Finance Wales passes £100million milestone as it marks 2,000th investment

29/10/08

Finance Wales invested a record £20.8million in Wales-based businesses during 2007/2008, taking its total investment to more than £102million through 2,000 investments since 2001, the company announced today (29th October 2008).

The figures, published in its Annual Review, show that Finance Wales completed 185 investments during the financial year from 1^st April 2007 to 31^st March 2008, including 151 syndicated investments and completed three successful equity realisations and two listings on the Alternative Investment Market (AIM).

“2007/2008 was a very successful year for Finance Wales,” said CEO, Siân Lloyd Jones. “For a third successive year we invested over £20million in Wales-based small and medium-sized businesses, playing an important role in helping them achieve their growth ambitions.

“In addition, investee businesses in our existing portfolio continued to grow, highlighting the importance of follow-on funding for growing businesses. Developing such a competitive and profitable track record will help us achieve our goal of developing sustainable funds for reinvestment.”

The company recorded profits totalling £665,000, which it will re-invest directly in growth SMEs in Wales.

Chairman, Ian Johnson, commented: “Our impact on the economy of Wales continues to grow and currently stands at over £400million; both with regard to our own direct investment and the additional private capital we’ve been able to leverage into growing Welsh SMEs.

“Our commercial results have been just as impressive and we continue to work towards achieving a balanced investment portfolio, with a particular emphasis on early stage deals, development capital and succession deals.”

He added: “In these challenging economic times Finance Wales has an opportunity to play a significant role helping SMEs invest for the future. I look forward to future challenges as Finance Wales seeks to invest in even more Wales-based SMEs and continues to build an investment track record as one of the most successful organisations of its type in the UK.”

Finance Wales, a subsidiary company of the Welsh Assembly Government, provides commercial funding to small and medium-sized businesses in Wales. Established in 2001, it uses public and private sector funds, including European Union, and operates commercially and independently with its own board of directors and management team.

Welcoming the latest figures from Finance Wales, Ieuan Wyn Jones, Deputy First Minister and Minister for the Economy and Transport, said: “During the current economic climate it is imperative that businesses have access to necessary funding. The latest figures for 2007/2008 demonstrate that Finance Wales, a subsidiary of the Assembly Government, is achieving this and highlights the company’s important role during the current financial climate.”

During 2007/2008, Finance Wales renewed its commitment to early stage investment and completed its first co-investment deal with AIM-listed Fusion IP, which has an exclusive IP pipeline agreement with Cardiff University. Both companies invested £250,000 as part of a £2million funding round for Cardiff-based Q Chip Ltd. Two further co-investments have been made with Fusion IP.

In addition, Finance Wales achieved three equity realisations from Enfis, Accountis and Greenwood during the financial year. Two investee companies, Boomerang and Freshwater, also listed on AIM. Such successful equity realisations enable Finance Wales to re-invest returns and achieve the company’s goal of developing sustainable investment funds.

The Annual Review also highlighted how:

• xénos, the Wales Business Angel Network, a subsidiary of Finance Wales plc, facilitated over £2million investment in 17 deals. Since 1997 xénos has facilitated more than £19.5 million private sector investment in over 118 deals, enabling funding at all stages of development, from early stage through to expansion, acquisition and turnaround.
• Finance Wales completed a new £30million round of funding in September 2007 which allowed it to invest into companies throughout Wales. The fund was completed with £15million raised from Barclays Bank plc and a further £15million from the Welsh Assembly Government.
• Finance Wales manages the Wales Creative IP Fund on behalf of the Welsh Assembly Government and by 2007/2008 it had invested more than £5million in nine films, three television productions, a new media project and two factual documentaries since its inception in May 2005.
• Finance Wales had invested a total of £2.2million in 65 social enterprises and community businesses throughout Wales within the financial year as part of its Community Loan Fund. The fund provides investment of between £5,000 and £600,000 to social enterprises and community organisations.

Key achievements 2007/2008

• £20.8 million invested in Wales-based growth SMEs
• 185 investments completed - including 151 syndicated investments
• Three successful equity realisations
• Two listings on AIM
• Three early stage co-investments with Fusion IP
• £2million investment facilitated by xénos in 17 companies

Key achievements to date (2001 - 2008)

• £102 million invested in Wales-based SMEs, leveraging an additional £317 million private sector investment
• Over 2000 investments in growth SMEs in Wales since 2001
• xénos has now invested £19.5 million in 118 companies since it was established in 1997

2001 - 2002

• Welsh Assembly Government establishes Finance Wales
• The company begins investing its £45.2million Objective 1 fund, backed by Barclays Bank and the European Regional Development Fund

2002 - 2003

• Finance Wales raises another fund, the £35.9million Objective 2 fund, backed by Barclays Bank, the European Regional Development Fund and the Welsh Assembly Government

2003 - 2004

• Finance Wales invests £6million

2004 - 2005

• First investment exit achieved from Crumlin-based Atlantic Technologies which is followed by an exit from Rafiki
• Largest equity investment to date is made in Cardiff-based Boomerang
• Annual investment level reaches £12.8million

2005 - 2006

• Finance Wales starts managing the Wales Creative IP Fund for the Welsh Assembly Government
• Finance Wales exits Crystal Reference in a trade sale to AD Pepper Media and the company’s annual investment level exceeds
• £20 million for the first time

2006 - 2007

• First all-Wales investment fund (£30million) launched. Finance Wales exits howies in trade sale to Timberland
• Finance Wales maintains annual investment level in excess of £20million
• 2007-08 - Freshwater and Boomerang list on AIM, Finance Wales exits from Enfis, Accountis and Greenwood
• Finance Wales completes three early stage co-investments with Fusion IP as annual investment levels exceed £20million for the third year in succession

2007 - 2008

• Finance Wales achieves the goal it set in 2001 of investing £100 million by 2008