Member Info for steph

Of the 7 portfolio investments that contributed the bulk of the 363 m nav increase we know: 1) We can assume safely the massive NAV increase in Thought Machine is rock solid as page 37 "Post year-end, Thought Machine announced their Series D round raising US$160.0 million" - and I presume this is at the same or higher valuation. So post crash very recent funding rounds with no hint of retrace in fair value. 2) we can also safely assume our NAV for Aven with revenue growth of over 100% pa and a series D post March 31 2022 round at the same or increased NAV is 100% solid. 3) ledger I don't extract much info. 4m unit sales and 15% of worlds crypto assets using leger is a serious market share of a fast growing area. No sales growth stated. 4) Revolut no sales states but a fantastic market niche. Like apple pay and google pay. I don't have a problem with the 33bn valuation. If the company continues it will be a 500bn company in the medium term as sector huge and market share they have already significant. Competition about to be sure. not a lot of information in annual report. 5) Coach HUb; Round B which I assume was the basis of the valuation was in first half of year. No sales Info expect that sales double last year in first half of this. 6) AIr Call: series d funding round that is probably basis for year end fair value was in first half of year. No sales stats. 7) Form 3: In 2021, annual recurring revenue grew by 233% from 2020 levels. Fantastic. Series c funding round in first half of year appears to be basis of year end fair value. So 2/7 have proven safe NAV's and if we accept the 2 as indicative of the other 5 maybe we are worrying unnecessarily. Trimming the fair value by around 25% -which is what I think they have done- is prudent. Was the haircut enough to mean we can have a NAV increase however small by September half yearly -Who knows but unlikely a big fair value decrease either.

many thanks for the analysis.

I find this bit from page 31 key: " The performance of our portfolio companies continues to be strong with average revenue growth rates in the core portfolio above 65% during 2021."

The market expects revenue growth of plus 50% for a rocketing start up funded purely by VC but to achieve that on average across a diversified portfolio where some companies are already in net profitability is quite remarkable. Fantastic stock picking -Cazoo excluded because we did not get out in time. .

A lot has been invested recently -over 300m. Some of that post crash but few dates in report so a lot of work to check. A good chunk of that round A's nearly a third. Round A's are presumably not frothy.

That is a stonking rate of revenue growth and no reason to assume it will slow down. This includes a substantial period of post crash environment. Assuming we get the same for 2022-2023 we can absorb an awful lot of headwinds and still made valid progress on valuations resulting in "profit" for GROW -not the declines in NAV/share the market seems to assume will happen right now.

Are we at bottom? Is the bottom U shaped or V shaped.? Wish I had a crystal ball or better yet a time machine. Sadly I don't but willing to take quit high risk that we are near bottom on this and the recovery wil be sharp or steady but there will be a recovery soon. GRWO doing a poor job right now of communication with those institutional entities who buy, hold and sell our shares. . Looking forward to an updated Edison report and some broker guidance. That might move the needle.

IN March2020 we have a very sharp v shaped recovery once the market understood the situation with regards to us. Maybe the same now?? I live in hope.

All good analysis but we have had 2 last rounds recently and both uplifted nav. Maybe fools buying the 2 privately listed companies in our portfolio but maybe just fools selling our trust.?

Unfortunately once doubts on nav holding steady get established need hard proof to break psychology. Basically prove a negative. Will require September update.

https://www.edisongroup.com/wp-content/uploads/2022/03/GB00BY7QYJ50MoltenOutlook210322_new.pdf
May 17 2022 berenberg reiterated a target of 1300

Both post crash and post Ukraine. Plus results yesterday strongly indicating there will not no profit warnings (ie decreases in NAV/Share) but rather a return to norm of 20% growth in fair value from the heady last 2 years where we exceeded that.

Don't forget forget our overall nav was running above trend for 2 years but not frothy up Cazoo, trust pilot UIpath type up. So will not be frothy down. Sales growth has been averaging over 60% across the portfolio so can absorb some significant bad news or environment.

We are trying to explain why the SP is down by logically speculating valuations will come down (balance of probability need to come down 30% or more to justify the current sp) in spite of all 3 "official" sources saying no. maybe it is just panic after all and we would be suckers to sell at these levels. Maybe the 9.38 is solid and will go up in September 2022 and march 2023 -as it has done for the last 6 years.

I admit I'm spooked but I'm holding.

53.4% down of 937 is 437 I think

Sage you may be correct. Certainly the market missed entirely in march 2020 the neutral or positive effect of covid on most tech stocks. The tech exception did lead to some overshoot on the up and thus a correction and, for my money, an overshoot on the way down.

ONe has to go back all the way to 2007 pre financial crash to really have comparables as low interest rates since then have flattered the markets. It has been so long since we had normal interest rates even the threat of 2 or 3 % central bank rates is throwing the market into a tizzy when pre 2007 3% would have been considered a stimulus rate.

Priced in to some extent right now for tech is the threat that interest rates are going back to the 1970’s which I think is remote odds. Central bank rates of even just 5% for any length of time will now cause some sovereign default debt problems and for that reason central banks will talk the talk but not walk the walk. Italy and others still very vulnerable. A lot of forward guidance to raise rates hoping this will be enough to cool expectations but very little actual rate raising. Of course mistakes can be made so not a time to be leveraged as I am.

Until we get on the other side of this inflationary spike the markets will be quite choppy. I think the inflation drop will be led by oil and much else will follow. I’d be very surprised if oil was above 80 in 6 months and as it does might drop faster than that. Saudis, us shale etc locking in in long term off-take agreements while the price is high and once the saudis have what they want in that regard they will be more flexible to increase production by a million or 2 per day (after they have protected themselves from a dropping price). US shale driven by market forces will add 3 or 4m petty fast. Whole sector on overtime and fabulous salaries. Others are ramping up. IN 2 years time if not much sooner oil will revert to it’s long term average range of 40 to 60 and with that the inflationary commodities scare will be largely over.

War in Ukraine a drag on business confidence but as GROW point out little or no direct impact on actual GROW business.

53.3% I get. All the more reason to think we are about bottom.

ALl on a fear NAV will not hold in spite of guidance that it will and on top of holding we will enjoy nav increases (and thus earnings) 2022-2023. In March 20 2020 we had no guidance NAV would hold. Nobody knew anything. It was a well deserved but ultimately unnecessary panic. Global pandemic was a new one for all. Vaccines came much faster than expected and it mutated to be less not more deadly. Most experts were talking bout 5 years for a vaccine.

Correction

We have been here before. We had a nav of about 530 on March 20 2021 at the peak of the covid scare yet an SP of 2.78. Nearly half on the fear I suppose of NAV declining due to downturn.

Here are are at 4.40 and nav of 9.28. Just over half on fear of NAV declining due to downturn.

IN March 2020 the rebound was rapid and we did not stop rising until September 6 2022 when we were over NAV/share by around 50%.

SO volatility is 50% up or down from NAV/share.

Are we at bottom? WHo knows. How long will it take us to get back to NAV /share? I’d guess 6 to 12 months. Wil we ever get to 30% or more premium to NAV/share gains? Probably but not for 1 to 2 years.

I’ve put into my spread bet risk analysis a dip all the way to 2.78. I don’t remotely think we will test that level but I will not get margin calls just in case we do.

Good luck all. For my money this is a stonking good buy at this level and I am holding all I can safely hold and not much else. I do expect the general market might decline 10% over the next 6 months but I expect some investor will nibble our toes before then and we will outperform -maybe modestly maybe spectacularly.

Yes if they believe there will be no funding rounds of most of the core portfolio at lower valuations now is a unique time to buy own shares as it allows them to top up at a discounted rate as well as add useful volatility reduction. .

We ahve had 6 shares that went down with the market since march 31 2021. , Cazoo quite spectacularly -90%. All absorbed in our healthy fair value gains overall. I think we can do it again. Maybe not 37% fair value increase but 10% to 20% and in time maybe another kick up as some of the investments made in todays bad market mature.

They reported 2 last round valuations after march 31. One was thought machine on May 18th. Both up in current awful market conditions. If we are facing a 50% devaluation against stated NAV due to current market conditions it should be evident already on any of the last round valuations that have happened post crash.

“Annual fair value growth across the cycle” as it applies to 2023 is very poor wording if a profit warning. I hold that it is a statement of the obvious that there will be a return to “only” 20% growth not a actual decline in 2023 that averages down the last 2 exceptional years. I take your concern about lags in devaluations but I think they are guiding that it is OK. I think they are saying that the Portfolio is not overvalued and there will unlikely not be net decreases in fair value over the next 12 months unless some new big dip in the general market (always possible I may add).

Chief executive Martin Davis said: "This year, we made huge progress across the business from both an operational and financial perspective.

"Despite recent volatility in world markets caused in part by the tragic events in Ukraine, VC remains resilient, and the European technology market continues to be an area of growth. We have successfully navigated several market cycles and our adaptable and scalable business model, combined with the significant progress made this year, puts us in an advantaged position within the current market context.

Welcome wild.

Chief Executive Martin Davis added: "The current level of volatility makes it challenging to give a meaningful forecast of portfolio fair value growth for the current financial year, but we remain confident in the strength of our portfolio and of our model which has proven its ability to meet or exceed our targets of 10% of NAV in cash realisations and an annual fair value growth of 20% across the cycle."

Confusing to be sure but it does not look like a profit warning for 2023. More like an expectation of deceleration of our fair value growth from last year and return to the typical 20% fair value growth - after an exceptional 2 years where we beat the 15 to 20% they stated as KPI by a wide margin.

This is possible if they have chosen core portfolio wisely and have deflated by 25% some of the last round valuations that might not have been sustainable. Also feeder funds seem to be booming although not too much continuation to profits.

Proof will be in the pudding and we are unlikely to get back to 11.82 for some time. Months for sure and maybe a year or two. At some point funds will build back their positions and that will take us back to 8 quid pretty quickly.

I await new broker guidance. Expecting most to be above 10 quid even with market conditions. Particularly interested in Berenberg and if they keep their 1,300 target.

Exactly sang. A good news story that runway lengths are long is clouded by fuzzy imprecise communication. Market then prices in that some important bits of portfolio might get into trouble if downturn persists for a year or more.

One thing to consider they are legally obliged to give a profit warning if one in the works for half year update and can’t say anything that might mislead on future profits. That is one of the reasons I think they communicated a slow down in earnings to 20% and not a retrace to zero or negative growth. Of course we will all be watching closely future funding rounds but so far none have led to a downgrade in NAV. 6 shares in the core portfolio lost value which is an unusually high number so a bit of churn. I’d say those 6 are not the core strategic ones (which for me are deep tech or true disrupters) which tend to be slower burns rather than retail rockets. Interesting comment on Ukrainian war. NO real downside for GROW and maybe a brain drain towards eastern eu where we operate. We had no Russian or Belorussian shares in our portfolio even our feeder funds and war, horrible as it is, can even benefit some of the portfolio we have.

Agree with Sage that not enough detail on valuations to back up the self confident front end of the report in the current jittery suspicious market. The trust us approach on valuations is wearing thin. Basic minimum is sales increases per portfolio company, which are if any net portable and run way lengths if not. They did not even reiterate sales increases in aggregate which was in an update. More on why multiples have gone up for the shares valued mostly on multiples would have been helpful. I’m sure there is an explanation but it is not there even in the footnotes.

The fact that the 20% increase over the cycle comment for 2023 can be interpreted in different ways is a serious failure of communication to be sure. No way in an annual report should you have any statement as market sensitive as future earnings that open to different interpretations. If “over the cycle” means no NAV increases for next year why not say that directly? What is the cycle length and at what point are we in the cycle? Lazy wording to be sure. I suspect they are not hinting at no NAV/share increases for 2023 or 2024 but I agree with Sage impossible to pin them down on that.

I feel management have not transition fully from a privately listed trust to a public ally listed trust and gotten the balance of information out there correct. I worry that the funds that make up the share register have better information consistently than we do as ordinarily “retail” share holders.

I stil have lots of confidence in GROW and happy with my holding but believe we are underperforming where we should be sp wise due to a lack of transparency on valuations. Annoying.

If one goes to note 28 on valuations page 163 they have heavily discounted (some 25% on average) about half of the last round valuations -presumably because was high on the cycle. So evidence of actively managing cycle in real time by depressing last round implied valuations.

Somewhat disappointingly they have not company by company stated the revenue increases although they did it for some. That cherry picking approach is not helpful when the markets are jittery. Nothing on runway length. Still very much a trust us approach .

Slightly weirdly on revenue multipliers have increased multiples from 4.8 average to 7.8. I assume benchmarks have gone up which seems cyclical but might be because of maturing GRWO specific bigger company portfolio. Anyhow revenue multiple valuations are only now 1/3rd of total portfolio -much less than last year.

Where is the publicity?

but they do say 2023 for the 20%. My interpretation is March 31 2023 is the end of cycle they are referring to.

All good stuff for clarifications especially during our upcoming AGM Aug 3

I'm gutted we declined "so far" 6.3% on that report and more than the market comparables to boot.

Weird open. It as if those who buy and sell do not read any share specific news. How could update be any better? Solid reason why nav increased 37% and good prospects for 2023 to go another 20%. What about 9.38 is not getting through.

Some fund will come in sooner or later and take advantage of the dip. I hope they come in soon so I can sleep at night. Be nice to see a director buy right now and some more publicity.