AI assistant
FORESIGHT ENTERPRISE VCT PLC Interim / Quarterly Report 2021
4772_rns_2021-09-29_c3c55782-0caa-46d8-9de8-f4b8af752d37.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
Foresight
FOR A SMARTER FUTURE
FORESIGHT ENTERPRISE VCT PLC
UNAUDITED HALF-YEARLY FINANCIAL REPORT
30 JUNE 2021
SHAREHOLDER INFORMATION
Foresight Enterprise VCT plc is a Venture Capital Trust aiming to provide investors with attractive returns from a portfolio of investments in fast growing, unquoted UK companies.
Enquiries
The Board and the Manager are always keen to hear from investors. If you have any feedback about the service you receive or any queries relating to Foresight Enterprise VCT plc, please contact the Investor Relations team:
Telephone: 020 3667 8181
Email: [email protected]
www.foresightenterprisevct.com
Annual and Half-Yearly Reports, as well as quarterly Factsheets and information on new investments, can be viewed online.
As part of the Manager's investor communications policy, investor forums are held throughout the year. Shareholders can also arrange a mutually convenient time to meet the Manager's investment team. Please contact Investor Relations if you are interested.
Dividends
All cash dividends will be credited to your nominated bank/building society account. Your options are:
- Receive your dividends in sterling via direct credit to a UK domiciled bank account
- Reinvest your dividends for additional shares in the Company through our Dividend Reinvestment Scheme
www.investorcentre.co.uk
Investors can manage their shareholding online using Investor Centre, Computershare's secure website. Shareholders just require their Shareholder Reference Number (SRN), which can be found on any communications previously received from Computershare, to access the following:
Holding Enquiry Balances | Values History | Payments | Reinvestments
Payments Enquiry Dividends | Other payment types
Address Change Change registered address to which all communications are sent
Bank Details Update Please ensure bank details are up to date in order to receive your dividends
Outstanding Payments Reissue payments using our online replacement service
Downloadable Forms for Dividend mandates | Stock transfer | Dividend reinvestment | Change of address
Alternatively you can contact Computershare by phone on 0370 703 6385
Key dates
Annual Results to 31 December 2021 April 2022
Annual General Meeting ("AGM") June 2022
Interim Results to 30 June 2022 September 2022
FORESIGHT ENTERPRISE VCT.COM
1
FORESIGHT ENTERPRISE VCT.COM - 10000000 Half-Yearly Financial Report 10 June 2021
CONTENTS
Introduction
- Financial Highlights 2
- Key Metrics 3
- Chairman's Statement 4
Manager's Review
- Investment Manager's Review 7
- Top Ten Investments 14
- Responsible Investment 19
- Portfolio Overview 20
Governance
- Unaudited Half-Yearly Results and Responsibilities Statements 22
Financial Statements
- Unaudited Income Statement 24
- Unaudited Balance Sheet 25
- Unaudited Reconciliation of Movements in Shareholders' Funds 26
- Unaudited Cash Flow Statement 27
- Notes to the Unaudited Half-Yearly Results 28
- Glossary of Terms 30
- FCA Information 31
- Corporate Information 32
- Additional Information IBC
FINANCIAL HIGHLIGHTS
"In the period, the value of the investment portfolio rose by £11.9 million, driven by £5.1 million of deployment and an increase of £12.5 million in the value of investments offset by a realisation of £5.7 million."
| £123.5m
Total net assets
as at 30 June 2021 | 4.2p
Dividend paid
18 June 2021 |
| --- | --- |
| £11.9m
Uplift in portfolio value
in period to 30 June 2021 | 63.8p
NAV per share
as at 30 June 2021 |
- Total net assets £123.5 million.
- An interim dividend of 4.2p per share was paid on 18 June 2021, returning £8.1 million to Shareholders.
-
The portfolio value has increased by £11.9 million in the last six months.
-
Net Asset Value per share increased by 2.7% in the period from 62.1p at 31 December 2020 to 63.8p at 30 June 2021. Including the payment of a 4.2p dividend made on 18 June 2021, NAV total return per share at 30 June 2021 was 68.0p, representing a positive total return of 9.5% in the period.
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
Key Metrics
Key Metrics
| 30 June 2021 | 31 December 2020 | |
|---|---|---|
| Total net assets | £123.5m | £120.4m |
| Net Asset Value per share | 63.8p | 62.1p |
| Movement in Net Asset Value total return during the period^{1} | 9.5% | 16.3% |
| Share price | 56.5p | 52.5p |
| Dividend per share paid in the period | 4.2p | 2.8p |
| Dividend yield^{1} | 7.4% | 5.3% |
| Ordinary Shares in issue | 193,758,305 | 193,859,213 |
| 30 June 2021 | 31 December 2020 | |
| --- | --- | --- |
| Discount to NAV^{1} | 11.4% | 15.5% |
| Average discount on buybacks^{1} | 7.5% | 7.5% |
| Shares bought back during the period under review | 1,613,303 | 2,078,035 |
| Shares issued under the dividend reinvestment scheme | 1,512,395 | 1,111,024 |
| Ongoing charges ratio^{1} (based on net assets) | 2.35% | 2.35% |
- Definitions of these Alternative Performance Measures can be found in the Glossary on page 30.
CHAIRMAN'S STATEMENT
> "NAV total return per share for the six-month period was 68.0p, representing a total return of 9.5%."
Raymond Abbott
Chairman of Foresight Enterprise VCT plc
I am pleased to present the unaudited Half-Yearly Report for Foresight Enterprise VCT plc for the period ended 30 June 2021.
Material events during the period
Before providing other details, I would like to draw attention to the continuing impact of COVID-19 on the Company and its portfolio.
The COVID-19 virus has presented the Company and the management of every one of its portfolio companies with unprecedented challenges which it is anticipated will persist for a considerable time to come. The Manager continues to work closely with the portfolio companies, attempting to minimise any adverse impact and it is a great credit to the quality of the management of the portfolio companies that the fallout from the pandemic has not been even more significant. Until this virus is brought under worldwide control, it is impossible to assess its full impact and challenges remain.
The overall impact of the COVID-19 pandemic could be seen in the material fall in the valuation of the Company's portfolio at 31 March 2020. On a positive note, I can say that so far this year the trading position of most of these businesses has significantly improved, resulting in an £11.9 million increase in portfolio value in the six months to 30 June 2021.
The end of the Brexit transition period on 31 December 2020 has created some economic uncertainty. The Manager has engaged with portfolio companies to prepare and advise them as some encounter supply chain challenges and experience staffing issues. Thanks to the diverse nature of the portfolio, with a combination of businesses focused on the domestic UK market and some that export and source worldwide, the Board remains confident that the Company is well-positioned to endure potential volatility.
Performance and portfolio activity
During the period Net Asset Value per share increased by 2.7% from 62.1p at 31 December 2020 to 63.8p at 30 June 2021. Including the payment of a 4.2p dividend made on 18 June 2021, NAV total return per share at 30 June 2021 was 68.0p, representing a positive total return of 9.5%. This positive movement is a result of the strategy and business changes throughout the portfolio alluded to above.
During the period under review the Manager completed three new investments and one follow-on investment costing £4.1 million and £1.0 million respectively as well as announcing the sale of its investment in FFX Group Limited, generating a return of 4.3x on the original investment.
Additionally, after the period end, the Manager completed one new investment and two follow-on investments costing £2.4 million and £0.9 million respectively as well as announcing the sale of its investment in Mologic Ltd, generating a return of 3.1x on the original investment. Also in August 2021 the Company sold its investment in Ixaris Group Holdings Limited. The Board and the Manager are confident that a number of new and follow-on investments can be achieved in the remainder of the 2021 year, particularly with the increased investment activity noted above. Details of each of these new, existing and former portfolio companies can be found in the Manager's Review.
Foresight Group LLP, the Company's investment manager, continues to see a strong pipeline of potential investments sourced through its regional networks and well-developed relationships with advisers and the SME community, however, it is also focused on supporting the existing portfolio through the COVID-19 pandemic. Following both the successful fundraises launched in May 2017 and June 2018, the Company is in a position to fully support the portfolio, where appropriate, and exploit potential attractive investment opportunities.
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
Dividends
An interim dividend of 4.2p per share was declared on 20 May 2021 based on an ex-dividend date of 3 June 2021 and a record date of 4 June 2021. The dividend was paid on 18 June 2021.
As noted in the Annual Report and Accounts and in light of the change in portfolio towards earlier stage, higher risk companies as required by the new VCT rules, the Board felt it prudent to adjust the dividend policy towards a targeted annual dividend yield of 5% of NAV per annum. The Board and the Manager hope that this may be enhanced by additional 'special' dividends as and when particularly successful portfolio exits are made. The impact of COVID-19 will be taken into consideration when the Board considers dividends in the near term.
Shareholder communication
We were disappointed that so far this year we still have not been able to meet with Shareholders in person as a result of the travel restrictions imposed due to COVID-19. As an alternative, we invited Shareholders to our virtual AGM in July, as well as an online investor forum facilitated by the Manager in June.
We appreciate how popular such events are with our investors and will continue to hold similar events remotely until it is considered safe to meet in person. Details of any such future events will be communicated to investors.
Board composition
The Board continues to review its own performance and undertakes succession planning to maintain an appropriate level of independence, experience, diversity and skills in order to be in a position to discharge all its responsibilities.
Outlook
The persisting uncertainty over the full impact of COVID-19 and the ongoing changes related to Brexit create truly exceptional challenges for every business. The Company invests primarily in developing companies which by their nature benefit from general economic growth and the current environment places considerable demands upon them and their management teams. The Manager's Private Equity Team is well aware of the management and business needs of each of the companies within the investment portfolio and is working closely with them to help them progress during these testing times.
Until the pandemic is brought under worldwide control there will inevitably be further, mainly unhelpful, implications for many UK based businesses. Notwithstanding this, the Board and the Manager have been impressed by the resilience shown by the significant majority of the Company's investments and are optimistic that the existing portfolio has potential to add value once the virus has been successfully contained.
Raymond Abbott
Chairman
28 September 2021
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
MANAGER'S REVIEW
WHAT'S IN THIS SECTION
Investment Manager's Review 7
Top Ten Investments 14
Responsible Investment 19
Portfolio Overview 20
FORESIGHT ENTERPRISE VCT PLC Unadited Half-Yearly Financial Report 30 June 2021
INVESTMENT MANAGER'S REVIEW
The portfolio value has increased by £11.9 million in the last six months.
Portfolio summary
As at 30 June 2021 the Company's portfolio comprised 38 investments with a total cost of £62.1 million and a valuation of £104.3 million. The portfolio is diversified by sector, transaction type and maturity profile. Details of the ten largest investments by valuation, including an update on their performance, are provided on pages 14 to 18.
During the six months to June, the value of the investment portfolio held rose by £11.9 million. This was driven by £5.1 million of new and follow-on investments and an increase of £12.5 million in the value of existing investments offset by a realisation of £5.7 million. The Company's portfolio continues to recover following the impact of COVID-19 over the past 18 months. Many of the portfolio companies have successfully navigated the new economic landscape, with some performing extremely strongly while others continue to adjust.
The Manager remains focused on supporting an annual dividend to Shareholders of at least 5% of the NAV per share whilst retaining a stable NAV. The Company has made reasonable progress against these objectives in the period.
New investments
The Manager has taken a prudent approach to investing since the onset of COVID-19. Repeated lockdowns have made it challenging for the Private Equity Team to meet prospective companies and their teams face to face, an important part of assessing investments and developing relationships with management teams. However, the Manager and SMEs have adjusted to this new landscape given companies still wish to grow their businesses despite the economic uncertainty. The Manager continued to meet new companies and advisers throughout this period. Relationships are now forged virtually with deals being introduced and completed entirely online.
As a result, three new investments were completed in the six months to 30 June 2021. Further details of each of these are provided below. Behind these, there is a strong pipeline of opportunities that the Manager expects to convert during the second half of 2021.
NWEH
NorthWest EHealth
NorthWest EHealth
In June 2021, the Company invested £1.5 million into NorthWest EHealth, which provides software and services to the clinical trials market, allowing pharmaceutical companies and contract research organisations to conduct feasibility studies, recruit patients and run trials. The investment will be used to expand the current data network, enabling the company to support a larger number of trials at a global level, increase product development and expand the sales and marketing team to help build long term, strategic relationships.
Portfolio Diversification
Key:
- Technology, media & telecommunications 39% | 32%
- Healthcare 22% | 23%
- Industrials & manufacturing 11% | 20%
- Business services 11% | 12%
- Consumer & leisure 15% | 8%
- General 2% | 5%
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
INVESTMENT MANAGER'S REVIEW
CONTINUED
New investments continued
HR HEXARAD RADIOLOGY
Hexarad Group
Also in June 2021, the Company invested £0.9 million into Hexarad Group, an early stage, high growth healthcare services company, providing teleradiology services to NHS Trusts and UK private healthcare customers. Headquartered in London, the company was founded in 2016 by a group of NHS consultant radiologists and differentiates itself through its clinical leadership and technology-led proposition. The investment into Hexarad Group will enable the company to support more NHS and private healthcare customers and further improve customer and radiologist experience.
ADDITIVE MANUFACTURING TECHNOLOGIES
Additive Manufacturing Technologies
Finally, in June 2021, the Company invested £1.7 million into Additive Manufacturing Technologies ("AMT"), which manufactures systems that automate the post-processing of 3D printed parts. AMT originally received seed funding from Foresight Williams EIS in September 2019. The additional investment, made alongside further investment from Foresight Williams, will be used to further commercialise its products now they have achieved commercial traction.
Callen-Lenz
Callen-Lenz Associates
Post-period end, in August 2021, £2.4 million of growth capital was invested into Callen-Lenz Associates, a provider of innovative technology solutions for unmanned aerial vehicles, commonly known as drones. Based near Salisbury, the company develops, designs, and manufactures vehicles, components, and software for drones globally.
Follow-on investments
The Manager had expected that more portfolio companies would need additional capital to support them through difficult trading conditions resulting from the various lockdowns, driving an increase in follow-on investment. However, the portfolio has remained relatively resilient, supported by the Manager, which has increased oversight of the portfolio and provided guidance to portfolio management teams throughout the pandemic. The Company made one follow-on investment in the period, totalling £1.0 million, to support further growth opportunities post-COVID-19 restrictions lifting. Further details are provided below.
Many companies used forms of Government support, such as the furlough scheme and the Coronavirus Business Interruption Loan Scheme, which reduced the need for additional equity injections in the period. However, as these schemes unwind, the Manager anticipates some requirements for follow-on investment in the next six months.
ClubSpark
Clubspark
In March 2021, Clubspark, a software platform that provides sports clubs and centres with the ability to manage operations such as court and equipment booking, received a £1.0 million follow-on investment from the Company. The investment will be used to expand into other sports and push further into international markets, such as the US.
biotherapy services
Biotherapy Services
Post-period end, in July 2021 a follow-on of £0.8 million was also made into Biotherapy Services ("BTS"), a leading pharmaceutical biotech company. BTS has developed a wound care treatment for diabetic foot ulcers and the additional funds will be used to support its clinical trial.
fertility focus
Fertility Focus
In August 2021, post-period end, a £0.2 million follow-on investment was made into Fertility Focus, a leading fertility monitoring technology company that has developed registered medical devices that enable women to predict ovulation. The funding will be used to support a new product launch over the next 12 months.
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
PORTFOLIO SUMMARY
I-MIST LTD
Company Background
I-Mist was founded in 2015 by Tony Sims and Alex Pollard who together have over 15 years' experience within the fire suppression industry. Their goal was to revolutionise the traditional fire sprinkler, developing a more cost effective and simple solution that could be installed easily in domestic and residential buildings.
The company has developed a new technology using high pressure water mist that brings with it a number of benefits compared to existing products in the market. Notably, the technology is substantially more environmentally friendly, using six litres of water per minute versus 51 for traditional sprinkler systems and thereby causing less damage. I-Mist addresses a clear gap in the market, as competitors are typically focused on larger industrial and commercial projects. I-Mist is based in East Yorkshire, Scotland and Kent, as well as in a recently established North Carolina facility to facilitate its US expansion strategy.
I-Mist Key Facts
| Name | I-Mist Ltd |
|---|---|
| Location | Unit 11 Park Road Industrial Estate, Swanley, BR8 8AH |
| Website | www.imist.com |
| Industry | Business Services |
| Foresight Enterprise VCT plc Commitment | £1.6 million |
| Foresight Enterprise VCT plc Ownership % | 15.8% (fully diluted) |
| Stage | Growth Capital |
| Investment Date | December 2020 |
| Total Foresight Group LLP Commitment | £4.5 million (£1.6 million of investment made by Foresight VCT plc and £1.6 million of investment made by Foresight Enterprise VCT plc alongside £1.3 million of co-investment from the Foresight Scottish Growth Fund) |
FORESIGHT ENTERPRISE VCT PLC (Inaudited Half Yearly Financial Report 30 July 2021)
INVESTMENT MANAGER'S REVIEW CONTINUED
Pipeline
At 30 June 2021, the Company held cash of £19.3 million, which will be used to fund new and follow-on investments, buybacks and running expenses and support the Company's dividend objectives. The Manager is seeing a recovery in the pipeline of potential investments and has a number of opportunities under exclusivity or in due diligence. The Company remains well-positioned to continue pursuing these potential investment opportunities. As the economy recovers from the worst effects of COVID-19, the Manager expects demand for funding to increase, driving some particularly interesting opportunities for investment.
Exits and realisations
The M&A climate has remained surprisingly buoyant during the last 18 months. At first, most trade acquirers focused on their core business and private equity investors focused on their existing portfolios or on distressed acquisitions.
However, since the second half of last year, the Manager has seen acquisition interest returning, particularly in the healthcare, technology and e-commerce sectors, with numerous investment opportunities being presented for consideration.
In January 2021 the Company successfully sold its investment in FFX Group, one of the UK's largest multi-channel, independent suppliers of high-quality power tools, fixings and building supplies. The transaction generated proceeds of £5.7 million at completion and the Company will receive up to £0.2 million of deferred consideration after 18 months subject to certain conditions. This implies a cash on cash return of 4.3x the initial investment of £1.4 million, made in October 2015, which is equivalent to an IRR of c.32%. During the investment period, FFX Group opened a new 60,000 sq ft distribution centre and a new head office in Kent. The business updated its brand and launched an extensive range of its own products. Since the Company's investment, FFX Group more than tripled revenues and increased headcount by over 125.
Post-period end, the Company announced the successful sale of Mologic, a health diagnostics company providing both contract research services for clients and developing its own range of proprietary point-of-care diagnostics products. It was sold to Global Access Health, a not-for-profit company financed by the Soros Economic Development Fund, the impact investing arm of the Open Society Foundations and a group of other philanthropic organisations and investors. The return multiple of 3.1x includes deferred consideration, which is equivalent to an IRR of c.38%. During the investment period, the Mologic team has worked with the Manager to strengthen the business, advancing the product portfolio, increasing turnover by over 165% and increasing employee numbers by over 40%. The business has also developed a presence in the US, opening an office on the East Coast, and developed a manufacturing partnership in West Africa.
The Company's investment in Ixaris Group Holdings was sold in August 2021 to Nium, a global B2B payments platform headquartered in Singapore.
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
PORTFOLIO SUMMARY
NORTHWEST EHEALTH
Company Background
Established in 2016, NorthWest EHealth ("NWEH") grew out of a collaboration between the University of Manchester, Salford Royal Foundation NHS Trust and Salford Clinical Commissioning Group. Its products provide the life sciences industry with an alternative approach to clinical trial design and management. NWEH's leading-edge technologies help run trials more cost effectively, from feasibility studies to the World's first large scale Phase III trial using data directly from source electronic health records.
NWEH utilises existing electronic health records from primary care providers to conduct clinical trials much more efficiently via its two products, Farsite and Connexon. Farsite allows for the automated searching of a population dataset to assess trial feasibility and identify and recruit patients. This is historically a manual and hugely expensive process, with NWEH able to reduce this from months to days.
The Connexon platform automates data collection and validation during a trial, remotely collecting results through primary care data, wearables and patient input.
This reduces trial cost by reducing manual input, validation and audit, with Connexon adhering to all regulatory standards.
NWEH has historically worked with some of the largest pharma companies, including Novartis and Pfizer. The company has recently begun to develop strong relationships with several large contract research organisations in the market, which can potentially provide a recurring source of trials.
The UK is one of the leading global markets for clinical trials, currently worth c.£3.0 billion per year, with life sciences identified as a priority sector by the UK Government post-Brexit. This leads to an addressable market of c.150 trials per year for NWEH.
NorthWest EHealth Key Facts
| Name | NorthWest EHealth Limited |
|---|---|
| Location | 2/F, Bright Building, Manchester Science Park, Pencroft Way, Manchester, M15 6GZ |
| Website | www.nweh.co.uk |
| Industry | Healthcare |
| Foresight Enterprise VCT plc Commitment | £1.5 million |
| Foresight Enterprise VCT plc Ownership % | 13.9% (fully diluted) |
| Stage | Growth Capital |
| Investment Date | June 2021 |
| Total Foresight Group LLP Commitment | £3.0 million (£1.5 million of investment made by Foresight VCT plc and £1.5 million of investment made by Foresight Enterprise VCT plc) |
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
INVESTMENT MANAGER'S REVIEW CONTINUED
Disposals in the six months to 30 June 2021
| Company | Detail | Accounting cost at date of disposal (£) | Proceeds (£) | Realised gain (£) | Valuation at 31 December 2020 (£) |
|---|---|---|---|---|---|
| FFX Group Limited | Full Disposal | 1,372,002 | 5,651,756^{1} | 4,279,754 | 5,723,459 |
- A further £71,703 in deferred consideration has been reflected in the accounts.
Key portfolio developments
In the first six months of the year, the portfolio has shown further recovery, which started in the second half of 2020, as businesses adapt to the new economic climate combined with the gradual easing of restrictions.
The value of unquoted investments held rose by £11.9 million in the six months to June, driven by deployment of £5.1 million and an increase in value of existing investments by £12.5 million offset by a realisation of £5.7 million. A disciplined approach to investment valuations has been maintained in light of COVID-19. During the prior period, the value of investments held rose by £26.2 million, driven by deployment of £6.5 million and an increase in the value of existing investments of £19.7 million.
Material changes in valuation, defined as increasing or decreasing by £1.0 million or more since 31 December 2020, are detailed below. Updates on these companies are included in the Top Ten Investments section on pages 14 to 18.
Key valuation changes in the period
| Company | Valuation (£) | Valuation change (£) |
|---|---|---|
| Galinette Limited | 3,317,884 | 2,057,468 |
| Biofortuna Ltd | 8,559,163 | 1,377,859 |
| Aerospace Tooling Corporation Limited | 4,072,294 | 1,075,795 |
| Hospital Services Group Limited | 4,294,035 | 1,070,285 |
| Mologic Ltd | 3,257,940 | 1,055,793 |
Outlook
The United Kingdom has now lifted most of its COVID-19 restrictions, marking a milestone as the country moves into a new phase. However, this newfound freedom has brought with it a raft of challenges, including a sharp rise in new COVID-19 cases and the consequential increase in the percentage of the population isolating. This has led to staff shortages across the country, leading to either reductions in capacity or the temporary closure of businesses.
The rules are changing constantly, and it is clear that COVID-19 will still continue to impact trading in the medium term and businesses must remain cautious through this transition to the 'new normal'. The Manager will continue to provide added support to its portfolio companies and, if the situation worsens, will be on standby to administer the same 'toolbox' of support as in prior lockdowns.
On a positive note, the International Monetary Fund believes that the UK economy will grow faster than previously expected this year, upgrading the UK's forecast to 7% growth. Despite this, the Manager has taken a prudent view, encouraging companies to revise budgets to manage creditor stretch and debt build-up, particularly due to the reduction of Government support. The Manager is ensuring that finance directors at the portfolio companies continue to tightly manage overheads and critically assess capital expenditure given the uncertain macro environment.
Whilst COVID-19 has brought unprecedented disruption, it has also prompted many organisations to reassess their business models and take action to adapt to a new economic landscape. A number of the Company's portfolio have used this as an opportunity to review their overall strategy, venture into a new market or launch a new product or service.
For example, to supplement lost revenues from their core business some portfolio companies have procured and provided PPE or other protective equipment, such as hand sanitising stations or screens. Healthcare and life science investments have also contributed to national efforts to defeat the virus by manufacturing COVID-19 testing kits.
Some of the portfolio companies used this time as an opportunity to improve online activity and have seen an uptick in revenues as a consequence. With the trend towards e-commerce accelerating during COVID-19, retail businesses will need to continue embracing this channel fully and make it a core part of the overall growth strategy.
The Manager is working closely with portfolio companies to ensure they are well-positioned to capitalise on this opportunity.
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
Beyond COVID-19, the end of the Brexit transition period on 31 December 2020 has also created some economic uncertainty. The Manager has worked closely with portfolio companies to prepare them to the best extent possible as some of them encounter supply chain challenges and experience staffing issues. Thanks to the diverse nature of the portfolio, with a combination of businesses focused on the domestic UK market and some that export and source worldwide, the Manager remains confident that the Company is well-positioned to endure potential volatility.
Notwithstanding this uncertain economic backdrop, the Manager continues to see encouraging levels of activity from smaller UK companies seeking growth capital. The Manager expects this to increase as companies begin to recover from the impact of COVID-19, with requirements for permanent funding to working capital. VCTs are still viewed by many entrepreneurs as an attractive source of capital that provide scale-up funding to businesses at an early stage of their growth, when other sources of funding may not be readily available or alongside other sources of capital, including government measures for supporting businesses during COVID-19.
Despite the challenges of COVID-19 in the medium and long term, the UK remains an excellent place to start, scale and sell a business, with broad pools of talent and an entrepreneurial culture.
Russell Healey
on behalf of Foresight Group LLP
Head of Private Equity
Foresight Group LLP
28 September 2021
ABOUT THE MANAGER – FORESIGHT GROUP LLP
Foresight Group LLP is a leading infrastructure and private equity investment manager.
Sustainability and ESG criteria are central to all investments – Foresight was among the first to prioritise sustainability and ESG and it remains at the forefront of these developing investment themes.
| 200+
Institutional clients | 19
Institutional solutions | 62%
Institutional assets |
| --- | --- | --- |
| 28,000
Retail investors | 14
Retail solutions | 38%
Retail assets |
INFRASTRUCTURE
Foresight now manages over 300 infrastructure assets, including wind, solar and bioenergy, with installed capacity to generate 2.9GW of renewable energy.
| £6.5bn
AUM | 90% | 317
Assets |
| --- | --- | --- |
PRIVATE EQUITY
Foresight manages more than 100 growth capital and replacement capital investments through a network of seven regional UK offices.
| £714m
AUM | 10% | 115
Investments |
| --- | --- | --- |
OFFICES
Foresight has 12 offices, the largest of which is in London.
£7.2bn
AUM audited as at 31 March 2021
- Infrastructure
- Private Equity
London Stock Exchange
On 9 February 2021, Foresight Group Holdings Limited shares were unconditionally listed on the premium segment of the London Stock Exchange Main Market, under the ticker “FSG”. Foresight Group Holdings Limited was awarded the LSE’s Green Economy Mark, which recognises companies that derive 50% or more of their annual revenues from products and services that contribute to the global green economy. www.fsg-investors.com
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
TOP TEN INVESTMENTS
BY VALUE AS AT 30 JUNE 2021
For the investments below held by Foresight 3 VCT plc ("F3") pre-merger, the amount invested refers to the initial amount invested by F3 and the Company. The accounting cost includes both the initial investment by both funds and also the valuation of the F3 investment at the point it was transferred to the Company.
DATAPATH GROUP LIMITED
BIOFORTUNA
BIOFORTUNA LTD
WIRRAL www.biofortuna.com
SECTOR: TECHNOLOGY, MEDIA & TELECOMMUNICATIONS
Datapath Group is a UK manufacturer of multiscreen computer graphics cards and video capture hardware, specialising in video wall and data wall technology.
SECTOR: HEALTHCARE
Biofortuna, established in 2008, is a diagnostics business based in the North West that provides contract development, contract manufacturing and genomic services.
30 June 2021 update
Biofortuna's technical ability and freeze-drying capability allowed it to support several clients, manufacturing their COVID-19 testing kits, with over 30 million manufactured since April 2020. COVID-19-related activity produced material revenue growth for the company, however, more recently there has been a slowdown in trading as the pandemic begins to ease. Its COVID-19-related work has raised Biofortuna's profile and new opportunities are arising as a consequence. In the period Biofortuna acquired a genomic services company, Northgene.
30 June 2021 update
Tradition has improved and revenues are now materially ahead of prior year, although volatility is expected to persist over the next six months. COVID-19 continues to impact customer demand, while the business has also experienced chip shortages. The focus is on building out the new product order book to underpin trading for the rest of the financial year.
| Initial investment | September 2007 |
|---|---|
| Amount invested (£) | 2,000,000 |
| Accounting cost (£) | 11,081,243 |
| Investment value (£) | 15,321,243 |
| Basis of valuation | Discounted earnings multiple |
| Equity held (%) | 26.7% |
| Initial investment | March 2012 |
| --- | --- |
| Amount invested (£) | 3,517,537 |
| Accounting cost (£) | 3,517,537 |
| Investment value (£) | 8,559,163 |
| Basis of valuation | Discounted revenue multiple |
| Equity held (%) | 45.0% |
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
15
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
Specac
SPECAC INTERNATIONAL LIMITED
KENT
www.specac.com
SECTOR: INDUSTRIALS & MANUFACTURING
Specac International is a leading manufacturer of high specification sample analysis and preparation equipment used in testing and research laboratories worldwide.
30 June 2021 update
Specac International had a strong start to its financial year, mainly driven by higher sales volumes and improved gross margins. Cost control and efficiency have both improved under the new Managing Director. The order book and sales pipeline are encouraging, buoyed by customers replacing capital goods after the end of lockdown.
TFC EUROPE LIMITED
EAST SUSSEX
www.tfc.eu.com
SECTOR: INDUSTRIALS & MANUFACTURING
TFC Europe is one of Europe's leading suppliers of fixing and fastening products to customers across a wide range of industries, including aerospace, automotive, oil & gas and mechanical engineering.
30 June 2021 update
TFC Europe continued to generate strong sales despite the impact of COVID-19, with revenues and profits now ahead of budget. TFC Europe has used this period to review its pricing model, strengthen its balance sheet and overall focus on increasing market share to drive value in the long term. Investment in the sales and marketing functions is beginning to pay off with demand now increasing.
| Initial investment | April 2015 |
|---|---|
| Amount invested (£) | 1,300,000 |
| Accounting cost (£) | 2,554,761 |
| Investment value (£) | 7,794,033 |
| Basis of valuation | Discounted earnings multiple |
| Equity held (%) | 39.2% |
| Initial investment | March 2007 |
| --- | --- |
| Amount invested (£) | 1,408,638 |
| Accounting cost (£) | 2,149,307 |
| Investment value (£) | 7,212,888 |
| Basis of valuation | Discounted earnings multiple |
| Equity held (%) | 42.5% |
TOP TEN INVESTMENTS CONTINUED
BY VALUE AS AT 30 JUNE 2021
GovGrant
our insight, your reward
INNOVATION CONSULTING GROUP LIMITED
HERTFORD
www.govgrant.co.uk
SECTOR: BUSINESS SERVICES
Innovation Consulting Group (formerly The Business Advisory Limited) provides support services and contingent advice to UK based SME businesses seeking to gain access to Government tax incentives.
30 June 2021 update
Innovation Consulting Group has had a mixed six months of trading, with one strong quarter followed by a softer quarter. During the period, the business launched a new self-serve portal for accountants to perform and submit their own R&D claims, and initial feedback from the market has been positive. This has led to additional lead generation for the company, which should help to generate additional growth.
30 June 2021 update
HSL has traded very well with revenues and profits materially ahead of prior year and budget. In the period, the company acquired MDI Medical, a leading supplier, installer and servicer of medical devices and systems, particularly ultrasound and patient monitoring equipment. This is performing particularly well, while HSL's other divisions, PPE aside, are seeing an uptick in trading following the impact of COVID-19.
| Initial investment | September 2015 |
|---|---|
| Amount invested (£) | 1,650,000 |
| Accounting cost (£) | 1,938,046 |
| Investment value (£) | 6,317,853 |
| Basis of valuation | Discounted earnings multiple |
| Equity held (%) | 36.7% |
| Initial investment | September 2015 |
| --- | --- |
| Amount invested (£) | 1,200,000 |
| Accounting cost (£) | 1,200,000 |
| Investment value (£) | 4,294,035 |
| Basis of valuation | Discounted earnings multiple |
| Equity held (%) | 16.3% |
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
Foresight Enterprise
ATL
TOOLING CORPORATION
Protean
Software
AEROSPACE TOOLING CORPORATION LIMITED
KENT
www.atlturbineservices.co.uk
SECTOR: INDUSTRIALS & MANUFACTURING
Founded in 2007, Aerospace Tooling Corporation ("ATL") is a niche engineering company based in Dundee. ATL provides specialist inspection, maintenance, repair and overhaul ("MRO") services for components in high-specification aerospace and turbine engines.
30 June 2021 update
ATL has had a strong trading period, with revenues and profits ahead of budget. Revenue continues to be evenly split between aviation, a majority of which is military, and industrial divisions. The business is having promising conversations with a number of prospective new customers that should convert later in the year.
| Initial investment | June 2013 |
|---|---|
| Amount invested (£) | 2,000,000 |
| Accounting cost (£) | 415,255 |
| Investment value (£) | 4,072,294 |
| Basis of valuation | Discounted earnings multiple |
| Equity held (%) | 46.9% |
PROTEAN SOFTWARE LIMITED
COVENTRY
www.proteansoftware.co.uk
SECTOR: TECHNOLOGY, MEDIA & TELECOMMUNICATIONS
Protean Software develops and sells field service management software for organisations involved in the supply, installation, maintenance and hire of equipment.
30 June 2021 update
Trading continues to recover, with revenues in the last quarter being the second best in the company's history. The company is working on recruiting additional suitable engineers in both the UK and Poland but finding it hard given current market pressures. They are using contractors in the meantime to fill this gap. Despite this, the forecast for FY22 looks to be a pivotal year as the market transitions more fully to SaaS.
| Initial investment | July 2015 |
|---|---|
| Amount invested (£) | 1,500,000 |
| Accounting cost (£) | 1,795,229 |
| Investment value (£) | 3,413,734 |
| Basis of valuation | Discounted revenue multiple |
| Equity held (%) | 23.8% |
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
TOP TEN INVESTMENTS
CONTINUED
BY VALUE AS AT 30 JUNE 2021
| GALINETTE LIMITED | |
|---|---|
| LONDON |
SECTOR: GENERAL
Galinette holds investments in smaller companies, most notably True Lens Services Limited (“TLS”), a specialist provider of lens manufacturing, refurbishment and servicing to the film and television markets. The business was a subsidiary of Procam TV, previously held by the Company, but was carved out by the Manager in September 2020.
30 June 2021 update
The principal driver of TLS’ performance has been the lens rehousing activities. The TV and film production market is very active in the post-pandemic period due to the backlog in content generation over the last 15 months, this has created strong momentum and demand for TLS’ services. The sale of the new Vega lenses has been slightly slower than planned but further marketing activities are ongoing to promote the lenses in both the domestic and international markets.
| Initial investment | June 2017 |
|---|---|
| Amount invested (£) | 100 |
| Accounting cost (£) | 100 |
| Investment value (£) | 3,317,884 |
| Basis of valuation | Net assets |
| Equity held (%) | 100.0% |
MOLOGIC LTD
BEDFORD
www.mologic.co.uk
SECTOR: HEALTHCARE
Mologic is a health diagnostics company providing contract research services for clients and developing its own range of proprietary point-of-care diagnostics products. It also conducts various grant-funded projects for large philanthropic organisations.
30 June 2021 update
Post-period end, the Company announced the successful sale of Mologic. It was sold to Global Access Health, a not-for-profit company financed by the Soros Economic Development Fund, the impact investing arm of the Open Society Foundations, and a group of other philanthropic organisations and investors. The return multiple of 3.1x includes deferred consideration. During the investment period, the Mologic team and Foresight worked to strengthen the business, advancing the product portfolio, increasing turnover by over 165% and increasing employee numbers by over 40%.
| Initial investment | April 2018 |
|---|---|
| Amount invested (£) | 1,059,000 |
| Accounting cost (£) | 1,059,000 |
| Investment value (£) | 3,257,940 |
| Basis of valuation | Sales proceeds¹ |
| Equity held (%) | 6.4% |
- Including contractual deferred consideration.
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
RESPONSIBLE INVESTMENT
We believe in delivering sustainable growth and incorporate ESG into our management process.
In order to deliver sustainable growth and long-term success, the Manager believes it is critical to incorporate Environmental, Social and Governance factors ("ESG") into its investment management processes. Often referred to as Responsible Investment, these principles provide not only a key basis for generating attractive returns for investors, but also to help build better quality businesses in the UK, creating jobs and making a positive contribution to society.
ESG values form an integral part of the Manager's day-to-day decision making, with all new investments made since May 2018 subject to ESG due diligence and ongoing ESG monitoring. This accounts for 48% of the current portfolio, with the view of reaching 100% as legacy investments are sold. Central to its investment approach are five ESG Principles which are used to evaluate investee companies.
Overall 40 individual key performance indicators are considered under the five Principles. The Manager invests in a wide range of sectors and believes its approach covers the key tests that should be applied to assess a company's ESG performance, throughout the life cycle of an investment:
Strategy and Awareness
Does the business demonstrate a good awareness of corporate social responsibility?
Is this reflected in its processes and management structure?
Environmental
Does the company follow good practice for limiting or mitigating its environmental impact, in the context of its industry?
How does it encourage the responsible use of the world's resources?
Social
What impact does the company have on its employees, customers and society as a whole?
Is it taking steps to improve the lives of others, either directly, such as through job creation, or indirectly?
Governance
Does the company and its leadership team demonstrate integrity?
Are the correct policies and structures in place to ensure it meets its legislative and regulatory requirements?
Third Party Interaction
Is the principle of corporate responsibility evidenced in the company's supply chain and customers?
How does it promote ESG values and share best practice?
UN SDGs
The evaluation of investee companies against each of the five Principles is supported by quantitative and qualitative data, starting at the initial review of an opportunity through to exit. This process helps identify both the risks and opportunities that exist within the portfolio and aims to ensure that investments support positive environmental and social outcomes.
The UN's Sustainable Development Goals ("SDGs") also represent a key driver and important lens through which corporate and investment activities are reviewed. Each portfolio company is also subject to an annual assessment where progress against each of the five Principles and SDGs are measured and an evaluation matrix updated to allow progress to be tracked and continuous improvement encouraged.
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
PORTFOLIO OVERVIEW
| Investment | 30 June 2021 | Basis of valuation | 31 December 2020 | ||
|---|---|---|---|---|---|
| Accounting Cost £ | Investment Value £ | Accounting Cost £ | Investment Value £ | ||
| Datapath Group Limited | 11,081,243 | 15,321,243¹ | Discounted earnings multiple | 11,081,243 | 15,670,327 |
| Biofortuna Ltd | 3,517,537 | 8,559,163¹ | Discounted revenue multiple | 3,517,537 | 7,181,304 |
| Specac International Limited | 2,554,761 | 7,794,033¹ | Discounted earnings multiple | 2,554,761 | 7,263,367 |
| TFC Europe Limited | 2,149,307 | 7,212,888¹ | Discounted earnings multiple | 2,149,307 | 6,540,051 |
| Innovation Consulting Group Limited (formerly The Business Advisory Limited) | 1,938,046 | 6,317,853¹ | Discounted earnings multiple | 1,938,046 | 6,002,488 |
| Hospital Services Group Limited | 1,200,000 | 4,294,035¹ | Discounted earnings multiple | 1,200,000 | 3,223,750 |
| Aerospace Tooling Corporation Limited | 415,255 | 4,072,294¹ | Discounted earnings multiple | 415,255 | 2,996,499 |
| Protean Software Limited | 1,795,229 | 3,413,734¹ | Discounted revenue multiple | 1,795,229 | 2,964,339 |
| Galinette Limited | 100 | 3,317,884¹ | Net assets | 100 | 1,260,416 |
| Mologic Ltd | 1,059,000 | 3,257,940¹ | Sales proceeds | 1,059,000 | 2,202,147 |
| Spektrix Limited | 2,118,000 | 3,101,512 | Discounted revenue multiple | 2,118,000 | 2,472,661 |
| Roxy Leisure Ltd | 2,500,000 | 2,912,915 | Discounted earnings multiple | 2,500,000 | 2,521,997 |
| Clubspark Ltd | 1,860,000 | 2,881,506 | Discounted revenue multiple | 860,000 | 1,639,281 |
| PH Realisations 2020 Limited (formerly Procam Television Holdings Limited) | 2,162,929 | 2,544,379 | Discounted earnings multiple | 2,162,929 | 2,314,634 |
| Itad Limited | 1,371,726 | 2,169,274 | Discounted earnings multiple | 1,371,726 | 1,950,547 |
| Ixaris Group Holdings Limited | 3,479,188 | 2,095,864 | Discounted offer | 3,479,188 | 1,388,932 |
| Accrosoft Limited | 1,050,000 | 1,883,055 | Discounted revenue multiple | 1,050,000 | 1,469,901 |
| Biotherapy Services Limited | 1,500,000 | 1,842,957 | Price of last funding round | 1,500,000 | 1,981,234 |
| I-Mist Ltd | 1,614,500 | 1,810,803 | Discounted revenue multiple | 1,614,500 | 1,614,500 |
| IMMJ Systems Limited | 1,750,000 | 1,786,077 | Discounted revenue multiple | 1,750,000 | 1,750,000 |
| Additive Manufacturing Technologies Limited | 1,737,500 | 1,737,499 | Price of last funding round | — | — |
| Steamforged Games Ltd | 1,600,000 | 1,724,478 | Discounted revenue multiple | 1,600,000 | 1,321,506 |
- Top ten investments by value are shown on pages 14 to 18.
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
| Investment | 30 June 2021 | Basis of valuation | 31 December 2020 | ||
|---|---|---|---|---|---|
| Accounting Cost £ | Investment Value £ | Accounting Cost £ | Investment Value £ | ||
| Titania Group Limited | 1,250,000 | 1,635,399 | Discounted revenue multiple | 1,250,000 | 1,250,000 |
| Positive Response Corporation Ltd | 1,009,195 | 1,582,329 | Discounted revenue multiple | 1,009,195 | 1,384,180 |
| NorthWest EHealth Limited | 1,500,000 | 1,500,000 | Price of last funding round | — | — |
| Fourth Wall Creative Limited | 2,000,000 | 1,465,456 | Discounted earnings multiple | 2,000,000 | 1,323,157 |
| Iphigenie Limited | 100 | 1,267,511 | Net assets | 100 | 1,262,665 |
| Ten Health & Fitness Limited | 1,600,000 | 1,204,765 | Discounted revenue multiple | 1,600,000 | 953,191 |
| Codeplay Software Limited | 300,000 | 1,086,093 | Discounted revenue multiple | 300,000 | 1,019,912 |
| Hexarad Group Limited | 850,000 | 850,000 | Price of last funding round | — | — |
| Rovco Limited | 950,000 | 789,625 | Discounted revenue multiple | 950,000 | 786,105 |
| Fertility Focus Limited | 525,569 | 692,837 | Discounted revenue multiple | 525,569 | 649,868 |
| Whitchurch PE 1 Limited | 378,000 | 650,683 | Net assets | 378,000 | 651,062 |
| ABL Investments Limited | 1,494,075 | 639,130 | Discounted earnings multiple | 1,494,075 | 732,495 |
| Cole Henry PE 2 Limited | 200,000 | 368,126 | Net assets | 200,000 | 368,505 |
| Luminet Networks Limited | 960,000 | 343,987 | Discounted earnings multiple | 960,000 | 395,203 |
| Kingsclere PE 3 Limited | 100,000 | 211,250 | Net assets | 100,000 | 211,628 |
| Sindicatum Carbon Capital Limited | 544,538 | — | Nil value | 544,538 | — |
| FFX Group Limited | — | — | Sold | 1,372,002 | 5,723,459 |
| Total | 62,115,798 | 104,338,577 | 58,400,300 | 92,441,311 |
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
GOVERNANCE
Unaudited half-yearly results and responsibilities statements.
Principal risks and Uncertainties
The principal risks faced by the Company are as follows:
- Performance
- Regulatory
- Economic (external shocks)
- Operational
- Financial
The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Accounts for the period ended 31 December 2020. A detailed explanation can be found on page 27 of the Annual Report and Accounts which is available on Foresight Enterprise VCT's website www.foresightenterprisevct.com or by writing to Foresight Group LLP at The Shard, 32 London Bridge Street, London, SE1 9SG. The Board considers that these principal risks and uncertainties are equally applicable to the remaining six months of the financial year as they were to the six months under review.
In the view of the Board, there has been a further change to the fundamental nature of these risks since the previous report. As the Brexit transition period ended on 31 December 2020, a number of portfolio companies have recently experienced increased economic uncertainty including supply chain challenges and staffing shortages. The Board and the Manager continue to follow Brexit developments closely with a view to identifying where changes affect the areas of the market in which portfolio companies operate. This enables the Manager to work closely with portfolio companies, preparing them to the best extent possible to ensure they are well-positioned to endure potential volatility.
Directors' responsibility statement
The Disclosure and Transparency Rules ('DTR') of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Half-Yearly Financial Report and financial statements.
The Directors confirm to the best of their knowledge that:
a) The summarised set of financial statements has been prepared in accordance with FRS 104
b) The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year)
c) The summarised set of financial statements gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company as required by DTR 4.2.4R
d) The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein)
Going concern
The Company's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Strategic Report of the Annual Report. The financial position of the Company, its cash flows, liquidity position and borrowing facilities are described in the Chairman's Statement, Strategic Report and Notes to the Accounts of the 31 December 2020 Annual Report.
In addition, the Annual Report includes the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its exposures to credit risk and liquidity risk.
The Company has considerable financial resources together with investments and income generated therefrom across a variety of industries and sectors. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully.
The Directors have reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
The Half-Yearly Financial Report has not been audited nor reviewed by the auditors.
On behalf of the Board
Raymond Abbott
Chairman
28 September 2021
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
FORECAST
FINANCIAL STATEMENTS
WHAT'S IN THIS SECTION
| Unaudited Income Statement | 24 |
|---|---|
| Unaudited Balance Sheet | 25 |
| Unaudited Reconciliation of Movements in Shareholders' Funds | 26 |
| Unaudited Cash Flow Statement | 27 |
| Notes to the Unaudited Half-Yearly Results | 28 |
| Glossary of Terms | 30 |
| FCA Information | 31 |
| Corporate Information | 32 |
| Additional Information | IBC |
FORECAST
FORECAST
UNAUDITED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2021
| Six months ended 30 June 2021 (Unaudited) | Six months ended 30 September 2020 (Unaudited) | Nine months ended 31 December 2020 (Audited) | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | |
| Investment holding gains | — | 8,253 | 8,253 | — | 9,990 | 9,990 | — | 20,372 | 20,372 |
| Realised gains/(losses) on investments | — | 4,280 | 4,280 | — | — | — | — | (623) | (623) |
| Income | 190 | — | 190 | 324 | — | 324 | 67 | — | 67 |
| Investment management fees | (290) | (871) | (1,161) | (295) | (884) | (1,179) | (434) | (1,301) | (1,735) |
| Other expenses | (291) | — | (291) | (270) | — | (270) | (490) | — | (490) |
| (Loss)/return on ordinary activities before taxation | (391) | 11,662 | 11,271 | (241) | 9,106 | 8,865 | (857) | 18,448 | 17,591 |
| Taxation | — | — | — | — | — | — | — | — | — |
| (Loss)/return on ordinary activities after taxation | (391) | 11,662 | 11,271 | (241) | 9,106 | 8,865 | (857) | 18,448 | 17,591 |
| (Loss)/return per share | (0.2)p | 6.0p | 5.8p | (0.1)p | 4.7p | 4.6p | (0.4)p | 9.5p | 9.1p |
During the period, the Company shortened its accounting period from 31 March 2021 to 31 December 2020. Given this change, the latest half-yearly and annual comparative results shown in this report are for the six months ending 30 September 2020 and the nine months ending 31 December 2020.
The total columns of this statement are the profit and loss account of the Company and the revenue and capital columns represent supplementary information.
All revenue and capital items in the above Income Statement are derived from continuing operations. No operations were acquired or discontinued in the period.
The Company has no recognised gains or losses other than those shown above, therefore no separate statement of total recognised gains and losses has been presented.
The Company has only one class of business and one reportable segment, the results of which are set out in the Income Statement and Balance Sheet.
There are no potentially dilutive capital instruments in issue and, therefore, no diluted earnings per share figures are relevant. The basic and diluted earnings per share are, therefore, identical.
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
UNAUDITED BALANCE SHEET
AT 30 JUNE 2021
Registered Number: 03506579
| | As at
30 June
2021
£'000
(Unaudited) | As at
30 September
2020
£'000
(Unaudited) | As at
31 December
2020
£'000
(Audited) |
| --- | --- | --- | --- |
| Fixed assets | | | |
| Investments held at fair value through profit or loss | 104,338 | 76,196 | 92,441 |
| Current assets | | | |
| Debtors | 149 | 971 | 162 |
| Cash and cash equivalents | 19,258 | 34,884 | 27,862 |
| Total current assets | 19,407 | 35,855 | 28,024 |
| Creditors | | | |
| Amounts falling due within one year | (214) | (124) | (111) |
| Net current assets | 19,193 | 35,731 | 27,913 |
| Net assets | 123,531 | 111,927 | 120,354 |
| Capital and reserves | | | |
| Called-up share capital | 1,938 | 1,944 | 1,939 |
| Share premium account | 68,344 | 80,002 | 67,458 |
| Capital redemption reserve | 539 | 518 | 523 |
| Special distributable reserve | 58,921 | 56,678 | 68,307 |
| Capital reserve | (48,505) | (50,874) | (51,914) |
| Revaluation reserve | 42,294 | 23,659 | 34,041 |
| Equity Shareholders' funds | 123,531 | 111,927 | 120,354 |
| Net Asset Value per share | 63.8p | 57.6p | 62.1p |
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
UNAUDITED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
FOR THE SIX MONTHS ENDED 30 JUNE 2021
| Called-up share capital £'000 | Share premium account £'000 | Capital redemption Reserve £'000 | Special distributable reserve' £'000 | Capital reserve' £'000 | Revaluation Reserve £'000 | Total £'000 | |
|---|---|---|---|---|---|---|---|
| As at 1 January 2021 | 1,939 | 67,458 | 523 | 68,307 | (51,914) | 34,041 | 120,354 |
| Share issues in the period | 15 | 918 | — | — | — | — | 933 |
| Expenses in relation to share issues | — | (32) | — | — | — | — | (32) |
| Repurchase of shares | (16) | — | 16 | (909) | — | — | (909) |
| Realised gains on disposal of investments | — | — | — | — | 4,280 | — | 4,280 |
| Investment holding gains | — | — | — | — | — | 8,253 | 8,253 |
| Dividends paid | — | — | — | (8,086) | — | — | (8,086) |
| Management fees charged to capital | — | — | — | — | (871) | — | (871) |
| Revenue loss for the period | — | — | — | (391) | — | — | (391) |
| As at 30 June 2021 | 1,938 | 68,344 | 539 | 58,921 | (48,505) | 42,294 | 123,531 |
- Reserve is available for distribution, total distributable reserves at 30 June 2021 are £10,416,000 (31 December 2020: £16,393,000).
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
UNAUDITED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2021
| Six months ended 30 June 2021 £'000 (Unaudited) | Six months ended 30 September 2020 £'000 (Unaudited) | Nine months ended 31 December 2020 £'000 (Audited) | |
|---|---|---|---|
| Cash flow from operating activities | |||
| Loan interest received on investments | 205 | 29 | 136 |
| Dividends received from investments | 21 | — | — |
| Deposit and similar interest received | 1 | 26 | 28 |
| Investment management fees paid | (1,161) | (1,179) | (1,283) |
| Secretarial fees paid | (79) | (79) | (119) |
| Other cash payments | (216) | (147) | (349) |
| Net cash outflow from operating activities | (1,229) | (1,350) | (1,587) |
| Cash flow from investing activities | |||
| Purchase of investments | (5,087) | — | (6,532) |
| Net proceeds on sale of investments | 5,652 | — | 46 |
| Net cash inflow/(outflow) from investing activities | 565 | — | (6,486) |
| Cash flow from financing activities | |||
| Expenses of fundraising | (32) | (19) | (28) |
| Repurchase of own shares | (756) | (795) | (1,085) |
| Equity dividends paid | (7,152) | (4,824) | (4,824) |
| Net cash outflow from financing activities | (7,940) | (5,638) | (5,937) |
| Net outflow in cash in the period | (8,604) | (6,988) | (14,010) |
| Reconciliation of net cash flow to movement in net funds | |||
| Decrease in cash and cash equivalents for the period | (8,604) | (6,988) | (14,010) |
| Net cash and cash equivalents at start of period | 27,862 | 41,872 | 41,872 |
| Net cash and cash equivalents at end of period | 19,258 | 34,884 | 27,862 |
Analysis of changes in net debt
| At 1 January 2021 £'000 | Cash Flow £'000 | At 30 June 2021 £'000 | |
|---|---|---|---|
| Cash and cash equivalents | 27,862 | (8,604) | 19,258 |
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
NOTES TO THE UNAUDITED HALF-YEARLY RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2021
-
The Unaudited Half-Yearly Financial Report has been prepared on the basis of the accounting policies set out in the statutory accounts of the Company for the nine months ended 31 December 2020. Unquoted investments have been valued in accordance with IPEV Valuation Guidelines.
-
These are not statutory accounts in accordance with S436 of the Companies Act 2006 and the financial information for the six months ended 30 June 2021 and 30 September 2020 has been neither audited nor formally reviewed. Statutory accounts in respect of the nine months ended 31 December 2020 have been audited and reported on by the Company's auditors and delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under S498(2) or S498(3) of the Companies Act 2006. No statutory accounts in respect of any period after 31 December 2020 have been reported on by the Company's auditors or delivered to the Registrar of Companies.
-
Copies of the Unaudited Half-Yearly Financial Report will be sent to Shareholders via their chosen method and will be available for inspection at the Registered Office of the Company at The Shard, 32 London Bridge Street, London, SE1 9SG.
4 Net Asset Value per share
The Net Asset Value per share is based on net assets at the end of the period and on the number of shares in issue at the date.
| Net assets | Shares in Issue | |
|---|---|---|
| 30 June 2021 | £123,531,000 | 193,758,305 |
| 30 September 2020 | £111,927,000 | 194,420,778 |
| 31 December 2020 | £120,354,000 | 193,859,213 |
5 Return per share
The weighted average number of shares used to calculate the respective returns are shown in the table below.
| Shares | |
|---|---|
| Six months ended 30 June 2021 | 193,660,150 |
| Six months ended 30 September 2020 | 194,054,492 |
| Nine months ended 31 December 2020 | 194,099,123 |
Earnings for the period should not be taken as a guide to the results for the full year.
6 Income
| Six months ended 30 June 2021 £'000 | Six months ended 30 September 2020 £'000 | Nine months ended 31 December 2020 £'000 | |
|---|---|---|---|
| Loan stock interest | 168 | 278 | 19 |
| Dividends | 21 | — | — |
| Deposit and similar interest received | 1 | 26 | 28 |
| Other income | — | 20 | 20 |
| Total income | 190 | 324 | 67 |
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
7 Investments held at fair value through profit or loss
£'000
| Book cost as at 1 January 2021 | 58,400 |
|---|---|
| Investment holding gains | 34,041 |
| Valuation at 1 January 2021 | 92,441 |
Movements in the period:
| Purchases | 5,087 |
|---|---|
| Disposal proceeds¹ | (5,652) |
| Realised gains | 4,280 |
| Investment holding gains² | 8,182 |
| Valuation at 30 June 2021 | 104,338 |
| Book cost at 30 June 2021 | 62,115 |
| Investment holding gains | 42,223 |
| Valuation at 30 June 2021 | 104,338 |
- The Company received £5,651,756 from the disposal of investments during the period. The book cost of these investments when they were disposed was £1,372,002. These investments have been revalued over time and until they were sold any unrealised gains or losses were included in the fair value of the investments.
- Investment holding gains in the income statement include the deferred consideration debtor of £71,703, relating to FFX Group Limited.
8 Related party transactions
No Director has an interest in any contract to which the Company is a party other than their appointment and payment as Directors.
9 Transactions with the manager
Foresight Group LLP acts as manager to the Company and was appointed on 27 January 2020. During the period, services of a total cost of £1,161,000 (30 September 2020: £1,179,000; 31 December 2020: £1,735,000) were purchased by the Company from Foresight Group LLP.
During the period, administration services of a total cost of £79,000 (30 September 2020: £79,000; 31 December 2020: £119,000) were delivered to the Company by Foresight Group LLP, Company Secretary.
At 30 June 2021, the amount due from Foresight Group LLP was £nil (30 September 2020: £452,000; 31 December 2020: £nil).
29
GLOSSARY OF TERMS
VCT
A Venture Capital Trust as defined in the Income Tax Act 2007.
Net Asset Value or NAV
The Net Asset Value (NAV) is the amount by which total assets exceed total liabilities, i.e. the difference between what the Company owns and what it owes. It is equal to Shareholders' equity, sometimes referred to as Shareholders' funds.
Net Asset Value per share or NAV per share
Net Asset Value expressed as an amount per share.
Dividend Yield
The sum of dividends paid during the period of 4.2p (30 September 2020: 2.8p; 31 December 2020: 2.8p) expressed as a percentage of the mid-market share price at the period end date of 56.5p (30 September 2020: 49.5p; 31 December 2020: 52.5p). This giving a dividend yield of 7.4% (30 September 2020: 5.7%; 31 December 2020: 5.3%).
Discount to NAV
A discount to NAV is the percentage by which the mid-market share price of the Company of 56.5p (30 September 2020: 49.5p; 31 December 2020: 52.5p) is lower than the Net Asset Value per share of 63.8p (30 September 2020: 57.6p; 31 December 2020: 62.1p). This giving a discount to NAV of 11.4% (30 September 2020: 14.1%; 31 December 2020: 15.5%).
Ongoing Charges Ratio
The sum of expenditure incurred in the ordinary course of business being £1.5 million (30 September 2020: £1.4 million; 31 December 2020: £2.1 million) expressed as a percentage of the average Net Asset Value during the period being £121.9 million (30 September 2020: £111.5 million; 31 December 2020: £120.4 million), adjusted for the number of months in the period in order to give an annual figure.
Movement in Net Asset Value Total Return
The movement in the NAV per share at the start of the period to the NAV per share at the end of the period plus all dividends paid per share in the period. The NAV at the start of the period was 62.1p (30 September 2020: 55.8p; 31 December 2020: 55.8p), dividends paid during the period were 4.2p (30 September 2020: 2.8p; 31 December 2020: 2.8p) with NAV at the end of the period being 63.8p (30 September 2020: 57.6p; 31 December 2020: 62.1p) as such NAV total return at the end of the period was 68.0p (30 September 2020: 60.4p; 31 December 2020: 64.9p). Therefore the movement in Net Asset Value total return in the period is 9.5% (30 September 2020: 8.2%; 31 December 2020: 16.3%).
Average discount on buybacks
The average of the percentage by which the buyback price is lower than the Net Asset Value per share at the point of the buyback.
Dividends paid in the period
The total dividends paid in the period per share of 4.2p (30 September 2020: 2.8p; 31 December 2020: 2.8p).
Shares bought back in the period
The total number of shares which were bought back in the period being 1,613,303 (30 September 2020: 1,516,470; 31 December 2020: 2,078,035).
Qualifying Investment
An investment which consists of shares or securities first issued to the VCT (and held by it ever since) by a Qualifying Company and satisfying certain conditions under the VCT legislation.
Qualifying Company
A company satisfying certain conditions under the VCT legislation. The conditions are detailed but include that the company must be unquoted (companies listed on AIM can qualify), have a permanent establishment in the UK, apply the money raised for the purposes of growth and development for a qualifying trade within a certain time period and not be controlled by another company. There are additional restrictions relating to the size and stage of the company to focus investment into earlier stage businesses, as well as maximum investment limits (certain of such restrictions and limits being more flexible for 'knowledge intensive' companies). VCT funds cannot be used by a Qualifying Company to acquire shares in another company or a trade.
Manager
Foresight Group LLP as the Company's manager.
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
FINANCIAL CONDUCT AUTHORITY INFORMATION
5,000 people contact the Financial Conduct Authority about share fraud each year, with victims losing an average of £20,000.
BEWARE OF SHARE FRAUD
Fraudsters use persuasive and high-pressure tactics to lure investors into scams.
They may offer to sell shares that turn out to be worthless or non-existent, or to buy shares at an inflated price in return for an upfront payment.
While high profits are promised, if you buy or sell shares in this way you will probably lose your money.
HOW TO AVOID SHARE FRAUD
- Keep in mind that firms authorised by the FCA are unlikely to contact you out of the blue with an offer to buy or sell shares.
- Do not get into a conversation, note the name of the person and firm contacting you and then end the call.
- Check the Financial Services Register from www.fca.org.uk to see if the person and firm contacting you is authorised by the FCA.
- Beware of fraudsters claiming to be from an authorised firm, copying its website or giving you false contact details.
- Use the firm's contact details listed on the Register if you want to call it back.
- Call the FCA on 0800 111 6768 if the firm does not have contact details on the Register or you are told they are out of date.
- Search the list of unauthorised firms to avoid at www.fca.org.uk/scams.
- Consider that if you buy or sell shares from an unauthorised firm you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme.
- Think about getting independent financial and professional advice before you hand over any money.
- Remember: if it sounds too good to be true, it probably is!
Report a scam
If you are approached by fraudsters please tell the FCA using the share fraud reporting form at www.fca.org.uk/scams, where you can find out more about investment scams.
You can also call the FCA Consumer Helpline on 0800 111 6768.
If you have already paid money to share fraudsters you should contact Action Fraud on 0300 123 2040.
In association with
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
32
FORESIGHT ENTERPRISE VCT PLC Unaudited Half-Yearly Financial Report 30 June 2021
CORPORATE INFORMATION
COMPANY NUMBER
03506579
DIRECTORS
Raymond Abbott (Chairman)
Gaynor Coley
Michael Gray
Simon Jamieson
COMPANY SECRETARY
Foresight Group LLP
The Shard
32 London Bridge Street
London
SE1 9SG
MANAGER
Foresight Group LLP
The Shard
32 London Bridge Street
London
SE1 9SG
AUDITOR
Deloitte LLP
20 Castle Terrace
Edinburgh
EH1 2DB
SOLICITORS AND VCT STATUS ADVISERS
Shakespeare Martineau LLP
No. 1 Colmore Square
Birmingham
B4 6AA
and
60 Gracechurch Street
London
EC3V 0HR
REGISTRAR
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
MARKET MAKER
Panmure Gordon & Co
One New Change
London
EC4M 9AF
ADDITIONAL INFORMATION
Privacy policy
We respect your privacy and are committed to protecting your personal data. If you would like to find out more about the measures the Manager takes in processing your personal information, please refer to the privacy policy, which can be found at http://www.foresightgroup.eu/privacy-policy/.
Share buyback dates
Share buybacks are timed to avoid the Company's closed periods. Buybacks will generally take place, subject to demand, during the following times of the year:
- April, after the Annual Report has been published
- June, prior to the half-yearly reporting date of 30 June
- September, after the Half-Yearly Report has been published
- December, prior to the end of the financial year
Trading shares
The Company's shares are listed on the London Stock Exchange. Share price information is available on Foresight Group LLP's website and can also be obtained from many financial websites.
The Company's shares can be bought and sold in the same way as any other quoted company on the London Stock Exchange via a stockbroker. The primary market maker for Foresight Enterprise VCT plc is Panmure Gordon & Co.
You can contact Panmure Gordon by phone on 0207 886 2716 or 0207 886 2717
Investment in VCTs should be seen as a long-term investment and Shareholders selling their shares within five years of original purchase may lose any tax reliefs claimed. Investors who are in any doubt about selling their shares should consult their independent financial adviser.
Please contact the Manager if you or your adviser have any questions about this process.
Important information
Foresight Enterprise VCT plc currently conducts its affairs so that its shares can be recommended by IFAs to ordinary retail investors in accordance with the FCA's rules in relation to non-mainstream pooled investment products and intends to continue to do so for the foreseeable future.
The shares are excluded from the FCA's restrictions which apply to non-mainstream pooled investment products because they are shares in a VCT.
Past performance is not necessarily a guide to future performance. Stock markets and currency movements may cause the value of investments and the income from them to fall as well as rise and investors may not get back the amount they originally invested. Where investments are made in unquoted securities and smaller companies, their potential volatility increases the risk to the value of, and the income from, the investment.
Designed and produced by lyonsbennett.com
This report is printed on Revive 100 Offset made from FSC® recycled certified post-consumer waste pulp. Printed sustainably in the UK by Pureprint, a CarbonNeutral® company with FSC® chain of custody and an ISO 14001 certified environmental management system recycling over 100% of all dry waste.
Foresight
FOR A SMARTER FUTURE
Foresight Enterprise VCT plc
The Shard
32 London Bridge Street
London
SE1 9SG
www.foresightenterprisevct.com