Listed on the AIM Market of the London Stock Exchange, Tekcapital Plc (LON: TEK) has attracted investors with its exciting portfolio companies coupled with strong financial growth. The company has been profitable for four years and demonstrated a continual growth in its revenues that has increased around 13% to US$7.72 million during FY2019. Net Asset Value (NAV) of Tekcapital rose by 40% to US$22.25 million , taking the NAV per share to $0.35 for the full year 2019. (Source: Thomson Reuters)
These double-digit growth figures underscore Tekcapital’s unique investment theme focused on creating marketplace value from investing in university-developed Intellectual Properties (IP). Tekcapital’s four key portfolio companies are core to its multi-year growth record as their disruptive technologies, and innovative product offerings have the potential to deliver a strong footprint in its fast-growing global marketplace.
The growth of Tekcapital is inseparably linked to the growth of its portfolio companies. These four major portfolio companies include: Belluscura Plc (Respiratory Medical product company), Salarius Ltd (Food technology solution company), Lucyd Ltd (Tech eyewear company), and Guident Ltd (Tech company supporting contactless autonomous deliveries).
Tekcapital’s Investment Portfolio Summary in the years ended 30 November 2019 and 30 November 2018 (Source: Company Report)
Together these portfolio companies represent a diversified group of compelling investments built on leading-edge intellectual property and led by experienced management.
Let’s Deep Dive into the Financial Performance of Tekcapital’s Portfolio Companies in FY2019
Guident Ltd is a wholly-owned portfolio company of Tekcapital that commercialises new Intellectual Property for augmenting the utility, safety, and efficiency of autonomous vehicles and ground-based delivery drones.
In FY2019, Guident’s fair value recorded a gain of US$7.0 million, primarily driven by the acquisition of two new intellectual properties and development of a third one rounding out its IP position during the year. Guident has also started its B2B marketing program and has been actively looking out to develop partnerships with vehicle Original Equipment Manufacturer (OEM) to provide remote tele-monitoring and control centre IP and technology for autonomous vehicles.
As per the third-party valuation, Tekcapital’s fair value of the investment in Guident Ltd is reportedly estimated to be at US$15.5 million as of 30 Nov 2019 (see the table).
Medical product company Belluscura has developed an improved portable oxygen concentrator to provide on-the-go supplemental oxygen with user-replaceable filter cartridges. In this way, when a patient’s disease progresses, they now can upgrade the filter cartridge using Belluscura’s Portable Oxygen Concentrator (POC) to provide more litres of O2 per minute, rather than having to replace an expensive medical device. Through this revolutionary medical product, Belluscura aims to make healthcare more affordable to patients.
The fair value of the company’s holding in Belluscura increased by US$0.6 million to US$1.8 million, supported by the most recent private placement of US$2.7 million at 15 pence per share, in April 2019. The company also plans to utilise these proceeds for its go to market strategy. It anticipates receiving US FDA 510(K) clearance for the X-PLO2R™ portable oxygen in the near future.
According to Global Market Insights, the market for medical portable O2 is presently recorded at $1.4 billion a year with future annual growth of over $100 million.
Lucyd, wholly owned by Tekcapital, is a tech eyewear company that provides smart glasses with bluetooth and wireless technologies. Lucyd glasses allow the user to answer calls, listen to music or talk to Siri and Google Voice, all through the frame of glasses. The fair value of the company’s investment in Lucyd’s declined by US$1.9 million to US$1.1 million. The value of Lucyd broadly reflects the worth of its e-commerce platform, selling fashionable and advanced eyewear.
In March 2020, Lucyd also filed the patent and trademark for its upcoming Vyrb(TM) app which includes the voice command to allow the users to listen and post to social media apps like Facebook and Twitter with their voice. Further, Lucyd recently announced the launch of its Bluetooth(R)-enabled glasses on the website of US superstore chain Walmart.com.
Salarius is a food tech business that owns a patented process to produce nanoparticle sized salt called MicroSalt®. The company has successfully launched its full-flavour low-sodium SaltMe!® potato chips, with the first 3 commercial accounts beside joining hands with a leading natural food wholesaler & broker for the retail presence of SaltMe!®
The fair value of Tekcapital’s investment in Salarius is recorded at US$1.8 million, up US$0.9 million, representing the group’s 97.5% stake in Salarius’ net assets valued at US$ 1.9 million. In March 2020, Salarius had inked a sales partnership deal with iLevel Brands as part of the launch of its new SaltMe!® product in North America. It represents an important milestone for Salarius’ new potato chip snack line for establishing a brand presence and expand market across the entire East Coast, Midwest and Southwest geographic areas of the United States.
With the year to date return of 171.62 per cent, Tekcapital stock is trading at GBX 14.26 on 11 June 2020 at market close. Its 52 weeks high and low stand at GBX 20.00 and GBX 4.00, respectively with the market capitalisation of £12.07 million as at the time of writing.