Stack Capital Group Inc. Reports 2022 Year End Results

TORONTO, March 01, 2023 (GLOBE NEWSWIRE) -- Stack Capital Group Inc., (“Stack Capital” or the “Company”) (TSX: STCK and STCK.WT) today announced its financial results for the year ended December 31, 2022. Stack Capital reports all amounts in Canadian Dollars unless otherwise stated.

Company Commentary:

  • As at December 31, 2022, Book Value per Share of the Company was $11.28, slightly higher compared with $11.26 as at December 31, 2021, despite a significant market correction during 2022.

  • The Company’s cash position as at December 31, 2022, was $31.4 million or $3.43 per share.

  • To date, the Company has completed eight investments with fair value totalling $70.0 million or $7.65 per share as at December 31, 2022, into the following:

    • Newfront Insurance, Inc. (insurance & benefits)
    • Locus Robotics, Inc. (robotics)
    • Prove Identity, Inc. (cyber-security)
    • Omio, Inc. (travel & leisure)
    • SpaceX (space exploration & communications)
    • Bolt Financial, Inc. (e-commerce)
    • Hopper, Inc. (travel & leisure)
    • Varo Money, Inc. (neo-banking)

  • During Q4-2022, the Company announced a normal course issuer bid to buy back its outstanding common shares which it believes to be undervalued. During Q4-2022, 81,800 shares were repurchased at an average price of $5.84 per share.

  • The current market remains attractive in relation to the opportunities available to deploy capital across quality, high-growth companies, at reasonable valuations, with the added downside protection offered through preferred shares. 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 31% 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.”

Q4-2022 Highlights

  • As at December 31, 2022, the Book Value of the Company was $103.2 million, and the Book Value per Share was $11.28. A detailed summary of Book Value per Share is as follows:

Breakdown of Book Value per Share as at December 31, 2022: 
Cash$        3.43 
Investment – Prove Identity Inc. 1.26 
Investment – Newfront Insurance, Inc. 1.18 
Investment – Locus Robotics, Inc. 1.18 
Investment – Omio, Inc. 1.04 
Investment – SpaceX (FNEX Ventures LLC – Series 103) 1.02 
Investment – Bolt Financial, Inc. 0.90 
Investment – Hopper Inc. 0.89 
Investment – Varo Money, Inc.                     0.38 
Net other assets                   (0.00)
Book Value per Share$        11.28 

  • During Q4-2022, Stack Capital invested US$8.0 million in Locus Robotics, Inc. (“Locus”). Locus is a leading provider of enterprise robotics solutions for some of the world’s most dynamic warehouses and leading brands operating in third-party logistics, retail & e-commerce, healthcare, and the industrial sectors. Designed to work collaboratively alongside human labor, Locus’ suite of robots transforms large-scale warehouse fulfillment and distribution facilities with industry-leading, intelligent, and dynamically scalable solutions that reduce costs, improve productivity, and enhance overall efficiency. Its Robotics-as-a-Service (“RaaS”) pricing model dramatically reduces the upfront costs typically associated with outfitting a warehouse facility, combined with monthly operating savings in the form of a 2-3x increase in productivity, and a large reduction in the cost per pick.

  • During Q4-2022, Hopper Inc. raised US$96.0 million from Capital One Financial Corporation and announced a long-term strategic partnership with Capital One Travel. Following the success of Capital One Travel powered by Hopper, this extension of their partnership and additional capital will help fuel future growth. Hopper also announced that their market share of third-party air travel in the United States has increased to 11.2% (source: MIDT) and Hopper is now the #3 largest OTA in North America. Sales in their app are up 4-5x year-over-year and holding at that high level and revenue is pacing 25X over 2019.

  • During Q4-2022, the Company hedged US$25.0 million US dollars to Canadian dollars at a rate of 1.3573 to limit the fluctuations due to foreign exchange. The gain on this contract as at December 31, 2022 was $97,500. This required cash collateral of $1.5 million and is held in Stack’s account and earning market interest rates.

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 or unrealized deferred gains or losses 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 and 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 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.