Blue Star Capital’s portfolio growth moves it into profitability
said the value of its investment portfolio has grown by around 78% in its final results for the year ended 30 September 2020, moving the company into profitability.
The investment firm said the increase in value - which has driven its investment portfolio up from £5.1m to £9m - comes as a result of an investment of around £1.7 million in seven esports businesses and an increase in value over the period of approximately £2.2 million.
The Company said it had made a profit for the period of £1.7m compared with a loss in the corresponding period of £0.68m. The group cited the major contributor factor as ‘the uplift in valuation’ achieved on the company’s investments in Guild Esports and Dynasty Esports.
The group hailed “an excellent year with strong performance” from its esports portfolio as well as “encouraging progress” from its tech payment businesses. It said its portfolio was successfully diversified with the move into esports which is now seen as its major focus.
The esports market is experiencing significant growth. In 2020 the market was estimated at around 495m viewers and is projected to reach around 646m viewers by 2023. This is expected to result in revenues growing over the same period from $950m to $1.60bn.
Given the market growth and an array of commercial opportunities, the Board ‘firmly believes’ that esports will eventually constitute a significant proportion of the global sports industry.
Specifically, over the last twelve months, Blue’s esports portfolio has enjoyed two major successes and at the year end the valuation of the esports portfolio stood at approximately £3.8 million compared with an accumulated investment to date of approximately £1.7 million.
The board said it remains ‘highly confident’ in the strong underlying trends in esports and believes there is significant upside to be achieved moving forward from the esports portfolio.
Cash as at 30 September 2020 was £0.132m compared to £0.12m in the corresponding period. Post the year endm the Company raised £0.095m through the exercise of warrants.
"The Company has enjoyed an excellent year with diversification into the fast growing esports sector and strong progress at our tech payments businesses, “ said CEO, Tony Fabrizi.
He added, “We consider the portfolio to be well positioned to maintain this growth in the coming year and we look forward to the updating the market as the year progresses."
Looking ahead, the Board said it believes the Company's portfolio has developed significantly during the year with the diversification into esports providing a strong strategic move.
The Company's ‘historic’ tech payment investments in SatoshiPay and Sthaler continue to make strong progress while 2021 is expected to be ‘the year of commercialisation’ for both businesses. Overall, the Directors said it believes the Company has developed into a more solid business over the past year and the Board views the future outlook with confidence.
Meanwhile, Blue announced that after seven years as Chief Executive, Tony Fabrizi will be stepping down from the Board once a new non-executive director has been appointed.
Shares in Blue Star Capital have increased by nearly 80% in value since the beginning of November to open 8.33% lower this morning at 0.225p following the announcement.
More on Blue Star Capital
Blue Star is an investing company with a focus on new technologies. Its investments include a 27.7% holding in SatoshiPay, a payments business using blockchain technology; investments in 6 early stage esports companies with shareholdings ranging from 5.9% to 13.6% and a 0.9% investment in Sthaler, an identity and payments technology business which enables a consumer to identify themselves and pay using just their finger.
The company provided an update in respect of its esports portfolio back in December 2020 as well as its investee companies - The Drops Esports Inc and Diemens Esports PTY Ltd.
Since the group’s initial £0.9m investment in six esports opportunities in November 2019, Blue Star has invested around £1.68m across seven companies. It has since invested in Guild Esports PLC, Dynasty eSports Pte Ltd and, most recently, in FORMATION Esports SaaS.
Based on the current valuation of Guild which was admitted to the standard segment of the London Stock Exchange's main market on 2 October 2020, and the higher valuation achieved by Dynasty in its subsequent fund raises, Blue Star's esports portfolio is now valued at £3.71m showing an unrealised gain of £2,035,890 and an increase of approximately 120%.
Tony Fabrizi, CEO of Blue Star commented, "The overall performance from our portfolio approach is showing a significant return in year one. Although today's news from The Drops and Diemens is disappointing, both companies continue to explore opportunities to build their respective businesses. While the overall performance from our portfolio approach is showing a significant return in year one and while the early-stage nature of our esports portfolio will lead to some disappointments, the Board remains highly optimistic regarding the future performance of the Company's overall portfolio."
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