HydrogenOne Capital Growth provides portfolio update

The directors of HydrogenOne, the first London-listed fund investing in clean hydrogen for a positive environmental impact, continue to monitor wider market events including the current share price volatility in the market price of its shares. The board is not aware of company-specific factors that have led to the recent decline in the share price. On 8 February 2023 the company announced its quarterly NAV and portfolio update for the period ended 31 December 2022 which was stable. The company also announced 4 April 2023 as the expected date for its annual results for the year ended 31 December 2022. 

Management provided an update on their portfolio valuations as follows:

The company applies a consistent approach to portfolio valuation, centred on discounted cash flows using the international private equity and venture capital valuation guidelines.

  • The valuation of the company’s entire private portfolio is reviewed and approved by the board on a quarterly basis, and reviewed by the company’s auditor annually.
  • The private portfolio is valued using either the DCF method, or a combination of the DCF method and the price of recent investment. The DCF valuations are also benchmarked against listed peer group valuations in the company’s valuation process.
  • The company’s discount rates are calculated using market parameters for each investment domicile. The portfolio average discount rate for December 2022 was 12.9%, compared to 12.5% in 2021.
  • The company’s portfolio continues to perform in line with the expectations of the company’s Investment Adviser, HydrogenOne Capital LLP
  • Seven of the company’s private investments, representing 89% of its invested portfolio by value, are revenue-generating, producing equipment and technology solutions for clean hydrogen production. The unaudited aggregate revenue from these investments was c. £33 million in the 12-month period to 31 December 2022, an increase of 110% from 2021 on a pro-forma basis.
  • The company’s unaudited NAV per share at 31 December 2022 was 97.3 pence, an increase of 1.6% from 31 December 2021, and 0.8% from 30 September 2022.
  • The resulting private valuation has an implied forward revenue multiple of 6X (2024E), which is some 40% lower than listed hydrogen sector multiples.
  • The company, and its private investments, do not have any exposure to Silicon Valley Bank.

HGEN : HydrogenOne Capital Growth provides portfolio update

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