TIDMFTV
FORESIGHT VCT PLC
Final Results
31 December 2019
Foresight VCT plc, managed by Foresight Group LLP, today announces the
final results for the year ended 31 December 2019.
These results were approved by the Board of Directors on 27 April 2020.
The Annual Report will shortly be available in full at
www.foresightgroup.eu. All other statutory information can also be found
there.
Highlights
-- Total net assets GBP133.1 million.
-- The portfolio has seen an uplift in valuation of GBP7.6 million
during the year.
-- Net Asset Value per share decreased by 2.0% from 78.1p at 31 December
2018 to 76.5p. Including the payment of a 5.0p dividend made on 3 May
2019, NAV per share at 31 December 2019 was 81.5p, representing a
positive total return of 4.4%.
-- Seven new investments totalling GBP12.8 million and four follow-on
investments totalling GBP2.9 million made during the year.
-- The Company successfully exited its investments in Idio Limited and
Flowrite Refrigeration Limited realising a total of GBP1.9 million.
-- The Board is recommending a final dividend for the year ended 31
December 2019 of 3.3p per share, to be paid on 19 June 2020.
Chairman's Statement
I am pleased to present the Company's Audited Annual Report and Accounts
for the year ended 31 December 2019.
I would draw your attention to the separate section in my statement
which includes information on Material Post Year End Events.
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 past year is reviewed more fully below.
NET ASSET VALUE
At 31 December 2019 the NAV of the Company stood at GBP133.1 million
(2018: GBP136.7 million). During the year ended 31 December 2019 the NAV
per share rose by 3.4p, an increase of 4.4%. However, following the
payment of a 5.0p per share dividend on 3 May 2019, which is detailed
below, the NAV per share reduced from 78.1p at 31 December 2018 to 76.5p
at 31 December 2019.
DIVIDS
The interim dividend of 5.0p per share was paid on 3 May 2019 based on
an ex-dividend date of 11 April 2019, with a record date of 12 April
2019. The cost of this dividend was a total of GBP8.8 million, including
shares allotted under the dividend reinvestment scheme.
The Board is recommending a final dividend for the year ended 31
December 2019 of 3.3p per share, to be paid on 19 June 2020 based on an
ex-dividend date of 4 June 2020, with a record date of 5 June 2020.
The Company has achieved or exceeded annual dividend payments of at
least 5.0p per share for each of the past nine years. As discussed in
the Half-Yearly Report, 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 total return per share from an investment made five years ago would
be 9.2%, 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.
Before the payment of dividends, the Company's NAV increased last year
by GBP5.2 million. The Board believes this reflects the benefit of the
enlarged and diversified portfolio of qualifying investments which the
Manager has built up over the past few years. The Company started the
current year with nearly 85% of its assets invested in a range of
unquoted growth capital investments; the Board and the Manager believe
that these investments will continue to mature and help improve the
future rate of growth in NAV. During the year under review the Manager
completed seven new investments costing GBP12.8 million. Details of each
of these new portfolio companies can be found in the Manager's Review.
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 ongoing impact of the Covid-19 Coronavirus will slow
down the new investment process.
BUYBACKS
During the year the Company repurchased 3.1 million shares for
cancellation at an average discount of 10.1%. 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. Buybacks
will generally 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%. This has resulted in ongoing charges for the year
ended 31 December 2019 of 2.3% of net assets, which is at the lower end
of the range when compared to competitor VCTs.
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 GBP47.1 million. Under
the terms of the Incentive Arrangements, as detailed in note 14 to the
accounts, the 'Total NAV Return Hurdle', has not yet been achieved and
no performance incentive payment is due. The Board however believes it
is prudent to record a contingent liability in relation to the
performance incentive fee due to there being a possible future
obligation. More detail on this is given in note 16 to the accounts.
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 an additional provision to provide
an annual increase to the Total Return Hurdle (originally 100p) by the
greater of RPI and 3.5% was added to the requirements.
BOARD COMPOSITION
The Board continues regularly 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 the present
intention not to alter the composition of the Board during the current
year and the next planned change is scheduled to take effect during
2021.
MATERIAL POST YEAR EVENTS
Since the end of last year two material events have occurred to which I
would like to draw specific attention. The first is the continuing
impact of Covid-19 on the Company and its portfolio and the second is to
report on the Company's fundraising which closed on 7 April this year.
The Covid-19 virus has presented the Company and the management of its
portfolio companies with an unprecedented threat which it is anticipated
will persist for a considerable time to come. On behalf of the Board I
would pay tribute to the work which has been undertaken by the Manager,
both in administering the Company and more particularly in working
closely with the management of the Company's portfolio companies, in
order to try to minimise the ongoing impact of this threat. Until this
virus is brought under worldwide control, it is impossible to assess its
full impact. However, it is already clear that in the immediate future
every business in the UK will be materially affected; considerable work
has and is continuing to be undertaken by the Manager alongside the
management teams at each and every one of the companies within the
portfolio to contain the impact so far as possible.
Despite the ongoing difficulties created by Covid-19, the Board is
pleased that the Company has been 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. 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 compares with the NAV at
the end of last year of 76.5p per share.
OUTLOOK
The persisting uncertainty over the full impact of Covid-19 and the
ongoing 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
ensure that they are able to make progress during these testing times.
Nevertheless, the Board and the Manager are optimistic that the existing
portfolio has potential to grow further once the spread of the virus has
been successfully contained.
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.
As communicated in the Half-Yearly Report, the Board offered
shareholders the opportunity to choose the method by which they receive
shareholder communications. I am pleased to announce that 92% of
communications to investors will now be provided electronically. The
Board believes that, in addition to promoting sustainability, a shift
towards electronic communications will result in cost savings for the
Company.
AUDITOR
The Board launched a tender for its audit contract following the signing
of the 2018 Annual Report and Accounts. The previous auditor, KPMG LLP,
was invited to tender alongside several other firms. As announced in the
Half-Yearly Report, following this tender process, Deloitte LLP was
appointed as company auditor for the year ending 31 December 2019. The
Board is pleased with the appointment but would like to record its
thanks to KPMG LLP for its services and advice over the past eight
years.
ANNUAL GENERAL MEETING
The Company's Annual General Meeting will take place on 28 May 2020 at
1.00pm. Please refer to the formal notice on page 74 of the Annual
Report and Accounts for further details in relation to the format of
this year's meeting and the request to observe social distancing and
travel restrictions in place.
John Gregory
Chairman
Telephone: 01296 682751
Email: j.greg@btconnect.com
27 April 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.
Overview
We are pleased to report an uplift in the existing portfolio's value of
GBP7.6 million in the year, although NAV per share was reduced by
payment of an GBP8.8 million dividend and performance was therefore
behind target. Good progress was made in regards new investments with
seven completed in the year, deploying GBP12.8 million. We continue to
support the Board in management of the Company's resources to ensure
sufficient liquidity for new and follow-on investments, dividends and
regular buybacks, with the Company repurchasing 3.1 million shares at an
average discount of 10.1% in the year. As the portfolio mix evolves in
line with the new VCT rules we believe the Board's new target dividend
of 5% of NAV per annum, enhanced by the opportunity for 'special'
dividends following successful portfolio exits, is appropriate in light
of the new VCT rules.
Portfolio Summary
As at 31 December 2019 the Company's portfolio comprised 43 investments
with a total cost of GBP91.4million and a valuation of GBP120.5 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 12 to 16 of the
accounts.
NEW INVESTMENTS
The Company maintained investment momentum in 2019, investing a total of
GBP12.8 million in seven new investments: ClubSpark, a specialist
software company providing sports management software to sports clubs,
venues, coaches and participants; Steamforged Games, a developer and
retailer of tabletop games with a portfolio of miniature role playing,
board and card games; Fourth Wall Creative, a technology-led sports
merchandising business; Ten Health, a group of boutique fitness studios
offering a range of services including physiotherapy, massage therapy
and fitness classes; Biotherapy Services, a pharmaceutical biotech
company specialising in wound treatment medicine; Rovco, a disruptive
technology subsea surveying company and Roxy Leisure, a group of games
orientated bars.
CLUBSPARK
In January 2019 the Company made a c.GBP1.3 million investment in
Sportlabs Technology Limited, trading as ClubSpark, a specialist
software company providing sports management software to sports clubs,
venues, coaches and participants. ClubSpark was founded in 2012 by two
ex-Lawn Tennis Association employees who spotted an opportunity to
develop a platform to manage operations for the LTA member clubs. The
investment will be used to establish an international presence, enhance
the platform and expand into new sports markets.
STEAMFORGED GAMES
In March 2019 the Company invested c.GBP2.4 million in Steamforged Games,
a developer and retailer of tabletop games with a portfolio of tabletop
role playing, board and card games. Founded in 2014, Steamforged Games
has successfully carved out a niche in the market developing tabletop
games based on popular video game titles, incorporating their own
original content. The investment will be used to fund growth through
product development and international expansion.
FOURTH WALL CREATIVE
In April 2019 the Company invested c.GBP3.0 million in Fourth Wall
Creative, a technology-led sports merchandising business. Its core
business is the design and distribution of membership welcome packs on
behalf of football clubs. The investment will fund growth through the
development of new services, expanding the customer base and exploring
other sports opportunities.
TEN HEALTH & FITNESS
In June 2019 the Company invested c.GBP2.4 million in Ten Health, a
group of boutique fitness studios offering a range of services including
physiotherapy, massage therapy and fitness classes. Ten Health was
developed to bridge the gap in the market between traditional healthcare
and mainstream fitness. The investment will be used to further develop
Ten Health's non-fitness services and to support a roll-out of new
studios.
BIOTHERAPY SERVICES
In November 2019, the Company invested c.GBP1.5 million in Biotherapy
Services, a pharmaceutical biotech company specialising in wound
treatment regenerative medicine, with a focus on chronic diabetic foot
ulcers and complex wounds. The investment will support the completion of
medical trials and facilitate product development.
ROVCO
In December 2019, the Company invested GBP0.9 million in Rovco, a
company which provides subsea surveying services. Established in 2015,
the business seeks to disrupt the industry with new technology which
will lead to a fully automated process. The investment will support the
growth of the business' commercial and operational capabilities to help
with its goal of global expansion.
ROXY LEISURE
In December 2019, the Company invested GBP1.5 million in Roxy Leisure, a
games focused bar group operating eight sites across the Midlands and
Northern England. Founded in 2013, the sites provide a range of
entertainment facilities including pool tables, ping-pong, bowling,
shuffleboard, mini-golf, arcade gaming and karaoke. The investment will
be used to support the business' expansion into additional locations
across the UK with multiple openings planned in 2020.
FOLLOW ON INVESTMENTS
Follow-on investments totalling GBP2.9 million were also made in four
existing portfolio companies throughout the year. Further details of
each of these are provided below.
FERTILITY FOCUS
During the year the Company made a GBP0.4 million follow-on investment
in Fertility Focus, a fertility monitoring device business. This was in
order to support new product launches planned for 2020.
NANO
During the year the Company made a GBP1.0 million follow-on investment
in Nano, a data analysis software platform, as part of a larger funding
round. This additional investment enabled Nano to invest in new
technologies and provided support for further growth, product
development and US expansion.
LUMINET
In December 2019, the Company made a GBP1.4 million follow-on investment
in Luminet, providers of fixed wireless internet access to businesses
across London. The investment was required to help the business fulfil
its pipeline of new contracts.
BIOFORTUNA
Also in December 2019, the Company made a GBP0.1 million follow-on
investment in Biofortuna, a molecular diagnostics business which
manufactures DNA tests. The investment was required to provide
additional working capital and support an asset purchase.
PIPELINE
At 31 December 2019, the Company had cash balances of GBP12.3 million
available to fund new and follow-on investments, buybacks and running
expenses. The Board therefore decided to launch an offer for
subscription on 28 January 2020 and raised GBP24.8 million.
Depending on the length and severity of the Covid-19 Coronavirus
outbreak, we will likely see a higher proportion of our deployment
focused on follow-on investments in the existing portfolio in the medium
term, potentially alongside co-investors. We anticipate that the onset
of a downturn may result in lower new deal activity in the coming months
and we continue to remain disciplined on valuations paid for new
investments.
As the economy recovers from the worst effects of the virus, we expect
valuations to become more attractive, and expect there to be a number of
particularly interesting opportunities for investment.
EXITS AND REALISATIONS
During the period, proceeds of GBP1.9 million were generated from the
successful exit of two investments.
IDIO
In November 2019, Idio, an enterprise software company that analyses
data obtained from consumers' online activity, was sold to Episerver, a
private equity backed global software company. During the investment
period, Idio refocused its corporate strategy and was able to broaden
its customer base beyond financial services. The investment supported
the management team's growth strategy by building out the sales team,
improving account management to enhance retention rates and further
developing the broader business. Overall, the investment generated a
1.9x return for the Company.
FLOWRITE
In December 2019, the Company completed the successful sale of Flowrite
Refrigeration Holdings Limited, a company focused on the design,
installation and servicing of air conditioning equipment throughout the
UK, to Airedale Catering Equipment Group Limited. With our support,
Flowrite has become a market leader in the refrigeration and air
conditioning service market. The company has an enviable customer base
which includes some of the UK's largest restaurant chains, pub groups
and retailers. Overall, the investment generated a 1.4x return on cash
and a double digit IRR, when taking into account previous realisations.
DISPOSALS IN THE YEARED 31 DECEMBER 2019
Accounting
Cost at Date Realised Valuation at 31
of Disposal Proceeds Gain/(Loss) December 2018
Company Detail (GBP) (GBP) (GBP) (GBP)
----------------- ------------------ ------------------
Full
Idio Limited disposal 920,313 1,725,808 805,495 695,435
Flowrite Refrigeration Full
Limited disposal 209,801 194,849 (14,952) 194,783
The Business Advisory Loan
Limited Repayment 45,000 45,000 - 45,000
Autologic Diagnostics
Group Limited Dissolved 3,782,272 - (3,782,272)^ -
Mitgjorn Limited Dissolved 100 - (100) -
Total disposals 4,957,486 1,965,657 (2,991,829) 935,218
Deferred consideration of GBP441,016 was also received by the Company
from the sale of Trilogy Communications Limited.
^This loss refers to the transfer on disposal between unrealised and
realised reserves and has no impact on NAV in the current year.
KEY PORTFOLIO DEVELOPMENTS
Overall, the value of investments held rose to GBP120.5 million, driven
by investment of GBP15.8 million of cash and an increase in value of
existing investments by GBP7.6 million. Material changes in valuation
are defined as increasing or decreasing by over GBP1.0 million since 31
December 2018. Updates on these companies are included below, or in the
Top Ten Investments section on page 12 of the accounts.
Valuation Change
Company Valuation Methodology (GBP)
------------------------------ ---------------------------- ----------------
Discounted earnings
FFX Group Limited multiple 2,669,931
Discounted earnings
Mowgli Street Food Limited multiple 1,402,555
Nano Interactive Group
Limited Discounted revenue multiple 1,307,462
Aerospace Tooling Holdings Discounted earnings
Limited multiple 1,050,553
Ixaris Group Holdings Limited Discounted revenue multiple 1,023,418
Fresh Relevance Limited Discounted revenue multiple 1,021,321
Discounted earnings
Specac International Limited multiple 1,011,706
Powerlinks Media Limited Discounted revenue multiple (1,299,720)
Discounted earnings
Aquasium Technology Limited multiple (1,411,773)
Online Poundshop Limited Discounted revenue multiple (1,497,384)
----------------
MOWGLI STREET FOOD
Mowgli Street Food is a fast casual Indian street food chain of
restaurants founded in 2014 with a focus on healthier, homestyle Indian
cuisine. The business has performed exceptionally well to date with its
six mature sites achieving strong revenue growth and its four younger
sites performing ahead of budget.
AEROSPACE TOOLING ("ATL")
ATL is a niche engineering company based in Dundee which specialises in
the inspection, maintenance and repair of components for aircraft
engines. ATL has achieved strong sales in the past year, consistently
trading ahead of budget. The business has won a number of new key
accounts and broadened its customer base by targeting new product areas.
POWERLINKS MEDIA
Powerlinks Media is an advertising technology company that has developed
a real-time trading platform for online adverts globally. Sales are
materially behind forecast for the year, but the company remains in
discussion with its largest clients to improve volumes. The business is
continuing to reduce its cost base while improving the performance of
the technology platform in order to help with its recovery.
AQUASIUM
Aquasium manufactures, services and refurbishes electron beam welding
equipment and vacuum furnaces. Revenues for the year have been behind
budget, mainly due to a delay in a large anticipated order.
Encouragingly, the order book has picked up to its highest levels in 10
years and the pipeline remains healthy. The company's new product
development is progressing well.
ONLINE POUNDSHOP
Online Poundshop is an online only discount retailer. The business has
had a difficult year of trading with sales behind management forecasts.
On a positive note, customer satisfaction rates are steadily improving
and the team remains focused on improving sales as well as reducing
overheads.
OUTLOOK
The United Kingdom has officially left the European Union after a
three-year period of political uncertainty. Despite some relief, the
economic outlook remains mixed however, as businesses await further news
on future trade deals. Equally, a new threat has emerged in the form of
the Coronavirus. We have been working closely with the Company's
portfolio companies to identify potential risk areas and are encouraging
businesses to take the necessary precautions. The outbreak of Covid-19
will lead to weaker consumer and business spend as well as missed
forecasts. Given the above, we are asking our portfolio businesses to
stress test their cash position to ensure that they can withstand a
significant downturn in trading. We are ensuring the finance directors
at all of our portfolio companies are tightly managing central overheads,
reducing capital expenditure and preparing both short and long-term cost
reduction plans.
A proportion of our portfolio companies are particularly at risk due to
the sectors they operate in, such as Ixaris in the travel sector or
Ollie Quinn in retail. We are paying particular attention to these
assets by leveraging the experience and skillset of the wider investment
team to assist the management teams in preserving and maximising cash.
We are working closely with management teams to take firm and decisive
steps to significantly reduce cash burn in the short and medium term.
Notwithstanding these events, we are continuing to see encouraging
levels of activity from smaller UK companies seeking growth capital, and
expect this to increase as companies seek to recover from the impact of
Covid-19 with requirement for permanent funding to 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. The Company's portfolio is sector and market diverse and the
SME market tends to be resilient and nimble enough to weather periods of
volatility. 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 LLP
27 April 2020
Audited Income Statement
for the year ended 31 December 2019
Year ended Year ended
31 December 2019 31 December 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Realised (losses)/gains
on investments -- (2,551) (2,551) -- 921 921
Investment holding gains -- 10,258 10,258 -- 5,916 5,916
Income 1,284 -- 1,284 1,398 -- 1,398
Investment management
fees (643) (1,930) (2,573) (595) (1,784) (2,379)
Other expenses (565) -- (565) (472) -- (472)
Return on ordinary activities
before taxation 76 5,777 5,853 331 5,053 5,384
Taxation -- -- -- (34) 34 --
Return on ordinary activities
after taxation 76 5,777 5,853 297 5,087 5,384
Return per share: 0.0p 3.3p 3.3p 0.2p 2.9p 3.1p
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 year.
The Company has no recognised gains or losses other than those shown
above, therefore no separate statement of total comprehensive income 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.
Audited Reconciliation of Movements in Shareholders' Funds
Share
Called-up premium Capital redemption Distributable Capital Revaluation
Year ended 31 December share capital account reserve Reserve^ reserve^ reserve Total
2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ------------- -------------------- --------------- ----------- ----------
As at 1 January 2019 1,751 99,115 920 12,929 3,422 18,589 136,726
Share issues in the
year* 20 1,425 -- -- -- -- 1,445
Expenses in relation
to share issues** -- (92) -- -- -- -- (92)
Repurchase of shares (31) -- 31 (2,060) -- -- (2,060)
Cancellation of share
premium -- (21,607) -- 21,607 -- -- --
Realised losses on disposal
of investments -- -- -- -- (2,551) -- (2,551)
Investment holding gains -- -- -- -- -- 10,258 10,258
Dividends paid -- -- -- (8,753) -- -- (8,753)
Management fees charged
to capital -- -- -- -- (1,930) -- (1,930)
Revenue return for the
year -- -- -- 76 --- -- 76
As at 31 December 2019 1,740 78,841 951 23,799 (1,059) 28,847 133,119
*Relating to the dividend reinvestment scheme.
**Expenses in relation to share issues relate to trail commission for
prior years' fund raising.
^Reserve is available for distribution, total distributable reserves
at 31 December 2019 total GBP22,740,000 (2018: GBP16,351,000).
Share
Called-up premium Capital redemption Distributable Capital Revaluation
Year ended 31 December share capital account reserve reserve reserve reserve Total
2018 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ------------- -------------------- --------------- ----------- ------------- ----------
As at 1 January 2018 2,194 97,687 455 23,169 4,251 12,673 140,429
Share issues in the
year* 22 1,523 -- -- -- -- 1,545
Removal of shares (439) -- 439 -- -- -- --
Expenses in relation
to share issues** -- (95) -- -- -- -- (95)
Repurchase of shares (26) -- 26 (1,817) -- -- (1,817)
Realised gains on disposal
of investments -- -- -- -- 921 -- 921
Investment holding gains -- -- -- -- -- 5,916 5,916
Dividends paid -- -- -- (8,720) -- -- (8,720)
Management fees charged
to capital -- -- -- -- (1,784) -- (1,784)
Tax credited to capital -- -- -- -- 34 -- 34
Revenue return for the
year -- -- -- 297 --- -- 297
As at 31 December 2018 1,751 99,115 920 12,929 3,422 18,589 136,726
*Relating to the dividend reinvestment scheme.
**Expenses in relation to share issues relate to trail commission for
prior years' fund raising.
Audited Balance Sheet
at 31 December 2019
Registered Number: 03421340
As at
31 December As at
2019 31 December 2018
GBP'000 GBP'000
Fixed assets
Investments held at fair value through profit
or loss 120,521 99,065
Current assets
Debtors 362 542
Cash and cash equivalents 12,324 37,419
12,686 37,961
Creditors
Amounts falling due within one year (88) (300)
Net current assets 12,598 37,661
Net assets 133,119 136,726
Capital and reserves
Called-up share capital 1,740 1,751
Share premium account 78,841 99,115
Capital redemption reserve 951 920
Distributable reserve 23,799 12,929
Capital reserve (1,059) 3,422
Revaluation reserve 28,847 18,589
Equity Shareholders' funds 133,119 136,726
Net asset value per share: 76.5p 78.1p
The financial statements were approved by the Board of Directors and
authorised for issue on 27 April 2020 and were signed on its behalf by:
John Gregory
Chairman
Audited Cash Flow Statement
for the year ended 31 December 2019
Year ended Year ended
31 December 31 December
2019 2018
GBP'000 GBP'000
Cash flow from operating activities
Loan interest received from investments 733 1,025
Dividends received from investments 178 155
Deposit and similar interest received 186 258
Investment management fees paid (2,573) (2,379)
Secretarial fees paid (122) (115)
Other cash payments (465) (495)
Net cash outflow from operating activities (2,063) (1,551)
Cash flow from investing activities
Purchase of investments (15,791) (17,705)
Net proceeds on sale of investments 1,966 3,380
Net proceeds on deferred consideration 441 310
Net proceeds on liquidation of investments -- 20
Net cash outflow from investing activities (13,384) (13,995)
Cash flow from financing activities
Expenses of fund raising (92) (95)
Repurchase of own shares (2,248) (1,763)
Equity dividends paid (7,308) (7,176)
Net cash outflow from financing activities (9,648) (9,034)
Net outflow of cash in the year (25,095) (24,580)
Reconciliation of net cash flow to movement in net
funds
Decrease in cash and cash equivalents for the year (25,095) (24,580)
Net cash and cash equivalents at start of year 37,419 61,999
Net cash and cash equivalents at end of year 12,324 37,419
At 1 January At 31 December
Analysis of changes in net debt 2019 Cashflow 2019
GBP'000 GBP'000 GBP'000
Cash and cash equivalents 37,419 (25,095) 12,324
Notes
1. These are not statutory accounts in accordance with S436 of the
Companies Act 2006. The full audited accounts for the year ended 31
December 2019, which were unqualified and did not contain statements
under S498(2) of the Companies Act 2006 or S498(3) of the Companies Act
2006, will be lodged with the Registrar of Companies. Statutory accounts
for the year ended 31 December 2019 including an unqualified audit
report and containing no statements under the Companies Act 2006 will be
delivered to the Registrar of Companies in due course.
2. The audited Annual Financial Report has been prepared on the basis
of accounting policies set out in the statutory accounts of the Company
for the year ended 31 December 2019. All investments held by the
Company are classified as 'fair value through the profit and loss'.
Unquoted investments have been valued in accordance with IPEVC
guidelines. Quoted investments are stated at bid prices in accordance
with the IPEVC guidelines and Generally Accepted Accounting Practice.
3. Copies of the Annual Report will be sent to shareholders and can be
accessed on the following website:
https://www.globenewswire.com/Tracker?data=18quyPFtWR8-EXXM_mqAdK0L3mNbVgJfG3nBYSdfBYIHVe82OlMmAGxLiT-_vOTsHej-WJqdYR80HArXX6mpEJlx8pKTR9X-7tyPkhYmeOo=
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
year and on the number of shares in issue at that date.
31 December
2019 31 December 2018
Net assets GBP133,119,000 GBP136,726,000
No. of shares at
year end 173,959,405 175,051,026
Net asset value per 76.5p 78.1p
share
5. Return per share
Year ended
31 December Year ended 31
2019 December 2018
GBP'000 GBP'000
Total return after taxation 5,853 5,384
Total return per share (note
a) 3.3p 3.1p
Revenue return from ordinary
activities after taxation 76 297
Revenue return per share
(note b) 0.0p 0.2p
Capital return from ordinary
shares after taxation 5,777 5,087
Capital return per share
(note c) 3.3p 2.9p
Weighted average number of
shares in issue in the year 175,090,865 175,834,593
Notes:
a) Total return per share is total return after taxation divided by the
weighted average number of shares in issue during the year.
b) Revenue return per share is revenue return after taxation divided by
the weighted average number of shares in issue during the year.
c) Capital return per share is capital return after taxation divided by
the weighted average number of shares in issue during the year.
6. Annual General Meeting
The Annual General Meeting of the Company will be held at 5 Wildernesse
Mount, Sevenoaks, Kent, TN13 3QS on 28 May 2020 at 1.00 pm. Shareholders
are encouraged to observe the social distancing and travel restrictions
and are asked not to attend the Annual General Meeting which will be
held by way of a 'closed' meeting. Further information can be found
within the notification letter and at www.foresightgroup.eu.
7. Income
Year ended Year ended
31 December 31 December
2019 GBP'000 2018 GBP'000
----------------------------------------
Loan stock interest 920 985
Dividends receivable 178 155
Deposit and similar interest received 186 258
----------------------------------------
1,284 1,398
8. Investments held at fair value through profit or loss
2019 2018
GBP'000 GBP'000
Unquoted investments 120,521 99,065
Total
GBP'000
Book cost as at 1 January 2019 80,527
Investment holding gains 18,538
Valuation at 1 January 2019 99,065
Movements in the year:
Purchases at cost 15,791
Disposal proceeds^ (1,966)
Realised losses* (2,992)
Investment holding gains** 10,623
Valuation at 31 December 2019 120,521
Book cost at 31 December 2019 91,360
Investment holding gains 29,161
Valuation at 31 December 2019 120,521
^The Company received GBP1,966,000 (2018: GBP3,380,000) from the
disposal of investments during the year. The book cost of these
investments when they were purchased was GBP4,957,000 (2018:
GBP2,789,000). 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.
*Realised losses in the income statement includes deferred consideration
of GBP441,000 received from Trilogy Communications Limited in the year.
**Investment holding gains in the income statement have been reduced by
the offset in the deferred consideration debtor of GBP377,000 (Trilogy
Communications Limited) and have been increased by the deferred
consideration debtor for Idio Limited, totalling GBP12,000.
9. Related party transactions
No Director has an interest in any contract to which the Company is a
party other than their appointment as directors.
10. Transactions with the manager
During the year the manager of the Company was Foresight Group CI
Limited. During the year, investment management and administration
services of a total cost of GBP2,573,000 (2018: GBP2,379,000) were
delivered by Foresight Group CI Limited. At 31 December 2019, the amount
due to Foresight Group CI Limited was GBPnil (2018: GBPnil).
During the year, services of a total cost of GBP120,000 (2018:
GBP117,000) were indirectly delivered to the Company by Foresight Group
LLP. At 31 December 2019, the amount due to Foresight Group LLP was
GBPnil (2018: GBP2,000).
No amounts have been written off in the year in respect of debts due to
or from the Manager.
END
(END) Dow Jones Newswires
April 27, 2020 10:30 ET (14:30 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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