More than 400 businesses received investments totalling £125.2 million from Development Bank of Wales in the past year – but “challenging conditions” saw co-investment and equity investments fall.
The bank’s annual results for 2023/24 show that 430 different businesses benefitted from 491 investments totalling £125.2 million and generating £50.1 million of private sector co-investment. A total of 4,406 jobs were created or safeguarded against a target of 3,779.
The Development Bank said it was on track to deliver its total investment objective but it said that challenging market conditions saw the number of announced equity deals across the UK during 2023 fall by 25% from the previous year, from 2,917 in 2022 to 2,179 in 2023. The total amount raised was down by around half, from £20.6 billion in 2022 to £12 billion in 2023.
It said these conditions meant that the Development Bank’s own equity investments fell to £12.2 million in 2023/24. Co-investment figures also saw a reduction from £114.5 million to £50.1 million, but it said that 2022/23 did include one significant fundraise by Creo Medical.
Bucking the trend however, Angels Invest Wales performed well with a 38% increase on investment levels facilitated compared to 2022/23. The number of individual angel investments rose from 102 in 2022/23 to 119 in 2023/24.
Chief Executive Giles Thorley said:
“The results for 2023/24 represent solid progress against a backdrop of continued economic pressure and challenging conditions affecting the supply and demand for finance across the UK.
“The situation is no different in Wales which is why we will continue to be agile in responding to demand, promoting finance as a great enabler of business growth and work in close collaboration with the private and public sector to increase the flow of funds in Wales. With 3,000 customers and an ever-growing remit, we’ll keep striving to maintain delivery excellence, delivering debt and equity funding with a social impact to drive economic development in Wales.”
The average deal size increased to £254,977 and the bank recorded its largest ever strategic funding deal in January 2024 as part of a syndicate with co-investor Barclays for Bluestone Resorts. The ESG syndicated facility has enabled Bluestone to continue with a major sustainable investment programme, including the development of a five-hectare solar farm.
The value of exits rose by almost a third from £4.2 million in 2022/23 to £5.3 million.
Other highlights include:
- 282 micro loans totalling more than £8.1 million with an average transaction size of £28,900 to help small businesses start-up and grow
- £22 million of debt and equity for 55 companies to help finance management buy-outs and keep established businesses in Wales
- More than £8.8 million for 31 innovation and technology companies that are driving Wales’ tech sector
- £37.8 million for commercial and residential property development deals including £11 million under the Green Homes Incentive
- £3.3 million from the new Green Business Loan Scheme to support 18 businesses undertaking energy efficiency and decarbonisation projects
The Welsh Government’s Cabinet Secretary for Economy, Energy and Welsh Language, Jeremy Miles said:
“With every year since its inception the Development Bank can count hundreds more businesses based across Wales amongst its success stories. From medtech to fintech, leisure to semi-conductors and everything in between, the breadth of their support today is testament to the way in which they have grown since 2017.
“These results highlight the important role the Development Bank plays in helping businesses at different stages of their development and growth get the finance they need. In this year’s reporting, I was particularly struck by the 4,406 jobs which were created or safeguarded as a result of the bank’s support, comfortably exceeding their target for the year and demonstrating the tangible benefits that the right support can bring to both our businesses and our communities.”
It is the last full financial year for Chair Gareth Bullock OBE who will be replaced by experienced chair and non-executive director Sally Bridgeland FIA when his term finishes in September 2024.
Gareth said:
“Our performance is testament to the resilience and commitment of the entrepreneurs who need our funding to start and grow their businesses.
“Despite the continuing difficulties in the UK and global economy we’ve come a long way since we established the Development Bank of Wales in October 2017. These annual results show that we’re now a major force in the Welsh economy and a centre of excellence for SME finance and investment. I am proud of all that we have achieved during the last year and throughout my term as Chair. I thank everyone who has played a part in our journey to date.”
