Powerhouse in the red again
Powerhouse Ventures, a Christchurch-based technology startup imvestor, has posted another loss of $10 million.
State startup funder Callaghan Innovation recently renewed support to Powerhouse, which is listed on the Australian Securities Exchange, after reviewing its volatile performance over the past two years.
Powerhouse has various shareholdings in 25 companies whose technology is spun out of New Zealand universities, with a large number being from Canterbury University.
The company’s chairman, Russell Yardley, said there had been delays in raising money for some of the investee companies.
The company had expected a rise in the value of its portfolio of companies, but this would now take place in the next few months, and he anticipated ‘‘much stronger’’ earnings for the next profit report.
In his annual ASX report, Yardley said the theoretical value of Powerhouse shares was 32 cents each, based on book valuations of portfolio companies – but the share price has sunk to 16c, compared with $1.07 two years ago when it listed.
This means the 22 per cent shareholding of the Christchurch City Council’s economic development arm has plunged from $5m to about $1m.
The former Canterbury Development Corporation (now known as ChristchurchNZ) owned the shares because it was an early funder in several of the startup companies subsequently taken up by Powerhouse.
Powerhouse attributed the latest performance to losses by investee company CropLogic, and other write-downs.
Yardley said there would have been fair-value gains from Tiro and Upstream but there had been delays in capital raisings.
The values of several other companies had also declined, resulting in the total portfolio value declining from $17.5m a year ago to $11.5m.
On the positive side, the company sold shares in ArcActive at four times cost, and a portion of its holding in Invert Robotics had been sold after the balance date.
An operations review saw costs reduce from $3.4m to $1.1m.
The latest $10m loss for the year ended in June 2018 comes on top of a loss in 2017 of $11m.
The New Zealand Venture Investment Fund has suspended funding permanently.
Powerhouse has also initiated court action against the principals of investee company SolarBright over an intellectual property dispute.
The company was working to ensure its Australian expansion gathered pace. This included developing university networks and connecting with investors.
Yardley recently told The Press that difficult decisions had been made over directorships and the governance of investee companies that would bear fruit in the near future.