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Investment Trust Insider on Blue Prism’s inexorable rise

Investment Trust Insider on Blue Prism’s inexorable rise

Carthew: the beneficiaries of Blue Prism’s inexorable rise

Occasionally, early stage technology companies can produce spectacular share price gains. When this happens, even relatively small investments can make a noticeable difference to a fund’s returns.

Regular readers of my column may recall that I wrote about the potential dangers of holding too many early stage and loss-making technology companies in a portfolio a few weeks ago. Nevertheless, I felt it was important to touch on this subject after Blue Prism(PRSMB) featured on Herald Investment Trust’s (HRI) long list of investments that had more than doubled in 2017.

The company provides software to support robotic process automation by using artificial intelligence and machine learning to automate boring, repetitive tasks. It’s an interesting area that many investors have become very excited about.

This helps to explain why Blue Prism’s shares touched £16.83 on 24 November, 21 times its IPO price in March. As I write, the shares are trading around £12.09, which gives the company a market cap of £767 million. Blue Prism thinks analysts’ expectations of revenue for the year to November 2017 are a bit light at £21.8 million, while the earnings before interest, taxes, depreciation, and amortisation (Ebitda) loss for the year should be around £7.3 million.

Read more here ….

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