Unaudited Half-Yearly Financial Report

FORESIGHT ENTERPRISE VCT PLC
LEI: 213800MWJNR3WZZ3ZP42

UNAUDITED HALF-YEARLY FINANCIAL REPORT
FOR THE PERIOD ENDED 30 JUNE 2023

Financial Highlights

• Total net assets £148.2 million
• An interim dividend of 3.3p per share was paid on 30 June 2023, returning £7.7 million to Shareholders
• The portfolio value has increased by £3.2 million in the last six months
• Net Asset Value per share decreased by 2.3% in the period from 64.9p at 31 December 2022 to 63.4p at 30 June 2023
• Including the payment of a 3.3p dividend made on 30 June 2023, NAV Total Return per share at 30 June 2023 was 66.7p (being NAV at the end of the period plus dividends paid in the period), representing a positive NAV Total Return of 2.8% in the period

Chair’s Statement

I am pleased to present the unaudited Half-Yearly Report for Foresight Enterprise VCT plc for the period ended 30 June 2023 and to report a Net Asset Value Total Return of 2.8% for the period, including a dividend yield of 5.6%.

The business environment remains challenging despite the substantial impact of the COVID-19 pandemic receding. The war in Ukraine continues and supply chains remain strained while energy prices and persistent inflation have led to a series of interest rate increases. The threat of recession is the new economic reality, with consumer demand severely depleted. In addition, the financial markets were rocked by the collapse of both Silicon Valley Bank and Credit Suisse in March 2023 but fortunately the turmoil was short-lived and further contagion limited. However, heightened nervousness in the financial markets and recent changes to banks’ capital adequacy rules are beginning to reduce the level of funding available for smaller businesses. Understandably, consumer and business confidence in the UK remains fragile.

However, the Board believes that the careful planning, help and advice the Manager provides to all the portfolio companies will continue to be relevant to the current and future economic situations. While there will be bumps in the road, we believe that the portfolio is in good shape to withstand what we currently see ahead. The Company’s portfolio in aggregate has remained resilient amid economic and political turmoil that has plagued 2023.

Many of the portfolio companies have successfully adapted to the new economic landscape, with some performing extremely well and demonstrating the strength of their management teams. A minority of the portfolio companies struggled as a result of a fall in consumer demand and inflationary pressures. However, these businesses are now beginning to show signs of recovery.

In the six months ended 30 June 2023, 21 companies in the portfolio recorded a combined increase in valuation of £9.3 million, offset by 14 companies recording an aggregate fall in valuation of £6.1 million.

Strategy
The Board believes that it is in the best interests of Shareholders to continue to pursue a strategy of:

• Growth in Net Asset Value Total Return above a 5% target while continuing to grow the Company’s assets
• Payment of annual dividends of at least 5% of the NAV per share per annum based on the opening NAV per share of that financial year
• Implementation of a significant number of new and follow-on qualifying investments every year, exceeding deployment requirements to maintain VCT status
• Maintaining a programme of regular share buybacks (the Board continues to have an objective of achieving and maintaining buybacks at a discount of 5% over the medium term, subject to market conditions)

Central to the Company being able to achieve these objectives is the ability of the Manager to source and complete attractive new qualifying investment opportunities.

Whilst this task has not been made easier by the changes to VCT legislation since 2015, which (amongst other requirements) place greater emphasis on growth or development capital investment into younger companies, the Company is fortunate in that it has pursued a policy of seeking growth capital investments for several years prior to the rule changes and the Manager has an established track record in this area.

Performance and portfolio activity
During the period Net Asset Value per share decreased by 2.3% from 64.9p as at 31 December 2022 to 63.4p as at 30 June 2023. After adding back the payment of a 3.3p dividend paid on 30 June 2023, NAV Total Return per share at 30 June 2023 was 66.7p, representing a positive NAV Total Return of 2.8% in the period. This positive movement is a result of the strategy and business changes throughout the portfolio alluded to above.

On 14 October 2022, the Company launched an offer for subscription to raise up to £20 million, with an over‑allotment facility to raise up to a further £10 million, through the issue of new shares. The offer was closed on 26 April 2023 having raised gross proceeds of £22.6 million, £21.7 million after expenses. We would like to thank those existing Shareholders who have supported the offer and welcome all new Shareholders to the Company.

During the period the Manager completed five new investments and four follow-on investments costing £6.0 million and £2.6 million respectively. The Manager also fully disposed of two investments, generating proceeds of £16.4 million with a further £2.3 million of deferred consideration included within debtors at the period end, representing a combined cash-on-cash return multiple of 8.4 times the original investment.

After the period end, in September 2023, £1.8 million was invested in Loopr Ltd, trading as Looper Insights, a data analytics platform to film and TV content distributors and video‑on‑demand streaming services. Furthermore, the Company sold its holding in Protean Software Limited, which generated proceeds of £3.5 million at completion. Including cash returned to the date of this report, the exit delivered a return multiple of 2.4 times the original investment. Further details of these investments and realisations can be found in the Manager’s Report.

The Board and the Manager are confident that a number of new and follow-on investments can be achieved this year, particularly with the increased investment activity noted above. Details of each of these new, existing and former portfolio companies can be found in the Manager’s Review.

The Manager continues to see a strong pipeline of potential investments sourced through its regional networks and well-developed relationships with advisers and the SME community; however, it is also focused on supporting the existing portfolio through the current economic climate.

Responsible investing
The analysis of environmental, social and governance (“ESG”) issues is embedded in the Manager’s investment process and these factors are considered key in determining the quality of a business and its long-term success. Central to the Manager’s responsible investment approach are five ESG principles that are applied to evaluate investee companies, acquired since May 2018, throughout the lifecycle of their investment, from their initial review and acquisition to their final sale. Every year, the portfolio companies are assessed and progress measured against these principles. More detailed information about the process can be found on pages 26 and 27 of the Manager’s Review in the Unaudited Half-Yearly Financial Report.

Dividends
An interim dividend of 3.3p per share was declared on 8 June 2023 based on an ex-dividend date of 15 June 2023 and a record date of 16 June 2023. The dividend was paid on 30 June 2023, returning £7.7 million to Shareholders. The Board and the Manager continue to hope that additional “special” dividends can be paid as and when particularly successful portfolio exits are made.

Buybacks
The Board is pleased to have achieved an average discount across all buybacks of 7.5% to the Net Asset Value per share in the period, but continues to have an objective of achieving and maintaining buybacks at a discount of 5.0% over the medium term, subject to market conditions.

Shareholder communication
We were delighted to meet with some Shareholders in person at the AGM on 8 June 2023. We hope many of you will be available to attend our next in-person investor forum event on 19 October 2023 at The Shard. These events have proven very popular with our Shareholders in the past and provide the opportunity to learn first-hand about some of our investee companies from their founders and management.

Board composition
The Board continues to review its own performance and undertakes succession planning to maintain an appropriate level of independence, experience, diversity and skills in order to be in a position to discharge all its responsibilities.

The Board was delighted to appoint Kavita Patel as a Non-Executive Director in September 2023 and, after nine years of service, Simon Jamieson did not stand for re‑election at the AGM on 8 June 2023. I would once again like to thank Simon for his dedication to the Company and the Board over his tenure.

The Board is also engaged in a recruitment process to appoint an additional independent Non-Executive Director to its Board as further succession planning. An additional appointment is expected to be made towards the end of the year.

Sunset clause
As explained in last year’s Annual Report, a “sunset clause” applies to the current approved scheme for EIS and VCT tax reliefs. This clause provides that income tax relief will expire on subscriptions made for VCT shares on or after 6 April 2025, unless the legislation is amended to make the scheme permanent, or the “sunset clause” is extended.

The UK Chancellor has reconfirmed in his Spring Budget the government’s commitment to extend the income tax relief available on new VCT shares beyond the tax year ending in April 2025. The Treasury Select Committee’s report on early stage investment published in July supported the important role played by VCTs and called for early action on the “sunset clause”. It also noted that the UK should be able to extend the scheme without European Commission approval, as clarified by the new Northern Ireland Protocol, the Windsor Framework.

Trade bodies of which the Manager is a member will continue to lobby the government to provide greater clarity on the timing and nature of its plans for removing this obstacle.

Outlook
As mentioned in my introduction, while the impact of the pandemic has lessened, other economic impacts continue to dampen consumer and business confidence. Ongoing inflationary pressures, tight monetary policies, supply chain issues and a lack of bank lending appetite may continue to hinder economic recovery. The Board is conscious that such conditions could prove particularly challenging for our investee companies which are unquoted, small, early-growth businesses and by their nature entail higher levels of risk and lower liquidity than larger listed companies.

On the other hand, these younger companies may prove more agile and creative in their approach and better able to adapt their operations swiftly and identify new products and services in response to changing circumstances.

The portfolio is showing signs of resilience and the Manager has been working with management teams to assess business plans, consider funding requirements and help navigate through these difficult times. The Company’s current portfolio of investments is highly diversified by number, business sector, size and stage of development and overall has already demonstrated its relative resilience in the face of economic and geopolitical difficulties. We are confident that this approach will continue to provide protection in volatile market conditions.

The Manager is continuing to see a promising pipeline of potential investments, both new and follow-on. In addition to the funds raised earlier in the year, we have already announced our intention to raise further funds in the coming months. These combined funds will provide the necessary resources to make selective acquisitions from the increasing numbers of investment opportunities that are now emerging out of the recent disruption. Although in the short term there may be considerable economic headwinds, we believe the Company’s diversified portfolio is well positioned to generate long-term value for Shareholders.

Raymond Abbott
Chair
28 September 2023

Manager’s Review

The Board has appointed Foresight Group LLP (“the Manager”) to provide investment management and administration services.

Portfolio summary
As at 30 June 2023, the Company’s portfolio comprised 44 investments with a total cost of £65.5 million and a valuation of £107.3 million. The Company also held £39.0 million of cash and £1.9 million of net current assets taking total net assets to £148.2 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 19 to 22 in the Unaudited Half-Yearly Financial Report.

During the six months to 30 June 2023, the value of the portfolio increased by £3.2 million and £8.6 million of new and follow-on investment was concluded. There was a strong series of successful exits, realising £16.4 million, as well as £7.7 million returned to Shareholders through the interim dividend. Overall therefore, the value of the unquoted portfolio decreased by £4.6 million in the period.

The Company’s portfolio continues to navigate the various economic challenges, including inflation, tight labour markets and soft financial and M&A markets. Many of the portfolio companies are performing extremely well, while others continue to adjust.

In line with the Board’s strategic objectives, the investment team remains focused on continuing to grow the Company’s assets whilst paying an annual dividend to Shareholders of at least 5% of the opening NAV per share of the relevant financial year. The Company has so far achieved this target for the current year and this objective remains the Manager’s focus.

New investments
Fostering strong relationships with local deal introducers across the UK and Ireland remains central to the private equity team’s approach. The team remains focused on attending in-person meetings and events with both deal introducers and prospective investee companies to generate a flow of pipeline opportunities. The regional presence is central to this approach and the Manager opened three offices over the last year, in Leeds, Dublin and Newcastle. These new regional offices are expected to support stronger relationships with local advisers and increase deal flow from these geographies.

Five new investments were completed in the six months to 30 June 2023, totalling £6.0 million. Post-period end, in September 2023, the Manager invested a further £1.8 million in Loopr Ltd. Further details of each of these are provided below. Behind these, there is a strong pipeline of opportunities that the Manager expects to convert during the second half of 2023.

Sprintroom Limited
In January 2023, £1.0 million of growth capital was invested in Sprintroom, which trades as Sprint Electric. The business designs and manufactures drives for controlling electric motors in light and heavy industrial applications, as well as recovering and reusing otherwise lost energy. The investment will be used to further develop and commercialise novel alternating current variable speed drive technology.

Firefish Software Ltd.
In March 2023, the Company invested £1.5 million in Firefish Software, a Glasgow-based customer relationship management and marketing software platform targeting the recruitment sector. The funding will be used to further develop the platform in order to attract a larger enterprise-level customer base and expand its outbound sales team.

Red Flag Alert Technology Group Limited
In March 2023, the Company invested £1.8 million in Reg Flag Alert Technology Group, a Manchester-based proprietary SaaS intelligence platform with modular capabilities spanning compliance, prospecting, risk management and financial health assessments. The growth capital will be used to support continued product development alongside an increased marketing budget which is expected to accelerate new client acquisition with particular focus on larger enterprise-level customers.

Five Wealth Limited
In March 2023, the Company invested £0.7 million in Five Wealth, an established boutique financial planning business operating across the North West of England, headquartered in Manchester. Five Wealth’s service offering is focused on the provision of independent private client financial advice and wealth planning. This growth capital investment will be used to support increased marketing and advertising to drive top-line growth and greater regulatory and compliance costs which are forecast to increase commensurately with AUM.

The KSL Clinic Limited
In April 2023, the Company invested £1.0 million in The KSL Clinic, a leading provider of hair replacement treatments, with clinics in Manchester and Kent. The investment will be used to invest in facilities, create high-quality, sustainable jobs and to expand its geographic reach, resulting in significant improvements in the wellbeing of patients.

Loopr Ltd
Post-period end, in September 2023, the Company invested £1.8 million in Loopr Ltd, trading as Looper Insights, a data analytics platform to film and TV content distributors and video-on-demand streaming services. The investment will be used build a sales and marketing team, expand the customer success team and continue the development of the company’s software.

Follow‑on investments
The Manager expects to continue to deploy additional capital into both growing portfolio companies and those that require support to trade through more uncertain periods. Macro factors such as wage, commodity price and energy price inflation may impact some elements of the portfolio, but in general the Manager ensures at the time of initial investment that investee companies are well‑capitalised to trade through periods of lower market demand or supply challenges. This is evidenced by the portfolio remaining relatively resilient over the COVID-19 period, supported by the Manager’s active style, to ensure risks are identified and mitigated early.

The Company made four follow-on investments in the period, totalling £2.6 million, to support further growth opportunities. Further details are provided below.

Mizaic Ltd (formerly IMMJ Systems Limited)
In February 2023, £0.6 million was invested in Mizaic, a clinical electronic document management solution supplier to the NHS. The investment will be used to grow the leadership team and bolster the business’s abilities to support the digitisation of records, providing easy and efficient access to patient records for clinical care across the NHS.

NorthWest EHealth Limited (“NWEH”)
In March 2023, the Company invested a further £1.5 million in NWEH, which provides software and services to the clinical trials market, allowing pharmaceutical companies and contract research organisations to conduct feasibility studies, recruit patients and run trials. The investment will be used to support the delivery of a number of new real world trials in FY23, while completing building the company’s Connexon platform to be compatible with up to 18 million UK healthcare data sources. Since investment, NWEH has won a number of new customers and is considering changing its business model to focus more on referral revenues, which will mean a lower cost overhead in the business. 

Ten Health & Fitness Limited
In March 2023, Ten Health & Fitness, a multi-site operator in the boutique health, wellbeing and fitness market, received an additional investment of £0.4 million. The funding enabled the company to complete its new Kings Cross site and support the company’s transition to profitability from Q1 2023. The flagship Kings Cross site opened in March and is already trading well.

Additive Manufacturing Technologies Ltd (“AMT”)
In April 2023, the Company invested £0.1 million in AMT, which manufactures systems that automate the post-processing of 3D printed parts. See the key valuation changes in the period section on page 14 in the Unaudited Half-Yearly Financial Report for further details.

Pipeline
As at 30 June 2023, the Company held cash of £39.0 million. This will be used to fund new and follow‑on investments, buybacks and running expenses, and support the Company’s dividend objectives. The Manager has a number of opportunities under exclusivity or in due diligence. The Company remains well positioned to continue pursuing these potential investment opportunities.

Exits and realisations
Whilst global M&A markets are relatively soft, the Manager has delivered some strong realisations in the period. The Manager has witnessed particularly strong interest from overseas buyers, particularly those that are US funded. Certain acquirers also strategically need to acquire a UK presence following the UK’s exit from the EU. However, M&A activity in the broader market has been lower so far in 2023 than recent years, suggesting the market might be cooling slightly in the face of economic uncertainty and rising interest rates.

Datapath Group Limited
In March 2023, the Company was pleased to announce the exit of Datapath, a global leader in the provision of hardware and software solutions for multiscreen displays. The transaction generated proceeds of £10.1 million at completion with an additional £2.3 million payable over the next 24 months. When added to £10.8 million of cash returned to date, this implies a total cash-on-cash return of 11.6 times the original investment of £2.0 million made in September 2007, equivalent to an IRR of 38%.

Since the original investment, the Manager had supported Datapath through a period of material growth, with revenues growing from approximately £7 million to £25 million. Datapath has developed a market-leading hardware and software product suite for the delivery of multiscreen displays and video walls which are sold globally to a diverse customer base across a range of sectors.

Innovation Consulting Group Limited (“GovGrant”)
In March 2023, the Company announced the exit of GovGrant to Source Advisors, a US corporate buyer backed by BV Investment Partners. GovGrant is one of the UK’s leading providers of R&D tax relief, patent box relief and other innovation services. The transaction generated proceeds of £6.8 million at completion. When added to £0.7 million of cash returned to date, this implies a total cash-on-cash return of 4.5 times the capital of £1.65 million invested in October 2015, equivalent to an IRR of 25%.

Since the original investment in 2015, the Manager had helped GovGrant through a period of material growth during which it supported the R&D activities of a growing number of customers. GovGrant’s high levels of service and innovative products, such as the growing patent box offering, have contributed to driving innovation in the UK economy. The Manager had taken a proactive approach to supporting the exceptional senior management team, all of whom were introduced to the business during the investment period.

Protean Software Limited
In July 2023, the Company achieved a successful exit of its holding in Protean Software to Joblogic, a UK-based direct provider of Field Service Management software to SMEs, and Protean’s direct competitor. The Manager invested in Protean in July 2015 as one of the last buyouts prior to the changes in VCT legislation. Over the holding period the Manager helped Protean transition its highly featured legacy product into a modern software product sold on a SaaS basis. The transaction generated proceeds of £3.5 million on completion. When added to £0.1 million of cash returned to date, this implies a total cash-on-cash return of 2.4 times the original investment of £1.5 million made in July 2015, equivalent to an IRR of 12%.

Disposals in the period ended 30 June 2023

			Accounting cost	Exit proceeds
			At date of	and deferred
		Total invested1	disposal2	consideration	Total return3
Company	Detail	(£)	(£)	(£)	(£)
Innovation Consulting Group Limited	Full disposal	1,650,000	1,938,046	6,788,558	7,444,806
Datapath Group Limited	Full disposal	2,000,000	11,081,243	12,432,757	23,203,221
		3,650,000	13,019,289	19,221,315	30,648,027

1. Total invested reflects the total cash investment made by the Company and Foresight 3 VCT plc.
2. The accounting cost includes the valuation of Foresight 3 VCT plc’s investment in Datapath at the point it was transferred to the Company as part of the merger in June 2017. The investment cost at the date of transfer was £73,250.
3. Total return includes yield returned to the Company and Foresight 3 VCT plc up to the date of the exit.

Key portfolio developments
In the first six months of the year, the portfolio has demonstrated continued resilience in the face of the economic headwinds that started mid-way through 2022.

Material changes in valuation, defined as increasing or decreasing by £1.0 million or more since 31 December 2022, are detailed below. Updates on these companies are included below, or in the Top Ten Investments section on pages 19 to 22 in the Unaudited Half-Yearly Financial Report.

Key valuation changes in the period

Company	Valuation (£)	Valuation change (£)
Callen-Lenz Associates Limited	9,283,367	3,880,264
Aerospace Tooling Corporation Limited	3,190,346	(1,111,974)
Additive Manufacturing Technologies Ltd	—	(1,833,018)

Aerospace Tooling Corporation Limited 
Founded in 2007, Aerospace Tooling Corporation (“ATL”) is a niche engineering company based in Dundee. ATL provides specialist inspection, maintenance, repair and overhaul services for components in high-specification aerospace and turbine engines.

30 June 2023 update
Trading continues to be behind expectations, due to a combination of external factors, such as delays from customers providing parts for repair, and internal factors such as equipment failures. The senior management team has been significantly strengthened with a new chair and operations director hired, and a new finance director to start in the coming quarter.

Additive Manufacturing Technologies Ltd (“AMT”)
AMT is developing machines for post-production of 3D printed parts: removal of excess polymer (“depowdering”), surface smoothing/polishing, colouring and inspection. AMT’s goal is to provide a fully automated end-to-end post-production system, the “DMS”, with robots linking each stage.  

30 June 2023 update
The business is navigating the challenging economic environment with support from the Manager, providing expertise and guidance in line with its active management approach.

Outlook
The global and UK markets have experienced a volatile past six months following a strong recovery in consumer and business demand after the COVID-19 pandemic. The recovery has been somewhat stalled due to various economic factors following the pandemic. Rising input prices, driven by supply chain constraints during COVID-19 and rapidly increasing energy prices following Russia’s invasion of Ukraine in Q1 2022, drove inflation to a high of 11.1% in October 2022. This was initially slow to decrease, with inflation remaining at 10.1% in March 2023 and 7.9% in June 2023, partly driven by wage inflation resulting from a tight labour market in the UK.

The Bank of England responded by steadily raising the base interest rate from 0.1% in December 2021 to 5.25% in August 2023. While this is now taking effect with inflation reducing, many analysts predict further increases to interest rates in the short term. The Bank of England is expected to maintain interest rates at their current level in the medium term, with most analysts predicting no meaningful reduction during 2024. Rising wage inflation is limiting the impact of interest rate rises, suggesting a further tightening of monetary policy, which would potentially drive the UK into recession in late 2023 or 2024.

Despite this backdrop, the Company’s portfolio is reasonably well positioned to withstand the market volatility and economic headwinds. We have worked to balance risk, with the portfolio exposed to a broad base of both well‑established and earlier-stage growth companies across a range of sectors. In the period to 30 June 2023, the portfolio continued to perform well, with the Company realising two investments in this time.

Notable examples that demonstrate our ability to capitalise on high-quality regional opportunities in a variety of sectors are the sale of Innovation Consulting Group, a St Albans provider of R&D tax relief, patent box relief and other innovation services, to a US corporate buyer backed by BV Investment Partners that generated a 4.5 times return on investment, and Datapath Group, a Derbyshire-based global leader in the provision of visual solutions, achieving an impressive cash-on-cash return of 11.6 times the original investment. The current portfolio is well diversified with a good mix of earlier-stage and more mature investments that will yield attractive opportunities for the Company over time.

The Manager continues to leverage its regional offices to source the highest quality growth companies where we can employ our extensive advisory network and proactive portfolio management style to drive growth and add value to each investee company. There remains a strong appetite for funding from the smaller UK businesses with growth potential, which manifested itself in a number of exciting deals completed in the past year. Despite shifts in the investment landscape, we continue to see excellent opportunities to support small companies in many sub‑sectors, such as health, technology and compliance systems, amongst others.

While the macro environment is precarious, we believe that the Company’s portfolio is well placed to cope with a period of uncertainty. The UK undoubtedly remains an exceptional place to start, fund and grow a small business, and the Manager remains committed to supporting the best UK entrepreneurs on their journey.

James Livingston
Foresight Group LLP
28 September 2023

Unaudited Half-Yearly Results and Responsibilities Statements

Principal risks and uncertainties
The principal risks faced by the Company are as follows:

• Market risk
• Strategic and performance risk
• Internal and financial control risk
• Legislative and regulatory risk
• VCT qualifying status risk
• Investment valuation and liquidity risk

The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Accounts for the period ended 31 December 2022. A detailed explanation can be found on pages 45 to 47 of the Annual Report and Accounts, which is available on Foresight Enterprise VCT’s website www.foresightenterprisevct.com or by writing to Foresight Group LLP at The Shard, 32 London Bridge Street, London SE1 9SG. The Board considers that 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.

In the view of the Board, there have been no changes to the fundamental nature of these risks since the previous report. The emerging risks identified in the previous report included those of climate change, inflationary pressures, interest rates, supply chain issues, energy prices, the Russian invasion of Ukraine and increased tension between the United States and China over the future of Taiwan. These emerging risks continue to apply and be monitored. The Board and the Manager continue to follow all emerging risks closely with a view to identifying where changes affect the areas of the market in which portfolio companies operate. This enables the Manager to work closely with portfolio companies, preparing them so far as possible to ensure they are well positioned to endure potential volatility.

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 Half-Yearly Financial Report and financial statements.

The Directors confirm to the best of their knowledge that:

1. The summarised set of financial statements has been prepared in accordance with FRS 104
2. 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)
3. 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
4. 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 Chair’s Statement, Strategic Report and Notes to the Accounts of the 31 December 2022 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 its exposures to credit risk and liquidity risk.

The Company has considerable financial resources together with investments and income generated therefrom across a variety of industries and sectors. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully.

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

The Half-Yearly Financial Report has not been audited nor reviewed by the auditors.

On behalf of the Board

Raymond Abbott
Chair
28 September 2023

Unaudited Income Statement
For the six months ended 30 June 2023

	Six months ended			Six months ended			Year ended
	30 June 2023			30 June 2022			31 December 2022
	(Unaudited)			(Unaudited)			(Audited)
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Realised gains on investments	—	3,411	3,411	—	17,283	17,283	—	17,493	17,493
Investment holding gains/(losses)	—	1,950	1,950	—	(12,158)	(12,158)	—	(8,465)	(8,465)
Income	1,048	—	1,048	264	—	264	871	—	871
Investment management fees	(373)	(1,573)	(1,946)	(332)	(995)	(1,327)	(681)	(2,323)	(3,004)
Other expenses	(417)	—	(417)	(309)	—	(309)	(673)	—	(673)
Return/(loss) on ordinary activities before taxation	258	3,788	4,046	(377)	4,130	3,753	(483)	6,705	6,222
Taxation	—	—	—	—	—	—	—	—	—
Return/(loss) on ordinary activities after taxation	258	3,788	4,046	(377)	4,130	3,753	(483)	6,705	6,222
Return/(loss) per share	0.1p	1.7p	1.8p	(0.2)p	2.1p	1.9p	(0.2p)	3.3p	3.1p

The total columns of this statement are 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.

The Company has only one class of business and one reportable segment, the results of which are set out in the Income Statement and Balance Sheet.

There are no potentially dilutive capital instruments in issue and, therefore, no diluted earnings per share figures are relevant. The basic and diluted earnings per share are, therefore, identical.

Unaudited Reconciliation of Movements in Shareholders’ Funds
For the six months ended 30 June 2023

	Called-up	Share	Capital
	share	premium	redemption	Distributable	Capital	Revaluation
	capital	account	reserve	reserve1	reserve1	reserve	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
As at 1 January 2023	2,133	68,203	573	57,309	(32,793)	43,025	138,450
Share issues in the period	237	15,756	—	—	—	—	15,993
Expenses in relation to share issues	—	(632)	—	—	—	—	(632)
Repurchase of shares	(33)	—	33	(2,011)	—	—	(2,011)
Realised gains on disposal of investments	—	—	—	—	3,411	—	3,411
Investment holding gains	—	—	—	—	—	1,950	1,950
Dividends paid	—	—	—	(7,692)	—	—	(7,692)
Management fees charged to capital	—	—	—	—	(1,573)	—	(1,573)
Revenue return for the period	—	—	—	258	—	—	258
As at 30 June 2023	2,337	83,327	606	47,864	(30,955)	44,975	148,154

1. Reserve is available for distribution, total distributable reserves at 30 June 2023 are £16,909,000 (31 December 2022: £24,516,000).

Unaudited Balance Sheet
At 30 June 2023

Registered number: 03506579

	As at	As at	As at
	30 June	30 June	31 December
	2023	2022	2022
	(Unaudited)	(Unaudited)	(Audited)
	£’000	£’000	£’000
Fixed assets
Investments held at fair value through profit or loss	107,332	103,365	111,966
Current assets
Debtors	3,341	5,836	2,152
Cash and cash equivalents	39,012	25,730	24,814
Total current assets	42,353	31,566	26,966
Creditors
Amounts falling due within one year	(1,531)	(174)	(482)
Net current assets	40,822	31,392	26,484
Net assets	148,154	134,757	138,450
Capital and reserves
Called-up share capital	2,337	1,996	2,133
Share premium account	83,327	58,068	68,203
Capital redemption reserve	606	557	573
Distributable reserve	47,864	66,479	57,309
Capital reserve	(30,955)	(31,675)	(32,793)
Revaluation reserve	44,975	39,332	43,025
Equity Shareholders’ funds	148,154	134,757	138,450
Net Asset Value per share	63.4p	67.5p	64.9p

Unaudited Cash Flow Statement
For the six months ended 30 June 2023

	Six months	Six months	Year ended
	ended	ended	31 December
	30 June 2023	30 June 2022	2022
	(Unaudited)	(Unaudited)	(Audited)
	£’000	£’000	£’000
Cash flow from operating activities
Loan interest received from investments	636	193	653
Dividends received from investments	—	26	38
Deposit and similar interest received	412	19	202
Investment management fees paid	(1,485)	(1,330)	(2,766)
Secretarial fees paid	(91)	(83)	(178)
Other cash payments	(288)	(191)	(433)
Net cash outflow from operating activities	(816)	(1,366)	(2,484)
Cash flow from investing activities
Purchase of investments	(7,608)	(3,202)	(9,987)
Net proceeds on sale of investments	16,430	15,408	20,951
Net proceeds on deferred consideration	—	24	234
Net cash inflow from investing activities	8,822	12,230	11,198
Cash flow from financing activities
Proceeds of fundraising	14,685	4,469	13,987
Expenses of fundraising	(360)	(98)	(361)
Repurchase of own shares	(1,448)	(525)	(1,467)
Equity dividends paid	(6,685)	(6,093)	(13,172)
Net cash inflow/(outflow) from financing activities	6,192	(2,247)	(1,013)
Net inflow of cash in the period	14,198	8,617	7,701
Reconciliation of net cash flow to movement in net funds
Increase in cash and cash equivalents for the period	14,198	8,617	7,701
Net cash and cash equivalents at start of period	24,814	17,113	17,113
Net cash and cash equivalents at end of period	39,012	25,730	24,814

Analysis of changes in net debt

	At 1 January 2023	Cash flow	At 30 June 2023
	£’000	£’000	£’000
Cash and cash equivalents	24,814	14,198	39,012

Notes to the Unaudited Half-Yearly Results
For the six months ended 30 June 2023

1
The Unaudited Half-Yearly Financial Report has been prepared on the basis of the accounting policies set out in the statutory accounts of the Company for the year ended 31 December 2022. Unquoted investments have been valued in accordance with IPEV Valuation Guidelines (as updated in December 2022 including further COVID-19 guidance in March 2020).

2
These are not statutory accounts in accordance with S436 of the Companies Act 2006 and the financial information for the six months ended 30 June 2023 and 30 June 2022 has been neither audited nor formally reviewed. Statutory accounts in respect of the year ended 31 December 2022 have been audited and reported on by the Company’s auditors and delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under S498(2) or S498(3) of the Companies Act 2006. No statutory accounts in respect of any period after 31 December 2022 have been reported on by the Company’s auditors or delivered to the Registrar of Companies.

3
Copies of the Unaudited Half-Yearly Financial Report will be sent to Shareholders via their chosen method and will be available for inspection at the Registered Office of the Company at The Shard, 32 London Bridge Street, London SE1 9SG.

4 Net Asset Value per share
The Net Asset Value per share is based on net assets at the end of the period and on the number of shares in issue at the date.

		Number of
	Net assets	shares in issue
30 June 2023	£148,154,000	233,691,676
30 June 2022	£134,757,000	199,590,704
31 December 2022	£138,450,000	213,316,422

5 Return per share
The weighted average number of shares used to calculate the respective returns are shown in the table below.

	Shares
Six months ended 30 June 2023	225,472,482
Six months ended 30 June 2022	195,162,969
Year ended 31 December 2022	198,639,819

Earnings for the period should not be taken as a guide to the results for the full year.

6 Income

	Six months	Six months
	ended	ended	Year ended
	30 June	30 June	31 December
	2023	2022	2022
	£’000	£’000	£’000
Loan stock interest	636	207	631
Deposit and similar interest received	412	19	202
Dividends receivable	—	38	38
Total income	1,048	264	871

7 Investments at fair value through profit or loss

	£’000
Book cost as at 1 January 2023	69,921
Investment holding gains	42,045
Valuation at 1 January 2023	111,966
Movements in the period:
Purchases	8,608
Disposal proceeds1	(16,430)
Realised gains	3,411
Investment holding losses2	(223)
Valuation at 30 June 2023	107,332
Book cost at 30 June 2023	65,510
Investment holding gains	41,822
Valuation at 30 June 2023	107,332

1. The Company received £16,430,000 from the disposal of investments during the period. The book cost of these investments when they were purchased was £13,019,000. These investments have been revalued over time and until they were sold any unrealised gains or losses were included in the fair value of the investments.
2. Investment holding gains in the Income Statement include the deferred consideration debtor increase of £2,173,000. The debtor movement reflects the recognition of amounts receivable in respect of Datapath Group Limited (£2,333,000), offset by an FX movement in respect of Codeplay Software Limited (£19,000) and provisions made against balances in respect of Mologic Ltd. (£105,000) and FFX Group Limited (£36,000).

8 Related party transactions
No Director has an interest in any contract to which the Company is a party other than their appointment and payment as Directors.

9 Transactions with the Manager
Foresight Group LLP acts as Manager to the Company and was appointed on 27 January 2020. During the period, services of a total cost of £1,492,000 (30 June 2022: £1,327,000; 31 December 2022: £2,724,000) were purchased by the Company from Foresight Group LLP. Although no performance fee was paid in the period (30 June 2022: £nil; 31 December 2022: £nil), a liability of £734,000 has been recognised as at the period end (30 June 2022: £nil; 31 December 2022: £280,000).

During the period, administration services of a total cost of £91,000 (30 June 2022: £83,000; 31 December 2022: £178,000) were delivered to the Company by Foresight Group LLP, Company Secretary.

At 30 June 2023, the amount due to Foresight Group LLP was £nil (30 June 2022: £43,000; 31 December 2022: £nil).

END