Final Results
15/04/2024 18:20
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FORESIGHT VCT PLC
LEI: 213800GNTY699WHACF46
15 April 2024
Final results
31 December 2023
Foresight VCT plc, managed by Foresight Group LLP, today announces the final
results for the year ended 31 December 2023.
These results were approved by the Board of Directors on 15 April 2024.
The Annual Report will shortly be available in full at www.foresightgroup.eu.
All other statutory information can also be found there.
Financial Highlights
* Total net assets £219.1 million.
* A final dividend of 4.4p per share was paid on 30 June 2023, costing £10.7
million.
* A special interim dividend of 4.0p per share was paid on 18 August 2023,
costing £9.8 million.
* Net Asset Value per share decreased by 1.8% from 87.5p at 31 December 2022
to 85.9p at 31 December 2023. After adding back the payments of a 4.4p
dividend made on 30 June 2023 and a 4.0p dividend made on 18 August 2023, NAV
Total Return per share was 94.3p, bringing the total return in the year to
7.8%.
* Nine new investments costing £11.5 million and nine follow-on investments
costing £8.8 million were made during the year.
* The value of the investment portfolio rose by £1.6 million in the year to
31 December 2023. This was driven by an increase of £14.8 million in the
valuation of investments, plus £20.3 million of new and follow-on
investments offset by sales of investments totalling £33.2 million and loan
repayments totalling £0.3 million.
* The offer for subscription launched in November 2023 was closed to further
applications on 26 January 2024 and raised a total of £23.9 million after
expenses.
* The Board is recommending a final dividend for the year ended 31 December
2023 of 4.4p per share, to be paid on 28 June 2024.
Chair's Statement
I am pleased to present the Company’s audited Annual Report and Accounts for
the year ended 31 December 2023 and to report a Net Asset Value Total Return
of 7.8% for the year and a dividend yield of 10.7% including a special
dividend.
Overview of 2023
The Net Asset Value (“NAV”) Total Return per share of 7.8% for 2023
represents another good investment performance by the Company despite the
continuing challenges of the current macroeconomic environment.
The UK’s economy fell into a recession in the second half of 2023, with GDP
contracting in the two last quarters. At the start of the year inflation
remained stubbornly high but gradually fell to 4% by year end, closer to the
Bank of England's inflation target of 2%. Nonetheless the Bank of England,
still wary of embedded inflation, maintained interest rates at 5.25% from
August onwards and there is still uncertainty over the timing of future
interest rate cuts, despite a further fall in reported inflation to 3.4% in
February. On a global level, the continuing war in Ukraine and the more recent
conflict in the Middle East have increased geopolitical concerns and
heightened nervousness in the financial markets. Against this backdrop,
understandably consumer and business confidence in the UK remains fragile.
Nevertheless, the performance of the Company’s portfolio in aggregate
throughout the year has remained healthy against this unpromising background.
The Manager has continued to work closely with the individual investee
companies and developed a good understanding of their changing business
requirements. Many of the portfolio companies successfully adapted to the new
economic landscape, with some performing extremely well and demonstrating the
strength of their management teams. A minority struggled as a result of a fall
in consumer demand, inflationary pressures, surging energy prices, labour
shortages and more limited fundraising opportunities. The overall solid
performance of the Company through 2023, however, demonstrates the advantages
of a well-constructed and diversified portfolio.
Strategy
The Board and the Manager continue to pursue a strategy for the Company which
includes the following four key objectives:
* Growth in Net Asset Value Total Return above a 5% target
* Payment of annual ordinary dividends of at least 5% of the NAV per share per
annum (based on the latest announced NAV per share)
* The implementation of a significant number of new and follow-on qualifying
investments every year, exceeding deployment requirements to maintain VCT
status
* Maintaining a programme of regular share buybacks at a discount of no less
than 7.5% (2022: 10.0%) 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 in more detail below.
Net Asset Value and dividends
The NAV of the Company grew over the financial year from £191.7 million to
£219.1 million at 31 December 2023. At the end of 2023, nearly four-fifths
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 in 2024 and beyond. On 15 November 2023, the
Company launched an offer for subscription to raise up to £20 million, with
an over‑allotment facility to raise up to a further £5 million, through the
issue of new shares. The offer was closed to applications on 26 January 2024
having raised gross proceeds of £25.0 million, £23.9 million after
expenses.
During the year, the previous offer was closed to applications on 13 April
2023 and raised gross funds of £24.1 million. We would like to thank those
existing shareholders who supported these offers and welcome all new
shareholders to the Company.
The Company paid two dividends during the year: an ordinary dividend of 4.4p
per share paid on 30 June 2023 which represented 5% of the NAV per share as at
31 December 2022 and a special dividend of 4.0p per share paid on 18 August
2023, following the successful sales of Mowgli, Innovation Consulting Group
and Datapath. The distribution of both these dividends reduced the NAV per
share to 85.9p at 31 December 2023, a reduction of 1.6p from 87.5p at
31 December 2022. After adding back both dividends, the NAV per share for the
year was 94.3p, representing a total return of 7.8%.
The total return per share from an investment in the Company’s shares made
five years ago is 47.0%, which is well above the minimum target return set by
the Board of 5% per annum. Exceeding this target is at the centre of the
Company’s current and future portfolio management objectives.
The Board is recommending a final dividend for the year ended 31 December 2023
of 4.4p per share, to be paid on 28 June 2024 based on an ex-dividend date of
13 June 2024, with a record date of 14 June 2024. At the year end,
distributable reserves totalled £52,046,000 (2022: £64,303,000).
The Company continues to achieve its target dividend yield of 5% of NAV, which
was set in 2019 in light of the change in portfolio towards earlier-stage,
higher-risk companies, as required by the VCT rules. This level may be
supplemented in future by payment of additional special dividends as and when
particularly successful portfolio disposals are achieved.
Investment performance and portfolio activity
A detailed analysis of the investment portfolio performance over the year is
given in the Manager’s Review.
The value of the investment portfolio rose by £1.6 million in the year to 31
December 2023. This was driven by an increase of £14.8 million in the
valuation of investments, plus £20.3 million of new and follow-on
investments, offset by sales of investments totalling £33.2 million and loan
repayments totalling £0.3 million.
In brief, during the year under review, the Manager completed nine new
investments, in a range of sectors, and nine follow‑on investments deploying
£11.5 million and £8.8 million respectively. The Board and the Manager
believe that a similar number of new and follow-on investments can be achieved
in 2024. The Company also exited six investments, generating proceeds of
£33.2 million with a further £1.7 million of deferred consideration
included within debtors at the year end. These sales produced net gains in
valuation of £4.5 million in the year and represented in total a combined
return multiple of 3.4 times over the life of the investments. Of particular
note was the successful sale of Datapath Group Limited in September 2023,
which generated a multiple of over 11.6 times the original cost of £1.0
million. Further details of these particular investments and realisations can
be found in the Manager's Review.
After the year end, the Company made three new and two follow-on investments
totalling £8.2 million. Furthermore, in March 2024, the Company realised its
holding in Specac International Limited. The exit generated proceeds of £11.2
million at completion. When added to £1.5 million of cash returned to date,
this implies a total cash‑on-cash return of 10.3 times the initial
investment, equivalent to an IRR of 34%.
The Company and Foresight Enterprise 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 and to satisfy the investment needs of both companies.
Responsible investing
The analysis of environmental, social and governance (“ESG”) issues is
embedded in the Manager’s investment process and these factors are
considered key in determining the quality of a business and its long-term
success. Central to the Manager’s responsible investment approach are five
ESG principles that are applied to evaluate investee companies, acquired since
May 2018, throughout the lifecycle of their investment, from their initial
review and acquisition to their final sale. Every year, these portfolio
companies are assessed and progress is measured against these principles. More
detailed information about the process can be found on pages 46 to 49 of the
Manager’s Review of the Annual Report.
Buybacks
During the year the Company repurchased 6,784,285 shares for cancellation at
an average discount of 7.5%, achieving its revised objective of maintaining
regular share buybacks at a discount of 7.5%. As noted above and in the
November 2023 Prospectus, the Board now has a current objective of maintaining
a programme of regular share buybacks at a discount of no less than 7.5% to
the prevailing NAV per share. The Board and the Manager consider that the
ability to offer to buy back shares at no less than 7.5% is fair to both
continuing and selling shareholders, and continues 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
the year:
* April, after the Annual Report has been published
* June, prior to the half-yearly reporting date of 30 June
* September, after the Half-Yearly Report has been published
* December, prior to the end of the financial year
Management charges, co-investment and performance incentive
The annual management fee is an amount equal to 2% of net assets, excluding
cash balances above £20 million, which are charged at a reduced rate of 1%.
This has resulted in ongoing charges for the period ended 31 December 2023 of
2.2%, 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 £1.3 million alongside the
Company’s investments of £101.3 million. The co-investment scheme requires
that the individual members of the private equity team invest in all of the
Company’s investments from that date onwards and prohibits selective
“cherry picking” of co‑investments. If any individual team member opts
out of co-investment, they cannot invest in anything during that year. The
Board believes that the co-investment scheme aligns the interests of the
Manager's team with those of shareholders and has contributed to the
improvement in the Company’s investment performance.
A new performance incentive scheme was formally approved by shareholders at a
general meeting of the Company held on 15 June 2023 and has now replaced the
original scheme which was approved on 8 March 2017. The revised arrangements
were designed to be simpler to implement and understand and to cap the maximum
annual payment under the scheme, whilst continuing to incentivise the
Manager’s performance and align with the interests of shareholders. The new
arrangements will be subject to continual review by the Board to ensure they
meet these objectives. The new arrangements have superseded the previous
scheme and any potential outstanding liabilities relating to it have ended.
The Manager will now be able to earn an annual performance fee as summarised
below.
A performance incentive fee will be payable in respect of each financial year
commencing on or after 1 January 2023, where the Company achieves an average
annual NAV Total Return per share, over a rolling five-year period, in excess
of an average annual hurdle of 5% (simple not compounded). If this hurdle is
met, the Manager would be entitled to an amount equal to 20% of the excess
over the hurdle, subject to a cap of 1% of the closing Net Asset Value for the
relevant financial year. No fee will become due in excess of this cap. 75% of
the performance incentive fees are payable to the private equity team and the
balance of 25% to the Manager.
Where there is a negative annual return in the last year of the rolling
five-year period, no fee shall be payable, even if the five-year average
hurdle is exceeded. However, in such circumstances the potential fee will be
carried forward and may become due at the end of the next financial year if
certain criteria are met. Any such catch-up fees shall be paid alongside any
fee payable for the next financial year, subject to the 1% cap applying to
both fees in aggregate.
Any such catch-up fees cannot be rolled further forward to subsequent
financial years.
More information on the current performance incentive arrangements (including
an explanation of terms used above) can be found in note 13 of the Annual
Report.
A performance fee of £1.5 million is due in respect of the 2023 financial
year, based on the outperformance of the average five-year annual NAV Total
Return per share as described above. Over the last five years the NAV Total
Return per share has increased by 37.2p (47.6%), representing an average of
7.4p each year. This exceeds the average annual 5% hurdle by 3.5p per share
and represents a period of strong performance by the Company.
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 its
responsibilities.
2023 has seen some planned changes to the composition of the Board. The Board
was delighted to appoint David Ford and Dan Sandhu as Non-Executive Directors
in January 2023. After over 16 years as a Non-Executive Director, including
nearly 12 years as Chair of the Audit Committee, Gordon Humphries did not
stand for re-election at the AGM on 15 June 2023. On behalf of the Company, I
would like to thank Gordon for his significant contribution and dedication to
the Company over many years. We are very pleased to remain in contact with him
in his new role as Chair of the AIC where his VCT experience will continue to
benefit the VCT sector.
Gordon has been succeeded as Chair of the Audit Committee by Patricia Dimond,
who has already served on the Board for over three years.
Jocelin Harris, who has served on the Board since December 2015, will be
retiring from the Board at this year’s AGM. Jocelin’s commercial and
investment experience, combined with his legal training, have been of enormous
benefit to the Company. On behalf of the Board and shareholders, I would like
to thank Jocelin for his valuable contribution to Board discussions and his
wise counsel during his many years of service. He will be greatly missed and
we wish him the very best for the future.
Shareholder communication
We were delighted to meet with some shareholders in person at the AGM last
year. We hope many of you will be available to attend this year’s AGM on 4
June 2024, as detailed below.
Annual General Meeting
The Company’s Annual General Meeting will take place at the Company's
registered office on 4 June 2024 at 2:00pm and we look forward to meeting as
many of you as possible in person. Please refer to the formal notice on page
107 of the Annual Report for further details in relation to the format of this
year’s meeting. We would encourage you to submit your votes by proxy ahead
of the deadline of 2:00pm on 31 May 2024 and to forward any questions by email
to InvestorRelations@foresightgroup.eu in advance of the meeting.
VCT Sunset clause
A condition of the European Commission’s State Aid approval of the UK’s
VCT scheme in 2015 was the introduction of a retirement date for the current
scheme at midnight on 5 April 2025, known as the “Sunset clause”. This
"Sunset clause" for VCT reliefs therefore needs to be extended or cancelled by
the government before this expiry date or the income tax relief given to VCT
subscriptions made after this date would no longer be available to investors.
I am pleased to report that during the Autumn Statement delivered by the
government in November 2023, Chancellor Jeremy Hunt announced the extension of
the "Sunset clause" applying to VCTs for another ten years to April 2035. The
UK should be able to extend the scheme through secondary legislation without
European Commission approval, clarified by the Northern Ireland Protocol, the
Windsor Framework announced during the year.
Outlook
Experience has taught us that it is not possible to predict outcomes in an
uncertain world, particularly in a year when nearly half the population will
have the opportunity to vote in elections and potentially introduce radical
political change. However, it is not unreasonable to expect that growth in the
UK is likely to continue to be weak in 2024 against a background of
macroeconomic and political uncertainty: ongoing inflationary pressures, tight
monetary policies and supply chain issues, labour shortages and a lack of bank
lending appetite may all continue to dampen economic recovery. We are
conscious that such conditions could prove challenging for our investee
companies which are unquoted, small, early-growth businesses and, by their
nature, entail higher risk and lower liquidity levels than larger listed
companies.
On the other hand, these younger companies may prove more agile and creative
in their approach and better able to adapt their operations and develop new
products and services in response to the uncertain circumstances. A difficult
funding environment can create good opportunity for smart deployment.
The Manager understands well the management and business requirements of each
of the companies within the investment portfolio and is working closely with
them to help them adapt to, and grow within, this changing environment. The
Company’s current portfolio of investments is well diversified by number,
business sector, size and stage of development and overall has already
demonstrated its relative resilience in the face of economic and geopolitical
difficulties. We are confident that this approach will continue to provide
some protection in volatile market conditions.
The Manager is continuing to see a promising pipeline of potential
investments, both new and follow-on. The fundraising referred to earlier will
provide additional resources to make selective investments and enable the
Company to continue to take advantage of the increasing numbers of
opportunities that are now emerging out of the recent disruption. Although we
anticipate there will be considerable economic headwinds in the year ahead, we
believe the Company’s generalist, diversified portfolio is well positioned
to continue to generate long-term value for shareholders.
Margaret Littlejohns
Chair
15 April 2024
Manager's Review
“The Board has appointed Foresight Group LLP (“the Manager”) to provide
investment management and administration services.”
Portfolio summary
As at 31 December 2023, the Company’s portfolio comprised 53 investments
with a total cost of £103.9 million and a valuation of £171.3 million. The
portfolio is diversified by sector, transaction type and maturity profile.
Details of the ten largest investments by valuation, including an update on
their performance, are provided on pages 30 to 34 of the Annual Report.
In the year to 31 December 2023, the value of the investment portfolio rose by
£1.6 million as a result of an increase of £14.8 million in the valuation of
investments, plus £20.3 million of new and follow-on investments offset by
strong sales of several investments realising £33.5 million. Overall, the
portfolio has performed well despite uncertainty in the market with
significant geopolitical issues and continued domestic price inflation,
coupled with high interest rates.
In line with the Board’s strategic objectives, the Manager remains focused
on growing the Company through further development of Net Asset Value Total
Return. In the year, Net Asset Value Total Return was 7.8% and net assets
increased by 14.3% to £219.1 million after the payment of dividends, meaning
that the Company has successfully met this objective in the period under
review.
New investments
2023 was characterised by higher interest rates and cost inflation, although
this began to stabilise during the latter part of the year leading into 2024.
Many investee management teams have successfully steered their businesses
through the uncertainty of the year, whilst developing clearer medium and
longer-term growth plans.
The Manager has continued to invest in its deal origination capabilities and
identified a large number of potentially attractive investment opportunities
during the year.
Over the course of 2023, nine new investments were completed, investing a
total of £11.5 million. New investments were across recruitment software,
industrials, financial planning, health services, communications and
technology. Behind these, there continues to be a strong pipeline of
opportunities that the Manager expects to convert during the next 12 months.
Follow-on investments totalling £8.8 million were also made in nine existing
investee companies.
Sprintroom Limited
In January 2023, the Company invested £1.0 million of growth capital in
Sprintroom, which trades as Sprint Electric. The business designs and
manufactures drives for controlling electric motors in light and heavy
industrial applications, as well as recovering and reusing otherwise lost
energy. The investment will be used to further develop and commercialise novel
alternating current variable speed drive technology.
Red Flag Alert Technology Group Limited
In March 2023, the Company invested £1.7 million in Reg Flag Alert Technology
Group, a Manchester based proprietary SaaS intelligence platform with modular
capabilities spanning compliance, prospecting, risk management and financial
health assessments. The growth capital will be used to support further product
development and expand its commercial capabilities.
Firefish Software Ltd.
In March 2023, the Company invested £1.5 million in Firefish Software, a
Glasgow-based customer relationship management and marketing software platform
targeting the recruitment sector. The funding will be used to support the
company in its growth plans.
The KSL Clinic Limited
In April 2023, the Company invested £1.0 million in the KSL Clinic, a leading
provider of hair replacement treatments, with clinics in Manchester and Kent.
The investment will enable the company to grow its medical team and expand its
geographic presence.
Five Wealth Limited
In March 2023, the Company invested £0.7 million in Five Wealth, an
established boutique financial planning business operating across the North
West of England. Five Wealth’s service offering is focused on the provision
of independent private client financial advice and wealth planning. This
growth capital investment will be used to accelerate Five Wealth’s ambition
to help more people reach their financial planning goals.
Loopr Ltd
In September 2023, the Company invested £1.7 million in Loopr Ltd, trading as
Looper Insights, a fast-growing, London‑based technology business providing
data analytics to digital content distributors and streaming services.
The investment will enable Looper to increase the solution’s automation and
customer integration and accelerate rollout of its products internationally.
Live Group Limited
In December 2023, the Company invested £1.4 million in Live Group, a global
events and communications agency selling digital and live communications and
events services. The company has developed a proprietary delegate management
platform to collect attendee data, share content and enhance engagement with
delegates. The investment will be used to enhance and further develop the
platform whilst supporting growth plans, including international growth.
Kognitiv Spark Inc
In December 2023, the Company invested £1.0 million in Kognitiv Spark, a
developer of augmented reality software that enables the remote sharing of
critical data to on-site employees. Developed specifically for industrial
communications, the company’s core product offers superior performance in
terms of data compression and visualisation. The funding will be used to
expand the management team and explore new commercial opportunities.
Navitas Digital Safety Limited
In December 2023, the Company invested £1.5 million in Navitas Digital
Safety, a digital food safety management business. The company uses a
combination of hardware and software to provide a complete food safety
management solution to hospitality sector customers. The investment will
support the company’s effort to expand its commercial capabilities and
further develop the platform.
Follow-on investments
Given the expansion of the portfolio, there has been an increase in follow-on
investments during the year. These follow-on investments are to support
further growth initiatives within the portfolio. The Manager is pleased to
report that despite continuing macroeconomic uncertainty and stubbornly high
interest rates and inflation, the portfolio remains resilient overall.
The Manager has made follow-on investments in nine companies during 2023,
totalling £8.8 million. Further details of each of these are provided below.
The additional equity injections in the year were used to support further
growth plans, such as launching new products or opening new sites and
providing cash headroom for further growth. In view of the economic outlook,
which remains challenging, the Manager continued to be vigilant about the
health of the rest of the portfolio and the need for follow-on funding over
the coming months.
Mizaic Ltd (formerly IMMJ Systems Limited)
In February 2023, £0.6 million was invested in Mizaic, a clinical electronic
document management solution for the NHS. The investment was used to back the
new leadership team and enhance the product roadmap, bolstering the
business’ ability to support digitising patient records. Mizaic’s
principal product, MediViewer, saves time and costs for the NHS and improves
the outcomes for the clinician-patient experience.
NorthWest EHealth Limited (“NWEH”)
In March 2023 and October 2023, the Company invested a further £2.5 million
total in aggregate in NWEH, which provides software and services to the
clinical trials market, allowing pharmaceutical companies and contract
research organisations to conduct feasibility studies, recruit patients and
run trials. The investment provided support to the delivery of a number of new
real-world trials, while also enabling the company to complete its ConneXon
platform.
Ten Health & Fitness Limited
In March 2023, Ten Health & Fitness, a multi-site operator in the boutique
health, wellbeing and fitness market, received an additional investment of
£0.6 million. The funding enabled the company to complete its new flagship
Kings Cross site and support the company’s growth strategy.
Additive Manufacturing Technologies Ltd (“AMT”)
In April 2023, the Company invested £0.1 million in AMT, which manufactures
systems that automate the post-processing of 3D printed parts. See the Key
valuation changes in the period section below for further details.
Ollie Quinn Limited
In April 2023, the Company invested £1.0 million in Ollie Quinn, a branded
retailer of prescription glasses, sunglasses and non-prescription polarised
sunglasses based in the UK and Canada. The investment provided the cash
headroom and time to explore longer-term financing initiatives in its
continuing search for growth opportunities.
viO HealthTech Limited
In September 2023, the Company invested £35k in viO HealthTech Limited, a
developer of innovative medical devices that allow women to predict and detect
ovulation with a high degree of accuracy. The funding will support the
business in the next stage of market testing.
Weduc Holdings Limited
In October 2023, the Company invested £0.6 million in Weduc Limited, a
communication platform enabling smoother communication between parents,
teachers and students, alleviating the administrative burden for teachers and
improving parent and student engagement. The investment will be used to
support the continued growth of the platform.
Callen-Lenz Associates Limited
In December 2023, the Company invested £2.5 million in Callen‑Lenz
Associates Limited. Callen-Lenz develops, designs and manufactures air
vehicles, vehicle components and navigation and communication software for
high performance unmanned aerial vehicles ("UAVs") globally. The investment
will support the continued rapid growth of the business.
Clubspark Group Ltd
In October 2023, the Company invested £0.9 million in Clubspark Group Ltd, a
sports club management and reporting platform for local organisations and
national governing bodies. The funding will provide further cash headroom to
support Clubspark’s continued growth.
Realisations
The M&A climate has proved more challenging than in recent years in light of
the macroeconomic conditions of high interest rates and geopolitical
uncertainty. Despite this, the Manager was pleased to report some particularly
strong realisations, as well as the disposal of one challenged business within
the portfolio. The Manager continues to engage with a range of potential
acquirers of several portfolio companies and to carefully consider the timing
of exit for each. Demand remains for high-quality, high-growth businesses from
both private equity and trade buyers.
Mowgli Street Food Group Limited
In January 2023, the Company announced the successful exit of casual Indian
food chain Mowgli to TriSpan, a global private equity firm with extensive
restaurant expertise. The Manager invested in 2017, when the business had
three restaurant sites. It has since grown to 15 sites nationally. The Manager
introduced Dame Karen Jones, co-founder of Café Rouge and the Pelican Group,
as Chair. The Manager also introduced Matt Peck as Finance Director and helped
recruit Lucy Worth as Operations Director and, together with this team, built
a market-leading hospitality brand. The business also shared the Manager’s
commitment to sustainability, creating more than 500 jobs and ranking 16th
best UK company to work for in 2022, owing to its focus on employee welfare,
local charity support and sustainable sourcing.
The exit resulted in proceeds of £5.2 million, including £0.8 million which
was received in July 2023 and £0.8 million which was received in February
2024. When added to the £0.1m cash returned pre-exit, this implied a total
cash-on-cash return of 3.5x on the original investment, equivalent to an IRR
of 25% since the initial investment.
Datapath Group Limited
In March 2023, the Company exited Datapath, a global leader in the provision
of hardware and software solutions for multi‑screen displays. The
transaction generated proceeds of £5.1 million at completion and a further
£0.3 million was received in November 2023. An additional £0.9 million is
payable over 24 months following exit.
The investment in Datapath was initially held by Foresight 2 VCT plc
(“F2”) and was transferred to the Company on the merger with F2 on 17
December 2015. F2 initially invested £1.0 million into the business in 2007.
The accounting cost of £7.6 million refers to the value at which F2's holding
was transferred to the Company.
When added to £5.4 million of cash returned pre-exit, this implies a total
cash-on-cash return of 11.6x the original investment of £1.0 million,
equivalent to an IRR of 37% since the initial investment in 2007.
Since the original investment, the Manager had supported Datapath through a
period of material growth with revenues growing from approximately £7.0
million to £25.0 million. Datapath has developed a market-leading hardware
and software product suite for the delivery of multi-screen displays and video
walls which are sold globally to a diverse customer base across a range of
sectors.
Innovation Consulting Group Limited (“GovGrant”)
In March 2023, the Company announced the exit of GovGrant to Source Advisors,
a US corporate buyer backed by BV Investment Partners. GovGrant is one of the
UK’s leading providers of R&D tax relief, patent box relief and other
innovation services. The transaction generated proceeds of £6.8 million at
completion. When added to £0.5 million of cash returned to date, this implies
a total cash-on-cash return of 4.4x the capital of £1.65 million invested in
October 2015, equivalent to an IRR of 24%.
Since the original investment in 2015, the Manager had helped GovGrant through
a period of material growth during which it supported the R&D activities of a
growing number of customers. GovGrant’s high levels of service and
innovative products, such as the growing patent box offering, have contributed
to driving innovation in the UK economy. The Manager had taken a proactive
approach to supporting the exceptional senior management team, all of whom
were introduced to the business during the investment period.
Protean Software Limited
In July 2023, the Company achieved a successful exit of its holding in Protean
Software to Joblogic, a UK-based direct provider of Field Service Management
software to SMEs, and Protean’s direct competitor. The Company invested in
Protean in July 2015 as one of the last buyouts prior to the changes in VCT
legislation. Over the holding period, the Manager helped Protean transition
its highly featured legacy product into modern software sold on a SaaS basis.
The transaction generated proceeds of £5.9 million on completion. When added
to the £0.2 million cash returned pre-exit, this implies a total cash-on-cash
return of 2.4x on the original investment, equivalent to an IRR of 12% since
the initial investment.
Fresh Relevance Ltd
In September 2023, the Company announced the successful exit of Fresh
Relevance, an email marketing and e-commerce personalisation platform which
provides online retailers with tools to improve customer retention and
acquisition. The transaction generated proceeds of £10.6 million at
completion. When added to £0.2 million of cash returned pre-exit, this
implies a total cash-on-cash return of 3.8x, equivalent to an IRR of 27%.
The sale to Dotdigital Group PLC follows the growth of the business since the
original investment in 2017, with follow-on investment provided in 2021. With
the Company's investment, Fresh Relevance tripled revenues and created close
to 40 high-quality, sustainable jobs, positively impacting the local economy
in Southampton.
Luminet Networks Limited
In October 2023, the Company announced the exit of Luminet, London’s largest
fixed wireless network operator and leading business-to-business internet
provider. The transaction generated proceeds of £4.7 million at completion.
This implies a total cash-on-cash return of 1.2x the original investment,
equivalent to an IRR of 5%.
The Company's investment helped the company to scale up by adding additional
base stations to the existing infrastructure, as well as navigate through the
challenging period of COVID-19 related uncertainty.
Realisations in the year ended 31 December 2023
Company Detail Accounting cost at date of disposal (£) Proceeds (3 )(£) Realised gain/(loss) (£) Valuation at 31 December 2022 (£)
Fresh Relevance Ltd Full disposal 2,860,324 10,226,288 7,365,964 5,935,427
Innovation Consulting Group Limited Full disposal 1,605,000 6,138,615 4,533,615 5,474,353
Protean Software Limited Full disposal 2,500,000 5,291,070 2,791,070 4,382,049
Datapath Group Limited¹ Full disposal 7,563,365 5,049,691 (2,513,674) 5,245,695
Luminet Networks Limited Full disposal 3,783,251 3,433,268 (349,983) 2,472,529
Mowgli Street Food Group Limited² Full disposal 1,526,750 3,101,743 1,574,993 5,183,006
200 Degrees Holdings Limited Loan repayment 225,000 225,000 — 225,000
Positive Response Corporation Ltd Loan repayment 100,000 100,000 — 100,000
Total disposals 20,163,690 33,565,675 13,401,985 29,018,059
1. Excludes £292,000 of deferred consideration which was received in November
2023. A further £875,000 of deferred consideration has been recognised within
debtors. The accounting cost of £7.6 million includes the valuation of the
F2 investment at the point it was transferred to the Company.
2. Excludes £824,000 of deferred consideration which was received in July
2023. A further £824,000 of deferred consideration has been recognised within
debtors.
3. Proceeds on exit excluding interest, dividends and exit fees where
applicable.
Pipeline
At 31 December 2023, the Company had cash reserves of £46.2 million, which
will be used to fund new and follow‑on investments, buybacks, dividends and
corporate expenditure. The Manager is seeing a strong pipeline of new
opportunities, with several opportunities in due diligence or in exclusivity,
with further deal completions expected to be announced in the months to
follow.
Stubbornly high interest rates and inflation have created challenging trading
conditions for many companies, with inflation of wages and input prices of
particular concern. Interest on bank debt remains at a significantly higher
level than 18 months ago; however, the Manager notes that the cautious
approach to leveraging portfolio companies provides some protection here.
Continuing geopolitical concern surrounding conflicts in Ukraine and the
Middle East have also caused supply chain disruption. These challenges create
opportunities to source attractive investments, however, with many companies
seeking to strengthen their balance sheets.
The Manager continues to see an attractive pipeline of opportunities and does
not see this changing in the medium term. The Company is able to access these
opportunities through its wide and proprietary network across the country,
supported to a greater extent by its network of regional offices. The Manager
considers the Company’s strategy to be well-suited to market volatility, due
to its balanced mix of companies across sectors and stages, experienced
investment team and network of high‑quality non-executives.
Post year end activity
Family Adventures Group Limited
In January 2024, the Company invested £2.5 million of growth capital in
Family Adventures Group Limited, a provider of daycare nurseries and
children’s leisure sites that combines soft play areas with role play
facilities. All inspected sites have been rated “Good” by Ofsted and have
an average score of 9.9/10 on daynurseries.co.uk; whilst the leisure sites
have market leading Net Promoter Scores ("NPS") and high repeat visits. The
investment will be used to aid the business with a continued rollout of
nursery and leisure sites across the South West and Midlands.
Ollie Quinn Limited
In January 2024, following a period of challenging trading, the Manager exited
the UK division of Ollie Quinn, a branded retailer of prescription glasses,
sunglasses and non‑prescription polarised sunglasses based in the UK and
Canada. The exit returned £0.2 million on completion. A sale of the majority
of the remaining Canadian business was completed by the management team in
February 2024, unlocking the necessary third-party funding to take the
business forward whilst retaining the potential for future upside for the
Company.
Lepide Group Holding Company Ltd
In March 2024, the Company invested £1.9 million in Lepide, a cyber security
software solution that helps organisations to protect their unstructured data.
Lepide actively monitors event logs within Windows Active Directory in order
to detect suspicious activity and help organisations to manage over‑exposure
of data. The investment will help scale the business and accelerate growth
initiatives.
Evolve Dynamics Limited
In March 2024, the Manager completed a £2.0 million investment in Evolve
Dynamics Limited. Founded in 2016, the company designs and manufactures
smaller Unmanned Aerial Systems (“UAS”) with capabilities for
Intelligence, Surveillance, Target Acquisition and Reconnaissance
(“ISTAR”). The investment will help scale the business and aid in new
product launches.
Homelink Healthcare Limited
In March 2024, the Company completed a £1.0 million follow‑on investment in
Homelink Healthcare Limited. Foresight first invested into HomeLink in March
2022. Contracting with the NHS, the business provides patients with wound
care, physiotherapy and intravenous therapies in their own home. HomeLink is
also a leader in remote monitoring practice and offers a virtual ward
solution. The investment will support the organic expansion of the company.
Sprintroom Limited
In March 2024, the Company completed a £0.8 million follow-on investment in
Sprintroom Limited, which trades as Sprint Electric. The business designs and
manufactures drives for controlling electric motors in light and heavy
industrial applications, as well as recovering and reusing otherwise lost
energy. The investment will be used to drive continued revenue growth.
Specac International Limited
In March 2024, the Manager announced the sale of Specac International, a
leading manufacturer of high specification sample analysis and preparation
equipment used in testing and research laboratories worldwide, primarily
supporting infrared spectroscopy. The transaction generated proceeds of £11.2
million at completion. When added to £1.5 million of cash returned pre-exit,
this implies a total cash-on-cash return of 9.4x. equivalent to an IRR of 33%.
Since investment, the business has grown to sell globally through both
original equipment manufacturers (“OEMs”) and distributors. The Manager
also engaged with the team to support management team changes, improvements in
governance, headcount and numerous product launches. The exit will facilitate
the continued growth of the business.
Key portfolio developments
Material changes in valuation, defined as increasing or decreasing by £1.0
million or more since 31 December 2022, are detailed below. Updates on these
companies are included below, in the Post year end activity section on pages
24 and 25, or in the Top Ten Investments section on pages 30 to 34 of the
Annual Report.
Key valuation changes in the year
Company Valuation methodology Net movement (£)
Callen-Lenz Associates Limited Discounted offer received 9,512,985
Aquasium Technology Limited Discounted earnings multiple 4,836,061
Hospital Services Group Limited Discounted earnings multiple 1,790,599
Fourth Wall Creative Limited Discounted revenue multiple 1,452,191
TLS Management Limited Net assets 1,274,590
Copptech UK Limited Discounted revenue multiple (1,013,332)
Crosstown Dough Ltd Discounted revenue multiple (1,145,347)
Nano Interactive Group Limited Discounted revenue multiple (1,211,595)
Aerospace Tooling Corporation Limited Discounted earnings multiple (1,340,079)
So-Sure Limited Nil value (1,584,158)
Additive Manufacturing Technologies Ltd Price of last funding round (1,779,015)
Ollie Quinn Limited Discounted offer received (4,028,399)
Copptech UK Limited
Copptech has developed a series of antimicrobial technologies using copper,
zinc and organic active ingredients. The active ingredient is added to
polymers, plastics or dispersions such as varnish and kills bacteria, fungi
and viruses on contact.
31 December 2023 update
Sales in the 12 months to 31 December 2023 were in line with the prior year
but behind plan. The company’s EBITDA loss was driven by investment in
overhead and a drop in gross margin as finished goods sales were prioritised
to build strategic relationships. The management team continues to review
costs and the level of R&D.
Crosstown Dough Ltd
Crosstown began trading in 2014 and has a portfolio of 31 sites, including a
mix of bricks and mortar, food trucks and market stalls. Crosstown’s core
product are fresh sourdough doughnuts made at its central production unit in
Battersea. Crosstown has also developed an online presence, via its website
and other delivery providers, as well as a wholesale offering.
31 December 2023 update
Crosstown participated in The Mother of the Nation Festival in Abu Dhabi in
December, helping to build the brand internationally and presenting future
growth opportunities. Management continues to focus on improvements to the
existing retail network to return to like-for-like growth, as well as
selective new site opportunities. Crosstown continues to invest in its digital
business, following the recruitment of a new Head of E-commerce.
So-Sure Limited
So-Sure is an insurance technology company acting as "Managing General Agent"
for insurers, offering a more trusted proposition, greater pricing
transparency and improved customer experience through its customer-centric
digital platform.
31 December 2023 update
So-Sure has not performed in line with the management plan presented to the
Manager's Investment Committee at the time of the initial investment and was
fully written off in the quarter.
Aerospace Tooling Corporation Limited
ATL provides specialist inspection, maintenance, repair and overhaul ("MRO")
services for components in high-specification aerospace and turbine engines.
31 December 2023 update
Sales were in line with the prior year. ATL has implemented improvements in
its processes and internal systems which have led to improvements in gross
margin. There remains a focus on the delivery of a growing order book, which
is expected to result in an uplift in sales for 2024. Some challenges remain
over equipment reliability issues and the Board has implemented a plan to
resolve these.
Additive Manufacturing Technologies Limited
AMT is developing machines for post-production of 3D printed parts: removal of
excess polymer ("depowdering"), surface smoothing/polishing, colouring and
inspection. AMT’s goal is to provide a fully automated end-to-end
post-production system, the “DMS”, with robots linking each stage.
31 December 2023 update
A significant cost reduction exercise has been implemented, with the full
impact continuing to be realised in the business. The Manager continues to
support the business with its restructuring plan and progress towards a
break-even position. The business recently released a smaller version of its
machine to market which has been well received, with strong order intake
received in the first few months.
Outlook
Global economies demonstrated some recovery in 2023 with signs of stability
returning; however, the UK is proving slower to recover. The FTSE 100 grew by
just 4%, whilst the MCSI World Index grew by c.20% during the year and many
global indexes surpassed this, including the S&P 500 and NASDAQ – the latter
seeing 45% growth.
Consumer confidence has remained relatively weak in the face of inflation,
which fell steadily throughout 2023 to 4% but remained high by recent
standards. To combat this, interest rates increased from 3% to 5.25%
throughout the year, eroding consumer spending power and putting leveraged
businesses under financial pressure. At a global level, the ongoing conflict
in Ukraine and emerging conflict in the Middle East have led to continuing
supply chain uncertainty and volatility in oil and gas prices. Overall, the UK
economy experienced stagnation during 2023 and entered a technical recession
in the latter half of the year, although many commentators expected this to be
shallow by historic standards. As a result of these factors, M&A volumes
dropped noticeably in 2023.
Despite this challenging backdrop, the Company has performed well in the year,
achieving a 7.8% NAV Total Return for shareholders. Strong exits were
achieved, to both trade and PE buyers and across various sectors,
demonstrating that demand remains for high-quality assets that are well
prepared for sale. The exits of Datapath, GovGrant, Fresh Relevance and Mowgli
from across a range of sectors, significantly contributed to the Company’s
total dividends of 8.4p per share for the year, delivering an attractive
dividend yield of 10.7% and exceeding the Company’s target. The Company
retains a portfolio that is well balanced across sectors and stages, with some
companies delivering strong profitability whilst other earlier-stage
investments continue to display strong growth. The Manager’s cautious
approach to taking on leverage has protected many portfolio companies from
concerns surrounding rising interest rates.
Looking forward to 2024, considerable uncertainty remains in the UK economy.
The UK’s economic activity was subdued during 2023. This had an effect on
lenders’ confidence which had also been challenged by high interest rates
and inflation. Interest rates are set to remain above recent norms for the
foreseeable future, impacting consumer spending power. The forthcoming general
election, which will be announced at some point this year, will only add to
the sense of uncertainty, although it seems likely the government will seek to
reduce the tax burden to the degree possible in the run up to an election.
More broadly there is cause for optimism, however. The UK continues to be a
global leader in key sectors such as technology, life sciences and financial
services. There is a strong and established network of support for growing
young companies and world-class universities continue to nurture exciting
spin-outs. Multinationals continue to see the UK as an attractive place to
invest and grow their businesses. The strength of the US technology and
finance sectors in recent years has made UK valuations seem relatively cheap
by comparison, offering attractive opportunities for sale to international
buyers.
The Manager is pleased with the performance in the year, especially against
the backdrop of a challenging macroeconomic picture. Looking forward, with the
economy returning to some growth and interest rates and inflation having
likely peaked, there is potential for continued good performance over the
medium term. The Company’s strong performance has improved its position in
the VCT market, which is an increasingly attractive and visible source of
capital for the UK’s ambitious entrepreneurs. The portfolio remains
diversified and resilient to macroeconomic headwinds, supported by a
collaborative, hands-on approach from the Manager.
James Livingston
on behalf of Foresight Group LLP
Co-Head of Private Equity
15 April 2024
Income Statement
For the year ended 31 December 2023
Year ended 31 December 2023 Year ended 31 December 2022
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Realised gains on investments — 14,573 14,573 — 13,207 13,207
Investment holding gains — 2,833 2,833 — 2,138 2,138
Income 5,372 — 5,372 1,536 — 1,536
Investment management fees (1,004) (4,481) (5,485) (949) (2,550) (3,499)
Other expenses (817) — (817) (680) — (680)
Return/(loss) on ordinary activities before taxation 3,551 12,925 16,476 (93) 12,795 12,702
Taxation (476) 476 — — — —
Return/(loss) on ordinary activities after taxation 3,075 13,401 16,476 (93) 12,795 12,702
Return/(loss) per share 1.3p 5.6p 6.9p (0.1)p 5.9p 5.8p
The total columns of this statement are the profit and loss account of the
Company and the revenue and capital columns represent supplementary
information.
All revenue and capital items in the above Income Statement are derived from
continuing operations. No operations were acquired or discontinued in the
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.
The notes on pages 89 to 106 of the Annual Report form part of these financial
statements.
Reconciliation of Movements in Shareholders’ Funds
Year ended 31 December 2023 Called-up share capital £’000 Share premium account £’000 Capital redemption reserve £’000 Distributable reserve (1) £’000 Capital reserve (1) £’000 Revaluation reserve £’000 Total £’000
As at 1 January 2023 2,192 56,380 1,195 47,701 16,602 67,659 191,729
Share issues in the year (2) 428 37,827 — — — — 38,255
Expenses in relation to share issues (3) — (1,441) — — — — (1,441)
Repurchase of shares (68) — 68 (5,369) — — (5,369)
Realised gains on disposal of investments — — — — 14,573 — 14,573
Investment holding gains — — — — — 2,833 2,833
Dividends paid — — — (20,531) — — (20,531)
Management fees charged to capital — — — — (4,481) — (4,481)
Revenue return before taxation for the year — — — 3,551 — — 3,551
Taxation for the year — — — (476) 476 — —
As at 31 December 2023 2,552 92,766 1,263 24,876 27,170 70,492 219,119
1. Reserve is available for distribution; total distributable reserves at 31
December 2023 total £52,046,000 (2022: £64,303,000).
2. Includes the dividend reinvestment scheme.
3. Expenses in relation to share issues includes trail commission for prior
years’ fundraising.
The notes on pages 89 to 106 of the Annual Report form part of these financial
statements
Year ended 31 December 2022 Called-up share capital £’000 Share premium account £’000 Capital redemption reserve £’000 Distributable reserve (1) £’000 Capital reserve (1) £’000 Revaluation reserve £’000 Total £’000
As at 1 January 2022 2,056 34,954 1,081 75,591 5,945 65,521 185,148
Share issues in the year (2) 250 22,084 — — — — 22,334
Expenses in relation to share issues3 — (658) — — — — (658)
Repurchase of shares (114) — 114 (8,980) — — (8,980)
Realised gains on disposal of investments — — — — 13,207 — 13,207
Investment holding gains — — — — — 2,138 2,138
Dividends paid — — — (18,817) — — (18,817)
Management fees charged to capital — — — — (2,550) — (2,550)
Revenue loss for the year — — — (93) — — (93)
As at 31 December 2022 2,192 56,380 1,195 47,701 16,602 67,659 191,729
1. Reserve is available for distribution; total distributable reserves at 31
December 2023 total £52,046,000 (2022: £64,303,000).
2. Includes the dividend reinvestment scheme.
3. Expenses in relation to share issues includes trail commission for prior
years’ fundraising.
The notes on pages 89 to 106 of the Annual Report form part of these financial
statements.
Balance Sheet
At 31 December 2023
As at 31 December 2023 £’000 As at 31 December 2022 £’000
Fixed assets
Investments held at fair value through profit or loss 171,348 169,775
Current assets
Debtors 3,510 3,037
Cash and cash equivalents 46,200 19,525
49,710 22,562
Creditors
Amounts falling due within one year (1,939) (608)
Net current assets 47,771 21,954
Net assets 219,119 191,729
Capital and reserves
Called-up share capital 2,552 2,192
Share premium account 92,766 56,380
Capital redemption reserve 1,263 1,195
Distributable reserve 24,876 47,701
Capital reserve 27,170 16,602
Revaluation reserve 70,492 67,659
Equity shareholders’ funds 219,119 191,729
Net Asset Value per share 85.9p 87.5p
The financial statements were approved by the Board of Directors and
authorised for issue on 15 April 2024 and were signed on its behalf by:
Margaret Littlejohns
Chair
15 April 2024
Registered number: 03421340
The notes on pages 89 to 106 of the Annual Report form part of these financial
statements.
Cash Flow Statement
For the year ended 31 December 2023
Year ended 31 December 2023 £’000 Year ended 31 December 2022 £’000
Cash flow from operating activities
Loan interest received from investments 2,212 1,249
Dividends received from investments 1,525 132
Other income received from investments 284 —
Deposit and similar interest received 1,326 220
Investment management fees paid (4,014) (3,789)
Secretarial fees paid (130) (130)
Other cash payments (631) (457)
Net cash inflow/(outflow) from operating activities 572 (2,775)
Cash flow from investing activities
Purchase of investments (19,352) (11,051)
Proceeds on sale of investments 33,566 21,922
Proceeds on deferred consideration 1,171 266
Net cash inflow from investing activities 15,385 11,137
Cash flow from financing activities
Proceeds of fundraising 33,547 18,531
Expenses of fundraising (599) (473)
Repurchase of own shares (5,755) (9,234)
Equity dividends paid (16,475) (15,182)
Net cash inflow/(outflow) from financing activities 10,718 (6,358)
Net inflow of cash in the year 26,675 2,004
Reconciliation of net cash flow to movement in net funds
Increase in cash and cash equivalents for the year 26,675 2,004
Net cash and cash equivalents at start of year 19,525 17,521
Net cash and cash equivalents at end of year 46,200 19,525
Analysis of changes in net debt
At 1 January 2023 £’000 Cash flow £’000 At 31 December 2023 £’000
Cash and cash equivalents 19,525 26,675 46,200
The notes on pages 89 to 106 of the Annual Report form part of these financial
statements.
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 2023, 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 2023
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 2023. All investments held by the Company are
classified as ‘fair value through the profit and loss’. Unquoted
investments have been valued in accordance with IPEV guidelines. Quoted
investments are stated at bid prices in accordance with the IPEV 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: www.foresightvct.com.
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 31 December
2023 2022
Net assets £219,119,000 £191,729,000
No. of shares at year end 255,218,477 219,151,944
Net Asset Value per share 85.9p 87.5p
5. Return per share
Year ended Year ended
31 December 31 December
2023 2022
£’000 £’000
Total return after taxation 16,476 12,702
Total return per share (note a) 6.9p 5.8p
Revenue return/(loss) from ordinary activities after taxation 3,075 (93)
Revenue return/(loss) per share (note b) 1.3p (0.1)p
Capital return from ordinary activities after taxation 13,401 12,795
Capital return per share (note c) 5.6p 5.9p
Weighted average number of shares in
issue in the year (note d) 240,044,732 218,519,391
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/(loss) per share is revenue loss 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.
d) The weighted average number of shares is calculated by taking the number of
shares issued and bought back during the year, multiplying each by the
percentage of the year for which that share number applies and then totalling
with the number of shares in issue at the beginning of the year.
6. Annual General Meeting
The Annual General Meeting of the Company will be held at the offices of
Foresight Group LLP, The Shard, 32 London Bridge Street, SE1 9SG on 4 June
2024 at 2.00pm. Details will be published on both the Company’s and the
Manager’s website at www.foresightvct.com.
7. Income
Year ended Year ended
31 December 31 December
2023 2022
£’000 £’000
Loan stock interest 2,237 1,184
Dividends receivable 1,525 132
Deposit and similar interest received 1,326 220
Other income 284 —
5,372 1,536
8 Investments held at fair value through profit or loss
31 December 31 December
2023 2022
£’000 £’000
Unquoted investments 171,348 169,775
£’000
Book cost as at 1 January 2023 103,766
Investment holding gains 66,009
Valuation at 1 January 2023 169,775
Movements in the year:
Purchases at cost 20,342
Disposal proceeds (1) (33,566)
Realised gains² 13,402
Investment holding gains (3) 1,395
Valuation at 31 December 2023 171,348
Book cost at 31 December 2023 103,944
Investment holding gains 67,404
Valuation at 31 December 2023 171,348
1. The Company received £33,566,000 (2022: £21,922,000) from the disposal of
investments during the year. The book cost of these investments when they were
purchased was £20,164,000 (2022: £8,981,000). 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.
2. Realised gains in the Income Statement include deferred consideration
receipts from Accrosoft Limited (£13,000), Datapath Group Limited (£292,000)
and Mowgli Street Food Group Limited (£824,000), and completion proceeds
received from Datapath Group Limited (£39,000) and Protean Software Limited
(£3,000).
3. Investment holding gains in the Income Statement include the deferred
consideration debtor increase of £1,438,000. The debtor movement reflects the
recognition of amounts receivable from Datapath Group Limited (£1,170,000)
and Mowgli Street Food Group Limited (£1,647,000), offset by receipts from
Accrosoft Limited (£13,000), Datapath Group Limited (£292,000) and Mowgli
Street Food Group Limited (£824,000). The Codeplay Software Limited debtor
increased due to its foreign exchange movements (£100,000), and provisions
have been made against balances potentially due from Ixaris Systems Ltd
(£40,000), FFX Group Limited (£70,000) and Mologic Ltd (£240,000).
9. Related party transactions
No Director has an interest in any contract to which the Company is a party
other than their appointment and remuneration as Directors.
10.Transactions with the Manager
Foresight Group LLP was appointed as Manager on 27 January 2020 and earned
fees of £4,018,000 during the year (2022: £3,499,000). A performance
incentive fee of £1,467,000 was also accrued at 31 December 2023. Further
details are included in note 13 of the Annual Report.
Foresight Group LLP is the Company Secretary (appointed in November 2017) and
received accounting and company secretarial services fees of £130,000 (2022:
£130,000) during the year. At 31 December 2023, the amount due to Foresight
Group LLP was £4,000 (2022: £nil).
No amounts have been written off in the year in respect of debts due to or
from the Manager.
END
For further information please contact:
Gary Fraser, Foresight Group: 020 3667 8181