Final Results
Foresight Technology VCT PLC
16 April 2004
FORESIGHT TECHNOLOGY VCT PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS
CHAIRMAN'S STATEMENT
Introduction
The last twelve months have seen signs of an economic pick-up along with a
strong improvement in the share prices of many smaller companies, which has been
reflected in a number of the valuations of the quoted stocks in the Ordinary
Shares fund and the 'C' Shares fund portfolios. IT corporate spending, after a
particularly lean period, is now showing signs of increasing. As a result of
these trends a number of the unquoted holdings in both funds are also beginning
to experience improved market conditions. Whilst the difficult market and
economic conditions of the last two or three years have taken their toll on
certain of our investments, overall the two portfolios have weathered these
events reasonably well and, as noted above and elsewhere in the investment
advisers' report, a number of the investee companies are now seeing improved
demand and are making encouraging progress.
Results
The results for the year from 1 January 2003 to 31 December 2003 are set out in
the following pages. Comparative figures given for 31/12/2002 are for the 3
month period ended 31 December 2002. The return (after tax) attributable to the
Ordinary Shareholders was £12,711,291 (31/12/2002: loss of £126,312) and the net
asset value per Ordinary Share as at 31 December 2003 was 186.75p (31/12/2002:
96.48p). With regard to the holders of 'C' Shares the attributable loss (after
tax) was £1,420,232 (31/12/2002: £159,804) and the net asset value per 'C' Share
as at 31 December 2003 was 67.18p (31/12/2002: 72.51p).
The after tax revenue return (before capital gains) per Ordinary Share was 2.04p
and the after tax revenue return (before capital losses) per 'C' Share was 0.96p
for the year ended 31 December 2003.
Dividend
The Board are recommending a dividend of 0.50p per 'C' Share (31/12/2002: 0.75p)
for the year ended 31 December 2003 payable to 'C' Shareholders on the register
on 30 April 2003. If approved at the Annual General Meeting, these payments will
be paid on 1 August 2003. The Board do not recommend a final dividend on the
Ordinary Shares (31/12/2002: 0.50p) in addition to the special dividend of 8p
paid to Ordinary Shareholders in September 2003. The Company's dividend policy
is to distribute income earned and capital gains realised as soon as is
practicable to shareholders.
Ordinary Shares fund
Advanced Composites Group Limited enjoyed another successful year with both the
US and UK businesses achieving record sales and profits. For the year ended 31
August 2003 sales of £35m generated pre-tax profits of £3.8m; the company is on
budget to grow profits by 20% this year. The company has exciting new products
and market opportunities for future growth in areas such as wind turbine blades,
automotive applications and the marine sector. I am pleased to advise
shareholders that UMECO plc has agreed terms to acquire the company for a total
cash consideration of £44.25 million. The acquisition is expected to complete
in early May when Foresight expects to receive a cash consideration of
approximately £10 million. It is the Board's current intention to distribute
this to Ordinary Shareholders as soon as practicable following receipt of funds.
YooMedia plc has performed well in the year under review and the share price
increased from a low of 1.75p to 49p at the year end and a price of 28p as at
close of business on 15 April 2004. During 2003 the company successfully raised
£4.8 million and ended the year by acquiring the Go-play TV interactive games
channel from Sony who, at the same time, became a significant shareholder in the
company.
Approximately half the Telecom Plus Plc holding has been realised in aggregate,
partly in July 2003 and partly since the year end, resulting in the realisation
of £1.4m in total. An average six times return has been generated on this
investment to date.
As at 31 December 2003 approximately £7.2 million had been approved for
investment or invested in 9 companies. This represented approximately 95% of the
Company's investments, the balance being invested in money funds and cash
deposits. The Board and the Company's advisers, VCF Partners, are particularly
pleased with the overall performance of the investments within the Ordinary
Shares fund. This performance is reflected in the net asset value per Ordinary
Share which increased from 96.48p as at 31 December 2002 to 186.75p as at 31
December 2003.
'C' Shares fund
Since the year end Foresight has invested £863,438 in a £4 million further
fundraising in Oxonica Limited. Major investors in this round included the
multinational chemical company, BASF, who are adding significant strategic value
particularly in the fuel additive side of the business.
Sarantel Limited made good progress during 2003. In early 2004, Infineon
selected Sarantel's technology for a new GSM mobile phone design and with other
major projects in the design phase, prospects for the company are good. During
2003 the company raised a total of £4.9 million (including approximately
£350,000 from Foresight) and also acquired Heritage Image Partnership Limited
(HIP), in which Foresight had previously invested, resulting in an £850,000 cash
infusion for Sarantel.
Broadreach Networks Limited continues to make excellent strategic progress
penetrating the WiFi hotspot market particularly through its relationship with
Virgin in the 'on-train' market. Foresight advanced £500,000 in October 2003,
in line with the commitment made at the time of the initial investment in
February 2003.
A new investment of £500,000 was made in September 2003 in Camwood Limited, a
specialist provider of outsourced application packaging solutions. Camwood has
developed its own 'Catalyst' system to deliver quality assured component managed
enterprise application packaging and is seeing an increasing demand for its
services as companies undertake operating systems migration projects.
As at 31 December 2003 approximately £20 million had been approved for
investment or invested in 21 companies. This represented approximately 60% of
the Company's investments, the balance also being invested in money funds and
cash deposits.
VCF Partners are encouraged by the steady flow of opportunities and they and the
Board are currently reviewing a number of new investments as well as considering
further investments in existing portfolio companies. In addition as a result of
the improved stock market conditions, several potential initial public offering
opportunities within the portfolio are under consideration.
Details of investments made from both of the Company's funds during the period
are given in the Advisers' and Managers' Report.
Valuation Policy
The investments held by the Company that are not quoted on AIM, OFEX or the
London Stock Exchange have been valued in accordance with the revised Guidelines
for the Valuation and Disclosure of Venture Capital Portfolios issued by the
British Venture Capital Association ('BVCA') in June 2003 under which unquoted
investments are not normally revalued above cost for at least 12 months after
the date of acquisition and thereafter at 'fair value'. Listed investments and
investments traded on AIM and OFEX are stated at the mid-market value as at 31
December 2003. The portfolio valuations are prepared by VCF Partners and
approved by the Board.
Share Offer
The Company launched an offer for subscription to subscribe for packages of one
new Ordinary Share and three new 'C' Shares in September 2003. I am pleased to
report that this offer raised approximately £4.2 million and closed on 7 April
2004. Due to further interest from potential investors the Company launched a
further offer for subscription to subscribe for packages of one new Ordinary
Shares and three new 'C' Shares on 8 April 2004. This offer will remain open
until 14 May 2004. Further details in respect of this offer can be requested
from the Company's promoter, Matrix-Securities Limited.
2004 Warrant Exercise
Warrantholders will have received notices advising of the forthcoming warrant
exercise opportunity in respect of both 'O' Warrants and 'C' Warrants. This is
the final exercise opportunity following which all outstanding warrants will
lapse.
International Financial Reporting Standards ('IFRS')
The Board notes that the IFRS may have a potentially significant impact on the
Company's financial reporting. Plans are in hand to monitor the requirements
and timescales and to assess the impact and progress of any required changes.
The earliest possible impact is the 2005 accounting period.
Annual General Meeting
The Company's Annual General Meeting will take place on 22 July 2004. I look
forward to welcoming you all at the meeting.
I would like to take this opportunity to thank all shareholders and
warrantholders for their continued support.
Peter Dicks
Chairman
16 April 2004
THE VENTURE CAPITAL FUNDS
VCF Partners advise the Company in respect of investments made within the
Ordinary Shares fund and the 'C' Shares fund. During the year ended 31 December
2003 two follow on investments were made from the Ordinary Shares fund at a cost
of £475,000 and two new investments at a cost of £1.5 million and six further
investments were made from the 'C' Shares fund at a cost of £1,182,144. In
accordance with the BVCA guidelines, all investments are held at 'fair value'
unless this cannot be reliably measured, in such cases an explanation has been
given in the individual company narratives. No discounts have been applied to
the quoted investments, in line with generally accepted practice in the venture
capital market. The full investment portfolio of both funds as at 31 December
2003 is detailed below.
ORDINARY SHARES FUND
Actimax plc
Supplies digital telecommunications systems to small and medium sized customers.
The company installs complex computer and telephone combined systems using
components from suppliers such as Ascom, Alcatel, Cisco and Intertel. The
company made a small acquisition in the summer of 2003, won the Best SME
Convergence solution award 2003 and is trading profitably.
The loan, which has subsequently been repaid in March 2004, was held at cost as
at 31 December 2003. The equity holding has been valued on the same basis as
the investment made in the company by the 'C' Shares fund in June 2003, which
reflected a recognition of trading progress.
The Ordinary Shares fund holds 300,868 shares in the company and 34,615 warrants
attributable to the Ordinary Shares fund.
Results from the latest audited accounts for the period ended 31 December 2002:
profit before tax £35,191, retained loss £1,269,941, net liabilities £488,941.
Dates of Amount Valuation Valuation % Equity/ Loan Stock Investor % of Ordinary
Investment Invested Director Shares
(including as at 31 as at 31 Voting Rights Portfolio
Loan Stock) December 2002 December 2003
Nov 98, £600,001* 42.3* £120,000 Peter English 3.76
Mar 00 Cost** £937,412 (Unsecured)
& Jun 03
* Foresight also holds warrants in the company.
** Excluding the further investment in 2003.
Advanced Composites Group Limited
Is a long established manufacturer of high technology carbon fibre composite
material, with factories in Heanor, north of Derby, and Tulsa, USA. Successful
markets include F1 racing cars, sports equipment and aerospace applications.
UMECO plc has recently agreed terms to acquire 100% of the company for a total
cash consideration of £44.25 million. The company has been valued in accordance
with the agreed acquisition terms with UMECO. Foresight holds 3,163,971 shares
in the company.
Results from the latest consolidated audited accounts for the year ended 31
August 2003: profit before tax £3,751,000, retained profit £5,223,000, net
assets £9,558,000.
Dates of Amount Invested Valuation Valuation % Equity/Voting Investor % of Ordinary
Investment as at 31 as at 31 Rights Director Shares Portfolio
December 2002 December 2003
Mar 99, Oct 99 & £1,622,978 £6,668,965 £10,007,982 23.0 Peter English 40.14
Jul 00
Clarity Commerce Solutions plc (AIM listed)
Is part of a group of companies that provide EPOS solutions, CRM products and
services to the UK hospitality and leisure markets including the pub market
place and the restaurant and nightclub sector. Two acquisitions were made in the
second half of 2003 which provide further cross selling opportunities.
Foresight holds 400,000 shares in the company.
Results from the latest audited accounts for the year ended 31 March 2003:
profit before tax £315,000, retained loss £1,144,000, net assets £7,749,000.
Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of Ordinary
as at 31 December as at 31 December Rights Shares Portfolio
2002 2003
(Mid-market) (Mid-market)
Jul 00 £500,000 £278,000 £282,000 4.2 1.13
DSM Geo-Data Limited/Survey & Development Services Limited
Was formed to acquire certain parts of the business of Survey & Development
Services Limited ('SDS') from the Receivers of that company in August 2002. DSM
is a specialist geo-spatial data software products and services business,
serving the growing market for digital mapping. Foresight was issued 235,208
preference shares in DSM in respect of its original holding of loan stock in
Survey & Development Services Limited. DSM has been valued on the basis of
expected future cash flows to Foresight.
SDS was put into liquidation in 2002 and therefore the Board believes it prudent
to provide in full against this investment. Foresight continues to hold 170,408
shares in SDS.
Results from the latest audit accounts for the year ended 31 March 2003: loss
before tax £348,155, retained loss £318,155, net liabilities £148,155.
Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of Ordinary
as at 31 December as at 31 December Rights Shares Portfolio
2002 2003
Aug 02 £1 £137,327 £79,548 0.0 0.32
Sapphire International Limited
Owns the established 'DataEase' family of computer database software products
and has a worldwide base of several hundred thousand users. The company now
combines a consulting/professional services organisation with the sale of
DataEase software products. As a result of a difficult trading year in 2003, a
full impairment provision was made against the value of the equity investment.
Foresight holds 1,803,396 shares in the company.
Results from the latest audited accounts for the year ended 31 December 2002:
profit before tax £369,802, retained loss £3,042,360, net liabilities £28,269.
Dates of Amount Valuation Valuation % Equity/ Loan Stock Investor % of Ordinary
Investment Invested Director Shares
(including as at 31 as at 31 Voting Rights Portfolio
Loan Stock) December 2002 December 2003
Jul 98, Jun £1,150,000 18.6 £400,000 10% Bernard 1.61
00, Oct 00 & Cost £400,000 (Unsecured) Fairman
Jun 01
Telecom plus plc (listed on the London Stock Exchange)
Offers low cost telephone and energy services to private subscribers. The
company's penetration of its telephone subscriber base with energy services is
at 10% and increasing. The share price continued to rise over the second half of
2003 and Foresight sold 500,000 shares at a price of £2.18 (ex-div) per share
compared to an average subscription cost of 38p per share. Foresight also sold a
further 100,000 shares at an average share price of £4.025 per share in January
2004 leaving a current total of 651,000 shares held by Foresight (751,000 shares
as at 31 December 2003).
Results from the latest audited accounts for the year ended 31 March 2003:
profit before tax £5,588,000, retained profit £2,018,000, net assets
£11,226,000.
Dates of Amount Invested Valuation Valuation % Equity/Voting % of Ordinary
Investment as at 31 December as at 31 December Rights Shares Portfolio
2002 2003
(Mid-market) (Mid-market)
Jun 99 & Dec 02 £286,519* £1,957,815** £2,985,225 1.3 11.97
* Excludes the sale of 100,000 shares in January 2004.
** Excluding the 500,000 shares sold in 2003.
YooMedia plc (AIM listed)
Operates a portal site which provides an increasing number of facilities
including online games, e-mail, personal home pages and chat available from a
number of platforms. The company now operates interactive games channels on Sky
and Freeview and also distributes games on Telewest and NTL. In addition the
company provides various other interactive TV solutions like e-voting.
Foresight made further investments of £375,000 by way of convertible loan stock
in May 2003 (converted into shares in November 2003) and £100,000 in shares in
October 2003. Following these further investments, Foresight holds 18,410,000
shares in the company. YooMedia's share price has increased significantly since
the prior reporting date of 30 June 2003.
Results from the latest audited accounts for the year ended 31 December 2002:
loss before tax £7,037,986, retained loss £13,397,592, net assets £1,766,717.
Dates of Amount Invested Valuation Valuation % Equity/ Investor % of Ordinary
Investment as at 31 as at 31 Voting Rights Director Shares Portfolio
December 2002 December 2003
(Mid-market) (Mid-market)
Mar 99, £817,357 £855,600* £9,020,900 14.7 Bernard Fairman 36.18
Nov 02,
May 03 &
Oct 03
* Excluding the further investments in 2003
'C' SHARES FUND
Actimax plc
Supplies digital telecommunications systems to small and medium sized customers.
The company installs complex computer and telephone combined systems using
components from suppliers such as Ascom, Alcatel, Cisco and Intertel. The
company made a small acquisition in the summer of 2003. The company also won
the Best SME Convergence solution award 2003 and is trading profitably.
The 'C' Shares fund holds 79,440 shares in the company.
Results from the latest audited accounts for the period ended 31 December 2002:
profit before tax £35,191, retained profit £1,269,941, net liabilities £488,911.
Date of Amount Valuation Valuation % Equity/ Loans Investor % of 'C'
Investment Invested as at 31 as at 31 Voting Rights Director Shares
(including December 2002 December 2003 Portfolio
Loans)
Jun 03 £200,000 N/A Cost 10.0 £133,333 Peter English 0.86
(Secured)
Alaric Systems Limited
Specialises in the development, sale, distribution and support of payment
systems software including systems for electronic payments, authorisation and
e-commerce integration. It is also involved in the use of software based
mathematical modelling techniques for card payments and other fraud detection.
Foresight holds 2,141,075 shares in the company.
Results from the latest audited accounts for the year ended 31 March 2003: loss
before tax £2,600,141, retained loss £5,047,782, net assets £710,789.
Dates of Amount Invested Valuation Valuation % Equity/ Investor % of 'C' Shares
Investment as at 31 as at 31 Voting Rights Director Portfolio
December 2002 December 2003
Feb 02, Oct 02 & £1,254,179 Cost Cost 16.8 Donald 5.39
Dec 02 Maclennan
ANT Limited
Provides content rendering software to improve users' interactive communication
with digital television sets and other consumer electronic devices. ANT was set
up in 1993 and first licensed its software to Symbian (one of the leading
software platforms for PDAs) in May 1998. It now has a leading position in the
market for integrated digital TVs, TV over internet protocol and enhanced DVDs.
Trading in 2003 improved significantly and the company was profitable in the
last quarter of the year.
Foresight holds 21,800 shares in the company and warrants over a further 7% of
the equity. The Board considers it prudent to write down the investment since
the business is trading below initial expectation.
Results from the latest audited accounts for the year ended 31 December 2002:
loss before tax £2,001,995, retained loss £7,851,080, net liabilities
£5,379,661.
Dates of Amount Valuation Valuation % Equity/ Loans Investor % of 'C'
Investment Invested as at 31 as at 31 Voting Rights Director Shares
(including December 2002 December 2003 Portfolio
Loans)
Jul 01 & Feb £1,090,000 £892,000* £491,590 5.3 £981,000 Matt Taylor 2.11
03 (Secured)
* Excluding the further investment in 2003
Aquasium Technology Limited
Is engaged in the design, manufacture and marketing of bespoke electron beam
welding and vacuum furnace equipment. Its products are used in the processes of
a wide range of manufacturing industries including automotive, electronics,
medical, power generation and aerospace.
Foresight holds 86,666 shares in the company and invested further in the company
by way of a £200,000 loan in April 2003. The Board believes it prudent to write
down the investment because the Company is trading below initial expectations.
Results from the latest audited accounts for the period from 26 June 2001 to 31
December 2002: loss before tax £1,216,413, retained loss £1,147,035, net
liabilities £574,983.
Dates of Amount Valuation as Valuation as % Equity/ Loans Investor % of 'C'
Investment Invested at 31 at 31 Director Shares
(including December 2002 December Voting Rights Portfolio
Loans) 2003
Oct 01 & £1,200,000 Cost* £1,100,000 33.3 £866,667 Donald 4.73
April 03 (Secured) Maclennan
* Excluding the further investment in 2003
Blue Curve Research.net Limited
Is a software company that sells products and services to investment banks and
fund managers which automate the production and distribution of research
material. Analytical research and services are a key customer retention tool for
investment banks but are also a major cost. The company's software products
improve the efficiency of research distribution which, also reduces costs.
Foresight holds 367 shares in the company. The Board believes an impairment
should be recognised based on the company's current forecast compared to initial
expectation.
Results from the latest audited accounts for the year ended 31 December 2002:
loss before tax £534,058, retained loss £410,658, net liabilities £410,558.
Date of Amount Valuation as Valuation as % Equity/ Loans Investor % of 'C'
Investment Invested at 31 at 31 Director Shares
(including December 2002 December 2003 Voting Rights Portfolio
Loans)
Oct 01 £1,000,000 Cost £793,334 23.7 £666,667 Peter English 3.41
(Secured)
Broadreach Networks Limited
Provides both fixed line and Wi-Fi hotspot public internet access outside the
home or office. Users gain access from fixed terminals installed at coffee
shops, hotels and transport hubs by utilizing their own portable device.
Considerable strategic value is being generated from the 'on-train' wireless
access initiative. Investors include Virgin, Intel and British Telecom.
Foresight advanced a further £500,000, committed at the time of the original
investment, by way of a loan in October 2003.
Results from the latest audited accounts for the year ended 31 October 2002:
loss before tax £163,810, retained loss £331,104, net assets £2,208.
Date of Amount Valuation as Valuation as % Equity/ Loans Investor % of 'C'
Investment Invested at 31 at 31 Director Shares
(including December 2002 December 2003 Voting Rights Portfolio
Loans)
Feb 03 & Oct £1,000,000 21.1 £900,000 Jamie 4.30
03 N/A Cost (Secured) Richards
Callserve Communications plc
Is a voice over Internet Protocol telecoms network and service provider which
enables telephone calls to be made from a PC via the internet to any phone
worldwide.
The company completed further rounds of funding from existing investors
(excluding Foresight) in February and June 2003. The Board believes it is
prudent to write down this investment by 55% to reflect the fact that other
instruments rank ahead of Foresight. A new and experienced CEO has recently been
appointed and is implementing strategies to grow the business. Foresight holds
222,222 shares in the company.
Results from the latest audited accounts for the year ended 31 March 2003: loss
before tax £3,960,176, retained loss £15,977,738, net liabilities £4,323,990.
Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of 'C' Shares
as at 31 December as at 31 December Rights Portfolio
2002 2003
Oct 00 £500,000 £449,998 £224,999 1.27 0.97
Camwood Limited
Provides outsourced software application packaging solutions, a critical task in
operating system migrations. Camwood has developed its own 'Catalyst' system to
deliver quality assured component managed enterprise application packaging and
is seeing an increasing demand for its services as companies undertake operating
systems migration projects. Sales are made directly and through channel
partners to the corporate sector.
Results from the latest audited accounts for the year ended 31 March 2003
(before the date of investment): loss before tax £371,502, retained loss
£157,327, net liabilities £57,327.
Date of Amount Valuation as Valuation as % Equity/ Loans Investor % of 'C'
Investment Invested at 31 at 31 Director Shares
(including December 2002 December 2003 Voting Rights Portfolio
Loans)
Sep 03 £500,000 13.3 £333,333 Donald •2.15
N/A Cost (Secured) Maclennan
FfastFill plc (AIM Listed)
Is a software company that develops sophisticated trading solutions for futures
and options traders, brokers and risk managers. Following a disappointing start,
the company secured a £1.2m funding package in 2003 to help execute its
applications services strategy. New Executive Chairman, Keith Todd, stabilized
the business and with prospects for growth now showing improvement Foresight
participated in a further £1 million funding round in January 2004, investing
£100,000. Foresight held 2,914,070 shares in the company prior to the further
investment.
Results from the latest audited accounts for the year ended 31 March 2003: loss
before tax £4,926,000, retained loss £18,202,000, net assets £210,000.s of A
mount % Equity/ % of 'C'
Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of 'C' Shares
as at 31 December as at 31 December Rights Portfolio
2002 2003
(Mid-market) (Mid-market)
Jul 00 £500,000* £36,563 £52,559 2.0 0.23
*Excludes a further investment of £100,000 in shares in January 2004.
iCore Limited
Is an IT management services company, with services that range from strategic IT
reviews, infrastructure design and management, outsourcing procurement, through
to business process management, interim project management and establishing
project offices. The company is trading profitably and the valuation has been
written down based on revenues achieved by the company. Foresight holds 201,176
shares in the company. The Board believes an impairment should be recognised
based on comparables in the market.
Results from the latest audited accounts for the year ended 30 June 2003: profit
before tax £3,735, retained loss £197,223, net assets £564,442.nt
% Equity/ Investor % of 'C'
Date of Amount Invested Valuation Valuation % Equity/Voting Investor % of 'C' Shares
Investment as at 31 as at 31 Rights Director Portfolio
December 2002 December 2003
Dec 00 £750,000 Cost £544,000 16.8 Peter English 2.34
KeepAhead Limited
Despatches lifestyle email services (e.g. current affairs, astrology, sport)
which approximately 200,000 registered users receive free of charge. Revenue is
generated from targeted e-mail advertising. The Board believes an impairment
should be recognised in this investment to reflect the current values of
companies relying on the on-line advertising market. Foresight holds 25,248
shares and 7,631 warrants in the company.
Results from the latest unaudited accounts for the year ended 31 March 2003:
profit before tax £10,325, retained loss £885,995, net assets £22,576.
Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of 'C' Shares
as at as at Rights Portfolio
31 December 2002 31 December 2003
Apr 00 £1,000,000 £50,000 £30,000 15.0 0.13
Monactive Limited
Is a leading provider of Software Licence Information Management solutions with
over 100 customers. The company's software monitors software usage on PC
networks, providing corporates with data for cost reduction and compliance. Its
customers are able to reduce software licensing costs whilst demonstrating
legal compliance.
Foresight holds 474,057 shares in the company following a further investment of
£267,858 by way of a loan and shares in January 2003. After a difficult period,
the second half of 2003 saw renewed growth in sales and a return to
profitability at the operating level. The Board believes an impairment should
be recognized due to the company trading below initial expectation.
Results from the latest audited accounts for the year ended 31 July 2003: loss
before tax £792,351, retained loss £3,016,399, net liabilities £1,585,051.
Dates of Amount Valuation as Valuation as % Equity/ Loans Investor % of 'C'
Investment Invested at 31 at 31 Director Shares
(including December 2002 December 2003 Voting Rights Portfolio
Loans)
Mar 01 & £1,017,858 22.2 £616,072 Matt Taylor 2.82
Jan 03 Cost* £656,251 (Secured)
* Excludes the further investment in 2003
Mondas plc (AIM Listed)
Has developed e-Business technologies to allow securities and investment houses
to deploy new front and back office applications to facilitate straight through
processing. Customers benefit from improved content management, document
management, business process software and service solutions. Foresight holds
2,289,855 shares in the company (allowing for the conversion of loan stock)
Results from the latest audited accounts for the year ended 30 April 2003: loss
before tax £2,224,645, retained loss £7,880,966, net liabilities £421,349.
Dates of Amount Valuation as Valuation as % Equity/ Loan Stock Investor % of 'C'
Investment Invested at 31 December at 31 December Director Shares
(including 2002 2003 Voting Rights Portfolio
Loan Stock (Mid-market) (Mid-market)
Oct 00 & Dec £1,068,116 £932,464 £1,113,145 8.7 £900,000 Bernard 4.79
02 Fairman
Oxonica Limited
Is involved in design manipulation and engineering of properties of materials at
the nano-scale for application in fuel additives, sunscreen, bio tagging and
other products. The company has made good progress particularly in the fuel
additive business and has penetrated overseas markets as well as the UK.
Foresight invested a further £863,438 in shares in January 2004 as part of a
further funding round from existing shareholders which raised £4 million in
total. Foresight held 1,395 shares in the company and 1,769 warrants prior to
the further investment.
Results from the latest audited accounts for the year ended 31 December 2002:
loss before tax £2,119,506, retained loss £3,617,773, net assets £73,467.
Dates of Amount Valuation as Valuation as % Equity/ Loans Investor % of 'C'
Investment Invested at 31 at 31 Director Shares
(including December 2002 December 2003 Voting Rights Portfolio
Loans)
Jun 02 & Dec £999,999* Cost Cost 10.0 £524,053 Bernard 4.30
02 (Secured) Fairman
*Excludes a further investment of £863,438 in shares made in January 2004 taking
Foresight's equity holding to 16%.
Sarantel Limited
Owns proprietary antenna technology with applications in mobile phone and other
wireless devices. The company's technology delivers major performance benefits
over traditional antennae. Sales of Sarantel's first product, the GPS antenna,
are increasing and the company has launched proto types for Wi-Fi and 3G
applications.
Sarantel acquired the entire issued share capital of Heritage Image Partnership
Limited ('HIP') in October 2003 resulting in a cash injection of £850,000 for
Sarantel. Foresight was issued 723,429 new shares in Sarantel in respect of
their original holding in HIP. Following this further issue of shares Foresight
now holds 7,722,608 shares in the company.
Results from the latest audited accounts for the year ended 30 September 2003:
loss before tax £2,930,606, retained profit £6,835,224, net assets £5,023,395.
Dates of Amount Invested Valuation Valuation % Equity/ Investor % of 'C' Shares
Investment as at 31 as at 31 Voting Rights Director Portfolio
December 2002 December 2003
Sep 00, Apr 01, £2,466,158 Cost* Cost 22.9 Matt Taylor 10.60
Jun 01, Mar 02,
Aug 02, Sep 02,
Nov 02 & Feb 03
* Excludes the further investment in 2003
SmartFocus Holdings Limited
Provides software to enable accurate targeting and execution of marketing
campaigns. The company is an established solution provider in this area with 300
customers forming a wide customer base spread across financial services, retail,
marketing services and other consumer-driven sectors. The company adds value to
its customers marketing campaigns by linking with multiple databases, returning
query results in seconds whilst presenting the results in an easily
understandable graphic manor. Foresight holds 398,667 shares in the company.
Results from the latest audited accounts for the year ended 31 December 2002:
loss before tax £59,610, retained loss £75,040, net assets £461,823.
Date of Amount Valuation as Valuation as % Equity/ Loans Investor % of 'C'
Investment Invested at 31 at 31 Director Shares
(including December 2002 December 2003 Voting Rights Portfolio
Loans)
Dec 01 £1,000,000 Cost Cost 20 £666,667 Matt Taylor 4.30
(Secured)
themutual.net plc (AIM Listed)
Operates a financial information website and sells targeted advertising by email
aimed to its subscriber base. themutual.net's shares were listed on the AIM
market in June 2000 and the company's share price increased substantially during
2003. Foresight holds 342,730,249 shares in the company.
Results from the latest audited accounts for the year ended 30 April 2003:
profit before tax £557,950, retained loss £1,407,935, net assets £1,091,772.
Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of 'C' Shares
as at 31 December as at 31 December Rights Portfolio
2002 2003
Jun 00 £500,000 £308,457 £822,553 9.3 3.54
Travelstore.com plc
Sold its business to On-line Travel Limited, a company which provides on-line
services for travel arrangements and had synergies with Travelstore's business.
Travelstore sold the shares in On-line Travel Limited after the lock-up expired
in June 2003. The company has now been placed in liquidation so that
distributions can be made to shareholders. Foresight holds 4,265,000 shares in
the company. The Board's valuation is based on estimated distributions from the
liquidation.
Results from the latest audited accounts for the year ended 31 March 2003 loss
before tax £651,625, retained loss £29,906,301, net assets £1,789,220.
Dates of Amount Invested Valuation Valuation % Equity/Voting % of 'C' Shares
Investment as at 31 December as at 31 December Rights Portfolio
2002 2003
Dec 99 & Nov 02 & £1,339,000 £58,590 £54,600 3.5 0.23
Dec 02
Wire-e Limited
Provides broadcast voice and text services to corporates and smalll and medium
enterprises. The service enables users on the move to access phone numbers,
send emails, text messages and voice broadcasts to multiple contacts from a
mobile phone or desktop browser. The company has grown consistently through
2003. Foresight holds 6,666,666 shares in the company. The Board believes it
prudent to write down the investment since the business is trading below initial
expectations.
Results from the latest audited accounts for the year ended 30 June 2003: loss
before tax £1,126,297, retained loss £2,799,301, net liabilities £970,413.
Date of Amount Valuation as Valuation as % Equity/ Loans Investor % of 'C'
Investment Invested at 31 at 31 Director Shares
(including December 2002 December 2003 Voting Rights Portfolio
Loans)
Sep 02 £1,000,000 Cost £750,000 28.0 £900,000 Jamie 3.22
(Secured) Richards
UK Directory (Holdings) Limited
Operated an internet based directory of business websites, available on-line and
off-line via the publication of a nationally distributed magazine available from
W H Smith. Following difficult trading conditions liquidators were appointed to
the company in March 2003. A final distribution was made by the liquidators
during the second half of 2003 of £12,571. Foresight held 2 million shares in
the company.
Results from the latest audited accounts for the year ended 31 August 2002: loss
before tax £287,306, retained loss £2,565,537, net assets £201,414.
Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of 'C' Shares
as at 31 December as at 31 December Rights Portfolio
2002 2003
Apr 00 £1,000,000 £35,000 Nil 10.0 -
Investment Portfolio Summary at 31 December 2003
ORDINARY SHARES FUND Cost % of
(including Ordinary
administrative Shares
costs) Valuation Portfolio
Equity Portfolio (including loans) £ £ %
Advanced Composites Group Limited 1,622,978 10,007,982 40.14
YooMedia plc (formerly e-district.net plc) 817,357 9,020,900 36.18
Telecom plus plc 286,519 2,985,225 11.97
Actimax plc 600,001 937,412 3.76
Sapphire International Limited 1,150,000 400,000 1.61
Clarity Commerce Solutions plc 500,000 282,000 1.13
DSM Geodata Limited - 79,548 0.32
Survey and Development Services Limited 700,000 - -
Entraline Limited (formerly Creature
Laboratories Limited) 1,501,897 - -
--------------- --------------- ---------------
7,178,752 23,713,067 95.11
Current investments - see note below 1,217,995 1,217,995 4.89
--------------- --------------- ---------------
Total Ordinary Shares fund 8,396,747 24,931,062 100.00
--------------- --------------- ---------------
'C' SHARES FUND Cost % of
(including Ordinary
administrative Shares
costs) Valuation Portfolio
Equity Portfolio (including loans) £ £ %
Sarantel Limited 2,466,158 2,466,158 10.60
Alaric Limited 1,254,179 1,254,179 5.39
Mondas plc 1,068,116 1,113,145 4.79
Aquasium Technology Limited 1,200,000 1,100,000 4.73
Broadreach Networks Limited 1,000,000 1,000,000 4.30
Oxonica Limited 999,999 999,999 4.30
SmartFocus Holdings Limited 1,000,000 1,000,000 4.30
themutual.net.plc 502,938 822,553 3.54
Wire-e Limited 1,000,000 750,000 3.22
Blue Curve Research.net Limited 1,000,000 793,334 3.41
Monactive Limited 1,017,858 656,251 2.82
iCore Limited 750,000 544,000 2.34
Camwood Limited 500,000 500,000 2.15
ANT Limited 1,090,000 491,590 2.11
Callserve Communications plc 502,893 224,999 0.97
Actimax plc 200,000 200,000 0.86
FfastFill plc 506,114 52,559 0.23
Travelstore.com plc 1,343,202 54,600 0.23
KeepAhead Limited 1,000,000 30,000 0.13
UK Directory (Holdings) Limited 1,000,000 - -
iDesk plc 500,000 - -
--------------- --------------- ---------------
19,901,457 14,053,367 60.42
Current investments - see note below 9,204,957 9,204,957 39.58
--------------- --------------- ---------------
Total 'C' Shares fund 29,106,414 23,258,324 100.00
--------------- --------------- ---------------
COMPANY TOTAL 37,503,161 48,189,386
--------------- ---------------
Further information on the current investments included above is shown in note
12 below.
The amounts provided or written off against unlisted investments in the last
financial years were:
Provisions Made Write Offs
Financial Year £ £
Year ended 31 December 2003 2,456,474 695,000
Period to 31 December 2002 128,528 -
Year ended 30 September 2002 2,231,971 -
Year ended 30 September 2001 3,220,526 -
No individual provision or write off exceeded 5% of the gross assets of the
Company.
Non-Statutory Analysis between the Ordinary Shares and 'C' Shares Funds
Statement of Total Return for the year ended 31 December 2003
Ordinary Shares fund 'C' Shares fund
Revenue Capital Total Revenue Capital Total
£ £ £ £ £ £
Gains/(losses)
on investments - 12,667,088 12,667,088 - (1,383,128) (1,383,128)
Income 426,342 - 426,342 855,969 - 855,969
Investment
management fees (73,851) (221,553) (295,404) (144,878) (434,633) (579,511)
Other expenses (86,735) - (86,735) (315,289) - (315,289)
------------ ------------ ------------- ------------ ------------ ------------
Return on ordinary
activities before
taxation 265,756 12,445,535 12,711,291 395,802 (1,817,761) (1,421,959)
Tax on ordinary
activities - - - (73,475) 75,202 1,727
------------ ------------ ------------- ------------ ------------ ------------
Return attributable
to equity
shareholders 265,756 12,455,535 12,711,291 322,327 (1,742,559) (1,420,232)
Dividends in
respect of equity
shares - (1,022,462) (1,022,462) (428,344) - (428,344)
------------ --------------- --------------- ------------ -------------- -------------
Transfer to/(from)
reserves 265,756 11,423,073 11,688,829 (106,017) (1,742,559) (1,848,576)
------------ --------------- --------------- ------------ -------------- -------------
Return per share 2.04p 95.76p 97.80p 0.96p (5.21)p (4.25)p
Balance Sheets
as at 31 December 2003
Ordinary Shares fund 'C' Shares fund
£ £ £ £
Fixed assets
Investments 23,713,067 14,053,367
Current assets
Debtors and prepayments 190,671 397,327
Current investments 1,217,995 9,204,957
Cash at bank 29,160 81,287
------------ -------------
1,437,826 9,683,571
Creditors: amounts falling due within one year (107,029) (256,541)
------------ -------------
Net current assets 1,330,797 9,427,030
------------ --------------
Net assets 25,043,864 23,480,397
------------ --------------
Capital
Called up share capital 134,101 349,505
Share premium account 978,937 1,360,270
Cancelled share premium account 6,996,547 27,582,370
Revaluation reserve 16,544,315 (5,813,090)
Profit and loss account 389,964 1,342
-------------- ---------------
Equity shareholders' funds 25,043,864 23,480,397
-------------- --------------
Number of shares in issue 13,410,141 34,950,472
Net asset value per share - basic 186.75p 67.18p
Net asset value per share - diluted 165.43p 56.52p
Profit and Loss Account
for the year ended 31 December 2003
Year ended 3 months ended
31 December 2003 31 December 2002
Revenue Capital Total Revenue Capital Total
£ £ £ £ £ £
Gains on realisation of
investments - 64,000 64,000 - 3,800 3,800
Income 1,282,311 - 1,282,311 535,282 - 535,282
Investment management
fees (218,729) (656,186) (874,915) (55,641) (166,925) (222,566)
Other expenses (402,024) - (402,024) (114,326) - (114,326)
------------ ------------ ------------ ------------ ------------ ------------
Profit/(loss) on ordinary
activities before taxation 661,558 (592,186) 69,372 365,315 (163,125) 202,190
Tax on ordinary activities (73,475) 75,202 1,727 (28,458) 28,458 -
------------ ------------ ------------ ------------ ------------ ------------
Profit/(loss) on ordinary
activities after taxation 588,083 (516,984) 71,099 336,857 (134,667) 202,190
Dividends (428,344) (1,022,462) (1,450,806) (313,450) - (313,450)
------------ ------------ ------------ ------------ -------------- --------------
Retained profit/(loss) for
the year transferred to/
(from) reserves 159,739 (1,539,446) (1,379,707) 23,407 (134,667) (111,260)
------------ ------------ ------------ ------------ ------------- --------------
Earnings per share:
Ordinary Shares 2.60p (1.22)p
'C' Shares (0.80)p 0.13p
All the items in the above statement derive from continuing operations.
Statement of Total Recognised Gains and Losses
for the year ended 31 December 2003
Year ended 3 months ended
31 December 2003 31 December 2002
Revenue Capital Total Revenue Capital Total
£ £ £ £ £ £
Profit/(loss) for the 588,083 (516,984) 71,099 336,857 (134,667) 202,190
year
Unrealised
gains/(losses) on
revaluation of
investments - 11,219,960 11,219,960 - (488,306) (488,306)
------------ --------------- --------------- ------------ --------------- ---------------
Total recognised gains/
(losses) during the
year 588,083 10,702,976 11,291,059 336,857 (622,973) (286,116)
------------ --------------- --------------- ------------ --------------- ---------------
Return per share:
Ordinary Shares 2.04p 95.76p 97.80p 1.56p (2.52)p (0.96)p
'C' Shares 0.96p (5.21)p (4.25)p 0.40p (0.88)p (0.48)p
Note of Historical Cost Profits and Losses
for the year ended 31 December 2003
Year ended 3 months ended
31 December 31 December
2003 2002
Total Total
£ £
Profit on ordinary activities before taxation 69,372 202,190
Realisation of revaluation losses of previous years (381,208) (45,240)
-------------- --------------
Historical cost (loss)/ profit on ordinary activities before
taxation (311,836) 156,950
-------------- --------------
Historical cost loss for the year after taxation and dividends (1,760,915) (156,500)
-------------- --------------
Balance Sheet
as at 31 December 2003
Year ended 3 months ended
31 December 2003 31 December 2002
£ £ £ £
Fixed assets
Investments 37,766,434 34,435,175
Current assets
Debtors and prepayments 568,375 626,721
Current investments 10,422,952 -
Cash at bank 110,447 2,432,997
------------- -------------
11,101,774 3,059,718
Creditors: amounts falling due within one
year (343,947) (742,444)
-------------- --------------
Net current assets 10,757,827 2,317,274
-------------- --------------
Net assets 48,524,261 36,752,449
-------------- --------------
Capital
Called up share capital 483,606 463,396
Share premium account 2,339,207 -
Cancelled share premium account 34,578,917 36,800,938
Revaluation reserve 10,731,225 (869,943)
Revenue reserves 391,306 358,058
-------------- --------------
Equity shareholders' funds 48,524,261 36,752,449
-------------- --------------
Net asset value per share of 1 pence each: Basic Diluted Basic Diluted
Ordinary Shares 186.75p 165.43p 96.48p 85.27p
'C' Shares 67.18p 56.52p 72.51p 60.49p
CASH FLOW STATEMENT
for the year ended 31 December 2003
Year ended 3 months ended
31 December 2003 31 December 2002
£ £ £ £
Operating activities
Dividends received 356,690 189,838
Deposit and similar interest received 915,786 473,349
Other cash receipts 11,220 35,704
Investment management fees paid (892,855) (227,205)
Other cash payments (456,191) (74,901)
-------------- --------------
Net cash (outflow)/inflow from operating
activities (65,350) 396,785
Taxation
Net tax refund - (7,693)
Capital expenditure and financial
investment
Purchase of other investments (3,086,611) (2,095,617)
Sale of fixed income investments 9,016,050 2,445,307
Sale of other investments 2,100,275 42,800
-------------- --------------
Net cash inflow from capital expenditure
and financial investment 8,029,714 392,490
Equity dividends
Net dividends paid (1,831,953) -
-------------- --------------
Net cash inflow before financing and
liquid resource management 6,132,411 781,582
Management of liquid resources
Increase in current investments (10,422,952) -
Financing
Issue of shares (net of expenses) 2,366,012 -
Purchase of own shares (398,021) -
-------------- --------------
1,967,991 -
-------------- --------------
Net (decrease)/increase in cash (2,322,550) 781,582
-------------- --------------
Notes
1 Earnings and return per share
Total earnings after taxation for the year were £71,099 (Three month period to
31/12/2002: £202,190) comprising a profit on the Ordinary Shares fund after
taxation of £338,432 (Three month period to 31/12/2002: £160,074 ) and a loss
after taxation on the 'C' Shares fund of £267,333 (Three month period to 31/12/
2002: profit of £42,116). The basic earnings per Ordinary Share is based on the
net profit from ordinary activities and on 12,997,238 (Three month period to 31/
12/2002: 13,148,403 ) Ordinary Shares, being the weighted average number of
Ordinary Shares in issue during the year. There is no difference between the
basic earnings per share and diluted earnings per share as the Ordinary Warrants
are not considered to be dilutive. The basic earnings per 'C' Share is based on
the net loss from 'C' Shares fund activities and on 33,449,602 (Three month
period to 31/12/2002: 33,191,219 ) 'C' Shares, being the weighted average number
of 'C' Shares in issue during the year. There is no difference between the basic
earnings per share and diluted earnings per share as the 'C' Warrants are not
considered to be dilutive.
The revenue return per Ordinary Share is based on the net revenue from Ordinary
Share fund activities after taxation of £265,756 (Three month period to 31/12/
2002: £205,189 ) and on 12,997,238 (Three month period to 31/12/2002: 13,148,403
) Ordinary Shares, being the weighted average number of Ordinary Shares in issue
during the year. The revenue return per 'C' Share is based on the net revenue
from 'C' Share fund activities after taxation of £322,327 (Three month period to
31/12/2002: £131,668 ) and on 33,449,602 (Three month period to 31/12/2002:
33,191,219) 'C' Shares, being the weighted average number of 'C' Shares in issue
during the year.
The capital return per Ordinary Share is based on the net realised capital gains
of £294,229 (Three month period to 31/12/2002: losses of £45,115), on net
unrealised capital gains of £12,372,859 (Three month period to 31/12/2002:
losses of £286,386) and capitalised management fees less associated tax relief
of £221,553 (Three month period to 31/12/2002: £48,915) on the Ordinary Shares
fund and on 12,997,238 (Three month period to 31/12/2002: 13,148,403 ) Ordinary
Shares. The capital return per 'C' Share is based on the net realised capital
losses of £230,229 (Three month period to 31/12/2002: £89,552 ), on net
unrealised capital losses of £1,152,899 (Three month period to 31/12/2002: gains
of £201,920 ) and capitalised management fees less associated tax relief of
£359,431 (Three month period to 31/12/2002: £89,552) on the 'C' Shares fund and
on 33,449,602 (Three month period to 31/12/2002: 33,191,219 ) 'C' Shares.
2 Dividends
3 month
Year to period to
31 31
December December
2003 2002
£ £
Ordinary Shares
Interim dividend paid 1,023,263 -
Final dividend proposed - 65,107
Over-accrued in previous period (801) -
-------------- --------------
1,022,462 65,107
-------------- --------------
'C' Shares
Interim dividend paid 247,870 -
Final dividend proposed 181,237 248,343
Over-accrued in previous period (763) -
-------------- --------------
428,344 248,343
-------------- --------------
3 Net asset value per Share - basic and diluted
Basic net asset value per Ordinary Share is based on net assets of the Ordinary
Shares fund at the year end, and on 13,410,141 (31/12/2002: 13,148,403) Ordinary
Shares, being the number of Ordinary Shares in issue on that date.
Diluted net asset value per Ordinary Share is based on net assets of the
Ordinary Shares fund at the year end, and on 13,410,141 (31/12/2002: 13,148,403)
Ordinary Shares, being the number of Ordinary Shares in issue on that date, plus
the number of warrants remaining to be exercised of 1,728,500 on that date (31/
12/2002:1,728,500).
Basic net asset value per 'C' Share is based on net assets of the 'C' Shares
fund at the year end, and on 34,950,472 (31/12/2002: 33,191,219) 'C' Shares,
being the number of 'C' Shares in issue on that date.
Diluted net asset value per 'C' Share is based on net assets of the 'C' Shares
fund at the year end, and on 34,950,472 (31/12/2002: 33,191,219) 'C' Shares,
being the number of 'C' Shares in issue on that date, plus the number of
warrants remaining to be exercised of 6,592,192 on that date (31/12/2002:
6,595,192).
4. The financial information set out in these statements does not
constitute the Company's statutory accounts for the years ended 31 December 2003
but is derived from those accounts. Statutory accounts for the 3 months ended
31 December 2002 have been delivered to the Registrar of Companies and those for
2003 will be delivered following the Company's Annual General Meeting. The
auditors have reported on those accounts: their reports were unqualified and did
not contain statements under Section 237 (2) or (3) of the Companies Act 1985.
5. The Annual Report will be circulated by post to all shareholders
shortly and copies will be available thereafter to members of the public from
the Company's registered office at St Philips House, St Philips Place,
Birmingham B3 2PP.
6. The Annual General Meeting will be held at 11.00am on 22 July 2004 at
Mallory Court Hotel, Harbury Lane, Bishops Tachbrook, Leamington Spa,
Warwickshire CV33 9QB.
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