Augmentum Fintech PLC (AUGM.L) Earnings Call Transcript & Summary

I'm pleased to share some highlights from our annual results for the year ended 31st of March 2023. In the face of a challenging macroeconomic backdrop, our NAV per share after performance fee increased by 2.5% to 158.9p, and the IRR of our invested capital now stands at 18.5%. Our 10 highest value holdings have seen revenue growth at an average of 117% year-on-year and are either cash generative or have an average of over 2 years of cash runway. These growth metrics would have added GBP 85 million to our gross portfolio value were it not for the contraction of the publicly listed comparables that our auditors use in their valuations process. During the year, one of our earlier investments, interactive investor was acquired by Abrdn, which resulted in proceeds for the company of GBP 42.8 million, delivering an IRR of 85%. We also saw another realization announced during the year and completed post year-end, with Cushon being acquired by NatWest. This returned GBP 22.8 million to Augmentum, delivering an IRR of 62%. There have now been 5 exits from the portfolio since inception, all at or above their last reported value. We have continued to build our profile and exposure across Europe. And over the year, we invested in 2 new Fintechs: payments company, Kipp in Israel; and SME cyberinsurer Baobab, in Germany, along with several follow-on investments across our existing portfolio. Even with the challenging fundraising environment, our portfolio companies have raised over $300 million in capital, and we have seen impressive progress across the portfolio from Zopa surpassing GBP 8 billion in approved personal loans, to Tide acquiring Funding Options, and Volt winning Shopify and Worldpay as clients. Despite an increased focus from venture investors on profitability and reducing cash burn, the growth in our portfolio through the cycle reflects the quality of many of our companies and the unabated advance of digital transformation in the financial services sector. We are seeing a material increase in the number of compelling investment opportunities at more pragmatic valuations and expect that trend to continue throughout 2024. Our Fintech specialism and strong balance sheet leaves us well positioned to take advantage of more favorable investment conditions.