Foresight VCT PLC : Half-yearly report
FORESIGHT VCT PLC
Financial Highlights
Net asset value per Ordinary Share decreased by 2.5% for the period ended 30 June 2013 to 103.5p compared to 111.3p as at 31 December 2012, after adjusting for the interim dividend of 5.0p per share paid on 14 June 2013.
Net asset value per Planned Exit Share decreased by 8.2% for the period ended 30 June 2013 to 91.8p compared to 100.0p as at 31 December 2012.
Net asset value per Infrastructure Share increased by 0.4% for the period ended 30 June 2013 to 95.0p compared to 94.6p as at 31 December 2012.
Ordinary Shares Fund
Interim dividend of 5.0p per Ordinary Share was paid on 14 June 2013.
Realisation proceeds and loan repayments totalling £2,783,785 were received from six portfolio companies by the Ordinary Shares fund.
The Ordinary Shares fund provided follow-on funding totalling £704,012 for six portfolio companies and invested £2,300,000 in two new companies.
Planned Exit Shares Fund
The Planned Exit Shares fund provided follow-on funding totalling £132,880 for two portfolio companies and invested £180,000 in one new company.
Loan repayments were received by the Planned Exit Share fund totalling £50,000.
An interim dividend of 5.0p per Planned Exit Share will be paid on 25 October 2013.
Infrastructure Shares Fund
Investments were made by the Infrastructure Shares fund totalling £7,573,636 into six companies.
Proceeds of £5,986,761 were received from six special purpose vehicles and £8,875 was received from a loan repayment from one portfolio company.
Chairman's Statement
Performance and Dividends
At 30 June 2013, the Company had three classes of shares (Ordinary Shares, Planned Exit Shares and Infrastructure Shares) and each class of shares has its own portfolio of investments, the performances of which are more fully described in the Investment Manager's Report.
I am pleased to be able to report generally sound progress in the development of our investment portfolios, with the Ordinary Shares fund benefiting from several strongly performing private equity investments but being negatively impacted by write-downs in its environmental investments which also adversely affected the Planned Exit portfolio.
Ordinary Shares
The Ordinary Shares fund is an evergreen fund, unlike both the Planned Exit and Infrastructure Shares funds which are limited life funds. During the past two years, the Ordinary Shares fund has been progressively reshaped in line with the revised investment focus more fully described below and now requires significant further funds to take advantage of the current opportunities available for private equity investments. The Board therefore intends, subject to Shareholder approval, to raise up to £20 million through the issue of a prospectus to enable Foresight VCT to continue with its successful private equity investment strategy.
After adding back the 5.0p per Ordinary Share dividend paid in June 2013 the NAV of the Ordinary Shares dropped by 2.5% to 103.5p per share during the six months to 30 June 2013, from 111.3p per Ordinary Share at 31 December 2012. This reduction is consequent upon further write-downs to two of the remaining environmental investments of 2.7p per share, and does not yet fully reflect the strong performances of several recent private equity investments. This is in part demonstrated by the fact that during the three months from 31 March 2013 to 30 June 2013 the NAV per Ordinary Share increased by 5.3% (taking account of the latest NAV of 103.5p per share and the dividend paid in June 2013 of 5.0p per share).
The only remaining environmental investment, Closed Loop Recycling, recently raised £12.8 million for an expansion programme to double its capacity that should see it break into profitability. Consequently, the Board and Investment Manager are optimistic that any further strong performance in the private equity portfolio of the Ordinary Shares fund will no longer be offset by environmental investment write-downs.
During the six months to 30 June 2013, the Ordinary Share portfolio benefited from the performances of Autologic Diagnostics Group, Aquasium, Alaric and Blackstar Amplification, all of which saw increases in valuation or improved trading or order books during the period. The valuation of Trilogy fell as a result of lower sector multiples in the defence and communications sectors as well as some deferrals of orders, particularly in the US defence market although recent trading has been more promising. The provisions relating to environmental infrastructure investments resulted in valuation decreases outweighing portfolio gains, however, for the reasons stated relating to private equity investments, Foresight Group remains positive about the prospects for this portfolio.
Planned Exit Shares
The Planned Exit Shares fund is effectively fully invested, although realisations and loan repayments may be reinvested in new opportunities as they occur, in a range of established businesses on terms which the Manager believes will meet the fund's ultimate yield and capital return objectives. Based on evidence to date the Investment Manager remains confident about the overall prospects for the Planned Exit portfolio.
The NAV of the Planned Exit Shares decreased by 8.2% to 91.8p per share principally as a result of a write-down to Withion Power, an environmental investment. Some of the private equity investments experienced tougher trading conditions as a result of price competition; nevertheless these businesses remain profitable and we expect them to contribute to improvements in the underlying NAV in the medium term.
An interim dividend of 5.0p per Planned Exit Share will be paid on 25 October 2013. The shares will be quoted ex dividend on 9 October 2013 and the record date for payment will be 25 October 2013.
Infrastructure Shares
Two investments were completed in the first two weeks of 2013 which involved the acquisition of a 25% stake in each of the Sandwell Schools PFI Project and the Staffordshire Schools PFI Project, both of which are located in the West Midlands with an aggregate investment value of £3.4 million. Four investments in the PFI healthcare sector were completed in March 2013 comprising three acute hospitals and one forensic psychiatry unit with an aggregate investment value of £11.5 million. Across the eight investments, the fund now manages 13 individual school buildings, three hospitals and a forensic psychiatry unit.
Although the rate of investment to date is behind original expectations, Foresight Group expects to have fully invested the fund within the next few months and negotiations are currently well advanced to make future investments. In accordance with the original investment policy, these investments may be made within the wider infrastructure sector including solar investments or energy related investments where the strength of the investment counterparty will remain a priority.
The overall yield on the infrastructure portfolio has, due to market competition within the PFI sector, been negatively impacted over the last 12 months but this is being addressed with the wider investment focus described above. The Board anticipates paying a 5p per share dividend on the infrastructure shares by July 2014 as originally targeted but it is possible that this first dividend may come out of a combination of both revenue and capital reserves.
Total Expense Ratio
Although all Foresight VCT Shareholders may not own all three of the classes of shares currently in issue and noted above, the benefits from having an enlarged company consisting of all three share classes flows through to all Foresight VCT Shareholders by virtue of the total expenses of the Company being spread over a larger asset base. The total expense ratio of the company is currently 2.6%, which compares favourably with most generalist VCTs.
Investment Focus
Over time the investment focus of a share class will evolve in anticipation of how investment returns can be maximised for the benefit of Shareholders. Over the past two years this evolution has resulted in the Ordinary Shares fund applying its available funds entirely in private equity investments. This has resulted in a steady rate of new investments into businesses with demonstrable potential for both revenue and sustainable profit growth.
The Board and the investment manager believe there is currently an extremely attractive opportunity, post the recent recession, to make further private equity investments in order to enhance returns for Ordinary Shareholders. The ability to maintain this programme of these investments is important to enhance and maintain returns and for this reason the Board of Foresight VCT is launching a £20 million fund-raising in September 2013 to take advantage of continuing attractive investment opportunities.
Valuation Policy
Investments held by the Company have been valued in accordance with the International Private Equity and Venture Capital (IPEVC) valuation guidelines (August 2010) 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 (formerly PLUS) are valued at the bid price as at 30 June 2013. The portfolio valuations are prepared by Foresight Group and are subject to approval by the Board.
Dividends
The Company's policy is whenever possible to maintain a steady flow of tax-free dividends, generated from income or from capital profits realised on the sale of investments. As a result of the series of recent successful realisations, the Board paid an interim dividend of 5.0p per Ordinary Share on 14 June 2013. This dividend had an ex-date of 29 May 2013 and a record date of 31 May 2013. These realisations have also provided the funds required for new investments to replace those that have been sold, thereby creating the opportunity to generate further value for shareholders.
An interim dividend of 5.0p per Planned Exit Share will be paid on 25 October 2013. The shares will be quoted ex dividend on 9 October 2013 and the record date for payment will be 11 October 2013.
Share Issues and Share Buybacks
On 3 December 2012, the Company announced a small top-up offer of Ordinary Shares. During the six months to 30 June 2013, 502,391 Ordinary Shares were issued under the fully subscribed offer at prices ranging from 98.0p to 111.3p per Ordinary Share.
On 17 June 2013, 46,334 Ordinary Shares were allotted under the Company's Dividend Reinvestment Scheme at 98.0p per share.
All of these share issues were under the VCT provisions which commenced on 6 April 2006, principally 30% upfront income tax relief which can be retained by qualifying investors if the shares are held for the minimum five year holding period.
During the period, as part of the Company's continuing buyback programme, 315,973 Ordinary Shares were purchased for cancellation at a cost of £307,927 and 27,302 Planned Exit Shares were purchased for cancellation at a cost of £25,051.
It continues to be the Board's policy to manage the cash resources of each of the three share classes in order to be in a position to maintain a programme of regular share buybacks to facilitate shareholder disposals, estate planning and to manage the share price discount to net asset value on which the shares trade.
Outlook
The Board remains cautiously optimistic about the economic outlook in general. There are early signs of improvements in the UK in particular and over the medium term both the Board and Foresight Group, are optimistic that further realisations from the private equity portfolio can be achieved at attractive prices. The recent refocus of the Ordinary Share fund and expected final write-downs to environmental investments, should result in any significant realisations facilitating further distributions to shareholders.
John Gregory
Chairman
Telephone: 01296 682751
Email: j.greg@btconnect
30 August 2013
For further information please contact:
Gary Fraser, Foresight Fund Managers Limited Tel: 01732 471800
Investment Manager's Report
| Share Class | % NAV Change to 30 June 2013 | Dividend | NAV | Status |
| Ordinary Shares | -2.5 | 5.0p | 103.5p | Fully invested |
| Planned Exit Shares | -8.2 | - | 91.8p | Fully invested |
| Infrastructure Shares | 0.4 | - | 95.0p | In deployment phase |
Manager's Commentary
Compared to reports over recent years, I am pleased to report that, over the last few months, there has been a notable change in economic sentiment and encouraging signs of improving trading conditions across the portfolio with some companies achieving record results and growing order books. After several years of considerable macroeconomic uncertainties and weak demand, we are now hopeful that the economic climate and business confidence in the UK will improve, albeit we consider this is likely to be quite gradual. The buoyant stock market and strength of the M & A markets provide yet further evidence of returning confidence. Notwithstanding these encouraging signs, we are aware that significant economic uncertainties still remain, particularly in Europe where the outlook is still weak, albeit counterbalanced by the improving outlook in the USA, and that returning confidence could be knocked by relatively unpredictable macroeconomic factors.
Having made a number of secondary PFI investments, the Infrastructure Share class is continuing to look for more such investments but increasing competition for these assets has reduced yields substantially. Although the rate of investment to date is behind original expectations, Foresight Group expects to have fully invested the fund within the next few months and negotiations are currently well advanced to make future investments in the wider infrastructure sector.
Having successfully realised a significant number of investments over recent years, we continue to focus on achieving further profitable realisations from existing portfolio companies to facilitate the payment of dividends and make further new investments.
Planned £20 million Fund Raising
Foresight are currently experiencing strong deal flow, seeing an increasing number of high quality private equity investment opportunities, such as Procam and Aerospace Tooling referred to below. Foresight believe that, with the UK and US economies showing signs of continuing recovery, investing in growing, well managed private companies in this phase of the economic cycle should, based on past experience, generate attractive returns over the long term. With more realistic pricing expectations held by companies and selling shareholders, limited funding available from banks and relatively lower competition for deals, Foresight believe that now is the time to complete good deals on favourable terms. However, the Ordinary Shares fund has only finite cash resources and will soon have insufficient funds to take full advantage of this window of opportunity. As such, in order to invest in new investment opportunities from the strong deal flow being generated by Foresight, the Board is launching a prospectus to raise up to £20 million.
Portfolio Review: Ordinary Shares
During the period under review, several of the portfolio companies in the Ordinary Shares fund continued to perform or trade strongly, particularly Autologic Diagnostics, Alaric Systems, Aquasium Technology, Blackstar Amplification and Flowrite Refrigeration, resulting in their valuations increasing by a total of £1.57 million. Closed Loop Recycling successfully raised £12.8 million of loan finance to double the production capacity of its Dagenham plant and also entered into new long term supply contracts, as a consequence of which annual revenues are expected to double to over £35 million and future profits to increase substantially.
During the period, six follow on investments were made totalling £704,012. New investments totalling £2.3 million were made in two companies, namely Procam Television and Aerospace Tooling, while provisions totalling £995,477 were made against two of the environmental investments, Abacuswood (£389,891) and Withion Power (£605,586), reducing their valuations to nil. Closed Loop Recycling is the only remaining environmental investment in the portfolio and is now well positioned for substantial growth. The Board and Investment Manager have agreed that no further new environmental investments will be made. Reflecting the better risk adjusted returns available from private equity investments such as MBOs, MBIs, shareholder recapitalisations and growth capital, the Investment Manager will in future focus solely on private equity investment.
Follow-on funding (including capitalised interest)
| Company | £ |
| Abacuswood Limited | 120,000 |
| Autologic Diagnostics Holdings Limited | 34,673 |
| DCG Group Limited | 219,933 |
| Flowrite Refrigeration Holdings Limited | 11,888 |
| Trilogy Communications Limited | 181,518 |
| Withion Power Limited | 136,000 |
| Total | 704,012 |
New Investments
| Company | £ |
| Aerospace Tooling Corporation Limited | 1,500,000 |
| Procam Television Holdings Limited | 800,000 |
| Total | 2,300,000 |
Realisations
Following a public takeover offer from Espial Group Inc, the entire investment in Aim listed ANT plc was sold, realising £407,252.
The remaining investment in AiM listed Sarantel Group PLC was sold, realising £13,831.
£2 million was repaid by Leisure Efficiency III Limited to provide funds for the new investments in Aerospace Tooling Corporation Limited and Procam Television Holdings Limited.
A loan repayment and redemption premium were received from Alaric Systems totalling £265,814, while £89,404 was recovered from the administration of i-plas Group.
Proceeds of £7,484 were received from AppDNA.
Material provisions to a level below cost in the period
| Company | £ |
| Abacuswood Limited | 389,891 |
| Trilogy Communications Limited | 536,943 |
| Withion Power Limited | 605,586 |
| Total | 1,532,420 |
5. Performance Summary
Adjusting for the 5.0p per share dividend paid on 14 June 2013, the net asset value of the Ordinary Shares fund as at 30 June 2013 decreased by 2.5% from that at 31 December 2012 but increased by 5.3% from 31 March 2013. This reflects strong underlying trading in the second half of the six months under review at several of the portfolio companies, principally Autologic Diagnostics, Alaric, Blackstar and Flowrite, counterbalanced by provisions made against two environmental investments, Abacuswood and Withion Power. Other companies are showing promise, such as Biofortuna, while Closed Loop Recycling is now well placed to demonstrate its market leading potential following the completion of a £12.8 million funding round to double its capacity.
Two new investments totalling £2.3 million were made in Procam Television and Aerospace Tooling during the period. In April, the Ordinary Shares fund invested £800,000 alongside other Foresight VCTs in a management buy-out of Battersea based Procam Television Limited, one of the UK's leading broadcast hire companies, supplying equipment and crews for location TV production. In June, the Ordinary Shares fund invested £1.5 million alongside other Foresight VCTs in a shareholder recapitalisation of Dundee based Aerospace Tooling Limited, a well established specialist engineering company providing repair, refurbishment and remanufacturing services to large international companies for components in high-specification aerospace and turbine engines.
During the period, provisions totalling £995,477 were made against two of the environmental investments, Abacuswood (£389,891) and Withion Power (£605,586), reducing their valuations to nil. Having developed plans to raise £5.5 million to double capacity at Abacuswood's Bridgend wood pelleting plant, discussions were held with a number of parties but unfortunately a funding round could not ultimately be concluded. Foresight decided not to provide any further support and the company was placed into administration on 17 May 2013. Despite completing the successful first phase of Withion Power's Derby based advanced gasification waste wood to energy plant, raising finance for the much larger second and third phases proved particularly challenging. Although discussions were held with potential funders as well as with possible strategic partners to exploit this technology, no funding was forthcoming and the company was put into liquidation on 28 June 2013.
We continue to be cautiously optimistic about the current prospects and outlook for several portfolio companies, which are displaying strong order books and revenue and profit growth. The M & A market continues to be active which augurs well for further possible realisations. However, macroeconomic fundamentals remain uncertain. Foresight is actively pursuing new investment opportunities for the Company which has finite cash resources. A £20 million fund raising is now being proposed to enable Foresight to take advantage of its current strong deal flow.
Portfolio Review: Planned Exit Shares
The performance of the Planned Exit Shares fund during the period was affected by both positive and negative factors, the latter outweighing the former, resulting in the net asset value per Planned Exit Share decreasing by 8.2% to 91.8p per share. A dividend of 5p per Planned Exit share will be paid in October 2013. The valuations of Industrial Engineering Plastics and Trilogy Communications have both been reduced, in the case of the former because of lower margins arising from increased competition while reductions in US defence expenditure have significantly impacted on the latter's revenues. Data Continuity Group and Leisure Efficiency continue to trade satisfactorily as does Channel Safety Systems, despite experiencing temporary overseas supply problems in early 2013 which have since successfully been overcome. Although £50,000 of prior ranking secured loan was repaid by Withion Power, a provision of £204,952 was made against this investment, which as mentioned above was put into liquidation on 28 June 2013 following the failure to raise funds for the Derby plant's second and third phases. Where provisions have been made against the value of underlying investments, we have also provided against the income due from such investments.
Follow-on funding
| Company | £ |
| DCG Group Limited | 30,982 |
| Trilogy Communications Limited | 101,898 |
| Total | 132,880 |
New Investments
One new investment was made during the period. As part of a £360,000 funding round in March, the Planned Exit Shares fund invested £180,000 in Industrial Efficiency Limited, an energy efficiency investment.
Realisations
A loan of £50,000 was repaid by Withion Power.
Material provisions to a level below cost in the period
| Company | £ |
| Withion Power Limited | 204,952 |
| Total | 204,952 |
5. Performance Summary
During the period, one new investment of £180,000 was made in Industrial Efficiency Limited, an energy efficiency company, while two follow on investments were also made totalling £132,880, to purchase additional shares in DCG Group (£30,982) and provide additional working capital to Trilogy Communications (£101,898). The Planned Exit Shares fund is now fully invested in a range of established businesses. We are cautiously optimistic about the current prospects and outlook for most of the portfolio companies, which continue to display good revenue and profit growth notwithstanding the uncertain economic climate. Their performance, combined with encouraging prospects at DCG Group, Leisure Efficiency and Closed Loop Recycling following the recent raising of £12.8 million of loans to double its capacity, give comfort that the Planned Exit Shares fund's yield and capital return objectives can be met on the planned exit timetable. Foresight is actively monitoring the performance and likely returns from each investment to ensure that sufficient interest and cash are generated to meet the fund investors' running yield expectations and capital repayment profile.
Portfolio Review: Infrastructure Shares Fund
By the closing date of 18 July 2012, a total of £33,295,716 had been raised for the Infrastructure Shares fund jointly with Foresight 2 VCT's Infrastructure Shares fund (i.e. c. £16.6 million for each fund). The strategy of both funds is to invest in infrastructure assets on a pari passu basis in the secondary PFI, energy efficiency and onsite power generation markets.
New Investments
| Company | £ |
| Criterion Healthcare Holdings Limited | 1,709,074 |
| Lochgilphead Healthcare Holdings Limited | 1,693,368 |
| Stobhill Healthcare Facilities (Holdings) Limited | 1,493,247 |
| Durham Infrastructure 5 Limited | 1,000,000 |
| Norwich Infrastructure 4 Limited | 1,000,000 |
| Wharfdale SPV (Holding) Limited | 677,947 |
| Total | 7,573,636 |
The two funds have acquired shareholdings in eight operating PFI companies, comprising four in the education sector and four in the health sector. Across the eight investments in the portfolio, the Infrastructure Shares fund manages 13 individual schools, three acute hospitals and one forensic psychiatry unit. In terms of geographic diversification, four of the investments are located in Scotland, three in England and one in Northern Ireland. All of the projects are contracted under UK PFI standard form and the counterparties are various Local Authorities and NHS Trusts. All of the investments have strong operating records and have remaining contract terms ranging from 13 to 28 years. All also have project finance debt in place with interest rate hedging contracts for the duration of the concession removing any refinancing or interest rate risks. All of the companies have long term facilities management subcontracts in place which pass all operational risks through to blue chip companies that are well established in the UK PFI market.
Strong progress has been made towards investing the majority of the Infrastructure Shares fund in secondary PFI investments with 60% invested to date, although the proportion of VCT qualifying investments and yield profile are below the levels targeted. Secondary PFI yields have fallen significantly during the last 12 to 18 months owing to increased competition from four new PFI infrastructure funds and various tap issues from established funds, driven by increasing investor appetite for PFI investments. Foresight has experienced first hand these falling yields when the Infrastructure Shares fund has been out-bid during competitive bidding processes. Although the yield profile of the current PFI investments is lower than planned, Foresight expects to invest the balance of the fund to generate superior yields in order to compensate for this.
Although advance VCT clearances have been received from HMRC in respect of four of the portfolio investments, only one has been executed as a VCT qualifying investment because the co-shareholders in three of those companies would not cooperate in entering into a VCT qualifying structure. The funds raised via the Infrastructure Share class will fall within the Company's qualifying holdings test from December 2014 and the intention is to increase the VCT qualifying proportion of the Infrastructure Share class to approximately 70% by this date. Prior to this date, the non-qualifying assets will be refinanced with a component of third party shareholder debt to reduce the VCT's non-qualifying holdings and the refinancing proceeds will subsequently be used to invest in either additional qualifying PFI assets or qualifying solar infrastructure assets in accordance with the investment policy.
Portfolio Outlook
Although the rate of investment to date is behind our original expectations, Foresight Group expects to have fully invested the fund within the next few months and negotiations are currently well advanced on a number of investments in the solar infrastructure sector. Due to the more challenging conditions in the secondary PFI market, there is an increasing probability that, in line with the investment policy set out in the original prospectus, the balance of the fund will be invested in attractive solar infrastructure and energy related opportunities. Solar investments exhibit an infrastructure-like risk and return profile, are likely to achieve VCT qualifying trade status with HMRC and also offer diversification and yield benefits to the portfolio.
Reflecting progress being made in generating yield from these investments, a dividend of 5.0p per Infrastructure share is currently targeted to be paid in July 2014 in line with the dividend policy set out in the original prospectus. Shareholders will be updated further in due course.
Portfolio Company Highlights
The new Abacuswood management team, led by Julian Tranter, an experienced CEO, planned to double plant capacity at Bridgend and ultimately expand into the growing distributed energy supply markets by establishing ESCos (Energy Supply Companies), many of which were already supplied. The company continued to incur small EBITDA losses at the Bridgend plant during 2013. Although demand for the plant's high quality wood pellets continue to exceed supply, overcapacity in the UK wood pellet market adversely impacted the selling price, with a consequent pressure on margins. Following protracted discussions with potential funders, the Company revised its business plan, reduced its overheads further and re-entered into discussions with a number of potential funders to raise £5.5 million to double wood pellet production capacity to 50,000tpa and to reduce its energy costs by installing a new pellet fuelled boiler, thereby benefitting from additional revenues under the Government's Renewable Heat Incentive. The key risk was the timely availability of this required funding but unfortunately a funding round could not ultimately be concluded. The Foresight VCTs subsequently decided not to provide any further support to maintain operations and so the company was placed into administration on 17 May 2013, with no prospect of any significant recoveries, necessitating a full provision of £389,891 being made against the cost of the investment. Held in the Ordinary Shares fund.
In June, the Ordinary Shares fund invested £1.5 million alongside other Foresight VCTs in a £3.5 million shareholder recapitalisation of Dundee based Aerospace Tooling Limited, a well established specialist engineering company providing repair, refurbishment and remanufacturing services to large international companies for components in high-specification aerospace and turbine engines. The company was founded in 2007 by the former CEO, John Seaton, who, following the transaction, has assumed the role of Executive Chairman. John Green, formerly General Manager of the Dundee facility, became Operations Director, alongside a newly appointed Finance Director and Business Development Director. With a heavy focus on quality assurance, the company enjoys high quality relationships with companies serving the aerospace, military, marine and industrial markets. Held in the Ordinary Shares fund.
Alaric Systems, which develops and sells credit card authorisation and credit card anti fraud software to major financial institutions and retailers worldwide, performed particularly strongly in the year to 31 March 2013, generating an estimated profit before interest and tax of £2.1 million on sales of £10.4 million, significantly ahead of the previous year (PBIT of £1.5 million on sales of £8.7 million). A number of significant orders have been won recently which, combined with a growing sales pipeline, support achievement of the demanding budget for the current year. Capacity to satisfy these orders and further develop the product range is being met through continuing expansion of offices in Kuala Lumpur, Rome and London. In May 2013, reflecting strong cash generation, Alaric paid a total of £265,814 to the Company, comprising a redemption premium (£199,361) and repayment of loan principal (£66,453). Held in the Ordinary Shares fund.
In May 2012, as part of a phased £750,000 funding round, a further £150,150 was invested to fund AlwaysON's working capital requirements. Following a change of management, the turnround of this VPN/VOIP service provider made progress, the company achieving a breakeven operating profit on sales of £2.7 million for the year to 30 June 2012. For the year to June 2013, the company incurred an EBITDA loss of £388k on revenues of £2.9 million, reflecting considerable investment in upgrading the underlying network and recruiting additional staff for the network and applications teams. Despite this relatively disappointing financial performance, market sentiment is now particularly positive. The company is now one of two Tier 1 Microsoft Lync partners in the UK, the other being highly rated AiM listed Outsourcery, capitalised at £35m. Microsoft has prioritised MS Lync as a strategic initiative in the enterprise market. AlwaysOn has the first multi-tenanted hosted MS Lync environment in the UK and is making good progress in building a sales channel to resell this solution through partners. The sales pipeline is growing rapidly, with nearly half generated through partners, although conversion into orders and sales is unlikely to be fast. The final £250,000 tranche of the phased £750,000 funding round is likely to be drawn down in August 2013, a year later than planned. Held in the Ordinary Shares fund.
For the year to 31 December 2012, Aquasium Technology achieved a NPBT of £608,000 on sales of £8 million reflecting continuing demand for CVE's smaller electron welding machines. Trading in the current year to date has been strong, reflecting a growing sales pipeline and orders from a wider customer base across a range of industries. In June 2012, Aquasium's Massachusetts based engineering services subsidiary, Ebtec Corporation, was successfully sold to NASDAQ listed EDAC Technologies Corporation for $11 million, generating a 2.5 times return. Having invested a total of £1.93 million in Aquasium since 2001, the Company received up to £3,036,059 from the sale of Ebtec, of which the final £98,000 held in escrow is expected to be received by November. The Company still holds 33% of Aquasium's equity and £666,667 of loans. Held in the Ordinary Shares fund.
AtFutsalGroup provides facilities for futsal, a fast growing type of indoor football with 30 million participants worldwide and the only type of indoor football recognised by the Football Association. The Swindon arena is generating cash while sales have built up steadily at the flagship super arenas in Birmingham and Leeds. Educational activities are increasingly important with some 750 students now taking sports related courses within AtFutsal's arenas and a number of partnerships established with educational establishments, football clubs and training organisations. Some 1,500 students are planned to be recruited for the forthcoming academic year starting in September 2013. The company has reached cash break even and, with the increase in anticipated student numbers, is expecting to break into profitability during Q4 2013. Held in the Ordinary Shares fund.
Approximately 50% of the investment in Autologic Diagnostics was successfully sold in January 2012 in a £48 million secondary management buy-out funded by ISIS Equity Partners. The sale generated cash proceeds of £2.187 million for the Ordinary Shares fund (nearly 2.7 times original cost of £0.8 million). The Ordinary Shares fund has retained an ongoing investment of £1.486 million in a combination of equity and loan stock in the new buy-out company. In the year ended 31 December 2012, an operating profit of £6.0 million was achieved on sales of £17.1 million (£5.2 million on sales of £12.2 million in 2011). In the current year to 31 December 2013, Autologic is continuing to grow sales and profits further, particularly in the USA although markets in Europe are generally more subdued. Held in the Ordinary Shares fund.
Biofortuna, a 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 genetic compatibility tests for organ transplant recipients, although the application of the technology is extremely broad. 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. The company is making progress in a number of areas, including expanding into adjacent premises, improving manufacturing and internal processes and generating successful clinical data for its SSPGo product range for submission to the FDA, whose approval is required to make sales in the USA, its largest potential market. The SSPGo product range continues to see repeat orders from Abbott. The freeze-dried kit manufacturing service shows promise, with contract discussions with a number of parties. Held in the Ordinary Shares fund.
In July 2012, the Ordinary Shares fund invested £2.5 million in Northampton based Blackstar Amplification Holdings alongside £1 million from Foresight 4 VCT to finance a management buy-out of and provide growth capital to Blackstar Amplification Limited. The company was founded in 2004 by four senior members of the new product development team at Marshall Amplification to design and manufacture a range of innovative guitar amplifiers. Following commercial launch in 2007, sales grew rapidly, reflecting new product launches and entry into new markets, and a global brand was soon established. As a result of supply chain issues in 2011/12, UK and international demand could not be met fully and so terms were agreed with new suppliers to facilitate dual sourcing. In its financial year to 30 April 2013, the company achieved an EBITDA of £394k on sales of £9.7 million, nearly twice that achieved in the previous year, and further substantial growth is expected in the current year to April 2014. Management are focused on product sell through in established markets while also increasing Blackstar's presence in new, emerging markets, such as Asia and South America. The company currently has a presence in over 35 countries Worldwide and its products are stocked in over 2,500 stores globally. Management are also focused on completing the portfolio of core amplifiers, whilst investigating brand extension into non-core markets. The new ID: Lite range of amplifiers, which will be the company's first products at the value end of the market, is currently in development and is expected to come to market in December 2013. Held in the Ordinary Shares fund.
In December 2010, the Planned Exit Shares fund provided £565,000 to partially fund a management buy-in of long established Petersfield based ChannelSafety Systems which designs and distributes fire safety systems and emergency lighting, as well as providing associated services. Having traded profitably through the recession, the company achieved an operating profit of over £420,000 on sales of £8.3 million for the year to 31 October 2012 (£246,000 operating profit on sales of £7.8 million for the previous year) and trading in the current year is similar, despite some overseas supply problems in early 2013 which have since been successfully addressed. The management team is implementing a growth strategy, including introducing new products such as energy efficient LED emergency lighting, a domestic fire detection range and is combining this with a more effective marketing programme. Held in the Planned Exit Shares fund.
During the period under review, Closed Loop Recycling concluded a major new supply contract and new customer contracts worth £17 million per annum as well as securing £12.8 million of loan finance (of which £6 million was provided by the Foresight Environmental Fund,- the maximum allowed to an individual company under the Fund's mandate) to double production capacity at the Dagenham plant. Once the additional capacity has been fully installed, annual revenues are expected to double, principally through these long-term supply contracts, and future profits are expected to increase substantially. Facilities provided by Allied Irish Bank, the incumbent bank, have been placed on to a term basis. The additional plastic waste sorting equipment has been successfully installed while maintaining production, with an immediate impact on efficiency and output, resulting in record monthly turnover being achieved. The additional production equipment has been ordered and this is expected to be installed by September 2013, with the first output from these new production lines expected during Q4 2013. Management are examining a number of avenues to improve profitability further. Held in the Ordinary Shares and Planned Exit Shares funds.
DCG Group designs, sources, implements and maintains data storage solutions for companies and provides them as a managed service. Managed service contracts typically run for an initial term of three years and the company has a high level of customer retention. The £750,000 initial investment from the Planned Exit Shares fund was used to re-finance existing loans and to provide additional working capital to enable the company to continue the growth of its managed services. For the year to 31 March 2013, an EBITDA of £540,000 was achieved on sales of £5.6 million, most of which was recurring revenue. In response to increasing pricing pressure reflecting the general economic climate and reducing hardware costs, sales efforts have been increased and more channel partners are being recruited to resell DCG's services to their customers but this has yet to translate into improved orders. In January 2013, further shares representing 12.8% of the equity were acquired from other departing shareholders for £250,915 (£219,933 by the Ordinary Shares fund and £30,982 by the Planned Exit Shares fund). Held in the Ordinary Shares and Planned Exit Shares funds.
In May 2012, the Ordinary Shares fund invested £492,500 in Flowrite Refrigeration Holdings alongside other Foresight VCTs to finance the £3.2 million management buyout of Flowrite Services Limited, a long established Maidstone based company which provides refrigeration and air conditioning maintenance and related services nationally, principally to leisure and commercial businesses, such as hotels, clubs, pubs and restaurants. The management team has accelerated sales efforts, already winning a number of significant new customers and contracts, and a number of possible acquisitions are being considered to broaden national coverage. The company is enjoying strong growth and is currently generating profit at twice the level budgeted. Held in the Ordinary Shares fund.
As a part of a £360,000 funding round in April 2013, the Planned Exit Shares fund invested £180,000 in Industrial Efficiency, alongside £180,000 from the Foresight 2 Planned Exit Shares fund. The company installs and maintains proven and robust energy switching equipment, allowing end customers to reduce emissions and make significant cost savings. The company has signed up a major building supplies manufacturer as its first client. Returns are based solely on the cost savings made and do not depend on government subsidies or Feed-in Tariffs. Held in the Planned Exit Shares fund.
In December 2011 and March 2012, the Planned Exit Shares fund provided a total of £875,000 by way of loans and equity to partially fund a management buy-in at Industrial Engineering Plastics. The company is a long established Liphook based plastics distributor and fabricator to a wide range of industries nationally, principally supplying ventilation and pipe fittings, plastic welding rods, hygienic wall cladding, plastic tanks and sheets. For the year ended 30 June 2012, with some 20 employees, the company achieved an adjusted EBITDA of £700,000 on sales of £5.1 million, slightly ahead of the performance in the previous year. A new Chief Executive was recruited in early 2013 to replace the founder. In the current year, the company is experiencing more challenging conditions as a result of increased competition and pressure on margins but sales efforts have been consequently increased. Held in the Planned Exit Shares fund.
In January 2012, the Foresight VCT and Foresight 2 VCT Planned Exit Funds each invested £690,000 (i.e. £1.38 million in total) in a new, special purpose company, Leisure Efficiency Limited, to purchase and install energy saving equipment at 34 David Lloyd Leisure ("DLL") sites. All the equipment was installed by May 2012. The new company has a fixed life of seven years and will generate a strong yield over that period, after which it will be sold to DLL for a nominal value. Revenues are generated from taking a significant part of the value of the energy savings made by the equipment. The equipment is currently saving energy in excess of original projections and the company has already received a number of cash payments from DLL, justifying a small uplift in value. Held in the Planned Exit Shares fund.
In April 2013, the Ordinary Shares fund invested £800,000 alongside other Foresight VCTs in £1.8 million round to finance a management buy-out of Procam Television Limited, one of the UK's leading broadcast hire companies, supplying equipment and crews for UK location TV production to broadcasters, production companies and corporates for over 20 years. Headquartered in Battersea, London, with additional facilities in Manchester, Procam employs 70 people and has supported shows including Made in Chelsea , ITV's Splash, Watch's The Incredible Mr Goodwin, BBC2's The Great British Sewing Bee, Derren Brown and The Great British Bake Off. It is a preferred supplier to BSkyB and an approved supplier for BBC and ITV. Over the last four years revenues have doubled, following the introduction of new camera formats. The management buy-out team is led by current Managing Director John Brennan, with other existing senior staff now also appointed as company directors. The former CEO of Carlton Television, Clive Jones, has been appointed as Chairman. The company plans to gain greater market share by launching new facilities and services in the coming months. Held in the Ordinary Shares fund.
Trilogy Communications achieved strong trading results in the two years to 29 February 2012, following a number of contract wins in the defence sector with partners such as Northrop Grumman and Raytheon. Trading in the year to 28 February 2013, however, was adversely affected by the deferral of certain expected orders under long-term defence programmes, particularly from the US, reflecting uncertainties about reductions in US defence spending. Specified annual reductions in such spending are now in place (the so called 'Sequester'). These factors resulted in Trilogy incurring substantial trading losses and further major cost reductions were made, although the broadcast division continued to trade satisfactorily. After a lengthy hiatus, the company's defence order book has started to grow again as various defence programmes have been unlocked and the company has recently returned to profitability. Held in the Ordinary Shares and Planned Exit Shares funds.
Withion Power successfully built and commissioned a second generation 0.5MW advanced gasification waste wood to energy plant in Derby, being the first of three planned phases to build ultimately a 3MW plant. As operating this small, first phase of the plant alone was always recognised as being subeconomic, the decision was taken to hibernate the plant until the additional planned finance for the much larger second and third phases could be raised from strategic partners and funders or, alternatively, redevelop the site but these all proved particularly challenging. Although discussions were held with potential funders as well as with possible strategic partners to exploit this technology, no funding was forthcoming and the company was put into liquidation on 28 June 2013. A full provision of £605,586 has been made against the cost of this investment in the Ordinary Shares fund and a provision of £204,952 has been made against the cost of investment in the Planned Exit Shares fund as this fund has prior ranking security over certain surplus assets. Under the terms of the merger between the Ordinary Shares fund and the Keydata VCTs in February 2011, additional share consideration would have been due to former Keydata shareholders after September 2013 if the value of the merger assets (Withion Power) at 30 September 2013 had exceeded their value at the time of the merger. Following the company's liquidation, the value of the merger assets will be nil at that date and no such share consideration will be payable. Held in the Ordinary Shares and Planned Exit Shares funds.
Following a public takeover offer from Espial Group Inc, the entire investment in AiM listed ANTplc was sold, realising £407,252. The remaining investment in AiM listed Sarantel Group PLC was also sold, realising £13,831. Sold
£2 million was repaid to the Ordinary Shares fund by Leisure Efficiency III to provide funds for the new investments in Aerospace Tooling Holdings Limited and Procam Television Holdings Limited referred to above.
David Hughes
Chief Investment Officer
Foresight Group
30 August 2013
Unaudited Half-Yearly Results and Responsibility Statements
Principal Risks and Uncertainties
The principal risks faced by the Company are 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 December 2012. A detailed explanation can be found on page 23 of the Annual Report which is available on www.foresightgroup.eu or by writing to Foresight Group at ECA Court, 24-26 South Park, Sevenoaks, Kent, TN13 1DU.
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 Interim Report and financial statements.
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 interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year);
(c) the summarised set of financial statements gives 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 Business Review in the 31 December 2012 annual report. The financial position of the Company, its cash flows, liquidity position and borrowing facilities are described in the Chairman's Statement, Business Review and Notes to the Accounts of the 31 December 2012 annual report. In addition, the Annual Report 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 adequate financial resources together with investments and income generated there from 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 has not been audited or reviewed by the auditors.
On behalf of the Board
John Gregory
Chairman
30 August 2013
Unaudited Non-Statutory Analysis between the
Ordinary Shares, Planned Exit Shares and Infrastructure Shares Funds
Income Statements
for the six months ended 30 June 2013
| Ordinary Shares Fund | Planned Exit Shares Fund | Infrastructure Shares Fund | |||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total | |||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||
| Realised losses on investments | - | (3,574) | (3,574) | - | - | - | - | (13) | (13) | ||
| Investment holding gains/(losses) | - | 2,953 | 2,953 | - | (508) | (508) | - | - | - | ||
| Income | 242 | - | 242 | 66 | - | 66 | 316 | - | 316 | ||
| Investment management fees | (78) | (234) | (312) | (7) | (21) | (28) | (34) | (103) | (137) | ||
| Other expenses | (105) | - | (105) | (21) | - | (21) | (54) | - | (54) | ||
| Return/(loss) on ordinary activities before taxation | 59 | (855) | (796) | 38 | (529) | (491) | 228 | (116) | 112 | ||
| Taxation | 10 | - | 10 | (8) | 4 | (4) | (52) | 27 | (25) | ||
| Return/(loss) on ordinary activities after taxation | 69 | (855) | (786) | 30 | (525) | (495) | 176 | (89) | 87 | ||
| Return/(loss) per share | 0.3p | (3.1)p | (2.8)p | 0.5p | (8.6)p | (8.1)p | 1.1p | (0.5)p | 0.6p | ||
Balance Sheets
at 30 June 2013
| Ordinary Shares Fund | Planned Exit Shares Fund | Infrastructure Shares Fund | |
| £'000 | £'000 | £'000 | |
| Fixed assets | |||
| Investments held at fair value through profit or loss | 25,082 | 5,371 | 15,153 |
| Current assets | |||
| Debtors | 1,764 | 287 | 172 |
| Money market securities and other deposits | 1,054 | 109 | - |
| Cash | 703 | 20 | 648 |
| 3,521 | 416 | 820 | |
| Creditors | |||
| Amounts falling due within one year | (84) | (173) | (154) |
| Net current assets | 3,437 | 243 | 666 |
| Net assets | 28,519 | 5,614 | 15,819 |
| Capital and reserves | |||
| Called-up share capital | 276 | 61 | 166 |
| Share premium account | 4,092 | - | - |
| Capital redemption reserve | 392 | 1 | - |
| Special distributable reserve | 25,662 | 5,500 | 15,483 |
| Revenue reserve | (38) | 419 | 153 |
| Capital reserve | 4,703 | (443) | 17 |
| Revaluation reserve | (6,568) | 76 | - |
| Equity shareholders' funds | 28,519 | 5,614 | 15,819 |
| Number of shares in issue | 27,556,907 | 6,115,511 | 16,647,858 |
| Net asset value per share | 103.5p | 91.8p | 95.0p |
At 30 June 2013 there was an inter-share debtor/creditor of £300,000 which has been eliminated on aggregation.
Reconciliations of Movements in Shareholders' Funds
for the six months ended 30 June 2013
| Ordinary Shares Fund | Called-up share capital | Share premium account | Capital redemption reserve | Special distributable reserve | Revenue reserve | Capital reserve | Revaluation reserve | Total |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2013 | 273 | 3,513 | 389 | 26,206 | (107) | 9,658 | (9,521) | 30,411 |
| Shares issues in the period | 6 | 592 | - | - | - | - | - | 598 |
| Expenses in relation to share issues | - | (13) | - | - | - | - | - | (13) |
| Repurchase of shares | (3) | - | 3 | (310) | - | - | - | (310) |
| Net realised loss on disposal of investments | - | - | - | - | - | (3,574) | - | (3,574) |
| Investment holding gain | - | - | - | - | - | - | 2,953 | 2,953 |
| Dividends | - | - | - | - | - | (1,381) | - | (1,381) |
| Management fees charged to capital | - | - | - | (234) | - | - | - | (234) |
| Revenue return for the period | - | - | - | - | 69 | - | - | 69 |
| As at 30 June 2013 | 276 | 4,092 | 392 | 25,662 | (38) | 4,703 | (6,568) | 28,519 |
| Planned Exit Shares Fund | Called-up share capital | Share premium account | Capital redemption reserve | Special distributable reserve | Revenue reserve | Capital reserve | Revaluation reserve | Total |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2013 | 61 | - | 1 | 5,556 | 389 | (447) | 584 | 6,144 |
| Repurchase of shares | - | - | - | (35) | - | - | - | (35) |
| Investment holding losses | - | - | - | - | - | - | (508) | (508) |
| Management fees charged to capital | - | - | - | (21) | - | - | - | (21) |
| Tax credited to capital | - | - | - | - | - | 4 | - | 4 |
| Revenue return for the period | - | - | - | - | 30 | - | - | 30 |
| As at 30 June 2013 | 61 | - | 1 | 5,500 | 419 | (443) | 76 | 5,614 |
| Infrastructure Shares Fund | Called-up share capital | Share premium account | Capital redemption reserve | Special distributable reserve | Revenue reserve | Capital reserve | Revaluation reserve | Total |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2013 | 166 | 15,777 | - | (169) | (23) | 3 | - | 15,754 |
| Cancellation of share premium | - | (15,777) | - | 15,777 | - | - | - | - |
| Net realised loss on disposal of investments | - | - | - | - | - | (13) | - | (13) |
| Investment stamp duty | - | - | - | (22) | - | - | - | (22) |
| Management fees charged to capital | - | - | - | (103) | - | - | - | (103) |
| Tax credited to capital | - | - | - | - | - | 27 | - | 27 |
| Revenue return for the period | - | - | - | - | 176 | - | - | 176 |
| As at 30 June 2013 | 166 | - | - | 15,483 | 153 | 17 | - | 15,819 |
Unaudited Income Statement
for the six months ended 30 June 2013
| Six months ended 30 June 2013 (Unaudited) | Six months ended 30 June 2012 (Unaudited) | Year ended 31 December 2012 (Audited) | |||||||
| Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Realised (loss)/gain on investments | - | (3,587) | (3,587) | - | 5,055 | 5,055 | - | 3,372 | 3,372 |
| Investment holding gains/(losses) | - | 2,445 | 2,445 | - | (4,261) | (4,261) | - | (3,736) | (3,736) |
| Income | 624 | - | 624 | 861 | - | 861 | 974 | - | 974 |
| Investment management fees | (119) | (358) | (477) | (131) | (392) | (523) | (232) | (696) | (928) |
| Other expenses | (180) | - | (180) | (284) | - | (284) | (460) | - | (460) |
| Return/(loss) on ordinary activities before taxation | 325 | (1,500) | (1,175) | 446 | 402 | 848 | 282 | (1,060) | (778) |
| Taxation | (50) | 31 | (19) | (5) | 5 | - | (21) | 21 | - |
| Return/(loss) on ordinary activities after taxation | 275 | (1,469) | (1,194) | 441 | 407 | 848 | 261 | (1,039) | (778) |
| Return per share: | |||||||||
| Ordinary Share | 0.3p | (3.1)p | (2.8)p | 1.2p | 2.8p | 4.0p | 0.3p | (5.4)p | (5.1)p |
| Planned Exit Share | 0.5p | (8.6)p | (8.1)p | 2.2p | (5.1)p | (2.9)p | 3.4p | 10.0p | 13.4p |
| Infrastructure Share | 1.1p | (0.5)p | 0.6p | (0.3)p | (0.6)p | (0.9)p | (0.2)p | (1.0)p | (1.2)p |
The total column of this statement is the profit and loss account of the Company and the revenue and capital columns represent supplementary information.
All revenue and capital items in the above Income Statement are derived from continuing operations. No operations were acquired or discontinued in the 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.
Unaudited Balance Sheet Registered Number: 03421340
at 30 June 2013
| As at | As at | As at | |
| 30 June 2013 | 30 June 2012 | 31 December 2012 | |
| £'000 | £'000 | £'000 | |
| Fixed assets | |||
| Investments held at fair value through profit and loss | 45,606 | 39,884 | 44,433 |
| Current assets | |||
| Debtors | 1,923 | 6,641 | 2,266 |
| Money market securities and other deposits | 1,163 | 5,720 | 3,419 |
| Cash | 1,371 | 3,576 | 2,309 |
| 4,457 | 15,937 | 7,994 | |
| Creditors | |||
| Amounts falling due within one year | (111) | (1,339) | (118) |
| Net current assets | 4,346 | 14,598 | 7,876 |
| Net assets | 49,952 | 54,482 | 52,309 |
| Capital and reserves | |||
| Called-up share capital | 503 | 503 | 500 |
| Share premium account | 4,092 | 18,999 | 19,290 |
| Capital redemption reserve | 393 | 384 | 390 |
| Special distributable reserve | 46,645 | 32,429 | 31,593 |
| Revenue reserve | 534 | 439 | 259 |
| Capital reserve | 4,277 | 11,190 | 9,214 |
| Revaluation reserve | (6,492) | (9,462) | (8,937) |
| Equity shareholders' funds | 49,952 | 54,482 | 52,309 |
| Net asset value per share: | |||
| Ordinary Share | 103.5p | 120.8p | 111.3p |
| Planned Exit Share | 91.8p | 89.2p | 100.0p |
| Infrastructure Share | 95.0p | 94.6p | 94.6p |
Unaudited Reconciliation of Movements in Shareholders' Funds
for the six months ended 30 June 2013
| Company | Called-up share capital | Share premium account | Capital redemption reserve | Special distributable reserve | Revenue reserve | Capital reserve | Revaluation reserve | Total |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2013 | 500 | 19,290 | 390 | 31,593 | 259 | 9,214 | (8,937) | 52,309 |
| Share issues in the period | 6 | 592 | - | - | - | - | - | 598 |
| Expenses in relation to share issues | - | (13) | - | - | - | - | - | (13) |
| Repurchase of shares | (3) | - | 3 | (345) | - | - | - | (345) |
| Cancellation of share premium | - | (15,777) | - | 15,777 | - | - | - | - |
| Net realised loss on disposal of investments | - | - | - | - | - | (3,587) | - | (3,587) |
| Investment stamp duty | - | - | - | (22) | - | - | - | (22) |
| Investment holding gain | - | - | - | - | - | - | 2,445 | 2,445 |
| Dividends | - | - | - | - | - | (1,381) | - | (1,381) |
| Management fees charged to capital | - | - | - | (358) | - | - | - | (358) |
| Tax credited to capital | - | - | - | - | - | 31 | - | 31 |
| Revenue return for the period | - | - | - | - | 275 | - | - | 275 |
| As at 30 June 2013 | 503 | 4,092 | 393 | 46,645 | 534 | 4,277 | (6,492) | 49,952 |
Unaudited Cash Flow Statement
for the six months ended 30 June 2013
| Six months ended | Six months ended | Year ended | |
| 30 June 2013 | 30 June 2012 | 31 December 2012 | |
| £'000 | £'000 | £'000 | |
| Cash flow from operating activities | |||
| Investment income received | 371 | 657 | 1,209 |
| Dividends received | 98 | - | - |
| Deposit and similar interest received | 5 | 29 | 39 |
| Investment management fees paid | (427) | (353) | (796) |
| Secretarial fees paid | (46) | (60) | (114) |
| Other cash payments | (14) | (217) | (891) |
| Net cash (outflow)/inflow from operating activities and returns on investment | (13) | 56 | (553) |
| Taxation | - | - | - |
| Returns on investment and servicing of finance | |||
| Purchase of investments | (10,844) | (4,909) | (23,605) |
| Net proceeds on sale of investments | 8,830 | 5,637 | 6,342 |
| Net proceeds from deferred consideration | - | - | 197 |
| Net capital (outflow)/inflow from financial investment | (2,014) | 728 | (17,066) |
| Equity dividends paid | (1,336) | (2,013) | (2,321) |
| Management of liquid resources | |||
| Movement in money market funds | 2,256 | 5,621 | 7,922 |
| (1,107) | 4,392 | (12,018) | |
| Financing | |||
| Proceeds of fund raising | 507 | - | 15,857 |
| Expenses of fund raising | (3) | (72) | (320) |
| Repurchase of own shares | (335) | (842) | (1,308) |
| 169 | (914) | 14,229 | |
| (Decrease)/increase in cash | (938) | 3,478 | 2,211 |
Notes to the Unaudited Half-Yearly Results
The unaudited Haly-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 December 2012. 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.
These are not statutory accounts in accordance with S436 of the Companies Act 2006 and the financial information for the six months ended 30 June 2013 and 30 June 2012 have been neither audited nor reviewed. Statutory accounts in respect of the period to 31 December 2012 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 December 2012 have been reported on by the Company's auditors or delivered to the Registrar of Companies.
Copies of the unaudited Half-Yearly Financial Report will be sent to shareholders and will be available for inspection at the Registered Office of the Company at ECA Court, 24-26 South Park, Sevenoaks, Kent, TN13 1DU.
Net asset value per share
The net asset value per share is based on net assets at the end of the period and on the number of shares in issue at the date.
| Ordinary Shares Fund | Planned Exit Shares Fund | Infrastructure Shares Fund | ||||
| Net Assets | Number of shares in issue | Net Assets | Number of shares in issue | Net Assets | Number of shares in issue | |
| £'000 | £'000 | £'000 | ||||
| 30 June 2013 | 28,519 | 27,556,907 | 5,614 | 6.115.511 | 15,819 | 16,647,858 |
| 30 June 2012 | 33,445 | 27,684,809 | 5,515 | 6,179,833 | 15,522 | 16,406,496 |
| 31 December 2012 | 30,411 | 27,324,155 | 6,144 | 6,142,813 | 15,754 | 16,647,858 |
.
Return per share
The weighted average number of shares for the Ordinary Shares, Planned Exit Shares and Infrastructure Shares funds used to calculate the respective returns are shown in the table below.
| Ordinary Shares Fund | Planned Exit Shares Fund | Infrastructure Shares Fund | |
| (shares) | (shares) | (shares) | |
| Six months ended 30 June 2013 | 27,491,235 | 6,134,668 | 16,647,858 |
| Six months ended 30 June 2012 | 27,964,520 | 6,179,833 | 11,804,500 |
| Year ended 31 December 2012 | 27,783,381 | 6,170,224 | 14,626,385 |
.
Earnings for the period should not be taken as a guide to the results for the full year.
Income
| Six months ended | Six months ended | Year ended | |
| 30 June 2013 | 30 June 2012 | 31 December 2012 | |
| £'000 | £'000 | £'000 | |
| Loan stock interest | 520 | 833 | 836 |
| Overseas based Open Ended Investment Companies ("OEICs") | 5 | 28 | 30 |
| Dividends | 98 | - | 106 |
| Bank deposits | 1 | - | 2 |
| 624 | 861 | 974 |
Investments held at fair value through profit or loss
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Related party transactions
No Director has, or during the period had, a contract of service with the Company. No Director was party to, or had an interest in, any
contract or arrangement (with the exception of Directors' fees) with the Company at any time during the period under review or as at the date
of this report.
Transactions with the Manager
Foresight Group, as Investment Manager of the Company, is considered to be a related party by virtue of its management contract with the
Company. During the period, services of a total value of £477,000 (30 June 2012: £523,000; 31 December 2012: £928,000) were purchased
by the Company from Foresight Group. At 30 June 2013, the amount due to Foresight Group was £17,221.
Foresight Fund Managers Limited, as Secretary of the Company and as a subsidiary of Foresight Group, is also considered to be a related
party of the Company. During the period, services of a total value of £50,000 excluding VAT (30 June 2012: £50,000; 31 December 2012:
£100,000) were purchased by the Company from Foresight Fund Managers Limited. At 30 June 2013, the amount due to Foresight Fund
Managers Limited included within creditors was £nil.
END
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Source: Foresight VCT PLC via Thomson Reuters ONE
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