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Investment in Welsh businesses tops £100 million for the Development Bank of Wales


Published:
giles thorley

The Development Bank of Wales has reported a record 457 investments totalling £103.3 million in the financial year ended 31 March 2020. Highlights include:

  • Overall investment was up by £23.2 million a 29% increase, compared to y/e 2018/19
  • 457 investments compared to 420 in y/e 2018/19
  • Further private sector leverage of £75.9 million
  • £43.4 m (42% of all investments) were to existing customers
  • Investment in property development totals £34.1 million up by 47% from £23.2 million in y/e 2018/19
  • Total equity investment of £16.0 million
  • 51 investments totalling £11.44 million in early stage technology ventures 
  • Average micro loan deal size of £23,500 (loans up to £50,000)

 

The overall investment figure of £103.3 million is a 29% uplift on the previous year which attracted additional private sector leverage of £75.9 million across 457 individual investments. 3,964 jobs have been created or safeguarded.

There was a balanced spread across the country with £38.7 million invested in South Wales, £34.3 million in mid and West Wales and £30.4 million in North Wales.

Over half the number of investments was for small loans, micro loans up to £50,000, with an average deal size of £23,500. 265 businesses benefited from micro loans and 73 of these used the new fast track loan scheme to access £899,500. The updated fast track loan from the Development Bank of Wales was launched in December 2019 and is available to all businesses that have been trading in Wales for over two years. Funding was previously limited to £10,000 but loans of up to £25,000 are now available with a decision made in just two working days.

Investments in property schemes increased by 47% from £23.2 million in 2018/19 to £34.1 million. 44 SME property developers were supported across 52 different projects including 30 new developments that are delivering 263 market housing units and 70 affordable units across 16.15 hectares of land and 19 different Unitary Authorities.  2019/20 also saw the launch of the Wales Commercial Property Fund and the Self Build Wales Scheme.

The first to benefit from the Wales Commercial Property Fund was Aberystwyth developers Ellis Development Company (Wales) Ltd for the development of 100,000 square feet of new commercial space including 12 units totalling 16,910 sq ft of speculative light industrial and commercial space.

£43.4 m (42% of all investments made) were to existing customers. The Development Bank recorded two exits in 2019/20 with Pinnacle Document Solutions and Yard Associates. These had a combined exit value of £2.8million split equally between debt and equity. 

Minister for Economy, Transport and North Wales Ken Skates, said: “Coronavirus has placed unprecedented pressure on the economy and as we plan our recovery I have been clear that I want us to build back better.

“Today’s record results demonstrate the crucial role the Development Bank of Wales plays in doing exactly that. It provides the fast, flexible and responsive support Welsh business needs, which will be more important than ever as we plan for recovery.

“The Development Bank’s loan facility, created to help deal with the impact of the virus, has already allocated almost £100 million to more than 1,200 businesses, with staff working tirelessly alongside us to provide an essential lifeline that has safeguarded thousands of jobs.

“That is in addition to the impressive figures the Bank has posted for the last financial year, which show nearly a 30% increase in investments. The figures are a true testament to the value the Bank is adding to our economy and the vibrant business landscape we are fostering here in Wales. Our focus on a diverse package of business support is key to enhancing our economic resilience and will be vital as we work to drive inclusive growth across Wales.”

Investment in early stage technology businesses totalled £11.44 million across 51 investments. This included 22 which were seed equity investments from the Wales Technology Seed Fund totalling £3.52 million a record performance from this fund. .

Giles Thorley, Chief Executive of the Development Bank of Wales said: “Although the year finished in a way that nobody could have predicted with Covid-19, 2019/20 really was an exceptional 12 months for Welsh business with record investment for all growth stages,  start-ups, high growth and well-established companies of all sizes. I am delighted that we retained our status as one of the top five technology investors in the UK in calendar year 2019 (by volume) according to Beauhurst Report.

“I am particularly encouraged to see customers returning for more support. The relationship that we have with our customers is based on long-term value and support. It’s not just about the money, we’re here to nurture growth which is why we work hard to support the development of strong, well run businesses that will create jobs and future economic prosperity. 

“Having made over 256 referrals to Business Wales during the year, we continue to work closely with the Welsh Government and facilitate introductions to advisers, finance directors and non-executive directors to help our customers get the support and expertise that they need.

“Our recently expanded specialist property team continues to perform exceptionally well. It is one of our most active areas of the business with a total of £34,097 million having been approved for property development projects during the year for a mix of commercial and residential and mixed use projects. 

“Small and medium sized business are the lifeblood of our economy. We will continue to work closely with the Welsh Government to provide the funding that is needed to support growth, create jobs and drive ambition in all corners of our great nation.”