Crystal Amber Fund (CRS) has reported further progress in its wind-down strategy for the year ended 30 June 2025, highlighted by a successful exit from De La Rue and regulatory approval for its key holding Morphic Medical Inc (MMI).
After £9.1m of share buybacks and a £1.4m net loss, total NAV declined to £116.2m from £126.7m, although the fund’s net asset value (NAV) per share rose 2.6% over the year, from 173.9p to 178.4p. In comparison, its Deutsche Numis UK Smaller Companies including AIM Index benchmark rose 7.8%.
De La Rue activism finally comes to fruition
Crystal Amber’s long-running activist campaign at De La Rue reached a conclusion in April 2025 with the announcement of a 130p-a-share cash offer, valuing its stake at £40.7m, of which £18m was received shortly after the year end. CRS first invested in De La Rue in 2018, taking a stake of just under 10%, which it built over the years. In its results, CRS highlights that it has more than tripled its money since mid-2023, having built its holding to almost 17% of De La Rue’s equity through a series of purchases. QD comment Matthew Read: While this paints quite a rosy picture, we think it should also be noted that De La Rue started 2018 with a share price of 586.81p per share, which dropped quite steadily during that year, finishing the year at 130.26p per share. Given that CRS purchased around 10 percentage points of its 17% stake at that time, and it has taken around seven years to exit at 130p per share, we think that highlighting the returns since mid-2023 is a bit misleading. De La Rue’s all time share price low was during 2023 and using this as a reference point obviously flatters the return figures. However, according to Morningstar data, CRS has provided an NAV total return of 6.78% per annum over the last 10 years, which places it middle of the pack in terms of its performance within its peer group.
Morphic Medical achieves CE Mark approval
Immediately after the year end, MMI, which represents around two-thirds of the fund’s NAV and in which Crystal Amber holds a 98% stake, achieved CE Mark certification for its RESET® endoscopic treatment for obesity and type 2 diabetes. CRS says that the approval opens access to an estimated 93 million patients across Europe, and revenues have already begun in Germany and the UK.
RESET® offers a non-surgical, reversible alternative to bariatric surgery, using a 20-minute outpatient procedure that has shown patients losing an average of 19% of total body weight within a year, exceeding international safety and efficacy benchmarks.
With US FDA fast-track approval for its pivotal study, MMI is in talks with several potential investors, including major medical device companies. The fund believes any such investment would likely be at a premium to the current carrying value of MMI, which was independently assessed at US$107.2m (£78.1m) at 30 June 2025.
Portfolio activity and buybacks
The fund continues to run down its portfolio. In addition to De La Rue and MMI, it retains smaller stakes in Allied Minds, Sigma Broking, and Sutton Harbour, which together account for less than 10% of NAV.
During the year, 7.7m shares (10.6% of share capital) were repurchased for £9.1m at an average of 117.3p, a 34% discount to NAV, adding around 2.6% to NAV per share. Post year end, a further 2.2m shares were bought back at 148.7p, bringing total returns of capital, including all past buybacks, to over £120m.
Outlook and future structure
Crystal Amber’s cash balance at 30 June 2025 stood at £10.9m, but including the £18m De La Rue proceeds received in July, this would have been £28.9m (44.4p per share).
The board has begun consulting major shareholders on the fund’s future structure and strategy, noting that it needs to balance the need to fund MMI’s growth with potential further capital returns. Waldron noted that with MMI now the fund’s key asset, the board will reassess the most cost-effective and value-maximising way to hold the investment.
