Hygrovest Ltd (ASX:HGV) is continuing to focus its new investment efforts on themes like disease testing, biotech, cryptocurrencies and decarbonization.
At the same time, the company is also focused on its existing cannabis portfolio companies that outperform the industry.
Hygrovest recorded a loss of 20% for the financial year to 28 February 2022 compared to the 63% loss in the listed Canadian cannabis index.
The poor performance of listed cannabis securities has underlined the merits of the decision of Hygrovest shareholders to remove the cap on non-cannabis investments in December 2021 and focus on new investments in sectors other than cannabis.
The following are updates from Hygrovest’s portfolio companies:
- Weed Me. This month Hygrovest completed a second C$1 million investment tranche into Weed Me. Weed Me continues to outperform the industry and continues to outpace its budget forecast. The company now has a revenue run rate higher than many bellwether companies in the space and continues to show great margins. As the terms for Hygrovest’s investment were negotiated in mid-2021, the second tranche of the investment comes at a significant discount to the value the company has generated since then.
- Medio Labs/Brainworks. The company has recently informed Hygrovest of some large and unexpected customer wins with an expectation of material revenues over the next several months. As these revenues are verified, Hygrovest will review the valuation.
- Valo Therapeutics. Valo continues to progress its planned Phase-1 candidate PeptiCRAd-1 immunotherapy which remains on track to enter the clinic in Q1 2022. They are preparing all the necessary logistics at the clinical study sites so that they can treat their first patient in Q1 2022. Valo is concurrently making progress towards a stock market listing and associated financing round sometime in 2022. Valo has commenced many of the preparatory workstreams required for the contemplated listing including the appointment of issuers council, identification of a target shell, preparation of financial accounts, appointment of an additional communications agency, etc.
- Vintage Wine Estates (VWE). VWE recently announced that its Board of Directors has authorised the repurchase of up to US$30 million in aggregate value of the company’s common stock and/or warrants through 8 September 2022. Hygrovest is encouraged to see this as companies typically take such action when they believe their stock is undervalued and they expect to have excess cash flows.
- Southern Cannabis Holdings (SCH). Consolidated revenue from February 2022 is up about 20% on January and consolidated profit is back in the black since last September 2021. Restructuring of clinics and the investment in products is paying off and the Prescription Vape business continues to grow month-over-month. SCH expect the positive trends to continue with a record revenue number in March and an overall profitable quarter.
In addition to continued capital investments in new sectors, Hygrovest continues to leverage its portfolio platform so investee companies can help each other from a technical and commercial standpoint.
