Financial highlights

• NAV per share after performance fee1 increased by 0.8% to 160.2p (31 March 2023: 158.9p).

• IRR of 16.6%2 on invested capital since inception (31 March 2023: 18.5%)

• Available cash at period end of £51.8 million (free cash of £48.0 million) with no debt (31 March 2023: £38.5 million).

• Repurchased 3,918,878 shares over the period, at an average price of 99.2p per share.

Portfolio and investment highlights

• The top 10 holdings, which represent 82% of portfolio value, grew revenue at an average of 74%3 YoY and have an average of 29 months cash runway. 4 of the top 10 positions are cash generative.

• The sum value of the top three holdings in Tide, Grover, and Zopa, plus current cash, is above the Company’s market capitalisation. These positions continue to demonstrate their credentials as fintech market leaders, growing revenues by an average of over 1,200% since the Company’s investment and are either profitable or capitalised until projected profitability.

• Cushon, the workplace pensions and savings provider, completed their majority shareholding acquisition by NatWest Group in June 2023, which delivered a return of 2.1x multiple on invested capital with proceeds of £22.8 million and a 62% IRR.

• Tide, the SME business bank, now services 1 in 10 UK small and mid-sized businesses, representing 550,000 UK businesses. Since expanding into India in December 2022, Tide now has more than 150,000 members in the country.

• Zopa Bank, the digital-first consumer bank and lender, announced in September 2023 that it had successfully raised £75 million in Tier 2 capital to fuel its continuous growth and rapid expansion. This financing follows £75 million of equity funding raised earlier this year, in which Augmentum participated. Zopa Bank now serves 1 million customers and expects to hit full-year profitability for the first time this year.

• Monese, the mobile-only current accounts and banking as a service (BaaS) provider, announced the launch of XYB, an end-to-end ‘coreless’ banking platform provider, in May 2023.

• Wematch.live, the capital markets trading platform, surpassed $200 billion in ongoing notional volume of Total Return Swaps on equities in August 2023. Wematch.live also reached an average daily matched volume (ADMV) of $11 billion in EMEA in July 2023.

• A number of acquisitions were made across the portfolio, including by Onfido, the global leader in automated identity verification, who acquired Airside, the US-headquartered shareable digital identity technology company and FullCircl, the company intelligence and risk solution provider for frontline teams, who acquired RegTech provider W2 Global Data Solutions.

• The Company remains a highly selective investor. Since the start of 2022 it has consciously slowed deployment as the valuation environment has continued to re-rate. During the period, the Company made three follow-on investments, totaling £6.9 million, including £5.3 million into Volt, the account-to-account payment provider, as part of a $60 million Series B round. The Company also took up their pro rata shareholder rights to invest a total of £1.6 million in Grover, the consumer tech subscription platform, and Habito, the digital mortgage broker and direct lender.

Notes:

1 The Board considers NAV per share after performance fee to be the most appropriate measure of NAV per share attributable to shareholders.

2 Annualised IRR on invested capital and realisations since inception using valuations at the last reporting date before performance fee.

3 Revenue growth taken as the LTM to September 2023 vs the LTM to September 2022. Any outliers (>250%) have been capped to 250% to improve comparability.

Neil, Chairman of Augmentum Fintech plc, commented:

“The Company’s NAV per share after performance fee was 160.2p, a gain of 0.8% over the reporting period. This continues the Company’s unbroken NAV per share increase over every one of the eleven reporting periods since our IPO in 2018, notwithstanding the recent ongoing challenging market conditions.

“Whilst the Company’s shares have continued to trade at a discount to NAV, in order to convey to the market the Board’s confidence in the value of the portfolio, and to take advantage of the accretion to shareholders offered by the wide discount, we continued to buy-back shares over the period under review. These shares are held in treasury and may be reissued when the share price returns to a premium.

“Our Manager has retained their investment discipline over the last six months and at the end of the reporting period the Company held net free cash of £48 million. The Augmentum model has been proven through five successful realisations to date, and the Company’s track record coupled with the expected reduction in interest rates in 2024 may be the trigger for the re-rating that the Board believes is deserved.”

Tim Levene, CEO of Augmentum Fintech Management Limited, commented:“Despite a strong pipeline of opportunities, our bar for investment has remained high and we have retained our uncompromising standards for new investments. We made no additions to our portfolio during the period under review although have invested £6.9 million in three of our existing portfolio companies. Our three largest holdings, Tide, Grover and Zopa, are category defining digital leaders in large and growing markets. They are currently growing at an average of 79% year on year and are either profitable or funded to profitability.”

“We continue to apply a rigorous approach to valuations. This can be seen in our five exits to-date, where proceeds have been realised above or on-par with previously reported valuations. In this reporting period Cushon’s acquisition by NatWest Group brought in proceeds of £22.8 million, representing a 2.1 multiple on invested capital and an uplift of 47% on the previous valuation. Our approach to valuation, we believe, sets us apart from many other funds.”

“Markets are exhibiting the early signs of a shift in sentiment with interest rates being held steady first in the UK and then in the US. This signals a cautious yet hopeful economic outlook. This, combined with the continual move towards the digitisation of financial services and Augmentum’s disciplined approach to both investment and valuation will, we believe, offer exceptional opportunities for us to deliver a stand-out vintage in 2024 and 2025.”