Seraphim Space Investment Trust plc (LSE: SSIT), the world’s first SpaceTech investment company, announces its audited results for the financial year ended 30 June 2023.

The annual report can be found here

Full Year Highlights

• During the year, £4.9m was invested in six new portfolio companies. £4.2m into two new additions to the Company’s main portfolio, with £0.7m into early-stage companies.
• The Company completed £12.2m of additional follow-on investments in eight companies (five in the main portfolio totalling £10.7m and three early-stage, non-material companies totalling £1.5m).
• The top 10 portfolio companies saw their bookings increase by 199% on average over the year, with the average revenue growth increase 34% (both on a fair value weighted basis).
• Seven of SSIT’s portfolio companies closed funding rounds at higher valuations relative to previous rounds, versus only one at a lower valuation (the remaining rounds were unpriced convertible loan note issues).
• Investment activity was robust, with a total of 11 companies successfully closing funding rounds.
• The majority of rounds were led by new external investors, with SSIT participating in two-thirds of the rounds with the other rounds being able to access the required funding from other investors due to the strength of their syndicates.

Post Period Highlights

• Since 30 June 2023, the Company has invested a total of £4.1m, with £3.3m in follow-on funding into three existing portfolio companies and £0.9m into two new early-stage investments.
• On 13 July 2023, the Company announced a share repurchase programme. In the period to 8 September 2023, the Company bought back a total of 2,186,344 shares (0.9% of the shares in issue at 12 July 2023) at an aggregate cost of £1.0m or 45p per share.

Will Whitehorn, Chair of Seraphim Space Investment Trust plc, commented: “The SSIT portfolio is well-positioned given the strong global tailwinds of increased defence spending and the continued investment into solutions to address the climate and sustainability agenda. The top 10 portfolio companies saw their bookings increase by 199% on a fair value weighted average basis over the year. Therefore, these companies have solid contracted orders for the years ahead, providing great confidence to investors.

Encouragingly, we have seen some well-known private equity investors, such as KKR, Advent and BlackRock, entering the sector to build their SpaceTech exposure and indicating interest from new investor groups. Given their broad mandate to invest across sectors, their focus on space gives us confidence of increasing growth aspirations for the domain. Furthermore, with significant amounts of dry powder (capital which has been committed to but not yet invested by investment vehicles) sat in impact and climate funds from across the globe, we remain confident that there is a large and growing pool of motivated capital to support the needs of companies in the SSIT portfolio in the years ahead.

We have reserved cash to support portfolio fundraisings as required in the year ahead, leaving a modest sum for new investment until the market improves and more capital can be raised. Some of the best investments are undertaken at the bottom of the economic cycle. The SSIT deal flow pipeline is healthy and, given cash constraints, we are focused on participating in only the most exceptional opportunities, carefully selecting those with a strong growth premise that offer the highest returns for shareholders.”

James Bruegger, Chief Investment Officer, Seraphim Space Manager LLP, said: “We are delighted with the progress the portfolio has made during the period. The portfolio has proven itself adept at successfully accessing capital at a time when the wider funding raising environment has been challenging. It is particularly gratifying that many of these companies have closed funding rounds led by new investors and on improved terms relative to their previous funding rounds. The success in capital raising across the portfolio is in no small part due to the impressive commercial traction achieved allied to the scale of the opportunities these companies are addressing. With the majority of the portfolio now well-funded through the next 12‑18 months, we are excited to see what will be achieved over the year ahead.”

Mark Boggett, Chief Executive Officer, Seraphim Space Manager LLP, said: “We remain confident with the outlook for the space domain globally as well as the SSIT portfolio, consisting of best-of-breed SpaceTech companies. We continue to enjoy the privileged position of seeing the majority of the sector’s global deal flow. This provides an information asymmetry over the sector that informs our every move.

With the secular trends relating to global security, food security, climate change and sustainability expected to accelerate, we believe the Company is well-positioned to take advantage of the resultant opportunities. We anticipate that demand for the products and services of the Company’s portfolio companies, particularly from governments, should result in the portfolio delivering strong growth metrics.

As of 13 October 2023, cash was £29.4m, with a potential further £3.0m of liquidity available in the holdings of listed companies. We believe this liquidity should be sufficient to provide the necessary levels of support to the portfolio over the course of the next 12 months. Whilst we expect to continue to diversify the portfolio with selective new investments, uncertainty around the timing of market recovery (and, therefore, our ability to raise new equity capital) means that the size of new investments will likely be small, with investment activity expected to be more weighted in favour of supporting the existing portfolio until a time when the market provides the appropriate conditions to fundraise.”

News in full

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