FORESIGHT VCT PLC Final Results 31 December 2017 Foresight VCT plc, managed by Foresight Group CI Limited, today announces the final results for the year ended 31 December 2017. These results were approved by the Board of Directors on 10 April 2018. The Annual Report will shortly be available in full at www.foresightgroup.eu. All other statutory information can also be found there.
Highlights
Ordinary Shares fund · Diversified portfolio of 29 actively managed investments. · Total net assets £140.4 million. · Net Asset Value per Ordinary Share increased by 6.5% from 83.6p (31 December 2016) to 89.0p including dividends. A 5.0p dividend was paid on 3 April 2017 and a 4.0p dividend was paid on 29 September 2017, resulting in a NAV of 80.0p as at 31 December 2017. · The portfolio has seen an uplift in valuation of £11.7 million during the year. · Eight new investments, totalling £17.6 million and two follow-on investments totalling £0.3 million made during the year. · A total of £39.9 million raised through the issue of shares and the offer closed in March 2017, six weeks after launch. · In July 2017 the Company successfully sold Blackstar Amplification, Simulity Labs and The Bunker Secure Hosting, realising a total of £16.9 million compared to an investment cost of £8.0 million. · The Board is pleased to declare an interim dividend for the year ending 31 December 2018 of 5.0p per Ordinary Share, to be paid on 4 May 2018.
Planned Exit Shares fund · Following the sale of AlwaysON in January 2017 and Industrial Engineering Plastics in July 2017, the Fund has now realised all its investments. · An interim dividend for the year ended 31 December 2017 of 18.0p per Planned Exit Share was paid on 13 April 2017. · A second interim dividend of 7.71p per Planned Exit Share was paid on 29 December 2017, resulting in a total return for Shareholders of 82.71p. · The Planned Exit Shares were removed on 24 January 2018 following a General Meeting held on 23 January 2018.
Infrastructure Shares fund · Following the sale of all 11 infrastructure assets in the portfolio, the Fund has now realised all its investments. · An interim dividend of 93.05p per Infrastructure Share was paid on 29 December 2017, resulting in a total return for Shareholders of 115.05p. · The Infrastructure Shares were removed on 24 January 2018 following a General Meeting held on 23 January 2018.
Chairman's Statement
I am delighted to present the Audited Annual Report for Foresight VCT plc for the year ended 31 December 2017. The past year has seen some very significant development of the Company, including the effective completion of the wind-down of both the Planned Exit and Infrastructure Share classes. During December 2017, I provided shareholders with detailed information on the wind-down, which was approved at a General Meeting. Subsequently both the Planned Exit and Infrastructure Share classes were removed in January this year. As a consequence, whilst some final details relating to these share classes are contained later in this statement, I intend to concentrate on the performance of the Ordinary Shares Fund, which will form the continuing share class of the Company.
ORDINARY SHARES FUND The Directors, together with the Manager, have an agreed long term strategy for the Fund which includes the following four key objectives: · Increasing and then maintaining the net assets significantly above £150 million · Paying an annual dividend to shareholders of at least 5.0p per Ordinary Share and endeavouring to maintain, or increase, NAV per Ordinary Share year on year · Completing a significant number of new and follow on qualifying investments every year · Offering a programme of regular share buy backs at a discount in the region of 10% to the prevailing NAV.
For this and future statements, I intend to focus on performance in relation to these key objectives.
NET ASSET VALUE Following a successful fundraising period at the end of the 2016/17 tax year, the net assets of the Ordinary Shares Fund increased to £140.4 million as at 31 December 2017, from £107.0 million as at 31 December 2016. It remains the Board's belief that to support the other key objectives, it would be beneficial to increase the Fund's net assets over the coming years. With some £61 million of funds currently available for investment, however, it is not the Board's intention to raise more money in the near future.
During the year ended 31 December 2017 the net asset value ('NAV') per Ordinary Share rose by 5.4p, representing an annual increase of 6.5%. After deducting the dividends of 9.0p per share paid during the year, NAV per Ordinary Share as at 31 December 2017 was 80.0p compared with 83.6p as at 31 December 2016.
DIVIDENDS In line with the objective of paying regular annual dividends of at least 5p per share, an interim dividend of 5.0p per Ordinary Share was paid on 3 April 2017 based on an ex-dividend date of 16 March 2017, with a record date of 17 March 2017.
Following successful sales of several portfolio investments, in particular Simulity Labs in July 2017, a second interim dividend of 4.0p per Ordinary Share was paid on 29 September 2017 based on an ex-dividend date of 14 September 2017, with a record date of 15 September 2017.
The Board is pleased to declare an interim dividend for the year ending 31 December 2018 of 5.0p per Ordinary Share, to be paid on 4 May 2018 based on an ex-dividend date of 19 April 2018, with a record date of 20 April 2018.
The Board notes that the Company has achieved its target of paying an annual dividend of at least 5p per share for each of the past seven years. During this period, however, the total return per Ordinary Share has remained relatively static, rising 5.4% from 207.5p per share on 1 January 2011 to 218.7p per share at 31 December 2017. It is this performance which the Board wishes to improve in future years.
INVESTMENT PERFORMANCE AND PORTFOLIO ACTIVITY A detailed analysis of the investment portfolio performance over the past year is given in the Manager's Review. At the year end, the Fund held a diversified portfolio of qualifying investments in UK businesses, across a broad range of sectors.
The Board believes it is important for the long term performance of the Fund to identify a regular flow of new investments. The Manager completed eight new investments for the Fund during 2017. These new investments absorbed £17.6 million of funds held for investment and reflects the Manager's success in sourcing attractive growth capital investments in qualifying companies. The Board closely monitors the extent and nature of the pipeline of investment opportunities and anticipates that the Manager will be able to increase the level of new investments during 2018.
In July 2017, the Fund successfully sold three investments, generating total proceeds of £16.9 million compared to an original total investment cost of £8.0 million and a combined book value at date of disposal of £11.6 million. The sale of Simulity Labs is particularly pleasing since, after an investment period of only eight months, it generated a return of almost three times cost, with disposal proceeds of £11.4 million compared to an original investment cost of £4 million. In addition, following our year end, the deferred consideration for Simulity was received in full, generating a further £0.3m.
Since the end of the year, the Fund has sold ICA, generating proceeds of £1.3 million compared to an original investment cost of £0.9 million.
FUNDRAISING The Board took the opportunity to raise new funds in the Ordinary Shares Fund at the start of 2017. In just six weeks, £39.9 million of new capital was raised from new and existing shareholders. On behalf of the Board and the Manager, I would like to thank shareholders for their support. We believe that this demonstrates the improving investor support for the Ordinary Shares Fund and will assist the Fund to achieve its key objectives.
The Board appreciates that in order for the Fund to be able to achieve its key objectives, the Manager needs to source and complete attractive new qualifying investment opportunities. Over the past two calendar years, new investments have amounted to £22.4 million and at 31 December 2017, the Fund held £62 million of funds available for investment. After allowing for a cash margin to meet annual operating requirements, the Board and the Manager believe that the Fund is well positioned to take advantage of attractive investments being sourced across the UK by the Manager for at least the coming 24 months.
BUYBACKS During the year, the Company repurchased 2 million Ordinary Shares for cancellation at an average discount of 10.1%. The Board and the Manager consider that the ability to offer to buy back Ordinary Shares at a target discount in the region of 10% is fair to both continuing and selling shareholders, and is an appropriate way to help underpin the discount to NAV at which the Ordinary Shares trade.
MANAGEMENT CHARGES, CO-INVESTMENT AND INCENTIVE ARRANGEMENTS The annual management fee on the Ordinary Shares Fund is an amount equal to 2.0% of net assets, excluding cash balances above £20 million which are charged at a reduced rate of 1.0%. This has produced an ongoing charges ratio for the year ended 31 December 2017 of 2.2% of net assets, which is among the lower when compared to competitor VCTs.
The Board believes it to be advantageous to align, as far as may be practical, the interests of the Manager with those of shareholders. To that end, new co- investment and incentive arrangements were approved by shareholders on 8 March 2017. These oblige Foresight Group and individual members of their private equity team to co-invest alongside the Ordinary Shares Fund in exchange for entitlement to performance incentive payments, which are subject to the achievement of 'per investment' and 'fund as a whole' performance hurdles. Details of these arrangements can be found in note 14 to the accounts.
Since March 2017, co-investments have totalled £0.3 million alongside the Company's investment of £16.5 million. Currently the 'fund as a whole' threshold has not been achieved and no incentive payment is due.
OUTLOOK The Board and the Manager intend to continue to build on the progress achieved during 2017. We believe that the investments currently held within the Fund should grow further through 2018 and that the current pipeline will provide worthwhile new investment opportunities in the months ahead. Provided the current level and quality of new investment is maintained, the Board believes that the Fund will be well positioned to meet its key objectives, providing shareholders with regular dividends and maintained capital growth.
PLANNED EXIT SHARES FUND Following the full realisation of the Fund's assets, a dividend of 7.71p per Planned Exit Share was paid on 29 December 2017 based on an ex-dividend date of 21 December 2017, with a record date of 22 December 2017. This brought the Fund's total return for Shareholders to 82.71p, which represents a decrease of 0.2% on the total return per Planned Exit Share as at 31 December 2016 of 82.9p.
The original objective of the Planned Exit Shares Fund was to provide investors with a return of 110p per share through a combination of dividends and share buybacks by the sixth anniversary of the closure of the original offer, due in June 2016. The final outcome for Planned Exit Shareholders was very far from that anticipated at its inception. The reasons have been summarised in previous annual reports during the life of the Fund. Both the Board and the Manager recognise that the final return represented poor overall performance and regret that this was significantly behind the original target.
INFRASTRUCTURE SHARES FUND Following the full realisation of the Fund's assets, a dividend of 93.05p per Infrastructure Share was paid on 29 December 2017 based on an ex-dividend date of 21 December 2017, with a record date of 22 December 2017. This brought the Fund's total return for Shareholders to 115.05p, which represents an increase of 10.9% on the total return per Infrastructure Share as at 31 December 2016 of 103.7p. While behind the return objectives contained in the original prospectus, the Board believes the overall performance of the Infrastructure Shares Fund to be reasonable, particularly when viewed against the background of significant changes in both market conditions and VCT qualification rules during the life of the Fund.
This total return is net of a performance incentive fee paid to the Manager in accordance with the arrangements set out in the prospectus. Details of these arrangements can be found in note 14 to the accounts.
BOARD COMPOSITION The Board regularly reviews its own performance and undertakes succession planning to maintain an appropriate level of independence, experience and skills in order for it to be in a position to discharge its responsibilities. Peter Dicks, a founder member of the Board and a past Chairman, has served the Company with great commitment and distinction throughout this period. He has, however, decided to retire at this year's Annual General Meeting.
After commissioning an independent professional search, the Board was delighted to secure the services of Margaret Littlejohns as a Director of the Company. Margaret, who was appointed a Non-Executive Director of the Company in October last year, is an experienced fund director. She currently sits on the Boards of the Henderson High Income Trust, JPMorgan Mid Cap Investment Trust and UK Commercial Property Trust. Her earlier career was largely with Citigroup followed by a period from 2004 during which, with her husband, she set up and ran a self storage business which she successfully sold in 2016. A short biography of each of the Directors is contained on pages 32 to 34 of the accounts.
ANNUAL GENERAL MEETING The Company's Annual General Meeting will take place on 22 May 2018 at 2.00pm. I look forward to welcoming you to the Meeting, which will be held at the offices of Foresight Group in London. Details can be found on page 78 of the accounts.
John Gregory Chairman Telephone 01296 682751 Email: j.greg@btconnect.com 10 April 2018
Manager's Review ORDINARY SHARES FUND Portfolio Summary As at 31 December 2017 the portfolio of the Ordinary Shares Fund comprised 36 investments with a total cost of £65.6 million and a valuation of £78.0 million. The portfolio is diversified by sector, transaction type and maturity profile. Details of the ten largest investments by valuation, including an update on their performance, are provided on pages 16 to 20 of the accounts.
The main reason for the difference between the cost and value of investments in the TMT sector is Autologic, with a cost of £3.8 million. In July 2017, the sale of Autologic's operating subsidiaries was agreed with Opus Group AB of Sweden. Although healthy returns were achieved in the early years of this investment, since a part disposal in 2012 the performance has been disappointing. Following repayment of some loans during 2017 Autologic is now valued at nil and will be dissolved in due course.
The value of investments in the Industrials & Manufacturing sector is much greater than cost largely due to Aquasium, which is valued at £4.0 million against a cost of £0.3 million and Specac, valued at £3.8 million against a cost of £1.3 million.
NEW INVESTMENTS AND FOLLOW-ON FUNDING It has been an active year for the Ordinary Shares fund, having completed new investments in eight companies and two follow-on commitments, totalling £17.9 million. During the second half of the year, the fund added three new portfolio companies: 200 Degrees, an artisan coffee chain and roasting business; Nano Interactive, a leading advertising technology business and Powerlinks Media, a realtime trading platform for advertisements. These new investments are in addition to those reported at the half year: Poundshop.com; Ollie Quinn; Fresh Relevance; Cinelabs and Mowgli Street Food. A summary on each is provided on the next page.
As follow-on investments, in July 2017 a further tranche of £224,723 was invested in molecular diagnostics business Biofortuna as part of a £900,000 funding round alongside Foresight 4 VCT plc and co-investors to further develop its blood typing products. In October 2017, the Fund committed £34,159 of additional growth capital to Idio as part of a £543,000 equity raise from existing investors.
POUNDSHOP.COM The first investment of 2017 was a £1.7 million growth capital investment in Poundshop.com. Launched in February 2014, Poundshop.com is an online-only single price retailer, founded and chaired by Steve Smith, the founder of Poundland. Since investment, sales have increased, the company has launched a new website and moved to a new, larger warehouse which has enabled it to increase the number of items stocked.
OLLIE QUINN In March 2017, a £3.0 million investment was completed in Ollie Quinn, a branded retailer of prescription glasses, sunglasses and non-prescription polarised sunglasses. Following a period of rapid growth, follow-on funding of £650k was provided in January 2018 to support the company's working capital and current site optimisation strategy. Due to slower than projected revenue growth and an earlier than forecast follow-on funding requirement, a 25% provision has been made against the cost of this investment at 31 December 2017.
FRESH RELEVANCE The third investment, of £2.1 million, was completed in Fresh Relevance, a mail marketing and web personalisation platform, in March 2017. Based in Southampton, Fresh Relevance is a high growth, marketing technology business, providing online retailers with marketing tools including triggered emails and web personalisation. The capital will be used to fund increased sales resource, launch a US office and introduce a higher level of service and consultancy, all of which should help increase average order values. Progress to date is positive.
MOWGLI STREET FOOD The Fund also invested £1.6 million in Mowgli, a fast-casual chain of restaurants founded in 2014, serving Indian street food. Since investment, Mowgli has traded well, opening a new site in Birmingham, and is planning a fifth branch for Q1 2018. The modern focus on healthy, light, flavoursome dishes differentiates Mowgli from traditional Indian restaurants, as does its provision of a wide range of gluten-free, vegetarian and vegan dishes. This is the first investment alongside the Foresight Regional Investment LP, a £40 million institutional private equity fund. The LP funded the replacement capital element of the transaction, which the Fund, under the rules changes introduced in 2015, was unable to provide.
CINELABS The Fund has invested £2.2 million in Cinelabs, which is the UK's only full- service film laboratory, offering film processing, scanning, distribution, digitisation, restoration and archive management to clients in the media and entertainment industries such as the BFI, ITV and FIFA. Sales increased during 2017, reflecting good growth of the underlying client base, and the pipeline for 2018 looks promising.
NANO INTERACTIVE In October 2017, the Fund invested £3.4 million of growth capital in Nano Interactive. The company, founded in 2014 by two experienced advertising technology executives, is engaged in search retargeting; a form of online advertising where relevant adverts are shown to users based on key words from their recent search history. The company uses its proprietary data management platform to optimise search campaigns for its global customer base. The funding will support plans to expand internationally and invest in sales, marketing and product development, as well as the roll-out of its INSIST platform.
200 DEGREES In November 2017, £0.9 million was invested in 200 Degrees Holdings to support its growth plans. 200 Degrees was initially established as a supplier of coffee beans and machines. The company has since evolved into a wholesale business and coffee chain, with a Barista School and a total of six coffee shops across five cities. The investment will support the management team in opening new stores, while building the company's wholesale business. Since investment, performance has been driven by strong trading at a number of stores and operational improvements at newer sites.
POWERLINKS MEDIA The final investment of 2017 was a £2.7 million investment in Powerlinks Media, an advertising technology company, in December 2017. Unlike traditional digital adverts, PowerLinks ads are visually styled to align with the surrounding webpage or mobile app, delivering a non-intrusive, 'native' user experience. The investment follows a year of success and expansion, which has seen PowerLinks' market surpass 4,000 advertising campaigns from 140 connected advertisers, driving revenue growth. The investment is intended to accelerate PowerLinks' expansion in the US, with planned additions across the sales, client services and technology teams.
PIPELINE Foresight Group continues to work hard to develop and deliver attractive investment opportunities for the Company. Foresight Group's private equity team has strong connections within the community of businesses, advisors and professional service firms, which have been further bolstered through the recent recruitment of Matthew Evans-Young, previously at Synova Capital and KPMG, as an Origination Manager. Matthew will lead on the establishment of a dedicated direct origination practice within Foresight Group's private equity team. By proactively contacting target companies, this initiative aims to deliver exclusive access to new deals. Foresight Group's dedicated direct origination resource is already having a positive impact on the level and consistency of the teams' origination efforts with an increase in off market opportunities being seen. Whilst this is a long-term investment and off market opportunities generally take longer to convert, it is encouraging to see this strategy begin to produce results.
Foresight Group is firmly established as a key player in the investment range of £1 million to £5 million and is acknowledged for its appetite to transact and support ambitious SME management teams. The team typically analyses around 100 new investment opportunities each month, of which only a handful will be deemed of sufficient quality to require full evaluation for a potential investment.
As at 31 December 2017, the Ordinary Shares Fund had £61.9 million in cash and money market funds. This will be utilised for new and follow-on investments, as well as buybacks and ongoing running expenses.
REALISATIONS During the year to 31 December 2017, the Fund generated total proceeds of £18.2 million, principally through the sale of Simulity Labs, Blackstar Amplification and The Bunker Secure Hosting, which realised £16.9 million compared to a cost of £8.0 million.
Loan repayments contributed a total of £547,748 from Autologic Diagnostics Group and the final loan repayment of £166,667 made by Aquasium Technology. The Fund continues to hold an equity position in Aquasium, which manufactures, services and refurbishes electron beam welding equipment and vacuum furnaces. Proceeds were also received from the sale of the Fund's remaining shares in AIM-listed ZOO Digital, which supplies software and services for authored content and subtitling to media businesses and post-production firms. Deferred consideration was also received from the sales of O-Gen Acme Trek and Trilogy in 2016, and Alaric Systems in 2013.
During the year, the Ordinary Shares fund realised losses amounting to £2.3 million, which had already been provided for in full, following the liquidation of Abacuswood and The Skills Group, and the disposal of AlwaysOn Group.
SIMULITY In July 2017 the Manager successfully completed the sale of Simulity Labs to ARM, the world's leading semiconductor IP company. The transaction generated proceeds of £11.7 million (including deferred consideration) from an initial £4.0 million investment just eight months previously. Established in 2009, Simulity provides embedded communications software and related server systems for both SIM cards and embedded SIMs ('eSIMs'). Since investment in October 2016, Simulity successfully transitioned to a software licensing business model, launched its eSIM technology, increased valuable recurring revenue streams, improved gross margins materially and grew its international sales presence, making the company an attractive acquisition target.
BLACKSTAR The Fund originally invested in Blackstar Amplification, an award-winning Northampton-based designer and manufacturer of innovative guitar amplifiers, in 2012. The Fund provided growth capital and helped restructure the company's shareholder base and strengthened its management team. Blackstar more than doubled turnover over four years, expanded internationally, establishing itself as the number two amplifier brand in the UK and USA and broadened its product catalogue. The sale was implemented by a management buyout, supported by the company's manufacturing and distribution partners, and nearly doubled the Fund's original investment.
THE BUNKER The Fund acquired its investment in The Bunker from Foresight 2 VCT plc as part of the merger in December 2015. Having first invested in May 2006, the Foresight VCTs have been longstanding shareholders in The Bunker, which builds, hosts and manages high security, high availability IT data centres, providing competitive data storage solutions. The growth capital provided by the Foresight VCTs was used to materially scale The Bunker's data storage facilities. The business experienced a compound annual growth rate of over 14% of recurring revenues for the past three years with annual revenues growing to more than £9 million compared to £1.8 million at investment. The Bunker was acquired by Palatine Private Equity, generating an overall return of 2.44 times over the life of the investment.
ICA Post-year end, in February 2018, the Fund realised its position in ICA Digital ('ICA'), a managed print services business based in Surrey, realising an overall 2.4 times return, through a trade sale to ASL Group. During the course of the investment, Foresight Group supported management to execute a focused sales strategy, in particular developing high-margin contracted service revenues.
The Manager continues to engage with a range of potential acquirers of several portfolio companies, with demand for these high growth businesses demonstrated by both private equity and trade buyers.
DISPOSALS IN THE YEAR ENDED 31 DECEMBER 2017 Original Realised Valuation Cost/ Take- (Loss)/Gain at 31 On Value (£) December (£) Proceeds 2016 Company Detail (£) (£) ------------------------------------------------------------------------------- Abacuswood Dissolved 478,684 - (478,684)^ - Limited Full 1,473,271 - (1,473,271)^ - AlwaysON Group disposal Limited
Aquasium Loan Technology repayment 166,667 166,667 - 166,667 Limited
Autologic Loan 547,748 547,748 - 547,748 Diagnostics repayment
Group Limited
Blackstar Full 2,500,000 3,857,000 1,357,000 3,822,050 Amplification disposal
Holdings Limited
Simulity Labs Full 4,000,000 11,410,920* 7,410,920 4,000,000 Limited disposal
The Bunker Full 1,537,348 1,680,684 143,336 1,656,835 Secure Hosting disposal
Limited
The Skills Dissolved 391,301 563 (390,738)^ - Group Limited (formerly AtFutsal)
ZOO Digital Full 40,307 57,675 17,368 53,742 Group plc disposal ------------------------------------------------------------------------------- Total disposals 11,135,326 17,721,257 6,585,931 10,247,042 -------------------------------------------------------------------------------
In addition to the above, deferred consideration of £199,106 was received by the Fund from the sale of O-Gen Acme Trek Limited, £24,003 was received from the sale of Trilogy and £280,499 was received from the sale of Alaric Systems. ^This loss refers to the transfer on disposal between unrealised and realised reserves and has no impact on NAV in the current year. * Does not reflect an additional £257,846 deferred consideration received in February 2018. POST YEAR END DISPOSALS Original Realised Valuation at Cost/ Take- Gain/(Loss) 31 December On Value 2016 Proceeds
Company Detail (£) (£) (£) (£) ------------------------------------------------------------------------------- ICA Group Full 885,232 1,290,701* 405,469 880,894 Limited disposal -------------------------------------------------------------------------------
*Including deferred consideration due in April 2018.
KEY PORTFOLIO DEVELOPMENTS
The Ordinary Shares Fund has benefitted from strong performance of the underlying portfolio with a total net valuation change of £12.0 million, driven primarily by the agreed sale of Simulity Labs at a value £7.7 million above cost, as detailed above. The valuation of the Company's largest investment, Datapath, fell by £1.6 million but remains significantly above book cost. The reduction is due to ongoing investment in the business, as detailed further on page 16 of the accounts, which we believe will support further a long-term increase in value. Material changes in valuation, defined as an increase or decrease of £1 million or more since 31 December 2016, are detailed in the table below. Where these companies do not appear in the Top Ten Investments section of the report, an update on underlying developments that have driven changes in value is provided below.
+----------------------------+----------------------------+--------------------+ |Company | Valuation Methodology|Valuation Change (£)| +----------------------------+----------------------------+--------------------+ |Simulity Labs Limited Sold 7,410,920| | | |Ixaris Systems Limited Discounted revenue multiple 2,234,435| | | |Aquasium Technology Limited Discounted earnings multiple 1,980,168| | | |Thermotech Solutions Limited Discounted earnings multiple 1,602,958| | | |Aerospace Tooling Holdings Discounted earnings multiple 1,069,807| |Limited | | | |Procam Television Holdings Discounted earnings multiple (1,635,609)| |Limited | | | |Datapath Group Limited Discounted earnings multiple (1,628,430)| | | |CoGen Limited Discounted cash flow (1,087,383)| +------------------------------------------------------------------------------+
THERMOTECH SOLUTIONS Thermotech, which designs, installs and maintains customised air conditioning and fire sprinkler systems, has performed well in the year, with strong sales and an improvement in EBITDA. This has been attributable to good performance across the Fire and Mechanical Services divisions and the synergies that the company is now benefitting from following the acquisition of Oakwood in 2016. The company has continued to expand its portfolio of retail clients and won a number of sizeable new contracts.
AEROSPACE TOOLING Aerospace Tooling is an engineering company specialising in the refurbishment of high-value aerospace and industrial gas turbine components. The business has made a significant recovery, underlined by supportive trade from industrial customers. Improvements in operational performance are beginning to deliver favourable results.
COGEN CoGen develops, builds, owns and operates waste to energy and combined heat and power ('CHP') plants. During the year, the company sold its 20% stake in Ince Park for a proposed consideration of £1.75m, however, construction problems persist at Birmingham Bio Power plant. The plant continued to experience downtime, reducing electrical output, and the project company is now preparing for an arbitration process with the construction contractor. This, together with increased costs on some projects has led to a reduced valuation.
PROCAM TELEVISION Procam Television is a leading broadcast hire company, supplying equipment and crew for location TV production. The reduction in valuation reflects a disappointing 2017 following a strong performance in the prior year. Growth from Procam Projects and True Lens Services failed to offset a softer year in some other divisions. This, together with a significant investment in staff and equipment and financing obligations, resulted in the business raising additional funding in December 2017.
OUTLOOK While there remains a significant amount of uncertainty as to how the UK will be affected by its exit from the European Union, Foresight Group continues to see a strong pipeline of interesting investment opportunities and expressions of interest from potential acquirers of portfolio companies.
In the Autumn Budget 2017 the Government announced a plan to unlock over £20 billion of patient capital investment in innovative companies with the opportunity for growth. The Government's response to the Patient Capital Review recognises the positive role that VCTs play in providing long term patient capital. The proposed adjustments to the VCT scheme rules fall within the Fund's existing investment strategy.
Foresight Group will continue to monitor and adapt to market and regulatory changes to ensure the Company and its portfolio is well-placed to deliver returns to its investors. PLANNED EXIT SHARES FUND Portfolio Summary Following the sale of the two final holdings, alwaysOn in January 2017 and Industrial Engineering Plastics in July 2017, the Fund realised all of its portfolio investments. The Board completed the transfer of the Trilogy Entitlements, the outstanding entitlement to consideration held in escrow in respect of the sale of holdings in Trilogy Communications Holdings Limited, to the Ordinary Shares fund in exchange for £265,712 on 6 December 2017. Deferred consideration of £57,329 was also received in relation to the sale of Trilogy in 2016. This resulted in the assets of the Planned Exit Shares fund being fully realised. The Board paid a dividend of 7.71p per Planned Exit Share to shareholders on the register as at 22 December 2017. Ignoring tax reliefs, this dividend payment brought the total return on a Planned Exit Share to 82.71p.
Following approval of the requisite resolutions at the general meetings and separate class meetings of the Company held on 23 January 2018 and 24 January 2018 respectively, the Board of the Company completed the removal of the Planned Exit Shares.
ALWAYSON alwaysON provides data backup services, connectivity and Microsoft's Skype for Business collaboration software to SMEs and larger enterprises. Given the company's cash constraints, a decision was made to seek an exit rather than fund further losses. Despite challenging trading conditions the sale was completed in January 2017, generating proceeds of £2.0 million against an investment cost of £1.8 million.
INDUSTRIAL ENGINEERING PLASTICS Industrial Engineering Plastics ('IEP') is a plastics distributor and fabricator, supplying a wide range of industries with ventilation and pipe fittings, plastic welding rods, hygienic wall cladding, plastic tanks and sheets. In light of some of the structural challenges within IEP's markets, the Manager pursued multiple conversations with potential trade acquirers. As a result, two acquisition offers were received early in 2017 before an offer with one of IEP's competitors was agreed at a price marginally below the most recent valuation, and a loss against the original investment of £1.6 million. DISPOSALS IN THE YEAR ENDED 31 DECEMBER 2017
Original Realised Valuation at Cost/ Take- Gain/(Loss) 31 December On Value Proceeds 2016
Company Detail (£) (£) (£) (£) ------------------------------------------------------------------------------- AlwaysON Group Full 1,839,970 2,032,608 192,638 2,032,608 Limited disposal
Industrial Engineering Full 1,556,416 492,550 (1,063,866) 508,150 Plastics disposal Limited ------------------------------------------------------------------------------- Total disposals 3,396,386 2,525,158 (871,228) 2,540,758 -------------------------------------------------------------------------------
In addition to the above, deferred consideration of £323,041 was received by the Fund from the sale of Trilogy in the year ended 31 December 2016. INFRASTRUCTURE SHARES FUND Portfolio Summary Due to changes in VCT regulations, the Fund could no longer pursue its investment strategy of investing in infrastructure assets, including secondary Private Finance Initiatives ('PFI') assets and solar infrastructure. As such, the Board notified shareholders of its intention to dispose of the entire Infrastructure shares portfolio on 18 July 2017, shortly after the fifth anniversary of the Fund's closing.
Accordingly, a third party valuation was undertaken and we conducted a marketing process for the 11 assets held in the Infrastructure Shares Fund. After offering the assets on the open market, the sale of all investments was achieved, realising £28.1 million against a cost of £22.1 million and a valuation at 30 June 2017 of £24.8 million. Five of the non-solar infrastructure investment assets were sold to funds managed by Equitix Investment Management Limited. The three solar investment assets and the remaining three non-solar infrastructure investment assets were sold to other Foresight funds, on the basis of the independent valuation.
On 15 December 2017, following the realisation of all the remaining investments, the Board declared a final dividend of 93.05p per Infrastructure Share. This was paid on the 29 December 2017, bringing the total return per Infrastructure Share to 115.05p, after which no value remained in the Infrastructure Shares.
Following approval of the requisite resolutions at the general meetings and separate class meetings of the Company held on 23 January 2018 and 24 January 2018 respectively, the Board of the Company completed the removal of the Infrastructure Shares.
DISPOSALS IN THE YEAR ENDED 31 DECEMBER 2017
Original Realised Valuation at Cost/ Gain/(Loss) 31 December Take-On (£) 2016 Value Proceeds (£) Company Detail (£) (£) ------------------------------------------------------------------------------- Criterion Full 4,005,616 5,705,000 1,699,384 4,878,473 Healthcare disposal Holdings Limited
FS Hayford Farm Full 3,660,070 4,613,371 953,301 3,994,205 Limited disposal
FS Ford Farm Full 3,952,524 4,052,195 99,671 3,691,083 Limited disposal
Drumglass HoldCo Full 2,526,475 3,064,632 538,157 3,025,435 Limited disposal
FS Tope Limited Full 2,561,418 2,812,353 250,935 2,793,924 disposal
Stirling Gateway Full 2,069,978 3,322,000 1,252,022 2,244,070 HC Limited disposal
Wharfedale SPV Full 1,314,923 1,537,278 222,355 1,395,225 (Holdings) disposal Limited
Lochgilphead Full 493,186 1,416,772 923,586 637,969 HoldCo Limited disposal
Staffordshire Full 1,041,077 667,269 (373,808) 454,860 HoldCo Limited disposal
Sandwell HoldCo Full 282,646 619,525 336,879 216,332 Limited disposal
Stobhill HoldCo Full 231,987 337,974 105,987 193,738 Limited disposal ------------------------------------------------------------------------------- Total disposals 22,139,900 28,148,369 6,008,469 23,525,314 -------------------------------------------------------------------------------
Russell Healey Head of Private Equity Foresight Group 10 April 2018
Unaudited Non-Statutory Analysis of the Share Classes
Income Statements for the year ended 31 December 2017
Ordinary Shares Fund Planned Exit Shares Infrastructure Shares Fund Fund
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Realised gains/(losses) - 7,090 7,090 - (548) (548) - 6,008 6,008 on investments
Investment holding - 4,886 4,886 - 606 606 - (1,385) (1,385) gains/(losses)
Income 614 - 614 4 - 4 952 - 952
Investment management (654) (1,963) (2,617) (7) (22) (29) (68) (1,066)* (1,134) fees
Other expenses (521) - (521) (42) - (42) (636) - (636) ------------------------------------------------------------------------ (Loss)/return (561) 10,013 9,452 (45) 36 (9) 248 3,557 3,805 on ordinary activities before taxation
Taxation - - - - - - - - - ------------------------------------------------------------------------ (Loss)/return (561) 10,013 9,452 (45) 36 (9) 248 3,557 3,805 on ordinary activities after taxation ------------------------------------------------------------------------ Return per (0.3)p 6.0p 5.7p (0.4)p 0.3p (0.1)p 0.8p 10.9p 11.7p share ------------------------------------------------------------------------
*Includes £863,000 paid performance incentive fee.
Balance Sheets at 31 December 2017 Ordinary Planned Exit Infrastructure Shares Fund Shares Fund Shares Fund
£'000 £'000 £'000
Fixed assets
Investments held at fair value through 77,963 - - profit or loss ----------------------------------------
Current assets
Debtors 887 - -
Money market securities and other 60,482 - - deposits
Cash 1,388 21 108 ---------------------------------------- 62,757 21 108
Creditors
Amounts falling due within one year (291) (21) (108) ---------------------------------------- Net current assets 62,466 - - ---------------------------------------- Net assets 140,429 - - ----------------------------------------
Capital and reserves
Called-up share capital 1,756 114 324
Share premium account 97,687 - -
Capital redemption reserve 451 3 1
Distributable reserve 26,505 815 (4,151)
Capital reserve 1,357 (932) 3,826
Revaluation reserve 12,673 - - ---------------------------------------- Equity shareholders' funds 140,429 - - ---------------------------------------- Number of shares in issue 175,601,977 11,404,314 32,495,246
Net asset value per share 80.0p 0.0p 0.0p
Reconciliations of Movements in Shareholders' Funds for the year ended 31 December 2017
Called- Ordinary up Share Capital Shares Fund share premium redemption Distributable Capital Revaluation capital account reserve reserve reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 ------------------------------------------------------------------------------------ As at 1 1,280 96,071 431 5,247 (3,770) 7,787 107,046 January 2017
Share issues 496 42,110 - - - - 42,606 in the year
Expenses in relation to - (1,718) - - - - (1,718) share issues*
Repurchase (20) - 20 (1,476) - - (1,476) of shares
Cancellation of share - (38,776) - 38,776 - - - premium
Realised gains on - - - - 7,090 - 7,090 disposal of investments
Investment holding - - - - - 4,886 4,886 gains
Dividends - - - (15,481) - - (15,481) paid
Management fees charged - - - - (1,963) - (1,963) to capital
Revenue loss - - - (561) - - (561) for the year ------------------------------------------------------------------------------------ As at 31 December 1,756 97,687 451 26,505 1,357 12,673 140,429 2017 ------------------------------------------------------------------------------------
*Expenses in relation to share issues include advisor fees (£686,000) and promoters fees (£958,000) for the 2017 fund raise and trail commission in relation to prior year fund raises (£74,000). Called- up Share Capital share premium redemption Distributable Capital Revaluation Planned Exit capital account reserve reserve reserve reserve Total Shares Fund £'000 £'000 £'000 £'000 £'000 £'000 £'000 -------------------------------------------------------------------------------- As at 1 114 2,095 3 1,705 (362) (606) 2,949 January 2017
Trail - (8) - - - - (8) commission in relation to prior year share issues
Cancellation of share - (2,087) - 2,087 - - - premium
Realised losses on - - - - (548) - (548) disposal of investments
Investment holding - - - - - 606 606 gains
Dividends - - - (2,932) - - (2,932) paid
Management fees charged - - - - (22) - (22) to capital
Revenue loss - - - (45) - - (45) for the year -------------------------------------------------------------------------------- As at 31 December 114 - 3 815 (932) - - 2017 -------------------------------------------------------------------------------- Called- Share Capital up
share premium redemption Distributable Capital Revaluation
capital account reserve reserve reserve reserve Total
Infrastructure £'000 £'000 £'000 £'000 £'000 £'000 £'000 Shares Fund -------------------------------------------------------------------------------- As at 1 324 14,375 1 11,591 (1,116) 1,385 26,560 January 2017
Trail commission in relation to prior year share issues - (33) - (95) - - (128)
Cancellation of share - (14,342) - 14,342 - - - premium
Realised gains on disposal of - - - - 6,008 - 6,008 investments
Investment - - - - - (1,385) holding losses (1,385)
Dividends paid - - - (30,237) - - (30,237)
Management fees charged - - - - (1,066) - (1,066) to capital
Revenue return - - - 248 - - 248 for the year -------------------------------------------------------------------------------- As at 31 324 - 1 (4,151) 3,826 - - December 2017 --------------------------------------------------------------------------------
Audited Income Statement for the year ended 31 December 2017
Year ended Year ended 31 December 2017 31 December 2016
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Realised gains/(losses) on - 12,550 12,550 - (3,262) (3,262) investments
Investment holding gains - 4,107 4,107 - 8,279 8,279
Income 1,570 - 1,570 2,916 - 2,916
Investment management fees (729) (3,051)* (3,780) (534) (1,601) (2,135)
Other expenses (1,199) - (1,199) (596) - (596) ------------------------------------------------- (Loss)/return on ordinary (358) 13,606 13,248 1,786 3,416 5,202 activities before taxation
Taxation - - - (220) 220 - ------------------------------------------------- (Loss)/return on ordinary (358) 13,606 13,248 1,566 3,636 5,202 activities after taxation ------------------------------------------------- (Loss)/return per share:
Ordinary Share (0.3)p 6.0p 5.7p 0.4p 2.8p 3.2p ------------------------------------------------- Planned Exit Share (0.4)p 0.3p (0.1)p 0.3p 2.9p 3.2p ------------------------------------------------- Infrastructure Share 0.8p 10.9p 11.7p 3.4p 0.9p 4.3p -------------------------------------------------
*Includes £863,000 paid performance incentive fee relating to the Infrastructure Shares Fund.
The total column of this statement is the profit and loss account of the Company and the revenue and capital columns represent supplementary information. All revenue and capital items in the above Income Statement are derived from continuing operations. No operations were acquired or discontinued in the year. The Company has no recognised gains or losses other than those shown above, therefore no separate statement of total comprehensive income has been presented.
Audited Reconciliation of Movements in Shareholders' Funds
Called- up Share Capital Year ended share premium redemption Distributable Capital Revaluation 31 December capital account reserve reserve reserve reserve Total 2017 £'000 £'000 £'000 £'000 £'000 £'000 £'000 ------------------------------------------------------------------------------------ As at 1 1,718 112,541 435 18,543 (5,248) 8,566 136,555 January 2017
Share issues 496 42,110 - - - - 42,606 in the year
Expenses in - (1,759) - (95) - - (1,854) relation to share issues*
Repurchase (20) - 20 (1,476) - - (1,476) of shares
Cancellation of share - (55,205) - 55,205 - - - premium
Realised - - - - 12,550 - 12,550 gains on disposal of investments
Investment holding - - - - - 4,107 4,107 gains
Dividends - - - (48,650) - - (48,650) paid
Management - - - - (3,051) - (3,051) fees charged to capital
Revenue loss - - - (358) - - (358) for the year ------------------------------------------------------------------------------------ As at 31 December 2,194 97,687 455 23,169** 4,251** 12,673 140,429 2017 ------------------------------------------------------------------------------------ * Expenses in relation to share issues include advisor fees (£686,000) and promoters fees (£958,000) for the 2017 Ordinary Shares Fund raise and trail commission in relation to prior year fund raises (£115,000). ** Total distributable reserves at 31 December 2017 total £27,420,000 (2016: £13,295,000).
Called- up Share Capital Year ended share premium redemption Distributable Capital Revaluation 31 December capital account reserve reserve reserve reserve Total 2016 £'000 £'000 £'000 £'000 £'000 £'000 £'000 ------------------------------------------------------------------------------------ As at 1 1,305 77,016 421 31,654 (605) 287 110,078 January 2016
Share issues 427 37,312 - - - - 37,739 in the year
Expenses in relation to - (1,787) - - - - (1,787) share issues
Repurchase (14) - 14 (991) - - (991) of shares
Realised losses on - - - - (3,262) - (3,262) disposal of investments
Investment holding - - - - - 8,279 8,279 gains
Dividends - - - (13,686) - - (13,686)
Management fees charged - - - - (1,601) - (1,601) to capital
Tax credited - - - - 220 - 220 to capital
Revenue return for - - - 1,566 - - 1,566 the year ------------------------------------------------------------------------------------ As at 31 December 1,718 112,541 435 18,543 (5,248) 8,566 136,555 2016 ------------------------------------------------------------------------------------
Audited Balance Sheet at 31 December 2017 Registered Number: 03421340 As at As at 31 December 31 December 2017 2016 £'000 £'000 ----------------------------------------------------------------------------- Fixed assets
Investments held at fair value through profit or loss 77,963 92,217 ----------------------------------------------------------------------------- Current assets
Debtors 887 2,193
Money market securities and other deposits 60,482 30,976
Cash 1,517 11,361 ----------------------------------------------------------------------------- 62,886 44,530
Creditors
Amounts falling due within one year (420) (192) ----------------------------------------------------------------------------- Net current assets 62,466 44,338 ----------------------------------------------------------------------------- Net assets 140,429 136,555 ----------------------------------------------------------------------------- Capital and reserves
Called-up share capital 2,194 1,718
Share premium account 97,687 112,541
Capital redemption reserve 455 435
Distributable reserve 23,169 18,543
Capital reserve 4,251 (5,248)
Revaluation reserve 12,673 8,566 ----------------------------------------------------------------------------- Equity Shareholders' funds 140,429 136,555 ----------------------------------------------------------------------------- Net asset value per share:
Ordinary Share 80.0p 83.6p ----------------------------------------------------------------------------- Planned Exit Share 0.0p 25.9p ----------------------------------------------------------------------------- Infrastructure Share 0.0p 81.7p -----------------------------------------------------------------------------
The financial statements on pages 56 to 77 of the Annual Report and Accounts were approved by the Board of Directors and authorised for issue on 10 April 2018 and were signed on its behalf by:
John Gregory Chairman
Audited Cash Flow Statement for the year ended 31 December 2017
Year Year ended ended 31 December 31 December 2017 2016 £'000 £'000 ------------------------------------------------------------------------------- Cash flow from operating activities
Investment income received 2,457 2,768
Deposit and similar interest received 113 98
Investment management fees paid (3,797) (2,118)
Secretarial fees paid (113) (110)
Other cash payments (902) (848) ------------------------------------------------------------------------------- Net cash outflow from operating activities (2,242) (210)
Returns on investing activities
Purchase of investments (17,869) (4,877)
Net proceeds on sale of investments 48,394 9,287
Net proceeds on deferred consideration 561 64
Return of cash held on behalf of investee companies - (548) ------------------------------------------------------------------------------- Net cash inflow from investing activities 31,086 3,926
Financing
Proceeds of fund raising 39,384 36,028
Expenses of fund raising (1,247) (886)
Repurchase of own shares (1,336) (1,329)
Equity dividends paid (45,983) (12,961)
Movement in money market funds (29,506) (16,088)
Net cash (outflow)/inflow from financing activities (38,688) 4,764 ------------------------------------------------------------------------------- Net (outflow)/inflow of cash in the year (9,844) 8,480 ------------------------------------------------------------------------------- Reconciliation of net cash flow to movement in net funds
(Decrease)/increase in cash and cash equivalents for the (9,844) 8,480 year
Net cash and cash equivalents at start of year 11,361 2,881 ------------------------------------------------------------------------------- Net cash and cash equivalents at end of year 1,517 11,361 -------------------------------------------------------------------------------
Analysis of changes in net debt At 1 January 2017 Cashflow At 31 December 2017
£'000 £'000 £'000
Cash and cash equivalents 11,361 (9,844) 1,517 -----------------------------------------------
Notes
1. These are not statutory accounts in accordance with S436 of the Companies Act 2006. The full audited accounts for the year ended 31 December 2017, which were unqualified and did not contain statements under S498(2) of the Companies Act 2006 or S498(3) of the Companies Act 2006, will be lodged with the Registrar of Companies. Statutory accounts for the year ended 31 December 2017 including an unqualified audit report and containing no statements under the Companies Act 2006 will be delivered to the Registrar of Companies in due course.
2. The audited Annual Financial Report has been prepared on the basis of accounting policies set out in the statutory accounts of the Company for the year ended 31 December 2017. All investments held by the Company are classified as 'fair value through the profit and loss'. Unquoted investments have been valued in accordance with IPEVC guidelines. Quoted investments are stated at bid prices in accordance with the IPEVC guidelines and Generally Accepted Accounting Practice.
3. Copies of the Annual Report will be sent to shareholders and will be available for inspection at the Registered Office of the Company at The Shard, 32 London Bridge Street, London, SE1 9SG and can be accessed on the following website: www.foresightgroup.eu.
4. Net asset value per share
The net asset value per share is based on net assets at the end of the year and on the number of shares in issue at that date.
31 December 2017 31 December 2016
Ordinary Planned Infrastructure Ordinary Planned Infrastructure
Shares Exit Shares Shares Shares Exit Shares Shares
Fund Fund Fund Fund Fund Fund ----------------------------------------------------------------------------------- Net £140,429,000 £nil £nil £107,046,000 £2,949,000 £26,560,000 assets
No. of 175,601,977 11,404,314 32,495,246 shares at 127,985,288 11,404,314 32,495,246 year end
Net 80.0p 0.0p 0.0p asset value 83.6p 25.9p 81.7p per share -----------------------------------------------------------------------------------
5. Return per share
Year ended 31 December 2017 Year ended 31 December 2016
Ordinary Planned Infrastructure Ordinary Planned Infrastructure Share Exit Share Share Share Exit Share Share
£'000 £'000 £'000 £'000 £'000 £'000
Total return 9,452 (9) 3,805 3,442 367 1,393 after taxation
Total return per 5.7p (0.1)p 11.7p 3.2p 3.2p 4.3p share (note a) --------------------------------------------------------------------------------------- Revenue (561) (45) 248 return from ordinary 423 32 1,111 activities after taxation
Revenue return per (0.3)p (0.4)p 0.8p 0.4p 0.3p 3.4p share (note b) --------------------------------------------------------------------------------------- Capital 10,013 36 3,557 return from ordinary 3,019 335 282 shares after taxation
Capital return per 6.0p 0.3p 10.9p 2.8p 2.9p 0.9p share (note c) --------------------------------------------------------------------------------------- Weighted 165,748,167 11,404,314 32,495,246 average number of 109,561,757 11,488,663 32,502,653 shares in issue in the year ---------------------------------------------------------------------------------------
Notes: a) Total return per share is total return after taxation divided by the weighted average number of shares in issue during the year. b) Revenue return per share is revenue return after taxation divided by the weighted average number of shares in issue during the year. c) Capital return per share is capital return after taxation divided by the weighted average number of shares in issue during the year.
6. Annual General Meeting
The Annual General Meeting will be held at 2.00pm on 22 May 2018 at the offices of Foresight Group LLP, The Shard, 32 London Bridge Street, London, SE1 9SG.
7. Income
Year ended Year ended
31 December 31 December 2017 2016 £'000 £'000 ------------------------------------------------------------------------------- Loan stock interest 820 2,133
Dividends receivable 637 685
Overseas based Open Ended Investments 113 98 Companies ('OEICs') ------------------------------------------------------------------------------- 1,570 2,916 -------------------------------------------------------------------------------
8. Investments 2017 2016 Company £'000 £'000 --------------------------------------------- Quoted investments - 54
Unquoted investments 77,963 92,163 --------------------------------------------- 77,963 92,217 ---------------------------------------------
------------------------------------------------------------------------------- Quoted Unquoted Total
Company £'000 £'000 £'000 ------------------------------------------------------------------------------- Book cost as at 1 January 2017 40 84,373 84,413
Investment holding gains 14 7,790 7,804 ------------------------------------------------------------------------------- Valuation at 1 January 2017 54 92,163 92,217
Movements in the year:
Purchases at cost - 17,869 17,869
Disposal proceeds (57) (48,337) (48,394)
Realised gains* 17 11,706 11,723
Investment holding (losses)/gains* (14) 4,562 4,548 ------------------------------------------------------------------------------- Valuation at 31 December 2017 - 77,963 77,963 ------------------------------------------------------------------------------- Book cost at 31 December 2017 - 65,611 65,611
Investment holding gains - 12,352 12,352 ------------------------------------------------------------------------------- Valuation at 31 December 2017 - 77,963 77,963 ------------------------------------------------------------------------------- *Refer to Ordinary Shares Fund and Planned Exit Shares Fund footnotes for detail.
Quoted Unquoted Total
Ordinary Shares Fund £'000 £'000 £'000 ------------------------------------------------------------------------------- Book cost as at 1 January 2017 40 58,837 58,877
Investment holding gains 14 7,260 7,274 ------------------------------------------------------------------------------- Valuation at 1 January 2017 54 66,097 66,151
Movements in the year:
Purchases at cost - 17,869 17,869
Disposal proceeds (57) (17,664) (17,721)
Realised gains* 17 6,569 6,586
Investment holding (losses)/gains** (14) 5,092 5,078 ------------------------------------------------------------------------------- Valuation at 31 December 2017 - 77,963 77,963 ------------------------------------------------------------------------------- Book cost at 31 December 2017 - 65,611 65,611
Investment holding gains - 12,352 12,352 ------------------------------------------------------------------------------- Valuation at 31 December 2017 - 77,963 77,963 -------------------------------------------------------------------------------
*Deferred consideration of £504,000 was received by the Ordinary Shares fund in the year and is included within realised gains in the income statement.
** The above receipt was offset by a decrease in the deferred consideration debtor of £450,000. A further £258,000 of deferred consideration was recognised in the year and is included in investment holding gains in the income statement. Quoted Unquoted Total Planned Exit Shares Fund £'000 £'000
£'000 ------------------------------------------------------------------------------- Book cost as at 1 January 2017 3,396 3,396 -
Investment holding losses (855) (855) - ------------------------------------------------------------------------------- Valuation at 1 January 2017 2,541 2,541 -
Movements in the year:
Disposal proceeds (2,525) (2,525) -
Realised losses* (871) (871) -
Investment holding gains** 855 855 - ------------------------------------------------------------------------------- Valuation at 31 December 2017 - - - ------------------------------------------------------------------------------- Book cost at 31 December 2017 - - -
Investment holding gains - - - ------------------------------------------------------------------------------- Valuation at 31 December 2017 - - - -------------------------------------------------------------------------------
*Deferred consideration of £323,000 was received by the Planned Exit Shares fund in the year and is included within realised losses in the income statement. ** The above receipt was offset by a decrease in the deferred consideration debtor of £249,000.
Quoted Unquoted Total Infrastructure Shares Fund £'000 £'000
£'000 ------------------------------------------------------------------------------- Book cost as at 1 January 2017 22,140 22,140 -
Investment holding gains 1,385 1,385 - ------------------------------------------------------------------------------- Valuation at 1 January 2017 23,525 23,525 -
Movements in the year:
Disposal proceeds (28,148) (28,148) -
Realised gains 6,008 6,008 -
Investment holding losses (1,385) (1,385) - ------------------------------------------------------------------------------- Valuation at 31 December 2017 - - - ------------------------------------------------------------------------------- Book cost at 31 December 2017 - - -
Investment holding gains - - - ------------------------------------------------------------------------------- Valuation at 31 December 2017 - - - -------------------------------------------------------------------------------
9. Related party transactions
No Director has an interest in any contract to which the Company is a party.
10. Transactions with the manager
Foresight Group CI Limited, which acts as manager to the Company in respect of its investments, earned fees of £3,780,000 (including an £863,000 performance incentive fee) during the year (2016: £2,135,000).
Foresight Fund Managers Limited, Company Secretary until November 2017, received fees of £113,000 (2016: £110,000) during the year.
At the balance sheet date there was £nil (2016: £17,000) due to Foresight Group CI Limited and £nil (2016: £nil) due to Foresight Fund Managers Limited. No amounts have been written off in the year in respect of debts due to or from the related parties.
END
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Source: Foresight VCT PLC via GlobeNewswire
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