Transcription of Finance News Network Interview with Powerhouse Ventures Limited (ASX:PVL), Managing Director, Stephen Hampson
Carolyn Herbert: Hello I’m Carolyn Herbert from the Finance News Network and joining me from soon-to-be listed intellectual property commercialisation company, Powerhouse Ventures Limited is Managing Director, Stephen Hampson. Stephen welcome to FNN.
Stephen Hampson: Thank you, pleasure to be here.
Carolyn Herbert: Stephen can you start by giving us an introduction to the company?
Stephen Hampson: Powerhouse Ventures Limited was incorporated to work with the universities to create new companies. New companies that will take world-class research to market and create new businesses, businesses that will be significant in the global marketplace.
Carolyn Herbert: What do you see as the key drivers of the business, and can you tell us a bit more about the Australian IP research market, and why you’re targeting this area?
Stephen Hampson: The early stage intellectual property is quite difficult to commercialise. It’s new technology and works its way into the marketplace, usually in a disruptive way. And that requires patient capital and it’s patient capital that Powerhouse provides. We work with all the universities in New Zealand and that model that we’ve been running for the last six years, we’re bringing to Australia. Obviously Australia has some world-class universities. And we started working with those universities now, to identify compelling intellectual property that we can build businesses around.
Carolyn Herbert: Which sectors does the company’s investment portfolio cover, and can you tell us a little more about your agreements with New Zealand universities?
Stephen Hampson: We cover a broad range of sectors, technology and biotechnology. That includes ICT and digital agritech environmental, medical device and healthcare. We started with cleantech and engineering at the University of Canterbury in Christchurch. And our objective with those universities is to create long-term relationships with Powerhouse, but also long-term relationships with the companies that create.
So those businesses continue to do research, developing new technologies, new innovations, maintaining that competitive advantage that they’ve got in the marketplace. The university benefits from that, because they get more research and of course, it’s a pathway for these students into jobs.
Carolyn Herbert: What’s the growth strategy and why should people invest in Powerhouse?
Stephen Hampson: Our objective is to invest in five to ten new companies each year, all those companies based on university research. So obviously it’s a growing portfolio in terms of its size. But our portfolio currently is growing at 35 per cent per annum. So for those last six years, every year an increase in 35 per cent per annum, which is a significant growth. And it’s that sort of growth rate that we plan to continue in the future and produce those attractive returns to our shareholders.
Carolyn Herbert: Why did you decide to list on the ASX Limited (ASX:ASX)?
Stephen Hampson: The Australian investors have an appetite for technology. And certainly Powerhouse has got a strategy of establishing itself in Australia, and working with the universities here. So the ASX Limited (ASX:ASX) looked like a good fit. As well as that, our portfolio companies are also working their way through to an Australian listing. So this is a good way I guess of forging that path for them.
Carolyn Herbert: Can you provide a snapshot now of the company’s financials, and when do you hope to be cash flow positive?
Stephen Hampson: The company itself, the management company Powerhouse, effectively is incorporated inside the business. So there’re no external management fees that come out. The company runs effectively at breakeven, a small deficit. Our job is to build value in the portfolio company. So the capital we raise through the IPO will be invested in the portfolio and the new companies that we create, in Australia and New Zealand.
Carolyn Herbert: Finally Stephen. What’s the focus for the company for the next 12 months?
Stephen Hampson: In the next 12 months, we’ll have established our first Australian company in the portfolio. So we’ll be looking forward to doing that, and hope to think we’ll achieve that in the next few months. Then our portfolio has a number of companies that are heading towards a listing here in Australia. So I think that’s going to keep us busy for a while.
Carolyn Herbert: Stephen Hampson, good luck with the IPO.
Stephen Hampson: Thank you very much.