Foresight 4 VCT plc - Annual Financial Report

FORESIGHT 4 VCT PLC
Final Results
22 July 2020

Foresight 4 VCT plc, managed by Foresight Group LLP, today announces the final results for the year ended 31 March 2020.

These results were approved by the Board of Directors on 27 April 2020.

The Annual Report will shortly be available in full at www.foresightgroup.eu. All other statutory information can also be found there.

Summary Financial Highlights

• Total net assets £108.7 million.
• Net Asset Value per share decreased by 17.7% from 67.8p at 31 March 2019 to 55.8p. Including the payment of a 4.0p dividend made on 16 August 2019, NAV total return per share at 31 March 2020 was 59.8p, representing a decrease in total return of 11.8%.
• The portfolio has seen a decrease in valuation of £16.3 million during the year.
• Five new investments totalling c.£7.6 million and three follow-on investments totalling £0.8 million were made during the year.
• C.£0.4 million was realised from sales and loan redemptions from two portfolio companies.
• A dividend of 4.0p per share was paid on 16 August 2019 based on an ex-dividend date of 25 July 2019 and a record date 26 July 2019.
• £16.0 million was raised during the year through the issue of shares, bringing the total raised under the June 2018 offer to £51.1 million.

Chairman's statement
I am pleased to present the audited results for Foresight 4 VCT plc for the year ended 31 March 2020. 

PERFORMANCE AND PORTFOLIO ACTIVITY

During the year Net Asset Value per share decreased by 17.7% from 67.8p at 31 March 2019 to 55.8p at 31 March 2020. Including the payment of a 4.0p dividend made on 16 August 2019, NAV total return per share at 31 March 2020 was 59.8p, representing a decrease in total return of 11.8%. This decrease was primarily driven by the impact of Covid-19 on the Company’s portfolio. Please refer to the ‘Material events during the year’ section below for more detail on this.

At the end of the year the Company held 32 investments in UK based businesses across a wide range of sectors. The performance of the portfolio had, prior to the impact of Covid-19, been steady during the year. The impact of Covid-19, however, resulted in a decrease of £16.3m in value. Positive progress made by companies including Mologic Ltd has been offset by lower valuations for Ixaris Group Holdings Limited, one of the many companies materially impacted by Covid-19, as detailed in the Investment Manager’s Review and the Top Ten Investment sections of this report.

Five new investments were completed during the year of c.£7.6 million. Namely:

• Fourth Wall Creative Limited (a technology-led sports merchandising business);
• Ten Health & Fitness Limited (a group of boutique fitness studios offering physiotherapy, massage therapy and fitness classes);
• Roxy Leisure Limited (a games focused bar group);
• Rovco Ltd (a provider of subsea surveying services); and
• Biotherapy Services Limited (a pharmaceutical biotech company specialising in wound treatment regenerative medicine).

Foresight Group LLP, the Company’s investment manager continues to see a pipeline of potential investments sourced through its regional networks and well-developed relationships with advisors and the SME community, however, is also focused on supporting the existing portfolio through the Covid-19 pandemic. Following both the successful fundraises launched in May 2017 and June 2018, the Company is in a position to fully support the portfolio, where appropriate, and exploit potential attractive investment opportunities.

DIVIDENDS

An interim dividend of 4.0p per Share was declared on 18 July 2019 based on an ex-dividend date of 25 July 2019 and a record date of 26 July 2019. The dividend was paid on 16 August 2019.

In light of the change in portfolio towards earlier stage, higher risk companies, as required by the new VCT rules, the Board felt it prudent to adjust the dividend policy towards a targeted annual dividend yield of 5% of NAV per annum. The Board and the Manager hope that this may be enhanced by additional ‘special’ dividends as and when particularly successful portfolio exits are made. The impact of Covid-19 will be taken into consideration when the Board considers dividends in the near term.

TOP-UP SHARE ISSUES AND SHARE BUY-BACKS

Share buybacks took place on 12 July 2019 (650,000 shares at 61.0p), 24 July 2019 (500,000 shares at 61.0p), 30 September 2019 (736,153 shares at 57.75p), 27 January 2020 (500,000 shares at 60.4p) and 30 January 2020 (400,000 shares at 60.4p) all of which have enabled the enlarged VCT to achieve its target discount to NAV, which moved to 7.5% following the issue of the half-yearly report.

The dividend reinvestment scheme saw 1,192,686 shares being allotted on 16 August 2019.

FUNDRAISING

The offer for subscription dated 14 June 2018, which sought to raise up to £50 million (with an over-allotment facility to raise up to a further £30 million), closed on 12 April 2019 having raised £51.1 million.

Funds raised under this offer have allowed the Company to take advantage of attractive investment opportunities and to increase portfolio diversification in line with the ongoing strategy of the Company.

SHAREHOLDER COMMUNICATION

As a result of the travel restrictions imposed due to Covid-19, the Manager’s popular investor forums have been temporarily put on hold. Once it is possible to do so, details of both a London event and regional events will be sent to shareholders resident in the locality as and when they are organised. It is the intention of the Manager to hold an investor webinar whilst the investor forums are put on hold, details of which will be communicated to investors alongside the mailing of this report and included within the report and accounts section of the Managers website www.foresightgroup.eu.

As communicated in the Half-Yearly Report, the Board offered shareholders the opportunity to elect the method by which they receive shareholder communications. I am pleased to announce that 99% of communications to investors will now be provided electronically. The Board believe that in addition to further promoting sustainability, a key objective of the fund, this shift will result in some overall cost savings.

MATERIAL EVENTS DURING THE YEAR

The Covid-19 virus has presented the Company and the management of its portfolio companies with an unprecedented threat which it is anticipated will persist for a considerable time to come. On behalf of the Board I would pay tribute to the work which has been undertaken by the Manager, both in administering the Company and more particularly in working closely with the management of the Company’s portfolio companies, in order to try to minimise the ongoing impact of this threat. Until this virus is brought under worldwide control, it is impossible to assess its full impact. However, it is already clear that in the immediate future every business in the UK will be materially affected, as can be seen through the material fall in valuations during the year. Nevertheless, considerable work has and is continuing to be undertaken by the Manager alongside the management teams at each and every one of the companies within the portfolio to contain the impact so far as possible.

Prior to the issue of this report, on 15 April 2020 the Board and the Manager announced that the unaudited NAV per share as at 15 April 2020 was 56.1p, reflecting the valuation reductions generally across the investments in the portfolio as a result of the impact of the Covid-19 pandemic up to this date.

AUDITOR

The Board launched a tender for its audit contract following the signing of the 2019 Annual Report and Accounts. The previous auditor, KPMG LLP, was invited to tender alongside several other firms. As announced in the Half- Yearly Report, following this tender process, Deloitte LLP was appointed as company auditor for the year ended 31 March 2020. The Board is pleased with the appointment but would like to record its thanks to KPMG LLP for its services and advice over the past eight years.

OUTLOOK

The persisting uncertainty over the full impact of Covid-19 and the ongoing negotiations in relation to Brexit create truly exceptional challenges for every business. The Company invests primarily in developing companies which by their nature benefit from general economic growth and the current environment places considerable demands upon them and their management teams. The Manager’s Private Equity team is well aware of the management and business needs of each of the companies within the investment portfolio and is working closely with them to ensure that they are able to make progress during these testing times. Nevertheless, the Board and the Manager are optimistic that the existing portfolio has the potential to grow once the spread of the virus has been successfully contained.

ANNUAL GENERAL MEETING

The Company’s Annual General Meeting will take place on 10 September 2020 at 1.15pm. In light of the continuing Covid-19 situation, the meeting will be held by way of a closed virtual meeting and shareholders will not be permitted to attend. Shareholders are encouraged to vote by way of proxy and send any questions to the Manager’s Investor Relations team as further set out in the notice. Please refer to the formal notice on page 72 of the Annual Report and Accounts for further details in relation to the format of this year’s meeting and the request to observe social distancing and travel restrictions in place.

Raymond Abbott

Chairman

22 July 2020

Manager's Review

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

The investment management and administration arrangements were previously with Foresight Group CI Limited (the Manager’s parent undertaking), with Foresight Group CI Limited appointing the Manager as its investment adviser and delegating administration services to the Manager. The investment management and administration arrangements were novated and amended to be directly with the Manager on 27 January 2020. References to the Manager’s activities in this report include those activities of Foresight Group CI Limited prior to the change in arrangements.

 Portfolio Summary

As at 31 March 2020 the Company’s portfolio comprised 34 investments (including the Special Purpose Vehicles “SPVs”) with a total cost of £52.5 million and a valuation of £66.2 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 10 to 14 of the Annual Report and Accounts.

NEW INVESTMENTS

The Company maintained investment momentum throughout the financial year, investing a total of c.£7.6 million in five new businesses: Fourth Wall Creative, a technology-led sports merchandising business; Ten Health, a group of boutique fitness studios offering a range of services including physiotherapy, massage therapy and fitness classes; Biotherapy Services, a pharmaceutical biotech company specialising in wound treatment medicine; Rovco, a technology company focused on subsea surveying and Roxy Leisure, a group of games orientated bars. 

FOURTH WALL CREATIVE LIMITED

In April 2019 the Company invested £2.0 million in Fourth Wall Creative, a technology-led sports merchandising business. Its core business is the design and distribution of membership welcome packs on behalf of football clubs. The investment will fund growth through the development of new services, expanding the customer base and exploring other sports opportunities. 

TEN HEALTH & FITNESS LIMITED

In June 2019 the Company invested £1.6 million in Ten Health, a group of boutique fitness studios offering a range of services including physiotherapy, massage therapy and fitness classes. Ten Health was developed to bridge the gap in the market between traditional healthcare and mainstream fitness. The investment will be used to further develop Ten Health’s non-fitness services and to support a roll-out of new studios. 

BIOTHERAPY SERVICES LIMITED

In November 2019, the Company invested £1.5 million in Biotherapy Services, a pharmaceutical biotech company specialising in wound treatment regenerative medicine, with a focus on treating chronic diabetic foot ulcers and complex wounds. The investment will support the completion of clinical trials and facilitate product development and launch. 

ROVCO LTD

In December 2019, the Company invested c.£1.0 million in Rovco, a company which provides subsea surveying services. Established in 2015, the business seeks to disrupt the industry with new technology that significantly increases automation. The investment will support the growth of the business’s commercial and operational capabilities and its international expansion. 

ROXY LEISURE LIMITED

In December 2019, the Company invested £1.5 million in Roxy Leisure, a games focused bar group operating eight sites across the Midlands and Northern England. Founded in 2013, the sites provide a range of entertainment facilities including pool tables, ping-pong, bowling, shuffleboard, mini-golf, arcade gaming and karaoke. The investment will be used to support the business’s expansion. 

FOLLOW ON INVESTMENTS

Follow-on investments totalling c.£0.8 million were also made in three existing portfolio companies throughout the year. Further details are provided below. 

FERTILITY FOCUS LIMITED

During the year the Company made a c.£0.2 million follow-on investment in Fertility Focus, a fertility monitoring device business. This was to support new product launches planned for 2020. 

LUMINET NETWORKS LIMITED

In December 2019 the Company made a c.£0.4 million follow-on investment in Luminet, providers of fixed wireless internet access to businesses across London. The investment was required to help the business fulfil its pipeline of new contracts. 

BIOFORTUNA LIMITED

Also in December 2019, the Company made a £0.3 million follow-on investment in Biofortuna, a molecular diagnostics business which manufactures DNA tests. The investment was required to provide additional working capital and support an asset purchase. Biofortuna, has also been presented with a number of opportunities to help manufacture Covid-19 Polymerase Chain Reaction (PCR) test kits and will explore further commercial possibilities in the space.

PIPELINE  

At 31 March 2020, the Company had cash balances of £41.9 million available to fund new and follow-on investments, buybacks and running expenses. 

Depending on the length and severity of the Covid-19 outbreak and associated restrictions, we expect to see a higher proportion of the Company’s deployment focused on follow-on investments in the short to medium term. We anticipate that the onset of a downturn may result in lower new investment activity in the coming months and a disciplined approach to investment valuations will be maintained.

As the economy recovers from the worst effects of the virus, we expect valuations to be attractive and demand for funding to increase, driving some particularly interesting opportunities for investment.

EXITS AND REALISATIONS

During the period, proceeds of c.£0.4 million were generated from the successful exit of one investment.

In December 2019, the Company completed a successful sale of its holding in Flowrite Refrigeration Holdings Limited, a company focused on the design, installation and servicing of air conditioning equipment throughout the UK, to Airedale Catering Equipment Group Limited. With our support, Flowrite has become a market leader in the refrigeration and air conditioning service market. The company has an enviable customer base, including some of the UK’s largest restaurant chains, pub groups and retailers. Overall, the investment generated a 1.4x return on cash and a double-digit IRR, when taking into account previous proceeds.

DISPOSALS IN THE YEAR ENDED 31 MARCH 2020

Company	Detail	Original Cost/		Proceeds	Gain/(loss)	Valuation at
		Take-On Value		£	£*	31 March 2019
		£				£
Autologic Diagnostics Group Limited	Dissolved	2,162,787		-	(2,162,787)^	-
Evance Wind Turbines Limited	Dissolved	1,490,420		-	(1,490,420)^	-
Vector Command Limited	Dissolved	1,468,750		-	(1,468,750)^	-
The Naked Deli Ltd	Loan Repayment	81,000		81,000	-	81,000
Flowrite Refigeration Limited	Full disposal	513,368		353,101	(160,267)	352,981
Total disposals			5,716,325	434,101	(5,282,224)	433,981

*In addition to the above, the Company received deferred consideration of £31,287 (Trilogy Communications Limited).
^This loss refers to the transfer on disposal between unrealised and realised reserves and has no impact on NAV in the current year.

KEY PORTFOLIO DEVELOPMENTS

Overall, the value of investments held reduced from £74.6m to £66.2m during the year, driven by a decrease in value of existing investments by £16.3 million and balanced by new investments and disposal proceeds aggregating to £7.9 million.

Updates on the companies that have seen a material change in valuation are included below, or in the Top Ten Investments section on page 10 of the Annual Report and Accounts. Valuations, many of which are calculated using listed comparable companies, have been impacted in the short-term, reflecting the broader effects of the coronavirus outbreak on market sentiment. Material changes in valuation are defined as increasing or decreasing by over £0.5 million since 31 March 2019.

Company	Valuation Methodology	Valuation Change (£)
Innovation Consulting Group Limited*	Discounted earnings multiple	623,254
The Naked Deli Ltd	Nil Value	(669,000)
Specac International Limited	Discounted earnings multiple	(680,564)
Procam Television Holdings Limited	Nil Value	(1,300,255)
Biofortuna Limited	Discounted revenue multiple	(1,192,139)
Datapath Group Limited	Discounted earnings multiple	(2,004,371)
TFC Europe Limited	Discounted earnings multiple	(3,261,814)
Ixaris Group Holdings Limited	Discounted revenue multiple	(6,594,177)

*Formerly known as The Business Advisory Limited.

BIOFORTUNA

Biofortuna is a molecular diagnostics business that manufactures freeze-dried DNA tests. The drop in valuation can predominately be attributed to a slowdown in trading, with two key clients delaying projects. Following the Covid-19 outbreak, Biofortuna is exploring opportunities to produce testing kits. This should greatly improve the business’s cash position.

PROCAM TELEVISION HOLDINGS LIMITED

Procam Television is a leading broadcast hire company, supplying equipment and crew for location TV production. The reduction in valuation reflects a challenging year of trading to 31 March 2019, with both sales and gross margins lower than budget.

THE NAKED DELI

The Naked Deli Limited is a healthy eating food chain predominantly targeting lunchtime trade. Prior to COVID-19, the business implemented a turnaround plan with a new CEO and a revised menu format to try to improve performance. This strategy began to show some positive results and the business was able to pay £120k of accumulated interest and loan note principal to F4. Since March however, The Naked Deli closed all its stores in line with government guidance. The outlook for the sector is subdued for the longer term with uncertainties regarding footfall in town centres, particularly for lunchtime trade with employees still working from home. Due to the difficult outlook as well as the remaining uncertainty around the business model, the investment valuation has been written down to zero pending improved visibility on re-opening performance and recovery of the sector.

OUTLOOK

Despite a brief improvement in sentiment immediately following the election, a significant new threat has emerged in the form of Covid-19. We have been working closely with the Company’s portfolio to identify risk areas and are encouraging businesses to take the necessary precautions. Covid-19 will lead to significantly weaker consumer and business spending and in many cases, companies missing forecasts. Given the above, we are asking our portfolio businesses to stress-test their cash positions to ensure that where possible they can withstand a significant downturn in trading. We are ensuring that the finance directors at our portfolio companies are tightly managing central overheads, reducing capital expenditure and preparing both short and long-term cost reduction plans.

A proportion of our portfolio companies are particularly at risk due to the sectors they operate in, such as Ixaris in the travel sector or The Naked Deli in the consumer and leisure space. We are paying particular attention to these, leveraging the experience and skillset of the wider investment team to assist the management teams in preserving and maximising cash. We are working closely with certain management teams to take decisive steps to significantly reduce cash burn in the short and medium term.

There are also a number of companies, namely in the healthcare and life sciences sectors, which are trading strongly during this period due to the increased demand for the services they offer. Examples of this include Mologic, which recently received a grant of c.£1m to fund Covid related diagnostic development Molecular diagnostics business and Biofortuna, has also been presented with a number of opportunities to help manufacture Covid-19 Polymerase Chain Reaction (PCR) test kits and will explore further commercial possibilities in the space. Another of our portfolio companies, Hospital Services Limited, has seen increased demand for mobile x-ray machines, as chest x-rays are part of the treatment pathway for Covid-19.

The Company’s portfolio is diversified by sector and market, and the SME sector has historically proven to be resilient and nimble enough to weather periods of volatility.

Notwithstanding these events, we continue to see encouraging levels of activity from smaller UK companies seeking growth capital and expect this to increase as companies begin to recover from the impact of Covid-19 with requirements for permanent funding to working capital. VCTs continue to be viewed by many entrepreneurs as an attractive source of capital that provides scale-up funding to businesses at an early stage of their growth, when other sources of funding may not be readily available or alongside other sources of funding, including the recently announced government measures for supporting businesses during Covid-19. Despite the current challenges for Covid-19 in the medium and long term the UK remains an excellent place to start, scale and sell a business, with broad pools of talent and an entrepreneurial culture.

Russell Healey
Partner and Head of Private Equity
Foresight Group LLP
22 July 2020

 Audited Income Statement
for the year ended 31 March 2020

		Year ended			Year ended
		31 March 2020			31 March 2019
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Investment holding (losses)/ gains		-	(11,081)	(11,081)	-	5,292	5,292
Realised losses on investments			(5,251)	(5,251)	-	(514)	(514)
Income		3,673	-	3,673	744	-	744
Investment management fees		(545)	(1,633)	(2,178)	(498)	(1,494)	(1,992)
Other expenses		(594)	-	(594)	(568)	-	(568)
Profit/ (loss) on ordinary activities before taxation		2,534	(17,965)	(15,431)	(322)	3,284	2,962
Taxation		-	-	-	-	-	-
Profit/ (loss) on ordinary activities after taxation		2,534	(17,965)	(15,431)	(322)	3,284	2,962
Profit/ (loss) per share:		1.3p	(9.2)p	(7.9)p	(0.2)p	2.2p	2.0p

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.

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.

The notes on pages 56 to 71 of the Annual Report and Accounts form part of these financial statements.

Audited Reconciliation of Movements in Shareholders' Funds

Year ended 31 March 2020	Called-up share capital £’000	Share premium account £’000	Capital redemption reserve £’000	Special distributable reserve*   £’000	Capital reserve*   £’000	Revaluation reserve   £’000	Total     £’000
As at 1 April 2019	1,736	63,676	475	70,094	(43,106)	24,750	117,625
Share issues in the year	240	16,481	-	-	-	-	16,721
Expenses in relation to share issues	-	(714)	-	-	-	-	(714)
Repurchase of shares	(28)	-	28	(1,674)	-	-	(1,674)
Realised losses on disposal of investments	-	-	-	-	(5,251)	-	(5,251)
Investment holding losses	-	-	-	-	-	(11,081)	(11,081)
Dividends paid	-	-	-	(7,827)	-	-	(7,827)
Management fees charged to capital	-	-	-	-	(1,633)	-	(1,633)
Revenue loss for the year	-	-	-	2,534	-	-	2,534
As at 31 March 2020	1,948	79,443	503	63,127	(49,990)	13,669	108,700

The notes on pages 56 to 71 of the Annual Report and Accounts form part of these financial statements.

*Reserve is available for distribution, total distributable reserves at 31 March 2020 are £13,137,000 (2019: £26,988,000).

Year ended 31 March 2019	Called-up share capital £’000	Share premium account £’000	Capital redemption reserve £’000	Special distributable reserve   £’000	Capital reserve   £’000	Revaluation reserve   £’000	Total     £’000
As at 1 April 2018	1,121	51,186	372	46,898	(41,098)	19,458	77,937
Share issues in the year	718	50,748	-	-	-	-	51,466
Expenses in relation to share issues	-	(2,125)	-	-	-	-	(2,125)
Repurchase of shares	(103)	-	103	(6,541)	-	-	(6,541)
Expenses in relation to tender offer	-	(133)	-	-	-	-	(133)
Cancellation of Share Premium	-	(36,000)	-	36,000	-	-	-
Realised losses on disposal of investments	-	-	-	-	(514)	-	(514)
Investment holding gains	-	-	-	-	-	5,292	5,292
Dividends paid	-	-	-	(5,941)	-	-	(5,941)
Management fees charged to capital	-	-	-	-	(1,494)	-	(1,494)
Revenue loss for the year	-	-	-	(322)	-	-	(322)
As at 31 March 2019	1,736	63,676	475	70,094	(43,106)	24,750	117,625

Audited Balance Sheet
at 31 March 2020                                                                                        Registered number: 03506579

		As at 31 March 2020 £’000	As at 31 March 2019 £’000
Fixed assets
Investments held at fair value through profit or loss		66,206	74,615
Current assets
Debtors		726	10,331
Cash and cash equivalents		41,872	33,185
		42,598	43,516
Creditors
Amounts falling due within one year		(104)	(506)
Net current assets		42,494	43,010
Net assets		108,700	117,625
Capital and reserves
Called-up share capital		1,948	1,736
Share premium account		79,443	63,676
Capital redemption reserve		503	475
Special distributable reserve		63,127	70,094
Capital reserve		(49,990)	(43,106)
Revaluation reserve		13,669	24,750
Equity shareholders’ funds		108,700	117,625
Net asset value per share:
		55.8p	67.8p

The financial statements were approved by the Board of Directors and authorised for issue on 22 July 2020 and were signed on its behalf by:

Raymond Abbott
Chairman
22 July 2020

The notes on pages 56 to 71 of the Annual Report and Accounts form part of these financial statements.

Audited Cash Flow Statement
for the year ended 31 March 2020

	Year ended	Year ended
	31 March 2020	31 March 2019
	£'000	£'000
Cash flow from operating activities
Loan interest received on investments	559	549
Dividends received from investments	2,835	35
Deposit and similar interest received	238	149
Investment management fees paid	(2,579)	(2,104)
Secretarial fees paid	(169)	(166)
Other cash payments	(418)	(450)
Net cash inflow/ (outflow) from operating activities	466	(1,987)
Cash flow from investing activities
Purchase of investments	(8,361)	(8,281)
Net proceeds on sale of investments	434	2,082
Net proceeds on deferred consideration	31	513
Net cash outflow from investing activities	(7,896)	(5,686)
Cash flow from financing activities
Proceeds of fund raising	25,586	43,562
Expenses of fund raising	(336)	(972)
Repurchase of own shares	(2,067)	(6,480)
Equity dividends paid	(7,066)	(5,907)
Net cash inflow from financing activities	16,117	30,203
Net inflow of cash for the year	8,687	22,530
Reconciliation of net cash flow to movement in net funds
Increase in cash and cash equivalents for the year	8,687	22,530
Net cash and cash equivalents at start of year	33,185	10,655
Net cash and cash equivalents at end of year	41,872	33,185

Analysis of changes in net debt	At 1 April 2019 £’000	Cash flow £’000	At 31 March 2020 £’000
Cash and cash equivalents	8,687	33,185	41,872

The notes on pages 56 to 71 of the Annual Report and Accounts form part of these financial statements.

Notes

1. These are not statutory accounts in accordance with S436 of the Companies Act 2006. The full audited accounts for the year ended 31 March 2020, 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 March 2020 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 March 2020.  All investments held by the Company are classified as ‘fair value through the profit and loss’. Unquoted investments have been valued in accordance with IPEV guidelines. Quoted investments are stated at bid prices in accordance with the IPEV guidelines and Generally Accepted Accounting Practice.

3. Copies of the Annual Report will be sent to shareholders and can be accessed on the following website: www.foresightgroup.eu.

4. Net asset value per share

Net asset value per share is based on net assets at the year end of £108,700,000 (2019: £117,625,000) and on 194,826,224 (2019: 173,570,806) shares, being the number of shares in issue at that date.

5. Return per share

	Year ended 31 March 2020 £’000	Year ended 31 March 2019 £’000
Total (loss)/profit after taxation	(15,431)	2,962
Total (loss)/profit per share (note a)	(7.9)p	2.0p
Revenue profit/(loss) from ordinary activities after taxation	2,534	(322)
Revenue profit/(loss) per share (note b)	1.3p	(0.2)p
Capital (loss)/profit from ordinary activities after taxation	(17,965)	3,284
Capital (loss)/profit per share (note c)	(9.2)p	2.2p
Weighted average number of shares in issue in the year	195,581,908	147,007,155

Notes:

1. Total (loss)/profit per share is total (loss)/profit after taxation divided by the weighted average number of shares in issue during the year.
2. Revenue profit/(loss) per share is revenue profit/(loss) after taxation divided by the weighted average number of shares in issue during the year.
3. Capital (loss)/profit per share is capital (loss)/profit after taxation divided by the weighted average number of shares in issue during the year.

6. Annual General Meeting
The Company’s Annual General Meeting will take place on 10 September 2020 at 1.15pm. In light of the continuing Covid-19 situation, the meeting will be held by way of a closed virtual meeting and shareholders will not be permitted to attend. Shareholders are encouraged to vote by way of proxy and send any questions to the Manager’s Investor Relations team as further set out in the notice. Please refer to the formal notice on page 72 of the Annual Report and Accounts for further details in relation to the format of this year’s meeting and the request to observe social distancing and travel restrictions in place.

7. Income

	Year ended 31 March 2020 £’000	Year ended 31 March 2019 £’000
Loan stock interest	597	560
Dividends receivable	2,835	35
Deposit and similar interest received	241	149
	3,673	744

8.       Investments held at fair value through profit or loss

		2020 £’000	2019 £’000
Unquoted investments		66,206	74,615
		66,206	74,615

			£’000
Book cost as at 1 April 2019			49,892
Investment holding gains			24,723
Valuation at 1 April 2019			74,615
Movements in the year:
Purchases at cost			8,361
Disposal proceeds			(434)
Realised losses*			(5,282)
Investment holding losses**			(11,054)
Valuation at 31 March 2020			66,206
Book cost at 31 March 2020			52,537
Investment holding gains			13,669
Valuation at 31 March 2020			66,206

*Realised losses in the income statement include deferred consideration received of £31,000 (Trilogy Communications Limited).
 **Investment holding losses in the income statement have been reduced by the offset in the deferred consideration debtor of £27,000 (Trilogy Communications Limited)

9.    Related party transactions

No Director has an interest in any contract to which the Company is a party, other than their appointment as directors.

10.  Transactions with the manager

Foresight Group CI Limited, which acted as investment manager to the Company until 27 January 2020 when Foresight Group LLP was appointed as Manager, earned fees of £2,175,000 (2019: £1,992,000) , Foresight Group LLP, who was appointed as Manager on 27 January 2020 earned fees of £3,000 up to 31 March 2020 (2019: nil). No performance fee was paid or accrued for the period (2019: nil).

Foresight Group LLP is the Company Secretary (appointed in November 2017) and received, directly and indirectly, for accounting and company secretarial services fees of £169,000 (2019: £166,000) during the year.

At the balance sheet date there was £nil (2019: £nil) due to Foresight Group CI Limited and £452,000 (2019: £nil) due from Foresight Group LLP as a management fee rebate. No amounts have been written off in the year in respect of debts due to or from related parties.

END