The UK Games Sector

It is very well reported that the UK games sector is going through some growing pains at present - with significant layoffs from large developers having repercussions throughout the industry. According to GamesIndustryBiz, there have been 6,000 jobs lost in 2023 so far and the useful report from Games Job Live shows a consistent drop in roles currently being advertised through the year (thanks to Colin McDonald). So what has happened? Without trying to re-hash the same commentary from other, far more knowledgeable sources, we have taken a look at the largest corporates and read across to the wider market.

Source: Games Job Live, Colin McDonald

The games market boomed through covid, transformed by significantly increased console sales and engagement levels. In the same way that covid accelerated long term trends (such as a move from a cash to cashless economy), gaming habits changed too - consumers moved to digital purchases far quicker and a wider consumer base changed the market outlook. This led to a realisation that the addressable market was bigger than previously thought and the growth opportunities were significant. Naturally, this led to a flood of capital into the sector - through M&A (EA/Codemasters, Embracer/Gearbox, Tencent/Sumo) but also through IPOs (TinyBuild and Devolver) and significantly more private capital.

Post covid, the sector has continued to be strong but perhaps not quite as much as some hoped - we have seen some fantastic recent successes (Starfield, Zelda, Spider-Man 2) but publishers are also seeing more misses - games which were anticipated to be popular but never quite hit their major milestones. In the indie world, a lot of this can be attributed to the issues of discoverability - how do consumers get to know more about the game, how can anyone guarantee a success? This has led to some dramatic moves - the share prices of the listed business have fallen considerably - including the market’s darling, Team17.  impact of the global economy slowing, consumer discretionary spending falling and price increases have led to lower than anticipated sales numbers for some games.

The game developer business model is hard to justify - as there is considerable risk as to whether a game will be as popular as hoped. The developer is often unable to finance the full production so looks to use a publisher, who are increasingly delaying decisions until they can near guarantee their downside. Self publishing is definitely easier now than it was 10 years ago but unless a developer already has some proven successes, it is difficult to produce new IP solely from its own balance sheet. The change in valuations and investor sentiment has also now made it harder to access equity. So what are we seeing?

• First - nearly all developers we speak to are being pushed to develop games and audiences further - publishers want to see a significant amount of wish lists, Discord followers and game development. This all has cash requirements so we are seeing an increasing amount of developers looking to extend their runway through VGTR loans or alternative finance solutions, including bridging to significant cash catalysts such as Microsoft GamePass transactions or Meta payments.

• Second - more developers are looking at self publishing solutions so that they can recoup more from their own games but are looking at ways to cash flow this. Again, we can help here by providing debt rather than equity type solutions where we recoup interest rather than a percentage of game revenue. Similar to publishers, we will need to understand the game potential and address wishlist figures etc, but for those developers, this is a way to maximise their return from own IP.

• Finally, we see more developers struggling to access previously available Work For Hire deals where they effectively subcontract to lead developers on an IP. As the sector recovers from the over-exuberance post covid, and with recent job cuts etc, these type of transactions are less available, we are finding.This makes it harder for game developers to build up cash resources.

When will the sector recover from the current cold it has? It is hard to say - for AAA games, we expect to see strong sales figures for proven IP (if you weren’t aware, the new trailer for GTA VI comes out in December - you will undoubtedly see this). However, the issue of discoverability will not go away quickly - the supply of new games will continue to be high and the demand may not meet all expectations. Juicy offers from platforms won’t be as forthcoming meaning that we will see sub-forecast revenue for some time, in our opinion. The biggest change that we forecast here will be more engagement with audiences prior to launch and perhaps, a change in the strategy of early access.

In a truly cyclical sector, debt can often be portrayed as the downfall for companies - however, it is our view that debt can play a very practical solution in the kaleidoscope of funding solutions for developers.

Finstock Capital's market update

Market update

Every economist in the country is currently trying to work out the impact of the current financial storm of increasing interest rates, soaring inflation and plummeting currencies as every analyst is determining the underlying impact of increased borrowing costs, consumer sentiment declines and risk free rate changes and the value of listed businesses. What, however, does all this mean to the early stage market? The answer is certainly negative but how bad? Let's try and paint this picture for you.

First, looking at the background, an economist will paint a pretty rough image - recession, inflation, declining consumer sentiment and likely future job losses. Arguably, the economist will be hoping for the latter which will reduce the threat of a wage inflation spiral. It’s a stormy, unknown image, not dissimilar to Katsushika Hokusai’s infamous ‘Great Wave’ in the Edo period.

Then moving more on to our subject matter, the company analysts will show corporates struggling to pass on an inflated cost base, increased interest costs and potentially deteriorating top line growth leading to earnings being revised lower. The subject image feels like ‘The fighting Temeraire’ but perhaps it's not that bad.

Finally, the desirability of owning company equity, relative to alternative assets. There aren't a huge amount of liquid alternatives - rising interest rates mean that government debt is not attractive unless holding to maturity, the risk premium of other alternative assets has changed significantly driven by increasing interest rates. This leads to lower valuations for equity - as, like “Napoleon Crossing the Alps” in Davide’s great painting, investors seek a higher ‘yield’ to take the extra risk of equity versus bonds.

The early stage market is perceived as the higher risk end of the spectrum for equity investors, and therefore in a rising interest rate environment, those companies which don't pay dividends and are focussed on growth have been most hurt. Compressing valuations causes significant issues for both private and public markets - ARR multiples for the BVP NASDAQ Emerging Cloud Index (the public benchmark for software performance) have fallen from 34x in 2021 to around 8x in 2022. The impact on private markets is clear - lower valuations.

This is difficult for founders who have previously raised capital in rising markets - at multiples of ARR which are significantly higher than where they can raise now. For most, that means ‘down rounds’ which can be incredibly difficult for companies to come back from. 

The good news that came out of Kwasi Kwarteng’s budget were the comments on the Seed Enterprise Investment Scheme (SEIS) - from April 2023, the amount companies can raise through it will increase by two thirds from £150k to £250k and the annual investor limit will be doubled to £200k. Also, the age limit for companies accessing SEIS will increase from two to three years and the gross asset limit will be upped to £350k. Good news indeed for startups and those early stage investors. Also, the Enterprise Investment Scheme’s ‘sunset clause’ which meant that the scheme was to end in April 2025 has been extended. More good news!

We at Finstock Capital are seeing an increasing amount of enquiries from firms reluctant to dilute founders at down round valuations and therefore are seeking debt as an alternative. By now, I am sure all of our readers have seen the now infamous Sequoia presentation on extending the runway and founders are looking to see how they can get to breakeven or a significantly higher ARR without raising further equity. Debt does have a role to play here and we can support those companies where there is a catalyst for repayment. 

There is no doubt that the market has shifted a huge amount - from listed technology all the way to angel investments and the repercussions of the ever changing economic environment are still yet fully to be felt. However, we would urge those founders to look at the whole market to see what the best available option is to them.

Finstock Capital news

2022 has certainly been a volatile year for more reasons than just the above. In the Finstock team itself, there have been two further babies and in the portfolio of companies we work with, there have been some notable additions. 

In the world of games, we have been delighted to work with the likes of Bonsai Collaborative, Included Games and Cardboard Sword this year - some fantastic studios that are producing exciting, compelling and innovative games. In film, we would like to say a heartfelt congratulations to the team at Dartmouth Films for their latest launch which we were able to support. In theatre, it is not often that we can say we have, in some small way, supported both Paddington and Peter Rabbit with Histrionic Productions recent slate of shows in the UK.

Our R&D and venture debt facilities have been busy this year - continued delays at HMRC causing frustration and we are proud of the way that we can support some of these businesses with cash flow difficulties. The paracetamol to HMRC-induced headaches if you will.

Finally, we are delighted to add a further arm to our offering with insolvency and restructuring related finance.  We have set this up with a view to supporting businesses which have good underlying business models but which have struggled to overcome some of the issues created by the current business environment.

Finstock's video game support

For such a colossal industry (worth an estimated $218 billion annually), the video games sector has remained surprisingly simple in the way that games are built and financed. Actually, when you look at the mind-blowing capabilities of the latest unreal engine, perhaps the building of games isn’t that simple.

But when it comes to finance, particularly in the indie games sector, a publishing deal is still the Holy Grail for many developers. Only a small number of indie developers are willing (and an even smaller number able) to self-publish their games, instead preferring to stick to their core skills and outsource publishing.

Publishers in the indie and AA-rated game space have a conundrum: they have limited financial firepower and yet they know that a portfolio approach to games investing is most sensible due to the apparent randomness of which games “pop” and which are left unloved.

We are helping publishers to overcome this issue by co-funding games that are going through their greenlight process thereby allowing them to spread their pot of cash across more games with a partner who can be relied on not just for finance, but for helpful connections and investments in the games industry built up over the past 5 years.

This network is derived from ways we have supported and continue to support UK based companies with VGTR loans as well as specific equity investments into the wider games sector.

A couple of examples of businesses that we have invested in are:
1. Mod.io, which enables user-generated content (UGC) and since we invested has secured funding from Tencent, Lego and Sony to help it to the next stage.
2. Audiomob, which is seeking to improve in-game ads by making them less intrusive whilst remaining effective for brands.

Of course not all games can or will succeed but we hope that by partnering with the best publishers we can together give ourselves the best chance of backing winners and bringing more great games to market.

Get that monkey off your back: lessons learnt from Mailchimp

Last year Intuit Inc bought a company called Rocket Science Group for approximately $12bn - a business that was founded in 2001 and focussed on email marketing - trading as Mailchimp. The founders initially started an e-greetings website but launched MailChimp after one of their most popular e-greetings card characters. The most interesting part of the journey to eventual acquisition was the fact that the founders, Ben Chestnut, Mark Armstrong and Dan Kurzius did it by ‘bootstrapping’.

The definition of Bootstrapping by Investopedia is when the entrepreneurs 'rely on money other than outside investments. An individual is said to be bootstrapping when they attempt to found and build a company from personal finances or the operating revenues of the new company’. Now this is rarely possible - as Beauhust, the data provider, points out in its research ’The Stake of the Founder’:

“The stake of high-growth UK founders is greatest at the seed and established stages. For seed startups, whose funding typically stems from grants, angels and the crowd, founders own an average of 48% of shareholdings. Average founder stake is 33% for companies at the venture stage."

Source: The Stake of the Founder, Beauhurst Research

There are plenty of examples of successful exits at strong valuations but, having been diluted so much, a less than appropriate exit value for the initial founder.

It is all very well trying to minimise dilution; however, delaying an equity raise may mean not taking advantage of the growth opportunities ahead or building the economic moat to beat your competitive set. Bootstrapping is not possible for all. However, at the core of Finstock Capital’s philosophy is that there should be more non-dilutive solutions for founders. For example:

Don’t sign a short term CLN when you have a Term Sheet on the table - use debt to bridge you to your next round. We have seen this time and again where founders decide to use the support of their incumbent investors rather than use external parties. It’s great as they have supportive shareholders who are keen to help the business. However, this help comes at a c.20% discount to the next fundraise (which is known). If this is going to complete in less than 6 months time this is an annualised 40% rate. The incumbent investors will invest the amount anyway - don’t give your equity away for less than its worth!

Use your debtors to your advantage. Early stage businesses may not have that many debtors but they are likely to have a few - perhaps a small amount of regular paying customers, some outstanding invoices, or an R&D reclaim. Access to the cash may seem unreliable but there are ways to get access to capital which is non-dilutive. ARR funders, an increasing area of growth both in the US and the UK may look at loans against your ARR book, or invoice financiers may be able to support against those invoices or finally R&D lenders may be able to accelerate those payments. Or bespoke operators like ourselves who can look at the business in its entirety to see how we can help.

Build your business structures correctly. Like any building, the foundations of a business and the structures around it are of paramount importance. If your business has a profitable UK division but loss making international growth arm or if it has a product that is profitable but is loss making as a group, make sure that the reporting is clear and defined. The clearer the business breakdown the more likely that lenders will be able to support it - against the individual component parts. A recent example of this was a loan we provided to a technology business which as a group was loss making but underlying had a profitable arm and a cash thirsty growth arm. Lenders can support this growth with the knowledge that there is a fundamentally sound core business. Think outside the box.

Companies such as Finstock Capital exist to support growth businesses in a non-dilutive fashion. We aren’t looking to take warrants - but we seek to find ways to support the business and its founders. It could be that its a combination of all of the above! However, we do believe that founders should protect their own ownership as much as possible and not roll over to incumbent investors to keep them happy. There is always a counter-argument.

Finstock Capital supports Smart Pension on its £165m Series D funding round

Finstock Capital, a venture debt and bridging loan provider based in London, supported Smart Pension to its successful £165m Series D fundraise. The capital was used for working capital as the company continued its fundraising strategy. Finstock Capital was introduced on the 12th May and made the loan on 27th May, a turnaround of 12 working days.

Eoin Corcoran, Group Finance Director of Smart Pension, commented ‘"We were introduced to Finstock as a provider of bridge financing in the run up to our Series D round. From our intro, right through to drawdown of funds, a little over two weeks elapsed, which is testament to the energy and pragmatism with which the team operate and clearly speaks strongly to the support and trust they have from their backers. I wouldn't hesitate to use Finstock again, nor to recommend them to anyone in my network who is looking for flexible access to capital."'

Mike Cass from Capitase.com further commented:

"We have been working with Finstock Capital for a few years now on their R&D tax credit lending product and have been aware of their ability to move quickly for the right venture debt / bridging transactions. After being introduced to Smart Pension through our trusted network, this felt like the perfect opportunity to put that to the test - and it has to be said that they exceeded my expectations. Finstock understood immediately what was required and were able to produce a term sheet extremely quickly and move rapidly through the due diligence process. To be able to turn a facility like this around in two weeks was very impressive."

Finstock's Edo Salvesen explained ‘we were delighted to support Smart Pension with a loan at such an important stage in their growth strategy - it has been a pleasure working with the team and we are excited about the global ambitions of the business going forward’.

Finstock provides capital to early stage businesses which are seeking short to medium term financial solutions, including non-dilutive venture debt, R&D loans and video game finance. Finstock has deployed over £20m into more than 100 businesses and continues to expand its offering by focussing on bespoke alternative solutions for growth businesses.

For more information, please contact info@finstockcapital.com

3 reasons why you should work with a professional for your larger R&D claim?

A Guest Blog by Accountancy Cloud

Just because your business qualifies for R&D Tax credits, it doesn’t mean you should venture on and submit your own R&D claims. This is especially true if you’re submitting a large claim. 

The scope of Research and Development is pretty sizable, so why would you take the risk of submitting the claim yourself and not benefiting from the maximum potential of cash you could inject back into your business? 

This is particularly true considering the global pandemic. R&D Tax relief for many businesses will enable them to continue trading. It can literally be a lifeline. 

So, here’s 3 reasons why you should work with a professional for your large R&D claim...

1. Reduce risk

Unfortunately, large claims do tend to claim the attention of HMRC. If your claim is inadequately structured or has an error (easily done), HMRC will see this as a red light. It’s important that you work with a professional who can maximise your claim while following HMRC’s strict requirements.

A professional will know those common pitfalls and have the ability to get you the money back that you qualify for, with less frustrating questions being asked too.

That’s a win, win.  

2. Maximise your claim

An R&D Tax expert will ensure your submission is fully optimised and that nothing is missing from the claim. They will also be able to advise on how to collate and store your records for future applications. 

You may be thinking...but will the fees of the R&D professional outweigh the money claimed via tax credits?

The answer is no, by working with an expert your business will likely be able to claim more money in the long run than if you were to submit it yourself.

3. Delegate

We get it. For many businesses (especially smaller ones), delegation isn’t something that’s thought about. 

If your business is growing, your attention is needed elsewhere, meaning your R&D submission isn’t getting the focus it deserves (or demands).

By working with an R&D Tax professional you will be able to access the largest claim possible but also avoid the complex submission process. 

At Accountancy Cloud, it doesn’t matter whether you’ve never heard of R&D Tax credits or you already claim it, our expert team are ready and waiting to help.  With over £30 million in claims processed, and a world class technical team, you could say we really know our stuff! 

Join the many ambitious companies that have unlocked the full benefits of R&D Tax schemes today. 

Join our talk on LinkedIn

If you’re interested in finding out more about our partnership with Finstock Capital and R&D Tax credit loans, please join us on the 23rd April 2021, at 11am.

Wesley Rashid CEO and Founder of Accountancy Cloud will be hosting an event alongside Anh Vu, Senior R&D tax manager at Accountancy Cloud and Edo Salvesen, Director of Finstock Capital. They will discuss the exciting new partnership and uncover all of the juicy details you need to know about R&D Tax, including the latest developments surrounding furlough and the PAYE cap.

Simply head over to Accountancy Cloud’s LinkedIn page at 11am to watch. We’ll look forward to seeing you there.

Get in touch 

If you want to discover more about innovation funding and R&D Tax Credits, contact Accountancy Cloud. 

Partnerships in bloom

The idea of a partnership, where businesses agree to cooperate to advance their mutual interests has been around for a considerable time. As far back as 1336 in Renaissance Florence (which comes from the latin for “flourish” or “blossom”), the idea germinated into something more than the occasional support. We at Finstock Capital love to see these relationships bloom – we set up on the back of conversations with EIS funds who were seeking short-term capital mid-way through their tax year. Since then we have fostered a flurry of relationships through R&D, venture debt and video games finance. However, we are also staunchly independent – we work with a range of service providers whom we feel have the necessary capabilities to support us and we in turn can support them.

 We are therefore delighted to have a partnership with Accountancy Cloud to support their clients on bridging against R&D tax credits as well as funding support. When we lend against future or submitted tax credits, part of our process is to review the claims and understand the company’s qualifying projects. Over the past few years we have seen hundreds of claims – the good, the bad…and the downright dubious - and we see the importance of working with individuals who understand R&D. The regulations change often – just look at the recent PAYE cap that was initiated on 1st April – so it is therefore of paramount importance to reduce risk, maximise the claim and delegate to the experts. Given the professional understanding of the sector, we are delighted to include Accountancy Cloud as a partner and look forward to this seed germinating. Alright, enough with the Spring analogies!

Join The Accountancy Cloud’s talk on LinkedIn

If you’re interested in finding out more about our partnership with The Accountancy Cloud and R&D Tax credit loans, please join us on the 23rd April 2021, at 11am.

Wesley Rashid CEO and Founder of Accountancy Cloud will be hosting an event alongside Anh Vu, Senior R&D tax manager at Accountancy Cloud and Edo Salvesen, Director of Finstock Capital. They will discuss the exciting new partnership and uncover all of the juicy details you need to know about R&D Tax, including the latest developments surrounding furlough and the PAYE cap.

Simply head over to Accountancy Cloud’s LinkedIn page at 11am to watch. We’ll look forward to seeing you there.

What do we mean?

Generally, we have found an array of different meanings for two phrases that we use frequently: venture debt and project finance. In this article we explain below what we mean and how this may differ from others. We also talk through how and when this may be an appropriate product for companies.

Venture Debt

While the equity side of venture capital may get all the headlines, venture debt has an important part to play in a company’s funding strategy. As important as it is to have a healthy cash runway, founders do not want to be in a position where they have given away too much equity. Venture debt is often their solution to this issue. It is also cheaper: equivalent equity investments typically cost three and a half times more. However, it comes with risks in terms of security and ranking.

Typically venture debt is 3 year + money which has a mezzanine rate coupon but with equity warrants attached in order to reflect the intrinsically riskier nature of these early-stage investments. As a company reaches EBITDA positivity, venture debt may be an ideal solution to extend that cash runway. However, it is important to note that it still remains dilutive - and at the price of shares issued at the previous fund raise.

But what do we mean by venture debt? Well, that is something slightly different. We see it as 18 month to 3 year money, not necessarily with warrants attached (so therefore not dilutive), and payable based on pre-agreed catalysts. These catalysts are the key factor to repayment - we do not see aggressive amortisation of the loan as possible unless EBITDA is already cash positive, in which case a high street bank would provide a better option for the borrower. They range from R&D tax credits, significant invoices, grant repayments or even a combination of all of these. The key is for us to understand what the likelihood of these catalysts are, and what the continued cash burn for these early stage businesses is. We are here to help and our bespoke venture debt solutions have provided companies opportunities: to acquire and buyback shares, purchase necessary equipment, and grow revenues in anticipation of a later equity raise.

Project Finance

When we refer to project finance, we are specifically talking about a finance solution for video games companies. We see project finance as both an alternative and an additive to publisher finance - we look at a game on a standalone basis and see if we can get to a position where we can lend the game developer money to build it. Similar to our venture debt offering, we are paid back on pre-agreed catalysts, such as the developer’s Video Games Tax Relief (VGTR), and in return for the loan we receive an interest payment and a revenue share of the game. Project Finance can mean any number of agreements depending on the industry and the type of provider but in this instance we are referring to a loan structure which is securitised.

As with our venture debt offering, this is not a solution for all games companies. If they are looking to go down the self-publishing route, they need to have a successful track record of ’doing it alone’ and they also need to have invested a sufficient amount of equity already to get to a “vertical slice” or demo of the game. We also invest alongside publishers so that we and the publisher can spread the number of investments that we make over a greater number of games, thereby increasing the chances of a “hit”.

Again, this is a niche offering - it normally has a sub-5yr payback depending on the timeframe for developing the game and is aimed at those companies who do not want to dilute their equity, don't want to give away too much to publishers but want an alternative source of capital.

Conclusion

In both the early-stage ecosystem and in the games market, there are plenty of alternative options and a range of providers. It is important for directors of the business to understand the risks involved with different types of financing. As with all debt solutions, the key is in the cash flow forecast, particularly how much comfort can we have in it? How confident are we of the company hitting its targets and what is the appropriate funding solution? Equity is not always the best solution and founders being diluted can lead to the wrong results. We offer alternative financing solutions - bespoke and niche...but practical, we hope.

Did you see it?

A lockdown weekend was improved on Saturday as our advert in @The-Times for our R&D tax credit loans led to a good flurry of enquiries to address on Monday. Don’t forget, this isn’t all we do – we also provide loans against VGTR, project finance for games companies as well as short term venture debt solutions.

R&D legislation update

November update – Changes to R&D legislation

In the 2018 budget, the government announced that a cap set at 300% of a company’s PAYE/NIC liability would be applied to SME scheme payable credit claims.

The government then consulted extensively (in 2019 and again this year) and after considering all the views put forward, the government is now confirming that the design of the PAYE cap will include the following features to minimise the impact on genuine businesses:

·       A company making a small claim for payable credit below £20,000 will not be affected by the cap.

·       A company will be able to include related party PAYE and NIC liabilities attributable to the R&D project when calculating the cap and these will be subject to the 300% multiplier.

·       A company’s claim, of any size, will be uncapped if it meets two tests. These tests require that a company’s employees are creating, preparing to create or actively managing intellectual property (IP) and that its expenditure on work subcontracted to, or externally provided workers provided by, a related party is less than 15% of its overall R&D expenditure.  

Draft legislation for this measure, and a summary of responses are available on GOV.UK

The government has also released two reports on the effectiveness and returns that it sees on its investment in R&D in the UK through the SME scheme and RDEC scheme.

These reports evaluate the impacts of the aforementioned R&D tax reliefs. Some of the key findings were:

·       The evaluation of the SME scheme was shared with the European Commission in September 2019 as part of the government’s commitment to an independent evaluation for the State aid re-notification.

·       The evaluation suggests the scheme generates direct, indirect, and spill-over effects benefiting businesses that claim relief and the economy as a whole.

·       As such, it can be seen as satisfying its general and specific objectives.

·       However, compared with earlier evaluations it does suggest the additionality ratio – the extra R&D expenditure for every additional £1 of relief – has fallen to between 0.60 and 1.28.

·       The evaluation of the RDEC scheme was carried-out pro-actively by HMRC. It suggests a greater additionality ratio (around 2.5) than the SME scheme and that the relief could have generated up to £7.1bn of additional R&D expenditure in 2017-18.

Déjà vu

October has a sense of déjà vu about it as we enter school half terms with rolling “circuit breakers” around the country shutting down our beloved pubs and restaurants again, just as normality seemed to be returning. 

On the R&D tax credit lending side of things, we have had a fairly quiet few months as HMRC’s repayment times have dropped to their target 28 day turnaround time for the first time in who knows how long - perhaps ever?

But, as they say, when God closes a door he opens a window and we have done some interesting deals in areas which have benefitted from Coronavirus-related changes. We provided several loans against Video Games Tax Relief (VGTR) tax credits as game development studios continued to churn out games as quickly as possible to keep thumbs from being idle in lockdown. Those loans enable developers to raise capital to complete a game while maximising their exposure to the game’s success.

Elsewhere, we have made a significant loan to a UK biotechnology company in order to facilitate the expansion of their Covid-19 testing facilities in the UK and Jersey. It is a testament to the ingenuity and practicality of scientists that they have been able to set up reliable and cost-efficient testing so quickly using the highest quality machinery and adapted shipping containers for transportability.

Finally we have provided a term loan facility to a parcel delivery aggregator, which has seen a huge increase in customer numbers as a result of Coronavirus as people look for a means to send parcels cheaply and reliably without taking unnecessary risks of catching the virus at the Post Office. It is our conviction that even when the risk of Coronavirus has dissipated, people will continue to use this brilliant service and that sadly it will be the Royal Mail, with its large property portfolio, which suffers.

The main challenge for us has been to get sufficient comfort on deals without being able to meet borrowers, advisers or even colleagues in person. While video calls have made things easier, they are no panacea and we are very much looking forward to being able to have face-to-face interactions again.