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Foresight VCT Plc – Final Results 31 December 2021

LEI: 213800GNTY699WHACF46

Final results
31 December 2021

Foresight VCT plc, managed by Foresight Group LLP, today announces the final results for the year ended 31 December 2021.
These results were approved by the Board of Directors on 13 April 2022.
The Annual Report will shortly be available in full at www.foresightgroup.eu. All other statutory information can also be found there.


  • Total net assets £185.1 million
  • A final dividend of 3.7p per share was paid on 25 June 2021, costing £7.5 million
  • Net Asset Value per share increased by 22.3% from 73.7p at 31 December 2020 to 90.1p at 31 December 2021. After adding back the payment of a 3.7p dividend made on 25 June 2021, NAV Total Return per share was 93.8p, increasing the total return in the year to 27.3%
  • Six new investments totalling £9.9 million and six follow-on investments totalling £5.2 million made during the year
  • The value of the investment portfolio rose by £34.3 million in the year to 31 December 2021. This was driven by an increase of £42.0 million in the valuation of investments plus £15.1 million of new investments offset by sales of investments totalling £22.8 million
  • The offer for subscription launched in July 2021 was closed on 8 April 2022 and raised a total of £23.4 million after expenses
  • The Board is recommending a final dividend for the year ended 31 December 2021 of 4.5p per share, to be paid on 24 June 2022

Chair’s statement

I am pleased to present the Company’s audited Annual Report and Accounts for the year ended 31 December 2021 and to report a significant uplift in Net Asset Value (“NAV”) per share for the year.

I would like to draw your attention to the separate section on page 7 of the Annual Report and Accounts which includes information on material post year end events.

Overview of 2021
The NAV per share increased from 73.7p to 90.1p during the year and, after adding back the dividend of 3.7p which was paid in June 2021, the total return was an increase to 93.8p. This represents a strong investment performance with a NAV Total Return per share of 27.3% for the 12 months.

The widespread rollout of the vaccination programme in the UK in 2021 has fortunately resulted in a reduction in hospitalisations and deaths from COVID-19 despite the emergence of new, more transmissible variants. As a consequence, Government restrictions have gradually been lifted and life has begun to return to a more normal pattern, although some structural changes may now persist in the way that we live and work, as the use of technology has accelerated during this period.

After a sharp drop in value in 2020, the Company’s portfolio in aggregate experienced a recovery which continued strongly throughout 2021. Many of the portfolio companies have successfully adapted to the new economic landscape, with some performing extremely well and demonstrating the strength of their management teams.

A minority, particularly those companies in the travel, retail and hospitality sectors, struggled as a result of lockdowns, social distancing and travel restrictions, but these businesses are beginning to bounce back as pent-up demand is unlocked. At the end of 2021, 29 companies in the existing portfolio recorded a combined increase in unrealised value of £41.6 million, offset by 11 companies recording an aggregate fall in unrealised value of £4.0 million. Three investments were sold in full and one partially.

For the last two years the Manager has continued to work very closely with all the businesses in the portfolio to help them minimise the damage to their operations from the pandemic and to revise their strategies where necessary. Many of the members of the private equity team have done this whilst working from home. Despite this disruption to their working lives, they have also managed to source a growing number of investment opportunities during the year and added several new investments to the portfolio. It is a sign of the improving outlook that the team’s initial focus on value preservation of the portfolio during the worst of the pandemic has since changed to investment growth and acquisition. The Board would like to thank the members of the team for their dedication and diligence during this time.

The Board and the Manager continue to pursue a strategy for the Company which includes the following four key objectives:

  • Further development of Net Asset Value Total Return while continuing to grow the Company’s assets
  • Payment of an annual dividend of at least 5% of the NAV per share (based on the last announced NAV per share) and at the same time endeavouring, at a minimum, to maintain the NAV per share on a year?on?year basis
  • The implementation of a significant number of new and follow-on qualifying investments every year
  • Maintaining a programme of regular share buybacks 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 in more detail below.

Net Asset Value
As at 31 December 2021 the NAV of the Company was £185.1 million (31 December 2020: £151.8 million), which is in line with the Board’s objective of growing the Company’s assets.

At the start of the year, 87% 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 in 2021 and beyond. On 26 July 2021 the Company launched an offer for subscription to raise up to £20 million, with an over?allotment facility to raise up to a further £10 million, through the issue of new shares. By the end of 2021, £5.3 million of capital had been raised net of expenses and, as at the date of this report, funds raised have increased to £23.4 million, of which £18.1 million has been raised post year end, as detailed in the post balance sheet events note 20 of the Annual Report and Accounts. We would like to thank those existing shareholders who have supported this offer and welcome all new shareholders to the Company.

During the year the NAV per share increased by 22.3% from 73.7p at 31 December 2020 to 90.1p at 31 December 2021. After adding back the payment of a dividend of 3.7p per share on 25 June 2021, which is detailed below, NAV Total Return per share for the year was 93.8p, representing a total return of 27.3%.

After paying the dividend of 5.0% of NAV, the Company has exceeded its objective of maintaining the NAV per share on a year?on?year basis.

The total return per share from an investment made five years ago would be 38.9%, which is above the minimum target return set by the Board of 5% per annum. Exceeding this target is at the centre of the Company’s current and future portfolio management strategy.

The final dividend for the year ended 31 December 2020 of 3.7p per share was paid on 25 June 2021 based on an ex-dividend date of 10 June 2021, with a record date of 11 June 2021. The total cost of this dividend was £7.5 million, including shares allotted under the dividend reinvestment scheme.

The Board is recommending a final dividend for the year ended 31 December 2021 of 4.5p per share, to be paid on 24 June 2022 based on an ex-dividend date of 9 June 2022, with a record date of 10 June 2022.

The Company continues to achieve its target dividend yield of 5% of NAV, which was set in 2019 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 level may be exceeded in future by payment of additional “special” dividends as and when particularly successful portfolio disposals are achieved.

Investment performance and portfolio activity
A detailed analysis of the investment portfolio performance over the year is given in the Manager’s Review.

During the year under review, the Manager completed six new investments, mostly in the technology and healthcare sectors, and six follow-on investments costing £9.9 million and £5.2 million respectively. The Company also disposed of three investments and partially disposed of one investment, generating proceeds of £22.8 million with a further £1.5 million of deferred consideration included within debtors at the year end. Details of each of these new portfolio companies and disposals can be found in the Manager’s Review.

The Board and the Manager are confident that a more significant number of new and follow-on investments can be achieved in 2022 as the economy continues to open up and more opportunities emerge.

After the year end, a new investment of £1.1 million was made into Homelink Healthcare Limited and a further follow-on investment of £0.5 million was made into Rovco Limited.

The Company and Foresight Enterprise 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 and to satisfy the investment needs of both companies.

Responsible investing
The analysis of environmental, social and governance (“ESG”) issues is embedded in the Manager’s investment process and these factors are considered key in determining the quality of a business and its long-term success. Central to the Manager’s responsible investment approach are five ESG principles that are applied to evaluate investee companies, acquired since May 2018, throughout the lifecycle of their investment, from their initial review and acquisition to their final sale. Every year, these portfolio companies are assessed and progress measured against these principles. More detailed information about the process can be found on page 38 of the Manager’s Review in the Annual Report and Accounts.

During the year the Company repurchased 8,657,404 shares for cancellation at an average discount of 10.0%, achieving its objective of maintaining regular share buybacks at a discount of 10.0%, as noted above. The Board and the Manager consider that the ability to offer to buy back shares at a target discount of approximately 10.0% 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
  • December, prior to the end of the financial year

Management charges, co-investment and performance incentive
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 31 December 2021 of 2.0% 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 £1.0 million alongside the Company’s investments of £70.9 million. The co-investment scheme requires that the individual members of the team invest in all of the Company’s investments from that date onwards and prohibits selective “cherry picking” of co-investments. If any individual team member opts out of co-investment, they cannot invest in anything during that year.

The performance incentive scheme only applies after an investment has been sold and the scheme incorporates three different hurdles, all of which need to be achieved at different stages before any performance fee can be paid: an Investment Growth Hurdle for the individual investment at exit and also two NAV Total Return Hurdles, the first upon the exit of the investment and the second three years later. The NAV Total Return Hurdle increases each year, so the second NAV Total Return Hurdle will be higher than the first. The continued improvement in the Company’s net asset performance and in its NAV Total Return per share has resulted in the initial NAV Total Return Hurdle under the arrangement being met for the first time.

As at 31 December 2021, the individual Investment Growth Hurdles have been met for two realised and 13 unrealised investments out of the 31 new early?stage investments made since the introduction of the performance incentive arrangements and a contingent liability of £4.9 million in respect of this is disclosed in note 15 of the Annual Report and Accounts. For the first time, the Company has provided for a £0.3 million liability in relation to the Accrosoft exit, which achieved two of the three hurdles at the date of exit. An investment under the arrangement will only qualify for the payment of a performance fee if all three hurdles described above have been met.

More information on the performance incentive arrangements (including an explanation of terms used above) can be found in note 13 of the Annual Report and Accounts.

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. 2021 saw some planned changes to the composition of the Board.

The Board was delighted to appoint Patricia (Patty) Dimond as a Non-Executive Director in February 2021. Details of Patty’s experience and expertise can be found in her biography on page 45 of the Annual Report and Accounts.

After nearly 11 years as Chair, John Gregory retired at the AGM on 27 May 2021, as planned. On behalf of the Company, I would again like to thank John for his significant contribution and commitment to the Company, which has benefited enormously from his wisdom and guidance during his service as Chair. My fellow Directors and I wish John a happy retirement.

The Nomination Committee will continue its plans to refresh the Board over the next two years and aims to achieve a sensible balance between continuity and reinvigoration in compliance with the AIC code.

Material post year end events
The Russian invasion of Ukraine in February 2022 has created a humanitarian crisis in Europe on a scale not seen for decades, with the war’s fatalities and casualties mounting and millions of Ukrainian refugees seeking shelter in neighbouring countries. The wider ramifications of this tragedy are still unknown but inflationary pressures worldwide are increasing, particularly in energy and food, and supply chains, already under strain from the pandemic, will continue to be disrupted. The war has also increased the potential for further market turmoil and cyber attacks. The portfolio has some limited direct exposure to Russia and Ukraine but this remains manageable. The Manager is working closely with management teams of investee companies to be prepared and plan for a deteriorating economy.

Since the year end, the Company has continued to allot new shares under its Prospectus published on 26 July 2021, containing an offer for subscription to raise up to £20 million with an over-allotment facility to raise a further £10 million. In advance of the allotment of the Company’s new shares under this offer in March and as a result of increased market volatility, the Board announced on 18 March 2022 two unaudited NAVs per share: a NAV of 90.1p per share as at 31 December 2021 and 87.5p per share as at 28 February 2022. The reduction of 2.9% in NAV since 31 December 2021 follows from the general decline in public markets since that date. Since this announcement, allotments of new shares have been based on a NAV per share of 87.5p, the most up to date unaudited valuation at the time.

On 25 March 2022, in order to accommodate further demand and in accordance with the terms of the Prospectus, the Board decided to implement the over?allotment facility in part to raise up to a further £5 million. The offer was closed to applications on 7 April 2022 and ended on 8 April 2022 with gross funds raised of £24.1 million.

Shareholder communication
We were disappointed that we were not able to meet with shareholders in person in 2021 as a result of the travel restrictions imposed due to COVID-19. As an alternative, shareholders were invited to a virtual AGM in May, followed at the beginning of June by an online investor forum facilitated by the Manager. We appreciate how popular such events are with our investors and hope to hold future events in person if safe to do so.

Annual General Meeting
The Company’s Annual General Meeting will take place on 31 May 2022 at 1.00pm and we look forward to meeting as many of you as possible in person, providing rules permit. Please refer to the formal notice on page 89 of the Annual Report and Accounts for further details in relation to the format of this year’s meeting, including remote attendance. Voting will be conducted on a poll rather than a show of hands with the Chair of the AGM holding the proxy votes. We would encourage you to submit your votes by proxy ahead of the deadline of 1.00pm on 27 May 2022 and, if attending remotely, to forward any questions by email to [email protected] in advance of the meeting.

The global economy has rebounded strongly this year from the low levels of activity recorded in 2020, when the pandemic first struck and successive lockdowns severely impacted both supply and demand factors. However, the legacy of COVID-19, combined with the ongoing impact of Brexit and the current geopolitical conflict in Ukraine, continue to challenge both our economy and society and create uncertainty for businesses. In particular, the risks of inflationary pressures, supply chain issues and staff shortages are emerging and may impact the future economic recovery. In these conditions, the Company’s investments in unquoted, small, early-growth businesses entail higher levels of risk, greater volatility in valuation and lower liquidity than larger listed companies. It is unlikely, therefore, given these new global developments that the Company will generate the same level of total return that has been achieved in 2021.

However, the Manager understands well the management and business requirements of each of the companies within the investment portfolio and is working closely with them to help them adapt to, and grow within, this changing environment.

The Company’s current portfolio of investments is well diversified by number, business sector, size and stage of development and overall has demonstrated its relative resilience in the face of the pandemic and its repercussions. We anticipate that the portfolio in aggregate will also be able to withstand the increasing challenges and uncertainties arising from the current turmoil in Central Europe and will continue to prosper over time.

The fundraising referred to earlier will provide additional resources to make new acquisitions and enable the Company to take advantage of the increasing numbers of investment opportunities that are now emerging out of the recent disruption. We are cautiously optimistic that the existing portfolio and these new acquisitions will generate long term value for shareholders.

Margaret Littlejohns

13 April 2022

Manager’s review

The Board has appointed Foresight Group LLP (“the Manager”) to provide investment management and administration services.

Portfolio summary
As at 31 December 2021, the Company’s portfolio comprised 49 investments with a total cost of £102.7 million and a valuation of £167.0 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 24 to 28 of the Annual Report and Accounts.

In the year, the value of the investment portfolio rose by £34.3 million as a result of an increase of £42.0 million in the valuation of investments plus £15.1 million of new investments offset by sales of investments totalling £22.8 million. Overall, the portfolio has performed well as markets reopened following the impact of COVID-19.

In line with the Board’s strategic objectives, the Manager remains focused on growing the Company through further development of Net Asset Value Total Return whilst paying an annual dividend to shareholders of at least 5% of the last announced NAV per share. In the year, Net Asset Value Total Return was 27.3%, net assets increased 22.0% to £185.1 million and an annual dividend of 5% of the NAV per share as at 31 December 2020 was paid, meaning that the Company has successfully met these objectives.

New investments
The Manager was able to meet prospective companies in person again, an important part of assessing investments and developing relationships with management teams. Many management teams have successfully steered their businesses through the pandemic whilst developing clearer medium and longer-term growth plans. The Manager has also invested further in its origination capabilities and identified a large number of appropriate investment opportunities during the year.

Over the course of 2021, six new investments were completed, investing a total of £9.9 million. Behind these, there continues to be a strong pipeline of opportunities that the Manager expects to convert during the next 12 months. Follow-on investments totalling £5.2 million were also made in existing investee companies.

Hexarad Group Limited
In June 2021, the Company invested £0.8 million into Hexarad Group, an early-stage, high-growth healthcare technology company, providing teleradiology services to NHS Trusts and UK private healthcare customers. Headquartered in London, the company was founded in 2016 by a team of NHS consultant radiologists and differentiates itself through its clinical leadership and technology-led proposition. The investment into Hexarad Group will enable the company to support more NHS and private healthcare customers and further improve how they use the technology which is core to its customer and radiologist experience.

NorthWest EHealth Limited
In June 2021, the Company invested £1.5 million into NorthWest EHealth, which provides software and services to the clinical trials market, allowing pharmaceutical companies and contract research organisations to conduct feasibility studies, recruit patients and run trials. The investment will be used to expand the current data network, enabling the company to support a larger number of trials at a global level, increase product development and expand the sales and marketing team to help build long-term, strategic relationships.

Additive Manufacturing Technologies Ltd
In June 2021, the Company invested £1.7 million into Additive Manufacturing Technologies (“AMT”), which manufactures systems that automate the post-processing of 3D printed parts. AMT originally received seed funding from Foresight Williams EIS in September 2019. The additional investment, made alongside further investment from Foresight Williams and other institutions, will be used to further accelerate its commercial progress.

Callen-Lenz Associates Limited
In August 2021, the Company made a £2.4 million investment into Callen-Lenz Associates, a developer, designer and manufacturer of high performance unmanned aerial vehicles (“UAVs”) as well as components and navigation and communication software for UAVs. Callen-Lenz Associates delivers research and development contracts for large public and private sector clients, which create regulatory approved technologies that are made into products and sold to other commercial customers. Founded in 2007, it has four revenue segments: research and development, hardware, software and services which are mutually supportive to clients as they move through the design and sales process with the engineering team. The investment will enable Callen-Lenz Associates to scale the business through new hires in key operating and engineering functions.

Newsflare Limited
In December 2021, the Company invested £2.0 million into Newsflare, a marketplace for user-generated video (“UGV”) which currently has one of the largest video libraries with fully cleared rights in the world, with over 244,000 licensable videos on its platform. Newsflare was founded in 2011 and is headquartered in London with staff in Los Angeles, New York and a technology team in Bulgaria. This investment will allow the company to focus on building its video library, attract new customers by expanding the sales and marketing teams as well as improving their platform and technology.

Crosstown Dough Ltd
In December 2021, the Company invested £1.5 million into Crosstown Dough, a premium sweet treat brand offering a range of doughnuts, recently complemented by cookies and ice cream, with a growing vegan offering. Founded in 2014, it has 14 bricks-and-mortar stores and 12 market stalls and food trucks, plus its goods are sold online through its website, providing customers with an on?demand or pre-order delivery service, which traded well during the pandemic. The investment will support the further rollout of the retail network as well as growing the digital, wholesale and corporate/events revenue streams.

Follow-on investments
The Manager had expected that more portfolio companies would need additional capital to support them through continued difficult trading conditions resulting from the lockdown. However, the portfolio has remained relatively resilient, supported by the Manager.

The Manager has arranged follow-on investments into six companies during 2021, totalling £5.2 million. Further details of each of these are provided below.

The additional equity injections in the period were mainly used to support each company’s further growth plans, such as launching new products or to expand into new markets. As markets continue to open up, the Manager remains cautiously optimistic about the health of the rest of the portfolio and the need for follow-on funding over the coming months.

Clubspark Group Ltd
In March 2021, Clubspark Group, a software platform that provides sports clubs and centres with the ability to manage operations such as court and equipment booking, received a £1.5 million follow-on investment from the Company. The investment will be used to push further into international markets, including the US.

Fresh Relevance Ltd
In May 2021, a £0.7 million follow-on investment was made into Fresh Relevance, a SaaS email marketing and web personalisation platform providing online retailers with personalised customer experiences and real-time marketing tools. The investment will be used to support further growth and accelerate the product rollout.

Biotherapy Services Limited
In July 2021, a follow-on investment of £0.7 million was made into Biotherapy Services (“BTS”), a leading pharmaceutical biotech company. BTS has developed a wound care treatment for diabetic foot ulcers and the additional funds will be used to support its clinical development through trials.

Vio Healthtech Limited (formerly Fertility Focus Limited)
In August 2021, a £0.3 million follow-on investment was made into Vio Healthtech, a leading fertility monitoring technology company that has developed registered medical devices that enable women to predict ovulation. The funding will be used to support a new product launch over the next 12 months.

Fourth Wall Creative Limited
In November 2021, an additional £1.3 million was invested into Fourth Wall Creative (“FWC”). FWC designs, procures and fulfils branded merchandise for use in membership welcome packs, season-ticket presentation boxes and hospitality gifts for sports clubs and organisations, predominantly football clubs in the UK but increasingly cricket and rugby clubs. The investment will be used to invest further in its technology to enable the company to add more customers, allowing it to secure long-term licence agreements with sports teams to directly engage with the fans on their behalf. This will allow FWC to drive fan engagement for the clubs.

Ten Health & Fitness Limited
In December 2021, Ten Health & Fitness, a multi-site operator in the boutique health, wellbeing and fitness market, received an additional investment of £0.6 million. The funding will be used for the rollout strategy of more sites as consumers return to in-person studio offerings with an increased focus on health and wellbeing.

The M&A climate has been robust in certain sectors, particularly in healthcare, technology and ecommerce. The Manager 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.

FFX Group Limited
In January 2021, the Company successfully sold 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 £11.1 million at completion and the Company will receive up to £0.3 million of deferred consideration after 18 months, subject to certain conditions. This implies a cash-on-cash return of 4.3x the initial investment of £2.7 million, made in October 2015, which is equivalent to an IRR of c.32%. During the investment period, FFX Group opened a new 60,000 sq ft distribution centre and a new head office in Kent.

The business updated its brand and launched an extensive range of its own products. Since the Company’s investment, FFX Group more than tripled revenues and increased headcount by over 125.

Mologic Ltd.
In July 2021, the Company successfully sold its investment in Mologic, a health diagnostics company providing both contract research services for clients and developing its own range of proprietary point-of-care diagnostics products. It was sold to Global Access Health, a not-for-profit company financed by the Soros Economic Development Fund, the impact investing arm of the Open Society Foundations and a group of other philanthropic organisations and investors. The return multiple of 3.1x includes deferred consideration, reflecting an IRR of c.38%. During the investment period, the Mologic team had worked with the Manager to strengthen the business, develop the product portfolio, increasing turnover by over 165% and employee numbers by over 40%. The business has also developed a presence in the US, opening an office on the East Coast, and also a manufacturing partnership in West Africa.

Ixaris Systems Ltd
In August 2021, the Company sold its holding in Ixaris Systems, an award-winning leader in B2B travel payment technology, to Nium, a global B2B payments platform based in Singapore, resulting in proceeds of c.£1.2 million representing a return of 1.5x cost. Ixaris Systems’ main product is a pre-paid debit card providing flexible funding and payment methods. Ixaris Systems has clients in over 50 countries, ranging from the world’s largest travel brands to independent travel agencies.

The decision was made to exit this investment as it would likely have needed considerable further investment to continue trading given the depressed travel industry. Without a clear timeline on market recovery, a process was undertaken to find the best acquirer for Ixaris Systems led by a new executive chair brought in with the Manager’s support.

Since investment, the Manager helped recruit key senior team members as well as helping the business establish partnerships with Visa and Mastercard and increase headcount by over 75.

Accrosoft Limited
In October 2021, the Company completed the sale of Accrosoft, a recruitment and employee onboarding software company, to Acendre Technologies Inc., an HR software business headquartered in the US. One of its main products is Vacancy Filler (“VF”), software which streamlines talent acquisition and recruitment management for organisations. It helps millions of candidates to apply for jobs easily and empowers recruiters and hiring managers to recruit better and faster. Acendre and Accrosoft’s VF product are complementary businesses and by joining forces they will be able to offer a recruitment and HR management software platform across a much wider customer base, as well as establishing a presence in Europe.

Prior to the sale of Accrosoft, its subsidiary, Weduc, was spun out, with the Company retaining its 19.4% shareholding. Weduc is a leading communication platform sold into the education sector and was initially launched in 2017. The company has grown significantly since the Manager’s original investment, doubling its customer numbers over the past year.

This transaction generated proceeds of £4.3 million, which represents a return of 1.8x and IRR of 25.9% over a period of three years with further upside possible given the ongoing investment in Weduc.

Realisations in the year ended 31 December 2021

  Accounting  Valuation at
  cost at date Realised31 December
  of disposalProceedsgain/(loss)2020
FFX Group LimitedFull disposal2,676,42611,056,0748,379,64811,196,564
Mologic Ltd.Full disposal2,434,4836,270,2063,835,7235,054,260
Ixaris Systems LtdFull disposal2,266,0361,207,635(1,058,401)632,221
Accrosoft LimitedPartial disposal2,363,0624,276,1881,913,1263,369,089
Total disposals 9,740,00722,810,10313,070,09620,252,134

At 31 December 2021, the Company had cash reserves of £17.5 million, which will be used to fund new and follow?on investments, buybacks and running expenses. The Manager is seeing its pipeline of potential investments grow and has a number of opportunities under exclusivity or in due diligence, which it continues to progress.

The onset of COVID-19 and the resulting economic downturn resulted in lower new investment activity in 2020, while 2021 saw an increased flow of opportunities as restrictions reduced throughout the year. Depending on the length and severity of any potential COVID-19 variants and associated restrictions, the Manager expects to see a higher proportion of the Company’s deployment focused on new investments in the short to medium term.

As the economy recovers from the worst effects of the lockdowns, the Manager expects the demand for funding to increase. However, given high levels of liquidity in the market, investment opportunities are likely to be reasonably competitive. Therefore, the Manager remains focused on using its direct origination strategy to identify off-market opportunities and supplement traditional sources of deal flow.

Post-year end activity
HomeLink Healthcare Limited
Post year end, in March 2022, £1.1 million of growth capital was invested into HomeLink Healthcare, a specialist provider of Hospital-at-Home and Virtual Ward services. The company employs highly qualified and experienced nurses and rehabilitation teams to provide services to patients in their own homes, through contracts with the NHS. These services deliver a range of clinical interventions, including wound care, intravenous therapies, physiotherapy, and rehabilitation. The clinical services offered alleviate pressure on the NHS by freeing up vital bed space, saving time and reducing costs.

Rovco Limited
Post year end, in March 2022, Rovco received a £0.5 million follow-on growth capital investment, part of a funding round totalling £15.2 million. Rovco is a leading provider of autonomy and cloud managed robotics for subsea surveys in offshore wind and oil field decommissioning. The investment will allow Rovco, and its technology division Vaarst, to further tech development and continue global expansion to Austin, Texas and Tokyo, Japan, as well as increasing its presence across Europe.

Key portfolio developments
Material changes in valuation, defined as increasing or decreasing by £1.0 million or more since 31 December 2020, are detailed below. Updates on these companies are included below, or in the Top Ten Investments section on pages 24 to 28 of the Annual Report and Accounts.

Key valuation changes in the year

CompanyValuation methodologyNet movement (£)
Hospital Services Group LimitedDiscounted earnings multiple6,867,997
Nano Interactive Group LimitedDiscounted revenue multiple4,396,303
Specac International LimitedDiscounted earnings multiple3,740,867
TFC Europe LimitedDiscounted earnings multiple2,683,854
TLS Management Limited (formerly Dhalia Limited)Net assets2,620,405
Cinelabs International LtdDiscounted earnings multiple2,577,655
Roxy Leisure LtdDiscounted earnings multiple2,341,310
Mowgli Street Food Group LimitedDiscounted earnings multiple2,321,642
Codeplay Software LimitedDiscounted revenue multiple1,804,243
Ollie Quinn LimitedDiscounted revenue multiple1,329,909
Innovation Consulting Group LimitedDiscounted earnings multiple1,283,902
Spektrix LimitedDiscounted revenue multiple1,171,851
NorthWest EHealth LimitedDiscounted revenue multiple1,159,042
Fresh Relevance LtdDiscounted revenue multiple1,032,572
Online Poundshop LimitedNil value(1,099,597)

TLS Management Limited
TLS is based in Barwell, Leicestershire and is a specialist provider of lens manufacturing, refurbishment and servicing to the film and television markets.

31 December 2021 update
Performance in the lens rehousing business continued to underpin the company’s impressive performance, representing 82% of FY2021 full-year revenue. Demand from domestic and international customers remains strong with a robust order book providing revenue visibility for the next two years, driven by the high levels of production activity returning in the film and TV markets.

Cinelabs International Ltd
Cinelabs International provides non-creative post production services to film and TV production houses globally, primarily to those shooting on analogue film. It also offers film restoration, digitisation and archiving services to owners of film archives.

31 December 2021 update
Cinelabs International’s performance over 2021 was a significant improvement compared to the prior year given the strong performance in TV dramas and more consistent revenues from music promotions. However, feature film revenue remains impacted by COVID-19 postponements and some global supply chain issues for certain types of Kodak films. Cinelabs International made an attractive acquisition during the year which is performing well and brought additional digital capabilities.

Roxy Leisure Ltd
Roxy Leisure is a games bar group with venues predominantly across the North of England. It offers a range of entertainment facilities including pool tables, ping-pong, bowling, shuffleboard, mini golf, arcade games and karaoke.

31 December 2021 update
Roxy Leisure has had an extremely strong year since the lifting of restrictions, with customers returning in force. It is also benefiting significantly from the ongoing investments in new sites made during the pandemic. The search for potential new sites in other key target cities continues.

Mowgli Street Food Group Limited
A fast-casual chain of Indian street food restaurants founded in 2014, Mowgli Street Food Group is differentiated from traditional Indian restaurants with a focus on healthy dishes and an extensive gluten-free, vegetarian and vegan offering.

31 December 2021 update
Mowgli Street Food Group continues to trade very strongly across its 14 sites, including London and Cheltenham, which opened in 2021, and despite the Omicron wave and “Plan B” restrictions. There is a schedule of site openings planned throughout the UK for 2022.

Codeplay Software Limited
Codeplay Software is an Edinburgh-based software developer and software consultancy business which was established in 2002. Codeplay Software’s consultancy customers are chip manufacturers which need to develop tools that will extract the best performance from their products.

31 December 2021 update
After investing in developing the product offering, Codeplay Software has a platform which enables artificial intelligence algorithms to run more efficiently on next generation car hardware platforms. The nature of recent projects with large global tech customers is increasingly strategic.

Online Poundshop Limited
Online Poundshop is an online-only discount retailer of general merchandise. Founded and chaired by the founder of Poundland and a proven operator in the sector, it currently has over 200,000 customers in its database and sells over 3,000 products which are fulfilled from a 21,000 sq ft warehouse in Dudley.

31 December 2021 update
Despite generating ongoing revenues, the company had a challenging year, in part due to the return to the high street by consumers and in part due to stock availability challenges. A funding round was required and the Manager decided not to invest further, resulting in subsequent dilution and the holding has been written down to zero.

The direct impact of COVID-19 is gradually receding but the combination of loose fiscal policy and relaxation of restrictions globally is resulting in other challenges for businesses. In the UK, the success of the vaccination rollout has enabled the Government to remove restrictions and now “live with the virus”. There is an expectation that the UK’s return to normal should continue at least until next winter. This, combined with the gradual easing of COVID-19 related border security measures, will provide a welcome boost to hospitality, travel and leisure. The Manager remains cautiously optimistic but will keep the situation under review and will support the portfolio as required at the first sign of any relapse caused by new emerging COVID-19 variants.

The gradual opening up of the global economy and the consequential increase in demand for resources and staff are putting pressure on supply chains and resulting in staffing concerns across some industries. Several of Foresight Group’s portfolio companies have been impacted by the global computer chip shortage amongst other raw material price rises and delays in delivery. Businesses are also struggling with both staff retention and hiring new staff as the number of vacancies in the market is driving both churn and wage inflation. However, such is the demand in several markets, many companies are successfully passing cost increases on to the end customer, protecting margins but adding to the global consumer squeeze.

Hospitality, which had a particularly torrid 2020, enjoyed a strong summer 2021 and festive period, as consumers relieved pent-up demand and returned to a pre-pandemic trend of increased levels of experiential spend. This has resulted in positive results at portfolio companies including Roxy Leisure and Mowgli Street Food Group. Similarly, technology businesses with clear revenue visibility and a differentiated product, and healthcare services businesses, continue to trade strongly and are the current focus of the Manager’s origination efforts.

Inflation across the western world is at levels that have not been seen for many years. The majority of Foresight Group’s portfolio CEOs and finance directors have worked in a high inflation environment and the Manager is encouraging a prudent approach to cost inflation and supply chain management and requesting scenario analyses to model the impact of medium-term inflation on margins.

The Russian invasion of Ukraine, in recent weeks, has brought further pressure on inflation and energy prices, as well as the potential for further market turmoil and increased cyber risks. The Company’s portfolio has some direct exposure to Russia and Ukraine, but this remains manageable. We are working closely with management teams to ensure scenario planning for a wider economic impact has been undertaken.

The Manager is pleased with the overall performance of the portfolio over the past 12 months, especially in these challenging times, and looks forward to a further improvement as conditions return to normal.

During the pandemic, in addition to taking advantage of the Coronavirus Job Retention (or “furlough”) Scheme, many small businesses turned to Government-supported debt facilities including “Bounce Back Loans”, the Future Fund and the Coronavirus Business Interruption Loan Scheme. As companies come to the end of their repayment holidays, the drain on operating cash flow of interest and capital repayments is making companies look to alternative sources of funding for support or growth which should support VCT deal flow.

Global equity markets are currently highly volatile with a number of lockdown “winners” such as Amazon, Peloton and Netflix beginning to lose their shine, whilst mining stocks and traditional sectors including banking and utilities are showing record profits. The threat of war in Europe is looming over capital markets; however, M&A activity remains relatively buoyant and both international buyers and domestic investors have high levels of deployable capital which should provide support for a continued steady flow of realisations.

Notwithstanding the continued uncertainty, the Manager expects to see a sustained high level of activity from UK companies seeking growth capital, given VCTs remain an attractive source of capital for entrepreneurs.

Russell Healey
on behalf of Foresight Group LLP
Head of Private Equity

13 April 2022

Income statement
for the year ended 31 December 2021

 Year ended 31 December 2021Year ended 31 December 2020
Realised gains/(losses) on investments13,07013,070(1,415)(1,415)
Investment holding gains30,42430,4246,2506,250
Investment management fees(772)(2,612)(3,384)(680)(2,039)(2,719)
Other expenses(587)(587)(580)(580)
(Loss)/return on ordinary activities before taxation(501)40,88240,3815842,7963,380
(Loss)/return on ordinary activities after taxation(501)40,88240,3815842,7963,380
(Loss)/return per share(0.2)p19.9p19.7p0.3p1.4p1.7p

The total columns of this statement are 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.

The notes on pages 74 to 88 of the Annual Report and Accounts form part of these financial statements.

Reconciliation of movements in shareholders’ funds

Year endedCalled-uppremiumredemptionDistributableCapitalRevaluation 
31 December share capitalaccountreservereserve1reserve1reserveTotal
As at 1 January 20212,06067,63499450,546(4,513)35,097151,818
Share issues in the year2836,7146,797
Expenses in relation to share issues3(198)(198)
Repurchase of shares(87)87(6,142)(6,142)
Cancellation of share premium(39,196)39,196
Realised gains on disposal of investments13,07013,070
Investment holding gains30,42430,424
Dividends paid(7,508)(7,508)
Management fees charged to capital(2,612)(2,612)
Revenue loss for the year(501)(501)
As at 31 December 20212,05634,9541,08175,5915,94565,521185,148

Year endedCalled-uppremiumredemption DistributableCapitalRevaluation 
31 Decembershare capitalaccountreservereserve1reserve1reserveTotal
As at 1 January 20201,74078,84195123,799(1,059)28,847133,119
Share issues in the year236325,65526,018
Expenses in relation to share issues3(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 gains6,2506,250
Dividends paid(6,804)(6,804)
Management fees charged to capital(2,039)(2,039)
Revenue return for the year584584
As at 31 December 20202,06067,63499450,546(4,513)35,097151,818
  1. Reserve is available for distribution; total distributable reserves at 31 December 2021 total £81,536,000 (2020: £46,033,000).
  2. Includes the dividend reinvestment scheme.
  3. Expenses in relation to share issues includes trail commission for prior years’ fundraising.

The notes on pages 74 to 88 of the Annual Report and Accounts form part of these financial statements.

Balance sheet
At 31 December 2021

Registered number: 03421340

 As atAs at
 31 December 202131 December 2020
Fixed assets  
Investments held at fair value through profit or loss167,006132,739
Current assets  
Cash and cash equivalents17,52118,939
Amounts falling due within one year(751)(99)
Net current assets18,43919,079
Amounts falling due greater than one year(297)
Net assets185,148151,818

Capital and reserves

Called-up share capital2,0562,060
Share premium account34,95467,634
Capital redemption reserve1,081994
Distributable reserve75,59150,546
Capital reserve5,945(4,513)
Revaluation reserve65,52135,097
Equity shareholders’ funds185,148151,818
Net Asset Value per share90.1p73.7p

The financial statements were approved by the Board of Directors and authorised for issue on 13 April 2022 and were signed on its behalf by:

Margaret Littlejohns

The notes on pages 74 to 88 of the Annual Report and Accounts form part of these financial statements.

Cash flow statement
for the year ended 31 December 2021

 Year endedYear ended
 31 December31 December
Cash flow from operating activities  
Loan interest received from investments582478
Dividends received from investments3841,437
Deposit and similar interest received134
Investment management fees paid(3,095)(2,719)
Secretarial fees paid(122)(120)
Other cash payments(462)(449)
Net cash outflow from operating activities(2,712)(1,339)
Cash flow from investing activities  
Purchase of investments(15,111)(7,680)
Net proceeds on sale of investments22,810296
Net proceeds on deferred consideration13
Net cash inflow/(outflow) from investing activities7,699(7,371)
Cash flow from financing activities  
Proceeds of fundraising5,40724,203
Expenses of fundraising(164)(637)
Repurchase of own shares(5,496)(2,668)
Equity dividends paid(6,152)(5,573)
Net cash (outflow)/inflow from financing activities(6,405)15,325
Net (outflow)/inflow of cash in the year(1,418)6,615
Reconciliation of net cash flow to movement in net funds  
(Decrease)/increase in cash and cash equivalents for the year(1,418)6,615
Net cash and cash equivalents at start of year18,93912,324
Net cash and cash equivalents at end of year17,52118,939

Analysis of changes in net debt

 At At
 1 January 31 December
 2021Cash flow2021
Cash and cash equivalents18,939(1,418)17,521

The notes on pages 74 to 88 of the Annual Report and Accounts form part of these financial statements.


  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 2021, 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 2021 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.
  1. 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 2021. 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.
  1. Copies of the Annual Report will be sent to shareholders and can be accessed on the following website: www.foresightvct.com.
  1.  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 December31 December
Net assets£185,148,000£151,818,000
No. of shares at year end205,591,087205,954,017
Net Asset Value per share90.1p73.7p
  1. Return per share
 Year endedYear ended
 31 December31 December
Total return after taxation40,3813,380
Total return per share (note a)19.7p1.7p
Revenue (loss)/return from ordinary activities after taxation(501)584
Revenue (loss)/return per share (note b)(0.2)p0.3p
Capital return from ordinary activities after taxation40,8822,796
Capital return per share (note c)19.9p1.4p
Weighted average number of shares in issue in the year204,937,084199,164,754


  1. Total return per share is total return after taxation divided by the weighted average number of shares in issue during the year.
  2. Revenue (loss)/return per share is revenue return after taxation divided by the weighted average number of shares in issue during the year.
  3. Capital return per share is capital return after taxation divided by the weighted average number of shares in issue during the year.
  1. Annual General Meeting

The Annual General Meeting of the Company will be held at the offices of Foresight Group LLP, The Shard, 32 London Bridge Street, SE1 9SG on 31 May 2022 at 1.00pm. Details will be published on both the Company’s and the Manager’s website at www.foresightvct.com.

  1. Income
 Year endedYear ended
 31 December31 December
Loan stock interest473370
Dividends receivable3841,437
Deposit and similar interest received134
Other income3
  1. Investments held at fair value through profit or loss
Unquoted investments167,006132,739
Book cost as at 1 January 2021 97,316
Investment holding gains 35,423
Valuation at 1 January 2021 132,739
Movements in the year:  
Purchases at cost 15,111
Disposal proceeds1 (22,810)
Realised gains 13,070
Investment holding gains2 28,896
Valuation at 31 December 2021 167,006
Book cost at 31 December 2021 102,687
Investment holding gains 64,319
Valuation at 31 December 2021 167,006
  1. The Company received £22,810,000 (2020: £296,000) from the disposal of investments during the year. The book cost of these investments when they were purchased was £9,740,000 (2020: £1,724,000). 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.
  2. Investment holding gains in the Income Statement include the deferred consideration debtor of £1,528,000 with £141,000 relating to FFX Group Limited, £1,202,000 relating to Mologic Ltd., £114,000 relating to Ixaris Systems Ltd and £71,000 relating to Accrosoft Limited.
  1. 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.

  1. Transactions with the Manager

Foresight Group CI Limited, which acted as Manager to the Company until 27 January 2020, earned fees of £nil (2020: £192,000). Foresight Group LLP was appointed as Manager on 27 January 2020 and earned fees of £3,087,000 up to 31 December 2021 (2020: £2,527,000).

Foresight Group LLP is the Company Secretary (appointed in November 2017) and received accounting and company secretarial services fees of £122,000 (2020: £120,000) during the year. At 31 December 2021, the amount due to Foresight Group LLP was £nil (2020: £nil).

No amounts have been written off in the year in respect of debts due to or from the Manager.


For further information please contact:
Gary Fraser, Foresight Group: 020 3667 8181

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