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Digital 9 Infrastructure PLC (LSE:DGI9) has announced an update on its unaudited portfolio valuation and Net Asset Value (NAV) for the six-month period ending June 30, 2024. In advance of its interim results, the Board of Directors is in the process of reassessing the Group’s portfolio under International Financial Reporting Standards (IFRS). The early review findings suggest a substantial decrease in the portfolio’s aggregate value compared to its last published figure as of December 31, 2023.
Although the valuation process is still ongoing, the Board has noted that independent valuations of select portfolio companies indicate a significant decline. The unaudited NAV per share as of June 30, 2024, is provisionally estimated to be around 45 pence—marking a notable decrease from the audited NAV of 79.3 pence per share reported at the end of 2023.
Key Drivers Behind the NAV Decline
A major factor contributing to the reduced NAV is the reassessment of underlying portfolio companies' financial prospects. Specifically, the Board’s revised assumptions related to the availability of financing and its subsequent impact on portfolio companies' growth projections have led to a downward revision in valuation models. The shift reflects more conservative inputs than those used in the December 2023 valuation.
The Board has indicated that further adjustments may be necessary as the review process nears completion. However, any final changes to the portfolio valuation and NAV will only be confirmed once the complete financial assessment is concluded.
Interim Results Expected in September
Digital 9 Infrastructure is targeting the release of its interim financial results no later than September 30, 2024. The interim report will provide a comprehensive overview of the company’s financial position for the first half of 2024, shedding more light on the impact of the portfolio revaluation.
Progress in Sale Processes and Asset Review
Alongside the NAV update, Digital 9 Infrastructure provided insights into its ongoing asset sale processes. These sales are aligned with the company’s new investment objective and policy, approved by shareholders in March 2024. The company has already received non-binding offers for certain portfolio assets and has advanced a select group of preferred bidders to the second phase of negotiations, which includes detailed due diligence.
While sales processes are progressing for various assets, excluding Arqiva, the company cautioned that there is no guarantee the transactions will be completed. The Board remains committed to ensuring that any sales meet acceptable value thresholds before proceeding. Updates on the sales processes will be provided as developments occur.
