Molten Ventures Plc
("Molten Ventures", “Molten”, “the
Group” or the "Company")
FINAL RESULTS FOR THE YEAR ENDED 31
MARCH 2024
Molten Ventures (LSE: GROW, Euronext Dublin: GRW), a leading
venture capital firm investing in and developing disruptive,
high-growth technology companies, today announces its final results
for the year ended 31 March 2024.
Financial highlights
-
£1,379m
Gross Portfolio Value* (31 March
2023: £1,371m)
-
£1,251m
Net assets (31 March 2023:
£1,194m)
-
662p
NAV per share* (31 March 2023:
780p)
-
£57m
Consolidated Group cash (31 March
2023: £23m)
-
-1%
Gross Portfolio fair value
movement* (31 March 2023: -16%)
-
£39m
Cash proceeds from realisations
(year to March 31 2023: £48m)
-
£55m
Net of fees raised during the year
(31 March 2023: £Nil)
-
0.1%
Operating costs (net of fee income
and exceptional items) (31 March 2023: <0.1%) below the targeted
1% of year-end NAV*
-
£65m
invested, £40m direct and £25m
representing Forward Partners share-for-share exchange, in addition
a further £37m from the managed EIS/VCT funds (year to March 31
2023: £138m from plc and £41m from EIS/VCT funds)**
*The above figures contain alternative performance measures
(“APMs”) - see Note 35 for reconciliation of APMs to IFRS measures
in the Annual Report.
**EIS and VCT funds are managed by Molten Ventures plc group
but are not consolidated. See Accounting Policies on page 116 and
Glossary on page 162 for defined terms in the Annual
Report.
Performance highlights
• Investments
of £65m during the year from the Molten Ventures balance sheet,
with a further £37m from the managed EIS/VCT funds, alongside cash
proceeds from realisations during the year of £39m
• Completed
share-for-share acquisition of Forward Partners plc (‘Forward
Partners’) in March 2024
• Stake
acquired in Seedcamp Fund III in February 2024, continuing the
strategy of acquiring portfolios with high potential for near-term
realisation
• Committed
to 6 new seed funds via our Fund of Funds programme, bringing the
overall Fund of Funds portfolio to 80 funds.
• Weighted
average revenue growth of Core portfolio forecast to be over 50%
for calendar year 2024
• Over
85% of companies in the Core portfolio with at least 18 months of
cash runway as at 31 March 2024 (based on existing budgets and
growth plans)
ESG highlights
• Launched
inaugural stand-alone Sustainability Report on our
website
• Delivered
tailored climate workshops to portfolio companies with the aim of
improving their climate literacy and alignment to the Net Zero
transition, in line with the commitments set out in our Climate
Strategy
• Joined
the Steering Group of ESG_VC, became a member of Ventures ESG and
continued to report against external standards and frameworks
including PRI, CDP, TCFD, Investing in Women Code and
SECR
• Formally
launched the Esprit Foundation (part of the Molten Ventures Group)
and awarded its first grants to the Social Mobility Foundation,
Included VC and Foundervine
Post period-end
• On
30 April 2024, Hologic, Inc, a NASDAQ listed entity, signed
definitive agreement to acquire Endomagnetics Ltd. (‘Endomag’). The
acquisition, which is subject to completion conditions and
regulatory approval as well as working capital and other customary
closing adjustments, values Endomag at approximately $310 million,
which is modestly above NAV
Capital Allocation Policy
As
reported in our announcement on 30 April, we provide an update to
our capital allocation policy which outlines how the Company
intends to deploy its capital resources across NAV
per share
accretive opportunities in
order to deliver long-term value for its shareholders whilst
ensuring the Company has appropriate liquidity headroom.
1. The Company will
continue to focus its efforts on
deploying capital
into exceptional primary
and secondary investments
2.
The Company manages liquidity risk by maintaining adequate reserves
with ongoing monitoring of forecast and actual cash flows. Capital
resources are managed to ensure there is sufficient headroom for
18 months’ rolling
operating expenses
3.
Given the strong realisation pipeline, the Directors likewise
believe that the current share price
provides an opportunity
to deliver accretive benefits to shareholders by purchasing its own
shares at the prevailing discount levels. The Company therefore
intends to allocate a minimum of 10% of realisation proceeds to buy
back its own shares, utilising the existing authority granted to
the Board at the AGM
The Company will continue to balance the pipeline of new
investment opportunities against the ability to drive returns to
shareholders through share buy backs whilst maintaining sufficient
reserves.
Martin Davis, Chief Executive
Officer, Molten Ventures, commented:
“This has been a productive year
for Molten. We’ve continued to enhance our innovative platform to
capture the exceptional investment opportunities available in
backing high growth, disruptive, UK and European technology firms.
The underlying performance of our portfolio companies remain
strong, with valuations continuing to stabilise as the
macroeconomic environment shows signs of improvement.
“Looking ahead, we expect to see a
step up in realisations, in the region of £100 million of capital
back to the balance sheet this financial year, the proceeds of
which we expect to deploy towards NAV per share accretive
opportunities as outlined in our capital allocation policy today,
and in doing so, continuing to maximise value for our
shareholders”.
As previously announced, a live webcast presentation
including Q&A will be held today at 9.00am for analysts and
will be available on https://brrmedia.news/GROW_FY_24.
Conference call details for the Q&A are available upon request
via Powerscourt.
In addition, Molten will provide a
further presentation for retail investors via the Investor Meet
Company platform on at 10.00 on Friday 14 June. Existing and
potential investors can sign up to Investor Meet Company for free
via the link below.
https://www.investormeetcompany.com/molten-ventures-plc/register-investor
Enquiries:
Molten Ventures plc
Martin Davis (Chief Executive Officer)
Ben Wilkinson (Chief Financial Officer)
|
+44 (0)20 7931 8800
ir@molten.vc
|
Deutsche Numis
Joint Financial Adviser and
Corporate Broker
Simon Willis
Jamie Loughborough
Iqra Amin
|
+44 (0)20 7260 1000
|
Goodbody Stockbrokers
Joint Financial Adviser and
Corporate Broker,
Euronext Dublin Sponsor
Don Harrington
Dearbhla Gallagher
William Hall
|
+44 (0) 20 3841 6202
|
PowerscourtPublic
relations
Elly Williamson
Nick Hayns
Ollie Simmonds
|
+44 (0)20 7250 1446
molten@powerscourt-group.com
|
About Molten Ventures
Molten Ventures is a leading venture capital firm in Europe,
developing and investing in disruptive, high growth technology
companies. We inject visionary companies with energy to help them
to transform and grow. This energy comes in many forms - capital,
of course, but also knowledge, experience, and relationships. We
believe it is our role to support the entrepreneurs who will invent
the future, and that future is being built, today, in
Europe.
As at 31 March 2024, Molten Ventures had a diverse portfolio
with shareholdings in 118 companies, 20 of which represent our Core
holdings and account for 62% of the Gross Portfolio Value. Our Core
companies include Thought Machine, Coachhub, Aiven, Ledger and
Aircall. We invest across four sectors: Enterprise Technology,
Hardware and Deeptech, Consumer Technology, and Digital Health and
Wellness, with highly experienced partners constantly looking for
new opportunities in each. We look for high-growth companies
operating in new markets, with high potential for global expansion,
strong IP, powerful technology, and strong management teams to
deliver success. We also look for businesses with the potential to
generate strong margins to ensure rapid, sustainable growth in
substantial addressable markets.
A member of the London Stock Exchange’s FTSE 250, Molten
Ventures provides a unique opportunity for public market investors
to access these fast-growing tech businesses, without having to
commit to long term investments with limited liquidity. Since our
IPO in June 2016, we have deployed over £1bn capital into fast
growing tech companies and have realised over £520m to 31 March
2024. For more information, go
to https://www.moltenventures.com/
Chairman’s introduction
In
the years preceding my appointment, Molten developed and built an
innovative platform, cementing itself as one of Europe’s leading
venture capital firms. We support high-growth, disruptive
technology companies, and through our listing on the London Stock
Exchange and secondary listing on Euronext Dublin, we provide
access to the returns attainable from venture capital to both
institutional and retail investors. I am looking forward to helping
Molten Ventures build an even more successful business in the
coming years.
After two years of a very challenging economic and market
backdrop, we are beginning to see some signs of increased market
stability, helped by improved visibility on global interest rates.
Our portfolio remains in good health and the overall underlying
performance of our assets has been strong. While reduced M&A
activity since the end of the pandemic has resulted in fewer
transactions and correspondingly fewer realisations, the coming
year shows more promise, highlighted most recently by the announced
sales of Perkbox in the period, and Endomag post-period end, both
subject to completion conditions and regulatory approval. We
anticipate further exits in the course of the current financial
year. In the past year, the management team has continued to
enhance the platform through the equity capital raise, the
all-share acquisition of Forward Partners and the subsequent
purchase of a stake in Seedcamp Fund III. These were important
initiatives in ensuring that Molten is favourably positioned going
forward. We have the firepower to pursue attractive opportunities
in a buyer’s market for venture capital investment in our preferred
areas of expertise.
I
was pleased to welcome some of the portfolio companies and
colleagues coming across with Forward Partners at Molten’s annual
Investor Day in February, which was also my first. I have also
begun a programme of meeting many of our major Shareholders, as
well as industry bodies and other key stakeholders for the Group.
Our AGM in 2025 will be a policy approval year for executive
remuneration, and we will be proactively engaging with Shareholders
on this matter in the months ahead. In January, the Financial
Reporting Council announced the revisions it is making to the UK
Corporate Governance Code that enhance the transparency and
accountability of UK public companies, as well as help support the
growth and competitiveness of the UK, and preparation is well under
way to ensure that Molten continues to be fully
compliant.
In
my role as Chairman, ensuring Molten has best-practice governance
is an important priority. We commenced our first externally
facilitated Board evaluation in February, and more can be found on
this in the Governance section of this report. We will continue to
address such issues as Board diversity, mindful of the Parker
Review’s recommendations. Ensuring that Molten’s culture, ethos and
mission is carried across future key employees is critical, and
succession planning both for the Board and executive management is
underway. We refer to this in more detail in the Nomination
Committee report. We appointed Lara Naqushbandi as a Non-Executive
Director in September. Lara brings with her a wealth of global
commercial, strategic, and investment experience. Gervaise Slowey
has succeeded Richard Pelly as the designated Non-Executive
Director for employee engagement.
ESG issues are important to us, and as we have stated in the
past, Molten’s contribution to sustainability is two-fold, both
through our consideration of ESG in investment decision-making and
our excitement about investment opportunities in the climate tech
space in particular. We also continue to develop our reporting and
remuneration structure in alignment to ESG and wider sustainability
best practice. More information can be found in the ESG pages of
our Annual Report, and in our inaugural stand alone Sustainability
Report which has also been released today.
I
am conscious that Karen Slatford and Grahame Cook (who adeptly
covered her role as Interim Chair) will be hard acts to follow.
They have served Molten with distinction over several years –
Grahame continues to do so as Senior Independent Director and
Chairman of the Audit, Risk and Valuations Committee – and have
helped to develop the firm into the innovative venture capital
investor it is today. I would like to thank them both for their
leadership of the Board, and in particular Grahame for an informed
and seamless handover. I look forward to supporting management and
the wider team in continuing to develop a platform that provides
inspirational founders with long-term capital, access to
international networks and decades of experience building
businesses. Finally, I would like to thank our Shareholders for
their support during the past year as well as our Executive
Directors, and, importantly, each of our employees who are so vital
in ensuring the continued growth of Molten Ventures plc.
Laurence Hollingworth
Chairman
CEO’s statement
Overview
It
has been a busy and productive year for Molten Ventures, marked
with significant achievements amid an economic backdrop that has
been challenging for most technology companies and those who invest
in them.
We
continued to develop our platform, operating model, and acquisition
strategy while simultaneously navigating ‘higher-for-longer’
interest rates, inflationary pressures and the ongoing geopolitical
tensions which have cast a cautionary shadow over some notable
signs of stabilisation in the second half of the year.
Our focus within this context has been on what we can
control. We have maintained discipline around our own investment
process and worked closely with our portfolio companies to extend
cash runways, control costs, and retain talent. Our business
performance and the revenue growth of our portfolio companies has
remained strong, and the disruptive entrepreneurs we have backed
across UK and Europe continue to transform the industries in which
they operate.
Our adaptable model allowed us to act quickly to identify
opportunities at attractive valuations in the year, with a focus on
providing value for our Shareholders. Data from previous downturns
suggests that investments made in periods of economic decline have
yielded some of the greatest returns of all vintages for technology
investors. We continued to support innovation through our
fundraising activity, and by offering exposure to investors of
privately owned technology assets in the year.
Forward Partners
acquisition
In
November 2023, we announced a share-for-share acquisition of
Forward Partners, adding a portfolio of over 40 companies. The
acquisition, completed in March 2024, blends the maturity of our
assets with a more diverse pipeline of earlier-stage companies for
follow-on investment.
Forward Partners was founded in 2013 by Nic Brisbourne, a
former Molten Partner. Forward Partners investment strategy has
been focused on earlier-stage businesses than Molten has
traditionally invested in previously. We see significant
opportunity for continued growth in these portfolio companies and
to accelerate value creation. The Molten platform can provide the
winners with the additional support and resource to reach their
potential and generate returns.
We
extended an official welcome to Nic Brisbourne and the rest of the
Forward Partners team in March, with the history between Molten and
Forward allowing for a smooth integration which can be attributed
in part to a similar set of experiences, investment ethos and
cultural affinity. Several of our Forward Partners colleagues have
now joined our investment and finance teams, leading to cost
synergies and alignment across operational functions.
Alongside the Forward Partners transaction we successfully
completed an oversubscribed fundraise of £55 million (net of fees)
by way of issuance of new shares on the London Stock Exchange, and
the Euronext Dublin, to capitalise on attractive primary and
secondary investment opportunities during a period of market
dislocation.
Seedcamp III acquisition
Our acquisition of a stake in Seedcamp III in February 2024,
builds on Molten’s strategy to access exceptional Secondary
investments at attractive valuations. Our Secondaries acquisition
strategy acts to leverage our network in the venture capital market
to provide liquidity to Limited Partners in later life funds, with
a focus on acquiring portfolios of high-quality assets with
nearer-term visibility on realisation opportunities. To date, the
Secondaries strategy has delivered 2.5x returns (as a multiple on
invested capital).
The Seedcamp acquisition is an illustration of our strategy
in action and comes on the back of a strong track record of
Secondary investments; including Seedcamp Funds I & II,
Earlybird DWES Funds IV and Earlybird Digital East Fund
I.
Third-party asset
activity
Elsewhere, we continued to make progress with our third-party
assets strategy through the launch of our Irish-focused fund in
July 2023, which continues our long-standing relationship with the
Ireland Strategic Investment Fund as a strategic partner – as we
continue to back promising Irish technology companies and founders,
in a key European centre for the global tech industry.
We
are pleased to welcome Isabel (‘Izzy’) Fox as the Head of
Third-Party Funds, a new strategic role aimed at expanding the
firm’s impact through various targeted investment funds
complementing its publicly listed core model, EIS and VCT
investment vehicles. With Izzy’s appointment, Molten intends to
make further progress in building its third-party assets under
management and associated income, including via its syndicated Fund
of Funds programme and other third party private funds
strategies.
Venture capital as an asset class has typically generated
equal or better returns compared with listed equities or other
alternative asset classes, and the UK Government is keen that
Defined Contribution (‘DC’) pension schemes are able to invest in
these types of assets. This has the full support of the British
Private Equity & Venture Capital Associations (‘BVCA’), and is
something we at Molten are supporting wholeheartedly. Facilitating
access to venture capital for high-growth companies remains a
priority for UK and European governments, and forms part of the
UK’s proposed pension system reforms. Molten Ventures is among the
20 signatories to the BVCA’s Venture Capital Compact, supporting
the UK government’s Mansion House initiative to improve DC pension
schemes’ access to venture capital investments.
Molten Board
Our most valuable asset is our people, and we continue to
bolster our strength and expertise year-on-year. We appointed Lara
Naqushbandi as a Non-Executive Director in September 2023, followed
by the appointment of Laurence Hollingworth in January 2024 as
Chair of the Board. Lara brings a wealth of experience from
previously held roles in both finance and sustainability, and
Laurence brings significant capital markets, investment banking and
leadership experience to Molten.
Integrating ESG
We
continue to develop our ESG agenda as part of our commitment to
being a responsible investor. The integration of ESG across our
portfolio is a business priority throughout the full investment
cycle, and through our portfolio management we continue to fulfil
our broader corporate purpose of advancing society through
technological innovation.
We
aim to invest in businesses and entrepreneurs who recognise and
embrace the need for more sustainable practices, and strive to
improve their ESG performance to contribute towards a more
sustainable and prosperous future for all. You can read more about
these efforts in our Sustainability Report, also published
today.
During the year, we have made significant progress against
the commitments set out in our Climate Strategy, particularly with
regards to our portfolio engagement programme. We have also
continued to disclose against PRI, CDP, TCFD and the Investing in
Women Code.
Finally, The Esprit Foundation awarded its first four grants
to charities and organisations, whose objectives focus on the
advancement of education for the public benefit (especially those
aged under 30), with particular emphasis on the fields of
technology, business and entrepreneurship.
Market environment and the Molten
model
The cost of capital remains a significant factor for
investors, and we have adapted to an environment of
higher-for-longer interest rates. More recently, we have seen
forecasts for interest
rates stabilising, which is set to
allow greater visibility of the cost
of capital over the next 12 to 24 months.
We
have seen early shifts towards fresh capital raising, with a much
higher proportion of ‘flat rounds’, and in some cases small
up-rounds, compared to last year. General Partners are typically
raising less and taking longer to close funds due to a more
restricted liquidity environment.
We
believe the visibility over the interest rates provides further
confidence across the private market valuations. Although public
and private markets are interconnected, any anticipated rise in
confidence among public investors will take time to reflect in
private market valuations.
We
remain confident that our unique and flexible model will lead to
significant returns for our investors.
Financial position and our
portfolio
We
have retained the discipline of preserving our balance sheet, and
raised funds, which has provided us with a sufficient cash position
of £57 million, along with the £60 million additional headroom that
our undrawn revolving credit facility provides. I am pleased to say
that these measures have provided us with the ability to support
our existing portfolio and to invest in high-quality opportunities
where identified. Our portfolio has remained resilient and
well-funded, and we have continued to realise investments which
provides capital back for reinvestment in a period of muted
liquidity.
The Gross Portfolio Value at 31 March 2024 was £1,379
million, which is marginally up from £1,371 million at 30 September
2023, predominantly resulting from investments in Seedcamp III and
Forward Partners. We have generated realisations of £39 million and
a fair value uplift (excluding the impact of FX) of £6
million.
We
are rightly proud of our strong track record, having deployed more
than £1 billion of capital and realised over £520 million since our
IPO in 2016, achieving a 16% average return per year for our
Shareholders.
Realisations and exits
During the period, realisations remained fairly low relative
to previous years as a consequence of uncertain global
macroeconomic conditions and the resulting downturn in corporate
transactions across almost all industries and markets. While we do
not anticipate the IPO market for high-growth technology companies
to return to pre-downturn levels immediately, there is evidence
that some high-tech companies are publicly considering an
IPO.
Historically, most of our exits have been through trade
sales, and we have seen an uptick in M&A enquiries, alongside
the exits of Perkbox and Endomag, subject to completion conditions
and regulatory approvals (both due to take place above our holding
NAV).
Capital allocation
With a number of realisation processes either underway or
planned across the portfolio, we expect to be able to deliver in
the region of £100 million in realisations this upcoming financial
year alongside our existing meaningful cash resources.
As
reported in our announcement on 30 April, we provide an update to
our capital allocation policy which outlines how the Company
intends to deploy its capital resources across NAV
per share
accretive opportunities in
order to deliver long-term value for its shareholders whilst
ensuring the Company has appropriate liquidity headroom.
1. The Company will
continue to focus its efforts on
deploying capital
into exceptional primary
and
secondary investments.
2.
The Company manages liquidity risk by maintaining adequate reserves
with ongoing monitoring of forecast and actual cash flows. Capital
resources are managed to ensure there is sufficient headroom for
18 months’ rolling
operating expenses.
3.
Given the strong realisation pipeline, the Directors likewise
believe that the current share price
provides an opportunity
to deliver accretive benefits to shareholders by purchasing its own
shares at the prevailing discount levels. The Company therefore
intends to allocate a minimum of 10% of realisation proceeds to buy
back its own shares, utilising the existing authority granted to
the Board at the AGM.
The Company will continue to balance the pipeline of new
investment opportunities against the ability to drive returns to
shareholders through share buy backs whilst maintaining sufficient
reserves.
Outlook
Our flexible investment model has consistently demonstrated
its resilience and ability to generate significant returns. We have
implemented a capital allocation policy that aligns with our
current share price discount to NAV and the anticipated timeline
for realisations. This policy ensures that we are well-positioned
to maximise value for our Shareholders while maintaining a prudent
approach to capital management.
We
remain cautiously optimistic on the stabilisation of interest
rates, and the early signs of renewed capital raising activity
indicating a potential shift towards a more favourable investment
climate. The strength of our business model stands us in good
stead.
I
extend my thanks to the Molten team and look forward to delivering
on our strategy in the year to come.
Martin Davis
Chief Executive Officer
Market overview
Venture capital: an
overview
We believe that venture capital
works best when VCs give their energy to help companies succeed. At
Molten, this ‘energy’ can come in the form of capital, experience
or knowledge, as well as building relationships with our portfolio
companies that demonstrate our commitment for the long
term.
In
its most basic form, venture capital (VC) is a form of financing
where capital is invested into a company—a privately held start-up
or small business—in exchange for equity or convertible debt in the
company.
While investing in early-stage technology companies comes
with a degree of risk, VCs are driven by a conviction that
tomorrow’s problems won’t be solved by today’s conventions, and
that the process of rapid technological innovation and
transformation is set to continue.
As
well as generating returns for investors, VC is about empowering
start-up businesses with capital, mentorship, and advice to help
them succeed in their endeavours, and in doing so, helping them
create products and services that improve the human
experience.
Sometime these endeavours are connected to some of the
world’s largest and most complex challenges, and at other times
they could involve entirely new problem sets which are yet to be
clearly defined.
Starting a new business is always a daunting experience, and
entrepreneurs often find themselves having to educate investors,
customers, and the broader market as to why they exist at
all.
Companies raise money from VC investors to:
1. help
build their business and products
2. recruit
and retain a good pipeline of talent
3. make
acquisitions and invest further into intellectual
property
4. acquire
access to relevant networks and relationships, and
5. gain
advice and guidance from seasoned operators
VC
investors take the opportunity to assess companies, and invest in
those they believe to have highly credible management teams, a
unique product offering, and a framework to execute a business plan
to become a prominent competitor in their respective market
niche.
There are three major VC markets globally which are the US,
Europe, and Asia, and in 2023, over $300bn was invested between
those regions in start-up businesses. While the US and Asia are
larger than the European VC market, Europe is growing at a faster
rate, and the capital sought to support that market growth is
failing to keep pace. For this reason, Molten continues to see
great opportunities to invest in the category-defining businesses
of tomorrow, with a focus on investing in the best venture-stage
opportunities throughout Europe.
Who are Molten and how do they fit
in the VC sphere?
Molten disrupted the conventional venture capital model,
recognising the limitations of traditional approaches in driving
sustainable, transformative growth by pursuing an IPO in 2016. Our
focus is to collaborate with entrepreneurs who share in our
conviction that disruptive innovation is imperative for building
enduring, category-defining businesses.
Molten’s legacy traces back to 2006 when Esprit Capital
Partners was established as a spin-off from a larger asset manager.
Since then, we have scaled into a well-established VC platform,
supported by a team of over 60 professionals dedicated to investing
in promising start up and growth-stage businesses.
While headquartered in London and Dublin, Molten’s investment
platform has a pan-European mandate, spanning the entire lifecycle
from seed stage (typically as a limited partner) to later stages
(typically as a direct investor) through to IPO or acquisition. Our
adaptable platform is designed to facilitate long-term investments
and support companies throughout economic cycles, with a focus on
businesses capable of fundamentally disrupting the status quo and
becoming category leaders.
As
a minority equity investor, Molten fosters early relationships with
portfolio companies, and adds value through active Board
participation. Beyond capital, we provide entrepreneurs and
management teams with strategic advice, mentorship, and access to a
global network, which creates outcomes for all stakeholders,
including our Shareholders.
Molten operates a unified strategy across three vehicles: the
plc, and the managed EIS and VCT funds. Where investments qualify,
this structure enables us to combine three capital pools to invest
in the UK and Europe’s most promising technology companies in a
risk-adjusted and tax-efficient manner for our respective
investors.
Additionally, our Fund of Funds programme, established in
2017, enables us to gain exposure and invest in the most promising
seed and early-stage venture capital funds across the UK and
Europe. Seed and early-stage investing is a highly localised
endeavour, requiring deep networks within local ecosystems of angel
investors, incubators, and technology entrepreneurs. We believe
that nascent businesses are best funded by investors who can engage
founders locally or within specific verticals, and our Fund of
Funds programme (complemented by the acquisition of Forward
Partners) allows us to effectively leverage this
expertise.
Our decision in 2016 to IPO on the AlM growth market of the
London Stock Exchange, and Euronext Dublin, thereby adapting beyond
the traditional GP/LP model to become one of the largest public
venture capital firms in Europe, was partly driven by our
commitment to ‘democratise’ the returns available from venture
capital as an asset class, and make the rewards of our investments
accessible to public market investors, not just a small group of
Limited Partners.
Our innovative structure as a public company allows us to
direct capital from institutional and retail investors towards our
portfolio companies. We benefit from an evergreen balance sheet
strategy that offers flexible investment terms, and allows Molten
to focus on helping portfolio companies grow, while evaluating the
market for optimal exit conditions, which we aim to achieve above
NAV to maximise value for our Shareholders. This structure also
provides us with the flexibility to raise capital from public
market investors, including retail investors via the PrimaryBid
platform, giving us the ‘firepower’ to pursue investment
opportunities.
Our direct investment strategy primarily focuses on early and
growth-stage opportunities. We maintain a balanced portfolio that
is diversified across four key sectors of consumer tech, enterprise
tech, digital health and wellness, hardware and
deeptech.
Our market at a glance
17% European VC market
CAGR (2015-2023)
$66bn European VC
market valuation (2023)
189 No. of active
unicorns in Europe combined value over $500bn (2023)
Market events that have occurred in
VC in the past year
Over the past 12 months the global economy has experienced
stabilised high interest rates across most major currencies,
including the USD, EUR and GBP. Towards the end of 2022 (and into
the beginning of 2023) asset prices were volatile which seeped into
the private markets. Across 2023 and early 2024, both valuations
and volatility began to stabilise, with recent new heights on the
S&P 500, STOXX 600, and the FTSE 100.
Going forward, the consensus for global monetary policy
appears to favour dovish sentiment which historically has supported
upside potential for equity prices. As these market dynamics filter
into the VC market there is a sense of cautious optimism for new
compelling investment opportunities. In September 2023 we saw the
highly anticipated Tech IPO for ARM Holdings which was widely
regarded as a barometer for the IPO market. ARM successfully raised
nearly $5 billion and has shown promising after-market performance.
This is evidencing that ‘good deals can get done’ and that the
public market is ready to support outstanding high growth
technology businesses.
The market is showing signs of improvement, and technology
businesses are coming back into focus to drive performance through
innovation. Much of the tailwind experienced in the technology
market over the past 12 months has been driven by the potential
productivity gains through rapid adoption of artificial
intelligence. Microsoft’s most recent investment in Open AI valued
the business at $80 billion, NVIDIA’s market cap had crossed $2
trillion, surpassing Google and closing in on Apple and Microsoft.
At the earlier stages of the business lifecycle, Molten is seeing
companies take the next step in this market and focusing more
closely on real-world applications to drive productivity
gains.
Private markets typically lag public markets and 2023
displayed the largest contraction in European VC within the last
ten years. 2023 saw $66 billion invested in European VC deals which
was down 42% from the previous year. Much of that contraction was
due to liquidity restrictions in a challenging fundraising
environment coupled with repricing dynamics as a result of a higher
interest-rate environment. Given the public sphere showed more
promising returns than anticipated over the last 12 months to March
2024, we anticipate seeing improvements in the private
market over the next 12 months due
to that lag effect.
Currently in 2024, we are witnessing more capital invested in
European VC than in 2023. Since 2015 that continues to follow a
growth trajectory for the market which is scaling more rapidly than
the US or Asia.
Looking closely at the quarterly investment data for European
VC (see charts on bottom of this page), it was the larger rounds in
excess of $100 million that saw the biggest contractions throughout
2023, while investment in smaller/earlier rounds continued to
persist at more modest valuations. Q1 2024 saw some larger deals
(in excess of $250 million) come to market, raising over $7 billion
in aggregate in the first quarter. Comparatively, the total
investment in rounds at or above $250 million over all four
quarters in 2023 was only $11
billion.
Heading into the remainder of 2024, Molten sees value
opportunities in the market. With the recent acquisition of Forward
Partners, and having acquired a stake in Seedcamp III, we have an
expanded portfolio of assets, combined with those in our Fund of
Funds programme, which continue to present us with unique
investment opportunities. With this in mind, Molten is well
positioned to invest in the most interesting and competitive deals
in the market throughout the next 12 months.
Our strategy
Our strategy consists of six clear
objectives, underpinned by our corporate purpose ‘to advance
society through technology and innovation’.
Strategic
objective
|
FY24
progress
|
FY25
outlook
|
Links
|
To back disruptive
high‑growth technology companies to
invent the future
|
• Continued
development of our platform and team.
• Investments
of £65 million made during the year, including £25 million
share-for-share exchange for Forward Partners, with an additional
£37 million from the managed EIS/VCT funds.
• Invested
into 13 new and existing companies (direct) and committed to 6 new
funds via our Fund of Funds strategy.
• Trading
performance of our portfolio companies continues to be strong, with
weighted average revenue growth rates in the core portfolio
expected to be over 52% in 2024.
|
• Expected
level of annual deployment in the region of £100-150 million,
including the managed EIS/VCT funds.
|
Link to
principal
risks
(pages 58 to 65 of the Annual
Report)
1, 2, 3, 5, 6, 7,
8
Link to
KPIs
3, 4
|
To fuel their growth
with access to capital
|
• Investments
of £65 million made during the year, including £25 million
share-for-share exchange for Forward Partners, with an additional
£37 million from the managed EIS/VCT funds.
|
• Expected
level of annual deployment in the region of £100-150 million,
including the managed EIS/VCT funds.
|
Link to
principal
risks
(pages 58 to 65 of the Annual
Report)
1, 3, 4, 5,
9
Link to
KPIs
3
|
To provide a holistic
capital model, supporting entrepreneurs through the duration of
their journey
|
• £57
million of cash and £60 million undrawn RCF at 31 March 2024, with
a further £66 million available for investment from EIS/VCT
funds.
• Committed
to a further six Fund of Funds, leading to total commitments in 80
funds as part of our Fund of Funds programme.
• Investments
from the managed EIS/VCT funds.
|
• Continue
to utilise our flexible model to support entrepreneurs through the
duration of their journey.
• Continue
to support our Fund of Funds programme.
|
Link to
principal
risks
(pages 58 to 65 of the Annual
Report)
1, 3, 4, 7,
8
Link to
KPIs
3, 5
|
To scale our platform
for growth while maintaining the integrity of the investment
process
|
• The
platform’s AUM (including EIS and VCT) is c. £1.8
billion.
• Share-for-share
acquisition of Forward Partners contributing 40+ companies to the
portfolio, and new Investment and Finance team members.
• Continued
development of our team.
|
• Continue
to consider opportunities to introduce third-party capital,
enabling the Group to build a more material stake in
companies.
• Continue
to develop our processes as we grow.
|
Link to
principal
risks
(pages 58 to 65 of the Annual
Report)
1, 2, 3, 4, 7,
9
Link to
KPIs
1, 3, 5
|
To maintain a
high‑quality bar for investments to
continue to deliver strong investment returns underpinned by cash
realisations
|
• Fair
value increase of 0.4% in the gross portfolio.
• Realisations
of £39 million during the year.
|
• Continued
target of 20% fair value growth through the cycle.
• Continued
target of 10% in realisations of the Gross Portfolio Value through
the cycle.
|
Link to
principal
risks
(pages 58 to 65 of the Annual
Report)
3, 4, 7, 9
Link to
KPIs
1, 2, 4
|
To support
visionaries who find new ways for the world to work in the future.
We want that future to be sustainable, fair and accessible to
all
|
Achievement of FY24 ESG KPIs - see page
48 of the Annual Report of this report for further details, or see
more in our inaugural Sustainability report, also published
today.
|
• See
page 49 of the Annual Report for details of FY25 ESG
KPIs.
|
Link to
principal
risks
(pages 58 to 65 of the Annual
Report)
3, 4, 5, 7,
9
Link to
KPIs
6
|
KPIs
We are focused on delivering a
strong financial performance and achieving the targets we have set.
These core KPIs demonstrate our strategy’s effectiveness, and
validate the value delivered to Shareholders.
KPIs
|
Measurement
|
Progress this
year
|
Focus for
2025
|
01
Growth in value of
the portfolio
|
Gross Portfolio Value determined using
IPEV Guidelines.
|
Gross Portfolio Value has increased to
£1,379 million, with a fair value movement of £6 million,
reflecting a fair value increase of 0.4% from FY23 (FY23: £1,371
million).
|
Continued target of 20% fair value
growth through the cycle.
|
02
Realising
cash
|
Cash generated from portfolio company
exits against original cost.
|
£39 million realised in the year (FY23:
£48 million).
|
Continued target of 10% in realisations
of the Gross Portfolio Value through the cycle.
|
03
New
investments
|
Deploying funds for investments into
new portfolio companies, follow-on investments into existing
companies, stake building into existing companies and secondary
investments.
|
Investments of £65 million
made during the year, including £25
million share-for-share exchange for Forward Partners, (FY23: £138
million), with an additional £37 million from the managed EIS/VCT
funds (FY23: £41 million).
|
Expected level of annual deployment in
the region of
£100-150 million, including
EIS/VCT.
|
04
Dealflow
|
We maintain an internal database of
opportunities.
|
We continually track deals done at
stages earlier than our target investment criteria and filter to
pre-qualify future potential deals.
|
Through our brand and network, continue
to access high quality dealflow across Europe.
|
05
Cash
balances
|
Maintaining sufficient liquidity to
meet operational requirements, take advantage of investment
opportunities and support the growth of portfolio
companies.
|
£117 million cash available to plc,
incluidng undrawn £60 million revolving credit facility balance
from our £150 million debt facility at year-end with £90 million
term debt drawn (FY23: £83 million, £90 million drawn, with undrawn
revolving credit facility of £60 million) at year-end.
£66 million (FY23: £48 million) cash in
the managed EIS and VCT funds available for investment.
|
Target maintenance of 12-18 months of
cash resources.
|
06
ESG
|
Progress and track ESG performance in
line with our ESG KPIs (see page 48 of the Annual
Report).
|
We continued to make progress in our
ESG efforts, particularly with regard to tailored portfolio
engagement (Please refer to our Sustainability Report for more
detail).
Summary of our progress against FY24
ESG KPIs (see page 48 of the Annual Report).
|
Execute on the Company’s FY25 ESG KPIs,
which can be found in the Sustainability section of the report on
page 49 of the Annual Report.
|
Financial review
The current market cycle has been characterised by higher
interest rates leading to lower valuations, as a function of the
cost of capital increasing, and reduced liquidity in an environment
with less M&A and IPO activity. This backdrop has been in place
since March 2022, and we responded quickly to reflect the reduced
public market valuation multiples for technology businesses into
our portfolio holding values in September 2022 (the first valuation
period following the market adjustment). Alongside ensuring our
portfolio holding values are consistent with the prevailing market,
in line with IPEV guidelines, we focused on preserving the balance
sheet capital by reducing the amount invested and ensuring there
was sufficient liquidity to support our existing
portfolio.
The resilience of the portfolio has been demonstrated by: (1)
the capital raisings that have been undertaken during this past two
years, with over £1.2bn raised in FY23 and FY24, in spite of a less
active fundraising environment, (2) the continued commercial
traction and revenue growth of the portfolio businesses, and (3),
the limited capital support that was required from
Molten.
As
we appear to be entering an improving environment for realisations,
the robustness of our valuation processes and the quality of our
underlying portfolio is being validated as demonstrated by our
recent announcements, relating to portfolio companies Perkbox and
Endomag, modestly above their holding values.
The flexibility of our evergreen balance sheet model has been
further illustrated through the equity fundraise in the year to
take advantage of opportunities presented by a disconnected market,
where asset prices have been depressed alongside limited liquidity.
This provided an opportunity for the Group to acquire high-quality
assets via a share acquisition of Forward Partners ,and also
through a stake in Seedcamp Fund III.
The financial year 2024 reflects a continuation of this more
challenged market environment, but also demonstrates stability in
the portfolio values in the second half of the year. The first half
of the year saw further reduction in valuation multiples across the
broader technology sector before stabilising in the latter half of
the year. In addition to the decline in public market technology
valuations, private company fundraising has continued to stutter
across the broader market, outside of specific pockets of interest.
We have seen the impact of these factors in our own portfolio
valuations. Despite this macroeconomic picture, it has been
pleasing to see continued value creation stemming from our
secondary strategy. Our acquisition of a stake in Seedcamp’s Fund
III, along with an all-share acquisition of Forward Partners (both
which took place in the second half of the year) contributed fair
value uplifts to the portfolio.
As
ever, cash runway and preservation of liquidity remain key for our
portfolio, and we are encouraged by the resilience demonstrated by
our portfolio companies, as they continue to balance capital
preservation and growth priorities.
The first half of the financial year saw a reduction in
portfolio value which was offset in the second half by a slight
increase in the valuation of the existing portfolio, and increases
in fair value following the acquisitions of Forward Partners and
Seedcamp III. As at 31 March 2024, net assets stood at £1,251
million, an increase of £57 million on the prior year.
We
have generated fee income during the year of £20 million, which
serves to offset our cost base such that our costs (net of income)
remain substantially less than 1% of NAV. As we continue to build a
broader platform to incorporate third-party assets alongside our
own balance sheet, we have seen the benefit of fee income covering
93% of our general administrative expenses, including salaries.
Minimising the cost drag on investment returns remains an area of
focus for our management team.
The Forward Partners acquisition is recognised at fair value
through profit or loss (“FVTPL”) in the Consolidated Statement of
Financial Position and as a gain on bargain purchase in the
Consolidated Statement of Comprehensive Income. The terms of the
acquisition for Forward Partners were one new Molten share for nine
Forward Partners shares, resulting in a portfolio cost of £25
million (net of cash acquired). On acquisition, the Forward
Partners portfolio was valued at £65 million, representing a gain
on bargain purchase of £39 million. For more information of this
transaction see Note 14.
Statement of financial
position
Portfolio
The Gross Portfolio Value at 31
March 2024 is £1,379 million (£1,371 million at 31 March 2023). The
Gross Portfolio Value is an APM (see Note 35) and there is a
reconciliation from the gross to net portfolio value (see Note
30).
Molten has maintained a disciplined approach to its capital
allocation through FY24, with cash investments below historical
investment rates, and aligned to realisations during the period.
Investments of £65 million, including £25 million representing the
Forward Partners share-for-share exchange (net of cash acquired),
were made during the year; and cash proceeds from exits, escrows
and sales of shares were received of £39
million.
The gross fair value reduction on the portfolio was £18
million, of which £24 million results from a decline in foreign
exchange and offset by an increase of £6 million from fair value
movements. Further details on the Group’s valuation policy and
valuations basis as at 31 March 2024 can be found in Notes 4 and 30
to the consolidated financial statements. The gross portfolio fair
value has stabilised from and is broadly flat for the year at
constant currency, reflecting a modest increase in the
like-for-like portfolio in the second half of the year.
The Gross Portfolio Value, presented on page 26 of the Annual
Report, is subject to adjustments for the fair value of accrued
carry liabilities and deferred tax to generate the net portfolio
value of £1,292 million. Both carried interest liabilities and
deferred tax arise at the level of our investment vehicles and are
taken into account when arriving at the fair value of these
vehicles to be recognised in the consolidated statement of
financial position.
The Net Portfolio Value has
increased by £15 million to £1,292 million (31 March 2023: £1,277
million) with the summary of the movements in financial assets held
at fair value through the profit and loss (FVTPL) which is
recognised on the Consolidated Statement of Financial Position, is
shown on page 112
of the Annual Report.
The fair value reduction of £29 million, in accordance with
the relevant IFRS in Note 4, comprised of fair value movement on
investments of £68 million is reflected in the consolidated
statement of comprehensive income, offset by a £39 million gain on
bargain on purchase. Carry balances of £87 million are accrued to
previous and current employees of the Group based on the current
fair value at the year-end and deducted from the Gross Portfolio
Value. Carry payments totalling £2 million were made in the year
following the realisation of assets in the underlying fund holdings
that exceeded threshold returns. The non-investment movements to
entities held at FVTPL were made of £16 million, including for
settlement of priority profit share (“PPS”). The Gross Portfolio
Value table below reconciles the gross to net portfolio values, and
the movements between 31 March 2023 to 31 March 2024. The
percentage of net portfolio value to Gross Portfolio Value is 94%
(31 March 2023: 93%), which reflects the decrease to carry balances
in line with the movements of the portfolio.
Total liquidity
The consolidated cash balance at 31 March 2024 was £57
million (31 March 2023: £23 million).
Total available cash for Molten Ventures at 31 March 2024 was
£117 million, including £60 million undrawn on the Company’s
revolving credit facility (31 March 2023: £83 million, including
£60 million undrawn on the Company’s revolving credit
facility).
In
November 2023, we completed an equity fund raise of £55 million
(net of fees) from new and existing investors (including a
PrimaryBid retail element), to enable our position for new
follow-on direct and secondary investments. Molten issued
21,261,548 shares comprising a placing, subscription, retail offer
and offer for subscription. The proceeds of the placing are
recognised in the cash balance at the year end and within the share
capital movements (please see Note 26 for further
detail).
Debt facility
The existing debt facility with J.P. Morgan Chase Bank N.A.
London Branch (‘JPM’) and HSBC Innovation Bank Limited (‘HSBC’)
(the ‘Debt Facility’) comprises a £90 million term loan and a
revolving credit facility (‘RCF’) of up to £60 million on three and
two-year availability periods respectively, and is secured against
various assets and LP interests in the Group. The Debt Facility
interest rate is SONIA plus a margin of 5.5% per annum and is
underpinned by the value of the investment portfolio. The value of
the portfolio companies is subject to periodic independent
third-party valuation. The Debt Facility is utilised for investment
and working capital purposes.
We
have been compliant with all relevant financial
covenants throughout the duration of
the debt facilities and at period-end.
During the year, we amended the terms of the covenants
relating to loan to value and market adjusted GAV to provide
additional flexibility, see Note 24(i) for more
information.
As
at 31 March 2024, the £90 million term loan is fully drawn and the
£60 million RCF is undrawn and fully available, subject to
utilisation conditions. The drawn amount is recognised in the
Consolidated Statement of Financial Position at 31 March 2024,
offset by capitalised fees from the set-up of the Debt Facility,
which are being amortised over its life. Drawdowns and paydowns on
the Debt Facility will be driven by portfolio investments and
realisations. For further information, please see Note
24(i).
Net assets
Net assets in the Consolidated Statement of Financial
Position at 31 March 2024 have increased by £57 million from 31
March 2023, to £1,251 million, an increase of 4.7%. This is mainly
the result of the increase in the investments balance and cash due
to the fund raise and Forward Partners’ acquisition, along with a
decrease in deferred tax liability recognised in the statement of
financial position.
The Net Asset Value per share for the year ended 31 March
2024 was 662p (31 March 2023: 780p) after the issuance of new
shares for the equity fund raise and share-for-share acquisition of
Forward Partners.
Statement of comprehensive
income
We
recognised a loss after tax in the year of £41 million, compared to
a £243 million loss in FY23.
Income recognised during the year ending 31 March 2024
comprises investment fair value decreases of £29 million (year
ending 31 March 2023: £240 million decreases), including the gain
on bargain purchase attributed to the Forward Partners portfolio of
£39 million. Fee income of £20 million was generated in the year
(year ended 31 March 2023: £23 million), which is principally
comprised of priority profit share (“PPS”), management fees from
the managed EIS/VCT funds, performance fees and promoter fees. PPS
is generated from management fees charged on the underlying plc
funds, as invested capital, net of realisations, increases so too
does the PPS income. The decrease in fee income in the year is a
result of a decrease in PPS percentage held in older vintages with
the decreased level of investments in 2024. This has resulted in
management fees decreasing by 12.7% in the period.
Our operating costs (net of fee income) continue to be less
than our target of 1% of NAV. It is anticipated that further income
from fees generated from management of third-party funds will
provide a further positive contribution to our cost base and
profitability in the future.
Finance expenses have increased to £11 million from £7
million in 2023 due to the debt facility being utilised for the
full 12 months and an increase in the rate of SONIA. General and
administration costs (“G&A”) of £21 million, compared to the
£19 million recognised in the year to 31 March 2023, have increased
in comparison to the prior year following the growth of the
Investment Team and supporting infrastructure.
Post-period end
On
30 April 2024, Hologic, Inc, a NASDAQ listed entity, signed a
definitive agreement to acquire Endomagnetics Ltd. (‘Endomag’). The
acquisition, which is subject to regulatory approval as well as
working capital and other customary closing adjustments, values
Endomag at approximately $310 million, which is at a slight uplift
to NAV.
Ben Wilkinson
Chief Financial Officer
11
June 2024
Gross portfolio value
table
Investments
|
Fair
value of
investments
31-Mar-23
£’m
|
Investments
£’m
|
Realisations
£’m
|
Non-investment
cash movements
£m
|
Movement
in foreign exchange
£’m
|
Fair
value
movement
£’m
|
Fair
value movement
31-Mar-24
£’m
|
Fair
value of
investments
31-Mar-24
£’m
|
Cost
of
Investment
31-Mar-24
£m
|
Multiple
of
Invested
Cost
31-Mar-24
|
Ownership
interest
range*
|
ThoughtMachine
|
109.6
|
–
|
–
|
–
|
–
|
(10.4)
|
(10.4)
|
99.2
|
36.5
|
2.7×
|
A
|
Coachhub
|
96.6
|
–
|
–
|
–
|
(2.6)
|
(2.1)
|
(4.7)
|
91.9
|
31.3
|
2.9×
|
C
|
Aiven
|
94.5
|
–
|
(6.7)
|
–
|
(2.3)
|
(3.5)
|
(5.8)
|
82.0
|
4.6
|
14.0×
|
B
|
Ledger
|
71.8
|
–
|
–
|
–
|
(1.7)
|
(9.0)
|
(10.7)
|
61.1
|
28.5
|
2.1×
|
B
|
Aircall
|
58.6
|
–
|
–
|
–
|
(1.3)
|
3.2
|
1.9
|
60.5
|
14.3
|
4.2×
|
B
|
Form3
|
52.4
|
–
|
–
|
–
|
–
|
6.8
|
6.8
|
59.2
|
30.1
|
2.0×
|
B
|
Revolut
|
54.5
|
4.0
|
–
|
–
|
(1.1)
|
7.7
|
6.6
|
65.1
|
11.1
|
5.9×
|
A
|
M-Files
|
44.9
|
–
|
–
|
–
|
(1.4)
|
4.2
|
2.8
|
47.7
|
6.5
|
7.3×
|
B
|
ICEYE
|
35.7
|
–
|
–
|
–
|
(0.9)
|
8.1
|
7.2
|
42.9
|
22.5
|
1.9×
|
B
|
Ravenpack
|
41.0
|
–
|
–
|
–
|
(0.8)
|
(3.0)
|
(3.8)
|
37.2
|
7.5
|
5.0×
|
D
|
Endomagnetics
|
34.0
|
–
|
–
|
–
|
–
|
0.7
|
0.7
|
34.7
|
9.3
|
3.7×
|
C
|
FintechOS
|
28.3
|
2.6
|
–
|
–
|
(0.8)
|
(0.5)
|
(1.3)
|
29.6
|
29.6
|
1.0×
|
D
|
ISAR AeroSpace
|
27.4
|
–
|
(1.9)
|
–
|
(0.7)
|
(1.4)
|
(2.1)
|
23.4
|
4.1
|
4.6×
|
A
|
Schuttflix
|
21.1
|
1.7
|
–
|
–
|
(0.6)
|
(0.1)
|
(0.7)
|
22.1
|
21.5
|
1.0×
|
B
|
Graphcore
|
37.2
|
–
|
–
|
–
|
(0.4)
|
(16.2)
|
(16.6)
|
20.6
|
24.0
|
0.9×
|
A
|
Hive MQ
|
20.9
|
–
|
–
|
–
|
(0.6)
|
–
|
(0.6)
|
20.3
|
20.2
|
1.0×
|
B
|
Perkbox
|
16.2
|
–
|
–
|
–
|
–
|
0.1
|
0.1
|
16.3
|
14.0
|
1.2×
|
C
|
Riverlane
|
13.4
|
–
|
–
|
–
|
–
|
2.4
|
2.4
|
15.8
|
5.1
|
3.1×
|
B
|
Freetrade
|
9.9
|
–
|
–
|
–
|
–
|
4.6
|
4.6
|
14.5
|
14.0
|
1.0×
|
B
|
Smava
|
8.5
|
–
|
–
|
–
|
(0.4)
|
5.0
|
4.6
|
13.1
|
14.5
|
0.9×
|
A
|
Remaining
|
494.3
|
57.0
|
(30.3)
|
–
|
(8.3)
|
9.0
|
0.7
|
521.7
|
509.7
|
1.1x
|
|
Gross portfolio
value
|
1,370.8
|
65.3
|
(38.9)
|
–
|
(23.9)
|
5.6
|
(18.3)
|
1,378.9
|
858.9
|
1.6x
|
|
Carry external
|
(94.0)
|
–
|
1.9
|
–
|
–
|
5.0
|
5.0
|
(87.1)
|
|
|
|
Portfolio deferred tax
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
|
|
|
Trading carry &
co-invest
|
0.3
|
–
|
–
|
–
|
–
|
–
|
–
|
0.3
|
|
|
|
Non-investment cash movement
|
–
|
–
|
–
|
15.8
|
–
|
(15.8)
|
(15.8)
|
–
|
|
|
|
Net portfolio
value
|
1,277.1
|
65.3
|
(37.0)
|
15.8
|
(23.9)
|
(5.2)
|
(29.1)
|
1,292.1
|
|
|
|
* Fully
diluted interest categorised as follows: Cat A: 0–5%, Cat B: 6–10%,
Cat C: 11–15%, Cat D: 16–25%, Cat E: >25%.
Portfolio review
Molten remained well-diversified
across our four key sectors of investments which capture technology
subsector themes such as fintech, climate-tech, cloud-native and
security with early use cases of AI evident in our
portfolio.
Consumer technology
Consumer-facing services and products, innovative business
models, and proven execution capabilities that bring exceptional
opportunities enabled by technology.
allplants
|
crowdcube
|
Freetrade
|
Juno
|
LYST
|
N26
|
Onefootball
|
perbox
|
PrimaryBld
|
Revolut
|
smava
|
sweepr
|
SPOKE
|
ZOPA***
|
|
Enterprise technology
The software
infrastructure, applications and services that make enterprises
more productive, cost-efficient, and smoother to run.
&Open
|
ably
|
aircall
|
aiven*
|
ALTRUISTIQ***
|
APEXX**
|
reedr
|
CHOCO
|
CoachHub***
|
FINALCAD
|
FintechOS***
|
FORM3
|
Genesis
|
GETSAFE
|
gravity sketch
|
HiveMQ
|
MAKERS***
|
MANNA
|
Material Exchange
|
M-Files***
|
MOSTLY-AI*
|
OutThink**
|
Pigmant
|
Pliant
|
RavenPack**
|
realeyes
|
Robin*
|
SCHUTTFLIX***
|
sennder
|
SettleMint
|
SimScale***
|
SPOTQA***
|
Up LEARN***
|
Hardware & Deeptech
R&D-heavy technologies
which emerge to become commercially dominant, upending industries
and enabling entirely new ways of living and doing
business.
Bezero
|
FocalPoint
|
GRAPHCORE*
|
hadean
|
ICEYE**
|
INDY KITE
|
isaeaerospace
|
LEDGER
|
PARAGRAF
|
Ravelin**
|
riverlane
|
sorare
|
Thought Machine**
|
XMOS
|
|
Digital health &
wellness
Using data,
software and hardware to create new products and services for the
health and wellness market.
AKTIA**
|
CLUE
|
endomag
|
evonetix
|
ieso digital health*
|
lifesum
|
Companies
included in our company numbers and associated analysis are direct
investments, co-investment, Earlybird and assets under third party
management companies above a £2.0 million fair value threshold to
Molten Ventures.
Key
* AI
First
** AI-Powered
*** AI-Enhanced
Cash runway within the portfolio
remains a key focus within the current environment. We have
continued with discipline around our investment process, deploying
£40 million into the portfolio, including the acquisition of a
stake in Seedcamp fund III, and investments into Fund of Funds and
Earlybird strategies.
Portfolio valuations
The Gross
Portfolio Value as at 31 March 2024 is £1,379 million, an increase
of £8 million, net of investments, realisations and total fair
value movement, from the 31 March 2023 value of £1,371 million.
This represents a 1% increase in gross fair value, due to the
increase in investments made in the year. £18 million is a net
decrease, resulting from a £6 million increase in the gross fair
value, offset by negative currency movements of £24 million.
Valuations remain robust due to 97% of the portfolio value holding
downside protection thanks to preference rights.
Our portfolio
valuations process continues to follow the IPEV Guidelines and
aligns to the market movements in the period; we have seen
movements in some of our key assets to reflect public market
comparatives. We continue to see overall revenue growth in our
portfolio companies with forecast weighted average revenue growth
in the core of over 63% in the year, reflecting the ongoing
innovation and digital transition continuing across
sectors.
The Core
Portfolio is made up of 20 companies representing 62% of the Gross
Portfolio Value. The core portfolio constituents has been updated
to reflect the increase in valuation attributed to Freetrade,
Perkbox, Riverlane and Smava, with PrimaryBid moving to the
emerging portfolio category.
During the
period, we invested £12 million directly into new and existing
companies, including:
New
Companies
|
Company
|
Stage
|
Who they
are?
|
Oliva
|
Early
|
Oliva is a B2B mental health platform
offering online therapy to employees. By analysing thousands of
data points on how employees use Oliva, created the Employee
Wellbeing Index. Based on this, Oliva’s advanced triaging matches
employees with the ideal professional and wellbeing plan for
them.
|
Morressier
|
Growth
|
The Morressier platform supports the
entire pre-publishing journey, from hybrid and virtual conferences
where research is shared in its earliest stages, to journal
submissions, peer-review workflows, and AI-powered integrity
checks.
|
binalyse
|
Growth
|
Binalyze is a cybersecurity company
offering a digital forensics and incident response (DFIR) platform
named AIR, designed to automate and streamline the collection,
analysis, and management of digital evidence. It enables rapid
evidence acquisition, compromise assessment, and triage at scale
across network assets, significantly reducing incident response
times and facilitating collaborative investigations.
|
anima
|
Growth
|
Anima provides a comprehensive
healthcare platform that integrates various care management tools
into one system, automating manual tasks and enhancing care team
productivity. It supports online consultations, facilitates
document processing, enables detailed analytics, and improves
communication. Anima aims to streamline workflows, improve patient
outcomes, and save clinical hours.
|
imu
|
Growth
|
IMU Biosciences is led by a team of
world-class scientists in immunology. IMU has developed
leading-edge biological and computational tools to interrogate the
immune system. The company’s technology platform
generates a comprehensive analysis of immune system components in
patient samples, so the company is generating novel data using
existing hardware.
|
Follow-on
|
Company
|
Stage
|
Who they
are?
|
allplants
|
Growth
|
allplants is an online platform and
chef-to-customer delivery service aimed at providing delicious and
healthy chef-made meals to make eating more plants less effort and
more exciting. allplants dishes are flash-frozen, ensuring
nutrition and taste are locked in and ready to eat in
minutes.
|
Clue
|
Growth
|
Clue is a period tracking app, a
trusted menstrual health resource, and a thought leader in femtech.
By combining science and technology, Clue are actively changing the
way people learn, access, and talk about menstrual and reproductive
health around the world.
|
SCHUTTFLIX
|
Growth
|
Schüttflix is a digital logistics
platform for the construction industry, linking contractors, bulk
material sellers, carriers, and disposers to enhance efficiency.
Schüttflix digitizes traditional processes, providing timely
deliveries, price transparency, and efficient route management to
reduce emissions and waste. Schüttflix aims to streamline
operations across Germany and expand into other European countries,
driving sustainability and digital innovation in construction
logistics.
|
AKTIA
|
Growth
|
Aktiia is a health technology company
specialising in continuous blood pressure monitoring without the
use of a traditional cuff. The innovative wrist-worn device
provides accurate and convenient monitoring, empowering individuals
to manage their cardiovascular health pro-actively.
|
sweepr
|
Growth
|
Sweepr has developed a contextually
adaptive technical support platform for connected homes. With
Sweepr, consumer service providers and connected product
manufacturers can transform how they offer technical support,
enabling customers to resolve issues without calling customer care
and improving time to resolve for any remaining issues that are
escalated to traditional support channels.
|
realeyes
|
Growth
|
Realeyes utilizes AI and computer
vision to analyse how viewers react emotionally and attentively to
digital media. By measuring real-time responses through device
cameras, it enhances advertising effectiveness, supports identity
verification, and improves applications in wellbeing and
telehealth, providing insights across various
industries.
|
fintechOS
|
Growth
|
FintechOS is a technology company that
simplifies the creation and delivery of financial services. It
provides a platform that accelerates the development of financial
products, facilitating rapid deployment and service improvements.
The platform supports sectors like retail banking, insurance, and
embedded finance, helping businesses to efficiently launch and
manage personalized financial services and enhance customer
experiences. FintechOS aims to democratise access to advanced
financial technology for companies of all sizes.
|
Fund of
Funds
|
Earlybird
|
Our seed and early-stage Fund of Funds
programme continues to expand, providing access to earlier stage
companies, as well as deal flow opportunities for the highest
quality companies from within these portfolios. During the
financial year, we committed to another 6 funds, bringing our total
commitments to 80 funds. Molten’s commitments to new and existing
seed funds at 31 March 2024 are £133 million, of which £84 million
has been drawn to year-end £15 million during the year excluding
external LPs). It is anticipated the remaining £49 million will be
drawn over the next three to five years.
|
During this period, funds managed by
Earlybird VI and Earlybird VII drew down £6 million. This allows us
to continue to access earlier stage companies in Germany and Europe
with the benefit of Earlybird’s expertise.
|
Realisations
|
Total cash proceeds from realisation
and distribution during the year are £39 million, comprised of £9
million during the period from the sale of Trustpilot shares in the
public market, proceeds of £4
million from the acquisition of Friday Finance (formerly known as
Airbank), and proceeds of £12 million from the sale of Earlybird VI
shares.
Included within the £39 million of
realisations in the year is realisations of £5 million from the
Fund of Fund programme.
|
Molten Ventures Core Portfolio is
made up of 20 companies representing 62% of the Gross Portfolio
Value. New entrants to the core consist of Freetrade, Perkbox,
Riverlane and Smava, with PrimaryBid moving to the emerging
portfolio.
Note – narrative updates based on
publicly available information from the Core Portfolio
companies.
aircall |
Aircall is a cloud-based customer phone
and communication platform that is designed exclusively for sales
and support teams.
It is a fully cloud-based voice
platform that integrates with existing CRM systems and helpdesk
tools voice solution that eliminates any need for desk phones, and
company teams can be set up across several locations in an instant
with an internet connection.
Aircall won the “Business Phone System
Innovation of the Year” award from RemoteTech Breakthrough for the
second consecutive year in 2023. This
recognises Aircall’s innovations in their cloud-based business
phone system. Further, Aircall participated in the “2023 Service
Quality Benchmark Report Webinar” as part of World Certification
Week hosted by HubSpot Academy.
Aircall launched their AI-powered call
and voicemail transcription feature in May, which has expanded to
new suite of AI features which will help business reduce time spent
on busywork, admin, and training each week, saving on average 21
hours of time. Customers will be able to take a deep dive into
AI-generated Call Summaries, Key Topics, and Talk-to-Listen
Ratios.
The telephony market has evolved and
with the introduction of VOIP (Voice Over Internet Protocol)
Aircall drives value to its customers through actionable analytics,
sentiment analysis and now AI applications. Aircall’s integrations
with CRMs and other lead generation-customer service applications
has resulted substantial benefits for its clients. Aircall’s early
adoption into the call centre market positions it as a pioneer in
the space having a deep longstanding customer relationships and
expansion potential.
|
Location:
Paris,
France
|
Sector:
Enterprise
Technology
|
Invested:
£14m
|
Fair Value:
£61m
|
UN Sustainable Development
Goals Mapping: 8, 9
|
aiven |
Aiven is a multi-cloud managed service
provider which hosts and manages open-source databases and
messaging-system solutions on all major cloud platforms. Aiven’s
products are built using public cloud infrastructure such as Apache
Kafka, Cassandra, Elasticsearch, M3 and PostgreSQL, supporting
developers around the world with building new applications, without having to manage backend
infrastructure.
Aiven was named the 2023 Google Cloud
Breakthrough Partner of the Year for the Europe, Middle East, and
Africa (EMEA) region. This award recognizes Aiven’s achievements in
the Google Cloud ecosystem and helping joint customers unleash
cloud innovation.
Aiven focused on lowering their CO2
emissions from IT infrastructure, with key achievements including:
developing an open source solution called “Cloud Carbon Footprint”
to calculate CO2 emissions and creating the ability for Aiven and
its customers to calculate granular cloud emissions and energy
consumption.
Aiven is a look-through investment held
via Earlybird.
|
Location:
Helsinki,
Finland
|
Sector:
Enterprise
Technology
|
Invested:
£5m
|
Fair Value:
£82m
|
UN Sustainable Development
Goals Mapping: 8, 9
|
CoachHub |
CoachHub is a global digital coaching
and talent development platform that helps organisations to create
personalised, measurable, and scalable coaching programmes on a
one-to-one basis for entire workforces and teams. Coaching sessions
are based on scientific research and market insights led by
behavioural scientists and global research leaders to maximise
business impact and drive innovation. These are delivered via an
AI-enabled technology platform and seamless user experience. The
coaching journey is delivered by c. 3,500 business coaches across
six continents in more than 80 languages.
CoachHub launched the Innovation Lab, a
transformative research initiative to facilitate innovation in
digital coaching. The goal of CoachHub’s Innovation Lab is to
bridge the gap between research in people development and
real-world organisational needs, ensuring that coaching practices
are effective and aligned with the constantly evolving requirements
of businesses.
CoachHub announced their new
“Co-Development Hubs” offering in September 2023, offering a
collective coaching appraoch. Co-development Hubs are 90-minute
sessions with four to six peers facilitated by a trained coach who
follows the co-development methodology.
Coachhub’s platform and offering meets
the needs of a rapidly transforming industry which is growing
rapidly and where traditional formats are disrupted and new talent
generations ask for more career development options. The business
started in 2018 and is merging to be a global category leader with
an impressive blue chip customer base. We currently observe that
every major corporation is expected to coach their talent at scale
by the end of the decade and that Covid-19 accelerated this
transformation, which was already in motion.
|
Location:
Berlin,
Germany
|
Sector:
Enterprise
Technology
|
Invested:
£31m
|
Fair Value:
£92m
|
UN Sustainable Development
Goals Mapping: 4, 11
|
endomag |
Endomag is a global developer of breast
cancer technolgies, on a mission to improve breast cancer care by
preventing unnecessary surgery, improving surgical outcomes, and
making treatments more accessible, which can be made available at
any hospital. Endomag produces surgical guidance products which
allow surgeons to accurately remove cancerous tumours. Its products
include the Magseed marker for magnetic tissue localization before
surgery, the Magtrace lymphatic tracing injectable for breast
cancer staging and the Sentimag platform, which supports both
localisation and lymphatic tracings, without the use of radioactive
materials.
Endomag was highly commended in the
2023 Medtech Company of the Year category by Cambridge Independent
Science and Technology. In July 2023, Endomag raised over £2,000
for cancer charities. In September 2023 it named Royal Bolton
Hospital as one of the UK’s first ‘Centres of Excellence’, offering
peer-to-peer education to physicians around the world to learn from
experts in its technology.
Endomag pioneers the use of magnetic
sensing technology to improve surgical guidance and accuracy for
breast cancer treatment, through its range of innovative products:
Sentimag, Magtrace and Magseed, now adopted in over 300 hospitals
globally. It operates in a rapidly growing medical device space,
particularly for technologies enhancing breast cancer care
standards and patient experience. With significant funding rounds
totalling more than $22 million, regulatory approvals, and a
proposed strategic acquisition by Hologic (a global leader in
women’s health) in 2024 for c. $310 million, the deal is subject to
working capital and other closing adjustments.
|
Location:
Cambridge,
UK
|
Sector:
Digital Health & Wellness
|
Invested:
£9m
|
Fair Value:
£35m
|
UN Sustainable Development
Goals Mapping: 3, 9
|
fintechOS |
FintechOS is a global leader in high
productivity fintech infrastructure (HPFI), and aims to simplify
and accelerate the launch and service of innovative financial
products. FintechOS achieves high speed product launches for major
retail banks and insurance companies. These solutions give
companies the ability to engage customers across new digital
channels. With a low code/no code approach, their product
facilitates interaction across technical and non-technical product
teams at banks and insurers.
FintechOS announced 40% year-over-year
revenue growth in 2023, with the company expecting to achieve
profitability in 2024. Growth has been driven by winning new
customers in strategic markets, including the US, UK, Continental
Europe, and most recently Asia-Pacific.
In 2023, FintechOS announced strategic
partnerships and collaborations, including with Mircrosoft,PwC,
Weanalyze, and EY. FintechOS also received several accolades in
2023 - being named as a Representative Vendor in the 2023 Gartner
Market Guide for Core Banking, Europe and Commercial Loan
Origination Solutions, named as a Technology Standout Provider by
Celent, and winning Insurtech Company of the Year at Fintech Awards
London.
FintechOS’s product is designed to be
all about speed to market. The repeal and replace legacy technology
method works for certain types of banks, typically larger Tier 1
banks, where it takes many years and at high cost. However, for the
vast majority of the banks and insurance market, their technology
stacks remain an amalgamation and accumulation of technology, they
require technology that can seamlessly integrate with their
existing stack and enable them to innovate to match and compete
with FintechOS.
|
Location:
London, UK
|
Sector:
Enterprise
Technology
|
Invested:
£30m
|
Fair Value:
£30m
|
UN Sustainable Development
Goals Mapping: 8, 9
|
FORM3 |
Form3 is a cloud native
payments-as-a-service platform that designs, builds, and runs the
technology that powers the future of payments. Removing reliance on
outdated, complex and costly payments infrastructure through
provision of a modern, real-time account-to-account payment
platform, Form3’s product is designed as a single-instance,
multi-tenant architecture, meaning a single instance of the
software supports multiple clients. When payment scheme rules
change, banks face difficulties in adapting - Form3’s technology
once implemented is applied to all customers in real-time,
seamlessly.
In September 2023, Visa announced its
investment in Form3 embarking on a partnership to offer Form3’s
payment technology to its client base. Form3 continues to scale in
the UK, Europe and the US, where it is has partnered with Thought
Machine, another Molten portfolio company, to add FedNow, TCH RTP
and SEPA Instant Credit Transfer connectivity to Thought Machine’s
payment platform, Vault Payments. This partnership brings together
two next-generation payment solutions, offering banks and financial
and financial institutions an end-to-end solution for seamless
real-time payment processing.
In 2023, Form3 and its staff won
multiple awards - including CEO of the Year (RemoteTech
Breakthrough Awards), Payment Tech of the Year (UK Fintech Awards),
Team of the Year - Engineering Team (Europe Fintech Awards), and
Tech of the Future for Banks & Financial Institutions (Paytech
Awards) - also being shortlisted for several others.
Payment schemes and systems are largely
regional and defined by currency, they are governed by a
combination of Governments, central and commercial banks. When
payments scheme rules change, banks face difficulties in adapting,
Form3’s technology once implemented is applied to all customers in
real-time, seamlessly. All major payments schemes around the world
are shifting into and/or are looking at building real-time schemes
which by design will require cloud-native software to support the
implementation and continued maintenance.
|
Location:
London, UK
|
Sector:
Enterprise
Technology
|
Invested:
£30m
|
Fair Value:
£59m
|
UN Sustainable Development
Goals Mapping: 8, 9
|
Freetrade |
Freetrade is a commission-free
investment platform that allows users to buy and sell shares in
companies and exchange-traded funds (ETFs) without paying any
trading fees or commissions. Freetrade aims to make investing more
accessible and affordable by eliminating the traditional trading
commissions charged by many brokers.
In 2023 Freetrade rolled out a beta
version of its web interface, Freetrade Web, for Plus members to
test. They now have over 1.5 million users with over 6,000 UK, EU
and US stocks as well as ETFs.
Freetrade is the leading challenger
broker in the UK and has an ambitious expansion plan across Europe.
Freetrade positions itself as an investment platform designed to
make investing more accessible and affordable for everyone, their
mission is “to get everyone investing” by simplifying the process
and offering commission-free trading, which to Molten, having
decided to innovate the venture capital model and publicly list
ourselves via our IPO to open up the VC model further to public
investors.
|
Location:
London, UK
|
Sector:
Enterprise
Technology
|
Invested:
£14m
|
Fair Value:
£15m
|
UN Sustainable Development
Goals Mapping: 8
|
GRAPHCORE |
Graphcore is a machine intelligence
semiconductor company, which develops Intelligent Processing Units
(“IPUs”) that enable world-leading levels of AI computing.
Graphcore has built a new type of processor for machine
intelligence to accelerate machine learning and AI applications for
a world of intelligent machines. The IPU architecture enables AI
researchers to undertake entirely new types of work - such as
building and deploying AI-native products and platforms using
Graphcore’s cloud services, pre-trained models, optimised inference
engines, and APIs - thereby helping to drive advances in machine
intelligence.
In 2023, Graphcore joined the PyTorch
Foundation as a general member, and announced it was expanding its
AI tools ecosystem, via IPU support from UbiOps. In December 2023,
Graphcore also presented FP8 (8-bit floating point) research at the
NeurIPS conference in New Orleans.
Graphcore is pioneering next-generation
AI compute with its Intelligence Processing Unit (IPU), a massively
parallel processor architecture optimized for machine learning
workloads, delivering up to 100x better performance than legacy
technologies. With over $300 million raised from strategic
investors like Samsung, Microsoft, and leading VCs, Graphcore is
well-positioned to become the global standard for accelerating AI
applications across industries. Its IPU products are already
shipping in production volumes, addressing the rapidly growing $50+
billion AI compute market. With proven technology execution,
strategic partnerships, and a vast market opportunity, Graphcore
represents a compelling investment in the AI hardware
landscape.
|
Location:
Bristol,
UK
|
Sector:
Hardware &
Deeptech
|
Invested:
£24m
|
Fair Value:
£21m
|
UN Sustainable Development
Goals Mapping: 8, 9
|
HiveMQ |
HiveMQ’s messaging platform (MQTT) is
designed for the fast, efficient and reliable bi-directional
movement of data between device and the cloud. The HiveMQ MQTT
platform is the proven enterprise standard designed to connect,
communicate, and control IoT data under real-world stress. From its
roots in the automotive industry in Germany, HiveMQ has grown into
other sectors and internationally. Leading brands choose HiveMQ to
build smarter IoT projects, modernise factories, and create better
customer experiences in use cases in automotive, energy, logistics,
smart manufacturing, transportation, and more.
In 2023, HiveMQ expanded community
channels and platform offerings, released several new versions of
the platform, and released new integrations. 2024 marks the 25th
anniversary of MQTT, now the standard IoT protocol, and in early
2024 HiveMQ received a 2024 IoT Evolution Industrial IoT Product of
the Year Award from IoT Evolution World.
HiveMQ, announced the opening an office
in Boston in response to the company’s rapid growth. HiveMQ’s
Boston office will serve as a hub for U.S. sales, support and
executive leadership, as total revenues have doubled year over year
and the U.S. market currently accounts for 60 percent of the German
company’s revenues.
HiveMQ provides an enterprise MQTT
messaging platform that enables reliable, scalable and secure
connectivity for IoT devices to the cloud. With an early mover
advantage in MQTT, the de-facto IoT messaging standard, HiveMQ is
well-positioned to capitalize on the rapidly growing $2.4 trillion
IoT market. Already generating significant revenue with over 130
Fortune 500 customers, HiveMQ has raised over €49 million from
investors.
|
Location:
Munich,
Germany
|
Sector:
Hardware &
Deeptech
|
Invested:
£20m
|
Fair Value:
£20m
|
UN Sustainable Development
Goals Mapping: 9
|
ICEYE |
ICEYE operates a synthetic-aperture
radar satellite constellation designed to deliver monitoring
capabilities for any location on earth. ICEYE US - a subsidiary of
ICEYE, delivers reliable and innovative remote sensing capabilities
to the United States Government, its allies and commercial partners
using SAR technology. It is a commercial radar imaging satellite
company and provides imaging services, designed to deliver frequent
coverage, 24/7, to help clients resolve challenges in sectors such
as maritime, disaster management, insurance, and finance. ICEYE’s
SAR (synthetic aperture radar) satellites enable the company to
develop unparalleled insights without the need for
line-of-sight.
In April 2023, ICEYE US was awarded a
five-year blanket purchase agreement by NASA to provide radar
satellite imagery for evaluation in support of Earth Science and
Research. In November 2023, ICEYE announced its landmark
partnership with the European Space Agency (ESA) that promises to
redefine Earth Observation (EO) for enhanced disaster management
and community resilience. As of 2024, ICEYE is also partnering with
WWF Finland and the global Arctic Programme to protect whale
migration routes in the Arctic region.
In April 2024, ICEYE, announced a
definitive agreement signed for an oversubscribed $93M growth
funding round. The financing will further accelerate investment in
constellation of SAR satellites and expand the company’s portfolio
of innovative data and subscription products. The round builds on
the success of the Series D round in February 2022, bringing the
total amount raised to $438M.
Satellite imagery is fast becoming a
standardised tool to gain valuable insights across a variety of
industries. With the global climate and international defence in
focus, governments have leaned heavily on public funded space
programs which in more recent years has sparked strong
participation from the private sector. ICEYE’s SAR (synthetic
aperture radar) satellites enable the company to develop insights
without the need for line-of-sight, ICEYE can see through clouds
and offer more reliable data for their clients around the world,
including some of the largest global insurance companies and
governments. ICEYE has signed deals with the likes of the Centers
for Disease Control and Prevention (CDC) in the US and the
Australian government to detect natural disasters like floods and
bushfires.
|
Location:
Espoo,
Finland
|
Sector:
Hardware &
Deeptech
|
Invested:
£23m
|
Fair Value:
£43m
|
UN Sustainable Development
Goals Mapping: 9, 13
|
isaraerospace |
Isar Aerospace develops and builds
launch vehicles to perform satellite launch operations. To disrupt
the space industry by lowering the entry barriers to space and to
make space access affordable and sustainable, Isar Aerospace is
developing a fully in-house designed space launch vehicle. As a
launch service provider, Isar Aerospace transports small and medium
sized satellites, and satellite constellations, into Earth’s orbit
and beyond, contributing to humanity’s progress and our planet’s
sustainable technological and economic development.
In November 2023, Isar Aerospace opened
Andøya Spaceport, its future launch site, in an official ceremony
with Crown Prince Haakon of Norway. The launch site supports the
two-stage launch vehicle Spectrum. Isar Aerospace is on track
towards the first test flight, and will soon offer the first fully
privately funded European launch solution to meet the growing
demand for transporting small and medium-sized satellites into
space.
Isar Aerospace conducted a successful
test of its fully in-house designed and built Aquila rocket engine
at the Esrange test site in Sweden as in October 2023. Further,
Isar was named “Startup of the Year” at the 2023 SpaceNews ICON
Awards, recognizing the company’s achievements and growth over the
past year.
Isar Aerospace is a look-through
investment held via Earlybird.
|
Location:
Munich,
Germany
|
Sector:
Hardware &
Deeptech
|
Invested:
£4m
|
Fair Value:
£23m
|
Ledger |
Ledger produces hardware wallets to
store private keys in a secure, offline environment. Hot wallets
are susceptible to online attacks and Ledger’s hardware wallets
provide enhanced security to prevent fraudulent access to crypto
assets digitally, so customers can integrate their Ledger device
with 50+ software wallets. In addition to their hardware wallet
product offering, Ledger has also built a full stack software
platform to help customers buy, sell, swap, stake, and lend their
crypto assets securely - the Ledger Live app provides a secure
gateway to access dApps and blockchain apps, allowing you to manage
your cryptocurrencies, finances, NFTs and Crypto assets from one
easy-to-use interface.
In June 2023, Ledger announced Ledger
Enterprise TRADELINK - core tech and governance to help
institutions manage crypto trading risk and regulation with
custodial trading solutions. Throughout 2023, Ledger also
consistently announced that it had partnered with various
protocols, apps, and networks, integrating them into its Ledger
Live ecosystem, which were featured to customers through the
‘Discover’ feature on the Ledger Live app.
Ledger Stax is Ledger’s latest hardware
wallet, it features a large, curved E Ink touch screen in a
compact, credit card-sized form factor that is easy to carry and
use on the go. Despite its innovative design, the Stax maintains
Ledger’s industry-leading security standards. It uses the same
secure element chip and proprietary BOLOS operating system as other
Ledger devices to keep your private keys and crypto assets safe
offline.
Ledger is the leading provider of
secure hardware wallets and software solutions for managing
cryptocurrencies and other digital assets. The company’s innovative
products, like the Nano S and Nano X hardware wallets, enable
individuals and institutions to safely store, trade and grow their
crypto holdings.
|
Location:
Paris,
France
|
Sector:
Hardware &
Deeptech
|
Invested:
£29m
|
Fair Value:
£61m
|
UN Sustainable Development
Goals Mapping: 8
|
M-Files |
M-Files is an intelligent file
management platform allowing its customers to organise their
content to improve search efficiency, categorisation, and document
security. From document creation and management to workflow
automation, external collaboration, enterprise search, security,
compliance, and audit trail, knowledge workers can increase
productivity and unlock efficiencies with M-Files’
industry-tailored solutions. Its metadata-driven document
management platform enables knowledge workers to instantly find the
right information in any context, and the platform connects to
existing folder networks and uses AI to help best categorise
information.
In 2023, M-Files announced it had made
enhancements to its platform, offering knowledge workers a truly
end-to-end automation solution. Powered by emerging Generative AI
(GenAI) technology, the M-Files Aino platform uses natural language
to help organise information, understand the context of documents,
and interact with an organisation’s knowledge.
M-Files is operating at significant
scale with high quality customers, the business has executed well
and grown their share of the document and content management space.
They have been able to architect their product offering using a
location agnostic approach allowing their powerful AI and workflow
automation features to create real value for customers. Their
sticky product has resulted in low churn across their 5k+ customers
currently generating over $100m in annual revenues (2023). At this
scale, the company is an interesting asset for a variety of market
participants.
|
Location:
Austin,
USA
|
Sector:
Enterprise
Technology
|
Invested:
£7m
|
Fair Value:
£48m
|
UN Sustainable Development
Goals Mapping: 8
|
perkbox |
Perkbox is an employee experience
platform that provides a suite of employee benefits, rewards,
recognition, and wellbeing tools to help companies engage and
motivate their workforce. Being an all-in-one platform that helps
companies attract, engage, and retain employees by offering a
comprehensive suite of benefits, rewards, recognition, wellbeing
support, and communication tools tailored to their
needs.
Perkbox is striving to become a
disruptor and innovator in the employee benefits and engagement
space; through its cloud-based, comprehensive product offerings,
and growth-focused approach.In March 2024, Perkbox announced that
it is combining with Vivup, a leading provider of health and
wellbeing benefits, through a strategic majority investment from
private equity firm Great Hill Partners.
|
Location:
London, UK
|
Sector:
Enterprise
Technology
|
Invested:
£14m
|
Fair Value:
£16m
|
UN Sustainable Development
Goals Mapping: 3, 4
|
RavenPack |
RavenPack is a leading provider of
insights and technology for data-driven companies. The company’s AI
tools and products allow financial institutions (including the most
successful hedge funds, banks, and asset managers in the world) to
extract value and insights from large amounts of information to
enhance returns, reduce risk, and increase efficiency by
systematically incorporating the effects of public information on
their models and workflows. RavenPack delivers structured analytics
on published content from high-quality sources (including gated
content) and over 40,000 web and social media sources, including
news and information in 13 languages for local-level precision and
global perspectives.
In 2023, RavenPack was shortlisted at
the 2023 Allstars Awards - a recognition platform for outstanding
achievements in Europe’s technology sector, organised by GP
Bullhound. Throughout the year, RavenPack representatives also
attended and presented at numerous national and international
events to share recent research and insights, including details of
the latest trends.
We have been invested in Ravenpack
since 2017 where we were the first institutional backers of the
business. The team has been together for over 20 years and offers a
truly differentiated data product focused on the financial services
and buy side sector. Their high-quality client base of well-known
investment banks and hedge funds have been using Ravenpack data for
many years to help optimise returns and understand market sentiment
on companies around the world. With the rich nature of Ravenpack’s
underlying data, they are leading the AI charge with respect to
financial services and will undoubtedly be bringing more
interesting products to market.
|
Location:
Marbella,
Spain
|
Sector:
Enterprise
Technology
|
Invested:
£8m
|
Fair Value:
£37m
|
UN Sustainable Development
Goals Mapping: 8
|
|
|
Revolut
|
Revolut is a global financial services
company that specialises in mobile banking, card payments, money
remittance, and foreign exchange. With 40+ million personal
customers globally, Revolut’s platform allows users to send money
to 160+ countries, hold up-to 36 currencies in the app, and spend
in 150+ currencies. Revolut also boasts 500k+ business customers to
date. Revolut’s goal is for everyone to do all things money -
spending, saving, investing, borrowing, managing, and more - in
just a few taps.
In 2023, Revolut expanded into new
markets, including Brazil and New Zealand. In the same year,
Revolut also significantly overhauled the design and layout of the
app, launched Ultra (its exclusive top-tier plan for retail
customers) in specific markets, and rolled out new features across
specific territories and customer segments - including Automated
Investing (US), local IBANS (Spain and Ireland), and enabling Tap
to Pay on iPhone for Business and Freelance customers in specific
markets. Revolut, has surpassed 40 million retail customers
worldwide, growing at almost one million customers per month, and
is now processing over 400 million transactions a month.
Revolut is transforming the banking
industry by providing a comprehensive financial super app that
offers retail and business customers a wide range of innovative
digital financial services. From multi-currency accounts and cards
to commission-free stock trading, cryptocurrency exchange,
insurance, and business banking tools, Revolut aims to be a
one-stop-shop for all financial needs.
Revolut generates revenue from a
variety of sources including interchange fees, foreign exchange
spreads, trading commissions, premium subscription fees, and
business account fees. This diversification, along with a focus on
cross-selling products to existing customers, has enabled Revolut
to achieve strong revenue growth.
|
Location:
London, UK
|
Sector:
Consumer
Technology
|
Invested:
£11m
|
Fair Value:
£65m
|
UN Sustainable Development
Goals Mapping: 8, 9
|
river lane |
Riverlane is a quantum computing
company that is building the Quantum Error Correction Stack to
comprehensively control all qubit types and correct the millions of
data errors that prevent today’s generation of quantum computers
from achieving useful scale. Riverlane’s customers are governments,
quantum computer hardware companies and world-leading research
labs.
Riverlane hosted the 4th edition of
Quantum Computing Theory in Practice conference in Cambridge, UK
with over 240 attendees from academia, industry, and government.
The conference explored advances in practical quantum computing,
including NISQ algorithms, error-corrected quantum computers, and
frontiers in quantum computing theory.
Riverlane demonstrated the world’s
first scalable quantum error decoder, a critical component for the
first generation of error-corrected quantum computers, at this UK
government-backed event.
They are pioneering quantum computing
company focused on developing the critical quantum error correction
stack, including high-speed decoders, orchestration, and universal
interfaces, to enable large-scale, fault-tolerant quantum computing
in partnership with hardware makers.
|
Location:
Cambridge,
UK
|
Sector:
Hardware &
Deeptech
|
Invested:
£5m
|
Fair Value:
£16m
|
UN Sustainable Development
Goals Mapping: 9
|
SCHUTTFLIX |
Schuttflix is Europe’s leading
logistics platform and B2B marketplace for bulk construction
materials and adjacent products in Europe. Bringing together
partners from the whole industry - including materials sellers,
waste disposers, transport carriers, and contractors - the app
connects suppliers and carriers directly with customers, enabling
the supply of materials and products on demand to professionals in
relevant sectors, such as landscaping, gardening, civil
engineering, and road construction. By providing a comprehensive
overview of project details - such as materials ordered, prices,
delivery dates, key carrier company contacts, and more - Schuttflix
has laid the foundation for the digital evolution of construction
industry logistics, and is on a mission to be the digital
cornerstone of every construction project.
In 2023 year Schuttflix further
expanded its circle of new strategic partners - including Goldbeck
(leaders in commercial construction), IK Umwelt (waste management
specialist), WaVe-X (Lower Austrian investment company). In August
Schuttflix announced that it had received a total of 45 million
euro in fresh capital. The new financing round is led by the
founders and existing investors and supplemented by a working
capital line.
The construction industry is under
pressure to improve efficiency, reduce emissions, and adopt digital
solutions. Schüttflix’s platform provides key capabilities like
paperless delivery documentation, live tracking, price comparison,
and optimized route planning to help construction companies
streamline operations and reduce waste. The company connects
contractors, bulk materials suppliers, waste disposal companies,
and freight forwarders to enable efficient procurement, disposal,
and transportation of key materials like gravel, sand, and
concrete.
With its innovative digital platform,
strong investor backing, rapid growth, and ability to address key
industry challenges, Schüttflix represents a leader in the digital
marketspace in the construction technology sector.
|
Location:
Gütersloh,
Germany
|
Sector:
Enterprise
Technology
|
Invested:
£21m
|
Fair Value:
£22m
|
UN Sustainable Development
Goals Mapping: 9
|
smava |
Smava is an online credit marketplace
in Germany, providing individuals access to personal loans and debt
consolidation solutions. Founded in 2007 and based in Berlin, Smava
connects borrowers with a diverse network of lenders, empowering
them to compare and secure the best loan offers. Through its
user-friendly platform and data-driven algorithms, Smava
streamlines the loan application process, fostering transparency
and competition among lenders. With a commitment to responsible
lending practices and customer satisfaction, Smava has earned a
reputation as a trusted partner in the German financial landscape,
enabling consumers to make informed financial decisions and achieve
their goals.
In 2023, Smava optimized their data
platform by leveraging Amazon Redshift Serverless and data sharing
capabilities. This optimization enabled them to achieve up to cost
savings compared to their previous analytics setup, produce reports
in a shorter lead time and reducing daily reporting time from 3
hours to less than 1 hour.
Smava is a look-through investment held
via Earlybird.
|
Location:
Berlin,
Germany
|
Sector:
Enterprise
Technology
|
Invested:
£15m
|
Fair Value:
£13m
|
UN Sustainable Development
Goals Mapping: 8, 9
|
Thought Machine |
Enabling service of customers in a
real-time ecosystem, Thought Machine provides cloud-native core
banking infrastructure to both incumbent and challenger banks. With
an existing library of 200+ products, its cloud-native offering -
including Vault Core (core banking platform) and Vault Payments
(payments processing platform) - is designed to give banks total
flexibility in designing products that are scalable. The company’s
technology provides an alternative, flexible, cloud-based solution
that can be configured to provide product, user experience,
operating model, or data analysis capability. Emerging as a global
category leader in this space, Thought Machine’s ability to build
and deliver core banking transformations for Tier 1 banks and
fintechs is world class.
In 2023, Thought Machine announced
strategic partnerships with several national and international
fintech businesses, including HMBradley, Cordada (Latin America),
Form3 (US and EU) and Trafalgar (Mexico).
Thought Machine, has partnered with
another Molten Core company, Form3, to add FedNow, TCH RTP and SEPA
Instant Credit Transfer connectivity to Thought Machine’s payment
platform, Vault Payments. This partnership brings together two
next-generation payment solutions, offering banks and financial
institutions an end-to-end solution for seamless real-time payment
processing.
Banks are struggling with siloed
information sources in on-premise technology stacks with leading
neobanks paving the way towards a real-time world class customer
experience, banks have no choice but to adopt a cloud native core
banking systems and build a single source of truth, that will help
then build highly personalised products early in the journey of
interacting with customers and be able to do so at lower
costs.
|
Location:
London, UK
|
Sector:
Hardware &
Deeptech
|
Invested:
£37m
|
Fair Value:
£99m
|
UN Sustainable Development
Goals Mapping: 8, 9
|
Risk management
In order to achieve our strategic
objectives and manage our business responsibly and sustainably, we
operate an effective risk-management framework that aims to balance
risk and reward, while protecting the business, our Shareholders,
employees, and other stakeholders. The Board has ultimate
responsibility for setting and managing the risk framework, as well
as defining appetite for risk. Ongoing oversight of the Company’s
risk profile and risk framework is delegated to the Audit, Risk and
Valuations Committee supported by the Compliance Team.
Risk appetite
The nature of our business fundamentally involves an
assumption of a level of risk if we are to achieve our strategic
aim of creating and maintaining a pipeline of investment
opportunities and supporting our diversified portfolio of high
growth early stage businesses over the long-term to attain
meaningful returns. However, we will accept risk only where we have
assessed that it can be appropriately managed and offers sufficient
reward. The Board has determined its risk appetite for each of the
principal risks described on pages 58 to 65 of the Annual Report
and considered appropriate ways to monitor performance and mitigate
against each risk to ensure that the level of exposure remains
acceptable.
Risk governance
We
adopt a top-down approach to risk governance, with a culture of
compliance that flows from the Board and its Committees through to
the Executive Team and Compliance Team who have delegated authority
to oversee the application of the risk framework across the
business, and thereafter to all staff, encouraging a thoughtful and
transparent attitude towards risk that is grounded in principles of
responsible stewardship for our stakeholders. For the Group, the
first line of defence comprises management controls and internal
control measures administered by all managers and staff. The second
line of risk management is administered and overseen by the
Compliance Team. The Compliance Team reports directly into the
Executive Team and Audit, Risk and Valuations Committee on all
compliance matters and have direct access as needed to the Chair of
the Board and the Chair of the Audit, Risk and Valuations
Committee.
Both the Audit, Risk and Valuations Committee and the
Executive Team regularly consider and review the existing and
emerging risks faced by the business to ensure that any exposure
and associated mitigations align with the business’s strategic
objectives. Risks associated with the Group and its activities that
are considered material are entered into the Company’s Corporate
Risk Register which applies a scoring system to assist the Audit,
Risk and Valuations Committee in its decision-making by capturing
inherent risks; mitigations; and the resultant residual risks, as
well as any proposed or ongoing actions. Risks are translated to a
heat map for ongoing monitoring purposes, while controls are in
place and regularly reviewed in order to mitigate the Group’s
exposure.
The Audit, Risk and Valuations Committee meets formally at
least four times a year, with other informal meetings convened as
necessary. The Group operates clear reporting lines throughout the
business and engages external compliance specialists, IQ-EQ, to
assist the Compliance Team in monitoring and advising on all
regulatory compliance matters at a fund manager level within the
Group structure.
We
identify and monitor risks closely throughout the business, which
ultimately involves all employees in overseeing and mitigating risk
on a day-to-day level in accordance with the Group Compliance
Manual and Group Code of Conduct. Periodic internal checks are
administered by the Compliance Team; enhanced IT security measures
are employed by the IT Manager supported by external IT
specialists, Rock IT and Softwerx; weekly meetings are conducted at
an Executive level where risk is a standing item; and dedicated
risk-review sessions are undertaken periodically by the Executive
Team structured around the Corporate Risk Register.
A
summary of the Company’s full suite of Policies, Procedures,
Systems and Controls can be found on our website at
https://investors.moltenventures.com/investor-relations/plc/documents.
Third-party review
There is a formal compliance report issued to the Board
annually in addition to the output of monitoring reports issued
quarterly by IQ-EQ, which during the year ended 31 March 2024
included a consistent focus on the newly introduced Consumer Duty,
which the Company (working alongside IQ-EQ) has taken relevant
steps to be compliant with.
Depositary services in the financial year were provided to
the Company and the Fund of Funds programme by Langham Hall UK
Depositary LLP including safekeeping of Company assets, oversight,
and reporting any breaches, anomalies and discrepancies.
Representatives of the Depositary attended a meeting of the Audit,
Risk and Valuations Committee prior to the year-end in order to
report on activity completed during the year and any associated
recommendations, with no items identified as being high risk or in
need of remedial action.
Training
Externally-led mandatory compliance-focused training is
provided to all staff at least annually to ensure a suitable level
of awareness and understanding of both the theory and the practical
application of the Group’s culture towards risk awareness, risk
mitigation and applicable professional and ethical standards to
which all employees are required to perform in the fulfilment of
their roles (including where relevant under the Senior Managers and
Certification Regime (“SM&CR”)).
During the year, IQ-EQ delivered targeted training on the
subjects of SM&CR; market abuse; bribery and corruption;
whistleblowing; and fraud. A separate refresher session was also
delivered by IQ-EQ, in conjunction with the Compliance Team, on the
the Group’s Client Assets Sourcebook (CASS) obligations to relevant
members of the compliance, legal, finance and administrative teams
involved in the safekeeping and reconciliation of client
assets.
Mandatory online training is conducted not less than annually
(including associated testing) on a variety of core topics
including anti-money laundering, anti-bribery and corruption,
SM&CR, anti-bullying and harassment, anti-modern slavery, cyber
security and data protection.
Targeted internal-led compliance training sessions are
delivered during the onboarding process for new joiners and to
different teams within the business as required. The Investment
Team also explore market themes, opportunities and risks as part of
the wider approach towards investments in the weekly Investment
Committee meetings and the bi-annual Strategy Days to review the
Group’s existing portfolio and assess risks and opportunities on
both an asset-by-asset level and at a wider aggregated portfolio
performance.
Whistleblowing
The Group operates established procedures whereby employees
may, in confidence, raise concerns relating to possible
improprieties in matters of financial reporting, financial control,
adequate management of risks or any other matter. The
Whistleblowing Policy applies to all employees of the Group and is
the subject of annual training.
Principal and emerging
risks
A
principal risk is a risk, or a combination of risks, from our
corporate risk register that can seriously affect the performance
or reputation of the Group. We regularly consider and assess the
principal and emerging risks and opportunities, both internal and
external, which may affect the Group in the near, medium, and long
term. The Executive Team and Audit, Risk and Valuations Committee
consider risk at meetings periodically as required and during the
year. The Audit, Risk and Valuations Committee additionally perform
a dedicated annual review of the Group’s principal risks, assessing
the severity and mitigation strategies in place for previously
identified risks, and identifying whether any new risks had
materialised in the period.
The heat map (below) highlights what we consider to be our
principal risks and uncertainties by potential impact and
likelihood of occurrence. Detailed descriptions of those principal
risks are set out on pages 58 to 65 of the Annual
Report.
Emerging risks are those risks not yet considered to be
“principal” by the Audit, Risk and Valuations Committee on
recommendation by the Executive Directors, but which have been
identified through horizon scanning, scenario analysis and third
party professional advice. These are risks that are either new and
therefore may, in time, pose a threat to the Company and/or its
business model; or they can be a pre-existing risk that has emerged
in a new or unfamiliar context. The following are some of the
emerging risks that have been identified and are currently being
monitored:
• Global
elections, including in the UK and US, the outcome of which could
lead to as-yet-unknown shifts in policy, regulation or
international relations, as well as polarising sentiment that could
have a material impact on the Company or the wider venture capital
industry
• Increased
regional and international tension in Israel and the
Middle-East
• Potential
escalation of China/Taiwan tensions and conflict with the
US
• Global
supply chain pressure due to concentration risk of various key
component materials that are embedded into many applications
relevant to the portfolio, or the underlying technologies on which
they are built
• Increased
adoption and regulation of artificial intelligence, the application
of which remain unclear
• Cost
of borrowing to finance investment /deployment with lack of
certainty about interest rates from central banks
• Continued
cost of living pressures effect on B2C/B2B sales
Risk framework updates
Updates to our risk framework for the year
include:
• Appointment
of a new IT Manager supported by new external IT and cyber security
support function - Rock IT to ensure that the business remains
cyber resilient and secure.
• Embedded
Consumer Duty across the Group.
Our principal risks
1. Macroeconomic
environment
|
Static
risk
|
Volatility of global
public and private markets
Link to KPIs
(page 19 of the Annual
Report)
1, 2, 3, 4, 5
|
Potential
impact
Challenges in the
macroeconomic environment events such as banking volatility, change
in UK, US and other major governments, high inflationary
environment, unpredictable government policy, or recessions could
lead to:
Increased cost of
living and commensurate reduction consumer or B2B spending,
diminishing the revenues of portfolio companies, lowering their
valuations and extending the period to realisations
Enhanced portfolio
company requirement for liquidity
Reduced confidence
in growth stocks in a higher interest rate environment
Risk of the Company
breaching its debt facility covenants |
Risk management and
mitigation
Executive
management engage in strong and consistent investor relations with
well-established and diversified Shareholder base
Diverse portfolio
across different stages of development, geographies and markets,
and syndicated strategy of minority equity ownership alongside
strong syndicate partners
Strong Board-level
and investment team experience of previous challenging
macro-economic conditions
Cash reserves
maintained and debt facility available for liquidity
purposes
Strength of the
Molten Ventures brand and reputation to retain and continue to
attract Shareholders and operate in the VC/tech
environment |
Changes/activities
during the year
High, but
stabilising, UK and international inflationary and interest rates
environment
Geopolitical
developments, including in Ukraine, Israel and the Middle East and
China/Taiwan relations
Signals of IPO
market in recovering in the UK and US
UK government
commitment to unlocking UK pension money into venture
capital |
Focus for
FY25
Continued emphasis
on appropriate levels of liquidity through access to debt facility,
cash realisations, additional fee income from third-party
co-investors with funds under Group management and ability to raise
from the market
Expansion of
syndicated fund strategies with third-party investors to share risk
and provide enhanced income streams
Maintain focus on
investor relations to communicate the strategy and resilience of
the Group |
2. Geopolitical
protectionism
|
Static
risk
|
Direct and
indirect impact
of
geopolitical
events
Link to KPIs
(page 19 of the Annual
Report)
1, 2, 4
|
Potential
impact
International
protectionism fuelling the escalation of geopolitical tensions and
impacting upon supply chains, which may be further accelerated by a
change of government at the next UK and US elections
Inter-governmental
policies presenting additional hurdles to cross-border M&A
opportunities, particularly impacting upon later stage large-scale
tech businesses, limiting route to a meaningful exit
Raised tariffs
making it harder for portfolio supply chains and deeptech hardware
companies to obtain required materials or make sales of their own
products |
Risk management and
mitigation
Supporting
portfolio with international structural optionality
Participation in
lobbying efforts on UK government (e.g. through BVCA
membership)
Continued
monitoring of Group exposure to sanctioned persons or corporates,
through our portfolio, Shareholders, suppliers, or other investors
into our portfolio companies |
Changes/activities
during the year
Escalation of
conflict in Israel and the Middle East and ongoing war in Ukraine
disrupting stability of region and associated supply chains
Increased tensions
between China and US in respect of Taiwan and broader economic and
political relations
Period of greater
stability in UK politics and government. |
Focus for
FY25
Continued
participation with BVCA to lobby UK government on benefits of
access to wider pools of capital including both in and outside the
exit process of the UK and Europe, including in the context of
cross-border portfolio exit opportunities
Providing access,
network opportunities and strategic advice to portfolio company
founders and managing teams to explore US and wider global
markets
Ongoing monitoring
and management of Group exposure to sanctioned persons or entities
throughout the Group and its investments |
3. Liquidity and
access to capital
|
Static
risk
|
Reduced availability
of capital precluding the Company from executing on its investment
strategy and/or meeting deployment targets
Link to KPIs
(page 19 of the Annual
Report)
1, 2, 3, 5
|
Potential
impact
The reduce
availability of capital and resulting reduction in liquidity may
impair the ability of the Company to make investments (new or
follow-on) or limit the frequency or quantum of deals in which the
Company is able to participate
The reduced
availability of capital across the public and private markets is
likely to impact upon funding models and the ability to execute on
strategic business plans, both at a Company and a portfolio level,
which could include:
reduced access to
revolving credit facility and/or capital raising mechanisms
slower or halted
progress on strategic initiatives or longer-term planning
reduced cost base
and decisions over prioritisation of capital, which could result in
reductions in headcount
depressed
valuations where portfolio companies are unable to demonstrate a
path to liquidity or profitability without further funding, or
their likely exit paths are blocked
reduced likelihood
of realisations due to slowed IPO market and tighter controls over
capital in PE and M&A spaces |
Risk management and
mitigation
Liquidity is
available to the Company through its revolving credit facility
maintained with JP Morgan and HSBC Innovation Banking
Cash flow forecasts
and borrowing structures are considered at each meeting of the
Executive Directors and every Company Board meeting to monitor and
ensure that a minimum quantum of cash is available to maintain
sufficient headroom to satisfy the Company’s debt covenants and
regulatory capital requirements
Frequent investor
engagement with all key Shareholders and stakeholders by the
Company’s CEO and CFO as well as wider marketing activity
Continued emphasis
on appropriate levels of liquidity through access to debt facility,
cash realisation and additional fee income from third-party
co-investors with funds under Group management |
Changes/activities
during the year
£60m of available
revolving credit facility from £150m debt facility with JP Morgan
and HSBC Innovation Banking Company
Engagement with
Shareholders through annual Investor Day, and Investor Meet Company
meetings held through the course of the period to engage with the
Company’s retail base, as well as individual meetings with key
shareholders |
Focus for
FY25
Focus upon
realisations from the portfolio to generate cash returns to the
balance sheet for redeployment
Development of the
acquired Forward Partners earlier stage portfolio to consider
whether there are opportunities for realisations by way of an exit
or secondary sale
Continued emphasis
on appropriate levels of liquidity through access to debt facility,
cash realisations and additional fee income from third-party just
retain funds with funds under Group management
Expansion of
additional syndicated fund strategies with third-party investors to
share risk and provide enhanced income streams
Maintain focus on
investor relations to communicate the strategy and resilience of
the Group |
4. Public market
risk
|
Decreasing
risk
|
As a publicly listed
entity, the Company is exposed to the risks associated with that
status and being traded on public markets
Link to KPIs
(page 19 of the Annual
Report)
1, 2, 5,
|
Potential
impact
A share price
persistently trading at a significant discount to NAV could lead
to: o
reduced value in
management and employee LTIPs which may affect hiring and retention
of key personnel o
potential
concentration of share register o
the Company
becoming an acquisition target or leading to Shareholder
activism
Information
concerning the Company is significantly more public relative to
Molten Ventures’ peer group which are overwhelmingly structured as
private GP/LP structures with far reduced public reporting
requirements
Immediate exposure
to fluctuations in the public markets and broader market trends
which can be volatile and disconnected from the performance or
activities of the Company
Ongoing
administrative, regulatory and compliance burden relative to
non-listed peer group |
Risk management and
mitigation
Work alongside the
Company’s brokers and PR agencies to engage with institutional and
retail Shareholders and build upon the Company’s well-diversified
Shareholder base with frequent investor engagement and marketing
activity
Close active
monitoring of the Company’s share register to track Shareholder
movement and ensure the Company’s Shareholder base is
well-diversified
Expansion of
syndicated fund strategies with third-party investors to share risk
and diversify income streams away from reliance on the capital
markets |
Changes/activities
during the year
Addition of new
strategic shareholder in Blackrock as part of the Forward Partners
transaction to help consolidate the share register
Public markets
showing signs of stabilising, particularly in the US and UK
Engagement with
Shareholders through annual Investor Day, and Investor Meet Company
meetings held during the course of the period for engagement with
the Company’s retail base, in addition to individual meetings with
key shareholders |
Focus for
FY25
Continued work
alongside the Company’s brokers to engage with institutional and
retail Shareholders and build upon the Company’s well-diversified
Shareholder base
Engage directly
with Shareholders to try to build share price relative to NAV and
in so doing, deliver value and returns for Shareholders
Continued focus on
ESG to meet, and where possible surpass, the public market
expectation for sustainable investing
Expand the
syndication of investment strategies and launch new fee-paying
funds with third-party capital under management to reduce reliance
on capital markets |
5. Climate
change
|
Static
risk
|
Increasing need to
navigate the energy transition, including regulatory, market,
technology, and reputational aspects as well as the potential
physical impacts of climate change
Link to KPIs
(page 19 of the Annual
Report)
1, 3, 4, 6
|
Potential
impact
Transitioning to a lower-carbon economy
will entail policy, legal, technology, and market changes to
address mitigation and adaptation requirements related to climate
change, including:
physical risk of
climate change-related events directly impacting upon the Company
or its people, or the companies and personnel within the Molten
Ventures portfolio
changing
stakeholder expectations on licence to do business for the Group
and/or the portfolio
increase in GHG
emissions-related regulation, including mandatory reporting
requirements |
Risk management and
mitigation
Adherence to the
Company’s ESG Policy and Climate Strategy to integrate
consideration of climate-related risks and opportunities throughout
the Group’s activities
Continued
climate-related engagement with portfolio companies as a component
part of the Molten Climate Strategy
Continued
climate-related reporting supported by external domain experts as
set out on pages 50 to 51 and our inaugural Sustainability
Report
A proportion of
variable pay for Executive Directors and all employees linked to
completion of ESG KPIs |
Changes/activities
during the year
Continued
engagement with Accenture to further develop and articulate or
Climate Strategy
Continued
engagement with Altruistiq to support our data collection and
carbon footprinting
Enhancement of
climate-related engagement with portfolio companies, including in
the course of four towards the FY24 ESG KPIs, a summary of which
can be found on page 13 of the Annual Report.
Ran bespoke
climate-focussed workshops with four portfolio companies with a
material emissions profile to Molten Ventures, more details of
which can be found in our inaugural Sustainability Report .
|
Focus for
FY25
Delivery of the
Company’s FY25 ESG KPIs details of which can be found on page 49 of
the Annual Report
Continued
development and delivery against the Company’s Climate
Strategy
Continued
engagement with our portfolio on climate-related topics including
carbon footprint measurement and GHG reduction plans
Evolve and develop
the application of climate within the valuations
process |
6. Key
personnel
|
Increasing
risk
|
The Group may not be
able to retain or attract staff with the right skills and
experience
Link to KPIs
(page 19 of the Annual
Report)
3, 4
|
Potential
impact
The work of the
Group requires specialist practitioners and, as a relatively small
team, if the Group does not succeed in recruiting or retaining the
skilled personnel necessary for the development and operation of
its business, it may not be able to grow as anticipated or meet its
strategic objectives. |
Risk management and
mitigation
Competitive
packages and enhanced employee benefits offered to personnel, with
periodic externally-led market comparisons for both staff and
Executive packages
Long-term
incentives aligned to Group strategy through the issue of
performance-related share options. Short-term incentives linked to
a blend of personal and corporate targets that are also aligned to
the Company’s corporate purpose, values and stakeholder
interests
Access to
externally-led coaching and mentoring through the CoachHub
platform; mental health support via Oliva; and ongoing focus on
staff development including with ringfenced budget towards learning
and development across the business
Continued focus on
diversity and inclusion across the Group, including through
training and the continued usage of the firm’s DEI Recruitment
Policy with recruiters used by the business. |
Changes/activities
during the year
The team has been
bolstered by the addition of a number of highly skilled personnel
with highly relevant experience as part of the Forward Partners
acquisition
Further recruitment
into the investment team and operational roles within the
business
Continued to
conduct employee surveys to solicit feedback on the working
environment and business culture
Assumption of the
Designated Non-Executive Director function by Gervaise Slowey
during the period and a programme of employee engagement reported
back to the Board on a regular basis |
Focus for
FY25
Continued
integration of the Forward Partners team functions into the Molten
group following the Forward Partners acquisition
Continued hiring in
line with the Company’s Diversity, Equality and Inclusion (DEI)
Recruitment Policy to source, interview and make hires from a
diverse, highly skilled talent pool to improve representation
across the Group
Continued focus on
improved mental and physical wellbeing of all staff through
outsourced providers
New LTIP issue on
revised targets for the next three‑year period |
7. Cyber
security
|
Static
risk
|
Cyber security
incidents may affect the operation and reputation of the
Group
|
Potential
impact
A significant
cyber/information security breach could result in financial
liabilities, reputational damage, severe business disruption or the
loss of business critical or commercially sensitive
information |
Risk management and
mitigation
Utilisation of
reliable hardware, software and cybersecurity measures including
robust firewalls, anti-virus protection systems, email risk
management software and backup procedures
Appropriate IT
security structures, policies and procedures in place including the
Group’s Business Continuity Plan
Maintained risk
register covering cyber security
Maintain cyber
insurance including coverage for breach response costs, cyber
extortion loss and data protection |
Changes/activities
during the year
Hire of a new
specialist IT Manager with a background in funds IT
Appointment of Rock
IT to support the Group’s cyber and wider IT environment along with
Softwerx’s ongoing provision of Security Operation Centre services
to the business
Continued external
penetration testing programme
Continued updates
to hardware and software environment to enhance robust
cybersecurity environment |
Focus for
FY25
Continued review
and development and adaptation of cyber security and information
security systems, policies and procedures with the support and
guidance of outsourced IT providers
Ongoing monitoring
and development of internal policy relating to the usage and
regulatory parameters surrounding AI |
8. Risk profile of
venture investing and venture investments
|
Static
risk
|
The profile of
venture investing and the companies into which investments are made
are rapidly scaling businesses with potential for outsized returns,
but are by their nature inherently riskier than other more stable
lower yield investment opportunities or companies
Link to KPIs
(page 19 of the Annual
Report)
1, 2, 5
|
Potential
impact
Individual
portfolio companies may not perform as anticipated and either fail
or have increased funding requirements
Significant
commitment of time and resource to the active management of
early-stage high-growth companies
Due to the illiquid
nature of the asset class in which the Company invests, valuation
of tech companies across global markets may impair the Group’s NAV
and impact on the timing and/or quantum of realisations at
exit
The timing of
portfolio company realisations is uncertain and cash returns to the
Group are therefore difficult to predict and could subject to a
lockup period in the event of an IPO |
Risk management and
mitigation
Rigorous due
diligence undertaken by highly qualified Investment Team and
surrounding operational platform
Active management
of portfolio with consent rights and Board seats or observer roles
typically required as a pre-requisite to investment
Diversified
portfolio across different geographies, sectors and stages to
mitigate impact of single investment failures
Calibration of risk
and reward for outsized returns on investment due to equity
ownership at an early stage in the life of the company
Multi-faceted
investment strategy focusing upon opportunities at different points
of the growth cycle from seed (through Fund of Funds), early
(acquired Forward Partners portfolio/managed EIS/VCT) to later
stage (Molten Ventures plc balance sheet) |
Changes/activities
during the year
Continued work to
syndicate investment strategies and launch new fee-paying funds
with third-party capital under management to reduce dependency on
capital markets and provide visibility on a greater range of
investment opportunities
Expansion of the
Molten investing platform through the acquisition of the Forward
Partners portfolio providing additional visibility alongside the
managed EIS and VCT investment vehicles on a pipeline of earlier
stage investment opportunities
Engagement with UK
government through participation on various BVCA committees and
working groups, in connection with the LIFTs Programme and Mansion
House Compact to facilitate greater in-flows of investment from DC
Pension Schemes to expand and diversify the profile of the UK
venture industry
Rich pipeline of
deal opportunities through the Fund of Funds strategy
Continued
participation in follow-on rounds where the asset is known and we
can continue to back the winners within the portfolio |
Focus for
FY25
Continuing to work
closely alongside portfolio management teams to extend cash runway
and preserve/enhance value and prepare for recovery of wider market
conditions
Continued emphasis
on appropriate levels of liquidity through access to debt facility,
cash realisations, and additional fee income from third-party
co-investors with funds under Group management
Continued focus on
identifying strong best-in-class scalable technology companies with
very large addressable markets and a path to becoming a category
leader
Additional working
alongside the BVCA and other industry bodies to advocate the
venture ecosystem and early-stage tech businesses
|
9. Industry
competition
|
Decreasing
risk
|
The Group and its
portfolio companies are subject to competition risk
Link to KPIs
(page 19 of the Annual
Report)
2, 3, 4
|
Potential
impact
Presence of
sophisticated capital in the European VC market leading to greater
competition for tier 1 deals
Rise in pre-empted
funding rounds can limit access to strong deals where opportunities
are outside of the Group’s network
Reputational risk
to the Molten brand if tier 1 deals are not won by the Group due to
presence of competitors |
Risk management and
mitigation
Proven
thesis-driven investment strategy with strong reputation in the
market within sector/geo-specialism
Addition of the
Forward Partners early-stage portfolio provides greater market
coverage and visibility on pipeline for Series A and B deals
Differentiated
model with strong pipeline sourcing and disciplined investment
process
Strong and visible
brand with established presence in VC and tech ecosystem
Well networked team
with proven syndication opportunities across the
industry |
Changes/activities
during the year
We announced a
share-for-share acquisition of Forward Partners and successfully
completed an oversubscribed fund raise of £55 million (net of fees)
by way of issuance of new shares on the London Stock Exchange and
the Euronext Dublin
Retrenching by some
global VCs from the European market who had less experience or
depth of networks in the region, reducing the competitive set for
UK and European deals
Continue to
demonstrate the flexibility of our model and structure to maximise
the ability for the Company to participate along EIS and VCT pools
of capital in qualifying deals |
Focus for
FY25
Continue the
strategic deployment of capital into existing portfolio companies
by way of follow-on funding and working with portfolio management
teams to manage cash runway and preserve/enhance value or raise
money in challenging economic conditions
Expand the
syndication of investment strategies and launch new fee-paying
funds with third-party capital under management to reduce
dependency on capital markets
Continued focus on
ESG as a competitive advantage and thought leader in the VC
space
Further development
of brand to entrench Molten Ventures position within the VC and
tech communities |
|
|
|
|
Principal risks
Board approval
The Strategic
Report as set out on pages 6 to 66 of the Annual Report was
approved by the Board of Directors on 11 June 2024 and signed on
its behalf by:
Ben Wilkinson
Chief
Financial Officer
Going concern
The Directors confirm that they have a reasonable expectation
that the Group will have adequate resources to continue in
operational existence for at least the next 12 months from the date
of the approval of the financial statements and accordingly they
continue to adopt the going concern basis in preparing the
financial statements. A statement in compliance with provision 31
of the Code can be found on page 66 of the Annual
Report.
Statement of directors’
responsibilities in respect of the financial statements
The directors are responsible for
preparing the Annual Report and the financial statements in
accordance with applicable law and regulation.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have prepared the group financial statements in accordance with
UK-adopted international accounting standards and the company
financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 “Reduced Disclosure Framework”, and applicable
law).
The group has also prepared financial statements in
accordance with international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union.
Under company law, directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and company and of the
profit or loss of the group and company for that period. In
preparing the financial statements, the directors are required
to:
• select
suitable accounting policies and then apply them
consistently;
• state
whether applicable UK-adopted international accounting standards
and international financial reporting standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union
have been followed for the group financial statements and United
Kingdom Accounting Standards, comprising FRS 101 have been followed
for the company financial statements, subject to any material
departures disclosed and explained in the financial
statements;
• make
judgements and accounting estimates that are reasonable and
prudent; and
• prepare
the financial statements on the going concern basis unless it is
inappropriate to presume that the group and company will continue
in business.
The directors are responsible for safeguarding the assets of
the group and company and hence for taking reasonable steps for the
prevention and detection of fraud and other
irregularities.
The directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain the
group’s and company’s transactions and disclose with reasonable
accuracy at any time the financial position of the group and
company and enable them to ensure that the financial statements and
the Directors’ Remuneration Report comply with the Companies Act
2006.
The directors are responsible for the maintenance and
integrity of the company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other
jurisdictions.
Directors’ confirmations
The directors consider that the Annual Report and accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the group’s
and company’s position and performance, business model and
strategy.
Each of the directors, whose names and functions are listed
in Board of Directors section on pages 70 and 71 of the Annual
Report confirm that, to the best of their knowledge:
• the
group financial statements, which have been prepared in accordance
with UK-adopted international accounting standards and
international financial reporting standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union,
give a true and fair view of the assets, liabilities, financial
position and loss of the group;
• the
company financial statements, which have been prepared in
accordance with United Kingdom Accounting Standards, comprising FRS
101, give a true and fair view of the assets, liabilities,
financial position and loss of the company; and
• the
Directors’ Report includes a fair review of the development and
performance of the business and the position of the group and
company, together with a description of the principal risks and
uncertainties that it faces.
By
order of the Board
Ben Wilkinson
Chief
Financial Officer
11 June
2024
Consolidated statement of
comprehensive income
For the year ended 31 March 2024
|
Notes
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Movements on investments held at fair
value through profit or loss
|
6
|
(67.6)
|
(240.1)
|
Gain on bargain purchase
|
14
|
38.6
|
–
|
Total movement in fair value through
the profit and loss
|
|
(29.0)
|
(240.1)
|
Fee income
|
7
|
19.8
|
22.7
|
Total investment
loss
|
|
(9.2)
|
(217.4)
|
|
|
|
|
Operating
expenses
|
|
|
|
General administrative
expenses
|
8
|
(21.2)
|
(18.8)
|
Depreciation and
amortisation
|
16, 19
|
(0.4)
|
(0.7)
|
Share-based payments – resulting from
Company share option scheme
|
15
|
(4.8)
|
(4.4)
|
Exceptional items
|
36
|
(3.6)
|
–
|
Total operating
expenses
|
|
(30.0)
|
(23.9)
|
|
|
|
|
Loss from
operations
|
|
(39.2)
|
(241.3)
|
|
|
|
|
Finance income
|
11
|
0.6
|
1.7
|
Finance expense
|
11
|
(11.2)
|
(7.1)
|
Loss before
tax
|
|
(49.8)
|
(246.7)
|
|
|
|
|
Tax benefit
|
12
|
9.2
|
3.3
|
Loss for the
year
|
|
(40.6)
|
(243.4)
|
|
|
|
|
Other comprehensive income
|
|
–
|
–
|
Total comprehensive
loss for the year
|
|
(40.6)
|
(243.4)
|
|
|
|
|
Loss per share
attributable to owners of the parent:
|
|
|
|
Basic loss per weighted average
share
|
13
|
(21p)
|
(159p)
|
Diluted loss per weighted average
share
|
13
|
(21p)
|
(158p)
|
The
consolidated financial statements should be read in conjunction
with the accompanying notes.
Consolidated statement of financial
position
As at 31 March 2024
|
Notes
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Non-current
assets
|
|
|
|
Intangible assets
|
16
|
10.4
|
10.5
|
Financial assets held at fair value
through profit or loss
|
17
|
1,292.1
|
1,277.0
|
Property, plant and
equipment
|
19
|
0.1
|
0.4
|
Total non-current
assets
|
|
1,302.6
|
1,287.9
|
Current
assets
|
|
|
|
Trade and other receivables
|
22
|
1.6
|
5.0
|
Cash and cash equivalents
|
21
|
57.0
|
22.9
|
Total current
assets
|
|
58.6
|
27.9
|
Current
liabilities
|
|
|
|
Trade and other payables
|
23
|
(9.1)
|
(9.6)
|
Financial liabilities
|
24
|
–
|
(0.3)
|
Total current
liabilities
|
|
(9.1)
|
(9.9)
|
Non-current
liabilities
|
|
|
|
Deferred tax
|
25
|
(11.7)
|
(22.5)
|
Provisions
|
|
(0.3)
|
(0.3)
|
Financial liabilities
|
24
|
(89.4)
|
(89.0)
|
Total non-current
liabilities
|
|
(101.4)
|
(111.8)
|
Net assets
|
|
1,250.7
|
1,194.1
|
|
|
|
|
Equity
|
|
|
|
Share capital
|
26
|
1.9
|
1.5
|
Share premium account
|
26
|
671.2
|
615.9
|
Own shares reserve
|
27(i)
|
(8.8)
|
(8.9)
|
Other reserves
|
27(ii)
|
74.7
|
33.3
|
Retained earnings
|
|
511.7
|
552.3
|
Total
equity
|
|
1,250.7
|
1,194.1
|
|
|
|
|
Net assets per share
(pence)
|
13
|
662
|
780
|
The
consolidated financial statements should be read in conjunction
with the accompanying notes. The consolidated financial statements
were authorised for issue by the Board of Directors on 11 June 2024
and were signed on its behalf by:
Ben Wilkinson
Chief
Financial Officer
Molten
Ventures plc registered number 09799594
Consolidated statement of cash
flows
For the year ended 31 March 2024
|
Notes
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Cash flows from
operating activities
|
|
|
|
Loss after
tax
|
|
(40.6)
|
(243.4)
|
Adjustments to reconcile loss to net
cash outflow in operating activities
|
28
|
36.7
|
241.7
|
Purchase of investments
|
17
|
(39.5)
|
(138.2)
|
Proceeds from disposals in underlying
investment vehicles
|
17
|
38.9
|
48.1
|
Net loans made to underlying investment
vehicles and Group companies
|
17
|
(17.8)
|
(16.2)
|
Share options exercised and paid to
employees
|
|
(0.3)
|
–
|
Interest received
|
11
|
0.6
|
–
|
Net cash outflow from
operating activities
|
|
(22.0)
|
(108.0)
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Cash acquired on purchase of
subsidiary
|
14
|
12.0
|
–
|
Net cash inflow from
investing activities
|
|
12.0
|
–
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Loan repayments
|
24
|
(38.0)
|
(65.0)
|
Loan proceeds
|
24
|
38.0
|
125.0
|
Fees paid on issuance of
loan
|
24(i)
|
–
|
(1.0)
|
Interest paid
|
11
|
(11.0)
|
(6.9)
|
Disposal/(acquisition) of own
shares
|
27(i)
|
0.1
|
(0.6)
|
Repayments of leasing
liabilities
|
24
|
(0.3)
|
(0.4)
|
Gross proceeds from issue of share
capital
|
26
|
57.3
|
–
|
Equity issuance costs
|
26
|
(1.8)
|
–
|
Net cash inflow from
financing activities
|
|
44.3
|
51.1
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents
|
|
34.3
|
(56.9)
|
Cash and cash equivalents at beginning
of year
|
|
22.9
|
78.1
|
Exchange differences on cash and cash
equivalents
|
11
|
(0.2)
|
1.7
|
Cash and cash
equivalents at end of year
|
|
57.0
|
22.9
|
Total cash and cash
equivalents and restricted cash at year end
|
21
|
57.0
|
22.9
|
The
consolidated financial statements should be read in conjunction
with the accompanying notes.
Consolidated statement of changes in
equity
For the year ended 31 March 2024
Year ended 31 March 2024
£m
|
Note
|
Share
capital
|
Share
premium
|
Own shares
reserve
|
Other
reserves
|
Retained
earnings
|
Total
equity
|
Brought forward as at
1 April 2023
|
|
1.5
|
615.9
|
(8.9)
|
33.3
|
552.3
|
1,194.1
|
Comprehensive
expense
for the
year
|
|
|
|
|
|
|
|
Loss for the year
|
|
–
|
–
|
–
|
–
|
(40.6)
|
(40.6)
|
Total comprehensive
expense
for the
year
|
|
–
|
–
|
–
|
–
|
(40.6)
|
(40.6)
|
Contributions by and
distributions to the owners:
|
|
|
|
|
|
|
|
Contributions of equity,
net of transaction costs and
tax
|
26, 27
|
0.4
|
55.3
|
–
|
36.9
|
–
|
92.6
|
Options granted and awards
exercised
|
15, 27
|
–
|
–
|
–
|
4.5
|
–
|
4.5
|
Disposal of treasury shares
|
27
|
–
|
–
|
0.1
|
–
|
–
|
0.1
|
Total contributions
by and distributions to the owners
|
|
0.4
|
55.3
|
0.1
|
41.4
|
–
|
97.2
|
Balance as at 31
March 2024
|
|
1.9
|
671.2
|
(8.8)
|
74.7
|
511.7
|
1,250.7
|
Year ended 31 March 2023
£m
|
Note
|
Share
capital
|
Share
premium
|
Own shares
reserve
|
Other
reserves
|
Retained
earnings
|
Total
equity
|
Brought forward as at
1 April 2022
|
|
1.5
|
615.9
|
(8.2)
|
28.9
|
795.7
|
1,433.8
|
Comprehensive
expense
for the
year
|
|
|
|
|
|
|
|
Loss for the year
|
|
–
|
–
|
–
|
–
|
(243.4)
|
(243.4)
|
Total comprehensive
expense
for the
year
|
|
–
|
–
|
–
|
–
|
(243.4)
|
(243.4)
|
Contributions by and
distributions to the owners:
|
|
|
|
|
|
|
|
Contributions of equity, net of
transaction costs and tax
|
26
|
–
|
–
|
–
|
–
|
–
|
–
|
Options granted and awards
exercised
|
15, 27
|
–
|
–
|
(0.1)
|
4.4
|
–
|
4.3
|
Acquisition of treasury
shares
|
27
|
–
|
–
|
(0.6)
|
–
|
–
|
(0.6)
|
Total contributions
by and distributions to the owners
|
|
–
|
–
|
(0.7)
|
4.4
|
–
|
3.7
|
Balance as at 31
March 2023
|
|
1.5
|
615.9
|
(8.9)
|
33.3
|
552.3
|
1,194.1
|
The
consolidated financial statements should be read in conjunction
with the accompanying notes.
Notes to the consolidated financial
statements
1. General information
Name of the
Company
|
Molten Ventures plc
|
LEI code of the
Company
|
213800IPCR3SAYJWSW10
|
Domicile of
Company
|
United Kingdom
|
Legal form of the
Company
|
Public limited company
|
Country of
incorporation
|
United Kingdom
|
Address of Company’s
registered office
|
20 Garrick Street, London, WC2E
9BT
|
Principal place of
business
|
20 Garrick Street, London, WC2E
9BT
|
Description of nature
of entity’s operations and principal activities
|
Venture capital firm
|
Name of parent
entity
|
Molten Ventures plc
|
Name of ultimate
parent of Group
|
Molten Ventures plc
|
Period covered by
financial statements
|
1 April 2023 – 31 March 2024
|
Molten
Ventures plc (the “Company”) is a public limited company
incorporated and domiciled in England and Wales.
The Company
is the ultimate parent company in which the results of all
subsidiaries are consolidated in line with IFRS 10 (see Note 4(b)
for further details). The consolidated financial statements for the
year ended 31 March 2024 and for the comparative year ended 31
March 2023 comprise the consolidated financial statements of the
Company and its subsidiaries (together, the “Group”).
The
consolidated financial statements are presented in Pounds Sterling
(GBP/£), which is the currency of the primary economic environment
in which the Group operates. All amounts are presented in millions,
unless otherwise stated.
2. Going concern assessment and
principal risks
Going concern
The Group’s
primary sources of liquidity are the cash flows it generates from
its operations, realisations of its investments and borrowings. The
primary use of this liquidity is to fund the Group’s operations
(including the purchase of investments). Responsibility for
liquidity risk management rests with the Board, which has
established a framework for the management of the Group’s funding
and liquidity management requirements.
The Group
manages liquidity risk by maintaining adequate reserves and with
ongoing monitoring of forecast and actual cash flows. The Group has
undertaken a going concern assessment and the latest assessment
showed sufficient headroom for liquidity for at least the next 12
months from the date of signing of these financial
statements.
The
assessment of going concern considered both the Group’s current
performance and future outlook, including:
• An
assessment of the Group’s liquidity and solvency position using a
number of severe but plausible downside case to assess the
potential impact on the Group’s operations and portfolio companies.
This downside scenario include (i) unpredictability of exit timing,
being only contractually committed realisations throughout the
Going Concern period; (ii) portfolio company valuations subject to
change, being a 25% decrease in GPV to assess the impact on
covenant compliance; and (iii) the impact of an additional 2%
increase in interest rates to take SONIA to 7.2%. The Group manages
and monitors liquidity regularly and continually assesses
investments, commitments, realisations, operating expenses, and
receipt of portfolio cash income including under stress scenarios
ensuring liquidity is adequate and sufficient. As at the date of
signing, the Directors believe the Group has sufficient cash
resources and liquidity, and is well placed to manage the business
risks in the current economic environment with the ability to
utilise the Debt Facility as required.
• The
Group must comply with financial and non-financial covenants as
part of its Debt Facility agreement (see Note 24(i) for further
details). In order to assess forecast covenant compliance,
management have performed an assessment to identify the level at
which covenants would be breached. This is based on the current
portfolio and assuming no intervention to manage a breach. For a
breach to occur under these circumstances, a 31% decrease in gross
asset value would need to occur which would trigger debt repayment.
The Directors do not consider this to be plausible based on the
performance in the year and the current outlook. Management action
would be taken in advance of such a significant decrease to the
gross asset value such as the sale of investments in the
secondaries market to repay the Debt Facility.
After making
enquiries and following challenge and review, the Directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for 12 months from the date of
approval of these financial statements. For this reason, they
continue to adopt the going concern basis in preparing the
financial statements.
For further
information, please refer to the Audit, Risk and Valuations
Committee Report on pages 83 to 85 and the Directors’ Report on
pages 99 to 101 of the Annual Report.
Principal risks
The Group has
reviewed its exposure to its principal risks and concluded that
these did not have a significant impact on the financial
performance and/or position of the Group for the year and as at 31
March 2024, respectively. For further details on the Group’s
principal risks, as well as its risk management processes, please
see the Risk Management and Principal Risks section in the
Strategic Report to these financial statements.
3. Adoption of new and revised
standards
i. Adoption of new and revised
standards
No changes to
IFRS have impacted this year’s financial statements.
ii. Impact of standards issued not
yet applied
No upcoming
changes under IFRS are likely to have a material effect on the
reported results or financial position. Management will continue to
monitor upcoming changes.
4. Material accounting policy
information
a) Basis of preparation
The financial
statements have been prepared in accordance with UK-adopted
International Accounting Standards (“IAS”) and the requirements of
the Companies Act 2006 as applicable to companies reporting under
those standards and International Financial Reporting Standards
(“IFRS”) adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union (“EU”).
UK-adopted
International Accounting Standards differ in certain respects from
International Financial Reporting Standards as adopted by the EU.
The differences have no material impact on the financial statements
for the periods presented, which, therefore, also comply with
International Financial Reporting Standards as adopted by the
EU.
The
consolidated financial statements have been prepared under the
historical cost convention as modified for the revaluation of
certain financial assets and financial liabilities held at fair
value. A summary of the Group’s principal accounting policies,
which have been applied consistently across the Group, is set out
below. The consolidated financial statements have been approved for
issue by the Board of Directors on 11 June 2024.
The financial
reporting framework that has been applied in the preparation of the
Company’s financial statements (beginning on page 153) is Financial
Reporting Standard 101, ‘Reduced Disclosure Framework’ (FRS 101).
The financial statements have been prepared under the historical
cost convention, as modified by the revaluation of certain
financial assets and financial liabilities measured at fair value
through profit or loss, and in accordance with the Companies Act
2006. The Company has taken advantage of disclosure exemptions
available under FRS 101 as explained further in Note 1 of the
Company’s financial statements. The financial statements are
prepared on a going concern basis as disclosed in the Audit, Risk
and Valuations Committee Report (pages 83 to 85 of the Annual
Report), in the Directors’ Report (pages 99 to 101 of the Annual
Report) and in Note 2.
In preparing
the financial statements we have considered the impact of climate
change, particularly in the context of the disclosures included in
the Strategic Report this year. There has not been a material
impact on the financial reporting judgements and estimates arising
from our considerations. Specifically, we note the
following:
• For
the fifth year running, we have offset 100% of our Scope 1 and
Scope 2 and select Scope 3 emissions for the financial year (see
more details on page 53 of the Annual Report).
• We
continue to engage ESG Consulting Partners to support us with
respect to our ESG roadmap. During the year, we worked Altruistiq
and Accenture to support us with our Climate Strategy, GHG
Verification and TCFD Report.
• As
stated in Note 30, based on work performed so far, management have
considered climate-related risks and consider these to be currently
immaterial to the value of our portfolio for FY24 (FY23:
immaterial).
A summary of
the Group’s principal accounting policies, which have been applied
consistently across the Group, is set out below.
b) Basis of consolidation
The consolidated
financial statements comprise the Company (Molten Ventures plc, 20
Garrick Street, London, England WC2E 9BT) and the results, cash
flows and changes in equity of the following subsidiary
undertakings as well as the Molten Ventures Employee Benefit
Trust:
Name of
undertaking
|
Nature of
business
|
Country of
incorporation
|
%
ownership
|
Esprit Capital Partners LLP^
|
AIFM to the Company, Molten Ventures
FoF I LP, Esprit Funds and Irish Co-Invest
|
England and Wales
|
100%
|
Elderstreet Holdings
Limited^
|
Intermediate holding company
|
England and Wales
|
100%
|
Elderstreet Investments
Limited^
|
AIFM to Molten Ventures VCT
plc and Molten SP I LLP
|
England and Wales
|
100%
|
Grow Trustees Limited^
|
Trustee of the Group’s employment
benefit trust
|
England and Wales
|
100%
|
Molten Ventures Advisors
Limited^
|
Investment Adviser
|
England and Wales
|
100%
|
Molten Ventures (Nominee)
Limited^
|
Dormant
|
England and Wales
|
100%
|
Encore Ventures LLP^
|
AIFM to the Encore Funds
|
England and Wales
|
100%
|
Esprit Capital I (GP)
Limited^
|
General Partner and co-invest
vehicle
|
England and Wales
|
100%
|
Esprit Capital I General
Partner^
|
General Partner
|
England and Wales
|
100%
|
Esprit Capital II GP
Limited†
|
General Partner
|
Cayman Islands
|
100%
|
Esprit Capital III Founder GP
Limited*
|
General Partner
|
Scotland
|
100%
|
Esprit Capital III GP LP*
|
General Partner
|
Scotland
|
100%
|
Encore I Founder GP
Limited†
|
General Partner
|
Cayman Islands
|
100%
|
Encore I GP Limited†
|
Intermediate holding company
|
Cayman Islands
|
100%
|
Esprit Capital Holdings
Limited^
|
Dormant
|
England and Wales
|
100%
|
Esprit Nominees Limited^
|
Nominee company
|
England and Wales
|
100%
|
Esprit Capital I (CIP)
Limited^
|
Dormant
|
England and Wales
|
100%
|
Esprit Capital III MLP LLP^
|
Intermediate holding company
|
England and Wales
|
100%
|
Esprit Capital III GP
Limited^
|
General Partner (dormant)
|
England and Wales
|
100%
|
Molten Ventures Growth Fund I GP
S.a.r.l‡
|
General Partner (dormant)
|
Luxembourg
|
100%
|
Molten Ventures Growth SP GP
LLP^
|
General Partner (dormant)
|
England and Wales
|
100%
|
Molten Ventures FoF I GP
LLP^
|
General Partner
|
England and Wales
|
100%
|
Molten Ventures Investments GP
LLP^
|
General Partner
|
England and Wales
|
100%
|
Molten Ventures Investment (Ireland) GP
LLP^
|
General Partner
|
England and Wales
|
100%
|
Forward Partners Group
Limited^
|
Limited Partner to the Forward
Funds
|
England and Wales
|
100%
|
Forward Partners Management Company
Limited^
|
Investment Manager to the Forward
Funds
|
England and Wales
|
100%
|
Forward Partners Venture Advance
Ltd^
|
Revenue-based financing
|
England and Wales
|
100%
|
Forward Partners General Partner
Limited^
|
General Partner
|
England and Wales
|
100%
|
Forward Partners Carried Interest
General Partner Limited*
|
General Partner
|
Scotland
|
100%
|
FPGP Nominees Limited^
|
Dormant
|
England and Wales
|
100%
|
Registered addresses
^ 20
Garrick Street, London, England, WC2E 9BT
* 50
Lothian Road, Festival Square, Edinburgh, Scotland, EH3
9WJ
† c/o
Maples Corporate Services Limited at PO Box 309, Ugland House,
Grand Cayman, KY1-1104, Cayman Islands
‡ 412F,
Route d’Esch, Grand Duchy of Luxembourg, 1471,
Luxembourg
Subsidiaries
Subsidiaries
are entities controlled by the Group. Control, as defined by IFRS
10, is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the
investee. Subsidiaries are fully consolidated from the date on
which the Group effectively obtains control. They are
deconsolidated from the date that control ceases. Control is
reassessed whenever circumstances indicate that there may be a
change in any of these elements of control.
All
transactions and balances between Group subsidiaries are eliminated
on consolidation, including unrealised gains and losses on
transactions between Group companies. Where unrealised losses on
intra-group asset sales are reversed on consolidation, the
underlying asset is also tested for impairment from a Group
perspective. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure
consistency with consolidated accounting policies adopted by the
Group. Profit or loss and other comprehensive income of
subsidiaries acquired or disposed of during the year are recognised
from the effective date of acquisition, or up to the effective date
of disposal, as applicable. The Group attributes total
comprehensive income or loss of subsidiaries between the owners of
the parent and the non-controlling interests based on their
respective ownership interests.
Employee Benefit Trust
On 27
November 2020, Molten Ventures Employee Benefit Trust (the “Trust”)
was set up to operate as part of the Molten Ventures employee share
option schemes. The substance of the relationship is considered to
be one of control by the Group and, therefore, the Trust is
consolidated, and all assets and liabilities are consolidated into
the Group. Grow Trustees Limited was appointed trustee of the Trust
and the substance of this relationship is also considered to be one
of control by the Group and, as such, Grow Trustees Limited is
consolidated.
Investment entity
In accordance
with the provisions of IFRS 10, Molten Ventures plc considers
itself to be an investment entity. As a result of its listed
status, it obtains funds from its Shareholders to acquire equity
interests in multiple high-growth technology businesses
(indirectly) with the purpose of capital appreciation over the life
of the investments. These investments are made on behalf of
investors in Molten Ventures plc across a number of deployment
strategies – see page 16. Exit strategies for the portfolio vary
depending on each investment, with realisations occurring typically
five to ten years after the investment is made. Exit strategies for
each of the portfolio companies are documented and discussed as
part of regular portfolio reviews. The Group reviews exit
opportunities regularly and each member of the Deal Team is
responsible for an exit thesis for the investee companies they are
responsible for prior to any investment being made. An exit thesis
is set out in the original investment papers and it is reiterated
or amended thereafter, as appropriate, in the Group’s regular
quarterly reports. Exit strategies for successful investments
include the sale of the investment via private placement or in a
public market, IPO, trade sale of a company, and distributions to
investors from funds invested into. All exits are approved by a
sub-committee of the Investment Committee, following a similar
approval process to any approval of a new investment, requiring a
majority vote. Although Molten Ventures plc holds these investments
indirectly, it has been deemed appropriate to directly consider the
investment strategies for the portfolio as the intermediary
investment vehicles discussed below were formed to hold investments
on behalf of Molten Ventures plc. Molten Ventures plc evaluates its
investments on a fair value basis and reports this financial
information to its Shareholders.
The Directors
have also satisfied themselves that Molten Ventures plc’s wholly
owned subsidiaries, as well as certain partnerships listed below,
meet the characteristics of an investment entity. Although they
have one or two investors, in substance these partnerships and
companies are investing funds on behalf of the Shareholders of
Molten Ventures plc. They have obtained funds for the purpose of
acquiring equity interests in high-growth technology businesses
with the purpose of capital appreciation over the life of the
investments for the benefit of Shareholders of Molten Ventures plc
and this has been communicated directly to the Shareholders. Exit
strategies for investments (directly or indirectly) are previously
discussed. The Group evaluates its portfolio on a fair value basis
and this financial information is communicated directly to the
Molten Ventures plc Shareholders. In line with the IFRS 10
consolidation exemption, entities meeting the definition of
investment entity do not consolidate certain subsidiaries and
instead measure those investments that are controlling interests in
another entity (i.e., their subsidiaries) as investments held at
fair value through profit or loss on the consolidated balance
sheet. Loans to investment vehicles are treated as net investments
at fair value through profit or loss.
The below is
a list of entities that are controlled and not consolidated but
held as investments at fair value through profit or loss on the
consolidated balance sheet.
Name of
undertaking
|
Principal
activity
|
Country of
incorporation
|
%
ownership
|
Molten Ventures (Ireland)
Limited1
|
Investment entity
|
Republic of Ireland
|
100%
|
Esprit Capital III,
L.P.2
|
Limited partnership pursuant to which
the Group makes certain investments
|
England and Wales
|
100%
|
Esprit Capital III (B),
L.P.2
|
Limited partnership pursuant to which
the Group makes certain investments
|
England and Wales
|
100%
|
Esprit Capital IV LP2
|
Limited partnership pursuant to which
the Group makes certain investments
|
England and Wales
|
100%
|
DFJ Europe X LP3
|
Limited partnership pursuant to which
the Group makes certain investments
|
Cayman Islands
|
100%
|
Esprit Investments (1)
L.P.2
|
Limited partnership pursuant to which
the Group makes certain investments
|
England and Wales
|
100%
|
Esprit Investments (2)
LP2
|
Limited partnership pursuant to which
the Group makes certain investments
|
England and Wales
|
100%
|
Esprit Investments (1) (B)
LP2
|
Limited partnership pursuant to which
the Group and Molten Ventures FoF I LP hold Fund of Fund
investments
|
England and Wales
|
89%7
|
Seedcamp Holdings
LLP2
|
Limited liability partnership which
holds investments acquired from Seedcamp
|
England and Wales
|
100%
|
Seedcamp Investments
LLP4
|
Limited liability partnership which
holds investments acquired from Seedcamp
|
England and Wales
|
100%
|
Seedcamp Investments II
LLP4
|
Limited liability partnership which
holds investments acquired from Seedcamp
|
England and Wales
|
100%
|
Esprit Investments (2) (B)
LP2
|
Limited partnership pursuant to which
the Group and Molten Ventures FoF I LP hold Fund of Fund
investments
|
England and Wales
|
89%7
|
SC_4_OF1 LP5
|
Limited partnership pursuant to which
the Group holds certain investments
|
England and Wales
|
100%
|
Molten Ventures Investments
LP2
|
Limited partnership pursuant to which
the Group makes certain investments
|
England and Wales
|
100%
|
Molten Ventures Growth Fund I
SCSp6
|
Limited partnership pursuant to which
the Group makes certain investments (dormant)
|
Luxembourg
|
100%
|
Molten Ventures Holdings
Ltd2
|
Intermediate Company and Qualifying
Asset Holding Company (“QAHC”)
|
England and Wales
|
100%
|
Esprit Investments (2) (B) (I)
LP2
|
Limited partnership pursuant to which
the Group makes
certain investments
(dormant)
|
England and Wales
|
100%
|
Esprit Investments 2(B) (II)
LP2
|
Limited partnership pursuant to which
the Group makes certain investments
|
England and Wales
|
100%
|
Molten Ventures FoF I
LP2
|
Limited partnership under the Group’s
management which makes Fund of Fund investments
|
England and Wales
|
50%
|
Molten Venture Investments (Ireland) I
LP
|
Limited Partnership under the Group's
management which makes Irish domiciled investments
|
England and Wales
|
50%
|
Forward Partners 1
L.P.2
|
Limited partnership pursuant to which
the Group makes certain investments
|
England and Wales
|
100%
|
Forward Partners II
L.P.2
|
Limited partnership pursuant to which
the Group makes certain investments
|
England and Wales
|
100%
|
Forward Partners III
L.P.2
|
Limited partnership pursuant to which
the Group makes certain investments
|
England and Wales
|
100%
|
1 32
Molesworth Street, Dublin 2, Ireland D02 Y512.
2 20
Garrick Street, London, England WC2E 9BT.
3 c/o
Maples Corporate Services Limited at PO Box 309, Ugland House,
Grand Cayman, KY1–1104, Cayman Islands.
4 16
Great Queen Street, London, England WC2B 5AH.
5 35
New Bridge Street, London, England EC4V 6BW.
6 412F,
Route d’Esch, Grand Duchy of Luxembourg, 1471,
Luxembourg.
7 circa
22% is held by Molten Ventures FoF I LP of which Molten and a third
party are both 50% LPs
Limited partnerships (carried
interest and co-invest)
Carried
interest vehicles and co-investment limited partnerships (“CIPs”) –
the Group’s general partners are members of these limited
partnerships. These vehicles are set up with two purposes: 1) to
facilitate payments of carried interest from the fund to carried
interest participants; and 2) in certain circumstances to
facilitate co-investment into the funds. Carried interest and
co-investment partnerships are investment entities and are measured
at FVTPL with reference to the performance conditions described in
Note 4(u) and held at FVTPL, which equates to the net asset value
attributable to the Group, in the statement of financial position
in line with our application of IFRS 10 for investment entities.
The vehicles in question are as follows:
Name of
undertaking
|
Principal
activity
|
Country of
incorporation
|
Encore I GP LP^
|
General partner
|
Cayman Islands
|
Encore I Founder LP^
|
Co-investment limited
partnership
|
Cayman Islands
|
Encore I Founder 2014 LP^
|
Co-investment limited
partnership
|
Cayman Islands
|
Encore I Founder 2014-A LP^
|
Co-investment limited
partnership
|
Cayman Islands
|
Esprit Capital III Founder
LP*
|
Co-investment limited partnership/carry
partner
|
Scotland
|
Esprit Investments (2) (Carried
Interest) LP*
|
Carry vehicle
|
Scotland
|
Esprit Capital III (Carried Interest)
LP*
|
Carry vehicle
|
Scotland
|
Esprit Investments (1) (Carried
Interest) LP*
|
Carry vehicle
|
Scotland
|
Molten Ventures Growth I Special
Partner LP*
|
Carry vehicle
|
Scotland
|
Molten Ventures Investments (Carried
Interest) LP*
|
Carry vehicle
|
Scotland
|
Molten Ventures FoF I (Special Partner)
LP*
|
Carry vehicle
|
Scotland
|
Molten SP I LLP†
|
Third Party Capital Investment vehicle
structured as a limited liability partnership
|
England and Wales
|
Forward Partners Carried Interest
L.P.*
|
Carry vehicle
|
Scotland
|
^ c/o
Maples Corporate Services Limited at PO Box 309, Ugland House,
Grand Cayman, KY1–1104, Cayman Islands.
* 50
Lothian Road, Festival Square, Edinburgh, Scotland EH3
9WJ.
† 20
Garrick Street, London WC2E 9BT.
Each carry
vehicle indirectly holds interests in a vintage of investments
within our portfolio with the purpose of producing profits for
distribution among the carried interest partners. The Group
evaluates its interest in carried interest at fair value as part of
the valuations cycle. Indirectly, the carry partnerships have exit
strategies for each investment within which they have an interest
as the manager of both the carry partner and the investment
vehicles regularly considers exit strategies as discussed
above.
Limited partnerships (managed by
Group entities)
A number of
limited partnerships are managed by entities within the Group but
are not considered to be controlled and, therefore, they are not
consolidated in these financial statements.
Legacy funds
The Group
continues to manage three legacy funds, Esprit Fund 1, Esprit Fund
2 and Esprit Fund 3(i), and their general partners are consolidated
within the Group. These funds are in run-off. Historically, the
Group has not had any direct beneficial interests in the assets
owned by these funds and the Group was not exposed to variable
returns from these funds.
Other than
Esprit Capital II LP, which is held at fair value through profit
and loss, as an investment, management considers the legacy funds
are held under an agency relationship with the funds where the
Group acts as an agent which is primarily engaged to act on behalf,
and for the benefit, of the fund investors rather than for its own
benefit. Although the manager (Esprit Capital Partners LLP,
subsidiary to Molten Ventures plc) has the power to influence the
returns generated by the fund, the Group does not have an interest
in their returns. As a result, the Group is not deemed to control
these managed funds and they are not consolidated.
The legacy
funds have the following details:
Esprit Fund 1: Esprit Capital I
Fund No.1 Limited Partnership and Esprit Capital I Fund No.2
Limited Partnership – c/o Molten Ventures plc, 20 Garrick Street,
London WC2E 9BT.
Esprit Fund 2 : Esprit Capital II
L.P. – c/o Maples Corporate Services Limited at PO Box 309, Ugland
House, Grand Cayman, KY1–1104, Cayman Islands
Esprit Capital 3(i): Esprit Capital
Fund III(i) LP and Esprit Capital Fund III(i) A LP –
c/o Maples Corporate Services Limited at PO Box 309, Ugland
House, Grand Cayman, KY1–1104, Cayman Islands.
EIS/VCT funds
Enterprise
Investment Scheme funds and Molten Ventures VCT plc are managed by
the Group. The Group has no direct beneficial interest in the
assets being managed and its sole exposure to variable returns are
to performance fees payable on exits above a specified hurdle and
management fees based on subscriptions (and Promoter’s fees in
certain cases), which is a small proportion of the total capital
within each fund. The Board believes that this results in an agency
relationship with the funds where the Group acts as an agent, which
is primarily engaged to act on behalf, and for the benefit, of the
fund investors rather than for its own benefit. Although the
managers (Encore Ventures LLP – EIS funds, Elderstreet Investments
Limited – VCT fund and Molten SP I LLP) have the power to influence
the returns generated by the fund, the Group only has an
insignificant interest in their returns. As a result, the Group is
not deemed to control these managed funds and they are not
consolidated.
The EIS/VCT
funds have the following details:
EIS funds: DFJ Esprit Angels’ EIS
Co-Investment Fund, DFJ Esprit Angels’ EIS Co-Investment II, DFJ
Esprit EIS III, DFJ Esprit EIS IV,
Draper Esprit EIS 5, Molten Ventures EIS and Molten Ventures
Approved KI EIS 23/24.
VCT funds: Molten Ventures VCT plc
– The Office Suite, Den House, Den Promenade, Teignmouth, United
Kingdom, TQ14 8SY.
Audit exemption for members of the
Group
The following
entities are included in the parent’s consolidated accounts. As a
result of section 479A of the Companies Act 2006, these
subsidiaries are exempt from the requirements of the Companies Act
2006 relating to the audit of accounts under section 475 of the
Companies Act 2006.
Esprit
Capital Holdings Limited, Esprit Capital I (CIP) Limited, Molten
Ventures (Nominee) Limited, Esprit Nominees Limited, Grow Trustees
Limited, Esprit Capital III MLP LLP, Esprit Capital III GP Limited,
Esprit Capital I (GP) Limited, Esprit Capital III Founder GP
Limited, Elderstreet Holdings Limited, Encore I GP Limited, Encore
I Founder GP Limited, Esprit Capital I General Partner, Esprit
Capital III GP LP, Molten Ventures Growth Fund I GP S.a.r.l, Molten
Ventures Growth SP GP LLP, Molten Ventures FoF I GP LLP and Molten
Ventures Investments GP LLP.
Esprit Foundation
Molten
Ventures plc is the sole member of the Foundation. However, this is
not controlled by Molten Ventures plc or the Group, as the Esprit
Foundation has a separate board of trustees with a separate
governance and decision-making process.
A donation was received during the year ended 31 March 2023.
A total of £0.1m in grants were made for the year ended 31 March
2024 (31 March 2023: £Nil). Charitable Incorporated Organisation
status was entered onto the Register of Charities with the
Registered Charity Number 1198436 on 30 March 2022. Stuart Chapman
is one of, and a donor to, the three Trustees of the Esprit
Foundation and is also an Executive Director on the Board of Molten
Ventures plc.
c) Operating segment
IFRS 8,
‘Operating Segments’, defines operating segments as those
activities of an entity about which separate financial information
is available and which are evaluated by the Chief Operating
Decision Maker to assess performance and determine the allocation
of resources.
The Board of
Directors have identified Molten’s Chief Operating Decision Maker
to be the Chief Executive Officer (“CEO”). The Group’s investment
portfolio engages in business activities from which it earns
revenues and incurs expenses, has operating results, which are
regularly reviewed by the CEO to make decisions about resources and
assess performance, and the portfolio has discrete financial
information available. The Group’s investment portfolio has similar
economic characteristics, and investments are similar in nature.
Dealflow for the investment portfolio is now consistent across all
funds (except for the Legacy funds – see below) and the Group’s
Investment Committee reviews and approves (where appropriate)
investments for all of the investment portfolio in line with the
strategy set by the Molten Ventures plc Board of Directors
(approvals from the Molten Ventures plc Board of Directors is
required for higher value investments where the proposed value of
the investment to be made by plc is above £3.0 million). Although
the managers of our EIS funds, VCT funds and plc funds have a
separate management committee, the majority of those sitting on the
committees are consistent across all. Taking into account the above
points, and in line with IFRS 8, the investment portfolio (across
all funds) has been aggregated into one single operating
segment.
Legacy funds
– the legacy funds (Esprit Capital I Fund No 1 LP, Esprit Capital
Fund No 2 LP, Esprit Capital Fund III (i) LP, Esprit Capital Fund
III (i) A LP and Esprit Capital II LP) continue to be managed by
the Group (Esprit Capital Partners LLP). These funds are in
run-off. Although the investments held within these funds are not
consistent with the rest of the investment portfolio (although
there has been some cross-over in the past), they are similar in
nature and the Group does not earn material revenue (neither is
material expenditure incurred) from the management of these funds
that would meet the quantitative thresholds set out in IFRS 8.
Management does not believe that separate disclosure of information
relating to the legacy funds would be useful to users of the
financial statements.
The majority
of the Group’s revenues are not from interest, and Management does
not primarily rely on net interest revenue to assess the
performance of the Group and make decisions about resource
allocation. Therefore, the Group reports interest revenue
separately from interest expense.
The Group’s
management considers the Group’s investment portfolio represents a
coherent and diversified portfolio with similar economic
characteristics and as a result these individual investments have
been aggregated into a single operating segment. In the view of the
Directors, there is accordingly one reportable segment under the
provisions of IFRS 8.
d) Revenue recognition
Revenue is
comprised of management fees from EIS/VCT funds and Molten SP I
LLP, as well as performance fees and promoter fees. Priority Profit
Share is incorporated within management fees, presented as
management fees charged on the underlying investment
vehicles.
Revenue is
also generated from Directors’ fees from a small number of
portfolio companies where members of the Investment Team act as
Directors for portfolio companies.
Revenue is
recognised at an amount that reflects the consideration to which
the Group is expected to be entitled in exchange for transferring
services to a customer.
For each
contract with a customer, the Group: identifies the contract with a
customer, identifies the performance obligations in the contract;
determines the transaction price which takes into account the time
value of money; allocates the transaction price to the separate
performance obligations on the basis of the relative standalone
selling price of each distinct service to be delivered; and
recognises revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the customer of
the services promised.
All revenue
from services is generated within the UK and is stated exclusive of
value added tax.
Revenue
presented as fee income are services comprised of:
i. Management
fees (Priority Profit Share)
Management fees are earned by General Partners of Limited
Partnerships, through a Priority Profit Share arrangement. The
basis of calculation of fund management fees differs depending on
the fund and its stage. Fund management fees are either earned at a
fixed annual rate or are set at a fixed percentage of funds under
management, measured by commitments or invested cost, depending on
the stage of the fund being managed. Revenues are recognised as the
related services are provided.
ii. Management
fees earned by Encore Ventures LLP.
Fund Close April 2019 and prior.
Management fees are charged on the Net Subscription per annum
for the first four years of the life of the portfolio. Management
fees are charged annually in advance. Cash received from the
investor’s Net Subscription is received and will be recognised as
revenue in the period they become due, across the first four years
in line with the investment and follow-on period for investing
activities.
In this case, the transaction price is fixed for the life of
the contract and, if management fees are recognised in the period
for which they are receivable.
Fund Close July 2019 onwards.
Management fees are charged on Net Subscription per annum for
the first five years of the life of the portfolio, payable annually
in advance. Cash received from the investor’s Net Subscription is
received and will be recognised as revenue in the period they
become due, across the first five years in line with the investment
and follow-on period for investing activities.
Management fees are charged annually in advance. Cash
received from the investor’s Net Subscription to cover the payment
of management fees relating to the first 2.75 years of the life of
the portfolio. Thereafter, fees will be accrued and deducted from
cash proceeds from exits at the time of becoming highly probable.
If no proceeds are received, these fees will not be charged to
investors.
iii. Performance
fees
Performance fees are earned on a percentage of returns over a
hurdle rate. These are recognised in the statement of comprehensive
income on realisation of underlying investment. Amounts are
recognised as revenue when it can be reliably measured and is
highly probable funds will flow to the Group, which is generally at
the point of invoicing or shortly before due to the
unpredictability associated with realisations but is assessed on a
case-by-case basis.
iv. Promoter’s
fees
Promoter’s fees are earned by Elderstreet Investments
Limited, as manager of the VCT funds, based on amounts subscribed
during each offer.
Fees are agreed on an offer-by-offer basis and are receivable
when the shares are allotted. Elderstreet Investments Limited may
also be entitled to promoter’s fees when it promotes offers for new
subscriptions into the funds it manages. Promoter’s fees are earned
at a percentage of subscriptions received. Revenue is recognised in
full at the time valid subscriptions are received.
v. Directors’
fees
Portfolio Directors’ fees are annual fees charged to an
investee company. Directors’ fees are only charged on a limited
number of the investee companies. Revenues are recognised as
services are provided.
e) Deferred income
The Group’s
management fees are typically billed quarterly or half-yearly in
advance. Where fees have been billed for an advance period, the
amounts are credited to deferred income, and then subsequently
released through the statement of comprehensive income during the
period to which the fees relate. Certain performance fees and
portfolio Directors’ fees are also billed in advance and these
amounts are credited to deferred income, and then subsequently
released through the statement of comprehensive income accounting
during the period to which the fees relate.
f) Business combinations
The Group
applies the acquisition method in accounting for business
combinations. The consideration transferred by the Group to obtain
control of a subsidiary is calculated as the sum of the
acquisition-date fair values of assets transferred, liabilities
incurred, and the equity interests issued by the Group, which
includes the fair value of any asset or liability arising from a
contingent consideration arrangement.
Acquisition
costs are expensed as incurred. Assets acquired and liabilities
assumed are generally measured at their acquisition-date fair
values.
The Group
recognises identifiable assets acquired and liabilities assumed in
a business combination, regardless of whether they have been
previously recognised in the acquiree’s financial statements prior
to the acquisition. Assets acquired and liabilities assumed are
generally measured at their acquisition-date fair values. Goodwill
is stated after separate recognition of identifiable intangible
assets. It is calculated as the excess of the sum of: a) fair value
of consideration transferred; b) the recognised amount of any
non-controlling interest in the acquiree; and c) acquisition-date
fair value of any existing equity interest in the acquiree, over
the acquisition-date fair values of identifiable net assets. If the
fair values of identifiable net assets exceed the sum calculated
above, the excess amount (i.e. gain on a bargain purchase) is
recognised in the statement of comprehensive income
immediately.
g) Goodwill and other intangible
assets
Goodwill is
measured as the excess of the sum of the consideration transferred,
the amount of any non-controlling interests in the acquiree, and
the fair value of the acquirer’s previously held equity interest in
the acquiree (if any) over the net of the acquisition-date amounts
of the identifiable assets acquired and the liabilities assumed.
If, after reassessment, the net acquisition-date amounts of the
identifiable assets acquired and liabilities assumed exceed the sum
of the consideration transferred, the amount of any non-controlling
interests in the acquiree and the fair value of the acquirer’s
previously held interest in the acquiree (if any), the excess is
recognised immediately in profit or loss as a bargain purchase
gain.
When the
consideration transferred by the Group in a business combination
includes an asset or liability resulting from a contingent
consideration arrangement, the contingent consideration is measured
at its acquisition-date fair value and included as part of the
consideration transferred in a business combination. Changes in
fair value of the contingent consideration that qualify as
measurement period adjustments are adjusted retrospectively, with
corresponding adjustments against goodwill. Measurement period
adjustments are adjustments that arise from additional information
obtained during the “measurement period” (which cannot exceed one
year from the acquisition date) about facts and circumstances that
existed at the acquisition date.
Other intangible assets
Certain
previously unrecognised assets acquired in a business combination
that qualify for separate recognition are recognised as intangible
assets at their fair values, e.g. brand names, customer contracts
and lists. All finite-lived intangible assets are accounted for
using the cost model whereby capitalised costs are amortised on a
straight-line basis over their estimated useful lives. Residual
values and useful lives are reviewed at each reporting date. In
addition, they are subject to impairment testing as described
below. Customer contracts are amortised on a straight-line basis
over their useful economic lives, typically the duration of the
underlying contracts. The following useful economic lives for
customer contracts were applied on the date of
acquisition:
i. Encore
Ventures LLP: eight years; and
ii. Elderstreet
Investments Limited: three years.
h) Impairment
For the
purposes of assessing impairment, assets are grouped at the lowest
level for which there are largely independent cash inflows (“cash
generating units” or “CGU”). As a result, some assets are tested
individually for impairment, and some are tested at cash-generating
unit level. Goodwill is allocated to those cash-generating units
that are expected to benefit from synergies of the related business
combination and represent the lowest level within the Group at
which management monitors goodwill. All other individual assets or
cash-generating units are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount may not
be recoverable.
An impairment
loss is recognised in the consolidated statement of total
comprehensive income for the amount by which the assets or
cash-generating units carrying amount exceeds its recoverable
amount that is the higher of fair value less costs to sell and
value-in-use.
To determine
value-in-use, management estimates expected future cash flows over
five years from each cash-generating unit and determines a suitable
discount rate in order to calculate the present value of those cash
flows. Discount factors are determined individually for each
cash-generating unit and reflect their respective risk profile as
assessed by management. Impairment losses for cash-generating units
reduce first the carrying amount of any goodwill allocated to that
cash-generating unit. Any remaining impairment loss is charged
pro-rata to the other assets in the cash-generating unit with the
exception of goodwill, and all assets are subsequently reassessed
for indications that an impairment loss previously recognised may
no longer exist. An impairment charge is reversed if the
cash-generating unit’s recoverable amount exceeds its carrying
amount where there has been a change in estimates used for the
calculation of the recoverable amount.
i) Foreign currency
Transactions
entered into by Group entities in a currency other than the
functional currency in which they operate are recorded at the rates
prevailing when the transactions occur. Foreign currency monetary
assets and liabilities are translated at the rates prevailing at
the reporting date. Exchange differences arising on the
retranslation of unsettled monetary assets and liabilities are
recognised immediately in the statement of comprehensive
income.
The
individual financial statements of the Group’s subsidiary
undertakings are presented in their functional currency. For the
purpose of these consolidated financial statements, the results and
financial position of each subsidiary undertaking are expressed in
Pounds Sterling, which is the presentation currency for these
consolidated financial statements.
The assets
and liabilities of the Group’s undertakings, whose functional
currency is not Pounds Sterling, are translated at exchange rates
prevailing on the reporting date. Income and expense items are
translated at the average exchange rates for the period.
j) Financial assets
All financial
assets are recognised when economic benefit is expected to be
transferred to the Group.
On
recognition, a financial asset is initially measured at fair value,
plus transaction costs, except for those financial assets
classified at “fair value through profit or loss” (“FVTPL”), which
are initially measured at fair value.
Financial
assets are classified by the Group into the following specified
categories:
• Financial
assets “FVTPL”; and
• Amortised
cost.
The
classification depends on the nature and purpose of the financial
assets and is determined at the time of initial
recognition.
Financial assets through profit or
loss
A financial
asset may be designated as at FVTPL upon initial recognition
if:
a. such
designation eliminates or significantly reduces a measurement or
recognition inconsistency that would otherwise arise; or
b. the
financial asset forms part of a group of financial assets or
financial liabilities, or both, which is managed, and its
performance is evaluated on a fair value basis, in accordance with
the Molten Venture Group’s documented risk management or investment
strategy, and information about the grouping is provided internally
on that basis; or
c. it
forms part of a contract containing one or more embedded
derivatives, and IFRS 9 ‘Financial Instruments’ permits the entire
combined contract (asset or liability) to be designated as at
FVTPL.
The Group
considers its investment interests referred to in Note 4(b) are
appropriately designated as at FVTPL as they meet criteria (b)
above. Further details of the accounting policy can be found in
Note 30, Fair value measurements. Financial assets through profit
or loss are accounted for at settlement date.
Amortised cost
A financial
asset is held at amortised cost under IFRS 9 where it is held for
the collection of cash flows representing solely payments of
principal and interest. These assets are measured at amortised cost
using the effective interest method, less any expected
losses.
The Group’s
financial assets held at amortised cost comprise trade and other
receivables, and cash and cash equivalents in the consolidated
statement of financial position. Financial assets held at amortised
cost are accounted for at trade date.
k) Financial liabilities
The Group’s
financial liabilities include trade and other payables, and
borrowings.
Trade and other payables
Trade and
other payables are recognised when the Group enters into
contractual arrangements with an expectation that economic benefits
will flow from the Group.
The carrying
amounts of trade and other payables are considered to be the same
as their amortised cost, due to their short-term nature.
Loans and borrowings
Borrowings
are initially recognised at fair value that is deemed to be the
carrying value at inception. Fees related to the debt facility are
amortised over the term of the loan, see Note 24(i) for further
detail regarding the debt facility.
The carrying
amount of borrowings is deemed to be presented at amortised cost as
the fair value of future cash flows have not been
incorporated.
All
interest-related charges are reported in profit or loss and are
included within finance costs.
l) Provisions
Provisions
are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the
outflow of resources embodying the economic benefits will be
required to settle the obligation and a reliable estimate can be
made of the amount of the obligation.
m) Share capital
Financial
instruments issued by the Group are classified as equity only to
the extent that they do not meet the definition of a financial
liability or financial asset.
The Group’s
shares are classified as equity instruments. Equity instruments are
recorded at the proceeds received, net of direct issue
costs.
Shares held
by Molten Ventures Employee Benefit Trust are held at cost and
disclosed as own shares and deducted from other equity.
n) Defined contribution
scheme
Contributions
to the defined contribution pension scheme are charged to the
consolidated statement of comprehensive income in the years to
which they relate.
o) Share-based payments
When
equity-settled share options are awarded to employees, the fair
value of the options at the date of grant is charged to the
consolidated statement of comprehensive income over the vesting
period on a straight-line basis. Non-market vesting conditions are
taken into account by adjusting the number of equity instruments
expected to vest at each reporting date so that, ultimately, the
cumulative amount recognised over the vesting period is based on
the number of options that eventually vest. Non-vesting conditions
and market vesting conditions are factored into the fair value of
the options granted. As long as all other vesting conditions are
satisfied, a charge is made irrespective of whether the market
vesting conditions are satisfied. The cumulative expense is not
adjusted for failure to achieve a market vesting condition or where
a non-vesting condition is not satisfied.
Where the
terms and conditions of options are modified before they vest, the
increase in the fair value of the options, measured immediately
before and after the modification, is also charged to the
consolidated statement of comprehensive income over the remaining
vesting period. Where equity instruments are granted to persons
other than employees, the consolidated statement of comprehensive
income is charged with the fair value of goods and services
received.
The employee
share option plans are administered by the Molten Ventures Employee
Benefit Trust, which is consolidated in accordance with the
principles in Note 4(b).
p) Current tax
The tax
currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the statement of
comprehensive income because it excludes items of income or expense
that are taxable or deductible in other years, and it further
excludes items that are never taxable or deductible. The Group’s
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet
date.
q) Deferred tax
Deferred tax
is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the
computation of taxable profit and is accounted for using the
balance sheet liability method.
Deferred tax
liabilities are generally recognised for all taxable temporary
differences, and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available, against
which deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference
arises from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.
Deferred tax
liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and
interests in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future. Deferred tax assets arising from deductible temporary
differences associated with such investments and interests are only
recognised to the extent that it is probable that there will be
sufficient taxable profits, against which to utilise the benefits
of the temporary differences and they are expected to reverse in
the foreseeable future.
The carrying
amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part
of the asset to be recovered.
Deferred tax
is calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset is realised
based on tax laws and rates that have been enacted or substantively
enacted at the balance sheet date. Deferred tax is charged or
credited in the income statement, except when it relates to items
charged or credited in other comprehensive income, in which case
the deferred tax is also dealt with in other comprehensive
income.
The
measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Group
expects, at the end of the reporting period, to recover or settle
the carrying amount of its assets and liabilities. Deferred tax
assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities, and when they relate to income taxes levied by the
same taxation authority and the Group intends to settle its current
tax assets and liabilities on a net basis.
r) Property, plant and
equipment
Fixtures and
equipment are stated at cost less accumulated depreciation and any
recognised impairment loss. Depreciation is recognised to write off
the cost or valuation of assets less their residual values over
their useful lives, using the straight-line method, on the
following basis:
• Leasehold
improvements – over the term of the lease
• Fixtures
and equipment – 33% per annum straight line
• Computer
equipment – 33% per annum straight line
The estimated
useful lives, residual values and depreciation method are reviewed
at the end of each reporting period, with the effect of any changes
in estimate accounted for on a prospective basis.
s) Cash and cash
equivalents
Cash and cash
equivalents comprise cash at bank and on hand, and short-term
highly liquid money market funds and deposits with a maturity of
three months or less, that are held for the purpose of meeting
short-term cash commitments and are readily convertible to a known
amount of cash and subject to an insignificant risk of changes in
value.
t) Interest income
Interest
income earned on cash and deposits and short-term liquidity
investments is recognised when it is probable that the economic
benefits will flow to the Group and the amount of income recognised
can be measured reliably. Interest income is accrued on a time
basis, with reference to the principal outstanding and at the
effective interest rate applicable.
u) Carried interest
The Company
has established carried interest plans for the Executive Directors
(see the following associated note), other members of the
Investment Team and certain other employees (together the “Plan
Participants”) in respect of any investments and follow-on
investments made from IPO. To 31 March 2020 each carried interest
plan operated in respect of investments made during the 24-month
period from inception of the fund, being the investment period, and
related follow-on investments made for a further 36-month period.
From 1 April 2020, a new carried interest plan was implemented,
which operates for a five-year period in respect of any investment.
From April 2020 onwards, the Executive Directors were not eligible
to participate in new carried interest plans, and instead now
participate in the Long-Term Incentive Plan. Continued
participation in existing carried interest schemes that pre-dated
the start of the 2021 financial year were not affected.
Subject to
certain exceptions, Plan Participants will receive, in aggregate,
15% of the net realised cash profits from the investments and
follow-on investments made over the relevant period once the
Company has received an aggregate annualised 10% realised return on
investments and follow-on investments made during the relevant
period. The carried interest plan from 1 April 2020 has an
aggregate annualised 8% realised return on investments and
follow-on investments made during the relevant period, to bring the
plans more in line with market. The Plan Participants’ return is
subject to a “catch-up” in their favour. Plan Participants’ carried
interests vest over five years for each carried interest plan and
are subject to good and bad leaver provisions. Any unvested carried
interest resulting from a Plan Participant becoming a leaver can be
reallocated by an adjudication committee formed by Esprit Capital
Partners LLP as manager of the carried interest plan at their
discretion, including to the Group, and, therefore, an assumption
is made in the financial statements that any unvested carried
interest as at the reporting date would be reallocated to the
Group. See Note 30 for further information on amounts that have
been attributed to the Group.
Carried
interest is measured at FVTPL with reference to the performance
conditions described above. This is deducted from the gross value
of our portfolio as an input to determine the fair value of our
investment vehicles, which are held at FVTPL in the statement of
financial position in line with our application of IFRS 10 for
investment entities. The external carry is deducted as it will be
paid to members external to the Group from proceeds of investments
on realisation. Where the Group has a holding in the carried
interest, this is recognised at FVTPL.
v) Fair value movement
Management
uses valuation techniques to determine the fair value of financial
assets. This involves developing estimates and assumptions
consistent with how market participants would price the assets.
Management bases its assumptions on observable data as far as
possible, but this is not always available, in that case,
management uses the best information available. Estimated fair
values may vary from the amount which may be received as
consideration for investments in normal market conditions, between
two willing parties, at the reporting date (See Note
5(a)).
w) Exceptional Items
The Group
classifies items of income and expenditure as exceptional when the
nature of the item or its size is likely to be material, to assist
the reader of the financial statements to better understand the
results of the operations of the Group. Such items by their nature
are not expected to recur and are shown separately on the face of
the consolidated statement of comprehensive income.
5. Critical accounting estimates and
judgements
The Directors
have made the following judgements and estimates that have had the
most significant effect on the carrying amounts of the assets and
liabilities in the consolidated financial statements. The estimates
and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the
revision affects both current and future periods. Actual results
may differ from estimates. The key estimate, (5)(a), and judgement,
(5)(b), are discussed below. There have been no new critical
accounting estimates and judgements in the financial year ended 31
March 2024.
Estimates:
a. Valuation
of unquoted equity investments at fair value through profit or
loss
The Group
invests into Limited Companies and Limited Partnerships, which are
considered to be investment companies that invest for the benefit
of the Group. These investment companies are measured at fair value
through profit or loss based on their net asset value (“NAV”) at
the year-end. The Group controls these entities and is responsible
for preparing their NAV, which is mostly based on the valuation of
their unquoted investments. The Group’s valuation of investments
measured at fair value through profit or loss is, therefore,
dependent upon estimations of the valuation of the underlying
portfolio companies.
The Group,
through its controlled investment companies also invests in
investment funds, which primarily focus on seed investments. These
investments are considered to be “Fund of Fund investments” for the
Group and are recognised at their NAV at the year-end date. These
Fund of Fund investments are not controlled by the Group and some
do not have coterminous year-ends with the Group. To value these
investments, management obtains the latest audited financial
statements or partner reports of the investments and discusses
further movements with the management of the funds following
consideration of whether the funds follow the IPEV
Guidelines.
Where the
Fund of Funds hold investments that are individually material to
the Group, management perform further procedures to determine that
the valuation of these investments has been prepared in accordance
with the Group’s valuation policies for portfolio companies, as
outlined below, and these valuations will be adjusted by the Group
where necessary based on the Group valuation policy for portfolio
companies.
The estimates
required to determine the appropriate valuation methodology of
investments means there is a risk of material adjustment to the
carrying amounts of assets and liabilities. These estimates include
whether to increase or decrease investment valuations and require
the use of assumptions about the carrying amounts of assets and
liabilities that are not readily available or
observable.
The fair
value of investments is established with reference to the IPEV
Guidelines. An assessment will be made at each measurement date as
to the most appropriate valuation methodology.
The Group
invests in early-stage and growth technology companies, through
predominantly unlisted securities. Given the nature of these
investments, there are often no current or short-term future
earnings or positive cash flows. Consequently, although not
considered to be the default valuation technique, the appropriate
approach to determine fair value may be based on a methodology with
reference to observable market data, being the price of the most
recent transaction. Fair value estimates that are based on
observable market data will be of greater reliability than those
based on estimates and assumptions and, accordingly, where there
have been recent investments by third parties, the price of that
investment will generally provide a basis of the
valuation.
If this
methodology is used, its initial use and the length of period for
which it remains appropriate to use the calibration of last round
price depends on the specific circumstances of the investment, and
the Group will consider whether this basis remains appropriate each
time valuations are reviewed. In addition, the inputs to the
valuation model (e.g. revenue, comparable peer group, product
roadmap, and other milestones) will be recalibrated to assess the
appropriateness of the methodology used in relation to the market
performance and technical/product milestones since the round and
the company’s trading performance relative to the expectations of
the round.
The Group
considers alternative methodologies in the IPEV Guidelines, being
principally price-revenue or price-earnings multiples, depending
upon the stage of the asset, requiring management to make
assumptions over the timing and nature of future revenues and
earnings when calculating fair value. When using multiples, we
consider public traded multiples as at measurement date (31 March
2024 for this report) in similar lines of business, which are
adjusted based on the relative growth potential and risk profile of
the subject company versus the market and to reflect the degree of
control and lack of marketability as well as considering company
performance against milestones (e.g. financial/technical/product
milestones).
The equity
values of our portfolio companies are generally assessed via the
methodologies described above. For direct investments, the equity
values are run through their relevant waterfalls to assess the fair
value of the investment to Molten Ventures under the current value
methodology. Other methodologies would be considered if
appropriate.
In all cases,
valuations are based on the judgement of the Directors after
consideration of the above and upon available information believed
to be reliable, which may be affected by conditions in the
financial markets. Due to the inherent uncertainty of the
investment valuations, the estimated values may differ
significantly from the values that would have been used, had a
ready market for the investments existed, and the differences could
be material. Due to this uncertainty, the Group may not be able to
sell its investments at the carrying value in these financial
statements when it desires to do so or to realise what it perceives
to be fair value in the event of a sale. See Note 30(iv) for
information on unobservable inputs used and sensitivity analysis on
investments held at fair value through profit or loss.
Judgement:
b. The
Company and certain subsidiaries as an investment entity
The Group has
a number of entities within its corporate structure and a judgement
has been made regarding which should be consolidated in accordance
with IFRS 10, and which should not. The Group consolidates all
entities where it has control, as defined by IFRS 10, over the
following:
• power
over the investee to significantly direct the
activities;
• exposure,
or rights, to variable returns from its involvement with the
investee; and
• the
ability to use its power over the investee to affect the amount of
the investor’s returns.
The Company
does not consolidate qualifying investment entities it controls in
accordance with IFRS 10 and instead recognises them as investments
held at fair value through profit or loss. An investment entity, as
defined by IFRS 10, is an entity that:
• obtains
funds from one or more investors for the purpose of providing those
investor(s) with the investment management services;
• commits
to its investor(s) that its business purpose is to invest funds
solely for returns from capital appreciation, investment income, or
both; and
• measures
and evaluates the performance of substantially all of its
investments on a fair value basis.
When judging
whether an entity within the Group is an investment entity, the
Group structure as a whole is considered. As a Group, the
investment entities listed in Note 4(b) have the characteristics of
an investment entity. This is because the Group has:
• more
than one investment;
• more
than one investor;
• unrelated
investors; and
• equity
ownership interests.
See Note 4(b)
for further details on the consolidation status of
entities.
6. Movements on investments held at
fair value through profit or loss.
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Movement in unrealised (losses) on
investments held at fair value through profit or loss
|
(40.9)
|
(305.3)
|
Movement in realised (losses)/gains on
investments held at fair value through profit or loss
|
(2.8)
|
22.8
|
Net foreign exchange (losses)/gains on
investments held at fair value through profit or loss
|
(23.9)
|
42.4
|
Total movements on
investments held at fair value through profit or loss
|
(67.6)
|
(240.1)
|
The changes
in (losses) on investment held at fair value through profit or loss
is exclusive of the gain on bargain purchase relating to the
acquisition of Forward Partners. For more information, see Note 14
for the gain on bargain purchase.
7. Fee income
Revenue is
derived solely within the UK, from continuing operations for all
years. An analysis of the Group’s revenue is as follows:
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Management fees
|
19.1
|
21.6
|
Performance fees
|
0.1
|
–
|
Promoter’s fees
|
0.3
|
0.9
|
Directors’ and other fees
|
0.3
|
0.2
|
Total fee
income
|
19.8
|
22.7
|
8. General administrative
expenses
Administrative expenses comprise:
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Employee and employee related expenses
(Note 9)
|
14.8
|
12.3
|
Legal and professional
|
3.6
|
3.7
|
Performance fees payable
|
0.1
|
–
|
Marketing expenses
|
0.6
|
0.6
|
Building costs and rates
|
0.5
|
0.5
|
Travel expenses
|
0.5
|
0.5
|
IT expenses
|
0.5
|
0.5
|
Listing fees
|
–
|
0.1
|
Other administrative costs
|
0.6
|
0.6
|
Total administrative
expenses
|
21.2
|
18.8
|
9. Employee and employee-related
expenses
Employee
benefit expenses (including Directors) comprise:
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Wages and salaries
|
11.6
|
9.6
|
Defined contribution pension
costs
|
1.0
|
0.9
|
Benefits (healthcare and life
assurance)
|
0.3
|
0.3
|
Recruitment costs
|
0.2
|
0.2
|
Social security contributions and
similar taxes
|
1.6
|
1.3
|
General employee and
employee-related expenses
|
14.8
|
12.3
|
Share-based payment expense arising
from Company share option scheme
|
4.8
|
4.4
|
Total employee
benefit expenses
|
19.6
|
16.7
|
The monthly
average number of persons (including Executive and Non-Executive
Directors) employed by the Group during the year was:
|
Year ended
31 March
2024
Number
|
Year ended
31 March
2023
Number
|
Executive Directors
|
3
|
3
|
Non-Executive Directors
|
4
|
5
|
Investment
|
21
|
22
|
Infrastructure
|
27
|
28
|
Total
|
55
|
58
|
At 31 March
2024, there were five Non-Executive Directors (31 March 2023:
four). See Nomination Committee report for further details of
changes in the year.
Infrastructure comprises finance, marketing, human resources,
legal, IT, Environmental, Social and Governance (“ESG”), investor
relations and administration.
10. Auditor’s
remuneration
The loss for
the year has been arrived at after charging:
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Fees paid to the Company’s auditor for
the audit of the Company and Group consolidated financial
statements
|
0.5
|
0.4
|
Fees payable to the Company’s auditors
and associates for other services:
|
|
|
Audit of the financial statements of
the subsidiaries and related undertakings
|
0.2
|
0.2
|
Audit-related assurance
services
|
0.1
|
0.1
|
Non-audit services
|
0.4
|
–
|
Total fees payable to
the Company’s auditors
|
1.2
|
0.7
|
Audit-related
assurance services paid to the Company’s Auditors in the year were
£39k related to CASS reporting to the FCA in respect of certain
subsidiaries (for the year ended 31 March 2023: £25k), £65k in
respect of the review of the Group’s interim financial statements
(for the year ended 31 March 2023: £61k).
Non-audit
services paid to the Company’s Auditors in the year were £430k in
respect of reporting accountant services (for the year ended 31
March 2023: £Nil).
For the year
ended 31 March 2024, the Group paid Grant Thornton £300k for the
audit of Forward Partners Group Limited and its
subsidiaries.
11. Net finance expense
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Interest and expenses on loans and
borrowings
|
(11.0)
|
(7.1)
|
Net foreign exchange loss
|
(0.2)
|
–
|
Finance
expense
|
(11.2)
|
(7.1)
|
Interest income on cash and cash
equivalents
|
0.6
|
–
|
Net foreign exchange gain
|
–
|
1.7
|
Finance
income
|
0.6
|
1.7
|
Net finance
expense
|
(10.6)
|
(5.4)
|
12. Tax expense
The charge to
tax, which arises in the Group and the corporate subsidiaries
included within these financial statements, is:
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Current tax
expense
|
|
|
Current tax on profits for the
year
|
–
|
–
|
Total current tax
expense
|
–
|
–
|
Deferred tax
(expense)/benefit
|
|
|
Adjustment for deferred tax of prior
periods
|
(1.6)
|
–
|
Movement on deferred tax (note
25)
|
10.8
|
3.3
|
Total deferred tax
benefit
|
9.2
|
3.3
|
Income tax
benefit
|
9.2
|
3.3
|
The UK
standard rate of corporation tax is 25% as at year-end (for the
year ended 31 March 2023: 19%). The reasons for the difference
between the actual tax charge for the year and the standard rate of
corporation tax in the United Kingdom applied to loss for the year
before tax are as follows:
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Loss for the year before tax
|
(49.8)
|
(246.7)
|
|
|
|
Tax at the UK tax rate of 25% (31 March
2023: 19%)
|
(12.5)
|
(46.8)
|
Adjustment for deferred tax of prior
periods
|
(1.6)
|
–
|
Losses on investments
|
16.9
|
45.6
|
Movement on deferred tax (note
25)
|
10.8
|
3.3
|
Other
|
(4.4)
|
1.2
|
Income tax
benefit
|
9.2
|
3.3
|
The standard
rate of corporation tax will remain at 25% for the 2024/2025 tax
year.
13. Loss per share and net asset
value
The
calculation of basic earnings per weighted average shares is based
on the profit attributable to Shareholders and the weighted average
number of shares. When calculating the diluted earnings per share,
the weighted average number of shares in issue is adjusted for the
effect of all dilutive share options and awards.
Basic loss per ordinary
share
|
Loss after
tax
£m
|
No. of
shares
m
|
Pence
per share
|
For the year ended 31
March 2024
|
(40.6)
|
189.0
|
(21)
|
For the year ended 31 March
2023
|
(243.4)
|
153.0
|
(159)
|
Diluted loss per ordinary
share
|
(Loss)/profit after tax
£m
|
No. of
shares1
m
|
Pence
per share
|
For the year ended 31
March 2024
|
(40.6)
|
189.4
|
(21)
|
For the year ended 31 March
2023
|
(243.4)
|
153.7
|
(158)
|
1 The
basic number of shares is 189.0 million (FY23: 153.0 million). This
has been adjusted to calculate the diluted number of shares by
accounting for options of 0.4 million in the year (FY23: 0.7
million) to get to the diluted number of shares of 189.4 million
(FY23: 153.7 million).
Net asset
value per share is based on the net asset attributable to
Shareholders and the number of shares at the relevant reporting
date. When calculating the diluted earnings per share, the number
of shares in issue at balance sheet date is adjusted for the effect
of all dilutive share options and awards.
Net asset value per ordinary
share
|
Net assets
£m
|
No. of
shares
m
|
Pence
per share
|
As at 31 March
2024
|
1,250.7
|
189.0
|
662
|
At at 31 March 2023
|
1,194.1
|
153.0
|
780
|
Diluted net asset value per ordinary
share
|
Net assets
£m
|
No. of
shares1
m
|
Pence
per share
|
As at 31 March
2024
|
1,250.7
|
189.4
|
660
|
As at 31 March 2023
|
1,194.1
|
153.7
|
777
|
1 The
basic number of shares is 189.0 million (FY23: 153.0 million). This
has been adjusted to calculate the diluted weighted average number
of shares by accounting for options of 0.4 million in the year
(FY23: 0.7 million) to get to the diluted weighted average number
of shares of 189.4 million (FY23: 153.7 million).
14. Business Combinations
On 14 March
2024, Molten Ventures plc acquired 100% of the issued shared
capital of Forward Partners Group plc, an AIM listed venture
capital investing in early-stage technology businesses, in an all
share acquisition completed via scheme of arrangement, in a ratio
of one new Molten Ventures plc ordinary share for every nine
Forward Partners plc ordinary shares. The Group acquired Forward
Partners Group plc to gain access to a range of promising startups
in high-growth sectors across AI, alternative asset and digital
marketplaces.
The Group
owned a 0.76% equity interest in Forward Partners Group plc through
the Fund of Funds Programme before the business combination, held
at a fair value of £0.5m. The Group therefore recognised a loss of
£0.04m on completion of the acquisition as a result of remeasuring
this equity interest at fair value on 14 March 2024. The resulting
fair value loss of £0.04m is included in Movements on investments
held at fair value through profit and loss for the year ended 31
March 2024. The Group opted to use a ‘convenience’ date of 31 March
2024 for acquisition accounts, as per IFRS 3. This standard allows
an entity to designate an acquisition date at the end (or the
beginning) of a month - the date in which it closes its book,
rather than the actual acquisition date.
The total
consideration for the acquisition of Forward Partners Group Limited
(formerly, Forward Partners Group plc) was therefore £37.5m.
Acquisition-related costs for this transaction amounted to £2.8m
which has been included in the Statement of Comprehensive Income
under exceptional costs. Forward
Partners Group Limited has generated revenues of £0.3m and net loss
of £7.5m of which £29k and net profit of £0.2m, respectively, were
generated from the date of acquisition to the year end
date.
Under the
scheme of arrangement Molten Ventures plc issued 14.8m new shares
in exchange for the issued share capital of Forward Partners Group
Limited. This equates to
consideration of £37.0m based on the closing Molten Ventures plc
share price on 14 March 2024 of £2.504 pence per share.
The total
consideration for the acquisition of Forward Partners was therefore
£37.5m.
As Forward
Partners Group Limited was trading at a discount to its Net Asset
Value on acquisition, the acquisition resulted in a Gain on bargain
purchase of £38.6m, which is recognised in the Consolidated
statement of comprehensive income.
Net assets of
business acquired
|
Fair Value
£m
|
Financial assets held at fair value
through profit and loss
|
65.0
|
Trade and other receivables
|
0.1
|
Cash and cash equivalents
|
12.0
|
Trade and other payables
|
(1.0)
|
Total identifiable
net assets
|
76.1
|
Non-controlling interest
|
–
|
Gain on bargain purchase
|
(38.6)
|
Total
consideration
|
37.5
|
The
consideration was satisfied by:
|
|
Issue of shares
|
37.0
|
Repurchase of holding held in the
group
|
0.5
|
Total
consideration
|
37.5
|
Net cash inflow
arising on acquisition
|
|
Cash and cash
equivalents
|
12.0
|
15. Share-based payments
|
Date of
Grant
|
b/f
1 April
2023
(No.)
|
Granted in the
year
(No.)
|
Lapsed in the
year
(No.)
|
Exercised in the
year
(No.)
|
c/f
31 Mar
2024
(No.)
|
Vesting
period
|
Exercise price
(pence)
|
Fair value per
granted instrument (pence)
|
3 Molten Ventures plc 2016 Company
Share Option Scheme (“CSOP”)
|
28–Nov–16
|
499,320
|
–
|
–
|
–
|
499,320
|
3 years
|
355
|
64.1
|
11–Nov–17
|
120,000
|
–
|
–
|
–
|
120,000
|
3 years
|
530
|
89.3
|
28–Nov–17
|
306,384
|
–
|
–
|
–
|
306,384
|
3 years
|
387
|
70.90
|
30–Jul–18
|
650,750
|
–
|
–
|
–
|
650,750
|
3 years
|
492
|
152.9
|
12–Feb–19
|
546,868
|
–
|
–
|
–
|
546,868
|
3 years
|
530
|
67.8
|
29–Jun–20
|
200,000
|
–
|
–
|
–
|
200,000
|
3 years
|
449
|
81.2
|
26–Jul–21
|
36,364
|
–
|
–
|
–
|
36,364
|
1 year
|
1
|
986.0
|
Molten Ventures plc Long-Term Incentive
Plan (“LTIP”)
|
29–Jun–20
|
547,240
|
–
|
(220,388)
|
(57,521)
|
269,331
|
3 years
|
1
|
449.0
|
16–Jul–21
|
551,253
|
–
|
(6,248)
|
–
|
545,005
|
1 year
|
1
|
940.0
|
17-Jun-22
|
476,250
|
–
|
(16,457)
|
(2,622)
|
457,171
|
3 years
|
1
|
540.0
|
17-Jun-22
|
543,609
|
–
|
–
|
–
|
543,609
|
5 years
|
1
|
540.0
|
22–Jun–23
|
–
|
96,262
|
(846)
|
–
|
95,416
|
2 years
|
1
|
241.0
|
22–Jun–23
|
–
|
113,453
|
–
|
–
|
113,453
|
2 years
|
1
|
447.0
|
23–Jun–23
|
–
|
2,380,128
|
(35,349)
|
–
|
2,344,779
|
3 years
|
1
|
274.0
|
Molten Ventures plc
Deferred Benefit Plan
(“DBP”)
|
17–Jun–22
|
211,110
|
–
|
–
|
–
|
211,110
|
2 years
|
1
|
540.0
|
22–Jun–23
|
–
|
44,058
|
–
|
–
|
44,058
|
2 years
|
1
|
241.0
|
Total
|
|
4,689,148
|
2,633,901
|
(279,288)
|
(60,143)
|
6,983,618
|
|
|
|
* This
is a vesting period of three years and a further two-year holding
period.
Set out below
are summaries of options granted under the plan
|
Year ended
31 March
2024
|
Year ended
31 March
2023
|
As at 1
April
|
4,689,148
|
3,745,855
|
Granted during the year
|
2,633,901
|
1,234,306
|
Lapsed in the year
|
(279,288)
|
(274,107)
|
Exercised during the year
|
(60,143)
|
(16,906)
|
As at 31
March
|
6,983,618
|
4,689,148
|
Both the CSOP
and LTIP are, as of 31 March 2024, partly administered by the
Molten Ventures Employee Benefit Trust (“Trust”). The Trust is
consolidated in these consolidated financial statements. The Trust
may purchase shares from the market and, from time to time, when
the options are exercised, the Trust transfers the appropriate
number of shares to the employee or sells these as agent for the
employee. The proceeds received, net of any directly attributable
transaction costs, are credited directly to equity. Shares held by
the Trust at the end of the reporting period are shown as own
shares in the consolidated financial statements (see Note 27(i)).
Of the 60,143 options exercised during the year, none were
satisfied with new ordinary shares issued by Molten Ventures plc
(FY23: 16,906 options exercised with no new ordinary shares
issued). All outstanding options have been assessed to be
reportable as equity-settled.
Share options
granted during the period under the LTIP vest over the prescribed
performance period to the extent that performance conditions are
met. The performance conditions relate to realisations, assets
under management (calculated in line with the relevant deed of
grant), and Total Shareholder Return. These options are granted
under the plan for no consideration and are granted at a nominal
value of one pence per share option.
The fair
value of the LTIP shares is valued using the Black–Scholes model,
which includes a Monte Carlo simulation model. A six-monthly review
takes place of non-market performance conditions and, as at 31
March 2024, the best estimate for expected vesting of unvested
share options is 52%.
In the year
ended 31 March 2024, it was agreed that 0% (31 March 2023: 0%) of
the Executive Team’s bonus for that financial year would be
deferred in shares of Molten Ventures plc. FY24 bonus amounts were
paid in cash for an amount up to 100% (FY23: 100%) of each
Director’s salary, with the balance being paid in the form of a
deferred share award over a number of shares calculated based on
the Volume Weighted Average Price per share for the five trading
days immediately prior to the date of grant. The deferral period
under the bonus scheme is two years from the date of the
award.
Vesting is
not subject to any further performance conditions (other than
continued employment at the date of vesting). The Black–Scholes
Option Pricing Model has been used for valuation
purposes.
The
share-based payment charge for the year is £4.8 million (year ended
31 March 2023: £4.4 million).
16. Intangible assets
As at 31 March
2024
|
Goodwill
£m
|
Customer
contracts
£m
|
Total
£m
|
Cost
|
|
|
|
Cost carried forward as at 1 April
2023
|
10.4
|
1.1
|
11.5
|
Additions during the period
|
–
|
–
|
–
|
Cost as at 31 March
2024
|
10.4
|
1.1
|
11.5
|
Accumulated
amortisation
|
|
|
|
Amortisation carried forward as at 1
April 2023
|
–
|
(1.0)
|
(1.0)
|
Charge for the period
|
–
|
(0.1)
|
(0.1)
|
Accumulated
amortisation as at 31 March 2024
|
–
|
(1.1)
|
(1.1)
|
Net book
value:
|
|
|
|
As at 31 March
2024
|
10.4
|
–
|
10.4
|
As at 31 March
2023
|
Goodwill
£m
|
Customer
contracts
£m
|
Total
£m
|
Cost
|
|
|
|
Cost carried forward as at 1 April
2022
|
10.4
|
1.1
|
11.5
|
Additions during the period
|
–
|
–
|
–
|
Cost as at 31 March
2022
|
10.4
|
1.1
|
11.5
|
Accumulated
amortisation
|
|
|
|
Amortisation carried forward as at 1
April 2022
|
–
|
(0.8)
|
(0.8)
|
Charge for the period
|
–
|
(0.2)
|
(0.2)
|
Accumulated
amortisation as at 31 March 2023
|
–
|
(1.0)
|
(1.0)
|
Net book
value:
|
|
|
|
As at 31 March
2023
|
10.4
|
0.1
|
10.5
|
The
amortisation charge for the year is shown in the “depreciation and
amortisation” line of the consolidated statement of comprehensive
income.
17. Financial assets held at fair
value through profit or loss
The Group
holds investments through investment vehicles it manages. The
investments are carried at fair value through profit or loss. The
Group’s valuation policies are set out in Note 5(a) and Note 30.
The table below sets out the movement in the balance sheet value of
investments from the start to the end of the year, showing
investments made, cash receipts and fair value
movements.
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
As at 1
April
|
1,277.0
|
1,410.8
|
Investments made in the
period1
|
65.3
|
138.2
|
Loans repaid from underlying investment
vehicles
|
(38.9)
|
(48.1)
|
Carry external
|
1.9
|
2.1
|
Non-investment cash
movements
|
15.8
|
14.1
|
Unrealised losses on the revaluation of
investments2
|
(29.0)
|
(240.1)
|
As at 31
March
|
1,292.1
|
1,277.0
|
1 Investments
made in the period include the cost attributed for the
share-for-share acquisition of Forward Partners amounting to
£25.8m
2 Unrealised
losses on the revaluation of investments are inclusive of the gain
on bargain purchase attributable to the acquisition of Forward
Partners. For more information, see Note 14 for the gain on bargain
purchase.
18. Significant holdings in
undertakings other than subsidary undertakings
For further
details of other related undertakings within the Group, see Note
4(b).
Please see
below details of investments held by the Group’s investment
companies, where the ownership percentage or partnership interest
exceeds 20%. These are held at fair value through the profit or
loss in the statement of financial position.
Name
|
Address
|
Principal
activity
|
Type of
shareholding
|
Interest FD category*
at reporting date/partnership interest
|
RavenPack Holding AG
|
Churerstrasse 135,
CH-8808 Pfäffikon,
Switzerland
|
Trading company
|
Ordinary shares
Preference shares
|
D
|
Earlybird GmbH & Co.
Beteiligungs-KG IV
|
c/o Earlybird Venture Capital,
Maximilianstr. 14, 80539, München
|
Limited partnership pursuant to which
the Group holds certain investments
|
Partnership interest
|
26%
|
Earlybird Special Opportunities
LP
|
c/o Earlybird Venture Capital,
Maximilianstr. 14, 80539, München
|
Limited partnership pursuant to which
the Group holds certain investments
|
Partnership interest
|
34%
|
Earlybird DWES Fund VI GmbH & Co.
KG
|
c/o Earlybird Venture Capital,
Maximilianstr. 14, 80539, München
|
Limited partnership pursuant to which
the Group holds certain investments
|
Partnership interest
|
50%
|
FintechOS Holding B.V
|
Amstelplein 1, 1096 HA Amsterdam,
Netherlands
|
Trading company
|
Ordinary shares Preference
shares
|
D
|
Realeyes (Holdings) Limited
|
5 New Street Square, London, EX4A 3TW,
GB
|
Trading company
|
Ordinary shares Preference
shares
|
E
|
* Fully
diluted interest categorised as follows: Cat A: 0–5%, Cat B: 6–10%,
Cat C: 11–15%, Cat D: 16–25%, Cat E: >25%.
Details of
the fair value of the Core companies are detailed as part of the
Gross Portfolio Value table on page 26.
19. Property, plant and
equipment
Year ended 31 March
2024
|
Right-of-use
assets
£m
|
Leasehold
improvements
£m
|
Computer
equipment
£m
|
Total
£m
|
Cost
|
|
|
|
|
Cost carried forward as at 1 April
2023
|
1.6
|
0.8
|
0.2
|
2.6
|
Additions during the period
|
–
|
–
|
–
|
–
|
Disposals during the year
|
–
|
–
|
–
|
–
|
Cost as at 31 March
2024
|
1.6
|
0.8
|
0.2
|
2.6
|
Accumulated
depreciation
|
|
|
|
|
Depreciation carried forward as at 1
April 2023
|
(1.3)
|
(0.7)
|
(0.2)
|
(2.2)
|
Charge for the period
|
(0.3)
|
–
|
–
|
(0.3)
|
Disposals during the year
|
–
|
–
|
–
|
–
|
Accumulated
depreciation as at 31 March 2024
|
(1.6)
|
(0.7)
|
(0.2)
|
(2.5)
|
Net book value:
|
|
|
|
|
As at 31 March
2024
|
–
|
0.1
|
–
|
0.1
|
As at 31 March
2023
|
Right-of-use
assets
£m
|
Leasehold
improvements
£m
|
Computer
equipment
£m
|
Total
£m
|
Cost
|
|
|
|
|
Cost carried forward as at 1 April
2022
|
1.6
|
0.8
|
0.2
|
2.6
|
Additions during the period
|
–
|
–
|
–
|
–
|
Disposals during the year
|
–
|
–
|
–
|
–
|
Cost as at 31 March
2023
|
1.6
|
0.8
|
0.2
|
2.6
|
Accumulated
depreciation
|
|
|
|
|
Depreciation carried forward as at 1
April 2022
|
(1.0)
|
(0.6)
|
(0.1)
|
(1.7)
|
Charge for the period
|
(0.3)
|
(0.1)
|
(0.1)
|
(0.5)
|
Disposals during the year
|
–
|
–
|
–
|
–
|
Accumulated
depreciation as at 31 March 2023
|
(1.3)
|
(0.7)
|
(0.2)
|
(2.2)
|
Net book value:
|
|
|
|
|
As at 31 March
2023
|
0.3
|
0.1
|
–
|
0.4
|
The
depreciation charge for the year is shown in the “depreciation and
amortisation” line of the consolidated statement of comprehensive
income.
20. Operating segments
The Group
follows the accounting policy on operating segments laid out in
Note 4(c).
21. Cash and cash
equivalents
|
31 March
2024
£m
|
31 March
2023
£m
|
Cash at bank and on hand
|
36.8
|
22.9
|
Cash equivalents
|
20.2
|
-
|
Total
|
57.0
|
22.9
|
Cash on hand
earns interest at floating rates based on daily bank deposit rates.
Cash equivalents represent monies held in a Sterling Government
Liquid Reserves Money Market Fund which can be redeemed
daily.
22. Trade and other
receivables
|
31 March
2024
£m
|
31 March
2023
£m
|
Trade receivables
|
0.9
|
3.1
|
Other receivables and
prepayments
|
0.7
|
1.9
|
Total
|
1.6
|
5.0
|
Expected
credit losses for these receivables are expected to be
immaterial.
The ageing of
trade receivables at reporting date is as follows:
|
31 March
2024
£m
|
31 March
2023
£m
|
Not past due
|
0.8
|
2.9
|
Past due 1–30 days
|
–
|
0.1
|
Past due 31–60 days
|
–
|
–
|
More than 60 days
|
0.1
|
0.1
|
Total
|
0.9
|
3.1
|
Trade
receivables are held at amortised cost. The maximum exposure to
credit risk of the receivables at the reporting date is the fair
value of each class of receivable mentioned above, which is as
shown above due to the short-term nature of the trade receivables.
The Group does not hold any collateral as security.
23. Trade and other
payables
|
31 March
2024
£m
|
31 March
2023
£m
|
Trade payables
|
(0.3)
|
(0.8)
|
Other taxation and social
security
|
(0.7)
|
(0.2)
|
Other payables
|
–
|
(2.4)
|
Accruals and deferred income
|
(8.1)
|
(6.2)
|
Total
|
(9.1)
|
(9.6)
|
All trade and
other payables are short term.
24. Financial liabilities
|
31 March
2024
£m
|
31 March
2023
£m
|
Current
liabilities
|
|
|
Leases
|
–
|
(0.3)
|
Loans and borrowings
|
–
|
–
|
Total current
financial liabilities
|
–
|
(0.3)
|
Non-current
liabilities
|
|
|
Leases
|
–
|
–
|
Loans and borrowings
|
(89.4)
|
(89.0)
|
Total non-current
financial liabilities
|
(89.4)
|
(89.0)
|
Total
|
(89.4)
|
(89.3)
|
The below
table shows the changes in liabilities from financing
activities.
|
Borrowings
£m
|
Leases
£m
|
At 1 April
2022
|
(29.7)
|
(0.7)
|
Capitalisation of costs
|
1.0
|
–
|
Amortisation of costs
|
(0.3)
|
–
|
Drawdowns
|
(125.0)
|
–
|
Repayment of debt
|
65.0
|
–
|
Other changes – Interest payments
(presented as operating cash flows)
|
–
|
–
|
Payment of lease liabilities
|
–
|
0.4
|
At 31 March
2023
|
(89.0)
|
(0.3)
|
Capitalisation of costs
|
–
|
–
|
Amortisation of costs
|
(0.4)
|
–
|
Drawdowns
|
(38.0)
|
–
|
Repayment of debt
|
38.0
|
–
|
Other changes – Interest payments
(presented as operating cash flows)
|
–
|
–
|
Payment of lease liabilities
|
–
|
0.3
|
At 31 March
2024
|
(89.4)
|
–
|
24(i). Loans and
borrowings
On 6
September 2022, the Company entered into a facility agreement
relating to a new debt facility (the “Debt Facility”) with J.P.
Morgan Chase Bank N.A., London Branch (“JPM”) and HSBC Bank Plc
(“HSBC”), with a JPM affiliate acting as the appointed
agent.
The Debt
Facility comprises a £90.0 million term loan (“Term Loan”) and a
revolving credit facility (“RCF”) of up to £60.0 million on three
and two-year availability periods respectively. Repayment dates for
both may be extended by two 12-month periods subject to the
lenders’ willingness to extend and satisfaction of various
conditions. The headline interest rate applied on both the Term
Loan and RCF includes a “margin” of 5.50% per annum plus SONIA. The
Debt Facility is secured against various Group assets, including
bank accounts and LP interests, with a number of entities within
the Group acceding as guarantors.
The Company’s
ability to borrow under the Debt Facility and satisfy its financial
and non-financial covenants is dependent on the value of the
investment portfolio (excluding third-party funds under
management), with draw downs being subject to a maximum loan to
value ratio of 12.5% on each utilisation. The lenders may
commission quarterly independent valuations of the investment
portfolio.
On execution
of the Debt Facility Agreement, the Group drew down £90.0 million
of the Term Loan, with the RCF (£60.0 million, currently undrawn)
being available for two years to September 2024 subject to any
extension. After expiry of the availability period, a cash sweep on
realisations will apply.
Both the RCF
and Term Loan must be fully repaid by the third anniversary of the
date of the Debt Facility Agreement, subject to any
extension.
The Debt
Facility contains financial and non-financial covenants, which the
Company and certain members of the Group must comply with
throughout the term of the Debt Facility:
• Maintain
a value to cost ratio of investments of at least 10%
(1.10:1.00).
• Total
financial indebtedness not to exceed 20% (12.5% on each
utilisation) of the value of investments in the portfolio with
adjustments for concentration limits (see below) together with the
value of all amounts held in specified bank accounts subject to the
security package.
• Total
aggregate financial indebtedness of the Company and certain members
of the Group is not to exceed 35% (25% on each utilisation) of the
value of secured investments in the portfolio with adjustments for
concentration limits calculated by reference to specified assets
and bank accounts subject to the security package.
• The
Company, and certain members of its Group, must maintain a minimum
number of investments subject to concentration limits connected to
sector, geography, joint or collective value, and/or listed
status.
Failure to
satisfy financial covenants may limit the Company’s ability to
borrow and/or also trigger events of default, which in some
instances could trigger a cash sweep on realisations and/or require
the Company to cure those breaches by repaying the Debt Facility
(either partially or in full).
The Company
seeks to maintain a conservative level of gearing and will limit
its borrowings to a maximum of 25 percent of Net Asset
Value.
|
31 Mar
2024
£m
|
31 Mar
2023
£m
|
Bank loan senior facility
amount
|
150.0
|
150.0
|
Interest rate
|
SONIA +
5.5%
|
SONIA + 5.5%
|
Drawn at balance sheet date
|
(90.0)
|
(90.0)
|
Arrangement fees
|
0.6
|
1.0
|
Loan liability
balance
|
(89.4)
|
(89.0)
|
Undrawn facilities at balance sheet
date
|
60.0
|
60.0
|
25. Deferred tax
Deferred tax
is calculated in full on temporary differences under the balance
sheet liability method using the tax rate expected to apply when
the temporary differences reverse. See breakdown below:
|
31 March 2024
£m
|
31 March
2023
£m
|
Arising on share-based
payments
|
(1.6)
|
(1.0)
|
Arising on co-invest and carried
interest
|
(0.2)
|
(0.3)
|
Arising on the investment
portfolio
|
(9.8)
|
(20.9)
|
Other timing differences
|
(0.1)
|
(0.3)
|
Deferred tax
liability
|
(11.7)
|
(22.5)
|
As at 31 March 2024, the Group had tax losses carried forward
of £2.9m (2023: £12.6m).
26. Share capital and share
premium
Ordinary share capital
Year ended 31 March
2024 – Allotted and fully paid
|
Number
|
Pence
|
£m
|
As at 1 April
|
152,999,853
|
1
|
1.5
|
Issue of share capital during the year
for cash1
|
21,261,548
|
1
|
0.2
|
Share-for-share
exchange2
|
14,785,049
|
1
|
0.2
|
As at 31
March
|
189,046,450
|
1
|
1.9
|
1 In
December 2023, the Company raised equity by issuing 21,261,548 new
ordinary shares at 1 pence.
2 In
March 2024, the Company exchanged 14,785,049 new ordinary shares as
part of the Forward Partners Group Limited acquisition.
Year ended 31 March
2023 – Allotted and fully paid
|
Number
|
Pence
|
£m
|
As at 1 April
|
152,999,853
|
1
|
1.5
|
Issue of share capital during the year
for cash¹
|
–
|
–
|
–
|
As at 31 March
|
152,999,853
|
1
|
1.5
|
Share premium
Allotted and fully
paid
|
31 March
2024
£m
|
31 March
2023
£m
|
As at 1 April
|
615.9
|
615.9
|
Premium arising on the issue of
ordinary shares
|
57.1
|
–
|
Equity issuance costs
|
(1.8)
|
–
|
As at 31 March
|
671.2
|
615.9
|
27. Own shares and other
reserves
i. Own shares reserve
Own shares
are shares held in Molten Ventures plc that are held by Molten
Ventures Employee Benefit Trust (“Trust”) for the purpose of
awarding shares under the Molten Ventures plc 2016 Company Share
Options Plan, Long-Term Incentive Plan and Deferred Bonus Plan.
Shares issued to employees are recognised on a weighted average
cost basis. The Trust holds 0.58% of the issued share capital at 31
March 2024 (31 March 2023: 0.72%).
|
31 Mar
2024
|
31 Mar
2023
|
|
No. of
shares
m
|
£m
|
No. of
shares
m
|
£m
|
As at 1
April
|
(1.1)
|
(8.9)
|
(0.9)
|
(8.2)
|
Acquisition of shares by the
Trust
|
–
|
–
|
(0.2)
|
(0.6)
|
Disposal or transfer of shares by the
Trust*
|
–
|
0.1
|
–
|
(0.1)
|
As at 31 March
|
(1.1)
|
(8.8)
|
(1.1)
|
(8.9)
|
* Disposals
or transfers of shares by the Trust also include shares transferred
to employees net of exercise price with no resulting cash
movements. Cash receipts in respect of sale of shares in the year
ended 31 March 2024 were £Nil (year ended 31 March 2023:
£Nil).
ii. Other reserves
The following
table shows a breakdown of the “other reserves” line in the
consolidated statement of financial position and the movements in
those reserves during the period. A description of the nature and
purpose of each reserve is provided below the table.
Year ending 31 March
2024
|
Merger relief
reserve
£m
|
Share-based payments
reserve resulting from Company share option scheme
£m
|
Share-based payments
reserve resulting from acquisition of subsidiary
£m
|
Total other
reserves
£m
|
As at 1
April
|
13.1
|
9.4
|
10.8
|
33.3
|
Share-based payments
|
–
|
4.5
|
–
|
4.5
|
Share-for-share exchange
|
36.9
|
–
|
–
|
36.9
|
As at 31
March
|
50.0
|
13.9
|
10.8
|
74.7
|
Year ending 31 March
2023
|
Merger relief
reserve
£m
|
Share-based payments
reserve resulting from Company share option scheme
£m
|
Share-based payments
reserve resulting from acquisition of subsidiary
£m
|
Total other
reserves
£m
|
As at 1
April
|
13.1
|
5.0
|
10.8
|
28.9
|
Share-based payments
|
–
|
4.4
|
–
|
4.4
|
Share-based payments – exercised during
the year
|
–
|
–
|
–
|
–
|
As at 31
March
|
13.1
|
9.4
|
10.8
|
33.3
|
Merger relief reserve
In accordance
with the Companies Act 2006, a Merger Relief Reserve of £13.1
million (net of the cost of share capital issued of £80k) was
created on the issue of 4,392,332 ordinary shares for 300 pence
each in Molten Ventures plc as consideration for the acquisition of
100% of the capital interests in Esprit Capital Partners LLP on 15
June 2016.
A Merger
Relief Reserve of £36.9 million was created on the issue of
14,785,049 ordinary Shares of 250 pence each in Molten Venture plc
as consideration for the acquisition of 100% of the capital
interest in Forward Partners Group plc on 14 March 2024.
Share-based payment
reserve
Where the
Group engages in equity-settled share-based payment transactions,
the fair value at the date of grant is recognised as an expense
over the vesting period of the options. The corresponding credit is
recognised in the share-based payment reserve. Please see Note 15
for further details on how the fair value at the date of grant is
recognised.
28. Adjustments to reconcile
operating (loss) to net cash outflow in operating
activities
|
Notes
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Adjustments to
reconcile operating (loss) to net cash outflow in operating
activities:
|
|
|
|
Revaluation of investments held at fair
value through profit and loss
|
6
|
67.6
|
240.1
|
Gain on Bargain purchase
Goodwill
|
14
|
(38.6)
|
–
|
Depreciation and
amortisation
|
16, 19
|
0.4
|
0.7
|
Share-based payments – resulting from
Company share option scheme
|
15
|
4.8
|
4.4
|
Finance income
|
11
|
(0.6)
|
(1.7)
|
Finance expense
|
11
|
11.0
|
7.1
|
Decrease in deferred tax
|
25
|
(10.8)
|
(5.2)
|
Decrease/(increase) in trade and other
receivables and other working capital movements
|
22
|
3.4
|
(1.0)
|
Decrease in trade and other
payables
|
23
|
(0.5)
|
(2.7)
|
Adjustments to
reconcile operating (loss) to net cash outflow in operating
activities
|
|
36.7
|
241.7
|
Please see
Note 24 for the changes in liabilities from financing
activities.
29. Retirement benefits
The Molten
Ventures Group makes contributions to personal pension schemes set
up to benefit its employees. The Group has no interest in the
assets of these schemes and there are no liabilities arising from
them beyond the agreed monthly contribution for each employee or
member that is included in employment costs in the profit and loss
account as appropriate.
30. Fair value
measurements
i. Fair value hierarchy
This section
explains the judgements and estimates made in determining the fair
values of the financial instruments that are recognised and
measured at fair value in the financial statements. This section
should be read with reference to Note 5(a) and Note 17. As
explained in Note 5(a), valuation of unquoted equity investments at
fair value through profit or loss is a critical accounting estimate
and actuals may differ from estimates. The Group has considered the
impact of ESG and climate-related risks on its portfolio, and
consider these to be currently immaterial to the value of our
portfolio for FY24, owing to the nature of the underlying
investments (FY23: immaterial) and taking into consideration the
climate risk impact channels and their financial impact across the
portfolio companies, however this will be monitored each year to
assess any changes. The Group recognised a number of
climate-related opportunities within the portfolio via our Climate
Tech thesis. The inputs to our valuations are described in the
sensitivities analysis table below, and because these are more
short-term in nature (e.g. forecast revenue for the current year
applied to current market multiples, and recent transactions), we
do not currently see any material impacts on these inputs from the
longer term risks described in our TCFD report and, therefore,
values as at 31 March 2024. We also recognise that, although the
risks are not currently material, they could become material in the
medium to long-term without mitigating actions, which are described
within the TCFD section of the Strategic Report. For further
discussion of our climate-related risks and opportunities, please
see our TCFD and Principal Risks section of the Strategic
Report.
The Group
classifies financial instruments measured at fair value through
profit or loss (“FVTPL”) according to the following fair value
hierarchy prescribed under the accounting standards:
• Level
1: inputs are quoted prices (unadjusted) in active markets for
identical assets or liabilities that the entity can access at the
measurement date (31 March 2024; and 31 March 2023 for
comparatives);
• Level
2: inputs are inputs, other than quoted prices included within
Level 1, that are observable for the asset or liability, either
directly or indirectly; and
• Level
3: inputs are unobservable inputs for the asset or
liability.
All financial
instruments measured at FVTPL in FY23 and FY24 are financial assets
relating to holdings in investment entities that hold high-growth
technology companies either directly or through Fund of Funds. The
Group invests in special purpose vehicles and limited partnerships,
which are considered to be investment companies that invest mostly
in equities for the benefit of the Group. As set out in Note 4(b),
these are held at their respective net asset values and, as such,
are noted to be all Level 3 for FY23 and FY24. For details of the
reconciliation of those amounts please refer to Note 17. The
additional disclosures below are made on a look-through basis and
are based on the Gross Portfolio Value (“GPV”). In order to arrive
at the Net Portfolio Value (“NPV”), which is the value recognised
as investments held at FVTPL in the statement of financial
position, the GPV is subject to deductions for the fair value of
carry liabilities and adjustments for Irish deferred tax. UK
deferred tax is recognised in the consolidated statement of
financial position as a liability to align the recognition of
deferred tax to the location in which it will likely become payable
on realisation of the assets.
For details
of the GPV and its reconciliation to the investment balance in the
financial statements, please refer to the extract of the Gross
Portfolio Value table below:
Investments
|
Fair Value of
Investments 31-Mar-23
£m
|
Investments
£m
|
Realisations
£m
|
Non-investment cash
movement
£m
|
Movement in Foreign
Exchange
£m
|
Movement in Fair
Value
£m
|
Fair Value movement
31-Mar-24
£m
|
Fair Value of
Investments 31-Mar-24
£m
|
Gross Portfolio
Value
|
1,370.8
|
65.3
|
(38.9)
|
–
|
(23.9)
|
5.6
|
(18.3)
|
1,378.9
|
Carry External
|
(94.0)
|
–
|
1.9
|
–
|
–
|
5.0
|
5.0
|
(87.1)
|
Portfolio Deferred tax
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
Trading carry &
co-invest
|
0.3
|
–
|
–
|
–
|
–
|
–
|
–
|
0.3
|
Non-investment cash movement
|
–
|
–
|
–
|
15.8
|
–
|
(15.8)
|
(15.8)
|
–
|
Net Portfolio
Value
|
1,277.1
|
65.3
|
(37.0)
|
15.8
|
(23.9)
|
(5.2)
|
(29.1)
|
1,292.1
|
Investments
|
Fair Value of
Investments 31-Mar-22
£m
|
Investments
£m
|
Realisations
£m
|
Non-investment cash
movement
£m
|
Movement in Foreign
Exchange
£m
|
Movement in Fair
Value
£m
|
Fair Value movement
31-Mar-23
£m
|
Fair Value of
Investments 31-Mar-23
£m
|
Gross Portfolio
Value
|
1,531.5
|
138.2
|
(48.1)
|
–
|
42.4
|
(293.3)
|
(250.9)
|
1,370.7
|
Carry external
|
(121.5)
|
–
|
2.1
|
–
|
–
|
25.4
|
25.4
|
(94.0)
|
Portfolio deferred tax
|
0.5
|
–
|
–
|
–
|
–
|
(0.5)
|
(0.5)
|
–
|
Trading carry and
co-invest
|
0.3
|
–
|
–
|
–
|
–
|
–
|
–
|
0.3
|
Non-investment cash movement
|
–
|
–
|
–
|
14.1
|
–
|
(14.1)
|
(14.1)
|
–
|
Net Portfolio
Value
|
1,410.8
|
138.2
|
(46.0)
|
14.1
|
42.4
|
(282.5)
|
(240.1)
|
1,277.0
|
Carry external – this relates
to accrued carry that is due to former and current employees or
managers external to the Group. These values are calculated based
on the reported fair value, applying the provisions of the limited
partnership agreements to determine the value that would be payable
by the Group’s investment entities to external managers and the
carried interest partnerships.
Portfolio
deferred tax – this relates to tax accrued against gains in the
portfolio to reflect those portfolio companies where tax is
expected to be payable on exits. This relates to Irish deferred tax
only. UK deferred tax is recognised in the consolidated statement
of financial position as a liability to align the recognition of
deferred tax to the location in which it will likely become payable
on realisation of the assets. These values are calculated based on
unrealised fair value of investments at reporting date at the
applicable tax rate.
Trading carry
and co-invest – this relates to accrued carry that is due to the
Group.
Non-investment cash movements – this relates to cash
movements relating to management fees and other non-investment cash
movements to the subsidiaries held at FVTPL.
During the
year ending 31 March 2024, Level 1 investments were realised. In
the year ending 31 March 2023, there were transfers out of Level 3
and into Level 1 following the listing of two investments, one was
held directly and one of which is held via our partnership with
Earlybird – see below for the breakdown of investments by fair
value hierarchy and Note 30 (iii) on the following page for
movements. The Group’s policy is to recognise transfers into and
out of fair value hierarchy levels as at the end of the reporting
period.
Fair value
measurements
At 31 March
2024
|
Level 1
£m
|
Level 2
£m
|
Level 3
£m
|
Total
£m
|
Financial assets at
fair value through profit or loss
|
|
|
|
|
Quoted investments
|
–
|
–
|
–
|
–
|
Unquoted investments being made up
of:
|
–
|
–
|
1,378.9
|
1,378.9
|
Unquoted investments – enterprise
technology
|
–
|
–
|
567.4
|
567.4
|
Unquoted investments – consumer
technology
|
–
|
–
|
147.5
|
147.5
|
Unquoted investments – hardware and
deeptech
|
–
|
–
|
317.3
|
317.3
|
Unquoted investments – digital health
and wellness
|
–
|
–
|
71.8
|
71.8
|
Unquoted investments –
other*
|
–
|
–
|
274.9
|
274.9
|
Total financial
assets
|
–
|
–
|
1,378.9
|
1,378.9
|
Fair value
measurements
At 31 March
2023
|
Level 1
£m
|
Level 2
£m
|
Level 3
£m
|
Total
£m
|
Financial assets at
fair value through profit or loss
|
|
|
|
|
Quoted investments
|
11.9
|
–
|
–
|
11.9
|
Unquoted investments being made up
of:
|
–
|
–
|
1,357.7
|
1,357.7
|
Unquoted investments – enterprise
technology
|
–
|
–
|
587.9
|
587.9
|
Unquoted investments – consumer
technology
|
–
|
–
|
144.7
|
144.7
|
Unquoted investments – hardware and
deeptech
|
–
|
–
|
357.3
|
357.3
|
Unquoted investments – digital health
and wellness
|
–
|
–
|
75.7
|
75.7
|
Unquoted investments –
other*
|
–
|
–
|
192.1
|
192.1
|
Total financial
assets
|
11.9
|
–
|
1,357.7
|
1,369.6
|
* ”other”
includes Fund of Funds investments and Earlybird investments where
we do not perform a look-through valuation. This differs from the
analysis in the Strategic Report in order to align to valuation
methodologies. Within the Strategic Report, additional Earlybird
companies are included within the sector analysis.
ii. Valuation techniques used to
determine fair values
The fair
value of unlisted securities is established with reference to the
IPEV Guidelines. In line with the IPEV Guidelines, the Group may
base valuations on earnings or revenues where applicable, market
comparables, calibrated price of recent investment in the investee
companies, or on net asset values of underlying funds (“NAV of
underlying funds”). An assessment will be made at each measurement
date as to the most appropriate valuation methodology, including
that for investee companies owned by third-party funds that Molten
Ventures plc invests in and which are valued on a look-through
basis.
Financial
instruments, measured at fair value, categorised as Level 3 can be
split into three main valuation techniques:
• Calibrated
price of recent investment;
• Revenue-multiple;
and
• NAV
of underlying fund.
Each
portfolio company will be subject to individual
assessment.
For a
valuation based on calibrated price of recent investment, the
recent round enterprise value is calibrated against the equivalent
value at year-end using a revenue-multiple valuation methodology as
well as in relation to technical/product milestones since the round
and the company’s trading performance relative to the expectations
of the round.
For a
valuation based on a revenue-multiple, the main assumption is the
multiple. The multiple is derived from comparable listed companies
or relevant market transaction multiples. Companies in the same
industry, geography, and, where possible, with a similar business
model and profile are selected and then adjusted for factors
including liquidity risk, growth potential and relative
performance.
Where the
Group invests in Fund of Fund investments, the value of the
portfolio will be reported by the fund to the Group. The Group will
ensure that the valuations comply with the Group policy and that
they are adjusted with any cash and known valuation movements where
reporting periods do not align.
See also Note
5(a) where valuation policies are discussed in more
detail.
iii. Fair value measurements using
significant unobservable inputs (Level 3)
The table
below presents the changes in Level 3 items for the years ending 31
March 2023 and 31 March 2024.
Level 3
valuations
|
£m
|
Opening balance at 1
April 2022
|
1,467.6
|
Investments
|
138.2
|
Losses
|
(225.4)
|
Realisations
|
(21.6)
|
Unadjusted closing
balance at 31 March 2023
|
1,358.8
|
Transfer to Level 1
|
–
|
Closing balance at 31
March 2023
|
1,358.8
|
Investments
|
65.4
|
Losses
|
(16.6)
|
Realisations
|
(28.7)
|
Unadjusted closing
balance at 31 March 2024
|
1,378.9
|
Transfer to Level 1
|
–
|
Closing balance at 31
March 2024
|
1,378.9
|
iv. Valuation inputs and
relationships for fair value
The following
table summarises the quantitative information about the significant
unobservable inputs used in Level 3 fair value
measurements:
Valuation
technique
|
Sector
|
Significant
input*
|
Fair value
at
31 Mar
2024
|
Sensitivity
on
significant
input
|
Fair value impact of
sensitivities (£m) +10%
|
Fair value impact of
sensitivities (£m) -10%
|
Calibrated
price of recent investment
|
All
|
Calibrated round
enterprise value – Pre
and post
year-end round enterprise
values have been
calibrated with
appropriate
premiums and discounts
taken to reflect
movements in publicly
listed peer
multiples, future revenue
projections and
timing risk. Premiums
and discounts
were applied to
75% (2023: 65%)
of the fair value of
investments
measured at calibrated
price of recent
investment. The range of
premiums applied
is 24% to 137% (2023: nil%). The range of discounts taken is
between 2%-79% (2023: 6%-79%). The weighted average discount taken
is 21% (2023: 35%). Less discounts have been applied in the current
year, reflecting calibration to the market.
|
328.2
(FY23: 668.0)
|
10% sensitivity applied
to the premium and
discount to last round
price.
|
289.8
(FY23: 573.8)
|
363.4
(FY23: 731.5)
|
Enterprise tech
|
121.3
(FY23: 279.2)
|
112.2
(FY23: 242.7)
|
131.8
(FY23: 293.6)
|
Consumer tech
|
5.7
(FY23: 34.1)
|
5.1
(FY23: 25.9)
|
6.0
(FY23: 38.5)
|
Hardware & Deeptech
|
146.6
(FY23: 313.0)
|
121.9
(FY23: 265.9)
|
168.2
(FY23: 355.9)
|
Digital health &
wellness
|
54.6
(FY23: 41.7)
|
50.6
(FY23: 39.3)
|
57.4
(FY23: 43.5)
|
Market comparables
|
All
|
Revenue-multiples are applied to the
revenue of our portfolio companies to determine their enterprise
value.
Implied revenue-multiple – the
portfolio we have is diversified across sectors and geographies and
the companies which have valuations based on revenue-multiples have
a range of multiples of between 1.2x-14.7x (2023: 1.0x-13.4x) and a
weighted average multiple of 6.6x (2023: 8.4x).
Revenue – we select forward revenues
from our portfolio companies mostly with reference to financial
updates in their board packs, adjusted where required in the event
we do not have forward-looking information. Our core portfolio
makes up 62% (2023: 62%) of the GPV and revenue growth in the core
portfolio for 2024 is 52% (2023: 68%).
The multiple range has remained
consistent with the prior financial year March 2023 but there has
been an increase to the weighted average multiple reflecting the
more significant weighting of larger assets.
|
737.1
(FY23: 462.2)
|
10% sensitivity applied to the
revenue–multiple
|
807.6
(FY23: 505.1)
|
667.9
(FY23: 417.5)
|
10% sensitivity applied to the revenue
of the portfolio company
|
807.6
(FY23: 505.1)
|
|
Enterprise tech
|
415.8
(FY23: 281.9)
|
10% sensitivity applied to the
revenue–multiple
|
450.4
(FY23: 308.6)
|
376.6
(FY23: 253.2)
|
10% sensitivity applied to the revenue
of the portfolio company
|
450.4
(FY23: 308.6)
|
376.6
(FY23: 253.2)
|
Consumer tech
|
141.9
(FY23: 110.6)
|
10% sensitivity applied to the
revenue–multiple
|
157.0
(FY23: 121.4
|
128.8
(FY23: 100.0)
|
10% sensitivity applied to the revenue
of the portfolio company
|
157.0
(FY23: 121.4)
|
128.8
(FY23: 100.0)
|
Hardware & Deeptech
|
162.2
(FY23: 35.7)
|
10% sensitivity applied to the
revenue–multiple
|
179.4
(FY23: 38.1)
|
148.6
(FY23: 33.2)
|
10% sensitivity applied to the revenue
of the portfolio company
|
179.4
(FY23: 38.1)
|
148.6
(FY23: 33.2)
|
Digital health &
wellness
|
17.2
(FY23: 34.0)
|
10% sensitivity applied to the
revenue–multiple
|
20.8
(FY23: 37.0)
|
13.9
(FY23: 31.1)
|
10% sensitivity applied to the revenue
of the portfolio company
|
20.8
(FY23: 37.0)
|
13.9
(FY23: 31.1)
|
NAV of underlying fund
|
All
|
NAV of funds, adjusted where required –
net asset values of underlying funds reported by the manager. These
are reviewed for compliance with our policies and are calibrated
for any cash and known valuation movements where reporting periods
do not align.
|
313.5
(FY23: 227.5)
|
10% sensitivity applied to the adjusted
NAV of funds
|
344.9
(FY23: 250.3)
|
282.2
(FY23: 204.8)
|
Enterprise tech
|
30.3
(FY23: 26.8)
|
33.4
(FY23: 29.5)
|
27.3
(FY23: 24.1)
|
Consumer tech
|
–
(FY23: –)
|
–
(FY23: –)
|
–
(FY23: –)
|
Hardware & Deeptech
|
8.5
(FY23: 8.6)
|
9.3
(FY23: 9.5)
|
7.6
(FY23: 7.8)
|
Digital health &
wellness
|
–
(FY23: –)
|
–
(FY23: –)
|
–
(FY23: –)
|
Other
|
274.7
(FY23: 192.1)
|
302.2
(FY23: 211.3)
|
247.3
(FY23: 172.9)
|
* There
were no significant inter-relationships between unobservable inputs
that materially affect fair values.
v. Valuations processes
The Audit,
Risk and Valuations Committee is responsible for ensuring that the
financial performance of the Group is properly reported on and
monitored. In addition to continuous portfolio monitoring through
the Board positions held in portfolio companies and the Investment
Committee, a bi-annual strategy day is held every six months to
discuss the investment performance and valuations of the portfolio
companies. The Investment Team leads discussions focused on
business performances and key developments, exit strategy and time
lines, revenue and EBITDA progression, funding rounds and latest
capitalisation table, and valuation metrics of listed peers.
Valuations are prepared every six months by the Finance Team during
each reporting period, with direct involvement and oversight from
the CFO. Challenge and approvals of valuations are led by the
Audit, Risk and Valuations Committee every six months, in line with
the Group’s half-yearly reporting periods.
31. Financial instruments
risk
Financial risk management
Financial
risks are usually grouped by risk type: market, liquidity and
credit risk. These risks are discussed in turn below.
Market risk – Foreign
currency
A significant
portion of the Group’s investments and cash deposits are
denominated in a currency other than Sterling. The principal
currency exposure risk is to changes in the exchange rate between
GBP and USD/EUR. Presented below is an analysis of the theoretical
impact of 10% volatility in the exchange rate on Shareholder
equity.
Theoretical
impact of a change in the exchange rate of +/-10% between GBP and
USD/EUR would be as follows:
Foreign currency
exposures – Investments
|
31 March
2024
£m
|
31 March
2023
£m
|
Investments –
exposures in EUR
|
650.8
|
672.3
|
10% decrease in GBP
|
723.1
|
747.0
|
10% increase in GBP
|
591.6
|
611.2
|
Investments –
exposures in USD
|
275.7
|
303.1
|
10% decrease in GBP
|
306.3
|
336.7
|
10% increase in GBP
|
250.6
|
275.5
|
Certain cash
deposits held by the Group are denominated in Euros and US Dollars.
The theoretical impact of a change in the exchange rate of +/-10%
between GBP and USD/EUR would be as follows:
Foreign currency
exposures – Cash
|
31 March
2024
£m
|
31 March
2023
£m
|
Cash denominated in
EUR
|
4.5
|
0.5
|
10% decrease in EUR: GBP
|
4.1
|
0.5
|
10% increase in EUR: GBP
|
5.0
|
0.6
|
Cash denominated in
USD
|
6.3
|
0.9
|
10% decrease in USD: GBP
|
5.7
|
0.8
|
10% increase in USD: GBP
|
7.0
|
1.0
|
The combined
theoretical impact on Shareholders’ equity of the changes to
revenues, investments and cash and cash equivalents of a change in
the exchange rate of +/- 10% between GBP and USD/EUR would be as
follows:
Foreign currency
exposures – Equity
|
31 March
2024
£m
|
31 March
2023
£m
|
Shareholders’
Equity
|
1,247.5
|
1,194.1
|
10% decrease in EUR: GBP/USD:
GBP
|
1,134.1
|
1,085.6
|
10% increase in EUR: GBP/USD:
GBP
|
1,386.1
|
1,326.8
|
Market risk – Price risk
Market price
risk arises from the uncertainty about the future prices of
financial instruments held in accordance with the Group’s
investment objectives.
It represents
the potential loss that the Group might suffer through holding
market positions in the face of market movements. As stated in Note
5(a) and Note 30, valuation of unquoted equity investments at fair
value through profit or loss is a critical accounting estimate and
actuals may differ from estimates.
The Group is
exposed to equity price risk in respect of equity rights and
investments held by the Group and classified on the balance sheet
as financial assets at fair value through profit or loss (Note 30).
These equity rights are held mostly in unquoted high-growth
technology companies and are valued by reference to revenue or
earnings multiples of quoted comparable companies (taken as at the
year-end date), last round price (calibrated against market
comparables), or NAV of underlying fund, and also in certain quoted
high-growth technology companies – as discussed more fully in Note
5(a). These valuations are subject to market movements.
The Group
seeks to manage this risk by routinely monitoring the performance
of these investments, employing stringent investment appraisal
processes.
Theoretical
impact of a fluctuation in equity prices of +/-10% would be as
follows:
|
Valuation
methodology
|
|
Quoted equity
£m
|
Revenue-multiple
£m
|
NAV of underlying
fund £m
|
Calibrated price
of
recent investment
£m
|
|
-10%
|
|
+10%
|
-10%
|
|
+10%
|
-10%
|
|
+10%
|
-10%
|
+10%
|
As at 31 March
2024
|
–
|
|
–
|
(63.6)
|
|
68.9
|
(31.1)
|
|
31.1
|
(32.3)
|
31.6
|
As at 31 March 2023
|
(1.2)
|
|
1.2
|
(43.6)
|
|
41.7
|
(22.8)
|
|
22.8
|
(54.4)
|
53.6
|
Given the
impact on both private and public markets from current market
volatility, which could impact the valuation of our unquoted and
quoted equity investments, we further flexed by 20% in order to
analyse the impact on our portfolio of larger market movements.
Theoretical impact of a fluctuation of +/- 20% would have the
following impact:
|
Valuation
methodology
|
|
Quoted equity
£m
|
Revenue-multiple
£m
|
NAV of underlying
fund £m
|
Calibrated price
of
recent investment
£m
|
|
-20%
|
+20%
|
-20%
|
+20%
|
-20%
|
+20%
|
-20%
|
+20%
|
As at 31 March
2024
|
–
|
–
|
(129.8)
|
132.0
|
(62.1)
|
62.1
|
(63.8)
|
63.6
|
As at 31 March 2023
|
(2.4)
|
2.4
|
(86.9)
|
82.5
|
(45.5)
|
45.5
|
(109.2)
|
106.8
|
Liquidity risk
Cash and cash
equivalents comprise of cash and short-term bank deposits with an
original maturity of three months or less held in readily
accessible bank accounts. There is no restricted cash as at 31
March 2024 (restricted cash as at 31 March 2023 included £2.3
million of collateral for interest payments on the revolving credit
facility (see Note 24 (i)). The carrying amount of these assets is
approximately equal to their fair value. Responsibility for
liquidity risk management rests with the Board of Molten Ventures
plc, which has established a framework for the management of the
Group’s funding and liquidity management requirements. The Group
manages liquidity risk by maintaining adequate reserves and by
continuously monitoring forecast and actual cash flows. The
utilisation of the debt facility and requirement for utilisation
requests is monitored as part of this process, the debt facility is
not linked to the liquidity of the Group and further drawdowns on
the debt facility have been considered within the Going Concern
assessment. For the contractual maturities of the Group’s
liabilities see tables below.
Contractual
maturities of liabilities at 31 March 2024 (£m)
|
Less than
6 months
|
6–12
months
|
Between
1–2 years
|
Between
2–5 years
|
Total
contractual
cash flows
|
Carrying
amount
|
Trade and other payables
|
(9.0)
|
(0.1)
|
–
|
–
|
(9.1)
|
(9.1)
|
Fees on facility
|
–
|
–
|
–
|
–
|
0.6
|
0.6
|
Facility
|
(5.0)
|
(5.0)
|
(95.0)
|
–
|
(105.0)
|
(90.0)
|
Provisions
|
–
|
(0.3)
|
–
|
–
|
(0.3)
|
(0.3)
|
Current lease liabilities
|
–
|
–
|
–
|
–
|
–
|
–
|
Non-current lease
liabilities
|
–
|
–
|
–
|
–
|
–
|
–
|
Total shown in the
statement of financial position
|
(14.0)
|
(5.4)
|
(95.0)
|
–
|
(113.8)
|
(98.8)
|
Contractual
maturities of liabilities at 31 March 2023 (£m)
|
Less than
6 months
|
6–12
months
|
Between
1–2 years
|
Between
2–5 years
|
Total
contractual
cash flows
|
Carrying
amount
|
Trade and other payables
|
(9.1)
|
(0.5)
|
–
|
–
|
(9.6)
|
(9.6)
|
Fees on facility
|
–
|
–
|
–
|
–
|
1.0
|
1.0
|
Facility
|
(4.4)
|
(4.4)
|
(8.8)
|
(116.5)
|
(134.1)
|
(90.0)
|
Provisions
|
–
|
(0.3)
|
–
|
–
|
(0.3)
|
(0.3)
|
Current lease liabilities
|
(0.3)
|
–
|
–
|
–
|
(0.3)
|
(0.3)
|
Non-current lease
liabilities
|
–
|
–
|
–
|
–
|
–
|
–
|
Total shown in
the
statement of
financial position
|
(13.8)
|
(5.2)
|
(8.8)
|
(116.5)
|
(143.3)
|
(99.2)
|
Lease
liabilities fall due over the term of the lease. The debt facility
has a term of three years – for further details, see Note 24(i).
All other Group payable balances at balance sheet date and prior
periods fall due for payment within one year.
As part of
our Fund of Funds, Earlybird, Irish Co-Invest and Molten SP I LP
strategy, we make commitments to funds to be drawn down over the
life of the fund. Projected drawdowns due by the Company are
monitored as part of the monitoring process above.
Credit risk
Credit risk
refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss. The Group is
exposed to this risk for various financial instruments, for example
by granting receivables to customers and placing deposits. As part
of the Group’s investments, the Group invests in debt instruments
such as bridging loans and convertible loan notes (included within
the investments held at FVTPL). This is not included below as the
risk is considered as part of the fair value measurement. The
Group’s trade receivables are amounts due from the investment funds
under management, or underlying portfolio companies. The Group’s
maximum exposure to credit risk is limited to the carrying amount
of trade receivables, cash and cash equivalents, and restricted
cash at each period-end is summarised below:
Classes of financial
assets impacted by credit risk, carrying amounts
|
31 March
2024
£m
|
31 March
2023
£m
|
Trade and other receivables
|
1.6
|
5.0
|
Cash and cash equivalents
|
57.0
|
22.9
|
Total
|
58.6
|
27.9
|
The Directors
consider that expected credit losses relating to the above
financial assets are immaterial for each of the reporting dates
under review as they are of good credit quality. In respect of
trade and other receivables, the Group is not exposed to
significant risk as the principal customers are the investment
funds managed by the Group, and in these the Group has control of
the banking as part of its management responsibilities. Investments
in unlisted securities are held within limited partnerships for
which Esprit Capital Partners LLP acts as manager, and,
consequently, the Group has responsibility itself for collecting
and distributing cash associated with these investments. The credit
risk of amounts held on deposit is limited by the use of reputable
banks with high-quality external credit ratings and, as such, is
considered negligible. The Group has an agreed list of authorised
counterparties. Authorised counterparties and counterparty credit
limits are established within the parameters of the Group Treasury
Policy to ensure that the Group deals with creditworthy
counterparties and that counterparty concentration risk is
addressed. Any changes to the list of authorised counterparties are
proposed by the CFO after carrying out appropriate credit
worthiness checks and any other appropriate information, and the
changes require approval from the Board. Cash at 31 March 2024 is
held with the following institutions (and their respective Moody’s
credit rating): (1) Barclays Bank plc (Baa2); (2) HSBC UK Limited
(Aa3); and at 31 March 2023, also (3) Investec Bank plc (Baa1).
Cash equivalents at 31 March 2024 comprise of a holding in Goldman
Sachs Sterling Government Liquid Reserves Fund (Moody’s credit
rating AAA-mf).
Capital management
The Group’s
objectives when managing capital are to:
• safeguard
their ability to continue as a going concern, so that they can
continue to provide returns for Shareholders and benefits for other
stakeholders; and
• maintain
an optimal capital structure.
The Group is
funded through equity and debt at the balance sheet date. During
the period, the Group had £90 million term loan which has been
fully drawn and an undrawn £60m revolving credit facility, please
refer to Note 24(i) for further details regarding the
loan.
In order to
maintain or adjust the capital structure, the Group may make
distributions to Shareholders, return capital to Shareholders,
issue new shares or sell assets between related parties or
otherwise to manage cash.
Interest rate risk
The Group’s
interest rate risk arises from borrowings on the £150.0 million
Debt Facility with JPM and HSBC, which was entered into in
September 2022, at which point £90.0 million term loan was drawn
down (31 March 2023: £90.0 million drawn). The Group’s borrowings
are denominated in GBP and are carried at amortised
cost.
£38 million
was drawn from the revolving credit facility 30 November 2023 and
fully repaid on 21 December 2023. Interest was charged at a rate of
SONIA plus 5.50%
The term loan
balance remains outstanding at the period-end. The interest charged
on future drawdowns will fluctuate with the movements on
SONIA.
32. Related party
transactions
The Group has
various related parties stemming from relationships with Limited
Partnerships managed by the Group, its investment portfolio, its
advisory arrangements/Directors’ fees (Board seats) and its key
management personnel.
Key management personnel
compensation
Key
management personnel are those persons having authority and
responsibility for planning, directing and controlling the
activities of the Group, and are considered to be the Directors of
the Company listed on pages 70 and 71 of the Annual
Report.
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Wages and salaries
|
2.4
|
2.1
|
Defined contribution pension
costs
|
0.2
|
0.2
|
Social security contributions and
similar taxes
|
0.3
|
0.3
|
Carried interest paid
|
0.6
|
1.2
|
Total
|
3.5
|
3.8
|
The details
of individual Directors’ remuneration and pension benefits, as set
out in the tables contained in the Directors’ Remuneration Report
on page 90 of the Annual Report, form part of these consolidated
financial statements.
During the
year, employees of Molten Ventures plc, including key management
personnel were granted and exercised share options – see Note 15
for further details.
Transactions with other related
parties
In addition
to key management personnel, the Company has related parties in
respect of its subsidiaries and other related entities.
On 30 March
2022, Molten Ventures plc entered into an agreement with Softcat
plc to provide Molten Ventures plc with fractional CIO services.
Karen Slatford was both the Chair of Softcat plc’s Board and was
Chair of Molten Ventures plc’s Board at the time of entering the
agreement until 17 January 2023. During the year fees of £Nil have
been recognised in relation to the services (31 March 2023: £0.1k),
and £Nil remains outstanding at 31 March 2024 (31 March 2023:
£Nil).
Management fees
Fees are
received by the Group in respect of the EIS and VCT funds as well
as unconsolidated structured entities managed by Esprit Capital
Partners LLP, which is consolidated into the Group. The EIS funds
are managed by Encore Ventures LLP under an Investment Management
Agreement; Encore Ventures LLP is a consolidated subsidiary of the
Group. Molten Ventures VCT plc is managed under an Investment
Management Agreement by Elderstreet Investments Limited, which is a
consolidated subsidiary of the Group. Management fees are received
by the Group in respect of these contracts. See Note 4(b) for
further information on consolidation.
Management fees
recognised in the statement of comprehensive income resulting from
related party transactions
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Management fees from unconsolidated
structured entities
|
14.3
|
16.8
|
Management fees from EIS and VCT
funds
|
5.6
|
5.9
|
Directors’ fees
Administration fees for the provision of Director services
are received where this has been agreed with the portfolio
companies. These amounts are immaterial. At times, expenses
incurred relating to Director services can be recharged to
portfolio companies – these are also immaterial. Molten Ventures
does not exercise control or management through any of these
Non-Executive positions.
Carry payments
Carry was
paid to 15 beneficiaries in the year, of which the below was to
related parties. Carry payments have been made in respect of Esprit
Capital III LP and Esprit Capital IV LP to key management personnel
in FY23 and FY24. Please see the Directors’ Remuneration Report for
further details.
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Carry payments
|
0.6
|
1.2
|
Performance fees
Performance fees
have not been paid during the year by the EIS and VCT funds to
Encore Ventures LLP. At 31 March 2024, £0.1 was unpaid (31 March
2023: £Nil).
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Performance fees
|
0.1
|
–
|
Unconsolidated structured
entities
The Group has
exposure to a number of unconsolidated structured entities as a
result of its venture capital investment activities.
The Group
ultimately invests all funds via a number of limited partnerships
and some via Molten Ventures plc’s wholly owned subsidiaries,
Molten Ventures (Ireland) Limited and Molten Venture Holdings
Limited. These are controlled by the Group and not consolidated,
but they are held as investments at fair value through profit or
loss on the consolidated statement of financial position in line
with IFRS 10 (see Note 4(b) for further details and for the list of
these investment companies and limited partnerships). The material
assets and liabilities within these investment companies are the
investments, which are held at FVTPL in the consolidated accounts.
Please see further details in the table below.
The Group has
a beneficial interest to these assets since the acquisition and as
such holds them as investments at fair value through profit and
loss.
Name of
undertaking
|
Registered
office
|
Activity
|
Holding
|
Country
|
31 March
2024
£m
|
31 March
2023
£m
|
Esprit Investments (1)(B) LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group and Molten Ventures FoF I LP hold Fund of Fund
investments
|
89%
|
England
|
10.6
|
14.2
|
Esprit Investments (2) (B)
LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group and Molten Ventures FoF I LP hold Fund of Fund
investments
|
89%
|
England
|
51.3
|
47.5
|
Esprit Investments (2) (B) (i)
LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to
which
the Group makes certain investments
(dormant)
|
100%
|
England
|
–
|
–
|
Molten Ventures (Ireland)
Limited
|
32 Molesworth Street, Dublin 2,
Ireland
|
Investment entity
|
100%
|
Ireland
|
951.4
|
1,041.7
|
Esprit Capital III LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
England
|
32.8
|
33.6
|
Esprit Capital IV LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
England
|
8.9
|
15.5
|
DFJ Europe X LP
|
c/o Maples Corporate Services Limited
at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman
Islands
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
Cayman Islands
|
3.2
|
5.8
|
Esprit Investments (1) LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to
which
the Group makes certain
investments
|
100%
|
England
|
147.3
|
169.9
|
Esprit Investments (2) LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to
which
the Group makes certain
investments
|
100%
|
England
|
761.8
|
822.2
|
Molten Ventures Holdings
Limited
|
20 Garrick Street, London, WC2E
9BT
|
Intermediate Company and Qualifying
Asset Holding Company (“QAHC”)
|
100%
|
England
|
85
|
51.9
|
Molten Ventures Investments
LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
England
|
29.8
|
2.5
|
Molten Ventures FoF I LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited partnership under the Group’s
management which makes Fund of Fund investments
|
50%
|
England
|
14.5
|
12.4
|
Molten Ventures Investments (Ireland)
LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership under the Group's
management which makes Irish domiciled investments
|
56%
|
England
|
3.5
|
-
|
Esprit Investments (2) (B) (ii)
LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
England
|
160.5
|
153.2
|
Forward Partners 1 L.P.
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
England
|
11.4
|
-
|
Forward Partners III L.P.
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
England
|
46.8
|
-
|
Forward Partners II L.P.
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
England
|
6.8
|
-
|
Molten
Ventures (Ireland) Limited invests via the following limited
partnerships: Esprit Investments (1) LP, Esprit Investments (2) LP,
Esprit Capital IV LP (which also holds investments via DFJ Europe X
LP) and Esprit Capital III LP.
Molten
Ventures Holdings Limited invests in or via the following limited
partnerships: Molten Ventures Investments LP, Molten Ventures FoF I
LP, Esprit Investments (2)(B)(ii) LP, and Molten Ventures
Investments (Ireland) I LP.
The
investments balance in the consolidated statement of financial
position also includes investments held by consolidated
entities.
The Group
also co-invests or historically co-invested with a number of
limited partnerships (see Note 4(b) for further details). The
exposure to these entities is immaterial.
Vested but
unrealised carried interest of £0.6 million is recognised by the
Group via Encore I Founder LP (14.5% aggregate carry LP interest)
and Esprit Capital III Carried Interest LP (2.2% aggregate carry LP
interest).
33. Capital commitments
The Group
makes commitments to Fund of Funds (including funds invested in as
part of our partnership with Earlybird) as part of its investment
activity, which will be drawn down as required by the funds over
their investment period. Contractual commitments for the following
amounts have been made as at 31 March 2024 but are not recognised
as a liability on the consolidated statement of financial
position:
|
31 March
2024
£m
|
31 March
2023
£m
|
Undrawn capital commitments
|
84.1
|
87.9
|
Total capital commitments
|
316.5
|
316.0
|
Total fair
value to the Group of these seed funds (including Earlybird) is
£312.3 million of total investments (31 March 2023: £349.8
million).
34. Ultimate controlling
party
The Directors
of Molten Ventures plc do not consider there to be a single
ultimate controlling party of the Group.
35. Alternative Performance Measures
(“APM”)
The Group has
included the APMs listed below in this report as they highlight key
value drivers for the Group and, as such, have been deemed by the
Group’s management to provide useful additional information to
readers of this report. These measures are not defined by IFRS and
should be considered in addition to IFRS measures.
Gross Portfolio Value
(“GPV”)
The GPV is
the gross fair value of the Group’s investment holdings before
deductions for the fair value of carry liabilities and any deferred
tax.
The GPV is
subject to deductions for the fair value of carry liabilities and
deferred tax to generate the net investment value, which is
reflected on the consolidated statement of financial position as
financial assets held at FVTPL. Please see Note 30(i) for a
reconciliation to the net investment balance.
This table
also shows the Gross to Net movement, which is 94% in the current
year calculated as the net investment value (£1,292.1 million)
divided by the GPV (£1,378.9 million). The table reflects a Gross
fair value movement of (£18.3 million), on an opening balance of
£1,370.8 million, which is a (1)% percentage change on the 31 March
2022 GPV. This is described in the report as the Gross fair value
decrease/increase.
Net Portfolio Value
(“NPV”)
The NPV is
the net fair value of the Group’s investment holdings after
deductions for the fair value of carry liabilities and any deferred
tax from the GPV.
The NPV is
the value of the Group’s financial assets classified at “fair value
through profit or loss” on the statement of financial
position.
NAV per share
The NAV per
share is the Group’s net assets attributable to Shareholders
divided by the number of shares at the relevant reporting date. See
the calculation in Note 13. Please see further details relating to
the calculation of the Net Portfolio Value in Note 30
(i).
Net fair value movement
This is the
fair value movement as calculated by dividing the fair value
movement, excluding foreign exchange movements, by the opening
Gross Portfolio Value at the relevant period.
Gross fair value movement
This is the
fair value movement as calculated by dividing the fair value
movement, including foreign exchange movements, by the opening
Gross Portfolio Value at the relevant period.
Platform AuM
The latest available fair value
of investments held at FVTPL and cash managed by the Group,
including funds managed by Elderstreet Investments Limited, Encore
Ventures LLP, and Esprit Capital Partners LLP. This includes a
deduction for Molten Ventures plc operating costs budget for the
year. We also refer to the EIS and VCT fund AUM separately within
the report.
Operating costs as a % of year end
NAV
This is the operating costs,
net of fee income and exceptional items divided by year-end
NAV.
36. Exceptional items
Exceptional
costs primarily consists of costs relating to the acquisition of
Forward Partners Group Limited and equity raise which amounted to
£3.6m for the year ended 31 March 2024 (year ended 31 March 2023:
£Nil).
The majority
of these costs include fees relating to brokers, legal advisory,
listing and reporting accountant.
37. Subsequent events
On 30 April
2024, Hologic, Inc, a NASDAQ listed entity, signed definitive
agreement to acquire Endomag. The acquisition, which is subject to
completion conditions and regulatory approval as well as working
capital and other customary closing adjustments, values Endomag at
approximately $310 million, which is at a slight uplift to
NAV.
There are no
further post balance sheet events requiring comment.
Company statement of financial
position
As at 31 March 2024
|
Notes
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Non-current
assets
|
|
|
|
Financial assets held at fair value
through profit or loss
|
6
|
1,288.5
|
1,271.5
|
Investments in subsidiary
undertakings
|
7
|
13.4
|
13.6
|
Property, plant and
equipment
|
4
|
0.1
|
0.4
|
Total non-current
assets
|
|
1,302.0
|
1,285.5
|
Current
assets
|
|
|
|
Trade and other receivables
|
9
|
10.7
|
13.1
|
Cash and cash equivalents
|
8
|
41.5
|
20.5
|
Total current
assets
|
|
52.2
|
33.6
|
Current
liabilities
|
|
|
|
Trade and other payables
|
11
|
(17.1)
|
(19.1)
|
Lease liabilities
|
|
–
|
(0.3)
|
Total current
liabilities
|
|
(17.1)
|
(19.4)
|
Non-current
liabilities
|
|
|
|
Deferred tax
|
16
|
(11.5)
|
(22.2)
|
Provisions
|
|
(0.3)
|
(0.3)
|
Loans and borrowings
|
10
|
(89.4)
|
(89.0)
|
Total non-current
liabilities
|
|
(101.2)
|
(111.5)
|
Net assets
|
|
1,235.9
|
1,188.2
|
|
|
|
|
Equity
|
|
|
|
Share capital
|
12
|
1.9
|
1.5
|
Share premium account
|
12
|
708.1
|
615.9
|
Other reserves
|
13
|
37.8
|
33.3
|
Retained earnings
|
|
488.1
|
537.5
|
Equity attributable
to owners of Molten Ventures plc
|
|
1,235.9
|
1,188.2
|
The Directors
have taken advantage of the exemption available under Section 408
of the Companies Act 2006 and have not presented a statement of
comprehensive income for the Company. The Company’s loss for the
year ended 31 March 2024 was £49.4m (31 March 2023: loss of £224.0
million).
The Company
financial statements should be read in conjunction with the
accompanying notes. The Company financial statements on pages 153
to 160 of the Annual Report were authorised for issue by the Board
of Directors on 11 June 2024 and were signed on its
behalf.
Ben Wilkinson
Chief
Financial Officer
Molten
Ventures plc registered number 09799594
Company statement of changes in
equity
For the year ended 31 March 2024
Year ended 31 March
2024
£m
|
Note
|
Share
capital
|
Share
premium
|
Other
reserves
|
Retained
earnings
|
Total
equity
|
Brought forward as at
1 April 2023
|
|
1.5
|
615.9
|
33.3
|
537.5
|
1,188.2
|
Comprehensive
income/(expense) for the year
|
|
|
|
|
|
|
Loss for the year
|
|
–
|
–
|
–
|
(49.4)
|
(49.4)
|
Total comprehensive
income/(expense) for the year
|
|
–
|
–
|
–
|
(49.4)
|
(49.4)
|
Contributions by and
distributions to the owners:
|
|
|
|
|
|
|
Contribution of equity, net of
transaction costs and tax
|
12
|
0.4
|
-
|
36.9
|
–
|
37.3
|
Share premium
|
12
|
–
|
55.3
|
–
|
–
|
55.3
|
Options granted and awards
exercised
|
14
|
–
|
–
|
4.5
|
–
|
4.5
|
Total contributions
by and distributions to the owners
|
|
0.4
|
55.3
|
41.4
|
–
|
97.1
|
Balance as at 31
March 2024
|
|
1.9
|
671.2
|
74.7
|
488.1
|
1,235.9
|
Year ended 31 March
2023
£m
|
Note
|
Share
capital
|
Share
premium
|
Other
reserves
|
Retained
earnings
|
Total
equity
|
Brought forward as at
1 April 2022
|
|
1.5
|
615.9
|
28.9
|
761.5
|
1,407.8
|
Comprehensive
income/(expense) for the year
|
|
|
|
|
|
|
Loss for the year
|
|
–
|
–
|
–
|
(224.0)
|
(224.0)
|
Total comprehensive
income/(expense) for the year
|
|
–
|
–
|
–
|
(224.0)
|
(224.0)
|
Contributions by and
distributions to the owners:
|
|
|
|
|
|
|
Issue of share capital
|
12
|
–
|
–
|
–
|
–
|
–
|
Share premium
|
12
|
–
|
–
|
–
|
–
|
–
|
Options granted and awards
exercised
|
14
|
–
|
–
|
4.4
|
–
|
4.4
|
Total contributions
by and distributions to the owners
|
|
–
|
–
|
4.4
|
–
|
4.4
|
Balance as at 31
March 2023
|
|
1.5
|
615.9
|
33.3
|
537.5
|
1,188.2
|
The
consolidated financial statements should be read in conjunction
with the accompanying notes.
Notes to the company financial
statements
1. Basis of preparation
The financial
reporting framework that has been applied in the preparation of the
Company’s financial statements is Financial Reporting Standard 101,
‘Reduced Disclosure Framework’ (FRS 101).
The financial statements have been prepared under the
historical cost convention, as modified by the revaluation of
certain financial assets and financial liabilities measured at fair
value through profit or loss, and in accordance with the Companies
Act 2006. The Company has taken advantage of disclosure exemptions
available under FRS 101 as explained
below. The financial statements are
prepared on a going concern basis.
A summary of
the more important Company accounting policies, which have been
consistently applied except where noted, is set out in the relevant
notes below.
The following
exemptions from the requirements of IFRS have been applied in the
preparation of these financial statements, in accordance with FRS
101:
paragraphs 45(b)
and 46 to 52 of IFRS 2 Share-based Payment (details of the number
and weighted average exercise prices of share options, and how the
fair value of goods or services received was determined);
IAS 7 Statement of
Cash Flows;
the requirements in
IAS 24 Related Party Disclosures to disclose related party
transactions entered into and between two or more members of a
group;
IAS 1 Presentation
of Financial Statements and the following paragraphs of IAS 1:
10(d) (statement of cash flows), 16 (statement of compliance with
all IFRS), 111 (cash flow statement information), and 134-136
(capital management disclosures).
No new
Standards have been adopted in the current financial year ending 31
March 2024 or in the prior financial year ending 31 March
2023.
2. Critical accounting estimates and
judgements
The Directors
have made judgements and estimates with respect to those items that
have made the most significant effect on the carrying amounts of
the assets and liabilities in the financial statements. The
Directors have concluded that the critical judgements and estimates
in the Company financial statements are consistent with those
applied in the consolidated financial statements, further details
of which can be found in Note 5 of the consolidated financial
statements.
3. Investments in subsidiary
undertakings
Investments
in subsidiaries are held at cost less any provision for impairment
with the exception of unconsolidated investment entity subsidiaries
that are held at fair value.
4. Property, plant and
equipment
Fixtures and
equipment are stated at cost less accumulated depreciation and any
recognised impairment loss. Depreciation is recognised to write off
the cost or valuation of assets less their residual values over
their useful lives, using the straight-line method, on the
following basis:
Leasehold
improvements – over the term of the lease
Fixtures and equipment – 33% p.a. straight line
Computer equipment – 33% p.a. straight line
The estimated
useful lives, residual values and depreciation method are reviewed
at the end of each reporting year, with the effect of any changes
in estimate accounted for on a prospective basis
31 March
2024
|
Right-of-use
assets
£m
|
Leasehold
improvements
£m
|
Computer
equipment
£m
|
Total
£m
|
Cost
|
|
|
|
|
Cost carried forward as at 1 April
2023
|
1.6
|
0.8
|
0.2
|
2.6
|
Additions during the year
|
–
|
–
|
–
|
–
|
Disposals during the year
|
–
|
–
|
–
|
–
|
Cost as at 31 March
2024
|
1.6
|
0.8
|
0.2
|
2.6
|
Accumulated
depreciation
|
|
|
|
|
Depreciation carried forward as at 1
April 2023
|
(1.4)
|
(0.7)
|
(0.1)
|
(2.2)
|
Charge for the year
|
(0.2)
|
–
|
(0.1)
|
(0.3)
|
Disposals during the year
|
–
|
–
|
–
|
–
|
Accumulated
depreciation as at 31 March 2024
|
(1.6)
|
(0.7)
|
(0.2)
|
(2.5)
|
Net book
value
|
|
|
|
|
As at 31 March
2024
|
–
|
0.1
|
–
|
0.1
|
As at 31 March 2023
|
0.2
|
0.1
|
0.1
|
0.4
|
As at 31 March
2023
|
Right-of-use
assets
£m
|
Leasehold
improvements
£m
|
Computer
equipment
£m
|
Total
£m
|
Cost
|
|
|
|
|
Cost carried forward as at 1 April
2022
|
1.6
|
0.8
|
0.2
|
2.6
|
Additions during the year
|
–
|
–
|
–
|
–
|
Disposals during the year
|
–
|
–
|
–
|
–
|
Cost as at 31 March
2023
|
1.6
|
0.8
|
0.2
|
2.6
|
Accumulated
depreciation
|
|
|
|
|
Depreciation carried forward as at 1
April 2022
|
(1.0)
|
(0.6)
|
(0.1)
|
(1.7)
|
Charge for the year
|
(0.4)
|
(0.1)
|
–
|
(0.5)
|
Disposals during the year
|
–
|
–
|
–
|
–
|
Accumulated
depreciation as at 31 March 2023
|
(1.4)
|
(0.7)
|
(0.1)
|
(2.2)
|
Net book
value
|
|
|
|
|
As at 31 March
2023
|
0.2
|
0.1
|
0.1
|
0.4
|
As at 31 March 2022
|
0.6
|
0.2
|
0.1
|
0.9
|
No “fixtures
and equipment” are held by the Company.
5. Results for the parent
company
The Auditors’
remuneration for audit services and other services is disclosed in
Note 10 to the consolidated financial statements.
6. Financial assets held at fair
value through profit or loss
Name of
undertaking
|
Registered
office
|
Activity
|
Holding
|
Country
|
31 March
2024
£m
|
31 March
2023
£m
|
Esprit Investments (1) (B)
LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group and Molten Ventures FoF I LP hold Fund of Fund
investments
|
100%
|
England
|
10.6
|
14.2
|
Esprit Investments (2) (B)
LP
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group and Molten Ventures FoF I LP hold Fund of Fund
investments
|
100%
|
England
|
53.1
|
47.5
|
Molten Ventures (Ireland)
Limited
|
32 Molesworth Street, Dublin 2,
Ireland
|
Investment entity
|
100%
|
Ireland
|
951.5
|
1,041.70
|
Molten Ventures Holdings
Limited
|
20 Garrick Street, London WC2E
9BT
|
Intermediate Company and Qualifying
Asset Holding Company (“QAHC”)
|
100%
|
England
|
85
|
51.9
|
Esprit Investments 2(B)(i)
LP
|
20 Garrick Street, London WC2E
9BT
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
England
|
–
|
–
|
Esprit Investments 2(B)(ii)
|
20 Garrick Street, London WC2E
9BT
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
England
|
123.3
|
116.2
|
Forward Partners 1 L.P.
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
England
|
11.4
|
–
|
Forward Partners III L.P.
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
England
|
46.8
|
–
|
Forward Partners II L.P.
|
20 Garrick Street, London, WC2E
9BT
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
England
|
6.8
|
–
|
Totals
|
|
|
|
|
1,288.5
|
1,271.5
|
|
31 March
2024
£m
|
31 March
2023
£m
|
As at 1
April
|
1,271.5
|
1,379.7
|
Investments made in the
year1
|
65.3
|
138.2
|
Loans made/repaid from underlying
investment vehicles1
|
(38.9)
|
(48.1)
|
Changes on gains on investments held at
fair value through profit or loss
|
(9.4)
|
(198.3)
|
Totals
|
1,288.5
|
1,271.5
|
1 Investments
and loans made in the year are amounts the Company has invested in
underlying investment vehicles. This is not the equivalent to the
total amount invested in portfolio companies, as existing cash
balances from the investment vehicles are reinvested.
See Note 4(b)
in the consolidated financial statements for the accounting
policies in respect of investments held at fair value through
profit or loss.
7. Investments in consolidated
subsidiary undertakings, associates and Employee Benefit
Trust
On 15 June
2016, the Company acquired the entire capital interests of Esprit
Capital Partners LLP for £13.2 million, which was satisfied in
shares and is held at cost on the Company’s balance sheet within
investments in subsidiary undertakings as at 31 March 2024 (2023:
£13.2 million).
On 26
November 2016, the Company acquired 30.77% of the capital interests
in Elderstreet Holdings Limited, the holding company of Elderstreet
Investments Limited (manager of Molten Ventures VCT plc) for £0.26
million which was held at cost on the Company’s balance sheet at 31
March 2020 within investments in associates. On 9 February 2021,
Molten Ventures plc acquired the remaining 69.23% of the issued
share capital in Elderstreet Holdings Limited. Elderstreet Holdings
Limited was held as an Investment in Associate on the consolidated
statement of financial position as at 31 March 2020. Total
consideration for the remaining issued share capital not previously
held was cash consideration of £0.79 million (with an amount
withheld for tax on share options). This transaction is accounted
for under IFRS 3 as a business combination achieved in stages (or
“step acquisition”) as this transaction resulted in Molten Ventures
plc obtaining control over Elderstreet Holdings Limited and
Elderstreet Investments Limited (as its 100% owned subsidiary). At
31 March 2024, the total investment in subsidiary undertaking is
£1.05 million made up of initial ownership and the cash
consideration (31 March 2023: £1.05 million).
On 27
November 2020, Molten Ventures Employee Benefit Trust (the “Trust”)
was set up to operate as part of the employee share option schemes.
The Trust is funded via a loan from Molten Ventures plc, which is
included in trade and other receivables on the company statement of
financial position.
On 14 March
2024, Molten Ventures plc acquired 100% of the issued capital of
Forward Partners plc in an all share acquisition scheme of
arrangement, in a ratio of one new Molten Ventures plc ordinary
share for every nine Forward Partners plc ordinary shares. In
accordance with IFRS 3, step acquisition accounting was applied as
the Company held a 0.76% equity interest in Forward Partners plc
before acquisition, at a fair value of £0.5m. The Company therefore
recognised a loss of £0.04m on completion of the acquisition as a
result of remeasuring this equity interest at fair value on 14
March 2024. Molten Ventures plc issued 14.8m new shares in exchange
for the issued share capital of Forward Partners
plc. This equates to consideration
of £37.0m based on the closing Molten Ventures plc share price on
14 March 2024 of £2.504 pence per share.
8. Cash and cash
equivalents
|
31 March
2024
£m
|
31 March
2023
£m
|
Cash at bank and on hand
|
21.3
|
20.5
|
Cash equivalents
|
20.2
|
–
|
Total
|
41.5
|
20.5
|
Cash on hand
earns interest at floating rates based on daily bank deposit rates.
Cash equivalents represent monies held in a Sterling Government
Liquid Reserves Money Market Fund which can be redeemed
daily.
9. Trade and other
receivables
|
31 March
2024
£m
|
31 March
2023
£m
|
Trade receivables
|
0.3
|
0.8
|
Other receivables and
prepayments
|
0.9
|
1.9
|
Loans made to Group
companies
|
9.5
|
9.5
|
Intercompany debtors
|
–
|
0.9
|
Total
|
10.7
|
13.1
|
10. Loans and borrowings
Molten
Ventures have an agree £150.0 million net asset value facility with
J.P. Morgan Chase Bank N.A. (“JPM”) and HSBC (the “Debt Facility”).
The Debt Facility comprises a £90.0 million term loan and a
revolving credit facility (“RCF”) of up to £60.0 million on three-
and two- year tenors respectively, both with one-year extensions up
to five years and is secured against various assets and LP
interests in the Group. The Debt Facility interest rate is SONIA
plus a margin of 5.5% per annum.
11. Trade and other
payables
|
31 March
2024
£m
|
31 March
2023
£m
|
Trade payables
|
(0.2)
|
(0.4)
|
Other taxation and social
security
|
(0.2)
|
(0.2)
|
Intragroup creditors
|
(9.2)
|
(11.2)
|
Other payables
|
(0.2)
|
(2.4)
|
Accruals and deferred income
|
(7.3)
|
(4.9)
|
Total
|
(17.1)
|
(19.1)
|
All trade and
other payables amounts are short term. The net carrying value of
all financial liabilities is considered a reasonable approximation
of fair value.
12. Share capital and share
premium
31 March 2024 –
Allotted and fully paid
|
Number
|
Pence
|
£m
|
At the beginning of the year
|
152,999,853
|
1
|
1.5
|
Issue of share capital during the year
for cash1
|
21,261,548
|
1
|
0.2
|
Share-for-share
exchange2
|
14,785,049
|
1
|
0.2
|
At the end of the
year
|
189,046,450
|
1
|
1.9
|
1 In
December 2023, the Company raised equity by issuing 21,261,548 new
ordinary shares at 1 pence.
2 In
February 2024, the Company exchanged 14,785,049 ordinary shares as
part of the Forward Partners Group Limited acquisition.
31 March 2023 -
Allotted and fully paid
|
Number
|
Pence
|
£’m
|
At the beginning of the year
|
152,999,853
|
1
|
1.5
|
Issue of share capital during the
year1
|
–
|
–
|
–
|
At the end of the
year
|
152,999,853
|
1
|
1.5
|
Movements in
share premium in the statement of changes in equity are shown net
of directly attributable costs relating to the share issuance.
Movements in share capital and share premium are explained in Note
26 of the consolidated financial statements.
13. Other reserves
Movements in
other reserves are explained in Note 27 of the consolidated
financial statements.
14. Share-based payments
The Company
operates a share option scheme that is explained in Note 15 of the
consolidated financial statements. The Company operates the share
option scheme within the Group, therefore, the details provided in
Note 15 are also applicable to the Company.
15. Employee information
Employee
benefit expenses (including Directors) comprise
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Wages and salaries
|
10.8
|
8.3
|
Defined contribution pension
costs
|
1.0
|
0.8
|
Benefits (healthcare and life
assurance)
|
0.3
|
0.3
|
Recruitment costs
|
0.2
|
0.2
|
Social security contributions and
similar taxes
|
1.4
|
1.2
|
General employee and
employee related expenses
|
13.7
|
10.8
|
Share-based payment expense arising
from Company share option scheme
|
4.8
|
4.4
|
Total employee
benefit expenses
|
18.5
|
15.2
|
The monthly
average number of persons (including Executive and Non-Executive
Directors) employed by the Company during the year was:
|
Year ended
31 March
2024
Number
|
Year ended
31 March
2023
Number
|
Executive Directors
|
3
|
3
|
Non-Executive Directors
|
4
|
5
|
Investment
|
22
|
22
|
Infrastructure
|
24
|
26
|
Total
|
53
|
56
|
Infrastructure comprises finance, marketing, human resources,
legal, IT, ESG, investor relations and administration.
At 31 March
2024, there were five Non-Executive Directors (31 March 2023:
five). See Nomination Committee report for further details of
changes in the year.
16. Deferred tax
Deferred tax is
calculated in full on temporary differences under the balance sheet
liability method using the tax rate expected to apply when the
temporary differences reverse. See breakdown below:
|
31 March 2024
£m
|
31 March
2023
£m
|
Arising on the investment
portfolio
|
(9.8)
|
(20.9)
|
Arising on share-based
payments
|
(1.6)
|
(1.0)
|
Other timing differences
|
(0.1)
|
(0.3)
|
Deferred tax
liability
|
(11.5)
|
(22.2)
|
At the end of the
period
|
(11.5)
|
(22.2)
|
17. Subsidiary
undertakings
The Company
has a number of subsidiary undertakings. For a breakdown of the
subsidiaries and related undertakings of the Group, of which Molten
Ventures plc is the ultimate parent entity, see Note 4(b) and Note
18 of the consolidated financial statements. See below the list of
direct subsidiaries of Molten Ventures plc.
Name of subsidiary
undertaking
|
Activity
|
Holding
|
Registered
office
|
Esprit Capital Partners LLP
|
AIFM to the Company and Esprit
Funds
|
100%
|
20 Garrick Street, London
WC2E 9BT United Kingdom
|
Molten Ventures (Nominee)
Limited1
|
Nominee company
|
100%
|
20 Garrick Street, London
WC2E 9BT United Kingdom
|
Elderstreet Holdings
Limited2
|
Intermediate holding company
|
100%
|
20 Garrick Street, London
WC2E 9BT United Kingdom
|
Molten Ventures (Ireland)
Limited
|
Investment entity
|
100%
|
32 Molesworth Street,
Dublin 2, Ireland
|
Esprit Investments (1) (B)
LP
|
Limited Partnership pursuant to which
the Company and Molten Ventures FoF I LP hold Fund of Fund
investments
|
100%
|
20 Garrick Street, London
WC2E 9BT United Kingdom
|
Esprit Investments (2) (B)
LP3
|
Limited Partnership pursuant to which
the Company and Molten Ventures FoF I LP hold Fund of Fund
investments
|
100%
|
20 Garrick Street, London
WC2E 9BT United Kingdom
|
Grow Trustees Limited
|
Trustee of the Group’s employment
benefit trust
|
100%
|
20 Garrick Street, London
WC2E 9BT United Kingdom
|
Molten Ventures Advisors Ltd
|
Investment Advisor to the Growth
Fund
|
100%
|
20 Garrick Street, London
WC2E 9BT United Kingdom
|
Molten Ventures Holdings
Limited
|
Intermediate Company and Qualifying
Asset Holding Company (“QAHC”)
|
100%
|
20 Garrick Street, London
WC2E 9BT United Kingdom
|
Esprit Investments (2)(B)(i)
LP
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
20 Garrick Street, London
WC2E 9BT United Kingdom
|
Esprit Investments (2)(B)(ii)
LP
|
Limited Partnership pursuant to which
the Group makes certain investments
|
100%
|
20 Garrick Street, London
WC2E 9BT United Kingdom
|
Forward Partners Group
Limited
|
Limited Partner to the Forward
Funds
|
100%
|
20 Garrick Street, London
WC2E 9BT United Kingdom
|
1 Molten
Ventures (Nominee) Limited is held at cost £Nil (2023: £Nil) on the
Company’s balance sheet.
2 The
remaining interest in Elderstreet Holdings Limited, holding company
of Elderstreet Investments Limited, was purchased by Molten
Ventures plc on 9 February 2021.
For further details,
see Note 18 of the FY21 consolidated financial
statements.
3 A
minority holding in Esprit Investments (1) (B) LP & Esprit
Investments (2) (B) LP was sold within the financial year ended 31
March 2023 to internal and external parties.
The
investments are held through the investment companies as set out in
Note 30 in the consolidated financial statements at their
respective net asset values, and as such, are all noted to be Level
3 for FY24 and FY23. The difference between investments disclosed
in Note 30 of the consolidated financial statements and the Company
investments relate to interests in unvested carried interest held
by subsidiaries of Molten Ventures plc, which are included in the
consolidated financial statements at FVTPL but are not included in
the Company financial statements. Unvested carried interest is
carried interest, which is yet to vest, but would be due on
realisation of assets based on measurement date fair values of
investments. See table below for a reconciliation to the investment
figure in Note 30 of the consolidated financial statements and the
investments figure on the Company statement of financial
position.
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Molten Ventures plc investments held at
fair value through profit or loss
|
1,288.5
|
1,271.5
|
Fair value of investments held in other
Group entities*
|
3.6
|
5.5
|
Total
|
1,292.1
|
1,277.0
|
1 *Refers
to the fair value of investments not held by Molten Ventures plc
but included within the Consolidated Statement of Financial
Position.
The Company
holds investments at FVTPL. Refer to Note 30 for the Group’s
policies with respect to fair value measurements and Note 2 of the
Company financial statements.
18. Financial instruments
risk
In the normal
course of business, the Company uses certain financial instruments
including cash, trade and other receivables and investments. The
Company is exposed to a number of risks through the performance of
its normal operations. Refer to Note 31 of the consolidated
financial statements.
19. Related party
transactions
Key management personnel
compensation
Key
management personnel are those persons having authority and
responsibility for planning, directing and controlling the
activities of the Company, and are considered to be the Directors
of the Company listed on pages 70 to 71 of the Annual
Report.
|
Year ended
31 March
2024
£m
|
Year ended
31 March
2023
£m
|
Wages and salaries
|
2.4
|
2.1
|
Defined contribution pension
costs
|
0.2
|
0.2
|
Social security contributions and
similar taxes
|
0.3
|
0.3
|
Carried interest paid
|
0.6
|
1.2
|
Total
|
3.5
|
3.8
|
The details
of individual Directors’ remuneration and pension benefits, as set
out in the tables contained in the Directors’ Remuneration Report
on page 90 of the Annual Report, form part of these financial
statements.
Other related party
transactions
Please refer
to Note 32 in the consolidated financial statements for further
details on related party transactions. In addition to the
transactions referenced in Note 32, the below transactions
eliminate on consolidation but are relevant for the
Company:
As at 31
March 2024, Molten Ventures plc has a receivable relating to an
intercompany loan with Grow Trustees Limited relating to the
purchase of own shares for the benefit of the Molten Ventures
Employee Benefit Trust of £9.5 million (31 March 2023: £9.5
million).
During the
year, £1.8 million (year ended 31 March 2023: £2.0 million) was
invoiced from Molten Ventures plc to Encore Ventures LLP for
overheads, including use of office space at 20 Garrick Street,
staff, and fixed assets. At year-end a balance , Molten Ventures
plc owed £0.1 million (31 March 2023: due £0.2 million). Encore
Ventures LLP is a subsidiary of Molten Ventures plc and has a
management contract with the EIS funds.
During the
year, the Company invoiced Elderstreet Investments Limited,
previously an associate and now a subsidiary, £0.4 million (year to
31 March 2023: £0.4 million), with a balance outstanding at
year-end of £Nil (31 March 2023: £Nil) for overheads, including use
of office space at 20 Garrick Street, staff, and fixed
assets.
During the
year, the Company transferred certain fund of fund investments
totalling £nil (31 March 2023: £26.2m) from Esprit Investments 1(B)
LP and Esprit Investments 2(B) LP to a newly formed entity, Molten
Ventures FoF I LP as part of a strategy for the syndication of Fund
of Funds.
20. Subsequent events
Please refer
to Note 37 of the consolidated financial statements.
Annual Report and
Accounts
The Company’s Annual Report and Accounts for the year ended
31 March 2024, in both PDF and structured electronic formats, will
also be available to download from the Company’s website at
https://investors.moltenventures.com/investor-relations/plc/reports
The Company has also submitted its Annual Report and Accounts
to the UK National Storage Mechanism (available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism) and
Euronext Dublin (available for inspection at
https://direct.euronext.com/#/oamfiling).
This announcement constitutes the material required by DTR
6.3.5 to be communicated in unedited full text through a Regulatory
Information Service.
Status of announcement
2023 Financial Information: The figures and financial
information for 2023 are extracted from the published Annual Report
and Accounts for the year ended 31 March 2023 and do not constitute
the statutory accounts for that year. The 2023 Annual Report and
Accounts have been delivered to the Registrar of Companies and
included the Report of the Independent Auditors which was
unqualified and did not contain a statement under either section
498(2) or section 498(3) of the Companies Act 2006.
2024 Financial Information: The figures and financial
information for 2024 are extracted from the Annual Report and
Accounts for the year ended 31 March 2024 and do not constitute the
statutory accounts for the year. The 2024 Annual Report and
Accounts include the Report of the Independent Auditors which is
unqualified and does not contain a statement under either section
498(2) or section 498(3) of the Companies Act 2006. The 2024 Annual
Report and Accounts will be delivered to the Registrar of Companies
in due course.
Neither the contents of the Company's website nor the
contents of any website accessible from hyperlinks on the Company's
website (or any other website) is incorporated into, or forms part
of, this announcement.