Foresight Solar & Technology VCT plc - Half-yea...

FORESIGHT SOLAR & TECHNOLOGY VCT PLC

LEI: 21380013CXOR8N6OD977

Financial Highlights

• Ordinary Shares Total Net Assets as at 30 September 2021: £29.5m
• Ordinary Shares Net Asset Value per share as at 30 September 2021: 85.4p
• Foresight Williams Technology Shares Total Net Assets as at 30 September 2021: £12.8m
• Foresight Williams Technology Shares Net Asset Value per share as at 30 September 2021: 97.0p

Ordinary Shares Fund

• Net Asset Value per Ordinary Share at 30 September 2021 was 85.4p, representing an increase of almost 25% from the Net Asset Value per Ordinary Share of 68.9p as at 31 March 2021, following a rebound in market power prices forecast by the energy industry’s independent, external modelling agencies and strong performance in the underlying portfolio.
• At 30 September 2021, the fund held positions in 11 UK solar assets, with a total installed capacity of 69.7MW.
• As we are now approaching the end of the minimum 5-year holding period for all shareholders in the Ordinary Share class, the Board and the Investment Manager have recently commenced the planned process of solar asset realisation with the objective to return value to all O shareholders.

Foresight Williams Technology Shares Fund

• Net Asset Value per FWT Share at 30 September 2021 was 97.0p (31 March 2021: 98.0p).
• During the period, under the Offer for subscription for the Foresight Williams Technology Shares fund (the “FWT Shares fund”), dated 30 December 2020, £3.2m of new funds were raised.
• During the period, the fund invested in six new portfolio companies as well as executed a follow on investment into Additive Manufacturing Technologies Limited.
• Since the end of the reporting period, a further £1.7m has been raised, bringing the total funds raised to £14.9m.
• Since the end of the reporting period, a further investment was made, bringing total deployment to £5.9m.

Dividend History

Ordinary Shares

Date	Dividend per share
25 September 2020	2.0p
22 November 2019	3.0p
26 April 2019	3.0p
23 November 2018	3.0p
27 April 2018	3.0p
24 November 2017	3.0p
7 April 2017	3.0p
18 November 2016	3.0p
8 April 2016	3.0p
13 November 2015	3.0p
10 April 2015	3.0p
14 November 2014	3.0p
4 April 2014	3.0p
25 October 2013	3.0p
12 April 2013	2.5p
31 October 2012	2.5p
Cumulative	46.0p

Chairman's Statement

On behalf of the Board, I am pleased to present the Unaudited Half-Yearly Financial Report for Foresight Solar & Technology VCT Plc for the six months ended 30 September 2021 and to provide you with an update on the developments affecting the Company.

ORDINARY SHARES

Performance and portfolio activity

The Net Asset Value per Ordinary Share increased by 16.5p to 85.4p at 30 September 2021, compared to 68.9p per share at 31 March 2021. This near 25% increase in NAV was largely driven by a significant increase in the long term power price forecasts, and strong performance in the underlying portfolio.

There were no acquisitions or disposals in the UK portfolio during the period. As reported in the Annual Report published in August, the focus of the share class has been to continue to optimise the performance of the existing portfolio ahead of a potential exit of the investments once all shareholders have passed their minimum 5-year qualifying holding period.

Consistent with prior communications, following the award of the Spanish claim (equivalent to £2m-£2.5m, or 5.8-7.2p per Ordinary Share), significant challenges remain with respect to collectability. The Company continues to follow up this claim in the courts and as such, the Board has not assigned any current value to the claim in the net asset value reported.

The overall performance of the Ordinary Shares remains robust and the total return since inception as at 30 September 2021 was 131.4p per Ordinary Share.

Dividends and share buybacks

In its original prospectus, the Board’s stated objective was to pay dividends of 5.0p per Ordinary Share each year throughout the life of the Company after the first year. The level of dividends was not, however, guaranteed.

Following the completion of the tender offer last year, the Board considered the future dividend policy of the Ordinary Shares fund. With the objective of maximising long-term future returns for Ordinary Shareholders (‘O shareholders’), the Board noted that it will endeavour to pay out dividends derived from the income generated by the underlying portfolio, rather than a fixed pence per share, with the hope that this may be enhanced by additional ‘special’ dividends as and when particularly successful portfolio exits are made.

As noted in my recent communications to shareholders, given that we are approaching the end of the minimum 5-year holding period for all O shareholders, the Board’s focus has been to optimise the current portfolio ahead of an eventual planned exit process to return value to all O Shareholders. I am pleased to report that the Board and the Investment Manager recently commenced this process, with the expectation of a full exit of the portfolio during 2022, and a corresponding return of capital to O shareholders shortly thereafter. With the recovery in long term power prices and the buoyant market in general, the Board are confident this would be an optimal time to conduct such a process and maximise shareholder value.

As such, the Board has resolved that its focus and that of the Investment Manager should remain fixed on the process of the planned exit and subsequent return of value to O shareholders.

During the period, the Ordinary Shares fund repurchased 515,409 shares for cancellation at a cost of £401,000, at an average discount to NAV of 2.0%. No new Ordinary Shares were issued during the period.

With the planned solar portfolio exit now in process, the Board have concluded that share buybacks in the interim will be unlikely.

Management fees

The annual management fee of the Ordinary Shares fund is calculated as 1.5% of Net Assets and equated to £195,000 during the period.

In the context of realisations achieved and the continuing professional management of the portfolio, the Board believe that the annual management fee represents good value for investors.

Green Economy Mark

The Board is pleased that the Company continues to be classified as a Green Economy Issuer by the London Stock Exchange (“LSE”). This is an initiative launched by the LSE supporting sustainable finance on its markets. The Green Economy Mark recognises listed companies with 50% or more of revenues from environmental solutions.

FWT SHARES

The Foresight Williams Technology VCT share class (the “FWT Shares”) was launched in December 2019, and represents an exciting investment opportunity made possible by the collaboration between Foresight Group and Williams Advanced Engineering (‘WAE’), a technology and engineering services business, originally spun out of the Williams Formula 1 business.

The share class provides investors with the opportunity to invest in a portfolio of early-stage companies with high growth-potential, developing innovative and occasionally transformational technologies across a range of different sectors. It builds on the successful relationship that Foresight and WAE have enjoyed from their launch of the Foresight Williams Technology EIS Fund (the ‘EIS fund’) in November 2016, which has raised over £50 million to date and has made over twenty investments across a range of different sectors so far.

Fundraising and share issues

The Offer for subscription, dated 30 December 2020, is up to £20 million (with an overallotment facility for up to an additional £10 million) through the issue of FWT Shares. During the period, 3.2 million FWT Shares were allotted, raising a further £3.2m, bringing the total funds raised since launch to over £13.2m.

Post period end, a further 1.7 million FWT Shares were allotted, increasing the total funds raised to £14.9m. The Offer is now closed for investment, however the Board and I are pleased to announce that a third offer for subscription will be published at the beginning of the New Year, allowing for investors to continue to participate in the future fundraising of the FWT share class.

Investment Performance and Portfolio Activity

A detailed analysis of the investment portfolio performance over the period is given in the Investment Manager’s Review on page 18.

During the period under review, the Investment Manager completed six new investments in exciting companies costing a total £2.8m. The Investment Manager also completed one follow on investment in Additive Manufacturing Technologies Limited costing £0.8m. See page 18 of the Interim Report for further details.

Details of each of these new portfolio companies can be found in the Investment Manager’s review.

As at 30 September 2021, the FWT Shares had made investments totalling £5.1m in ten exciting portfolio companies. Post period end, the FWT Shares made a further investment of £0.8m into a new portfolio company.

Management fees

The annual management fee of the FWT Shares fund is calculated as 2.0% of Net Assets and equated to £121,000 during the period.

COMPANY OUTLOOK

Outlook

Following the recent commencement of the planned process to return value to all Ordinary Shareholders, the Board and the Investment Manager will continue to seek to optimise the performance of the underlying solar portfolio and readying the assets for a sale.

The Company will also continue to raise new funds in the FWT Shares fund and seek appropriate qualifying investments for this share class.

Ernie Richardson
Chairman
17 December 2021

Investment Manager’s Review

ORDINARY SHARES

Portfolio summary and performance

During the period the Investment Manager remained focused on delivering a positive operational performance from the portfolio of assets. The backdrop to the portfolio’s stable performance was a volatile global power market that, like elsewhere, saw record high power prices in the UK. This has resulted in significant financial outperformance for the period and is summarised in subsequent sections.

The UK assets in the portfolio achieved a strong financial performance during the period despite total electricity production 0.2% below expectations. The assets generated a total of 47.23 GWh, enough clean electricity to power over 16,000 UK homes. This positive performance reflects higher than average irradiation levels and good availability of the solar plants. Further details on performance of the individual assets are included on pages 10 to 15 of the Interim Report.

Market update

Green Investment

In the wake of the pandemic, Governments and supranational organisations such as the EU are constructing substantial economic recovery packages, and clean energy is likely to play a key role in such plans. Over the last five years renewable power has emerged as the most cost-effective energy source in many countries around the globe; two thirds of the world’s population now live in areas where the cheapest form of energy is electricity generated from wind and solar. This is important because it implies there is no longer a trade-off between stimulating economic recovery and financing green growth.
  
The UK has also announced a £3 billion Green Recovery Package which should accelerate progress towards the 2050 net carbon neutral goal. The renewables sector is likely to be a beneficiary in terms of job creation and benign future energy policy.

Revenues

During the period, approximately 40% of revenue from the UK portfolio investments came from green certificates (Renewable Obligation Certificates) and other green benefits. These revenues are directly and explicitly linked to inflation for 20 years from the accreditation date under the ROC regime and subject to Retail Price Index (“RPI”) inflationary increases applied by Ofgem in April of each year. The remaining revenues derive from electricity sales by our UK portfolio companies, which are subject to wholesale electricity price movements.

The average power price achieved during the period was £77.04 per MWh, representing an increase on the price achieved in the 12 months to 31 March 2021 (£67.25 per MWh). Following power price declines early in the pandemic (Spring 2020) wholesale power prices have recovered and gone on to hit record highs in the UK and elsewhere. While financial performance for the period has been excellent, it should be noted that power prices have remained high following period end. The Investment Manager continues to monitor prices and enters into short term price fixing arrangements of up to 18 months when prices are high, increasing the portfolio’s value further.

During the period there was a 6.78% increase in long term power price forecasts from those seen at 31 March 2021. This was driven by an increase in short term forecast electricity demand as a result of increasing gas and oil prices. The Investment Manager uses these forward-looking power price assumptions to assess the likely future income of the portfolio investments for valuation purposes.

The Company’s assumptions are formed from a blended average of the forecasts provided by third party consultants and are updated on a quarterly basis. The forecasts anticipate a small increase in prices over the next ten years and to remain broadly stable over the longer term. The increase from the March 2021 figure is largely driven by global factors including the pandemic, fluctuating exchange rates, weather events and the impact of gas prices on power prices.

Power Purchase Agreements (“PPAs”) are entered into between each portfolio company and regulated retail energy suppliers in the UK electricity supply market. Under the PPAs, each portfolio company will sell the entirety of the generated electricity and ROCs. Electricity can be sold at a fixed price for an agreed duration, or at a variable rate, as agreed from time to time.

The PPA strategy adopted by our portfolio companies seeks to optimise their revenues from the power generated, while keeping the flexibility to manage their solar assets appropriately. The Boards of our portfolio companies, with assistance from Foresight, constantly assess conditions in the electricity market and set their pricing strategy on the basis of likely future movements.

The Company’s strategy is to maintain c.30% of the portfolio under fixed pricing agreements, with the remainder selling electricity at a variable market rate. The assets with fixed arrangements as at period end account for 37% of capacity.

In addition to high power prices, general inflation has increased substantially. While debate continues about whether such inflation is transitory or not, the increase in the RPI index for this year will be substantial and increase the value of all future ROC income that the portfolio will receive.

Sustainable investing

Sustainability lies at the heart of the Manager’s approach, and the Manager believes that investing responsibly, seeking to make a positive social and environmental impact, is critical to its long-term success. These factors have been integrated into the investment process, and are actively supported by all involved, regardless of seniority.

Foresight continues to refine its sustainability tracking to further improve its investment processes, enhance the sustainability performance of existing assets and demonstrate more comprehensively the environmental benefits and social contribution of the Company’s activities, implementing Foresight Group’s Sustainable Investing in Infrastructure Strategy. This strategy focuses on ensuring all assets are evaluated prior to acquisition and throughout their ownership, in accordance with Foresight Group’s Sustainability Evaluation Tool.

There are five central themes to the Tool, which cover the key areas of sustainability.

The five criteria are:

1. Sustainable Development Contribution: The development of affordable and clean energy as well as improved resource and energy efficiency.
2. Environmental Footprint: Assessing potential environmental impact such as emissions to air, land and water, effects on biodiversity and noise and light pollution.
3. Social Welfare: Engagement and consultation with local stakeholders. Ensuring a positive local economic and social impact, community engagement and the health and wellbeing of stakeholders.
4. Governance: Compliance with relevant laws and regulations and ensuring best practice is followed.
5. Third Party Interactions: Third party due diligence is conducted on key counterparties to ensure adherence to the aforementioned criteria where relevant.

Land management

Compliance audits have been carried out on all UK sites held by portfolio companies, confirming that they are in line with government permits and conditions. Foresight Group remains a working partner of the Solar Trade Association’s Large Scale Asset Management Working Group. Foresight is a signatory to the Solar Farm Land Management Charter and seeks to ensure that the solar farms operated by all of our portfolio companies are managed in a manner that maximises the agricultural, landscaping, biodiversity and wildlife potential, which can also contribute to lowering maintenance costs and enhancing security. As such, Foresight Group regularly inspects sites and advises portfolio companies to develop site specific land management and biodiversity enhancement plans to secure long term gains for wildlife and ensure that the land and environment are maintained to a high standard.

This includes:

• Management of grassland areas within the security fencing to promote wildflower meadows and sustainable sheep grazing;
• Planting and management of hedgerows and associated hedge banks;
• Management of field boundaries between security fencing and hedgerows;
• Sustainable land drainage and pond restoration;
• Installation of insect hotels and reptile hibernacula;
• Installation of boxes for bats, owls and kestrels;
• Installation of beehives by local beekeepers.

Most solar parks are designed to enable sheep grazing and the remaining plants are investigated for alterations to ensure that the farmland on which the solar assets are located can remain useful in agricultural production, which is a frequent desire of local communities.

Examples of sustainable land management activities across the portfolio include:

• Free-range chickens grazing at the New Kaine site
• The grounds of Turweston solar farm continue to be managed as wildflower meadow
• Beehives are on site at Turweston
• Bird and bat boxes have been installed at Basin Bridge
• At Turweston additional gates with sufficient gaps at the lower edge were installed to allow for safe wildlife passage across the site
• Trees and hedgerows have been planted, and hedge infill work undertaken at Dove View and Hurcott.

O&M Provider Sustainability Agreement

As detailed in previous reports the Investment Manager has been working closely with its major suppliers and counterparties to encourage the adoption of ESG and sustainability policies where such policies either did not exist or were not as robust as that of the Investment Manager’s own.

Foresight has established an O&M Provider Sustainability Agreement, which has been signed by the main providers of Operations and Maintenance services to the assets. We are pleased that these key O&M providers have agreed to align their approach with that of our own in placing sustainability at the heart of their operations.

This ground-breaking agreement stipulates where Foresight believes positive environmental and social outcomes can be achieved within supplier activity. Foresight also believes that adherence can offer long-term cost benefit and business opportunities through more efficient use of resources and intelligent forward planning.

In the long-term, Foresight will expect its O&M providers to track their own performance in these areas and report this through annual questionnaires. Foresight also expects its O&M providers to communicate these requirements and standards within their supply chain. In order to review the performance of our O&M providers, the Investment Manager will meet with them once a year and discuss how these principles worked in practice, as well as working together to update the principles, if necessary. Foresight plans to integrate these principles into future O&M contracts.

The principles that underpin the obligations of the agreements incorporate elements of both the United Nations Sustainable Development Goals and the Principles for Responsible Investment (“PRI”) international frameworks.

Social and Community Engagement

Foresight Group actively seeks to engage with the local communities around the solar assets operated by our portfolio companies and regularly attends parish meetings to encourage community engagement and promote the benefits of their solar assets. The relevant portfolio company has continued to make annual community payments for Marchington.

Health and safety

There were no reportable health and safety incidents during the period.

Safety, Health, Environment and Quality (“SHEQ”) performance and risk management are a top priority at all levels for Foresight Group. To further improve the management of SHEQ risks, reinforce best practice and ensure non-compliance with regulations is avoided, Foresight Group continues to work with independent health and safety consultants who regularly visit the assets operated by our portfolio companies to ensure they not only meet, but exceed, industry and legal standards. The consultants have confirmed that all sites are in compliance with applicable regulations.

Outlook

It has been a very positive period for the Ordinary Shares with good performance from the assets and excellent financial performance. The Ordinary Shares will continue to focus on delivering strong operational performance across the portfolio. Aside from power prices, the portfolio has always been a hedge against inflation and it is pleasing to see the value also increase as inflation has picked up for the first time in the life of the Ordinary Shares.

Given the excellent state of this portfolio, unprecedented trading conditions, higher inflation and increasing investor demand for assets such as those within this portfolio, the Investment Manager is aiming to dispose of the portfolio in the first half of 2022 in order to maximise shareholder returns. This is likely to lead to a return of capital to investors and a subsequent return of value to all Ordinary Shareholders. As progress is made with the process, investors will be informed.

FORESIGHT WILLIAMS TECHNOLOGY SHARES

Investment Manager’s Review

Summary

Between its launch on 20 December 2019 and the period end, the Foresight Williams Technology Shares (“the FWT fund”) had raised £13.2 million. The FWT fund provides investors with the opportunity to invest in a portfolio of early stage companies with high growth-potential, developing innovative and occasionally transformational technologies across a range of different sectors. As at 30 September 2021, the FWT fund had made investments in ten portfolio companies totalling £5.1 million. Post period end, the FWT Shares made a further investment of £0.8m into a new portfolio company.

Fundraising

The FWT fund, made possible through an innovative collaboration between Foresight Group and Williams Advanced Engineering Ltd, continues to build positive momentum in the market. Since the period end, a further £1.7 million has been raised, bringing the total raised to £14.9 million.

Pipeline

The Investment Manager is seeing a recovery in the demand for growth capital following the easing of pandemic related restrictions, and developing a healthy pipeline of opportunities. At the time of writing, three new deals had passed the Investment Manager’s initial Investment Committee stage and were progressing through detailed due diligence. A number of FWT EIS holdings were being considered for follow-on investment by the FWT fund.  

Foresight Group LLP
Investment Manager
17 December 2021

Unaudited Half-Yearly Results and Responsibilities Statements

Principal Risks and Uncertainties

The principal risks faced by the Company are as follows:

• Performance;
• Regulatory;
• Operational; and
• Financial.

The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Accounts for the year ended 31 March 2021. A detailed explanation can be found on page 34 of the Annual Report and Accounts which is available on Foresight Group’s website www.foresightgroup.eu or by writing to Foresight Group at The Shard, 32 London Bridge Street, London, SE1 9SG.

In the view of the Board, there have been no changes to the fundamental nature of these risks since the previous report and 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.

Directors' Responsibility Statement

The Disclosure and Transparency Rules (‘DTR’) of the Financial Conduct Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Half-Yearly Financial Report and financial statements.

The Directors confirm to the best of their knowledge that:

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

Going Concern

The Company’s business activities, together with the factors likely to affect its future development, performance and position, are set out in the Strategic Report of the Annual Report. The financial position of the Company, its cash flows, liquidity position and borrowing facilities are described in the Chairman’s Statement, Strategic Report and Notes to the Accounts of the 31 March 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, which benefit from Renewable Obligation Certificates guaranteed by the UK Government. 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

Ernie Richardson
Chairman
17 December 2021

Unaudited Non-Statutory Analysis of the Share Classes

Income Statement
for the six months ended 30 September 2021
	Ordinary Shares Fund			FWT Shares Fund
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment holding gains	—	6,689	6,689	—	45	45
Realised losses on investment	—	(1,121)	(1,121)	—	—	—
Income	558	—	558	—	—	—
Investment management fees	(49)	(146)	(195)	(30)	(91)	(121)
Other expenses	(177)	—	(177)	(115)	—	(115)
Profit/(loss) before taxation	332	5,422	5,754	(145)	(46)	(191)
Taxation	—	—	—	—	—	—
Profit/(loss) after taxation	332	5,422	5,754	(145)	(46)	(191)
Profit/(loss) per share	0.9p	15.5p	16.4p	(1.2)p	(0.3)p	(1.5)p

Balance Sheet
at 30 September 2021
				Ordinary Shares Fund		FWT Shares Fund
				£'000		£'000
Fixed assets
Investments held at fair value through profit or loss				29,466		5,109
Current assets
Debtors				376		139
Cash and cash equivalents				283		7,713
				659		7,852
Creditors
Amounts falling due within one year				(597)		(134)
Net current assets				62		7,718
Net assets				29,528		12,827
Capital and reserves
Called-up share capital				346		132
Share premium				—		10,683
Capital redemption reserve				208		—
Distributable reserve				35,923		2,115
Capital reserve				(13,777)		(148)
Revaluation reserve				6,828		45
Equity shareholders' funds				29,528		12,827
Net asset value per share				85.4p		97.0p

At 30 September 2021 there was an inter-share debtor/creditor of £113,000 which has been eliminated on aggregation.

Unaudited Non-Statutory Analysis of the Share Classes

Reconciliations of Movements in Shareholders’ Funds

for the six months ended 30 September 2021

Ordinary Shares Fund	Called-up share capital	Share premium account	Capital redemption reserve	Distributable reserve	Capital reserve	Revaluation reserve	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
As at 1 April 2021	351	-	203	35,995	(12,510)	139	24,178
Expenses in relation to prior year share issues	-	-	-	(3)	-	-	(3)
Repurchase of shares	(5)	-	5	(401)	-	-	(401)
Realised losses on disposal of investments	-	-	-	-	(1,121)	-	(1,121)
Investment holding gains	-	-	-	-	-	6,689	6,689
Management fees charged to capital	-	-	-	-	(146)	-	(146)
Revenue profit for the period	-	-	-	332	-	-	332
As at 30 September 2021	346	-	208	35,923	(13,777)	6,828	29,528

FWT Shares Fund	Called-up share capital	Share premium account	Capital redemption reserve	Distributable reserve	Capital reserve	Revaluation reserve	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
As at 1 April 2021	100	7,515	-	2,260	(57)	-	9,818
Share issues in the period	32	3,258	-	-	-	-	3,290
Expenses in relation to share issues	-	(90)	-	-	-	-	(90)
Investment holding gains	-	-	-	-	-	45	45
Management fees charged to capital	-	-	-	-	(91)	-	(91)
Revenue loss for the period	-	-	-	(145)	-	-	(145)
As at 30 September 2021	132	10,683	-	2,115	(148)	45	12,827

Financial Statements

Unaudited Income Statement for the six months ended 30 September 2021

	Six months ended 30 September 2021 (unaudited)			Six months ended 30 September 2020 (unaudited)			Year ended 31 March 2021 (audited)
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Investment holding (losses)/gains	—	6,734	6,734	—	(17,183)	(17,183)	—	(17,500)	(17,500)
Realised losses on investments	—	(1,121)	(1,121)	—	—	—	—	—	—
Income	558	—	558	16,275	—	16,275	17,667	—	17,667
Foreign exchange gains	—	—	—	—	2	2	—	—	—
Investment management fees	(79)	(237)	(316)	(53)	(161)	(214)	(114)	(340)	(454)
Interest payable	—	—	—	1,109	—	1,109	(71)	—	(71)
Other expenses	(292)	—	(292)	(252)	—	(252)	(478)	—	(478)
Profit/(loss) before taxation	187	5,376	5,563	17,079	(17,342)	(263)	17,004	(17,840)	(836)
Taxation	—	—	—	—	—	—	—	—	—
Profit/(loss) after taxation	187	5,376	5,563	17,079	(17,342)	(263)	17,004	(17,840)	(836)
Profit/(loss) per share:
Ordinary Share	0.9p	15.5p	16.4p	48.4p	(48.9)p	(0.5)p	48.4p	(50.2)p	(1.8)p
FWT Share	(1.2)p	(0.3)p	(1.5)p	(3.2)p	(0.7)p	(3.9)p	(3.5)p	(1.5)p	(5.0)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 recognised gains and losses has been presented.

Unaudited Balance Sheet at 30 September 2021

Registered Number: 07289280

	As at 30 September 2021 (unaudited)	As at 30 September 2020 (unaudited)	As at 31 March 2021 (audited)
	£’000	£’000	£’000
Fixed assets
Investments held at fair value through profit or loss	34,575	24,499	25,352
Current assets
Debtors	402	378	1,057
Cash and cash equivalents	7,996	3,950	8,076
	8,398	4,328	9,133
Creditors
Amounts falling due within one year	(618)	(210)	(489)
Net current assets	7,780	4,118	8,644
Net assets	42,355	28,617	33,996
Capital and reserves
Called-up share capital	478	392	451
Share premium	10,683	1,377	7,515
Capital redemption reserve	208	200	203
Distributable reserve	38,038	38,578	38,255
Capital reserve	(13,925)	(12,386)	(12,567)
Revaluation reserve	6,873	456	139
Equity shareholders' funds	42,355	28,617	33,996
Net asset value per share
Ordinary Share	85.4p	70.2p	68.9p
FWT Share	97.0p	97.1p	98.0p

Unaudited Reconciliation of Movements in Shareholders' Funds for the six months ended 30 September 2021

	Called-up share capital	Share premium account	Capital redemption reserve	Distributable reserve*	Capital reserve*	Revaluation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 April 2021	451	7,515	203	38,255	(12,567)	139	33,996
Share issues in the year	32	3,258	-	-	-	-	3,290
Expenses in relation to share issues	-	(90)	-	-	-	-	(90)
Expenses in relation to prior year share issues	-	-	-	(3)	-	-	(3)
Repurchase of shares	(5)	-	5	(401)	-	-	(401)
Realised losses on disposal of investments	-	-	-	-	(1,121)	-	(1,121)
Investment holding gains	-	-	-	-	-	6,734	6,734
Management fees charged to capital	-	-	-	-	(237)	-	(237)
Revenue profit for the period	-	-	-	187	-	-	187
As at 30 September 2021	478	10,683	208	38,038	(13,925)	6,873	42,355

*Total distributable reserves at 30 September 2021 were £24,113,000 (31 March 2021: £25,688,000).

Unaudited Cash Flow Statement for the six months ended 30 September 2021

	Six months ended 30 September 2021 (unaudited) £’000		Six months ended 30 September 2020 (unaudited) £’000		Year ended 31 March 2021 (audited) £’000
Cash flow from operating activities
Deposit and similar interest received	—		—		1
Investment management fees paid	(295)		(216)		(435)
Secretarial fees paid	(85)		(87)		(172)
Other cash payments	(88)		(267)		43
Net cash outflow from operating activities	(468)		(570)		(563)
Cash flow from investing activities
Purchase of investments	(2,827)		—		(1,441)
Investments awaiting completion	—		—		(796)
Net proceeds on sale of investments	—		488		759
Investment income received	—		274		406
Net cash (outflow)/inflow from investing activities	(2,827)		762		(1,072)
Cash flow from financing activities
Proceeds of fund raising	3,267		2,714		9,065
Expenses of fund raising	(52)		(49)		(204)
Repurchase of own shares	—		—		(243)
Equity dividends paid	—		(709)		(709)
Net cash inflow from financing activities	3,215		1,956		7,909
Net (outflow)/inflow of cash in the period	(80)		2,148		6,274
Reconciliation of net cash flow to movement in net funds
(Decrease)/Increase in cash for the period	(80)		2,148		6,274
Net cash at start of period	8,076		1,802		1,802
Net cash at end of period	7,996		3,950		8,076
	At 1 April 2021 £’000	Cash Flow £’000		At 30 September  2021 £’000
Cash	8,076	(80)		7,996

Notes to the Unaudited Half-Yearly Results for the six months ended 30 September 2021

1.     The Unaudited Half-Yearly Financial Report has been prepared on the basis of the accounting policies set out in the statutory accounts of the Company for the year ended 31 March 2021. Unquoted investments have been valued in accordance with International Private Equity and Venture Capital Valuation Guidelines.
2.     These are not statutory accounts in accordance with S436 of the Companies Act 2006 and the financial information for the six months ended 30 September 2021 and 30 September 2020 has been neither audited nor formally reviewed. Statutory accounts in respect of the year ended 31 March 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 March 2021 have been reported on by the Company’s auditors or delivered to the Registrar of Companies.
3.     Copies of the Unaudited Half-Yearly Financial Report for the six months ended 30 September 2021 have been sent to shareholders via their chosen method of communication and are available for inspection at the Registered Office of the Company at The Shard, 32 London Bridge Street, London, SE1 9SG. Copies are also available electronically at www.foresightgroup.eu.

4    Net asset value per share

The net asset value per share is based on net assets at the end of the period and on the number of shares in issue at that date.

	Ordinary Shares		FWT Shares
	Net assets £’000	Number of Shares in issue	Net assets  £’000	Number of Shares in issue
30 September 2021	29,528	34,593,623	12,827	13,220,546
30 September 2020	24,909	35,460,961	3,708	3,818,311
31 March 2021	24,178	35,109,032	9,818	10,021,408

5    Return per share

      The weighted average number of shares used to calculate the respective returns are shown in the table below:

	Ordinary Shares	FWT Shares
	Number of Shares	Number of Shares
30 September 2021	35,106,216	12,388,703
30 September 2020	35,460,961	2,536,809
31 March 2021	35,414,680	3,831,368

6    Income

	Six months ended 30 September 2021 (unaudited) £’000	Six months ended 30 September 2020 (unaudited) £’000	Year ended 31 March 2021 (audited) £’000
Loan stock interest	211	230	442
Dividends received	347	234	233
Bank interest	—	—	1
Release of loans payable*	—	15,811	16,991
	558	16,275	17,667

*Release of loans payable relates to the release of the Company’s liability from its wholly owned subsidiary, Youtan Limited, and associated accrued interest in the prior year. The release had an equal and opposite effect on the carrying value of Investments, resulting in a nil impact for the NAV of the Company.

7    Investments held at fair value through profit or loss

	Ordinary Shares £’000	FWT Shares £’000	Company £’000
Book cost at 1 April 2021	23,772	1,441	25,213
Investment holding gains	139	—	139
Valuation at 1 April 2021	23,911	1,441	25,352
Movements in the period:
Purchases at cost	—	3,623	3,623
Disposal proceeds	(13)	—	(13)
Realised losses	(1,121)	—	(1,121)
Investment holding gains	6,689	45	6,734
Valuation at 30 September 2021	29,466	5,109	34,575
Book cost at 30 September 2021	22,638	5,064	27,702
Investment holding gains	6,828	45	6,873
Valuation at 30 September 2021	29,466	5,109	34,575

8    Transactions with the manager

Details of arrangements with Foresight Group LLP and Foresight Group CI Limited are given in the Annual Report and Accounts for year ended 31 March 2021, in the Directors’ Report and Notes 3 and 13. All arrangements and transactions were on an arms length basis.

Foresight Group LLP, which was appointed as Investment Manager on 27 January 2020, earned fees of £316,000 in the six months ended 30 September 2021 (six months ended 30 September 2020: £214,000; year ended 31 March 2021: £454,000).

Foresight Group LLP is the Company Secretary (appointed in November 2017) and received, directly and indirectly, for accounting and company secretarial services fees of £85,000 in the six months ended 30 September 2021 (six months ended 30 September 2020: £84,000; year ended 31 March 2021: £169,000).

At the balance sheet date there was £25,000 due to (30 September 2020: £73,000 due from; 31 March 2021: £30,000 due from) Foresight Group LLP. No amounts have been written off in the year in respect of debts due to or from related parties.  

9    Related party transactions

There were no related party transactions in the period.

10  Post balance sheet event

Between the year end and the date of this report, under the offer for subscription to raise up to £20 million FWT shares (with an overallotment facility to raise up to a further £10 million), the Company issued a total of 1,655,154 shares based on price of 100.0p.

Between the period end and the date of this report, the FWT shares a further investment of £0.8m into a new portfolio company.

END