20th Jun 2022 10:59
(Alliance News) - Shares in Forward Partners Group PLC were down on Monday as "significant turmoil" forces it to lower full-year expectations for the valuation of its Ventures portfolio.
Shares in the London-base investment firm were down 16% to 50.00 pence each in London on Monday morning.
Back in February, Forward Partners said that it anticipated growth in the value of its Ventures portfolio for 2021 to meet expectations, with GBP8.8 million invested over the year. It added that it expected this momentum to continue into 2022.
On Monday, the board said it now expects to report a mid-to-high twenties percentage point decline in its Ventures portfolio valuation at the half-year, down on the previous market guidance of around GBP117 million for December 31, 2021.
Forward Partners said that since the February announcement there has been "significant turmoil" in the public markets. Notably, it cited significant uncertainty in the geopolitical outlook, particularly Russia's invasion of Ukraine.
Further, Forward Partners said that as investor confidence has weakened, it is continuing to see downward pressure on valuations whilst funding rounds are taking longer to close.
"The delay in funding rounds will result in key portfolio companies moving from being valued with reference to the price of the last round of investment to being valued on a revenue multiples basis. Further, those multiples are calculated from the enterprise values of listed peers which are trading at much lower levels than a year prior," the company explained.
Forward Partners said it expects this "downward pressure" on valuations to continue during the course of 2022, driven primarily by changes in the valuation basis where funding rounds have been delayed and by declining share prices of the broader listed peer groups.
However, the investment firm "remains confident" in the longer-term growth prospects of its portfolio.
Forward Partners will report results for 2021 by no later than June 30, where it will also provide a more detailed update on its Ventures portfolio.
By Sophie Rose; [email protected]
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