Chrysalis Investments reports half-year NAV decline and portfolio updates

Chrysalis Investments Limited (LON:CHRY) has announced its Interim Results for the period from 1 October 2025 to 31 March 2026.

Financial Summary

Headlines

– NAV per share of 133.94 pence at 31 March 2026, a decrease of 22.0% over the first half of the financial year (from 171.65p at 30 September 2025).

– The bulk of this movement occurred during the second quarter of the period, with the three months to 31 March 2026 alone accounting for a 31.4 pence (19.0%) decline. 30 March marked the year-to-date low for the NASDAQ and the S&P 500.

– Starling, Klarna and wefox drove the majority of the write-down in the period, with Starling’s carrying value falling 6.6 pence per share, Klarna falling 15.0 pence per share and wefox falling 10.8 pence per share, together accounting for 32.3 pence of the 37.7 pence decline over the period.

– Following the Auditor’s review of the Company’s valuations as at 31 March 2026, an error was identified in the external valuer’s application of the wefox waterfall, being the mechanism used to allocate value to investors. This has resulted in a downward adjustment to the Company’s NAV at that date of 3.33 pence per share compared to that reported on 5 May 2026.

– Starling’s comparable peer group fell c. 20% over the second quarter of the period; given continued operational momentum – including a fourth Engine contract win, with SBS Bank (New Zealand) – this movement was not fully reflected in Starling’s valuation. Following positive regulatory engagement, Starling has continued to see customer and underlying user growth.

– Klarna’s share price declined 63% over the period, reflecting geopolitical tensions, concerns over AI-related disruption, broader macroeconomic uncertainty and a downgrade to its 2026 profit guidance; underlying growth remained strong, with GMV up 33% year-on-year in the first quarter of 2026.

– wefox saw the introduction of a funding-uncertainty discount in the first quarter of the period; following the completion of a funding round in April 2026 this has been unwound, however, a change in valuation methodology at 31 March 2026 means the valuation has fallen further since 31 December 2025.

– Over the period, the Company continued to buy back shares, with 26.6 million shares bought into treasury for an approximate cost of £29.3 million. Since initiating the buyback on 26 September 2024, a total of £117.4 million has been returned to shareholders. As per the announcement on 5 May 2026, the board formally discontinued the share buyback programme on 30 April 2026. Under the new capital allocation policy, future capital returns will be contingent on cash realisations.

– Total liquidity in cash and cash equivalents plus listed assets stood at approximately £72.7 million at 31 March 2026.

Subsequent to period end

– In April 2026, the Company completed a €7 million follow-on investment in wefox as part of a larger funding round, which resulted in a revised waterfall structure, delivering improved economic terms for Chrysalis.

– On 16 June 2026, the Company made a further secondary acquisition of shares in Smart Pension of £8.5 million; this investment enhances the Company’s position in the equity ownership structure.

– On 23 June Starling Group announced that Colin Bell would become the new Chair of the Board of Starling Group Holdings. Sam Dobbyn has also been granted board observer status and Richard Watts has stood down as a director as part of a reshaping of the Board and a reduction in its size.

– On 25 June 2026, the Company agreed the repayment of its Barclays debt facility, comprising £17.2 million of principal and £0.6 million of accrued interest. To facilitate this repayment, the Company realised its remaining holding in Wise plc, generating proceeds of £2.5 million at an average price of £8.42 per share (31 March 2026: £2.7 million at £9.03 per share), and partially realised its investment in Klarna Group plc for proceeds of $8.9 million at a price of $17.73 per share (31 March 2026: $13.09 per share) leaving a residual holding with a value of $75.6 million as at close of trading on 26 June 2026.

Andrew Haining, Chrysalis Investments Chair, commented:

“The decline in NAV per share over the period largely reflects the de-rating of comparable peer groups amid significant equity market volatility, rather than the operational progress of our portfolio companies.

The Board has taken decisive steps to position the Company for the next phase of its life. Following the adoption of an orderly realisation strategy, the Board has confirmed its intention to move to a self-managed model, materially reducing the Company’s ongoing cost base while retaining robust portfolio oversight and the governance and information rights necessary to execute the strategy. The Board remains focused on maximising value for shareholders through the realisation of the portfolio over the next three years.”