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Draper Esprit PLC (GROW)

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Monday 14 June, 2021

Draper Esprit PLC

Final Results

RNS Number : 7183B
Draper Esprit PLC
14 June 2021
 

Draper Esprit PLC

14 June 2021

Draper Esprit plc

("Draper Esprit", "the Group" or the "Company")

FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2021

Draper Esprit (LSE: GROW, Euronext Growth: GRW), a leading venture capital firm investing in and developing high growth digital technology businesses, today announces its final results for the year ended 31 March 2021.

Financial highlights

· Gross Portfolio Value of £984m (31 March 2020: £703m).

· £206m of cash realisations (year to 31 March 2020: £40m).

· 51% Gross Portfolio Value fair value growth (year to 31 March 2020: 10%).

· £128m invested, and a further £34m from EIS/VCT funds (year to 31 March 2020: £90m and £38m from EIS/VCT funds).

· NAV per share of 743p (31 March 2020: 555p).

· Net assets of £1,033m (31 March 2020: £660m).

· £161m available Plc cash, as well as £43m available from EIS/VCT funds. (31 March 2020: £34m, with c.£50m from EIS/VCT funds).

· £107m net funds raised during the financial year.

· £267m profit after tax (year to 31 March 2020: £40m).

· <1% operating costs (net of fee income) as a percentage of NAV.

Some of the measures above are Alternative Performance Measures ('APMs') - see Note 29 of the Annual Report for further details.

Operational highlights

· Significant cash proceeds of £206m received during the year from realisations (full and partial) and escrows, which were predominantly generated by the exits from Peak Games, TransferWise and Decibel, and the partial disposals of Trustpilot and UiPath.

· Invested £128m in the year, increasing the investment cadence in H2 with £96m of investments made.

· Invested into 9 new companies (as well as 3 new via Earlybird) and 18 existing companies (as well as 3 via Earlybird)*.

· Committed to 15 new seed funds via our seed fund of funds programme, bringing the overall seed fund of funds portfolio to 35 funds.

· Acquisition in February 2021 of the shares not previously owned in Elderstreet Holdings Limited, holding company of Elderstreet Investments Limited which is manager of Draper Esprit VCT funds, further scaling the Group.

· Continued to build the infrastructure for scaling, welcoming six new team members into the Partnership and Platform teams that support the investment function.

· Continued to progress our ESG roadmap, including approval of our ESG Policy, assessment of our portfolio against the UN Sustainable Development Goals and development of ESG KPIs.

Post year-end

· Increased and extended our revolving credit facility with SVB and Investec by an additional one year from £60m to £65m.

· Invested a further £48m post year-end to 11 June 2021, including investments into Manna, FintechOS, Cervest, Ledger, and Lyst.

· Refreshed fund of funds programme, with the approval by the Board and Investment Committee of an additional £75.0 million investment budget. Commitments deployed over 5 years.

*Reporting threshold for Earlybird of £1m.

Martin Davis, CEO at Draper Esprit, commented:

"Our financial year and my first full year as CEO demonstrated the strength and flexibility of the Draper Esprit model in market conditions at two extremes. Despite market shock in the first half, our scale and maturity gave us room to focus on the needs of our portfolio companies and structuring ourselves for growth. Our close relationship to our portfolio and industry insight enabled us to accelerate into the digital transformation catalysed by the pandemic. Our investment team increased its cadence in the second half, deploying significant funds into existing portfolio companies and new, as intended when we raised equity in October. We look to the future with confidence that our model positions us well for opportunities in a transformed world. In line with the growth and maturity of the business, our intention is to move our listing to the Premium Segment of the Official List and to trading on the London Stock Exchange's Main Market as well as to the secondary listing segment of the Official List of Euronext Dublin and to trading on the regulated market of Euronext Dublin. Preparations to transfer our listing are well advanced and we expect to complete the move within the next couple of months."

 

Availability of Annual Report and Notice of AGM

The Annual Report and Accounts for the financial year ended 31 March will be available today on Draper Esprit's website at http://draperesprit.com/. The notice of the Annual General Meeting ("AGM") of Draper Esprit to be sent separately.

-ENDs-

 

 

 

Enquiries

Draper Esprit plc

Martin Davis (Chief Executive Officer)

Ben Wilkinson (Chief Financial Officer)

+44 (0)20 7931 8800

Numis Securities

Nominated Adviser & Joint Broker

Simon Willis

Richard Thomas

Jamie Loughborough

+44 (0)20 7260 1000

Goodbody Stockbrokers

Euronext Growth Adviser & Joint Broker

Don Harrington

Charlotte Craigie

Linda Clarke

+44 (0) 20 3841 6202

Powerscourt

Public relations

Elly Williamson

Jane Glover

+44 (0)7970 246 725 /

+44 (0)7961 628 862

 

If you would like to access the 0900 results presentation, please contact Powerscourt at [email protected] for dial in details.

About Draper Esprit

 

Draper Esprit is one of the most active venture capital firms in Europe, investing in disruptive, high growth technology companies. We believe the best entrepreneurs in Europe are capable of building the global businesses of the future. We fuel their growth with long-term capital, access to international networks and decades of experience building businesses.

 

Currently, Draper Esprit is a shareholder in a diverse portfolio of 71 companies with 17 of those part of our core portfolio which accounts for over 68% of our holdings. Our core companies include Graphcore, UiPath, Trustpilot, Aiven, Ledger, Lyst, Cazoo, Ravenpack, M-files, Smava, Aircall, Revolut, Freetrade, Perkbox, Thought Machine, Endomag, and SportPursuit. We invest across four sectors: Consumer Technology, Enterprise Technology, Hardware and Deeptech, and Digital Health and Wellness, with highly experienced partners constantly looking for new opportunities in each. We look for high-growth companies with strong IP, powerful technology, and the management teams to deliver success. They operate in new markets, with serious potential for global expansion. We also look for businesses with the potential to generate strong margins to ensure rapid, sustainable growth in substantial addressable markets.

 

Draper Esprit provides an opportunity for public market investors to access these fast-growing tech businesses, without having to commit to long term investments with limited liquidity. Since IPO in June 2016, we have deployed circa £550m+ capital into fast growing technology companies and have realised over £300m. In October 2020 we raised gross proceeds of circa £110m to help us

capitalise on a European VC market which is expanding rapidly but is still less than one quarter of the combined size of the US and European market by value. It will also allow us to capitalise on the transition to a digital future that has been given added impetus as a result of the recent pandemic.

 

For more information, go to https://draperesprit.com/

 

 

 

Chair's introduction

Financial Year 2021 has been unprecedented on a global basis for society, for all businesses and for the technology sector. The challenges of Brexit and the uncertainties of the US election seem insignificant compared with the global Coronavirus pandemic.

Looking back over the last 12 months, I don't think anyone would have predicted the pandemic's longevity and far-reaching impact nor the role technology has played in driving digital transformation, creating new opportunities, sustaining the economy and supporting people through successive lockdowns.

I am delighted by the way the team at Draper Esprit managed through these challenging times, accelerating the investment cadence, supporting our portfolio and continuing to improve and strengthen our approach to making investments. At times like these, small gestures and tokens of support for our community make a big difference as well as the determination to continue in "business as usual" mode as much as possible. I was delighted to receive a comforting bar of chocolate by post from Draper Esprit (thank you, Stuart) early on in the first lockdown and even more thrilled to see our annual Investor Day go ahead in early 2021, using the digital events platform provided by one of our portfolio companies, Hopin.

The team has made a number of investments in exciting new companies including Cazoo, Ravelin, PrimaryBid, CoachHub, Riverlane, Focal Point, and Agora and supported some of our other portfolio companies such as Peak Games, Trustpilot, Decibel, and UiPath through major financial milestones. In terms of business performance, we have had an exceptional year with a 51% increase in Gross Portfolio fair value. While the technology market remains buoyant, we continue to search for high quality and exciting investment opportunities with the highest potential to shape the future.

During the year, one of our two founders, Simon Cook, moved to the West Coast of Canada and while he continues as a member and supporter of the extended Draper Esprit family, he will no longer be an active contributor on a day-to-day basis. We will miss Simon's vision, drive and creativity, and wish him every success. Stuart Chapman, our other founder continues to be a member of our Board and our Chief Portfolio Officer, a sounding board and mentor to newer members of the team and to the portfolio companies he works with.

FY2021 represents Martin Davis' first full year as CEO; a year of outstanding performance but also a year in which Martin has been laying the foundations for further sustainable growth. During the year we have fully integrated the EIS fund, Encore Ventures, and the VCT fund, Elderstreet Investments. We are pleased to welcome both teams and to be able to work and co‑invest more seamlessly together.

Among many other activities, Ben Wilkinson has sponsored the Company's increasing focus on sustainability, which is also becoming an even more critical part of what Draper Esprit offers to companies and investors. We are committed to contributing towards a future that is sustainable, fair, and accessible.

In line with the growth and maturity of the business, our intention is to move our listing to the Premium Segment of the Official List and to trading on the London Stock Exchange's Main Market as well as to the secondary listing segment of the Official List of Euronext Dublin and to trading on the regulated market of Euronext Dublin. The Board believes the Company has grown and matured since IPO and that the Main Market is the most appropriate platform for the Company's future development. It is hoped that this will further raise Draper Esprit's profile, as well as potentially increase liquidity and enable its shares to be acquired by a wider group of investors.

In preparation for a Main Market listing, we are looking for additional Non-Executive Board Members to strengthen our team and bring more diversity of thought and experience to the Board.

It is almost exactly five years since Draper Esprit listed on AIM. The Company's scale, its sustained record of delivering growth even through times as uncertain as this year and the impressive maturity of many of the businesses in the portfolio reflect the firm belief that the listed VC model works well both for shareholders and our investee companies.

Karen Slatford

CEO's statement

Overview

Operating review

Financial performance

Fair value growth

We achieved Gross Portfolio fair value growth of £359.2 million. This increase in fair value of the gross portfolio of 51% is significant relative to the targeted 20% gross portfolio returns through the cycle.

 

Cash realisations and available capital resources

Investments

Sustainability

Summary and opportunity

• direct follow-on opportunities which we have already identified within our core and emerging companies and new deal flow beyond our portfolio;

• larger rounds as European technology companies continue to mirror US investment trends, which we can lead more often thanks to our balance sheet and co-investment structure;

• a potential growth fund for growth stage (Series B+) dealflow, using third-party funds alongside our own to provide a greater ability to lead deals and secure influence and allocation;

• the next Earlybird fund, Earlybird Fund VII, which will continue to target Series A investments in Germany and other parts of continental Europe; and

• our Fund of Funds programme, which also allows us to identify potential dealflow opportunities from within seed stage portfolios.

Outlook

Portfolio review

During the year

Portfolio

Investments

New investments

CoachHub: Draper Esprit was lead investor into the December 2020 US$30.0 million round in digital coaching platform, CoachHub, with an investment from Plc of £12.4 million.

• Unannounced: Draper Esprit Plc invested £10.8 million into the Series B of an unannounced intelligent process automation platform.

• Cazoo: Draper Esprit Plc invested £10.0 million during the year in British digital used car marketplace, Cazoo, as part of the company's £25.0 million second close of their Series C funding round and subsequently as part of their £240.0 million Series D round.

• Riverlane: Draper Esprit Plc led a US$20.0 million Series A investment round in Riverlane, the ground-breaking quantum computing software specialist. Plc invested £5.1 million, with a further £3.9 million invested from the EIS/VCT funds.

• Hopin: Draper Esprit Plc invested £4.4 million into Seedcamp SPV (a fund that invested in Hopin's Series B round in December 2020). Hopin is a virtual venue for live online events.

• Focal Point: Draper Esprit Plc invested £3.4 million, with further amounts expected to be invested in the second close from the Group, as sole investor into Focal Point, the deep-tech company revolutionising the accuracy of GPS and other global satellite positioning systems (GNSS).

• PrimaryBid: Draper Esprit co-led the US$50.0 million Series B fundraising by PrimaryBid, a technology platform that allows retail investors fair access to public companies raising capital. Plc has invested £5.4 million, of which £3.1 million was paid post year-end, with a further £4.0 million from EIS/VCT funds.

• AGORA: In December 2020, Draper Esprit led a £5 million investment round in AGORA, a London-based startup disrupting the beauty industry through social commerce, with £1.5 million invested from Plc.

• Ravelin: Draper Esprit led a US$20.0 million Series C investment round in Ravelin, a fraud detection company, investing £1.1 million. Ravelin has pioneered the use of machine learning and graph network technologies to help online businesses accept more payments with confidence. Further investments were also made from the EIS/VCT funds.

Follow-ons

Graphcore: Draper Esprit participated with a £10.3 million investment in a Series E funding round in Graphcore, maker of the Intelligence Processing Unit ("IPU"), which raised a total of US$222.0 million.

• Endomag: Draper Esprit led a round with a £12.3 million investment (£7.0 million from Plc and £5.3 million from EIS/VCT funds) into existing portfolio company Endomag, a breast cancer market leader.

• Freetrade: Draper Esprit participated in a US$69.0 million Series B fundraising round for existing portfolio company, Freetrade with an investment of £4.0 million.

• Push Doctor: Draper Esprit Plc invested £3.4 million into Push Doctor, as well as £1.2 million from EIS/VCT funds. Push Doctor provides online doctor and prescription services in the UK.

• Form3: £1.6 million was invested by Draper Esprit Plc in the year into leading cloud-native payment and technology provider for banks and regulated fintechs, Form3, as well as a further £3.0 million from EIS/VCT funds.

• M-files: Draper Esprit participated in an US$80.0 million investment round in portfolio company M-Files, with a £1.5 million investment. M-Files is an intelligent information management company that is using AI technologies in its proprietary Intelligent Metadata Layer.

• Pollen: £1.3 million was invested from Draper Esprit Plc and a further £1.0 million from EIS/VCT funds into Pollen (formerly Verve), an invite-only marketplace that makes it easy to invite friends to exclusive experiences and share rewards.

• Hadean: £1.0 million was invested from Plc into deep tech software business, Hadean, during the year. Hadean is focused on enabling distributed computing at a massive scale.

Fund of funds

At 31 March 2021, we have committed a total of £67.2 million (converted at year-end exchange rates) to our 35 seed fund of funds investments. £25.5 million of these commitments have been drawn as at 31 March 2021, £12.3 million of which was drawn within the year. We expect remaining commitments to be drawn over the coming five to eight years. Post year-end a further £75.0 million investment budget was approved by the Board and Investment Committee.

 

Earlybird

Realisations

Core company updates

Graphcore

£24.0m

£108.8m

Invested

Investment valuation

UiPath

£10.3m

£100.3m

Invested

Investment valuation

 

Trustpilot

£15.7m

£85.5m

Invested

Investment valuation

Smava

£14.5m

£23.8m

Invested

Investment valuation

Perkbox

£14.0m

£18.6m

Invested

Investment valuation

 

M-Files

£6.5m

£29.7m

Invested

Investment valuation

 

Ledger

£17.7m

£41.8m

Invested

Investment valuation

 

RavenPack

£7.5m

£29.9m

Invested

Investment valuation

Revolut

£7.4m

£20.4m

Invested

Investment valuation

 

Aircall

£10.7m

£32.8m

Invested

Investment valuation

 

Thought Machine

 

£16.5m

£18.4m

Invested

Investment valuation

 

Sportpursuit

£5.6m

£18.5m

Invested

Investment valuation

 

Aiven

£5.0m

£45.5m

Invested

Investment valuation

 

Cazoo

 

£10.0m

£25.7m

Invested

Investment valuation

 

Lyst

£6.0m

£35.1m

Invested

Investment valuation

 

Endomag

 

£9.3m

£15.7m

Invested

Investment valuation

Freetrade

 

 

£8.0m

£20.0m

Invested

Investment valuation

 

Financial review

 

The financial year to 31 March 2021 was a year of strong performance that contrasted with the uncertainty resulting from the Covid-19 pandemic at the beginning of the year. Following the cautious focus in the first months of the financial year on liquidity and the potential impact of lockdowns to portfolio company revenues, it quickly became apparent that an accelerated transition to digital was exacerbating wider existing trends towards tech in the global economies. Technology companies became enablers of the shifting work and living practices the pandemic created and with much discussion highlighting multiple years of change compressed into months, it was unsurprising to see capital being directed to the beneficiaries and enablers of change. Both public and private investors sought out the quality of recurring revenue streams, e-commerce, remote networking facilitators, cloud native applications, security infrastructure and technology enhancing automation.

Portfolio valuation

Consolidated Statement of Financial Position

Consolidated statement of comprehensive income

Post balance-sheet events

• Increased and extended our revolving credit facility with SVB and Investec by an additional one year from £60m to £65m post year-end.

• Invested a further £48m post year-end to 11 June 2021, including investments into Manna, FintechOS, Cervest, Ledger, and Lyst.

• Refreshed fund of funds programme, with the approval by the Board and Investment Committee of an additional £75.0 million investment budget.

Ben Wilkinson

Company

Fair Value of Investments 31-Mar-20

£m

Investments £m

Realisations £m

Draper Esprit (Ireland) Limited

£m

Movement in Foreign Exchange (A)
 m

Movement in Fair Value
(B)

£m

Total Fair Value Movement  (A+B)
£m

Fair Value of Investments 31-Mar-21

£m

Interest FD category* at reporting date

Graphcore

86.8

10.3

-

-

(7.5)

19.2

11.7

108.8

A

UiPath

28.0

-

(5.3)

-

(6.8)

84.4

77.6

100.3

A

Trustpilot

65.3

-

(75.0)

-

-

95.2

95.2

85.5

B

Aiven

12.8

-

-

-

(3.1)

35.8

32.7

45.5

B

Ledger

17.7

-

-

-

(2.9)

27.0

24.1

41.8

B

Lyst

10.8

-

-

-

(2.4)

26.7

24.3

35.1

C

Aircall

24.3

-

-

-

(1.6)

10.1

8.5

32.8

B

RavenPack

30.9

-

-

-

(2.1)

1.1

(1.0)

29.9

D

M-files

20.0

1.5

-

-

(1.6)

9.8

8.2

29.7

B

Cazoo

-

10.3

-

-

-

15.4

15.4

25.7

A

Smava

16.7

-

-

-

(1.6)

8.7

7.1

23.8

B

Revolut

21.7

-

-

-

(1.5)

0.2

(1.3)

20.4

A

Freetrade

-

4.0

-

-

-

16.0

16.0

20.0

B

Perkbox

19.9

-

-

-

-

(1.3)

(1.3)

18.6

C

SportPursuit

11.1

-

-

-

-

7.4

7.4

18.5

E

Thought Machine

17.4

-

-

-

-

1.0

1.0

18.4

B

Endomag

6.9

7.0

-

-

-

1.8

1.8

15.7

C

Remaining Portfolio

310.8

94.9

(125.4)

-

(20.1)

50.5

30.4

310.7

-

Total

701.1

128.0

(205.7)

-

(51.2)

409.0

357.8

981.2

-

Co-Invest

1.8

-

(0.6)

-

-

1.4

1.4

2.6

-

Gross Portfolio Value

702.9

128.0

(206.3)

-

(51.2)

410.4

359.2

983.8

-

Carry External

(40.6)

-

-

-

-

(56.4)

(56.4)

(97.0)

-

Portfolio Deferred tax

(5.3)

-

-

-

-

(14.7)

(14.7)

(20.0)

-

Trading carry & co‑invest

0.3

-

-

-

-

-

-

0.3

-

DE Ireland Limited

-

-

-

11.8

-

(11.8)

(11.8)

-

-

Net Portfolio value

657.3

128.0

(206.3)

11.8

(51.2)

327.5

276.3

867.1

-

Consolidated Statement of Comprehensive Income

 

Note

Year ended

31 March 2021

£'000s

Year ended

31 March 2020

£'000s

Change in gains on investments held at fair value through the profit and loss

5

276,307

40,755

Fee income

6

12,507

11,255

Total income

 

288,814

52,010

Operating expenses

 

 

 

General administrative expenses

7

(13,844)

(9,810)

Depreciation and amortisation

14, 17

(650)

(520)

Share-based payments - resulting from company share option scheme

13

(1,548)

(990)

Investments and acquisition expenses

 

(262)

(239)

Total operating expenses

 

(16,304)

(11,559)

Other income

18

94

-

Profit from operations

 

272,604

40,451

Finance (expense)

 

 

 

Net finance (expense)

10

(5,157)

(68)

Operating profit before tax

 

267,447

40,383

Income taxes

11

(26)

(17)

Profit for the year

 

267,421

40,366

Other comprehensive income/(expense)

 

-

-

Total comprehensive income for the year

 

267,421

40,366

 

 

 

 

Profit attributable to:

 

 

 

Owners of the parent

 

267,421

39,707

Non-controlling interest^

18

-

659

 

 

 

 

Earnings per share attributable to owners of the Parent:

 

 

 

Basic earnings per weighted average shares (pence)

12

208

34

Diluted earnings per weighted average shares (pence)

12

206

33

Consolidated Statement of Financial Position

 

Note

31 March 2021

£'000s

31 March 2020

£'000s

Non-current assets

 

 

 

Intangible assets

14

10,936

10,028

Investments in associates

15, 18

-

258

Financial assets held at fair value through the profit or loss

16

867,088

657,333

Property, plant and equipment

17, 20

1,368

1,760

Total non-current assets

 

879,392

669,379

Current assets

 

 

 

Trade and other receivables

19

3,700

7,719

Cash and cash equivalents

 

158,417

32,255

Restricted cash

20ii

2,260

1,883

Total current assets

 

164,377

41,857

Current liabilities

 

 

 

Trade and other payables

21

(9,645)

(5,038)

Financial liabilities

20

(345)

(358)

Total current liabilities

 

(9,990)

(5,396)

Non-current liabilities

 

 

 

Deferred tax

22

(362)

(611)

Financial liabilities

20

(276)

(45,611)

Total non-current liabilities

 

(638)

(46,222)

Net assets

 

1,033,141

659,618

 

 

 

 

Equity

 

 

 

Share capital

23

1,391

1,189

Share premium account

23

508,279

400,726

Own shares reserve

24i

(331)

-

Other reserves

24ii

26,258

26,259

Retained earnings

 

497,544

231,444

Equity attributable to owners of parent

 

1,033,141

659,618

Non-controlling interests

18

-

-

Total equity

 

1,033,141

659,618

 

 

 

 

Net assets per share (pence)

12

743

555

Consolidated Statement of Cash Flows

 

Note

Year ended

31 March 2021

£'000s

Year ended

31 March

 2020

£'000s

Cash flows from operating activities

 

 

 

Profit after tax

 

267,421

40,366

Adjustments to reconcile operating profit to net cash flows used in operating activities:

 

 

Revaluation of investments held at fair value through the profit and loss

5

(276,307)

(40,755)

Depreciation and amortisation

14,17

650

520

Share-based payments - resulting from company share option scheme

13

1,548

990

Net finance expense

10

5,157

68

Decrease/(Increase) in trade and other receivables and other working capital movements

 

402

(2,886)

Increase in trade and other payables

 

4,039

79

Purchase of investments

16

(127,976)

(89,935)

Proceeds from disposals in underlying investment vehicles

16

206,341

39,533

Net loans made to underlying investment vehicles and Group companies

16, 31

(8,122)

(8,541)

Net cash generated from/(used in) in operating activities

 

73,153

(60,561)

Tax (paid)

 

(2)

(3)

Net cash inflow/(outflow) from operating activities

 

73,151

(60,564)

Cash flows from investing activities

 

 

 

Acquisition of subsidiary, net of cash acquired

18

(650)

-

Purchase of property, plant and equipment

17

(143)

(368)

Net cash (outflow)/inflow from investing activities

 

(793)

(368)

Cash flows from financing activities

 

 

 

Cash paid to non-controlling interests

 

-

(893)

(Net loan repayments)/proceeds from loan

20

(45,000)

45,000

Fees paid on issuance of loan

20

(300)

(525)

Interest paid

 

(2,093)

(887)

Interest received

 

283

289

Repayments of leasing liabilities

20

(440)

(166)

Net acquisition of own shares

24

(720)

-

Gross proceeds from issue of share capital

23

111,872

993

Equity issuance costs

23

(3,520)

(40)

Cash paid out for share options exercised

 

(2,553)

(293)

Net cash inflow from financing activities

 

57,529

43,478

Net increase/(decrease) in cash & cash equivalents

 

129,887

(17,454)

 

 

 

 

Cash and cash equivalents at beginning of year

 

34,138

50,358

Exchange differences on cash and cash equivalents

10

(3,348)

1,234

Cash and cash equivalents at end of year

 

158,417

32,255

Restricted cash at year end

 

2,260

1,883

Total cash and cash equivalents and restricted cash at year end

 

160,677

34,138

Consolidated Statement of Changes in Equity

Year ended 31 March 2021

 

Attributable to equity holders of the parent (£'000s)

Note

Share capital

Share premium

Own shares reserve

Other reserves

Retained earnings

Total equity

Brought forward as at 1 April 2020

 

1,189

400,726

-

26,259

231,444

659,618

Comprehensive income for the year

 

 

 

 

 

 

 

Profit for the year

 

-

-

-

-

267,421

267,421

Total comprehensive income/(expense) for the year

 

-

-

-

-

267,421

267,421

Contributions by and distributions to the owners:

 

 

 

 

 

 

 

Issue of share capital

23

198

106,282

-

-

-

106,480

Options granted and awards exercised

13, 24

4

1,271

1,936

(1)

(1,321)

1,889

Acquisition of treasury shares

24

-

-

(2,267)

-

-

(2,267)

Total contributions by and distributions to the owners

 

 

202

 

107,553

 

(331)

(1)

 

(1,321)

 

106,102

Balance as at 31 March 2021

 

1,391

508,279

(331)

26,258

497,544

1,033,141

Year ended
31 March 2020

 

Attributable to equity holders of the parent (£'000s)

Attributable to non-controlling interest

(£'000s)

Total equity

(£'000s)

Note

Share capital

Share premium

Own shares reserve

Other reserves

Retained earnings

Total equity

Brought forward as at
1 April 2019

 

1,179

395,783

-

25,633

195,737

618,332

234

618,566

Comprehensive income for the year

 

 

 

 

 

 

 

 

 

Profit for the year

 

-

-

-

-

39,707

39,707

659

40,366

Acquired reserves from non‑controlling interest

 

-

-

-

-

-

-

-

-

Amounts withdrawn by non-controlling interest

 

-

-

-

-

-

-

(893)

(893)

Total comprehensive income/(expense) for the year

 

-

-

-

-

39,707

39,707

(234)

39,473

Contributions by and distributions to the owners:

 

 

 

 

 

 

 

 

 

Adjustment for Encore Ventures acquisition

18

-

-

-

-

(4,000)

(4,000)

-

(4,000)

Issue of share capital

23

10

4,943

-

-

-

4,953

-

4,953

Options granted and awards exercised

13,24

 

-

 

-

 

-

 

626

 

-

 

626

 

-

 

626

Total contributions by and distributions to the owners

 

 

10

 

4,943

 

-

 

626

 

(4,000)

 

1,579

 

-

 

1,579

Balance as at 31 March 2020

 

1,189

400,726

-

26,259

231,444

659,618

-

659,618

 

 

 

 

 

Notes to the Consolidated Financial Statements

1. General information

2. Adoption of new and revised standards

3. Significant accounting policies

a) Basis of preparation

b) Basis of consolidation

Name of undertaking

Nature of business

Country of incorporation

%

ownership

Esprit Capital Partners LLP^

Investment Management

England

100%

Elderstreet Holdings Limited^

Holding company

England

100%*

Elderstreet Investments Limited^

Investment Management

England

100%*

Grow Trustees Limited^

Trustee

England

100%**

Draper Esprit (Nominee) Limited^

Dormant

England

100%

Encore Ventures LLP^

Investment Management

England

100%

Esprit Capital I (GP) Limited^

General Partner

England

100%

Esprit Capital I General Partner^

General Partner

England

100%

Esprit Capital II GP Limited^^^

General Partner

Cayman

100%

Esprit Capital III Founder GP Limited^^

General Partner

Scotland

100%

Esprit Capital III GP LP^^

General Partner

Scotland

100%

Encore I GP Limited^^^

General Partner

Cayman

100%

Encore I Founder GP Limited^^^

General Partner

Cayman

100%

Esprit Capital Holdings Limited^

Dormant

England

100%

Esprit Nominees Limited^

Dormant

England

100%

Esprit Capital I (CIP) Limited^

Dormant

England

100%

Esprit Capital III MLP LLP^

Dormant

England

100%

Esprit Capital III GP Limited^

Dormant

England

100%

3. Significant accounting policies

*
At 31 March 2021, the Company owns 100% of the issued share capital of Elderstreet Holdings Limited, which in turns owns 100% of the issued share capital of Elderstreet Investments Limited, following the acquisition of 69.23% of the issued share capital on 9 February 2021. The Company previously owned 30.77% and the investment was accounted for as an Investment in Associate as at 31 March 2020. See Note 18 for further information.

Registered addresses

^  20 Garrick Street, London, England, WC2E 9BT

^^  50 Lothian Road, Festival Square, Edinburgh, Scotland, EH3 9WJ

Subsidiaries

Employee Benefit Trust

Associates

Investment company

In accordance with the provisions of IFRS 10, Draper Esprit Plc considers itself to be an investment entity as it obtains funds from investors to invest funds for returns from capital appreciation and the performance of substantially all of its investments are held at Fair Value through Profit and Loss. The Directors have also satisfied themselves that Draper Esprit Plc's wholly owned subsidiary, Draper Esprit (Ireland) Limited, as well as the partnerships listed below meet the characteristics of an investment company. Draper Esprit (Ireland) Limited as well as the partnerships listed below have one investor, however, in substance these partnerships and companies are investing funds on behalf of the investors of Draper Esprit Plc. Consequently, Draper Esprit (Ireland) Limited and the limited partnerships listed below are not consolidated in accordance with IFRS 10; instead, they are recognised as investments held at fair value through profit and loss on the consolidated balance sheet. Loans to investment vehicles are treated as net investments at fair value through the profit and loss.

 

3. Significant accounting policies

The below is a list of entities that are controlled and not consolidated but held as investments at fair value through the profit and loss on the consolidated balance sheet.

Name of undertaking

Principal activity

Country of incorporation

% ownership

Draper Esprit (Ireland) Limited^^

Investment company

Ireland

100%

Esprit Capital III LP^

Limited partnership

England

100%

Esprit Capital III(B) LP^

Limited partnership

England

100%

Esprit Capital IV LP^

Limited partnership

England

100%

Esprit Investments (1) LP^

Limited partnership

England

100%

Esprit Investments (2) LP^

Limited partnership

England

100%

Esprit Investments (1)(B) LP^

Limited partnership

England

100%

Seedcamp Holdings LLP^

Limited liability partnership

England

100%

Seedcamp Investments LLP^^^

Limited liability partnership

England

100%

Seedcamp Investments II LLP^^^

Limited liability partnership

England

100%

Esprit Investments (2)(B) LP^

Limited partnership

England

100%

^     20 Garrick Street, London, England, WC2E 9BT

^^   32 Molesworth Street, Dublin 2, Ireland, D02 Y512

Limited partnerships (co-investment and carried interest)

Name of undertaking

Principal activity

Country of incorporation

Encore I GP LP^

General partner

Cayman

Esprit Capital II Founder LP^

Co-investment limited partnership

Cayman

Esprit Capital II Founder 2 LP^

Co-investment limited partnership

Cayman

Encore I Founder LP^

Co-investment limited partnership

Cayman

Encore I Founder 2014 LP^

Co-investment limited partnership

Cayman

Encore I Founder 2014-A LP^

Co-investment limited partnership

Cayman

Esprit Capital III Founder LP^^

Co-investment limited partnership

Scotland

Esprit Investments (2) (Carried Interest) LP

Carried interest partner

Scotland

Esprit Capital III Carried Interest LP

Carried interest partner

Scotland

Esprit Investments (1) (Carried interest) LP

Carried interest partner

Scotland

^  c/o Maples Corporate Services Limited at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands

c) Operating segment

d) Revenue recognition

i.  Fund management services
Fund management fees are either earned at a fixed annual rate or are set at a fixed percentage of funds under management, measured by commitments or invested cost, depending on the stage of the fund being managed. Revenues are recognised as the related services are provided.

ii.  Portfolio Directors' fees
Portfolio Directors' fees are annual fees charged to an investee company. Directors' fees are only charged on a limited number of the investee companies. Revenues are recognised as services are provided.

3. Significant accounting policies

iii. Performance fees
Performance fees are earned on a percentage basis on returns over a hurdle rate in the statement of comprehensive income. Amounts are recognised as revenue when it can be reliably measured and is highly probable funds will flow to the Group.

e) Deferred income

f) Business combinations

g) Goodwill and other intangible assets

Other intangible assets

i.  Customer contracts - Encore Ventures LLP: 8 years; Elderstreet Investments Limited: 3 years.

h) Impairment

3. Significant accounting policies

To determine value-in-use, management estimates expected future cash flows over five years from each cash-generating unit and determine a suitable discount rate in order to calculate the present value of those cash flows. Discount factors are determined individually for each cash-generating unit and reflect their respective risk profile as assessed by management. Impairment losses for cash generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is charged pro-rata to the other assets in the cash-generating unit with the exception of goodwill, and all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment charge is reversed if the cash-generating units recoverable amount exceeds its carrying amount.

i) Foreign currency

j) Financial assets

Fair value through profit or loss

a.  such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

b.  the financial asset forms part of a group of financial assets or financial liabilities, or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Draper Esprit Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

c.  it forms part of a contract containing one or more embedded derivatives, and IFRS 9 Financial Instruments permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Amortised cost

k) Financial liabilities

Trade and other payables

3. Significant accounting policies

Borrowings

l) Provisions

m) Share capital

n) Defined contribution schemes

o) Share-based payments

p) Leased assets

• The contract involves the use of an identified asset - this may be specified, explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;

• The Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

• The Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the Group has the right to direct the use of the asset if either:

  The Group has the right to operate the asset; or

  The Group designed the asset in a way that predetermines how and for what purpose it will be used.

3. Significant accounting policies

contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

Lessee

Short-term leases and leases of low-value assets

q) Dividends

r) Current tax

s) Deferred tax

3. Significant accounting policies  

t) Property, plant and equipment

Leasehold improvements  - over the term of the lease

Fixtures and equipment   - 33% p.a. straight line

u) Cash and cash equivalents

v) Segmental reporting

w) Financial instruments

x) Interest income

y) Carried interest

3. Significant accounting policies  

Fair value measurement

4. Critical accounting estimates and judgements

a) Valuation of unquoted equity investments at fair value through the profit and loss

4. Critical accounting estimates and judgements

b) Carrying amount of goodwill

c) Control assessment

d) Business combinations

iv.  The Directors have undertaken a detailed assessment of the substance of the transaction through which the Company acquired the underlying investment vehicles and Esprit Capital Partners LLP and its subsidiaries with reference to the requirements of IFRS 10 and IFRS 3. Following that assessment based on the judgement of Directors, it has been determined that this transaction is appropriately accounted for as an acquisition.

v.  During the year ending 31 March 2021, Draper Esprit Plc acquired the remaining 69.23% of the issued share capital in Elderstreet Holdings Limited, the holding company of Elderstreet Investments Limited (manager of Draper Esprit VCT Plc). Elderstreet Holdings Limited was held as an Investment in Associate on the Consolidated Statement of Financial Position as at 31 March 2020. Total consideration for the remaining issued share capital not previously held was cash consideration of £0.8 million. This transaction is accounted for under IFRS 3 as a business combination achieved in stages (or "step acquisition") as this transaction resulted in Draper Esprit Plc obtaining control over Elderstreet Holdings Limited. For further details of the acquisition, please see Note 18.

vi.  During the year ending 31 March 2020, the Group acquired the remaining membership interest in Encore Ventures LLP on 10 March 2020. Prior to this, the Group held a membership interest of 71% and had determined based on its control assessment (see (4)(c) above) that the Group had control over Encore Ventures LLP and consolidated this entity in accordance with IFRS 10. As a result, the acquisition of the remaining membership interest was assessed to be a change in ownership interest and is accounted for as such under IFRS 10. This is not deemed to be a business combination.

 

5. Change in gains on investments held at fair value through the profit and loss

 

Year ended 31 March 2021

£'000s

Year ended 31 March 2020

£'000s

Change in unrealised gains on investments held at fair value through the profit and loss

183,575

(4,266)

Change in realised gains on investments held at fair value through the profit and loss

143,941

21,921

Net foreign exchange (loss)/gain on investments held at fair value through the profit and loss

(51,209)

23,100

Total movements on investments held at fair value through the profit and loss

276,307

40,755

6. Fee income

 

Year ended 31 March 2021

£'000s

Year ended 31 March 2020

£'000s

Management fees

12,462

11,213

Portfolio directors' fees

45

42

Total fee income

12,507

11,255

7. General administrative expenses

Administrative expenses comprise:

 

Year ended 31 March 2021

£'000s

Year ended 31 March 2020

£'000s

General employee and employee related expenses (Note 9)

9,950

6,074

Legal and professional

1,423

1,827

Travel expenses

97

349

Marketing expenses

705

741

IT expenses

157

85

Building costs and rates

420

503

Other administrative costs

1,092

231

Total administrative expenses

13,844

9,810

8. Profit from operations

 

Year ended 31 March 2021

£'000s

Year ended 31 March 2020

£'000s

Fees paid to the Company's auditor for the audit of the Group and Company annual accounts

188

146

Fees payable to the company's auditor for other services:

 

 

Audit of the accounts of subsidiaries and related undertakings

76

75

Audit-related assurance services

44

43

Non-audit services

31

-

Total fees payable to the Company's auditors

339

264

9. Employee and employee-related expenses

 

Year ended 31 March 2021

£'000s

Year ended 31 March 2020

£'000s

Wages and salaries

7,585

4,595

Defined contribution pension costs

677

278

Benefits (healthcare and life assurance)

172

127

Recruitment costs

38

473

Social security contributions and similar taxes

1,478

601

General employee and employee related expenses

9,950

6,074

Share-based payment expense arising from company share option scheme

1,548

990

Total employee benefit expenses

11,498

7,064

 

Year ended

31 March 2021

Number

Year ended

31 March 2020

Number

Directors

6

6

Investment

12

12

Infrastructure

19

15

Total

37

33

10. Net finance (expense)/income

 

Year ended 31 March 2021

£'000s

Year ended 31 March 2020

£'000s

Interest on leases (Note 20i)

(84)

(94)

Interest and expenses on loans and borrowings (Note 20ii)

(2,009)

(1,497)

Net foreign exchange loss

(3,348)

-

Finance costs

(5,441)

(1,591)

Net foreign exchange gain

-

1,234

Interest income on cash and cash equivalents

284

289

Finance income

284

1,523

Net finance (expense)/income

(5,157)

(68)

11. Income taxes

 

Year ended

31 March 2021

£'000s

Year ended

31 March 2020

£'000s

Current tax expense

 

 

Current tax on profits for the year

339

2

Adjustments for under/(over) provision in prior years

(65)

35

Total current tax

274

37

Deferred tax expense

 

 

Arising on business combinations (Note 18)

(23)

(20)

Other temporary differences

(225)

-

Total deferred tax

(248)

(20)

 

Year ended

31 March 2021

£'000s

Year ended

31 March 2020

£'000s

Profit/(loss) for the year before tax

267,421

40,383

Profit/(loss) on ordinary activities of Group companies before tax

 

 

Tax using the Company's domestic tax rate of 19% (2020: 19%)

50,810

7,673

Income not subject to tax

(18)

-

Unrealised gains on investments

(50,713)

(7,743)

Others

(53)

87

Total tax charge for the year

26

17

12. Earnings per share and net asset value

 

Basic earnings per ordinary share

 

Profit after tax

£'000s

Weighted average

no. of

shares '000

 

Pence per share

For the year ended 31 March 2021

267,421

128,860

208

For the year ended 31 March 2020

39,707

118,013

34

Diluted earnings per ordinary share

Profit after tax

£'000s

Weighted average

no. of

shares '000

Pence

per share

For the year ended 31 March 2021

267,421

129,741

206

For the year ended 31 March 2020

39,707

120,961

33

 

 

Net asset value per ordinary share

Net assets £'000s

No. of shares at balance sheet date '000

Pence per share

31 March 2021

1,033,141

139,097

743

31 March 2020

659,618

118,918

555

Diluted net asset value per ordinary share

Net assets £'000s

No. of shares at balance sheet date '000

Pence per share

31 March 2021

1,033,141

140,044

738

31 March 2020

659,618

121,609

542

13. Share-based payments

 

Date of Grant

b/f
1 April 2020 (No.)

Granted (No.)

Lapsed (No.)

Exercised (No.)

c/f

31 March 2021

Approved options (No.)

Vesting period

Exercise price

(p)

FV per granted instrument (p)

Draper Esprit Plc 2016 Company Share Options Plan (CSOP)

28/11/2016

1,216,034

-

-

(603,075)

612,959

33,800

3 years

355

64.1

28/11/2016

101,685

-

-

-

101,685

-

3 years

355

89.3

11/11/2017

160,000

-

(20,000)

(20,000)

120,000

8,356

3 years

354

89.8

28/11/2017

1,155,364

-

(45,775)

(741,254)

368,335

6,831

3 years

387

70.9

28/11/2017

116,016

-

-

-

116,016

-

3 years

387

97.9

30/07/2018

1,027,500

-

(184,950)

-

842,550

-

3 years

492

152.9

30/07/2018

102,750

-

-

-

102,750

-

3 years

492

186.4

12/02/2019

796,868

-

(61,566)

-

735,302

-

3 years

530

67.8

12/02/2019

75,000

-

-

-

75,000

-

3 years

530

95.2

26/11/2019

200,000

-

-

-

200,000

-

3 years

467

71.5

29/06/2020

-

200,000

-

-

200,000

-

3 years

449

81.2

Draper Esprit Plc Long Term Incentive Plan (LTIP)

29/06/2020

-

583,645

(1,949)

-

581,696

-

3 years

1

449.0

Total

 

4,951,217

783,645

(314,240)

(1,364,329)

4,056,293

48,987

 

 

 

14. Intangible assets

Year ended 31 March 2021

Goodwill1

£'000s

Customer contracts2

£'000s

Total

£'000s

Cost

 

 

 

Cost carried forward as at 1 April 2020

9,653

818

10,471

Acquisition of business (see Note 18)

697

328

1,025

Cost as at 31 March 2021

10,350

1,146

11,496

Accumulated amortisation

 

 

 

Amortisation carried forward as at 1 April 2020

-

(443)

(443)

Charge for the year

-

(117)

(117)

Accumulated amortisation as at 31 March 2021

-

(560)

(560)

Net book value:

 

 

 

As at 31 March 2021

10,350

586

10,936

As at 31 March 2020

9,653

375

10,028

Year ended 31 March 2020

Goodwill1

£'000s

Customer contracts2

£'000s

Total

£'000s

Cost

 

 

 

Cost carried forward as at 1 April 2019

9,653

818

10,471

Additions during the year

-

-

-

Cost as at 31 March 2020

9,653

818

10,471

Accumulated amortisation

 

 

 

Amortisation carried forward as at 1 April 2019

-

(341)

(341)

Charge for the year

-

(102)

(102)

Accumulated amortisation as at 31 March 2020

-

(443)

(443)

Net book value:

 

 

 

As at 31 March 2020

9,653

375

10,028

As at 31 March 2019

9,653

477

10,130

1. During the year, goodwill of £0.7 million arose on the step acquisition of all issued share capital in Elderstreet Holdings Limited. Elderstreet Holdings Limited is the holding company of Elderstreet Investments Limited, a VCT manager incorporated in the UK, on 9 February 2021 and represents the value of the acquired expertise and knowledge of the investment team. The Directors have identified the fund managers as the cash-generating unit ("CGU") being the smallest group of assets that generates cash inflows independent of cash flows from other assets or groups of assets. The fund managers are responsible for generating deal flow and working closely with the investee companies to create value and maximise returns for the Group. The Group tests Goodwill annually for impairment comparing the recoverable amount using value-in-use calculations and the carrying amount. Value-in-use calculations are based on future expected cash flows generated by the CGU fee income from management fees over the next three years with reference to the most recent financial budget and forecasts. A three-year cash flow period was deemed appropriate for value in use calculation given the terms of the Investment Management Agreement. The key assumptions for the value in use calculations are the discount rate using pre-tax rates that reflect the current market assessments of the time value of money and risks specific to the CGU. The internal rate of return ("IRR") will be based on past performance and experience.

  Goodwill of £9.7 million arose on the acquisition of all the capital interests in Esprit Capital Partners LLP, a Venture Capital manager based in the UK, on 15 June 2016 and represents the value of the acquired expertise and knowledge of the fund managers. The Directors have identified the fund managers as the cash-generating unit ("CGU") being the smallest group of assets that generates cash inflows independent of cash flows from other assets or groups of assets. The fund managers are responsible for generating deal flow and working closely with investee companies to create value and maximising returns for the Group. The Group tests goodwill annually for impairment comparing the recoverable amount using value-in-use calculations and the carrying amount. Value-in-use calculations are based on future expected cash flows generated by the CGU fee income from management fees over the next five years with reference to the most recent financial budget and forecasts.

  A 5-year cash flow period was deemed appropriate for the value in use calculation given the patient capital model adopted by the Group. The key assumptions for the value in use calculations are the discount rate using pre-tax rates that reflect the current market assessments of the time value of money and risks specific to the CGU. The internal rate of return ("IRR") used was based on past performance and experience. The discount rate used was 10% and the IRR used was 20%.

2. An intangible asset of £0.3 million was recognised in respect of the anticipated profit from the participation in Elderstreet Investments Limited following the acquisition of the remaining issued share capital the Group did not previously owned on 9 February 2021.

  In FY17, an intangible asset of £0.8 million was recognised in respect of the anticipated profit from the participation in Encore Ventures LLP as a consequence of the acquisition of Esprit Capital Partners LLP.

15. Investments in associates and related undertakings

Investments in associates

Related undertakings

Name

Address

Type of share holding

Interest FD category* at reporting date / partnership interest

SportPursuit Limited

Unit 1.18, Canterbury Court, Kennington Park,
1-3 Brixton Road, London, England, SW9 6DE

Ordinary shares
Preference shares

E

Bright Computing Holding B.V.

Kingsfordweg 151, 1043 GR Amsterdam, the Netherlands

Ordinary shares
Preference shares

E

RavenPack Holding AG

Churerstrasse 135, CH-8808 Pfäffikon, Switzerland

Ordinary shares
Preference shares

D

Earlybird GmbH & Co. Beteiligungs-KG IV

c/o Earlybird Venture Capital, Maximilianstr. 14, 80539, München

Partnership interest

27%

Earlybird DWES Fund VI GmbH & Co. KG

c/o Earlybird Venture Capital, Maximilianstr. 14,  80539, München 

Partnership interest

56.5%

Earlybird Special Opportunities LP

c/o Earlybird Venture Capitarl, Maximilianstr. 14,  80539, München

Partnership interest

34.8%

-  SportPursuit Limited: Net assets as at 30 November 2019 of £1.1 million and loss for the 11 month period ending 30 November 2019 of £0.6 million.

-  Bright Computing Holding B.V.: Net liabilities as at 31 December 2018 of US$6.9 million and a loss for the year ending 31 December 2018 of US$4.3 million.

 

16. Financial assets held at fair value through profit and loss

 

Year ended

31 March 2021

£'000s

Year ended

31 March 2020

£'000s

As at 1 April

657,333

562,061

Investments made in the year

127,976

89,935

Loans repaid from underlying investment vehicles

(206,341)

(39,533)

Loans made to underlying investment vehicles

11,813

4,115

Unrealised gains on the revaluation of investments

276,307

40,755

As at 31 March

867,088

657,333

17. Property, plant and equipment

Year ended 31 March 2021

Right of use

assets

£'000s

Leasehold improvements

£'000s

Computer equipment

£'000s

 

Total

£'000s

Cost

 

 

 

 

Cost carried forward as at 1 April 2020

1,614

680

72

2,366

Additions during the year

-

88

55

143

Disposals during the year

-

-

(8)

(8)

Cost as at 31 March 2021

1,614

768

119

2,501

Accumulated depreciation

 

 

 

 

Depreciation carried forward as at 1 April 2020

(306)

(261)

(39)

(606)

Charge for the year

(348)

(163)

(22)

(533)

Disposals during the year

-

-

6

6

Accumulated depreciation as at 31 March 2021

(654)

(424)

(55)

(1,133)

Net book value:

 

 

 

 

As at 31 March 2021

960

344

64

1,368

As at 31 March 2020

1,308

419

33

1,760

Year ended 31 March 2020

Right of use

assets

£'000s

Leasehold improvements

£'000s

Computer equipment

£'000s

Total

£'000s

Cost

 

 

 

 

Cost carried forward as at 1 April 20191

835

327

57

1,219

Additions during the year

779

353

15

1,147

Cost as at 31 March 2020

1,614

680

72

2,366

Accumulated depreciation

 

 

 

 

Depreciation carried forward as at 1 April 2019

-

(147)

(28)

(175)

Charge for the year

(306)

(114)

(11)

(431)

Accumulated depreciation as at 31 March 2020

(306)

(261)

(39)

(606)

Net book value:

 

 

 

 

As at 31 March 2020

1,308

419

33

1,760

As at 31 March 2019

-

180

29

209

18. Acquisition of subsidiaries

Elderstreet

Recognised amounts of identifiable net assets:

£'000s

Intangible assets

328^

Cash and cash equivalents

94

Trade and other receivables  

87

Net identifiable assets acquired

509

Add: goodwill

635

Add: Deferred tax on intangible asset

62

Net assets acquired

1,206

• Differences in accounting policies between the group and subsidiary; and

• The additional depreciation and amortisation that would have been charged, if the fair value adjustments to intangible assets had applied from 1 April 2020.

Encore Ventures LLP

19. Trade and other receivables

 

31 March 2021

£'000s

31 March 2020

£'000s

Trade receivables

2,535

2,669

Other receivables and prepayments

1,165

1,358

Loans made to related investment vehicles (Note 30)

-

3,692

Total

3,700

7,719

The ageing of trade receivables at reporting date is as follows:

 

31 March 2021

£'000s

31 March 2020

£'000s

Not past due

710

242

Past due 1-30 days

786

45

Past due 31-60 days

761

34

More than 60 days

278

2,348

Total

2,535

2,669

20. Financial liabilities

 

31 March 2021

£'000s

31 March 2020

£'000s

Current

 

 

Leases

(345)

(358)

Loans and borrowings

-

-

Total current financial liabilities

(345)

(358)

Non-current

 

 

Leases

(669)

(975)

Loans and borrowings

393

(44,636)

Total non-current financial liabilities

(276)

(45,611)

Total Financial liabilities

(621)

(45,969)

20(i). Leases

Real Estate Leases

The Group leases office buildings in London for use by its staff. The Group also has an office in Dublin and had an office in Cambridge until Q3 FY21, however these contracts are classified as service contracts and not leases. Information about leases for which the Group is a lessee is presented below.

The Group leases IT equipment such as printers for use by staff. The Group has elected to apply the recognition exemption for leases of low value to these leases.

(i) Amounts recognised on consolidated statement of financial position

20. Financial liabilities

Right-of-use assets

 

31 March 2021

£'000s

31 March 2020

£'000s

Property

960

1,308

Total right-of-use assets

960

1,308

 

Lease liabilities

 

31 March 2021

£'000s

31 March 2020

£'000s

Current

345

358

Non-current

669

975

Total lease liabilities

1,014

1,333

Additions to the right-of-use assets during the year ending 31 March 2021 was Nil (year ending 31 March 2020: £0.8 million).

(ii) Amounts recognised in the consolidated statement of profit or loss

The following amounts relate to leases:

Amounts recognised in the consolidated statement of comprehensive income

 

Year ended 31 March 2021

£'000s

Year ended 31 March 2020

£'000s

Interest on lease liabilities

(84)

(94)

Depreciation charge for the period on right-of-use assets

(348)

(306)

Expenses relating to short-term leases

-

-

Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets

(4)

(5)

20(ii). Loans and borrowings

a.  There must be a minimum of 10 core investments at all times (core investments are not defined in the same way as in this report as it is more broadly defined);

b.  The ratio of the NAV of all investments (as defined in the agreement) to original investment cost should not be less than 1.1:1.0 at any time; and

c.  The ratio of the NAV (as defined in the agreement) plus amounts in the collateral account to financial indebtedness (as defined in the agreement) should not be less than 10:1 at any time.

20. Financial liabilities

 

31 March 2021

£'000s

31 March 2020

£'000s

Bank loan senior facility amount

60,000

50,000

Interest rate

BOE base rate + 6.75% / 7.50% floor

BOE base rate + 6.75% / 7.50% floor

Drawn at balance sheet date

-

45,000

Arrangement fees

(393)

(364)

Loan liability balance

(393)

44,636

Undrawn facilities at balance sheet date

60,000

5,000

21. Trade and other payables

 

31 March 2021

£'000s

31 March 2020

£'000s

Trade payables

(557)

(739)

Other taxation and social security

(389)

(280)

Other payables

(200)

(164)

Accruals and deferred income

(8,499)

(3,855)

Total

(9,645)

(5,038)

22. Deferred tax

 

31 March 2021

£'000s

31 March 2020

£'000s

Arising on business combination

(114)

(75)

Arising on co-invest and carried interest

(520)

(414)

Other timing differences

272

(122)

As at 31 March

(362)

(611)

23. Share capital and share premium

Ordinary share capital

31 March 2021 - Allotted and fully paid

Number

Pence

£'000s

At the beginning of the year

118,918,124

1

1,189

Issue of share capital during the year1

359,131

1

4

Issue of share capital during the year2

19,819,820

1

198

As at the end of the year

139,097,075

1

1,391

1.  Between August 2020 and March 2021, 359,131 new 1p ordinary shares were issued in association with share options being exercised.

2.  In October 2020, the company secured commitments to raise gross proceeds of £110.0 million at a placing price of 555 pence per share by way of a conditional placing of 19,819,820 new ordinary shares.

Number

Pence

£'000s

At the beginning of the year

117,925,470

1

1,179

195,842

1

2

796,812

1

8

As at the end of the year

118,918,124

1

1,189

1.  Between 24 December 2019 and 21 February 2020, 195,842 new 1p ordinary shares were issued in association with share options being exercised.

2.  On 10 March 2020, as part of the acquisition agreement relating to the remaining interest in Encore Ventures LLP (see Note 18) it was agreed that the Company would issue 796,812 new ordinary shares at 502p.

Share premium

 

Allotted and fully paid

Year ended 31 March 2021

£'000s

Year ended 31 March 2020

£'000s

At the beginning of the year

400,726

395,783

Premium arising on the issue of ordinary shares^

111,073

4,983

Equity issuance costs

(3,520)

(40)

As at the end of the year

508,279

400,726

24. Own shares and other reserves

(i) Own shares reserve

Own shares

 

 

Number

of shares

000's

£'000s

Opening balance as at 1 April 2020

-

-

Acquisition of shares by the Trust

(350)

(2,267)

Disposal or transfer of shares by the Trust

235

1,936

Balance as at 31 March 2021

(115)

(331)

24. Own shares and other reserves

 (ii) Other reserves

 

Merger relief reserve

(£'000s)

Share-based payments reserve resulting from company share option scheme (£'000s)

Share-based payments reserve resulting from acquisition of subsidiary

(£'000s)

Total other reserves

(£'000s)

Brought forward as at 1 April 2020

13,097

2,339

10,823

26,259

Share based payments (Note 13)

-

760

-

760

Share based payment - exercised during the year (Note 13)

-

(761)

-

(761)

Balance as at 31 March 2021

13,097

2,338

10,823

26,258

 

Merger relief reserve

(£'000s)

Share-based payments reserve resulting from company share option scheme (£'000s)

Share-based payments reserve resulting from acquisition of subsidiary

(£'000s)

Total other reserves

(£'000s)

Brought forward as at 1 April 2019

13,097

1,713

10,823

25,633

Share based payments (Note 13)

-

990

-

990

Share based payment - exercised during the year (Note 13)

-

(364)

-

(364)

Balance as at 31 March 2020

13,097

2,339

10,823

26,259

Merger relief reserve

Share-based payment reserve

25. Retirement benefits

26. Financial assets and liabilities

 

Designated

FVTPL

£'000s

Amortised cost

£'000s

Total

£'000s

31 March 2021

 

 

 

Financial assets

867,088

-

867,088

Long-term financial assets

867,088

-

867,088

Trade and other receivables (excluding prepayments)

-

3,040

3,040

Loans to related investment vehicles

-

-

-

Cash and cash equivalents

-

158,417

158,417

Restricted cash

-

2,260

2,260

Short-term financial assets

-

163,717

163,717

Total financial assets

867,088

163,717

1,030,805

Financial liabilities

 

 

 

Loans and borrowings^

-

393

393

Lease liabilities

-

(669)

(669)

Long-term financial liabilities

-

(276)

(276)

Trade and other payables (excluding deferred income)

-

(8,517)

(8,517)

Loans and borrowings

-

-

-

Lease liabilities

-

(345)

(345)

Short-term financial liabilities

-

(8,862)

(8,862)

Total financial liabilities

-

(9,138)

(9,138)

 

Designated

FVTPL

£'000s

Amortised cost

£'000s

Total

£'000s

31 March 2020

 

 

 

Financial assets

657,333

-

657,333

Long-term financial assets

657,333

-

657,333

Trade and other receivables

-

4,027

4,027

Loans to related investment vehicles

-

3,692

3,692

Cash and cash equivalents

-

32,255

32,255

Restricted cash

-

1,883

1,883

Short-term financial assets

-

41,857

41,857

Total financial assets

657,333

41,857

699,190

Financial liabilities

 

 

 

Loans and borrowings

-

(44,636)

(44,636)

Lease liabilities

-

(975)

(975)

Long-term financial liabilities

-

(45,611)

(45,611)

Trade and other payables

-

(5,038)

(5,038)

Loans and borrowings

-

-

-

Lease liabilities

-

(358)

(358)

Short-term financial liabilities

-

(5,396)

(5,396)

Total financial liabilities

-

(51,007)

(51,007)

27. Fair value measurements

a.  Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

b.  Level 2: inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

c.  Level 3: inputs are unobservable inputs for the asset or liability.

Movements in Level 3 items

Level 3

£'m

Opening balance at 1 April 2020

701.1

128.0

357.8

(205.7)

Closing balance 31 March 2021

981.2

(85.5)

Closing balance 31 March 2021

895.7

Significant unobservable inputs for Level 3 valuations

· Financial instruments measured using last round price valuation methodology were £450.5 million (31 March 2020: £231.7 million), of which £160.6 million was held through fund of funds investments.

· Financial instruments measured using revenue-multiple valuation methodology were £326.6 million (31 March 2020: £401.3 million) of which £23.8 million was held through fund of funds investments.

· Financial instruments measured at amounts reported by the general partner of the underlying fund were £118.6 million (31 March 2020: £68.1 million).

27. Fair value measurements

If the multiple used to value each unquoted investment valued on a revenue-multiple basis as at 31 March 2021 were to decrease by 10%, the investment portfolio would decrease by £32.6 million (31 March 2020: £40.1 million). If the multiple were to increase by 10%, the investment portfolio would increase by £32.6 million (31 March 2020: £40.1 million).

 

If the multiple used to value each unquoted investment valued on a revenue-multiple basis as at 31 March 2021 were to decrease by 15%, the investment portfolio would decrease by £48.9 million (31 March 2020: £60.2 million). If the multiple were to increase by 15%, the investment portfolio would increase by £48.9 million (31 March 2020: £60.2 million).

 

28. Financial instruments risk

Financial risk management

Market risk - Foreign currency

 

Foreign currency exposures - Investments

31 March 2021

£'000s

31 March 2020

£'000s

Investments denominated in USD

477,771

338,885

10% decrease in GBP

530,833

376,539

10% increase in GBP

434,357

308,077

Investments denominated in EUR

286,550

218,682

10% decrease in GBP

318,374

242,980

10% increase in GBP

260,512

198,802

 

Foreign currency exposures - Cash

31 March 2021

£'000s

31 March 2020

£'000s

Cash denominated in EUR

40,565

6,976

10% decrease in EUR:GBP

36,508

6,278

10% increase in EUR:GBP

44,621

7,673

Cash denominated in USD

26,253

3,627

10% decrease in USD:GBP

23,627

3,264

10% increase in USD:GBP

28,878

3,990

 

Foreign currency exposures - equity

31 March 2021

£'000s

31 March 2020

£'000s

Shareholders' Equity

1,033,141

659,618

10% decrease in EUR:GBP/USD:GBP

929,827

593,656

10% increase in EUR:GBP/USD:GBP

1,136,455

725,580

Market risk - Price risk

28. Financial instruments risk

 

£'m

Revenue- multiple

NAV of underlying fund

 

Last round price

As at 31 March 2021

32.6

11.8

45.1

As at 31 March 2020

40.1

6.8

23.2

 

£'m

Revenue- multiple

NAV of underlying fund

 

Last round price

As at 31 March 2021

48.9

17.8

67.6

As at 31 March 2020

60.2

10.2

34.7

Liquidity risk

Credit risk

 

Classes of financial assets impacted by credit risk, carrying amounts

31 March 2021

£'000s

31 March 2020

£'000s

Trade receivables

2,535

2,669

Loan to related investment vehicle

-

3,692

Cash at bank and in hand

158,417

32,255

Restricted cash

2,260

1,883

 

163,212

40,499

28. Financial instruments risk

Capital management

a.  safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

b.  maintain an optimal capital structure.

Interest rate risk

• A drawdown totalling £35.0 million was rolled during the year (maximum drawn during the year of £45.0 million) at an interest rate of 7.5% - this was fully repaid by 31 March 2021 (all drawn amounts were repaid during the period). Future drawdowns may be subject to a different interest rate. The facility agreement has an interest rate calculated with reference to the Bank of England base rate (currently 0.10%) with a Margin of 6.75%. The agreement has an interest rate floor of 7.5%. As such, if the base rate increases, the interest charged on future drawdowns will increase.

29. Alternative Performance Measures ("APM")

Gross Portfolio Value

NAV per share

30. Related party transactions

30. Related party transactions

Key management personnel compensation

 

Year ended
31 Mar 2021
£'000s

Year ended
31 Mar 2020
£'000s

Wages and salaries

2,169

2,019

Short-term non-monetary benefits

13

9

Defined contribution pension costs

155

163

Share-based payment expense

977

466

Social security contributions and similar taxes

443

287

Carried interest paid

180

-

 

3,937

2,944

Unconsolidated structured entities

Name of undertaking

Registered office

Activity

Holding

Country

Fair value

31 March 2021 £'m

Fair value

31 March 2020 £'m

Esprit Investments (1) (B) LP

20 Garrick Street,

London, WC2E 9BT

Limited Partnership

100%

England

12.0

16.5

Esprit Investments (2) (B) LP

20 Garrick Street,

London, WC2E 9BT

Limited Partnership

100%

England

157.6

61.6

Draper Esprit (Ireland) Limited

32 Molesworth Street,

Dublin 2, Ireland

Investment company

100%

Ireland

670.6

553.3

31. Capital commitments

32. Ultimate controlling party

33. Subsequent events

• Increased and extended our revolving credit facility with SVB and Investec by an additional 1 year to £65m post year-end.

Invested a further £48m post year-end to 11 June 2021, including investments into Manna, FintechOS, Cervest, Ledger, and Lyst. 

• Refreshed fund of funds programme, with the approval by the Board and Investment Committee of an additional £75.0 million investment budget. 

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