Trading Update and Update on FY21 Results

RNS Number : 3888P

Forward Partners Group PLC

20 June 2022

 

20 June 2022

Forward Partners Group plc

("Forward Partners", the "Company" or the "Group")

Trading Update and Update on FY21 Results

Forward Partners, the London-based investment firm listed on AIM, today provides an update on its full-year expectations for the valuation of its Ventures portfolio.

In its Trading Update released on 28 February 2022 (the "February Update"), the Company confirmed that in FY21 it had continued to see commercial progress across its Venture portfolio, including demonstrating strong underlying revenue growth. Since that February Update, there has been significant turmoil in the public markets, with the ratings of fast-growth listed technology stocks being hit particularly hard, and, as widely-reported, there continues to be significant uncertainty in the geopolitical and macroeconomic outlook. Furthermore, as investor confidence weakens, the Company is seeing continued downward pressure on valuations and funding rounds which are taking longer to close. The delay in funding rounds will result in key portfolio companies moving from being valued with reference to the price of the last round of investment to being valued on a revenue multiples basis. Further, those multiples are calculated from the enterprise values of listed peers which are trading at much lower levels than a year prior.

As a result, the Company has experienced downward pressure on the valuations at which it holds its investments and expects valuations to remain under pressure during the course of FY22, driven primarily by changes in the valuation basis where funding rounds have been delayed and by declining share prices of the broader listed peer groups. Whilst acknowledging there is still significant uncertainty the Board now expects to report a mid-to-high twenties percentage point decline in its Ventures portfolio valuation at the half-year, down on the previous market guidance of circa £117m for 31^st December 2021.

The Company has significant cash reserves (£31m at the FY21 year-end), which together with the Group's existing cost base, are being conservatively managed. Many companies within the portfolio hold strong balance sheets and the Group will continue to carefully deploy existing resources to support growth at its investments . The Ventures and Studio teams continue to work closely with the portfolio management teams to ensure that they are able to extend existing resources to trade through this period of uncertainty . Moreover, the Group expects to continue to find attractive new investment opportunities in what is becoming a more favourable climate for in-price valuations.

Forward's portfolio demonstrated strong performance through 2021, and good momentum in the first half of 2022, with strong rounds raised by Spoke, Silico and Gravity Sketch. The Company reiterates that it remains confident in the longer-term growth prospects of its portfolio, and notes that Venture is an inherently disruptive alternative asset class where performance is weakly correlated with share prices of publicly traded technology companies.

The Company will provide a more detailed update on its Ventures portfolio, together with the activities of the wider Group, in its FY21 results, which are expected to be released by no later than 30 June 2022.

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Enquiries

FORWARD PARTNERS GROUP PLC	Via Maitland/AMO
Nic Brisbourne, Chief Executive Officer

Liberum Capital Limited
(Nominated Adviser and Broker)	Tel: [phone]
Neil Patel
Lauren Kettle
Cara Murphy

Maitland/AMO (Financial PR)
Sam Turvey Alistair de Kare-Silver	Tel: [phone] or [e-mail]

This announcement contains inside information under Article 7 of the Market Abuse Regulation (EU) No 596/2014 (as amended) as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as amended).

About Forward Partners

Founded in 2013, Forward Partners is an established and respected London-based investor, specialising in supporting high growth, early-stage technology businesses.

The Group brings together venture capital provider Forward Ventures, equity-free revenue-based financing through Forward Advances and highly specialised growth support from Forward Studio. This model supports founders to build stronger businesses faster to provide better outcomes for companies and investors alike.

The Group makes equity investments in early-stage, high growth UK companies, and from inception to its admission to London's AIM market in July 2021 had made over 60 unique investments and built a portfolio with an Initial Portfolio NAV in excess of £100m. It holds an eight-year track record of making venture capital investments, and targets underlying NAV growth of 20% per annum on average over the cycle.

The management team brings together highly experienced venture capitalists, entrepreneurs, and expert consultants. Since 2015, Forward Partners has been backed by BlackRock, one of the largest institutional investors in the world. The Group receives over 4,000 start-up funding applications every year.

For more information, visit https://forwardpartners.com .

 

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