The Net Tangible Asset (NTA) value per share before tax for Hygrovest Ltd (ASX:HGV, OTC:MMJJF) increased to A$0.1097 during August, a 3% lift compared to the NTA before tax of $0.1062 a month earlier.
Hygrovest’s investment manager HD Capital Partners Pty Ltd said this was primarily due to an 11% increase in the Enterprise Value to Net Revenue Multiple (EV/NRM) used when valuing the company’s investment in Canadian unlisted company Weed Me Inc.
Stronger position
The August 31 NTA before tax also compares favourably to the figure of $A0.1028 June 30, 2023, as well as to the A$0.1037 at June 30, 2024.
HGV’s NTA value per share after tax at August 31, 2024, was A$0.0956, up from A$0.0927 a month earlier while the Net Asset Value per share was A$0.0978 compared to A$0.0931.
The company's Net Asset Value, pre-tax, at August 31, 2024, was $24 million, up from $22 million on July 31, 2024.
In regard to the Weed Me investment, HD’s monthly investment report said: “This multiple is derived from the end-of-month market valuations of various listed Canadian companies, each of which HGV considers to be broadly comparable to Weed Me.”
About Hygrovest
Hygrovest is an Australian-listed specialist investment company which concentrates on producing capital growth over the medium term from investments in listed and unlisted equities and debt securities. The company’s shares are trading at $0.040 on the ASX.
The report said: “The listed Australian portfolio performed well in the August reporting season. In aggregate, these businesses are all cash flow positive and trading at attractive valuations, with outlooks provided at results that give us confidence in their future prospects.”
HD intends to present a more detailed presentation of the HGV portfolio and progress towards achieving its stated objectives at the company’s 2024 AGM. “This will be done with the intention of providing more transparency to shareholders as we continue to focus our energies on closing the large discount to NTA.”
Weed Me valuation
HGV was a foundation investor in Weed Me in December 2017 and its investment comprises 4.24 million shares representing about 13% of Weed Me’s issued capital and 460,830 warrants each convertible at C$2.17 with an expiry date of October 29, 2024.
As at the end of June, HGV had ascribed to the Weed Me shares a valuation of C$2.35 per share.
At June 30, 2024, HGV’s NTA per share post tax was $0.0910 down from 0.0978 a month earlier, HD said.
HD stated in its report: “Shareholders should always, including but not limited to this month, be mindful that HGV’s reported month-end NTA is a point-in-time assessment only and that HGV’s NTA is constantly fluid.
“HGV also applies a 15% discount to the derived valuation multiple to account for the fact that Weed Me is unlisted.”
Other large investments
As well as Weed Me, HGV is an investor in Emerging Therapeutics (ETG), formerly Southern Cannabis Holdings. This investment comprises 21 million shares representing approximately 18% of ETG’s issued capital.
At month end, HGV had ascribed to these shares a valuation of A$0.19 per share.
Hygrovest was a foundation investor in Delivra Health Brands Inc. (TSX-V:DHB) and its investment currently comprises 55,557,994 common shares of DHB representing an approximately 18% shareholding.