Foresight 4 VCT plc - Annual Financial Report

FORESIGHT 4 VCT PLC
Final Results
23 April 2021

Foresight 4 VCT plc, managed by Foresight Group LLP, today announces the final results for the nine month period to 31 December 2020.

These results were approved by the Board of Directors on 23 April 2021.

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

• During the period, the Company changed its accounting reference date from 31 March to 31 December for operational efficiency reasons. The Annual Report and Accounts are for the nine month period from 1 April 2020 to 31 December 2020.
• Total net assets £120.4 million.
• Net Asset Value per share increased by 11.3% from 55.8p at 31 March 2020 to 62.1p at 31 December 2020. Including the payment of a 2.8p dividend made on 28 August 2020, NAV total return per share at 31 December 2020 was 64.9p, representing a positive total return of 16.3%.
• The portfolio has seen an increase in valuation of £19.7 million during the period.
• Three new investments totalling c.£4.6 million and three follow-on investments totalling c.£1.9 million were made during the period.
• The Company exited its investment in The Naked Deli Ltd realising a total of £0.1 million.
• A dividend of 2.8p per share was paid on 28 August 2020 based on an ex-dividend date of 13 August 2020 and a record date 14 August 2020.

Chairman's statement
I am pleased to present the audited Annual Report and Accounts for the nine-month period to 31 December 2020. As announced in January 2021 the Board and the Manager changed the accounting reference date to 31 December for operational efficiency reasons.

MATERIAL EVENTS DURING THE PERIOD
Before providing other details, I would like to draw attention to a material event that occurred during the period being the continuing impact of Covid-19 on the Company and its portfolio.

The Covid-19 virus has presented the Company and the management of every one of its portfolio companies with unprecedented challenges which it is anticipated will persist for a considerable time to come. The Manager continues to work closely with the portfolio companies, attempting to minimise any adverse impact and it is a great credit to the quality of the management of the portfolio companies that the fallout from the pandemic has not been even more significant. Until this virus is brought under worldwide control, it is impossible to assess its full impact but challenges remain. However, it is already clear that the value of almost every business in the Company’s portfolio has been materially affected, a minority have benefitted but most have not.

At the end of March 2020 the Company held eight investments, representing some 16% by value of its investment portfolio, in businesses involved in the travel, retail, entertainment and food and drink sectors. To date these sectors are amongst those most hard hit by the provisions of the lockdown imposed by the UK Government in response to the Covid-19 virus. I am pleased to report that all the Company’s investments in these sectors are continuing to trade and, with one possible exception, they are already pursuing revised business strategies which hold the potential for a return to commercial viability in the short to medium term. It will, however, be some time before the value of most of these businesses is again at or above their pre-Covid levels.

The overall impact of the Covid pandemic could be seen in the material fall in the valuation of the Company’s portfolio at 31 March 2020. On a positive note, I can say that since March the trading position of many of these businesses has improved, resulting in a modest increase in portfolio value in the period to 31 December 2020. On behalf of the Board I would like to thank the Manager for the continued work alongside the management teams at each and every one of the companies within the portfolio.

PERFORMANCE AND PORTFOLIO ACTIVITY
During the period Net Asset Value per share increased by 11.3% from 55.8p at 31 March 2020 to 62.1p at 31 December 2020. Including the payment of a 2.8p dividend made on 28 August 2020, NAV total return per share at 31 December 2020 was 64.9p, representing a positive total return of 16.3%. This positive movement is a result of the strategy and business changes throughout the portfolio alluded to above.

During the period under review the Manager completed three new investments and three follow-on investments costing £4.6 million and £1.9 million respectively. The Board and the Manager are confident that a number of new investments can be achieved in the year ahead, particularly with the increased investment activity in the three months to 31 December 2020, which accounts for all of the new and follow on investments noted above. Details of each of these new portfolio companies can be found in the Manager’s Review.

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, it 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 2.8p per Share was declared on 6 August 2020 based on an ex-dividend date of 13 August 2020 and a record date of 14 August 2020. The dividend was paid on 28 August 2020.

As noted in the prior Annual Report and Accounts and 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.

Post period end the Board announced the Company’s successful sale of FFX Group Limited, one of the UK’s largest independent suppliers of high-quality power tools, fixings and building supplies. The transaction generated proceeds of £5.7 million at completion and the Company will receive up to £0.2 million of deferred consideration after 18 months subject to certain conditions, indicating a cash on cash return of 4.3x the initial investment of £1.4 million made in October 2015. On the basis of this successful exit, it is the intention of the Board to enhance the interim dividend planned in May 2021, compared to the level of dividend paid in 2020.

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. The Manager held an investor webinar in August 2020 and it is the intention of the Manager to hold further webinars in June and October of this year. Details of any future events will be communicated to investors.

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. As noted in the Half-Year report, the Board are delighted to announce that Gaynor Coley was appointed to the Board on 10 September 2020 and as Chair of the Audit Committee on 19 November 2020.

OUTLOOK
The persisting uncertainty over the full impact of Covid-19 and the ongoing changes related 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 help them progress during these testing times.

Until the pandemic is brought under worldwide control there will inevitably be further, mainly unhelpful, implications for many UK based businesses. Notwithstanding this, the Board and the Manager have been impressed by the resilience shown by the significant majority of the Company’s investments and are optimistic that the existing portfolio has potential to add value once the virus has been successfully contained.

ANNUAL GENERAL MEETING
The Company’s Annual General Meeting will take place on 7 July 2021 at 1.00pm. Please refer to the formal notice on page 74 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 guidelines in place.

Shareholders will note that it is proposed by resolution 11 to adopt new articles of association (“New Articles”). The key changes to the New Articles are to provide for the ability to hold virtual and hybrid general meetings. The Board wishes to note its preference is to hold AGMs by way of an open meeting and AGMs will only be held virtually where absolutely necessary.

Raymond Abbott
Chairman
23 April 2021

Manager's Review

Portfolio Summary
As at 31 December 2020 the Company’s portfolio comprised 36 investments with a total cost of £58.4 million and a valuation of £92.4 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 12 to 16 of the Annual Report and Accounts .

During the period, the value of investments held rose by £26.2 million, driven by deployment of £6.5 million into new and follow-on investments and an increase in the value of existing investments of £19.7 million. After a sharp drop in portfolio value in the quarter to March 2020 at the peak of uncertainty around Covid-19, the Company’s portfolio, in aggregate, has seen a recovery, as many of the portfolio companies have successfully navigated the new economic landscape, with some performing extremely strongly and some heavily impacted by Covid-19.

The investment team remain focused on supporting an annual dividend to shareholders of at least 5% of the NAV per share whilst retaining a stable NAV. The Company has made reasonable progress against these objectives in the period.

NEW INVESTMENTS
The Manager has taken a prudent approach to investing during 2020. Repeated lockdowns have made it challenging for the Investment Manager to meet prospective companies and their teams face to face, an important part of assessing investments and developing relationships with management teams. The continued economic uncertainty has also made ascertaining the underlying value and progress within a business difficult to assess, as many sectors have been affected by the pandemic. For much of the period there were fewer opportunities coming to market, with management teams focused on steering their businesses through economic uncertainty.

Despite these challenges, the Manager has continued to search for high quality businesses that have demonstrated resilience during Covid-19. As a result, three new investments were completed in December 2020, IMMJ Systems, a document management system serving the NHS and other healthcare providers, iMist, a manufacturer of fire suppression systems and Titania Group, a cybersecurity software business. Behind these, there is a strong pipeline of opportunities that the Manager expects to convert during 2021.

IMMJ SYSTEMS LIMITED
In December 2020 the Company made a c.£1.8 million investment into IMMJ Systems Limited, an innovative, electronic document management solution for the healthcare sector, serving NHS Trusts and private providers. Founded in 2015 by a team experienced in enterprise IT and NHS technology distribution, IMMJ developed MediViewer, software that addresses the challenge of digitising patient records and providing a single, easy access interface for clinical caregivers. The investment will enable IMMJ to scale the business through new hires in key functions such as operations, technology and account management, to support the expanding deployment of MediViewer.

IMIST LIMITED
In December 2020 the Company invested c.£1.6 million into iMist Holdings Limted, a manufacturer and installer of water mist fire protection systems for homes and residential buildings. iMist was founded in 2015 by Tony Sims who has over 20 years’ engineering experience. iMist has developed its own range of high-pressure water mist fire suppression systems. The proprietary solution offers a number of benefits over traditional fire sprinkler and lower pressure water mist products including more efficient use of water, ease of installation and cost effectiveness. The investment will drive further growth and development activities across the UK, on the back of the current regulatory opportunity.

TITANIA LIMITED
In December 2020, the Company invested c.£1.3 million into Titania Group Limited, a cybersecurity software business. Founded in 2009, Titania has grown substantially due to the success of its first product, Nipper, which automates the assessment of network devices to accurately identify vulnerabilities. The winner of multiple cybersecurity industry awards, Titania has over 1,000 customers globally. The investment will also be used to enhance sales and marketing efforts for Titania’s current suite of products.

FOLLOW ON INVESTMENTS
The Manager had expected that more portfolio companies would need additional capital to support them through difficult trading conditions resulting from the various lockdowns, driving an increase in follow-on investment. However the portfolio has remained relatively resilient, supported by increased monitoring and guidance to portfolio management teams by the Manager. The Manager has made follow-on investments into three companies during 2020, totalling £1.9 million.

Many companies used forms of Government support, such as the furlough scheme and the Coronavirus Business Interruption Loan Scheme, which reduced the need for additional equity injections in the period. However, as these schemes unwind and while the economic climate remains depressed, The Manager anticipates numerous requirements for follow-on investment in the coming months.

ROXY LEISURE LTD
During December 2020 the Company made a c.£1.0 million follow-on investment into Roxy Leisure, an entertainment bar group offering customers a variety of games such as pool and bowling. Roxy Leisure was performing extremely strongly prior to Covid-19 but has been affected by repeated lockdowns. The business will use funds to open new sites once restrictions ease, aiming to capitalise on increased consumer demand.

SPEKTRIX LIMITED
In December 2020, Spektrix a leading enterprise software solution for the UK and US arts sector encompassing ticketing, marketing, fundraising, analytics and customer relationship management, received a follow-on investment of c.£0.6 million from the Company. The investment will enable Spektrix to capitalise on new opportunities following the reopening of the arts sector.

ACCROSOFT LIMITED
Also in December 2020, the Company made a £0.3 million follow-on investment into Accrosoft, a software as a service company with two core products focusing on recruitment and parent-teacher-student communication. The investment will support the commercialisation of the school communications platform, with strong demand seen in the market due to the increased role of such technology while schools are closed because of Covid-19 restrictions.

PIPELINE
At 31 December 2020, the Company had cash in hand of £27.9 million, which will be used to fund new and follow-on investments, buybacks and running expenses. The Manager is seeing a recovery in the pipeline of potential investments and has a number of opportunities under exclusivity or in due diligence. The Company remains well positioned to continue pursuing these potential investment opportunities.

The onset of Covid-19 and the resulting economic downturn resulted in lower new investment activity in 2020. Depending on the length and severity of the Covid-19 outbreak and associated restrictions, the Manager expects to see a higher proportion of the Company’s deployment focused on follow-on investments in the short to medium term.

As the economy recovers from the worst effects of the pandemic, the Manager expects demand for funding to increase, driving some particularly interesting opportunities for investment.

EXITS AND REALISATIONS
Whilst the M&A climate has been challenging in the period, with most trade acquirers focused on their core business and private equity investors focused on their existing portfolios or on distressed acquisitions, the Manager is now seeing acquisition interest returning, particularly in the healthcare, technology and ecommerce sectors.

Fast casual and grab and go eateries have been particularly hard hit during the pandemic and to that end with the difficult market outlook as well as the remaining uncertainty around the business model, the Company realised its position in The Naked Deli, a healthy eating food chain, via an initial loan repayment of £0.1 million and the subsequent sale of share capital and loan note positions for £50k to the Company. The Naked Deli closed all its stores in line with government guidance in March and the outlook for this sector remains extremely challenging. There is uncertainty about town centre footfall, particularly for lunchtime trade, while employees are still working from home. In aggregate, The Naked Deli returned 0.2x money invested to the Company.

In contrast, post-period end, the Company successfully realised its position in FFX Group, one of the UK’s largest multi-channel, independent suppliers of high-quality power tools, fixings and building supplies. The transaction generated proceeds of £5.7 million at completion and the Company will receive up to £0.2 million of deferred consideration after 18 months subject to certain conditions, implying a cash on cash return of 4.3x the initial investment of £1.4 million made in October 2015, equivalent to an IRR of c.32%. During the investment period, FFX opened a new 60,000 sq ft distribution centre and a new head office in Kent. The business updated its brand and launched an extensive range of its own products. Since the Company’s investment, FFX has more than tripled revenues and increased headcount by over 125.

DISPOSALS IN THE NINE MONTH PERIOD TO 31 DECEMBER 2020

Company	Detail	Accounting cost at		Proceeds	Realised loss	Valuation at
		date of disposal		£	£	31 March 2020
		£				£
The Naked Deli	Full Disposal	669,000		46,065	(622,935)	-
Total disposals			669,000	46,065	(622,935)	-

KEY PORTFOLIO DEVELOPMENTS

Overall, the value of unquoted investments held rose by £26.2 million in the period, driven by deployment of £6.5 million and an increase in value of existing investments by £19.7 million. A disciplined approach to investment valuations has been maintained in light of Covid-19. In the quarter to March 2020, the onset of the Covid-19 pandemic drove significant economic uncertainty and the portfolio initially saw a substantial decrease in value of £20.6 million. In the following quarters, as the portfolio adapted to the new economic climate, fair values saw a recovery in aggregate. Material changes in valuation, defined as increasing or decreasing by £1.5 million or more since 31 March 2020, are detailed below. Updates on these companies are included below, or in the Top Ten Investments section on pages 12 to 16 of the Annual Report and Accounts.

Company	Valuation Methodology	Valuation Change (£)
Biofortuna limited	Discounted revenue multiple	6,183,364
Innovation Consulting Group Limited	Discounted earnings multiple	2,903,349
FFX Group Limited	Offer proceeds	2,424,678
Procam Television Holdings Limited	Discounted earnings multiple	2,314,634
Hospital Services Group Limited	Discounted earnings multiple	1,666,181
Datapath Group Limited	Discounted earnings multiple	1,546,422
Ixaris Group Holdings Limited	Discounted revenue multiple	(2,573,874)

PROCAM TELEVISION HOLDINGS LIMITED
Procam is a broadcast hire company, supplying equipment and crew for location TV and film production and also has a division (True Lens Services) focused on the manufacture and maintenance of camera lenses. During Covid-19, Procam’s rental business had to largely close due to the halting of television and film production. Conversely, its True Lens Services division continued to trade positively, back to pre-Covid-19 levels. As challenging trading conditions continued, Procam required a formal restructuring and the Company supported a sale of the trade and assets of Procam’s rental division and spun out its True Lens Service division into a separate company, supporting a substantial recovery in value. The basis of the Procam valuation reflects the loan note value and accrued interest attributable to the Company.

IXARIS GROUP HOLDINGS LIMITED
Ixaris is a payments platform enabling efficient global payments, targeted in particular at the travel sector. The business has seen a severe downturn in trading due to the collapse of the travel sector in the wake of the pandemic. There remains significant uncertainty about when worldwide travel might resume. The Manager has engaged a new chair with extensive industry experience who has made a material contribution to improving the company’s prospects since joining in December.

Outlook
On 22 February 2021, Prime Minister Boris Johnson outlined the planned route out of lockdown for businesses in England, culminating in the lifting of all social restrictions on 21 June 2021 if circumstances allow. Businesses of all sizes have faced a very testing 12 months, not least with the stop-start dynamic of multiple lockdowns, therefore the Prime Minister’s political commitment to an ‘irreversible’ ending of lockdown is welcomed, along with the extended support of the Coronavirus Job Retention Scheme. It is vital that SMEs are supported through the full reopening of UK’s economy in order to rebuild consumer and business confidence and to enable our retail, hospitality, cultural, leisure and tourism sectors to get back to business. Most businesses had fully reopened after the first lockdown by September 2020, with the Manager supporting its portfolio through a transition to the ‘new normal’. During the November and current lockdowns, the Manager acted quickly to administer the same ‘toolbox’ of support for the portfolio companies as in the first lockdown, to guide and prepare them for a prolonged period of uncertainty. The Investment Manager has also been working with companies to revise business plans and budgets to manage creditor stretch and debt build-up, and to prepare them for a reduction of Government support. The Manager is ensuring that finance directors at the portfolio companies continue to tightly manage overheads, reduce capital expenditure and work through longer-term cost reduction plans given the uncertain macro environment. It is important that management teams and investors are well prepared for a sustained period of weaker consumer and business demand as consumers and businesses adapt to the ‘new normal’.

While Covid-19 has brought unprecedented disruption, it has also prompted many organisations to reassess their business models and take action to adapt to a new economic landscape. A number of the Manager’s portfolio companies have used this as an opportunity to review their overall strategy, venture into a new market or launch a new product or service. For example, to supplement lost revenues from their core business some portfolio companies have procured and provided PPE or other protective equipment, such as hand sanitising stations or screens. Healthcare and life science investments have also contributed to national efforts to defeat the virus by manufacturing Covid-19 testing kits. An example of this is portfolio company Mologic, which received a grant of c.£1m to fund Covid related lateral flow diagnostics development. Fellow portfolio company Biofortuna, another diagnostics company, has successfully won contracts to manufacture millions of Covid-19 PCR testing kits for others.

Some of the portfolio companies used this time as an opportunity to improve online activity and have seen an uptick in revenues as a consequence. With the trend towards ecommerce accelerating during Covid-19, retail businesses will need to continue embracing this channel fully and make it a core part of the overall growth strategy. The Manager is working closely with portfolio companies to ensure they are well-positioned to capitalise on this opportunity.

A proportion of the portfolio companies are particularly at risk due to the sectors they operate in, such as travel, hospitality and leisure. Many of these businesses are now stuck in a prolonged period of closures with anticipated re-opening in the next few months. The Manager is working closely with these businesses, paying particular attention to managing creditors and cash preservation. It is important to highlight that some of the Company’s leisure investments demonstrated market leading site metrics pre- Covid and will have the ability to weather this temporary period of reduced trading. Once reopened, even with capacity limitations, the Manager expects several of these leisure businesses to return to profit and cash generation, thanks to a loyal customer base and favourable customer demographic.

Beyond Covid-19, another factor providing economic uncertainty was Brexit, with the Brexit transition period coming to an end on 31 December 2020. The Manager has worked closely with portfolio companies to prepare them to the extent possible. Thanks to the diverse nature of businesses in the portfolio, with a combination of businesses which really focus on the domestic UK market and some that export and source worldwide, the Manager remains confident that the Company is well-positioned to endure potential volatility.

Notwithstanding this uncertain economic backdrop, the Manager continues to see encouraging levels of activity from smaller UK companies seeking growth capital. The Investment Manager expects this to increase as companies begin to recover from the impact of Covid-19, with requirements for permanent funding to working capital. VCTs are still viewed by many entrepreneurs as an attractive source of capital that provide 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 capital, including the government measures for supporting businesses during Covid-19. Despite the current challenges of 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
23 April 2021

Audited Income Statement
for the nine months ended 31 December 2020

		Nine months ended			Year ended
		31 December 2020			31 March 2020
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Investment holding gains/ (losses)		-	20,372	20,372	-	(11,081)	(11,081)
Realised losses on investments			(623)	(623)		(5,251)	(5,251)
Income		67	-	67	3,673	-	3,673
Investment management fees		(434)	(1,301)	(1,735)	(545)	(1,633)	(2,178)
Other expenses		(490)	-	(490)	(594)	-	(594)
(Loss)/ profit on ordinary activities before taxation		(857)	18,448	17,591	2,534	(17,965)	(15,431)
Taxation		-	-	-	-	-	-
(Loss)/ profit on ordinary activities after taxation		(857)	18,448	17,591	2,534	(17,965)	(15,431)
(Loss)/ profit per share:		(0.4)p	9.5p	9.1p	1.3p	(9.2)p	(7.9)p

The total column of this statement is the profit and loss account of the Company and the revenue and capital columns represent supplementary information.

All revenue and capital items in the above Income Statement are derived from continuing operations. No operations were acquired or discontinued in the period.

The Company has no recognised gains or losses other than those shown above, therefore no separate statement of total 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 58 to 73 of the Annual Report and Accounts form part of these financial statements.

Audited Reconciliation of Movements in Shareholders' Funds

Nine months ended 31 December 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 2020	1,948	79,443	503	63,127	(49,990)	13,669	108,700
Share issues in the period*	11	578	-	-	-	-	589
Expenses in relation to share issues**	-	(28)	-	-	-	-	(28)
Repurchase of shares	(20)	-	20	(1,085)	-	-	(1,085)
Cancellation of share premium	-	(12,535)	-	12,535	-	-	-
Realised losses on disposal of investments	-	-	-	-	(623)	-	(623)
Investment holding gains	-	-	-	-	-	20,372	20,372
Dividends paid	-	-	-	(5,413)	-	-	(5,413)
Management fees charged to capital	-	-	-	-	(1,301)	-	(1,301)
Revenue loss for the period	-	-	-	(857)	-	-	(857)
As at 31 December 2020	1,939	67,458	523	68,307	(51,914)	34,041	120,354

*relating to the dividend investment scheme.

** Expenses in relation to share issues relate to trail commission for prior years’ fund raising.

^Reserve is available for distribution, total distributable reserves at 31 December 2020 are £16,393,000 (31 March 2020: £13,137,000).

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 58 to 73 of the Annual Report and Accounts form part of these financial statements.

Audited Balance Sheet
at 31 December 2020                                                                                        Registered number: 03506579

		As at 31 December 2020 £’000	As at 31 March 2020 £’000
Fixed assets
Investments held at fair value through profit or loss		92,441	66,206
Current assets
Debtors		162	726
Cash and cash equivalents		27,862	41,872
		28,024	42,598
Creditors
Amounts falling due within one year		(111)	(104)
Net current assets		27,913	42,494
Net assets		120,354	108,700
Capital and reserves
Called-up share capital		1,939	1,948
Share premium account		67,458	79,443
Capital redemption reserve		523	503
Special distributable reserve		68,307	63,127
Capital reserve		(51,914)	(49,990)
Revaluation reserve		34,041	13,669
Equity shareholders’ funds		120,354	108,700
Net asset value per share:
		62.1p	55.8p

The financial statements were approved by the Board of Directors and authorised for issue on 23 April 2021 and were signed on its behalf by:

Raymond Abbott
Chairman
23 April 2021

The notes on pages 58 to 73 of the Annual Report and Accounts form part of these financial statements.

Audited Cash Flow Statement
for the nine months ended 31 December 2020

	Nine months ended	Year ended
	31 December 2020	31 March 2020
	£'000	£'000
Cash flow from operating activities
Loan interest received on investments	136	559
Dividends received from investments	-	2,835
Deposit and similar interest received	28	238
Investment management fees paid	(1,283)	(2,579)
Secretarial fees paid	(119)	(169)
Other cash payments	(349)	(418)
Net cash (outflow)/ inflow from operating activities	(1,587)	466
Cash flow from investing activities
Purchase of investments	(6,532)	(8,361)
Net proceeds on sale of investments	46	434
Net proceeds on deferred consideration	-	31
Net cash outflow from investing activities	(6,486)	(7,896)
Cash flow from financing activities
Proceeds of fund raising	-	25,586
Expenses of fund raising	(28)	(336)
Repurchase of own shares	(1,085)	(2,067)
Equity dividends paid	(4,824)	(7,066)
Net cash (outflow)/ inflow from financing activities	(5,937)	16,117
Net (outflow)/ inflow of cash for the year	(14,010)	8,687
Reconciliation of net cash flow to movement in net funds
(Decrease)/ Increase in cash and cash equivalents for the year	(14,010)	8,687
Net cash and cash equivalents at start of year	41,872	33,185
Net cash and cash equivalents at end of year	27,862	41,872

Analysis of changes in net debt	At 1 April 2020 £’000	Cash flow £’000	At 31 December 2020 £’000
Cash and cash equivalents	41,872	(14,010)	27,862

The notes on pages 58 to 73 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 nine months ended 31 December 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 nine month period ended 31 December 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 nine months ended 31 December 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 period end of £120,354,000 (31 March 2020: £108,700,000) and on 193,859,213 (31 March 2020: 194,826,224) shares, being the number of shares in issue at that date.
5.    Return per share

	Nine months ended 31 December 2020 £’000	Year ended 31 March 2020 £’000
Total profit/ (loss) after taxation	17,591	(15,431)
Total profit/ (loss) per share (note a)	9.1p	(7.9)p
Revenue (loss)/profit from ordinary activities after taxation	(857)	2,534
Revenue (loss)/profit per share (note b)	(0.4)p	1.3p
Capital profit/ (loss) from ordinary activities after taxation	18,448	(17,965)
Capital profit/ (loss) per share (note c)	9.5p	(9.2)p
Weighted average number of shares in issue in the year	194,099,123	195,581,908

Notes:

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

6. Annual General Meeting

The Company’s Annual General Meeting will take place on 7 July 2021 at 1:00pm. In light of the continuing Covid-19 situation, the meeting will be held by way of a closed meeting and shareholders will not be permitted to attend. Shareholders will, however, be able to attend virtually, but will not be able to vote on the resolutions at the Annual General Meeting. Please refer to the formal notice on page 74 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

	Nine Months ended 31 December 2020 £’000	Year ended 31 March 2020 £’000
Loan stock interest	19	597
Dividends receivable	-	2,835
Deposit and similar interest received	28	241
Other Income	20	-
	67	3,673

8. Investments held at fair value through profit or loss

		31 December 2020 £’000	31 March 2020 £’000
Unquoted investments		92,441	66,206
		92,441	66,206

			£’000
Book cost as at 1 April 2020			52,537
Investment holding gains			13,669
Valuation at 1 April 2020			66,206
Movements in the period:
Purchases at cost			6,532
Disposal proceeds			(46)
Realised losses			(623)
Investment holding gains			20,372
Valuation at 31 December 2020			92,441
Book cost at 31 December 2020			58,400
Investment holding gains			34,041
Valuation at 31 December 2020			92,441

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 LLP earned fees of £1,735,000 in the nine month period to 31 December 2020 (31 March 2020: £3,000. Prior to this Foresight Group CI Limited acted as investment manager until 27 January 2020: £2,175,000). No performance fee was paid or accrued for the period (31 March 2020: 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 £119,000 (31 March 2020: £169,000) during the period.

At the balance sheet date there was £nil due to or from Foresight Group LLP (31 March 2020: £452,000 due from Foresight Group LLP). No amounts have been written off in the period in respect of debts due to or from related parties.

END