Foresight Group Hldg - FY23 Trading Update
13/04/2023 07:00
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RNS Number : 0406W Foresight Group Holdings Limited 13 April 2023
LEI: 213800NNT42FFIZB1T09
13 April 2023
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. FOR IMMEDIATE RELEASE
Trading update for the financial year ended 31 March 2023
Diversified and resilient business model delivers record year of profitability
and AUM growth
Foresight Group Holdings Limited ("Foresight", the "Group"), a
sustainability-led infrastructure and private equity investment manager, is
pleased to announce a trading update for the financial year ended 31 March
2023 ("FY23", "the period").
Financial Highlights
● Continued to deliver highly profitable growth
○ Strengthening previously guided 8 - 10% upgrade on FY23 core EBITDA pre-Share
Based Payments ("SBP")(2) to the top end of this range
○ Continued profitable realisations generating performance fees across the
business
○ In the three months to 31 March 2023 ("Q4 FY23"), our diversified business
model raised funds of £151 million into retail and private equity vehicles
(excluding Foresight Capital Management ("FCM")) which benefit from higher
revenue margin and longer tenure
○ In Q4 FY23, net FCM outflows totalled £(69) million
● Exceptional increase in Assets under Management ("AUM") and Funds under
Management ("FUM") in FY23 of 37% and 34% to £12.2 billion and £9.0 billion
respectively(3) (FY22: £8.8 billion AUM and £6.7 billion FUM), well in
excess of our target
○ On a constant currency basis, removing adverse foreign exchange movements
largely attributable to our Australian assets, FY23 growth increases to 40%
and 36%
○ In Q4 FY23, the decrease in AUM of (1)% was principally driven by the adverse
foreign exchange movement of £(120) million
○ With a strong pipeline of organic fundraising scheduled for FY24, we reiterate
our target AUM growth rate of 20-25% per annum on a rolling 3-year average
basis
● Revenue significantly up on the prior year and is anticipated to be ahead of
latest consensus(4). Recurring revenue for the period is expected to be within
our target range of 85 - 90%, further demonstrating our predictable long-term
revenue model
Operational Highlights
Infrastructure
In FY23, infrastructure division AUM increased by 50% to £9.5 billion (FY22:
£6.3 billion):
● The transformational acquisition of Infrastructure Capital Group in September
2022 added c.£3.0 billion to AUM, and it has now been fully integrated and
rebranded as Foresight Australia
● AUM growth was supported by organic fundraising across retail and
institutional vehicles, including £41 million(5) of committed capital raised
by the Australian Renewables Income Fund ("ARIF") in Q4 FY23, with additional
fundraising targeted in FY24
Capital deployment remained strong in Q4 FY23. This contributed to record
deployment levels in FY23 of £686 million, rising to £2,339 million when
including future deployment rights of £1,653 million:
Deployment Q4 FY23 FY23 FY22
Transactions completed 16 54 41
Value (£ million) 103 686 484
Future deployment rights(6) (£ million) 923 1,653 427
Total (£ million) 1,026 2,339 911
Private Equity
In FY23, the private equity division delivered its strongest year to date with
significant AUM growth of 52% to £1.4 billion (FY22: £0.9 billion):
● Excellent institutional inflows were driven by successful first closes of four
new funds (+£132 million) with additional commitments to existing and new
institutional funds totalling £39 million
● FY23 inflows into retail vehicles of £115 million
● The successful acquisition and integration of the technology ventures division
of Downing LLP substantially increased Foresight's existing ventures offering
and added £275 million of AUM
Throughout the year, the division demonstrated its capabilities in sourcing
and completing investments and delivering strong exits despite the volatility
in the economic environment:
● Capital deployed during FY23 was £99 million (FY22: £81 million) across 69
equity transactions (FY22: 53) and £71 million across secured lending
investments (FY22: £47 million)
● Numerous successful exits including the recent exits in Q4 FY23 of portfolio
companies Datapath (11.7x), Gov Grant (4.5x) and Mowgli (3.5x)
Foresight Capital Management
In FY23, FCM AUM reduced by 19% to £1.3 billion (FY22: £1.6 billion):
● This movement reflects net outflows of £(97) million and market performance
of £(183) million, against a backdrop of significant volatility in global
equity markets, with high inflation leading central banks to tighten monetary
policy by increasing interest rates at an unprecedented pace
● FCM's strategies are well placed to return to growth, with underlying sectors
(in particular sustainability, decarbonisation and infrastructure renewables)
expected to benefit from the long-term structural tailwinds
In Q4 FY23, FCM expanded the Group's geographic footprint into the US market
through its appointment as sub-adviser to the Cromwell Foresight Global
Sustainable Infrastructure Fund. We believe that growth opportunities in the
US offer the potential over the long term to exceed FCM's current businesses.
In addition, the division is actively pursuing further distribution
opportunities, with Europe being a key focus in the near term.
Bernard Fairman, Executive Chairman of Foresight Group Holdings Limited,
commented:
"This was an outstanding year for the Group, with our diversified and
resilient business model achieving exceptional results against a challenging
market backdrop. This included significantly growing our geographic footprint
through the transformational acquisition of Infrastructure Capital Group in
Australia and our FCM division expanding into the US sub-advisory market.
The outlook for the Group remains very positive, being ideally positioned to
capture the long-term structural growth trends in our key markets. Our focus
in FY24 will be organic growth, with a strong infrastructure fundraising
pipeline that includes established strategies such as ARIF and Foresight
Energy Infrastructure Partners returning to the market, supported by new
opportunities including core European renewables and our planned expansion
into adjacent asset classes, such as hydrogen. FY24 profit will also reflect
the full 12-month benefit of our growth in FY23, including the organic growth
of our private equity division and our significant acquisition activity. In
addition, we expect the likely fall in inflation to increase the value of the
long duration renewable energy assets within the FCM portfolio as discount
rates fall.
We have confidence in our ability to continue our excellent track record of
profitable growth and delivering against our strategic and financial
priorities."
Notes:
1. Please note that all figures contained in this announcement are unaudited and
subject to change.
2. Guidance provided as part of the trading update for the three months to 31
December 2022, which was based on consensus core EBITDA pre-SBP of £44.8
million as at 6 December 2022.
3. AUM and FUM movement summary:
Last 3 months Last 12 months
(£ billion) 31 Mar 2023 31 Dec 2022 Change % 31 Mar 2022 Change %
AUM 12.2 12.3 (1)% 8.8 + 37%
FUM 9.0 9.0 0% 6.7 + 34%
4. Based on consensus revenue of £116.6 million as at 16 January 2023.
5. A$75 million, converted from AUD to GBP at an exchange rate of 0.5424.
6. Subject to certain conditions being met.
FY23 Results Announcement
Foresight's Full Year Results to 31 March 2023 are scheduled to be released on
Tuesday 4 July 2023, with a presentation for analysts on the same day. Details
on how to attend the presentation will be available on
https://www.foresightgroup.eu/shareholders
(https://www.foresightgroup.eu/shareholders) in due course.
Citigate Dewe Rogerson
Foresight Group Investors
Liz Scorer Caroline Merrell / Toby Moore
+44 (0) 7966 966956 +44 (0) 7852 210329 / +44 (0) 7768 981763
ir@foresightgroup.eu (mailto:ir@foresightgroup.eu) caroline.merrell@citigatedewerogerson.com
(mailto:caroline.merrell@citigatedewerogerson.com) /
toby.moore@citigatedewerogerson.com
(mailto:toby.moore@citigatedewerogerson.com)
About Foresight Group Holdings Limited
Foresight Group was founded in 1984 and is a leading listed infrastructure and
private equity investment manager. With a long-established focus on ESG and
sustainability-led strategies, it aims to provide attractive returns to its
institutional and private investors from hard-to-access private markets.
Foresight manages over 350 infrastructure assets with a focus on solar and
onshore wind assets, bioenergy and waste, as well as renewable energy enabling
projects, energy efficiency management solutions, social and core
infrastructure projects and sustainable forestry assets. Its private equity
team manages eleven regionally focused investment funds across the UK and an
SME impact fund supporting Irish SMEs. This team reviews over 2,500 business
plans each year and currently supports more than 250 investments in SMEs.
Foresight Capital Management manages four strategies across seven investment
vehicles with an AUM of £1.3 billion.
Foresight operates in eight countries across Europe, Australia and United
States with AUM of £12.2 billion*. Foresight Group Holdings Limited listed on
the Main Market of the London Stock Exchange in February 2021.
https://www.foresightgroup.eu/shareholders
(https://www.foresightgroup.eu/shareholders)
*Based on Foresight Group unaudited AUM as at 31 March 2023.
Disclaimer - Forward-looking statements
This announcement, prepared by Foresight Group Holdings Limited (the
"Company"), may contain forward-looking statements about the Company and its
subsidiaries (the "Group"). Such forward-looking statements can be identified
by the use of forward-looking terminology, including the terms "believes",
"projects", "estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would", "could" or
"should" or, in each case, their negative or other various or comparable
terminology. Forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other factors which are beyond the Company's
control and are based on the Company's beliefs and expectations about future
events as of the date the statements are made. If the assumptions on which the
Company bases its forward-looking statements change, actual results may differ
from those expressed in such statements. There are a number of factors that
could cause actual results and developments to differ materially from those
expressed or implied by these forward-looking statements, including those set
out under "Principal Risks" in the Company's annual report for the financial
year ended 31 March 2022. The annual report can be found on the Company's
website (https://www.foresightgroup.eu/). Forward-looking statements speak
only as of the date they are made. Except as required by applicable law and
regulation, the Company undertakes no obligation to update these
forward-looking statements. Nothing in this announcement should be construed
as a profit forecast.
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