TIDMGROW
RNS Number : 1383O
Draper Esprit PLC
28 May 2020
Draper Esprit plc
("Draper Esprit", "the Group" or the "Company")
Full year trading update and notice of results
Draper Esprit (LSE: GROW, Euronext Growth: 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 2020, which are scheduled for release on 29
June 2020.
Highlights
-- Unaudited Gross Portfolio Value is expected to be not less
than GBP695m (30 September 2019 - GBP683m; 31 March 2019 -
GBP594m). The core portfolio accounts for approximately 70% of
this
-- NAV per share is expected to be not less than 550p (30
September 2019 - 574p; 31 March 2019 - 524p)
-- Investments since September 2019 amount to GBP48m, bringing
the total for the year to GBP90m. The core portfolio accounts for
GBP26m of investments since September 2019
-- Realisations since September 2019 amount to GBP17m, bringing
the total for the year to GBP40m
-- Gross Portfolio Fair Value movement increase of circa GBP55m
over the 12 month period but reflecting a net decline of circa
GBP15m since September 2019:
Ø Strong funding activity in portfolio through the period.
Funding rounds closed (some after the COVID-19 pandemic had
impacted on the economy) for portfolio companies including
Graphcore, Revolut, Aiven, Evonetix, Freetrade, Aircall and others
as yet unannounced. This has led to total revaluation gains of
circa GBP65m since September 2019
Ø These gains have been offset by revaluation adjustments
approaching GBP80m across the portfolio due to the impact of
COVID-19. The majority of these fair value adjustments have arisen
in companies in the earlier stage emerging portfolio and only 5 of
the 18 core portfolio companies impacted. An appropriately
stringent approach to valuation has been undertaken, as further
detailed below
-- Available cash resources at year-end of GBP34m and undrawn
debt facilities of GBP5m, further complemented by GBP50m from EIS
and VCT funds give the Group good liquidity against a backdrop of a
well-funded portfolio and a cautious approach to new opportunities
in the near term. The Board view the existing financial resources
as sufficient to support the portfolio and to appraise selective
new investments
-- Post year-end a further investment has been made into
cloud-based voice platform Aircall, an existing portfolio company,
which has raised a $65m Series C funding round at a valuation above
the September 2019 fair value. The round was led by DTCP with
participation from new investors Swisscom and Adam Street. Existing
investors including eFounders, Balderton Capital, and NextWorld
also participated in the round. This round brings the company's
total funding to date to over $100m
-- Draper Esprit announce today that Simon Cook is stepping down
from the Board from 1st July. Simon will remain with the Company
and focus on generating new deals for the Group. He will continue
to manage a portfolio of companies including Trustpilot, Ledger and
Freetrade, His new title will be Founding Partner
Impact of COVID-19 on portfolio and valuations
-- Prior to the pandemic, the Group was on track to achieve its
targeted annual 20% portfolio growth and, despite the current
market backdrop, has still delivered strong growth across the
business
-- A substantial majority of the portfolio is well positioned to
benefit from historic trends which have accelerated due to the
impact of COVID-19. Companies focused on secure cloud, automation,
online financial services and gaming/entertainment, digitalisation
are continuing to trade well with minimal disruption. Evidence from
public market activities, and funding rounds, indicates strong
demand for high quality companies in these areas
-- The Group reacted quickly to examine the impacts of COVID-19
on its portfolio companies and has taken steps to assist companies
where necessary including:
Ø Appraisal of valuation metrics has been adopted where
applicable to reflect the rapid shift in the economic
environment
Ø 42% of portfolio valuations are at last round valuations,
compared with 65% at 30 September 2019, with 58% of the portfolio
now valued with reference to comparable multiples
Ø Lower growth forecasts for 2020 and 2021 have been assumed for
companies impacted by COVID-19. The Group consistently applies
multiples lower than those prevailing for comparable quoted
companies to mitigate stock market volatility
Ø Year-end audit process is ongoing and therefore there may be
some further minor adjustments to this split
-- Relative to our pre-COVID-19 expectations which were in line
with our 20% portfolio growth target we have made provisions of
circa GBP99m across the portfolio, which is equivalent to a 21%
adjustment across 53% (by value post-amendment) of our portfolio.
Only around one third of these adjustments related to our 18 core
portfolio assets, reflecting the strong performance and positions
of these businesses even when viewed through a more stringent
valuation lens. The long-term potential of the portfolio remains
positive and we expect the value of the portfolio to grow post
COVID-19 particularly in light of the accelerated transition to
digital
-- The Executive Directors in Draper Esprit have elected to
defer 20% of their salaries for three months and will use these
deferred balances when paid to purchase Draper Esprit shares in the
market. In addition, the non-Executive Directors have elected to
defer any fee increases over the same period in line with the
Executive Directors
-- No Draper Esprit staff have been furloughed or made redundant
and the Company has not applied for any of the Government funding
schemes
Martin Davis, Chief Executive Officer, Draper Esprit,
commented:
"Over the medium term, we believe the recovery from the pandemic
will sharply accelerate the trends which Draper Esprit's portfolio
businesses focus on. Transformations such as secure cloud
infrastructure, remote financial services, online gaming and
entertainment, and digital health, all stand to benefit from the
societal shifts which the crisis has engendered. These dynamic
businesses are weathering the current environment well and we are
confident they will emerge stronger when economic activity
normalises.
"Draper Esprit's position as one of Europe's most active VCs,
and our long and deep understanding of the needs of this community,
put us in an excellent position to play a leading role in helping
innovative businesses of all sizes emerge stronger from this
crisis."
-ENDs-
Enquiries
Draper Esprit plc
Martin Davis (Chief Executive
Officer)
Ben Wilkinson (Chief Financial
Officer) +44 (0)20 7931 8800
Numis Securities
Nominated Adviser & Joint Broker
Simon Willis
Richard Thomas
Jamie Loughborough +44 (0)20 7260 1000
Goodbody Stockbrokers
Euronext Growth Adviser & Joint
Broker
Don Harrington
Charlotte Craigie
Dearbhla Gallagher +44 (0) 20 3841 6202
Powerscourt
Public relations
James White
Elly Williamson
Jessica Hodgson
Notes to editors +44 (0)20 7250 1446
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTSEMFWWESSEEI
(END) Dow Jones Newswires
May 28, 2020 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
