TIDMFTV
FORESIGHT VCT PLC
Financial Highlights
-- Total net assets GBP136.7 million.
-- A final dividend of 3.3p per share was paid on 19 June 2020, costing
GBP6.8 million.
-- The portfolio has seen a decrease in valuation of GBP13.2 million in
the last six months.
-- Net Asset Value per share decreased by 14.0% from 76.5p at 31
December 2019 to 65.8p at 30 June 2020. Including the payment of a 3.3p
dividend made on 19 June 2020, NAV total return per share was 69.1p,
representing a decrease in total return of 9.7%.
-- The offer for subscription launched in January 2020 was closed on 7
April 2020 and raised a total of GBP24.8 million before expenses.
Chairman's Statement
I am pleased to present the Company's Unaudited Half- Yearly Financial
Report for the period ended 30 June 2020.
MATERIAL EVENTS DURING THE PERIOD
Before providing other details, I would like to draw attention to the
two material events that have occurred during the period. The first is
the continuing impact of Covid-19 on the Company and its portfolio and
the second is the Company's fundraising which closed on 7 April this
year.
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
has been working closely with the portfolio companies, in order to try
to minimise any adverse impact of this virus, 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. However, it is already clear that the value of every
business in the Company's portfolio has been materially affected, a
minority have benefitted but most have not.
At the end of last year the Company held 13 investments, representing
some 22% by value of its investment portfolio, in businesses involved in
the travel, retail, entertainment and food and drink sectors. To date
these sectors are amongst those most hard hit by the provisions of the
lockdown imposed by the UK Government in response to the Covid-19 virus.
I am pleased to report that since the recent easing of the lockdown
provisions all the Company's investments in these sectors are continuing
to trade and, with one possible exception, they are already pursuing
revised business strategies which hold the potential for a return to
commercial viability in the short to medium term. It will, however, be
some time before the value of most of these businesses is again at or
above their pre-Covid levels.
The overall impact of the Covid virus during the first six months of
this year can be seen in the material fall in the valuation of the
Company's portfolio. On a positive note, I can say that since the period
end the trading position of many of these businesses has improved, some
quite significantly. On behalf of the Board I would like to thank the
Manager for the considerable work which it has done and is continuing to
do alongside the management teams at each and every one of the companies
within the portfolio.
At the start of this year some 90% of the Company's assets were already
invested and the Board believed it would be in the Company's best
interest to raise further funds to provide liquidity for its activities
over the coming year and beyond. Despite the difficulties created by
Covid-19, the Board is pleased that the Company was successful in
raising additional funds to support both its current and future
portfolio of investments. The Company closed its offer for subscription
on 7 April and raised GBP24.8 million before expenses. The majority of
the funds received were subscribed in the final allotments totalling
GBP18.6 million, which took place on 3 April and 14 April based on a NAV
of 66.5p per share, which compared with the NAV at the end of last year
of 76.5p per share.
STRATEGY
The Board, together with the Manager, continue to pursue a strategy for
the Company which includes the following four key objectives:
-- further development of the net assets of the Company to a level in
excess of GBP150 million;
-- payment of an annual dividend to shareholders of at least 5% of the
NAV per share and at the same time endeavouring to maintain the NAV per
share at around its current level;
-- the implementation of a significant number of new and follow on
qualifying investments every year; and
-- maintaining a programme of regular share buy backs at a discount in
the region of 10% to the prevailing NAV per share.
The Board and the Manager believe that these key objectives remain
appropriate and the Company's performance in relation to each of them
over the period is reviewed more fully below.
NET ASSET VALUE
At 30 June 2020 the NAV of the Company stood at GBP136.7 million (31
December 2019: GBP133.1 million). The successful fundraising completed
during the period under review added GBP24.2m to the NAV.
However, in the six months to 30 June 2020 the NAV per share decreased
by 14.0% from 76.5p at 31 December 2019 to 65.8p at 30 June 2020.
Including the payment of a 3.3p dividend made on 19 June 2020, which is
detailed below, NAV total return per share was 69.1p, representing a
decrease in total return of 9.7%.
DIVIDS
The final dividend of 3.3p per share was paid on 19 June 2020 based on
an ex-dividend date of 4 June 2020, with a record date of 5 June 2020.
The total cost of this dividend was GBP6.8 million, including shares
allotted under the dividend reinvestment scheme.
The total return per share from an investment made five years ago would
be 3.7%, which is materially below the target return set by the Board.
It is the future achievement of this target that is at the centre of the
Company's current and future portfolio management strategy.
INVESTMENT PERFORMANCE AND PORTFOLIO ACTIVITY
A detailed analysis of the investment portfolio performance over the
period is given in the Manager's Review.
The Company started the current period with nearly 90% of its assets
invested in a range of unquoted growth capital investments; the Board
and the Manager believe that despite recent events more fully described
above, the majority of these investments will continue to mature and
help improve the future rate of growth in NAV. During the period under
review the Manager made no new investments, as it focused on supporting
the current portfolio during the ongoing Covid-19 Coronavirus outbreak.
The Company and Foresight 4 VCT plc have the same Manager and share
similar investment policies. The Board closely monitors the extent and
nature of the pipeline of investment opportunities and is reassured by
the Manager's confidence in being able to deploy funds without
compromising quality during 2020 and beyond, so as to be in a position
to satisfy the investment needs of both companies. We do however
anticipate that the impact of Covid-19 will continue to slow down the
new investment process and will delay at least some of the anticipated
realisation dates of existing investments.
BUYBACKS
During the period the Company repurchased 2.4 million shares for
cancellation at an average discount of 9.9%. The Board and the Manager
consider that the ability to offer to buy back shares at a target
discount of approximately 10% is fair to both continuing and selling
shareholders and is an appropriate way to help underpin the discount to
NAV at which the shares trade. Share buybacks are timed to avoid the
Company's closed periods and will usually take place, subject to demand,
during the following times of 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; and
-- December, prior to the end of the financial year.
MANAGEMENT CHARGES, CO-INVESTMENT AND INCENTIVE ARRANGEMENTS
The annual management fee is an amount equal to 2.0% of net assets,
excluding cash balances above GBP20 million, which are charged at a
reduced rate of 1.0%. With the unforeseen impact of Covid-19, this has
resulted in an ongoing charges ratio for the period ended 30 June 2020
of 2.4% of net assets, which is within the 2.4% cap. In line with the
Management Agreement, any rebate for expenses above the expense cap will
be assessed at the year end.
Since March 2017, co-investments made by the Manager and individual
members of the Manager's private equity team have totalled GBP0.7
million alongside the Company's investments of GBP48.1 million. Under
the terms of the Incentive Arrangements, the 'Total NAV Return Hurdle'
has not yet been achieved and no performance incentive payment is due.
Recognising the importance of protecting shareholder interests the Board
and the Manager agreed that it was appropriate to update the Incentive
Arrangements and from 27 January 2020 a change to provide for an annual
increase to the Total Return Hurdle (originally 100p) by the greater of
RPI or 3.5% was added to the requirements.
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. It is not the present intention to
alter the composition of the Board during the current year, however the
Nomination Committee is embarking on the process of seeking a new
non-executive director for appointment during 2021 and details will be
communicated as and when appropriate.
SHAREHOLDER COMMUNICATION
As a result of the travel restrictions imposed due to Covid-19, the
Manager's popular investor forums have been temporarily put on hold.
Once it is possible to do so, details of both a London event and
regional events will be sent to shareholders resident in the locality as
and when they are organised. The Manager held an investor webinar on 25
August 2020, details of which had been previously communicated to
investors. It is the intention of the Manager to continue to hold
investor webinars whilst the investor forums are on hold and details of
any future events will be communicated to investors.
OUTLOOK
The persisting uncertainty over the full impact of Covid-19 and the
negotiations in relation 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.
John Gregory
Chairman
Telephone 01296 682751
Email: j.greg@btconnect.com
4 September 2020
Manager's Review
The Company has appointed Foresight Group LLP ("the Manager") to provide
investment management and administration services.
The investment management and administration arrangements were
previously with Foresight Group CI Limited (the Manager's parent
undertaking), with Foresight Group CI Limited appointing the Manager as
its investment adviser and delegating administration services to the
Manager. The investment management and administration arrangements were
novated and amended to be directly with the Manager on 27 January 2020.
References to the Manager's activities in this report include those
activities of Foresight Group CI Limited prior to the change in
arrangements.
Portfolio Summary
As at 30 June 2020 the Company's portfolio comprised 44 investments with
a total cost of GBP91.2 million and a valuation of GBP107.1 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 10 to 14.
During the period, the value of unquoted investments reduced overall by
GBP13.2 million as the portfolio was buffeted by the challenging
circumstances of COVID-19. In the quarter to March the portfolio value
reduced by GBP18.9 million, reflecting significant economic and market
uncertainty as the UK entered lockdown. In the second quarter the
portfolio value saw some recovery, increasing by GBP5.7 million, as many
of the portfolio companies successfully navigated the period and
economic and public market uncertainty reduced partially.
In line with the Board's strategic objectives, the investment team
remain focused on growing NAV to GBP150.0 million whilst paying an
annual dividend to shareholders of at least 5% of the NAV per share and
maintaining the capital value of NAV per share. The Company is behind on
these targets currently but is working towards achieving these
objectives in the medium term.
NEW INVESTMENTS
The Company has made no new investments in the six months to 30 June
2020 given the challenges of consummating a new investment during
lockdown and the difficulties experienced during the period, with
smaller companies focused largely on survival rather than strategic
growth. In addition, the investment team was focused heavily on managing
and supporting the existing portfolio through these unprecedented times.
FOLLOW ON INVESTMENTS
There have been no follow-on investments during the six months to 30
June 2020. Given the current climate, we had anticipated an increase in
follow-on investments during the period. However, the portfolio has
remained resilient thanks to the support and expertise of the investment
team which has provided assistance and guidance throughout the COVID-19
pandemic. Many of the portfolio benefitted from various forms of
Government support such as the furlough scheme and the Coronavirus
Business Interruption Loan Scheme, which reduced the need for equity
follow on in the period. However, as these schemes unwind and the
economic climate remains depressed, we anticipate various requirements
for follow-on investment.
EXITS AND REALISATIONS
In the six months to 30 June 2020 there has been one loan repayment from
The Naked Deli Ltd of GBP0.2 million. Whilst the mergers and
acquisitions climate has been challenging in the period, with most trade
acquirers focused on survival and private equity investors focused on
their existing portfolios or on distressed acquisitions, the Manager is
seeing acquisition interest returning, particularly in the healthcare,
technology and e-commerce sectors.
PIPELINE
At 30 June 2020, the Company had cash balances of GBP29.1 million, which
will be used to fund new and follow-on investments, buybacks and running
expenses. We are seeing a recovery in the pipeline of potential
investments and have a number of opportunities under exclusivity or in
due diligence. The Company remains well positioned to continue pursuing
these potential investment opportunities.
The onset of COVID-19 and the resulting economic downturn has resulted
in minimal new investment activity in the first half of 2020. Depending
on the length and severity of the COVID-19 outbreak and associated
restrictions, we expect to see a higher proportion of the Company's
deployment focused on follow-on investments in the short to medium term.
As the economy recovers from the worst effects of the virus, we expect
company valuations to be more attractive and demand for funding to
increase, driving some particularly interesting opportunities for
investment.
KEY PORTFOLIO DEVELOPMENTS
Overall, the value of investments held decreased by GBP13.2 million to
GBP107.1 million in the period. A disciplined approach to investment
valuations has been maintained in light of COVID-19. As stated above, in
the quarter to March, the onset of the pandemic drove significant
economic uncertainty and the portfolio saw a substantial decrease in
value of GBP18.9 million. In the second quarter, as the portfolio
adapted to the new economic climate, fair values saw some recovery
across the board increasing by GBP5.7 million. Material changes in
valuation, defined as increasing or decreasing by GBP1.0 million or more
since 31 December 2019, are detailed below. Updates on these companies
are included below.
Company Valuation (GBP) Valuation Change (GBP)
------------------------------ --------------- ----------------------
Hospital Services Group
Limited 5,826,846 2,193,727
------------------------------ --------------- ----------------------
The Naked Deli Ltd - (1,027,922)
------------------------------ --------------- ----------------------
Cinelabs International
Limited 1,263,030 (1,222,341)
------------------------------ --------------- ----------------------
Datapath Group Limited 7,189,645 (1,235,973)
------------------------------ --------------- ----------------------
Spektrix Limited 2,593,493 (1,571,084)
------------------------------ --------------- ----------------------
TFC Europe Limited 3,930,229 (1,676,434)
------------------------------ --------------- ----------------------
Ixaris Group Holdings Limited 1,848,696 (3,738,112)
------------------------------ --------------- ----------------------
HOSPITAL SERVICES GROUP LIMITED
Hospital Services Group has performed exceptionally well during the
first half of 2020, already eclipsing prior year's revenue and EBITDA.
This has been driven by significant sales of PPE in response to
COVID-19. With a customer base and supply chain now in place, Hospital
Services Group will continue to provide PPE for the foreseeable future.
The company's core business divisions have continued to perform well
during the period.
THE NAKED DELI LTD
The Naked Deli is a healthy eating food chain predominantly targeting
lunchtime trade. Prior to COVID-19, the business implemented a
turnaround plan with a new CEO and a revised menu. This was showing some
positive results and the business paid GBP280,000 of accumulated
interest and loan note principal to the Company. However, The Naked Deli
closed all its stores in line with government guidance in March and the
outlook for this sector remains extremely challenging. There is
uncertainty about town centre footfall, particularly for lunchtime trade,
while employees are still working from home. Due to the difficult
outlook as well as the remaining uncertainty around the business model,
the investment valuation has been written down to zero pending improved
visibility on re-opening performance and recovery of the sector.
CINELABS INTERNATIONAL LIMITED
Cinelabs provides non-creative post-production services to film and TV
production houses globally, primarily to those shooting on analogue
film. The business was trading reasonably well prior to the COVID-19
outbreak, however the complete halt of new film and TV production since
lockdown has drastically impacted revenues. At the time of writing, film
and TV productions were recommencing, providing some opportunity for
recovery.
DATAPATH GROUP LIMITED
Prior to the outbreak of COVID-19, Datapath continued to generate
material profits, helped by an improved gross margin. The company has
invested in new product development and its sales channels over recent
years, notably strengthening its worldwide sales team. Whilst COVID-19
has created some short-term volatility, the company has still
outperformed its revised budgets.
SPEKTRIX LIMITED
Spektrix is an enterprise software company, providing ticketing, CRM,
marketing, and fundraising software to companies in the performing arts
sector in the UK and US. With theatres in the UK and US closed since
March, the company has seen a reduction in revenue as part of the
company's revenues are derived from ticket sales. However, the company
has continued to win new clients in the period, particularly within the
UK. The UK Government's recently announcement support package for the UK
arts industry should improve trading and a number of theatres are now
selling tickets for outdoor performances. The company has continued to
invest in its technology, increasing functionality, resilience and
scalability during the period.
TFC EUROPE LIMITED
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. The
business has remained profitable during the period, however revenues are
down 35% on prior year. TFC has used this period to review its pricing
model and overall strategy to increase value in the long-term.
IXARIS GROUP HOLDINGS LIMITED
Ixaris is a payments platform enabling efficient global payments,
targeting the travel sector in particular. Ixaris had a strong financial
year to December 2019 but has since seen a severe downturn in trading
due to the disruption faced by the travel sector in the wake of the
pandemic. The business is fundamentally strong and there is clear
potential for value recovery. The team have used this opportunity to
refine the current business model and look for areas for improvement.
OUTLOOK
We reacted quickly to the onset of COVID-19 in March 2020, working
closely with the portfolio companies to identify risk areas and
encourage businesses to take the necessary actions and precautions. As
more businesses begin to reopen, the trading landscape looks very
different and companies are having to adapt to a 'new normal'. We are
supporting the portfolio companies through this process, working closely
with them to implement safe working environments and resilient business
models.
A proportion of the portfolio companies are particularly at risk due to
the sectors they operate in, such as travel, hospitality and leisure. We
are working extensively with these businesses, paying particular
attention to managing creditors and cash preservation. The Government
has now allowed pubs, restaurants and bars to reopen, adhering to a
strict set of health and safety measures. The sector remains at risk
with indoor hospitality settings having to reduce capacity by 50% on
average, combined with reduced consumer appetite to visit bars or
restaurants. Nevertheless, some of the Company's leisure investments
demonstrated market leading site metrics pre-COVID and will have the
ability to weather this temporary period of reduced trading. Even with
capacity limitations, we expect several of our leisure businesses to
return to profit and cash generation over time thanks to a loyal
customer base and young demographic.
There are also a number of companies, namely in the healthcare and life
sciences sectors, which have traded strongly during this period due to
the increased demand for the services they offer. Examples of this
include Mologic, which recently received a grant of c.GBP1 million to
fund COVID-related diagnostic development. Molecular diagnostics
business, Biofortuna has also been presented with a number of
opportunities to help manufacture COVID-19 test kits and they have
manufactured 17 million test kits to date. They will also explore
further commercial possibilities in the space. Another of the portfolio
companies, Hospital Services Group, has seen increased demand for mobile
x-ray machines, as chest x-rays are part of the treatment pathway for
COVID-19.
As businesses reopen, we are ensuring that finance directors at the
portfolio companies continue to manage overheads tightly, reduce capital
expenditure and work through longer-term cost reduction plans given the
uncertain macro environment. It is important that management teams and
investors are well prepared for a sustained period of weaker consumer
and business demand and missed forecasts as consumers and businesses
adapt to the changed environment. The Company's portfolio is diversified
by sector and market, and the SME sector has historically proven to be
resilient and nimble enough to weather periods of volatility.
Notwithstanding this difficult backdrop, we continue to see encouraging
levels of activity from smaller UK companies seeking growth capital and
expect this to increase as companies begin to recover from the impact of
COVID-19 with requirements for permanent funding of working capital.
VCTs are still viewed by many entrepreneurs as an attractive source of
capital that provides 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 funding, including the
government measures for supporting businesses during COVID-19. Despite
the current 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
Head of Private Equity
Foresight Group
4 September 2020
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 December
2019. A detailed explanation can be found on page 27 of the Annual
Report and Accounts which is available on the Company's website
www.foresightvct.com 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 UK Listing
Authority require the Directors to confirm their responsibilities in
relation to the preparation and publication of the Interim 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 Chairman's Statement, Strategic Report and Notes to the
Accounts of the 31 December 2019 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
John Gregory
Chairman
4 September 2020
Unaudited Income Statement
for the six months ended 30 June 2020
Six months ended Six months ended 30 Year ended 31 December
30 June 2020 (Unaudited) June 2019 (Unaudited) 2019 (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
Realised gains/(losses)
on investments - 13 13 - (3,341) (3,341) - (2,551) (2,551)
Investment holding
(losses)/ gains - (13,227) (13,227) - 8,204 8,204 - 10,258 10,258
Income 2,014 - 2,014 677 - 677 1,284 - 1,284
Investment management
fees (353) (1,057) (1,410) (314) (943) (1,257) (643) (1,930) (2,573)
Other expenses (283) - (283) (289) - (289) (565) - (565)
Return/ (loss)
on ordinary activities
before taxation 1,378 (14,271) (12,893) 74 3,920 3,994 76 5,777 5,853
Taxation - - - - - - - - -
Return/ (loss)
on ordinary activities
after taxation 1,378 (14,271) (12,893) 74 3,920 3,994 76 5,777 5,853
Return/ (loss)
per share:
0.7p (7.5)p (6.8)p 0.1p 2.2p 2.3p 0.0p 3.3p 3.3p
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.
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.
Unaudited Balance Sheet
at 30 June 2020
Registered Number: 03421340
As at
As at As at 31 December
30 June 2020 30 June 2019 2019
GBP'000 GBP'000 GBP'000
Fixed assets
Investments held at fair value
through profit or loss 107,118 112,774 120,521
Current assets
Debtors 797 235 362
Cash and cash equivalents 29,079 19,810 12,324
29,876 20,045 12,686
Creditors
Amounts falling due within one
year (290) (479) (88)
Net current assets 29,586 19,566 12,598
Net assets 136,704 132,340 133,119
Capital and reserves
Called-up share capital 2,078 1,755 1,740
Share premium account 103,319 100,495 78,841
Capital redemption reserve 975 935 951
Distributable reserve 16,815 3,224 23,799
Capital reserve (2,103) (862) (1,059)
Revaluation reserve 15,620 26,793 28,847
Equity shareholders' funds 136,704 132,340 133,119
Net asset value per share:
65.8p 75.4p 76.5p
Unaudited Reconciliation of Movements in Shareholders' Funds
for the six months ended 30 June 2020
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 January 2020 1,740 78,841 951 23,799 (1,059) 28,847 133,119
Share issues in the
period 362 25,655 - - - - 26,017
Expenses in relation
to share issues - (1,177) - - - - (1,177)
Repurchase of shares (24) - 24 (1,558) - - (1,558)
Realised gains on disposal
of investments - - - - 13 - 13
Investment holding losses - - - - - (13,227) (13,227)
Dividends paid - - - (6,804) - - (6,804)
Management fees charged
to capital - - - - (1,057) - (1,057)
Revenue return for the
period - - - 1,378 - - 1,378
As at 30 June 2020 2,078 103,319 975 16,815 (2,103) 15,620 136,704
^Reserve is available for distribution, total distributable reserves at
30 June 2020 total GBP14,712,000 (31 December 2019: GBP22,740,000).
Unaudited Cash Flow Statement
for the six months ended 30 June 2020
Six months Six months Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Loan interest received from investments 230 381 733
Dividends received from investments 1,437 113 178
Deposit and similar interest received 29 107 186
Investment management fees paid (1,364) (1,257) (2,573)
Secretarial fees paid (60) (62) (122)
Other cash payments (312) (257) (465)
Net cash outflow from operating activities (40) (975) (2,063)
Cash flow from investing activities
Purchase of investments - (8,956) (15,791)
Net proceeds on sale of investments 188 45 1,966
Net proceeds on deferred consideration 13 441 441
Net cash inflow /(outflow) from investing
activities 201 (8,470) (13,384)
Cash flow from financing activities
Proceeds of fund raising 24,203 - -
Expenses of fund raising (594) (46) (92)
Repurchase of own shares (1,442) (810) (2,248)
Dividends paid (5,573) (7,308) (7,308)
Net cash inflow/ (outflow) from financing
activities 16,594 (8,164) (9,648)
------------------------------------------ ---------- ---------- ------------
Net inflow/ (outflow) of cash in
the period 16,755 (17,609) (25,095)
Reconciliation of net cash flow to
movement in net funds
Increase/ (decrease) in cash and
cash equivalents for the period 16,755 (17,609) (25,095)
Net cash and cash equivalents at
the start of period 12,324 37,419 37,419
Net cash and cash equivalents at
the end of period 29,079 19,810 12,324
Analysis of changes in net debt
At 1 January At 30 June
2020 Cash Flow 2020
GBP'000 GBP'000 GBP'000
Cash and cash equivalents 12,324 16,755 29,079
Notes to the Unaudited Half-Yearly Results
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 December 2019. Unquoted investments have
been valued in accordance with IPEV 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 June
2020 and 30 June 2019 has been neither audited nor formally reviewed.
Statutory accounts in respect of the year ended 31 December 2019 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 2019 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 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.
Number of
Shares in
Net assets Issue
30 June 2020 GBP136,704,000 207,824,856
30 June 2019 GBP132,340,000 175,481,093
31 December
2019 GBP133,119,000 173,959,405
1. 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
2020 191,020,332
Six months ended 30 June
2019 175,365,523
Year ended 31 December
2019 175,090,865
Earnings for the period should not be taken as a guide to the results
for the full year.
6) Income
Six months Six months Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
GBP'000 GBP'000 GBP'000
Loan stock interest 548 457 920
Dividends 1,437 113 178
Deposit and similar interest received 29 107 186
2,014 677 1,284
7) Investments at fair value through profit or loss
GBP'000
Book cost as at 1 January 2020 91,360
Investment holding gains 29,161
Valuation at 1 January 2020 120,521
Movements in the period:
Purchases -
Disposal proceeds (188)
Realised gains* -
Investment holding gains** (13,215)
Valuation at 30 June 2020 107,118
Book cost at 30 June 2020 91,172
Investment holding gains 15,946
Valuation at 30 June 2020 107,118
*Realised gains in the income statement relate to deferred consideration
of GBP13,000 received from the sale of Idio Limited.
**Investment holding losses in the income statement include the removal
of the deferred consideration debtor of GBP12,000, relating to Idio
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 CI Limited, which acted as Manager to the Company until
27 January 2020, earned fees of GBP192,000 (30 June 2019: GBP1,257,000,
31 December 2019: GBP2,573,000). Foresight Group LLP was appointed as
Manager on 27 January 2020 and earned fees of GBP1,218,000 up to 30 June
2020 (30 June 2019: GBPnil, 31 December 2019: GBPnil).
Foresight Group LLP is the Company Secretary (appointed in November
2017) and received, directly and indirectly, for accounting and company
secretarial services fees of GBP60,000 (30 June 2019: GBP60,000, 31
December 2019: GBP120,000) during the period.
At the balance sheet date there was GBPnil (30 June 2019: GBPnil, 31
December 2019: GBPnil) due to Foresight Group CI Limited and GBP7,000
(30 June 2019: GBPnil, 31 December 2019: GBPnil) due to Foresight Group
LLP.
END
(END) Dow Jones Newswires
September 04, 2020 08:53 ET (12:53 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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