Chrysalis Investment Trust’s net asset value (NAV) dipped further in the six months to 31 March 2023, with the trust’s board set to offer shareholders a ‘managed exit programme’ in April next year.
Falling valuations continue to harm the growth-orientated trust, and chairman Andrew Haining said its AGM in April will give shareholders the option to determine if the company should continue investing proceeds from realisations, or return all investment proceeds over a managed exit programme.
Upon the trust’s IPO in 2018, the board was obligated to ask shareholders whether it should operate beyond its fifth anniversary, which falls in November.
Chrysalis’ share price fell 6% to 59p during the half, and with an NAV per share of 130p, the trust was trading at staggering discount of nearly 55% by the end of March.
Klarna and Starling Bank, the trust’s second largest holding, suffered further valuation write-downs during the period, along with much of the portfolio.
Chrysalis committed a further £20m to Starling after Jupiter sold up in February, and said the underlying performance of the bank remained strong.
Number one holding Wefox gained £8m in fair value during the half, and the trust added to its position with a £3.6m investment.
However, despite a strong period for Wefox, it was one of just three of the largest 15 holdings in the trust to gain value.
Investment losses
In all, Chrysalis made a net loss of £103m on its investments, with Haining saying the performance reflected both peer group stock-market valuations and the tougher capital market conditions for private capital.
However, it was an improvement on the equivalent six-month period in 2022, when the trust’s investments returned a £234m loss.
NAV per share did recover slightly during the trust’s financial Q2, having fallen 13% in Q1 alone. NAV has remained flat since 31 March, and trust’s share price has climbed to 66p, leaving it trading at a slightly tighter discount of nearly 50%.
Shares have fallen 75% since peak price in 2021, when managers Nick Williamson and Richard Watts (pictured) commanded a huge performance fee.
The trust said it is continuing to shift from a pure growth focus to more of a balance between profitability and growth, in line with investor demand.
Haining said it had been a “challenging” period, but said he remained confident in the potential of the portfolio companies, and in the value that Chrysalis can create for its shareholders.
