TMT expecting 'positive' revaluations after paying maiden dividend

High-growth technology-focussed venture capital company TMT Investments announced its final results for the year ended 31 December on Thursday, a year in which it made $6.15m of profitable cash exits from Depositphotos and VitalFields.

The AIM-traded firm also reported a $4.08m positive revaluation of Pipedrive, and $2.57m impairments of WhalePath, Adinch and Gild.

Its board said $2.25m was allocated to new and follow-on investments in Vinebox, Send A Job, Attendify, Sixa, Virool, APPrise, Try the World, and Scentbird.

A special dividend of 10 cents per share was paid in November.

TMT’s net asset value per share was $1.89 at year-end, down 1% from $1.91 as of 31 December 2015.

The board explained that its diversified portfolio of more than 30 companies was focussed around big data, e-commerce, and business software-as-a-service tools, with “many” portfolio companies continuing to experience “rapid” growth.

It said it had “strong” expectations of a number of positive revaluations in 2017.

“2016 was another successful year for the company, with several sizeable revaluations and exits across our portfolio,” said executive director Alexander Selegenev.

“There is always an asymmetric approach when revaluing the portfolio's assets.”

Selegenev said the downward revaluations generally preceded the upgrades, which would normally only come when there was a tangible third party equity transaction.

“This has the effect of dulling the NAV performance in the first several years of the portfolio's life.”

“However, we were especially pleased to have effected a major partial disposal in cash of our stake in stock photo marketplace Depositphotos for $5.83m net.”

That allowed the company to keep investing in promising new companies as well as reinvesting in its most successful portfolio companies to date as they continued to grow, Selegenev explained.

“A recent $17m capital raise by Pipedrive, one of our star portfolio companies, has increased the fair value of our investment in Pipedrive by $4.08m.

“In total, positive revaluations have added 15.2 cents to the company's NAV per share.”

As the portfolio matured, Selegenev said it was not surprising to register some impairments, of which the company made three in 2016, reducing the company's NAV by 9.3 cents per share.

“The company paid a maiden dividend of 10 cents per share in November 2016, and the net result was that our NAV per share as of 31 December decreased only slightly to $1.89

“TMT has successfully exited from nine investments - including two partial exits - since its admission to AIM in December 2010 to date.”

Selegenev said that demonstrated the management team's ability to identify “highly promising” companies with “exceptional” leadership at an early stage.

“Given the rapid growth experienced by a significant number of our portfolio companies, we strongly expect 2017 to produce several further positive revaluations across our portfolio.”