Molten Ventures swings to first-half loss

Molten Ventures reported a gross portfolio value of £1.45bn at the end of its first half on Monday, down from £1.53bn at the end of March, as its net assets fell to £1.28bn from £1.43bn and it swung to a loss.

The FTSE 250 firm said its net asset value per share totalled 837p on 30 September, compared to 937p, as its gross portfolio saw a fair value decrease of 12%, with a 17% negative gross foreigh exchange impact.

It invested £112m of cash invested in the period itself, as well as £17m from the EIS and VCT funds, compared to a respective £165m and £4m in the same period a year earlier.

Consolidated group cash totalled £28m at period end, up from £78m at the end of March including restricted cash), as well as £58m available to invest in the EIS and VCT funds, down from £61m over the same period.

Operating costs net of fee income were still less than the targeted 1% of period-end net asset value.

Cash proceeds from realisations totalled £13m in the period, down from £67m at the same time last year, as the company swung to a loss after tax of £155m from a profit of £218m in the six months ended 30 September last year.

Molten currently had an expanded debt facility of £150m, with £90m drawn as at 30 September.

Since the period ended, business payments provider Fleetcore Technologies signed a definitive agreement to acquire Molten’s portfolio company Roomex.

The company said it had received £6.4m in cash proceeds since the end of the first half, with further escrow expected.

It said the realised fair value, including escrow, was higher than its reported fair value as at 31 March.

“Molten has not been immune from the challenging market conditions for technology companies worldwide,” said chief executive officer Martin Davis.

“Wider macroeconomic factors - rising inflation and global interest rates - have impacted public markets and particularly the valuation of technology stocks and, in turn, this has fed through into the private arena where valuations have also declined, and investment capital has slowed.

“However, our portfolio has demonstrated strong revenue growth and considerable relative valuation resilience, particularly compared to the performance of some of the listed technology stocks and indices such as Nasdaq.”

Davis said Molten was an “active manager” working closely with its portfolio.

“We continue to surround our best companies with knowledge and relationships grounded in decades of operating experience.

“This, combined with our adaptable platform and focus on preserving capital will continue to serve us well through this stage of the cycle.

“I am firmly of the belief our portfolio will continue innovating to disrupt the future and that we are well set up to identify strong opportunities within the down market.”

At 0838 GMT, shares in Molten Ventures were down 6.8% at 419.4p.

Reporting by Josh White for Sharecast.com.