Forward Partners Group plc

("plc", "Forward Partners", "Forward", "the Group" or the "Company")

FULL YEAR TRADING UPDATE AND NOTICE OF RESULTS

Forward Partners (LSE: FWD), the London-based investment firm specialising in supporting high growth, early-stage technology businesses, announces an update on its Ventures portfolio and progress more widely across the business ahead of its final results for the year ended 31 December 2021.

Highlights

●    Strong Ventures portfolio growth. The Directors believe that Ventures Portfolio Value growth to 31 December 2021 will be in line with expectations.

●    Investment momentum on track. £5.3m invested since 1 July 2021. A total for the year of £8.8m.

●    A strong and growing pipeline of investment opportunities. Exciting early-stage deal flow from the UK startup ecosystem and follow-on rounds from scaling companies within Forward's portfolio.

●    A maturing Ventures portfolio seeing its first significant exits. Sales of shares in Wonderbly and Heights total £5.0m representing IRRs of 103% and 29% respectively.

●    Forward Advances continues to grow. FY21 originations of £9.5m 13x growth in its first full year of operations. Write-offs within the FY21 cohort are higher than anticipated, totalling £0.8m (8.0%). This rate is expected to trend down for the FY22 cohort and to 1% in the long term.

●    Ventures portfolio momentum expected to continue into 2022. Ventures Portfolio Value guidance of 20% per annum growth over the cycle re-iterated for FY22, exclusive of new investments.

●    Cash position at end of the year of £32.1m.

Ventures portfolio growth.

Forward's strong financial performance continued throughout FY21.

Ventures Portfolio Value has benefitted from a series of stand-out valuations, leading to outperformance in the first half of the year and continued growth in the second half. Good progress has been seen across the portfolio - both in terms of companies' revenue growth and in achieving ambitious commercial milestones. At 31 December 2021, Forward Partners core holdings (i.e. top 15 by Portfolio Value) were Ably, Apexx, Appear Here, Cazoo, Cherryz, Gravity Sketch, Juno, Koru Kids, Koyo, Lexoo, Makers, Patch, Robin AI, Snaptrip and Spoke.

The Directors anticipate reporting Ventures Portfolio Value growth to 31 December 2021 in line with expectations.

Forward's portfolio has demonstrated strong underlying revenue growth. Internal analysis suggests that if the comparable ratios of publicly traded companies that we use had remained constant, the value of our portfolio at 31 December 2021 would have been 5.9% higher*.

Strong Ventures investment pipeline for FY22

FY21 Venture investments totalled £8.8m, including £4.3m in new investments and £4.5m in follow-on investments. As the Group enters FY22, it continues to see an acceleration in portfolio growth and maturity, presenting further opportunities to participate in follow-on investments into businesses well known and understood by both the Ventures and Studio Teams.

First portfolio realisations

Forward's maturing portfolio saw its first significant exit events in August 2021. Successful trade sales of Heights and Wonderbly totalled £5.0m cash, followed shortly after by Cazoo's SPAC merger that resulted in a holding valued at £4.9m as at 31 December 2021 (£6.7m at the point of the company's IPO to the NYSE).

Advances originations accelerate

Forward Advances has shown strong growth, driven by a focused strategy and the increasing appeal of revenue-based financing for fast-growing British small and medium sized businesses. Total originations grew by 13x in FY21, driven by growth in both volume and size of individual Advances to total £9.5m for the year. Gross IRR on fully repaid Advances - exclusive of write-offs - was 33.7%.

Advances is expecting total write-offs of £0.8m (8.0%) within the FY21 cohort of loans, largely driven by defaults at three accounts. Management believes this level of write-offs was incurred as Advances rapidly expanded whilst evolving processes and enriching and automating underwriting data sets. Mitigations have already been put in place to support this fast scaling part of our business in order to reduce write-off risk going forward. This includes strengthening of key aspects of the underwriting process and technology enhancements; developing further data integrations for decision making and monitoring; bolstering the team and introducing additional governance measures. Management is confident that recent and continued improvements to the underwriting process, alongside continued portfolio growth will result in a higher quality loan book and a reduction in the write-off rate for the FY22 cohort and to 1% in the long term.

Boosting talent, teams and operations across business for long-term success

FY21 saw a series of highly encouraging developments within the portfolio - both in terms of realisations and a growing opportunity for follow-on investments. As the Group enters FY22, we continue to see an acceleration in the number of potential investment opportunities and intend to make further selected investments into expanding both portfolio and operational teams. These investments will increase the Group's cost base but position it to capitalise on these opportunities for future portfolio growth and manage a large portfolio of investments.

Nic Brisbourne, CEO at Forward Partners, commented: "We're really pleased to announce strong results for our first year as a listed business. They highlight the great underlying revenue growth momentum in our portfolio, particularly when considered against the headwinds of comparable valuations in public markets that drive our valuations.

These are uncertain times, but we move forward with confidence. Early-stage venture is a patient investment. We believe that firms who focus on sourcing and supporting businesses that demonstrate the strong fundamentals that underpin growth from the start are more likely to deliver good returns and demonstrate resilience in the face of market corrections.

This strategy is paying off. We've not only seen great early-stage deal opportunities this year - as our portfolio matures, we encounter an increasing number of follow on investment opportunities from businesses that we know well across both the investment and studio teams. Through 2021, we have focused on these fundamentals - strengthening core functions, expanding the Ventures team and building further rigour into Advances operations and underwriting puts us in good stead to deliver predictable growth.

We're excited to capitalise on the opportunities ahead to unlock value and deliver growth through the next year."

NOTES:

Ventures Portfolio Value represents the gross value of the Group's venture capital investment holdings before deductions for carry.

* 21% of Ventures Portfolio Value is determined through comparable analysis (unaudited). This method utilises the ratio between enterprise value and revenue multiples at comparable, publicly traded companies and a portfolio company's trailing twelve months revenue to determine a valuation.

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About Forward Partners

Founded in 2013, Forward Partners is an established and respected London-based investor, specialising in supporting high growth, early-stage technology businesses.

The Group brings together venture capital provider Forward Ventures, equity-free revenue-based financing through Forward Advances and highly specialised growth support from Forward Studio. This model supports founders to build stronger businesses faster to provide better outcomes for companies and investors alike.

The Group makes equity investments in early-stage, high growth UK companies, and from inception to its admission to London's AIM market in July 2021 had made over 60 unique investments and built a portfolio with an Initial Portfolio NAV in excess of £100m. It holds an eight-year track record of making venture capital investments, and targets underlying NAV growth of 20% per annum over the cycle.

The management team brings together highly experienced venture capitalists, entrepreneurs, and expert consultants. Since 2015, Forward Partners has been backed by BlackRock, one of the largest institutional investors in the world. The Group receives over 4,000 start-up funding applications every year.

For more information, visit https://forwardpartners.com.