July 16, 2024

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Foresight 4 VCT plc – Half-year report

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Financial Highlights

• Total net assets £111.9 million.

• Net asset value per share increased by 3.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in the period from 55.8p at 31 March 2020 to 57.6p. Including the payment of a 2.8p dividend made on 28 August 2020, NAV total return per share at 30 September 2020 was 60.4p, representing a positive total return of 8.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in the period.

• An interim dividend of 2.8p per share was paid on 28 August 2020, costing £5.4 million.

• 1.1 million ordinary shares were issued as part of the Dividend Reinvestment Scheme on 28 August 2020.

• The portfolio has seen an uplift in valuation of £10.0 million in the last six months.

Chairman’s Statement

I am pleased to present the un-audited Half-Yearly Report for Foresight 4 VCT plc for the period ended 30 September 2020.

Material events during the period
Before providing other details, I would like to draw attention to a material event that occurred during the period being the continuing impact of Covid-19 on the Company and its portfolio.

The Covid-19 virus has presented the Company and the management of every one of its portfolio companies with unprecedented challenges which it is anticipated will persist for a considerable time to come. The Manager has been working closely with the portfolio companies, in order to try to minimise any adverse impact of this virus, and it is a great credit to the quality of the management of the portfolio companies, that the fallout from the pandemic has not been even more significant. Until this virus is brought under worldwide control, it is impossible to assess its full impact. However, it is already clear that the value of every business in the Company’s portfolio has been materially affected, a minority have benefitted but most have not.

At the end of last year the Company held eight investments, representing some 16{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} by value of its investment portfolio, in businesses involved in the travel, retail, entertainment and food and drink sectors. To date these sectors are amongst those most hard hit by the provisions of the lockdown imposed by the UK Government in response to the Covid-19 virus. I am pleased to report that since the easing of the initial lockdown provisions all the Company’s investments in these sectors are continuing to trade and, with one possible exception, they are already pursuing revised business strategies which hold the potential for a return to commercial viability in the short to medium term. It will, however, be some time before the value of most of these businesses is again at or above their pre-Covid levels.

The overall impact of the Covid virus could be seen in the material fall in the valuation of the Company’s portfolio at 31 March 2020. On a positive note, I can say that since the year end date the trading position of many of these businesses has improved resulting in a modest increase in portfolio value in the period to 30 September 2020. On behalf of the Board I would like to thank the Manager for the considerable work it has done and is continuing to do alongside the management teams at each and every one of the companies within the portfolio.

Performance and portfolio activity
During the period Net Asset Value per share increased by 3.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} from 55.8p at 31 March 2020 to 57.6p at 30 September 2020. Including the payment of a 2.8p dividend made on 28 August 2020, NAV total return per share at 30 September 2020 was 60.4p, representing a positive total return of 8.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} during the same six month period.

During the period under review the Manager made no new investments, as it focused on supporting the current portfolio during the ongoing Covid-19 Coronavirus outbreak.

Foresight Group LLP, the Company’s investment manager, continues to see a pipeline of potential investments sourced through its regional networks and well-developed relationships with advisors and the SME community, however, it is also focused on supporting the existing portfolio through the Covid-19 pandemic. Following both the successful fundraises launched in May 2017 and June 2018, the Company is in a position to fully support the portfolio, where appropriate, and exploit potential attractive investment opportunities.

An interim dividend of 2.8p per Share was declared on 6 August 2020 based on an ex-dividend date of 13 August 2020 and a record date of 14 August 2020. The dividend was paid on 28 August 2020.

As noted in the Annual Report and Accounts and in light of the change in portfolio towards earlier stage, higher risk companies, as required by the new VCT rules, the Board felt it prudent to adjust the dividend policy towards a targeted annual dividend yield of 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of NAV per annum. The Board and the Manager hope that this may be enhanced by additional ‘special’ dividends as and when particularly successful portfolio exits are made. The impact of Covid-19 will be taken into consideration when the Board considers dividends in the near term.

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 on 25 August 2020, details of which had been previously communicated to investors. It is the intention of the Manager to continue to hold investor webinars whilst the investor forums are on hold and details of any future events will be communicated to investors.

Board composition
The Board continues to review its own performance and undertakes succession planning to maintain an appropriate level of independence, experience, diversity and skills in order to be in a position to discharge all its responsibilities. As noted in the Annual Report and Accounts the Board and Nomination Committee were seeking to appoint a new non-executive director. The Board are delighted to announce that Gaynor Coley was appointed to the Board on 10 September 2020 and as Chair of the Audit Committee on 19 November 2020.

The persisting uncertainty over the full impact of Covid-19 and the negotiations in relation to Brexit create truly exceptional challenges for every business. The Company invests primarily in developing companies which by their nature benefit from general economic growth and 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.

Raymond Abbott
4 December 2020

Manager’s Review

Portfolio Summary

As at 30 September 2020 the Company’s portfolio comprised 34 investments with a total cost of £52.5 million and a valuation of £76.2 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 10 to 14 of the Half Yearly Report.

The investment team remain focused on supporting an annual dividend to shareholders of at least 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the NAV per share whilst retaining a stable NAV. The Company is currently on target as whilst dividends have remained at 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, NAV per share has also increased by 3.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in the period.

During the period, the value of unquoted investments increased overall by £10.0 million as the portfolio began to recover following the steep decline experienced in the quarter to March as the country entered the first peak of Covid-19. Whilst the recovery has been mixed across the portfolio depending on sector, in aggregate the recovery is reflective of the portfolio’s ability to successfully navigate the impacts of Covid-19 and the general uptick in economic activity following the reopening of businesses over the summer. Since the end of September, the country has had to face a second lockdown, which will bring further volatility to trading. Nevertheless, the portfolio is well prepared to weather this period of uncertainty with strong foundations laid during the first lockdown.


Given the challenges of completing transactions during lockdown and the broader uncertainty during the period, no new investments were made in the six months to September. Smaller companies remained focused largely on survival rather than strategic growth. In addition, the investment team were primarily focused on managing and supporting the existing portfolio through these unprecedented times. Where possible, portfolio companies are trying to maximise any commercial opportunities arising from Covid-19, with some thriving in the current climate.


With very active portfolio management and use of the various forms of Government support, such as the furlough scheme and the Coronavirus Business Interruption Loan Scheme, there have been no follow-on investments during the six months to 30 September 2020. However, as these schemes unwind and the economic climate remains depressed due to further lockdowns, the Company anticipates multiple requirements for follow-on investment in the coming months. In addition, the Company
will seek to make strategic follow-on investments into businesses to support new growth plans or opportunities that have stemmed from the new economic landscape.


Whilst the M&A climate has been challenging in the period, with most trade acquirers focused on survival and private equity investors focused on their existing portfolios or on distressed acquisitions, the Investment Manager is seeing acquisition interest returning, particularly in the healthcare, technology and E-commerce sectors.

At 30 September 2020, the Company had cash in hand of £34.9 million, which will be used to fund new and follow-on investments, dividends, buybacks and running expenses. Foresight Group 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 has resulted in lower new investment activity across the market in the first three quarters of 2020. As the economy recovers from the worst effects of the virus, we expect company valuations to be attractive and demand for funding to increase, driving some particularly interesting opportunities for investment.


Overall, the value of unquoted investments held increased by £10.0 million to £76.2 million in the period, driven by an increase in the value of existing investments. A disciplined approach to investment valuations has been maintained in light of Covid-19. In the quarter to March, the onset of the Covid-19 pandemic drove significant economic uncertainty and the portfolio saw a substantial decrease in value of £20.6 million. In the quarter to June, as the portfolio adapted to the new economic climate, and started adapting their business models fair values saw a slight recovery in aggregate, increasing by £3.3 million. This upwards trend has continued, with valuations rebounding a further £6.7 million in the quarter to September. Material changes in valuation, defined as increasing or decreasing by £1.0 million or more since 31 March 2020, are detailed below. Updates on these companies are included below, or in the Top Ten Investments section on pages 10 to 14 of the Half Yearly Report.


Company Valuation (£) Valuation Change (£)
Biofortuna Limited 5,163,636 4,165,696
Procam Television Holdings Limited 2,179,243 2,179,243
FFX Group Limited 5,057,127 1,758,346
Hospital Services Group Limited 3,089,081 1,531,512
Specac International Limited 7,011,068 1,232,162


Procam is a broadcast hire company, supplying equipment and crew for location TV and film production and also has a division (True Lens Services) focused on the manufacture and maintenance of camera lenses. During Covid-19, Procam’s rental business had to largely close due to the halting of television and film production. Conversely, its True Lens Services division continued to trade positively, back to pre-Covid-19 levels. As challenging trading conditions continued, Procam required a formal restructuring and the Company supported a sale of the trade and assets of Procam’s rental division and spun out its True Lens Service division into a separate company, supporting a substantial recovery in value.


In light of rapidly evolving Government guidance, we now face a second countrywide lockdown. Most businesses had fully reopened by September, with the Manager supporting its portfolio through a transition to the ‘new normal’, working closely with them to implement safe working environments and resilient business models. It is now crucial that we act quickly and administer the same tools as the first lockdown to support our portfolio companies. We will increase our dialogue with management teams to closely monitor ongoing performance and cash levels. We have also been working with companies to revise business plans and budgets to manage creditor stretch and debt build-up, and to prepare them for an eventual reduction of Government support. We are ensuring that finance directors at the portfolio companies continue to tightly manage overheads, reduce capital expenditure and work through longer-term cost reduction plans given the uncertain macro environment. It is important that management teams are well prepared for a sustained period of weaker consumer and business demand. The Company’s portfolio is diversified by sector and market, and the SME sector has historically proven to be resilient and nimble enough to weather periods of volatility.

Where possible, we are trying to maximise any commercial opportunities arising from the current situation. For example, there are also a number of companies, particularly in the healthcare and life sciences sectors, which have traded strongly during this period due to the increased demand for the services they offer. Examples of this include Mologic, which received a grant of c.£1m to fund Covid-related diagnostic development. Molecular diagnostics business, Biofortuna moved quickly on a number of opportunities to help manufacture 20 million Covid-19 test kits and will explore further commercial possibilities in the space. Another of the portfolio companies, HSL, has had very considerable success supplying PPE to Irish and Northern Irish hospitals and has also seen increased demand for mobile x-ray machines, as chest x-rays are part of the treatment pathway for Covid-19. Other portfolio companies are benefitting from wider trends that have stemmed from the pandemic, such as power tools and building materials supplier FFX, which has seen an upsurge in sales due to increased DIY spend and a boost in E-commerce.

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 will now be stuck in a prolonged period of closures and uncertainty on when they will be allowed to reopen. The Manager is working extensively 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 suppressed trading. Once reopened, even with capacity limitations, we expect several of our leisure businesses to return to profit and cash generation over time thanks to a loyal customer base and favourable customer demographic.

Notwithstanding this backdrop, we continue to see encouraging levels of activity from smaller UK companies seeking growth capital and expect 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 provides 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 funding, including the Government measures for supporting businesses during Covid-19. Despite the current challenges for 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
4 December 2020

Unaudited Half-Yearly Results and Responsibilities Statements

Principal Risks and Uncertainties

The principal risks faced by the Company are as follows:

  • Performance;
  • Regulatory;
  • Economic (external shocks);
  • Operational; and
  • Financial.

The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Accounts for the year ended 31 March 2020. A detailed explanation can be found on page 25 of the Annual Report and Accounts which is available on Foresight 4 VCT’s website: www.foresight4vct.com 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.


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

The Directors confirm to the best of their knowledge that:

  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).

The Company’s business activities, together with the factors likely to affect its future development, performance and position, are set out in the Strategic Report of the Annual Report. The financial position of the Company, its cash flows, liquidity position and borrowing facilities are described in the Chairman’s Statement, Strategic Report and Notes to the Accounts of the 31 March 2020 Annual Report. In addition, the Annual Report includes the Company’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its exposures to credit risk and liquidity risk.

The Company has considerable financial resources together with investments and income generated therefrom across a variety of industries and sectors. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully.

The Directors have reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

The Half-Yearly Financial Report has not been audited nor reviewed by the auditors.

On behalf of the Board

Raymond Abbott


4 December 2020

Unaudited Income Statement
for the six months ended 30 September 2020

  Six months ended 30 September 2020 (Unaudited) Six months ended 30 September 2019 (Unaudited) Year ended 31 March 2020 (Audited)
  Revenue £’000 Capital £’000 Total £’000 Revenue £’000 Capital £’000 Total £’000 Revenue £’000 Capital £’000 Total £’000
Investment holding gains/ (losses) 9,990 9,990 7,900 7,900 (11,081) (11,081)
Realised losses on investments (3,623) (3,623) (5,251) (5,251)
Income 324 324 420 420 3,673 3,673
Investment management fees (295) (884) (1,179) (330) (991) (1,321) (545) (1,633) (2,178)
Other expenses (270) (270) (315) (315) (594) (594)
(Loss) /return on ordinary activities before taxation (241) 9,106 8,865 (225) 3,286 3,061 2,534 (17,965) (15,431)
(Loss) /return on ordinary activities after taxation (241) 9,106 8,865 (225) 3,286 3,061 2,534 (17,965) (15,431)
(Loss) /return per share (0.1)p 4.7p 4.6p (0.1)p 1.7p 1.6p 1.3p (9.2)p (7.9)p

The total column of this statement is the profit and loss account of the Company and the revenue and capital columns represent supplementary information.

All revenue and capital items in the above Income Statement are derived from continuing operations. No operations were acquired or discontinued in the period.

The Company has no recognised gains or losses other than those shown above, therefore no separate statement of total recognised gains and losses has been presented.

Unaudited Balance Sheet
at 30 September 2020      

Registered Number: 03506579

                                           As at
30 September 2020
As at
30 September 2019
As at
31 March 2020
Fixed assets      
Investments held at fair value through profit or loss 76,196 82,488 66,206
Current assets      
Debtors 971 15,874 726
Cash and cash equivalents 34,884 29,893 41,872
  35,855 45,767 42,598
Amounts falling due within one year (124) (497) (104)
Net current assets 35,731 45,270 42,494
Net assets 111,927 127,758 108,700
Capital and reserves      
Called-up share capital 1,944 1,957 1,948
Share premium account 80,002 79,466 79,443
Capital redemption reserve 518 494 503
Special distributable reserve 56,678 60,911 63,127
Capital reserve (50,874) (47,720) (49,990)
Revaluation reserve 23,659 32,650 13,669
Equity shareholders’ funds 111,927 127,758 108,700
Net asset value per share 57.6p 65.3p 55.8p

Unaudited Reconciliation of Movements in Shareholders’ Funds
for the six months ended 30 September 2020

  Called-up share capital
Share premium account
Capital redemption reserve
Distributable reserve*
Capital reserve*
Revaluation reserve
 As at 1 April 2020 1,948 79,443 503 63,127 (49,990) 13,669 108,700
Share issues in the period 11 578 589
Expenses in relation to share issues (19) (19)
Repurchase of shares (15) 15 (795) (795)
Investment holding gains 9,990 9,990
Dividend paid (5,413) (5,413)
Management fees charged to capital (884) (884)
Revenue loss for the period (241) (241)
As at 30 September 2020 1,944 80,002 518 56,678 (50,874) 23,659 111,927

*Reserve is available for distribution, total distributable reserves at 30 September 2020 are £5,804,000 (31 March 2020: £13,137,000).

Unaudited Cash Flow Statement
for the six months ended 30 September 2020

  Six months ended 30 September 2020
Six months ended 30 September 2019
Year ended 31 March 2020
Cash flow from operating activities      
Loan interest received on investments 29 196 559
Dividends received from investments 28 2,835
Deposit and similar interest received 26 111 238
Investment management fees paid (1,179) (1,267) (2,579)
Secretarial fees paid (79) (85) (169)
Other cash payments (147) (248) (418)
Net cash (outflow)/inflow from operating activities (1,350) (1,265) 466
Cash flow from investing activities      
Purchase of investments (3,600) (8,361)
Net proceeds on sale of investments 434
Net proceeds on deferred consideration 31 31
Net cash outflow from investing activities (3,569) (7,896)
Cash flow from financing activities      
Proceeds of fund raising 10,021 25,586
Expenses of fund raising (19) (314) (336)
Repurchase of own shares (795) (1,098) (2,067)
Equity dividends paid (4,824) (7,067) (7,066)
Net cash (outflow)/inflow from financing activities (5,638) 1,542 16,117
Net (outflow)/inflow in cash in the period (6,988) (3,292) 8,687

Analysis of changes in net debt

  At 1 April 2020
Cash Flow
At 30 September 2020
Cash and cash equivalents 41,872 (6,988) 34,884

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 March 2020. 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 September 2020 and 30 September 2019 has been neither audited nor formally reviewed. Statutory accounts in respect of the year ended 31 March 2020 have been audited and reported on by the Company’s auditors and delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under S498(2) or S498(3) of the Companies Act 2006. No statutory accounts in respect of any period after 31 March 2020 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 via their chosen method and will be available for inspection at the Registered Office of the Company at The Shard, 32 London Bridge Street, London, SE1 9SG.
  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


Shares in Issue
30 September 2020 £111,927,000 194,420,778
30 September 2019 £127,758,000 195,726,224
31 March 2020 £108,700,000 194,826,224
  1. Return per share

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

Six months ended 30 September 2020 194,054,492
Six months ended 30 September 2019 195,728,848
Year ended 31 March 2020 195,581,908

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

6)      Income

  Six months ended 30 September 2020
Six months ended 30 September 2019
Year ended 31 March 2020
Loan stock interest 278 281 597
Dividends 28 2,835
Deposit and similar interest received 26 111                  241
Other Income 20
  324 420 3,673

7)        Investments held at fair value through profit or loss

Book cost as at 1 April 2020 52,537
Investment holding gains 13,669
Valuation at 1 April 2020 66,206
Movements in the period:  
Disposal proceeds
Realised gains
Investment holding gains 9,990
Valuation at 30 September 2020 76,196
Book cost at 30 September 2020 52,537
Investment holding gains 23,659
Valuation at 30 September 2020 76,196

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 LLP acts as manager to the Company and was appointed on 27 January 2020. During the period, services of a total cost of £1,179,000 (30 September 2019: £nil; 31 March 2020: £3,000) were purchased by the Company from Foresight Group LLP. Foresight Group CI Limited, which acted as Manager to the Company until 27 January 2020 earned £nil in the period (30 September 2019: £1,321,000, 31 March 2020: £2,175,000).

During the period, administration services of a total cost of £79,000 (30 September 2019: £85,000; 31 March 2020: £169,000) were delivered to the Company by Foresight Group LLP, Company Secretary.

At 30 September 2020, the amount due from Foresight Group LLP was £452,000 (30 September 2019: £nil; 31 March 2020: £452,000) and the amount due to Foresight Group CI Limited was £nil (30 September 2019: £nil, 31 March 2020: £nil).

 10) Post-Balance sheet events 
On 27 October 2020 the Company purchased 260,827 shares for cancellation based on a NAV of 50.32p per share.


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