Member Info for steph

https://www.theguardian.com/world/2022/nov/14/chinese-authorities-unveil-sweeping-measures-to-rescue-property-sector?CMP=Share_iOSApp_Other

I had a helpful chat with Alex Holland GROW’s finance manager. He was returning my weeks old inquiry about when preliminary half yearly results would come out.

Of course guarded as he needs to be about anything that might be market sensitive.

One useful take away is that the recent credit facility announced on the 7th of September 2022 was agreed after exhaustive inquiries on NAV calculations. More so than the auditors questions. Sterling Overnight rate (currently 2.9%) plus 5.5% a good non stressed rate in this market . I guess they (chase and jp morgan) wanted to make sure their money was safe so they gave all the NAV valuation tires a real good kick.

https://www.telegraph.co.uk/business/2022/11/10/undervalued-british-market-poised-stellar-comeback/

I’m long term for sure. Nearly 100% grow and half held in my isa and no plans to diversify my holding a bit until at least 12 quid is reached

Expecting 12 quid within 18 months and 20 quid within 36. Expecting we will trade shortly in a 5 to 6 quid range until year end results or some general background market improves (which it did in part last week). Then we shod quickly spurt up to our very, perhaps overly, conservatively calculated NAV/share.

Under the bonnet our portfolio here is booming and going from strength tho strength. Sales growth sector beating fast. Quality high. No overvaluations I think even for the worst assumptions about the current market.

https://www.theguardian.com/business/live/2022/nov/10/next-ceo-lord-wolfson-brexit-foreign-workers-uk-economy-us-inflation-ftx-bitcoin-business-live?CMP=Share_iOSApp_Other

https://www.theguardian.com/business/2022/nov/07/global-inflation-economy-imf-managing-director-kristalina-georgieva?CMP=Share_iOSApp_Other

https://www.theguardian.com/business/2022/nov/03/bank-of-england-interest-rates-higher-uk-economy?CMP=Share_iOSApp_Other

Just after close some after hours trades can be erratic and can be from much earlier in the day.

We are showing all the signs of recovery from a panicked low of 2.4 in October.. I expect we will be in a 5 quid to 6 quid range within a few weeks, most likely following our half yearly results.

I expect the general tech market to turn as soon as interest rates stop rising. Indications this is about to happen may come sooner rather than later. Chief economist of BOE has said as much. BOE only needs a mild recession to dampen inflation expectations -not a deep one. Hunt's tax rises, spending cuts and general market jitters and low business confidence plenty enough to slow growth all on it's own.

thanks sang.

We have a very strong portfolio and the holding at most risk of a downroud does not need funding as in net profit already.

I suspect GROW have overshot a bit on discounting the valuations implied by actual last rounds (even those post crash) but in any case that stabilized the sp and NAV can only go up from here. I'm expecting we will continue to drift (or shot) up to a range of 5 to 6 quid (2/3rds NAV/share) and then bounce around in there until the finals or the general market changes.

I'm expecting FEd and BOE to start signaling an end to interest rate rises sooner rather than later. BOE already starting but all eyes on the FED. Way BOE and FED did QE puts pressure on both to keep rates low. I have not fully wrapped my head around that but accept it to be true. FED and BOE holding gilts should be positive as rates rise but apparently not necessarily. Will need to research.

https://www.telegraph.co.uk/business/2022/11/07/whoops-central-banks-may-soon-need-gigantic-bail-out/

Berenberg our only regular analyst has been consistently bullish on GROW . They gave us a 1300 12 month target Nov. 29th 2021 -which obviously is not about to happen. That was before the headwinds of Ukraine, sharp inflation and fiscal tightening.
In current circumstances that target has been trimmed of late first to 1050 in July 2022 and now down to 900 in nov 20-22. Interestingly still above trailing NAV/share of 8.30.
Berenberg seem to believe the SP will follow the NAV/share and that NAV/share has bottomed out and will go up from here. Indeed broker guidance shows we will not in 2022-2023 dip into a loss but will grow in prifit and go up form here. That means we wil need to finish the year aat least 10% above 9.29 NAV/share so stong grwoht in second ahlf.
Strong growth from a credible and accepted NAV/share in market conditions that at least don’t get any worse is entirely credible with the following from RNS:

“ Portfolio well-funded with more than 75% of the Core with over 18 months of cash runway and revenues continue to grow at an average for the Core of over 60% with forecast growth of 70% for 2023”
Normally for unlisted tech sales growth translates directly to NAV growth. Not unreasonable to expect that 60 to 70% annual sales growth (30 to 35% over 6 months) will lift NAV by 20% from here over the next 6 months.
Revolut, our most vulnerable share to a dowround, does not need funding rounds and in in net profit. Even if Revolut value no longer 37bn in current market conditions we have discounted value on our books by a substantial amount, maybe more than enough.
I expect over the next 4 weeks we will drift up to a trading range of 5 to 6 quid (2/3rds nav/share) and then pause until year end results. If background market improves we will drift up further. Background market will improve if interest rates show they have peaked even at the cost of a tough recession. Our shares are not sensitive to a recession (they soared during the COVId induced recession) but very sensitive to interest rate rises.
Good luck all.

its written by ai not a person

yes but even for the spot price to go negative for a short bit shows the shift in the global markets and the flexibility of shipped gas. 70 % of middle eastern liquified gas goes currently to asia mostly china. china have alternative piped supplies from russia. others will respond to price pressures to share with eu and ration a bit or shift to alternatives.us shale ramping up gas production

russia will find market forces blunts their idea of piped stranglehold . was true in the past but liquified facilities and fleet big enough now to absorb. .

macron furious use profiteering on price of us gas but that will lead to supplies redirected to eu faster than the analysts predict.

yes but they say infinite runway which means net profit. if they have a burn rate they have a finite runway length.

we dont have the amount of discount from last round revolut is on our books. may already be 1/3rd.

in any case good news to be in net profitb in this choppy market and having an infinite runway.

wow that was our only company in any real danger of a substantial down-round and now firmly it will not happen.

maybe grow has become overly cautious .

in any case good news as that protects the 91 m uplift we got last year on revolut.

“The influx of US liquefied natural gas amid decreased gas demand led to the European gas market [being] oversupplied, pushing day-ahead prices into the negative territory briefly,” said UBS analyst Henri Patricot.

“Unseasonably warm weather delayed the heating season”, he said, which helped storage levels across Europe reach 95pc by the end of October.

good interview. GROW now playing the cautious card to regain nav credibility. Probably overstated caution and over compensated discounts against last rounds -even when those last rounds were post crash.

Anyhow seems to be doing the trick in terms of credibility from an obvious overshoot on the downside of our SP.

Once this market cycle is over and inflation and interest rates are declining the valuations will return to normal multiples and we will get a big jump on top of organic growth of 60% plus Just need some patience. No time to sell. Hang on for circa 2 years and we may get 5x from here

"The interim valuation of the portfolio reflects the movements in public market peer comparables with EV reductions across the Core portfolio on average of 35%, leading to a fair value reduction of 17%, before currency movements. The lower fair value reduction relative to the EV movements reflects the preference share protection limiting the downside."

The existence of preference shares in enough volume and consistency across the core portfolio meant that we escaped half of the decrease in EV. This mitigating effect has never been mentioned in any annual report. I've word checked. Very significant advantage to GROW in our current market. Maybe because we lead rounds and maybe the founders can't have them. can't have all investors with preference shares or it does not work. I'm guessing but I suppose the % we own of the company goes up on a decrees in EV. to compensate in whole or in part for the EV decrease. That happed to a friend of mine when he signed up for VC. He hated it. The worse his company did the greater the % of his company they owned for the same 3m injected.

"The lower fair value reduction relative to the EV movements reflects the preference share protection limiting the downside."

60 to 70% sales growth of portfolio in this year. Great growth rate. Even with comparable continuing to go down (unlikely form here I think) this sales growth compensates and then some valuation wise. Also predicting an increase in NAV/share between now and year end.

Hoping it is "evidence based decision-making" and not just "optimism. We shall see.

I have been caught by surprise on how volatile these can be. I had thought that tracking private company last round investment our SP would be relatively as stable as that market is a slow burn. Gave me the advantages of the higher rate of return normally available only to funds that buy directly unlisted tech plus retail access to come in and out whenever I wanted. Same retail freedom, though, drove us down to silly levels on the downside. Hopefully this is the start of more realistically priced sp.

I expect our SP even in this terrible marek to drrift up to 2/3rds the new nav/share pretty quick. Maybe as fast as tour ful reslts end of November. That wil be about 5.50 per share.

After that depends on general market. Any clear turn and we will get back to the deflated nav/share (8.30 ) and then if a solid recovery there will be speculation that the NAV calculations can come out of emergency mode and back to normal supporting a nAV/share above 12 quid an an sp anywhere form NAV/share to a 30% premium or so as per our history. So 15 quid within a couple of years quite credible.