Molten Ventures Plc (GROW; GRW) Full year trading update and
notice of results 27-Apr-2023 / 07:00 GMT/BST
-----------------------------------------------------------------------------------------------------------------------
Molten Ventures plc
27 April 2023
Molten Ventures plc
("Molten Ventures", "Molten", or the "Company")
Full year trading update and notice of results
Signs of stabilisation in second half
Molten Ventures (LSE: GROW, Euronext Dublin: GRW), a leading
venture capital firm investing in and developing high-growth
digital technology businesses, today announces an update on its
portfolio and NAV (unaudited) ahead of its Final Results for the
year ended 31 March 2023, due to be announced on 15 June 2023.
Highlights:
-- Gross Portfolio Value ("GPV") (unaudited) is expected to be
circa GBP1,370 million (31 March 2022: GBP1,532million).
-- Underlying Gross Portfolio decrease in fair value (unaudited)
is approximately 19% at constant currency,reflecting stabilisation
in markets during the second half (first half: 17% decrease at
constant currency, secondhalf: 2% decrease at constant currency).
Currency movements from the weaker USUSD partially reversed the FX
gains ofthe first half.
-- Core portfolio remains well funded, focused on capital
efficiency and continues to trade strongly, withvery limited
exceptions: in the calendar year to 31 December 2022,
value-weighted revenue growth in our Coreportfolio was 40%.
-- GBP138 million (year to 31 March 2022: GBP311 million)
invested from Molten's balance sheet for the yearended 31 March
2023, with a further GBP41 million from EIS and VCT
co-investment.
-- Realisations generated cash proceeds for Molten in the year
of GBP48 million (year to 31 March 2022: GBP126million), with
realisations exceeding new investments in the second half of the
year.
-- NAV per share (unaudited) is expected to be approximately
775p (31 March 2022: 929p).
Six Year to
months to
Six months to 30 % change to % change to 31 March % change to
September 2022 opening GPV 31 March opening GPV 2023 opening GPV
2023
GBP'million GBP'million GBP'million
Opening Gross Portfolio 1,532 1,450 1,532
Value
Investments 112 26 138
Realisations (13) (35) (48)
Movement in Foreign 83 5% (48) -3% 35 2%
Exchange (a)
Movement in Fair Value (264) -17% (23) -2% (287) -19%
(b)
Total Fair Value (181) -12% (71) -5% (252) -17%
Movements (a+b)
Closing Gross Portfolio 1,450 1,370 1,370
Value
Note: Core represents 62% of total portfolio value. Emerging
includes three publicly listed investment held at 31 March 2023
market prices. The Emerging portfolio also includes holdings
through the Molten fund of funds programme.
Fair value movements and portfolio performance:
-- Gross fair value reduction in the six-month period to 31
March 2023 of GBP23 million excluding FX. Fairvalue movement
reflects the net of GBP81 million increases offset by reductions of
GBP104 million. The reductionscomprise of GBP63 million to the
value of the Core, the majority across two assets, and GBP41
million to the value ofthe Emerging portfolio.
-- Portfolio companies continue to maintain strong revenue
growth momentum, demonstrating the underlyingresilience of these
businesses and the structural demand they are seeing for their
products across their respectiveend markets. Some specific
provisions have been reflected in two Core company valuations in
the six-month period to31 March 2023, but overall valuations are
broadly unchanged from 30 September 2022, when more significant
marketadjustments were made to reflect public market peer movements
over the prior six months.
-- The valuation approach continues to reflect the public market
peer movements. On average EnterpriseValues have reduced 37% in the
Core over the 12-month period, leading to a fair value reduction of
19%, beforecurrency movements. The lower fair value reduction
relative to the Enterprise Value movements reflects thepreference
share protection limiting the downside.
-- Company valuations continue to be supported by evidence from
external capital raises with a total of GBP1.0billion raised by
companies across 28 rounds in the portfolio during FY2023, of which
over 90% have been at higheror equivalent valuations.
-- Portfolio companies have adapted to the current environment
and undertaken cost-cutting measures as wellas prudently managing
their own balance sheets. The portfolio remains well funded with
over 80% of the Core havingmore than 18 months of cash runway
(including those that are profitable or funded to profitability and
based onexisting budgets and growth plans).
-- Revenues of the Core have grown at an average of 40% calendar
year 2021-22 with forecast growth of over65% for 2022-23.
-- Downside protection in 97% of investments with preferred
share classes which provide first call oninvested capital at
realisation.
Cash resources and investment cadence:
-- Molten balance sheet cash as at 31 March 2023 of GBP23
million, and a further GBP58 million available forinvestment in the
EIS/VCT funds. Undrawn RCF of up to GBP60 million provides further
funding flexibility subject tocertain drawing conditions.
-- Operating costs (net of fee income) expected to be well below
the targeted 1% of period-end NAV at 0.1%.
-- The Company anticipates the continued preservation of capital
in FY24 and based on current projectionsanticipates the funding
requirement within the portfolio will be in the region of GBP20
million.
Strategic and operational review
FY23 (year ending 31 March 2023) (unaudited)
Our focus for the year has been on adaptation and stabilisation
for our business and active management of the portfolio as we
rapidly adjusted to a new normal. The current landscape is one
where investors are more cautious and focused on how companies will
manage costs, lengthen runways, and offer a route to
profitability.
As we've said throughout the year, Molten has not been immune
from the market pressures, driven by rising inflation, rising
interest rates, and poor macroeconomic conditions, which have
impacted private and public technology companies.
However, we have responded quickly to the new environment and
our model, which is built on a consistent approach to valuations
and a diverse portfolio, has enabled Molten to demonstrate relative
resilience throughout the period. Our belief in the continuing
attractive opportunities represented by European technology
companies has been vindicated by the strong underlying business
performance and revenue growth of our portfolio companies taken as
a whole. Our active management approach has meant we've worked
closely with management teams to ensure they have the right people
in place and are focused on capital efficiency. We have also
continued to adapt to a market where the volume of trade sales and
IPOs remains low, and reduced our exposure to listed holdings
through the sale of our shares.
We continuously monitor and assess the portfolio against our
target returns criteria and the opportunity cost of invested
capital versus alternative uses of that capital for new investments
or further investment into existing portfolio companies. Discipline
around our investment process remains a focus, with capital
deployment for the year from the plc balance sheet at GBP138
million, reflecting a significant reduction in the second half of
the financial year to GBP26 million, with realisations of GBP35
million exceeding the amount deployed over that period.
In September, we announced our new debt facility, a Revolving
Credit Facility of up to GBP60 million and a GBP90 million Term
Loan, providing additional funding flexibility.
In FY23 we also continued to deliver on our strategy of growing
our third-party assets and income through our EIS and VCT
strategies and our Fund of Funds programme, enabling us to provide
access to high growth private assets for a range of co-investors.
This co-investment capital has ensured we remain active in the
market to invest in exciting new technology companies. This is an
increasingly important part of our business, and we expect this to
become a significant proportion of our overall deployment.
Focus for FY24 (year to 31 March 2024)
In the coming year, we expect to continue to build on our
progress in growing third party assets and income. This includes
our investments via our EIS and VCT strategies and our Fund of
Funds programme. We continue to believe that the best way to gain
exposure to the significant returns available to venture capital as
an asset class is through investment in a diversified portfolio
with risk triaged across different stages and technology
sub-sectors and astute investment teams with experience across the
cycle.
While significant macroeconomic headwinds and uncertainty
remains for technology businesses, we are increasingly optimistic
that markets have now begun to stabilise and that the relatively
low levels of fundraising and dealmaking experienced in FY23 will
not persist for the entirety of the next 12 months.
Our strategy, based on the deep levels of experience and
expertise in our investment team, our scalable and adaptable model,
and thesis-led investment approach, means we are well-positioned as
we transition into the next stage of the cycle.
Martin Davis, Chief Executive Officer of Molten Ventures,
commented:
"Our focus for the year has been on adaptation for our business
and active management of the portfolio. The strength of our model
and expertise of Molten's people has enabled us to do this,
providing relative resilience throughout a period of challenging
macroeconomic conditions.
"While economic uncertainties persist, we are beginning to see
signs of stabilisation. Molten is well positioned to manage through
a recovery and capitalise on any opportunities presented and in
doing so deliver for shareholders."
Notice of Full Year Results:
Molten Ventures announces that the Company's Final Results are
scheduled for release on 15 June 2023. Presentation and conference
call details will be confirmed in due course.
-ENDS -
Enquiries:
Molten Ventures plc
Martin Davis (Chief Executive Officer) +44 (0)20 7931 8800
Ben Wilkinson (Chief Financial Officer)
Numis Securities
Joint Financial Adviser and Corporate Broker
Simon Willis
Jamie Loughborough +44 (0)20 7260 1000
Havish Patel
Iqra Amin
Goodbody Stockbrokers
Joint Financial Adviser and Corporate Broker,
Euronext Dublin Sponsor
Don Harrington +44 (0) 20 3841 6202
Charlotte Craigie
Dearbhla Gallagher
Powerscourt
Public relations +44 (0)7970 246 725 /
Elly Williamson +44 (0)7713 246 126
Jane Glover
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 30 September 2022, Molten Ventures had a diverse portfolio
with shareholdings in 78 companies, 21 of which represent our Core
holdings and account for 64% of the Gross Portfolio Value. Our Core
companies include Thought Machine, Coachhub, Graphcore, Aiven and
Ledger. 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.
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 GBP970m capital
into fast growing tech companies and have realised over GBP450m to
30 September 2022.
-----------------------------------------------------------------------------------------------------------------------
Dissemination of a Regulatory Announcement, transmitted by EQS
Group. The issuer is solely responsible for the content of this
announcement.
-----------------------------------------------------------------------------------------------------------------------
ISIN: GB00BY7QYJ50
Category Code: TST
TIDM: GROW; GRW
LEI Code: 213800IPCR3SAYJWSW10
OAM Categories: 3.1. Additional regulated information required to be disclosed under the laws of a Member State
Sequence No.: 239834
EQS News ID: 1618311
End of Announcement EQS News Service
=------------------------------------------------------------------------------------
Image link:
https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=show_t_gif&application_id=1618311&application_name=news
(END) Dow Jones Newswires
April 27, 2023 02:00 ET (06:00 GMT)
Molten Ventures (LSE:GROW)
Historical Stock Chart
From Apr 2024 to May 2024
Molten Ventures (LSE:GROW)
Historical Stock Chart
From May 2023 to May 2024