Augmentum proves resilient in face of crisis – Augmentum Fintech has announced results for the year ended 31 March 2020. Over that period, the NAV increased by 5.9% to 116.1p as the portfolio was written up in value by £12.7m. There is no dividend. The shares collpased to trade at a 41.6% discount in the general market rout around the end of March. Since then, they have recovered and now trade on a 7.8% discount.
Having expanded the company with a £25.8m equity issue in July 2019, the managers invested £17.8m in three new companies (Habito, Grover and Receipt Bank) and made follow-on investments in seven existing positions totalling £15.0m. That left £14.4m of available cash at the end of March. The board has reduced the maximum size of a new investment to 15% of the portfolio (from 20%), reflecting the increased diversification of the portfolio, which now has 17 positions.
Since the end of the year:
- Augmentum was included in the FTSE All Share Index and the FTSE Smallcap Index.
- Zopa gained its full UK banking licence and will launch Zopa Bank alongside its P2P business.
- ReceiptBank acquired Xavier, who automate complex checking of financial data.
- iwoca and Previse accredited to the Coronavirus Business Interruption Loan Scheme (CBILS) and Tide accredited to the Bounce Back Loan Scheme (BBLS).
- interactive investor’s acquisition of Share PLC completed, which valued interactive investor at £675m.
- More than £100m of equity has been raised by portfolio companies.
- Augmentum invested a further £2.6m in Farewill as part of a £20m Series B investment round led by Highland Europe.
- The manager re-designed its investment selection and management process in line with PRI (principles of responsible investment) guidelines.
As we have pointed out before, many of Augmentum’s investments have benefited from the shifting of business online since the COVID-19 outbreak but those providing credit were sometimes severely impacted. The chairman says that “where the impact has been negative, our stake is often protected by the structure of the deal. In many of our investments we benefit from a senior position in the capital structures, providing downside protection.”