TIDMFTN
FORESIGHT 2 VCT PLC
Summary Financial Highlights
-- Net asset value per Ordinary Share at 31 March 2015 was 59.9p (30
September 2014: 59.4p).
-- Net asset value per Planned Exit Share at 31 March 2015 was 72.2p, after
payment of the interim dividend of 7.5p per Planned Exit Share in January
2015 (30 September 2014: 73.7p).
-- Net asset value per Infrastructure Share at 31 March 2015 was 91.5p,
after payment of the interim dividend of 2.5p per Infrastructure Share in
October 2014 (30 September 2014: 91.4p).
Ordinary Shares Fund
-- The Ordinary Shares fund realised GBP2.0 million, including GBP0.6
million in interest, from four portfolio companies.
Planned Exit Shares Fund
-- The Planned Exit Shares fund realised GBP1.6 million from three portfolio
companies.
-- An interim dividend of 7.5p per Planned Exit Share was paid on 12 January
2015. The dividend had a record date of 30 December 2014 and an
ex-dividend date of 29 December 2014.
Infrastructure Shares Fund
-- An interim dividend of 2.5p per Infrastructure Share was paid on 3
October 2014. The dividend had a record date of 26 September 2014 and an
ex-dividend date of 24 September 2014.
-- The Manager agreed that the Infrastructure Share fund's management fee
would be reduced from 1.75% to 1.0% from 1 January 2015.
31 March 2015 30 September 2014
Planned Planned
Ordinary Exit Infrastructure Ordinary Exit Infrastructure
Shares Shares Shares Shares Shares Shares
Fund Fund Fund Fund Fund Fund
Net asset value per
share 59.9p 72.2p 91.5p 59.4p 73.7p 91.4p
Net asset value
total return 72.5p 92.7p 96.5p 72.0p 86.7p 93.9p
Planned Planned
Ordinary Exit Infrastructure Ordinary Exit Infrastructure
Shares Shares Shares Shares Shares Shares
Fund Fund Fund Fund Fund Fund
Share price 36.5p 67.0p 90.0p 38.1p 86.0p 88.5p
Share price total
return 49.1p 87.5p 95.0p 50.7p 99.0p 91.0p
Planned Planned
Ordinary Exit Infrastructure Ordinary Exit Infrastructure
Shares Shares Shares Shares Shares Shares
Fund Fund Fund Fund Fund Fund
Dividends paid* 12.6p 20.5p 5.0p 12.6p 13.0p 2.5p
Dividends paid in
the period - 7.5p 2.5p - 5.0p 2.5p
Dividend yield % - 11.2 2.8 - 5.8 2.8
*From inception to 31 March 2015
Ordinary Shares Fund
Share price discount to NAV at 31 March 2015 stood
at: 39.1%
Shares bought back during the period under review: -
Increase in net asset value during period: 0.8%
Ongoing charges ratio: 3.0%
Planned Exit Shares Fund
Share price discount to NAV at 31 March 2015 stood
at: 7.2%
Shares bought back during the period under review: 17,706
Decrease in net asset value during period: 2.0%
Ongoing charges ratio: 2.1%
Infrastructure Shares Fund
Share price discount to NAV at 31 March 2015 stood
at: 1.6%
Shares bought back during the period under review: 25,325
Increase in net asset value during period: 0.1%
Ongoing charges ratio: 2.5%
Chairman's Statement
Performance
The net asset value of the Ordinary Shares fund increased by 0.8% during
the 6 months ended 31 March 2015, from 59.4p per share at 30 September
2014 to 59.9p per share at the period end.
Whilst the NAV of the fund did not change significantly, there was a
substantial improvement in liquidity, following a refinancing of The
Bunker Secure Hosting, from which over GBP1.4 million was received by
the fund. As noted in the annual report and accounts, ICA returned some
GBP600,000 in a similar fashion in December 2014 and the Ordinary shares
fund now has higher cash balances than for some time. The Manager
expects that a further GBP3 million may be released from the portfolio
in the next few months, so that over GBP5 million will have been
realised, through a combination of dividends, investment refinancing,
interest received and partial realisations, since December 2014.
As noted in the annual accounts, the Board reduced the valuation of
Closed Loop Recycling to 5% of cost at 30 September 2014 in light of the
failure to achieve a sale and continuing trading difficulties. These
continued in the New Year and the company entered administration on 30
April 2015. A final full provision of GBP308,000 has therefore been made
in this fund.
Following this the portfolio has little exposure to environmental type
investments and the remaining portfolio now comprises private equity
type investments in a range of sectors. The majority are profitable at
EBITDA level and increases in the valuation of these investments have
offset the further provision made against Closed Loop Recycling.
After adding back the interim dividend of 7.5p per Planned Exit Share
paid on 12 January 2015 the net asset value of the Planned Exit Shares
fund increased by 8.1% to 72.2p at 31 March 2015 from 73.7p per share at
30 September 2014. This principally reflects profits realised on the
sale of Industrial Efficiency and Leisure Efficiency in January 2015 and
an increase in the valuation of Trilogy Communications, which is making
better progress. In October 2014, the investment in Channel Technical
Services, a subsidiary of Channel Safety Systems Group, was sold for
GBP1.6 million as a result of which the Planned Exit Shares fund was
repaid loan capital plus interest totalling GBP644,000.
Following these realisations, the Board is pleased to announce a second
interim dividend of 15.0p per Planned Exit Share, further details of
which are given below.
After adding back the interim dividend of 2.5p per share paid on 3
October 2014 the net asset value of the Infrastructure Shares fund was
91.5p at 31 March 2015 compared to 91.4p per share at 30 September 2014,
an increase of 2.8%. As previously reported, the fund is now fully
invested and is earning a market rate of return on its infrastructure
investments.
As noted in the latest annual report, the investment phase for this fund
took longer than expected. During the investment period, the available
yields on infrastructure investments fell and at the same time, the rate
of return that could be achieved for funds awaiting investment was
minimal. As a result of this, the annual dividend is likely to be closer
to 4p per share than 5p. However, we are pleased that the Manager agreed
to reduce its management fee from 1.75% to 1% per annum with effect from
1 January 2015, which will help towards recovering some of the
shortfall.
The Board proposes to maintain its target interim dividend of 2.5p per
Infrastructure Share. Further details are given below.
For a detailed review of the Company's investments I refer you to the
Manager's Report that starts on page 6.
Dividends
Ordinary Shares
It continues to be the Company's policy to provide a flow of dividends,
generated from income and from capital profits realised on the sale of
investments which will be tax free to those who qualify. Distributions
will, however, be dependent on sufficient cash being available for
future requirements and the Board will consider the possibility of
paying a dividend when finalising the accounts for the current year.
Planned Exit Shares
The Board is pleased to declare a second interim dividend for the year
ending 30 September 2015. The dividend of 15.0p per Planned Exit Share
will be paid on 26 June 2015 and shares will be quoted ex dividend on 11
June 2015. The record date for payment will be 12 June 2015.
Infrastructure Shares
The Board is pleased to announce a second interim dividend for the year
ending 30 September 2015. The dividend of 2.5p per Infrastructure Share
will be paid on 26 June 2015 and the shares will be quoted ex dividend
on 11 June 2015. The record date for payment will be 12 June 2015.
Share Issues and Share Buy-backs
During the period under review the Company did not issue any new shares.
A total of 17,706 Planned Exit Shares and 25,325 Infrastructure Shares
were repurchased for cancellation at a cost of GBP12,000 and GBP23,000
respectively.
VCT Legislation
VCTs, as tax efficient investment vehicles, are periodically subject to
new rules which the Government and/or the European Commission consider
appropriate for achieving the scheme's objectives and to comply with the
rules relating to state aid to promote risk finance investments.
The UK Government is currently negotiating with the European Commission
on further changes to the existing rules and regulations regarding VCT
investments and these new rules are likely to become law during 2015,
although they may only apply to new funds raised from 6 April 2015.
These new rules are likely to relate principally to the introduction of
a maximum limit on the number of years for which recipients of new
investments can have been in business and a cap on the total amount of
finance a company can receive from VCT, EIS and SEIS and other state aid
sources. I will report to you in due course on the impact of these
changes when they have been finalised and implemented.
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 Infrastructure Share class is generating an attractive running yield
and following the reduction in the management fee we hope that, over the
remaining life of the Share class, we can make up some of the adverse
impact of the delay in sourcing suitable investments.
The Planned Exit Shares fund has the objective to realise investments
and return capital to investors during the twelve months after June 2015
and the task of finding buyers for this fund's underlying investments
has been a priority for some time. Over the last few months, the sale of
Channel Technical Services Limited, Leisure Efficiency, Industrial
Efficiency and Channel Safety Systems are examples of this continuing
process and has funded the payment of the dividend of 7.5p per Planned
Exit Share in January 2015 and the 15.0p dividend per Planned Exit Share
declared for payment in June 2015.
We are very pleased that the Manager has had some success in realising
cash from the Ordinary Share portfolio and that further proceeds are
anticipated over the coming months. We hope to be able to provide a
further update on this the next time we report to shareholders.
Jocelin Harris
Chairman
28 May 2015
Manager's Report
During the period, the net asset value per Ordinary Share increased
slightly to 59.9p per share as at 31 March 2015 from 59.4p per share as
at 30 September 2014. Several companies in the Ordinary Shares fund
portfolio continued to perform well, such as Procam Television Holdings
and Datapath. Recapitalisations by ICA Group and The Bunker Secure
Hosting enabled loans and interest totalling GBP2 million to be paid to
the Ordinary Shares fund. As explained below, a provision of GBP308,132
was made against the investment in Closed Loop Recycling following the
appointment of administrators on 30 April 2015.
The net asset value of the Planned Exit Shares fund increased by 8.1% to
72.2p at 31 March 2015 (after adding back the interim dividend of 7.5p
per Planned Exit Share paid on 12 January 2015) compared to 73.7p per
share at 30 September 2014, principally reflecting profits realised on
the sale of Industrial Efficiency and Leisure Efficiency and an increase
in the valuation of Trilogy Communications. In October 2014, Channel
Technical Services, a subsidiary of Channel Safety Systems Group, was
sold, as a result of which the Planned Exit Shares fund was repaid loan
capital and interest totalling GBP644,239.
An interim dividend of 7.5p per Planned Exit Share was paid on 12
January 2015 and a second interim dividend of 15.0p per Planned Exit
Share will be paid on 26 June 2015.
The net asset value per share of the Infrastructure Shares fund at 31
March 2015 was 91.5p compared with 91.4p at 30 September 2014,
reflecting an increase of 2.8% after adding back the 2.5p per share
dividend paid in October 2014. A second interim dividend of 2.5p per
Infrastructure Share will be paid on 26 June 2015.
A summary of the portfolio investments for all three share classes,
namely the Ordinary Shares fund, the Planned Exit Shares fund and the
Infrastructure Shares fund, is set out below. We remain principally
focussed on achieving exits in both the Ordinary Shares fund and the
Planned Exit Shares fund to realise cash to facilitate paying dividends,
making new investments or implementing share buy backs as appropriate.
Review: Ordinary Shares Fund
1. New Investments
During the period, one small new investment was made by the Ordinary
Shares fund in CoGen Limited, a new company formed between O-Gen UK and
its existing 50:50 joint venture partner, Una Group, to further develop
their combined pipeline of waste to energy projects. As part of a
GBP1.25 million funding round, the Ordinary Shares fund invested a
nominal GBP4 for a shareholding representing 3.92% of CoGen's equity,
alongside similar investments from other Foresight VCTs.
2. Follow-On Investments
Company GBP
AtFutsal Group Limited 57,596
Closed Loop Recycling Limited 24,556
Procam Television Holdings Limited 69,445
Total 151,597
3. Realisations
In December 2014, ICA completed a recapitalisation enabling loans and
interest totalling GBP600,000 to be paid to the Ordinary Shares fund. In
March 2015, The Bunker Secure Hosting similarly completed a
recapitalisation enabling loans and interest totalling GBP1,411,205 to
be paid to the Ordinary Shares fund. A further loan repayment of
GBP31,478 was received from the administrator of Evance Wind Turbines.
During the period, 36,694 ordinary shares in AiM listed Zoo Digital were
sold, realising GBP3,448.
4. Material Provisions to a level below cost
Company GBP
Abacuswood Limited 32,000
AlwaysOn Group Limited 17,095
Closed Loop Recycling Limited 308,132
Total 357,227
5. Review and Outlook
During the period, Autologic Diagnostics Group, Datapath Group Holdings,
Procam Television Holdings, TFC Europe and The Bunker Secure Hosting all
continued to trade well, each generating significant EBITDA profits.
With stronger demand from SMEs for its document management solutions and
good cash generation, ICA Group completed a recapitalisation in December
2014. In March 2015, The Bunker Secure Hosting similarly completed a
recapitalisation, as detailed above. Procam Television Holdings
experienced strong demand for its TV broadcast hire services and
completed two acquisitions, which were partially funded by further
investment from the Ordinary Shares fund. Trading continued to improve
at AtFutsal Group as a result of greater efforts to develop the
educational business. O-Gen UK also made good progress, obtaining
planning permission for a further waste to energy power station. Its
partnership with Una Group was formalised by combining the two
management teams and staff in a new company, CoGen Limited, to further
develop their substantial, combined pipeline of projects. 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, supporting a significant valuation increase in the period.
Provisions totalling GBP357,227 were made against three investments
during the period, principally a provision of GBP308,132 against the
cost of the investment in Closed Loop Recycling following the
appointment of administrators on 30 April 2015, thereby reducing the
valuation to nil. Despite operating at full capacity, the company's
recent performance was impacted by adverse movements in the price of
waste plastic bottles as a result of overseas demand for bottles and
weaker prices for virgin resin, reflecting the falling price of oil. The
latter impacted the price customers paid for the company's competing
recycled HDPE and PET pellets. The company focused its efforts on
improving profitability whilst actively pursuing various strategic
options, including raising capital from third party sources and an
outright sale. Notwithstanding the above efforts, the company failed to
raise new capital and was placed into administration on 30 April 2015,
with no prospect of any recoveries.
Following further cost reductions, management changes and a recovery in
defence orders at Trilogy Communications, the company is now operating
at, or near, EBITDA break-even on a monthly basis. Following successful
completion of two important test programs, significant defence orders
are expected in mid 2015 which should materially improve profitability
and cash generation.
We continue to examine ways to realise further capital from the
portfolio by disposals, dividends and recapitalisations and hope to
announce further successes in this regard in the next few months.
Review: Planned Exit Shares Fund
1. New Investments
No new investments were made during the period.
2. Follow-on funding
Company GBP
Closed Loop Recycling Limited 2,865
Total 2,865
3. Realisations
Company GBP
Channel Safety Systems Group Limited 614,250
Industrial Efficiency Limited 205,500
Leisure Efficiency Limited 793,000
Total 1,612,750
4. Material Provisions to a level below cost
Company GBP
Closed Loop Recycling Limited 115,865
Industrial Engineering Plastics Limited 83,594
Total 199,459
5. Review and Outlook
During the period, the net asset value of the Planned Exit Shares fund
increased by 8.1% to 72.2p at 31 March 2015 (after adding back the
interim dividend of 7.5p per Planned Exit Share paid on 12 January 2015)
compared to 73.7p per share at 30 September 2014, principally reflecting
profits realised on the sale of Industrial Efficiency and Leisure
Efficiency and an increase of GBP305,066 in the valuation of Trilogy
Communications.
After the year end, in October 2014, Channel Technical Services, a
subsidiary of Channel Safety Systems Group, was sold for GBP1.6 million
as a result of which the Planned Exit Shares fund was paid GBP644,239,
comprising a loan repayment of GBP614,250 and interest of GBP29,989. In
April 2015, the parent company was sold to Newbury Investments (UK)
Limited, realising GBP518,937 for the Planned Exit Shares fund, which
compares with original cost of GBP75,750.
In January 2015, the investments in Leisure Efficiency and Industrial
Efficiency were sold for GBP793,000 and GBP205,500 respectively.
Since the appointment in late 2014 of a new Chairman and experienced
turnaround CEO at Industrial Engineering Plastics, the company's
performance has improved substantially, with a greater emphasis on
fabrication work, improving margins and increasing EBITDA profitability.
Although the turnaround is making good progress, a provision of
GBP83,594 was made against this investment during the period because of
poor previous performance. Following the appointment of administrators
to Closed Loop Recycling on 30 April 2015, with no prospect of any
recoveries, a provision of GBP115,865 was made against the cost of this
investment, reducing the valuation to nil.
A dividend of 7.5p per Planned Exit Share was paid on 12 January 2015
and a further dividend of 15.0p per Planned Exit Share has been declared
to be paid on 26 June 2015.
We continue to focus on realising portfolio investments with a view to
returning proceeds to investors, as originally planned, during the
period from June 2015 to June 2016.
Review: Infrastructure Shares Fund
Background
By the closing date of 18 July 2012, a total of GBP33,295,716 had been
raised for the Infrastructure Shares fund jointly with Foresight VCT's
Infrastructure Shares fund (i.e. some GBP16.6 million for each fund).
The strategy of both funds is to invest in infrastructure assets on a
pari passu basis in the secondary PFI, solar infrastructure, energy
efficiency and on-site power generation markets.
The two funds acquired shareholdings in eight operating PFI companies,
four in the education sector holding interests in 13 schools and four in
the health sector, comprising three acute hospitals and one forensic
psychiatry unit. All of the projects are contracted under UK PFI
standard form and the counterparties are various Local Authorities and
NHS Trusts. These investments have strong operating records and have
remaining contract terms ranging from 12 to 27 years. All have project
finance debt in place with long term interest rate hedging contracts and
also long term facilities management subcontracts which pass all
operational risks through to well established major companies.
While some progress was made in investing the majority of the
Infrastructure Share fund in secondary PFI investments within 12 months
of the closing date, yields fell significantly, reflecting increased
competition from new and established PFI infrastructure funds. This was
driven by increasing investor appetite for PFI investments and a
contraction in the supply of new infrastructure assets. This yield
compression has meant that assets were acquired at yields lower than
originally forecast. The total return, will, however depend on the
prices achieved on an ultimate sale or refinancing (with suitable debt
finance) of the assets. Foresight Group agreed with the Board to reduce
its management fee from 1.75% to 1% per annum from 1 January 2015 on the
Infrastructure Shares fund in order to help reduce costs and help
improve investor returns.
Portfolio Developments
Although advance VCT clearances were received from HMRC in respect of
four of the PFI investments, only one is VCT qualifying because the
co-shareholders in the other three would not agree to change the
structure. Action was then taken to increase the VCT qualifying
proportion of the Infrastructure Shares fund to 70% by July 2014 to meet
the VCT qualification test. This action included the refinancing of
GBP4.5 million of non-qualifying PFI assets with loans from the
Foresight Inheritance Tax Service to reduce the non-qualifying holdings
and then using these proceeds to invest in five qualifying solar
infrastructure companies, in line with the investment policy.
During the period the Infrastructure Shares fund formally completed
investments committed in July 2014 totalling GBP6.0 million in three
solar projects. The solar assets share many of the characteristics of
PFI assets, including RPI-linked revenues, low correlation to economic
conditions and low counterparty risk, although there is an element of
exposure to commercial electricity prices.
The solar project details are as follows:
-- GBP2 million was invested in Rovinj Solar Limited in July 2014 to
acquire a shareholding in the 5.5MW Ford Farm solar project, located in
St Ives, Cornwall which has been generating electricity since March
2013. The investment received HMRC clearance and was formally completed
in December 2014.
-- GBP2 million was invested in FS Hayford Farm Limited in July 2014
which had a conditional contract to acquire the Hayford Farm solar
project which was formally completed in December 2014. Hayford Farm is a
9.8MW project which was partially financed with a co-investment from the
Foresight Inheritance Tax Service and third party debt from Investec
Bank. The investment received HMRC clearance in July 2014 and has been
generating revenues since connection to the National Grid in September
2014.
-- GBP2 million was invested in Krk Solar Limited in July 2014 which
completed the acquisition of the 3.3MW Tope Farm Solar Project near
Blackawton in Devon on 14 October 2014. This investment has received
HMRC clearance.
GBP800,000 was invested in Zagreb Solar Limited in July 2014 on a
qualifying basis. On 1 April 2015, HMRC clearance was received to merge
Zagreb with York Infrastructure 3 Limited, and utilise their combined
cash resources to repay GBP1.6 million of the senior debt on the
Drumglass PFI project.
New Investments
No new investments were made during the period.
Follow-on investments
No follow-on investments were made during the period.
Outlook
The Infrastructure Shares fund has been successfully deployed into a
combination of qualifying PFI and solar investments.
Reflecting progress in yield from these investments, a second interim
dividend of 2.5p per Infrastructure Share has been declared to be paid
on 26 June 2015. We are optimistic for the prospects of the restructured
portfolio over the coming years, although the original target total
return of 130.0p per share is challenging.
Portfolio Review
In April 2014, the two Foresight portfolio companies, AlwaysOn Group and
Data Continuity Group (together now known as AlwaysOn Group), merged and
implemented a major reorganisation, involving significant cost
reductions and a change in year end from June to March 2015. The merged
business now provides data backup services, connectivity and Microsoft's
Lync collaboration software (AlwaysOn being a Microsoft Gold partner) to
SMEs and larger enterprises. In the year to 31 March 2015, losses were
successfully stemmed, with a small EBITDA profit being achieved on sales
of GBP6.6 million and reasonable cash balances at that date.
Revenues for the merged entity were slightly behind budget, due to
weaker product sales and data back up renewals, while managed services
performed ahead of expectations. To improve the company's digital
presence and channel sales of Lync (to be rebranded Skype for Business),
a new Head of Marketing has been recruited, who has already made a
beneficial impact on sales. With a number of significant pipeline
opportunities beginning to be generated through partners, performance is
expected to improve significantly once these convert into orders. Held
in the Ordinary Shares and Planned Exit Shares funds.
AtFutsal Group runs government approved education programmes for
students aged 16-18 years old, principally as part of a consortium made
up of Football League clubs, colleges and academies and training/
accreditation organisations. Funding for these programmes is sourced
from the Education Funding Agency. The company's three arenas in
Birmingham, Leeds and Swindon are used as part of these education
programmes. AtFutsal has introduced a wider range of government approved
BTech courses and is using its own online education software platform to
provide a broader range of educational services. A separate English
Colleges education programme has been established to provide additional
futsal related courses for 16-18 year olds at sixth form colleges, with
an increasing number of courses being offered. Courses for other age
groups are also being developed. For the current student year which
commenced in September 2014, the company registered some 1,400 students
on its futsal related courses, compared with 1,200 in the previous
academic year and some 100 for its new English Colleges programme.
AtFutsal is also improving its capacity utilisation across its three
arenas with a variety of different sports being regularly played at each
arena alongside futsal at both child and adult level.
For the year ended 31 December 2014, a small operating profit was
achieved on sales of GBP5.0 million, with the growing Education division
generating the majority of the profit and cash flow within the Group.
Trading in the current year has started strongly, a key focus for the
education team being to ensure that student enrolment for September 2015
is as strong as possible. As part of a GBP355,000 funding round to
support the continuing 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). The Ordinary
Shares fund invested GBP172,789 in total (GBP57,596 in February and
GBP115,193 in April) and increased its equity shareholding from 25.4% to
35.9%. Management is focussed on improving profitability by increasing
the number of students and range of education programmes and also the
usage of its online education platform. Held in the Ordinary Shares
fund.
Following the GBP48 million secondary buy-out by Living Bridge (formerly
ISIS Private Equity) in January 2012, investments in equity and loan
stock valued at GBP1.98 million were retained in Autologic Diagnostics
Group. The company generated reduced profits for the year to December
2013, achieving an EBITDA of GBP5.4 million on sales of GBP18.8 million
(an EBITDA of GBP5.9 million on revenues of GBP17.2 million in 2012).
Similar trading results were achieved during 2014, with relatively
stronger sales in the UK and Europe compared with the USA. As at 31
December 2014, the company had a healthy cash balance of GBP7.9 million.
Trading in the current year to date is in line with budget. Management
continues to develop a business model to generate recurring revenues and
improve the quality of the company's earnings through a new
service-oriented product, to be launched in May 2015. In the short term,
this change in strategy towards a pure recurring revenue model will
result in certain exceptional costs being incurred and depending on the
level of new customer sales is likely to impact EBITDA in 2015 and 2016
while helping to drive longer term shareholder value. During the period,
interest of GBP49,061 was deferred under the terms of the loan agreement
with Autologic Diagnostics Group was capitalised. Held in the Ordinary
Shares fund.
In December 2010, the Planned Exit Shares fund provided GBP565,000 to
partially fund a management buy-in of long established, Petersfield
based, Channel Safety Systems Group which designs and distributes
emergency lighting and fire safety systems, as well as providing
associated installation and maintenance services through its subsidiary,
Channel Technical Services ("CTS"). For the year to 31 October 2013,
Channel Safety Systems Group performed well, achieving an EBITDA of
GBP580,000 on sales of GBP8.58 million (2012: GBP420k EBITDA on sales of
GBP8.5 million). In the year to 31 October 2014, the group traded well
ahead of budget and the previous year and had a strong cash balance. CTS
was sold for GBP1.6 million in October 2014, of which the Planned Exit
Shares fund received GBP644,239, comprising a loan repayment of
GBP614,250 and interest of GBP29,989. In April 2015, post the period end,
the parent company was itself sold to Newbury Investments (UK) Limited,
realising GBP518,937 for the Planned Exit Shares fund, which compares
with original cost of GBP75,750. Combined with the above mentioned sale
of Channel Technical Services, Foresight's investment in Channel Safety
Systems Group returned 2.0 times cost in aggregate and an IRR of 22%.
Held in the Planned Exit Shares fund.
During 2013/14, Closed Loop Recycling successfully doubled the capacity
of its Dagenham plant, which processed approaching 1,000 tonnes per week
of waste plastic bottles. In October 2014, following protracted
negotiations, the shareholders entered into a confidential, conditional
sale and purchase agreement with a purchaser planning to seek a public
listing simultaneously with the conclusion of the acquisition, at a
price higher than the then carrying valuation. In order to achieve a
sale, Foresight 2 VCT plc agreed to fund the process and contributed
GBP27,421 towards the professional costs during the period. One of the
purchase conditions related to the financial performance of the company
during the listing process. However, the company's recent and short-term
projected performance were impacted by adverse movements in the price of
waste plastic bottles reflecting overseas demand for such bottles and
weaker prices for virgin resin, indirectly reflecting the falling price
of oil.
The latter impacted the price the company received for its competing
recycled HDPE and PET pellets. To mitigate the impact of these price
movements, price surcharges were negotiated with key customers. The
conditional sale and purchase agreement with the potential purchaser was
formally terminated in December 2014, following weaker than projected
financial performance by the company.
During the first quarter of 2015, the company's competitive position
worsened further with oil prices declining to below $50 per barrel. This
led to a substantial fall in the price of virgin HDPE polymer and lower
prices for the company's recycled HDPE pellets. This markedly increased
the pressure on the company's margins and business model and worsened
the P&L and cash position. Waste bottle prices also fell but to a lesser
extent than the reduction in oil and virgin pellet prices which,
combined with a time lag, meant that the price surcharge to customers
increased from GBP200 per tonne in December 2014 to over GBP300 per
tonne in March 2015. This continuing pricing pressure cast doubt on the
continuing viability of the company's business model.
The company focussed its efforts on current trading and improving
profitability, whilst also actively pursuing various strategic options,
including raising capital from third party sources, an outright sale and
further supply chain support. Discussions were held with various parties
with regard to raising new capital but these were hindered by lack of
sufficient support from the various parties involved. Because of these
conditions, other experienced and credible recyclers experienced similar
challenges to their long-standing business models.
Final provisions of GBP308,132 and GBP115,865 respectively were made
during the period against the cost of the investment in the company by
the Ordinary Shares fund and Planned Exit Shares fund, reducing their
valuations to nil. The company failed to raise new capital and was
placed into administration on 30 April 2015, with no prospect of any
recoveries. Held in the Ordinary Shares and Planned Exit Shares funds.
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 sales in control
rooms, betting shops and signage and is entering new markets. Audited
accounts for the year to 31 March 2014 show record operating profits of
GBP7.36 million on sales of GBP19.6 million (for the year ended 31 March
2013, record operating profits of GBP5.1 million were achieved on sales
of GBP14.1 million). Trading and cash generation in the year to 31 March
2015 was strong, with the company continuing to enjoy good demand from
its main OEM partners and distributors. The company has acquired its US
distributor and has established an office in Philadelphia to further
develop its US sales and add to its distributorships. In February 2015,
the company launched its range of leading new IP products at the ISE
show, receiving a favourable response from OEMs and distributors.
Management are working to improve sales efforts and processes as well as
improve project management and product delivery times. Held in the
Ordinary Shares fund.
ICA Group is a leading document management solutions provider in the
South East of England, reselling and maintaining Ricoh, Toshiba and
Kyocera 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 (against an EBITDA of GBP561,000 on sales of GBP3 million
in the previous year). The company continues to trade well in the
current year. 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 paid to the
Ordinary Shares fund. The recapitalisation was financed through a GBP1
million four year 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 as Executive Chairman in
January 2015. The sales team has since been strengthened through the
recruitment of three new sales people, resulting in an improved sales
performance. The company is now well positioned to capitalise on the
improving market environment. Held in the Ordinary Shares fund.
As a part of a GBP360,000 funding round in April 2013, the Planned Exit
Shares fund invested GBP180,000 in Industrial Efficiency, alongside
GBP180,000 from the Foresight VCT Planned Exit Shares fund. The company
installs and maintains proven and robust energy switching equipment,
allowing customers to reduce emissions and make significant cost
savings. The company completed its first energy cost reduction project
in September 2013 and continues to pursue a number of similar
opportunities. Returns are based solely on the cost savings made and do
not depend on government subsidies or Feed-in-Tariffs. In January 2015,
the investment in Industrial Efficiency was sold for GBP205,500 to
another Foresight managed fund, based on an independent third party
valuation. The sale of Industrial Efficiency realised a profit of
GBP85,215 and generated a total return of 1.5 times original cost. Held
in the Planned Exit Shares fund.
In December 2011 and March 2012, the Planned Exit Shares fund provided a
total of GBP875,000 by way of loans and equity to help 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 18 month period ended 31 May 2014, following
increased competition in its plastics distribution and industrial
fabrication markets, the company achieved a reduced EBITDA of GBP205,000
on sales of GBP6.7 million (compared with an EBITDA of GBP646,000 on
sales of GBP4.9 million in 2012). Despite a good start in the current
year and improved market sentiment, performance deteriorated during
Summer 2014. A new Chairman and experienced turnround CEO were appointed
to improve trading, operational efficiency and systems. Performance has
since improved substantially, with greater emphasis on fabrication work,
improving margins and increasing EBITDA. Monthly sales in March 2015
were close to the previous monthly record. Although the turnround is
making good progress, a provision of GBP83,594 was made against this
investment during the period. Held in the Planned Exit Shares fund.
Ixaris Systems has developed and operates Entropay, a web based global
prepaid payment service using the VISA network. Entropay's revenues and
profits have continued to grow. The company also offers its IxSol
product (formerly known as Opn) on a 'Platform as a Service' basis to
enable enterprises to develop their own customised global applications
for payments over various payment networks. IxSol is trading
satisfactorily with a number of deployments in progress and a good sales
pipeline. IxSol is being used by companies in the affiliate marketing
and travel sectors and sales efforts are now also focussing on the
international e-commerce and financial services sectors. An experienced
executive is being recruited to lead this unit, improve execution and
drive sales growth.
During 2013, the company invested in further 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. The first
deployment of the Payment System is expected in Q2 2015. A pipeline of
sales opportunities is being developed for several different
applications. Ixaris was awarded an EU grant of EUR2.5 million, of which
EUR1.6m will be received over three years, to help fund the existing
platform technology roadmap which highlights the innovative nature of
the Payment System.
In January 2014, Ixaris raised GBP2 million of new equity to accelerate
investment in the Payment System. In the year to 31 December 2014, as a
result of continuing investment in software and systems, an EBITDA loss
of GBP622,000 was incurred on revenues of GBP9.4 million (against an
EBITDA loss of GBP617,000 on sales of GBP9.5 million in the previous
year). Following a reduction of cost base in July 2014, the company is
currently operating at cash flow break even and had GBP3.1 million of
cash at 31 December 2014. Held in the Ordinary Shares fund.
As part of a GBP1.38 million funding round in January 2012, the Planned
Exit Shares fund invested GBP690,000 in Leisure Efficiency. The company
installs and maintains energy efficiency equipment, including voltage
optimisers and heat exchangers, in 34 David Lloyd Leisure ("DLL") sites
across the UK. The contract with DLL has a life of seven years during
which the company will generate a strong yield. In January 2015, the
investment in Leisure Efficiency was sold for GBP793,000 to another
Foresight managed fund, based on an independent third party valuation.
The sale of Leisure Efficiency realised a profit of GBP470,975 and
generated a total return of 1.7 times original cost. Held in the Planned
Exit Shares fund.
In February 2014, O-Gen Acme Trek received planning permission for the
proposed rebuild of the plant in Stoke as a 7MW waste wood to energy
power plant. Management is currently working with the selected
technology provider and a major EPC contractor to develop the project to
the next stage, but this is taking longer than anticipated. Accordingly,
it is expected that the project will now need to qualify under the
Contract for Difference (CfD) subsidy regime rather than the ROC subsidy
regime. Both Foresight and CoGen (see O-Gen UK below) are working
together to establish how best to develop the project under this new
regime. In view of the delays described above, the company is actively
seeking other competitive bids for the project. Held in the Ordinary
Shares fund.
O-Gen UK continues to make good progress. Working together with
Carbonarius (its 50:50 joint venture with Plymouth based Una Group),
O-Gen UK has built on the success of its GBP48 million, 10MW Birmingham
BioPower project ("BBPL") to become the UK's leading independent
developer of Advanced Conversion Technology waste to energy projects. In
March 2015, O-Gen UK formalised this partnership with Una Group by
combining the two management teams and staff in a new company, CoGen
Limited, to further develop their substantial, combined pipeline of
projects. 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 24.59% of
CoGen's equity, including Foresight 2 VCT plc (3.92%), Foresight 3 VCT
plc (8.59%), Foresight 4 VCT plc (9.50%) and the Foresight UK
Sustainable EIS fund (2.58%). Reflecting the terms of this new equity
subscription, the O-Gen UK valuation has been increased by 10% to 1.6
times original cost.
This merger will help O-Gen UK demonstrate the sufficient scale, track
record and project pipeline to secure an appropriate exit in due course.
In March 2015, CoGen reached financial close on its most recent project,
a GBP53 million, 10MWe waste wood to energy plant in Welland,
Northamptonshire, using the same technology and partners as in the BBPL
project. This latest project was funded with investment from Balfour
Beatty plc, Equitix and Noy (an Israeli investment fund), with CoGen
earning GBP400,000 in development fees on the transaction whilst
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 with MITIE plc, on which a 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 owning 50% but with a prior ranking
return on the latter's invested capital. CoGen has also recently agreed
terms to develop a 25MW project in Merseyside using refuse derived fuel.
Held in the Ordinary Shares fund.
In April 2013, the Ordinary Shares fund invested GBP100,000 alongside
other Foresight VCTs in a GBP1.8 million round to finance a management
buy-out of Procam Television Holdings. Procam is one of the UK's leading
broadcast hire companies, supplying equipment and crews for UK location
TV production to broadcasters, production companies and other businesses
for over 20 years. Headquartered in Battersea, London, with additional
facilities in Manchester, Edinburgh and Glasgow, Procam is a preferred
supplier to BSkyB and an approved supplier to the BBC and ITV. Over the
last four years revenues have doubled, following the introduction of new
camera formats and increased sales and marketing efforts.
In September 2013, Hammerhead, a competitor with facilities in London,
Manchester, Edinburgh and Glasgow, was acquired in order to broaden the
customer base, national coverage and realise various synergistic
benefits. For the year to 31 December 2013, an EBITDA of GBP1.8 million
was achieved on sales of GBP6.4 million, well ahead of 2012. In the year
to 31 December 2014, significant growth in sales and profits was
achieved, again well ahead of the prior year, reflecting both strong
organic growth and the successful integration of the Hammerhead
acquisition. Continuing strong growth is expected in the current
financial year which will necessitate expansion into larger premises.
In December 2014, Procam acquired True Lens Services, based in Leicester,
which specialises in the repair, refurbishment and supply of camera
lenses to the film and television industries in the UK and overseas. 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, which provides camera, audio and lighting rental for TV production,
plus crew and related production services from its premises in
Manhattan. These acquisitions were supported by further investment of
GBP1.25 million from the Foresight VCTs, of which the Ordinary Shares
fund invested a further GBP69,445. Integration of both acquisitions is
making good progress and initial trading is in line with plan. Other
suitable acquisition opportunities are under consideration. Held in the
Ordinary Shares fund.
TFC Europe, a leading distributor of technical fasteners in the UK and
Germany, performed well during the year to 31 March 2014, achieving
record operating profits of GBP2.75 million on sales of GBP19.5 million
(against a record operating profit of GBP2.45 million on sales of
GBP18.1 million in 2013). Trading in the year to 31 March 2015 continued
to be strong, with record profits and sales again being achieved. The
budget for the current year shows continuing good growth. With effective
national coverage through five service centres in the UK, management is
focussed on increasing sales efforts and expansion in Germany, the
largest market in Europe. A new full service centre was opened in Bochum
near Dusseldorf in October 2013 helping TFC to expand its business in
Germany. The seventh service centre, acquired in October 2014 in Singen,
near Stuttgart, has already won new substantial customers with potential
for further growth. This acquisition provides increased opportunities to
service existing Southern German customers and target new customers with
a wider product range. This strong physical presence in Europe's largest
manufacturing market is expected to assist TFC in growing its sales and
profits substantially. The order book remains strong and the new project
pipeline is healthy, showing good prospects for the coming months. Held
in the Ordinary Shares fund.
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 2014, an EBITDA of GBP2.22 million was achieved on
sales of GBP9.3 million, similar to the previous year. Sales growth
slowed during the year, however, because of increased competition, but
has since recovered. Recurring annual revenues presently exceed GBP9.3
million. For the year to date, trading continues in line with budget.
As referred to above, the Bunker repaid all its shareholder loans and
outstanding interest on 31 March 2015.
To meet growing customer demand, a number of new Cloud based services
have been launched, including Secure Archive, Secure Hosted Desktop,
Backup and Disaster Recovery as a Service. A number of Channel partners
and customers have already been signed and a growing pipeline has been
developed through Channel partners for these Cloud 2.0 services. Secure
Archive is being marketed through Channel partners to major operations
which generate and hold large amounts of data such as marketing agencies,
film/photo libraries and government bodies. The sales and marketing
strategy has been reassessed and sales team strengthened.
A power upgrade at the Newbury Data Centre was successfully completed in
March. To increase capacity and resilience, the core network was
similarly upgraded and capacity to internet service providers
substantially increased during the period. Held in the Ordinary Shares
fund.
Strong results in 2012 trading at Trilogy Communications were
subsequently affected by delays in long-term US defence programme orders
and this negatively impacted on 2013 and 2014 results. For the year to
28 February 2015, an EBITDA loss of GBP509,000 was incurred on sales of
GBP3.9 million (against an EBITDA loss of GBP762,000 on sales of GBP4.0
million in 2014). Following further cost reductions and some recovery in
defence orders, losses have been largely stemmed and the company is now
operating at or near EBITDA breakeven on a monthly basis and is managing
cash closely. A new non-executive Chairman has been appointed and the
Chief Operating Officer promoted to the position of Chief Executive
Officer. A new Sales Director has also been recruited to increase
broadcast sales. Discussions are in progress in relation to further
defence programmes and the company continues to develop its range of
communication equipment and related services, including the planned
launch of a software only variant. Following successful completion of
two important test programmes, significant orders are expected from
defence customers by mid 2015, which should materially improve
profitability and cash generation. In light of these prospective orders,
improving broadcast revenues and increased sales efforts in the USA, the
company is budgeting to return to profitability during the current year
to February 2016. Held in the Ordinary Shares and Planned Exit Shares
funds.
David Hughes
Chief Investment Officer
Foresight Group
28 May 2015
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 30
September 2014 ('the Annual Report'). A detailed explanation can be
found on page 8 of the Annual Report which is available on
www.foresightgroup.eu or by writing to Foresight Group at The Shard, 32
London Bridge Street, London, SE1 9SG.
In the view of the Board, there have not been any 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 Strategic Report of the Annual Report. The financial position of the
Company, its cash flows, liquidity position and borrowing facilities are
described in the Chairman's Statement, Strategic Report and Notes to the
Accounts of the 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 therefrom across a variety of industries and
sectors, and the Directors believe that the Company is able to manage
its business risks.
Cash flow projections have been reviewed and show that the Company has
sufficient funds to meet both its contracted expenditure and any
discretionary cash outflows in the form of share buybacks and dividends.
The Company has no external loan finance in place and therefore is not
exposed to any gearing covenants, although its underlying investments
may have external loan finance.
The Directors have reasonable expectation that the Company has
sufficient 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.
By order of the Board
Jocelin Harris
Chairman
28 May 2015
Unaudited Non-Statutory Analysis of the Share Classes
Income Statements
for the six months ended 31 March 2015
Ordinary Shares Infrastructure Shares
Fund Planned Exit Shares Fund Fund
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Realised
(losses)/gains
on
investments - (6) (6) - 269 269 - (24) (24)
Investment
holding gains - 270 270 - 75 75 - 450 450
Income 407 - 407 118 - 118 311 - 311
Investment
management
fees (74) (221) (295) (6) (18) (24) (33) (99) (132)
Other expenses (123) - (123) (22) - (22) (57) - (57)
Return on
ordinary
activities
before
taxation 210 43 253 90 326 416 221 327 548
Taxation 39 - 39 (18) 3 (15) (45) 21 (24)
Return on
ordinary
activities
after
taxation 249 43 292 72 329 401 176 348 524
Return per 0.5p 0.1p 0.6p 1.2p 5.4p 6.6p 1.1p 2.1p 3.2p
share
Unaudited Non-Statutory Analysis of the Share Classes
Balance Sheets
at 31 March 2015
Ordinary Shares Planned Exit Infrastructure
Fund Shares Fund Shares Fund
GBP'000 GBP'000 GBP'000
Fixed assets
Investments held
at fair value
through profit or
loss 25,087 3,158 14,945
Current assets
Debtors 727 584 249
Money market
securities and
other deposits 1 1 -
Cash 2,582 673 69
3,310 1,258 318
Creditors
Amounts falling
due within one
year (561) (20) (111)
Net current assets 2,749 1,238 207
Net assets 27,836 4,396 15,152
Capital and
reserves
Called-up share
capital 465 61 165
Share premium
account 9,154 - 3
Capital reserve -
realised (8,299) (29) (444)
Capital reserve -
investment
holding
(losses)/gains (4,693) (854) 151
Distributable
reserve 31,090 5,217 15,276
Capital redemption
reserve 119 1 1
Equity
shareholders'
funds 27,836 4,396 15,152
Number of shares
in issue 46,457,032 6,086,322 16,565,233
Net asset value 59.9p 72.2p 91.5p
per share
At 31 March 2015 there was an inter-share class debtor/creditor of
GBP313,000 which has been eliminated on aggregation.
Unaudited Non-Statutory Analysis of the Share Classes
Reconciliations of Movements in Shareholders' Funds
for the six months ended 31 March 2015
Capital
Capital reserve -
Called-up Share reserve investment Capital
share premium - holding Distributable redemption
Ordinary Shares Fund capital account realised losses reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 October 2014 465 9,206 (8,072) (4,963) 30,841 119 27,596
Expenses in relation to
share issues - (52) - - - - (52)
Realised losses on disposal
of investments - - (6) - - - (6)
Investment holding gains - - - 270 - - 270
Management fees charged to
capital - - (221) - - - (221)
Revenue return for the
period - - - - 249 - 249
As at 31 March 2015 465 9,154 (8,299) (4,693) 31,090 119 27,836
Capital
Capital reserve -
Called-up Share reserve investment Capital
share premium - holding Distributable redemption
Planned Exit Shares Fund capital account realised losses reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 October 2014 61 - (283) (929) 5,653 1 4,503
Expenses in relation to
share issues - - - - (38) - (38)
Repurchase of shares - - - - (12) - (12)
Realised gains on disposal
of investments - - 269 - - - 269
Investment holding gains - - - 75 - - 75
Dividends - - - - (458) - (458)
Management fees charged to
capital - - (18) - - - (18)
Tax credited to capital - 3 - - - 3
Revenue return for the
period - - - - 72 - 72
As at 31 March 2015 61 - (29) (854) 5,217 1 4,396
Capital
Capital reserve -
Called-up Share reserve investment Capital
share premium - holding Distributable redemption
Infrastructure Shares Fund capital account realised gains reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 October 2014 165 3 (342) (299) 15,629 1 15,157
Expenses in relation to
share issues - - - - (91) - (91)
Repurchase of shares - - - - (23) - (23)
Realised losses on disposal
of investments - - (24) - - - (24)
Investment holding gains - - - 450 - - 450
Dividends - - - - (415) - (415)
Management fees charged to
capital - - (99) - - - (99)
Tax credited to capital - 21 - - - 21
Revenue return for the
period - - - - 176 - 176
As at 31 March 2015 165 3 (444) 151 15,276 1 15,152
Unaudited Income Statement
for the six months ended 31 March 2015
Six months ended Six months ended Year ended
31 March 2015 31 March 2014 30 September 2014
(Unaudited) (Unaudited) (Audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Realised
gains/(losses)
on
investments - 239 239 - (1,550) (1,550) - (4,092) (4,092)
Investment
holding
gains/(losses) - 795 795 - (970) (970) - (4,328) (4,328)
Income 836 - 836 373 - 373 1,554 - 1,554
Investment
management
fees (113) (338) (451) (130) (392) (522) (251) (752) (1,003)
Other expenses (202) - (202) (225) - (225) (405) - (405)
Return/(loss)
on ordinary
activities
before
taxation 521 696 1,217 18 (2,912) (2,894) 898 (9,172) (8,274)
Taxation (24) 24 - (23) 23 - (23) 23 -
Return/(loss)
on ordinary
activities
after
taxation 497 720 1,217 (5) (2,889) (2,894) 875 (9,149) (8,274)
Return/(loss)
per share:
Ordinary Share 0.5p 0.1p 0.6p (0.3)p (5.6)p (5.9)p 0.5p (16.5)p (16.0)p
Planned Exit
Share 1.2p 5.4p 6.6p 0.3p (3.1)p (2.8)p 2.7p (18.5)p 15.8p
Infrastructure
Share 1.1p 2.1p 3.2p 0.7p (0.5p) 0.2p 3.0p (2.2)p 0.8p
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: 05200494
at 31 March 2015
As at As at As at
30
31 March 31 March September
2015 2014 2014
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Fixed assets
Investments held at fair value through profit and
loss 43,190 48,841 44,983
Current assets
Debtors 1,247 3,764 1,562
Money market securities and other deposits 2 2 2
Cash 3,324 368 1,347
4,573 4,134 2,911
Creditors
Amounts falling due within one year (379) (308) (638)
Net current assets 4,194 3,826 2,273
Net assets 47,384 52,667 47,256
Capital and reserves
Called-up share capital 691 692 691
Share premium account 9,157 9,171 9,209
Capital reserve - realised (8,772) (5,795) (8,697)
Capital reserve - investment holding losses (5,396) (2,833) (6,191)
Distributable reserves 51,583 51,312 52,123
Capital redemption reserve 121 120 121
Equity shareholders' funds 47,384 52,667 47,256
Net asset value per share:
Ordinary Share 59.9p 69.4p 59.4p
Planned Exit Share 72.2p 86.8p 73.7p
Infrastructure Share 91.5p 90.8p 91.4p
Unaudited Reconciliation of Movements in Shareholders' Funds
for the six months ended 31 March 2015
Capital
Capital reserve -
Called-up Share reserve investment Capital
share premium - holding Distributable redemption
Company capital account realised losses reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1
October
2014 691 9,209 (8,697) (6,191) 52,123 121 47,256
Expenses in
relation to
share
issues - (52) - - (129) - (181)
Repurchase
of shares - - - - (35) - (35)
Net realised
gains on
disposal of
investments - - 239 - - - 239
Investment
holding
gains - - - 795 - - 795
Dividends - - - - (873) - (873)
Management
fees
charged to
capital - - (338) - - - (338)
Tax credited
to capital - - 24 - - - 24
Revenue
return for
the period - - - - 497 - 497
As at 31
March 2015 691 9,157 (8,772) (5,396) 51,583 121 47,384
Unaudited Cash Flow Statement
for the six months ended 31 March 2015
Six months Six months
ended ended Year ended
31 March 2015 31 March 2014 30 September 2014
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Investment income received 1,057 441 977
Dividend received from investments 46 70 170
Deposit and similar interest received - - 1
Investment management fees paid (721) (345) (445)
Secretarial fees paid (65) (65) (98)
Other cash payments (133) (111) (264)
Net cash inflow/(outflow) from operating activities
and returns on investment 184 (10) 341
Taxation - - -
Returns on investment and servicing of finance
Purchase of unquoted investments and investments quoted
on AIM (198) (47) (7,622)
Net proceeds on sale of investments 3,074 492 8,720
Net capital inflow from financial investment 2,876 445 1,098
Equity dividends paid (873) (723) (723)
Management of liquid resources
Movement in money market funds - - -
- - -
Financing
Issue of shares - - -
Expenses arising from the issue of shares (175) (1) 42
Repurchase of own shares (35) (19) (87)
(210) (20) (45)
Net inflow/(outflow) of cash for the period 1,977 (308) 671
Reconciliation of net cash flow to movement in net
funds
Increase/(decrease) in cash for the period 1,977 (308) 671
Net cash at start of the period 1,347 676 676
Net cash at end of the period 3,324 368 1,347
Notes to the Unaudited Half-Yearly Financial Report
for the six months ended 31 March 2015
1. The Unaudited Half-Yearly Financial Report has been prepared on the basis
of accounting policies set out in the statutory accounts of the Company
for the year ended 30 September 2014. Unquoted investments have been
valued in accordance with IPEVCV guidelines. Quoted investments are
stated at bid prices in accordance with the IPEVCV guidelines and
Generally Accepted Accounting Practice.
1. These are not statutory accounts in accordance with S434 of the Companies
Act 2006 and the financial information for the six months ended 31 March
2015 and 31 March 2014 has been neither audited nor formally reviewed.
Statutory accounts in respect of the period to 30 September 2014 have
been audited and reported on by the Company's auditors and delivered to
the Registrar of Companies and included the report of the auditors which
was unqualified and did not contain a statement under S498(2) or S498(3)
of the Companies Act 2006. No statutory accounts in respect of any period
after 30 September 2014 have been reported on by the Company's auditors
or delivered to the Registrar of Companies.
1. Copies of the Unaudited Half-Yearly Financial Report will be sent to
shareholders and will be available on the website and for inspection at
the Registered Office of the Company at The Shard, 32 London Bridge
Street, London SE1 9SG.
1. 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 that date.
Planned Exit Infrastructure Shares
Ordinary Shares Fund Shares Fund Fund
Number of Number of
Net Net shares in Net shares in
assets Number of shares in issue assets issue assets issue
GBP'000 GBP'000 GBP'000
31 March
2015 27,836 46,457,032 4,396 6,086,322 15,152 16,565,233
31 March
2014 32,246 46,457,032 5,314 6,122,876 15,107 16,647,858
30
September
2014 27,596 46,457,032 4,503 6,104,028 15,157 16,590,558
.
1. Return per share
The weighted average number of shares for the Ordinary Share, Planned
Exit Share and Infrastructure Share funds used to calculate the
respective returns are shown in the table below.
Ordinary Shares Planned Exit Infrastructure
Fund Shares Fund Shares Fund
(shares) (shares) (shares)
Six months ended
31 March 2015 46,457,032 6,103,542 16,589,862
Six months ended
31 March 2014 46,457,032 6,141,158 16,647,858
Year ended 30
September 2014 46,457,032 6,127,190 16,633,258
.
1. Income
Six months ended Six months ended Year ended
31 March 2015 31 March 2014 30 September 2014
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Loan stock income 790 302 1,372
Dividend income 46 71 181
Deposit interest - - 1
836 373 1,554
1. Investments held at fair value through profit or loss
Company Quoted Unquoted Total
GBP'000 GBP'000 GBP'000
Book cost at 1 October 2014 194 50,573 50,767
Investment holding losses (142) (5,642) (5,784)
Valuation at 1 October 2014 52 44,931 44,983
Movements in the period:
Purchases at cost - 247 247
Disposal proceeds (4) (3,070) (3,074)
Realised (losses)/gains (6) 245 239
Investment holding gains 30 765 795
Valuation at 31 March 2015 72 43,118 43,190
Book cost at 31 March 2015 184 47,995 48,179
Investment holding losses (112) (4,877) (4,989)
Valuation at 31 March 2015 72 43,118 43,190
Ordinary Shares Fund Quoted Unquoted Total
GBP'000 GBP'000 GBP'000
Book cost at 1 October 2014 194 30,397 30,591
Investment holding losses (142) (4,403) (4,545)
Valuation at 1 October 2014 52 25,994 26,046
Movements in the period:
Purchases at cost - 223 223
Disposal proceeds (4) (1,442) (1,446)
Realised losses (6) - (6)
Investment holding gains 30 240 270
Valuation at 31 March 2015 72 25,015 25,087
Book cost at 31 March 2015 184 29,178 29,362
Investment holding losses (112) (4,163) (4,275)
Valuation at 31 March 2015 72 25,015 25,087
Planned Exit Shares Fund Quoted Unquoted Total
GBP'000 GBP'000 GBP'000
Book cost at 1 October 2014 - 5,343 5,343
Investment holding losses - (940) (940)
Valuation at 1 October 2014 - 4,403 4,403
Movements in the period:
Purchases at cost - 24 24
Disposal proceeds - (1,613) (1,613)
Realised gains - 269 269
Investment holding gains - 75 75
Valuation at 31 March 2015 - 3,158 3,158
Book cost at 31 March 2015 - 4,023 4,023
Investment holding losses - (865) (865)
Valuation at 31 March 2015 - 3,158 3,158
Infrastructure Shares Fund Quoted Unquoted Total
GBP'000 GBP'000 GBP'000
Book cost at 1 October 2014 - 14,833 14,833
Investment holding losses - (299) (299)
Valuation at 1 October 2014 - 14,534 14,534
Movements in the period:
Purchases at cost - - -
Disposal proceeds - (15) (15)
Realised losses - (24) (24)
Investment holding gains - 450 450
Valuation at 31 March 2015 - 14,945 14,945
Book cost at 31 March 2015 - 14,794 14,794
Investment holding gains - 151 151
Valuation at 31 March 2015 - 14,945 14,945
8 Transactions with the Manager
Foresight Group acts as manager to the Company. During
the period, services of a total cost of GBP451,000
(31 March 2014: GBP522,000; 30 September 2014: GBP1,003,000)
were purchased by the Company from Foresight Group.
At 31 March 2015, the amount due to Foresight Group
in respect of management fees was GBP252,000 (31 March
2014: GBP174,000; 30 September 2014: GBP512,000).
Foresight Group also provides secretarial service
for the Company. During the period, services of a
total value of GBP65,000 excluding VAT (31 March 2014:
GBP65,000; 30 September 2014: GBP130,000) were purchased
by the Company. At 31 March 2015, the amount due to
Foresight Group for secretarial services was GBP4,000
(31 March 2014: GBP4,000; 30 September 2014: GBP4,000).
9 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 Company at any time during the period under
review or as at the date of this report.
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 2 VCT PLC via Globenewswire
HUG#1924968
http://www.foresightgroup.eu/
Foresight Vct (LSE:FTN)
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Foresight Vct (LSE:FTN)
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