Stack Capital Group Inc. Reports Q3-2023 Financial Results

TORONTO, Nov. 02, 2023 (GLOBE NEWSWIRE) -- Stack Capital Group Inc., (“Stack Capital” or the “Company”) (TSX: STCK and STCK.WT) today announced its financial results for the three and nine months ended September 30, 2023. Stack Capital reports all amounts in Canadian Dollars unless otherwise stated.

Company Commentary:

  • As at September 30, 2023, Book Value per Share of the Company was $11.30, compared with $11.17 as at June 30, 2023.
  • The Company’s cash position as at September 30, 2023, was $25.8 million or $2.87 per share.
  • To date, the Company has completed eight investments contributing $8.46 to the Book Value per Share, as at September 30, 2023, into the following:

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

  • The Company announced a normal course issuer bid on November 15, 2022, to buy back its outstanding common shares which it believes to be undervalued. For the nine months ended September 30, 2023, 150,400 common shares were repurchased at a weighted average price of $6.19 per share. Since the initiation of the normal course issuer bid to September 30, 2023, 245,900 shares have been repurchased at an average price of $6.14.

Portfolio Companies - Quarterly Update:

  • Locus Robotics - during the quarter, Locus Robotics surpassed the 2 billion units picked in customer warehouses, coming just 11 months after reaching 1 billion units picked in 2022. The first billion took more than 6 years, therefore, there has been a significant increase in pace between the first and second billion picks. UPS also issued a press release outlining its strengthened network capabilities through automation - highlighting its partnership with Locus Robotics to drive network efficiency and create a safer working environment for employees.
  • Hopper - Hopper has continued to significantly grow with a recent partnership with Air Canada to offer travelers more freedom and flexibility using Hopper’s “Cancel for Any Reason” feature. Hopper also entered into strategic partnerships with Turo for their auto inventory and Hotelbeds and WebBeds, to expand their global hotel inventory by adding 700,000+ hotel properties.
  • SpaceX - during the quarter, SpaceX had a tender offer for secondary shares at a reported valuation of US$150 billion, or $81 per share, which resulted in a fair value increase of $0.4 million for Stack Capital. Starlink, a wholly owned subsidiary of SpaceX, reached over 2 million global subscribers during the quarter as well as signed key contracts with the US Space Force to provide customized satellite communication for the US military and Qatar Airways to offer in-flight WiFi on their fleet. SpaceX also signed a landmark deal with the European Space Agency to launch satellites into orbit.
  • Omio – Stack Capital invested an additional $1 million in Omio, increasing the Company’s overall investment to $10.4 million. Omio has been progressing well with its strategy in both its B2B and B2C business units. In an interview with Skift at the end of September 2023, the CEO of Uber discussed the success of their pilot in the UK saying that 60% of users who have booked a bus or train are repeat customers. Omio also recently introduced a plugin for ChatGPT in their app, allowing travelers to utilize AI to plan seamless travel.
  • Prove Identity – subsequent to the quarter, it was announced that Prove had completed a US$40 million raise led by MassMutual and Capital One Venture to continue their global expansion and continue building its technology to face threats by public and private institutions. This includes innovations like the Prove Pre-Fill® identity verification solution which provides customers with seamless, secure onboarding and authentication processes, driving results such as up to 79% faster onboarding, a 35% reduction in abandonment, and a 75% reduction in fraud (relative to attack rate).

“The continued growth across our portfolio companies is very encouraging,” said Jeff Parks, CEO of Stack Capital. “The management teams of our underlying businesses have demonstrated the ability to not only weather the current economic environment but expand in the face of higher interest rates and inflationary pressures. As 2024 approaches, we’re optimistic that this positive momentum can continue, which bodes well for potential future liquidity events.”

Book Value per Share Summary (Q3-2023)

  • As at September 30, 2023, the Book Value of the Company was $101.7 million, and the Book Value per Share was $11.30. A detailed summary of Book Value per Share is as follows:
Investment – Prove Identity, Inc.1 1.28 
Investment – Hopper, Inc. 1.21 
Investment – Newfront Insurance, Inc. 1.20 
Investment – Locus Robotics, Inc. 1.20 
Investment – SpaceX (FNEX Ventures LLC – Series 103) 1.17 
Investment – Omio, Inc. 1.16 
Investment – Bolt Financial, Inc. 0.91 
Investment – Varo Money, Inc. 0.33 
Other assets and liabilities (0.03)
Book Value per Share$11.30 

1 This includes a deferred gain of $1.1 million for Prove Identity Inc. This was due to an immediate gain in valuation which per IFRS 9 Financial Instruments requires the gain to be deferred and netted against the carrying value.

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.