NAV up by 3%, discount up by 1pp

Well positioned to act with 35% net cash

22% NAV discount vs. historical average of 15%

Stable Q1 after outperformance in Q4
At the end of Q1, NAVPS was SEK 63.75, a 3.1% increase q-o-q. Meanwhile, the NAV discount ticked up by 1pp to 24%. TSR was +1%, which was lower than the performance of the SIXRX benchmark (+13%). It is, however, worth noting that NAXS outperformed the SIXRX by 11pp in Q4. With regard to the direct investments, Awilco Drilling and Scout Gaming Group, posted TSRs of +16% and -16%, respectively. In Q4, NAXS proposed a maximum DPS of SEK 2.80, as the actual dividend was to depend on the amount of buybacks in Q1. As a result, it now proposes a DPS of 2.78 for 2018, corresponding to a 5.8% yield.

Little portfolio activity
NAXS increased its holding in Awilco Drilling, as it acquired additional shares in a private placement in March. It also carried out buybacks amounting to SEK 0.2bn. The underlying funds made one new investment and two exits. NAXS expects activity and valuations in the private equity space to be volatile over the coming quarters. Regardless, the company stands well positioned to act on new opportunities with its 34% net cash position.

Valuation below historical average
NAXS currently offers exposure to eleven funds from eight different managers and three direct investments. The NAV discount has widened by 8pp over the last two years and presently stands at 22%, which compares to the historical average (2010-) of 15%. We expect the share buybacks to resume, and the dividend yield amounts to 5.8%. Moreover, we believe that a further lowering of the substantial cash position would act as a catalyst for reducing the NAV discount, and we consider continued buybacks in combination with new investments an adequate deployment of capital.

info@introduce.se (Introduce.se)

ABG Sundal Collier - Introduce.se