Member Info for steph

Many thanks for your debate. I am a simple economist and thus look too far ahead for short term trading.

I do understand that tax liability has to be set aside on realizations before they can be booked as assets that form part of NAV/share. Beyond that I am just confused on what makes up NAV/share now.

They have not appeared to have booked the full uplift that 45bn REvolut implies -this is in line with many valuations in the peak where they also did not book all they could have based on last rounds. SO we went into the downturn with a less frothy valuation on some key portfolio than we might have. I have long suspected they try to smooth valuations to show a steady climb rather than a market spooking stop start pattern.

20m profit on the first half before currency movement is OK -especially if they are trying to save the best news for the second half so when we start booking profit it is sustainable.

For the life of me I don’t know what is happening to out 50% plus average sales growth per annum in portfolio. That should be powering NAV upwards unless they are still adjusting the multiple of NAV to sales downwards in line with benchmarks. I really just don’t know and that is not acceptable. There is not a hint of any portfolio company having trouble so where have the 90m losses come from unless a pretty sharp reduction in sales multiples vs value. Good to have a low sales to value ratio as a starting point in any recovery of SP but why now? Are they creating an opportunity for big funds with more compete information than us to accumulate?

Anyhow on the audited results in about 4 weeks we will see a lot more of what happened.

“Molten highlighted a £20m fair value uplift at constant currency”. That is good news of a sort.

https://static.lse.co.uk/research/download/edison-molten-ventures_34103_20241101.pdf?code=27e2207d-ebfa-11ed-813e-fa163ed08d9c

Still where did 90m fair value decreases come from? Always some bits of portfolio lose value but we had no warning of any part of portfolio in trouble. Where does fast 50% plus aggregate average sales growth factor in? Is it mearly from such a low average base that it has not much impact on NAV? Sales growth of 50% plus should be driving increased valuations of portfolio.

When will this SP nightmare end? 8 years and no SP increase at all and no dividends yet a seemingly much larger more valuable portfolio. Were we massively overvalued 8 years ago or are we massively undervalued now?

Without basic data like gross sales coverage of individual portfolio companies and sales growth per portfolio company and margins on those sales per portfolio company a lot is “trust us”. No good enough for such a jittery market.

Thanks sang

in my simple mind nav/share not complete until all debt and assets added in. danger i guess of brief unaudited releases. lots if room for confusion and no notes.

be good news if dip in nav due to accounting methodology and not declines in portfolio.

First time I felt really let down. Most other times we went down I felt it was mostly external events not GROW management. Even over spending on strong 2021 2022 realizations is hindsight. Most pundits at the time thought the good times would last longer and so an urgency to invest upstream immediately and not sit on cash.

No idea where the losses on the portfolio came from if sales are increasing on average 50% pa.No news on any setbacks. Only news has been modest successes and Revoult. As 90% of valuations now comparables and sales cover and sales growth is a key par of comparables if we are growing fast on sales Nav on our component companies should be going up not down. Comparables have not gone down recently. Multiples of sales to valuations stable.

Anyhow I am now confused as to what our management is doing. I will hold until we go over 11.82 again however long that takes. It will be 6 months until we get better results than this.

I don’t think it will take years until the discount to NAv disappears once profit is made and the forward guidance is that it will continue. Between 2016 and first half 2022 we never had a half with a decline in NAV. Over 11 in a row were positive.

I’ve always had a suspicion that management depress booking good news in order to smooth the results a bit. So a tiger in the tank.

INterest rates will drop quite a bit over the next 6 months and with that maybe the IPO and late round market will come back. Seems for us IOP market very critical as it is the main way the sector cashes out and recycles upstream into the round 1 to 3 shares we mostly have.

Why on earth did this update not mention sales growth or runway lengths. Just a black box. We have not always given unaudited updates so maybe this was not helpful.

Update hurt. All bad or mediocre news and no forward guidance.

Silly to be at 50% NAV/share when we should start turning a sustainable profit soon (ie by year end).

a simple explanation is simply poor confusing communication. of course total portfolio value goes down on net cash realizations that are not reinvested in a “portfolio”. the resulting cash is still part of nav/share but not part of portfolio until reinvested.

i worry the same a stuart that a seemingly sudden departure of ceo might have been an internal fight. a lot of senior managers have bought shares and might be ****ed about the sp as we are and want a change of direction. still being run as if a private company with no shareholder pressure for steady year on year performance.

“Total gross portfolio value lower in the six-month period to 30 September 2024 by £35 million driven by a combined impact of significant delivery of realisations above the investment level for the period” ..

Sadly not an accountant. I completely fail to understand the logic of cash realizations not counting in NAV. ONly guess I have is money in limbo. Asset gone but cash not in yet and not 100% certain until in.

Whole announcement disappointing. No idea why they thought it a good idea to bury the change of CEO on a results day. Nothing at all, not even a tiny hint about year end profit or not. Surely they have some idea. Why not talk a bit about runway length for reassurance.

We were 342 oct 30 2016 a few months after launch. We actually dipped to the exact same 342 yesterday, Oct 30 2024 8 years later. No dividends. What a shameful 8 year track record in a lucrative growing sector.

We shall have to wait a few weeks for the audited half yearly results to see more on what is actually happening.

Going forward I think there is ridiculous hidden and unpriced value but my god is this share testing my patience to hold until we see an SP that reflects that. Interest rates dropping and end of pipeline valuations in high tech traded big companies at historic highs. Seed funds at other end of pipeline holding values nicely. IPO and late round market should repair itself but taking its sweet time.

I can also announce that we will apply a 50% relief in all circumstances on inheritance tax for shares on the Alternative Investment Market (AIM), and other similar markets, setting the effective rate of tax at 20%

We have not gone up significantly from offer price when we went public in 2016. No dividends and hot sector.

I think we are undervalued but that does not buy bread this weekend.

I absolutely do not understand cash on hand not in NAV. We will have to wait a few weeks to see more detail on that.

Poor communication to have CEO change and results on same day. No need.

Thanks for the tip that dollar pound exchange rate more important than pound Euro. I don’t really understand that one but it explains more as Pound/euro more stable.

Does not seem to book new 45bn valuation of Revout in calculations. That was about 100m “profit” on it’s own. Good to be conservative and depress a bit implied valuations based on limited sales that might not stand the test of time but maybe GROW overdoing it. I would have thought organic growth of sales would have boosted most valuations based on sales multiples in a market where these comparables have not declined.

Currency movements have stopped us reporting a modest profit. Basically 60% of portfolio in euro zone but results announced in pounds. Thus a 3% decrease in the Euro vs pound creates a 3% dip in portfolio value of that on 60% of portfolio. looks like a loss. In practice just random and currency movement benefits us half the time. Roughly currency movements have hurt us by 30 to 40m pounds. As UK interest rates come down that will reverse itself.

The government is reportedly considering scrapping Business Asset Disposal Relief (BADR) — which limits tax to 10% on exit takings of up to £1m — and raising capital gains tax (CGT) on the sale of shares, as well as employers national insurance contributions (a payroll tax).

Been a strong lobby against scrapping BADR and angst on capital gains tax. We will see if some form of BADR scale back is in the budget. I doubt it. Will be a “growth” budget and scraping BADR is an anti growth tax. BADR is a pretty stupid tax break and as I understand it California has higher capital gains taxes on start ups than we do yet hardly hurt them on numbers of start ups. Other factors much more important than tax breaks on profit that will occur long in the future for a start up making losses and thus with a “burn rate” and “runway length” to worry about.

Https://www.cityam.com/revolut-us-investor-tried-to-scoop-up-cheap-shares-with-budget-tax-warning/

Anything that shows doubt on the 45bn Revolut valuation will hurt us even a cheeky approach that went nowhere.

Explains why we went up 5% 3 days again but went down 2 days ago. This news broke 2 days ago.

But then why the rise 3 days ago?

none of it makes sense

I don’t think budget anything to do with this 11% dip over 2 days. We did get a 4.7% rise for no reason 3 days ago so ups and downs.

Just volatility and profit taking ahead of results on light volume making the dip today and yesterday bigger than it deserved.

So far yes.

Anyway I topped up. Believe it will all come good shortly.

Https://images.go.newyorklifeinvestments.com/Web/NewYorkLifeInvestmentManagementLLC/%7Bbf7abab4-98c6-4463-b60b-69a0df83fe9f%7D_NYLIM_Global_Private_Markets_Outlook_July_2024.pdf?elq_cpid=emc_&elq_mid=13790&elq_cid=1569350&u=

At the risk of losing further credibility (i failed to foresee the decline from 11.82 to 2.01), i think we are on the brink of a pretty smooth transition back to 11.82 over the next 2 years.

i also think we will jump quite a bit over the next 10 days.

We could get our half yearly update as early as today or as late as end of next week. Soon though.

EU/Pound Currency movement not in our favor this time but still should be a substantial profit -first profit for 3.5 years.

If guidance is that profit is sustainable (as it always was pre 2022) we should jump. Surprised we have not drifted up towards 5 pounds in anticipation but choppy market and we are a bit of an unknown entity.

Quite right jovie. same sector different structure. i was thinking likes of SMT which i have on observers list along with gb