Atom Bank, a component of Schroders (LON:SDR) Capital Global Innovation Trust PLC's portfolio, has successfully garnered GBP100 million in equity capital. The funding was sourced from shareholders BBVA (BME:BBVA), Toscafund, and Infinity Investment Partners to expedite lending and foster balance sheet growth.
Simultaneously, the bank's Alternative Investment Fund Manager (AIFM) is conducting its quarterly revaluation of unlisted assets. As a result of the recent fundraising, Atom Bank's valuation has been adjusted to GBP23.1 million. This marks a decrease of GBP8.6 million from its June 2023 value of GBP31.7 million and will be reflected in the unaudited Net Asset Value (NAV) on today.
Despite the initial negative impact on fair value due to this fundraising, portfolio managers Tim Creed and Harry Raikes view it as a positive indicator of Atom Bank's potential for operational efficiency. They interpret it as a confidence signal in Atom Bank’s progression towards a future liquidity event.
This development comes even as Atom Bank's stock price stands at 15.23 pence, indicating a 1.8% drop over the past year. However, the bank is progressively moving towards a future liquidity event, which Schroders' stake in Atom Bank could benefit from despite its current revaluation to GBP23.1 million.
It's important to note that while the revaluation led to a temporary decrease in Schroders' stake in Atom Bank, Lead Portfolio Manager Tim Creed, and Co-Portfolio Manager Harry Raikes see this as an affirmation of confidence in Atom Bank's expansion strategy.
InvestingPro Insights
InvestingPro's real-time data and tips provide valuable insights into Schroders Capital Global Innovation Trust PLC. The company has a market cap of $7661.74M and a P/E ratio of 14.07, indicating a strong valuation and potential for growth. The adjusted P/E ratio as of Q2 2023 is 10.94, suggesting that the stock might be undervalued.
InvestingPro Tips points to the strong financial health of the company. Schroders has been able to maintain dividends for 32 consecutive years, an impressive feat that signals financial stability. Additionally, the company's liquid assets exceed its short-term obligations, further demonstrating its robust financial health.
InvestingPro Tips also highlights that Schroders yields a high return on invested capital and has raised its dividend for three consecutive years. This is significant as it shows the company's commitment to providing value to its shareholders.
For those seeking more insights, InvestingPro offers a wealth of additional tips and data points on Schroders and other companies. These can provide more comprehensive information to guide investment decisions.
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