TIDMGROW
RNS Number : 1234H
Draper Esprit PLC
23 March 2020
Draper Esprit plc
("Draper Esprit", "the Group" or the "Company")
COVID-19 UPDATE
Draper Esprit (LSE: GROW, Euronext Growth: GRW), a leading
venture capital firm investing in and developing high growth
digital technology businesses, today provides an update on the
impact of the COVID-19 virus on the business and the measures the
Group is taking.
In this rapidly evolving environment, we have been quick to take
the necessary measures to safeguard our employees, our investments
and the liquidity of the Company. More detail is provided below on
the measures taken to date to protect our employees, support our
portfolio companies and undertake the detailed reviews of the
potential cash requirements of our investments across quarterly
timeframes. We are remaining close to our portfolio companies to
assimilate the available information as the specific market
implications and the impacts of the global Governmental support
become clearer. We remain well financed with cash resources to
provide support where necessary.
Keeping our team safe
The Group's primary concern is ensuring the ongoing safety of
its employees and their families. Management started to closely
track events in China at the turn of the year when news of COVID-19
first emerged and moved quickly to put in place robust measures to
protect staff via travel and face to face meeting restrictions,
flexible working plans and remote working where possible. Our
broader team includes the management of the portfolio companies who
have also acted swiftly to protect their people.
We continue to follow all protocols and guidance being given by
Public Health England and, given the nature of our business and our
role in the technology sector, we believe that Draper Esprit is
better placed than most to utilise technology in order to mitigate
the impact of social distancing on our team's day to day
operations.
Supporting our portfolio companies
We have increased our dialogue with our portfolio companies and
continue to provide them with operational support and advice,
particularly in relation to accessing various elements of the
Government's financial assistance packages.
We are actively modelling the potential impact of COVID-19 on
our portfolio and although we anticipate a period of trading
slowdown we remain very positive about the long term areas of
growth in the markets our companies address such as artificial
intelligence, cloud computing for remote working and digital
health. Many of our portfolio companies generate recurring revenues
and the geographic diversity of our portfolio, combined with the
broad cross section of areas in which they operate, means that we
are not overly exposed to any individual market or sector.
We have conducted an initial review of the financial robustness
of our portfolio in the current environment and we believe that
businesses amounting to up to approximately 80% of Draper Esprit's
NAV (including most of the core portfolio) have strong cash balance
sheets and/or the ability to adjust costs to trade through a crisis
lasting through 2020. Companies such as Graphcore, Revolut, N26,
Ravenpack, UI Path, Thought Machine, M-Files and Aiven have
collectively raised over $1.5 billion in the last year alone. We
believe this will allow these companies to continue to grow
further, develop their leading technology and prepare for the
recovery. We are working in conjunction with our numerous other
co-investors across the rest of the portfolio to provide support
for the businesses that are facing difficulty.
Only a small number of our portfolio companies (approx. 7% of
NAV) operate in industries which are more directly affected, such
as travel, leisure and hospitality, and we will work closely with
these companies to navigate this period of uncertainty.
A number of our portfolio companies are playing an increasingly
important role in the provision of online healthcare services,
communications systems and entertainment. These include:
-- Push Doctor, the leading online medical consultation
provider, is working with the NHS to deal with the rapid increase
in demand for video GP services;
-- Ieso Digital Health is offering increased services to
patients requiring remote mental health support and therapy
services;
-- Companies such as Aircall (provider of cloud based phone
system and call centre software), Conversocial (provider of social
customer service software) and M-Files (intelligent information
management platform) are seeing increased demand for their services
as a result of a larger number of employees working from home;
-- Kaptivo, which is also seeing increased demand from home
workers and academics for its whiteboard camera system which turns
whiteboards into smart, digital collaboration tools;
-- Mobile technology company Peak Games is experiencing
continued demand for its mobile games and apps.
Strong balance sheet
The Group reported a Gross Portfolio Value of GBP683 million as
at 30 September 2019 and has a debt facility of GBP50 million, of
which GBP45 million is currently drawn with GBP36 million
undeployed. As such the Group has available cash resources of GBP36
million at the plc and GBP40 million within our EIS/VCT funds. The
efforts of the Draper Esprit team are focused on helping our
smaller emerging portfolio companies and we believe we have
sufficient funds to support them. Our investments are supported by
strong syndicates of investors and we will be working with our
portfolio companies to access additional capital should that be
required.
Martin Davis, Chief Executive Officer of Draper Esprit,
commented:
"The ongoing spread of the COVID-19 virus is, first and
foremost, a public health crisis but the impact on the economy and
businesses will clearly also be very significant.
We have taken early steps to prudently manage our business and
remain well financed. Many of our portfolio companies generate
recurring revenues and the geographic diversity of our portfolio,
combined with the broad cross section of areas in which they
operate, means that we are not overly exposed to any individual
market or sector and we remain very positive about the long term
areas of growth in the markets our companies address such as
artificial intelligence, cloud computing for remote working and
digital health.
We are immensely proud to support a number of businesses who are
providing their customers with vital products and services during
this intensely challenging period and stand ready to support
existing portfolio companies should they require additional
financial support in the near term.
As an investor in high growth technology businesses we are
acutely aware of the positive role that technology can play in
helping the world to recover from this crisis and remain committed
to playing a key role in funding and supporting Europe's brightest
technology businesses."
-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
Richard Thomas
Jamie Loughborough +44 (0)20 7260 1000
Goodbody Stockbrokers UC
Euronext Growth Adviser & Joint Broker
Don Harrington
Charlotte Craigie +44 (0) 20 3841
Dearbhla Gallagher 6202
Powerscourt
Public Relations
James White
Elly Williamson
Jessica Hodgson +44 (0)20 7250 1446
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