Development Bank of Wales reports half year results for 2020

gareth bullock

£137 million has been invested in Welsh companies by the Development Bank of Wales during the period from April to September 2020, according to figures published by the Welsh investment company today.

In an extraordinary six months, a total of £137 million has been invested in some 1500 companies with the Covid-19 Wales Business Loan Scheme accounting for two-thirds of the investment at £92 million across 1334 businesses.

In addition, £45 million has been invested in around 200 investments, which is comparable with the levels of investment seen last year. Private sector leverage on this figure stands at £27 million.

With Welsh SME confidence reported to be at an all-time low during the period with 66% of Welsh SMEs seeing a fall in turnover and 31% either having no cash reserves or only enough for three months, Chief Executive of the Development Bank of Wales Giles Thorley believes that continued support for businesses is vital. He said: “It’s been an extraordinary six months, but it is business as usual in terms of loans and equity. Some £45 million has been used to support micro, technology and property businesses along with succession planning and growth. Business start-ups as a proportion of micro loans more than doubled from 18% in 2019 to 40% in 2020 and £23.4 million, over half of our business as usual funding, was invested in 58 property projects with seven deals over £1 million.

“Equity investment totalling £8 million included nearly £5 million for technology businesses with ten investments in ten weeks at the height of lockdown. Other notable highlights during the period include our exit from Glamorgan Telecom following its acquisition by Onecom and the strong performance of all property funds, including an investment for DS Properties as the developers of the Goods Shed in Barry.

“The availability of Bounce Back Loans, CBILS and the Covid-19 Wales Business Loan Scheme has shaped the flow of deals with leisure, hospitality, wholesale and construction sectors have been particularly hit by the pandemic. This is reflected in the applications for and recipients of our financial support.

“However, the last six months have shown just how resilient and agile Welsh business owners and entrepreneurs are; finding opportunities out of adversity, pivoting business models at pace and securing important new markets.

Gareth Bullock, Chair of the Development Bank of Wales added: “These half year results show us the importance of continued support for Welsh SMEs and their employees which is why I am so grateful to our team for pulling out all of the stops to support our customers through some of the most challenging times our economy and our society have ever faced. Our half year results demonstrate the sheer scale of all that has been achieved.

“Of course, there is still a bumpy road ahead with further contraction of the economy forecast, but we remain steadfast in our support for Welsh businesses and those looking to invest in Wales. We will continue to work closely with Welsh Government as we help to navigate our economic future using our various funds to complement any additional help from UK government schemes.” 

Economy Minister Ken Skates said: “These figures show the crucial role the Development Bank has played in supporting Welsh businesses through an incredibly difficult year.

“In Wales we have put in place the most generous package of support for businesses anywhere in the UK to help them deal with the challenges of the coronavirus pandemic and the Development Bank’s part in that cannot be underestimated. Back in April, the Covid-19 Wales Business Loan Scheme received more than 1,500 applications in a week, and thanks to the hard work of the team at the Development Bank, the first loans were approved within three days of the fund launching – ensuring businesses received financial assistance when they needed it most.

“I’d like to thank the Development Bank of Wales for everything they have done and continue to do to provide the help, guidance and financial support that Welsh businesses need to protect and create jobs as well as develop and prosper. Their work will continue to be vital as we recover and rebuild post pandemic.”