TIDMGROW
RNS Number : 5604O
Molten Ventures PLC
13 June 2022
13 June 2022
Molten Ventures Plc
("Molten Ventures", "Molten", "the Group" or the "Company")
FINAL RESULTS FOR THE YEARED 31 MARCH 2022
Molten Ventures (LSE: GROW, Euronext Dublin: GRW), a leading
venture capital firm investing in and developing high growth
digital technology businesses, today announces its final results
for the year ended 31 March 2022.
Financial highlights
-- GBP1,532m Gross Portfolio Value (31 March 2021: GBP984m)
-- 37% Gross Portfolio fair value growth (31 March 2021: 51%)
-- GBP311m Cash invested in the year, and a further GBP45m from
EIS/VCT funds (year to 31 March 2021: GBP128m from plc and GBP34m
from EIS/VCT funds)
-- 937p NAV per share (31 March 2021: 743p)
-- GBP78m plc cash (including restricted cash) (31 March 2021: GBP161m plc cash)
-- GBP301m Profit after tax (year to 31 March 2021: GBP267m)
-- GBP126m Cash proceeds from realisations (year to 31 March 2021: GBP206m)
-- GBP108m Net funds raised during the year (31 March 2021: GBP107m)
-- <1% Operating costs (net of fee income) continue to be
substantially less than the targeted 1% of year-end NAV
-- GBP1,434m Net Assets (31 March 2021: GBP1,033m)
The above figures contain alternative performance measures
("APMs") - see Note 33 for reconciliation of APMs to IFRS
measures.
Operational highlights
-- Cash investments of GBP311m during the year from the Molten
Ventures balance sheet (year to 31 March 2021: GBP128m), with a
further GBP45m from EIS/VCT funds (year to 31 March 2021: GBP34m).
This increased cadence is attributable to a higher level of
follow-on opportunities in the existing portfolio, consistently
leading rounds in new primary investment opportunities and the
continued expansion of our scalable platform
-- Committed to 22 new seed funds via our Fund of Funds
programme bringing the overall seed portfolio to 57 funds
-- Cash proceeds of GBP126m received during the year (year to 31
March 2021 GBP206m). These were predominantly generated by the sale
of shares held in publicly-listed Trustpilot and UiPath, exits from
SportPursuit, Premfina, Conversocial and Bright Computing, as well
as amounts being released from escrow relating to previously
announced disposals
-- Completed successful move to the Premium Segment of the
Official List and to trading on the London Stock Exchange's Main
Market as well as to the secondary listing segment of the Official
List of Euronext Dublin and to trading on the regulated market of
Euronext Dublin
-- Unveiled a new name, Molten Ventures, and a new motto "Make
More Possible". The new brand reflects our ongoing transformation:
our increased investment cadence and expanding team
-- Continued to progress our ESG roadmap, including being
awarded the Diversity VC Standard Level 1 certification, becoming a
signatory of the Investing in Women Code, establishing an ESG
Committee of the Board (in addition to the ESG Working Group),
completing our first year of TCFD reporting, approval of our Board
Diversity and Inclusion Policy, Investment Team ESG training, and
engaging with the portfolio on their own ESG activities
Post period-end highlights
-- Deployed GBP73.7 million into new and existing portfolio
companies, including our announced deal in HiveMQ
-- Announced the funding rounds of Thought Machine and Aiven
(Aiven is held via our partnership in Earlybird)
-- At 31 March 2022, we held interests in three listed companies
- Trustpilot, UiPath, and Cazoo. Their valuations are based on
their quoted share price on 31 March 2022. Their value using the
closing quoted share price on 8 June 2022 was GBP43.9 million
Martin Davis, Chief Executive Officer of Molten Ventures,
commented:
"This year, we made huge progress across the business from both
an operational and financial perspective. In addition to producing
strong full year results, we successfully moved to the main market
of the London Stock Exchange and the official list of Euronext
Dublin, subsequently entered the FTSE 250 and underwent a complete
rebrand to Molten Ventures.
"Our job is not only to identify the best opportunities but to
do everything we can to support the growth of the companies in our
portfolio, and ensure they have all the tools they need to realise
their full potential. Molten is better positioned than ever to take
advantage of investing in these sought-after assets right the way
through their lifecycle from seed to exit.
"Despite recent volatility in world markets caused in part by
the tragic events in Ukraine, VC remains resilient, and the
European technology market continues to be an area of growth. We
have successfully navigated several market cycles and our adaptable
and scalable business model, combined with the significant progress
made this year, puts us in an advantaged position within the
current market context.
-S-
Enquiries:
Molten Ventures plc
Martin Davis (Chief Executive Officer)
Ben Wilkinson (Chief Financial Officer) +44 (0)20 7931 8800
Numis Securities
Joint Financial Adviser and Corporate
Broker
Simon Willis
Jamie Loughborough
Havish Patel +44 (0)20 7260 1000
Goodbody Stockbrokers
Joint Financial Adviser and Corporate
Broker,
Euronext Dublin Sponsor
Don Harrington
Charlotte Craigie
Linda Clarke +44 (0) 20 3841 6202
Powerscourt
Public relations
Robin O'Kelly
Jane Glover +44 (0)20 7250 1446
About Molten Ventures
Molten Ventures is one of the most active venture capital firms
in Europe, developing and investing in disruptive, high growth
technology companies. We believe it is our role to support the
visionary entrepreneurs who will invent the future. We fuel their
growth with our "energy" in the form of long-term capital, access
to international networks and decades of experience building
businesses.
As at 31 March 2022, Molten Ventures had a diverse portfolio
with shareholdings in 69 companies, 21 of which represent our core
holdings and account for 68% of the total portfolio value. Our core
companies include Graphcore, Ledger, Revolut, Aiven, and CoachHub.
We invest across four sectors: Consumer Technology, Enterprise
Technology, Hardware and Deeptech, 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 GBP865m capital
into fast growing tech companies and have realised over GBP439m to
31 March 2022.
For more information, go to https://www.moltenventures.com/
Chair's introduction
FY22 has been a busy year for us - we began it as Draper Esprit,
listed on AIM and Euronext Growth, and ended it as Molten Ventures,
a FTSE 250 and Euronext Dublin company. The successful rebranding
and step up to a Main Market listing reflect the considerable
progress we have made since our AIM listing in 2016 in maturing and
growing the business in pursuit of our commitment to investing in
Europe's best entrepreneurs and seed funds.
This transformation continued in FY22 amidst a volatile external
environment. It saw the end of many national lockdowns and the
beginning of a post-pandemic 'new normal', followed by the invasion
of Ukraine and a resulting fall in stock markets across the world.
Despite these factors, overall FY22 was a period of strong
performance and significant investment opportunity for the Molten
team.
I would like to offer my thanks to Grahame Cook, our Senior
Independent Director, who stepped up to assume the responsibility
of temporary Chair during a short period earlier in the year when I
was indisposed due to illness.
I am very impressed by the team at Molten, who have managed
these challenging times with professionalism and consistency. They
have invested in some of the best companies in the market, while
maintaining a high level of investment discipline and rigour. Our
people remain the most important part of our business. The
considerable work which we have undertaken in recent years to
create an agile, scalable and resilient platform provides a sound
base for our continued delivery of value to our Shareholders.
Once again, we exceeded our stated gross fair value growth
target in FY22 and are actively invested in a diverse portfolio of
high-growth technology businesses, all of which have their own
ambitions to harness the power of technology to invent a better
future.
FY22 has also been a positive year for realising investments,
where Molten's role has come to a natural conclusion, including the
sale of Bright Computing and SportPursuit, which were sold to new
owners. Cazoo and UiPath were listed on leading Stock Exchanges
during the year, following TrustPilot's listing in the previous
financial year. These are, in some cases, decade-long partnerships
and we are happy to have been able to support these entrepreneurs
and companies in a key stage of their development.
At Molten, we are also proud to be playing a significant part in
society's mission to achieve a sustainable future for coming
generations. As well as our own internal ESG initiatives, we are
committed to working with our entrepreneurs to support them with
their own ESG programmes. We are active board members, and we know
that as investors we have a responsibility to help build companies
which are successful in growing value but also sustainable in the
long term. ESG is increasingly embedded into every part of our
business, including within our investment criteria, our initiative
into climate tech investing, our subscription to the UK Corporate
Governance Code, as well as through our remuneration structure.
Finally, I am pleased to welcome Gervaise Slowey, Non-Executive
Director and Chair of our newly formed ESG Committee, and Sarah
Gentleman, Non-Executive Director and Chair of Molten's
Remuneration Committee, who joined the Board in July and September
2021 respectively. They bring with them decades of experience in
strategy, general management and governance.
Karen Slatford
CEO's statement
Overview
This year, we made strong progress across the business from both
an operational and financial perspective. I am pleased to report
that, through the efforts we have taken to grow and mature our
model, we have advanced our strategic ambition of making Molten the
leader of a new generation of technology VCs.
FY22 saw continued strong momentum in deal activity, with
increased capital deployment across our four investment pillars,
above the previous annual investment cadence, reflecting a period
of strong opportunities. We were also able to achieve gross fair
value growth significantly above our targeted 20% through the
cycle, reflecting the strong performance of our portfolio and the
disciplined approach of our Investment Team. In June 2021 we raised
GBP107.7 million by way of a placing (net proceeds) and since then
we have set about deploying that capital to take advantage of the
growing European venture capital market and the continued shift
towards technology and digitalisation.
Our business model is adaptable across investment cycles and
continues to scale, including through the expansion of the Fund of
Funds programme, and the identification of new deployment
strategies and sources of capital and fee income. Our team, which
has been augmented through the year, brings together a diverse
group of leading investment decision-makers, supporting the
effective delivery of our strategy. Plans for our growth fund are
on track, which will target Series B+ deal flow, syndicating
third-party funds alongside our own, to provide a greater ability
to consistently lead growth-stage deals, and secure greater
influence and allocation. The additional fees generated from the
growth fund are anticipated to provide a positive contribution to
our cost base and profitability.
In July 2021, we completed the successful move to a Premium
listing on the London Stock Exchange's Main Market and a secondary
listing on Euronext Dublin. The move was motivated by the growth
and maturity of the business and what we believe to be the most
appropriate platform for the Company's future development.
In November 2021, we announced our name change from Draper
Esprit plc to Molten Ventures plc. This rebrand reflects the
Company's transformation in recent years, accelerated growth, as
well as a recognition of Molten's unique role in the
democratisation of venture capital. We also announced our new
motto, "Make More Possible", which reflects Molten's contribution
as a listed venture capital firm to identify and fully support the
vision of some of Europe's most successful companies and, in doing
so, deliver value for our Shareholders.
Financial performance
We are pleased with our strong financial performance across all
our key measures: fair value growth, cash realisations, investments
made and available capital resources.
The gross fair value growth achieved during the year of 37%
(FY21: 51%) was principally achieved by our Core Companies,
reflecting growth in the investments made in previous financial
years, both through financing rounds at higher valuations and
revenue growth, offsetting the fall in valuation of our publicly
listed companies at 31 March 2022.
Due to the steps taken to transform the Company, including our
move to the Main Market, our investment in strengthening the team
and creating a more scalable platform, our costs during the year
increased. These costs were offset by increased fee income and
remain well within our target of less than one percent of net asset
value.
Increased capital deployment
Capital deployed during the year was GBP311.2 million (compared
to GBP128.0 million in FY21), as a result of an acceleration of
rounds for some of our existing companies, high-quality new
investments, taking lead positions in rounds and larger stake
sizes. This has been underpinned by our thesis-driven approach, the
deep networks of our Partnership Team and our increased scale,
which we have been able to leverage to consistently lead funding
rounds and support our portfolio companies. Quality remained a
consistent focus and we continued to invest capital wisely and
remain disciplined around the quality and number of deals in which
we chose to participate.
We have participated in new deals and follow-on rounds in
sub-sectors we feel are poised for strong growth, including climate
tech, marketplaces, artificial intelligence and machine learning,
low code/no code and cloud-native technologies, including Thought
Machine, Gardin, Mostly AI, CausaLens, Form3, CoachHub, Aircall,
Ledger, Lyst, Cervest and FintechOS.
Realisations & IPOs
Realisations are an important part of our business and cash
proceeds from realisations during the year remained strong at
GBP126.3 million (FY21: GBP206.3 million). The recycling of capital
allows us to reinvest further in the portfolio as part of our
evergreen model. Our portfolio is a blend of mature core portfolio
companies and the emerging portfolio, which includes some of the
future's best businesses.
Cash proceeds during the year delivered a return on opening
Gross Portfolio Value ("GPV") of 13%, within our stated 10-15%
return on GPV target across the cycle. Exits were mainly from
mature companies, including Bright Computing and SportPursuit, as
well as share sales in TrustPilot and UiPath. Historically the
majority of our realisations have been through trade sales, while
in the past year the balance shifted as a result of the strong IPO
market of 2021.
In addition to Trustpilot in FY21, two of our companies, UiPath
and Cazoo, have gone public during FY22. We have received cash
proceeds in the year from UiPath of GBP49.8 million and GBP23.2
million from TrustPilot following proceeds received of
GBP5.3million and GBP75.5 million in FY21 respectively.
Broader market environment
Despite the recent volatility in global equities reflected
through high inflation and interest rates, venture capital as an
asset class shows signs of resilience.
Public and private markets are closely linked, but they
nevertheless operate differently. This lack of correlation can be
explained by the contrasting funding cycles and valuation periods.
Global events will have an impact on both public and private
markets, and while often with a lagged effect, we are seeing some
impact of this in private markets, particularly at the later
growth/pre-IPO stages.
What is fundamental is the commercial traction of the portfolio
companies and their ability to navigate shifting market
environments. With technology underpinning growth and efficiency in
so many industries, we see this demand continuing. We are an active
manager, providing support and oversight, allowing us to work with
our portfolio companies to plan and reorganise to attune to changes
in the market as they emerge.
The markets of the last couple of years have seen capital from
new entrants; the effect of any downward shift in the market is
that this capital will be displaced. A feature of venture capital
is understanding how to operate through cycles in what is a
long-term asset class. We will continue to access quality deals in
tighter macro conditions and position our portfolio to grow in
environments where capital is more selective in subsequent
investment rounds. We know that in any market, quality deals will
still be highly competitive, and reputation and experience matter
greatly. We have successfully navigated several market cycles and
our robust but stable platform allows us the flexibility to
continue to do so. For these reasons, we believe that Molten is
well positioned to navigate the current uncertainty and capitalise
on any opportunities presented.
Sustainability
"Make More Possible" is not just about capital investment, it is
also about the positive transformation that Molten can drive
through its actions. I am pleased to report a continued focus on
ESG during the year, something which is not only important to
Molten in our own operations, but is embedded into our investment
activities, both through our ESG-focused investment criteria and
our push into investing in climate tech companies (see more on our
climate tech thesis and investments on pages 22-23).
We are gaining recognition for our efforts, tying first place as
a Top Performer in the ITPEnergised and Orbis Advisory ESG
Transparency Index in February 2022 for embracing ESG integration
into our operations, positioning the company at the forefront of
ESG for the VC industry.
Our ESG activities during the year involved engagement with both
Molten staff and our portfolio, including hosting our first ESG
portfolio engagement session (with more to come) and sharing our
ESG Framework with the portfolio companies, delivering externally
led training to the investment team on the topic of ESG within the
investment process, as well as continuing to progress with our
climate-related work, including kicking off our Task Force on
Climate-Related Financial Disclosures ("TCFD") project, which we
are undertaking voluntarily.
We have spent considerable time focusing on Diversity, Equity,
and Inclusion ("DEI"), achieving the launch of our Board D&I
Policy (inclusive of targets for adjusted board composition in line
with the Hampton-Alexander Review and Parker Review
recommendations), our Group-wide DEI & Equal Opportunities
Policy, and the roll out of our DEI recruitment policy.
We will continue to progress our ESG roadmap into FY23 by
reporting to the CDP Climate Change questionnaire for the first
time, and through the development of a Climate Change Policy which
will capture our carbon reduction strategy and path to net
zero.
Our ESG-related KPIs, indexed to 10% of annual bonus entitlement
for all Molten employees (including Executive Directors), can be
found on page 51 of the Annual Report for the year ending 31 March
2022.
We recognise ESG is a journey, and we are pleased to be making
good progress, but there is still work to be done and we look
forward to providing further updates in the year ahead.
People
As a group, for more than a decade we have been bringing
together experienced investors with companies that will invent the
future. This year we have continued to grow with 14 new hires into
the Company, including 6 additions to the Investment Team,
bolstering both our partnership and platform offerings. We also
welcomed two new members to our Board, Gervaise Slowey and Sarah
Gentleman.
We believe that bringing together different experiences,
opinions and perspectives is the key to building long-term success
in venture capital.
Outlook
Looking forward to the next 12 months, there is clearly a great
deal of uncertainty with the current geopolitical and macroeconomic
factors unlikely to change significantly over the next 6-9 months.
The other main driver restricting growth, the pandemic, appears to
continue to retreat within developed markets and is likely to have
a lesser impact on our business moving forward. However, continued
COVID-19 restrictions in China and future variants are likely to
impact supply chains and drag consumer sentiment and investor
confidence for at least the remainder of the current financial
year.
We remain confident that the technological advances we have seen
over the past 3-5 years will continue to transform the way we live,
work, build and deliver products and services. In addition, many of
our portfolio companies are delivering solutions that provide
greater efficiencies and customer engagement/ROI that will be
crucial for businesses as they respond to the new economic reality.
We also believe that technology can provide the foundations for how
we use data, manage our environment and provide our food and energy
requirements for future generations. Our disciplined thesis-driven
investment approach does not change, despite our constant evolving
view of the likely winners in these markets.
We have built a platform that has flexibility and adaptability
at its core. Accordingly, we anticipate little change to our
fundamental investment approach: indeed history tells us that
tomorrow's winners will typically be created and funded during
periods of uncertainty.
The environment in which we will have to operate during the
current year dictates that in order to maximise the flexibility
within our model, we must make some small shifts in emphasis to
ensure we continue to preserve capital, deliver shareholder value
and position ourselves for the future. We anticipate a slowing of
investment, especially as the core portfolio remains well funded,
thus the opportunities for follow-ons are less, and therefore I
expect a level of annual deployment in the region of GBP150.0
million.
Our privileged market positioning enables us to provide access
to high growth private assets for a range of co-investors. We
already manage c.GBP400m for investors via our EIS and VCT
strategies which we expect to grow significantly in the next FY.
Our Growth Fund and Fund of Funds are areas where we expect to
welcome new co-investors over the next FY. Two sectors where we see
great potential over the next 3-5 years are climate technology and
in the emerging technology ecosystems in Eastern Europe. We have
specialists with expertise in these areas and expect to build third
party funds to help grow these important sectors over the next 24
months.
We believe that Molten, with our stable team with deep levels of
experience and expertise, scalable and adaptable model, cash
resources, active approach to portfolio management and thesis-led
investment approach, can continue to deliver in the current market.
The current level of volatility makes it challenging to give a
meaningful forecast of portfolio fair value growth for the current
financial year, but we remain confident in the strength of our
portfolio and of our model which has proven its ability to meet or
exceed our targets of 10% of NAV in cash realisations and an annual
fair value growth of 20% across the cycle.
Martin Davis
Chief Executive Officer
Portfolio review
Our increased investment cadence has allowed us to continue to
take advantage of high-quality opportunities and back our existing
portfolio through their cycle. Whilst we have increased deployment
this year, we have also maintained focus on the quality of our
investment process and balanced this uplift through
realisations.
Investments made during the year of GBP311.2 million include
GBP111.7 million of investments into new companies and GBP130.3
million of follow-ons into our existing portfolio. Our higher
levels of deployment have enabled us to invest in new companies,
lead more rounds and take larger stakes.
Cash proceeds were GBP126.3 million, including proceeds from
partially selling down shares held in publicly-listed Trustpilot
and UiPath, as well as from the full realisations of SportPursuit,
Premfina, Conversocial, and Bright Computing, and escrow receipts
relating to previously announced disposals and distributions from
Fund of Funds interests.
Our portfolio continues to comprise of a balance of mature core
companies and emerging businesses.
Portfolio valuations
The Gross Portfolio Value as at 31 March 2022 is GBP1,531.5
million, an uplift of GBP547.7 million to the 31 March 2021 value
of GBP983.8 million. The fair value increase for the year ending 31
March 2022 is GBP362.8 million, of which GBP15.9 million results
from the impact of foreign currency movements on the portfolio. The
largest contributors to the unrealised fair value gains are Revolut
(GBP75.9 million), Thought Machine (GBP65.1 million), Aiven
(GBP59.8 million) and CoachHub (GBP58.6 million).
At 31 March 2022, we held interests in three listed companies -
Trustpilot, UiPath, and Cazoo. We also held an interest in one
listed fund as part of our Fund of Funds programme. Their
valuations are based on their quoted share price on 31 March
2022.
68% of the Gross Portfolio Value is made up of our 21 core
companies. New entrants to the core are: CoachHub, Form3, ICEYE,
N26, Isar Aerospace and PrimaryBid, whilst Perkbox is not included
in the core in this period, and we exited SportPursuit. We
partially disposed of Trustpilot and UiPath during the period,
however these companies remain in the core. For more details on the
movements of the core during the year, please see the Gross
Portfolio Value table on below.
The Gross Portfolio Value reflects fair value growth driven by
financing rounds at higher valuations and increased revenues. The
fall in value of our public company shareholdings has been offset
by gains in the value of our private investments at 31 March 2022.
The performance of our portfolio companies continues to be strong
with average revenue growth rates in the core portfolio above 65%
during 2021.
Investments
New companies
During the year, we invested GBP111.7 million into new entrants
to the portfolio, taking advantage of opportunities to lead rounds
in areas such as climate tech, fintech and drone delivery
technology, whilst maintaining the quality and volume of
investments made.
-- FintechOS - we led a US$60.0 million Series B funding round
in FintechOS, supported by existing investors. FintechOS is a
global technology provider for banks, insurers and other financial
services companies with a low code approach to digital
transformation.
-- Schüttflix - we led a US$50.0 million Series A round into
Schüttflix, a platform that connects material producers and freight
forwarders with customers from different construction sectors, such
as building, civil engineering, and landscaping.
-- Material Exchange - we led a EUR25.0 million Series A round
into Material Exchange, a SaaS enabled marketplace for sourcing
materials within apparel industries.
-- Mostly AI - we led a US$25.0 million Series B round into
Mostly AI, which uses AI to create synthetic data sets to look just
as real as a company's original customer data and reflect
behaviours and patterns enabling companies to comply with data
protection regulations and use sensitive data in cloud
environments.
-- SimScale - we co-led a EUR25.0 million Series C extension
round in SimScale, a cloud-based SaaS platform making high-fidelity
simulation technically and economically accessible to engineers
worldwide.
-- Allplants - we led a GBP38.0 million Series B funding round
in Allplants, the D2C plant-based food business. Its plant-based
meals are hand-made 24 hours a day by 140 chefs in the company's
own kitchen and delivered across the UK.
-- Aktiia - we led a US$17.5 million Series A round in Aktiia,
which has built a system for continuous blood pressure monitoring
for remote patient monitoring in hypertension. Aktiia's core
product is a CE-marked, non-invasive optical blood pressure
monitoring device worn on the wrist.
-- Cervest - we led a US$30.0 million Series A round in Cervest,
whose AI Climate Intelligence platform combines public and private
data sources, machine learning and cutting-edge statistical science
to present a unified view of climate risk.
-- Manna - we led a US$25.0 million Series A round in Manna.
Manna designs, builds and operates unmanned aerial vehicles which
perform high-speed deliveries of takeaway food, groceries and
pharmacy goods/supplies up to 3kg in suburban last-mile
settings.
-- BeZero Carbon - we led a GBP15.0 million seed round into
carbon offset intelligence platform BeZero Carbon. BeZero is
building a data and analytics platform for catalysing and scaling
the Voluntary Carbon Market.
-- IndyKite - we led a US$8.0 million seed round into IndyKite,
a software company building the identity layer for Web 3.0. It has
products that securely manage human, IoT and machine identity.
-- CausaLens - we co-led a US$45.0 million Series A round into
CausaLens, a no-code Causal AI platform. The platform is designed
to quantify cause-and-effect relationships to reason alongside
humans in a manner that is designed to be trustworthy, explainable,
and fair.
-- Gardin - we led a US$11.0 million seed round into Gardin, an
agtech company aiming to make nutritious food sustainable and
affordable. Gardin has developed optical sensors to obtain data at
the individual plant level, allowing growers to monitor biochemical
processes such as photosynthesis in real time.
-- Satellite Vu - we invested as part of a GBP15.0 million
Series A round into Satellite Vu, which is bringing satellite
technology to address global challenges and plans to monitor the
temperature of any building on the planet in near real time using a
new satellite technology to determine insights into economic
activity, energy efficiency and carbon footprint.
The final close of PrimaryBid's Series B, which we reported in
our Annual Report for the year ended 31 March 2021, also forms part
of the deployment figure into primaries in the year.
New companies - co-investment strategy
As an extension of our existing strategy of deploying capital
via other vehicles through our Fund of Funds programme,
co-investments with some of our seed fund managers have enabled us
to invest GBP28.9 million into four new additions to the portfolio
during the period.
-- Genesis Global - a low-code platform for capital markets.
-- Sorare - a French-based fantasy sports game, where players
can buy, trade, play and collect with official NFT player
cards.
-- Choco - a German digital platform connecting restaurants and
their suppliers to optimise the food supply chain.
-- Pigment - a French collaborative financial planning software for mid and large enterprises.
Follow-on
We deployed GBP130.3 million into follow-ons in 17 existing
portfolio companies during the year, supporting our portfolio in
their larger, later stage rounds. These companies included the
following (over GBP2.0 million invested):
-- Form3 - we deployed GBP25.0 million in a US$160.0 million
Series C round. Founded in 2016, Form3 is a platform payment
technology provider and offering an alternative to the traditional
payment infrastructure model, through its always-on, cloud-native,
Payments-as-a-Service platform.
-- Thought Machine - we invested GBP20.0 million into the Series
C round. Thought Machine is a cloud native core banking technology
company founded in 2014 with a mission to enable banks to deploy
modern systems and move away from the legacy IT platforms of the
banking industry.
-- ICEYE - we participated in a US$136.0 million Series D round
with an investment of GBP15.0 million. ICEYE has now raised over
US$304.0 million since 2015, and owns and operates a constellation
of Synthetic-aperture radar (SAR) satellites.
-- CoachHub - we participated with a GBP14.7 million investment
in their US$80.0 million Series B extension round. CoachHub is a
global talent development platform that enables organisations to
create a personalised, measurable and scalable coaching programme
for their entire workforce, regardless of department and seniority
level.
-- Ledger - we invested GBP10.0 million in a US$380.0 million
Series C round. We first invested in Ledger in 2018, as part of its
US$75.0 million Series B. Ledger's hardware wallets allow investors
to access the world of digital assets securely.
-- PrimaryBid - we participated in a GBP125.0 million Series C
round with an investment of GBP8.8 million. PrimaryBid is an online
funding platform that enables investors to gain access to placings
and fundraisings of listed companies.
-- Pollen - we participated in a US$150.0 million Series C round
with an investment of GBP7.5 million. Pollen is a destination
travel marketplace, which offers both third-party events and
Pollen's own curated events.
-- Lyst - we participated in a US$85.0 million funding round in
Lyst with an investment of GBP7.2 million, joined by new investors.
Lyst is a global fashion search platform that lets users search
thousands of online fashion stores at once.
-- Paragraf - we participated in a US$60.0 million Series B
round with an investment of GBP6.0 million. Paragraf's patented
contamination-free deposition technology delivers a scalable
approach to graphene device manufacturing.
-- Freetrade - we invested GBP5.0 million into Freetrade, a
challenger stock trading and investing app providing simple and
commission-free access for users to online trading.
-- Aircall - we participated in a US$120.0 million Series D
round with an investment of GBP3.6 million, having first invested
in their US$25.0 million Series B round in 2018. Aircall is an
entirely cloud-based voice platform which integrates seamlessly
with popular productivity and helpdesk tools.
-- Crowdcube - we participated in a GBP15.0 million Series C
round with an investment of GBP3.0 million. Crowdcube is a leading,
British equity crowdfunding platform.
Fund of Funds
Our Fund of Funds programme continues to expand, providing
access to earlier-stage companies, as well as dealflow
opportunities for the highest quality companies from within these
portfolios. During the year, we committed to another 22 funds,
bringing our total to 57 funds. Total commitments to new and
existing Fund of Funds at 31 March 2022 were GBP109.9 million
(converted at year-end exchange rates), of which GBP52.5 million
has been drawn (FY21: GBP67.2 million committed with GBP25.5
million drawn). During the year, we deployed capital of GBP27.0
million into drawdowns.
Our funds are experts in specific areas. Among the new funds
within our portfolio are:
-- Paua Ventures - a Berlin-based B2B software and deep tech fund.
-- Boost VC - focusing on pre-seed "Sci-Fi" technology companies.
-- Nomad Capital - a pre-seed and seed stage fund focused on
US/EU based SaaS and Marketplace start-ups.
We have also continued our support of some of our existing
managers by committing to their new funds, such as Join Capital II,
ByFounders II, Hardware Club II, and IQ Capital IV A.
Earlybird
During this period, we deployed GBP13.3 million via our
partnership with Earlybird into their Digital East Fund I,
Earlybird Growth Opportunities Fund, and Earlybird West's Fund VI
and VII, continuing to access earlier-stage companies in Germany
and Europe with the benefit of Earlybird's expertise.
Realisations
Cash proceeds of GBP126.3 million were received during the year,
relating to the full exits from SportPursuit, Premfina,
Conversocial, and Bright Computing, as well as partial exits
relating to Trustpilot and UiPath (now both publicly listed), a
secondary partial realisation in Revolut, distributions from our
Fund of Funds programme, and distributions of escrows relating to
exits in prior periods.
-- SportPursuit - we exited our investment in the online private
outdoor active clothing and accessories sales club in the UK and
Germany following the acquisition by private equity firm of
SportPursuit, bd-capital. We realised a total cash return of
GBP22.8 million (including estimated escrow not yet received),
above the GBP18.5 million fair value held at 31 March 2021. We
first invested in SportPursuit in 2012 as part of a Series A round,
providing the first institutional investment and supported them in
each subsequent fund raise through to exit.
-- Bright Computing - we exited our investment in the software
developer as a result of NVIDIA's acquisition of Bright Computing,
generating proceeds of GBP11.7 million with a 1.6x return on
invested capital.
-- Premfina - we generated proceeds of GBP1.5 million from the
sale of Premfina to HPS Partners.
-- Conversocial - Conversocial was sold via acquisition and
generated proceeds of GBP5.2 million.
-- Trustpilot - during the prior financial year, as part of
Trustpilot's IPO in March 2021, Molten sold down part of its
holding in the leading global review platform, generating proceeds
during FY21 of GBP75.5 million. At 31 March 2022, we held 25
million shares in Trustpilot plc, having generated further proceeds
of GBP23.2 million during the period. Post period-end, we sold no
further Trustpilot shares. Since IPO, we have so far generated cash
proceeds of GBP98.7 million.
-- UiPath - UiPath listed on the New York Stock Exchange in
April 2021. We have generated proceeds of GBP49.8 million during
the period from related distributions from Earlybird Digital East
and sale of shares and are recognising the remaining holding at 31
March 2022 at the period-end share price.
Post period-end
-- We have deployed GBP73.7 million into new and existing
portfolio companies, including our announced deal in HiveMQ.
-- We announced the funding rounds of Thought Machine and Aiven
(Aiven is held via our partnership with Earlybird).
-- At 31 March 2022, we held interests in three listed companies
- Trustpilot, UiPath, and Cazoo. Their valuations are based on
their quoted share price on 31 March 2022. Their value using the
closing quoted share price on 8 June 2022 was GBP43.9 million.
Portfolio review: core company updates
**Please refer to Note 28 for details.
Graphcore
-----------------------------------------------------------------------------------------
Graphcore is a machine intelligence semiconductor company, GBP24.0m Invested
which develops Intelligent Processing Units ("IPUs") that GBP113.5m Investment
enable unprecedented levels of AI compute. The IPUs' unique valuation**
architecture enables AI researchers to undertake entirely
new types of work, which drives advances in machine intelligence.
* In December 2020, Graphcore raised US$222.0 million
in a Series E funding round led by the Ontario
Teachers' Pensions Plan. Also participating in the
round were Molten Ventures, funds managed by Fidelity
International Schroders, and Baillie Gifford
* Industry performance metrics published by MLPerf
demonstrated Graphcore have a significant Price to
Performance advantage over the market leader,
Nvidia(1) . These are the first public benchmarks
published that show Graphcore against Nvidia
* Graphcore increased spend on research and development
by 125% in 2020, and ended the year with a cash
balance of US$121.0 million, up 119% from 2019
* The company continues to roll out partnerships and
product integrations, such as Pytorch lightning, ATOS
Pacific Northwest National Laboratory (PNNL), NEC,
and Spell
* In December 2021, the company launched Poplar SDK 2.4
* In March 2022, Graphcore launched the world's first
3D wafer-on-wafer processor - the Bow IPU - which
delivers up to 40% higher performance and 16% better
power efficiency for real world AI applications than
its predecessors
* Jeff Richardson joined the Graphcore Board as an
Independent Director. Jeff is current Chairman of
Lattice Semiconductor (NASDAQ: LSCC) and was COO of
LSI Logic
(1) https://mlcommons.org/en/training-normal-10/
------------------------------------------------------------------ ---------------------
Aiven
-----------------------------------------------------------------------------------------
Aiven democratises access to the latest opensource technologies GBP5.0m Invested
by offering fully-managed services for popular open-source GBP105.3m Investment
projects like Apache Kafka and Cassandra, Elasticsearch, valuation**
M3 and PostgreSQL in the public cloud.
* In October 2021, the company announced it had
extended the previous mentioned Series C funding
round from US$100.0 million to US$160.0 million. As
well as Earlybird, investors include Atomico, IVP
(Institutional Venture Partners), World Innovation
Lab, and Salesforce Ventures
* Aiven has been growing its revenue over 100% year on
year
* Released Aiven for OpenSearch and now Kubernetes
Operator support for PostgreSQL and Apache Kafka
* The company has increased its headcount by more than
65% since October 2021
* Launched Cluster startup programme to help startups
build their data infrastructure using Aiven services
* Post year-end, Aiven announced their Series D funding
round
This investment is held via Earlybird.
------------------------------------------------------------------ ---------------------
Thought Machine
-----------------------------------------------------------------------------------------
Cloud native core banking technology company, Thought GBP36.5m Invested
Machine provides core banking infrastructure to both incumbent GBP103.5m Investment
and challenger banks. The company's technology provides valuation**
an alternative, more flexible cloud-based solution that
can be configured to provide any product, user experience,
operating model, or data analysis capability.
* US$200.0 million Series C funding raised new
institutional investors including ING Ventures, J.P.
Morgan Chase Strategic Investments and Standard
Chartered Ventures. Existing investors Molten, Lloyds
Banking Group, British Patient Capital, Eurazeo, SEB,
Backed, and IQ Capital have all participated in the
round
* Cauldron, a Thought Machine spin-out launched as a
standalone financial video game studio
* J.P. Morgan selected Thought Machine to overhaul its
core banking systems across the bank's entire US
retail network, Chase Bank
* Italian bank Intesa Sanpaolo invested GBP40.0 million
into Thought Machine and uses "Vault" to power a new
digital banking platform
* Post year-end, Thought Machine announced their Series
D round raising US$160.0 million
------------------------------------------------------------------ ---------------------
Ledger
-----------------------------------------------------------------------------------------
Ledger has created a next generation hardware digital GBP27.7m Invested
asset wallet providing customers the highest level of GBP91.9m Investment
physical security solution to store their digital assets. valuation**
Ledger's products are USB-like devices which store access
keys for a customer's crypto assets; the device uses advanced
security authentication to allow customers to access their
crypto assets. Ledger currently has sold over 4 million
devices and over 15% of the world's crypto assets are
already secured through Ledger products. In addition to
its Nano products, Ledger has launched a dedicated app
allowing customers to buy, sell, exchange, lend and manage
crypto assets to other customers on the platform. Ledger
combines a hardware wallet to the Ledger Live app to offer
consumers the easiest way to start their crypto journey
while maintaining full control over their digital assets.
However, consumer products are just one aspect of Ledger's
business. The company is also developing solutions for
businesses including Ledger Vault, to secure digital assets,
and Ledger Enterprise Solutions, a digital asset custody
and security solution for institutional investors and
financial players, as well as a staking solution.
-- In March 2022, the company launched a new update of
its Nano S, the Nano S+, with a bigger screen that offers
easy navigation and a smooth experience. A larger memory
allows the installation of over 100 apps simultaneously
and manages over 5,500 digital assets
* A key partnership was also achieved with Coinbase in
2022: Coinbase users can now secure their coins and
NFTs with Ledger as the Coinbase Wallet browser
extension adds support for Ledger Hardware Wallets
* Ledger has launched a debit card that connects
directly with a crypto wallet (the Crypto Life card).
Cardholders will also be able to receive their
paychecks into their card account directly. They will
be able to convert a percentage of their paycheck
into Bitcoin and Ethereum every time they get paid
------------------------------------------------------------------ ---------------------
Revolut
-----------------------------------------------------------------------------------------
Revolut is a global financial services company that specialises GBP7.1m Invested
in mobile banking, card payments, money remittance, and GBP91.3m Investment
foreign exchange. Revolut is developing into a fintech valuation**
super-app.
* In July 2021, Revolut raised US$800.0 million Series
E funding from SoftBank's Vision Fund 2 and Tiger
Global, valuing the business at US$33.0 billion. The
funding will be used to continue to build the first
global financial super-app
* Secured Australian Credit licence and launched stock
trading in Australia
* Launched Payday, to help employees access wages early
to improve their financial wellbeing
* Acquired Forex Licence holder Arvog Forex Private
Limited; the acquisition supports Revolut's continued
expansion strategy which has included launches in
Singapore, Australia, the US and Japan in the past
two years
* Continue to update and innovate, launching savings
vault product and pet insurance as they enter the
insuratech space
* Revolut Junior now enables the use of Google Pay and
Apple Pay
* Acquired Nobly ePOS business to expand services into
the hospitality sector
* Revolut appointed a number of new hires including:
Paroma Chatterjee as CEO India to build and lead
Revolut's subsidiary in India, Mikko Salovaara as
Group CFO, Sid Jajodia as Chief Banking Officer, and
Joe Heneghan steps up to a new role as Chief
Executive Officer, Europe. The company also appointed
Ibrahim Dusi as Chief Risk Officer for Americas and
Juan Miguel Guerra as CEO Mexico. Revolut acquired a
team from New York talent-sourcing marketplace,
Wanted, to support their product development resource
------------------------------------------------------------------ ---------------------
CoachHub
-----------------------------------------------------------------------------------------
CoachHub is a leading global talent development platform GBP27.1m Invested
that enables organisations to create a personalised, measurable, GBP85.7m Investment
and scalable coaching programme for the entire workforce, valuation**
regardless of department and seniority level. By doing
so, organisations are able to reap a multitude of benefits,
including increased employee engagement, higher levels
of productivity, improved job performance, and increased
retention.
* CoachHub raised US$80.0 million Series B2 funding,
increasing total funding to US$110.0 million. Molten,
RTP Global, HV Capital, Signals Venture Capital,
Partech, and Speedinvest all participated in the
round
* Continued expansion in Australia following the Series
B fundraise including a series of new hires,
expanding the team and bolstering leadership
* In the first half of 2021, CoachHub exceeded their
full year of new business generation for 2020
* Acquired French market leader and a pioneer in
digital coaching, MoovOne
* The company launched CoachHub Wellbeing, its new
mental health coaching programme designed to improve
employee wellbeing across the global workforce
* Acquired coaching division of leading Austrian
consulting company Klaiton including its pool of 500
highly qualified business coaches
* Continued global expansion with the opening of an
Asia Pacific Headquarters in Singapore and a new
office in Amsterdam
* Professor Jonathan Passmore appointed as Senior Vice
President of Coaching
------------------------------------------------------------------ ---------------------
Aircall
-----------------------------------------------------------------------------------------
The company's cloud-based platform integrates seamlessly GBP14.3m Invested
with popular productivity and helpdesk tools and is accessible, GBP62.9m Investment
transparent, and collaborative. It replaces outdated systems valuation**
with a collaborative platform that helps to communicate
with customers, prospects, candidates, and colleagues.
This enables businesses to be better on customer support
or sales engagement with a phone system.
* The company raised a US$120.0 million Series D
funding round. Goldman Sachs joined the round as the
newest investor. Molten also participated alongside
eFounders, NextWorld Capital, Adams Street Partners,
DTCP, Swisscom Ventures, and Gaia Capital Partners
* The expansion of Aircall's North American operations
led to a growth of 26% in North American revenue from
June to December 2021.
* The company opened its Sydney office at the beginning
of 2021 and has grown its team from one to 30, and
reached the milestone of 1,000 customers. It also
opened a new office in London as part of its
expansion across Europe
* Aircall continues to have a number of partnerships
and integrations with platforms like HubSpot, CRM and
Paytia
------------------------------------------------------------------ ---------------------
Form3
-----------------------------------------------------------------------------------------
Form3 provides a cloud-native, real-time payment technology GBP30.1m Invested
platform to enable banks and regulated fintechs to create GBP46.6m Investment
amazing products and experiences. valuation**
* The company announced US$160.0 million Series C
funding round led by Goldman Sachs Asset Management.
Molten, alongside other existing investors, also
participated
* In 2021, annual recurring revenue grew by 233% from
2020 levels
* Several new hires were made to its Executive
Leadership team, including Giles Hawkins as Chief
Legal Officer and Simeon Lando as Chief Marketing
Officer
* Employs over 260 people in 22 countries
------------------------------------------------------------------ ---------------------
Lyst
-----------------------------------------------------------------------------------------
A search engine just for fashion. Lyst offers a social GBP13.2m Invested
shopping site that includes an inventory of fashion products GBP39.7m Investment
and provides access to changing fashion data points every valuation**
hour, enabling users to find and buy the latest fashion
trends by browsing through a series of clothing and accessories.
* The company raised a US$85.0 million funding round.
Molten participated alongside several existing
investors and were joined by new investors, Fidelity
International, Novator Capital, Giano Capital and C4
Ventures
* In 2021, GMV exceeded US$500.0 million, following
1100% growth in new users on the Lyst app. Lifetime
GMV is now over US$2.0 billion
* Revenue of GBP35.5 million was generated in 2021,
which was an increase of 54% on 2020
* Lyst released its own Conscious Fashion Report, a
deep-dive into fashion lovers' changing sustainable
habits and the creators driving that change from the
company's insights and data analysis
* The company announced a few appointments in senior
management positions: Mateo Rando, previously at
Spotify, as Chief Product Officer and Emma McFerran,
formerly General Counsel and Chief People Officer,
has been appointed COO and a new board member
------------------------------------------------------------------ ---------------------
M-Files
-----------------------------------------------------------------------------------------
M-Files provides an intelligent information management GBP6.5m Invested
platform that is repository neutral and utilises AI to GBP37.3m Investment
break down information silos and unify systems, data and valuation**
content. M-Files, organises customers' content with the
ability to connect to existing network folders and systems
and to enhance them with the help of AI to categorise
and protect information.
* Annual recurring revenue grew by more than 30% in
2021, with net revenue retention increasing to over
120% in 2021
* The company received the highest score in two use
cases in updated Gartner(R) Critical Capabilities for
Content Services Platforms report
* Launched smart content migration with new
intelligence service offering
* Named winner in the 2022 Business Intelligence
Group's Artificial Intelligence Excellence awards,
recognised for its innovations to the M-Files
metadata-driven document management platform
* Recognised as one of five 2022 Gartner Peer
Insights(TM) Customers' Choice for Content Services
Platforms
* 3 key recent appointments to further support M-Files'
commitment to rapidly expand the company's global
presence and deliver continuous innovation across its
document management platform; appointment of Bob
Pritchard (former SVP Sales of Alfresco) as Chief
Revenue Officer, appointment of Nancy Harris (former
EVP & MD of Sage North America) and Christophe
Duthoit (former BCG Sr. Partner Emeritus) to the
Board of Directors
------------------------------------------------------------------ ---------------------
Trustpilot
-----------------------------------------------------------------------------------------
Online global review platform, Trustpilot, provides a GBP12.1m Remaining
trust layer for the open commerce ecosystem by giving cost
consumers the confidence to purchase goods and services GBP36.5m Investment
from a wide range of online and offline businesses across valuation**
the world. GBP98.7 Proceeds
-- Trustpilot is listed on the London Stock Exchange with received
the ticker TRST
* Revenue increased 24% in 2021 from 2020, with revenue
of US$131.4 million, and the Company's ARR increased
26% from 2020 to 2021
* Launched integrations with Shopify, WooCommerce
marketplace and PrestaShop
* The company became a member of the European Tech
Alliance (EUTA) joining 37 other major European
digital champions, scaleups, and leading start-ups to
provide insight on the tech industry and the
experience of scaling in the EU
* Joe Hurd was appointed to the board as a
Non-Executive Director. Former Marketing Director of
QuickBooks, Alicia Skubick was appointed Chief
Marketing Officer (effective 4 October 2021)
------------------------------------------------------------------ ---------------------
RavenPack
-----------------------------------------------------------------------------------------
RavenPack is a leading big data analytics provider for GBP7.5m Invested
financial services. The Company offers a comprehensive GBP35.1m Investment
data solution for global risk analysis to isolate and valuation**
manage fast-moving issues. The data analytics platform
uses natural language processing (NLP) algorithms to scan
the news in real time and calculate sentiment and volume
risk metrics allowing clients to enhance returns, reduce
risk and increase efficiency by systematically incorporating
the effects of public information on their models or workflows.
RavenPack's clients include some of the most successful
systematic hedge funds, as well as asset managers and
banks.
* Launched RavenPack Edge, the most advanced
multilingual NLP platform on the planet. Edge is new
AI platform that collects, reads, and analyses
billions of documents to help businesses better
monitor and mitigate emerging risks. RavenPack Edge
is capable of understanding content in 13 different
languages and can extract insights from all types of
documents - from short news articles to complex legal
filings and more recently, job news
* Launched the Credit Suisse RavenPack Artificial
Intelligence Index, a rules-based multi-asset index
applying an S&P 500(R) sector rotation process driven
by news sentiment. This powers systematic investment
strategies designed to provide exposure to sectors of
the US economy with stronger sentiment based on a
news analytics algorithm powered by RavenPack. As of
March 2022, Credit Suisse trades more than USD$1.0
billion in derivatives linked to the Index
* RavenPack has been recently named Alternative Data
Vendor of the Year 2022 by Risk.Net magazine, an
important endorsement in the company's ecosystem
recognising that the company leads the way with the
most sophisticated text analytics platform that turns
news, transcripts, filings and any text in different
languages into actionable indicators
------------------------------------------------------------------ ---------------------
ICEYE
-----------------------------------------------------------------------------------------
ICEYE's radar satellite imaging service, with coverage GBP22.5m Invested
of selected areas every few hours, both day and night, GBP32.1m Investment
helps clients resolve challenges in sectors such as maritime, valuation**
disaster management, insurance, finance, security, and
intelligence. ICEYE is the first organisation in the world
to successfully launch synthetic-aperture radar (SAR)
satellites with a launch mass under 100 kg.
* In March 2021, ICEYE had US$50.0 million in signed
contracts, which was nearly 10x growth from the
previous year
* In April 2021, the company opened new spacecraft
production facility in Irvine California expanding
manufacturing, research, and customer operations in
the US
* Four new radar imaging satellites launched in July
2021 to increase persistent monitoring capabilities
* Contract with National Oceanic and Atmospheric
Administration (NOAA) to support the monitoring and
response to environmental hazards in the maritime
sector also announced
* Makoto Higashi joins as General Manager for local
business operations as ICEYE expands its offering in
Japan. Appointed Lisa Wardlaw as Global Head of
Insurance Solutions as ICEYE accelerates growth in
the insurance segment; Andy Read hired as Global Head
of Government Solutions
------------------------------------------------------------------ ---------------------
Isar Aerospace Technologies
-----------------------------------------------------------------------------------------
Isar Aerospace develops and builds launch vehicles for GBP4.5m Invested
transporting small and medium-sized satellites, as well GBP27.9m Investment
as satellite constellations into Earth's orbit. valuation**
* The company extended its Series B funding round to
over US$165.0 million led by HV Capital, Porsche SE,
and Lombard Odier. Other participants include
existing investors Earlybird, Lakestar, Vsquared
Ventures, and Apeiron
* The company won EUR10.0 million in funding from the
EU in January 2022 along with EUR11.0 million from
the Federal German Government and the German
Aerospace Center in April 2021
* The company has signed an agreement with Norwegian
Andøya Space to secure exclusive access for a
period of up to 20 years to one of its launch pads on
the island Andøya. As a launch site operator,
Andøya Space provides launch pads, payload
integration facilities, as well as the technical
infrastructure on site
* Airbus Defence and Space has committed to use Isar
Aerospace for satellite launch services
* Partnership with OroraTech to launch satellites for
tackling global wildfire crises
* Astrocast to use Isar Aerospace's launch vehicle to
launch a satellite as part of its global
nanosatellite IoT network
This investment is held via Earlybird.
------------------------------------------------------------------ ---------------------
Endomag
-----------------------------------------------------------------------------------------
Endomag utilises technology to improve cancer care by GBP9.3m Invested
preventing unnecessary surgery and improving outcomes GBP24.7m Investment
and patient experience where surgery is needed. valuation**
* The company has received a 2021 Queen's Award for
Enterprise in International Trade for the second time,
originally having been selected as a recipient back
in 2018
* The company was named one of Europe's fastest growing
companies by the Financial Times, featured on the
list as the 7th highest rated Healthcare company
* An endorsement from the UK health technology
assessment body NICE was received, opening the way to
broader adoption of its technology in the National
Health Service
------------------------------------------------------------------ ---------------------
PrimaryBid
-----------------------------------------------------------------------------------------
Technology platform that allows everyday investors fair GBP14.2m Invested
access to public companies raising capital. The company GBP24.6m Investment
ensures retail investors are able to transact at the same valuation**
time and at the same price as institutional investors.
* The company raised US$190.0 million in their Series C
round, which was led by SoftBank Vision Fund 2, with
participation from Molten Ventures, as well as a
number of existing investors
* First cross-border IPO of Soho House on the New York
Stock Exchange
* Launched partnership with Euronext in France
* Made ten offers available to individual investors in
one week, PrimaryBid's highest ever
* Crossed US$1.0 billion in demand on the platform
users
* Reached milestone of over 5 billion shares
transferred
* Revenue increased over 3,500% in FY21, to over GBP4.9
million
------------------------------------------------------------------ ---------------------
N26
-----------------------------------------------------------------------------------------
N26 provides mobile banking services for customers. Its GBP10.6m Invested
mobile banking services offer online banking that includes GBP22.1m Investment
making and handling of current accounts, fixed accounts, valuation**
and other banking services, letting customers manage and
control their banking details via a smartphone application
easily.
* Raised US$900.0+ million Series E Round led by Third
Point Ventures and Coatue Management, and joined by
Dragoneer Investment Group as well as existing N26
investors
* Launched on-demand insurance product N26 insurance,
which will offer the digital bank's customers the
option from the N26 app to purchase coverage, manage
plans and initiate claims for a range of insurance
plans from different providers. The offering is
currently available in Europe
* The company announced a partnership with SumUp,
lowering barriers for cashless payment acceptance for
freelancers and self-employed individuals
* US operations were discontinued as the company
sharpens its focus on its European business
* Expanded its management team with the appointment of
Thomas Grosse taking on the role of Chief Risk
Officer (CRO), Dr. Stephan Niermann as Group Money
Laundering Reporting Officer (MLRO), and Dr. Volker
Vonhoff as Director of Group Risk. Chief Financial
Officer Dr. Jan Kemper, has taken over the roles of
COO and CFO as COO Adrienne Gormley steps down.
Alongside the appointment of Dr. Jan Kemper as Chief
Financial Officer (CFO) of the Group, Christian
Strobl was also appointed as Austrian Market lead
This investment is held via Earlybird.
------------------------------------------------------------------ ---------------------
Freetrade
-----------------------------------------------------------------------------------------
Freetrade is a challenger stockbroker with mobile-first, GBP13.0m Invested
commission-free investing. Freetrade is on a mission to GBP20.1m Investment
enable people to invest and grow their savings by benefitting valuation**
from the global economic growth driven by public companies.
Freetrade is FCA-regulated, FSCS-secured and one of the
newest members of the London Stock Exchange (LSE).
* A record-breaking fundraising via Crowdcube was
achieved; the company hit GBP8.0 million in fewer
than six hours
* April 2021 saw the launch of Freetrade self-invested
personal pension (SIPP)
* The company received its licence from Sweden's
financial regulator making its next step in European
expansion
* German, Finnish and Dutch stock have launched on
Freetrade
* The company reached a number of milestones in the
past year including one million registered users in
October and GBP1.0 billion assets under
administration in November
* Paul Brooker joined Freetrade as CFO in September
2021, formerly serving as CFO and Head of Financial
Control at Revolut
------------------------------------------------------------------ ---------------------
smava
-----------------------------------------------------------------------------------------
Online loan comparison platform, which brings private GBP14.5m Invested
applicants together with a variety of banks and private GBP17.3m Investment
investors, offering highly attractive interest rates for valuation**
loans, providing customers a tailored online loan with
the best conditions free of charge within seconds.
* Announced partnership with Deutsche Bank and Younited
Credit
* In February 2021, smava acquired Finanzcheck
* Since market launch in 2007, smava has enabled more
than 500,000 consumers to take out cheap loans
This investment is held via Earlybird.
------------------------------------------------------------------ ---------------------
UiPath
-----------------------------------------------------------------------------------------
UiPath provides a comprehensive robotic software solution GBP4.4m Remaining
for IT-based process automation. Built on a comprehensive, cost
fully integrated platform with centralised instrumentality, GBP14.0m Investment
UiPath is designed for the highest standards of enterprise valuation**
management, security, scalability and auditability. GBP59.8 Proceeds
* UiPath listed on 21 April 2021 onto the New York received
Stock Exchange with the ticker PATH
* As of January 31 2022,, UiPath's annualised renewal
run-rate had grown 59% year on year, with ARR of
US$925.0 million
* Announced features that enable customers to further
their automation journeys with powerful capabilities
and simpler, more gratifying experiences in
discovering, building, managing, and running
automations with its latest platform release
* Five UiPath executives were named in CRN's 2021 Women
of the Channel List for their leadership, dedication
and channel advocacy
* The company strengthened their leadership team with
two new hires; former ServiceMax executive, Bettina
Koblick, was appointed new Chief People Officer and
Andreea Baciu was appointed the company's first Chief
Culture Officer
* We have received distributions in kind from the
Earlybird funds and now hold a portion of UiPath
directly
This investment is partially held via Earlybird.
------------------------------------------------------------------ ---------------------
Cazoo
-----------------------------------------------------------------------------------------
Founded in 2018 by entrepreneur, Alex Chesterman, Cazoo GBP9.9m Invested
is changing the way to buy and sell a car online. Cazoo GBP12.0m Investment
is a UK digital business and leading online car retailer, valuation**
allowing purchase, financing or subscription to cars online,
with the option of home delivery or collection. In August
2021 Cazoo launched on NYSE trading under the symbol "CZOO".
* US$630.0 million fund raise led by Viking Global
Investors to support continued growth and expansion
in the UK and EU
* Secured EUR50.0 million asset backed securitisation
with BNP Paribas
* Launched in Spain, France and Germany and opened
customer centres in Carlisle, Liverpool, Lakeside,
Essex and Newcastle (marking its 21(st) customer
centre)
* The company has made a number of acquisitions in the
past year including; automotive data insights
platform, Cazanna, SMH Fleet Solutions, Swipcar, and
Italian online car retailer, brumbrum
* Agreed partnership with Oglive fleet securing 18,000+
vehicles
* Expanded its offering to commercial vehicles
* Duncan Tatton-Brown, Anne Wojcicki, Moni Mannings and
Luciana Berger joined the Cazoo board. Appointed a
number of new hires including Veronica Sharma (Group
Chief People Officer), Abhishek Roy (European
Managing Director), Andreas Schuierer (Country
Manager for Germany), Romain Weill (Country Manager
for France), Tommaso Debenedetti (Country Manager for
Italy) and Julio Ribes (Country Manager for Spain)
------------------------------------------------------------------ ---------------------
Financial review
FY22 delivered strong uplifts in the portfolio, increased
investment capital deployed and further portfolio company IPOs set
against a backdrop of a variable environment. With an equity raise,
move to the Main Market and corporate rebrand, it was another
active year. It is pleasing to be able to report further
strengthening of the portfolio with fair value growth and a number
of new exciting companies added. The resilience and flexibility of
our model is beneficial as we link public markets into the private
venture capital ecosystem, and we will look to broaden this by
building the capital pool alongside the balance sheet with
additional private fund strategies. This will complement our
existing c.GBP400 million of AUM from our EIS and VCT funds.
As at 31 March 2022, net assets of GBP1,433.8 million were
recognised, which is an increase of GBP400.7 million on prior year.
This growth is mainly driven by the movement in value of our net
portfolio, which is recognised at fair value through profit or loss
("FVTPL") in the consolidated statement of financial position.
We have a strong and diversified portfolio, across sectors and
stages of their lifecycle, which is evidenced by the gross fair
value growth for the year of GBP362.8 million (37%), a GBP329.4
million net fair value increase. We have generated fee income
during the year of GBP21.8 million, both internally and externally,
which allows us to continue to meet and improve on our target of
costs (net of income) being less than 1% of NAV.
In June 2021, we completed an equity raise of GBP107.7 million
(net of costs) from new and existing investors (including a
PrimaryBid retail element), followed by the Company moving to the
Main Market in July 2021, further broadening the investor base.
Statement of financial position
Portfolio
The Gross Portfolio Value at 31 March 2022 is GBP1,531.5 million
(GBP983.8 million at 31 March 2021). The Gross Portfolio Value is
an APM (see Note 33) and a reconciliation from gross to net
portfolio value, which is recognised on the consolidated statement
of financial position, is shown below. Investments of GBP311.2
million were made during the year, cash proceeds from exits,
escrows and sales of shares were received of GBP126.3 million
(GBP112.8 million net of carry payments) and non-investment
movements of GBP15.9 million related mostly to internal management
fee payments. The gross fair value movement on the portfolio was
GBP362.8 million, of which GBP15.9 million results from foreign
exchange movements and GBP346.9 million from fair value movements.
The overall fair value increase results from the net GBP564.2
million increase in fair value offset by GBP217.3 million decrease
in fair value. Further details on the Group's valuation policy and
valuations basis as at 31 March 2022 can be found in Notes 5, 28
and 29 to the consolidated financial statements.
The fair value growth in the year reflects strong performance in
the private portfolio on the basis of their continued commercial
traction and rounds at higher valuations, offset by the fall in
value of our public company shareholdings at 31 March 2022. Private
market valuations have been underpinned with several financing
rounds at higher valuations, including recently announced rounds
for Thought Machine and Aiven. This demonstrates the breadth and
robustness of the portfolio. Key fair value increases during the
year relate to some of our core companies, including Revolut
(GBP75.9 million), Thought Machine (GBP65.1 million), Aiven
(GBP59.8 million) and CoachHub (GBP58.6 million).
The Gross Portfolio Value is subject mainly to adjustments for
the fair value of carry liabilities and Irish deferred tax to
generate the Net Portfolio Value of GBP1,410.8 million. Both
carried interest liabilities and Irish deferred tax arise at the
level of our investment vehicles, and must be taken into account
when arriving at the fair value of our these vehicles to be
recognised in the consolidated statement of financial position.
The increase of GBP543.7 million in the year from GBP867.1
million at 31 March 2021 results from investments made of GBP311.2
million and a net fair value increase of GBP329.4million (including
GBP15.9 million of FX impact), offset by realisations of GBP126.3
million (GBP112.8 million net of carry paid).
The net fair value gain on investments of GBP329.4 million is
reflected in the consolidated statement of comprehensive income.
The deferred tax recognised on the Gross Portfolio Value has
decreased in the year as a UK deferred tax liability in respect of
the investment portfolio has been recognised in the consolidated
statement of financial position. This is to more closely align the
recognition of deferred tax to the location in which it will likely
become payable on realisation of the assets. Carry balances of
GBP121.5 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
GBP13.5 million were made in the year following the further
realisations of assets in the underlying fund holdings that
exceeded threshold returns. In addition, non investment cash
movements to entities held at FVTPL were made of GBP15.9 million,
including for payments of Priority Profit Share ("PPS"). The Gross
Portfolio Value table below has been generated to reconcile the
Gross to Net Portfolio Values and the movements between 31 March
2021 to 31 March 2022. The percentage of Net Portfolio Value to
Gross Portfolio Value is 92% (31 March 2021: 88%), which is a
reflection of the deferred tax alignment and increase in carry
balances as the portfolio grows.
Total liquidity
Total available liquidity for the Group at 31 March 2022 was
GBP113.1 million, including GBP35.0 million undrawn on the
Company's revolving credit facility (31 March 2021: GBP220.7
million, including GBP60.0 million undrawn on the Company's
revolving credit facility). Our EIS and VCT funds also have GBP60.5
million of cash available for investment at 31 March 2022. The
consolidated cash balance at 31 March 2022 was GBP78.1 million (31
March 2021: GBP160.7 million). This includes GBP2.3 million of
restricted cash relating to our revolving credit facility - see
Note 22(ii) for further details. During the year, our fundraise
generated net proceeds of GBP107.7 million and we received cash
proceeds from portfolio realisations of GBP126.3 million. This was
offset by investments made during the period of GBP311.2 million,
as well as carry, management fees, and operating costs.
Following the fundraise in June 2021, a total of 13,902,778 new
ordinary shares were issued at a placing price of 800p per share;
retail investors in the UK subscribed via an offer via PrimaryBid
for 603,500 of these. These are recognised in share capital (1p
ordinary shares) and share premium in the consolidated statement of
financial position, net of directly attributable costs.
The Company has a revolving credit facility of GBP65.0 million,
of which GBP35.0 million remains undrawn at 31 March 2022. The
facility was extended and increased by one year to GBP65.0 million
(from GBP60.0 million) in May 2021. We have been in compliance with
all covenants throughout the duration of the facility and at the
year-end. The drawn amount of GBP30.0 million is recognised in the
consolidated statement of financial position at 31 March 2022,
offset by capitalised fees from the setup and extension of the
facility, which are being amortised over its life. Drawdowns and
paydowns will continue to be driven by portfolio investments and
realisations.
Net assets
Net assets in the consolidated statement of financial position
at 31 March 2022 have increased by GBP400.7 million from 31 March
2021 to GBP1,433.8 million, an increase of 39%. This is mainly the
result of the increase in the investments balance discussed above,
offset by the resulting decrease in cash, deferred tax recognised
in the statement of financial position, drawdown on the revolving
credit facility, and an increase in deferred income relating to
fees.
Statement of comprehensive income
We recognised profit in the year of GBP300.7 million, up from
GBP267.4 million in FY21.
Income recognised during the year ending 31 March 2022 comprises
investment gains of GBP329.4 million (year ending 31 March 2021:
GBP276.3 million), as well as fee income of GBP21.8 million (year
ended 31 March 2021: GBP12.5 million). Fee income is principally
comprised of Priority Profit Share ("PPS"), management fees from
the 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. Performance fees are generated from realisations of EIS
assets ahead of return hurdles. These are passed through to the
management teams with GBP0.5m retained within the Group. Promoter
fees are income that is recognised alongside fundraising activity
in the VCT. The increase in fee income is a result of an increase
in the funds under management and particularly from the increase in
the third-party funds. This in part reflects the consolidation of
the manager of our VCT funds following acquisition of the full
holding.
General and administration costs ("G&A") of GBP19.5 million,
compared to the GBP13.8 million recognised in the year to 31 March
2021, have increased due to growth in the team and infrastructure
as the Group builds the investment platform. Within G&A is
GBP2.0 million of performance fees (highlighted above) that were
paid out. Exceptional costs of GBP2.4 million were recognised in
the period relating to the Company's move to the Main Market. This
includes all non-recurring costs relating to the Main Market move,
such as legal, reporting accountant, exchange, and broker fees.
Our operating costs (net of fee income) continue to be
substantially less than our target of 1% of NAV and have narrowed
as income builds. It is anticipated that further income in fees
generated from management of third-party funds, such as our planned
growth fund, will provide a further positive contribution to our
cost base and profitability in the future.
Post period-end:
We have deployed GBP73.7 million into new and existing portfolio
companies, including our announced deal in HiveMQ.
We announced the funding rounds of Thought Machine and
Aiven.
At 31 March 2022, we held interests in three listed companies -
Trustpilot, UiPath, and Cazoo. Their valuations are based on their
quoted share price on 31 March 2022. Their value using the closing
quoted share price on 8 June 2022 was GBP43.9 million.
Ben Wilkinson
Chief Financial Officer
12 June 2022
Gross Portfolio Value Table
Fair Fair Fair Interest
Value Movement Movement Value Value FD
of Non-investment in in of of Category*
Investments cash Foreign Fair Movement Investments at
31-Mar-21 Investments Realisations movement Exchange Value 31-Mar-22 31-Mar-22 reporting
Investments GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm date
--------------- ----------- ----------- ------------ -------------- -------- -------- --------- ----------- ---------
Graphcore 108.8 0.0 0.0 0.0 5.2 (0.5) 4.7 113.5 A
Aiven 45.5 0.0 0.0 0.0 (1.0) 60.8 59.8 105.3 B
Thought Machine 18.4 20.0 0.0 0.0 0.0 65.1 65.1 103.5 A
Ledger 41.8 10.0 0.0 0.0 (1.3) 41.4 40.1 91.9 B
Revolut 20.4 0.0 (5.0) 0.0 2.7 73.2 75.9 91.3 A
CoachHub 12.4 14.7 0.0 0.0 (1.2) 59.8 58.6 85.7 D
Aircall 32.8 3.6 0.0 0.0 2.4 24.1 26.5 62.9 B
Form3 10.2 25.0 0.0 0.0 0.0 11.4 11.4 46.6 C
Lyst 35.1 7.2 0.0 0.0 1.9 (4.5) (2.6) 39.7 C
M-Files 29.7 0.0 0.0 0.0 (0.3) 7.9 7.6 37.3 B
Trustpilot 85.5 0.0 (23.2) 0.0 0.0 (25.8) (25.8) 36.5 B
Ravenpack 29.9 0.0 0.0 0.0 1.5 3.7 5.2 35.1 D
ICEYE 13.1 15.0 0.0 0.0 1.0 3.0 4.0 32.1 A
Isar Aerospace 14.8 0.0 0.0 0.0 (0.5) 13.6 13.1 27.9 A
Endomag 15.7 0.0 0.0 0.0 0.0 9.0 9.0 24.7 C
PrimaryBid 2.3 11.9 0.0 0.0 0.0 10.4 10.4 24.6 A
N26 10.0 0.0 0.0 0.0 (0.3) 12.4 12.1 22.1 A
Freetrade 20.0 5.0 0.0 0.0 0.0 (4.9) (4.9) 20.1 B
Smava 23.8 0.0 0.0 0.0 0.0 (6.5) (6.5) 17.3 A
UiPath 100.3 0.0 (49.8) 0.0 1.9 (38.4) (36.5) 14.0 A
Cazoo 25.7 0.0 0.0 0.0 0.3 (14.0) (13.7) 12.0 A
Remaining
portfolio 285.0 198.8 (48.3) 0.0 3.6 46.5 50.1 485.6
--------------- ----------- ----------- ------------ -------------- -------- -------- --------- ----------- ---------
Total Portfolio 981.2 311.2 (126.3) 0.0 15.9 347.7 363.6 1,529.7
--------------- ----------- ----------- ------------ -------------- -------- -------- --------- ----------- ---------
Co-Invest 2.6 0.0 0.0 0.0 0.0 (0.8) (0.8) 1.8
--------------- ----------- ----------- ------------ -------------- -------- -------- --------- ----------- ---------
Gross Portfolio
Value 983.8 311.2 (126.3) 0.0 15.9 346.9 362.8 1,531.5
--------------- ----------- ----------- ------------ -------------- -------- -------- --------- ----------- ---------
Carry External (97.0) 0.0 13.5 0.0 0.0 (38.0) (38.0) (121.5)
Portfolio
Deferred tax (20.0) 0.0 0.0 0.0 0.0 20.5 20.5 0.5
Trading carry &
co-invest 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.3
Non-investment
cash
movement 0.0 0.0 0.0 15.9 0.0 (15.9) (15.9) 0.0
--------------- ----------- ----------- ------------ -------------- -------- -------- --------- ----------- ---------
Net Portfolio
Value 867.1 311.2 (112.8) 15.9 15.9 313.5 329.4 1,410.8
--------------- ----------- ----------- ------------ -------------- -------- -------- --------- ----------- ---------
* 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%
Consolidated statement of comprehensive income
for the year ended 31 March 2022
Year ended Year ended
31 March 31 March
2022 2021
Notes GBP'm GBP'm
----------------------------------------------------- ------ ---------- ----------
Change in gains on investments held at fair value
through profit and loss 6 329.4 276.3
Fee income 7 21.8 12.5
----------------------------------------------------- ------ ---------- ----------
Total investment income 351.2 288.8
----------------------------------------------------- ------ ---------- ----------
Operating expenses
General administrative expenses 8 (19.5) (13.8)
Depreciation and amortisation 15, 18 (0.8) (0.7)
Share-based payments - resulting from Company share
option scheme 14 (3.7) (1.5)
Investment and acquisition costs (0.2) (0.3)
Exceptional items 34 (2.4) -
----------------------------------------------------- ------ ---------- ----------
Total operating costs (26.6) (16.3)
----------------------------------------------------- ------ ---------- ----------
Other income - 0.1
----------------------------------------------------- ------ ---------- ----------
Profit from operations 324.6 272.6
----------------------------------------------------- ------ ---------- ----------
Finance income 11 1.8 0.2
Finance expense 11 (1.4) (5.4)
----------------------------------------------------- ------ ---------- ----------
Profit before tax 325.0 267.4
----------------------------------------------------- ------ ---------- ----------
Income taxes 12 (24.3) -
----------------------------------------------------- ------ ---------- ----------
Profit for the year 300.7 267.4
----------------------------------------------------- ------ ---------- ----------
Other comprehensive income - -
----------------------------------------------------- ------ ---------- ----------
Total comprehensive income for the year 300.7 267.4
----------------------------------------------------- ------ ---------- ----------
Earnings per share attributable to owners of the
parent:
----------------------------------------------------- ------ ---------- ----------
Basic earnings per weighted average shares (pence) 13 200 208
Diluted earnings per weighted average shares (pence) 13 198 206
----------------------------------------------------- ------ ---------- ----------
The consolidated financial statements should be read in
conjunction with the accompanying notes.
Consolidated statement of financial position
As at 31 March 2022
Year ended Year ended
31 March 31 March
2022 2021
Notes GBP'm GBP'm
--------------------------------------------------- ------ ---------- ----------
Non-current assets
Intangible assets 15 10.7 10.9
Financial assets held at fair value through profit
or loss 16 1,410.8 867.1
Deferred tax 23 1.6 -
Property, plant and equipment 18 0.9 1.4
--------------------------------------------------- ------ ---------- ----------
Total non-current assets 1,424.0 879.4
--------------------------------------------------- ------ ---------- ----------
Current assets
Trade and other receivables 20 2.8 3.7
Cash and cash equivalents 75.8 158.4
Restricted cash 22(ii) 2.3 2.3
--------------------------------------------------- ------ ---------- ----------
Total current assets 80.9 164.4
--------------------------------------------------- ------ ---------- ----------
Current liabilities
Trade and other payables 21 (14.3) (9.7)
Financial liabilities 22 (0.4) (0.3)
--------------------------------------------------- ------ ---------- ----------
Total current liabilities (14.7) (10.0)
--------------------------------------------------- ------ ---------- ----------
Non-current liabilities
Deferred tax 23 (26.1) (0.4)
Provisions (0.3) -
Financial liabilities 22 (30.0) (0.3)
--------------------------------------------------- ------ ---------- ----------
Total non-current liabilities (56.4) (0.7)
--------------------------------------------------- ------ ---------- ----------
Net assets 1,433.8 1,033.1
--------------------------------------------------- ------ ---------- ----------
Equity
Share capital 24 1.5 1.4
Share premium account 24 615.9 508.3
Own shares reserve 25 (8.2) (0.3)
Other reserves 25 28.9 26.2
Retained earnings 795.7 497.5
--------------------------------------------------- ------ ---------- ----------
Total equity 1,433.8 1,033.1
--------------------------------------------------- ------ ---------- ----------
Net assets per share (pence) 13 937 743
--------------------------------------------------- ------ ---------- ----------
The consolidated financial statements should be read in
conjunction with the accompanying notes. The consolidated financial
statements on pages 134-169 of the Annual Report for the year
ending 31 March 2022 were authorised for issue by the Board of
Directors on 12 June 2022 and were signed on its behalf.
Ben Wilkinson
Chief Financial Officer
Molten Ventures plc registered number 09799594
Consolidated statement of cash flows
for the year ended 31 March 2022
Year ended Year ended
31 March 31 March
2022 2021
Notes GBP'm GBP'm
-------------------------------------------------------- ----- ---------- ----------
Cash flows from operating activities
Operating profit after tax 300.7 267.4
Adjustments to reconcile operating profit to net
cash (outflow)/inflow in operating activities 26 (294.8) (264.4)
Purchase of investments 16 (311.2) (128.0)
Proceeds from disposals in underlying investment
vehicles 16 126.3 206.3
Net loans made (to)/returned from underlying investment
vehicles and Group companies 16 (29.4) (8.1)
Share options exercised and paid to employees (3.4) (2.6)
Tax paid (0.4) (0.0)
-------------------------------------------------------- ----- ---------- ----------
Net cash (outflow)/inflow from operating activities (212.2) 70.6
-------------------------------------------------------- ----- ---------- ----------
Cash flows from investing activities
Payment for acquisition of subsidiary, net of cash
acquired - (0.7)
Payments for property, plant and equipment 18 (0.1) (0.1)
-------------------------------------------------------- ----- ---------- ----------
Net cash (outflow) from investing activities (0.1) (0.8)
-------------------------------------------------------- ----- ---------- ----------
Cash flows from financing activities
-------------------------------------------------------- ----- ---------- ----------
Loan repayments 22 - (80.0)
Loan proceeds 22 30.0 35.0
Fees paid on issuance of loan 22 (0.3) (0.3)
Interest paid (1.0) (2.2)
Interest received 0.2 0.3
Acquisition of own shares 25 (8.0) (2.3)
Sale of own shares 25 - 1.6
Repayments of leasing liabilities 22 (0.4) (0.4)
Gross proceeds from issue of share capital 24 111.2 111.9
Equity issuance costs 22 (3.6) (3.5)
-------------------------------------------------------- ----- ---------- ----------
Net cash inflow from financing activities 128.1 60.1
-------------------------------------------------------- ----- ---------- ----------
Net (decrease)/increase in cash and cash equivalents (84.2) 129.9
-------------------------------------------------------- ----- ---------- ----------
Cash and cash equivalents at beginning of year 160.7 34.1
Exchange differences on cash and cash equivalents 11 1.6 (3.3)
-------------------------------------------------------- ----- ---------- ----------
Cash and cash equivalents at end of year 75.8 158.4
-------------------------------------------------------- ----- ---------- ----------
Restricted cash at year end 2.3 2.3
-------------------------------------------------------- ----- ---------- ----------
Total cash and cash equivalents and restricted cash
at year end 78.1 160.7
-------------------------------------------------------- ----- ---------- ----------
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 2022
Year ended 31 March 2022
Own shares Retained
GBP'm Note Share capital Share premium reserve Other reserves earnings Total equity
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Brought forward as
at 1 April 2021 1.4 508.3 (0.3) 26.2 497.5 1,033.1
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Comprehensive
income/(expense)
for the year
Profit for the year - - - - 300.7 300.7
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Total comprehensive
income/(expense) for
the year - - - - 300.7 300.7
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Contributions by
and distributions
to the owners:
Contributions of equity,
net of transaction
costs and tax 24 0.1 107.6 - - - 107.7
Options granted and
awards exercised 14, 25 - - 0.1 2.7 (2.5) 0.3
Acquisition of treasury
shares 14, 25 - - (8.0) - - (8.0)
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Total contributions
by and distributions
to the owners 0.1 107.6 (7.9) 2.7 (2.5) 100.0
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Balance as at 31
March 2022 1.5 615.9 (8.2) 28.9 795.7 1,433.8
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Year ended 31 March 2021
Own shares Retained
GBP'm Note Share capital Share premium reserve Other reserves earnings Total equity
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Brought forward as
at 1 April 2020 1.2 400.7 - 26.2 231.4 659.5
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Comprehensive
income/(expense)
for the year
Profit for the year - - - - 267.4 267.4
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Total comprehensive
income/(expense) for
the year 267.4 267.4
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Contributions by
and distributions
to the owners:
Contributions of equity,
net of transaction
costs 24 0.2 106.3 - - - 106.5
Options granted and
awards exercised 14, 25 0.0 1.3 2.0 (0.0) (1.3) 1.9
Acquisition of treasury
shares 25 - - (2.3) - - (2.2)
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Total contributions
by and distributions
to the owners 0.2 107.6 (0.3) (0.0) (1.3) 106.2
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
Balance as at 31
March 2021 1.4 508.3 (0.3) 26.2 497.5 1,033.1
--------------------------- ------ ------------- ------------- ---------- -------------- --------- ------------
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
-------------------------------------- ---------------------------------------
Explanation of change in name of
reporting entity or other means of Molten Ventures plc was formerly known
identification from end of preceding as Draper Esprit plc
reporting period (company name change in November 2021)
-------------------------------------- ---------------------------------------
Period covered by financial statements 1 April 2021 - 31 March 2022
-------------------------------------- ---------------------------------------
Molten Ventures plc (the "Company") is a public limited company
incorporated and domiciled in England and Wales. During FY22, as
part of a rebrand, Draper Esprit plc has changed its name to Molten
Ventures plc. On 23 July 2021, the Company's ordinary shares were
admitted to the premium listing segment of the Official List of the
Financial Conduct Authority and to trading on the London Stock
Exchange's Main Market for listed securities, as well as to the
secondary listing of the Official List of the Irish Stock Exchange
plc and to trading on the regulated market of Euronext Dublin.
Prior to this, between 15 June 2016 and 22 July 2021, the Company
was listed on the London Stock Exchange's AIM market and the Irish
Stock Exchange's Euronext Growth market.
The Company is the ultimate parent company in which results of
all subsidiaries are consolidated in line with IFRS 10 (see Note
4(b) below for further details). The consolidated financial
statements for the year ending 31 March 2022 and for the
comparative year ending 31 March 2021 comprise the consolidated
financial statements of the Company and its subsidiaries (together,
"the Group").
The consolidated financial statements are presented in Pounds
Sterling (GBP/GBP), which is the currency of the primary economic
environment in which the Group operates. All amounts are rounded to
the nearest million, 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 approval 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 scenarios to assess the
potential impact on the Group's operations and portfolio companies.
These downside scenarios include unpredictability of exit timing
and portfolio company valuations subject to change. 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 31 March 2022,
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.
-- The Group must comply with financial and non-financial
covenants as part of the revolving credit facility with Silicon
Valley Bank and Investec (see Note 22(ii) for further details). An
assessment of forecast covenant compliance was undertaken using a
number of severe but plausible scenarios on valuations. Under each
adverse scenario the Group still had sufficient headroom in order
to comply with the covenant obligations.
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 99 to 102 and the Directors'
Report on pages 122 to 124.
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 2022, 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. Significant accounting policies
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. On 31 December 2020,
EU-adopted IFRS at that date was brought into UK law and became
UK-adopted International Accounting Standards, with future changes
being subject to endorsement by the UK Endorsement Board. Molten
Ventures plc transitioned to UK-adopted International Accounting
Standards in its consolidated financial statements on 1 April 2021.
There was no impact or changes in accounting policies from the
transition.
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 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 12 June 2022.
The financial reporting framework that has been applied in the
preparation of the Company's financial statements (beginning on
page 170) 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 99 to 102 of
the Annual Report for the year ending 31 March 2022), in the
Directors' Report (pages 122 to 124 of the Annual Report for the
year ending 31 March 2022) 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 third 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 57).
-- We have engaged ESG Consulting Partner, ITPEnergised.
-- As stated in Note 28, 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 FY22
(FY21: 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 AIFM to the Company and
LLP^ the Esprit Funds England and Wales 100%
-------------------------------- ---------------------------------- ------------------------- -----------
Elderstreet Holdings Limited^ Intermediate holding company England and Wales 100%
-------------------------------- ---------------------------------- ------------------------- -----------
AIFM to Molten Ventures
Elderstreet Investments VCT plc (formerly Draper
Limited^ Esprit plc) England and Wales 100%
-------------------------------- ---------------------------------- ------------------------- -----------
Trustee of the Group's employment
Grow Trustees Limited^ benefit trust England and Wales 100%
-------------------------------- ---------------------------------- ------------------------- -----------
Molten Ventures Advisors
Ltd^
(incorporated 24th January Investment Advisor to the
2022) Growth Fund England and Wales 100%
-------------------------------- ---------------------------------- ------------------------- -----------
Molten Ventures (Nominee)
Limited^ (formerly Draper
Esprit (Nominee) Limited) Nominee company England and Wales 100%
-------------------------------- ---------------------------------- ------------------------- -----------
Encore Ventures LLP^ AIFM to the Encore Funds England and Wales 100%
-------------------------------- ---------------------------------- ------------------------- -----------
General Partner and co-invest
Esprit Capital I (GP) Limited^ 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%
-------------------------------- ---------------------------------- ------------------------- -----------
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
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.
Associates
Associates are all entities over which the Group has significant
influence, but not control or joint control. This is generally the
case where the Group holds between 20% and 50% of the voting
rights. Investments in associates are accounted for using the
equity method of accounting, after initially being recognised at
cost. Under the equity method of accounting, the investments are
initially recognised at cost and adjusted thereafter to recognise
the Group's share of the post-acquisition profits or losses of the
investee in profit or loss, and the Group's share of movements in
other comprehensive income. Dividends received or receivable from
associates and joint ventures are recognised as a reduction in the
carrying amount of the investment. When the Group's share of losses
in an equity-accounted investment equals or exceeds its interest in
the entity, including any other unsecured long-term receivables,
the Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the other entity. The
carrying amount of equity-accounted investments is tested for
impairment where there are indications that the carrying value may
no longer be recoverable. Following the acquisition of the
remaining interest in Elderstreet Holdings Limited on 9 February
2021, no associates are recognised in the consolidated financial
statements. For related undertakings held at fair value through
profit or loss, refer to Note 17.
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 15 of the Annual Report for the year ending
31 March 2022. Exit strategies for the portfolio vary depending for
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 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 subsidiary, Molten Ventures (Ireland)
Limited, 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 discussed above. 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)
Limited^ Investment entity Republic of Ireland 100%
------------------------------------------- ------------------------------ ------------------------- -----------
Limited partnership pursuant
to which the Group makes
* Esprit Capital III LP* certain investments England and Wales 100%
------------------------------------------- ------------------------------ ------------------------- -----------
Limited partnership pursuant
to which the Group makes
* Esprit Capital III (B) LP* certain investments England and Wales 100%
------------------------------------------- ------------------------------ ------------------------- -----------
Limited partnership pursuant
to which the Group makes
* Esprit Capital IV LP* certain investments England and Wales 100%
------------------------------------------- ------------------------------ ------------------------- -----------
Limited partnership pursuant
to which the Group makes
* DFJ Europe X LP certain investments Cayman Islands 100%
------------------------------------------- ------------------------------ ------------------------- -----------
Limited partnership pursuant
to which the Group makes
* Esprit Investments (1) LP* certain investments England and Wales 100%
------------------------------------------- ------------------------------ ------------------------- -----------
Limited partnership pursuant
to which the Group makes
* Esprit Investments (2) LP* certain investments England and Wales 100%
------------------------------------------- ------------------------------ ------------------------- -----------
Limited partnership pursuant
Esprit Investments to which the Group makes
(1) (B) LP* certain investments England and Wales 100%
------------------------------------------- ------------------------------ ------------------------- -----------
Limited liability partnership
pursuant to which the Group
* Seedcamp Holdings LLP* makes certain investments England and Wales 100%
------------------------------------------- ------------------------------ ------------------------- -----------
Limited liability partnership
pursuant to which the Group
* Seedcamp Investments LLP++ makes certain investments England and Wales 100%
------------------------------------------- ------------------------------ ------------------------- -----------
Limited liability partnership
pursuant to which the Group
* Seedcamp Investments II LLP++ makes certain investments England and Wales 100%
------------------------------------------- ------------------------------ ------------------------- -----------
Limited partnership pursuant
Esprit Investments to which the Group makes
(2) (B) LP* certain investments England and Wales 100%
------------------------------------------- ------------------------------ ------------------------- -----------
Limited partnership pursuant
to which the Group makes
* SC_4_OF1 LP" certain investments England and Wales 100%
------------------------------------------- ------------------------------ ------------------------- -----------
^ 32 Molesworth Street, Dublin 2, Ireland, D02 Y512
* 20 Garrick Street, London, England, WC2E 9BT
c/o Maples Corporate Services Limited at PO Box 309, Ugland
House, Grand Cayman, KY1-1104, Cayman Islands
++ 16 Great Queen Street, London, England, WC2B 5AH
" 35 New Bridge Street, London, England, EC4V 6BW
Limited partnerships (co-invest and carried interest)
Carried interest vehicles / 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(x) 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
-------------------------- --------------------------------- ------------------------
Esprit Capital II Founder
LP^ Co-investment limited partnership Cayman Islands
-------------------------- --------------------------------- ------------------------
Esprit Capital II Founder
2 LP^ Co-investment limited partnership 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 Co-investment limited partnership
LP* / 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 Growth
SP GP LLP Carry vehicle England and Wales
-------------------------- --------------------------------- ------------------------
^ 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
20 Garrick Street, London, WC2E 9BT
Each carry vehicle indirectly hold interests in a vintage of
investments within our portfolio with the purpose of producing
profits for distribution amongst 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, Esprit Fund 3(i), and their general partners are
consolidated within the Group. These funds are in run-off. The
Group does not have any direct beneficial interests in the assets
owned by these funds and the Group is not exposed to variable
returns from these funds. Management considers 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 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 funds) 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, and Draper Esprit EIS (renamed Molten
Ventures EIS post-period end).
VCT funds : Molten Ventures VCT plc - 6th Floor St Magnus House,
3 Lower Thames Street, London, England, EC3R 6HD.
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
Esprit Foundation
The Esprit Foundation was set up during the year. Molten
Ventures plc is sole member. 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. No activity took place in the year ending
31 March 2022. 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 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 resource.
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 is 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 GBP15.0
million). Although the managers of our EIS funds, VCT funds and plc
funds have a 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 II LP, Esprit Capital
IIIi Fund LP and Esprit Capital IIIiA fund 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
which 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.
As such and as the Group's investment portfolio represents a
coherent and diversified portfolio with similar economic
characteristics, the individual investments and funds have been
aggregated into a single operating segment.
The majority of the Group's revenues are not from interest, and
the chief operating decision maker 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, as
well as performance fees and promoter fees. Priority Profit
Share/management fees are also generated from management fees
charged on the funds underlying the plc fund. 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 measured at the fair value of the
consideration received or receivable and represents amounts
receivable for services provided in the normal course of business,
net of discounts, VAT and other sales-related taxes. All revenue
from services is generated within the UK and is stated exclusive of
value added tax. Revenue from services comprises:
i. Fund management services
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. Portfolio 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.
iii. Performance fees
Performance fees are earned on a percentage basis on returns
over a hurdle rate in the statement of comprehensive income.
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.
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 profit or
loss 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 are applied:
i. Encore Ventures LLP: 8 years
ii. Elderstreet Investments Limited: 3 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 profit and loss.
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 and derecognised on a trade
date where the purchase or sale of a financial asset is under a
contract whose terms require delivery of the financial asset within
the timeframe established by the market concerned and are 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 that its investment interests referred to in
Note 4(b) are appropriately designated as at FVTPL as they meet
criteria (b) above.
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
intangible assets, deferred tax, property, plant and equipment,
trade and most other receivables, and cash and cash equivalents in
the consolidated statement of financial position.
k) Financial liabilities
The Group's financial liabilities may include borrowings, and
trade and other payables. All of the Group's financial liabilities
are measured at amortised cost.
Trade and other payables
Trade and other payables are recognised and derecognised on a
trade date where the purchase or sale of a financial asset is under
a contract whose terms require delivery of the financial asset
within the timeframe established by the market concerned and are
initially measured at fair value, plus transaction costs.
Financial liabilities are measured subsequently at amortised
cost using the effective interest method. All interest-related
charges and, if applicable, changes in an instrument's fair value
that are reported in profit or loss are included within finance
costs or finance income.
Borrowings
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently measured at
amortised cost using the effective interest rate method. All
interest-related charges are reported in profit or loss and are
included within finance costs or finance income.
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
Where 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.
p) Leased assets
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. At inception or on reassessment
of a contract that contains a lease component, the Group allocates
the consideration in the contract to each lease component on the
basis of their relative stand-alone prices.
The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or
to restore the underlying asset, less any lease incentives
received. The right-of-use asset is subsequently depreciated using
the straight-line method from the commencement date to the earlier
of the end of the useful life of the right-of-use asset or the end
of the lease term.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group's incremental
borrowing rate. The lease liability is measured at amortised cost
using the effective interest method. It is remeasured when there is
a change in future lease payments. When the lease liability is
remeasured, a corresponding adjustment is made to the carrying
amount of the right-of-use asset or is recorded in the profit or
loss if the carrying amount of the right-of-use asset has been
reduced to zero.
The Group presents right-of-use assets that do not meet the
definition of investment property in "property, plant and
equipment" and lease liabilities in "financial liabilities" in the
statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and
lease liabilities for short-term leases that have a lease term of
12 months or less and leases of low-value assets, including IT
equipment. The Group would recognise the lease payments associated
with these leases as an expense on a straight-line basis over the
lease term.
q) Dividends
Dividends are recognised when they become legally payable. In
the case of interim dividends to equity Shareholders, this is when
the dividend is paid. In the case of final dividends, this is when
the dividend is approved by the Shareholders at the AGM.
r) Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
income statement 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.
s) 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.
t) 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 period, with the
effect of any changes in estimate accounted for on a prospective
basis. See (p) above for PPE relating to right-of-use assets
resulting from leases.
u) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, deposits at
bank and highly liquid investments with a term of no more than 90
days that are readily convertible into known amounts of cash and
that are subject to an insignificant risk of changes in value.
Where they are not readily convertible into known amounts of cash,
they will be reflected as restricted cash on the consolidated
statement of financial position.
v) Financial instruments
Financial assets and financial liabilities are recognised in the
consolidated balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial
liabilities at FVTPL) are added to or deducted from the fair value
of the financial assets or financial liabilities, as appropriate,
on initial recognition.
w) 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.
x) Carried interest
The Company has established carried interest plans for the
Executive Directors (see associated note below), 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 operates in respect of investments made during a 24-month
period and related follow-on investments made for a further
36-month period. From 1 April 2020 the carried interest plan
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.
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. Where the Group has a holding in
the carried interest, this is recognised at FVTPL.
y) 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 actual prices that would be achieved in an
arm's length transaction at the reporting date (See Note 5(a)).
z) 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 2022.
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 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 German or
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. 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 outlined below and these valuations will be
adjusted by the Group where necessary based on the Group valuation
policy for valuing 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 International Private Equity and Venture Capital Valuation
Guidelines as well as the IPEV Board, Special Valuation Guidance
issued on 31 March 2020 in response to the COVID-19 crisis ("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.
Recent transactions may include post-year-end as well as
pre-year-end transactions depending on the nature and timing of
these transactions.
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) 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 2022 and 31 March 2021 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.
Where a fair value cannot be estimated reliably, the investment
is reported at the carrying value at the previous reporting date
unless there is evidence that the investment has since been
impaired.
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 28 for
information on unobservable inputs used and sensitivity analysis on
investments held at fair value through profit or loss.
Judgement:
b) 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 3(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. Changes in gains on investments held at fair value through
profit or loss
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
------------------------------------------------------------ ---------- ----------
Changes in unrealised gains on investments held at fair
value through profit or loss 217.6 183.6
------------------------------------------------------------ ---------- ----------
Changes in realised gains on investments held at fair value
through profit or loss 95.9 143.9
------------------------------------------------------------ ---------- ----------
Net foreign exchange gain/(loss) on investments held at
fair value through profit or loss 15.9 (51.2)
------------------------------------------------------------ ---------- ----------
Total movements on investments held at fair value through
profit or loss 329.4 276.3
------------------------------------------------------------ ---------- ----------
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 Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
-------------------------- ---------- ----------
Management fees 17.8 12.5
-------------------------- ---------- ----------
Performance fees 2.5 -
-------------------------- ---------- ----------
Promoter's fees 1.4 -
-------------------------- ---------- ----------
Directors' and other fees 0.1 -
-------------------------- ---------- ----------
Total fee income 21.8 12.5
-------------------------- ---------- ----------
8. General administrative expenses
Administrative expenses comprise:
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
-------------------------------------------------------- ---------- ----------
General employee and employee related expenses (Note 9) 11.9 10.0
Legal and professional 2.5 1.4
Performance fees payable 2.0 0.1
Marketing expenses 1.1 0.7
Building costs and rates 0.4 0.4
Travel expenses 0.3 0.1
IT expenses 0.3 0.1
Listing fees 0.2 0.1
Other administrative costs 0.8 0.9
-------------------------------------------------------- ---------- ----------
Total administrative expenses 19.5 13.8
-------------------------------------------------------- ---------- ----------
9. Employee and employee-related expenses
Employee benefit expenses (including Directors) comprise:
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
-------------------------------------------------------------- ---------- ----------
Wages and salaries 9.0 7.6
Defined contribution pension costs 0.8 0.7
Benefits (healthcare and life assurance) 0.3 0.2
Recruitment costs 0.2 -
Social security contributions and similar taxes 1.6 1.5
-------------------------------------------------------------- ---------- ----------
General employee and employee-related expenses 11.9 10.0
-------------------------------------------------------------- ---------- ----------
Share-based payment expense arising from Company share option
scheme 3.7 1.5
-------------------------------------------------------------- ---------- ----------
Total employee benefit expenses 15.6 11.5
-------------------------------------------------------------- ---------- ----------
Infrastructure comprises finance, marketing, human resources,
legal, IT, and administration.
The monthly average number of persons (including Executive and
Non-Executive Directors) employed by the Group during the year
was:
Year ended Year ended
31 March 31 March
2022 2021
Number Number
------------------------ ---------- ----------
Executive Directors 3 3
Non-Executive Directors 4 3
Investment 16 12
Infrastructure 25 19
------------------------ ---------- ----------
Total 48 37
------------------------ ---------- ----------
At 31 March 2022, there were 5 Non-Executive Directors (31 March
2021: 3).
10. Auditors' remuneration
The profit for the year has been arrived at after charging:
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
---------------------------------------------------------- ---------- ----------
Fees paid to the Company's auditor for the audit of the
Company and Group consolidated financial statements 0.3 0.2
Fees payable to the Company's auditors and associates for
other services:
Audit of the financial statements of the subsidiaries and
related undertakings 0.1 0.1
Audit-related assurance services 0.1 -
Non-audit services 0.3 -
---------------------------------------------------------- ---------- ----------
Total fees payable to the Company's auditors 0.8 0.3
---------------------------------------------------------- ---------- ----------
Audit-related assurance services paid to the Company's auditors
in the year were GBP18k related to CASS reporting to the FCA in
respect of certain subsidiaries (for the year ended 31 March 2021:
GBP17k), GBP46k in respect of the review of the Company's interim
financial statements (for the year ended 31 March 2021:
GBP27k).
Non-audit services paid to the Company's Auditors in the year
were, GBP305k in respect of reporting accountant services (for the
year ended 31 March 2021: GBPNil) and GBPNil in respect of ESG
advisory work (for the year ended 31 March 2021: GBP31k).
11. Net finance income/(expense)
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
---------------------------------------------- ---------- ----------
Interest on leases (Note 22(i)) (0.1) (0.1)
---------------------------------------------- ---------- ----------
Interest and expenses on loans and borrowings (1.3) (2.0)
---------------------------------------------- ---------- ----------
Net foreign exchange loss - (3.3)
---------------------------------------------- ---------- ----------
Finance expense (1.4) (5.4)
---------------------------------------------- ---------- ----------
Interest income on cash and cash equivalents 0.2 0.2
---------------------------------------------- ---------- ----------
Net foreign exchange gain 1.6 -
---------------------------------------------- ---------- ----------
Finance income 1.8 0.2
---------------------------------------------- ---------- ----------
Net finance income/(expense) 0.4 (5.2)
---------------------------------------------- ---------- ----------
12. Income taxes
The charge to tax, which arises in the Group and the corporate
subsidiaries included within these financial statements, is:
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
------------------------------------------------------ ---------- ----------
Current tax expense
Current tax on profits for the year - 0.3
Adjustments for under/(over) provision in prior years (0.1) -
------------------------------------------------------ ---------- ----------
Total current tax expense (0.1) 0.3
------------------------------------------------------ ---------- ----------
Deferred tax expense
Arising on business combinations - -
Prior year correction on deferred tax (20.5) -
Movement on deferred tax (3.7) (0.3)
Total deferred tax (expense)/benefit (24.2) (0.3)
------------------------------------------------------ ---------- ----------
Income tax expense (24.3) -
------------------------------------------------------ ---------- ----------
The UK standard rate of corporation tax is 19% (for the year
ended 31 March 2021: 19%). From 1 April 2023, the UK rate of
corporation tax will rise to 25% for companies with profits greater
than GBP250,000. The UK rate of corporation tax will remain 19% for
companies with profits of not more than GBP50,000, with marginal
relief for profits of up to GBP250,000. It is anticipated that
Molten Ventures plc will have profits of greater than GBP250,000 in
FY24, and therefore in FY24 a corporation tax rate of 25% is
anticipated to apply.
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 profit/(loss) for the year before tax are as
follows:
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
------------------------------------------ ---------- ----------
Profit for the year before tax 325.0 267.4
Tax at the UK tax rate of 19% (2021: 19%) 61.8 50.8
Taxable gains 1.1 -
Gains on investments (62.6) (50.7)
Prior year correction on deferred tax 20.5 -
Movement on deferred tax 3.7 0.3
Other (0.2) (0.4)
------------------------------------------ ---------- ----------
Income tax expense 24.3 -
------------------------------------------ ---------- ----------
13. Earnings 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 earnings per ordinary share
Profit No. of
after tax shares Pence
GBP'm m per share
--------------------------------- ---------- ------- ----------
For the year ended 31 March 2022 300.7 150.1 200
--------------------------------- ---------- ------- ----------
For the year ended 31 March 2021 267.4 128.9 208
--------------------------------- ---------- ------- ----------
Diluted earnings per ordinary share
Profit No. of
after tax shares(1) Pence
GBP'm m per share
--------------------------------- ---------- ---------- ----------
For the year ended 31 March 2022 300.7 151.9 198
--------------------------------- ---------- ---------- ----------
For the year ended 31 March 2021 267.4 129.7 206
--------------------------------- ---------- ---------- ----------
1. The basic number of shares is 150.1m (FY21: 128.9m). This has
been adjusted to calculate the diluted number of shares by
accounting for options of 1.8m in the year (FY21: 0.8m) to get to
the diluted number of shares of 151.9m (FY21: 129.7m).
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
No. of
Net assets shares Pence
GBP'm m per share
-------------------- ---------- ------- ----------
As at 31 March 2022 1,433.8 153.0 937
-------------------- ---------- ------- ----------
As at 31 March 2021 1,033.1 139.1 743
-------------------- ---------- ------- ----------
Diluted net asset value per ordinary share
No. of
Net assets shares(1) Pence
GBP'm m per share
-------------------- ---------- ---------- ----------
As at 31 March 2022 1,433.8 154.9 926
-------------------- ---------- ---------- ----------
As at 31 March 2021 1,033.1 140.0 738
-------------------- ---------- ---------- ----------
1. The basic weighted average number of shares is 153.0m (FY21:
139.1m). This has been adjusted to calculate the diluted weighted
average number of shares by accounting for options of 1.9m in the
year (FY21: 0.9m) to get to the diluted weighted average number of
shares of 154.9m (FY21: 140.0m).
14. Share-based payments
b/f c/f
Granted Lapsed Exercised
Date 1 April in the in the in the 31 Mar
of 2021 year year year 2022 Vesting
Fair
value
Exercise per granted
Approved Price instrument
Grant (No.) (No.) (No.) (No.) (No.) options period (pence) (pence)
----------- ---------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
Molten
Ventures
plc 2016
Company
Share
Option
Scheme
("CSOP") 28-Nov-16 612,959 - - (90,540) 522,419 25,350 3 years 355 64.1
----------- ---------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
28-Nov-16 101,685 - - (101,685) - - 3 years 355 89.3
---------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
11-Nov-17 120,000 - - - 120,000 8,356 3 years 359 89.8
---------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
28-Nov-17 407,007 - - (100,623) 306,384 - 3 years 387 70.9
---------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
28-Nov-17 77,344 - - (77,344) - - 3 years 387 97.9
---------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
30-Jul-18 842,550 - - (178,100) 664,450 - 3 years 492 152.9
---------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
30-Jul-18 102,750 - - (102,750) - - 3 years 492 186.4
---------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
12-Feb-19 735,302 - - (178,434) 556,868 - 3 years 530 67.8
---------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
12-Feb-19 75,000 - - (75,000) - - 3 years 530 95.2
---------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
26-Nov-19 200,000 - - - 200,000 - 3 years 467 71.5
---------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
29-Jun-20 200,000 - - - 200,000 - 3 years 449 81.2
---------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
26-Jul-21 - 56,314 (3,044) - 53,270 - 1 year 1 986.0
---------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
Molten
Ventures
plc
Long-Term
Incentive
Plan
("LTIP") 29-Jun-20 581,696 - (20,119) - 561,577 - 3 years 1 449.0
----------- ---------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
16-Jul-21 - 581,212 (20,325) - 560,887 - 1 year 1 940.0
---------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
Total 4,056,293 637,526 (43,488) (904,476) 3,745,855 33,706
----------------------- --------- ------- -------- --------- --------- -------- -------- -------- -----------
Both the CSOP and LTIP are, as of 31 March 2022, 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 25(i)). Of the 0.9 million options exercised during the
year, none were satisfied with new ordinary shares issued by Molten
Ventures plc (FY21: 1.4 million options exercised with 0.4 million
satisfied with new ordinary shares issued) (see Note 24).
For share options granted under the CSOP, the Black-Scholes
Option Pricing Model has been used for valuation purposes. All
options are settled in shares. Volatility is expected to be in the
range of 20-30% based on an analysis of the Company's and peer
group's share price. The risk-free rates used were taken from zero
coupon United Kingdom government bonds on a term consistent with
the vesting period. There are no non-market performance conditions
attached to the share options granted under the CSOP.
Share options granted during the year under the LTIP vest if
certain performance standards are met. The amount of options that
will vest depends on performance conditions included within the
agreement relating to realisations, assets under management, and
Total Shareholder Return. These options are granted under the plan
for no consideration and are granted at a nominal value of 1 pence.
All options are settled in shares. The fair value of the LTIP
shares will be 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 2022 we are
currently on target for LTIPs.
The share-based payment charge for the year is GBP3.7 million
(year ended 31 March 2021: GBP1.5 million).
15. Intangible assets
Customer
Goodwill contracts(2) Total
Year ended 31 March 2022 GBP'm GBP'm GBP'm
------------------------------------------------ -------- ------------- ------
Cost
Cost carried forward as at 1 April 2021 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 2021 - (0.6) (0.6)
Charge for the period - (0.2) (0.2)
------------------------------------------------ -------- ------------- ------
Accumulated amortisation as at 31 March 2022 - (0.8) (0.8)
Net book value:
As at 31 March 2022 10.4 0.3 10.7
------------------------------------------------ -------- ------------- ------
Customer
Goodwill(1) contracts(2) Total
Year ended 31 March 2021 GBP'm GBP'm GBP'm
------------------------------------------------ ----------- ------------- ------
Cost
Cost carried forward as at 1 April 2020 9.7 0.8 10.5
Acquisition of business 0.7 0.3 1.0
------------------------------------------------ ----------- ------------- ------
Cost as at 31 March 2021 10.4 1.1 11.5
Accumulated amortisation
Amortisation carried forward as at 1 April 2020 - (0.4) (0.4)
Charge for the year - (0.2) (0.2)
------------------------------------------------ ----------- ------------- ------
Accumulated amortisation as at 31 March 2021 - (0.6) (0.6)
Net book value:
As at 31 March 2021 10.4 0.5 10.9
------------------------------------------------ ----------- ------------- ------
1 In FY21, goodwill of GBP0.7 million arose on the step
acquisition of all issued share capital in Elderstreet Holdings
Limited. Elderstreet Holdings Limited is the holding company of
Elderstreet Investments Limited, a VCT manager incorporated in the
UK, on 9 February 2021 and represents the value of the acquired
expertise and knowledge of the Investment Team. The Directors have
identified the fund managers as the cash-generating unit ("CGU")
being the smallest group of assets that generates cash inflows
independent of cash flows from other assets or groups of assets.
The fund managers are responsible for generating dealflow and
working closely with the investee companies to create value and
maximise returns for the Group. The Group tests goodwill annually
for impairment comparing the recoverable amount using value in use
calculations and the carrying amount. Value in use calculations are
based on future expected cash flows generated by the CGU fee income
from management fees over the next three years with reference to
the most recent financial budget and forecasts. A three-year cash
flow period was deemed appropriate for value in use calculation
given the terms of the Investment Management Agreement. The key
assumptions for the value in use calculations are the discount rate
using pre-tax rates that reflect the current market assessments of
the time value of money and risks specific to the CGU. The internal
rate of return ("IRR") will be based on past performance and
experience.
2 In FY21, an intangible asset of GBP0.3 million was recognised
in respect of the anticipated profit from the participation in
Elderstreet Investments Limited following the acquisition of the
remaining issued share capital the Group did not previously own on
9 February 2021.
The amortisation charge for the year is shown in the
"depreciation and amortisation" line of the consolidated statement
of comprehensive income.
16. 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 28. 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 Year ended
31 March 31 Mar
2022 2021
GBP'm GBP'm
--------------------------------------------------- ---------- ----------
As at 1 April 867.1 657.3
Investments made in the period(1) 311.2 128.0
Investments settled in shares - -
Loans repaid from underlying investment vehicles (126.3) (206.3)
Carry external 13.5 -
Non-investment cash movements(2) 15.9 11.8
Unrealised gains on the revaluation of investments 329.4 276.3
--------------------------------------------------- ---------- ----------
As at 31 March 1,410.8 867.1
--------------------------------------------------- ---------- ----------
1 Investments and loans made in the period/year are amounts the
Group 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.
2 In FY21, there is a difference between the movement in the
loans made to underlying investment vehicle in Note 16 and in the
statement of cash flows. This difference is due to the fact that in
FY21 the Company loaned GBP3.7 million to Esprit Capital Fund No 1
& No 2 LP. The loan was repaid during the year ending 31 March
2021. For further details, see Note 30.
17. Related 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 and loss in the statement of financial position.
Interest
FD category*
at reporting
date/partnership
Name Address Principal activity Type of shareholding interest
----------------------- ------------------------- ----------------------- --------------------- -----------------
Churerstrasse 135, Ordinary shares
Ravenpack Holding CH-8808 Pfäffikon, Preference
AG Switzerland Trading company shares D
----------------------- ------------------------- ----------------------- --------------------- -----------------
Ordinary shares
4, rue Jules Lefebvre Preference
FinalCAD 75009 Paris Trading company shares D
----------------------- ------------------------- ----------------------- --------------------- -----------------
Solar House, 282
Chase Road, London, Ordinary shares
United Kingdom, N14 Preference
Allplants Ltd 6NZ Trading company shares D
----------------------- ------------------------- ----------------------- --------------------- -----------------
Limited partnership
Earlybird GmbH c/o Earlybird Venture pursuant to which the
& Co. Beteiligungs-KG Capital, Maximilianstr. Group holds certain Partnership
IV 14, 80539, München investments interest 27%
----------------------- ------------------------- ----------------------- --------------------- -----------------
Limited partnership
Earlybird Special c/o Earlybird Venture pursuant to which the
Opportunities Capital, Maximilianstr. Group holds certain Partnership
LP 14, 80539, München investments interest 35%
----------------------- ------------------------- ----------------------- --------------------- -----------------
Limited partnership
Earlybird DWES c/o Earlybird Venture pursuant to which the
Fund VI GmbH Capital, Maximilianstr. Group holds certain Partnership
& Co. KG 14, 80539, München investments interest 57%
----------------------- ------------------------- ----------------------- --------------------- -----------------
* 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 in the Financial
Review.
Below sets out the latest publicly available accounts for the
related undertakings above. These reflect the net asset and profit
or loss position. These relate to historic periods. No other
publicly available accounts for the related undertakings above are
available.
-- Allplants Ltd: Net assets at 31 August 2020 of GBP2.9 million
and a loss for the 12 month period ending 31 August 2020 of GBP5.2
million. The numbers in these accounts are unaudited.
18. Property, plant and equipment
Right-of-use Leasehold Computer
assets improvements equipment Total
Year ended 31 March 2022 GBP'm GBP'm GBP'm GBP'm
------------------------------------------- ------------ ------------- ---------- ------
Cost
Cost carried forward as at 1 April 2021 1.6 0.8 0.1 2.5
Additions during the period - - 0.1 0.1
Disposals during the year - - - -
------------------------------------------- ------------ ------------- ---------- ------
Cost as at 31 March 2022 1.6 0.8 0.2 2.6
------------------------------------------- ------------ ------------- ---------- ------
Accumulated depreciation
Depreciation carried forward as at 1 April
2021 (0.7) (0.4) - (1.1)
Charge for the period (0.3) (0.2) (0.1) (0.6)
Disposals during the year - - - -
------------------------------------------- ------------ ------------- ---------- ------
Accumulated depreciation as at 31 March
2022 (1.0) (0.6) (0.1) (1.7)
------------------------------------------- ------------ ------------- ---------- ------
Net book value:
------------------------------------------- ------------ ------------- ---------- ------
As at 31 March 2022 0.6 0.2 0.1 0.9
------------------------------------------- ------------ ------------- ---------- ------
Right-of-use Leasehold Computer
assets improvements equipment Total
Year ended 31 March 2021 GBP'm GBP'm GBP'm GBP'm
--------------------------------------------- ------------ ------------- ---------- ------
Cost
Cost carried forward as at 1 April 2020 1.6 0.7 0.1 2.4
Additions during the period - 0.1 - 0.1
Disposals during the year - - - -
--------------------------------------------- ------------ ------------- ---------- ------
Cost as at 31 March 2021 1.6 0.8 0.1 2.5
--------------------------------------------- ------------ ------------- ---------- ------
Accumulated depreciation
Depreciation carried forward as at 1 April
2020 (0.3) (0.3) - (0.6)
Charge for the period (0.3) (0.2) - (0.5)
Disposals during the year - - - -
--------------------------------------------- ------------ ------------- ---------- ------
Accumulated depreciation as at 31 March 2021 (0.6) (0.5) - (1.1)
--------------------------------------------- ------------ ------------- ---------- ------
Net book value:
--------------------------------------------- ------------ ------------- ---------- ------
As at 31 March 2021 1.0 0.3 0.1 1.4
--------------------------------------------- ------------ ------------- ---------- ------
The depreciation charge for the year is shown in the
"depreciation and amortisation" line of the consolidated statement
of comprehensive income.
For further information on right-of-use assets, please see the
leases note - Note 22(i).
19. Operating segments
The Group follows the accounting policy on operating segments
laid out in Note 4(c).
20. Trade and other receivables
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
---------------------------------- ---------- ----------
Trade receivables 1.1 2.5
Other receivables and prepayments 1.7 1.2
---------------------------------- ---------- ----------
Total 2.8 3.7
---------------------------------- ---------- ----------
Expected credit losses for these receivables are expected to be
immaterial. The ageing of trade receivables at reporting date is as
follows:
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
-------------------- ---------- ----------
Not past due 1.0 0.7
Past due 1-30 days 0.0 0.8
Past due 31-60 days 0.0 0.7
More than 60 days 0.1 0.3
-------------------- ---------- ----------
Total 1.1 2.5
-------------------- ---------- ----------
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.
21. Trade and other payables
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
----------------------------------- ---------- ----------
Trade payables (0.5) (0.6)
Other taxation and social security (0.5) (0.4)
Other payables (1.9) (0.2)
Accruals and deferred income (11.1) (8.2)
Accrued tax expense (0.3) (0.3)
----------------------------------- ---------- ----------
Total (14.3) (9.7)
----------------------------------- ---------- ----------
All trade and other payables are short term.
22. Financial liabilities
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
---------------------------------------- ---------- ----------
Current liabilities
Leases (0.4) (0.3)
Loans and borrowings - -
---------------------------------------- ---------- ----------
Total current financial liabilities (0.4) (0.3)
---------------------------------------- ---------- ----------
Non-current liabilities
Leases (0.3) (0.7)
Loans and borrowings (29.7) 0.4
---------------------------------------- ---------- ----------
Total non-current financial liabilities (30.0) (0.3)
---------------------------------------- ---------- ----------
Total (30.4) (0.6)
---------------------------------------- ---------- ----------
The below table shows the changes in liabilities from financing
activities.
Borrowings Leases
GBP'm GBP'm
---------------------------------------------------------- ---------- ------
At 1 April 2020 (44.6) (1.4)
Capitalisation of costs 0.3 -
Amortisation of costs (0.3) -
Drawdowns - -
Repayment of debt 45.0 -
Other changes - Interest payments (presented as operating
cash flows) - -
Payment of lease liabilities - 0.4
---------------------------------------------------------- ---------- ------
At 31 March 2021 0.4 (1.0)
---------------------------------------------------------- ---------- ------
Capitalisation of costs 0.3 -
Amortisation of costs (0.4) -
Drawdowns (30.0) -
Repayment of debt - -
Other changes - Interest payments (presented as operating
cash flows) - (0.1)
Payment of lease liabilities - 0.4
---------------------------------------------------------- ---------- ------
At 31 March 2022 (29.7) (0.7)
---------------------------------------------------------- ---------- ------
22 (i). Leases
The Group leases office buildings in London for use by its
staff. Information about leases for which the Group is a lessee is
presented below. The Group also has an office in Dublin, however
this contract is classified as a service contract and not a lease.
This is not deemed to be a lease as it has been assessed not to be
controlled by the Group as these are managed offices with no
alterations to the space allowed by the Group.
The Group leases IT equipment such as printers for use by staff.
The Group has elected to apply the recognition exemption for leases
of low value to these leases.
i. Amounts recognised on the consolidated statement of financial
position
Right-of-use assets
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
--------- ---------- ----------
Property 0.6 1.0
--------- ---------- ----------
Total 0.6 1.0
--------- ---------- ----------
Lease liabilities
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
------------ ---------- ----------
Current (0.4) (0.3)
Non-current (0.3) (0.7)
------------ ---------- ----------
Total (0.7) (1.0)
------------ ---------- ----------
Additions to the right-of-use assets during the year ending 31
March 2022 were GBPNil (year ending 31 March 2021: GBPNil).
ii. Amounts recognised in the consolidated statement of
comprehensive income
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
---------------------------------------------------------- ---------- ----------
Interest on lease liabilities (0.1) (0.1)
Depreciation charge for the period on right-of-use assets (0.3) (0.3)
---------------------------------------------------------- ---------- ----------
The total cash outflow for leases in the year ending 31 March
2022 was GBP0.4 million (year ending 31 March 2021: GBP0.4
million).
22 (ii). Loans and borrowings
In May 2021, the Company's existing revolving credit facility
with Silicon Valley Bank and Investec ("the Financiers") was
extended by GBP5.0 million to GBP65.0 million with a maturity of
June 2024. The Company incurred costs of GBP0.3 million in respect
of the increase and extension of the facility during the period,
which are presented within loans and borrowings on the statement of
financial position and are amortised over the life of the facility.
Interest-related charges are reported in the consolidated statement
of comprehensive income as finance costs (see Note 11). The bank
loans are secured on agreed assets of the Group within the asset
class of investments, updated as agreed with the Financiers from
time to time, and are subject to customary financial and
non-financial covenant conditions with which the Group must
comply.
The facility agreement contains financial and non-financial
covenants.
a. There must be a minimum of ten core investments at all times
(core investments are not defined in the same way as in this Annual
Report (as it is more broadly defined));
b. The ratio of the NAV of all investments (as defined in the
agreement) to original investment cost should not be less than
1.1:1.0 at any time; and
c. The ratio of the NAV (as defined in the agreement) plus
amounts in the collateral account to financial indebtedness (as
defined in the agreement) should not be less than 10:1 at any
time.
In addition, the borrowing base (as defined in the agreement)
must exceed the facility amount.
The debt facility is repayable on maturity (June 2024) but may
become repayable earlier under certain conditions, including it
becoming unlawful for Molten Ventures plc to perform any of its
obligations per the legal agreement, voluntary cancellation of the
loan, the principal outstanding on the loan exceeding the facility
limit, or the principal outstanding exceeding the maximum permitted
amount.
As collateral for interest payments, an amount equal to the
aggregate amount of interest costs due for the coming six months,
all being equal, must be held in an Interest Reserve Account at all
times. The balance of this at 31 March 2022 was GBP2.3 million (31
March 2021: GBP2.3 million) and is reflected on the consolidated
statement of financial position as restricted cash.
As at 31 March 2022, the Company has drawn down GBP30.0 million
of the GBP65.0 million facility (31 March 2021: GBPNil of the
GBP60.0 million facility)
31 Mar 2022 31 Mar 2021
GBP'm GBP'm
----------------------------------------- --------------------- ----------------------
Bank loan senior facility amount 65.0 60.0
----------------------------------------- --------------------- ----------------------
BOE base rate
Interest rate BOE base rate + 6.25% + 6.75% / 7.50% floor
----------------------------------------- --------------------- ----------------------
Drawn at balance sheet date (30.0) -
----------------------------------------- --------------------- ----------------------
Arrangement fees 0.3 0.4
----------------------------------------- --------------------- ----------------------
Loan liability balance (29.7) 0.4
----------------------------------------- --------------------- ----------------------
Undrawn facilities at balance sheet date 35.0 60.0
----------------------------------------- --------------------- ----------------------
23. 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:
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
------------------------------------------ ---------- ----------
Arising on share-based payments 1.6 -
------------------------------------------ ---------- ----------
Deferred tax asset 1.6 -
------------------------------------------ ---------- ----------
Arising on business combination (0.1) (0.1)
Arising on co-invest and carried interest (0.3) (0.6)
Arising on the investment portfolio (25.6) -
Other timing differences (0.1) 0.3
------------------------------------------ ---------- ----------
Deferred tax liability (26.1) (0.4)
------------------------------------------ ---------- ----------
Net deferred tax liability 24.5 (0.4)
------------------------------------------ ---------- ----------
24. Share capital and share premium
Ordinary share capital
31 March 2022 - Allotted and fully paid Number Pence GBP'm
--------------------------------------------------- ----------- ------ ------
As at 1 April 139,097,075 1 1.4
Issue of share capital during the year for cash(1) 13,902,778 1 0.1
--------------------------------------------------- ----------- ------ ------
As at 31 March 152,999,853 1 1.5
--------------------------------------------------- ----------- ------ ------
1 In June 2021, the Company raised gross proceeds of GBP111.2
million at a placing price of 800 pence per share by way of a
placing of 13,902,778 new ordinary shares.
31 March 2021 - Allotted and fully paid Number Pence GBP'm
--------------------------------------------------- ----------- ------ ------
As at 1 April 118,918,124 1 1.2
Issue of share capital during the year for share
options being exercised(1) 359,131 1 -
Issue of share capital during the year for cash(2) 19,819,820 1 0.2
--------------------------------------------------- ----------- ------ ------
As at 31 March 139,097,075 1 1.4
--------------------------------------------------- ----------- ------ ------
1 Between August 2020 and March 2021, 359,131 new 1 pence
ordinary shares were issued in association with share options being
exercised.
2 In October 2020, the Company secured commitments to raise
gross proceeds of GBP110.0 million at a placing price of 555 pence
per share by way of a conditional placing of 19,819,820 new
ordinary shares.
Share premium
Year ended Year ended
31 Mar 31 Mar
2022 2021(1)
Allotted and fully paid GBP'm GBP'm
--------------------------------------------------- ---------- ----------
As at 1 April 508.3 400.7
Premium arising on the issue of ordinary shares(2) 111.2 111.1
Equity issuance costs (3.6) (3.5)
--------------------------------------------------- ---------- ----------
As at 31 March 615.9 508.3
--------------------------------------------------- ---------- ----------
1 There is a difference between the share premium balance sheet
movement and cash flow movement. This difference results from the
fact that, in respect of shares issued for share options exercised
during FY21, the cash is the market value of shares, whereas the
amount recognised in share premium is the exercise price less share
capital.
2 The movement on share premium during the year ending 31 Match
2022 has arisen as a result the issue of 13,902,778 ordinary shares
issued by way of a conditional placing in June 2022. The movement
on share premium during the year ending 31 March 2021 has arisen as
a result of 359,131 ordinary shares issued in association with
share options being exercised during the year and the issue of
19,819,820 ordinary shares issued by way of a conditional placing
in October 2020.
25. 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 issuing shares under the Molten Ventures plc 2016 Company Share
Options Plan and Long-Term Incentive Plan. Shares issued to
employees are recognised on a weighted average cost basis. The
Trust holds 0.61% of the issued share capital at 31 March 2022.
Year ended 31 Year ended 31 Mar
Mar 2022 2021
No. of No. of
shares shares
m GBP'm m GBP'm
--------------------------------------------- ------- ------ ---------- -------
As at 1 April (0.1) (0.3) - -
Acquisition of shares by the Trust (0.8) (8.0) (0.3) (2.3)
Disposal or transfer of shares by the Trust* - 0.1 0.2 2.0
--------------------------------------------- ------- ------ ---------- -------
As at 31 March (0.9) (8.2) (0.1) (0.3)
--------------------------------------------- ------- ------ ---------- -------
* 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 ending 31 March 2022 were GBPNil (year ending 31
March 2021: GBP1.6 million).
ii. Other reserves
The following table shows a breakdown of the "other reserves"
line in the consolidated interim 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.
Share-based
payments Share-based
reserve payments
resulting reserve
Merger from Company resulting
relief share option from acquisition Total other
reserve scheme of subsidiary reserves
Year ending 31 March 2022 GBP'm GBP'm GBP'm GBP'm
---------------------------------------- -------- ------------- ----------------- -----------
As at 1 April 13.1 2.3 10.8 26.2
Share-based payments - 3.7 - 3.7
Share-based payments - exercised during
the year - (1.0) - (1.0)
---------------------------------------- -------- ------------- ----------------- -----------
As at 31 March 13.1 5.0 10.8 28.9
---------------------------------------- -------- ------------- ----------------- -----------
Share-based
payments Share-based
reserve payments
resulting reserve
Merger from Company resulting
relief share option from acquisition Total other
reserve scheme of subsidiary reserves
Year ending 31 March 2021 GBP'm GBP'm GBP'm GBP'm
---------------------------------------- -------- ------------- ----------------- -----------
As at 1 April 13.1 2.3 10.8 26.2
Share-based payments - 0.8 - 0.8
Share-based payments - exercised during
the year - (0.8) - (0.8)
---------------------------------------- -------- ------------- ----------------- -----------
As at 31 March 13.1 2.3 10.8 26.2
---------------------------------------- -------- ------------- ----------------- -----------
Merger relief reserve
In accordance with the Companies Act 2006, a Merger Relief
Reserve of GBP13.1 million (net of the cost of share capital issued
of GBP80k) 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.
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 14 for further details on how the fair
value at the date of grant is recognised.
26. Adjustments to reconcile operating profit to net cash
(outflow)/inflow in operating activities
Year ended Year ended
31 March 31 March
2022 2021
Notes GBP'm GBP'm
------------------------------------------------------ ------ ---------- ----------
Adjustments to reconcile operating profit to net
cash (outflow)/inflow in operating activities:
Revaluation of investments held at fair value through
profit and loss 6 (329.4) (276.3)
Depreciation and amortisation 15, 18 0.8 0.7
Share-based payments - resulting from Company share
option scheme 14 3.7 1.5
Finance income 11 (1.8) (0.2)
Finance expense 11 1.4 5.4
Deferred tax on investment portfolio 23 25.6 -
(Increase)/decrease in trade and other receivables
and other working capital movements (0.6) 0.4
Increase/(decrease) in trade and other payables 5.5 4.1
------------------------------------------------------ ------ ---------- ----------
Adjustments to reconcile operating profit to net
cash (outflow)/inflow in operating activities: (294.8) (264.4)
------------------------------------------------------ ------ ---------- ----------
Please see Note 22 for the changes in liabilities from financing
activities.
27. 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.
28. 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 and Note 16.
As noted Note 5, valuation of unquoted equity investments at fair
value through profit or loss is a critical accounting estimate and
actuals may differ from estimates. 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 FY22
(FY21: immaterial). For further discussion of our climate-related
risks, please see our TCFD and Principal Risks sections 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 2022, and 31 March 2021
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 FY21 and FY22 are
financial assets relating to holdings in high-growth technology
companies. The Group invests in special purpose vehicles and
limited partnerships which are considered to be investment
companies that invest 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 FY21 and FY22.
For details of the reconciliation of those amounts please refer to
Note 16. 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:
Fair Value Fair Value
of Movement Movement Fair Value of
Investments Non-investment in Foreign in Fair movement Investments
31-Mar-21 Investments Realisations cash movement Exchange Value 31-Mar-22 31-Mar-22
Investments GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
Total Portfolio 981.2 311.2 (126.3) - 15.9 347.7 363.6 1,529.7
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
Co-Invest 2.6 - - - - (0.8) (0.8) 1.8
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
Gross Portfolio
Value 983.8 311.2 (126.3) - 15.9 346.9 362.8 1,531.5
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
Carry External (97.0) - 13.5 - - (38.0) (38.0) (121.5)
Portfolio
Deferred
tax (20.0) - - - - 20.5 20.5 0.5
Trading carry
& co-invest 0.3 - - - - - - 0.3
Non-investment
cash movement - - - 15.9 - (15.9) (15.9) -
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
Net Portfolio
Value 867.1 311.2 (112.8) 15.9 15.9 313.5 329.4 1,410.8
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
Fair Value Fair Value Fair Value
of Movement Movement of of
Investments Non-investment in Foreign in Fair movement Investments
31-Mar-20 Investments Realisations cash movement Exchange Value 31-Mar-21 31-Mar-21
Investments GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
Portfolio 701.1 128.0 (205.7) - (51.2) 409.0 357.8 981.2
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
Total 701.1 128.0 (205.7) - (51.2) 409.0 357.8 981.2
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
Co-Invest 1.8 - (0.6) - - 1.4 1.4 2.6
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
Gross Portfolio
Value 702.9 128.0 (206.3) - (51.2) 410.4 359.2 983.8
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
Carry External (40.6) - - - - (56.4) (56.4) (97.0)
Portfolio
Deferred
tax (5.3) - - - - (14.7) (14.7) (20.0)
Trading carry
& co-invest 0.3 - - - - - - 0.3
Non-investment
cash movement - - - 11.8 - (11.8) (11.8) -
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
Net Portfolio
Value 657.3 128.0 (206.3) 11.8 (51.2) 327.5 276.3 867.1
--------------- ----------- ----------- ------------ -------------- ---------- -------- ---------- -----------
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 which would be due to 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. These values are calculated
based on unrealised fair value of investments at reporting date at
the applicable tax rate.
Trading carry & 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 2022, there were transfers out
of Level 3 and into Level 1 following the listing of two
investments, one is 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 (iii) below 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 Level 1 Level 2 Level 3 Total
At 31 March 2022 GBP'm GBP'm GBP'm GBP'm
---------------------------------------------- ------- ------- ------- -------
Financial assets at fair value through profit
or loss
Quoted investments 64.0 - - 64.0
Unquoted investments - - 1,465.7 1,465.7
---------------------------------------------- ------- ------- ------- -------
Total financial assets 64.0 0.0 1,465.7 1,529.7
---------------------------------------------- ------- ------- ------- -------
Fair value measurements Level 1 Level 2 Level 3 Total
At 31 March 2021 GBP'm GBP'm GBP'm GBP'm
---------------------------------------------- ------- ------- ------- ------
Financial assets at fair value through profit
or loss
Quoted investments 85.5 - - 85.5
Unquoted investments - - 895.7 895.7
---------------------------------------------- ------- ------- ------- ------
Total financial assets 85.5 - 895.7 981.2
---------------------------------------------- ------- ------- ------- ------
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
-- NAV of underlying fund
-- Revenue-multiple
Each portfolio company will be subject to individual
assessment.
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 and 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. They are also adjusted to represent our longer-term
view of performance through the cycle of our existing
assumption.
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.
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 2022 and 30 March 2021.
Level 3 valuations GBP'm
-------------------------------------------- -------
Opening balance at 1 April 2020 701.1
Investments 128.0
Gains 357.8
Realisations (205.7)
-------------------------------------------- -------
Unadjusted closing balance at 31 March 2021 981.2
-------------------------------------------- -------
Transfer to Level 1 (85.5)
-------------------------------------------- -------
Closing balance at 31 March 2021 895.7
-------------------------------------------- -------
Investments 309.1
Gains 435.7
Realisations (86.2)
-------------------------------------------- -------
Unadjusted closing balance at 31 March 2022 1,554.3
-------------------------------------------- -------
Transfer to Level 1 (88.6)
-------------------------------------------- -------
Closing balance at 31 March 2022 1,465.7
-------------------------------------------- -------
iv. Valuation inputs and relationships for fair value
The following table summarises the methodologies used by the
Group to measure the fair value of Level 3 instruments:
FY22
------------ ---------- ------------------- -------------------------------- ----------- -----------
Sensitivity - effect
of % enterprise value
movement on total
fair value
GBP'm
------------------------
Fair value
Investments GBP'm Valuation technique Significant input +10% -10%
------------ ---------- ------------------- -------------------------------- ----------- -----------
Calibrated round enterprise
value - Pre and post year-end
round enterprise values
have been calibrated with
appropriate discounts taken
to reflect movements in
publicly listed peer multiples,
future revenue projections
and timing risk. Discounts
were applied to 52% of
the fair value of investments
measured at calibrated
price of recent investment.
The range of discounts
Calibrated taken is between 15%-89%.The
Unquoted price of weighted average discount
equity 806.7 recent investment taken is 25%. 881.0 739.6
------------ ---------- ------------------- -------------------------------- ----------- -----------
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 0.9x-13.8x and
a weighted average multiple
of 7.8x.
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
418.1 Market comparables information. 458.0 378.3
------------ ---------- ------------------- -------------------------------- ----------- -----------
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
NAV of underlying movements where reporting
240.8 fund periods do not align. 264.9 216.8
------------ ---------- ------------------- -------------------------------- ----------- -----------
Total 1,465.7 1,603.9 1,334.7
------------ ---------- ------------------- -------------------------------- ----------- -----------
FY21
------------ ---------- ------------------- --------------------------------- ----------- -----------
Sensitivity - effect
of % enterprise value
movement on total
fair value
GBP'm
------------------------
Fair value
Investments GBP'm Valuation technique Significant input +10% -10%
------------ ---------- ------------------- --------------------------------- ----------- -----------
Calibrated round enterprise
value - recent round enterprise
value is calibrated against
the equivalent value using
a revenue-multiple valuation
methodology, amongst other
factors.
Pre and post year-end round
enterprise values have
been calibrated with appropriate
discounts taken to reflect
movements in publicly listed
Calibrated peer multiples, future
Unquoted price of recent revenue projections and
equity 450.5 investment timing risk. 495.6 405.4
------------ ---------- ------------------- --------------------------------- ----------- -----------
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 0.6x-9.1x and
a weighted average multiple
of 4.8x.
Revenue - We select 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
326.6 Market comparables information. 359.2 294.0
------------ ---------- ------------------- --------------------------------- ----------- -----------
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
NAV of underlying movements where reporting
118.6 fund periods do not align. 130.4 106.8
------------ ---------- ------------------- --------------------------------- ----------- -----------
Total 895.7 985.2 806.2
------------ ---------- ------------------- --------------------------------- ----------- -----------
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, 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 timelines, 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.
29. 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:
31 Mar 31 Mar
2022 2021
Foreign currency exposures - Investments GBP'm GBP'm
----------------------------------------- ------ ------
Investments - exposures in EUR 614.3 286.6
10% decrease in GBP 682.6 318.4
10% increase in GBP 558.5 260.5
----------------------------------------- ------ ------
Investments - exposures in USD 484.5 477.8
10% decrease in GBP 538.3 530.8
10% increase in GBP 440.5 434.4
----------------------------------------- ------ ------
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:
31 March 31 March
2022 2021
Foreign currency exposures - Cash GBP'm GBP'm
---------------------------------- -------- --------
Cash denominated in EUR 24.5 40.6
10% decrease in EUR: GBP 22.0 36.5
10% increase in EUR: GBP 26.9 44.6
---------------------------------- -------- --------
Cash denominated in USD 32.5 26.3
10% decrease in USD: GBP 29.3 23.6
10% increase in USD: GBP 35.8 28.9
---------------------------------- -------- --------
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:
31 March 31 March
2022 2021
Foreign currency exposures - Equity GBP'm GBP'm
------------------------------------ -------- --------
Shareholders' Equity 1,433.8 1,033.1
10% decrease in EUR: GBP/USD : GBP 1,290.5 929.8
10% increase in EUR: GBP/USD : GBP 1,577.3 1,136.5
------------------------------------ -------- --------
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 and Note 28, 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 28). 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 Revenue-multiple NAV of underlying Calibrated
fund price of
investment
---------------- ------------------- -------------------- --------------
-10% +10% -10% +10% -10% +10% -10% +10%
--------------------- -------- ---------- ------- ----------- ------- ------- -----
As at 31 March 2022 (6.4) 6.4 (39.8) 39.9 (24.1) 24.1 (67.2) 74.3
-------- ------ ---------- ------- ----------- ------- ------- -----
As at 31 March 2021 (8.6) 8.6 (32.6) 32.6 (11.8) 11.8 (45.1) 45.1
-------- ------ ---------- ------- ----------- ------- ------- -----
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. For
further details of movements in our quoted investments post
year-end, please see the Note 35, Subsequent events. Theoretical
impact of a fluctuation of +/- 20% would have the following
impact:
Valuation methodology
Quoted equity Revenue-multiple NAV of underlying Calibrated
fund price of
investment
---------------- ------------------- -------------------- ----------------
-20% +20% -20% +20% -20% +20% -20% +20%
--------------------- --------- ---------- ------- ----------- ------- -------- ------
As at 31 March 2022 (12.8) 12.8 (80.2) 79.7 (48.2) 48.2 (132.2) 151.4
--------- ----- ---------- ------- ----------- ------- -------- ------
As at 31 March 2021 (17.1) 17.1 (65.2) 65.2 (23.7) 23.7 (90.1) 90.1
--------- ----- ---------- ------- ----------- ------- -------- ------
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. Restricted cash includes GBP2.3
million of collateral for interest payments on the revolving credit
facility (see Note 22). 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 loan facility and requirement for utilisation
requests is monitored as part of this process. For the contractual
maturities of the Group's liabilities see tables below.
Contractual maturities Between Between
of liabilities at 31 March Less than 1 and 2 and Total contractual Carrying
2022 6 months 6-12 months 2 years 5 years cash flows amount
------------------------------ --------- ----------- -------- -------- ----------------- --------
Trade and other payables (13.3) (1.0) - - (14.3) (14.3)
Fees on facility - - - - 0.3 0.3
Facility (1.2) (1.2) (2.3) (30.3) (35.0) (35.0)
Provisions - - (0.2) - (0.2) (0.2)
Current lease liabilities (0.2) (0.2) - - (0.4) (0.4)
Non-current lease liabilities - - (0.3) - (0.3) (0.3)
------------------------------ --------- ----------- -------- -------- ----------------- --------
Total shown in the Statement
of Financial Position (14.7) (2.4) (2.8) (30.3) (49.9) (49.9)
------------------------------ --------- ----------- -------- -------- ----------------- --------
Contractual maturities of Between Between
liabilities at 31 March Less than 1 and 2 and Total contractual Carrying
2021 6 months 6-12 months 2 years 5 years cash flows amount
------------------------------ --------- ----------- -------- -------- ----------------- --------
Trade and other payables (8.1) (1.6) - - (9.7) (9.7)
Fees on facility - - - - 0.4 0.4
Facility - - - - - -
Current lease liabilities (0.2) (0.1) - - (0.3) (0.3)
Non-current lease liabilities - - (0.4) (0.3) (0.7) (0.7)
------------------------------ --------- ----------- -------- -------- ----------------- --------
Total shown in the Statement
of Financial Position (8.3) (1.7) (0.4) (0.3) (10.3) (10.3)
------------------------------ --------- ----------- -------- -------- ----------------- --------
Lease liabilities fall due over the term of the lease - see Note
22(i) for further details. The debt facility has a term of three
years - for further details, see Note 22. 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 strategy, we make commitments to
funds to be drawn down over the life of the fund. Projected
drawdowns are monitored as part of the monitoring process above.
For further details, see Note 31.
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.
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 31 March is summarised below:
31 March 31 March
Classes of financial assets impacted by credit risk, carrying 2022 2021
amounts GBP'm GBP'm
-------------------------------------------------------------- -------- --------
Trade and other receivables 2.8 3.7
Cash at bank and on hand 75.8 158.4
Restricted cash 2.3 2.3
-------------------------------------------------------------- -------- --------
Total 80.9 163.2
-------------------------------------------------------------- -------- --------
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 2022 and
31 March 2021 is held with the following institutions: (1) Barclays
Bank plc; (2) Silicon Valley Bank plc; (3) Investec Bank plc; and
(4) EFG Private Bank Limited.
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 balance sheet
date. The Group has a revolving credit facility in place. During
the year drawdowns of GBP30.0 million took place, with GBP30.0
million drawn at 31 March 2022 (31 March 2021: no drawdowns).
Please refer to Note 22(ii) for further details regarding the
revolving credit facility.
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 to manage cash.
Interest rate risk
The Group's interest rate risk arises from borrowings on the
GBP65.0 million loan facility with Silicon Valley Bank and
Investec, which was entered into in June 2019. Prior to the period
ending 30 September 2019, the Group did not have any borrowings.
The Group's borrowings are denominated in GBP and are carried at
amortised cost.
Drawdowns of GBP30.0 million were made during the year (maximum
drawn during the year of GBP30.0 million) at an interest rate of
6.75%, rising to 7% from 17 March 2022 - an amount of GBP30.0
million was drawn at 31 March 2022. Future drawdowns may be subject
to a different interest rate. The facility agreement has an
interest rate calculated with reference to the Bank of England base
rate (currently 1.0% at date of publication) with a margin of
6.25%. At 31 March 2022, the agreement does not have an interest
rate floor (at 31 March 2021: interest rate floor of 7.50%). If the
base rate increases, the interest charged on future drawdowns will
increase.
If the Bank of England base rate had been 1.0% higher during the
year to 31 March 2022 the difference to the consolidated statement
of comprehensive income would have been an increase in finance
costs of GBP0.1 million. If the Bank of England base rate had been
1.0% higher during the year to 31 March 2022 the difference to the
consolidated statement of cash flows would have been an increase in
expenditure of GBP0.1 million.
30. 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.
On 30th March 2022, Molten Ventures plc entered into an
agreement with Softcat plc to provide Molten Ventures plc with
fractional CIO services. Karen Slatford is both the Chair of
Softcat plc's Board and the Chair of Molten Ventures plc's
Board.
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 84 to 85 of the Annual Report for the
year ending 31 March 2022.
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
------------------------------------------------ ---------- ----------
Wages and salaries 2.6 2.2
Short-term non-monetary benefits - -
Defined contribution pension costs 0.2 0.1
Share-based payment expense - 1.0
Social security contributions and similar taxes 0.4 0.4
Carried interest paid 2.6 0.2
------------------------------------------------ ---------- ----------
Total 5.8 3.9
------------------------------------------------ ---------- ----------
The details of individual Directors' remuneration and pension
benefits, as set out in the tables contained in the Directors'
Remuneration Report on page 112, 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 14 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.
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.
Year ended Year ended
31 March 31 March
Management fees recognised in the statement of comprehensive 2022 2021
income resulting from related party transactions GBP'm GBP'm
------------------------------------------------------------- ---------- ----------
Management fees from unconsolidated structured entities 12.7 9.2
Management fees from EIS and VCT funds 5.1 3.4
------------------------------------------------------------- ---------- ----------
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 16 beneficiaries in the year, of which the
below was to related parties. Carry payments have been made in
respect of Esprit Capital III LP, Esprit Capital IV LP and Esprit
Capital (1) (B) LP to key management personnel in FY21 and FY22.
Please see the Directors' Remuneration Report for further
details.
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
--------------- ---------- ----------
Carry payments 2.6 0.2
--------------- ---------- ----------
Performance fees
Performance fees have been paid during the year by the EIS and
VCT funds to Encore Ventures LLP. At 31 March 2022, GBP0.8 million
was unpaid (31 March 2021: GBPNil).
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
----------------- ---------- ----------
Performance fees 2.5 -
----------------- ---------- ----------
Loans to related parties
In addition to the above, during the year ended 31 March 2021,
the Company loaned GBP3.7 million to Esprit Capital Fund No 1 &
No 2 LP on an arm's length basis. The loan was repaid during the
year ending 31 March 2021 along with accrued interest of GBP0.4
million.
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
subsidiary, Molten Ventures (Ireland) 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.
31 March 31 March
Registered 2022 2021
Name of undertaking office Activity Holding Country GBP'm GBP'm
-------------------- ------------------- ------------------------- ------- -------- -------- --------
Limited Partnership
20 Garrick pursuant to which
Esprit Investments Street, London, the Group makes certain
(1) (B) LP WC2E 9BT investments 100% England 18.0 12.0
-------------------- ------------------- ------------------------- ------- -------- -------- --------
Limited Partnership
20 Garrick pursuant to which
Esprit Investments Street, London, the Group makes certain
(2) (B) LP WC2E 9BT investments 100% England 240.0 157.6
-------------------- ------------------- ------------------------- ------- -------- -------- --------
32 Molesworth
Molten Ventures Street, Dublin
(Ireland) Limited 2, Ireland Investment entity 100% Ireland 1,121.7 670.6
-------------------- ------------------- ------------------------- ------- -------- -------- --------
Limited Partnership
20 Garrick pursuant to which
Esprit Capital Street, London, the Group makes certain
III LP WC2E 9BT investments 100% England 50.8 71.4
-------------------- ------------------- ------------------------- ------- -------- -------- --------
Limited Partnership
20 Garrick pursuant to which
Esprit Capital Street, London, the Group makes certain
IV LP WC2E 9BT investments 100% England 34.8 79.6
-------------------- ------------------- ------------------------- ------- -------- -------- --------
c/o Maples
Corporate
Services Limited
at PO Box
309, Ugland Limited Partnership
House, Grand pursuant to which
DFJ Europe X Cayman, KY1-1104, the Group makes certain Cayman
LP Cayman Islands investments 100% Islands 15.8 62.7
-------------------- ------------------- ------------------------- ------- -------- -------- --------
Limited Partnership
20 Garrick pursuant to which
Esprit Investments Street, London, the Group makes certain
(1) LP WC2E 9BT investments 100% England 248.3 211.1
-------------------- ------------------- ------------------------- ------- -------- -------- --------
Limited Partnership
20 Garrick pursuant to which
Esprit Investments Street, London, the Group makes certain
(2) LP WC2E 9BT investments 100% England 787.2 307.8
-------------------- ------------------- ------------------------- ------- -------- -------- --------
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), Esprit Capital III 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.
31. Capital commitments
The Group makes commitments to seed 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 2022 but are
not recognised as a liability on the consolidated statement of
financial position:
Year ended Year ended
31 March 31 March
2022 2021
GBP'm GBP'm
---------------------------- ---------- ----------
Undrawn capital commitments 74.2 68.2
---------------------------- ---------- ----------
Total capital commitments 263.5 218.9
---------------------------- ---------- ----------
Total exposure for the Group to these seed funds (including
Earlybird) is GBP399.5 million of investments (31 March 2021:
GBP328.8 million).
32. Ultimate controlling party
The Directors of Molten Ventures plc do not consider there to be
a single ultimate controlling party of the Group.
33. 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 28 for a reconciliation to the net investment balance. This
table also shows the Gross to Net movement, which is 92% in the
current year calculated as the net investment value (GBP1,410.8
million) divided by the GPV (GBP1,531.5 million). The table
reflects a Gross fair value movement of GBP362.8 million, on an
opening balance of GBP983.8 million, which is a 37% percentage
change on the 31 March 2021 GPV. This is described in the report as
the Gross fair value 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.
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.
34. Exceptional items
Exceptional costs were recognised in the year ending 31 March
2022 relating to the Company's Main Market Move of GBP2.4 million
(31 March 2021: GBPNil). The majority of these costs include fees
relating to brokers, legal advisory, listing, reporting accountant,
NED recruitment, remuneration advisory, IT consultancy, and PR
services.
35. Subsequent events
Post period-end, we have deployed GBP73.7 million in investments
including our announced deal in HiveMQ.
We announced the funding rounds of Thought Machine and Aiven
(Aiven is held via our partnership with Earlybird).
At 31 March 2022, we held interests in three listed companies -
Trustpilot, UiPath, and Cazoo. Their valuations are based on their
quoted share price on 31 March 2022. Their value using the closing
quoted share price on 8 June 2022 was GBP43.9 million.
There are no further post balance sheet events requiring
comment.
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