TIDMFTD
FORESIGHT 3 VCT PLC
2016 Highlights
-- Net asset value per Ordinary Share at 31 March 2016 was 59.6p (31 March
2015: 66.8p). After allowing for the 3.0p per share dividend paid on 24
March 2016, this represented a fall in net asset value of 6.3% for the
year.
-- The Ordinary Shares fund provided follow-on funding totalling GBP0.38
million to three portfolio companies and invested GBP2.5 million in five
new investments.
-- The Ordinary Shares fund realised GBP2.1 million from sales and loan
redemptions from seven portfolio companies.
Chairman's Statement
Performance
During the year to 31 March 2016, the net asset value per Ordinary Share
decreased by 6.3% to 59.6p from 66.8p at 31 March 2015, after allowing
for the 3.0p per share dividend paid in March 2016.
Overall, the Board is happy with the composition of the portfolio
including the recent addition of five new investments for a total
consideration of GBP2.5 million. Several of these investments are
already making encouraging progress, particularly Itad and Specac. The
performance in the last quarter of the year under review demonstrated
some of this portfolio improvement showing a small increase in
underlying NAV of 1.6%.
The Board believes the portfolio is well placed to deliver growth,
underpin future dividends and enhance shareholder returns.
The fall in the year, however, is disappointing but effectively reflects
poor performance of one portfolio company, Aerospace Tooling, which has
seen a reduction or delay in orders from some of its customers who have
been severely impacted by the significant drop in the price of oil.
Although it did not feel the impact as acutely as Aerospace Tooling, TFC
Europe also suffered a drop in revenues from market driven factors
related to the fall in the price of oil. Aerospace Tooling was reduced
by GBP1.76 million or 3.5p per share. Some encouraging progress has been
made in winning orders and new customers but the related sales cycles
inevitably takes time. A new experienced CEO was appointed in January
2016 and the company has since seen improving sales and returning to
profitability. Despite the further provisions against the valuation of
ATL following the period of sustained difficult trading condition, the
company has previously repaid the entire cost of the original investment
to the VCT.
Derby-based Datapath Group is the largest holding in the portfolio
valued at GBP8.7 million. The company 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
itsmarket share in control rooms, betting shops and signage and entering
other new areas such as the medical market. For the year to 31 March
2015, an operating profit of GBP6.8 million was achieved on sales of
GBP20.3 million, with the North American division trading ahead of
budget.
The Board and Manager continue to focus on derisking large portfolio
exposures such as Datapath and, in November 2015, Datapath paid a
special dividend of GBP2.1 million to the Company. This was met
principally from the company's own cash resources and management loans
which are expected to be repaid from internally generated cash flow over
the next year.
For a detailed review of all of the Company's investments I refer you to
the Manager's Report that starts on page 11 of the Annual Report and
Accounts.
Dividends
An interim dividend of 3.0p per Ordinary Share for the year ended 31
March 2016 was paid on 24 March 2016. The shares were quoted ex dividend
on 10 March 2016 and the record date for payment was 11 March 2016. 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. Distributions, however, will inevitably be
dependent on cash being generated from portfolio investments and
successful realisations.
The recent success in generating cash from portfolio investments within
the Ordinary Shares fund gives the Board confidence that it will be able
maintain the future payment of dividends to Shareholders.
Share Buybacks
During the period under review 533,877 Ordinary Shares were repurchased
for cancellation at a cost of GBP235,000. These were purchased at a
discount to NAV ranging from 22.5% to to 34.9%. There were no shares
issued during the year.
VCT Legislation
As previously discussed, changes to VCT regulations were finally
confirmed on 18 November 2015. There were no material changes to those
detailed in my interim report. One of the principal purposes of the
changes was to prevent VCT investment being used to acquire existing
shares or the principal trade or assets of businesses.
The key aspects of the proposed new rules are as follows:
-- Introducing an 'age of company' restriction of a maximum of seven years
at the time of first VCT investment;
-- Introducing a lifetime state aided investment limit of GBP12 million; and
-- Prohibiting VCT investment financing acquisitions (as mentioned above).
Although the recent rule changes preclude VCTs investing in replacement
capital transactions, the Treasury and HMRC have since agreed to review
this policy following representations from inter alia the British
Venture Capital Association, the Association of Investment
Companies, a number of legal firms and VCT managers, including Foresight
Group.
Rather than an absolute restriction on replacement capital transactions,
this review will consider relaxing the current rules to enable VCTs to
invest an element of replacement capital alongside a significant element
of growth capital in any particular transaction, possibly up to a
maximum of 50% of the total amount invested. This review is currently
expected to take up to two years and shareholders will be kept informed
of any significant developments.
If concluded satisfactorily, the range of potential investment
opportunities for VCTs would be widened, compared to the more
restrictive regime that currently applies.
Brexit
There are two principal areas where the implementation of Brexit could
impact the VCT:
1. Investee Companies - there has been much debate on the possible impact on
trade between Europe and the UK following the Brexit vote and how this
will impact UK corporates. Although it is much too early to say how large
or small the impact may ultimately be, we do not believe that the impact
will be material in the short to medium term; and
2. Regulation - many parts of the current VCT legislation has been cast from
EU State Aid Directives, however, we do not believe that even following
Brexit that changing VCT legislation will be a priority for the UK
Government and therefore we do not expect any changes to the existing
legislation in the short to medium term.
Merger Consideration
The Board has been closely monitoring the successful merger of Foresight
VCT plc and Foresight 2 VCT plc following Shareholder approval in
December 2015. Although the Board has not formally engaged with another
company at this time, it is considering whether a merger and the
benefits therefrom would be in Shareholders' long term interests and
hopes to provide a further update in that regard in due course.
Annual General Meeting
The Company's Annual General Meeting will take place on 30 August 2016
at 1.00pm. I look forward to welcoming you to the Meeting, which will be
held at the offices of Shakespeare Martineau LLP in London.
Details can be found on page 61 of the Annual Report and Accounts.
Prior to the formal business of the Annual General Meeting, Foresight
Group, the investment Manager and two investee companies will give
presentations between 12.00pm and 1.00pm.
Outlook
Although there is still considerable uncertainty in continental Europe
as a result of stresses within the Euro area, the UK economy is in
reasonable health and many businesses are making steady progress. The
recent decision resulting from the referendum on 23 June, for the UK to
begin negotiations to leave the European Union has also given rise to
further uncertainty and it will take time to gauge the full effect that
this may have for the Company. Many of the familiar risks, both
financial and political, remain and there can be no grounds for
complacency as all of our investments operate in competitive
environments.
We hope that the effect of the improvement in the economy over the last
few years continues, as this has been reflected in the improving
performance of the private equity part of the Ordinary Shares portfolio.
Within the portfolio, there is an ongoing focus on performance and
realisations, refinancings, dividends and loan repayments which underpin
the Board's dividend commitment to Shareholders. It has also enabled
several new investments to be made which we anticipate will further
enhance Shareholder returns.
Raymond Abbott
Chairman
28 July 2016
Manager's Report
In the year under review for 31 March 2016, the net asset value per
Ordinary Share decreased by 6.3% to 59.6p per share as at 31 March 2016
from 66.8p per Ordinary Share as at 31 March 2015 (after taking into
account the 3.0p per share dividend paid in March 2016). During the year
the Company benefitted from good performances by several portfolio
companies, the receipt of a GBP2.1 million dividend from Datapath and a
recapitalisation of GBP565,000 from TFC, but was negatively impacted by
a GBP1.76 million reduction in the valuation of one investment,
Aerospace Tooling Holdings due to a reduced level of orders from its two
largest customers.
An interim dividend of 3.0p per Ordinary Share was paid on 24 March 2016
to shareholders on the Register on 10 March 2016.
Having realised a significant number of investments over recent years,
the principal focus in the year under review was to make new
investments. Five new investments were made during the period, several
of which are already making encouraging progress, particularly Itad and
Specac. Further details of these new investments can be found in the
Portfolio Review later in this report.
Foresight Group continues to see a number of high quality private equity
investment opportunities. Foresight believes that, with the UK and US
economies slowly recovering, investing in growing, well managed private
companies should, based on past experience, generate attractive returns
over the longer term. Based on its current deal flow, Foresight Group
believes that attractive deals are currently available.
The recent referendum results on the United Kingdom leaving the European
Union is not expected to result in any immediate material changes to the
overall portfolio. Any prolonged weakness in Sterling will benefit those
companies in the portfolio with a high proportion of exports.
Impact of recent changes to VCT legislation
The budget in July 2015 introduced a number of significant changes to
VCT legislation. Following receipt of EU State Aid approval, these
regulatory changes took effect from 18 November 2015, the date of Royal
Assent to the Finance Act 2015. Two of these changes in particular are
expected to impact the future management of all VCTs. First the
restriction on the age of a company that is eligible for investment by a
VCT (generally no more than seven years from the date of the company's
first commercial sale) and second, restrictions on VCT funds being used
in acquiring an interest in another company or existing business. By
precluding replacement capital transactions, such as shareholder
recapitalisations, management buy-outs or buy-ins and funding
acquisitions by investee companies, the restrictions are designed to
encourage more development capital transactions and investment in
generally younger, less mature companies.
Foresight VCTs already invest in all these types of transactions so,
although the proposed changes will result in a change of investment
emphasis, they are not expected to have a material impact. The VCTs will
continue to focus on investing in established, growing, profitable
companies with an attractive risk/return profile as at present but will
change emphasis from replacement capital transactions to development
capital investments, including investing in earlier stage companies with
a clear path to profitability. It will not be the policy, except in
exceptional circumstances, to invest in start up companies.
Foresight has a strong track record in development capital transactions,
having invested in both growth capital and replacement capital
transactions since its formation over 30 years ago. For example,
40% of all investments made since 2010 were development capital
transactions. Since then, 14 of these investments have been successfully
realised, generating an average return of 2.2 times original cost.
With this long and successful track record, Foresight's marketing
efforts have been refocused towards finding suitable, later stage
development capital investment opportunities, with the aim of
accelerating their growth. A number of such opportunities are currently
under active consideration. Foresight remains confident that sufficient,
suitable new and attractive investment opportunities can be sourced
which will meet its return criteria and comply with the VCT rules.
While the full implications of the new rules have yet to be established,
it is clear that, over the medium term, as existing investments are
realised, this change in investment emphasis and the nature of new
investments may lead to an increase in the VCTs' risk profile. Over the
medium term, however, any such increase in risk profile could be
tempered by a favourable outcome to the proposed VCT policy review, as
mentioned below. The rule changes will, however, make the VCTs'
operating environment more complicated and could limit the number of
opportunities available for investment. Similarly, the Company may not
necessarily be able to provide further investment funds for companies
already in its portfolio.
Proposed VCT Policy Review
Although the recent rule changes preclude VCTs investing in replacement
capital transactions, the Treasury and HMRC have since agreed to review
this policy following representations from inter alia the British
Venture Capital Association, the Association of Investment Companies and
a number of legal firms and VCT managers, including Foresight. Rather
than an absolute restriction on replacement capital transactions, this
review will consider relaxing the current rules to enable VCTs to invest
an element of replacement capital alongside a significant element of
growth capital in any particular transaction, possibly up to a maximum
of 50% of the total amount invested. This review and possible
consultation process are expected to start in the near future. At this
stage, it is not possible to forecast the ultimate outcome of the review,
particularly since any proposed amendments will currently require both
EU State Aid and Parliamentary approval. This process is expected to
take up to two years and shareholders will be kept informed of any
significant developments.
If this review concludes satisfactorily, the range of potential
investment opportunities for VCTs would be widened, compared to the more
restrictive regime that currently applies.
Portfolio Review
1. New investments
Company GBP
ABL Investments Limited 475,000
Itad Limited 250,000
Protean Software Limited 500,000
Specac International Limited 650,000
The Business Advisory Limited 650,000
Total 2,525,000
In September 2015, as part of a GBP4.2 million round alongside other
Foresight VCTs, the Company invested GBP475,000 in ABL Investments
Limited ("ABL") to support its continuing growth. ABL, based in
Wellingborough, Northants and with a manufacturing subsidiary in Serbia,
manufactures and distributes office power supplies and distributes
monitor arms, cable tidies and CPU holders to office equipment
manufacturers and distributors across the UK.
In September 2015, as part of a GBP4.0 million round alongside other
Foresight VCTs, the Company invested GBP250,000 in Itad Limited, a long
established consulting firm which monitors and evaluates the impact of
international development and aid programmes, largely in developing
countries. Customers include the UK Government's Department for
International Development, other European governments, philanthropic
foundations, charities and international NGOs. Most contracts are long
term, providing good revenue visibility, while more than half of the
employees are experienced consultants.
In July 2015, the Company invested GBP500,000 as part of a GBP4.0
million round alongside other Foresight VCTs to finance a management buy
in/buy out of Coventry based Protean Software Limited ("Protean").
Protean develops and sells business management and field service
management software for organisations involved in the supply,
installation and maintenance of equipment, across sectors including
facilities management, HVAC and elevator installation. Foresight has
introduced two experienced software executives as CEO and Chairman
respectively, who are working alongside three of the current directors
to drive the business forward and execute growth plans.
In April 2015, the Company and Foresight 4 VCT each invested GBP650,000
in shares and loan notes, alongside a further a GBP1.3 million
investment by Foresight VCT, in Specac International Limited ("Specac")
to finance a GBP2.6 million management buy-out of Specac Limited from
Smiths Group plc. The three Foresight VCTs together acquired a majority
equity shareholding with the management team holding the remaining
equity.
Specac, based in Orpington, Kent, is a long established, scientific
instrumentation accessories business, manufacturing high specification
sample analysis and sample preparation equipment used across a broad
range of applications in testing, research and quality control
laboratories and other end markets worldwide. The company's products are
primarily focused on supporting IR Spectroscopy, an important analytical
technique widely used in research and commercial/ industrial
laboratories.
In September 2015, as part of a GBP3.3 million round alongside other
Foresight VCTs, the Company invested GBP650,000 in The Business Advisory
Limited. This company provides a range of advice and support services to
UK based small businesses seeking to gain access to Government tax
incentives, largely on a contingent success fee basis. With a large
number of small customers signed up under medium term contracts, the
company enjoys a high level of recurring income and good visibility on
future revenues.
2. Follow-on funding
Company GBP
The SkillsGroup (formerly named AtFutsal Group) 34,014
Industrial Efficiency II Limited 187,500
Autologic Diagnostic Group Limited* 158,820
Total 380,334
* Representing capitalised interest.
3. Realisations
Cole Henry PE 2, Kingsclere PE 3 and Whitchurch PE 1, all acquisition
vehicles preparing to trade, repaid loans totaling GBP1,322,000. The
resultant funds were utilised in making new investments during the year.
In November 2015, the Company received a dividend of GBP2,111,929 from
Datapath.
In March 2016 the Company's interest in O-Gen Acme Trek was sold to
Blackmead Infrastructure Limited, a subsidiary of Foresight's
Inheritance Tax Solution, at book value for an initial cash
consideration and a deferred consideration.
In July 2015, TFC effected a successful recapitalisation and share
reorganisation, through which the Foresight VCTs were repaid all their
outstanding loans, together with accrued interest and a redemption
premium. The company was repaid GBP568,165 and increased its
shareholding from 14.29% to 17.78%.
During the year, 71,313 ordinary shares in AIM listed Zoo Digital were
sold, realising GBP8,023.
Loan repayments of GBP93,096 were received from the administrators of
i-plas Group.
After financial year end, on 8 July 2016, the investment in Integrated
Environmental Solutions Limited was sold for the current valuation
amount GBP425,000, realising a profit of GBP100,000 on original cost.
4. Material provisions to a level below cost
Company GBP
The SkillsGroup (formerly named AtFutsal Group) 411,679
MplSystems Limited 113,530
Total 525,209
The valuation of the investment in Aerospace Tooling Holdings Limited
was reduced by GBP1,755,797 to GBP93,000 during the year due to a lower
level of orders from its two largest customers. The cost of investment
at the year end was GBP50,000. The full original cost of the investment
has already been repaid to Foresight 3 VCT plc.
5. Performance Summary
The net asset value per Ordinary Share decreased by 6.3% to 59.6p per
share as at 31 March 2016 from 66.8p per Ordinary Share as at 31 March
2015 (after incorporating the 3p per share dividend paid in March 2016).
As explained below, the net asset value was negatively impacted by a
GBP1.76m reduction in the valuation of Aerospace Tooling Holdings.
During the year the Company benefitted from good performances by several
portfolio companies. Together with Itad and Specac, CoGen Limited,
Industrial Efficiency II, Ixaris Systems Limited, Positive Response
Communications Limited, and The Bunker Secure Hosting Limited all
performed well, supporting an increase in their aggregate valuation of
over GBP1.7 million. Five new investments totalling GBP2.5 million were
made during the year and are already making encouraging progress,
particularly Itad and Specac.
Itad has won several large long term contracts, providing good revenue
visibility for the current and future years, while Specac has
successfully launched new products and increased sales, particularly in
the important US market.
TFC's valuation was reduced by GBP1.13 million during the year
reflecting reduced demand from the Oil & Gas sector in marked contrast
to positive signs of improvement across a variety of other industry
sectors.
As a consequence of the VCT rule changes referred to above, Foresight's
marketing efforts have already been refocused towards finding more
suitable, later stage development capital investment opportunities, with
the aim of accelerating the growth of established, profitable companies.
A number of such opportunities are currently under active consideration.
The M&A market continues to be active, providing opportunities for
future realisations.
Portfolio Company Highlights
In September 2015, as part of a GBP4.2 million round alongside other
Foresight VCTs, the Company invested GBP475,000 in ABL Investments
Limited ("ABL") to support further growth. ABL, based in Wellingborough,
Northants and with a manufacturing subsidiary in Serbia, manufactures
and distributes office power supplies and distributes monitor arms,
cable tidies and CPU holders to office equipment manufacturers and
distributors across the UK. Founded in 2003, ABL has grown strongly over
the last five years, achieving an EBITDA of GBP1.9 million on sales of
GBP5.5 million in its financial year to 31 August 2015, reflecting a
strong focus on customer service, speed of delivery and value for money.
Growth is forecast to be achieved by broadening both the product range
and customer base in the UK, improving efficiency, marketing materials
and the website and, in due course, expanding internationally. A new
Chairman with experience of the office supplies market has been
appointed to the Board, alongside a new Finance Director, with plans in
hand to recruit a COO. A Financial Controller and additional salesmen
have been recruited.
In June 2013, the Company invested GBP500,000 alongside other Foresight
VCTs in a GBP3.5 million investment in Dundee-based Aerospace Tooling
Holdings ("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 well established relationships with companies serving the
aerospace, military, marine and industrial markets. In the year to 30
June 2014, a number of large orders underpinned exceptional growth, with
turnover doubling and EBITDA profits increasing significantly to a
record GBP4.3 million.
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 loan of
GBP450,000 and dividends of GBP50,000 equal to the cost of its equity
investment, the Company retained its original 7.7% equity shareholding
in the company, effectively at nil cost.
Although sales and profitability were expected to be lower in the year
to 30 June 2015, the actual trading results were weaker than budgeted,
EBITDA of GBP2.5 million being achieved on sales of GBP8.1 million,
reflecting weak trading in the final quarter of the year due to a
premature reduction of work under a major defence contract. This
unexpected early contract termination was subsequently followed by a
significant reduction in work for an important customer in the Oil and
Gas industries, as a consequence of the falling oil price. With poor
order visibility, costs were reduced, management changes made and sales
efforts increased substantially.
Trading in the first half to December 2015 continued to be weak, with
EBITDA losses being incurred on significantly lower sales. A new
experienced CEO was appointed in January 2016 and the company has since
seen improving sales, winning customers and returning to profitability.
Following the GBP48.0 million secondary buy-out of Autologic Diagnostics
Group, an automotive diagnostics software company, by Living Bridge
(formerly ISIS Private Equity) in January 2012, the Company retained
investments in equity and loan stock valued at GBP1.98 million. For the
year to 31 December 2014, an EBITDA of GBP5.4 million was achieved on
sales of GBP19.7 million, with sales relatively stronger in the UK and
Europe compared with the USA. In May 2015, a new business model was
launched to generate recurring revenues and improve the quality of the
company's earnings from a new product, Assist Plus, and associated
Assist Plus service. This change in strategy towards a pure recurring
revenue model has resulted in certain exceptional costs being incurred
and impacted EBITDA during 2015, reducing this to GBP4.0 million on
revenues of GBP18.5 million for the year to 31 December 2015, in line
with expectations. At 31 March 2016, the company had cash balances of
over GBP6.0 million. Management are transitioning the existing customer
base onto the new support service platform and growing sales of the new
product and service to both new and existing customers. Depending on the
number of existing customers transitioning onto the new product and
service and level of new customer sales, this change in strategy will
also impact EBITDA in 2016 but is expected to increase shareholder value
over the longer term. Initial signs are promising, with largely positive
feedback from customers.
Biofortuna, established in 2008, is a molecular diagnostics business
based in the North West, which has developed unique expertise in the
manufacture of freeze dried, stabilised DNA tests. Biofortuna develops
and sells both its own proprietary tests as well as a comprehensive
range of contract manufacturing services. A GBP1.3 million round to
finance capital expenditure and working capital was completed in August
2013, in which the Company invested GBP99,066 in the first tranche and a
further GBP50,901 in the second, final tranche in April 2014. For the
year to March 2015, a substantially reduced operating loss of GBP528,000
was incurred on higher sales of GBP1.1 million (2014: an operating loss
of GBP1.1 million incurred on sales of GBP325,000). Trading in the year
to 31 March 2016 was well ahead of budget and the previous year, with an
improved, reduced EBITDA loss, the profitable Contract Manufacturing
division helping to offset investment in the proprietary products being
developed by the Molecular Diagnostics division.
To finance the development of new products, a GBP1.6 million round was
concluded in January 2015, of which GBP890,000 was committed by the
Foresight VCTs. The Company committed to invest GBP214,335, of which
GBP127,997 was invested as the first tranche. With a lower than planned
cash outflow, the second, final tranche is now expected to be drawn down
during late 2016.
Building on the success of its GBP48.0 million, 10MW Birmingham Bio
Power Limited project ("BBPL") with Carbonarius (a 50:50 joint venture
with Plymouth-based Una Group), O-Gen UK has become the UK's leading
independent developer of Advanced Conversion Technology waste to energy
projects. In March 2015, O-Gen UK and Una Group combined their two teams
into a new company, CoGen Limited, to further develop their substantial,
combined pipeline of projects. In order to accelerate growth and provide
additional working capital, a new investor subscribed GBP750,000 for
equity in CoGen, alongside a loan of GBP500,000 from Una Group. Funds
managed by Foresight hold 22.13% of CoGen's equity, including Foresight
VCT (3.53%), Foresight 3 VCT (7.73%), Foresight 4 VCT (8.55%) and the
Foresight UK Sustainable EIS fund (2.32%). O-Gen UK remains the
shareholder in BBPL.
In March 2015, CoGen reached financial close on a GBP53.0 million, 10MWe
waste wood to energy plant in Welland, Northamptonshire, using the same
technology and partners as BBPL. This latest project was funded with
investment from Balfour Beatty plc, Equitix and Noy (an Israeli
investment fund), with CoGen earning development fees on the transaction
while retaining a 12.5% shareholding in the project.
Also in March, CoGen completed the acquisition of the entire O-Gen
Plymtrek site in Plymouth, originally developed by Carbonarius and MITIE
plc, on which an GBP8.0 million 4.5MW waste to energy plant is planned
to be built utilising much of the footprint of the existing plant. The
funding for this transaction was provided by Aurium Capital Markets,
with CoGen owning 50% of the acquisition vehicle and Aurium 50% but with
a prior ranking return on the latter's invested capital.
In October 2015, CoGen reached financial close on a GBP98.0 million,
21.5MW project in Ince Park, Merseyside to be fuelled with circa 160,000
tonnes per annum of recycled wood fibre. All of the funding was provided
by the Bioenergy Infrastructure Group ("BIG", of which Foresight Group
is a co-sponsor) through a combination of shareholder loan and shares
which receive a preferential return.
Cogen is developing its pipeline of projects and funding relationships,
with active support from Foresight and BIG. The market has become more
uncertain with the Government's changes in renewables policy, in
particular uncertainty relating to future CfD auctions. Cogen was
unfortunately not able to close its final, potential GBP120.0 million
Renewable Obligation Certificates ("ROC") project as time expired under
the ROC deadline. Cogen's primary deal pipeline comprises four projects
in Northern England and it plans to bid in the CfD auction due at the
end of 2016, with the aim of closing projects, if successful in that
auction, during 2017. BIG is expected to jointly fund this process,
requiring a total of GBP5.0 million of investment.
Year of financial
Project Name Project size (GBPm) close Shareholding
Birmingham Bio Power
Limited 48 2013 20.0%
Plymouth 20 2015 50.0%
Welland 53 2015 12.5%
Ince Park 98 2015 20.0%
It is unlikely that full value will be secured for Foresight VCT's
stakes in Cogen and O-Gen UK until the portfolio of plants is fully
operational. However, Foresight Group will keep this situation under
review.
In February 2014, the O-Gen Acme Trek facility in Stoke-on-Trent was
granted planning permission for an enlarged 8MW waste wood to energy
plant. It was not possible, however, to finance and redevelop the site
as a project qualifying for ROCs in time for the ROC deadline. In March
2016 the Company's interest in O-Gen Acme Trek was sold to Blackmead
Infrastructure Limited, a subsidiary of Foresight's Inheritance Tax
Solution, at book value based on an independent valuation for an initial
cash consideration and a deferred consideration element.
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 shops and signage and entering other new markets
such as medical. For the year to 31 March 2015, an operating profit of
GBP6.8 million was achieved on sales of GBP19.3 million, with the North
American division trading ahead of budget (2014: record operating
profits of GBP7.4 million on sales of GBP18.7 million). In November
2015, Datapath paid dividends of GBP6.3 million, comprising GBP2.1
million to the Company and the same amount to each of Foresight 2 VCT
and Foresight 4 VCT. This was met principally from the company's own
cash resources and short term loans which are expected to be repaid from
internally generated cash flow over the next year. For the year to March
2016, the company made an operating profit of GBP5.9 million on sales of
GBP19.9 million.
In May 2012, the Company invested GBP200,000 in Flowrite Refrigeration
Holdings alongside other Foresight VCTs to finance the GBP3.2 million
management buy-out of Kent-based Flowrite Services Limited. Flowrite
Refrigeration Holdings provides refrigeration and air conditioning
maintenance and related services nationally, principally to leisure and
commercial businesses such as hotels, clubs, pubs and restaurants. In
the year to 31 October 2014, the company traded well, achieving an
operating profit of GBP740,000 on sales of GBP10.8 million after
substantial investment in new engineers and systems.
In July 2015, the company completed another recapitalisation, returning
GBP156,000 of accrued interest to the Foresight VCTs, including
GBP23,000 to the Company, taking total cash returned on this investment
to 85% of cost. For the 14 months to 31 December 2015, the company
achieved a disappointing operating profit of GBP404,000 on sales of
GBP12.8 million, reflecting difficulties arising from installing a new
workflow IT system to improve operational efficiency and optimise
profitability. To drive the business forward, steps were taken in August
2015 to broaden the management team through the appointment of a new
Chairman and a new Finance Director.
ICA Group is a leading document management solutions provider in the
South East of England, reselling and maintaining office printing
equipment to customers in the commercial and public sectors. For the
year to 31 January 2015, trading was strong and ahead of budget, with an
EBITDA of GBP645,000 being achieved on sales of GBP3.7 million (2014:
EBITDA of GBP561,000 on sales of GBP3.0 million). Trading in the year to
31 January 2016 was in line with expectations and reflected continuing
investment in developing the sales team. With stronger demand from
SMEs and good cash generation, ICA completed a recapitalisation and
reorganisation in December 2014, enabling loans and interest totalling
GBP600,000 to be repaid. The recapitalisation was financed through a
GBP1.0 million bank loan facility and the company's cash resources. As
part of the reorganisation, Steven Hallisey, a seasoned executive with
relevant sector experience, was appointed Executive Chairman in January
2015.
In July 2014, as part of the first GBP1.4 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 the Company in
Industrial Efficiency II, alongside GBP990,760 from Foresight VCT. In
December 2014, the second GBP500,000 tranche was advanced, GBP125,000
from the Company and GBP375,000 from Foresight VCT. Industrial
Efficiency II provides energy efficiency fuel switching services,
enabling customers to make significant cost savings and reduce
emissions. Once each installation is completed, the company charges 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. The company is trading well to date, with
healthy cash balances.
In September 2015, as part of a GBP4.0 million round alongside other
Foresight VCTs, the Company invested GBP250,000 in Itad Limited, a long
established consulting firm which monitors and evaluates the impact of
international development and aid programmes, largely in developing
countries. Customers include the UK Government's Department for
International Development, other European governments, philanthropic
foundations, charities and international NGOs. For the year to 31
January 2015, Itad achieved an EBITDA of
GBP1.5 million on revenues of GBP8.8 million with significant future
growth forecast. A number of significant contracts have been won
recently and, as most contracts are long term, this provides good
revenue visibility for the current and future years.
Ixaris Systems has developed and operates Entropay, a web-based global
prepaid payment service using the VISA network. Ixaris also offers its
IxSol product on a 'Platform as a Service' basis to enable enterprises
to develop their own customised global applications for payments over
various payment networks. 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 to customers based on prepaid
cards. This division continues to make good progress. The first
deployment went live in late 2015, the second in early 2016 with a third
expected shortly. Ixaris was awarded an EU grant of EUR2.5 million, of
which EUR1.6 million will be received over three years, to help fund the
existing platform technology roadmap, which highlights the innovative
nature of the Payment System.
For part of the year to 31 December 2015, the company operated at around
EBITDA and cash flow break even while continuing to invest further in
Ixsol and Ixaris Payment System. For the full year to 31 December 2015,
reflecting strong trading and continuing investment in software and
systems, an EBITDA loss of GBP501,000 was incurred on sales of GBP10.8
million, ahead of budget (2014: an EBITDA loss of GBP622,000 on sales of
GBP9.5 million).
Mplsystems Limited (formerly The Message Pad) develops and sells contact
centre and customer service software on a SaaS (Software as a Service)
basis to improve the efficiency of its customers' call centres and
customer experience. For the year to 31 May 2015, the company incurred a
small operating loss on sales of GBP2.4 million, appreciably ahead of
the budgeted loss (2014: operating loss of GBP777,000 on sales of GBP1.8
million). The transition towards a SaaS business model continues to
progress well in the current year to date with a number of new contracts
and customers being won. The focus remains on sales, principally
expanding initial ticket sizes for larger customers in order to justify
a relatively high cost of customer acquisition.
For the year to the 31st May 2016, mplsystems achieved generated revenue
of GBP2.9 million, 22% ahead of revenue for the same period last year.
Focus remains on new business sales signing more SaaS deals. In terms of
the full year outlook, management forecast strong growth momentum to
continue. An experienced business development manager from IBM is due to
join the sales team in June 2016. Mplsystems has been included for the
second year running in the prestigious Gartner CRM Magic Quadrant.
In December 2014, the Company invested GBP500,000 alongside other
Foresight VCTs in a GBP2.0 million round to finance a shareholder
recapitalisation of Positive Response Communications. Established in
1997, the company monitors the safety of people and property from its 24
hour monitoring centre in Dumfries, Scotland. Customers include several
major restaurant and retail chains. For the year ended 31 March 2015, an
EBITDA of GBP637,000 was achieved on sales of GBP2.0 million. In the
financial year to 31 March 2016, sales grew modestly with reduced EBITDA
profits, reflecting investment in improving efficiency and systems and
recruitment of more sales staff. The management team has been
strengthened with the appointment of three experienced executives as
Chairman, CEO and Finance Director respectively.
In April 2013, the Company invested GBP650,000 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 Acton, 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
and profits have grown strongly, following the introduction of new
camera formats, acquisitions in both the UK and USA and increased sales
and marketing efforts.
In December 2014, Procam acquired True Lens Services, based in Leicester,
which specialises in the repair, refurbishment and supply of camera
lenses with further support from the Foresight VCTs. In March 2015, in
order to service the requirements of many of its existing UK customers
and enter the large US market, Procam acquired HotCam New York City
which provides camera, audio and lighting rental for TV production, plus
crew and related production services. These two acquisitions were
supported by a further investment of GBP1.3 million from the Foresight
VCTs, of which the Company invested GBP451,385.
In February 2016, ProCam acquired the trading assets of the film
division of Take 2 Films which provides digital and film camera
equipment for Film and TV. This was funded by bank debt and asset
finance facilities.
For the year to 31 December 2014, the company achieved an EBITDA of
GBP2.3 million on revenues of GBP8.1 million, ahead of the prior year,
reflecting organic growth and the integration of the Hammerhead
acquisition. Trading in the year to 31 December 2015 was strong with an
EBITDA of GBP3.3 million being achieved on sales of GBP11.5 million,
reflecting both organic growth, driven principally by the strong
performance of the London office, and impact of the acquisitions during
the year.
In July 2015, as part of a GBP4.0 million round alongside other
Foresight VCTs, the Company invested GBP500,000 in Coventry-based
Protean Software. Protean develops and sells business management and
field service management software, together with related support and
maintenance services, to organisations involved in the supply,
installation and maintenance of equipment, across a number of sectors
including facilities management, HVAC and elevator installation.
Protean's software suite offers both desktop and mobile variants used on
engineers' Android devices. A new CEO and an experienced Chairman were
appointed at completion and a new Financial Controller recruited
subsequently. For the year to 31 March 2015, EBITDA of GBP900,000 was
achieved on sales of GBP3.0 million. Trading in the year to 31 March
2016 was ahead of the previous year while profits were in line with the
previous year, reflecting increased investment and overheads.
In April 2015, Foresight funds invested GBP2.6 million in shares and
loan notes in Specac International ("Specac") to finance a management
buy-out of Specac Limited from Smiths Group plc. The Company invested
GBP650,000, alongside GBP1.3 million from Foresight VCT and
GBP650,000 from Foresight 4 VCT, together acquiring a majority equity
shareholding with the management team holding the remaining equity.
Specac, based in Orpington, Kent, is a long established, leading
scientific instrumentation accessories business, manufacturing high
specification sample analysis and sample preparation equipment a broad
range of applications in testing, research and quality control
laboratories and other end markets Worldwide. The company's products are
primarily focused on supporting IR Spectroscopy, an important analytical
technique widely used in research and commercial / industrial
laboratories.
For the year to 31 July 2015, the company achieved EBITDA of GBP906,000
on sales of GBP6.9 million. Trading in the current year to date has
exceeded expectations with profit growth ahead of forecast, reflecting
greater focus on sales and costs. The company has accelerated new
product development and successfully launched new products. A
non-executive Chairman has also been appointed with a strong sales and
marketing background in the scientific instrumentation market who will
complement the existing management team and assist in further developing
the business.
TFC Europe, a leading distributor of technical fasteners in the UK and
Germany, performed satisfactorily during the year to 31 March 2015,
achieving an operating profit of GBP2.8 million on sales of GBP20.3
million (2014: operating profit of GBP2.8 million on sales of GBP19.5
million). Trading in the year to 31 March 2016, however, was appreciably
weaker than budgeted due to a general downturn in the UK manufacturing
sector, particularly the Oil and Gas sector.
In July 2015, the company effected a successful recapitalisation, as a
result of which GBP2.4 million was received by the Foresight VCTs,
repaying all their outstanding loans, together with accrued interest and
a redemption premium. The overall Foresight shareholding increased from
53.6% to 66.7%. The Company received GBP568,165 and increased its
shareholding from 14.29% to 17.78%. A number of senior management
changes and promotions were made to facilitate the planned retirement of
the Chairman, helping the CEO to drive strategic growth projects,
particularly in Germany and focus on new customer targets within the
aerospace sector. In April 2015, two senior managers were promoted to
Sales Director and Commercial Director roles. A Group Operations Manager
has been appointed to drive cost efficiencies and introduce best
operational practice across the Group.
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 2015, an EBITDA of GBP2.2 million was achieved on
sales of GBP9.6 million (2014: EBITDA of GBP2.2 million on sales of
GBP9.3 million). Recurring annual revenues presently exceed GBP9.3
million while cash balances remain healthy. On 31 March 2015, The Bunker
repaid all its shareholder loans and outstanding interest totalling
GBP6.5 million, financed through a GBP5.7 million secured medium term
bank loan plus GBP1.0 million from its own cash resources. In total,
GBP5.1 million was repaid to the Foresight VCTs, comprising GBP3.0
million of loan principal and GBP2.1 million of interest. The Company
received GBP1.7 million, comprising GBP1.3 million of loan principal and
GBP408,994 of interest and retains an 10.3% shareholding. The company
has now commenced a trial with a large distributor which serves many
value added resellers. A new, experienced Sales Manager has been
recruited to lead channel sales. A number of acquisitions have been
reviewed with a view to increasing the scale of operations.
In September 2015, as part of a GBP3.3 million round alongside other
Foresight VCTs, the Company invested GBP650,000 in The Business Advisory
Limited. This company provides a range of advice and support services to
UK-based small businesses seeking to gain access to Government tax
incentives, largely on a contingent success fee basis. With a large
number of small customers signed up under medium term contracts, the
company enjoys a high level of recurring income and good visibility on
future revenues.
For the year to 30 September 2015, a net profit before tax of GBP1.4
million on sales of GBP4.2 million was achieved, well ahead of the prior
year. Management has been strengthened by the appointment of a new COO
in January 2016 and a new experienced, non-executive Chairman.
Reflecting a decline in trading in the second half of the year, The
SkillsGroup (formerly named AtFutsal Group) was placed into
administration on 10 December 2015, with the prospect of only minimal
recoveries. The company ran government-approved education programmes for
students aged 16-18 years old, sourced from Football clubs, colleges,
academies and training/accreditation organisations, the funding for
which was provided by the Education Funding Agency. Arenas in Birmingham,
Leeds and Swindon were used in part for these education programmes.
Trading during 2015 was weak, resulting in a small EBITDA loss being
incurred, compounded by the number of students undertaking programmes
for the new academic year which began in September 2015 falling by 50%
compared to the previous year. In early 2015, as part of a GBP355,000
funding round to support the planned growth of the Educational division
and a related share reorganisation, the Foresight VCTs invested a
further GBP300,000 (GBP100,000 in February 2015 and GBP200,000 in April
2015) of which the Company invested GBP34,014. Despite changes made to
senior management trading remained weak and the decision was made to
make a full provision of GBP411,679 against the cost of the investment,
reducing the valuation to nil.
Russell Healey
Head of Private Equity Foresight Group
28 July 2016
Principal risks, risk management and regulatory environment
The Board believes that the principal risks faced by the Company are:
-- Economic risk - events such as an economic recession and movement in
interest rates could affect smaller companies' performance and
valuations. The Company mitigates this risk by investing in a diversified
portfolio of companies across a variety of sectors which provides
protection against such events.
-- Loss of approval as a Venture Capital Trust - the Company must comply
with Section 274 of the Income Tax Act 2007 which allows it to be
exempted from corporation tax on investment gains. Any breach of these
rules may lead to: the Company losing its approval as a VCT; qualifying
shareholders who have not held their shares for the designated holding
period having to repay the income tax relief they obtained; and future
dividends paid by the Company becoming subject to tax in the hands of
investors. The Company would also lose its exemption from corporation tax
on capital gains. To mitigate this risk the company employs specialists
lawyers to monitor and advise on matters that may impact qualifying
status.
-- Investment and strategic - inappropriate strategy, poor asset allocation
or consistently weak stock selection leading to under performance and
poor returns to shareholders. To mitigate this risk the Company ensures
its directors have the appropriate qualities and experience to make
decisions that maximise shareholder benefit.
-- Regulatory - the Company is required to comply with the Companies Acts
2006, the rules of the UK Listing Authority and United Kingdom Accounting
Standards. Breach of any of these might lead to suspension of the
Company's Stock Exchange listing, financial penalties or a qualified
audit report. To mitigate this risk the company ensures the staff of the
Investment Manager have the appropriate knowledge and experience to
prevent breaches of any required standards and where appropriate will
seek professional advice on regulatory matters concerning the company.
-- Reputational - inadequate or failed controls might result in breaches of
regulations or loss of shareholder trust. To mitigate this risk the
Company maintains a transparent relationship with its shareholders and
regularly solicits their views.
-- Operational - failure of the Manager's or Company Secretary's accounting
systems or disruption to its business leading to an inability to provide
accurate reporting and monitoring. To mitigate this risk the Company has
a business continuity plan in place and regularly reviews all third party
service providers to ensure they have similar plans and procedures in
place.
-- Financial - inadequate controls might lead to misappropriation or loss of
assets. Inappropriate accounting policies might lead to misreporting or
breaches of regulations. Additional financial risks, including interest
rate, credit, market price and currency, are detailed later in this note.
-- Market risk - investment in AIM traded, ISDX Growth Market traded and
unquoted companies by its nature involves a higher degree of risk than
investment in companies traded on the main market. In particular, smaller
companies often have limited product lines, markets or financial
resources and may be dependent for their management on a small number of
key individuals. In addition, the market for stock in smaller companies
is often less liquid than that for stock in larger companies, bringing
with it potential difficulties in acquiring, valuing and disposing of
such stock.
-- Liquidity risk - the Company's investments, both unquoted and quoted, may
be difficult to realise. Furthermore, the fact that a share is traded on
AIM or ISDX Growth Markets does not guarantee that it can be realised.
The spread between the buying and selling price of such shares may not
reflect the price that any realisation is actually made.
The Board regularly reviews the principal risks and uncertainties facing
the Company which the Board and the Manager have identified and the
Board sets out delegated controls designed to manage those risks and
uncertainties. Key risks within investment strategy are managed by the
Board through a defined investment policy, with guidelines and
restrictions, and by the process of oversight at each Board meeting.
Operational disruption, accounting and legal risks are also covered at
least annually and regulatory compliance is reviewed at each Board
meeting. The Directors have adopted a robust framework of internal
controls which is designed to monitor the principal risks and
uncertainties facing the Company and provide a monitoring system to
enable the Directors to mitigate these risks as far as possible. Details
of the Company's internal controls are contained in the Corporate
Governance and Internal Control sections.
Income Statement
for the year ended 31 March 2016
Notes Year ended 31 March 2016 Year ended 31 March 2015
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Realised
losses on
investments 8 - (10,922) (10,922) - (10,012) (10,012)
Investment
holding
gains 8 - 7,466 7,466 - 7,607 7,607
Income 2 2,360 - 2,360 864 - 864
Investment
management
fees 3 (186) (559) (745) (216) (648) (864)
Other expenses 4 (360) - (360) (420) - (420)
Return/(loss)
on ordinary
activities
before
taxation 1,814 (4,015) (2,201) 228 (3,053) (2,825)
Taxation 5 - - - (35) 35 -
Return/(loss) on
ordinary activities 1,814 (4,015) (2,201) 193 (3,018) (2,825)
after taxation
Return/(loss)
per Ordinary 7 3.6p (8.0)p (4.4)p 0.4p (6.0)p (5.6)p
Share
The total column of this statement is the profit and loss account of the
Company and the revenue and capital columns represent supplementary
information.
All revenue and capital items in the above Income Statement are derived
from continuing operations. No operations were acquired or discontinued
in the year.
The Company has no recognised gains or losses other than those shown
above, therefore no separate statement of total recognised gains and
losses has been presented.
Reconciliation of Movements in Shareholders' Funds
Capital
Share redemption
Called-up share capital premium account reserve Profit and loss account Total
Year ended 31 March 2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April 2014 512 8,899 1,972 26,648 38,031
Expenses in relation to
previous years share
issues* - (31) - - (31)
Repurchase of shares (8) - 8 (490) (490)
Dividends - - - (1,010) (1,010)
Transaction costs - - - (12) (12)
Loss for the year - - - (2,825) (2,825)
As at 31 March 2015 504 8,868 1,980 22,311** 33,663
* Trail commission payable to financial advisors in the year.
** Of this amount GBP5,417,000 (2015: GBP16,815,000) is realised and
distributable.
Capital
Share redemption
Called-up share capital premium account reserve Profit and loss account Total
Year ended 31 March 2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April 2015 504 8,868 1,980 22,311 33,663
Expenses in relation to
previous years share
issues* - (36) - - (36)
Repurchase of shares (6) - 6 (235) (235)
Dividends - - - (1,504) (1,504)
Transaction costs - - - 8 8
Loss for the year - - - (2,201) (2,201)
As at 31 March 2016 498 8,832 1,986 18,379** 29,695
Balance Sheet
at 31 March 2016
As at As at
31 March 31 March
2016 2015
Notes GBP'000 GBP'000
Fixed assets 28,340 31,532
Investments held at fair value through profit
or loss 8
Current assets 28,340 31,532
Debtors 9 941 730
Cash 620 1,507
Creditors 1,561 2,237
Amounts falling due within one year 10 (206) (106)
Net current assets 1,355 2,131
Net assets 29,695 33,663
Capital and reserves
Called-up share capital 11 498 504
Share premium account 8,832 8,868
Capital redemption reserve 1,986 1,980
Profit and loss account 18,379 22,311
Equity shareholders' funds 29,695 33,663
Net asset value per Ordinary Share 12 59.6p 66.8p
Cash Flow Statement
for the year ended 31 March 2016
Year ended Year ended
31 March 31 March
2016 2015
GBP'000 GBP'000
Cash flow from operating activities
Investment income received 306 942
Dividends received from investments 2,112 50
Deposit and similar interest received 1 1
Investment management fees paid (745) (864)
Secretarial fees paid (127) (127)
Other cash payments (238) (262)
Net cash inflow/(outflow) from operating activities
and returns on investment 1,309 (260)
Taxation - -
Investing activities
Purchase of unquoted investments and investments quoted
on AIM (2,747) (1,825)
Net proceeds on sale of unquoted investments 1,890 4,566
Net proceeds on sale of quoted investments 8 19
Net proceeds on deferred consideration and liquidation
of investments 314 295
Net capital (outflow)/inflow from financial investment (535) 3,055
Equity dividends paid (1,504) (1,010)
Management of liquid resources - 277
Movement in money market funds
Financing - 277
Expenses of previous years fund raising (36) (57)
Repurchase of own shares (121) (585)
(157) (642)
(Decrease)/Increase in cash (887) 1,420
Reconciliation of net cash flow to movement in net cash
(Decrease)/increase in cash for the year (887) 1,420
Net cash at start of the year 1,507 87
Net cash at end of year 620 1,507
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
March 2016, which were unmodified and did not contain any statements
under S498(2) of Companies Act 2006 or S498(3) of Companies Act 2006,
will be lodged with the Registrar of Companies. Statutory accounts for
the year ended 31 March 2016 including an unmodified audit report and
containing no statements under the Companies Act 2006 will be delivered
to the Registrar of Companies in due course.
2. The disclosures in this announcement have been prepared on the basis
of accounting policies set out in the statutory accounts of the Company
for the year ended 31 March 2016. All investments held by the Company
are classified as 'fair value through the profit and loss'. Unquoted
investments have been valued in accordance with IPEVC guidelines. Quoted
investments are stated at bid prices in accordance with the IPEVC
guidelines and Generally Accepted Accounting Practice.
3. Copies of the Annual Financial Report will be sent to shareholders
and will be available for inspection at the Registered Office of the
Company at The Shard, 32 London Bridge Street, London SE1 9SG and can be
accessed on the following website: www.foresightgroup.eu
4. Net asset value per Ordinary Share
Net asset value per Ordinary Share is based on net assets at the year
end of GBP29,695,000 (2015: GBP33,663,000), and on 49,836,524 Ordinary
Shares (2015: 50,370,401 Ordinary Shares), being the number of Ordinary
Shares in issue at that date.
5. Return per Ordinary Share
Year ended Year ended
31 March 31 March
2016 2015
GBP'000 GBP'000
Total loss after taxation (2,201) (2,825)
Basic (loss)/return per share (note a) (4.4)p (5.6)p
Revenue return from ordinary activities after taxation 1,814 193
Revenue return per share (note b) 3.6p 0.4p
Capital loss from ordinary activities after taxation (4,015) (3,018)
Capital loss per share (note c) (8.0)p (6.0)p
Weighted average number of shares in issue in the
year 50,254,735 50,900,357
Notes:
a) Total loss per share is total return after taxation divided by the
weighted average number of shares in issue during the year.
b) Revenue return per share is revenue return after taxation divided by
the weighted average number of shares in issue during the year.
c) Capital loss per share is capital return after taxation divided by
the weighted average number of shares in issue during the year.
6. Annual General Meeting
The Company's Annual General Meeting will take place on 30 August 2016
at 1.00pm. I look forward to welcoming you to the Meeting, which will be
held at the offices of Shakespeare Martineau LLP in London.
Prior to the formal business of the Annual General Meeting, Foresight
Group, the investment Manager and two investee companies will give
presentations between 12.00pm and 1.00pm.
7. Income
Year ended Year ended
31 March 31 March
2016 2015
GBP'000 GBP'000
Loan stock interest 247 813
Dividend income 2,112 50
Bank deposits 1 1
2,360 864
8. Investments held at fair value through profit or loss
Quoted Unquoted Total
GBP'000 GBP'000 GBP'000
Book cost as at 1 April 2015 2,486 30,990 33,476
Investment holding losses (2,152) 208 (1,944)
Valuation at 1 April 2015 334 31,198 31,532
Movements in the year:
Purchases at cost** - 2,906 2,906
Disposal proceeds (8) (2,080) (2,088)
Realised losses* (18) (10,992) (11,010)
Investment holding gains*** 11 6,989 7,000
Valuation at 31 March 2016 319 28,021 28,340
Book cost at 31 March 2016 2,460 20,824 23,284
Investment holding (losses)/gains (2,141) 7,197 5,056
Valuation at 31 March 2016 319 28,021 28,340
* Included within realised gains/(losses) on investments in the Income
Statement is GBP88,000 of deferred consideration in relation to the
disposal of Alaric Systems Limited in a previous year.
** Not included within purchases of investments in the cashflow
statement is GBP159,000 of capitalised interest which was recognised in
the year.
*** Investment holding gains in the income statement includes GBP466,000
of deferred consideration recognised in the year.
9. Transactions with the manager
Foresight Group, acting as investment manager to the Company in respect
of its venture capital investments, earned fees of GBP745,000 during the
year (2015: GBP864,000). Fees excluding VAT of GBP127,000 (2015:
GBP127,000) were received during the year for company secretarial,
administrative and custodian services to the Company.
At the balance sheet date, there was GBP1,839 due from Foresight Group
(2015: GBP14,446 due to Foresight Group) and GBPnil due to Foresight
Fund Managers Limited (2015: GBPnil due to Foresight Fund Managers). No
amounts have been written off in the year in respect of debts due to or
from these parties.
Foresight Group also received from investee companies arrangement fees
of GBP75,750 (2015: GBP41,828). VCF partners, an associate of Foresight
Group, received from investee companies, Directors' fees of GBP113,072
(2014: GBP144,795).
10. Related party transactions
No Director has an interest in any contract to which the Company is a
party.
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#2031656
http://www.foresightgroup.eu/
(END) Dow Jones Newswires
July 28, 2016 13:58 ET (17:58 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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