BY JEN HILL, Citywire Investment Trust Insider, 27 June 2023:
Efforts to enhance the profitability of portfolio companies of the embattled growth capital fund Chrysalis (CHRY) appear to be paying off. Around 84% of the portfolio is now profitable or expected to be funded to profitability, double the 42% in March last year.
The manager has been working with companies to shift the focus from pure growth to a balance of profitability and growth in response to last year’s fierce headwinds of rising inflation and interest rates, which saw a sharp selloff in growth stocks.
‘CHRY may have already turned a corner,’ said James Carthew, head of investment company research at QuotedData.
‘The manager’s efforts are on ensuring that as much of the portfolio as possible can stand on its own feet without the need for further funding, and conserving cash to support portfolio companies makes sense in that regard,’ he said.
Co-managers Nick Williamson and Richard Watts of Jupiter Asset Management said revenue growth across the portfolio of 46% in the six months to the end of March was ‘all the more impressive given the switch in focus towards profit generation from predominantly sales growth’.
‘The portfolio is stronger because of these efforts and is well positioned not only to weather any further challenges but also to take advantage of the opportunities that will arise when market activity begins to normalise again,’ they said.
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