REG - Chrysalis Investment - Quarterly NAV Announcement and Trading Update

Chrysalis InvestmentsAnnouncement

Thu 07:01

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RNS Number : 2851T  Chrysalis Investments Limited  31 July 2025

The information contained in this announcement is restricted and is not for
publication, release or distribution in the United States of America, any
member state of the European Economic Area (other than to professional
investors in Belgium, Denmark, the Republic of Ireland, Luxembourg, the
Netherlands, Norway and Sweden), Canada, Australia, Japan or the Republic of
South Africa.

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 which forms part of domestic law in the United Kingdom
pursuant to The European Union Withdrawal Act 2018, as amended by The Market
Abuse (Amendment) (EU Exit) Regulations 2019.

 

31 July 2025

 

 

Chrysalis Investments Limited ("Chrysalis" or the "Company")

 

Quarterly NAV Announcement and Trading Update

 

Net Asset Value

 

The Company announces that as at 30 June 2025 the unaudited net asset value
("NAV") per ordinary share was 173.57 pence.

 

The NAV calculation is based on the Company's issued share capital as at 30
June 2025 of 523,574,538 ordinary shares of no par value.

 

June's NAV per share represents a 20.95 pence per share (13.7%) increase since
31 March 2025. The increase in the fair value of the portfolio accounted for
approximately 21.10 pence per share, with foreign exchange generating an
offset of approximately 1.91 pence per share. The share buyback led to 2.59
pence per share of accretion; other income, fees and expenses make up the
balance.

 

Richard Watts and Nick Williamson, Managing Partners of Chrysalis Investment
Partners LLP comment:

 

"The strong NAV per share progression in the period reflects on-going robust
delivery across the portfolio.

 

The material increase in the valuation of Starling was a function of both the
progress made in the core UK bank, but also the inclusion for the first time
of a valuation for Engine. Given the prospects for both sides of the Starling
business, we continue to be optimistic about the company's future prospects.

 

Klarna saw a double-digit percentage increase in its assessed valuation,
driven by a shift in the valuation horizon to the current year, from a
trailing basis, supported by a rebound in peer valuations. We believe the top
three portfolio investments, which now account for 71% of NAV, all have clear
routes to continue to drive future value accretion."

 

Portfolio Activity

 

There were two significant events over the quarter.

 

First, Chrysalis received £49.8 million in relation to sale of InfoSum to WPP
early in the period.

 

Second, the Company bought back approximately 19 million shares at an average
share price of 98.11 pence, resulting in a total cost of £18.3 million. This
led to 2.59 pence of NAV per share accretion (circa 1.7% increase in NAV per
share versus March); as of 29 July 2025, the Company had spent £74.5 million
on buying back shares.

 

Portfolio Update

 

Starling

 

Starling reported annual results to March 2025 in the quarter.

 

For the year ending March 2025, Starling maintained a strong level of profit,
delivering PBT of approximately £290 million, on a run-rate basis, compared
to £301 million in the prior period. Normalising for surplus capital, this
gave Starling a post-tax return on capital employed of approximately 37%,
which the Investment Adviser believes compares very favourably to traditional
UK banks.

 

Following the successful launch of its Easy Saver product in late-2024,
Starling continues to invest in various growth projects and has launched both
a cash ISA product and an AI-powered tool to give customers insights into
their spending habits.

 

Further investment was also made into Engine, Starling's
"Banking-as-a-Service" platform, which continued to build out its pipeline of
potential new customers, with Declan Ferguson - Starling's CFO - commenting
that this gave it a "very creditable path to becoming a £100 million
recurring revenue business within two years". Given the high valuation
multiples commanded by similar software businesses, the Investment Adviser
believes the Engine investment case could drive significant further value
accretion in the future.

 

Smart Pension

 

The company continues to look to grow its Master Trust, which has now
surpassed £6.5 billion in assets. This growth has been achieved by a
combination of organic means as well as acquisitions, with the Options Master
Trust due to add up to a further £600 million of assets once fully
consolidated over 2025. In addition, new product initiatives and features
continue to be developed.

 

On the Keystone side of the business - the platform that powers the Master
Trust and is sold to third parties as a software offering - the pipeline of
potential new customers remains highly encouraging, with several potential
contracts at a late-stage of negotiation.

 

Klarna

 

Klarna released its 1Q25 results during the period.

 

Revenue rose 15% year-on-year to $701 million, with the US - its largest
market - growing 33%, on Gross Merchandise Volume ("GMV") up 13%; the business
was profitable (adjusted operating profit) for the fourth consecutive quarter.

 

Interestingly, merchant growth was 27% - with 150,000 new retail partners
joining the network in the quarter (to 724,000) - due to the integration with
Stripe. The Investment Adviser has previously highlighted the number of
commercial relationships that Klarna has signed since the latter part of 2024
and sees this as evidence of their potential to drive growth over coming
quarters; the company highlights that the deals struck with JPMorgan Payments,
Worldpay and Nexi are all expected to drive further growth in merchant
numbers.

 

Klarna has said it remains committed to an IPO.

 

wefox

 

Shortly post period end, wefox announced that it had secured €151 million of
financing, of which €76 million came in the form of equity from existing
investors and €75 million in the form of debt refinancing.

 

This investment is designed to support the company in pursuing its Managing
General Agent ("MGA") model in the key markets of Austria, the Netherlands and
Switzerland.

 

Brandtech

 

Brandtech continues to develop its Gen-AI proposition, and this was recently
strengthened by the announcement of a global strategic partnership with Boston
Consulting Group (BCG). The collaboration combines BCG's expertise in AI
transformation and organizational change with Pencil's Gen-AI technology to
help global brands swiftly transition from pilots and trial initiatives to
full-scale deployments. The partnership is designed to drive meaningful
efficiency gains, cost savings, and performance improvements across marketing
functions. We remain excited about Pencil and the positive engagement it has
created with current and prospective clients.

 

In recent weeks, Brandtech announced that Angela Tangas has been appointed the
new Global CEO of Oliver, the Group's market leading company designing,
building and running in-house agencies and marketing ecosystems. The former
Dentsu UK Group CEO will also serve as Brandtech's first Chief Strategy
Officer, with Oliver founder and Global CEO Simon Martin moving into a new
role as Chair of the Company.

 

Cash Update

 

As of 30 June 2025, the Company had gross cash and equivalents of
approximately £140 million and a position in Wise of approximately £3
million, to give a total liquidity position of approximately £143 million.
The gross cash position increased over the quarter as a result of proceeds
received on the sale of InfoSum and was subsequently reduced by the ongoing
share buyback being pursued by the Company.

 

The Company had a net cash position of approximately £73 million, once the
£70 million term loan is accounted for.

 

Portfolio Composition

 

As of 30 June 2025, the portfolio composition was as follows:

 

                                             30-Jun
                                             Carrying Value

 Portfolio Company                           (£ millions)    % of NAV
 Starling                                    384.7           42.3%

 Klarna                                       136.9          15.1%

 Smart Pension                                123.4          13.6%

 wefox                                        90.8           10.0%

 Brandtech                                    55.0           6.1%

 Deep Instinct                                22.2           2.4%

 Secret Escapes                               14.5           1.6%

 Featurespace (deferred disposal proceeds)    10.5           1.2%

 Wise                                         3.1            0.3%

 Sorted                                       0.3            0.0%

 Graphcore (deferred disposal proceeds)       0.1            0.0%
 Gross cash and cash equivalents             143.4           15.4%

 

Source: Chrysalis Investments Limited. The above percentages are based on a
net asset value of approximately £909 million for 30 June 2025.

 

Shareholder Consultation

 

The Board has reviewed the scope of the shareholder consultation which was
announced in May 2025. The intention is that this process will launch in
September 2025.

 

Factsheet

 

An updated Company factsheet will shortly be available on the Company's
website:  https://www.chrysalisinvestments.co.uk
(https://www.chrysalisinvestments.co.uk) .

 

 

-ENDS-

 

 For further information, please contact:

 Media                                             +44 (0) 7921 881 800

 Montfort Communications:                          chrysalis@montfort.london

 Charlotte McMullen / Imogen Saunders

 Investment Adviser                                +44 (0) 20 7871 5343

 Chrysalis Investment Partners LLP:

 James Simpson

 AIFM                                              +44 (0) 20 7397 5450

 G10 Capital Limited:

 Maria Baldwin

 Deutsche Numis:                                   +44 (0) 20 7260 1000

 Nathan Brown / Matt Goss

 Panmure Liberum:                                  +44 (0) 20 3100 2222

 Chris Clarke / Darren Vickers

 Barclays Bank PLC:                                +44 (0) 20 7623 2323

 Dion Di Miceli / Stuart Muress / James Atkinson

 IQEQ Fund Services (Guernsey) Limited:            +44 (0) 1481 231 852

 Aimee Gontier / Elaine Smeja

 

LEI: 213800F9SQ753JQHSW24

A copy of this announcement will be available on the Company's website at
https://www.chrysalisinvestments.co.uk
(https://www.chrysalisinvestments.co.uk)

The information contained in this announcement regarding the Company's
investments has been provided by the relevant underlying portfolio company and
has not been independently verified by the Company. The information contained
herein is unaudited.

This announcement is for information purposes only and is not an offer to
invest. All investments are subject to risk. Past performance is no guarantee
of future returns. Prospective investors are advised to seek expert legal,
financial, tax and other professional advice before making any investment
decision. The value of investments may fluctuate. Results achieved in the past
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announcement nor, unless previously published by means of a recognised
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The Company is an alternative investment fund ("AIF") for the purposes of the
AIFM Directive and as such is required to have an investment manager which is
duly authorised to undertake the role of an alternative investment fund
manager ("AIFM"). G10 Capital Limited is the AIFM to the Company. Chrysalis
Investment Partners LLP is the investment adviser to G10 Capital Limited.
Chrysalis Investment Partners LLP (FRN: 1009684) is an Appointed
Representative of G10 Capital (FRN: 648953) Limited, which is authorised and
regulated by the Financial Conduct Authority.

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