TIDMFTD
FORESIGHT 3 VCT PLC
Summary Financial Highlights
-- Net asset value per Ordinary Share for the six month period ended 30
September 2014 decreased by 0.3% represented by a net asset value of
74.0p compared to a net asset value of 74.2p at 31 March 2014.
-- Funding totalling GBP378,000 was provided to two companies. There was
also GBP685,000 of interest capitalised under the terms of loan
agreements in three companies.
-- Realisation proceeds and loan repayments totalling GBP1,218,000 were
received from four portfolio companies.
Six months Year ended
ended
30 31 March
September 2014
2014
Net asset value per Ordinary Share 74.0p 74.2p
Net asset value per Ordinary Share (including all 130.8p 131.0p
dividends paid)
Share price per Ordinary Share 60.1p 62.5p
Share price total return per Ordinary Share (including 116.9p 119.3p
all dividends paid)
Chairman's Statement
Performance
During the period, our private equity investments, which account for the
majority of the current portfolio, benefited from the recent economic
upturn both in the UK and traditional export markets such that the
aggregate performance of the portfolio showed a moderate uplift in the
period prior to the deduction of expenses. This performance was
comprised of both positive and negative movements across the entire
private equity portfolio. The largest fall in valuation was Datapath
which reduced by some GBP0.4 million as a result of a fall in comparable
price/earnings ratios being the basis used for valuations despite
increasing profits beyond the GBP7 million announced in the year to 31
March 2014. The largest gain in the portfolio was GBP0.8 million for
Aerospace Tooling (ATL), which increased profits by 58% in its last
financial year with further progress being made in its current financial
year. Additionally, ATL repaid the Fund's entire GBP500,000 cost of
investment in September 2014 as a result of this solid performance,
effectively meaning that any future exit proceeds will be 100% profit.
Overall net asset value of the fund at 30 September 2014 decreased by
0.3% to 74.0p per Ordinary Share at 30 September 2014 from 74.2p per
Ordinary Share at 31 March 2014.
The environmental investments, which the Company's exposure is limited
to just three remaining investments, namely Closed Loop Recycling, O-Gen
Acme Trek and O-Gen UK produced very little movement in valuation
although a great deal of effort is still being invested in these
companies to secure a return for your Company.
In addition to the GBP500,000 received from ATL, a further GBP150,794
was repaid from Orthoview Holdings in April 2014 prior to a successful
sale in October 2014 which realised GBP1.12 million. Further disposal
proceeds are expected before the end of the current calendar year.
For a detailed review of the Company's investments I would refer you to
the Manager's Report that starts on page 5.
Dividends
It continues to be the Company's policy to provide a flow of tax-free
dividends, generated from income and from capital profits realised on
the sale of investments. However distributions will inevitably be
dependent on cash being generated from portfolio investments and
successful realisations.
Following recent realisations, the Board expect to maintain the payment
of dividends to Shareholders, which remain a priority.
Share Buy-Backs
During the period under review 446,000 Ordinary Shares were repurchased
for cancellation at a cost of GBP271,000.
Alternative Investment Fund Management Registration
The Board has considered the impact on the Company of an EU directive
regulating Alternative Investment Fund Managers (AIFM) which applies to
most UK investment funds including the Company. To minimise the
regulatory and financial cost of compliance as a 'full scope UK AIFM',
with this legislation the Board decided that the Company would register
as a 'small registered UK AIFM' directly with the Financial Conduct
Authority as permitted by the rules as a 'small registered UK AIFM'. The
application process was completed in June 2014 and approval was
confirmed in early August 2014. This will not affect the current
arrangements with the Manager which will continue to report to the Board
and manage the Company's investments on a discretionary basis.
Valuation Policy
Investments held by the Company have been valued in accordance with the
International Private Equity and Venture Capital Valuation ("IPEVCV")
guidelines (December 2012) developed by the British Venture Capital
Association and other organisations. Through these guidelines,
investments are valued as defined at 'fair value'. Ordinarily, unquoted
investments will be valued at cost for a limited period following the
date of acquisition, being the most suitable approximation of fair value
unless there is an impairment or significant accretion in value during
the period. Quoted investments and investments traded on AIM and ISDX
Growth Market are valued at the bid price as at 30 September 2014. The
portfolio valuations are prepared by Foresight Group, reviewed and
approved by the Board quarterly and subject to review by the auditors
annually.
Directorate Change
I am pleased to welcome Raymond Abbott to the Board as a Director of the
Company. Raymond joined the Board on 3 October 2014 and will assume the
role of Chairman when I retire from the Board on 31 December 2014.
Raymond was formerly a Director of Foresight 4 VCT plc and Enterprise
VCT plc (which was merged into Foresight 3 VCT plc in 2008) and was
previously the Managing Director of Alliance Trust Equity Partners.
Raymond is currently a non-executive director of The Scottish Building
Society, Galleria Holdings Limited and Essex Services Group plc.
Outlook
It is encouraging that the UK economy is continuing to recover and we
believe this should help the development of the businesses in which we
have invested. A number of the investments in the fund are well placed
to continue their successful expansion. However many of the familiar
risks, both financial and political, remain and there can be no grounds
for complacency as all operate in competitive environments.
The fund is, on the back of recent realisations, considering new
investment opportunities and several potential investments are currently
going through the selection process. Additionally, the Manager continues
to concentrate on improving the performance of the existing portfolio
and continues to look for appropriate opportunities to realise gains
from the disposal of successful investments.
Following the recent successful refinancing and realisation of ATL and
Orthoview Holdings, the Board expects to maintain the payment of
dividends to Shareholders, which remain a priority. This in turn should
help improve the liquidity of the Ordinary Shares and reduce the
discount to net asset value, which continues at a higher level than the
Board feels is justified by the prospects of the underlying investments.
Graham Ross Russell
Chairman
28 November 2014
Investment Manager's Report
Manager's report
For the half year to 30 September 2014, the economic climate remained
relatively benign, supported by continuing low levels of interest rates
although there are currently signs of volatility returning. Business
confidence remains generally positive, as demonstrated by the volume of
new issues during the period and signs that the major banks are
beginning to lend selectively to small companies. At the same time
merger and acquisition activity has been increasing. These conditions
look set to continue for the time being, although significant
macroeconomic risks and uncertainties remain, particularly in major
overseas markets.
During the period under review, the net asset value per Ordinary Share
decreased by 0.3% to 74.0p from 74.2p as at 31 March 2014.
Several investments performed well during the period, including TFC
Europe, Orthoview Holdings, Procam Television Holdings, The Bunker
Secure Hosting and most notably Aerospace Tooling Corporation, which
repaid its entire GBP500,000 cost of investment within 15 months, which
together generated an increase in valuation of GBP1.7 million in the
period. As described below, in October 2014, shortly after the period
end, the investment in Orthoview Holdings was sold to Materialise NV for
up to GBP1.35 million, generating a return of three times original cost
of investment. As shown below, provisions totalling GBP624,423 were made
against three investments during the period.
Foresight Group remains positive about the overall prospects for the
investment portfolio and is focused on achieving increases in net asset
value and realisations from the existing investments to facilitate
shareholder distributions and provide additional funding for new
investments which are being actively pursued. A review of the portfolio
is set out below.
1. Follow-on funding (excluding capitalised interest)
Company GBP
Biofortuna 50,901
Total 50,901
*Capitalised interest of GBP685,425 was recognised in the period for
Closed Loop Recycling (GBP634,493), Autologic Diagnostic Group
(GBP49,329) and Flowrite Refridgeration Holdings (GBP1,603).
2. New investments
Company GBP
Industrial Efficiency II 326,740
Total 326,740
3. Exits and realisations
Following a period of particularly strong trading and cash generation,
Aerospace Tooling Corporation effected a recapitalisation and dividend
distribution in September 2014, returning the entire GBP3.5 million cost
of the Foresight VCTs' investments made only 15 months previously.
Having received full repayment of its GBP450,000 loan and a dividend of
GBP50,000 being equal to the cost of its equity investment, Foresight 3
VCT plc still retains its original 7.52% equity shareholding in the
company.
Following a capital reorganisation in May 2013, Orthoview Holdings
(formerly Meridian Technique) paid GBP283,304 of preference share
dividends and repaid GBP43,900 of loan stock. A further GBP157,255 was
similarly repaid in October 2013 and GBP150,794 in April 2014. After the
period end, Orthoview Holdings was successfully sold to NASDAQ quoted
Materialise NV for GBP8.47 million in cash. Foresight 3 VCT received
initial consideration of GBP1.12 million, with a further GBP234,099 held
in escrow to support warranties, to be released in two tranches over two
years. Combined with proceeds from the capital reorganisation, the
investment generated a return of three times original cost.
In May 2014, the investment in Xention Pharma, a drug development
company, was sold for GBP10,422. A loan repayment totalling GBP157,193
was received from Evance Wind Turbines (in administration).
Cole Henry PE 2 Limited, an acquisition vehicle preparing to trade,
repaid a loan of GBP450,000 in the period, which was used to fund the
investment in Industrial Efficiency II.
4. Material provisions to a level below cost
Company GBP
AtFutsal 184,581
Evance Wind Turbines 52,731
Mplsystems (formerly The Message Pad)
387,111
Total 624,423
New and Follow on Investments
In July 2014, as a part of the initial GBP1.38 million tranche of a
phased funding round totalling up to GBP4.4 million by three Foresight
managed funds, a new investment of GBP326,740 was made by Foresight 3
VCT into Industrial Efficiency II, alongside GBP990,760 from Foresight
VCT. The company provides energy efficiency fuel switching services,
allowing customers to make significant cost savings and reduce
emissions.
In April 2014, a follow on investment of GBP50,901 was made into
Biofortuna, being the second, final tranche of the funding round
completed in August 2013.
Outlook
The improvement in business confidence continues to be reflected in the
trading of a number of companies across the portfolio and Management
considers that the portfolio is now well positioned for further growth.
With a pipeline of high quality private equity investment opportunities
and funds available from recent realisations, Foresight is now actively
pursuing selected new investment opportunities while also continuing to
endeavour to realise existing investments, where appropriate, to
generate cash for shareholder distributions and further funds for such
new investments.
Portfolio Review
In June 2013, the Company invested GBP500,000 alongside other Foresight
VCTs in a GBP3.5 million investment in Dundee based Aerospace Tooling
Corporation (ATL), a well established specialist engineering company.
ATL provides repair, refurbishment and remanufacturing services to large
international companies for components in high-specification aerospace
and turbine engines. With a heavy focus on quality assurance, the
company enjoys strong relationships with companies serving the aerospace,
military, marine and industrial markets. In the year to 30 June 2014, a
number of significant orders underpinned growth, with turnover doubling
and profits increasing significantly. Further progress is being made in
winning more orders and new customers in the current year, supporting an
increase in valuation of GBP849,000 during the period. Reflecting
particularly strong cash generation, the company effected a
recapitalisation and dividend distribution in September 2014, returning
the entire GBP3.5 million cost of the Foresight VCTs' investments made
only 15 months previously. Having received full repayment of its
GBP450,000 loan and a dividend of GBP50,000 equal to the cost of its
equity investment, Foresight 3 VCT retains its original 7.52% equity
shareholding in the company effectively at nil cost.
AtFutsal Group runs government approved education programmes for
students aged 16-18 years old in conjunction with a consortium made up
of Football League clubs, colleges and academies and
training/accreditation organisations. Funding for these programmes is
sourced from the Education Funding Agency. The company's three arenas in
Birmingham, Leeds and Swindon are used as part of these education
programmes. AtFutsal is introducing a wider range of government approved
BTech courses and has developed its own online education software
platform so that it can provide a broader range of educational services.
The company has also developed a separate English Colleges education
programme to provide additional futsal related courses for 16-18 year
olds at sixth form colleges. For the current student year which
commenced in September 2014, the company registered 1,400 students on
its futsal related courses, compared with 1,200 in the previous academic
year and 100 for its new English Colleges programme. AtFutsal Group is
also improving its capacity utilisation across its three arenas with a
variety of different sports being regularly played at each arena
alongside futsal at both child and adult level. This improved
utilisation has enabled the arenas to approach cash breakeven. For the
year to 30 June 2014, a small operating profit was achieved on sales of
GBP4.3 million, with the growing Education division generating the
majority of the profit and cash flow within the Group. However,
reflecting delays in achieving the forecast level of profitability, a
further provision of GBP184,581 has been made in the period. Management
is focussed on increasing the number of students and range of education
programmes, increasing usage of its online education platform and
achieving a consistent breakeven on the arenas each month.
Following the GBP48 million secondary buy-out by ISIS Private Equity in
January 2012, investments in equity and loan stock of GBP2.23 million
were retained in Autologic Diagnostics Group. Autologic Diagnostics
Group continues to generate strong profits and for the year to December
2013 achieved an EBITDA of GBP5.4 million on sales of GBP18.6 million
(an EBITDA of GBP5.9 million on revenues of GBP17.2 million in 2012).
The company has traded satisfactorily for the year to date, with
relatively stronger sales in the UK and Europe compared with the USA. As
at 30 September 2014, the company had a healthy cash balance of GBP5.1
million. Management continues to develop a business model to generate
recurring revenues and improve the quality of the company's earnings
through a new service-oriented product, the launch of which has now been
slightly delayed to Q1 2015. In the short term, the change in strategy
towards a pure recurring revenue model may impact EBITDA in 2015 and
possibly 2016 while helping to drive shareholder value. During the half
year, interest of GBP49,329 deferred under the terms of the loan
agreement with Autologic Diagnostics Group was capitalised.
Biofortuna, an early stage molecular diagnostics business based in the
Wirral, has developed unique expertise in the important area of enzyme
stabilisation, effectively hi-tech freeze drying. Its first range of
products, SSPGo, is a series of tests for genetic diseases and organ
transplant compatability. Because of the company's stabilisation and
freeze drying technology, its products can be transported easily (in the
post if needed) and stored at room temperature for up to two years. A
GBP1.3 million round to finance capital expenditure and working capital
was completed in August 2013, in which the Company initially invested
GBP99,066 and then GBP50,901 as the second, final tranche in April 2014.
For the year to 31 March 2014, an operating loss of GBP1.05 million was
incurred on sales of GBP325,000. Trading in the current year is stronger,
with a much reduced rate of operating loss. The company is progressing
in a number of areas, including assessing new markets, broadening its
product range, winning new customers and increasing its manufacturing
capacity. Following successful FDA trials, Biofortuna has obtained FDA
approval for its SSPGo genetic testing product range in the USA, a
particularly important milestone enabling access to the American market,
the largest in the World, as well as obtaining FDA registration for its
manufacturing site. Five companies have selected the company's
freeze-dried kit manufacturing service to produce freeze dried versions
of their products, with paid for feasibility studies and contract
discussions occurring with a number of parties.
In February 2013, Closed Loop Recycling concluded a major new supply
contract and new customer contracts worth GBP17 million per annum as
well as securing GBP12.8 million of loan finance (of which GBP6 million
was provided by the Foresight Environmental Fund) to double capacity at
the Dagenham plant. Although production of rHDPE utilising this
additional capacity started in November 2013, the production ramp up
took several months longer to achieve than expected. Additional loan
capital of GBP1.0 million was agreed with the Foresight Environmental
Fund in May 2014 to provide the necessary capital to achieve the
forecast production run rate. Following the successful installation and
commissioning of the final, third rHDPE extruder delivered in July 2014,
the enlarged capacity has resulted in a substantial improvement in
operational performance, with further improvements expected. Reflecting
higher prices, the feedstock market continues to be tight, but the
company is well positioned to secure supplies from new local sorting
capacity. Management is examining a number of potential opportunities to
improve profitability further. The company's banking facilities were
successfully extended in September 2014.
Derby based Datapath Group is a World leading innovator in the field of
computer graphics and video-wall display technology utilised in a number
of international markets. The company is increasing its market share in
control rooms, betting and signage and is entering other new markets.
Management accounts for the year to 31 March 2014 show record operating
profits of GBP7.36 million on sales of GBP18.7 million (compared with
profit of GBP5.1 million was achieved on sales of GBP14.1 million in the
previous year). Trading and cash generation in the current year remains
strong and the company continues to enjoy good demand from its main OEM
partners and distributors. The company has acquired its US distributor
and has established an office in Philadelphia to develop more US sales
and distributorships.
Following the appointment of administrators to Evance Wind Turbines in
April 2014 as a result of reductions in the Feed-in-Tariff for small
wind turbines which started in October 2012, a loan repayment of
GBP157,193 was received during the period.
In May 2012, GBP200,000 was invested in Flowrite Refrigeration Holdings
alongside other Foresight VCTs to finance a GBP3.2 million management
buyout of Kent based Flowrite Services Limited. Flowrite Refrigeration
Holdings provides refrigeration and air conditioning maintenance
services nationally, principally to leisure and commercial businesses
such as hotels, clubs, pubs and restaurants. Management has accelerated
sales efforts, won significant new contracts, additional customers and
reviewed several potential acquisitions with the aim of broadening its
national coverage. In the year to 31 October 2013, the company traded
well, achieving an operating profit of GBP1.06 million on sales of
GBP10.0 million (against an operating profit of GBP852,000 on sales of
GBP7.9 million in 2012) and also repaid loans of GBP127,709,
representing some 75% of original cost of investment, after only 18
months after the MBO. The company traded well during this year's
seasonally busy summer months, benefiting from increased numbers of
engineers and also from the new workflow IT system installed in May 2014
which has already resulted in increased operational efficiency. Recent
order wins and a growing prospects list should support future growth in
sales and profits. During the period, interest of GBP1,603 deferred
under the terms of the loan agreement was capitalised.
In July 2014, as a part of the initial GBP1.38 million tranche of a
phased funding round totalling up to GBP4.4 million by three Foresight
managed funds, a new investment of GBP326,740 was made by Foresight 3
VCT into Industrial Efficiency II, alongside GBP990,760 from Foresight
VCT. The company provides energy efficiency fuel switching services,
allowing customers to make significant cost savings and reduce
emissions. A number of installations are currently in the course of
construction for the first customer, a major corporation, and further
tranches may be drawn down over the next year. Once the installations
are completed, the company will charge the customer based on the volume
of fuel and electricity consumed at each site up to a pre agreed level,
which is expected to be reached after five years, at which time the
contract will terminate and payments reduce to a nominal level.
Ixaris Systems has developed and operates Entropay, a web based global
prepaid payment service using the VISA network, and offers its new IxSol
(formerly known as Opn) product on a 'Platform as a Service' basis to
enable enterprises to develop their own customised global applications
for payments over various payment networks. IxSol is trading
satisfactorily with a number of deployments in progress and a strong
sales pipeline. IxSol is being used by companies in the affiliate
marketing and travel sectors and sales efforts are being focussed on the
international e-commerce and financial services sectors.
During 2013, the company invested in developing and marketing its Ixaris
Payment System, the platform that runs IxSol, to financial institutions.
The platform enables financial institutions to offer payment services
based on prepaid cards to their customers. In the year to 31 December
2013, an EBITDA loss of GBP617k was incurred on sales of GBP9.5 million,
reflecting the above mentioned investment in software and systems
(against an EBITDA loss of GBP293,000 on sales of GBP8.4 million in the
previous year). In January 2014, the Company invested a further
GBP219,852 as part of a GBP2 million equity funding round to finance
further investment in the Payment System. In the current year, revenues
are currently behind the aggressive budget but the EBITDA loss is
appreciably less than budgeted following cost reductions resulting in a
monthly breakeven position.
To focus on its technology division, Mplsystems (formerly The Message
Pad) sold its other larger division, call centre outsourcing, in June
2013. The sale proceeds were used to further develop the company's
contact centre and customer service software sold on a SaaS (Software as
a Service) basis to improve the efficiency of its customers' call
centres and customers' experience. For the year to May 2013 and prior to
the above sale, an operating profit of GBP299,000 was achieved on sales
of GBP5.86 million. The transition to a SaaS business model is going
well although, as expected, the company is incurring losses on annual
sales of GBP2 million. The sales pipeline remains strong including a
number significant opportunities. As a result of new contract wins, the
level of contracted recurring SaaS revenues continues to grow.
In February 2014, O-Gen Acme Trek received planning permission for the
proposed rebuild of the plant in Stoke as a 7MW waste wood to energy
power plant. Management is currently working with the selected
technology provider and a major EPC contractor to develop the project to
the next stage, but this is taking longer than anticipated. The project
is now expected to qualify under the Government's new CfD regime, rather
than the ROC regime. The implications of the CfD regime are not yet
fully established and both Foresight and O-Gen remain in close contact
with the Government and Regulators to stay abreast of latest
developments.
O-Gen UK is a leading developer of waste wood gasification facilities in
the UK and in December 2013 reached financial close on a GBP48 million,
10MW, waste wood to energy power plant project in Birmingham.
Construction of the plant is progressing ahead of schedule. The company
has established a number of partnerships which have led to the
development of a growing pipeline of similar opportunities, including
one in Lincolnshire for which planning permission was obtained in July
2014 and ROC grace period secured in October, with financial close
anticipated early in 2015. The company continues to develop
relationships with a number of technology providers and major EPC
contractors. O-Gen UK will not finance the construction of these plants
but expects to benefit from project management fees, equity
shareholdings and fuel and operation and maintenance contracts.
After the period end, Orthoview Holdings was successfully sold to NASDAQ
quoted Materialise NV, a leading provider of additive manufacturing
software and of sophisticated 3D printing solutions in the medical and
industrial markets, for GBP8.47 million in cash. Foresight 3 VCT
received initial consideration of GBP1.12 million, with a further
GBP234,099 held in escrow in support of warranties, to be released in
two tranches over two years. Combined with proceeds from the capital
reorganisation, the investment generated a return of three times
original cost.
In April 2013, the Company invested GBP250,000 alongside other Foresight
VCTs in a GBP1.8 million round to finance a management buy-out of Procam
Television Holdings. Procam is one of the UK's leading broadcast hire
companies, supplying equipment and crews for UK location TV production
to broadcasters, production companies and other businesses for over 20
years. Headquartered in Battersea, London, with additional facilities in
Manchester, Edinburgh and Glasgow, Procam is a preferred supplier to
BSkyB and an approved supplier to the BBC and ITV. Revenues have doubled
in the last four years following the introduction of new camera formats.
In September 2013, Hammerhead, a competitor with facilities in London,
Manchester and Edinburgh and Glasgow, was acquired in order to broaden
the customer base, national coverage and realise various synergistic
benefits. For the year to 31 December 2013, an EBITDA of GBP1.8 million
was achieved on sales of GBP6.4 million, well ahead of trading in 2012.
In the current year to date, significant growth in sales and profits has
been achieved, well ahead of the prior year, reflecting both strong
organic growth and the successful integration of the Hammerhead
acquisition. Plans for opening other facilities and making other
acquisitions are under consideration.
TFC Europe, a leading distributor of technical fasteners in the UK and
Germany, performed well during the year to 31 March 2014, again
achieving record profits of GBP2.75 million on sales of GBP19.5 million
(against a record operating profit of GBP2.45 million on sales of
GBP18.1 million in 2013). Trading in the current year continues to be
strong, supporting an increased valuation during the period. In
September 2013, a small Scottish distribution business was acquired,
thereby improving national UK coverage. Management's current focus is to
expand in Southern Germany. A new full service centre was opened in
Bochum near Dusseldorf in October 2013 and existing customers are
already expanding their business with TFC. A seventh service centre was
acquired in October 2014 in Singen, near Stuttgart. This acquisition
will provide increased opportunities to service existing Southern German
customers and target new customers with a wider product range. This
strong physical presence in Europe's largest manufacturing market is
expected to assist TFC greatly in growing its sales and profits.
The Bunker Secure Hosting, which operates two ultra secure data centres,
continues to generate substantial profits at the EBITDA level. For the
year to 31 December 2013, record EBITDA of GBP2.2 million was achieved
on sales of GBP9.25 million (against an EBITDA of GBP1.8 million on
sales of GBP8.5 million in 2012). Sales growth slowed during the year,
however, reflecting increased competition, but has since recovered.
Recurring annual revenues presently exceed GBP9 million. For the year to
date, trading continues in line with budget. To meet growing customer
demand, a number of new Cloud based services have recently been launched
while the sales and marketing strategy has been reassessed and sales
efforts strengthened. A number of new customers have already been signed
and a growing pipeline has been developed through channel partners for
the Cloud 2.0 and Object Storage services. Investment continues in
upgrading the existing infrastructure.
David Hughes
Foresight Group
Chief Investment Officer
28 November 2014
Unaudited Half-Yearly Results and Responsibility Statements
Principal Risks and uncertainties
The principal risks faced by the Company can be divided into various
areas as follows:
-- Performance;
-- Regulatory;
-- Operational; and
-- Financial.
The Board reported on the principal risks and uncertainties faced by the
Company in the Annual Report and Accounts for the year ended 31 March
2014. A detailed explanation can be on found on page 51 of the Annual
Report and Accounts which is available at www.foresightgroup.eu or by
writing to Foresight Group at The Shard, 32 London Bridge Street, London
SE1 9SG.
In the view of the Board, there have been no changes to the fundamental
nature of these risks since the previous report and these principal
risks and uncertainties are equally applicable to the remaining six
months of the financial year as they were to the six months under
review.
Directors' responsibility statement:
The Disclosure and Transparency Rules ('DTR') of the UK Listing
Authority require the Directors to confirm their responsibilities in
relation to the preparation and publication of the Unaudited Half-Yearly
Financial Report for the six month period ended 30 September 2014.
The Directors confirm to the best of their knowledge that:
(a) the summarised set of financial statements has been prepared in
accordance with the pronouncement on interim reporting issued by the
Accounting Standards Board;
(b) the Unaudited Half-Yearly Financial Report for the six month period
ended 30 September 2014 includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the six
months of the year and a description of principal risks and
uncertainties that the Company faces for the remaining six months of the
year);
(c) the summarised set of financial statements give a true and fair view
of the assets, liabilities, financial position and profit or loss of the
Company as required by DTR 4.2.4R; and
(d) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
Going concern
The Company's business activities, together with the factors likely to
affect its future development, performance and position are set out in
the Strategic Report of the 31 March 2014 Annual Report and Accounts.
The financial position of the Company, its cash flows, liquidity
position and borrowing facilities are described in the Chairman's
Statement, Strategic Report and Notes to the Accounts of the 31 March
2014 Annual Report and Accounts. In addition, the Annual Report and
Accounts includes the Company's objectives, policies and processes for
managing its capital; its financial risk management
objectives; details of its financial instruments and hedging activities;
and its exposures to credit risk and liquidity risk.
The Company has considerable financial resources together with
investments and income generated therefrom across a variety of
industries and sectors. As a consequence, the Directors believe that the
Company is well placed to manage its business risks successfully despite
the current uncertain economic outlook.
The Directors have reasonable expectation that the Company has adequate
resources to continue in operational existence for the foreseeable
future. Thus they continue to adopt the going concern basis of
accounting in preparing the annual financial statements.
The Half-Yearly Financial Report for the six month period ended 30
September 2014 has not been audited or reviewed by the auditors.
On behalf of the Board
Graham Ross Russell
Chairman
28 November 2014
Unaudited Income Statement
for the six months ended 30 September 2014
Six months ended Six months ended Year ended
30 September 2014 30 September 2013 31 March 2014
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Realised
(losses)/gains
on
investments - *(10.956) (10,956) - (3,660) (3,660) - 1,898 1,898
Investment
holding
gains/(losses) - *10,794 10,794 - 4,847 4,847 - (816) (816)
Income 610 - 610 498 - 498 787 - 787
Investment
management
fees (110) (331) (441) (123) (368) (491) (237) (710) (947)
Other expenses (215) - (215) (207) - (207) (390) - (390)
Return/(loss)
on ordinary
activities
before
taxation 285 (493) (208) 168 819 987 160 372 532
Taxation - - - - - - - - -
Return/(loss)
on ordinary
activities
after
taxation 285 (493) (208) 168 819 987 160 372 532
Return/(loss)
per Ordinary
Share 0.6p (1.0)p (0.4)p 0.3p 1.6p 1.9p 0.3p 0.7p 1.0p
The total column of this statement is the profit and loss account of the
Company and the revenue and capital columns represent supplementary
information.
All revenue and capital items in the above Income Statement are derived
from continuing operations. No operations were acquired or discontinued
in the period.
The Company has no recognised gains or losses other than those shown
above, therefore no separate statement of total recognised gains and
losses has been presented.
*Note: Realised (losses)/gains on investments and investment holding
gains/(losses) includes investments dissolved in the period and
investments where loans have been disposed of for nominal consideration.
These losses were previously recognised in unrealised losses and had a
nominal impact on the net asset value in the period.
Unaudited Balance Sheet
at 30 September 2014
Registered Number: 03121772
As at As at As at
31 March
30 September 2014 30 September 2013 2014
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Fixed assets
Investments held at fair
value through profit or
loss 35,769 37,794 36,086
35,769 37,794 36,086
Current assets
Debtors 1,478 1,321 1,762
Money market securities and
other deposits - 476 277
Cash 540 456 87
2,018 2,253 2,126
Creditors
Amounts falling due within
one year (211) (66) (181)
Net current assets 1,807 2,187 1,945
Net assets 37,576 39,981 38,031
Capital and reserves
Called-up share capital 508 519 512
Share premium account 8,923 8,934 8,899
Capital redemption reserve 1,976 1,965 1,972
Profit and loss account 26,169 28,563 26,648
Equity shareholders' funds 37,576 39,981 38,031
Net asset value per Ordinary 74.0p 77.0p 74.2p
Share
Unaudited Reconciliation of Movements in Shareholders' Funds
for the six months ended 30 September 2014
Called-up Share Capital Profit and
share premium redemption loss
capital account reserve account Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April
2014 512 8,899 1,972 26,648 38,031
Repurchase of
shares (4) - 4 (271) (271)
Expenses in
relation to
share
issues - 24 - - 24
Loss for the
period - - - (208) (208)
As at 30
September
2014 508 8,923 1,976 26,169 37,576
Unaudited Cash Flow Statement
for the six month period ended 30 September 2014
Six months Six months Year
ended ended ended
30 30
September September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Investment income received 164 94 357
Dividends received from investment 50 283 283
Deposit and similar interest received 1 1 2
Investment management fees paid (441) (466) (922)
Secretarial fees paid (64) (62) (126)
Other cash payments (152) (112) (250)
Net cash outflow from operating activities and returns
on investment (442) (262) (656)
Taxation - - -
Returns on investment and servicing of finance
Purchase of unquoted investments and investments quoted
on AIM (381) (1,453) (4,673)
Net proceeds on sale of unquoted investments 1,218 184 4,157
Net proceeds on sale of quoted investments - 166 566
Net capital inflow/(outflow) from investment 837 (1,103) 50
Equity dividends paid - - (1,031)
Management of liquid resources
Movement in money market funds 277 (1) 198
Financing
Proceeds of fund raising - 1,154 1,196
Expenses of fund raising - (70) (75)
Net movement from share issues and share buybacks (219) (1) (334)
(219) 1,083 787
Increase/(decrease) in cash 453 (283) (652)
Reconciliation of net cash flow to movement in net
cash
Increase/(decrease) in cash for the period 453 (283) (652)
Net cash at start of the period 87 739 739
Net cash at end of period 540 456 87
Notes to the Unaudited Half-Yearly Financial Report
for the six month period ended 30 September 2014
1. The Unaudited Half-Yearly results have been prepared on the basis of
accounting policies set out in the statutory accounts of the Company for
the year ended 31 March 2014. Unquoted investments have been valued in
accordance with the International Private Equity and Venture Capital
Valuation ("IPEVCV") guidelines. Quoted investments are stated at bid
prices in accordance with IPEVC guidelines and UK Generally Accepted
Accounting Practice.
2. These are not statutory accounts in accordance with S436 of the Companies
Act 2006 and the Unaudited Half-Yearly Financial Reports for the six
months ended 30 September 2014 and 30 September 2013 have been neither
audited nor reviewed. Statutory accounts in respect of the year ended 31
March 2014 have been audited and reported on by the Company's auditors
and delivered to the Registrar of Companies and included the report of
the auditors which was unqualified and did not contain a statement under
S498(2) or S498(3) of the Companies Act 2006. No statutory accounts in
respect of any period after 31 March 2014 have been reported on by the
Company's auditors or delivered to the Registrar of Companies.
3. Copies of the Unaudited Half-Yearly Financial Report for the six month
period ended 30 September 2014 have been sent to shareholders and are
available for inspection at the Registered Office of the Company at The
Shard, 32 London Bridge Street, London SE1 9SG.
Copies of the Unaudited Half-Yearly Financial Report for the sixth month
period ended 30 September 2014 are also available electronically at
www.foresightgroup.eu.
1. Net asset value per Ordinary Share
The net asset value per share is based on net assets at the end of the
period and on the number of Ordinary Shares in issue at that date.
Number of
Ordinary
Net Assets Shares
GBP'000 in issue
30 September 2014 37,576 50,780,401
30 September 2013 39,981 51,901,401
31 March 2014 38,031 51,226,401
1. Return/(loss) per Ordinary Share
Six months Six months
ended ended Year ended
30 30
September September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
Total (loss)/return after taxation (208) 987 532
Basic (loss)/return per Ordinary Share (note a) (0.4)p 1.9p 1.0p
Revenue return from ordinary activities after
taxation 285 168 160
Revenue return per Ordinary Share (note b) 0.6p 0.3p 0.3p
Capital (loss)/return from ordinary activities after
taxation (493) 819 372
Capital (loss)/return per Ordinary Share (note c) (1.0)p 1.6p 0.7p
Weighted average number of Ordinary Shares in issue
in the period 51,171,625 51,816,919 51,767,674
Notes:
a) Total return per Ordinary Share is total return
after taxation divided by the weighted average number
of Ordinary Shares in issue during the period.
b) Revenue return per Ordinary Share is revenue return
after taxation divided by the weighted average number
of Ordinary Shares in issue during the period.
c) Capital return per Ordinary Share is capital return
after taxation divided by the weighted average number
of Ordinary Shares in issue during the period.
1. Income
Six months
ended Six months ended Year ended
30 September
2014 30 September 2013 31 March 2014
GBP'000 GBP'000 GBP'000
Loan stock
interest 560 214 501
Dividend income 50 283 283
Overseas based
Open Ended
Investment
Companies
('OEICs') - 1 1
Bank deposits - - 2
610 498 787
1. Investments held at fair value through profit or loss
Quoted Unquoted Total
GBP'000 GBP'000 GBP'000
Book cost as at 1 April 2014 2,548 43,089 45,637
Investment holding losses (2,308) (7,243) (9,551)
Valuation at 1 April 2014 240 35,846 36,086
Movements in the period:
Purchases at cost - 1,063 1,063
Disposal proceeds - (1,218) (1,218)
Realised losses - (10,956) (10,956)
Investment holding (losses)/gains (4) 10,798 10,794
Valuation at 30 September 2014 236 35,533 35,769
Book cost at 30 September 2014 2,548 31,978 34,526
Investment holding (losses)/gains (2,312) 3,555 1,243
Valuation at 30 September 2014 236 35,533 35,769
*Capitalised interest of GBP685,000 was recognized in the period and is
included within purchases at cost.
1. Transactions with the manager
Foresight Group, acting as investment manager to the Company in respect
of its venture capital investments, earned fees of GBP441,000 during the
period (30 September 2013: GBP491,000; 31 March 2014: GBP947,000). Fees
excluding VAT of GBP64,000 (30 September 2013: GBP62,000; 31 March 2014:
GBP126,000) were received during the period for company secretarial,
administrative and custodian services to the Company.
At the balance sheet date, there was GBP9,000 due to or from Foresight
Group (30 September 2013: GBPnil; 31 March 2014: GBP317 due from
Foresight Group) and GBPnil due to Foresight Fund Managers Limited (30
September 2013: GBPnil; 31 March 2014: GBPnil). There were no related
party transactions in the period and no amounts have been written off in
the period in respect of debts due to or from related parties.
END
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Foresight 3 VCT PLC via Globenewswire
HUG#1875357
http://www.foresightgroup.eu/
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