Australian-listed specialist investment company Hygrovest Ltd (ASX:HGV, OTC:MMJJF) has delivered its performance metrics and key developments for September 2024.
The company, managed by HD Capital Partners, focuses on undervalued growth opportunities, primarily in small-cap markets.
Key developments during the month included portfolio adjustments, asset sales and the announcement of a share buyback program.
Evolving portfolio
Hygrovest made strong progress in reshaping its portfolio, particularly through the sale of its investment in Emerging Therapeutics Group Pty Ltd (ETG) for A$3.8 million.
This transaction included an upfront payment of A$3.5 million and an additional A$0.3 million payable in March 2026.
While the sale was executed at a small discount to the A$4 million carrying value, it still delivered a substantial return on the company's original A$700,000 investment.
The divestment is part of Hygrovest's broader strategy to transition from a cannabis-focused portfolio to one that is more diversified and liquid.
Additionally, Hygrovest's portfolio as of September 2024 includes a range of listed and unlisted assets.
Its largest holding, Weed Me Inc., represents around 45% of the total portfolio value at A$10 million.
The company continues to evaluate opportunities to realise value from its remaining legacy cannabis investments, including Delivra Health Brands.
On-market share buyback
In response to its shares trading below net asset value, Hygrovest has announced an on-market share buyback program, set to commence on October 10.
The buyback allows for the acquisition of up to 10% of the company’s shares, equivalent to 21,031,060 ordinary shares, over a 12-month period.
The program is intended to optimise capital management and enhance shareholder value, with buyback prices capped at 105% of the volume-weighted average price (VWAP) over the preceding five trading days.
Investment performance
As of September 30, Hygrovest’s Net Tangible Asset (NTA) per share before tax stood at A$0.1055, representing a 4% decrease from the previous month.
This drop was primarily attributed to a 5% reduction in the valuation multiple applied to its investment in Weed Me Inc, reflecting market movements in comparable Canadian cannabis companies.
Despite this, the company’s portfolio remains robust, with an asset value of A$22 million.
Hygrovest continues to work towards optimising its portfolio, focusing on realising value from key investments such as Weed Me and Delivra Health.
The company hopes the strategic shift toward a more liquid and diversified portfolio positions it to navigate evolving market conditions and deliver long-term growth for shareholders.