Augmentum releases first results – Augmentum Fintech has published its interim results for the period ending 30 September 2018. The NAV total return for the period was 5.1%.At the date of the
report, the share price was 96.1 pence per share, representing a 7.6% discount to the NAV per share. The directors have resolved not to pay a dividend. The company is focused on providing capital growth, and given the investment opportunities in the sector, they do not anticipate recommending to pay a dividend in the near future unless required to do so to maintain our investment trust status.
The manager says it has seen over 350 new investment opportunities in European fintech over the past six months and has made five investments.
Extract from the manager’s report
“Our Initial Portfolio has seen positive activity in the period, leading to revaluations of our holdings in Zopa and interactive investor.
Zopa recently announced the closure of a £60m funding round as it continues its progress to launching a bank and acquiring a full UK banking licence. The funding round was at a premium to the price that we acquired our holding in March and required us to increase our valuation to £22m, representing an increase of £3.5m or 3.7 pence per share. Zopa continues to meet the milestones it has set itself on its journey to acquire a banking licence and we retain a strong conviction that the model it is pursuing will maximise shareholder value in the long term.
During the period there was a small amount of secondary stock available to us in interactive investor. We bought as much as we were able to buy at a 50% increase on our holding value, and our ambition is to buy more if the opportunity arises at the right price. The business has successfully integrated the acquisition of TD Direct and continues to trade well. Since the reporting period it has also announced the intention to acquire Alliance Trust Savings which will take its total assets under administration to £35bn and make it the clear number two in the D2C market. It also sold Internaxx for €25m (a non-core Luxembourg asset) which should complete at the end of January 2019. Across the rest of our initial portfolio, BullionVault, (including WhiskyInvestDirect), Seedrs and SRL remain well funded and consequently there was no change in the valuation of these investments. We continue to hold these investments at our acquisition cost set in March 2018.
The adjustment in valuation for Zopa and interactive investor mean that the NAV of our Initial Portfolio has increased by £5m, representing an annualised IRR of 30% since IPO. This is in excess of our long-term aim of delivering a portfolio return over 20% per annum.
New Investments
We announced five new investments in the period, each of which represent exciting opportunities for growth.
- Tide is bringing SME banking into the 21st century by removing many of the pain points SME customers experience with the banking providers, not least the account opening process which is shortened from weeks to just minutes.
- Duedil provides access to information on businesses that helps both prospecting and on-boarding. In fintech terms, the business is more mature, but we believe it has now found its product market fit and is poised to grow strongly over the coming years.
- Previse is tackling the massive and politically charged issue of getting suppliers paid faster for their goods and services. We invested in Previse alongside Bessemer Venture Partners, the pioneers of Venture Capital in the US.
- Unmortgage is tackling the dual problem of people in the UK being unable to afford to buy homes and of finding a way for pension funds to effectively access the residential property market.
- Monese provides banking services typically to those who work abroad and need a local bank account but who find it difficult to meet the usual account opening requirements such as residential history. They have found good traction across Europe and we invested in a heavily competitive funding round alongside Kinnevik, Paypal and IAG (Avios).“
AUGM : Augmentum releases first results