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Share Name Share Symbol Market Type Share ISIN Share Description
Foresight Vct Plc LSE:FTV London Ordinary Share GB00B68K3716 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 67.50 66.00 69.00 0.00 01:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 1.8 0.6 0.3 225.0 118

Foresight VCT PLC Foresight Vct Plc - Annual Financial Report

09/04/2021 6:03pm

UK Regulatory (RNS & others)


 
TIDMFTV 
 
   FORESIGHT VCT PLC 
 
   Final Results 
 
   31 December 2020 
 
   Foresight VCT plc, managed by Foresight Group LLP, today announces the 
final results for the year ended 31 December 2020. 
 
   These results were approved by the Board of Directors on 9 April 2021. 
 
   The Annual Report will shortly be available in full at 
www.foresightgroup.eu. All other statutory information can also be found 
there. 
 
   Highlights 
 
 
   -- Total net assets GBP151.8 million. 
 
   -- The portfolio has seen an uplift in valuation of GBP4.8 million during 
      the year. 
 
   -- Net Asset Value per share decreased by 3.7% from 76.5p at 31 December 
      2019 to 73.7p. Including the payment of a 3.3p dividend made on 19 June 
      2020, NAV total return per share at 31 December 2020 was 77.0p, 
      representing a positive total return of 0.7%. 
 
   -- The offer for subscription launched in January 2020 was closed on 7 April 
      2020 and raised a total of GBP24.2 million after expenses. 
 
   -- Three new investments totalling GBP4.6 million and three follow-on 
      investments totalling GBP3.1 million made during the year. 
 
   -- The Board is recommending a final dividend for the year ended 31 December 
      2020 of 3.7p per share, to be paid on 25 June 2021. 
 
 
   Chairman's Statement 
 
   I am pleased to present the Company's Audited Annual Report and Accounts 
for the year ended 31 December 2020. 
 
   The Continuing Impact of Covid-19 
 
   Before providing other details, I would like to draw attention to the 
continuing impact of Covid-19 on the Company and its investment 
portfolio. 
 
   The Covid-19 virus has presented the Company and the management of every 
one of the businesses in the Company's portfolio with unprecedented 
challenges. For many of these companies, significant challenges will 
continue for some time to come. The Manager has been working closely 
with all the businesses, in order to minimise any adverse impact of the 
virus and it is a great credit to the quality of the management of the 
portfolio companies to be able to record that the fallout from the 
pandemic has not been more significant. Until the virus is brought under 
control, it is impossible to assess its full impact. However, it is 
clear that the value of all the businesses has been affected, a minority 
have benefitted but most have not. 
 
   At the end of last year, the Company held 13 investments in businesses 
involved in the travel, retail, entertainment and food and drink 
sectors; these investments amounted to some 22% by value of the 
Company's investment portfolio. To date these sectors are amongst those 
most hard hit by the various lockdowns imposed by the UK Government in 
response to Covid-19. I am pleased to report that during the summer, 
when initial lockdown provisions were eased, all the Company's 
investments in these sectors were continuing to trade and, with one 
possible exception, they were pursuing revised business strategies which 
hold the potential for a return to commercial viability when the current 
restrictions are eased. Inevitably the reimposition of a total lockdown 
after Christmas has placed further demands on these and other businesses 
within the portfolio, the full impact of which we will only be able to 
assess later this year. 
 
   The immediate impact of the Covid virus at the beginning of 2020 can be 
seen in the material fall in the valuation of the Company's portfolio in 
March 2020. Since the end of the first lockdown the trading position of 
many of the businesses has improved, some quite significantly and the 
year-end valuations reflect this benefit. On behalf of the Board I would 
again like to thank the members of the Manager's team for the 
considerable work which they have done and continue to do alongside the 
management teams at each of the companies in the portfolio. 
 
   Strategy 
 
   The Board and the Manager continue to pursue a strategy for the Company 
which includes the following four key objectives: 
 
   -- further development of the net assets of the Company to maintain a 
level in excess of GBP150 million; 
 
   -- payment of an annual dividend of at least 5% of the NAV per share and 
at the same time endeavouring to maintain the NAV per share at no less 
than its current level; 
 
   -- the implementation of a significant number of new and follow on 
qualifying investments every year; and 
 
   -- maintaining a programme of regular share buy backs at a discount in 
the region of 10% to the prevailing NAV per share. 
 
   The Board and the Manager believe that these key objectives remain 
appropriate and the Company's performance in relation to each of them 
over the past year is reviewed more fully below. 
 
   Net Asset Value 
 
   At 31 December 2020 the NAV of the Company was GBP151.8 million (2019: 
GBP133.1 million), which is in line with the Board's objective of 
developing the net assets of the Company to a level in excess of GBP150 
million. 
 
   At the start of last year some 90% of the Company's assets were already 
invested and the Board believed it would be in the Company's best 
interest to raise further funds to provide liquidity for its activities 
over the coming year and beyond. Despite the difficulties created by 
Covid-19, the Board is pleased that the Company was successful in 
raising additional funds. The Company closed its offer for subscription 
on 7 April 2020 and raised GBP24.8 million before expenses. The majority 
of the funds received were subscribed in the final allotments totalling 
GBP18.6 million, which took place on 3 April and 14 April based on a NAV 
of 66.5p per share, which compared with the NAV on 31 December 2019 of 
76.5p per share. 
 
   During the year the NAV per share decreased by 3.7% from 76.5p at 31 
December 2019 to 73.7p at 31 December 2020. Including the payment of a 
3.3p per share dividend made on 19 June 2020, which is detailed below, 
NAV total return per share for the 12 month period was 77.0p, 
representing a total return of 0.7%. 
 
   After the payment of a dividend of 5.0% of NAV which is detailed below, 
the Company has not met its objective of maintaining NAV per share at 
around its current level. On this occasion, the Company's failure to 
achieve this most important objective was due to the impact of the 
Covid-19 lockdown on the Company's portfolio. The Board and the Manager 
are working towards achieving this key objective in the medium term and 
the portfolio had already seen a significant recovery from its March 
2020 valuation by the year end. 
 
   Dividends 
 
   The final dividend for the year ended 31 December 2019 of 3.3p per share 
was paid on 19 June 2020 based on an ex-dividend date of 4 June 2020, 
with a record date of 5 June 2020. The total cost of this dividend was 
GBP6.8 million, including shares allotted under the dividend 
reinvestment scheme. 
 
   The Board is recommending a final dividend for the year ended 31 
December 2020 of 3.7p per share, to be paid on 25 June 2021 based on an 
ex-dividend date of 10 June 2021, with a record date of 11 June 2021. 
The Company continues to achieve its target dividend yield of 5% of NAV, 
which was set in the prior year in light of the change in portfolio 
towards earlier stage, higher risk companies, as required by the current 
VCT rules. The Board and the Manager hope that this performance may be 
enhanced by additional 'special' dividends as and when particularly 
successful portfolio disposals are achieved. 
 
   The total return per share from an investment made five years ago would 
be 17.7%, which is below the target return set by the Board of 5% per 
annum. 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. 
 
   As mentioned earlier, the Company started 2020 with around 90% of its 
assets invested in a range of unquoted growth capital investments; the 
Board and the Manager believe that these investments will continue to 
mature and help improve the future rate of growth in NAV. During the 
year under review the Manager completed three new investments and three 
follow-on investments costing GBP4.6 million and GBP3.1 million 
respectively. This achievement was somewhat behind the Company's 
objective of implementing a significant number of new and follow-on 
investments every year, however, due to Covid-19, the Manager has been 
focusing on supporting the existing portfolio through the various stages 
of the pandemic. The Board and the Manager are confident this objective 
can be achieved in the year ahead, particularly with the increased 
investment activity in the three months to 31 December 2020, which 
accounts for all of the new and follow on investments noted above. 
Details of each of these new portfolio companies can be found in the 
Manager's Review. 
 
   The Company and Foresight 4 VCT plc 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 deploy funds without 
compromising quality during 2021 and beyond, so as to be in a position 
to satisfy the investment needs of both companies. 
 
   Buybacks 
 
   During the year the Company repurchased 4.3 million shares for 
cancellation at an average discount of 10.1%, achieving its objective of 
maintaining regular share buybacks at a discount of 10%, as noted above. 
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 to avoid the Company's closed periods. Buybacks 
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 date of 30 June; 
 
   -- September, after the Half-Yearly 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 GBP20 million, which are charged at a 
reduced rate of 1.0%. This has resulted in ongoing charges for the year 
ended 31 December 2020 of 2.1% 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 the Manager's private equity team have totalled GBP0.8 
million alongside the Company's investments of GBP55.8 million. Under 
the terms of the Incentive Arrangements, as detailed in note 14 to the 
accounts, the 'Total NAV Return Hurdle', has not yet been achieved and 
no performance incentive payment is due. The Board believes it is 
prudent to record a contingent liability in relation to the performance 
incentive fee due to there being a possible future obligation. More 
detail on this is given in note 16 to the accounts. 
 
   Recognising the importance of protecting shareholder interests the Board 
and the Manager agreed that it was appropriate to update the Incentive 
Arrangements and from 27 January 2020 a change to provide for an annual 
increase to the Total Return Hurdle (originally 100p) by the greater of 
RPI or 3.5% was added to the requirements. 
 
   Board Composition 
 
   The Board continues to review its own performance and undertakes 
succession planning to maintain an appropriate level of independence, 
experience, diversity and skills in order to be in a position to 
discharge its responsibilities. The current year sees some planned 
changes to the composition of the Board. 
 
   The Board was delighted to announce recently that, following an 
independent professional search, Patricia (Patty) Dimond was appointed a 
non-executive director with effect from 1 February 2021. Patty is an 
experienced non-executive director currently on the Board of LXI REIT 
plc and English National Opera, she is a qualified chartered accountant 
and has a wide experience of investing in early stage technology 
businesses particularly those in FinTech and Consumer & Retail. Patty 
will be offering herself for election at the forthcoming AGM and if 
elected, will be appointed as a member of the Audit, Nomination, 
Management Engagement and Remuneration Committees. 
 
   After nearly 11 years as Chairman, I shall be retiring at the 
forthcoming AGM and I am especially pleased to be able to announce that 
Margaret Littlejohns has been invited by the Board to succeed me. 
Margaret has made an outstanding contribution since her appointment to 
the Board some 3 years ago and I wish her and her fellow Directors every 
success in the future. 
 
   Shareholder communication 
 
   As a result of the travel restrictions imposed due to Covid-19, the 
Manager's popular investor forums have been temporarily put on hold. 
Once it is possible to do so, details of both a London event and 
regional events will be sent to shareholders resident in the locality as 
and when they are organised. The Manager held an investor webinar in 
August 2020 and it intends to hold further webinars in June and October 
of this year. Details of any future events will be communicated to 
investors. 
 
   Outlook 
 
   Continuing uncertainty over the full impact of Covid-19 and the impact 
of Brexit create exceptional challenges for every business. The Company 
invests primarily in developing businesses which by their nature need 
general economic expansion and stability; the current environment places 
considerable demands upon them and their management teams. The Manager's 
private equity team is well aware of the management and business needs 
of each of the companies within the investment portfolio and is working 
closely with them to help them progress during these testing times. 
Until the pandemic is brought under worldwide control there will 
inevitably be further, mainly unhelpful, implications for many UK based 
businesses. Notwithstanding this, the Board and the Manager have been 
impressed by the resilience shown by the significant majority of the 
Company's investments and are optimistic that the existing portfolio has 
potential to add value once the virus has been successfully contained. 
 
   Annual General Meeting 
 
   The Company's Annual General Meeting will take place on 27 May 2021 at 
1.00pm. Please refer to the formal notice on page 80 of the Annual 
Report and Accounts for further details in relation to the format of 
this year's meeting and the request to observe social distancing 
guidelines in place. 
 
   Shareholders will note that it is proposed by resolution 14 to adopt new 
articles of association ("New Articles"). The key changes to the New 
Articles are to provide for the ability to hold virtual and hybrid 
general meetings. The Board wishes to note its preference is to hold 
AGMs by way of an open meeting and AGMs will only be held virtually 
where absolutely necessary. 
 
   John Gregory 
 
   Chairman 
 
   Telephone: 01296 682751 
 
   Email: j.greg@btconnect.com 
 
   9 April 2021 
 
 
 
   Manager's Review 
 
   The Board has appointed Foresight Group LLP ("the Manager") to provide 
investment management and administration services. 
 
   The investment management and administration arrangements were 
previously with Foresight Group CI Limited (the Manager's parent 
undertaking), and Foresight Group CI Limited appointed the Manager as 
its investment adviser and delegated administration services to it. The 
investment management and administration arrangements were novated and 
amended to be directly with the Manager on 27 January 2020. References 
to the Manager's activities in this report include those activities of 
Foresight Group CI Limited prior to the change in arrangements. 
 
   Portfolio Summary 
 
   As at 31 December 2020 the Company's portfolio comprised 46 investments 
with a total cost of GBP97.3 million and a valuation of GBP132.7 
million. The portfolio is diversified by sector, transaction type and 
maturity profile. Details of the ten largest investments by valuation, 
including an update on their performance, are provided on pages 14 to 18 
of the Annual Report and Accounts. 
 
   During the year, the value of investments held rose by GBP12.2 million, 
driven by deployment of GBP7.7 million, an increase in the value of 
existing investments of GBP4.8 million offset by a realisation of 
GBP0.3m. After a sharp drop in portfolio value in the quarter to March 
2020 at the peak of uncertainty around Covid-19, the Company's portfolio, 
in aggregate, has seen a recovery, as many of the portfolio companies 
have successfully navigated the new economic landscape, with some 
performing extremely strongly and some continuing to be adversely 
impacted by Covid-19. 
 
   In line with the Board's strategic objectives, the Manager remains 
focused on maintaining NAV at above GBP150 million whilst paying an 
annual dividend to shareholders of at least 5% of the NAV per share. 
Whilst the Company has made reasonable progress against these objectives 
in the year, it has not maintained the value of the NAV per share after 
the payment of the dividend. This objective remains the Manager's focus 
in the coming year. 
 
   NEW INVESTMENTS 
 
   The Manager has taken a prudent approach to investing during 2020. 
Repeated lockdowns have made it challenging for the private equity team 
to meet prospective companies and their management teams face to face, 
an important part of assessing investments and developing relationships. 
The continued economic uncertainty has also made it difficult to assess 
the underlying value and progress within a business as everyone has been 
affected by the pandemic. For much of the year there were fewer 
opportunities coming to market, with management teams focused on 
steering their businesses through economic uncertainty. Despite these 
challenges, the Manager has continued to search for high quality 
businesses that have demonstrated resilience during Covid-19. As a 
result, three new investments were completed in December 2020, IMMJ 
Systems, a document management system serving the NHS and other 
healthcare providers, iMist, a manufacturer of fire suppression systems 
and Titania Group, a cybersecurity software business. 
 
   IMMJ SYSTEMS 
 
   In December 2020 the Company made a c.GBP1.7 million investment into 
IMMJ Systems Limited, an innovative, electronic document management 
solution for the healthcare sector, serving NHS Trusts and private 
providers. Founded in 2015 by a team experienced in enterprise IT and 
NHS technology distribution, IMMJ developed MediViewer, software that 
addresses the challenge of digitising patient records and providing a 
single, easy access interface for clinical caregivers. The investment 
will enable IMMJ to scale the business through new hires in key 
functions such as operations, technology and account management, to 
support the expanding deployment of MediViewer.. 
 
   iMIST 
 
   In December 2020 the Company invested c.GBP1.6 million into iMist 
Holdings Limted, a manufacturer and installer of water mist fire 
protection systems for residential buildings. iMist was founded in 2015 
by Tony Sims who has over 20 years' engineering experience. iMist has 
developed its own range of high-pressure water mist fire suppression 
systems. The proprietary solution offers a number of benefits over 
traditional fire sprinkler and lower pressure water mist products 
including more efficient use of water, ease of installation and cost 
effectiveness. The investment will drive further growth and development 
activities across the UK, on the back of the current regulatory 
opportunity. 
 
   TITANIA 
 
   In December 2020, the Company invested c.GBP1.2 million into Titania 
Group Limited, a cybersecurity software business. Founded in 2009, 
Titania has grown substantially due to the success of its first product, 
Nipper, which automates the assessment of network devices to accurately 
identify vulnerabilities. The winner of multiple cybersecurity industry 
awards, Titania has over 1,000 customers globally. The investment will 
be used to enhance sales and marketing efforts for Titania's current 
suite of products. 
 
   FOLLOW ON INVESTMENTS 
 
   The Manager had expected that more portfolio companies would need 
additional capital to support them through difficult trading conditions 
resulting from the various lockdowns, driving an increase in follow-on 
investment. However, the portfolio has remained relatively resilient, 
supported by the Manager, who has increased oversight of the portfolio 
and provided guidance to portfolio management teams throughout the 
pandemic. The Manager has made follow-on investments into three 
companies during 2020, totalling GBP3.1 million. Further details of each 
of these are provided below. 
 
   Many companies took advantage of Government support, such as the 
furlough scheme and the Coronavirus Business Interruption Loan Scheme, 
which reduced the need for additional equity injections in the period. 
However, as these schemes unwind and while the economic climate remains 
difficult, the Manager anticipates numerous requirements for follow-on 
investment in the coming months. 
 
   ROXY LEISURE 
 
   During December 2020 the Company made a c.GBP1.0 million follow-on 
investment into Roxy Leisure, an entertainment bar group offering 
customers a variety of games such as pool and bowling. Roxy Leisure was 
performing extremely strongly prior to Covid-19 but has been affected by 
the repeated lockdowns. The business will use funds to open new sites 
once restrictions ease, aiming to capitalise on increased consumer 
demand.. 
 
   SPEKTRIX 
 
   In December 2020, Spektrix, a leading enterprise software solution for 
the UK and US arts sector encompassing ticketing, marketing, fundraising, 
analytics and customer relationship management, received a follow-on 
investment of c.GBP1.4 million from the Company. The investment will 
enable Spektrix to capitalise on new opportunities following the 
reopening of the arts sector. 
 
   ACCROSOFT 
 
   Also in December 2020, the Company made a GBP0.7 million follow-on 
investment into Accrosoft, a software as a service company with two core 
products focusing on recruitment and parent-teacher-student 
communication. The investment will support the commercialisation of the 
school communications platform, with strong demand seen in the market 
due to the increased role of such technology while schools were closed 
because of Covid-19 restrictions. 
 
   PIPELINE 
 
   At 31 December 2020, the Company had cash balances of GBP18.9 million, 
which will be used to fund new and follow-on investments, buybacks and 
running expenses. The Manager is seeing a recovery in the pipeline of 
potential investments and has a number of opportunities under 
exclusivity or in due diligence. The Company remains well positioned to 
continue pursuing these potential investment opportunities. 
 
   The onset of Covid-19 and the resulting economic downturn resulted in 
lower new investment activity in 2020. Depending on the length and 
severity of the Covid-19 outbreak and associated restrictions, the 
Manager expects to see a higher proportion of the Company's deployment 
focused on follow-on investments in the short to medium term. 
 
   As the economy recovers from the worst effects of the virus, the Manager 
expects demand for funding to increase, driving some particularly 
interesting opportunities for investment. 
 
   REALISATIONS 
 
   Whilst the M&A climate has been challenging in the period, with most 
trade acquirers focused on their core business and private equity 
investors focused on their existing portfolios or on distressed 
acquisitions, the Manager is now seeing acquisition interest returning, 
particularly in the healthcare, technology and ecommerce sectors. 
 
   Fast casual and grab and go eateries have been particularly hard hit 
during the pandemic and to that end with the difficult market outlook as 
well as the remaining uncertainty around the business model, the Company 
realised its position in The Naked Deli, a healthy eating food chain, 
via an initial loan repayment of GBP0.2 million and the subsequent sale 
of share capital and loan note positions for GBP0.1 million to the 
Company. The Naked Deli closed all its stores in line with government 
guidance in March 2020 and the outlook for this sector remains extremely 
challenged. There is uncertainty about town centre footfall, 
particularly for lunchtime trade, while employees are still working from 
home. In aggregate, The Naked Deli returned to the Company 0.2x money 
invested. 
 
   In contrast, post-period end, the Company successfully realised its 
investment in FFX Group, one of the UK's largest multi-channel 
independent suppliers of high-quality power tools, fixings and building 
supplies. The transaction generated proceeds of GBP11.1 million at 
completion and the Company will receive up to GBP0.3 million of deferred 
consideration after 18 months subject to certain conditions, implying a 
cash on cash return of 4.3x the initial investment of GBP2.7m made in 
October 2015, equivalent to an IRR of c.32%. During the investment 
period, FFX opened a new 60,000 sq ft distribution centre and a new head 
office in Kent, updated its brand and launched an extensive range of its 
own products. Since the Company's investment, FFX more than tripled 
revenues and increased headcount by over 125. 
 
   DISPOSALS IN THE YEARED 31 DECEMBER 2020 
 
 
 
 
 
                              Accounting                                            Valuation           Valuation 
                             Cost at Date                         Realised        at 31 December     at 30 September 
                              of Disposal     Proceeds           Gain/(Loss)           2019               2020 
Company     Detail               (GBP)          (GBP)               (GBP)             (GBP)               (GBP) 
The Naked   Full 
 Deli        disposal            1,724,139       295,487         (1,428,652)             695,435                   Nil 
Total disposals                  1,724,139       295,487         (1,428,652)             695,435                   Nil 
 
 
 
   Deferred consideration of GBP13,000 was also received by the company 
from the sale of Idio Limited. 
 
   KEY PORTFOLIO DEVELOPMENTS 
 
   Overall, the value of unquoted investments held rose by GBP12.2 million 
in the year, driven by deployment of GBP7.7 million, an increase in 
value of existing investments by GBP4.8 million and offset by the sale 
of The Naked Deli of GBP0.3 million. 
 
   A disciplined approach to investment valuations has been maintained in 
light of Covid-19. In the quarter to March 2020, the onset of the 
Covid-19 pandemic drove significant economic uncertainty and the 
portfolio initially saw a substantial decrease in value of GBP18.9 
million. In the following quarters, as the businesses adapted to the new 
economic climate, fair values saw a recovery in aggregate. Material 
changes in valuation, defined as increasing or decreasing by GBP2.0 
million or more since 31 December 2019, are detailed below. Updates on 
these companies are included below, or in the Top Ten Investments 
section on pages 14 to 18 of the Annual Report and Accounts. 
 
 
 
 
                                                              Valuation Change 
Company                                Valuation Methodology        (GBP) 
------------------------------  ----------------------------  ---------------- 
Hospital Services Group         Discounted earnings 
 Limited                         multiple                            5,329,619 
FFX Group Limited               Offer proceeds                       3,439,036 
Innovation Consulting Group     Discounted earnings 
 Limited                         multiple                            2,634,323 
Mologic Ltd                     Discounted revenue multiple          2,105,454 
Biofortuna Limited              Discounted revenue multiple          2,089,201 
Ixaris Group Holdings Limited    Discounted revenue multiple       (4,954,587) 
                                                              ---------------- 
 
   BIOFORTUNA 
 
   Biofortuna, established in 2008, is a molecular diagnostics business 
based in the North West that manufactures freeze dried, stabilised DNA 
tests. 
 
   31 December 2020 Update 
 
   Biofortuna's technical ability and freeze-drying capability allowed it 
to support several clients, manufacturing their Covid-19 testing kits, 
with over 30 million manufactured since April 2020. This has transformed 
the company's financial performance, with material revenue growth and 
maiden profits generated. Biofortuna continues to explore new commercial 
opportunities unrelated to Covid-19. 
 
   IXARIS SYSTEMS LIMITED 
 
   Ixaris is a payments platform enabling efficient global payments, 
targeted in particular at the travel sector. 
 
   31 December 2020 Update 
 
   Ixaris has seen a severe downturn in trading due to the collapse of the 
travel sector in the wake of the pandemic. There remains significant 
uncertainty about when worldwide travel will resume. 
 
   OUTLOOK 
 
   On 22 February 2021, Prime Minister Boris Johnson outlined the planned 
route out of lockdown for businesses in England, culminating in the 
lifting of all social restrictions on 21 June 2021. Businesses of all 
sizes have faced a very testing 12 months, not least with the stop-start 
dynamic of multiple lockdowns. Therefore the Prime Minister's political 
commitment to an 'irreversible' ending of lockdown is welcomed, along 
with the extended support of the Coronavirus Job Retention Scheme. It is 
vital that SMEs are supported through the full reopening of the UK's 
economy in order to rebuild consumer and business confidence and to 
enable our retail, hospitality, cultural, leisure and tourism sectors to 
get back to business. 
 
   Most businesses in the portfolio had fully reopened by September, with 
the Manager supporting the portfolio through a transition to the 'new 
normal'. During the November and current year lockdowns, the Manager 
acted quickly to administer the same 'toolbox' of support for the 
portfolio companies as in the first lockdown, to guide and prepare them 
for a prolonged period of uncertainty. The Manager has also been working 
with companies to revise business plans and budgets to manage creditor 
stretch and debt build-up, and to prepare them for a reduction of 
Government support. The Manager is ensuring that finance directors at 
the portfolio companies continue to manage overheads tightly, reduce 
capital expenditure and work through longer-term cost reduction plans 
given the uncertain macro environment. It is important that management 
teams and investors are well prepared for a sustained period of weaker 
consumer and business demand as consumers and businesses adapt to the 
'new normal'. 
 
   While Covid-19 has brought unprecedented disruption, it has also 
prompted many organisations to reassess their business models and take 
action to adapt to a new economic landscape. A number of the portfolio 
companies have used this as an opportunity to review their overall 
strategy, venture into a new market or launch a new product or service. 
For example, to supplement lost revenues from their core business some 
companies have procured and provided PPE or other protective equipment, 
such as hand sanitising stations or screens. Healthcare and life science 
investments have also contributed to national efforts to defeat the 
virus by manufacturing Covid-19 testing kits. An example of this is 
portfolio company Mologic, which received a grant of c.GBP1m to fund 
Covid related lateral flow diagnostics development. Fellow portfolio 
company Biofortuna, another diagnostics company, has successfully won 
contracts to manufacture millions of Covid-19 PCR testing kits for 
others. 
 
   Some of the portfolio companies used this time as an opportunity to 
improve online activity and have seen an uptick in revenues as a 
consequence. With the trend towardsecommerce accelerating during 
Covid-19, retail businesses will need to continue embracing this channel 
fully and make it a core part of the overall growth strategy. The 
Manager is working closely with portfolio companies to ensure they are 
well-positioned to capitalise on this opportunity. 
 
   A proportion of the portfolio companies are particularly at risk due to 
the sectors they operate in, such as travel, hospitality and leisure. 
Many of these businesses are now stuck in a prolonged period of closure 
with anticipated re-opening in the next few months. The Manager is 
working closely with these businesses, paying particular attention to 
managing creditors and cash preservation. It is important to highlight 
that some of the Company's leisure investments demonstrated market 
leading site metrics pre-Covid and will have the ability to weather this 
temporary period of reduced trading. Once reopened, even with capacity 
limitations, the Manager expects several of these leisure businesses to 
return to profit and cash generation over time, thanks to a loyal 
customer base and favourable customer demographic. 
 
   Beyond Covid-19, another factor providing economic uncertainty was 
Brexit, with the Brexit transition period ending on 31 December 2020. 
The Manager has worked closely with portfolio companies to prepare them 
for this. Thanks to the diverse nature of businesses in the portfolio, 
most of which primarily focus on the domestic UK market and some that 
export and source worldwide, the Manager remains confident that the 
portfolio businesses are well-positioned to deal with any Brexit related 
difficulties. 
 
   Notwithstanding the uncertain economic backdrop, the Manager continues 
to see encouraging levels of activity from smaller UK companies seeking 
growth capital. The Manager expects this to increase as companies begin 
to recover from the impact of Covid-19, with requirements for permanent 
funding to working capital. VCTs are still viewed by many entrepreneurs 
as an attractive source of capital that provide scale-up funding to 
businesses at an early stage of their growth, when other sources of 
funding may not be readily available or alongside other sources of 
capital, including the government measures for supporting businesses 
during Covid-19. Despite the current challenges of Covid-19 in the 
medium and long term, the UK remains an excellent place to start, scale 
and sell a business, with broad pools of talent and an entrepreneurial 
culture. 
 
   Russell Healey 
 
   Head of Private Equity 
 
   Foresight Group LLP 
 
   9 April 2021 
 
   Audited Income Statement 
 
   for the year ended 31 December 2020 
 
 
 
 
                                    Year ended                    Year ended 
                                  31 December 2020              31 December 2019 
                                Revenue    Capital    Total   Revenue    Capital    Total 
                                GBP'000    GBP'000   GBP'000  GBP'000    GBP'000   GBP'000 
Realised losses on investments        --    (1,415)  (1,415)        --    (2,551)  (2,551) 
Investment holding gains              --      6,250    6,250        --     10,258   10,258 
Income                             1,844         --    1,844     1,284         --    1,284 
Investment management 
 fees                              (680)    (2,039)  (2,719)     (643)    (1,930)  (2,573) 
Other expenses                     (580)         --    (580)     (565)         --    (565) 
Return on ordinary activities 
 before taxation                     584      2,796    3,380        76      5,777    5,853 
Taxation                              --         --       --        --         --       -- 
Return on ordinary activities 
 after taxation                      584      2,796    3,380        76      5,777    5,853 
 
Return per share:                   0.3p       1.4p     1.7p      0.0p       3.3p     3.3p 
 
   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 year. 
 
   The Company has no recognised gains or losses other than those shown 
above, therefore no separate statement of total 
 
   comprehensive income has been presented. 
 
   The Company has only one class of business and one reportable segment, 
the results of which are set out in the Income 
 
   Statement and Balance Sheet. 
 
   There are no potentially dilutive capital instruments in issue and, 
therefore, no diluted earnings per share figures are relevant. 
 
   The basic and diluted earnings per share are, therefore, identical. 
 
 
 
   Audited Reconciliation of Movements in Shareholders' Funds 
 
 
 
 
                                                      Share 
                                  Called-up           premium    Capital redemption    Distributable     Capital   Revaluation 
Year ended 31 December           share capital        account          reserve            Reserve^       reserve^    reserve       Total 
 2020                               GBP'000           GBP'000          GBP'000            GBP'000        GBP'000     GBP'000       GBP'000 
                              ----------------  -------------  --------------------  ---------------  -----------               ---------- 
As at 1 January 2020                     1,740         78,841                   951           23,799      (1,059)       28,847     133,119 
Share issues in the 
 year*                                     363         25,655                    --               --           --           --      26,018 
Expenses in relation 
 to share issues**                          --        (1,221)                    --               --           --           --     (1,221) 
Repurchase of shares                      (43)             --                    43          (2,674)           --           --     (2,674) 
Cancellation of share 
 premium                                    --       (35,641)                    --           35,641           --           --          -- 
Realised losses on disposal 
 of investments                             --             --                    --               --      (1,415)           --     (1,415) 
Investment holding gains                    --             --                    --               --           --        6,250       6,250 
Dividends paid                              --             --                    --          (6,804)           --           --     (6,804) 
Management fees charged 
 to capital                                 --             --                    --               --      (2,039)           --     (2,039) 
Revenue return for the 
 year                                       --             --                    --              584          ---           --         584 
As at 31 December 2020                   2,060         67,634                   994           50,546      (4,513)       35,097     151,818 
 
  ^Reserve is available for distribution, total distributable reserves at 31 December 
  2020 total GBP46,033,000 (2019: GBP22,740,000). 
  *Includes the dividend reinvestment scheme. 
  **Expenses in relation to share issues includes trail commission for prior years' 
  fund raising. 
                                                        Share 
                                     Called-up        premium    Capital redemption    Distributable      Capital  Revaluation 
Year ended 31 December           share capital        account               reserve         Reserve^     reserve^      reserve       Total 
 2019                                  GBP'000        GBP'000               GBP'000          GBP'000      GBP'000      GBP'000     GBP'000 
                              ----------------  -------------  --------------------  ---------------  -----------               ---------- 
As at 1 January 2019                     1,751         99,115                   920           12,929        3,422       18,589     136,726 
Share issues in the 
 year*                                      20          1,425                    --               --           --           --       1,445 
Expenses in relation 
 to share issues**                          --           (92)                    --               --           --           --        (92) 
Repurchase of shares                      (31)             --                    31          (2,060)           --           --     (2,060) 
Cancellation of share 
 premium                                    --       (21,607)                    --           21,607           --           --          -- 
Realised losses on disposal 
 of investments                             --             --                    --               --      (2,551)           --     (2,551) 
Investment holding gains                    --             --                    --               --           --       10,258      10,258 
Dividends paid                              --             --                    --          (8,753)           --           --     (8,753) 
Management fees charged 
 to capital                                 --             --                    --               --      (1,930)           --     (1,930) 
Revenue return for the 
 year                                       --             --                    --               76          ---           --          76 
As at 31 December 2019                   1,740         78,841                   951           23,799      (1,059)       28,847     133,119 
*Relating to the dividend reinvestment scheme. **Expenses in relation to share issues relate to trail commission for prior years' fund 
raising. 
 
   Audited Balance Sheet 
 
   at 31 December 2020 
 
   Registered Number: 03421340 
 
 
 
 
                                                     As at         As at 
                                                   31 December   31 December 
                                                      2020          2019 
                                                     GBP'000       GBP'000 
Fixed assets 
Investments held at fair value through profit 
or loss                                                132,739       120,521 
Current assets 
Debtors                                                    239           362 
Cash and cash equivalents                               18,939        12,324 
                                                        19,178        12,686 
Creditors 
Amounts falling due within one year                       (99)          (88) 
Net current assets                                      19,079        12,598 
Net assets                                             151,818       133,119 
Capital and reserves 
Called-up share capital                                  2,060         1,740 
Share premium account                                   67,634        78,841 
Capital redemption reserve                                 994           951 
Distributable reserve                                   50,546        23,799 
Capital reserve                                        (4,513)       (1,059) 
Revaluation reserve                                     35,097        28,847 
Equity Shareholders' funds                             151,818       133,119 
 
Net asset value per share:                               73.7p         76.5p 
 
 
 
   The financial statements were approved by the Board of Directors and 
authorised for issue on 9 April 2021 and were signed on its behalf by: 
 
   John Gregory 
 
   Chairman 
 
 
 
   Audited Cash Flow Statement 
 
   for the year ended 31 December 2020 
 
 
 
 
                                                      Year ended    Year ended 
                                                      31 December   31 December 
                                                         2020          2019 
                                                        GBP'000       GBP'000 
Cash flow from operating activities 
Loan interest received from investments                       478           733 
Dividends received from investments                         1,437           178 
Deposit and similar interest received                          34           186 
Investment management fees paid                           (2,719)       (2,573) 
Secretarial fees paid                                       (120)         (122) 
Other cash payments                                         (449)         (465) 
Net cash outflow from operating activities                (1,339)       (2,063) 
Cash flow from investing activities 
Purchase of investments                                   (7,680)      (15,791) 
Net proceeds on sale of investments                           296         1,966 
Net proceeds on deferred consideration                         13           441 
Net cash outflow from investing activities                (7,371)      (13,384) 
Cash flow from financing activities 
Proceeds of fund raising                                   24,203             - 
Expenses of fund raising                                    (637)          (92) 
Repurchase of own shares                                  (2,668)       (2,248) 
Equity dividends paid                                     (5,573)       (7,308) 
Net cash inflow/ (outflow) from financing 
 activities                                                15,325       (9,648) 
Net inflow/ (outflow) of cash in the year                   6,615      (25,095) 
Reconciliation of net cash flow to movement in net 
 funds 
Increase/ (decrease) in cash and cash equivalents 
 for the year                                               6,615      (25,095) 
Net cash and cash equivalents at start of year             12,324        37,419 
Net cash and cash equivalents at end of year               18,939        12,324 
 
 
 
 
 
 
                                  At 1 January            At 31 December 
Analysis of changes in net debt       2020      Cashflow       2020 
                                    GBP'000     GBP'000      GBP'000 
Cash and cash equivalents               12,324     6,615          18,939 
 
 
   Notes 
 
   1.     These are not statutory accounts in accordance with S436 of the 
Companies Act 2006. The full audited accounts for the year ended 31 
December 2020, which were unqualified and did not contain statements 
under S498(2) of the Companies Act 2006 or S498(3) of the Companies Act 
2006, will be lodged with the Registrar of Companies. Statutory accounts 
for the year ended 31 December 2020 including an unqualified audit 
report and containing no statements under the Companies Act 2006 will be 
delivered to the Registrar of Companies in due course. 
 
   2.    The audited Annual Financial Report has been prepared on the basis 
of accounting policies set out in the statutory accounts of the Company 
for the year ended 31 December 2020.  All investments held by the 
Company are classified as 'fair value through the profit and loss'. 
Unquoted investments have been valued in accordance with IPEV 
guidelines. Quoted investments are stated at bid prices in accordance 
with the IPEV guidelines and Generally Accepted Accounting Practice. 
 
   3.   Copies of the Annual Report will be sent to shareholders and can be 
accessed on the following website: www.foresightvct.com. 
 
   4.    Net asset value per share 
 
   The net asset value per share is based on net assets at the end of the 
year and on the number of shares in issue at that date. 
 
 
 
 
                       31 December 
                           2020       31 December 2019 
Net assets            GBP151,818,000   GBP133,119,000 
No. of shares at 
 year end                205,954,017       173,959,405 
Net asset value per            73.7p             76.5p 
 share 
 
 
   5.    Return per share 
 
 
 
 
                                          Year ended 
                                          31 December                              Year ended 31 
                                             2020                                   December 2019 
                                      GBP'000                           GBP'000 
Total return after taxation                     3,380                                       5,853 
Total return per share (note 
 a)                                              1.7p                                        3.3p 
Revenue return from ordinary 
 activities after taxation                        584                                          76 
Revenue return per share 
 (note b)                                        0.3p                                        0.0p 
Capital return from ordinary 
 shares after taxation                          2,796                                       5,777 
Capital return per share 
 (note c)                                        1.4p                                        3.3p 
Weighted average number of 
 shares in issue in the year              199,164,754                                 175,090,865 
 
 
   Notes: 
 
   a) Total return per share is total return after taxation divided by the 
weighted average number of shares in issue during the year. 
 
   b) Revenue return per share is revenue return after taxation divided by 
the weighted average number of shares in issue during the year. 
 
   c) Capital return per share is capital return after taxation divided by 
the weighted average number of shares in issue during the year. 
 
   6.    Annual General Meeting 
 
   The Annual General Meeting of the Company will be held at The Shard, 32 
London Bridge Street, SE14 5QA on 27 May 2021 at 1.00 pm. Shareholders 
are encouraged to observe the social distancing and travel restrictions 
and are asked not to attend the Annual General Meeting which will be 
held by way of a 'closed' meeting. Shareholders will, however, be able 
to attend virtually, but will not be able to vote on the resolutions at 
the Annual General Meeting. Details on how to sign up and join the 
Annual General Meeting virtually will be published on both the Company's 
and the Manager's website at www.foresightvct.com. 
 
   7.    Income 
 
 
 
 
                                           Year ended     Year ended 
                                           31 December    31 December 
                                           2020 GBP'000   2019 GBP'000 
---------------------------------------- 
  Loan stock interest                               370            920 
  Dividends receivable                            1,437            178 
  Deposit and similar interest received              34            186 
  Other Income                                        3              - 
---------------------------------------- 
                                                  1,844          1,284 
 
 
   8.    Investments held at fair value through profit or loss 
 
 
 
 
                          2020      2019 
                         GBP'000   GBP'000 
Unquoted investments     132,739   120,521 
 
 
 
 
 
 
                                 Total 
                                 GBP'000 
Book cost as at 1 January 2020    91,360 
Investment holding gains          29,161 
Valuation at 1 January 2020      120,521 
Movements in the year: 
Purchases at cost                  7,680 
Disposal proceeds^                 (296) 
Realised losses*                 (1,428) 
Investment holding gains**         6,262 
Valuation at 31 December 2020    132,739 
Book cost at 31 December 2020     97,316 
Investment holding gains          35,423 
Valuation at 31 December 2020    132,739 
 
 
 
 
   ^The Company received GBP296,000 (2019: GBP1,966,000) from the disposal 
of investments during the year. The book cost of these investments when 
they were purchased was GBP1,724,000 (2019: GBP4,957,000). These 
investments have been revalued over time and until they were sold any 
unrealised gains or losses were included in the fair value of the 
investments. 
 
   *Realised losses in the income statement includes deferred consideration 
of GBP13,000 received from Idio Limited in 
 
   the year. 
 
   **Investment holding gains in the income statement have been reduced by 
the offset in the deferred consideration 
 
   debtor of GBP12,000 (Idio Limited). 
 
   9.    Related party transactions 
 
   No Director has an interest in any contract to which the Company is a 
party other than their appointment as directors. 
 
   10.  Transactions with the manager 
 
   Foresight Group CI Limited, which acted as Manager to the Company until 
27 January 2020, earned fees of GBP192,000 (2019: GBP2,573,000). 
Foresight Group LLP was appointed as Manager on 27 January 2020 and 
earned fees of GBP2,527,000 up to 31 December 2020 (2019: GBPnil). 
 
   During the year, services of a total cost of GBP120,000 (2019: 
GBP120,000) were delivered to the Company by Foresight Group LLP. At 31 
December 2020, the amount due to Foresight Group LLP was GBPnil (2019: 
GBPnil). 
 
   No amounts have been written off in the year in respect of debts due to 
or from the Manager. 
 
   END 
 
 
 
 

(END) Dow Jones Newswires

April 09, 2021 13:03 ET (17:03 GMT)

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