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Tern Shares Plunged 10.5% as Profits Elude the IoT Investment Firm During H1 2021

Updated: 14 Sep 2021

Shares of Tern PLC (LON: TERN) plunged 10.5% after releasing its interim half-year results, where it reported significant progress in its portfolio firm but no profits as yet.

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The investment company achieved significant milestones, including a 75% increase in the turnover generated by its portfolio companies in the six months to 30 June 2021 compared to the 62% turnover increase generated in a similar period last year.

Tern’s portfolio companies also grew their employee count by 14% over the six months compared to the 7% growth recorded in H1 2020. The rise in employee numbers was accompanied by a 53% increase in revenues generated per employee during the period.

The company invested £0.7 million in its portfolio companies during the period under review and had £0.4 million in cash at the end of the reporting period.

Shortly after that, the firm raised £4 million via a fundraising event in July 2021 while at the same time completing the listing of Wyld Networks on NASDAQ’s First North market on 2 July 2021.

Tern noted that its investee Device Authority continued to grow its annual recurring revenues by increasing subscriptions via its KeyScaler platform, which is now available via Microsoft’s Azure marketplace.

Other portfolio companies, including Talking Medicines, FundamentalVR and InVMA, all made significant progress during the review period.

Al Sisto, CEO of Tern Plc, said:

“The increase in aggregate turnover and portfolio headcount growth reflects our portfolio companies customers' belief in and adoption of their products and services. I am also pleased how the team at Tern has been able to help guide our investee companies through this period of market expansion and growth.

Adding:

“The ‘New Normal' presents many unique challenges, but our companies are now experiencing significant repeat business from existing customers through internal referrals.”

Sisto also noted that Tern’s unique approach has helped reduce its aggregate portfolio sales cycles and development costs. For example, the improved revenues per employee were a result of the same strategies.

Tern share price.

IG chart of Tern share price 14-09-2021

Tern shares plunged 10.49% to trade at 17.23p, falling from Monday’s closing price of 19.25p.

Should you invest in Tern shares?

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