The Bailador Technology Investments Ltd (ASX: BTI) share price is pushing higher today following the release of its half year results.
At the time of writing, the technology investment company’s shares are up 1% to $1.34.
How did Bailador perform in the first half?
For the six months ended 31 December, Bailador reported a gain on financial assets and marketable securities of $23.5 million. This was up 865% compared to the prior corresponding period.
This ultimately led to the company reporting a net profit of $13.1 million for the half. This compares to a profit of just $118,000 in the same period last year.
Also growing was Bailador’s pre-tax net tangible assets. It increased 12.3% to $1.39 per share.
What were the drivers of its growth?
The company’s investment in Instaclustr was a highlight during the half. Its valuation increased 42.2% following another strong 12-month period of growth. Instaclustr provides managed and supported open source solutions to businesses.
Also supporting its growth was an $11.5 million revaluation of Stackla. It was previously valued at $0, but this has been amended after demonstrating business performance and market attractiveness.
The valuation of its stake in Straker Translations Ltd (ASX: STG) was marked to market and up 71.4% compared to a year earlier. This was driven largely by the announcement of a new global translation agreement with IBM.
Bailador’s Co-Founder and Managing Partner, David Kirk, said: “We are very pleased with the performance of the portfolio during a tumultuous period. No emergency capital raisings were required, and the businesses all have healthy sustainable models. The quality of the businesses and management teams has the portfolio well positioned for continued growth.”
More growth ahead?
In an accompanying presentation, management pointed out that its portfolio ended 2020 conservatively valued. It estimates that its portfolio trades on an EV/LTM revenue multiple of ~6x.
This compares to an average of 19x for its peers, which it feels allows for material upside to returns
Outlook
Bailador expects 2021 to be a significant year for profitable realisations.
Bailador’s other Co-Founder and Managing Partner, Paul Wilson, commented: “A number of our Bailador portfolio companies represent attractive acquisition targets or IPO candidates. Harvesting gains is a key element of our business, and we are aiming to provide significant positive news to the market on these companies during the coming months.”
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Bailador Technology Investments Limited and Straker Translations. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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