Tuesday 5th February 2008
Double-digit returns emerge from Chrysalis
Chrysalis VCT, which invests primarily in unquoted companies, generated double-digit returns for its investors in the year to October. But the kind of lucrative exits that boosted profits in 2007 may prove more elusive this year due to a ‘less buoyant climate’, according to the company’s management.
Total returns from Chrysalis ordinary shares were 12.0 per cent over the year, including a dividend of 3p. This was a slight fall from 2006, when ordinary shares returned 14.1 per cent including a 2p dividend.
During the year the VCT made three major disposals. Restaurant chain Ma Potters was sold to Café Rouge owner Tragus for £14.2 million, generating a return of 2.5 times Chrysalis’s original investment or an IRR of 27 per cent. Additionally, payments processor Protx was sold to accountancy group Sage, while AIM-quoted Computer Software Group was the subject of a management buy-out.
The company’s management believes that this year, the fall-out from the credit crunch will make profitable realisations ‘more difficult to achieve, particularly in the short term’.
Chrysalis VCT has a fund of £30 million, of which £10 million is available for reinvestment. It typically makes investments of between £250,000 and £1 million.
Nick Britton
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