Powerhouse Ventures (ASX:PVL) 1H18 results & outlook


by Rachael Jones

Powerhouse Ventures Limited (ASX:PVL) CEO, Paul Viney, talks 1H18 results, portfolio updates and the company's new model of portfolio management and stakeholder alignment.

Rachael Jones:
Hello I’m Rachael Jones for the Finance News Network. Joining me from Powerhouse Ventures (ASX:PVL) is CEO Paul Viney. Paul welcome to the Network.

Paul Viney: Thank you.

Rachael Jones: So Powerhouse Ventures is a very early investor. Can you give me a brief overview?

Paul Viney: Our investment managers work with our university partners. They walk the corridors of the universities and they find exciting groundbreaking IP, from which we form spinout companies. We build Boards and we recruit CEOs and CTOs to take the companies forward.

Rachael Jones: Now to your 1H18 results. What were the highlights?

Paul Viney: I’m afraid there weren’t any highlights. It was a period where Powerhouse’s performance was impacted by three main things. Firstly CropLogic, Limited (ASX:CLI) an invested company that listed on the Australian Stock Exchange in the period, has had some share price weakness. And that has directly flowed through to Powerhouse’s profit and loss. In addition, we’ve got two other companies that are misbehaving somewhat, and they are Motim Technologies and SolarBright. We’ve made ASX announcements about those companies.

With Motim, Powerhouse has intervened and we’ve found a potential buyer for the company and the IP. That would include employment of all the people. We’re working with the shareholders and the Board of Motim to complete that transaction. So we’re hopeful of some good news in the near future. With SolarBright, unfortunately the founders have removed the IP from the company, and Powerhouse is working with the new Board of SolarBright, to retrieve that IP and hopefully transact. The IP’s valuable and we’re hopeful of retrieving value for the shareholders.

Rachael Jones: Now to your operating model. Can you talk about some recent changes and some early wins?

Paul Viney: In the 100 days since I’ve taken over as Chief Executive, I’ve been working with the Board to review our model. It’s clear that we have to operate a lower cost model, that’s appropriate for an ASX listed company. So we’ve done that, we’ve refined our team. But I’m pleased to say, we’ve also employed three new young graduates from the University of Canterbury. And they’re working with the investment team, but also with me and the portfolio, on great news stories and we’ve got plenty of those. In addition, we have realised that we need to demonstrate to the market that we can make returns. And in the period, we have disposed of a couple of off-model companies at substantial returns, one at a 4X and one at a 10X.

Rachael Jones: What can you tell me about the work you’re doing with CSIRO?

Paul Viney: It’s a large organisation, it’s very interesting and there has been some focus in the press, about the fact that they don’t commercialise enough research. And we’re here to help with that. We’ve been working with the CSIRO in Melbourne and in Sydney. There’s a lot of IP in there and there’s not much being looked at. So Powerhouse can certainly help with this and we think we’ve identified, a number of investments that we’d love to spinout.

Rachael Jones: Now to your Australian expansion work. What can you tell me about the work you’re doing with the universities?

Paul Viney: We’ve already been working with a number of universities for some many months. Our first investment in Ferronova out of Uni SA is going very well. We’re also working and talking to Adelaide University and Flinders University. In addition, Powerhouse is particularly interested in Deakin University. They’ve got a lot of research money being spent currently and they do have a good commercialisation team, and we’d like to work with them.

Rachael Jones: What does Powerhouse offer in exchange?

Paul Viney: Working with universities is not easy. Many venture capital firms try to work with universities, but in so doing they just don’t have the right attitude. Powerhouse is different. We’re patient, we understand and we know for the universities, they want far more than just to spinout a new company and make money. There are different drivers for them and we get it.

Rachael Jones: Last question Paul. What can investors expect in terms of news flow over the next six months?

Paul Viney: Powerhouse is a complex company. It’s an investment house primarily and we have investments in 25 companies, and probably soon, there’ll be 30 or 35. Therefore, it’s complicated. So I’ve taken the stance of employing a graduate comms specialist, to help me to explain new technologies that we’re finding. And you’ll see a lot of news flow about the exciting new companies we’re spinning out.

Rachael Jones: Paul Viney, thanks for the update.

Paul Viney: Thank you.