Chrysalis Investments (CHRY) announced a trading update for the three month period to 31 March 2023. The company saw a 4.09 pence per share increase in NAV, equivalent to 2.3%. This was driven predominantly by movement in the fair value of the portfolio which added 5.15 pence per share, with foreign exchange generating an adverse movement of approximately 0.87 pence per share. Fees and expenses made up the balance of the move.
Over the quarter a modest, expected investment of approximately £6m was made into Smart Pension. As with most of the portfolio, Smart continues to look for ways to operate more efficiently, and this additional capital will help it to continue to grow – potentially via M&A as well as organically – and support the company to profitability. The company believes the latter state is achievable in relatively short order. Elsewhere, the position in Wise was reduced, taking advantage of the rising share price, yielding approximately £3m.
Commenting on the performance, and the broader market environment, Richard Watts and Nick Williamson, managing partners of Chrysalis added:
“The company’s NAV rose modestly over the period, driven by the on-going positive performances of assets such as Starling, Klarna and Smart, the latter having been written up by approximately 24% (translating to 3.7p of NAV), as per the March guidance relating to Chrysalis’s follow-on investment.
“Klarna saw a rise in its assessed valuation multiple, which was the main driver of its valuation uplift. Starling saw its valuation rise due to less prominence placed on valuation metrics that were calibrated back to the time of the Company’s acquisition of secondary stock in February 2023. wefox was marked down in the period, as discussed below.
“As we look forward, we remain cautiously optimistic about a rebound in market activity, which could lead to opportunities to realise significant liquidity for the Company. In addition, the process around the “likely disposal” announced in December 2023 continues, and we hope to be able to update the market in the coming months.”
CHRY : Positive outlook for Chrysalis after solid start to the year