Flow Capital announces 6 year cumulative investment performance

26.4% IRR since inception; $67.6 million deployed

TORONTO, ON, June 12, 2024 (GLOBE NEWSWIRE) —  Flow Capital Corp (TSXV:FW) (“Flow Capital” or “Flow”) reports on its investment performance since the company’s inception six years ago.

Key highlights:

  • 26.4% annual portfolio level IRR since inception (March 2018 to March 2024)
  • $67.6 million total invested into 22 portfolio companies
  • $1.23 book value per share, up from $0.45 in 2019

Since, March 2018, post the merger of two predecessor companies, Flow has been focused exclusively on the growth venture debt segment of the venture debt market, a $40 billion annual market in North America. Flow makes loans into high growth companies, primarily in the technology sector. Our loans enable entrepreneurs to scale their businesses while avoiding or delaying an expensive and dilutive equity issue.

Investment performance since March 20181

  # of Investments Capital Invested Capital Returned Value Remaining2 IRR
Investments where debt has been repaid 9 $23.2M $35.0M $4.1M 35.0 %
Currently Active Investments 13 $44.4M $12.7M $44.3M 18.7 %
Totals 22 $67.6M $47.6M $48.5M 26.4 %

      1.   Data in the table above covers the period of new investments from March 2018 and includes all payments, fees, and equity gains until April 2024.

      2.   Includes warrants, equity, and equity-like bonuses. Warrant values are calculated using the Black-Scholes pricing model. See Flow Capital’s financial statements and MD&A for the period ended March 31, 2024.

As a result of the strong portfolio returns and profitability, Flow has seen its book value per share grow from $0.45 in December 31, 2019, to $1.23 as of March 31, 2024. This represents a compound annual growth rate of 27% over the four and a quarter years, materially outperforming the TSX Small Cap Index.   “Since March 2018, we have been laser focused on generating shareholders returns by growing book value per share,” said Alex Baluta CEO of Flow Capital. “Similar to the way Warren Buffett tracks his book value per share growth in Berkshire Hathaway, we have included a chart showing our book value performance over the 4 1/4 years”.

Book Value per Share since December 2019

  Flows’ Book Value per Share % Change S&P/TSX Small Cap Index % Change
December 31, 2019 $ 0.45   594  
December 31, 2020 $ 0.56 23.4 % 655 10.3 %
December 31, 2021 $ 0.75 34.0 % 774 18.2 %
December 31, 2022 $ 1.223 62.7 % 688 (11.1 %)
December 31, 2023 $ 1.194 (2.3 %) 702 2 %
March 31, 2024 $ 1.23 2.9 % 753 7.3 %
Compound annual growth rate   27 %   6 %

     3.  Consistent historical and projected profitability allowed the recognition of a $7.9 million deferred tax asset which increased BVPS by $0.25.
     4.  Dilution as a result of the exercise of outstanding warrants and options decreased BVPS by $0.08.

“We are proud of the success of our portfolio companies over the past six years. By focussing on senior secured loans into high growth companies, we have generated meaningful value for our shareholders, while providing a compelling return and income stream for our debenture holders, who today are earning a yield between 10.25% – 11.33% (depending on unit currency and class). Looking forward, as the equity markets rebound, we continue to be optimistic about our growth potential over the next five years,” said Alex Baluta, CEO of Flow.

“And, as I always like to point out, we are not running an equity portfolio, but a secured debt portfolio, with equity upside. I believe our market focus and our business model enables us to earn equity-like returns—or better, but with secured debt-like risk,” continued Mr. Baluta. “We encourage investors to review our financial statements and MD&A in detail and then contact us with questions.”

About Flow Capital

Flow Capital Corp. is a Canadian based, publicly listed venture debt lender. Since 2018 we have financed high growth companies in the US, the UK, and Canada. We help companies speed their growth without the dilutive effect of an equity issue or the difficulties associated with traditional lenders, such as banks. We specialize in revenue generating VC sponsored and founder owned businesses seeking $3 to $7 million in capital to fund continued growth. To learn more about us, visit www.flowcap.com.

For further information, please contact:

Flow Capital Corp.
Alex Baluta
Chief Executive Officer

47 Colborne St, Suite 303,
Toronto, Ontario M5E 1P8,

Forward-Looking Information and Statements

Certain statements herein may be “forward-looking” statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Flow or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Flow assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances.