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Last checked at 
4 Aug 2022 07:00
London, UK, 4 August 2022
Edison issues review on Seraphim Space Investment Trust (SSIT)
So far in 2022 long-duration growth stocks have seen a significant de-rating due to a variety of reasons such as the war in Ukraine, supply chain issues and monetary contraction as interest rates have risen to counter soaring inflation. Seraphim Space Investment Trust's (SSIT's) share price has been hard hit given the relatively early-stage growth companies into which it invests. However, the long-term secular drivers of demand for the industries that space technology enables, such as defence and climate change mitigation, have, if anything, come into sharper focus in 2022 with the war in Ukraine and notable climate events such as flooding and prolonged heat waves. It is also important to separate the current market sentiment towards such companies and their operational performance and balance sheet strength. Average revenues across the top 10 portfolio positions (which accounted for 91% of the 31 March 2022 NAV) grew at 58% y-o-y to June 2022, while bookings increased by 77% over the same period. In addition, the majority of SSIT's portfolio is fully funded through June 2023, mitigating the need to raise additional finance in less favourable capital markets.
While the share price has declined substantially versus the 31 March 2022 NAV of 104.7p, the fundamental attractiveness of the addressable market and investment proposition has not diminished. Arguably, the long-term drivers of the investment case have become even more relevant with the events surrounding the war in Ukraine and various environmental disasters experienced around the world in 2022. We would highlight to investors the improving operational performance of the underlying companies, the £57.7m of cash (23% of 31 March 2022 NAV) held within SSIT and the on average five quarters of cash runway within the top 10 portfolio positions, allowing these entities to ride out the volatility in markets. It is also worth noting that SSIT is not structurally geared. The NAV for the end of June 2022 will be published in October when we will provide investors with a further update.
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