Tekcapital (AIM: TEK) said ‘important development milestones’ reached by its portfolio companies has resulted in record net assets for the six-month period ended 31 May 2020.
In a half-year results, the UK intellectual property (IP) investment group said many of its key portfolio companies had made ‘significant progress’ and as a result, its net assets ended the period at record levels, increasing 16% to US$26.18m from US$22.53m at 30 Nov 2019.
The group said it has now demonstrated 3.5 years of consistent growth of net assets in spite of significant headwinds due to COVID-19 and an economic recession in the UK and US.
Although total revenue for the period halved to $2.85m from $5.40m in the comparative 2019 period and pre-tax profit dropped to $1.89m from $4.42m in 2019, Tekcapital reported an increase of $2.42m in fair value across its portfolio companies over the period.
Salarius, of which Tekcapital owns 91.7%, secured a national food ingredient broker for its lead product Microsalt® in the US in December, a US broker partner in January and a North American distribution agreement for launch of its SaltMe!® snacks in March this year.
Tekcapital said the deal secured in March represents an important milestone for the food technology group’s new potato chip snack line and will enable an unprecedented reach of the group’s SaltMe!® products into consumer outlets of every size in North America.
Shares in Tekcapital have reached highs of 11.70p in the last month and closed on Thursday afternoon at 10.5p.
The group also secured a further two agreements in March to expand across the US while Tekcapital’s wholly owned portfolio companies, Lucyd® and Guident, also saw further progress across the period, as did Belluscura® of which Tekcapital holds 18% interest in.
“We are pleased to report a successful half-year performance for the Group, which has noted record net assets for the period and the achievement of important development milestones for most of its portfolio companies,” said Chairman, Dr. Clifford M. Gross.
He added, “We believe our approach of acquiring and commercialising university innovations is demonstrating good progress towards our goal of improving the quality of life for customers whilst delivering significant returns on invested capital.”
Tekcapital acknowledged that it is ‘progressing very well,’ but said its expects net asset values to fluctuate from period to period due to factors including the current pandemic.
It said however that it believes that there is ‘considerable value to be realised from its portfolio companies and is continuing to further assist and invest in these operations.’
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