TIDMFWT
FORESIGHT TECHNOLOGY VCT PLC
LEI: 21380013CXOR8N6OD977
Financial Highlights
FWT Shares Fund
-- Net Asset Value per FWT Share at 30 September 2023 was 101.0p (31 March
2023: 102.8p).
-- During the period, under the Offer for subscription for the Foresight WAE
Technology Shares fund (the "FWT Shares fund"), dated 5 January 2022,
GBP2.8m of new funds were raised.
-- During the period, the fund executed four follow-on investments into
Machine Discovery Limited, Previsico Limited, Additive Manufacturing
Technologies Limited and Insphere Limited.
-- Since the end of the reporting period, a further GBP3.0m has been raised,
bringing the total funds raised to GBP28.7m.
-- Since the end of the reporting period, one new and three follow-on
investments have been made, bringing total deployment to GBP19.9m.
Chairman's Statement
On behalf of the Board, I am pleased to present the Unaudited
Half-Yearly Financial Report for Foresight Technology VCT Plc for
the six months ended 30 September 2023 and to provide you with an
update on the developments affecting the Company.
COMPANY
The Foresight WAE Technology VCT share class (the "FWT Shares")
was launched in December 2019, and represents an exciting
investment opportunity made possible by the collaboration between
Foresight Group and WAE Technologies Limited ("WAE"), a technology
and engineering services business, originally spun out of the
Williams Formula 1 business.
The share class provides investors with the opportunity to
invest in a portfolio of early-stage companies with high
growth-potential, developing innovative and occasionally
transformational technologies across a range of different sectors.
It builds on the successful relationship that Foresight and WAE
have enjoyed from their launch of the Foresight WAE Technology EIS
Fund (the 'EIS fund') in November 2016, which has raised over GBP60
million to date and has made over thirty investments across a range
of different sectors so far.
Fundraising and share issues
The Offers for subscription, dated 11 January 2023 and
relaunched on 6 September 2023, are each up to GBP15 million (with
an overallotment facility for up to an additional GBP10 million)
through the issue of FWT Shares. During the six months ended 30
September 2023, across both Offers, 2.7 million FWT Shares were
allotted, raising a further GBP2.8m, bringing the total funds
raised to over GBP25m.
Post period end, a further 2.9 million FWT Shares were allotted,
increasing the total funds raised to GBP28.7m.
Portfolio and Deal Activity
A detailed analysis of the investment portfolio performance over
the period is given in the Investment Manager's Review.
During the period under review the Investment Manager completed
four follow-on investments in exciting companies costing a total of
GBP1.0m. The follow-on investments that were completed in the
period were into Machine Discovery Limited, Previsico Limited,
Additive Manufacturing Technologies Limited and Insphere
Limited.
Details of each of the top 10 portfolio companies by value as at
30 September 2023 can be found in the Investment Manager's
review.
As at 30 September 2023, the FWT shares had made investments
totalling GBP17.9m in 27 exciting portfolio companies. An
additional two investments were acquired as part of the merger with
the Ordinary share class, bringing the total number of investments
for the FWT Share class to 29. Post period end, the FWT Shares made
one new and three follow-on investments totalling GBP2.0m.
The 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 current economic environment. Following the fundraising
over the last couple of years as well as the fundraising for the
ongoing September 2023 offer, the Company is in a position to fully
support the portfolio, where appropriate, and exploit potential
attractive investment opportunities.
Management fees
The annual management fee of the FWT Shares fund is calculated
as 2.0% of Net Assets and equated to GBP248,000 during the period.
The Board believe that the annual management fee represents good
value for investors.
Responsible Investing
The analysis of environmental, social and governance ("ESG")
issues is embedded in the Manager's investment process and these
factors are considered key in determining the quality of a business
and its long-term success. Central to the Manager's responsible
investment approach are five ESG principles that are applied to
evaluate investee companies, acquired since May 2018, throughout
the lifecycle of their investment, from their initial review and
acquisition to their final sale. Every year, these portfolio
companies are assessed and progress measured against these
principles.
Share Class Merger
As explained in last year's Annual Report, on 5 July 2023,
shareholders of the Company approved the resolution to redesignate
the residual GBP0.6m of Ordinary Share capital (following a further
dividend of 5.5p per share to Ordinary Shareholders which was paid
on 25 July 2023) to FWT Shares, and cease the existence of the
Ordinary Shares. The Ordinary shares were suspended from the London
Stock Exchange on 28 June 2023 and subsequently, on 4 September
2023, the Company's name was changed to Foresight Technology VCT
Plc.
On the 20 September 2023 the Board announced a variation to the
buyback policy for the former Ordinary Shareholders which would
allow the Shareholders to benefit from a buyback at a nil discount
to NAV in respect of FWT Shares which they hold pursuant to the
above-mentioned redesignation. This Buyback offer will remain open
until 20 September 2024.
Sunset Clause
As explained in last year's Annual Report, a "sunset clause"
applies to the current approved scheme for EIS and VCT tax reliefs.
In the Annual Report we discussed how this clause provides that
income tax relief will expire on subscriptions made for VCT shares
on or after 6 April 2025, unless the legislation is amended to make
the scheme permanent, or the "sunset clause" is extended.
The UK Chancellor has confirmed in the autumn statement that the
government remains committed to ensuring early-stage, innovative
companies have access to the investment they need to grow and
develop. As a result it was announced on 22 November 2023 that the
government will legislate to extend the Enterprise Investment
Scheme ('EIS') and Venture Capital Trusts ('VCT') to 2035 - this is
dependent on approval for the extension from the EU due to Northern
Ireland's unique access to the EU Single Market.
Outlook
While the impact of the pandemic has lessened, other economic
impacts continue to dampen consumer and business confidence.
Ongoing inflationary pressures, tight monetary policies, supply
chain issues and a lack of bank lending appetite may continue to
hinder economic recovery. The Board is conscious that such
conditions could prove particularly challenging for our investee
companies which are unquoted, small, early-growth businesses and by
their nature entail higher levels of risk and lower liquidity than
larger listed companies.
On the other hand, these younger companies may prove more agile
and creative in their approach and better able to adapt their
operations swiftly and identify new products and services in
response to changing circumstances.
The portfolio is showing signs of resilience and the Manager has
been working with management teams to assess business plans,
consider funding requirements and help navigate through these
difficult times.
The Manager is continuing to see a promising pipeline of
potential investments, both new and follow-on. In addition to the
funds raised earlier in the year, we have already launched a new
offer on 6 September 2023 to raise further funds over the coming
months. These combined funds will provide the necessary resources
to make selective acquisitions from the increasing numbers of
investment opportunities that are now emerging out of the recent
disruption. Although in the short term there may be considerable
economic headwinds, we believe the Company's diversified portfolio
is well positioned to generate long-term value for
Shareholders.
Ernie Richardson
Chairman
22 December 2023
FWT Shares
Investment Manager's Review
Summary
Between its launch on 20 December 2019 and the end of the
reporting period, the FWT Shares fund has raised GBP25.7m. The
Offer provides investors with the opportunity to invest in a
portfolio of early-stage companies with high growth-potential,
developing innovative and occasionally transformational
technologies across a range of different sectors. As at 30
September 2023, the fund had made investments into 29 companies
totalling GBP17.9m. This included four follow-on investments in the
six month period to 30 September 2023 totalling GBP1.0m. These
investments are summarised below:
Additive Manufacturing Technologies (AMT): a manufacturer of
systems that automate the postprocessing of 3D printed parts e.g.
unpacking, surface smoothing, sealing and colouring.
Insphere: a developer of novel metrology technologies that will
measure the accuracy of automated manufacturing processes in
real-time.
Machine Discovery: a University of Oxford spin-out developing
machine learning technology that simplifies, automates and
accelerates highly complex computer simulations.
Previsico: a University of Loughborough spin-out providing a
market-leading flood forecasting and warning software platform.
Fundraising
The Offer, made possible through an innovative collaboration
between Foresight Group and WAE Technologies Ltd, continues to
build positive momentum in the market, for the six months ending 30
September 2023, a further GBP3.4m has been raised, bringing the
total raised to GBP5.0m in the most recent fund-raising round and
GBP25.7m overall (with the above figures inclusive of the GBP0.6m
that converted from Ordinary Shares to FWT Shares).
Pipeline
The investment manager continues to see a strong pipeline of
opportunities comprising of new and portfolio follow-ons. At the
time of writing, two deals were nearing completion and a number of
other deals were having terms negotiated.
Foresight Group LLP
Investment Manager
22 December 2023
Unaudited Half-Yearly Results and Responsibilities
Statements
Principal Risks and Uncertainties
The principal risks faced by the Company are as follows:
-- Performance;
-- Regulatory;
-- Operational; and
-- Financial.
The Board reported on the principal risks and uncertainties
faced by the Company in the Annual Report and Accounts for the year
ended 31 March 2023. A detailed explanation can be found on pages
26 and 27 of the Annual Report and Accounts which is available on
Foresight Group's website www.foresightgroup.eu or by writing to
Foresight Group at:
The Shard,
32 London Bridge Street,
London,
SE1 9SG.
In the view of the Board, there have been no changes to the
fundamental nature of these risks since the previous report and
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.
Directors' Responsibility Statement
The Disclosure and Transparency Rules ('DTR') of the Financial
Conduct 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:
1. the summarised set of financial statements has been prepared in
accordance with FRS 104;
2. 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);
3. 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; and
4. 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 Chair's
Statement, Strategic Report and Notes to the Accounts of the 31
March 2023 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 through the cash generated from fundraising
activities. As a consequence, the Directors believe that the
Company is well placed to manage its business risks
successfully.
The Directors have a 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
Ernie Richardson
Chairman
22 December 2023
Unaudited Income Statement
for the six months ended
30 September 2023
Six months ended Six months ended Year ended
30 September 2023 30 September 2022 31 March 2023
(Unaudited) (Unaudited) (Audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment
holding
(losses)/gains -- (856) (856) -- 9,848 9,848 -- (12,096) (12,096)
Realised
gains on
investments -- -- -- -- -- -- -- 27,917 27,917
Income 866 -- 866 214 -- 214 656 -- 656
Investment
management
fees (62) (186) (248) (122) (367) (489) (263) (3,557) (3,820)
Other expenses (235) -- (235) (252) -- (252) (559) -- (559)
Profit/(loss)
before
taxation 569 (1,042) (473) (160) 9,481 9,321 (166) 12,264 12,098
Taxation -- -- -- -- -- -- -- -- --
Profit/(loss)
after taxation 569(1) (1,042)(2) (473)(3) (160) 9,481 9,321 (166) 12,264 12,098
Profit/(loss)
per share
Ordinary
Share 2.3p (2.4)p 0.0p (0.1)p 24.0p 23.9p 0.2p 31.7p 31.9p
FWT Share (1.0)p (0.9)p (1.9)p (0.6)p 6.2p 5.6p (1.2)p 6.7p 5.5p
The total column of this statement is 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.
(1)GBP806k relates to the Ordinary Share class before the
completion of the merger on 5 July 2023.
(2)(GBP823k) relates to the Ordinary Share class before the
completion of the merger on 5 July 2023.
(3)(GBP17k) relates to the Ordinary Share class before the
completion of the merger on 5 July 2023.
Unaudited Reconciliation of Movements in Shareholders' Funds
for the six months ended 30 September 2023
Called-up Share Capital
share premium redemption Distributable Capital Revaluation
capital account reserve reserve* reserve* reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April 2023 568 19,079 208 1,828 603 3,009 25,295
Share issues in the
period 27 2,805 -- -- -- -- 2,832
Share class merger (341) 341 -- -- -- -- --
Expenses in relation
to share issues -- (70) -- -- -- -- (70)
Expenses in relation
to prior year share
issues -- (3) -- -- -- -- (3)
Investment holding
losses -- -- -- -- -- (856) (856)
Dividends paid -- -- -- (1,903) -- -- (1,903)
Management fees charged
to capital -- -- -- -- (186) -- (186)
Revenue profit for
the period -- -- -- 569 -- -- 569
As at 30 September
2023 254 22,152 208 494 417 2,153 25,678
--------------------------- --------- -------- ----------- --------------- ---------- ----------- -------
* Total distributable reserves at 30 September 2023 were
GBP911,000 (31 March 2023: GBP2,431,000).
Unaudited Balance Sheet at 30 September 2023
Registered Number: 07289280
As at As at As at
30 September 30 September 31 March 2023
2023 (unaudited) 2022 (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Fixed assets
Investments held at fair
value through profit or
loss 20,048 60,679 19,951
Current assets
Debtors 88 569 170
Cash and cash equivalents 5,848 3,592 5,437
5,936 4,161 5,607
Creditors
Amounts falling due within
one year (306) (138) (263)
Net current assets 5,630 4,023 5,344
Net assets 25,678 64,702 25,295
Capital and reserves
Called-up share capital 254 534 568
Share premium 22,152 15,633 19,079
Capital redemption reserve 208 208 208
Distributable reserve 494 37,948 1,828
Capital reserve 417 (14,574) 603
Revaluation reserve 2,153 24,953 3,009
Equity shareholders' funds 25,678 64,702 25,295
Net asset value per share
Ordinary Share n/a 131.2p 7.2p
FWT Share 101.0p 102.9p 102.8p
Unaudited Cash Flow Statement
for the six months ended 30 September 2023
Year
Six months Six months ended
ended ended 31 March
30 September 30 September 2023
2023 (unaudited) 2022 (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Deposit and similar interest received 44 11 30
Investment management fees paid (261) (472) (1,030)
Performance incentive paid -- -- (2,767)
Secretarial fees paid (39) (87) (173)
Other cash payments (149) (192) (299)
Net cash outflow from operating
activities (405) (740) (4,239)
----------------------------------------- ----------------- ----------------- ----------
Cash flow from investing activities
Purchase of investments (853) (4,874) (10,146)
Investments awaiting completion -- -- (100)
Net proceeds on sale of investments -- 274 52,247
Investment income received 822 74 984
Net cash (outflow)/inflow from investing
activities (31) (4,526) 42,985
Cash flow from financing activities
Proceeds of fund raising 2,816 1,697 5,239
Expenses of fund raising (66) (53) (98)
Equity dividends paid (1,903) -- (45,664)
Net cash inflow/(outflow) from financing
activities 847 1,644 (40,523)
----------------------------------------- ----------------- ----------------- ----------
Net inflow/(outflow) of cash in the
period 411 (3,622) (1,777)
Reconciliation of net cash flow to
movement in net funds
Increase/(decrease) in cash for the
period 411 (3,622) (1,777)
Net cash at start of period 5,437 7,214 7,214
Net cash at end of period 5,848 3,592 5,437
At 1 At 30
April September
2023 Cash Flow 2023
Analysis of changes in net debt GBP'000 GBP'000 GBP'000
Cash and cash equivalents 5,437 411 5,848
Notes to the Unaudited Half-Yearly Results
for the six months ended 30 September 2023
1. 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 year ended 31 March 2023. Unquoted investments have been
valued in accordance with International Private Equity and Venture
Capital Valuation Guidelines.
2. These are not statutory accounts in accordance with S436 of the
Companies Act 2006 and the financial information for the six months ended
30 September 2023 and 30 September 2022 has been neither audited nor
formally reviewed. Statutory accounts in respect of the year ended 31
March 2023 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 March 2023 have been reported on by the
Company's auditors or delivered to the Registrar of Companies.
3. Copies of the Unaudited Half-Yearly Financial Report for the six
months ended 30 September 2023 have been sent to shareholders via their
chosen method of communication and are available for inspection at the
Registered Office of the Company at The Shard, 32 London Bridge Street,
London, SE1 9SG. Copies are also available electronically at
www.foresightgroup.eu.
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 that
date.
Ordinary Shares FWT Shares
Number of Number of
Net assets Shares in Net assets Shares in
GBP'000 issue GBP'000 issue
30 September
2023 -- -- 25,678 25,419,835
30 September
2022 45,378 34,593,623 19,324 18,776,656
31 March 2023 2,477 34,593,623 22,818 22,200,316
5 Return per share
The weighted average number of shares used to calculate the
respective returns are shown in the table below:
Number of Shares
Ordinary Shares FWT Shares
--------------------- -------------------------- ----------------
30 September 2023(1) 34,593,623 24,608,698
30 September 2022 34,593,623 18,596,307
31 March 2023 34,593,623 19,466,327
--------------------- -------------------------- ----------------
Earnings for the period should not be taken as a guide to the
results for the full year.
(1)The number of shares used to calculate the returns for the
Ordinary Share class in the period is the weighted average from the
period start date to the date of the merger, 5 July 2023.
6 Income
Six months
Six months ended ended 30 Year ended
30 September September 31 March
2023 (unaudited) 2022 (unaudited) 2023 (audited)
GBP'000 GBP'000 GBP'000
Dividends received 822 -- 264
Bank interest 44 11 30
Loan stock interest -- 203 362
Total Income 866 214 656
-------------------- ----------------- ----------------- ---------------
7 Investments held at fair value through profit or loss
Company
GBP'000
Book cost at 1 April 2023 16,942
Investment holding gains at 1 April
2023 3,009
Valuation at 1 April 2023 19,951
Movements in the period:
Purchases at cost 953
Disposal proceeds --
Realised gains --
Investment holding losses (856)
Valuation at 30 September 2023 20,048
Book cost at 30 September 2023 17,895
Investment holding gains at 30 September
2023 2,153
Valuation at 30 September 2023 20,048
8 Transactions with the manager
Details of arrangements with Foresight Group LLP are given in
the Annual Report and Accounts for year ended 31 March 2023, in the
Directors' Report and Notes 3 and 13. All arrangements and
transactions were on an arms length basis.
Foresight Group LLP, which was appointed as Investment Manager
on 27 January 2020, earned fees of GBP248,000 in the six months
ended 30 September 2023 (six months ended 30 September 2022:
GBP489,000; year ended 31 March 2023: GBP3,820,000 including a
performance incentive fee of GBP2,767,000).
Foresight Group LLP is the Company Secretary (appointed in
November 2017) and received, directly and indirectly, for
accounting and company secretarial services fees of GBP39,000 in
the six months ended 30 September 2023 (six months ended 30
September 2022: GBP87,000; year ended 31 March 2023:
GBP173,000).
At the balance sheet date there was GBP22,000 due from (30
September 2022: GBP38,000 due to; 31 March 2023: GBP35,000 due
from) Foresight Group LLP. No amounts have been written off in the
period in respect of debts due to or from related parties.
9 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.
10 Post balance sheet event
Between the year end and the date of this report, under the
offer for subscription to raise up to GBP15m FWT shares (with an
overallotment facility to raise up to a further GBP10m), the
Company issued a total of 2,894,110 shares which raised funds of
GBP3.0m.
Between the 30 September 2023 and the date of this report, the
FWT shares invested a total of GBP2.0m across four investee
companies.
END
(END) Dow Jones Newswires
December 22, 2023 08:51 ET (13:51 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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