Seraphim Space (SSIT) has announced its annual results for the year ended 30 June 2022. During the year, SSIT’s NAV grew by 1.9%, but its share price fell by 47.0%, so it finished its year end on a 47.% discount to NAV. The chairman, Will Whitehorn says that “Given the discrepancy of performance between NAV and share price over the period, the Board has considered buying back shares as part of share rating management. However, we concluded that it was in the best interests of shareholders to reserve the Company’s cash to support the portfolio and make selective new investments” [QD comment: it’s been a difficult year to launch a ground-breaking growth focused trust such as this, but we are nonetheless surprised that a 47% discount isn’t attractive enough to warrant repurchasing some shares as it would be highly NAV accretive for remaining shareholders.]
- The following is a summary of highlights from the report:
- Net assets of £239.3m at 30 June 2022
- 150.0m shares issued pursuant to IPO, further 89.4m shares issued pursuant to acquisition of portfolio of holdings in 19 companies acquired from Seraphim Space LP
- Positive growth in NAV per share since IPO, up 1.9% over the period to 99.97p with the strength of the private company portfolio (including FX gains) offset by weakening valuations of the listed portfolio
- NAV per share for three months ended 30 June 2022 down 4.1% principally due to listed portfolio and the reduction in listed comparables (where used for the valuation of private portfolio companies)
- Valuation of listed portfolio, representing 7.8% of NAV, materially impacted by weakening equity market performance and broader sector rotation away from high-growth and technology companies
- Strong levels of investment activity with seven new investments and nine follow-on transactions closed during the period with aggregate cost of £87.1m.
- Portfolio now comprises 26 companies valued at £186.1m, being 104.3% of cost
- Portfolio performance underpinned by growth of climate capabilities and government budgets for Space-related defence with 94% of aggregate revenues of the private companies in the top 10 holdings (nine companies representing 79% of fair value) being climate- or defence-related
- Private companies in top 10 holdings reported fair value-weighted average annual revenue and bookings growth of 51.3% and 71.2% respectively
- Ongoing investor appetite for SpaceTech sector is reflected in private company portfolio, which collectively raised $703m of new equity capital over the period; recent rounds established enterprise valuations at 30 June 2022 for most private company portfolio holdings
- Portfolio companies, overall, well capitalised for year ahead, whilst SSIT has strong buffer of liquid resources of £57.7m at 30 June 2022, to fund portfolio requirements and selectively continue to add to portfolio
- Angela Lane joined SSIT’s Board
- Three key appointments made to SSIT’s Investment Manager, Seraphim Space Manager LLP (“Seraphim Space”): Sarah Shackleton as COO, Patrick McCall as Venture Partner and Andre Ronsoehr as Investment Principal