REG-Augmentum Fintech Plc: Correction : Half-year Report
24/11/2022 08:45
The announcement earlier this morning omitted details with respect to buybacks
since the year end, being that 195,000 shares have been bought back since
September, at an average price of 89.7p per share, representing an average
discount to the updated NAV after performance fee as at 30 September 2022 of
42.1%. There are no other changes.
24 November 2022
Augmentum Fintech plc
Interim Results for the six months ended 30 September 2022
Augmentum Fintech plc (LSE: AUGM) (the “Company” or “Augmentum”),
Europe’s leading publicly listed fintech fund, announces its unaudited
interim results for the six months ended 30 September 2022.
Financial highlights
• NAV per share after performance fee(1) remained stable at
155.0p (31 March 2022: 155.2p).
• Net Asset Value(2) decreased to £292.1 million (31 March
2022: £295.2 million).
• IRR(3) of 19.3% on invested capital since IPO (31 March 2022:
22.6%).
• Available cash at period end of £57.1 million with no debt.
• Repurchased 1,746,798 shares over the period, at an average
price of 115.8p per share.
Portfolio and investment highlights
• Top 10 holdings growing revenue at an average of +100%(4) year
on year and are cash generative or have an average of 22 months cash runway.
• The Company received proceeds of £42.8 million from the
completion of abrdn’s acquisition of interactive investor (“ii”),
representing an 85% IRR and 11 times gross money-on-money (“MoM”)
multiple.
• Portfolio company highlights:
o Grover, the Company’s largest holding, secured a €270
million asset-backed debt facility and $110 million in equity, to support the
growth of the subscriber base in existing markets and accelerate international
expansion.
o Tide, the Company’s second largest holding, now services one
in 12 UK businesses. Tide continues to grow revenues by over 60% year-on-year
and excluding its investment in growth it is profitable in the UK.
o Zopa, the Company’s third largest holding, now has over
800,000 customers and revenue growth this year is sustained at over 150%, with
the business cash generative for the first time.
• £7.7 million invested into four companies – new investment
Kipp, an Israeli payments company, and three existing portfolio companies,
Previse, Habito and Wayhome (30 September 2021: £44.5 million invested in six
new companies and five existing portfolio companies). An additional £2.7
million was invested into Anyfin post-period end.
• The Company remains highly selective, investing in 0.1% of
opportunities assessed (31 March 2022: 0.4%). Since the start of 2022 the
Company has consciously slowed deployment as the valuation environment has
continued to rerate.
• The current average forward enterprise value to revenue
multiple for the top 10 holdings is 4.2 times (top 10 at 31 March 2022: 5.7
times, excluding ii), which compares favourably to high growth listed fintech
peers.
• The negative impact on valuations from the contraction of
multiples in comparable businesses was largely offset by strong revenue growth
in several of the portfolio companies and an FX benefit from non-sterling
holdings.
Notes:
1. The Board considers NAV per share after performance fee to be the most
appropriate measure of NAV per share attributable to shareholders.
2. Net Asset Value before performance fee.
3. Annualised IRR on invested capital and realisations since inception
using valuations at the last reporting date before performance fee.
4. Revenue growth taken as the first nine months of 2021 vs the first nine
months of 2022. Any outliers (>500%) have been adjusted down to the next
largest growth rate to improve comparability.
Neil England, Chairman of Augmentum Fintech plc commented:
“In the face of significant market volatility and economic uncertainty over
the half year, the NAV per share held firm. The negative impact on valuations
from the contraction of multiples in comparable businesses was largely offset
by strong revenue growth in several of the portfolio companies and an FX
benefit from non-sterling holdings.”
“It is frustrating that our share price has been hit hard by the rotation of
market sentiment, notwithstanding the underlying value and prospects of the
portfolio. With the current economic and market backdrop, it is likely that
sentiment towards the technology sector will remain subdued for some time yet,
but if history is any indicator we should enjoy a significant rerating when
markets recover. The portfolio is well placed to benefit from the increasing
digitisation of financial services, which continues despite stock market
volatility.”
“With our top 10 holdings delivering revenue growth of 100%(4) year on year
and being either cash generative or with an average of 22 months cash runway,
combined with the Company’s £57m cash position at period end, Augmentum
will enter 2023 with a well-positioned portfolio and strong balance sheet. We
remain Europe’s leading publicly listed specialist fintech fund, offering
shareholders access to some of Europe’s most exciting fintech businesses.”
Tim Levene, CEO of Augmentum Fintech Management Limited commented:
“Market uncertainty has been a constant in my recent reports to
shareholders, but so has my view that high quality fintechs will continue to
scale effectively during times of uncertainty. Our bar for investment remains
high, while the consistency, discipline and prudence in our valuation approach
has protected our positions from the price volatility we have seen in public
tech stocks over the past 12 months.”
“Despite the current macroeconomic challenges, we remain very positive about
fintech’s future potential. The industry will continue to eliminate
friction, improve user experiences, broaden access and reduce costs. We are
only part way through the first phase of the story.”
Enquiries:
Augmentum Fintech Tim Levene, Portfolio Manager Georgie Hazell Kivell, Marketing and IR +44 (0)20 3961 5420 georgie@augmentum.vc
Quill PR Press and Media +44 (0)20 7466 5050 press@augmentum.vc
Peel Hunt LLP Liz Yong, Luke Simpson, Huw Jeremy (Investment Banking) +44 (0)20 7418 8900
Singer Capital Markets Harry Gooden, Robert Peel, Alaina Wong (Investment Banking) +44 (0)20 7496 3000
Frostrow Capital LLP Paul Griggs, Company Secretary +44 (0)20 3709 8733
About Augmentum Fintech
Augmentum invests in fast growing fintech businesses that are disrupting the
financial services sector. Augmentum is the UK’s only publicly listed
investment company focusing on the fintech sector in the UK and wider Europe,
having launched on the main market of the London Stock Exchange in 2018,
giving businesses access to patient capital and support, unrestricted by
conventional fund timelines and giving public markets investors access to a
largely privately held investment sector during its main period of growth.
.
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Augmentum Fintech plc
Half Year Report for the six months ended
30 September 2022
.
Chairman’s Statement
Introduction
I am pleased to report on your Group’s progress in the six months to 30
September 2022 and its financial position at that date.
Investment Strategy
Your Company invests in early stage fintech businesses which use technology to
disrupt traditional financial services and/or support the trend to
digitisation. We invest in private companies that offer the prospect of high
growth with scalable opportunities, a policy consistent with our objective to
provide long-term capital growth to shareholders.
Performance and Transactions
In the face of significant market volatility and economic uncertainty,
although there were movements in the valuations of individual portfolio
companies, the net asset value (“NAV”) per share after performance fee
held firm over the half year, declining by just 0.2p to 155.0p (the Board
considers the NAV per share after performance fee to be the most appropriate
metric of NAV to best reflect the value of each share). The negative impact on
valuations from the contraction of multiples in comparable businesses was
largely offset by strong revenue growth in several of the portfolio companies
and an FX benefit from non-sterling holdings. However, due to market sentiment
unrelated to investment performance, the price at which the shares traded was
disappointing, ending the period at 92p per share, representing a 30.8%
reduction from the price at 31 March 2022.
During the period under review the Company received proceeds of £42.8 million
from the completion of abrdn’s acquisition of interactive investor
(“ii”), made a new investment of £4.0 million in Israeli fintech Kipp,
and made follow-on investments to support Previse (£2.0 million), Habito
(£0.7 million) and Wayhome (£0.2 million). Following these transactions and
as at the period end, the Company held cash of £57.1 million.
The Portfolio Manager’s report, beginning on page 8, includes a detailed
review of the portfolio and investment transactions in the period.
Valuations
Together with our advisers, we carefully review both the status and the
forecasts of all of the portfolio companies for the purpose of valuing the
portfolio at the year end and half year. We use appropriate methodologies to
determine the value of each investment and sense check our conclusions. The
outcome of this is reflected in the valuations in this report. In addition to
the growth of portfolio companies supporting those valuations that have
increased, we also benefit from occupying a senior position in the capital
structures of a number of them, providing a level of protection against
downside risk. These protections mean the overall valuation is somewhat
sheltered from market sentiment, although it is appropriately factored in
where relevant by reference to the comparables used. During this period the
valuations of those holdings not denominated in sterling, or with overseas
operations, (approximately 40% of the portfolio by value) benefitted from
sterling’s weakness.
Portfolio Management
Our investment team continues to evaluate a wide range of opportunities,
reviewing and challenging financial and commercial metrics in order to
identify those most likely to offer strong and sustainable returns. We avoided
paying inflated multiples when the market was buoyant, even though that meant
doing very few deals during this period. Shareholders will be aware from
previous reports that we have been careful not to invest at inflated
valuations, so the inevitable correction in revenue multiples has had a
correspondingly more modest effect on the NAV per share. The current average
forward revenue multiple for the top 10 investments in the portfolio is 4.2
times (top 10 at 31 March 2022: 5.7 times, excluding ii), which compares
favourably to high growth listed fintech peers.
We are active investors with a team that works closely with the companies we
invest in, typically taking either a board or an observer seat and working
with management to guide strategy consistent with long-term value creation. We
have built a balanced portfolio across different fintech sectors and maturity
stages and are committed to a responsible and sustainable investment approach.
Discount Control
Your shares continued to trade at a discount to NAV for the period under
review and up to the date of this report. This is in sharp contrast with the
situation that pertained for a prolonged period up to January 2022, during
which the shares traded at a substantial premium. For much of this time we
enjoyed one of the highest premiums of all London-listed closed-ended funds,
reflecting interest in the opportunity that the emerging fintech sector offers
and, specifically, the quality of the diverse portfolio that we have built.
It is frustrating that our share price has been hit hard by the rotation of
market sentiment, notwithstanding the underlying value and prospects of the
portfolio. To take advantage of the wide discount to the benefit of our
shareholders, we have continued a modest programme of accretive buybacks in
the period under review and since, seeking to convey to the market the
Board’s confidence in the value of the portfolio. Directors and others
associated with the Company have also purchased shares, both in the period
under review and since. All shares purchased by the Company are being held in
treasury and will potentially be reissued when the share price returns to a
premium.
1,746,798 shares were bought back into treasury during the six months to 30
September 2022, at an average price of 115.8p per share, representing an
average discount to the 31 March 2022 NAV after performance fee of 25.4%. A
further 195,000 shares have been bought back since September, at an average
price of 89.7p per share, representing an average discount to the updated NAV
after performance fee as at 30 September 2022 of 42.1%.
Outlook
With the current economic and market backdrop, it is likely that sentiment
towards the technology sector will remain subdued for some time yet, but if
history is any indicator we should enjoy a significant rerating when markets
recover. The portfolio is well placed to benefit from the increasing
digitisation of financial services, which continues despite stock market
volatility. We remain the Europe’s only listed specialist fintech fund,
offering shareholders access to some of Europe’s most exciting fintech
businesses.
Your Board believes the fintech market offers a substantial opportunity for
further growth as technology and business models deployed are now becoming the
de facto operating standard across the financial services industry. It is
already fast growing but the level of penetration into traditional financial
services is still very low in most cases. We remain confident that the
long-term investor will be well rewarded.
Neil England
Chairman
23 November 2022
.
Investment Objective and Policy
Investment objective
The Company’s investment objective is to generate capital growth over the
long term through investment in a focused portfolio of fast growing and/or
high potential private financial services technology (“fintech”)
businesses based predominantly in the UK and wider Europe.
Investment policy
In order to achieve its investment objective, the Company invests in early or
later stage investments in unquoted fintech businesses. The Company intends to
realise value through exiting these investments over time.
The Company seeks exposure to early stage businesses which are high growth,
with scalable opportunities, and have disruptive technologies in the banking,
insurance and wealth and asset management sectors as well as those that
provide services to underpin the financial sector and other cross-industry
propositions.
Investments are expected to be mainly in the form of equity and equity-related
instruments issued by portfolio companies, although investments may be made by
way of convertible debt instruments. The Company intends to invest in unquoted
companies and will ensure that the Company has suitable investor protection
rights where appropriate. The Company may also invest in partnerships, limited
liability partnerships and other legal forms of entity. The Company will not
invest in publicly traded companies. However, portfolio companies may seek
initial public offerings from time to time, in which case the Company may
continue to hold such investments without restriction.
The Company may acquire investments directly or by way of holdings in special
purpose vehicles or intermediate holding entities (such as the Partnership*).
The Management Team has historically taken a board or board observer position
on investee companies and, where in the best interests of the Company, will do
so in relation to future investee companies.
The Company’s portfolio is expected to be diversified across a number of
geographical areas predominantly within the UK and wider Europe, and the
Company will at all times invest and manage the portfolio in a manner
consistent with spreading investment risk.
The Management Team will actively manage the portfolio to maximise returns,
including helping to scale the team, refining and driving key performance
indicators, stimulating growth, and positively influencing future financing
and exits.
Investment restrictions
The Company will invest and manage its assets with the object of spreading
risk through the following investment restrictions:
• the value of no single investment (including related investments in
group entities or related parties) will represent more than 15 per cent. of
NAV;
• the aggregate value of seed stage investments will represent no more
than 1 per cent. of NAV; and
• at least 80 per cent. of NAV will be invested in businesses which
are headquartered in or have their main centre of business in the UK or wider
Europe.
In addition, the Company will itself not invest more than 15 per cent. of its
gross assets in other investment companies or investment trusts which are
listed on the Official List of the FCA.
Each of the restrictions above will be calculated at the time of investment
and disregard the effect of the receipt of rights, bonuses, benefits in the
nature of capital or by reason of any other action affecting every holder of
that investment. The Company will not be required to dispose of any investment
or to rebalance the portfolio as a result of a change in the respective
valuations of its assets.
Hedging and derivatives
Save for investments made using equity-related instruments as described above,
the Company will not employ derivatives of any kind for investment purposes.
Derivatives may be used for currency hedging purposes.
Borrowing policy
The Company may, from time to time, use borrowings to manage its working
capital requirements but shall not borrow for investment purposes. Borrowings
will not exceed 10 per cent. of the Company’s NAV, calculated at the time of
borrowing.
Cash management
The Company may hold cash on deposit and may invest in cash equivalent
investments, which may include short-term investments in money market type
funds and tradeable debt securities.
There is no restriction on the amount of cash or cash equivalent investments
that the Company may hold or where it is held. The Board has agreed prudent
cash management guidelines with the AIFM and the Portfolio Manager to ensure
an appropriate risk/return profile is maintained. Cash and cash equivalents
are held with approved counterparties.
It is expected that the Company will hold between 5 and 15 per cent. of its
Gross Assets in cash or cash equivalent investments, for the purpose of making
follow-on investments in accordance with the Company’s investment policy and
to manage the working capital requirements of the Company.
Changes to the investment policy
No material change will be made to the investment policy without the approval
of Shareholders by ordinary resolution. Non-material changes to the investment
policy may be approved by the Board. In the event of a breach of the
investment policy set out above or the investment and gearing restrictions set
out therein, the Management Team shall inform the AIFM and the Board upon
becoming aware of the same and if the AIFM and/or the Board considers the
breach to be material, notification will be made to a Regulatory Information
Service.
* Please refer to the Glossary on page 41
.
Portfolio
as at 30 September 2022
Fair value of Net Impact of FX rate changes Investment Fair value of % of
holding at investments/ £’000 return holding at portfolio
31 March (realisations) £’000 30 September
2022 £’000 2022
£’000 £’000
Grover 42,415 - 1,763 (448) 43,730 18.7%
Tide 28,221 - - (414) 27,807 11.9%
Zopa^ 25,577 - - 476 26,053 11.1%
Cushon 13,584 - - 1,974) 15,558 6.7%
Onfido 15,393 - 2,019 (2,692) 14,720 6.3%
Monese 13,225 - - 79 13,304 5.7%
Gemini† 10,508 - 1,858 - 12,366 5.3%
Intellis 4,003 - 359 4,544 8,906 3.8%
BullionVault^ 10,023 - - (1,280) 8,743 3.7%
AnyFin 9,870 - 324 (2,165) 8,029 3.4%
Top 10 Investments 172,819 - 6,323 74 179,216 76.6%
interactive investor 42,797 (42,797) - - - -
Other Investments* 53,191 6,237 2,614 (7,514) 54,528 23.4%
Total Investments 268,807 (36,560) 8,937 (7,440) 233,744 100.0%
Excludes cash held in the Company of £57.1 million.
^ Held via Augmentum I LP
† Held through Augmentum Gemini Ltd
* There are 14 other investments (31 March 2022: 14) held in the
portfolio. See page 19 for further details.
.
Portfolio Manager’s Review
Overview
Market uncertainty has been a constant in my recent reports to shareholders,
but so has my view that good quality fintechs will continue to do well even
during times of uncertainty. This has been particularly true of this reporting
period given the political instability and economic aftermath of the pandemic.
Few asset classes have escaped impact from this over the last six months, but
the technology sector has been particularly badly hit.
Within these major public market valuation shifts there has been a clear
flight to quality. Investors have regrouped around businesses that display
strong fundamentals and eschewed those whose high-burn, growth-at-all-cost,
strategies are incompatible with current conditions.
The same patterns are reflected in private markets. Overall investment
activity is significantly below 2021 levels, magnified by the reduction in
‘tourist capital’ that flooded the sector in 2020 and 2021. High-quality
companies continue to attract capital, albeit at more palatable valuations.
Patterns of investment have also changed, with more companies deciding to
raise capital with existing investors to extend their runways rather than
embrace the challenges of the external market. In general there has been a
shift towards early stage investment activity, reflecting both the
acceleration of innovation in times of uncertainty and the cooling of later
stage and pre-IPO valuation multiples. As a result, the forward pipeline of
compelling investment prospects in the fintech sector remains resilient.
Growing momentum in the digital transformation of the financial services
sector and the huge scale of the opportunity ahead remains a defining feature
of fintech. A drive to modernisation continues across an industry that still
predominantly relies on a legacy technology backbone. The near-term trading
environment will benefit some fintech models and challenge others, but we
continue to believe that a diversified portfolio offers investors optimal
exposure to the fintech opportunity over the longer term.
With levels of venture capital ‘dry powder’ (funds committed but not yet
deployed) for European venture opportunities still at elevated levels,
competition for the best fintech opportunities remains high. Our clear sector
focus and permanent capital model continues to resonate with founding teams
and distinguishes us from our peers. We continue to execute with a thesis
driven approach, valuation discipline and active engagement with portfolio
companies in order to maximise long-term outcomes for the Company’s
investors.
Investments
The additional amount invested during the period was £7.7 million, down from
£34.0 million in the same period last year, reflective of market conditions.
Following our disciplined approach, within the reporting period we made a
single new investment in Israel based payments innovator Kipp. We continued to
be active in supporting portfolio companies and participated in follow-on
funding rounds in Previse, Habito and Wayhome.
New Investments
Kipp, increases our portfolio exposure to payments, one of the largest and
most mature verticals in fintech. Based in Tel Aviv and working with global
merchants and issuing banks, Kipp’s innovative platform enables merchants to
achieve higher transaction acceptance rates without increasing transaction
risk. Augmentum invested £4.0 million into Kipp in May.
The Existing Portfolio
The companies in the portfolio continue to adjust to the current market
conditions with a tight focus on cost control. We continue to use our
extensive experience as operators to guide portfolio companies through these
challenging times. The stability of the NAV per share reflects the diversified
portfolio. The decrease in public market comparables that we use in our
valuations have broadly been compensated by the growth in the companies that
we apply them to. The majority of the companies in the portfolio are
sufficiently funded to navigate the next 18 months. Where core portfolio
companies do seek new capital in the months ahead we believe the strong
fundamentals that were key to our investment decision will position them as
beneficiaries in the flight to quality.
We continue to support the portfolio with follow-on investments. Previse,
which operates in the embedded lending and payments space, completed a £14.5
million Series B investment round led by the investment arm of Tencent.
Augmentum invested £2.0 million in the round alongside existing Singapore
based investor Reefknot. Habito, the UK’s leading digital mortgage broker,
underwent a restructuring process as the business refocuses around its core
product set and user group. Augmentum invested £0.7 million in this process
and now holds a significant equity stake as a result of the recapitalisation.
We also continued to support Wayhome, which launched its gradual homeownership
product earlier this year. Wayhome offers an alternative to mortgage financing
and have found strong early traction in the UK market. Their solution becomes
relevant to an even wider audience in a raised interest rate environment.
Post-period end we invested a further £2.7 million into Anyfin, which
continues to make strong progress as the leading European player in consumer
credit refinancing, a counter-cyclical product. Anyfin is approaching
profitability in their home market of Sweden and growing quickly with strong
unit economics in Germany.
Grover is now the portfolio’s largest holding and continues to deliver
strong growth. Adoption of the company’s electronics rental platform is
driven by a secular trend towards utilisation over ownership. It has expanded
from its core market in Germany and has now been operating in the US for over
a year with growth during this period exceeding forecast.
It has strengthened its B2B offering, which now represents 15% of the
company’s global business, with new senior hires and the launch of its
online hardware asset management platform. The company considerably
strengthened its balance sheet during the period with a new fully committed
€270 million asset backed debt facility from M&G. This, together with the
equity round which first closed in March 2022 at $110 million, with subsequent
additions during the period, positions the company strongly for profitable
growth.
One in 12 UK businesses now bank with portfolio company Tide. The company
continues to grow revenues by over 60% year-on-year, maintaining payments
growth whilst diversifying its income base across a range of increasingly
non-payment related revenue areas alongside a favourable interest rate
environment. Excluding its investment in growth, Tide is profitable in the UK,
while India provides a growing operational base for the company’s
development team and is expected to scale rapidly as a second market.
Zopa is expected to continue to exploit the advantage it now has with its
banking licence, enabling it to perform liquidity transformation across a
range of consumer loans and access funds at a lower cost of capital. With over
800,000 customers, revenue growth this year is sustained at over 150%, with
the business now cash generative for the first time. The company is well
positioned to strengthen its balance sheet and benefit from multiple embedded
opportunities in the retail environment.
Onfido has faced a more challenging 2022 than 2021, but there are encouraging
signs as the digital identity verification business continues to diversify its
offering. It continues to grow, albeit at a slower pace than 2021, as a result
of the contraction in the crypto market and increased competition.
Nevertheless, there are strong signs for next year. Onfido has rolled out its
demand engine and diversified into larger identity orchestration, growing the
size of its addressable market significantly.
Cushon is well positioned in the workplace savings and pensions market with
500,000 customers and assets under management of around £1.6 billion.
Cushon’s leading app-first proposition focused on employee financial
wellbeing and Net Zero pensions has found strong cut-through and gives it a
solid foundation for continued growth. Following three successful acquisitions
of pension master trusts Cushon is positioned as the consolidator of choice
and regulatory tail winds remain broadly beneficial to the company’s
mission.
Other notable performers in the portfolio include Intellis, who’s AI trading
algorithms have delivered strong and consistent performance in the foreign
exchange market through the volatility of 2022. Intellis takes a conviction
based assessment towards trading in the foreign exchange markets, a position
uncorrelated to traditional news driven trading firms. They have established a
firm base of operations during the year and a regulated fund structure that
will enable them to onboard new liquidity partners seamlessly.
In the payments space, Volt, which provides account-to-account payments
technology to international merchants and payment service providers has
consistently grown at a double digit monthly rate since its Series A raise in
June 2021. Their aggregator approach to the payments space has found rapid
traction with a range of businesses generally taking larger than average cash
deposits.
We support innovation in financial services and the adoption of new
technologies, but we believe strongly that true progress can only ultimately
be made within a clear and robust regulatory framework. Recent events within
the digital asset sector exemplify why this is the case, although it is
important to separate the alleged malpractice of bad actors from the
fundamental disruptive potential of blockchain technology. Our investments in
the digital asset sector represented circa 7% of NAV at 30 September 2022. The
downside protection we have on our investment in Gemini has seen its value
hold firm, whereas our investments in Tesseract and Parafi have been revalued
downwards to reflect the trend within the sector over the period.
Exits
At the beginning of the period the portfolio saw its second significant exit
with abrdn agreeing the acquisition of interactive investor for £1.49
billion. interactive investor was an early investment in the Augmentum
portfolio, quite antithetical to most venture capital radars at the point of
investment. Under strong leadership and disciplined focus the company grew
rapidly to be the clear number two self-directed investment platform in the UK
with £55 billion of customer assets under administration. The transaction
returned £42.8 million to the Company in May 2022 delivering an 85% IRR and
11 times gross money-on-money (“MoM”) multiple.
Performance
For the 6 months to 30 September 2022, we are reporting a stable NAV per share
after performance fee of 155.0p (31 March 2022: 155.2p). Since IPO the capital
that the Company has deployed has generated an IRR of 19.3%.
Our approach to valuations continues to be a core focus of our team and the
Board. We value each position on an individual basis, selecting the
methodology (or methodologies) most appropriate to the company’s stage and
circumstances. Consistency and prudence in our approach have protected our
positions from the valuation swings seen in public tech stocks. Where we
report valuation increases these are supported by growth in the underlying
company.
The downside protection structures we negotiate in our investments also play a
role in the stability of our valuations, particularly in our earlier-stage
positions. In contrast to the uniform valuation treatment of ordinary shares
in publicly traded companies, the value of the preferred shares we hold in a
large number of our positions are protected in the eventuality that a
company’s headline valuation is reduced. The most common downside
protections across our portfolio are liquidation preference and anti-dilution
provisions; 20 out of 24 of our investments have at least one of these.
Our four exits to date provide an opportunity for external validation of our
approach to valuations. In each of the four secured to date, the exit has been
realised at either a premium to, or on par with, our last reported valuation.
Outlook
Augmentum Fintech plc will enter 2023 with a strong balance sheet, with £57.1
million of free cash as at 30 September 2022 and no debt. As I mentioned at
the start of this report, our bar for investment remains extremely high;
against the backdrop of continued market uncertainty in the last six months
our historical conversion rate for new investments of 0.4% has reduced further
to 0.1% of companies we look at.
Our key portfolio companies are addressing significant, enduring market
opportunities, and performing well, on average growing at over 100% in the
first 9 months of this year.
Diversification is a critical strength in both the short term, where market
conditions favour some models over others, and long term for maximising
investor exposure to the sector. We believe our portfolio companies are well
placed. We are also seeing a significant positive shift in the availability of
talent due to the slowing growth of big tech companies such as Google, Meta
and Apple.
Looking ahead we continue to see significant potential in optimisation of the
payments technology stack, digitisation of the CFO office and emerging
insurance categories such as cyber-insurance, in particular.
We are building strong relationships with companies operating in our areas of
high conviction well ahead of investment, giving us an ability to track their
performance over time and be well positioned to proceed if the right
opportunity presents itself. Our brand is now established within the fintech
community.
We have welcomed the reset in private fintech valuations and where we do make
investments, we will do so with full conviction in the proposition and ongoing
discipline on valuation, alongside our standard downside protection
structure.
Consolidation is an increasingly important dynamic in the market as valuations
have corrected. Notable momentum is building from strategic acquirers,
particularly incumbent banks. Our mature portfolio companies may also have
opportunities to capitalise on this.
Despite the macroeconomic challenges, we are very positive about fintech’s
future potential. The industry will continue to eliminate friction, improve
user experiences, broaden access and reduce costs. We are only part way
through the first phase of the story.
Tim Levene
CEO
Augmentum Fintech Management Limited
23 November 2022
.
Investments
Grover
Berlin-based Grover (www.grover.com) is the leading consumer-tech subscription
platform, bringing the access economy to the consumer electronics market by
offering a simple, monthly subscription model for technology products. Private
and business customers have access to over 3,000 products including
smartphones, laptops, virtual reality technology, wearables and smart home
appliances. The Grover service allows users to keep, switch, buy, or return
products depending on their individual needs. Rentals are available in
Germany, Austria, the Netherlands, Spain and the US. Grover is a pioneer in
the advancement of the circular economy, with products being returned,
refurbished and recirculated until the end of their usable life.
In September 2019 Augmentum led an €11 million funding round with a €6
million convertible loan note (“CLN”) investment. This coincided with
Grover signing a new €30 million debt facility with Varengold Bank, one of
Germany’s major fintech banking partners. In March 2021 Grover completed a
€60 million Series B funding round, with Augmentum participating and
converting its CLN. The round was made up of €45 million from equity
investors and €15 million in venture debt financing. With its Series C
funding round in April 2022 Grover raised US$330 million in equity and debt
funding, bringing the company’s valuation to over US$1 billion.
Source: Grover
30 Sept 31 March
2022 2022
£’000 £’000
Cost 7,927 7,927
Value 43,730 42,415
% ownership (fully diluted) 6.4% 8.3%
Valuation Methodology^ Rev. Multiple CPORT
As an unquoted German company, Grover is not required to publicly file audited
accounts.
^see note 7 on pages 30 and 31.
Tide
Tide’s mission is to help SMEs save time and money in the running of their
businesses. Customers are set up with an account number and sort code in as
little as 5 minutes, and the company is building a comprehensive suite of
digital banking services for businesses, including automated accounting,
instant access to credit, card control and quick, mobile invoicing. Tide
provides business current accounts and smart financial administration services
to over 350,000 small-business owners through their mobile-first platform.
In September 2019 Augmentum led Tide’s £44.1m first round of Series B
funding, alongside Japanese investment firm The SBI Group. Tide appointed Sir
Donald Brydon as its first independent Non-Executive Chair in September 2020;
Sir Donald brings extensive experience to the Board, previously chairing the
London Stock Exchange, the Royal Mail and Sage. In the same month Tide also
won a second major BCR grant in partnership with ClearBank.
Source: Tide
30 Sept 31 March
2022 2022
£’000 £’000
Cost 13,200 13,200
Value 27,807 28,221
% ownership (fully diluted) 5.4% 5.4%
Valuation Methodology^ Rev. Multiple Rev. Multiple
As per last filed audited accounts of the investee company for the year to 31
December 2020 (2021 accounts are expected to be filed shortly):
2020 2019
£’000 £’000
Turnover 14,442 4,860
Pre tax loss (23,208) (20,821)
Net assets 17,761 26,021
Zopa
Zopa (www.zopa.com) was founded in 2005 as the world’s first peer-to peer
(P2P) lending company, aiming to give people access to simpler, better-value
loans and investments. Following a funding round in 2020 Zopa launched Zopa
Bank and was granted a full UK banking licence, which allowed it to offer a
wider product range. It is regulated by both the PRA and the FCA.
After 16 years of delivering positive returns for investors, Zopa closed the
P2P lending side of its business in 2021 to fully focus on Zopa Bank.
Current products include fixed term and smart savings, wedding and home
improvement loans, debt consolidation loans, a credit card and motor finance.
Zopa is a multiple awards winner. In 2021 Zopa was awarded Best Personal Loan
Provider and Best Credit Card Provider by the British Bank Awards, Best Online
Savings Provider by Moneynet Personal Finance, Best use of IT in Consumer
Finance in the FStech Awards and won the Personal Credit Cards Innovation
award in the Finder Lending Innovation Awards. In 2022 it has won Best Short
Term Fixed Rate Bond Provider, Best Fixed Rate Bond Provider and Best New
Savings Provider in the Savings Champion Awards and been awarded Banking Brand
of the Year 2022 in the MoneyNet Awards 2022.
Augmentum participated in a £20m funding round led by Silverstripe in March
2021 and in October participated with a further £10 million investment in a
£220 million round led by SoftBank.
Source: Zopa
30 Sept 31 March
2022 2022
£’000 £’000
Cost 29,670 29,670
Value 26,053 25,577
% ownership (fully diluted) 3.3% 3.3%
Valuation Methodology Rev. Multiple CPORT
As per last filed audited accounts of the investee company for the year to 31
December 2021:
2021 2020
£’000 £’000
Operating income 60,501 21,171
Pre tax loss (41,599) (41,479)
Net assets 270,512 134,074
Cushon
Cushon (www.cushon.co.uk) provides workplace pensions and payroll-linked ISAs
to more than 200,000 members across 8,000 UK employers. Cushon has overall
assets under management of £740 million and is authorised by The Pensions
Regulator to operate a master trust pension scheme. In January 2021, Cushon
became the first UK pension provider to launch a fully carbon neutral ‘Net
Zero Now’ pension product. In April 2022 it finalised the acquisition of
Creative Benefits, manager of Creative Pension Trust, making it the fifth
largest master trust pension provider in the UK and doubling its assets under
management to £1.7 billion.
Augmentum invested £5 million in Cushon in June 2021 and followed up with a
further £5 million in March 2022.
Source: Cushon
30 Sept 31 March
2022 2022
£’000 £’000
Cost 10,000 10,000
Value 15,558 13,584
% ownership (fully diluted) 13.9% 13.9%
Valuation Methodology AUM Multiple CPORT
As per last filed audited accounts of the investee company for the year to 31
March 2021:
2021 2020
£’000 £’000
Turnover 1,632 2
Pre tax loss (3,742) (2,036)
Net assets 5,407 1,699
Onfido
Onfido (www.onfido.com) is building the new identity standard for the
internet. Its AI-based technology assesses whether a user’s
government-issued ID is genuine or fraudulent, and then compares it against
their facial biometrics. Using computer vision and a number of other AI
technologies, Onfido can verify against 4,500 different types of identity
documents across 195 countries, using techniques like “facial
liveness’’ to see patterns invisible to the human eye.
Onfido was founded in 2012 and has offices in London, San Francisco, New York,
Lisbon, Paris, Amsterdam, New Delhi and Singapore and helps over 800
companies, including industry leaders such as Revolut, bung and Bitstamp.
These customers are choosing Onfido over others because of its ability to
scale, speed in on-boarding new customers (15 seconds for flash verification),
preventing fraud, and its advanced biometric technology.
In October 2021 the company announced its acquisition of biometric innovator,
EYN, and in November 2021 its partnership with Italian bank Banca Profilo via
fintech partner Tinaba.
Augmentum invested an additional £3.7 million in a convertible loan note in
December 2019 as part of a £4.7 million round. This converted into equity
when Onfido raised an additional £64.7 million in April 2020.
Source: Onfido
30 Sept 31 March
2022 2022
£’000 £’000
Cost 7,750 7,750
Value 14,720 15,393
% ownership (fully diluted) 2.3% 2.3%
Valuation Methodology Rev. Multiple Rev. Multiple
As per last filed audited accounts of the investee company for the 13 months
to 31 January 2022:
2022 2020
£’000 £’000
Turnover 94,513 45,408
Pre tax loss (44,980) (34,712)
Net assets 39,221 68,508
Monese
With Monese (www.monese.com) you can open a UK or European current account in
minutes from your mobile, with a photo ID and a video selfie. Their core
customers are amongst the hundreds of millions of people who live some part of
their life in another country - whether it’s for travel, work, business,
study, family, or retirement.
With its mobile-only dual UK and Euro IBAN current account, its portability
across 31 countries, and both the app and its customer service available in 14
languages, Monese allows people and businesses to bank like a local across the
UK and Europe. Launched in 2015 Monese has more than 2 million registered
users. 70% of incoming funds are from salary payments, indicating that
customers are using Monese as their primary account. In October 2020
Mastercard and Monese announced a multi-year strategic partnership, with
Monese becoming a principal Mastercard issuer. Monese’s new Banking as a
Service (“BaaS”) platform, which arrived following deals by Monese with
Mastercard and core banking provider Thought Machine, will be used by Investec
for its private client transactional banking service and in the launch of a
new business current account offering for private companies. Over time,
Investec also expects BaaS will allow the bank to consolidate its retail
savings products. In December 2021 the company expanded its credit and lending
capabilities through the acquisition of financial services provider Trezeo.
Augmentum is invested alongside Kinnevik, PayPal and International Airlines
Group.
Source: Monese
30 Sept 31 March
2021 2021
£’000 £’000
Cost 11,428 11,428
Value 13,304 13,225
% ownership (fully diluted)* 7.5% 7.5%
Valuation Methodology CPORT CPORT
* 31 March 2022: £0.9m of investment in a convertible loan note.
As per last filed audited accounts of the investee company for the year to 31
December 2020 (2021 accounts are expected to be filed shortly):
2020 2019
£’000 £’000
Turnover 16,282 10,273
Pre tax loss (41,599) (38,061)
Net liabilities (18,044) (17,398)
Gemini
Gemini (www.gemini.com) enables individuals and institutions to safely and
securely buy, sell and store cryptocurrencies. Gemini was founded in 2014 by
Cameron and Tyler Winklevoss and has been built with a security and regulation
first approach. Gemini operates as a New York trust company regulated by the
New York State Department of Financial Services (NYSDFS) and was the first
cryptocurrency exchange and custodian to secure SOC 1 Type 2 and SOC 2 Type 2
certification. Gemini entered the UK market in 2020 with an FCA Electronic
Money Institution licence and is one of only ten companies to have achieved
FCA Cryptoasset Firm Registration.
Gemini announced acquisitions of portfolio management services company BITRIA
and trading platform Omniex in January 2022.
Augmentum participated in Gemini’s first ever funding round in November 2021
with an investment of £10.2 million. This investment has benefitted from
being US dollar denominated.
Source: Gemini
30 Sept 31 March
2022 2022
£’000 £’000
Cost 10,150 10,150
Value 12,366 10,508
% ownership (fully diluted) 0.2% 0.2%
Valuation Methodology Rev. Multiple* CPORT
* Valuation supported by senior position in capital structure.
As an unquoted US company, Gemini is not required to publicly file audited
accounts.
Intellis
Intellis, based in Switzerland, is an algorithmic powered quantitative hedge
fund operating in the FX space. Intellis’ proprietary approach takes a
conviction based assessment towards trading in the FX markets, a position
which is uncorrelated to traditional news driven trading firms. They operate
across a range of trading venues with a regulated Investment Trust fund
structure that enables seamless onboarding of new Liquidity Partners.
Augmentum exercised its option to invest a further €1 million in March 2020
and a further €1 million in March 2021.
Source: Intellis
30 Sept 31 March
2022 2022
£’000 £’000
Cost 2,696 2,696
Value 8,906 4,003
% ownership (fully diluted) 23.8% 23.8%
Valuation Methodology P/E Multiple CPORT
As an unquoted Swiss company, Intellis is not required to publicly file
audited accounts.
.
BullionVault
BullionVault (www.bullionvault.co.uk) is a physical gold and silver market for
private investors online. It enables people across 175 countries to buy and
sell professional-grade bullion at the very best prices online, with US$3.8
billion of assets under administration, over US$100 million worth of gold and
silver traded monthly, and over 100,000 clients.
Each user’s property is stored at an unbeaten low cost in secure, specialist
vaults in London, New York, Toronto, Singapore and Zurich. BullionVault’s
unique daily audit then proves the full allocation of client property every
day.
The company generates solid monthly profits from trading, commission and
interest. It is cash generative, dividend paying, and well-placed for any
cracks in the wider financial markets.
Source: BullionVault
30 Sept 31 March
2022 2022
£’000 £’000
Cost 8,424 8,424
Value 8,743 10,023
% ownership (fully diluted) 11.1% 11.1%
Dividends paid - 520
Valuation Methodology EBITDA Multiple CPORT
As per last filed audited accounts of the investee company for the year to 31
October 2021:
2021 2020
£’000 £’000
Turnover 12,086 15,707
Pre tax profits 7,741 10,703
Net assets 39,148 34,851
AnyFin
Anyfin (www.anyfin.com) was founded in 2017 by former executives of Klarna,
Spotify and iZettle, and leverages technology to allow creditworthy consumers
the opportunity to improve their financial wellbeing by consolidating and
refinancing existing credit agreements with improved interest rates, as well
as offering smart budgeting tools. Anyfin is currently available in Sweden,
Finland and Germany.
Augmentum invested £7.2 million in Anyfin in September 2021 as part of a $52
million funding round.
Source: AnyFin
30 Sept 31 March
2022 2022
£’000 £’000
Cost 7,248 7,248
Value 8,029 9,870
% ownership (fully diluted) 2.7% 2.7%
Valuation Methodology CPORT Rev. Multiple
As an unquoted Swedish company, Anyfin is not required to publicly file
audited accounts.
OTHER INVESTMENTS
Farewill
In the next 10 years, £1 trillion of inheritance will pass between
generations in the UK. Farewill (www.farewill.com) is a digital, all-in-one
financial and legal services platform for dealing with death and after-death
services, including wills, probate and cremation. In 2021 Farewill won
National Will Writing Firm of the Year for the third year in a row and Probate
Provider of the Year for the second consecutive year at the British Wills and
Probate Awards. Farewill also won Best Funeral Information Provider and
Low-cost Funeral Provider of the Year at the Good Funeral Awards 2021. The
organisation has also been voted the UK’s best-rated death experts on
Trustpilot, scoring an average customer approval rating of 4.9/5 from over
10,000 reviews. It is now the largest will writer in the UK.
Since its launch in 2015 Farewill’s customers have pledged over £450
million in legacy gifts written into their wills.
In January 2019 Augmentum led Farewill’s £7.5 million Series A fundraise,
with a £4 million investment. Augmentum participated in Farewill’s £20
million Series B, led by Highland Europe in July 2020.
iwoca
Founded in 2011, iwoca (www.iwoca.co.uk) uses award-winning technology to
disrupt small business lending across Europe. They offer short-term loans of
up to £200,000 to SMEs across the UK, Germany and Poland. iwoca leverages
online integrations with high-street banks, payment processors and
sector-specific providers to look at thousands of data points for each
business. These feed into a risk engine that enables the company to make a
fair assessment of any business – from a retailer to a restaurant, a factory
to a farm – and approve a credit facility within hours. The company has
issued over £1 billion in funding to over 50,000 SMEs in total and has
surpassed £100 million worth of lending through the Coronavirus Business
Interruption Loan Scheme to businesses grappling with the fallout of the
economic crisis caused by the coronavirus. Iwoca launched iwocaPay in June
2020, an innovative business-to-business (B2B) ‘buy now pay later’ product
to provide flexible payment terms to buyers while giving peace of mind to
sellers.
Tesseract
Tesseract (www.tesseractinvestment.com) is a forerunner in the dynamic digital
asset sector, providing digital lending solutions to market makers and other
institutional market participants via regulated custody and exchange
platforms. Tesseract was founded in 2017, is regulated by the Finnish
Financial Supervisory Authority (“FIN-FSA”), and was one of the first
companies in the EU to obtain a 5AMLD (Fifth Anti-Money Laundering Directive)
virtual asset service provider (“VASP”) licence. It is the only VASP with
an express authorisation from the FIN-FSA to deploy client assets into
decentralized finance or “DeFi”.
Taking no principal position, Tesseract provides an enabling crypto
infrastructure to connect digital asset lenders with digital asset borrowers.
This brings enhanced capital efficiency with commensurate cost reduction to
trading, in a space that is currently significantly under-leveraged relative
to traditional capital markets.
Augmentum led Tesseract’s Series A funding round in June 2021 with an
investment of £7.3 million.
Volt Logo
Volt (www.volt.io) is a provider of account-to-account payments connectivity
for international merchants and payment service providers (PSPs). An
application of Open Banking, Account-to-account payments – where funds are
moved directly from one bank account to another rather than via payment rails
– delivers benefits to both consumers and merchants. This helps merchants
shorten their cash cycle, increase conversion and lower their costs. In
October 2021 Volt announced their partnership with Worldline, the European
leader in payments and transactional services, giving over 600
enterprise-level merchants globally access to Volt’s open payments
infrastructure. It also announced its expansion into Brazil in November to
integrate Brazil’s domestic instant payments network, Pix, and established
its physical presence in São Paolo. More recently, in April 2022, it
partnered with Mercuryo (https://mercuryo.io/) to help the crypto payments
company offer open banking payments to their two million global customers. The
real-time account-to-account payments (A2A) will provide Mercuryo wallet
users, alongside their business partners, with single-click payment solutions
via fiat currency.
Augmentum invested £0.5 million in Volt in December 2020 and a further £4
million in June 2021.
Kipp
Kipp (www.letskipp.com) is an Israeli fintech that has developed an AI
platform that transforms the traditional payment model to increase credit card
transaction approvals, revenue, and customer satisfaction. Its core solution
relies heavily on data enrichment and risk management to help merchants and
banks split the cost of risk to incentivize issuing banks to approve more
transactions.
Augmentum invested £4 million in May 2022.
ParaFi Capital
ParaFi Capital (www.parafi.com) is an investor in decentralised finance
protocols that address tangible use cases of the technology and demonstrate
signs of product-market fit. The ParaFi investment has drawn on their domain
expertise developed in both traditional finance and crypto to identify and
invest in leading protocols such as Compound (lending and interest accrual),
Aave (asset borrowing), Uniswap (automated liquidity provision), Synthetix
(synthetic asset trading) and MakerDAO (stablecoins). ParaFi also supports its
protocols as a liquidity provider and governance participant.
Augmentum invested £2.8 million in ParaFi in January 2021. Co-investors
include Bain Capital Ventures and Galaxy Digital.
WeMatch
Wematch (www.wematch.live) is a capital markets trading platform that helps
financial institutions transition liquidity to an orderly electronic service,
improving productivity and de-risking the process of voice broking. Their
solution helps traders find liquidity, negotiate, trade, optimise and manage
the lifecycle of their portfolios of assets and trade structures. Wematch is
focused on structured products such as securities financing, OTC equity
derivatives and OTC cleared interest rates derivatives.
Wematch is headquartered in Tel Aviv and has offices in London and Paris. In
2021 Wematch managed more than 12,000 matching and lifecycle events, saving
more than 500,000 trader to trader contacts, saved over 5,000 working hours
for their premium users with their workflow solutions, launched a new
securities lending platform and a new ETF synthetic portfolio management
product.
Augmentum invested £3.7 million in September 2021.
Wayhome
Wayhome (www.wayhome.co.uk) offers a unique part-own part-rent model of home
ownership, requiring as little as 5% deposit with customers paying a market
rent on the portion of the home that Wayhome owns, with the ability to
increase the equity in the property as their financial circumstances allow. It
launched to the public in September 2021, following closure of the initial
phase of a £500 million pension fund investment.
Wayhome opens up owner-occupied residential property as an asset class for
pension funds, who will earn inflation-linked rent on the portion not owned by
the occupier.
Augmentum invested £1 million in 2021, adding to its previous £2.5 million
investment from 2019.
Habito
Habito (www.habito.com) is transforming the United Kingdom’s £1.3 trillion
mortgage market by taking the stress, arduous paperwork, hidden costs and
confusing process out of financing a home.
Since launching in April 2016, Habito has helped nearly 400,000 better
understand their mortgage needs and submitted almost £6 billion of mortgages.
Habito launched their own buy-to-let mortgages in July 2019 and in March 2021
launched a 40-year fixed-rate mortgage ‘Habito One’, the UK’s
longest-ever fixed rate mortgage.
In August 2019, Augmentum led Habito’s £35 million Series C funding round
with a £5 million investment.
Previse
Previse allows suppliers to be paid instantly. Previse’s artificial
intelligence (“AI”) analyses the data from the invoices that sellers send
to their large corporate customers. Predictive analytics identify the few
problematic invoices, enabling the rest to be paid instantly. Previse charges
the suppliers a small fee for the convenience, and shares the profit with the
corporate buyer and the funder. Previse precisely quantifies dilution risk so
that funders can underwrite pre-approval payables at scale. The company
processes over 100,000 invoices a day. In January 2022 Mastercard unveiled
that its next-generation virtual card solution for instant B2B payments would
use Previse’s machine learning capabilities. The solution combines
Previse’s machine learning, with Mastercard’s core commercial solutions
and global payment network, to transform how businesses send and receive
payments.
Augmentum invested £250,000 in a convertible loan note in August 2019. This
converted into equity as part of the company’s US$11 million funding round
in March 2020, alongside Reefknot Investments and Mastercard, as well as
existing investors Bessemer Venture Partners and Hambro Perks. Previse was
awarded a £2.5 million Banking Competition Remedies’ Capability and
Innovation Fund grant in August 2020.
FullCircl
FullCircl (www.fullcircl.com) was formed from the combination of Artesian and
Duedil. Artesian was founded with a goal to change the way B2B sellers
communicate with their customers. They have built a powerful sales
intelligence service using the latest in Artificial Intelligence and Natural
Language Processing to automate many of the time consuming, repetitive tasks
that cause the most pain for commercial people.
Augmentum originally invested in DueDil, which merged with Artesian in July
2021. Combining DueDil’s Business Information Graph (B.I.G.)™ and Premium
APIs (https://www.duedil.com/about-duedil/our-technology), and Artesian’s
powerful web application (https://artesian.co/engage/) and advanced rules
engine (https://artesian.co/connect/) delivers an easy to deploy solution
for banks, insurers and FinTechs to engage, onboard and grow the right
business customers.
Epsor
Epsor (www.epsor.fr) is a Paris based provider of employee and retirement
savings plans delivered through an open ecosystem, giving access to a broad
range of asset management products accessible through its intuitive digital
platform. Epsor serves more than 40,000 savers and over 400 companies in
France.
Augmentum invested £2.2 million in Epsor in June 2021.
sfermion
Sfermion (www.sfermion.io) is an investment fund focused on the non-fungible
token (NFT) ecosystem. Their goal is to accelerate the emergence of the open
metaverse by investing in the founders, companies, and entities creating the
infrastructure and environments forming the foundations of our digital future.
Augmentum committed US$3 million in October 2021, to be drawn down in
tranches. US$750,000 of the commitment remains outstanding.
WhiskyInvestDirect
Founded in 2015, WhiskyInvestDirect (www.whiskeyinvestdirect.com), was a
subsidiary of BullionVault and is the online market for buying and selling
Scotch whisky as it matures in barrel. This is an asset class that has a long
track record of growth, yet has previously been opaque and inaccessible.
The Company has over 3,500 bulk-stockholding clients holding the equivalent of
29 million bottles of whisky stored in barrels. The business seeks to change
the way some of the three billion litres of maturing Scottish whisky is owned,
stored and financed, giving self-directed investors an opportunity to profit
from whisky ownership, with the ability to trade 24/7.
Augmentum’s holding derives from WhiskeyInvestDirect being spun out of
BullionVault.
.
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2022
Six months ended Six months ended
30 September 2022 30 September 2021
Notes Revenue Capital Total Revenue Capital Total
return return £’000 return£’000 return £’000
£’000 £’000 £’000
Gains on investments held at fair value - 1,497 1,497 – 25,817 25,817
Investment income 38 - 38 – – –
AIFM and Performance Fees 2 (301) - (301) (229) 6,508 6,279
Other expenses (2,256) (21) (2,277) (1,559) (50) (1,609)
(Loss)/return before taxation (2,519) 1,476 (1,043) (1,788) 32,275 30,487
Taxation - - - – – –
(Loss)/return attributable to equity shareholders of the parent company (2,519) 1,476 (1,043) (1,788) 32,275 30,487
(Loss)/return per share (pence) 3 (1.4p) 0.8p (0.6p) (1.1p) 20.3p 19.2p
The total column of this statement represents the Group’s Consolidated
Income Statement, prepared in accordance with IFRS as adopted by the UK.
The revenue return and capital return columns are supplementary to this and
are prepared under guidance published by the Association of Investment
Companies.
The Group does not have any other comprehensive income and hence the total
return, as disclosed above, is the same as the Group’s total comprehensive
income.
All items in the above statement derive from continuing operations.
All returns are attributable to the equity holders of Augmentum Fintech plc,
the parent company. There are no non?controlling interests.
.
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 September 2022
Six months ended 30 September 2022
Group Ordinary Share Special Other Revenue Total
share premium reserve capital reserve £’000
capital account £’000 reserve £’000
£’000 £’000 £’000
Opening shareholders’ funds 1,810 105,383 91,191 107,989 (11,169) 295,204
Purchase of own shares into treasury - - (2,036) - - (2,036)
Return/(loss) for the period - - - 1,476 (2,519) (1,043)
At 30 September 2022 1,810 105,383 89,155 109,465 (13,688) 292,125
Six months ended 30 September 2021
Group Ordinary Share Special Other Revenue Total
share premium reserve capital reserve £’000
capital account £’000 reserve £’000
£’000 £’000 £’000
Opening shareholders’ funds 1,405 52,151 92,101 44,876 (7,371) 183,162
Issue of shares following placing and offer for subscription 405 54,595 – – – 55,000
Costs of placing and offer for subscription – (1,363) – – – (1,363)
Return/(loss) for the period – – – 32,275 (1,788) 30,487
At 30 September 2021 1,810 105,383 92,101 77,151 (9,159) 267,286
.
Condensed Consolidated and Company Statement of Financial Position
as at 30 September 2022
Note 30 September 31 March
2022 2022
£’000 £’000
Non current assets
Investments held at fair value 7 233,744 268,807
Property, plant & equipment 329 9
Current assets
Right of use asset 663 750
Other receivables 112 391
Cash and cash equivalents 59,350 31,326
Total assets 294,198 301,283
Current liabilities
Other payables (1,277) (5,296)
Lease liability (796) (783)
Provisions - -
Total assets less current liabilities 292,125 295,204
Net assets 292,125 295,204
Capital and reserves
Called up share capital 4 1,810 1,810
Share premium account 4 105,383 105,383
Special reserve 89,155 91,191
Retained earnings:
Capital reserves 109,465 107,989
Revenue reserve (13,688) (11,169)
Total equity 292,125 295,204
NAV per share (pence) 5 163.6 163.7p
NAV per share after performance fee (pence) 5 155.0 155.2p
.
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 September 2022
Six months Six months
ended ended
30 September 30 September
2022 2021
£’000 £’000
Cash flows from operating activities
Purchases of investments (11,994) (32,276)
Sales of investments 44,226 10,536
Acquisition of property, plant and equipment (355) (4)
Interest received 29 -
Operating expenses paid (1,846) (1,490)
Net cash outflow from operating activities 30,060 (23,234)
Cash flow from financing activities
Issue of shares following placing and offer for subscription - 55,000
Costs of placing and offer for subscription - (1,363)
Purchase of own shares into Treasury (2,036) -
Net cash (outflow)/inflow from financing (2,036) 53,637
Increase in cash and cash equivalents 28,024 30,403
Cash and cash equivalents at the beginning of the period 31,326 27,433
Cash and cash equivalents at the end of the period 59,350 57,836
.
Notes to the Financial Statements
For the six months ended 30 September 2022
1.a General information
Augmentum Fintech plc is a company limited by shares, incorporated and
domiciled in the UK. Its registered office and principal place of business is
at 25 Southampton Buildings, London WC2A 1AL, UK. Its shares are listed on the
London Stock Exchange.
These condensed interim financial statements were approved for issue on 23
November 2022. These condensed interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 March 2022 were approved by the
board of directors on 1 July 2022 and delivered to the Registrar of
Companies.
The report of the auditors on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain any statement under
section 498 of the Companies Act 2006.
The financial statements have been reviewed, not audited.
1.b Basis of preparation
This condensed consolidated interim financial report for the half-year
reporting period ended 30 September 2022 has been prepared in accordance with
the Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority and Accounting Standard IAS 34, ‘Interim Financial Reporting’,
as adopted in the UK.
The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period, except for the
adoption of new and amended standards as set out below.
1.c New and amended standards adopted by the Group
No new or amended standards became applicable for the current reporting period
that have an impact on the Group or Company.
1.d Going Concern
The Directors believe that it is appropriate to adopt the going concern basis
in preparing these condensed consolidated financial statements, as the Board
considers the Group has sufficient liquid financial resources to continue in
business for the foreseeable future.
1.e Segmental Analysis
The Group operates a single business segment for reporting purposes and is
managed as a single investment company. Reporting is provided to the Board of
Directors on an aggregated basis. The investments are all located in the UK,
continental Europe, Israel and the US.
1.f Related Party Transactions
There have been no changes to the nature of the related party arrangements or
transactions during the period to those reported in the Annual Report for the
year ended 31 March 2022.
1.g Events after the reporting period
There have been no significant events since the end of the reporting period
requiring disclosure.
2 AIFM and Performance Fees
Revenue Capital Six months Revenue Capital Six months
£’000 £’000 ended £’000 £’000 ended
30 September 30 September
2022 2021
£’000 £’000
AIFM fees 301 - 301 229 - 229
Performance fee - - - - (6,805) (6,805)^
301 - 301 229 (6,805) (6,279)
^ As set out in the Annual Report the performance fee arrangement was set
up to provide a long-term employee benefit plan to incentivise employees of
AFML and align them with shareholders through participation in the realised
investment profits of the Group. During the six months to 30 September 2021
the existing plan for AFML staff was terminated and the performance fee
liability to AFML employees accrued as at 31 March 2021 of £6,508,000 was
reversed. AFML continues to be entitled to a performance fee as before, but
any performance fee paid by the Company to AFML will now be allocated to
employees of AFML on a discretionary basis by the Management Engagement &
Remuneration Committee of the Company. Non-executive Directors of the Company
are not eligible to participate in any allocation of the performance fee.
A performance fee is payable by the Company to AFML when the Company has
realised an aggregate annualised 10% return on investments (the ‘hurdle’)
in each basket of investments. Based on the investment valuations and the
hurdle level as at 30 September 2022 the hurdle has been met, on an unrealised
basis, and as such a performance fee of £15,413,000 has been accrued by the
Company as at 30 September 2022, equivalent to 8.6 pence per share. This
accrual is reversed on consolidation and not included in the Group Statement
of Financial Position.
The performance fee is only payable to AFML if the hurdle is met on a realised
basis. See page 23 and Note 19.9 of the Company’s 2022 Annual Report for
further details. As noted above any allocation of the performance fee by AFML
to its employees is made on a discretionary basis.
3 (Loss)/return per share
The (loss)/return per share figures are based on the following figures:
Six months Six months
ended ended
30 September 30 September
2022 2021
£’000 £’000
Net revenue loss (2,519) (1,788)
Net capital return 1,476 32,275
Net total (loss)/return (1,043) 30,487
Weighted average number of ordinary shares in issue 179,413,420 159,054,953
Pence Pence
Revenue loss per share (1.4) (1.1)
Capital return per share 0.8 20.3
Total (loss)/return per share (0.6) 19.2
4 Share capital
As at 30 September 2022 there were 178,578,988 (31 March 2022: 180,325,786)
ordinary shares in issue, excluding shares held in treasury, and 2,434,709 (31
March 2022: 687,911) shares held in treasury.
On 8 July 2021 40,590,406 ordinary shares were issued. The nominal value of
the shares issued was £405,000 and the total gross cash consideration
received was £55,000,000. This consideration has been offset against costs of
issue, which totalled £1,362,000.
During the year to 31 March 2022 687,911 shares were bought back into treasury
at an average price of 131.1p per share.
From 1 April 2022 to 30 September 2022 1,746,798 of the Company’s ordinary
shares were bought back into treasury at an average price of 115.8p per share.
No shares were issued during the six months.
5 Net asset value (“NAV”) per share
The NAV per share is based on the Group net assets attributable to the equity
shareholders of £292,125,000 (31 March 2022: £295,204,000) and 178,578,988
(31 March 2022: 180,325,786) shares being the number of shares in issue at the
period end.
The NAV per share after performance fee* is based on the Group net assets
attributable to the equity shareholders, less the performance fee accrual made
by the Company of £15,413,000 (31 March 2022: £15,265,000), and the number
of shares in issue at the period end.
* Alternative Performance Measure
6 Subsidiary undertakings
The Company has an investment in the issued ordinary share capital of its
wholly owned subsidiary undertaking, Augmentum Fintech Management Limited,
which is registered in England and Wales, operates in the United Kingdom and
is regulated by the Financial Conduct Authority.
7 Financial Instruments
The principal risks which the Company faces from its financial instruments
are:
• Market Price Risk
• Liquidity Risk; and
• Credit Risk
Market Price Risk
Market price risk arises mainly from uncertainty about future prices of
financial instruments in the Group’s portfolio. It represents the potential
loss the Group might suffer through holding market positions in the face of
price movements, mitigated by stock diversification.
The Group is exposed to the risk of the change in value of its unlisted equity
and non-equity investments. For unlisted equity and non-equity investments the
market risk is principally deemed to be represented by the assumptions used in
the valuation methodology as set out in the accounting policy.
Liquidity Risk
The Group’s assets comprise unlisted equity and non-equity investments.
Whilst unlisted equity is illiquid, short-term flexibility is achieved through
cash and cash equivalents.
Credit Risk
The Group’s exposure to credit risk principally arises from cash and cash
equivalents. Only highly rated banks (with credit ratings above A3, based on
Moodys ratings or the equivalent from another ratings agency) are used for
cash deposits and the level of cash is reviewed on a regular basis.
Further details of the Company’s management of these risks can be found in
note 13 of the Company’s 2022 Annual Report.
There have been no changes to the management of or the exposure to credit risk
since the date of the Annual Report.
Fair Value Hierarchy
Fair value is the amount for which an asset could be exchanged, or a liability
settled between knowledgeable willing parties in an arm’s length
transaction.
The Group complies with IFRS 13 in respect of disclosures about the degree of
reliability of fair value measurements. This requires the Group to classify,
for disclosure purposes, fair value measurements using a fair value hierarchy
that reflects the significance of the inputs used in making the measurements.
The levels of fair value measurement bases are defined as follows:
Level 1: fair values measured using quoted prices (unadjusted) in active
markets for identical assets or liabilities.
Level 2: fair values measured using valuation techniques for all inputs
significant to the measurement other than quoted prices included within Level
1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
Level 3: fair values measured using valuation techniques for which any
significant input to the valuation is not based on observable market data
(unobservable inputs).
The determination of what constitutes ‘observable’ requires significant
judgement by the Directors.
The Group considers observable data to be market data that is readily
available, regularly distributed or updated, reliable and verifiable, not
proprietary and provided by independent sources that are actively involved in
the relevant market.
All investments were classified as Level 3 investments as at, and throughout
the period to, 30 September 2022. Details of movements in, and changes in
value of, the Level 3 investments are included on the next page.
All investments were valued in accordance with accounting policy as set out in
note 19.4 of the Company’s Annual Report for the year ended 31 March 2022.
When using the price of a recent transaction in the valuations the Company
looks to ‘re-calibrate’ this price at each valuation point by reviewing
progress within the investment, comparing against the initial investment
thesis, assessing if there are any significant events or milestones that would
indicate the value of the investment has changed and considering whether a
market-based methodology (ie. using multiples from comparable public
companies) or a discounted cashflow forecast would be more appropriate.
The main inputs into the calibration exercise, and for the valuation models
using multiples, are revenue, EBITDA and P/E multiples (based on the most
recent revenue, EBITDA or earnings achieved and equivalent corresponding
revenue, EBITDA or earnings multiples of comparable public companies), quality
of earnings assessments and comparability difference adjustments. Revenue
multiples are often used, rather than EBITDA or earnings, due to the nature of
the Group’s investments, being in fast-growing, small financial services
companies which are not normally expected to achieve profitability or scale
for a number of years. Where an investment has achieved scale and
profitability the Group would normally then expect to switch to using an
EBITDA or earnings multiple methodology.
In the calibration exercise and in determining the valuation for the Group’s
equity instruments, comparable trading multiples are used. In accordance with
the Group’s policy, appropriate comparable public companies based on
industry, size, developmental stage, revenue generation and strategy are
determined and a trading multiple for each comparable company identified is
then calculated. Due to the nature of the Group's investments there are
frequently no directly comparable public companies; in these instances baskets
of public companies will be used that share similar characteristics to the
investee company.
The multiple is calculated by dividing the enterprise value of the comparable
company by its revenue, EBITDA or earnings. The trading multiple is then
adjusted for considerations such as illiquidity, premium to public companies
implied in an investee's previous financing round, marketability and other
differences, advantages and disadvantages between the Group’s portfolio
company and the comparable public companies based on company specific facts
and circumstances.
The main input into the PWERM (‘Probability Weighed Expected Return
Methodology’) was the probability of conversion. This method was used for
the convertible loan notes held by the Company.
Total gains and losses on assets measured at Level 3 are recognised as part of
Gains on Investments in the Consolidated Income Statement, and no other
comprehensive income has been recognised on these assets. The total unrealised
return for the period was £1,497,000 (period ended 30 September 2021:
£25,817,000).
The table below presents those investments in portfolio companies whose fair
values are recognised in whole or in part using valuation techniques based on
assumptions that are not supported by prices or other inputs from observable
current market transactions in the same instrument and the effect of changing
one or more of those assumptions behind the valuation techniques adopted based
on reasonably possible alternative assumptions.
Valuation Technique Fair Value Fair Value Unobservable Inputs Reasonably possible shift Change in
30 September 31 March in input +/- valuation
2022 2022 +/(-) £’000
£’000 £’000
Multiple methodology 187,634 35,888 Multiple 10% 15,870/(15,631)
Illiquidity adjustment increase / Premium decrease 30% (17,493)
Illiquidity adjustment decrease / Premium increase 30% 23,871
CPORT* 34,286 180,359 Transaction price 10% 2,834/(3,084)
PWERM** 7,291 2,087 Probability of conversion 25% 376/(376)
NAV 4,533 7,677 Discount to NAV 30% (1,360)
Sales Price - 42,796 N/a
* Calibrated price of recent transaction.
** Probability weighted expected return methodology.
The following table presents the movement of investments measured at fair
value, based on fair value measurement levels.
Level 3
Six months to Year to
30 September 31 March
2022 2022
£’000 £’000
Opening balance 268,807 164,127
Purchases at cost 7,666 59,262
Realisation proceeds (44,226) (11,263)
Gains on investments held at fair value 1,497 56,681
Closing balance as at 30 September 233,744 268,807
.
Independent Review Report to Augmentum Fintech plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2022 which comprises the Condensed Consolidated Income Statement,
Consolidated Statement of changes in Equity, Condensed Consolidated Statement
of Financial Position, Condensed Consolidated Statement of Cash Flows and the
related notes.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2022 is not prepared,
in all material respects, in accordance with UK adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom’s Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, “Review of Interim Financial Information Performed by
the Independent Auditor of the Entity” (“ISRE (UK) 2410”). A review of
interim financial information consists of making enquiries, primarily of
persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in
scope than an audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410, however future events or conditions may cause the group to
cease to continue as a going concern.
Responsibilities of Directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom’s Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half?yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the Disclosure Guidance and
Transparency Rules of the United Kingdom’s Financial Conduct Authority and
for no other purpose. No person is entitled to rely on this report unless such
a person is a person entitled to rely upon this report by virtue of and for
the purpose of our terms of engagement or has been expressly authorised to do
so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other purpose
and we hereby expressly disclaim any and all such liability.
BDO LLP
Chartered Accountants
London, UK
23 November 2022
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
.
Interim Management Report
Principal Risks and Uncertainties
A review of the half year and the outlook for the Company can be found in the
Chairman’s Statement and in the Portfolio Manager’s Review. The principal
risks and uncertainties faced by the Company fall into the following broad
categories: macroeconomic risks, strategy implementation risks; investment
risks; portfolio diversification risk, cash risk, credit risk, valuations
risk, operational risk and key person risk. Information on these risks is
given in the Annual Report for the year ended 31 March 2022.
The Board believes that the Company’s principal risks and uncertainties have
not changed materially since the date of that report and are not expected to
change materially for the remaining six months of the Company’s financial
year.
Related Party Transactions
During the first six months of the current financial year, no transactions
with related parties have taken place which have materially affected the
financial position or the performance of the Group.
Going Concern
The Directors believe, having considered the Company’s investment objective,
risk management policies, capital management policies and procedures, and the
nature of the portfolio and the expenditure projections, that the Group has
adequate resources, an appropriate financial structure and suitable management
arrangements in place to continue in operational existence for the foreseeable
future.
Directors’ Responsibilities
The Board of Directors confirms that, to the best of its knowledge:
(i) the condensed set of financial statements contained within
this Half Year Report has been prepared in accordance with Accounting Standard
IAS 34, ‘Interim Financial Reporting’, as adopted in the UK;
(ii) the condensed set of financial statements give a true and
fair view of the assets, liabilities, financial position and return of the
issuer and the undertakings included in the consolidation; and
(iii) the Half Year Report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the UK Listing Authority
Disclosure Guidance and Transparency Rules.
In order to provide these confirmations, and in preparing these financial
statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are reasonable and
prudent;
• state whether applicable IFRS have been followed, subject to any
material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Company will continue in business;
and the Directors confirm that they have done so.
On behalf of the Board of Directors
Neil England
Chairman
23 November 2022
.
Glossary and Alternative Performance Measures
Alternative Investment Fund Managers Directive (“AIFMD”)
Agreed by the European Parliament and the Council of the European Union and
transposed into UK legislation, the AIFMD classifies certain investment
vehicles, including investment companies, as Alternative Investment Funds
(“AIFs”) and requires them to appoint an Alternative Investment Fund
Manager (“AIFM”) and depositary to manage and oversee the operations of
the investment vehicle. The Board of the Company retains responsibility for
strategy, operations and compliance and the Directors retain a fiduciary duty
to shareholders.
Alternative Performance Measures (“APMs”)
The measures the Board of Directors uses to assess the Company’s performance
that are not defined under the International Financial Reporting Standards but
which are viewed as particularly relevant for investment trusts. Definitions
of the terms used and the basis of calculation are set out in this Glossary
and the APMs are indicated with an asterisk (*).
Convertible Loan Note
A convertible loan note is a loan which bears interest and is repayable but
may convert into shares under certain circumstances.
Discount or Premium
A description of the difference between the share price and the net asset
value per share. The size of the discount or premium is calculated by
subtracting the share price from the net asset value per share and is usually
expressed as a percentage (%) of the net asset value per share. If the share
price is higher than the net asset value per share the result is a premium. If
the share price is lower than the net asset value per share, the shares are
trading at a discount.
Initial Public Offering (“IPO”)
An IPO is a type of public offering in which shares of a company are sold to
institutional investors and usually also retail (individual) investors.
Through this process, colloquially known as floating, or going public, a
privately held company is transformed into a public company.
Internal Rate of Return (“IRR”)
Is the annualised return on an investment calculated from the cash flows
arising from that investment taking account of the timing of each cash flow.
It is derived by computing the discount rate at which the present value of all
subsequent cash flows arising from an investment are equal to the original
amount invested.
Performance fee - Company
AFML is entitled to a performance fee (previously referred to as carried
interest) in respect of the performance of the Company's investments. Each
performance fee operates in respect of investments made during a 24 month
period and related follow-on investments made for a further 36 month period,
save that the first performance fee shall be in respect of investments
acquired using 80% of the net proceeds of the Company’s IPO in March 2018
(including the Initial Portfolio), and related follow-on investments.
Subject to certain exceptions, AFML will receive, in aggregate, 15% of the net
realised cash profits from the sale of investments made over the relevant
period once the Company has received an aggregate annualised 10% realised
return on investments (the ‘hurdle’) made during the relevant period.
AFML's return is subject to a ‘’catch-up’’ provision in its favour.
The performance fee is paid in cash as soon as practicable after the end of
each relevant period, save that at the discretion of the Board payments of the
performance fee may be made in circumstances where the relevant basket of
investments has been realised in part, subject to claw-back arrangements in
the event that payments have been made in excess of AFML’s entitlement to
any performance fees as calculated following the relevant period.
The performance fee payable by the Company to AFML is accrued in the Company's
financial statements and eliminated on consolidation in the Group financial
statements.
Performance Fee - AFML
The performance fee arrangements within AFML were set up with the aim of
incentivising employees of AFML and aligning them with shareholders through
participation in the realised investment profits of the Group.
Any performance fee received by AFML will be allocated to its employees on a
discretionary basis by the Management Engagement & Remuneration
Committee of the Company.
NAV per share Total Return*
The theoretical total return on the NAV per share, reflecting the change in
NAV during the period assuming that any dividends paid to shareholders were
reinvested at NAV at the time the shares were quoted ex-dividend. This is a
way of measuring investment management performance of investment trusts which
is not affected by movements in the share price discount/premium.
Net Asset Value (“NAV”)
The value of the Group’s assets, principally investments made in other
companies and cash being held, minus any liabilities. The NAV per share is
also described as ‘shareholders’ funds’ per share. The NAV is often
expressed in pence per share after being divided by the number of shares in
issue. The NAV per share is unlikely to be the same as the share price, which
is the price at which the Company’s shares can be bought or sold by an
investor. The share price is determined by the relationship between the demand
and supply of the shares.
Net Asset Value per share after performance fee*
The NAV of the Group as calculated above less the performance fee accrual made
by the Company divided by the number of issued shares.
Partnership
Augmentum I LP, a limited partnership registered in Jersey and a wholly-owned
subsidiary of the Company.
Total Shareholder Return*
The theoretical total return per share reflecting the change in share price
during the period and assuming that any dividends paid were reinvested at the
share price at the time the shares were quoted ex-dividend.
Unquoted investment
Investments in unquoted securities such as shares and debentures which are not
quoted or traded on a stock market.
.
The half year report will shortly be available for inspection on the Company's
website (https://augmentum.vc) and the National Storage Mechanism website
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism).
- END -
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