Trading Update - six months to 30 September 2023
Core EBITDA pre-SBP anticipated 20-25% ahead of prior year; AUM and FUM marginally down due to currency and market conditions.
- Core EBITDA pre-SBP 20-25% ahead of prior year
- Assets under Management £12.1 billion (prior £12.2 billion)
- Funds under Management £8.8 billion (prior £9.0 billion)
- Retail vehicle fundraising £159 million
- Total future deployment pipeline in international infrastructure exceeding £5 billion
- Foresight Capital Management AUM decrease £350 million
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Foresight Group Holdings Limited ("Foresight", the "Group"), a sustainability-led infrastructure and private equity investment manager, is pleased to announce its trading update for the six months ended 30 September 2023 ("H1 FY24", the "period").
Financial and Operational Highlights1
| ● | Core EBITDA pre-Share Based Payments ("SBP") anticipated to be 20-25% ahead of the prior year period, driven by: |
| ○ | Successful prior year and year-to-date fundraising into higher margin and longer tenure vehicles |
| ○ | Annualisation of FY23 acquisition activity |
| ○ | Maintenance of firm cost discipline in an inflationary environment |
| ● | Assets under Management ("AUM") and Funds under Management ("FUM") were £12.1 billion 2 and £8.8 billion, marginally down 1% and 3% respectively in the six months to 30 September 2023 (FY23: £12.2 billion and £9.0 billion). On a constant currency basis, AUM remained at £12.2 billion 3 in the period with FUM at £8.8 billion 3 |
| ○ | £159 million was raised into higher margin retail vehicles |
| ○ | The private equity division achieved further success in institutional fundraising through a £30 million third close of the Foresight North East Fund, with the division having a promising pipeline of new fund mandates and additional further fund closes |
| ○ | With rising interest rates continuing to impact the valuation of long duration infrastructure assets in the period, Foresight Capital Management ("FCM") AUM decreased by £350 million, including inflows of £170 million offset by outflows of £377 million |
| ● | High quality revenue visibility maintained, with recurring revenue within our target range of 85-90% |
| ● | Investment opportunities within our key markets grew strongly during the period 4,5 with our total future deployment pipeline in international infrastructure now exceeding £5 billion |
| ● | Expanded the international reach of our FCM strategies by signing a new distribution partnership covering the Nordic region, building upon our existing US partnership. In addition, we have created a newly resourced specialist OEIC UK sales team with FCM products as its sole focus |
Outlook
In comparison to retail fundraising, the market for institutional fundraising remains challenging and this has necessarily slowed the pace but not the size or scope of our institutional fundraising activities. Indications are that this should start to improve in the first half of 2024.
Our diversified business model leverages both organic and inorganic growth through acquisitions, including a number of high quality institutional strategies in pre marketing alongside continuous retail fundraising. We remain confident in continuing our strong track record of core EBITDA pre-SBP growth, alongside our stated target AUM growth rate of 20-25% per annum on a rolling 3-year average basis.
Bernard Fairman, Executive Chairman of Foresight Group Holdings Limited, commented:
"Over the last six months we have seen strong inflows into higher margin retail vehicles and successful institutional fundraising in our private equity business.
We have also seen continuing growth in our substantial international infrastructure deployment pipeline which reflects the very significant investment opportunities created by the worldwide energy transition. I believe that the green energy transition is the biggest investment opportunity of our generation and will shape all our lives for years to come. Foresight's considerable experience in sustainability-led investment ideally positions us to capitalise on this exceptional opportunity and create significant value for all our stakeholders."
Notes:
- Please note that all figures contained in this announcement are unaudited and subject to change.
- Divisional AUM movement:
| (£ billion) | H1 FY24 | FY23 | Change % |
|---|---|---|---|
| Infrastructure | 9.7 | 9.5 | +3% |
| Private Equity | 1.4 | 1.4 | +1% |
| FCM | 1.0 | 1.3 | (27)% |
- Group AUM and FUM movement summary on a constant currency basis:
| Actuals | Constant currency basis | ||||
|---|---|---|---|---|---|
| (£ billion) | 30 Sep 2023 | 31 March 2023 | Change % | 30 Sep 2023 | Change % |
| AUM | 12.1 | 12.2 | (1)% | 12.2 | 0% |
| FUM | 8.8 | 9.0 | (3)% | 8.8 | (2)% |
| 4. Infrastructure divisional deployment: | |||||
| H1 FY24 | H1 FY23 | ||||
| Transactions completed | 14 | 24 | |||
| Value (£m) | 128 | 539 | |||
| New future deployment rights (£m)* | 519 | 409 | |||
| Total (£m) | 647 | 948 | |||
*New future deployment rights associated with transactions completed during the period.
Private equity divisional deployment:
| H1 FY24 | H1 FY23 | |
|---|---|---|
| Equity | ||
| Transactions completed | 32 | 31 |
| Value (£m) | 51 | 46 |
| Secured lending | ||
| Value (£m) | 50 | 40 |
Interim Results Announcement
Foresight's Interim Results to 30 September 2023 are scheduled to be released on 30 November 2023, with a presentation for analysts on the same day. Details on how to attend the presentation will be available on https://www.foresightgroup.eu/shareholders in due course.
| Foresight Group Investors | Citigate Dewe Rogerson |
| Liz Scorer / Ben McGrory | Caroline Merrell / Toby Moore |
| +44 (0) 7966 966956 / +44 (0) 7443 821577 | +44 (0) 7852 210329 / +44 (0) 7768 981763 |
| ir@foresightgroup.eu | caroline.merrell@citigatedewerogerson.com / |
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