Seraphim Space Investment Trust plc (LSE: SSIT), the world’s first SpaceTech investment company, announces its interim results for the period ended 31 December 2022.

The Interim Report can be found here, and the summary is below:

Financial Summary, 31 Dec 2022 (June 2022)

NAV: £222.0m, down 7.2% (£239.3m)

NAV per share:  92.74p, down 7.2% (99.97p)

Portfolio valuation: £181.2m, down 2.6% (£186.1m)

Fair value vs. cost: 97.2% (104.3%)

Market capitalisation: £108.2m down 14.7% (£126.9m)

Share price: 45.2p down 14.7% (53.0p)

Discount/+premium: 51.3% (47.0%)

Ongoing charges: 1.88% (1.72%)

Number of shares in issue: 239.4m

Liquid resources: £40.9m (June 2022: £57.7m)

Interim Highlights

• Invested £13.4m during the period (£4.4m in new investments and £9.0m in follow-on investments).
• The NAV per share decreased by 7.2% over the period, from 99.97p to 92.74p at 31 December 2022, largely driven by a reduction in the fair value of the portfolio.
• Commercial performance strong with the private portfolio companies in the top 10 increasing revenue by 56% h-o-h in the six month period[2]
• Fair value of the portfolio’s private companies (accounting for 86% by number and 94% by fair value of the portfolio) largely remained stable over the period, with fair value reaching 114.1% of cost.
• At 31 December 2022, the Company had investments in 29 SpaceTech companies with an aggregate value of £181.2m and remains well-capitalised with cash reserves of £40.9m.
• Pace of deployment moderated to provide sufficient funding reserves to support existing portfolio and selective new investments.

Post Period Highlights

• The Investment Manager is in advanced negotiations to complete follow-on investments in two of the Company’s top 10 portfolio companies, both with agreed term sheets in hand.

Will Whitehorn, Chair of Seraphim Space Investment Trust plc, commented: “The events of the last few years have changed the economic imperatives of financial markets in a way that had not been seen for decades. Faced with a new set of challenges, the western economies have innovated, with the venture capital industry and SpaceTech industries playing a crucial part of this process, leading the way in strengthening, developing, and diversifying the capability and supply chains that the modern world depends upon.

Government revenues, in the form of contracts or grants, are a significant driver for many portfolio companies. They provide a source of stable funding, which can act as a cushion against reduced demand from the commercial sector in a challenging economic environment. This stability can help the space industry to weather economic downturns and maintain its operations, research and development and infrastructure investments.

Remote sensing and earth observation continue to play a key role in addressing one of the greatest global challenges of our time – climate change. Satellite-based monitoring systems are providing critical data and information on weather patterns, addressing the impacts of climate-related extreme weather events, carbon emissions and other factors related to mitigating the effects of climate change. Revenue from this area is another key driver for portfolio companies, underpinning expectations of continuing growth.

The Investment Manager is actively engaged with numerous investment prospects, carefully selecting those with a strong growth premise and that offer the highest returns for shareholders. It is taking a cautious approach to the allocation of cash between supporting existing portfolio companies, making new investments, and managing the Company’s working capital until the market improves and more capital can be raised.”

Mark Boggett, Chief Executive Officer, Seraphim Space Manager LLP, said:

“With most of the portfolio performing robustly and capitalised through 2023 the portfolio overall is well positioned to benefit from the secular trends relating to global security, food security, climate change and sustainability as and when the wider economic environment improves. We continue to believe that the Company is well positioned to ride out current macroeconomic turbulence and deliver a strong return to investors over the long term.

We are cognisant of the difficulties posed by the current economic downturn, particularly in the context of fast-growing technology companies maintaining access to funding in order to continue to innovate. Therefore, we have focussed on helping our portfolio companies navigate these issues and are pleased to report that 11 of our investments raised money in the period under review. This pays testament to the quality of the portfolio, and we will continue to support them in this capacity going forward.

Having operated as investors through three previous downturns over the last 20 years, members of the Investment Manager have first-hand experience of helping to guide companies through challenging funding environments. It is during such periods that success is often forged.

Given the Company still has sizeable cash reserves and listed holdings, we believe it is well positioned to support both the high potential current portfolio companies and to capitalise on the continued strength of new investment opportunities.”

News in full

In the video below, CEO Mark Boggett outlines Seraphim’s Investment Strategy