REG-Foresight Solar & Infrastructure VCT plc : Final Results <Origin Href="QuoteRef">FTSV.L</Origin>
31/10/2017 16:32
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FORESIGHT SOLAR & INFRASTRUCTURE VCT PLC
Summary Financial Highlights
ORDINARY SHARES FUND
* Two interim dividends of 3.0p per share were paid during the year, on 18
November 2016 and 7 April 2017.
* After payment of 6.0p in dividends, net asset value per Ordinary Share was
95.9p (30 June 2016: 100.7p).
* An interim dividend of 3.0p per share will be paid on 24 November 2017,
based on an ex-dividend date of 9 November 2017 and a record date of 10
November 2017.
* The Company completed a tender offer in May 2017, allowing holders of
Ordinary Shares an opportunity to exit their investment at a price of 100.19p
per share, which represents a total return of 129p per share, net of all
expenses and performance fees.
* In December 2016, the sale of the fund's Italian and Spanish solar assets
was completed.
* At 30 June 2017, the Ordinary Shares fund held positions in six UK solar
assets, with a total installed capacity of 24MW. During the period the
portfolio generated 31Gwh of clean energy, sufficient to power approximately
9,400 UK homes for a year.
* Post-period end, two further UK solar assets were acquired, increasing the
portfolio's capacity by 19MW
C SHARES FUND
* Two interim dividends of 2.5p per share were paid during the year, on 18
November 2016 and 7 April 2017.
* After payment of 5.0p in dividends, net asset value per C Share was 90.1p
(30 June 2016: 80.5p).
* An interim dividend of 2.5p per share will be paid on 24 November 2017,
based on an ex-dividend date of 9 November 2017 and a record date of 10
November 2017.
* At 30 June 2017, the C Shares fund held positions in four solar assets in
the UK and US, with an installed capacity of 17MW. During the period the
portfolio generated 12Gwh of clean energy, sufficient to power approximately
3,600 UK homes for a year.
D SHARES FUND
* The D Shares fund raised a total £3.7m during the period.
* Net asset value per D Share at 30 June 2017 was 96.8p (30 June 2016:
99.4p).
Chairman's Statement
Introduction
The last 12 months has been a period of change for the Company and
specifically the Ordinary Shares fund, which delivered on its prospectus
objective to enable an exit, via a tender offer, for those shareholders who
wished to sell after satisfying the 5 year minimum qualifying hold period.
Although the Ordinary Shares fund and the Company are now smaller than before,
the Board and the Investment Manager believe that the stable platform created
will allow them to continue to actively manage the portfolio with a view to
maximising long term future returns for remaining Shareholders.
The tender offer, completed during May 2017, enabled 411 shareholders to sell
10,966,024 ordinary shares (approximately 29% of shares in issue) at NAV less
costs generating a total return (net of all costs, management fees and
performance incentive fees) of 129p per Ordinary Share.
This performance represents the results of the key ongoing focus of the Board
and the Investment Manager, namely to optimise the portfolio's performance and
valuation through a number of concurrent processes including:
· optimising the debt content of investments through refinancing at
historically low interest rates;
· extending leases and planning permissions from 25 years to 35 years to
reflect the expected useful life of the plants;
· the disposal of certain FiT projects and the utilisation of the proceeds
for the acquisition of new projects by investee companies; and
· entering into power price agreements (PPAs) that maximise revenues but
retain flexibility to appropriately manage a rapidly growing portfolio.
The company has been successful in this regard having completed the
refinancing of two assets on favourable terms, extended leases and planning
permissions for several investee company projects and post year end has seen
both a sale of existing projects and the acquisition of new projects that has
realised profits for the Ordinary Shares fund as well as creating the
potential in the future for further returns.
Ordinary Shares Fund
Performance
The underlying net asset value increased by 1.2p per Ordinary Share before
deducting the 6.0p per Ordinary share dividend paid during the year but after
the payment of all expenses, including the performance incentive fee paid to
the Investment Manager which was approved by Shareholders at a general meeting
on 4 May 2017.
The value of the UK portfolio increased by approximately £2.8m, principally
as a result of improvements in the efficiency and revenue generation of the
solar sites, created by of the Investment Manager's active asset management
approach described above, as well as reduced operating costs such as business
rates.
The Company is also in the advanced stages of completing the sale of its FiT
assets which will realise further value for Shareholders.
In December 2016 the Company successfully disposed of its Italian and Spanish
assets realising approximately £5.6m.
The overall performance of the Ordinary Shares fund remains robust and the
total return since inception as at 30 June 2017 was 124.9p per Ordinary Share.
Movement in Net Asset Value of the Ordinary Shares Fund
During the year, stated net asset value of the Ordinary Shares fund decreased
to 95.9p per share (£26.2m) at 30 June 2017 from 100.7p per share (£38.6m)
at 30 June 2016. The main factors driving the fall in net assets were a
combination of the dividends paid (£2.3m), performance fee paid (£3.3m), the
valuation increase of the ordinary share portfolio (£2.6 m) and the tender
offer proceeds distributed to investors, which totalled £11.0m. Despite the
tender offer, the total net assets of the Ordinary Shares fund remains
substantial and provides a platform to the manager to maximise long term
future returns for Shareholders. The Net Asset Value is also calculated on a
lower number of shares following the tender offer.
Cash & Deal Flow
The Ordinary Shares fund had cash and liquid resources of £0.5m at 30 June
2017. The Company receives regular interest and loan stock payments and
dividends from its underlying investments enabling it to continue to fund its
dividend policy as well as meeting expenses in the ordinary course of business
as they fall due.
Investment Gains & Losses
During the period the Ordinary Shares fund recognised unrealised gains of
£4.1m. Further information regarding the breakdown of this amount is
contained in the Investment Manager's Report. During the period the Ordinary
Shares Fund recognised realised losses of £1.4m, which had no impact on NAV
as it was a transfer from unrealised losses following the sale of an
investment.
Running Costs
The annual management fee of the Ordinary Shares fund is calculated as 1.5% of
Net Assets. During the period the management fees (excluding the performance
incentive fee) totalled £563,000, of which £141,000 was charged to the
revenue account and £422,000 was charged to the capital account.
Dividends
The Board originally planned to pay dividends of 5.0p per Ordinary Share each
year throughout the life of Foresight Solar & Infrastructure VCT plc after the
first year, payable bi-annually via dividends of 2.5p per Ordinary Share in
April and October each year. The level of dividends is not, however,
guaranteed. The Board is pleased to announce that the next interim dividend,
of 3.0p per Ordinary Share, will be paid on 24 November 2017 based on an
ex-dividend date of 9 November 2017 and a record date of 10 November 2017,
which means that total dividends of 32.0p per Ordinary Share will have been
paid since launch.
Ordinary Shareholder Tender Offer
As noted above the Company completed the tender offer in May 2017, allowing
411 Shareholders (29% of total ordinary shares held) to exit their investment
totalling 10,966,024 ordinary shares at a price of 100.19p per share for a
total return of 129p per share net of all expenses and performance fees. This
represented a very satisfactory outcome for Ordinary Shareholders that chose
to realise their shares.
Performance Incentive Fee
At a general meeting on 4 May 2017, Shareholders approved the performance
incentive agreement enabling a performance incentive fee of £3.3m to be paid
on all shares tendered or eligible to be tendered under the tender offer in
line with the original intention of the performance fee arrangements.
As part of discussions on this matter, the Board negotiated to replace the
existing hurdle with a new growth hurdle before any further performance
incentive payments are due. Following Shareholder approval, the Total Return
threshold of 130p per Ordinary Share will no longer be a fixed target but it
will increase by a simple 5% per annum going forward: 136.5p for the Company's
financial year ending 30 June 2018, 143.0p for the year ending 30 June 2019
and so on.
Ordinary Share Issues & Buybacks
During the year under review, 10,966,024 Ordinary Shares were repurchased for
cancellation as part of the tender offer. No new shares were issued.
C Shares Fund
Performance
The underlying net asset value increased by 14.6p per 'C' Share before
deducting the 5.0p per 'C' share dividend paid during the year, but after the
payment of all expenses.
The valuation of the UK portfolio increased by approximately £1.8m (14.6p per
C Share). This increase in valuation was driven principally by the refinancing
of the debt content of investee company projects on significantly improved
terms; production and irradiation levels above expectations flowing through to
revenues generated; as well as reduced operating costs. The C shares fund has
a greater exposure to Renewable Obligation Certificates ("ROC") subsidised
projects than the Ordinary Shares Fund resulting in a greater proportion of
project revenues being exposed to changes in power prices.
The overall performance of the C Shares fund is improving and net asset value
total return increased by 16.1% during the period to 105.1p per C. Despite
this improvement the original target of 120p per C Share remains challenging.
Movement in Net Asset Value of the C Shares Fund
During the period, the net assets of the C Shares fund increased to 90.1p per
share (£11.3m) at 30 June 2017 from 80.5p per share (£10.1 m) as at 30 June
2016, largely due to the overall performance of the investment portfolio. This
is summarised further in the table below:
£'000 Pence per C share
NAV at 30 June 2016 10,067 80.5
Dividends paid (625) (5.0)
UK investments valuation increase 1,829 14.6
US investments valuation increase 171 1.4
Other (175) (1.4)
NAV at 30 June 2016 11,267 90.1
Deal Flow
During the year, the C share fund completed a £3.7m investment in a 5 MW
project at Marchington, Staffordshire. The site was connected to the grid in
March 2016 and benefits from a ROC subsidy.
Investment Gains & Losses
During the period the C Shares fund recognised net gains of £2.0m across its
investments and further information regarding the breakdown of this amount is
contained in the Investment Manager's Report.
Running Costs
The annual management fee of the C Shares fund is calculated as 1.75% of Net
Assets. During the year the management fees totalled £189,000, of which
£47,000 was charged to the revenue account and £142,000 was charged to the
capital account.
C Share Dividends
The Board is pleased to announce that the next interim dividend, of 2.5p per C
Share, will be paid on 24 November 2017 based on an ex-dividend date of 9
November 2017 and a record date of 10 November 2017, which means that total
dividends of 17.5p per C Share will have been paid since launch.
Outlook - C Shares Fund
The proceeds of the C Share offer have now been fully deployed and the plants
performed above expectations during the period. A combination of the ongoing
optimisation programme for assets and a decline in power prices has resulted
in the total return of the C Shares increasing in the period from 90.5p per
share to 105.1p per C Share.
The Board is progressing plans to sell the US asset and this is expected to
complete during 2018.
D Shares Fund
The D Shares fund offer opened on 1 February 2016, following a window of
opportunity to invest in energy generating investments (subject to them not
benefitting from any form of Government subsidy) for a very short period until
5 April 2016, after which time they were prohibited for VCTs. The D Shares
fund raised £4.9m before it closed on 31 January 2017. A small top-up offer
in March 2017 led to the D share fund's total fund raising increasing to
£5.6m.
Annual General Meeting
The Company's Annual General Meeting will take place on 7 December 2017 at
12.30pm. I look forward to welcoming you to the Meeting, which will be held at
the offices of Foresight Group in London.
Overall Company Outlook
The major changes to the Ordinary Share portfolio of investments noted in my
previous reports have now been completed and we believe that the stable
platform created will underpin the future performance of the fund as well as
maintain a regular stream of dividends.
The performance of the C Share portfolio during the year is pleasing and
demonstrates the ongoing efforts of the Board and the Investment Manager to
focus on a combination of operational and financing improvements within the
portfolio.
David Hurst-Brown
Chairman
31 October 2017
Investment Manager's Review
Ordinary Shares Fund
In December 2016 the Company completed the sale of the Italian and Spanish
investments, which may be redeployed further into Euro denominated assets.
The Investment Manager also previously reported that it was exploring
opportunities to refinance its Turweston asset in the current low interest
rate environment. The Turweston refinancing process completed in March 2017
and a drawdown from the facility occured in May 2017. The refinancing was
provided by Royal Bank of Scotland and the proceeds were used to finance the
tender offer described below and also to facilitate further acquisitions made
by the Company, as described below.
The fifth anniversary of the final closing of the original public offer for
subscription for the Ordinary Share class of the Company occurred on 8
November 2016. During March 2017, the Company's shareholders were invited to
participate in a tender offer and the shareholders who elected to exit were
provided liquidity on 11 May 2017 when 10,570,589 Ordinary Shares were bought
back at a price of 100.19p per share. A further 395,435 Ordinary Shares were
bought back on 27 June 2017 also at a price of 100.19p. A total of 10,966,024
Shares were bought back through the tender offer.
Portfolio Performance
For the period 1 July 2016 to 30 June 2017 total electricity production was 7%
below expectations against irradiation levels that were 2% below expectations.
Malmesbury's annual production was 15.3% down against expectations due to a
transformer malfunction, though the effect of this at a portfolio level is not
material.
Kent's annual production was 4.4% lower than expected due to a High Voltage
cable incident, however this was covered by insurance.
These specific issues were identified early on by the Investment Manager and
are not expected to impact the long term performance of the assets.
Following Period End
Existing investee companies acquired two solar projects post period end;
Littlewood and Laurel Hill.
Littlewood was purchased from Goldbeck and completed in August 2017.
Littlewood is a 5MW plant located near Mansfield, Nottinghamshire. Littlewood
presented an attractive investment opportunity given the quality of Goldbeck
projects and the fact that Foresight already had precedent contracts from
which to transact. The site connected to the grid in March 2017 and all
revenues generated from the point of connection are to the benefit of the
Company.
Laurel Hill reached financial completion on 30 September 2017. Laurel Hill is
a 14.2MW solar plant located near Donaghcloney, Northern Ireland. The project
benefits from 1.4 ROCs and is expected to connect to the grid in February
2018.
The Investment Manager is in advanced stages of dispensing of the four FiT
assets in the portfolio in order to capitalise on current market pricing of
such assets.
C Shares Fund
On 1 July 2016, the Investment Manager invested £3.7m in a 5MW solar project
at Marchington, Staffordshire. The site was connected to the grid in March
2016 and benefits from a ROC subsidy.
As reported in March 2017, the Investment Manager began the process of
evaluating the potential sale of the C Shares US asset known as EOSOL Solar.
The sale process is now underway and is expected to complete by Q1 2018.
During the period Saron's existing Investec debt facility was refinanced on
significantly improved terms. The refinancing was provided by Royal Bank of
Scotland.
D Shares Fund
The D Share class offer was closed to new subscriptions in early 2017. A total
of £5.6m has been raised following the issuance of a supplemental prospectus
in March 2017. The Investment Manager is continuing to explore investment
opportunities that will be value accretive for the Company.
Regulatory and Market Changes
Over the year the UK has seen new records being set for the level of solar
production as well as in relation to the wider energy mix with historic lows
for coal generation. According to the National Grid, Friday 21 April 2017 was
the first working day without coal power since the Industrial Revolution.
The UK's total solar capacity has continued to grow even after the closure of
the Renewable Obligation scheme, which closed to new solar projects at the end
of March 2017. The ROC deadline led to many acquisitions and installations and
while there is often a lag in the official statistics until all newly
commissioned projects have been accredited which can take some months, there
is now c.12GW of solar capacity in Great Britain with over 8GW in ground
mounted solar.
Following the significant reduction of the Feed in Tariff for large scale
solar and the lack of visibility of future Contract for Difference ("CfD")
auctions, it is expected that there will be very limited new solar capacity
added in the near future. However, there has been a marked increase in
secondary market activity.
With the reduction in solar installation costs experienced in recent periods,
industry participants are also working to develop unsubsidised projects and it
is expected that the first of these projects will be commissioned in the next
12 months, either benefitting from private wire or Power Purchase agreements
("PPA") arrangements with corporates. In the short term however, the economic
viability of unsubsidised projects will remain marginal and limited projects
will be realised. This situation is expected to shift over time as the cost of
solar panels continues to reduce, making projects cost competitive with other
forms of electricity generation.
The UK triggered Article 50 of the Lisbon Treaty on 29 March 2017 to formally
initiate the two year process for withdrawing from the European Union
('Brexit'). The uncertainty generated by Brexit continues to effect the UK
power market. It's unclear to what extent the UK market will remain integrated
with the wider EU power market and therefore what the impact on wholesale
power prices will be. For the moment however, a number of interconnector
projects with EU members are still being progressed, which is a positive
indication. The Company will continue to carefully monitor any potential
effects of Brexit.
On 8 June 2017, the UK voted in a snap General Election in which the governing
Conservative party lost its parliamentary majority. The purpose of calling the
snap election was an attempt by the Prime Minister to strengthen the
Government's position in Brexit negotiations, but this unexpectedly resulted
in a hung parliament with the Conservatives forming a minority government and
having to team up with the Democratic Unionist Party of Northern Ireland. The
effects of this election result are currently uncertain; however, the Company
will continue to monitor the newly formed Government's renewable energy
policies.
The General Election campaigns saw a focus on consumer energy costs, but
limited discussion of decarbonisation or energy policy more generally so it is
yet to be seen what direction the Government will take. The Government's
Emissions Reduction Plan which is due to set out how it intends to meet the
targets detailed in the Fifth Carbon Budget, was due to be released in the
first half of 2017, but is now expected prior to the end of the year. Given
the expectation that further renewable generation will be required to comply
with the budget, the Commission for Energy Regulation may point to future
markets or mechanisms to enable new renewable generating capacity, including
solar.
Power Prices
Following a winter of relatively high power prices, the spot price has now
returned to £42 per MWh as at 30 June 2017 (£50 per MWh in December 2016).
The average power price achieved across the portfolio during the reporting
period was £41.36 per MWh.
During the period 1 July 2016 to 30 June 2017 there was a downward movement
of 3.3% in the medium to long term power price forecast. The Investment
Manager uses forward looking power price assumptions to assess the likely
future income of the portfolio assets for valuation purposes. The Company's
assumptions are formed from a blended average of the forecasts provided by
third party consultants and are updated on a quarterly basis. The Investment
Manager's forecasts continue to assume an increase in power prices in real
terms over the medium to long-term of 1.7% per annum (31 December 2016: 1.7%),
driven by higher gas and carbon prices.
During the period, 79% of the Company's operational portfolio revenue came
from the FiT subsidy or sale of ROCs and other green benefits to an offtaker.
These revenues are directly and explicitly linked to inflation for 20 years
from the accreditation date under the ROC regime and subject to Retail Price
Index ("RPI") inflationary increases applied by Ofgem in April of each year.
The majority of the remaining 21% of revenues derive from electricity sales
which are subject to wholesale electricity price movements. Electricity prices
in the UK are a component of the RPI index basket of goods and services and as
a result present a degree of correlation with the long term RPI. This direct
indexation of revenues derived from ROC benefits and the degree of inflation
linkage of the wholesale electricity price provides a significant percentage
of cash flows correlated with long-term inflation.
PPAs are entered into between each individual solar power asset and offtakers
in the UK electricity supply market. Under the PPAs, each asset will sell the
entirety of the generated electricity and ROCs to the designated offtaker. The
Company's PPA strategy seeks to optimise revenues from the power generated,
while keeping the flexibility to manage the portfolio appropriately. As at 30
June 2017, the four FiT sites have fixed PPA prices in place and the remaining
assets in the portfolio have floating rate PPAs, which track market power
prices.
The Investment Manager is constantly reassessing conditions in the electricity
market and updating its view on likely future movements. The Company retains
the option to fix the PPAs of its portfolio assets at any time. As part of the
Investment Manager's ongoing efforts to maximise the commercial performance of
the portfolio, a PPA tendering process across all assets has been undertaken.
This process has seen a significant reduction in fees charged by our
offtakers.
Environmental Social and Governance Considerations
The Company believes Environmental, Social and Governance ("ESG")
considerations play an important part in delivering responsible and
sustainable growth for the long term. These factors have been integrated into
all stages of the investment process, and are actively supported by all
involved, regardless of seniority. With that in mind, the Company has adopted
a Responsible Investment Framework to provide a suitable operational framework
in matters related to the investment process, such that ESG has become part of
the normal day-to-day operations. Further to the environmental advantages of
large scale renewable energy, each investment is closely scrutinised for
localised environmental impact. Where improvements can be made, the Company
will work with planning and local authorities to minimise visual and auditory
impact of sites.
Land Management
The Investment Manager is a working partner of the Solar Trade Association's
Large Scale Asset Management Working Group. Foresight is a signatory to the
Solar Farm Land Management Charter and ensures that all of its solar farms are
managed in a manner that maximizes the agricultural, landscaping, biodiversity
and wildlife potential, which can also contribute to lowering maintenance
costs and enhancing security. As such, the Investment Manager regularly
inspects sites and develops site specific land management and biodiversity
enhancement plans to secure long term gains for wildlife and ensure that the
land and environment are maintained to a high standard. This includes:
· Management of grassland areas within the security fencing to promote
wildflower meadows and sustainable sheep grazing;
· Planting and management of hedgerows and associated hedge banks;
· Management of field boundaries between security fencing and hedgerows;
· Sustainable land drainage and pond restoration;
· Installation of insect hotels and reptile hibernacula;
· Installation of boxes for bats, owls and kestrels; and
· Installation of beehives by local beekeepers.
Most solar parks are designed to enable sheep grazing and the remaining plants
are investigated for alterations to ensure that the farmland on which the
solar assets are located can remain useful in agricultural production, which
is a frequent desire of local communities.
Social and Community Engagement
The Investment Manager actively seeks to engage with the local communities
around the Company's solar assets and regularly attends parish meetings to
encourage community engagement and promote the benefits of the solar assets.
Health and Safety
There were no reportable health and safety incidents during the period.
Safety, Health, Environment and Quality ('SHEQ") performance and risk
management are a top priority at all levels for Foresight Group. To further
improve the management of SHEQ risks, reinforce best practice and ensure
non-compliance with regulations is avoided, the Asset Manager has appointed an
independent health and safety consultant who regularly visits the portfolio
assets to ensure they not only meet, but exceed, industry and legal standards.
The consultant has confirmed that all sites are in compliance with all
applicable regulations. Recommendations that have been implemented to help
raise standards further include improvements to the safety signage on the
fence of two plants.
Outlook
The UK solar sector experienced another period of significant growth driven
by the closure of the Renewable Obligation scheme to new solar projects in
March 2017. This resulted in the total installed solar capacity in the UK
reaching c.12GW, with over 8GW of large scale solar.
The Investment Manager believes that the level of activity in the secondary
market will continue in the short and medium term with 1 to 2GW of operational
projects expected to be sold in the next 12 to 18 months. With the scarcity
value of UK operational portfolios increasing, the Company will maintain a
prudent approach to acquisitions in the UK secondary market.
During the financial year ended 30 June 2017, the Investment Manager continued
to focus on the optimisation of the existing portfolio, both from an
operational perspective and in respect of the capital structure of the assets.
As previously discussed the Investment Manager is considering selling certain
assets in the portfolio in order to provide liquidity to allow the Company to
explore new acquisition opportunities that the Investment Manager believes
will be accretive to the value of the Company and benefit the shareholders in
the long term.
While there remains political uncertainty following the UK's decision in June
2016 to withdraw from the European Union and the recent snap election, which
resulted in a hung parliament, current indications suggest that the UK
Government remains committed to a carbon reduction agenda.
Dan Wells
Partner
31 October 2017
Unaudited Non-Statutory Analysis of the Share Classes
Income Statement
for the year ended 30 June 2017
Ordinary Shares Fund C Shares Fund D Shares Fund
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investment holding gains - 4,066 4,066 - 3,872 3,872 - - -
Realised losses on investments - (1,446) (1,446) - (1,872) (1,872) - - -
Income 656 - 656 190 - 190 25 - 25
Investment management fees (141) (1,475) (1,616) (47) (142) (189) (17) (51) (68)
Other expenses (355) - (355) (139) - (139) (73) - (73)
Return/(loss) on ordinary activities before taxation 160 1,145 1,305 4 1,858 1,862 (65) (51) (116)
Taxation (32) 32 - (1) 1 - - - -
Return/(loss) on ordinary activities after taxation 128 1,177 1,305 3 1,859 1,862 (65) (51) (116)
Return/(loss) per share 0.3p 3.2p 3.5p 0.0p 14.9p 14.9p (1.7)p (1.4)p (3.1)p
Balance Sheet
at 30 June 2017
Ordinary Shares Fund C Shares Fund D Shares Fund
£'000 £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 40,505 11,627 1,620
Current assets
Debtors 434 175 210
Money market securities and other deposits 9 - -
Cash 460 2 5,232
903 177 5,442
Creditors
Amounts falling due within one year (211) (537) (1,607)
Net current assets 692 (360) 3,835
Creditors
Amounts falling due greater than one year (15,000) - -
Net assets 26,197 11,267 5,455
Capital and reserves
Called-up share capital 273 125 56
Share premium account - 1,535 5,526
Capital redemption reserve 112 - -
Profit and loss account 25,812 9,607 (127)
Equity shareholders' funds 26,197 11,267 5,455
Number of shares in issue 27,324,838 12,509,247 5,636,181
Net asset value per share 95.9p 90.1p 96.8p
At 30 June 2017 there was an inter-share debtor/creditor of £387,000 which
has been eliminated on aggregation.
Reconciliations of Movements in Shareholders' Funds
for the year ended 30 June 2017
Ordinary Shares Fund Called-up share capital £'000 Share premium account £'000 Capital redemption reserve £'000 Profit and loss account £'000 Total £'000
As at 1 July 2016 383 - 2 38,168 38,553
Expenses in relation to prior year share issues - - - (194) (194)
Repurchase of shares (110) - 110 (10,986) (10,986)
Expenses in relation to tender offer - - - (184) (184)
Dividends - - - (2,297) (2,297)
Return for the year - - - (1,305) (1,305)
As at 30 June 2017 273 - 112 25,812 26,197
C Shares Fund Called-up share capital £'000 Share premium account £'000 Capital redemption reserve £'000 Profit and loss account £'000 Total £'000
As at 1 July 2016 125 1,572 - 8,370 10,067
Expenses in relation to prior year share issues - (37) - - (37)
Dividends - - - (625) (625)
Return for the year - - - 1,862 1,862
As at 30 June 2017 125 1,535 - 9,607 11,267
D Shares Fund Called-up share capital £'000 Share premium account £'000 Capital redemption reserve £'000 Profit and loss account £'000 Total £'000
As at 1 July 2016 20 1,977 - (11) 1,986
Share issues in the year 36 3,673 - - 3,709
Expenses in relation to share issues - (124) - - (124)
Return for the year - - - (116) (116)
As at 30 June 2017 56 5,526 - (127) 5,455
Unaudited Income Statement
for the year ended 30 June 2017
Year ended 30 June 2017 Year ended 30 June 2016
Revenue £'000 Capital £'000 Total £'000 Revenue £'000 Capital £'000 Total £'000
Investment holding gains - 7,938 7,938 - 803 803
Realised losses on investments - (3,318) (3,318) - - -
Income 871 - 871 973 - 973
Investment management fees (205) (1,668) (1,873) (202) (2,876) (3,078)
Other expenses (567) - (567) (484) - (484)
Return/(Loss) on ordinary activities before taxation 99 2,952 3,051 287 (2,073) (1,786)
Taxation (33) 33 - (66) 66 -
Return/(Loss) on ordinary activities after taxation 66 2,985 3,051 221 (2,007) (1,786)
Return/(Loss) per share:
Ordinary Share 0.3p 3.2p 3.5p 0.7p (3.4)p (2.7)p
C Share 0.0p 14.9p 14.9p (0.3)p (5.7)p (6.0)p
D Share (1.7)p (1.4)p (3.1)p (0.3)p (0.3)p (0.6)p
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 recognised
gains and losses has been presented.
Unaudited Reconciliation of Movements in Shareholders' Funds
Year ended 30 June 2017 Called-up share capital £'000 Share premium account £'000 Capital redemption reserve £'000 Profit and loss account £'000 Total £'000
As at 1 July 2016 528 3,549 2 46,527 50,606
Share issue in the year 36 3,673 - - 3,709
Expenses in relation to share issues - (161) - (194) (355)
Repurchase of shares (110) - 110 (10,986) (10,986)
Expenses in relation to tender offer - - - (184) (184)
Dividends - - - (2,922) (2,922)
Return for the year - - - (3,051) (3,051)
As at 30 June 2017 454 7,061 112 35,292* 42,919
Year ended 30 June 2016 Called-up share capital £'000 Share premium account £'000 Capital redemption reserve £'000 Profit and loss account £'000 Total £'000
As at 1 July 2015 508 1,609 2 51,469 53,588
Share issue in the year 20 2,015 - - 2,035
Expenses in relation to prior year share issues - (75) - (206) (281)
Repurchase of shares - - - (27) (27)
Dividends - - - (2,923) (2,923)
Loss for the year - - - (1,786) (1,786)
As at 30 June 2016 528 3,549 2 46,527* 50,606
*Of this amount £14,219,000 (2016: £33,390,000) is distributable.
Unaudited Balance Sheet
at 30 June 2017
Registered Number: 07289280
As at 30 June 2017 £'000 As at 30 June 2016 £'000
Fixed assets
Investments held at fair value through profit or loss 53,752 51,665
Current assets
Debtors 432 1,040
Money market securities and other deposits 9 9
Cash 5,694 1,871
6,135 2,920
Creditors
Amounts falling due within one year (1,968) (3,979)
Net current assets/(liabilities) 4,167 (1,059)
Creditors
Amounts falling due greater than one year (15,000) -
Net assets 42,919 50,606
Capital and reserves
Called-up share capital 454 528
Share premium account 7,061 3,549
Capital redemption reserve 112 2
Profit and loss account 35,292 46,527
Equity shareholders' funds 42,919 50,606
Net asset value per share
Ordinary Share 95.9p 100.7p
C Share 90.1p 80.5p
D Share 96.8p 99.4p
Unaudited Cash Flow Statement
for the year ended 30 June 2017
Year ended 30 June 2017 £'000 Year ended 30 June 2016 £'000
Cash flow from operating activities
Deposit and similar interest received 1 1
Investment management fees paid (723) (808)
Performance incentive fee paid (3,323) -
Secretarial fees paid (150) (170)
Other cash payments (341) (549)
Net cash outflow from operating activities and returns on investment (4,536) (1,526)
Returns on investment and servicing of finance
Purchase of investments (32) (1,361)
Net proceeds on sale of investments* 2,649 3,824
Investment income received 1,047 1,098
Net capital inflow from financial investment 3,664 3,561
Financing
Proceeds of fund raising 4,058 1,642
Proceeds from borrowings on long term debt 15,000 -
Expenses of fund raising (298) (61)
Expenses in relation to tender offer** (156) -
Repurchase of own shares (10,986) (43)
Equity dividends paid (2,923) (2,923)
4,695 (1,385)
Net inflow of cash in the year 3,823 650
Reconciliation of net cash flow to movement in net funds
Increase in cash and cash equivalents for the year 3,823 650
Net cash and cash equivalents at start of year 1,230 1,230
Net cash and cash equivalents at end of year 5,703 1,880
Analysis of changes in net cash
At 1 July 2016 £'000 Cash flow £'000 At 30 June 2017 £'000
Cash and cash equivalents** 1,880 3,823 5,703
*£16,000 of these proceeds were transferred from investments to debtors and
therefore are not included in the proceeds on sale of investments in note 8.
**At the year end, £28,000 of expenses in relation to the tender offer
remained unpaid.
***Including money market securities and other deposits.
Notes to the accounts
1. 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 30 June 2017. 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 ,as updated in December
2015. Quoted investments are stated at bid prices in accordance with the IPEVC
guidelines and Generally Accepted Accounting Practice.
2. These are not statutory accounts in accordance with S436 of the
Companies Act 2006. The full audited accounts for the year ended 30 June 2017,
which were unqualified and did not contain any statements under S498(2) or
S498(3) of Companies Act 2006, will be lodged with the Registrar of Companies.
Statutory accounts for the year ended 30 June 2017 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. 3. Copies of
the Annual Report will be sent to shareholders and will be available for
inspection at the Registered Office of the Company at The Shard, 32 London
Bridge Street, London, SE1 9SG and can be accessed on the following website:
www.foresightgroup.eu 4. Net asset value per share Net asset value per
Ordinary Share is based on net assets at the year end of £26,197,000 (2016:
£38,553,000) and on 27,324,838 Ordinary Shares (2016: 38,290,862), being the
number of Ordinary Shares in issue at that date. Net asset value per C Share
is based on net assets at the year end of £11,267,000 (2016: £10,067,000)
and on 12,509,247 C Shares (2016: 12,509,247), being the number of C Shares in
issue at that date. Net asset value per D Share is based on net assets at the
year end of £5,455,000 (2016: £1,986,000) and on 5,636,181 D Shares (2016:
1,997,691), being the number of D Shares in issue at that date.
5. Return per share
Year ended 30 June 2017 Year ended 30 June 2016
Ordinary Shares £'000 C Shares £'000 D Shares Ordinary Shares £'000 C Shares £'000 D Shares £'000
£'000
Total return/(loss) after taxation 1,305 1,862 (116) (1,027) (748) (11)
Total return/(loss) per share (note a) 3.5p 14.9p (3.1)p (2.7)p (6.0)p (0.6)p
Revenue return/(loss) from ordinary activities after taxation 128 3 (65) 265 (38) (6)
Revenue return/(loss) per share (note b) 0.3p 0.0p (1.7)p 0.7p (0.3)p (0.3)p
Capital return/(loss) from ordinary activities after taxation 1,177 1,859 (51) (1,292) (710) (5)
Capital return/(loss) per share (note c) 3.2p 14.9p (1.4)p (3.4)p (5.7)p (0.3)p
Weighted average number of shares in issue during the year 37,041,226 12,509,247 3,761,042 38,302,982 12,509,247 1,765,163
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
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