Foresight Enterprise VCT plc - Unaudited Half-y...

Foresight Enterprise VCT plc - Unaudited Half-yearly Financial Report

FORESIGHT ENTERPRISE VCT PLC
LEI: 213800MWJNR3WZZ3ZP42

UNAUDITED HALF-YEARLY FINANCIAL REPORT
FOR THE PERIOD ENDED 30 JUNE 2022

FINANCIAL HIGHLIGHTS

Total net assets £134.8 million
An interim dividend of 3.5p per share was paid on 30 June 2022, returning £6.9 million to Shareholders
The portfolio value has increased by £4.6 million in the last six months
Net Asset Value per share decreased by 2.3% in the period from 69.1p at 31 December 2021 to 67.5p at 30 June 2022
Including the payment of a 3.5p dividend made on 30 June 2022, NAV Total Return per share at 30 June 2022 was 71.0p, representing a positive total return of 2.7% 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 2022.

The business environment remains challenging after the substantial impact of the COVID-19 pandemic receded, with the war in Ukraine, supply chain issues, rapidly rising inflation and energy prices and the threat of recession looming. I believe that the careful planning, help and advice the Manager provided the portfolio companies during the pandemic will continue to be relevant to the current and future economic situations. While there will be bumps in the road, the Board believes that the portfolio is in good shape to withstand what we currently see ahead.

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

Continued enhancement of Net Asset Value Total Return 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 of that financial year
Implementation of a significant number of new and follow-on qualifying investments every year
Maintaining a programme of regular share buybacks

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 69.1p at 31 December 2021 to 67.5p at 30 June 2022. After adding back the payment of a 3.5p dividend made on 30 June 2022, NAV Total Return per share at 30 June 2022 was 71.0p, representing a positive total return of 2.7%.

During the period, the Manager completed new investments of £1.6 million into SO-SURE Limited and £1.1 million into HomeLink Healthcare Limited. The Manager also completed one follow-on investment costing £0.5 million into Rovco Limited. Additionally, the Manager disposed of two investments, TFC Europe Limited and Codeplay Software Limited, generating proceeds of £19.7 million with a further £0.4 million of deferred consideration included within debtors at the period end.

After the period end, new investments of £1.8 million and £2.5 million were made into Strategic Software Applications Ltd and Copptech UK Limited respectively. Additionally, a further follow-on investment of £0.7 million was made into Hexarad Group Limited.

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 in the Unaudited Half-Yearly Financial Report.

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. Following the successful realisations of TFC Europe Limited and Codeplay Software Limited in June 2022, the Company is in a position to fully support the portfolio, where appropriate, and exploit potential attractive investment opportunities.

The January 2022 offer is due to close on 30 September 2022 having raised gross funds of £5.3 million to date. We would like to thank those existing Shareholders who have supported this offer and welcome all new Shareholders to the Company. The Board is also pleased to announce that a new offer for subscription is due to be launched in mid-October 2022, providing Shareholders and new investors with a further opportunity to invest in the Company and benefit from the VCT tax reliefs available to qualifying investors.

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, these portfolio companies are assessed and progress measured against these principles. More detailed information about the process can be found on page 24 of the Manager’s Review in the Unaudited Half-Yearly Financial Report.

Dividends
An interim dividend of 3.5p per share was declared on 27 May 2022 based on an ex-dividend date of 16 June 2022 and a record date of 17 June 2022. The dividend was paid on 30 June 2022.

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% over the medium term, subject to market conditions.

Shareholder communication
We were delighted to meet once again with some Shareholders in person at the AGM on 9 June 2022, having long been unable to do so as a result of the travel restrictions due to COVID-19. Following the disappointing remote attendance at the hybrid event, the Board will be reverting to an in person event only in the future. The Manager is hoping to reintroduce in-person investor forum events in the winter, which have proven popular with our Shareholders in the past.

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.

Outlook
As mentioned in my introduction, while the impact of the pandemic has lessened, other economic impacts are being seen after Russia invaded Ukraine, including, but not limited to, the significant rise in energy prices, rapid inflation, the cost of living crisis and the potential for a global recession. Supply chains remain under pressure post Brexit and pandemic, and after the Russian invasion, such issues are unlikely to be resolved soon. While the Company’s portfolio has not been materially exposed to either Russia or Ukraine, it is very likely that the economic impacts we are currently experiencing will raise issues and concerns for the individual investee company management teams and the Manager.

However, 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 portfolio is well diversified in terms of sector, size and number and the Manager’s approach through the pandemic will continue to be valuable to tackle the challenges ahead.

The Company is well positioned to continue to support the portfolio and the fundraising that we are making will also provide the opportunity to seek new investments and take advantage of the opportunities that will emerge from the current economic situation.

To date, the impact of both the economic and geopolitical landscapes have not been considered material to the overall portfolio. This can be seen in the positive NAV Total Return of 2.7% in the period which includes the 3.5p dividend that was paid on 30 June 2022.

Raymond Abbott
Chair
30 September 2022

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 2022, the Company’s portfolio comprised 39 investments with a total cost of £65.4 million and a valuation of £103.4 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 16 to 20 in the Unaudited Half-Yearly Financial Report.

During the six months to 30 June 2022, the value of the portfolio reduced by £11.9 million as a result of £19.7 million of successful realisations, partially offset by new investments of £3.2 million and an increase in the value of the investments of £4.6 million. The Company’s portfolio continues to recover following the impact of COVID-19 over the past 24 months. Many of the portfolio companies have successfully navigated the new economic landscape, with some 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 NAV per share per annum based on the opening NAV of that financial year. The Company has so far achieved this target for the current year and this objective remains the Manager’s focus.

New investments
Since COVID-19 restrictions eased, there has been a shift towards more in-person events and meetings, and whilst not yet back to pre-pandemic levels, it is now easier for the private equity team to meet prospective companies and their teams face to face. This is an important part of assessing investments and developing relationships with management teams and other members of the local investment community. The Manager and SMEs have adjusted to this new landscape given companies still wish to grow their businesses and act on opportunities as they arise. The Manager continued to meet new companies and advisers throughout the period and build its reputation in each of the regions it operates in.

Two new investments were completed in the six months to 30 June 2022. 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 2022.

HomeLink Healthcare Limited
In March 2022, the Company invested £1.1 million of growth capital into HomeLink, a specialist provider of clinical services to patients in their own homes, alleviating pressure on the NHS, freeing up vital bed space, saving time and reducing costs. The investment will be used to consolidate HomeLink’s position as a first mover in a sizeable and growing market.

SO-SURE Limited
In May 2022, the Company invested £1.6 million into SO-SURE, a digital insurance platform for consumer mobile phones and home contents. The investment will be used to scale up operations and extend the product range, which has shown great potential beyond the existing lines.

Strategic Software Applications Ltd
Post period end, in August 2022, the Company invested £1.8 million of growth capital into Strategic Software Applications, previously referred to as Axiom HQ but now trading as Ruleguard, a SaaS technology provider supporting regulatory compliance for financial institutions. The investment will be used to help the business maximise opportunities as its target market grows in line with the adoption of specialised technology as a result of increasing regulatory complexity.

Copptech UK Limited
Also in August 2022, the Company invested £2.5 million of growth capital into Copptech UK, an innovative anti-microbial technology company that uses a patented microparticle in polymers, plastics and building materials to kill bacteria, fungi and viruses on contact. The investment will be used to help the business grow sales and market presence in new geographies.

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, with an active management style to ensure risks are identified and mitigated early.

The Company made one follow-on investment in the period, totalling £0.5 million, to support further growth opportunities. Further details are provided below.

Rovco Ltd
In March 2022, Rovco, a developer of 3D computer vision and AI technology for streamlining and ultimately automating the monitoring and management of marine infrastructure, received a £0.5 million follow-on investment from the Company as part of a £15.3 million funding round. The investment will be used to support the growing working capital needs in the contract business as well as the expansion of Rovco’s commercial, operational and technological capabilities.

Hexarad Group Limited
Post period end, the Company completed a £0.7 million investment into Hexarad as part of a £2.1 million funding round. Hexarad is a high-growth healthcare technology company, delivering teleradiology services to NHS and private healthcare customers. It gives healthcare providers access to faster diagnosis of medical images (CT, MRI and X-Ray), using proprietary allocation tools to distribute scans to a pool of remote radiologists.

Pipeline
At 30 June 2022, the Company held cash of £25.7 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
The M&A climate has remained buoyant during the period but it may be cooling. In June 2022, the Company successfully realised investments in Codeplay Software Limited and TFC Europe Limited.

Codeplay is one of the leading solutions providers to the semiconductor industry. During the investment period, the Manager helped the business reframe its strategy to offer a suite of services rather than standalone products, which made it an important player in an ecosystem of high-performance computing. It evolved its technology and developed new routes to market.

The Manager also introduced a chairperson and through the Manager's joint venture with Williams Advanced Engineering, the business was able to access the automotive market. The business was sold to a leading computer chip developer in a transaction that generated proceeds of £4.3 million at completion, an exceptional return on an investment of £0.3 million.

The sale of industrial fastener products supplier TFC generated proceeds of £15.4 million, another strong performance. Since the original investment, the Company helped to extend TFC’s network in the UK and Germany.

TFC also rapidly expanded its vendor managed inventory service, growing the customer base, so it now provides a market-leading service to SMEs and international global businesses operating across a range of industries. The Company supported three acquisitions as well as considerable investment in new and existing facilities, opening new sites in England, Northern Ireland and Europe.

Disposals in the period ended 30 June 2022

		Accounting			Valuation at
		cost at date		Realised	31 December
		of disposal	Proceeds	gain	2021
Company	Detail	(£)	(£)	(£)	(£)
TFC Europe Limited	Full disposal	2,149,307	15,407,883	13,258,576	10,330,550
Codeplay Software Limited	Full disposal	300,000	4,300,599	4,000,599¹	1,697,425
		2,449,307	19,708,482	17,259,175	12,027,975

A further £411,936 of deferred consideration has been reflected in the accounts.

Key portfolio developments
In the first six months of the year, the portfolio has shown further recovery, which started in the second half of 2021, as businesses adapt to the new economic climate.

The value of investments held reduced by £11.9 million in the six months to 30 June 2022, driven largely by realisations of £19.7 million, offset partially by deployment of £3.2 million and an increase in the value of existing investments of £4.6 million.

Material changes in valuation, defined as increasing or decreasing by £1.0 million or more since 31 December 2021, are detailed below. Updates on these companies are included in the Top Ten Investments section on pages 16 to 20 in the Unaudited Half-Yearly Financial Report.

Key valuation changes in the period

		Valuation
Company	Valuation (£)	change (£)
Hospital Services Group Limited	6,864,934	1,188,621
Biofortuna Ltd	3,580,838	(2,011,013)
Innovation Consulting Group Limited	5,104,469	(2,025,094)
Datapath Group Limited	10,671,763	(3,491,763)

Outlook
The global and UK markets have experienced a volatile past 12 months following a strong recovery in consumer and business demand after the COVID-19 pandemic. At the same time, supply chains remained constrained by continued lockdowns in China and Europe and the cautious return of labour to the UK workforce, as lockdowns and furlough schemes altered people’s working patterns. All these factors began to drive price inflation in late 2021 – a symptom that was further compounded by the war in Ukraine – causing the prices of gas, electricity, precious metals and food, amongst other commodities, to soar in Q1 2022.

The Bank of England responded by raising the base interest rate from 0.1% in December 2021 to 2.25% in September 2022 to help reduce inflation, which has increased from 7.5% in December 2021 to 12.3%¹ by August 2022 and most analysts expect further increases to both inflation and interest rates in the medium term. The Bank of England now forecasts that the UK will enter a recession later in 2022.

Despite this backdrop, the Company’s portfolio is well positioned to withstand the market volatility. 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. Over the past 12 months, the portfolio continued to perform well, with the Company realising five 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 Codeplay, an Edinburgh-based software tool developer, to a US corporate buyer delivering an impressive 16.1x return, and the sale of TFC, an East Sussex distributor of specialist fixings and industrial fasteners, that generated a 12.6x return on investment. The current portfolio has a good mix of earlier stage and more mature investments, which are expected to generate both income and capital returns for investors 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
on behalf of Foresight Group LLP
30 September 2022

Bank of England, RPI December 2021 to August 2022 www.ons.gov.uk/economy/inflationandpriceindices/timeseries/czbh/mm23

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 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 2021. A detailed explanation can be found on pages 36 to 37 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 has been a further change to the fundamental nature of these risks since the previous report, given prolonged market volatility over the previous 12 months. While there was a strong recovery in consumer and business demand after the COVID-19 pandemic, supply chains have remained constrained by the Brexit transition period, continued lockdowns in China and Europe and the change in working patterns of the UK workforce post-COVID-19. All these factors began to drive price inflation in late 2021, a symptom that was further compounded by Russia’s invasion of Ukraine, causing the prices of gas, electricity, precious metals and food, amongst other commodities, to soar in Q1 2022. 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 to the best extent 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:

a)   The summarised set of financial statements has been prepared in accordance with FRS 104
b)   The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year)
c)   The summarised set of financial statements gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company as required by DTR 4.2.4R
d)   The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties’ transactions and changes therein)

Going concern
The Company’s business activities, together with the factors likely to affect its future development, performance and position, are set out in the Strategic Report of the Annual Report. The financial position of the Company, its cash flows, liquidity position and borrowing facilities are described in the Chair’s Statement, Strategic Report and Notes to the Accounts of the 31 December 2021 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 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
30 September 2022

UNAUDITED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2022

	Six months ended			Six months ended			Year ended
	30 June 2022			30 June 2021			31 December 2021
	(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	—	17,283	17,283	—	4,280	4,280	—	5,763	5,763
Investment holding (losses)/gains	—	(12,158)	(12,158)	—	8,253	8,253	—	17,449	17,449
Income	264	—	264	190	—	190	1,408	—	1,408
Investment management fees	(332)	(995)	(1,327)	(290)	(871)	(1,161)	(604)	(1,812)	(2,416)
Other expenses	(309)	—	(309)	(291)	—	(291)	(627)	—	(627)
(Loss)/return on ordinary activities before taxation	(377)	4,130	3,753	(391)	11,662	11,271	177	21,400	21,577
Taxation	—	—	—	—	—	—	—	—	—
(Loss)/return on ordinary activities after taxation	(377)	4,130	3,753	(391)	11,662	11,271	177	21,400	21,577
(Loss)/return per share	(0.2)p	2.1p	1.9p	(0.2)p	6.0p	5.8p	0.1p	11.1p	11.2p

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 2022

	Called-up	Share	Capital	Special
	share	premium	redemption	distributable	Capital	Revaluation
	capital	account	reserve	reserve¹	reserve¹	reserve	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
As at 1 January 2022	1,928	52,996	549	74,246	(47,963)	51,490	133,246
Share issues in the period	76	5,219	—	—	—	—	5,295
Expenses in relation to share issues	—	(147)	—	—	—	—	(147)
Repurchase of shares	(8)	—	8	(487)	—	—	(487)
Realised gains on disposal of investments	—	—	—	—	17,283	—	17,283
Investment holding losses	—	—	—	—	—	(12,158)	(12,158)
Dividends paid	—	—	—	(6,903)	—	—	(6,903)
Management fees charged to capital	—	—	—	—	(995)	—	(995)
Revenue loss for the period	—	—	—	(377)	—	—	(377)
As at 30 June 2022	1,996	58,068	557	66,479	(31,675)	39,332	134,757

Reserve is available for distribution, total distributable reserves at 30 June 2022 are £34,804,000 (31 December 2021: £26,283,000).

UNAUDITED BALANCE SHEET
AT 30 JUNE 2022

Registered number: 03506579

	As at	As at	As at
	30 June	30 June	31 December
	2022	2021	2021
	(Unaudited)	(Unaudited)	(Audited)
	£’000	£’000	£’000
Fixed assets
Investments held at fair value through profit or loss	103,365	104,338	115,238
Current assets
Debtors	5,836	149	1,028
Cash and cash equivalents	25,730	19,258	17,113
Total current assets	31,566	19,407	18,141
Creditors
Amounts falling due within one year	(174)	(214)	(133)
Net current assets	31,392	19,193	18,008
Net assets	134,757	123,531	133,246
Capital and reserves
Called-up share capital	1,996	1,938	1,928
Share premium account	58,068	68,344	52,996
Capital redemption reserve	557	539	549
Special distributable reserve	66,479	58,921	74,246
Capital reserve	(31,675)	(48,505)	(47,963)
Revaluation reserve	39,332	42,294	51,490
Equity Shareholders’ funds	134,757	123,531	133,246
Net Asset Value per share	67.5p	63.8p	69.1p

UNAUDITED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2022

	Six months	Six months	Year
	ended	ended	ended
	30 June	30 June	31 December
	2022	2021	2021
	(Unaudited)	(Unaudited)	(Audited)
	£’000	£’000	£’000
Cash flow from operating activities
Loan interest received from investments	193	205	346
Dividends received from investments	26	21	1,022
Deposit and similar interest received	19	1	2
Investment management fees paid	(1,330)	(1,161)	(2,416)
Secretarial fees paid	(83)	(79)	(161)
Other cash payments	(191)	(216)	(447)
Net cash outflow from operating activities	(1,366)	(1,229)	(1,654)
Cash flow from investing activities
Purchase of investments	(3,202)	(5,087)	(13,163)
Net proceeds on sale of investments	15,408	5,652	12,700
Net proceeds on deferred consideration	24	—	—
Net cash inflow/(outflow) from investing activities	12,230	565	(463)
Cash flow from financing activities
Proceeds of fundraising	4,469	—	—
Expenses of fundraising	(98)	(32)	(36)
Repurchase of own shares	(525)	(756)	(1,444)
Equity dividends paid	(6,093)	(7,152)	(7,152)
Net cash outflow from financing activities	(2,247)	(7,940)	(8,632)
Net inflow/(outflow) of cash in the period	8,617	(8,604)	(10,749)
Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash and cash equivalents for the period	8,617	(8,604)	(10,749)
Net cash and cash equivalents at start of period	17,113	27,862	27,862
Net cash and cash equivalents at end of period	25,730	19,258	17,113

Analysis of changes in net debt

	At 1 January		At 30 June
	2022	Cash flow	2022
	£’000	£’000	£’000
Cash and cash equivalents	17,113	8,617	25,730

NOTES TO THE UNAUDITED HALF-YEARLY RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2022

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 2021. Unquoted investments have been valued in accordance with IPEV Valuation Guidelines.

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 2022 and 30 June 2021 has been neither audited nor formally reviewed. Statutory accounts in respect of the year ended 31 December 2021 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 2021 have been reported on by the Company’s auditors or delivered to the Registrar of Companies.

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.

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 2022	£134,757,000	199,590,704
30 June 2021	£123,531,000	193,758,305
31 December 2021	£133,246,000	192,806,963

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 2022	195,162,969
Six months ended 30 June 2021	193,660,150
Year ended 31 December 2021	193,445,500

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

Income

	Six months	Six months
	ended	ended	Year ended
	30 June	30 June	31 December
	2022	2021	2021
	£’000	£’000	£’000
Loan stock interest	207	168	381
Dividends receivable	38	21	1,025
Deposit and similar interest received	19	1	2
Total income	264	190	1,408

Investments held at fair value through profit or loss

	£’000
Book cost as at 1 January 2022	64,626
Investment holding gains	50,612
Valuation at 1 January 2022	115,238
Movements in the period:
Purchases at cost	3,202
Disposal proceeds¹	(19,708)
Realised gains²	17,259
Investment holding losses³	(12,626)
Valuation at 30 June 2022	103,365
Book cost at 30 June 2022	65,379
Investment holding gains	37,986
Valuation at 30 June 2022	103,365

The Company generated £19,708,000 from the disposal of investments during the period. Proceeds of £4,301,000 million from the Codeplay Software Limited disposal were received post period end in early July 2022 and are shown in debtors as at the date of this report. The book cost of these investments when they were purchased was £2,449,000. 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.
Realised gains in the Income Statement includes deferred consideration of £23,000 received from Accrosoft Limited and £1,000 from Hallmarq Veterinary Imaging Limited in the period.
Investment holding losses in the Income Statement include the deferred consideration debtor increase of £468,000. The debtor movement reflects the recognition of amounts receivable from Codeplay Software Limited (£412,000) and FFX Group Limited (£79,000), offset by a receipt from Accrosoft Limited (£23,000).

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.

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 £1,327,000 (30 June 2021: £1,161,000; 31 December 2021: £2,416,000) were purchased by the Company from Foresight Group LLP.

During the period, administration services of a total cost of £83,000 (30 June 2021: £79,000; 31 December 2021: £161,000) were delivered to the Company by Foresight Group LLP, Company Secretary.

At 30 June 2022, the amount due to Foresight Group LLP was £43,000 (30 June 2021: £nil; 31 December 2021: £nil).

END

For further information, please contact:

Company Secretary
Foresight Group LLP
Contact: Gary Fraser Tel: 0203 667 8100

Investor Relations
Foresight Group LLP
Contact: Ellie Kakoulli Tel: 0203 667 8181