disposal and debt facility could provide liquidity exceeding £100m.

• Potential Klarna IPO could yield a further £100m in liquidity.

• Capital discipline and careful liquidity management are priorities, with potential for share buybacks if liquidity events occur.