The 2022 annual report of OXO Technologies Holding Plc. has been published. According to the report, the investment company has successfully adapted to the radically changed economic and business environment by increasing the value of its funds raised, assets under management and investment portfolio, while ensuring the profitability of its operations. In the meantime, it has been able to prepare itself to operate in the new economic climate on a sustainable basis and to create the conditions for growth for many years to come.
The fact that OXO Technologies Holding Plc’s 2022 stock exchange report shows overall stable management and profitable operations early in its investment period is evidence of a successful portfolio management and diversification strategy. The profit of HUF 263 million also points to positive financial trends in relation to the company’s market capitalisation of almost EUR 16.5 million at the date of the report. The profitable management is due to the successful exits from a carefully built investment portfolio during this period, even as the company has simultaneously taken the necessary write-downs on some of its critical investments and receivables in view of the growing macroeconomic risks.
The range of new investments executed last year mainly concerned profitable investment targets. The investment in Gloster Plc and the buy-out of Inventurio Zrt. totalled around EUR 2 million, both of which show sustainable profit potential and significant value appreciation over the short term. The investment activity will continue to focus on mature target companies with the potential to generate profits in the coming period, as a result of which the company expects to pay regular dividends and management fees from some of its subsidiaries in addition to future exits.
The report also shows that the Company successfully completed its first major exit from its investment portfolio in the first half of the year with the sale of the shares in Gravity R&D Zrt. This transaction provided profitable operations and significant liquidity reserves early in its investment period and also demonstrated that the extent of some of the write-downs that the Company’s investments necessarily incur due to the nature of innovative technology investments dwarfs the value and profit that can be achieved from the continued appreciation of the portfolio and from individual exits.
In the second half of 2022, as a result, the Company has been able to further increase its profitability, which implies that the Group’s ongoing operations, dividend and management fee income from the individual members of the Group, as a result of the strategic investments already successfully made, will cover operating costs alone, so that the future potential profitability of the investment activity could essentially increase shareholder returns in full. In view of the tightening of funding due to the soaring inflation and interest rate environment in the domestic and Central and Eastern European markets, the Company has started to expand its investor network at the beginning of 2022 with international players and at the end of the first half of the year raised a further €2 million in capital, the majority of which came from private investors based in Germany. Subsequently, assessing the needs of new potential markets, the Company started the process of converting its reporting to international IFRS standards and converting its accounting, capital and share trading into euro, which was successfully completed in early 2023. These measures could provide significant additional scope for attracting new potential investors and significantly increasing liquidity and investable funds in the coming period.
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