Stack Capital Group Inc. Reports Q2-2022 Financial Results

TORONTO, Aug. 03, 2022 (GLOBE NEWSWIRE) -- Stack Capital Group Inc., (“Stack Capital” or the “Company”) (TSX: STCK and STCK.WT) today announced its financial results for the three and six months ended June 30, 2022. Stack Capital reports all amounts in Canadian Dollars unless otherwise stated.

Company Commentary:

  • As at June 30, 2022, Book Value per Share of the Company was $11.80 as compared with $11.25 as at June 30, 2021, a 5% increase.

  • The Company’s cash position as at June 30, 2022, was $44.9 million or $4.94 per share.

  • To date, the Company has completed seven investments totalling $62.6 million or $6.88 per share as at June 30, 2022, into the following:

    • SpaceX (space exploration & communications)
    • Hopper, Inc. (travel & leisure)
    • Bolt Financial, Inc. (e-commerce)
    • GoEuro Corp. (Omio) (travel & leisure)
    • Prove Identity, Inc. (cyber-security)
    • Newfront Insurance, Inc. (insurance & benefits)
    • Varo Money, Inc. (neo-banking)
  • Recent dislocations across the financial markets have created attractive private equity investment opportunities that the Company believes offer strong risk/reward profiles. Stack Capital will look to capitalize on the current market weakness through both primary issuances and secondary transactions

“Despite the challenging market environment, we’re quite pleased to report that several of our existing portfolio companies have continued to generate growth,” said Jeff Parks, CEO of Stack Capital. “With roughly 42% of the portfolio in cash, we’re in excellent position to take advantage of opportunities born out of the recent market weakness. As with our previous investments, we will focus our efforts in targeting preferred shares of leading private companies – which provide an additional margin of safety for our shareholders.”

Q2-2022 Highlights

  • As at June 30, 2022, the Book Value of the Company was $107.2 million, and the Book Value per Share was $11.80. A detailed summary of Book Value per Share is as follows:

Breakdown of Book Value per Share as at June 30, 2022: 
Cash$        4.94 
Investment – Varo Money, Inc.                     0.37 
Investment – FNEX Ventures LLC – Series 103 (SpaceX)                     0.98 
Investment – Bolt Financial, Inc.                    1.72 
Investment – Prove Identity Inc.                     0.83 
Investment – Hopper Inc. 0.85 
Investment – Newfront Insurance, Inc. 1.14 
Investment – Omio 0.99 
Net other assets                   (0.02)
Book Value per Share$        11.80 
  • In May 2022, Stack Capital invested US$8 million in Newfront Insurance, Inc. (“Newfront”). Newfront is a provider of insurance, retirement solutions, and employee benefits; its innovative software-driven platform is modernizing the insurance brokerage business, delivering a better experience for customers, and providing insurance professionals with the tools to enhance productivity. Already profitable, Newfront is growing at a rate that significantly exceeds the industry average; meanwhile, its established client base, made up of some of silicon valley’s top companies, offers attractive organic growth potential.

  • In May 2022, Stack Capital invested US$7 million in GoEuro Corp. (“Omio”). Omio is a leading multi-modal travel booking platform that allows consumers to easily book trains, buses, ferries, and flights – saving them both time and money. Omio initially began as an app to book trains throughout Europe with an easy-to-use solution but has since expanded into multiple business lines and geographies that have strengthened both revenue and scalability.

  • In June 2022, Stack Capital invested an additional US$2.1 million in Prove Identity Inc. (“Prove”). As a result of this investment at a lower share price, the Company has revised the common share fair value of previously held common shares resulting in an unrealized loss on this investment of $0.2 million on the Statements of Income (Loss) and Comprehensive Income (Loss).

  • During Q2 2022, Stack management recognized an unrealized loss on its position in Varo Money, Inc. (“Varo”). Given the drawdown in valuations across public FinTech companies, the Company concluded that the current fair market value estimate for Varo had changed and, as such, recognized an unrealized loss on the investment of $3.3 million on the Statements of Income (Loss) and Comprehensive Income (Loss).

  • During Q2 2022, Stack management increased the value of its position in SpaceX (FNEX Ventures LLC – Series 103) by $1.3 million, reflecting a recent financing completed in May 2022 that valued the business at $127 billion. SpaceX was previously valued at $100 billion, following a stock sale in October 2021. The increase in value was recognized as an unrealized gain on the Statements of Income (Loss) and Comprehensive Income (Loss).

Intellectual Property Licensing Agreement

  • During Q2 2022, the Company entered into a Licensing Agreement with the Manager with an indefinite term pursuant to which the Manager has granted a non-exclusive, royalty-free license to use the name “Stack”, “Stack Capital”, and the Stack brand logo. Other than under this limited license, the Company does not have a legal right to “Stack”, the “Stack Capital” name, and the Stack brand.

About Stack Capital

Stack Capital is an investment holding company and its business objective is to invest in equity, debt and/or other securities of growth-to-late-stage private businesses. Through Stack Capital, shareholders have the opportunity to gain exposure to a diversified private investment portfolio; participate in the private market; and have liquidity due to the listing of the Common Shares and Warrants on the TSX. At the same time, the public structure also allows the Company to focus its efforts on maximizing long-term performance through a portfolio of high growth businesses, which are not widely available to most Canadian investors. SC Partners Ltd. (the “Manager”) has taken the initiative in creating the Company and acts as the Company's administrator and is responsible to source and advise with respect to all investments for the Company.

For more information, please visit our website at or contact:
Brian Viveiros
VP, Corporate Development and Investor Relations

Non-IFRS Financial Measures

This press release may make reference to the following financial measures which are not recognized under International Financial Reporting Standards (“IFRS”), and which do not have a standard meaning prescribed by IFRS:

  • Book Value - the aggregate fair value of the assets of the Company on the referenced date, less the aggregate carrying value of the liabilities, excluding any deferred taxes if applicable, of the Company; and
  • Book Value per Share (BVPS) - the Book Value on the referenced day divided by the aggregate number of Common Shares that are outstanding on such day.

The Company’s Book Value per Share is a measure of the performance of the Company as a whole. The Company’s method of determining this financial measure may differ from other issuers’ methods and, accordingly, this amount may not be comparable to measures used by other issuers. This financial measure is not a performance measure as defined under IFRS and should not be considered either in isolation of, or as a substitute for, net earnings per share prepared in accordance with IFRS.

Cautionary Note Regarding Forward-Looking Information

This press release contains forward-looking information. Such forward-looking statements or information are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any such forward-looking information may be identified by words such as “proposed”, “expects”, “intends”, “may”, “will”, and similar expressions. Forward-looking information contained or referred to in this press release includes, but may not be limited to, the exit conditions of the TSX Sandbox; and the business of Stack Capital and the risks associated therewith, including those identified in the Annual Information Filing under the heading “Risk Factors”.

Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect. Although Stack Capital believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Stack Capital can give no assurance that such expectations will prove to be correct. Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, the ability to capitalize on investment opportunities. The forward-looking information in this press release reflects the current expectations, assumptions and/or beliefs of Stack Capital based on information currently available to Stack Capital.

Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, Stack Capital disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events, or results or otherwise. The forward-looking statements or information contained in this press release are expressly qualified by this cautionary statement.