Foresight VCT plc - Half-year report

FORESIGHT VCT PLC

Financial Highlights

• Total net assets £132.3 million.

• An interim dividend of 5.0p per share was paid on 3 May 2019, costing £8.8 million.

• The portfolio has seen an uplift in valuation of £4.8 million in the last six months.

• Net Asset Value per share increased by 2.9% from 78.1p at 31 December 2018 to 80.4p before dividends. After payment of a 5.0p dividend made on 3 May 2019, NAV per share at 30 June 2019 reduced to 75.4p.

• Four new VCT qualifying investments, totalling £9.0 million were made during the period.

Chairman's Statement

I am pleased to present the Unaudited Half-Yearly Financial Report for Foresight VCT plc for the period ended 30 June 2019.

STRATEGY

The Directors, together with the Manager, continue to pursue a strategy for the Company which includes the following four key objectives:

• Increasing and then maintaining the Company’s net asset value (NAV) significantly above £150 million;

• Paying an annual dividend to shareholders and endeavouring to maintain, or increase, NAV per share year on year, after payment of dividends;

• Completing a significant number of new and follow on qualifying investments every year; and

• Offering a programme of regular share buy backs at a discount of approximately 10% to the prevailing NAV.

NET ASSET VALUE  

During the period ended 30 June 2019 the NAV per share rose by 2.3p, an increase of 2.9%. However, following the payment of a 5.0p per share dividend on 3 May 2019, which is detailed below, the NAV of the Company decreased from £136.7 million at 31 December 2018 to £132.3 million as at 30 June 2019.

At 30 June 2019 the cash resources of the Company were £19.8 million and in line with the current strategy, the Directors will give consideration to the benefits which might arise from further fund raising in the coming months.

DIVIDENDS  

The interim dividend of 5.0p per share was paid on 3 May 2019 based on an ex-dividend date of 11 April 2019, with a record date of 12 April 2019. The cost of this dividend was a total of £8.8 million, including shares allotted under the dividend reinvestment scheme.  

The Company has achieved or exceeded its target of paying an annual dividend of at least 5.0p per share for each of the past nine years. Since establishing the current dividend strategy major changes have taken place to the VCT rules and, as I have highlighted in recent Statements to Shareholders, these have been intended to shift investment into earlier stage, higher risk companies. By their nature these companies normally take longer to mature and, though eventual returns should be similar, the Board anticipates that for the coming few years enhancement to investment values, realisations and income will all be more volatile. As a consequence, although the total amount of distributions over the longer term could be similar, the Board believes that it would be prudent to move the dividend policy towards a targeted annual dividend yield of 5% of NAV per annum. This should be enhanced by additional ‘special’ dividends as and when particularly successful portfolio exits are made.

The total return per share from an investment made five years ago would be 12.6%, which is materially below the target return set by the Directors, and it is the future achievement of this target that is at the centre of the Company’s current and future portfolio management strategy.

INVESTMENT PERFORMANCE AND PORTFOLIO ACTIVITY

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

Before the payment of dividends, the Company’s NAV increased in the period by £4.4 million. The Board believes that this reflects the benefit of the enlarged and diversified portfolio of qualifying investments which the Manager has built up over the past few years. The Company started the current year with 85% of its assets invested in a range of unquoted growth capital investments; the Board and Manager believe that, in aggregate, these investments will continue to mature and should help improve the future rate of growth in NAV.

During the period under review the Manager completed four new VCT qualifying investments amounting to £9.0 million. Details of each of these new portfolio companies can be found in the Manager’s Review.

The Manager expects that the current pipeline of opportunities should support completion of a number of additional new investments during the remainder of the current year.

The Board is aware that Foresight 4 VCT plc (‘Foresight 4’) has over the past two years raised a considerable amount of new money, much of which needs to be invested in the near future. The Company and Foresight 4 have the same Manager and share similar investment policies. The Board closely monitors the extent and nature of the pipeline of investment opportunities and is reassured by the Manager’s confidence in being able to increase the level of new investments without compromising quality during 2019 and beyond, so as to be in a position to satisfy the investment needs of both the Company and Foresight 4.

BUYBACKS

During the period the Company repurchased 1.5 million shares for cancellation at an average discount of 10.0%. The Board and the Manager consider that the ability to offer to buy back shares at a target discount of approximately 10% is fair to both continuing and selling shareholders and is an appropriate way to help underpin the discount to NAV at which the shares trade.

Share buybacks are timed during the year taking account of the Company’s closed periods. These will generally take place, subject to demand, during the following times of year:

• April, after the Annual Report has been published;

• June, prior to the Half-Yearly reporting period date of 30 June;

• September, after the Half- Yearly Financial Report has been published; and

• December, prior to the end of the financial year.

MANAGEMENT CHARGES, CO-INVESTMENT AND INCENTIVE ARRANGEMENTS

The annual management fee is an amount equal to 2.0% of net assets, excluding cash balances above £20 million, which are charged at a reduced rate of 1.0%. This has resulted in ongoing charges for the period ended 30 June 2019 being 2.3% of net assets, which is at the lower end of the range when compared to competitor VCTs.

Since March 2017, co-investments made by the Manager and individual members of Foresight Group’s private equity team have totalled £0.6 million alongside the Company’s investments of £41.4 million. Under the terms of the Incentive Arrangements, the ‘Total NAV Return Hurdle’ has not yet been achieved and no performance incentive payment is due.

BOARD COMPOSITION

The Board continues regularly 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. There is no present intention to alter the composition of the Board and the first planned change is scheduled to take effect during 2021.

SHAREHOLDER COMMUNICATION

As part of its commitment to high quality investor relations, Foresight Group continues to host its popular investor forums. In addition to an annual event in London, several regional investor forums have been or will be held around the country. Details of regional events will be sent to Shareholders resident in the locality as and when they are organised.

The Board is offering shareholders the opportunity to elect the method by which they receive shareholder communications in the future. Details of this are included in the letter enclosed with this report. The Board believes that, in addition to promoting sustainability, a shift towards electronic communications will result in cost savings for the Company.

AUDITOR

The Board regularly reviews the Company’s ongoing costs and launched a tender for its audit contract following the signing of the 2018 Annual Report and Accounts. The previous auditor, KPMG LLP, was invited to tender alongside several other firms. Following this competitive tender process, I am pleased to confirm that Deloitte LLP have been appointed as company auditor for the year ending 31 December 2019. The Board would like to thank KPMG for their service over the past eight years. As announced earlier today, KPMG’s section 519 statement will be enclosed with this report.

OUTLOOK

The persisting uncertainty over Brexit and worrying indicators for various areas of world trade are unhelpful for business in general. Foresight VCT invests primarily in developing companies which by their nature benefit from general economic growth, and the current environment places additional demands upon them and their management teams. Foresight Group’s private equity team is well aware of the management and business needs of each of the companies within the investment portfolio and is working closely with them to ensure that they are able to make progress during these testing times. The Board and the Manager are optimistic that the existing portfolio has potential to grow further during the current year and beyond and that the present pipeline of potential investments includes some attractive opportunities.

John Gregory
Chairman
Telephone [phone]
Email: [e-mail]
30 August 2019

Manager's Review

The Company has appointed Foresight Group CI Limited as its manager (“The Manager”) to provide investment management and administration services. Foresight Group CI Limited has appointed Foresight Group LLP to be its investment adviser. The Manager has also delegated secretarial, accounting and other administration services to Foresight Group LLP. References to “the Manager” throughout this report refer to the activities of Foresight Group CI Limited and include the activities of Foresight Group LLP when acting as the Manager’s investment adviser and administrative delegate.

Overview

We were pleased to deliver an uplift in portfolio value of £4.8 million in the period, although NAV was reduced by payment of an £8.8 million dividend and performance was therefore behind target. Good progress was made in regards new investments with four completed in the six-month period, deploying £9.0 million. We continue to manage the Company’s resources to ensure sufficient liquidity for new and follow-on investments, dividends and regular buybacks, with the Company repurchasing 1.5 million shares at an average discount of 10% in the period under review.

As the portfolio mix evolves in line with the new VCT rules we believe the Board’s new target dividend of 5% of NAV per annum, enhanced by the opportunity for ‘special’ dividends following successful portfolio exits, more appropriately reflects likely returns from the underlying portfolio.

Portfolio Summary

As at 30 June 2019 the Company’s portfolio comprised 42 investments with a total cost of £85.7 million and a valuation of £112.8 million. The portfolio is diversified by sector, transaction type and maturity profile.

NEW INVESTMENTS AND FOLLOW-ON FUNDING

The Company invested a total of £9.0 million during the first six months of 2019. This included Clubspark, a sports management software company, Steamforged Games, a developer and retailer of tabletop games, Fourth Wall Creative, a technology-led sports merchandising business and most recently Ten Health & Fitness, a boutique group of health and fitness studios.

CLUBSPARK

In January 2019 the Company made a c.£1.3 million investment into Sportlabs Technology Limited, trading as ClubSpark, a specialist software company providing sports management software to sports clubs, venues, coaches and participants. ClubSpark was founded in 2012 by two ex-Lawn Tennis Association employees who spotted an opportunity to develop a platform to manage operations for the LTA member clubs. The investment will be used to establish an international presence, enhance the platform and expand into new sports markets.

STEAMFORGED GAMES

In March 2019 the Company invested c.£2.4 million in Steamforged Games, a developer and retailer of tabletop games with a portfolio of miniature role playing, board and card games. Founded in 2014, Steamforged Games has successfully carved out a niche in the market developing tabletop games based on popular video game titles, as well as their own original content. The investment will be used to fund growth through product development and international expansion.

FOURTHWALL CREATIVE

The Company invested c.£3.0 million in Fourth Wall Creative, a technology-led sports merchandising business. Founded in 2010, their core business is the design and distribution of membership welcome packs on behalf of football clubs. The investment will fund growth through the development of new services, expanding the customer base and exploring other sports opportunities.

TEN HEALTH & FITNESS

In June 2019 the Company invested c.£2.4 million in Ten Health, a group of boutique fitness studios offering a range of services including physiotherapy, massage therapy and fitness classes. Founded in 2007, Ten Health was developed to bridge the gap in the market between traditional healthcare and mainstream fitness. The investment will be used to further develop Ten Health’s non-fitness services and to support a roll-out of new studios.

FOLLOW-ON INVESTMENTS

There have been no follow-on investments during the six months to 30 June 2019.

PIPELINE

Foresight Group continues to see a strong pipeline of potential investments and has a number of opportunities under exclusivity or in due diligence. Our investment team currently consists of 24 experienced private equity professionals operating from six offices in the UK, due to be expanded to seven later in 2019. We review nearly 1,500 business plans of potential investee companies per year, with an increasing number of prospects originated directly by our investment team. This approach allows us to seek off-market opportunities which are often better value as there is less competition in the process. During the first half of 2019 we are on track to review a record number of businesses thanks to our expanding regional footprint. The Company focuses on SMEs in all sectors across the UK, seeking funding of £1-5 million.  

At 30 June 2019, the Company had cash balances of £19.8 million, which will be used to fund new and follow-on investments, buybacks and running expenses. The Company remains well positioned to continue pursuing the potential investment opportunities in the pipeline.

EXITS AND REALISATIONS

The Business Advisory Limited repaid a £45,000 loan in the period. Other than this there have been no exits during the six months to 30 June 2019. Foresight Group continues to engage with a range of potential acquirers of several portfolio companies, with demand for these high growth businesses demonstrated by both private equity and trade buyers.

In May 2019 LGDA Limited (formerly Autologic Diagnostics Group Limited) was dissolved, realising a loss of £3,782,272. The investment in Autologic had been valued at £nil since 2017. This loss results from the transfer from unrealised to realised reserves and has no impact on NAV in the current period.

KEY PORTFOLIO DEVELOPMENTS

Overall, the value of unquoted investments held rose to £112.8 million, driven by £9.0 million of deployment and an increase in the value of existing investments by £4.8 million. Material changes in valuation, defined as increasing or decreasing by £1.0 million or more since 31 December 2018, are detailed below. Updates on these companies are included below;

Company	Valuation (£)	Valuation Change (£)
FFX Group Limited	7,408,267	2,320,670
Specac International Limited	6,315,005	1,267,684
Ixaris Systems Limited	5,580,716	1,017,326
Datapath Group Limited	7,782,267	(1,027,677)
Online Poundshop Limited	933,187	(1,041,399)
Powerlinks Media Limited	411,358	(1,129,666)

ONLINE POUNDSHOP

Online retailer Poundshop has had a soft period of trading primarily due to the seasonality of their business combined with unusually hot weather and a reduced level of stock. Sales are down, however management are working on improving gross margins and their cash management to reduce further losses.

POWERLINKS MEDIA

PowerLinks Media, a real-time trading platform for native digital advertisements, has converted several large new clients over the past six months. Sales however remain behind expectations. To help fund growth, PowerLinks Media undertook a small private capital raise in Q2 and will continue to focus on managing its cost base.

OUTLOOK

There remains uncertainty around the UK’s withdrawal from the EU and it is likely that economic growth will stay subdued, or even slip into negative territory, over the coming year. Generally, the business environment remains uncertain with the Bank of England keeping interest rates low and with employment still at record levels. This was reflected through muted levels of UK consumer confidence in July, and this is anticipated to fall again in August due to rising concerns over a no-deal Brexit. The Bank of England also cut its outlook for growth in 2020 to 1.3%, from a previous projection of 1.6%. There is a likely period of volatility ahead, nonetheless Foresight Group remains positive about the prospects for the Company’s diversified portfolio. We continue to see encouraging levels of activity from smaller UK companies seeking growth capital, as well as from potential acquirers of portfolio companies. Your investment management team remains focused on targeting companies in markets with sound fundamentals, with attractive growth attributes and strong management teams.

Foresight Group has undertaken a further review of the impact of Brexit on the investment portfolio, attempting to identify and mitigate potential risks that could arise as a result of Brexit, as well as identifying opportunities that could result from it. Given the lack of clarity on timing or type of Brexit and the relatively limited resources available to small companies, mitigation planning is clearly challenging. However, given the diverse nature of businesses in the portfolio, with a combination of UK-centric businesses and companies that are net importers/net exporters from and to the EU and the rest of the world, Foresight Group remains confident the Company is reasonably well positioned to deal with potential volatility. Nevertheless, the investment team is scenario planning for all eventual outcomes. We will continue to monitor investments closely and adapt to market changes to ensure the Company’s portfolio is well-placed to deliver returns to its investors.

Russell Healey
Head of Private Equity
Foresight Group
30 August 2019

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 December 2018. A detailed explanation can be found on page 27 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 UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim 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 December 2018 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

John Gregory

Chairman

30 August 2019

Unaudited Income Statement
for the six months ended 30 June 2019

	Six months ended 30 June 2019 (Unaudited)			Six months ended 30 June 2018 (Unaudited)			Year ended 31 December 2018 (Audited)
	Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000
Realised (losses)/ gains on investments	-	(3,341)	(3,341)	-	2,192	2,192	-	921	921
Investment holding gains	-	8,204	8,204	-	523	523	-	5,916	5,916
Income	677	-	677	735	-	735	1,398	-	1,398
Investment management fees	(314)	(943)	(1,257)	(293)	(879)	(1,172)	(595)	(1,784)	(2,379)
Other expenses	(289)	-	(289)	(213)	-	(213)	(472)	-	(472)
Return on ordinary activities before taxation	74	3,920	3,994	229	1,836	2,065	331	5,053	5,384
Taxation	-	-	-	(32)	32	-	(34)	34	-
Return on ordinary activities after taxation	74	3,920	3,994	197	1,868	2,065	297	5,087	5,384
Return per share:
	0.1p	2.2p	2.3p	0.1p	1.1p	1.2p	0.2p	2.9p	3.1p

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 June 2019  

Registered Number: 03421340

	As at 30 June 2019 £’000	As at 30 June 2018 £’000	As at 31 December 2018 £’000
Fixed assets
Investments held at fair value through profit or loss	112,774	85,407	99,065
Current assets
Debtors	235	723	542
Money market securities and other deposits	17,323	44,582	34,723
Cash	2,487	3,669	2,696
	20,045	48,974	37,961
Creditors
Amounts falling due within one year	(479)	(181)	(300)
Net current assets	19,566	48,793	37,661
Net assets	132,340	134,200	136,726
Capital and reserves
Called-up share capital	1,755	1,762	1,751
Share premium account	100,495	99,172	99,115
Capital redemption reserve	935	908	920
Distributable reserve	3,224	13,566	12,929
Capital reserve	(862)	5,596	3,422
Revaluation reserve	26,793	13,196	18,589
Equity shareholders’ funds	132,340	134,200	136,726
Net asset value per share:
	75.4p	76.2p	78.1p

Unaudited Reconciliation of Movements in Shareholders' Funds
for the six months ended 30 June 2019

	Called-up share capital £’000	Share premium account £’000	Capital redemption reserve £’000	Distributable reserve £’000	Capital reserve £’000	Revaluation reserve £’000	Total £’000
As at 1 January 2019	1,751	99,115	920	12,929	3,422	18,589	136,726
Share issues in the period*	19	1,426	-	-	-	-	1,445
Expenses in relation to share issues	-	(46)	-	-	-	-	(46)
Repurchase of shares	(15)	-	15	(1,026)	-	-	(1,026)
Realised losses on disposal of investments	-	-	-	-	(3,341)	-	(3,341)
Investment holding gains	-	-	-	-	-	8,204	8,204
Dividend paid	-	-	-	(8,753)	-	-	(8,753)
Management fees charged to capital	-	-	-	-	(943)	-	(943)
Revenue return for the period	-	-	-	74	-	-	74
As at 30 June 2019	1,755	100,495	935	3,224	(862)	26,793	132,340

*Relating to the dividend reinvestment scheme.

Distributable reserves at 30 June 2019 totalled £2.4 million. Share premium totalling £21.6 million was cancelled on 30 July 2019, increasing distributable reserves by this amount.

Unaudited Cash Flow Statement
for the six months ended 30 June 2019

	Six months ended 30 June 2019 £’000	Six months ended 30 June 2018 £’000	Year ended 31 December 2018 £’000
Cash flow from operating activities
Investment income received	494	577	1,180
Deposit and similar interest received	107	108	258
Investment management fees paid	(1,257)	(1,172)	(2,379)
Secretarial fees paid	(62)	(56)	(115)
Other cash payments	(257)	(319)	(495)
Net cash outflow from operating activities	(975)	(862)	(1,551)
Cash flow from investing activities
Purchase of investments	(8,956)	(7,936)	(17,705)
Net proceeds on sale of investments	45	3,019	3,380
Net proceeds on deferred consideration	441	339	310
Net proceeds on liquidation of investments	-	20	20
Net cash outflow from investing activities	(8,470)	(4,558)	(13,995)
Cash flow from financing activities
Expenses of fund raising	(46)	(48)	(95)
Repurchase of own shares	(810)	(1,104)	(1,763)
Dividends paid	(7,308)	(7,176)	(7,176)
Movement in money market funds	17,400	15,900	25,759
Net cash inflow from financing activities	9,236	7,572	16,725
Net (outflow)/ inflow of cash in the period	(209)	2,152	1,179
Reconciliation of net cash flow to movement in net funds
(Decrease)/increase in cash and cash equivalents for the period	(209)	2,152	1,179
Net cash and cash equivalents at the start of period	2,696	1,517	1,517
Net cash and cash equivalents at the end of period	2,487	3,669	2,696

Analysis of changes in net debt

	At 1 January 2019 £’000	Cash Flow £’000	At 30 June 2019 £’000
Cash and cash equivalents	2,696	(209)	2,487

Notes to the Unaudited Half-Yearly Results

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 December 2018. Unquoted investments have been valued in accordance with IPEV 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 June 2019 and 30 June 2018 has been neither audited nor formally reviewed. Statutory accounts in respect of the year ended 31 December 2018 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 2018 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 will be sent to shareholders and will be available for inspection at the Registered Office of the Company at The Shard, 32 London Bridge Street, London, SE1 9SG.
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 the date.

	Net assets	Number of Shares in Issue
30 June 2019	£132,340,000	175,481,093
30 June 2018	£134,200,000	176,180,654
31 December 2018	£136,726,000	175,051,026

5. 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 2019	175,365,523
Six months ended 30 June 2018	175,775,983
Year ended 31 December 2018	175,834,593

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

6)      Income

	Six months ended 30 June 2019 £’000	Six months ended 30 June 2018 £’000	Year ended 31 December 2018 £’000
Loan stock interest	457	568	985
Dividends	113	60	155
Overseas based Open Ended Investment Companies (“OEICs”)	100	100	241
Bank interest	7	7	17
	677	735	1,398

7)        Investments at fair value through profit or loss

	£’000
Book cost as at 1 January 2019	80,527
Investment holding gains	18,538
Valuation at 1 January 2019	99,065
Movements in the period:
Purchases	8,956
Disposal proceeds	(45)
Realised gains*	(3,782)
Investment holding gains**	8,580
Valuation at 30 June 2019	112,774
Book cost at 30 June 2019	85,656
Investment holding gains	27,118
Valuation at 30 June 2019	112,774

*Realised losses in the income statement include deferred consideration of £441,000 received from the sale of Trilogy Communications Limited.
**Investment holding gains in the income statement have been reduced by the offset in the deferred consideration debtor of £376,000, relating to Trilogy Communications Limited.

8)        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.

9)     Transactions with the Manager
Foresight Group CI Limited acts as manager to the Company. During the period, services of a total cost of £1,257,000 (30 June 2018: £1,172,000; 31 December 2018: £2,379,000) were purchased by the Company from Foresight Group CI Limited. At 30 June 2019, the amount due to Foresight Group CI Limited was £nil (30 June 2018: £nil; 31 December 2018: £nil).

During the period, administration services of a total cost of £60,000 (30 June 2018: £56,000; 31 December 2018: £117,000) were delivered to the Company by Foresight Group LLP, Company Secretary. At 30 June 2019 the amount due to Foresight Group LLP was £nil (30 June 2018: £nil; 31 December 2018: £2,000).

10) Post-Balance sheet events  

On 30 July 2019 share premium totalling £21.6 million was cancelled, increasing distributable reserves by this amount.

END