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German Startups Group profitable again in the first half of 2016
Profitable growth similar to previous year with net consolidated profit of 1.9 million euros
German Startups Group will not make use of the capital increase in the amount of up to 27 million shares that was authorised by the General Meeting
The portfolio companies Service Partner One and Savedo achieve increases in value as a result of financing rounds
German Startups Group, the second most active venture capital provider in Germany in the time period since 2012 (CB Insights, 2015), grew profitably again in the first half of 2016 at levels similar to the same period in the previous year, according to preliminary calculations. Therefore, the company has been continuously profitable since its first full fiscal year (2012).
German Startups Group achieved a preliminary net consolidated profit of approximately 1.9 million euros in the reporting period (1H 2015: 2.0 million euros). With an average of 11,564,829 shares, this equates to a net profit of approximately 0.15 euros per share after the profit share for the minority shareholders of the Exozet group (1H 2015: 0.30 euros). These preliminary profits may change as a result of new findings into the valuation of portfolio companies in the event that these findings cause a value increase or decrease in the stakes held by German Startups Group.
The preliminary profit is attributed to an increase in value of 11 out of 25 minority shareholdings of particular significance to German Startups Group, which comprise 89% of the total value of all 47 active minority shareholdings, and can therefore be attributed to the breadth of the portfolio. German Startups Group determines the fair value of its stakeholdings predominantly on the basis of prices paid by third parties for the same or similar shares. This is the case for 21 of 25 holdings that are of particular signifiance to German Startups Group. The value of the majority stake in the very well-performing Exozet Group is not assessed in the consolidated financial statements, but rather fully consolidated. Therefore, an increase in value cannot be entered into the balance sheet and the profit and loss account, but will instead lead to the creation of hidden reserves. As already announced, Exozet was able to increase its 1H16 revenue by 60% compared to 1H15 and at the same time, as opposed to 1H15 (losses of 0.25 million euros), achieved a profit of 0.41 million euros. It should be noted that generally the first half of the year is seasonally weaker than the second half of the year.
German Startups Group proposed a resolution at the Ordinary General Meeting held on 23 March 2016 that would allow for a capital increase of up to 27 million shares and the authorisation of share capital. This capital increase was authorised to be executed by 23 September 2016. Following the company’s own assessment and the current share price level, the management has decided not to make use of this, as an issue of new shares significantly under the net asset value of the company would not be commercially beneficial for the company or its shareholders. The German Startups Group is solidly and sustainably financed even without the capital increase.
The positive development of the portfolio companies of German Startups Group continues in the second half of 2016 as well. After the company already announced, at the end of June, some of the developments within its investment portfolio in the first half of 2016, German Startups Group has since recorded further growths in value in two of its portfolio companies:
Service Partner One, a shareholding significant to German Startups Group, achieved an increase in valuation following its recently finalised Series A financing round of over 10 million US dollars. The digital office management startup that records, according to its own statements, an average monthly growth rate of 30% was able to win two reputable investors with EQT Ventures and Target Global.
The portfolio company Savedo also appreciated in value. The FinTech company, which offers online-optimised fixed-term deposits in other European countries, received 5.6 million US dollars in the first closing of its Series A financing round and was able to raise a further 2 million US dollars in the second closing.
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