Annual Report
For the year ended 31st March 202Ǫ
About Augmentum Fintech plc
Augmentum Fintech plc (the “Company”) is the UK’s only publicly
listed investment company focusing on the fintech sector, having
launched on the main market of the London Stock Exchange in
2018, giving businesses access to patient funding and support,
unrestricted by conventional fund timelines
We invest in early and later stage fast growing fintech businesses that are
disrupting the banking, insurance, asset management and wider financial services
Portfolio management is undertaken by Augmentum Fintech Management Limited
(“AFML”). AFML is a wholly owned subsidiary of the Company, together referred to
as the “Group”.
Strategic Report and Business Review
2 Chairmans Statement
5 Investment Objective and Policy
6 Portfolio Review
7 Key Investments
13 Other Investments
15 Portfolio Manager’s Review
19 Strategic Report
Corporate Governance
32 Board of Directors
33 Management Team
34 Directors’ Report
38 Corporate Governance Report
44 Directors Remuneration Report
47 Directors’ Remuneration Policy
48 Report of the Audit Committee
51 Statement of Directors Responsibilities
Financial Statements
52 Consolidated Income Statement
53 Consolidated and Company Statements of
Changes in Equity
54 Consolidated Balance Sheet
55 Company Balance Sheet
56 Consolidated Cash Flow Statement
57 Company Cash Flow Statement
58 Notes to the Financial Statements
69 Independent Auditor’s Report to the Members of
Augmentum Fintech plc
Further Information
77 Information for Shareholders
78 Glossary and Alternative Performance Measures
80 Contact Details
Chairmans Statement
I am pleased to present our sixth annual report since the launch of the
Company in March 2018. This report covers the year ended 31 March
Investment Policy
Your Company predominantly invests in early stage European fintech
businesses which have technologies with the potential to transform the
traditional financial services sectors and/or support the trend to
digitalisation and market efficiency. A typical investment will offer the
prospect of high growth and the potential to scale. Our objective is to
provide long-term capital growth to shareholders by offering them
exposure to a focused portfolio of private fintech companies during
what is often their period of rapid value accretion.
Your Company’s NAV per share after performance fee at 31 March 2024
was 167.4p, up 5.4% from 31 March 2023, continuing our history of
increases for every reporting period since the Company’s IPO in 2018.
However, the price at which the shares traded continued to fail to
represent the NAV throughout the period, ending at 100.5p per share, up
3.5p from the price at 31 March 2023 but still representing a discount to
the NAV per share after performance fee of 40.0%.
The UK equity market, and investment companies in particular, has been
largely out of favour and investment company discounts are running at
historic highs in many cases. The initial negative reaction to increased
interest rates has sustained but most commenta
tors predict a rate
reduction at some point; the question remains as to when. UK inflation
numbers are improving which removes one of the barriers to lower rates.
History suggests that growth companies such as Augmentum will be
early beneficiaries of any rally inspired by declining rates.
Our underlying portfolio is performing well and the current discount is
illogical. As at 31 March 2024, like at the half year, the valuation of our top
three positions in Tide, Zopa Bank and Grover, plus cash, was almost
equivalent to our £170 million market capitalisation, attributing virtually no
value to our £119 million of other investments.
In the first half of the year, the Company benefitted from its fifth portfolio
realisation since IPO. We received proceeds of £22.8 million from the
completion of NatWest Group’s acquisition of Cushon, appreciably
ahead of its prior valuation and representing a 2.1x multiple on invested
capital, and an IRR of 62%. Shortly after the year end, in April, we had
our sixth exit. One of the leading global providers of online identity
verification, Entrust, acquired Onfido, delivering an IRR of 5.8% and a
multiple on capital invested of 1.3x, with the realised value representing
a c.5% uplift on the holding value we reported in the Company’s half
year results. To date, all of the Company’s investment exits have been at
or above the last reported holding value, which should provide investors
with comfort that our valuations process is rigorous and corroborates
the discipline our Portfolio Manager has exercised when evaluating new
investments and their reporting on the portfolio.
Deployments in the year included one new investment, £4.0 million in
London-based insurtech Artificial, and a further £12.0 million of
follow-on funding to support existing portfolio companies. These
included Volt (£5.3 million), Tide (£4.2 million) and, Grover (£1.4 million).
There is a full review of the portfolio and investment transactions during
the year in the Portfolio Manager’s Review beginning on page 15.
Portfolio Management
Our investment team continues to evaluate a wide range of
opportunities, reviewing financial and commercial metrics in order to
identify those most likely to be successful. We are active investors and
our Portfolio Manager works closely with the companies we invest in,
often taking either a board or an observer seat, and working closely with
management to guide strategy consistent with long-term value creation.
Our portfolio is already diversified across different fintech sectors and
maturity stages and we are keen to expand it further. We are committed
to responsible investing. We integrate Environmental, Social and
Governance (“ESG”) factors in our analysis, due diligence and operating
practices as we believe that these are key in mitigating risk and creating
good investments.
* These are considered to be Alternative Performance Measures. Please see the Glossary and Alternative Per-
formance Measures on page 78.
The Board considers the NAV per share after any performance fees provision to be the most accurate way to
reflect the underlying value of each share, whereas accounting standards require the Groups consolidated NAV
per share to be presented before such fees are deducted as a consequence of our Portfolio Manager being
within our Group structure and the fees therefore being eliminated on consolidation.
To read about our KPIs see page 23.
Performance Highlights
31 March 31 March
4 2023
NAV per Share after performance fee
* 167.4p 158.9p
NAV per Share after performance fee Total Return* 5.4% 2.4%
Share price 100.5p 97.0p
Total Shareholder Return* 3.6% (27.1%)
Discount to NAV per Share after performance fee* (40.0%) (39.0%)
Ongoing Charges Ratio* 2.0% 1.9%
Chairmans Statement continued
Your Board considers its governance role in the valuations process to
be of utmost importance. We operate with a Valuations Committee in
addition to an Audit Committee, both playing a key role in assessing
portfolio valuation. Your Board understands that shareholders are often
sceptical of private equity valuations as they cannot be readily verified
in the way that public equities can. We have always maintained a
consistent, rigorous and disciplined approach to valuations and the
results we are reporting reflect an in-depth process, supported by our
advisers. We maintained our multiples in the bull market for fintech
when listed fintech multiples became elevated and so we have not
needed to make subsequent corrections, unlike some others. The six
disposals made to date provide some retrospective validation of this
We have carefully reviewed both the status and the forecasts of all of
the portfolio companies, used appropriate and consistent
methodologies to determine the value of each investment and sense
checked our conclusions. We also benefit from the majority of our
investments occupying a senior position in the capital structures of the
investee companies, offering an element of protection against
downside risk.
Discount Control
The Company’s shares traded at a discount to NAV for the whole of the
year under review and up to the date of this report, notwithstanding the
underlying value and strong prospects of the portfolio.
The Board has continued its programme of highly accretive buybacks,
albeit more modestly in the second half, seeking to convey to the
market our confidence in the value of the portfolio, while also balancing
this with the need for capital to be available for new and follow-on
investments. All the shares repurchased by the Company are being held
in treasury to potentially reissue when the share price returns to
4,687,567 shares were bought back into treasury during the year to
31March 2024 (2023: 5,806,934 shares), at an average price of 97.7p
per share, representing an average discount to the prevailing NAV per
share after performance fee of 38.6% and adding 1.7p/1.1% to the NAV
per share. A further 99,118 shares have been bought back since March,
up to 24June 2024, at an average price of 98.7p per share.
We will seek to renew shareholders authorities to issue and buy back
shares at the forthcoming AGM.
Potential Returns of Capital
As set out on page 25 of this annual report, the Company may, at the
discretion of the Directors, return up to 50% of the gains realised during a
year from the disposal of investments. Factors influencing decisions in
this regard include the quantum of sale proceeds, the opportunities
offered by the investment pipeline and the working capital requirements
of the Company. To date the Board has applied a proportion of such gains
to share buybacks, as this has been highly accretive to the Company’s
NAV per share. This notwithstanding, the Directors intend to consult with
shareholders to determine whether other means of cash distribution
would be preferred.
No dividend has been declared or recommended for the year. Your
Company is focused on providing capital growth and has a policy only to
pay dividends to the extent that it is necessary to maintain the Company’s
investment trust status.
There have been no changes to the Board during the year but the three
Directors at IPO in 2018 are all scheduled to retire from the Board at the
same time, so it seems logical to stage these departures and commence
Board refreshment now. After six years in the Chair, I have decided to
retire first and will not be offering myself for re-election at the forthcoming
AGM. We have an excellent mix of skills and experience on the Board
already but intend to supplement our team with a new Director. We have
engaged an independent search firm for this purpose.
It has been my pleasure to chair Augmentum Fintech PLC from its
successful IPO in 2018 and to see it grow into a leading and highly
respected player in European fintech. My grateful thanks to our
shareholders for their support, to my Board colleagues for their diligence
and hard work, and to Tim, Richard and the team at Augmentum Fintech
Management Limited who have together built a much-admired
Our AGM will be held on Thursday 19 September 2024 at 11.00 a.m. at the
Augmentum Fintech Management Limited office at 4 Chiswell Street,
London EC1Y 4UP. Your Board strongly encourages shareholders to
register their votes in advance using the proxy form provided or by voting
online, or if they are not held directly, by instructing the nominee company
through which the shares are held. Registering votes in advance does not
preclude shareholders from attending the meeting.
Details of all of the resolutions can be found in the Notice of AGM, which
is published separately from this annual report and will be sent to
shareholders when the annual report is published. Both documents will
also be available to view on or download from the Company’s website at
Your Directors consider that all the resolutions listed are in the best
interests of the Company and its shareholders and recommend voting in
favour of them, as your Directors intend to do in respect of their own
Interest rates remain stubbornly high for now, but UK and global inflation
numbers are improving which suggests a more positive medium-term
outlook for growth companies. As I write, early-stage growth portfolios
remain out of favour, but our Portfolio Manager has proved its model,
well-illustrated by the returns produced by our six realisations to date.
Additionally, our largest investments are performing very well.
The underlying need to digitalise and transform financial services
remains. The opportunity is undiminished as the traditional operators
continue to dominate, despite inroads made by some stellar fintech
businesses with less costly, and in many cases more secure, business
models. Penetration is still only c.5% across the industry although
adoption of consumer focused fintech by younger demographics is
markedly higher.
We maintained our investment discipline over the last year and, with our
strong cash reserves (£44.8 million at 31 May 2024), we are well placed
both to take advantage of new opportunities and to reinforce our appeal
as a supportive investor. We have a healthy pipeline of opportunities
under consideration.
Your Board believes that the Company will see a closing of the discount
at which its shares trade in due course and, with the underlying growth of
the portfolio generally being very strong, expects that our patient
shareholders will be well rewarded in time.
Neil England
24 June 2024
Chairmans Statement continued
Investment objective
The Company’s investment objective is to generate capital growth over
the long term through investment in a focused portfolio of fast growing
and/or high potential private financial services technology (“fintech”)
businesses based predominantly in the UK and wider Europe.
Investment policy
In order to achieve its investment objectiv
e, the Company invests in
early or later stage investments in unquoted fintech businesses. The
Company intends to realise value through exiting these investments
over time.
The Company seeks exposure to early stage businesses which are
high growth, with scalable opportunities, and have disruptive
technologies in the banking, insurance and wealth and asset
management sectors as well as those that provide services to underpin
the financial sector and other cross-industry propositions.
Investments are expected to be mainly in the form of equity and equity-
related instruments issued by portfolio companies, although
investments may be made by w
ay of convertible debt instruments. The
Company intends to invest in unquoted companies and will ensure that
the Company has suitable investor protection rights where appropriate.
The Company may also invest in partnerships, limited liability
partnerships and other legal forms of entity. The Company will not invest
in publicly traded companies. However, portfolio companies may seek
initial public offerings from time to time, in which case the Company may
continue to hold such investments without
The Company may acquire investments directly or by way of holdings in
special purpose vehicles or intermediate holding entities (such as the
The Management Team has historically taken a board or board
observer position at investee companies and, where in the best
interests of the Company, will do so in relation to future
The Company’s portfolio is expected to be diversified across a number
of geographical areas predominantly within the UK and wider Europe,
and the Company will at all times invest and manage the portfolio in a
manner consistent with spreading investment risk.
The Management Team will actively manage the portfolio to maximise
returns, including helping to scale the team, refining and driving key
performance indicators, stimulating growth, and positively influencing
future financing and exits.
Investment restrictions
The Company will invest and manage its assets with the object of
spreading risk through the following in
vestment restrictions:
l the value of no single investment (including related investments in
group entities or related parties) will represent more than
15percent. of Net Asset Value;
l the aggregate value of seed stage investments will represent no
more than 1 per cent. of Net Asset Value; and
l at least 80 per cent. of Net Asset Value will be invested in
businesses which are headquartered in or have their main centre
of business in the UK or wider Europe.
* Please refer to the Glossary on page 78.
In addition, the Company will itself not invest more than 15percent. of its
gross assets in other investment companies or
investment trusts which
are listed on the Official List of the FCA.
Each of the restrictions above will be calculated at the time of investment
and disregard the effect of the receipt of rights, bonuses, benefits in the
nature of capital or by reason of any other action affecting every holder of
that investment. The Company will not be required to dispose of any
investment or to rebalance the portfolio as a result of a change in the
respective valuations of its assets.
Hedging and derivatives
Save for investments made using equity
-related instruments as
described above,
the Company will not employ derivatives of any kind
for investment purposes, but derivatives may be used for currency
hedging purposes.
Borrowing policy
The Company may, from time to time, use borrowings to manage its
working capital requirements but shall not borrow for investment
purposes. Borrowings will not exceed 10 per cent. of the Company’s
Net Asset Value, calculated at the time of borrowing.
Cash management
The Company may hold cash on deposit and may invest in cash
equivalent investments, which may
include short-term investments in
money market type funds and tradeable debt securities.
There is no restriction on the amount of cash or cash equivalent
investments that the Company may hold or where it is held. The Board
has agreed prudent cash management guidelines with the AIFM and
the Portfolio Manager to ensure an appropriate risk/return profile is
maintained. Cash and cash equivalents are held with approved
It is expected that the Company will hold between 5 and 15percent. of
its Gross Assets in cash or cash equivalent investments, for the purpose
of making follow-on investments in accordance with the Company’s
investment policy and to manage the working capital requirements of
the Company.
Changes to the investment policy
No material change will be made to the investment policy without the
approval of Shareholders by ordinary resolution. Non-material changes
to the investment policy may be approved by the Board. In the event of
a breach of the investment policy set out above or the investment and
gearing restrictions set out therein, the Management Team shall inform
the AIFM and the Board upon becoming aware of the same and if the
AIFM and/or the Board considers the breach to be material, notification
will be made to a Regulatory Information Service.
Investment Objective and Policy
Portfolio Review
Fair value of Impact Fair value of
holding at Net of foreign holding at % of Net
31 March investments/ currency rate Investment 31 March assets after
2023 (realisations) changes return 2024 performance
£’000 £’000 £’000 £’000 £’000 fee
Tide 35,692 4,176 – 11,425 51,293 18.0%
Zopa Bank^ 30,093 – – 9,198 39,291 13.8%
Grover 43,150 1,368 (1,103) (7,522) 35,893 12.6%
Volt 14,216 5,300 – 5,942 25,458 9.0%
BullionVault^ 11,564 (799) – 2,354 13,119 4.6%
Gemini 8,306 (308) 2,926 10,924 3.9%
Onfido 10,242 – (51) (43) 10,148 3.6%
Intellis 8,412 – (79) 1,741 10,074 3.5%
AnyFin 9,304 – (817) 928 9,415 3.3%
Iwoca 7,882 – – 44 7,926 2.8%
Top 10 Investments 178,861 10,045 (2,358) 26,993 213,541 75.1%
Other Investments* 52,644 5,931 (564) (6,469) 51,542 18.1%
Cushon 22,790 (22,790) – – 0.0%
Total Investments 254,295 (6,814) (2,922) 20,524 265,083 93.2%
Cash & cash equivalents 40,015 38,505 13.5%
Net other current liabilities (186) (271) -0.1%
Net Assets 294,124 303,317 106.7%
Performance Fee accrual (16,819) (18,980) -6.7%
Net Assets after performance fee 277,305 284,337 100.0%
^ Held via Augmentum I LP
* There are fourteen other investments (31 March 2023: fifteen). See page 13 for further details.
Key Investments
The Augmentum portfolio is well diversified across the fintech ecosystem
by sub-sector, %
Circular Economy
Wealth & Asset Management
Digital Banking & Lending
Acquired post-year end
1. NAV before performance fee, as at 31 March 2024, NAV after performance fee is £284.3m
2. £38.5m cash as at 31 March 2024
Digital Asset Infrastructure
Cash and
other net
Mar-23 Investment Realisation
Uplift Reduction Cash available & other
Acquired post-year end
1. Cushon exited in June 2023
2. Consolidated cash position of £38.5m less net liabilities
3. NAV is shown before performance fee, NAV after performance fee is £284.3m
4. Onfido exited post period end
Portfolio valuation changes
Year ended 31 March 2024