Artemis and Schroders cut Reaction Engines stake value in Oxfordshire

Artemis, a London-based fund manager, is set to significantly reduce the value of its 2.3% stake in Reaction Engines, a company focused on hypersonic travel, by approximately 75%. This decision follows a similar move by Schroders Capital Global Innovation Trust, which recently cut its valuation of Reaction Engines from £10.6 million to £1.4 million, bringing the company's total valuation to around £34 million. Despite recent contract awards and a 400% increase in commercial revenues last year, Reaction Engines has faced slower-than-expected revenue growth, prompting the need for further investment to achieve cash positivity. The company, chaired by former defense minister Philip Dunne, specializes in advanced propulsion systems and is developing a new engine designed to reach Mach 25. Reaction Engines has appointed advisers to assist in raising additional funds from both new and existing investors, indicating a proactive approach to securing financial support. The interest in its cooling technology for military aircraft and potential applications in zero-emission commercial flight technologies highlights the company's innovative capabilities. While Artemis and Reaction Engines have declined to comment on the situation, other fund managers, including Baillie Gifford, are closely monitoring the company's valuation. An asset management source expressed confidence in the potential of Reaction Engines' technology, suggesting that a successful fundraising effort could lead to upward revisions in its valuation. The ongoing developments reflect the challenges and opportunities within the aerospace sector, particularly for companies like Reaction Engines that are at the forefront of pioneering technologies. The future of the company will depend on its ability to secure necessary funding and demonstrate the commercial viability of its innovative propulsion systems.