Interim report January-March 2020

  • Net asset value was SEK 146.7 per share compared to SEK 196.6 at the beginning of the year, which corresponds to a decrease of 25.4 per cent.
  • Bure’s net asset value was SEK 10,117M compared to SEK 13,563M at the beginning of the year.
  • Total return on the Bure share was -25.8 per cent compared to the SIX Return Index which fell 18.2 per cent.
  • Consolidated profit after tax amounted to SEK -3,460M (1,919). Earnings per share amounted to SEK -50.2 (27.8).
  • Bure acquired 0.65 million shares in Cavotec for SEK 11.2M, increasing its holding to 27.8 per cent.

Subsequent events

  • Net asset value amounted to SEK 180.8 per share on 27 April 2020, which corresponds to a decrease of 8.1 per cent since the beginning of the year.
  • In April, Bure acquired 1.2 million shares in Mentice for SEK 51.7M, increasing its holding to 15.1 per cent.

Comments from the CEO

The Covid-19 epidemic threw much of the western world into crisis during the quarter. Many countries shut their borders as well as schools, universities, and workplaces. Large numbers of people were forbidden from going out or were encouraged not to leave their homes. Such measures created a dramatic step-change for financial markets all over the world. Following a strong start to the year in January, with many stocks achieving all-time-high valuations, the SIX RX fell 18 per cent during the quarter.

Bure’s net asset value was also negatively affected during the period as all listed portfolio companies were hit by the fall in the market. Net asset value per share fell 25 per cent to SEK 146.7 per share at the end of March. The decrease in net asset value of some SEK 3.4 billion is entirely due to falls in share prices of listed portfolio companies. It is therefore with some relief that we have seen a recovery in share valuations in April.

In addition to stock market falls, the day-to-day economic consequences of the epidemic are likely to be considerable for many. Lost income and a fixed cost base is a challenging combination. The majority of Bure’s portfolio companies have global market positions and their products typically have a high technological content, which increases the likelihood that potential income losses will be more a case of income delays. Demand for these types of products and services should recover once the spread of the virus has been contained.

Furthermore, Bure has adopted a conservative view of financial risk for many years, which has resulted in portfolio companies being generally well-capitalised.

Initially, drastic measures may be needed to adapt the businesses to the new conditions they face. As owners, it is also important to look ahead. Crises do not last forever. My ambition is that Bure can help the portfolio companies to be proactive, maintain perspective, think long-term, and ensure that this crisis makes them stronger.

Bure Equity AB (publ)