Molten Ventures Plc

FY23 has been a challenging year across the whole of the global economy. We've seen high inflation and rising interest rates, which have impacted on portfolio company valuations, but also the availability of capital. That's led to problems within our own portfolio from the perspective of valuation. but it's also meant that the companies have had to adapt their models and demonstrate resilience through that ability to be flexible. We focus very much on our own cash resources and also on the active management to support our portfolio in the period. What we've seen on the valuations this year has been a mixture of first half reductions and stabilization in the second half. We were very quick to reflect the movements in the public market valuation reductions into our portfolio, and that led to a 17% reduction in that first half. In the second half, we've seen peer group comparable multiples have improved. We've also seen growth in the revenue of the underlying portfolio companies. And so we've seen a more nuanced picture where we've had growth in the valuations being offset by some specific provisions we've taken in some of the core companies. The overall impact has been a 19% reduction in the gross portfolio value on a constant currency basis with the benefit of currency tailwinds that's actually reduced to a minus 16% reduction and that leaves the gross portfolio value at 1.37 billion at the period end. We've maintained our discipline in our investment approach through the year. We have the first half of 112 million being deployed into new investments and follow-on investments. And in the second half, substantially less. We've had 26 million invested as we preserve balance sheet resources. Alongside this, we have co-investment capital from EIS and VCT resources where we put 41 million to work in the period. And that's ensured that we can maintain our market activity. We generated more capital from realizations in the second half of the year than we've deployed. The total for the full year is 48 million of realizations, which comes back to the balance sheet. The portfolio is well-funded. In the core, we have 80% of the companies with more than 18 months of cash runway. Importantly, across the portfolio, they've raised in the year over a billion pounds, and 90% of those raises have been at valuations above or equal to where we hold them in the books. We have increased our debt facilities in the year to 150 million, of which 90 million is term debt that is drawn and 60 million is undrawn revolving credit facility. Alongside this, we have 23 million of cash balances at the period end and an additional 60 million in EIS and VCT funds alongside.