Augmentum Fintech PLC - Revision history

161.12.100.241: /* What's the expected return of an investment in Augmentum Fintech using the relative valuation approach? */

2023-11-01T12:55:33Z

What's the expected return of an investment in Augmentum Fintech using the relative valuation approach?

← Older revision		Revision as of 13:55, 1 November 2023
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	=== Valuation Risk ===		=== Valuation Risk ===
	The valuation of investments in accordance with IFRS 13 and International Private Equity and Venture Capital (IPEV) Valuation Guidelines requires considerable judgement ~~and is explained in note 19.17~~.		The valuation of investments in accordance with IFRS 13 and International Private Equity and Venture Capital (IPEV) Valuation Guidelines requires considerable judgement.

	The Company’s investments are illiquid and a sale may require consent of other interested parties. Such investments may therefore be difficult to value and realise. Such realisations may involve significant time and cost and/or result in realisations at levels below the value of such investments as estimated by the Company.		The Company’s investments are illiquid and a sale may require consent of other interested parties. Such investments may therefore be difficult to value and realise. Such realisations may involve significant time and cost and/or result in realisations at levels below the value of such investments as estimated by the Company.
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	==== What's the expected return of an investment in Augmentum Fintech using the relative valuation approach? ====		==== What's the expected return of an investment in Augmentum Fintech using the relative valuation approach? ====

	Stockhub ~~estimates~~ that the expected return of an investment in Augmentum Fintech over the next year is 51%. In other words, an £1,000 investment in the company is expected to return £1,513 in a years time. The assumptions used to estimate the return figure can be found in the table below.		The Stockhub users estimate that the expected return of an investment in Augmentum Fintech over the next year is 51%. In other words, an £1,000 investment in the company is expected to return £1,513 in a years time. The assumptions used to estimate the return figure can be found in the table below.

	==== What are the assumptions used to estimate the return figure? ====		==== What are the assumptions used to estimate the return figure? ====

161.12.100.241: /* Financials */

2023-11-01T12:46:44Z

Financials

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161.12.100.241: /* Valuation */

2023-11-01T12:25:35Z

Valuation

← Older revision		Revision as of 13:25, 1 November 2023
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	== Valuation ==		== Valuation ==
			ccc

	== Appendix ==		== Appendix ==

161.12.100.241: /* What are the assumptions used to estimate the return figure? */

2023-11-01T12:24:21Z

What are the assumptions used to estimate the return figure?

← Older revision		Revision as of 13:24, 1 November 2023
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	As noted earlier in this report, research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach, so that's the approach that Stockhub suggests using to determine the estimated value of the company (the valuation based on the discounted cash flow approach can be found in the valuation section of this report); nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the relative valuation approach.		As noted earlier in this report, research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach, so that's the approach that Stockhub suggests using to determine the estimated value of the company (the valuation based on the discounted cash flow approach can be found in the valuation section of this report); nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the relative valuation approach.

	==== What's the expected return of an investment in ~~Arctic Shores~~ using the relative valuation approach? ====		==== What's the expected return of an investment in Augmentum Fintech using the relative valuation approach? ====

	Stockhub estimates that the expected return of an investment in ~~Arctic Shores~~ over the next ~~five years~~ is ~~ccc%, which equates to an annual return of ccc~~%. In other words, an £1,000 investment in the company is expected to return ~~£ccc~~ in ~~five~~ years time. The assumptions used to estimate the return figure can be found in the table below.		Stockhub estimates that the expected return of an investment in Augmentum Fintech over the next year is 49.79%. In other words, an £1,000 investment in the company is expected to return £1,498 in a years time. The assumptions used to estimate the return figure can be found in the table below.

	==== What are the assumptions used to estimate the return figure? ====		==== What are the assumptions used to estimate the return figure? ====
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	\|-		\|-
	\|Which type of multiple do you want to use?		\|Which type of multiple do you want to use?
	\|~~Growth-adjusted EV~~/~~sales~~		\|Price/NAV
	\|For ~~the numerator~~, ~~the Stockhub users believe that to account for the different financial leverage levels of~~ its ~~peers~~, ~~it's best to use enterprise value~~ (EV), rather than price. For the denominator, the Stockhub users believe that because it expects Arctic Shores to reinvest almost all of its revenue back into the business over the five year forecast period and therefore its earnings are expected to be abnormally low over the period, it's best to use sales. Accordingly, the Stockhub users suggest valuing its company using the EV/sales ratio. However, the Stockhub users think that to take into account the different business lifecycle stages of its peers, the most ~~suitable valuation multiple to use is the growth-adjusted EV/sales multiple, rather than the EV/sales multiple~~.		\|For Augmentum Fintech, given its nature as an investment company, Net Asset Value (NAV) is arguably the most relevant metric.
	\|-		\|-
	\|In regards to the ~~growth-adjusted EV~~/~~sales~~ multiple, for the ~~sales~~ figure, which year to you want to use?		\|In regards to the price/NAV multiple, for the NAV figure, which year to you want to use?
	\|Year 5		\|Year 5
	\|~~Stockhub suggests that to account for general market cyclicity, it's best to estimate~~ the ~~expected return~~ of the company ~~between now and five years time~~.		\|The most recent NAV figure is Year 5 (from the incorporation of the company), so the Stockhub users suggest using that year.
	\|-		\|-
	\|In regards to the ~~growth-adjusted EV~~/~~sales multiple, for the sales growth figure, which year(s) do you want to use?~~		\|In regards to the price/NAV multiple, what multiple figure do you want to use?
	~~\|Year 6, from now~~		\|1x
	~~\|Stockhub suggests that for the sales growth figure, it's best to use Year 6.~~		\|In Stockhub's view, Augmentum Fintech closest peer(s) is ccc.
	\|-
	~~\|In regards to the growth-adjusted EV/sales~~ multiple, what multiple figure do you want to use?
	\|~~0.18x~~
	\|In Stockhub's view, ~~Arctic Shores~~ closest peer(s) is ~~Sova Assessment Limited.~~
	\|-
	~~\|Which financial forecasts to use?~~
	~~\|Stockhub users~~
	~~\|The only available forecasts are the ones that are supplied by the Stockhub users (the forecasts can be found in the financials section of this report), so Stockhub suggests using those~~.
	\|-		\|-
	\|What's the current value of the company?		\|What's the current value of the company?
	\|~~£21~~.98 million		\|£138.83 million
	\|The ~~Stockhub users calculate the~~ valuation as of ~~£21~~.98 million ~~(for the calculation, see the 'Arctic Shores Series B valuation calculation' table in this report. However~~, according to ~~Dealroom.co estimates, the firm valuation is between $30m and $46m ($38 million mean) as of January 2023~~.<ref ~~name~~=":2" /> ~~The valuation is based on either of: the publicly disclosed value, or an estimate that is based on the last funding round amount, using similar rounds as benchmarks.~~		\|The valuation of Augmentum Fintech is £138.83 million as of 1st November 2023, according to Google.<ref>https://www.google.com/finance/quote/AUGM:LON?sa=X&sqi=2&ved=2ahUKEwiEw-r14KKCAxX1S0EAHVoFC94Q3ecFegQIHRAf</ref>
	\|-		\|-
	\|Which time period do you want to use to estimate the expected return?		\|Which time period do you want to use to estimate the expected return?
	\|Between now and ~~five years~~ time		\|Between now and one year time
	\|Stockhub suggests ~~that to account for general market cyclicity, it's best to estimate the expected return of the company~~ between now and ~~five years~~ time.		\|The Stockhub users suggests between now and one year time.
	\|-		\|-
	\|Which valuation recommendation method do you want to use?		\|Which valuation recommendation method do you want to use?
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	==== Sensitivity Analysis ====		==== Sensitivity Analysis ====

			ccc
	== References ==		== References ==

161.12.100.241: /* Advisory */

2023-11-01T12:00:58Z

Advisory

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 == Financials ==
 {| class="wikitable"
-|+
+|+Financials
 !Year
 !1
 !2
 !3
-!4
+!4<ref name=":3" />
-!5
+!5<ref name=":3" />
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 === Key person risk ===
 There is a risk that the individuals responsible for managing the portfolio may leave their employment or may be prevented from undertaking their duties.<ref name=":3" />
 == References ==

161.12.100.241: /* Financials */

2023-11-01T11:54:39Z

Financials

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161.12.100.241: /* Investment characteristics */

2023-11-01T11:38:34Z

Investment characteristics

← Older revision		Revision as of 12:38, 1 November 2023
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	** Augmentum can use its propriety network to gain unique access to exciting and fast growth businesses in the sector before valuations inflate		** Augmentum can use its propriety network to gain unique access to exciting and fast growth businesses in the sector before valuations inflate
	* Series B		* Series B
	** This is where the current equity gap is the greatest, and where the Company sees the least competition for deals		** This is where the current equity gap<ref>The term "equity gap" in the context of Series B funding rounds often refers to a shortage of equity investment capital available to companies at this particular stage of growth. Here are the various facets of the equity gap as it pertains to Series B funding:

			1) '''Funding Discrepancy:''' Companies at the Series B stage are often in a transitional phase where they have developed a viable product and have some level of market traction, but they need additional capital to scale operations, expand market reach, or achieve other significant growth milestones. The equity gap arises when there is a shortage of investors willing or able to provide the necessary capital at this stage.

			2) '''Investor Focus:''' Investors may be more inclined to participate in earlier (Seed or Series A) or later (Series C and beyond) stages of funding. Early-stage investments might be seen as more exciting or potentially more lucrative, while later-stage investments are often perceived as less risky. The lesser focus on Series B stage could lead to a significant equity gap.

			3) '''Competition for Deals:''' The passage you provided mentions a lesser degree of competition for deals at the Series B stage. This could mean that there are fewer investors vying to invest in companies at this stage, which can exacerbate the equity gap.

			4) '''Valuation Challenges:''' Valuing a company at the Series B stage can be challenging, which might deter some investors, contributing to the equity gap. The valuation at Series B is often higher than at Series A, and investors may be cautious about overpaying for equity.</ref> is the greatest, and where the Company sees the least competition for deals

	* Value / Down Rounds		* Value / Down Rounds

161.12.100.241: /* Portfolio */

2023-10-31T18:01:48Z

Portfolio

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	=== Portfolio ===		=== Portfolio ===
	{\| class="wikitable"		{\| class="wikitable"
	\|+Portfolio		\|+Portfolio<ref name=":3" />
	!		!
	!		!

161.12.100.241: /* Portfolio */

2023-10-31T18:00:35Z

Portfolio

← Older revision		Revision as of 19:00, 31 October 2023
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	{\| class="wikitable"		{\| class="wikitable"
	\|+Portfolio		\|+Portfolio
	\|		!
	\|		!
	'''Fair value of holding at 31 March 2022 £’000'''		'''Fair value of holding at 31 March 2022 £’000'''
	\|		!
	'''Net investments/ (realisations) £’000'''		'''Net investments/ (realisations) £’000'''
	\|		!
	'''Impact of foreign currency rate changes £’000'''		'''Impact of foreign currency rate changes £’000'''
	\|		!
	'''Investment return £’000'''		'''Investment return £’000'''
	\|		!
	'''Fair value of holding at 31 March 2023 £’000'''		'''Fair value of holding at 31 March 2023 £’000'''
	\|		!
	'''% of Net assets after performance fee'''		'''% of Net assets after performance fee'''
	\|-		\|-
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	\|12.9%		\|12.9%
	\|-		\|-
	\|Zopa ^		\|Zopa<ref name=":4">Held via Augmentum I LP.</ref>
	\|25,577		\|25,577
	\|4,000		\|4,000
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	\|4.2%		\|4.2%
	\|-		\|-
	\|BullionVault ^		\|BullionVault<ref name=":4" />
	\|10,023		\|10,023
	\|(564)		\|(564)
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	\|'''71.0%'''		\|'''71.0%'''
	\|-		\|-
	\|interactive investor ^		\|interactive investor<ref name=":4" />
	\|42,797		\|42,797
	\|(42,797)		\|(42,797)
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	\|0.0%		\|0.0%
	\|-		\|-
	\|Other Investments *		\|Other Investments<ref>There are fifteen other investments (31 March 2022: fourteen).</ref>
	\|58,091		\|58,091
	\|11,532		\|11,532
	\|2,325		\|2,325
	\|(14,801)**		\|(14,801)<ref>The Other Investments investment loss is primarily from write-downs in the valuations of Gemini and Tesseract.</ref>
	\|57,147		\|57,147
	\|20.6%		\|20.6%

161.12.100.241: /* Serviceable Obtainable Market (SOM) */

2023-10-31T17:55:26Z

Serviceable Obtainable Market (SOM)

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