FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2022

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 YEAR ENDED 31 MARCH 2022

Molten Ventures (LSE: GROW, Euronext Dublin: GRW),

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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.

 

-ENDS-

 

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 £865m capital into fast growing tech companies and have realised over £439m to 31 March 2022.

 

For more information, go to https://www.moltenventures.com/  

 

 

 

 

 

 

 

 

Cash proceeds were £126.3 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. 

Investments

 

New companies - co-investment strategy

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**Please refer to Note 28 for details.

Industry performance metrics published by MLPerf demonstrated Graphcore have a significant Price to Performance advantage over the market leader, Nvidia1.  These are the first public benchmarks published that show Graphcore against Nvidia

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/

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.£400 million of AUM from our EIS and VCT funds.

Priority Profit Share ("PPS")

We recognised profit in the year of £300.7 million, up from £267.4 million in FY21.

Income recognised during the year ending 31 March 2022 comprises investment gains of £329.4 million (year ending 31 March 2021: £276.3 million), as well as fee income of £21.8 million (year ended 31 March 2021: £12.5 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 £0.5m 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 £19.5 million, compared to the £13.8 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 £2.0 million of performance fees (highlighted above) that were paid out. Exceptional costs of £2.4 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.

Gross Portfolio Value Table

Investments

Fair Value of

Investments 31-Mar-21

£m

Investments

£m

Realisations

£m

Non-investment cash movement

£m

Movement in

Foreign Exchange

£m

Movement in

Fair Value

£m

Fair Value of

Movement 31-Mar-22

£m

Fair Value of

Investments 31-Mar-22

£m

Interest FD Category* at reporting date










*   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%


Notes

Year ended
31 March 2022

£'m

Year ended
 31 March 2021

£'m








































Notes

Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m
































Notes

Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m




































£'m

Note

Share capital

Share premium

Own shares reserve

Other reserves

Retained earnings

Total equity














£'m

 Note

Share capital

Share premium

Own shares reserve

Other reserves

Retained earnings

Total equity


















1. General information

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Name of undertaking

Nature of business

Country of incorporation

% ownership

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

Name of undertaking

Principal activity

Country of incorporation

% ownership

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^   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

 

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. The vehicles in question are as follows:

Name of undertaking

Principal activity

Country of incorporation

^   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.

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.

Continued participation in existing carried interest schemes that pre-dated the start of the 2021 financial year were not affected.


Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m


Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m


Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m


Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m


Year ended
31 March 2022

Number

Year ended
31 March 2021

Number


Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m




Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m


Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m






Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m


Profit after tax

£'m

No. of shares

m

Pence
per share


Profit after tax

£'m

No. of shares1

m

Pence
per share


Net assets

£'m

No. of shares

m

Pence
per share


Net assets

£'m

No. of shares1

m

Pence
per share


Date of
Grant

b/f
1 April 2021

(No.)

Granted in the year

(No.)

Lapsed in the year

(No.)

Exercised in the year

(No.)

c/f
31 Mar 2022

(No.)

Approved options

Vesting
period

Exercise Price (pence)

Fair value per granted instrument (pence)





Year ended 31 March 2022

Goodwill

£'m

Customer contracts2

£'m

Total 

£'m










Year ended 31 March 2021

Goodwill1

£'m

Customer contracts2

£'m

Total 

£'m










1  In FY21, goodwill of £0.7 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 £0.3 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.


Year ended
31 March 2022

£'m

Year ended
31 Mar 2021

£'m

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 £3.7 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.

Name

Address

Principal activity

Type of shareholding

Interest FD category* at reporting date/partnership interest

*  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%.

Year ended 31 March 2022

Right-of-use assets

£'m

Leasehold improvements

£'m

Computer equipment

£'m

Total 

£'m













Year ended 31 March 2021

Right-of-use assets

£'m

Leasehold improvements

£'m

Computer equipment

£'m

Total 

£'m














Year ended
31 March 2022

£'m

Year ended

31 March 2021

£'m


Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m


Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m


Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m





Borrowings

£'m

Leases

£'m


Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m


Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m


Year ended
31 March 2022

£'m

Year ended
31 March 2021

£'m


31 Mar 2022

£'m

31 Mar 2021

£'m


Year ended

 31 March 2022

£'m

Year ended

31 March 2021

£'m

31 March 2022 - Allotted and fully paid

Number

 Pence 

 'm

1  In June 2021, the Company raised gross proceeds of £111.2 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 

 'm

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 £110.0 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 

Allotted and fully paid

Year ended

31 Mar 2022

£'m

Year ended

31 Mar 20211

£'m

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.

 

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.


Year ended 31 Mar 2022

Year ended 31 Mar 2021


No. of shares

m

 'm

No. of shares

m

 'm

*  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 £Nil (year ending 31 March 2021: £1.6 million).

Year ending 31 March 2022

Merger relief reserve

£'m

Share-based payments reserve resulting from Company share option scheme

£'m

Share-based payments reserve resulting from acquisition of subsidiary

£'m

Total other reserves

£'m

Year ending 31 March 2021

Merger relief reserve

£'m

Share-based payments reserve resulting from Company share option scheme

£'m

Share-based payments reserve resulting from acquisition of subsidiary

£'m

Total other reserves

£'m


Notes

Year ended

31 March 2022

£'m

Year ended

31 March 2021

£'m







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:

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

At 31 March 2021

Level 1

£'m

Level 2

£'m

Level 3

£'m

Total

£'m





Level 3 valuations

£'m

FY22










Sensitivity - effect of % enterprise value movement on total fair value

£'m

Investments

Fair value

£'m

Valuation technique

Significant input

+10%

-10%

 Discounts were applied to 52% of the fair value of investments measured at calibrated price of recent investment. The range of discounts taken is between 15%-89%.The weighted average discount taken is 25%.



FY21










Sensitivity - effect of % enterprise value movement on total fair value

£'m

Investments

Fair value

£'m

Valuation technique

Significant input

+10%

-10%



Foreign currency exposures - Investments

31 Mar 2022

£'m

31 Mar 2021

£'m

Foreign currency exposures - Cash

31 March 2022

£'m

31 March 2021

£'m

Foreign currency exposures - Equity

31 March 2022

£'m

31 March 2021

£'m

Contractual maturities of liabilities at 31 March 2022

Less than
6 months

6-12 months

Between
1 and 2 years

Between
2 and 5 years

Total contractual
cash flows

Carrying amount

Contractual maturities of liabilities at 31 March 2021

Less than
6 months

6-12 months

Between
1 and 2 years

Between
2 and 5 years

Total contractual
cash flows

Carrying amount

Classes of financial assets impacted by credit risk, carrying amounts

31 March 2022

£'m

31 March 2021

£'m

Drawdowns of £30.0 million were made during the year (maximum drawn during the year of £30.0 million) at an interest rate of 6.75%, rising to 7% from 17 March 2022 - an amount of £30.0 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.


Year ended

31 March 2022

£'m

Year ended

31 March 2021

£'m

Management fees recognised in the statement of comprehensive income resulting from related party transactions

Year ended

31 March 2022

£'m

Year ended

31 March 2021

£'m


Year ended

31 March 2022

£'m

Year ended

31 March 2021

£'m

Performance fees have been paid during the year by the EIS and VCT funds to Encore Ventures LLP. At 31 March 2022, £0.8 million was unpaid (31 March 2021: £Nil).

 

 

Year ended

31 March 2022

£'m

Year ended

31 March 2021

£'m

Name of undertaking

Registered office

Activity

Holding

Country

31 March 2022

£'m

31 March 2021

£'m


Year ended

31 March 2022

£'m

Year ended

31 March 2021

£'m

 

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