TIDMFTSV
FORESIGHT SOLAR & TECHNOLOGY VCT PLC
Financial Highlights
-- Ordinary Shares Net Assets as at 30 September 2020: GBP24.9m
-- Ordinary Shares Net Asset Value per share as at 30 September 2020: 70.2p
-- Foresight Williams Technology Shares Net Assets as at 30 September 2020:
GBP3.7m
Ordinary Shares Fund
-- Total net assets GBP24.9 million.
-- After payment of 2.0p in dividends, Net Asset Value per Ordinary Share at
30 September 2020 was 70.2p (31 March 2020: 72.7p).
-- At 30 September 2020, the fund held positions in 12 UK assets, with a
total installed capacity of 74.7MW. During the period the portfolio
generated 53 gigawatt hours of clean energy, sufficient to power
approximately 18,000 UK homes for a year.
-- At 30 September 2020, the fund also held a position in one Italian solar
asset with a total installed capacity of 0.4MW.
-- Post period end, in December 2020, the fund's portfolio companies
completed the sales of Littlewood and Telecomponenti.
Foresight Williams Technology Shares Fund
-- At 30 September 2020, under the FWT Shares Offer, the Company had raised
GBP3.8m, and was yet to make an investment.
-- Post period end, the FWT Shares made investments totalling GBP1.1m in
three companies: Additive Manufacturing Technologies Limited, Audioscenic
Limited and Refeyn Limited.
-- Since the end of the reporting period, a further GBP1.7m has been raised,
bringing the total raised to GBP5.5m.
Dividend History
Ordinary Shares Dividend per
share
25 September 2.0p
2020
22 November 3.0p
2019
26 April 2019 3.0p
23 November 3.0p
2018
27 April 2018 3.0p
24 November 3.0p
2017
7 April 2017 3.0p
18 November 3.0p
2016
8 April 2016 3.0p
13 November 3.0p
2015
10 April 2015 3.0p
14 November 3.0p
2014
4 April 2014 3.0p
25 October 2013 3.0p
12 April 2013 2.5p
31 October 2012 2.5p
Cumulative 46.0p
Chairman's Statement
On behalf of the Board, I am pleased to present the Unaudited
Half-Yearly Financial Report for Foresight Solar & Technology VCT Plc
for the six months ended 30 September 2020 and to provide you with an
update on the developments affecting the Company.
ORDINARY SHARES
Performance and portfolio activity
The Net Asset Value per Ordinary Share decreased by 0.5p to 70.2p at 30
September 2020, compared to 72.7p per share at 31 March 2020, after
deducting the 2.0p per Ordinary Share dividend that was paid on 25
September 2020. The decrease in NAV is driven by the usual running
expenses of the fund, with steady valuations in the portfolio for the
period. As reported in the Company's Annual Report and Accounts released
in July, the effects of COVID-19 on the existing investment portfolio
remain reasonably limited given the nature of the underlying
investments.
There were no new acquisitions in the UK portfolio during the period. As
reported in the Annual Report, final terms were agreed for the sale of
the small Italian rooftop asset, Telecomponenti, which completed post
period end in December 2020, delivering a return of 1.2x to the Company.
The Board are also pleased to announce the sale of Littlewood completed
post period end in December 2020. A sale of Greenersite, the smallest UK
asset, is also being pursued.
Following the award of the Spanish claim (equivalent to GBP2m-GBP2.5m,
or 5.6-7.0p per Ordinary Share), consistent with July's annual report,
there continues to remain significant challenges with respect to
collectability. The Company continues to follow up this claim in the
courts and as such, the Board has not assigned any current value to the
claim in the net asset value reported.
The Board was also pleased that the Investment Manager was able to
complete the refinancing of the investment portfolio in June 2020,
reducing finance costs across the portfolio. With a portfolio solely
situated in the UK, the Board consider the Ordinary Shares fund to be
optimally invested and well placed to maximise future returns for
Shareholders.
Dividends
During the period, an interim dividend of 2.0p per Ordinary Share was
paid on 25 September 2020. This brought the total dividends paid since
launch to 46.0p per Ordinary Share, and a total return of 116.2p per
Ordinary Share since launch (compared with 116.7p per Ordinary Share as
at 31 March 2020 and 133.6p per Ordinary Share as at 30 September 2019).
As reported in July's annual report, following the completion of the
Company's tender offer in March 2020 and a subsequent review of the
dividend policy, the Board will endeavour to pay out dividends derived
from the income generated by the underlying portfolio, rather than a
fixed pence per share.
Management fees
The annual management fee of the Ordinary Shares fund is calculated as
1.5% of Net Assets and equated to GBP189,000 during the period.
FWT SHARES
The Foresight Williams Technology VCT share class (the 'FWT Shares') was
launched in December 2019, and represents an exciting investment
opportunity made possible by the collaboration between Foresight Group
and Williams Advanced Engineering ('WAE'), a technology and engineering
services business, originally spun out of the Williams Formula 1
business.
The share class provides investors with the opportunity to invest in a
portfolio of early-stage companies with high growth-potential,
developing innovative and occasionally transformational technologies
across a range of different sectors. It builds on the successful
relationship that Foresight and WAE have enjoyed from their launch of
the Foresight Williams Technology EIS Fund (the 'EIS fund') in November
2016, which has raised approximately GBP50 million to date and has made
over twenty investments across a range of different sectors so far.
Fundraising and share issues
The Offer for subscription is up to GBP20 million (with an overallotment
facility for up to an additional GBP10 million) through the issue of FWT
Shares. During the period, 2.7 million FWT Shares were allotted, raising
a further GBP2.7m, bringing the total funds raised to over GBP3.8m.
Post period end in November and December 2020, a further 1.7 million FWT
Shares were allotted, increasing the total funds raised to GBP5.5m.
The Offer is now closed for investment, however the Board and I are
pleased to announce that a second offer for subscription will be
published shortly, allowing for investors to continue to participate in
the future fundraising of the FWT share class.
Portfolio and deal activity
As at 30 September 2020, the FWT shares had yet to begin investing,
however the Board and I are pleased to announce that post period end, in
October and November 2020, the FWT Shares made investments totalling
GBP1.1m in three exciting companies: Additive Manufacturing Technologies
Limited, Audioscenic Limited and Refeyn Limited. Further details of
these deals are included in the Investment Manager's review.
Management fees
The annual management fee of the FWT Shares fund is calculated as 2.0%
of Net Assets and equated to GBP25,000 during the period.
Auditor
The Board regularly reviews the Company's ongoing costs and launched a
tender for its audit contract following the signing of the 2020 Annual
Report and Accounts. A competitive tender process is in progress and due
to conclude soon, and I look forward to announcing its outcome in the
near future.
Outlook
As noted in the Annual Report, following the successful refinancing of
the underlying portfolio, the Company will continue to seek to optimise
the performance of the existing Ordinary Shares portfolio including
fixing power price agreements (PPAs) when they are deemed attractive,
and pay dividends through a combination of income earned and realised
gains. The Board and the Investment Manager continue to monitor the
ongoing impact of the COVID-19 pandemic which has, so far, been limited.
Over the medium to long term, once all Ordinary Shareholders have
reached their minimum 5-year qualifying holding period, the Board and
the Investment Manager will, if appropriate, begin a managed process of
returning the value of the Ordinary Shares fund to its Shareholders.
The Company will also continue to raise new funds in the FWT Shares fund
and seek appropriate qualifying investments for this share class.
Ernie Richardson
Chairman
22 December 2020
Investment Manager's Review
ORDINARY SHARES
Portfolio summary and performance
During the period the Investment Manager remained focused on delivering
a positive operational performance from the portfolio of assets. The
disposal of three smaller assets was progressed, while the debt
refinancing completed during the period improving the return potential
of the Company.
The UK assets in the portfolio achieved a strong performance during the
period 1 April 2020 to 30 September 2020 with total electricity
production 4.3% above expectations. The assets generated a total of
53GWh, enough clean electricity to power over 18,000 UK homes. This
positive performance reflects higher than average irradiation levels and
good availability of the solar plants. Further details on performance of
the individual assets are included on pages 12 to 18 of the Half Yearly
report. The operation of the assets has not been affected by national or
regional COVID-19 lockdowns.
As anticipated, in June 2020 a new cross-portfolio debt facility was
agreed with the existing lender, refinancing all project-level debt for
the UK solar assets. The term of the new facility runs until 31 December
2023. By working with the existing lender which is familiar with the
whole portfolio, the Investment Manager was able to secure preferable
terms on the loans.
There were no acquisitions during the period.
Disposals
Following a decision to refocus the portfolio and to provide liquidity
for the fund, the Investment Manager has been working to complete the
sale of three small assets.
In May, final terms were agreed for the sale of a small Italian rooftop
asset, Telecomponenti -- the fund's sole remaining foreign asset. The
completion of the sale process was delayed by COVID-19 but completed
post period end in December 2020.
Also post period end, in December 2020, the Littlewood asset was sold. A
sale of Greenersite, the smallest UK asset, is also being pursued.
Market update
COVID-19
As the Government imposed lockdown restrictions on the UK in order to
limit the spread of COVID-19, the energy industry saw a sharp
contraction in demand with industrial and commercial businesses shutting
down overnight. This drop in demand resulted in wholesale energy prices
reaching historic lows. Following an overall fall in electricity demand
of 20%, demand slowly recovered as lockdown restrictions eased, the
holiday period came to an end, and as businesses and schools began to
reopen.
The Company's solar plants typically operate with minimal human
involvement and have been able to carry on operating unaffected by
either national or regional lockdowns. As electricity generators, the
solar plants provide an essential service and are therefore classified
as a 'Critical Sector', with all those responsible for maintaining them
deemed 'Key Workers'. The solar projects continue to generate
electricity and receive payments for the green energy that they produce,
which is essential in keeping the country running.
Nonetheless, the Investment Manager conducted a full review of all key
service providers and looked at the risks within the supply chain for
spare parts. We are confident in the resilience of the business
continuity plans in place for the solar sites' operations.
Green Investment
In the wake of the pandemic, Governments and supranational organisations
such as the EU are constructing substantial economic recovery packages,
and clean energy is likely to play a key role in such plans. Over the
last five years renewable power has emerged as the most cost--effective
energy source in many countries around the globe; two thirds of the
world's population now live in areas where the cheapest form of energy
is electricity generated from wind and solar. This is important because
it implies there is no longer a trade-off between stimulating economic
recovery and financing green growth.
The UK has also announced a GBP3 billion Green Recovery Package which
should accelerate progress towards the 2050 net carbon neutral goal. The
renewables sector is likely to be a beneficiary in terms of job creation
and benign future energy policy.
Brexit
Current EU rules on trade and business continue to apply as we draw
towards the end of the transition period in January 2021. For example,
the EU Emissions Trading System (EU ETS), which sets a cap on the total
amount of greenhouse gases that can be emitted by installations, will
continue until April 2021. In a bid to boost the UK's environmental
credentials post-Brexit, Chancellor Rishi Sunak has outlined the
country's updated green finance strategy ahead of the 26th UN Climate
Change Conference of the Parties (COP 26) scheduled for November 2021 in
Glasgow. Sunak announced the intention to set a green "taxonomy" which
replicates the European Union's approach, with a common methodology for
determining which activities can be defined as environmentally
sustainable. The UK taxonomy will take the scientific metrics in the EU
taxonomy as its basis and a UK Green Technical Advisory Group will be
established.
Foresight's view has not changed from that set out previously; the
energy market in the UK is closely aligned with European markets and
this is not expected to change over the long term. The exit from the EU
has yet to cause significant volatility in the energy markets in the
short term. Longer term impacts such as weaker economic demand and the
availability of unskilled labour are not deemed material to the future
operations of the portfolio. Foresight remains of the view that Brexit
is unlikely to have a significant impact on the financial and
operational performance of the assets.
Revenues
During the period, approximately two thirds of revenue from the UK
portfolio investments came from subsidies (predominantly under the ROC
scheme) and other green benefits. These revenues are directly and
explicitly linked to inflation for 20 years from the accreditation date
under the ROC regime and subject to Retail Price Index ("RPI")
inflationary increases applied by Ofgem in April of each year. The
remaining revenues derive from electricity sales by our UK portfolio
companies, which are subject to wholesale electricity price movements.
The average power price achieved during the period 1 April 2020 to 30
September 2020 was GBP38.66 per MWh, representing a decrease on the
price achieved in the 12 months to 31 March 2020 (GBP44.45 per MWh).
Although power prices declined early in the period as the COVID-19
lockdown dramatically suppressed demand, as restrictions were lifted,
wholesale power prices recovered. However, there remains volatility and
uncertainty about market factors affecting prices in the short to medium
term. The Investment Manager continues to monitor these in order to seek
the best opportunities to enter into short term price fixing
arrangements when they arise.
During the period 1 April 2020 to 30 September 2020 there was a 3.76%
decrease in long term power price forecasts from 31 March 2020. This was
driven by a major reduction in short term forecast electricity demand as
a result of COVID-19 induced economic restrictions. The Investment
Manager uses these forward-looking power price assumptions to assess the
likely future income of the portfolio investments for valuation
purposes.
The Company's assumptions are formed from a blended average of the
forecasts provided by third party consultants and are updated on a
quarterly basis. The forecasts anticipate a small increase in prices
over 2020-2030 and then remain broadly stable over the longer term.
This decrease from the March 2020 figure is largely driven by global
factors including the pandemic, fluctuating exchange rates, weather
events and the impact of gas prices on power prices. The various
lockdown measures announced across Europe over Winter 2020 will continue
to incite volatility in power prices, with near-term contracts falling
following strong gas supply to Europe.
Power Purchase Agreements ("PPAs") are entered into between each
portfolio company and regulated retail energy suppliers in the UK
electricity supply market. Under the PPAs, each portfolio company will
sell the entirety of the generated electricity and ROCs. Electricity can
be sold at a fixed price for an agreed duration, or at a variable rate,
as agreed from time to time.
The PPA strategy adopted by our portfolio companies seeks to optimise
their revenues from the power generated, while keeping the flexibility
to manage their solar assets appropriately. The Boards of our portfolio
companies, with assistance from Foresight, constantly assess conditions
in the electricity market and set their pricing strategy on the basis of
likely future movements.
The Company's strategy is to maintain c.30% of the portfolio under fixed
pricing agreements, with the remainder selling electricity at a variable
market rate. The assets with fixed arrangements currently account for
34% of capacity. The average UK power price achieved across the
portfolio for the period was GBP38.66MWh, compared to a wholesale market
average of GBP30.68MWh demonstrating the effectiveness of the strategy
in place.
Sustainable investing
Sustainability lies at the heart of the Manager's approach, and the
Manager believes that investing responsibly, seeking to make a positive
social and environmental impact, is critical to its long-term success.
These factors have been integrated into the investment process, and are
actively supported by all involved, regardless of seniority.
Foresight continues to refine its sustainability tracking to further
improve its investment processes, enhance the sustainability performance
of existing assets and demonstrate more comprehensively the
environmental benefits and social contribution of the Company's
activities, implementing Foresight Group's Sustainable Investing in
Infrastructure Strategy. This strategy focuses on ensuring all assets
are evaluated prior to acquisition and throughout their ownership, in
accordance with Foresight Group's Sustainability Evaluation Criteria.
There are five central themes to the Criteria, which cover the key areas
of sustainability.
The five criteria are:
1. Sustainable Development Contribution: The development of affordable and
clean energy as well as improved resource and energy efficiency.
2. Environmental Footprint: Assessing potential environmental impact such as
emissions to air, land and water, effects on biodiversity and noise and
light pollution
3. Social Engagement: Engagement and consultation with local stakeholders.
Ensuring a positive local economic and social impact, community
engagement and the health and wellbeing of stakeholders.
4. Governance: Compliance with relevant laws and regulations and ensuring
best practice is followed.
5. Third Party Interactions: Third party due diligence is conducted on key
counterparties to ensure adherence to the aforementioned criteria where
relevant.
Land management
Compliance audits have been carried out on all UK sites held by
portfolio companies, confirming that they are in line with government
permits and conditions. Foresight Group remains a working partner of the
Solar Trade Association's Large Scale Asset Management Working Group.
Foresight is a signatory to the Solar Farm Land Management Charter and
seeks to ensure that the solar farms operated by all of our portfolio
companies are managed in a manner that maximises the agricultural,
landscaping, biodiversity and wildlife potential, which can also
contribute to lowering maintenance costs and enhancing security. As such,
Foresight Group regularly inspects sites and advises portfolio companies
to develop site specific land management and biodiversity enhancement
plans to secure long term gains for wildlife and ensure that the land
and environment are maintained to a high standard.
This includes:
-- Management of grassland areas within the security fencing to promote
wildflower meadows and sustainable sheep grazing;
-- Planting and management of hedgerows and associated hedge banks;
-- Management of field boundaries between security fencing and hedgerows;
-- Sustainable land drainage and pond restoration;
-- Installation of insect hotels and reptile hibernacula;
-- Installation of boxes for bats, owls and kestrels;
-- Installation of beehives by local beekeepers.
Most solar parks are designed to enable sheep grazing and the remaining
plants are investigated for alterations to ensure that the farmland on
which the solar assets are located can remain useful in agricultural
production, which is a frequent desire of local communities.
Examples of sustainable land management activities across the portfolio
include:
-- Free-range chickens grazing at the New Kaine site
-- The grounds of Turweston and Littlewood solar farms continue to be
managed as wildflower meadow
-- Beehives are on site at Turweston
-- Bird and bat boxes have been installed at Basin Bridge
-- At Turweston additional gates with sufficient gaps at the lower edge were
installed to allow for safe wildlife passage across the site
-- Trees and hedgerows have been planted, and hedge infill work undertaken,
at Dove View, Hurcott and Littlewood.
O&M Provider Sustainability Agreement
As detailed in previous reports the Investment Manager has been working
closely with its major suppliers and counterparties to encourage the
adoption of ESG and sustainability policies where such policies either
did not exist or were not as robust as that of the Investment Manager's
own.
Foresight has established an O&M Provider Sustainability Agreement,
which has been signed by the main providers of Operations and
Maintenance services to the assets. We are pleased that these key O&M
providers have agreed to align their approach with that of our own in
placing sustainability at the heart of their operations.
This ground-breaking agreement stipulates where Foresight believes
positive environmental and social outcomes can be achieved within
supplier activity. Foresight also believes that adherence can offer
long-term cost benefit and business opportunities through more efficient
use of resources and intelligent forward planning.
In the long-term, Foresight will expect its O&M providers to track their
own performance in these areas and report this through annual
questionnaires. Foresight also expects its O&M providers to communicate
these requirements and standards within their supply chain. In order to
review the performance of our O&M providers, the Investment Manager will
meet with them once a year and discuss how these principles worked in
practice, as well as working together to update the principles, if
necessary. Foresight plans to integrate these principles into future O&M
contracts.
The principles that underpin the obligations of the agreements
incorporate elements of both the United Nations Sustainable Development
Goals and the Principles for Responsible Investment ("PRI")
international frameworks.
Social and Community Engagement
Foresight Group actively seeks to engage with the local communities
around the solar assets operated by our portfolio companies and
regularly attends parish meetings to encourage community engagement and
promote the benefits of their solar assets.
Due to COVID-19, there were no site visits during the period and the
Investment Manager was unable to attend parish meetings. However, the
Investment Manager has continued to make annual community payments for
Marchington, which have been extended to reflect the site's 40-year
consent.
Health and safety
There were no reportable health and safety incidents during the period.
In May 2020 there was a fire close to the Stables farm asset. Although
outside of the boundaries of the site, the event was recorded and
investigated as a Near Miss in order to identify and eliminate any fire
hazards from the premises.
Safety, Health, Environment and Quality ("SHEQ") performance and risk
management are a top priority at all levels for Foresight Group. To
further improve the management of SHEQ risks, reinforce best practice
and ensure non-compliance with regulations is avoided, Foresight Group
continues to work with independent health and safety consultants who
regularly visit the assets operated by our portfolio companies to ensure
they not only meet, but exceed, industry and legal standards. The
consultants have confirmed that all sites are in compliance with
applicable regulations.
Recommendations have been investigated with follow-up actions agreed to
help raise standards further. During the period, improvements to method
statements have been made relating to the safe isolation of central
inverters. The health and safety advisor provided additional
recommendations to plan movement around the sites. The advisor noted
that wet weather conditions make traversing the sites difficult in some
places, especially when completing manual handling of heavy parts.
Recommendations included a warning regarding driving off-road, which
will be implemented for applicable sites by the Operation and
Maintenance companies.
Outlook
Despite a fall in the external power prices negatively impacting the
portfolio valuation, it has otherwise been another positive period for
the Company with good performance from the assets. The Company will
continue to focus on delivering strong operational performance across
the portfolio. During the period, the Investment Manager successfully
concluded the negotiation of new debt terms with the existing lender to
refinance the majority of the UK solar assets, with pricing materially
less than the previous arrangements.
Long-term renewable energy projects typically have inflation-linked
income streams, often with a high degree of Government backing through
subsidies, which will be unaffected by a slowdown in economic growth. We
believe this offers a degree of protection for investors from the
inevitable economic impact of the coronavirus pandemic.
More broadly, investor demand for renewable energy assets continues to
rise with solar generation becoming an established mature investment
sector. Coupled with reduced interest rates, valuations have proven to
be resilient, notwithstanding the falls in power prices and power price
projections. With prices and forecasts both more stable, we are
cautiously optimistic that asset values will trade up over the next
couple of years before the next exit can be considered.
FORESIGHT WILLIAMS TECHNOLOGY SHARES
Investment Manager's Review
Summary
Between the launch of the Foresight Williams Technology Shares ("the FWT
fund") on 20 December 2019 and the end of the reporting period, GBP3.8m
was raised. The Offer provides investors with the opportunity to invest
in a portfolio of early-stage companies with high growth-potential,
developing innovative and occasionally transformational technologies
across a range of different sectors.
As at 30 September 2020, the FWT fund had yet to begin investing,
however, subsequently the fund has acquired investments totalling
GBP1.1m in three exciting companies. Audioscenic and Refeyn are detailed
below as well as AMT in a case study on page 11 of the Half Yearly
report.
Post period acquisitions
AUDIOSCENIC
The FWT fund's investment into Audioscenic, a developer of immersive 3D
audio software, was completed in October. The company is a spin-out from
the Institute of Sound and Vibrational Research ("ISVR") at the
University of Southampton. By integrating computer vision into a
soundbar, its speaker technology can monitor the location of a
listener's head, beaming separate sound waves to their left and right
ears. An immersive 3D audio experience can be created from a single,
compact soundbar. An experience that is normally available to consumers
only through headphones. The investment will support the
commercialisation of the company's products and team expansion.
REFEYN
In November, the FWT fund invested into Refeyn, a life sciences
instrumentation company that span-out from the University of Oxford. The
company is commercialising a disruptive technology ("Mass Photometry")
that uses light to measure the mass of molecules (such as proteins).
Identifying and characterising protein molecules through mass
measurement is an integral part of life sciences research, particularly
in the development of new medicines. Refeyn's instruments are easier to
use, significantly faster and lower cost than existing techniques.
Please refer to page 11 of the Half Yearly report for the case study on
AMT.
Fundraising
The offer, made possible through an innovative collaboration between
Foresight Group and Williams Advanced Engineering Ltd, the engineering
consulting company that spun-out of Williams F1, continues to build
positive momentum in the market. Since the end of the reporting period a
further GBP1.7m has been raised, bringing the total raised to GBP5.5m.
Pipeline
The onset of the coronavirus pandemic and the strict lockdown measures
introduced in March triggered a slowdown in investment activity in the
market targeted by the FWT fund. Encouragingly, the Investment Manager
started to see a recovery in the demand for growth capital towards the
end of the summer, supporting the development of a healthy pipeline of
opportunities as the fund began to invest. The Investment Manager
expects this to increase as the economy recovers from the pandemic. At
the time of writing, three further deals had passed the Investment
Manager's Initial Investment Committee stage and were progressing to
detailed due diligence.
Foresight Group LLP
Investment Manager
22 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;
-- Operational; and
-- Financial.
The Board reported on the principal risks and uncertainties faced by the
Company in the Annual Report and Accounts for the nine months ended 31
March 2020. A detailed explanation can be found on page 31 of the Annual
Report and Accounts which is available on Foresight Group's website
www.foresightgroup.eu or by writing to Foresight Group at The Shard, 32
London Bridge Street, London, SE1 9SG.
In the view of the Board, there have been no changes to the fundamental
nature of these risks since the previous report and these principal
risks and uncertainties are equally applicable to the remaining six
months of the financial year as they were to the six months under
review.
Directors' Responsibility Statement
The Disclosure and Transparency Rules ('DTR') of the UK Listing
Authority require the Directors to confirm their responsibilities in
relation to the preparation and publication of the 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).
Going Concern
The Company's business activities, together with the factors likely to
affect its future development, performance and position, are set out in
the Strategic Report of the Annual Report. The financial position of the
Company, its cash flows, liquidity position and borrowing facilities are
described in the Chairman's Statement, Strategic Report and Notes to the
Accounts of the 31 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, which benefit from Renewable
Obligation Certificates guaranteed by the UK Government. 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
Ernie Richardson
Chairman
22 December 2020
Unaudited Non-Statutory Analysis of the Share Classes
Income Statement
for the six months ended
30 September 2020
Ordinary Shares Fund FWT Shares Fund
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment holding losses -- (17,183) (17,183) -- -- --
Income 16,275 -- 16,275 -- -- --
Foreign exchange gains -- 2 2 -- -- --
Investment management
fees (47) (142) (189) (6) (19) (25)
Interest payable 1,109 -- 1,109 -- -- --
Other expenses (176) -- (176) (76) -- (76)
Profit/(loss) before
taxation 17,161 (17,323) (162) (82) (19) (101)
Taxation -- -- -- -- -- --
Profit/(loss) after
taxation 17,161 (17,323) (162) (82) (19) (101)
Profit/(loss) per share 48.4p (48.9)p (0.5)p (3.2)p (0.7)p (3.9)p
Balance Sheet
at 30 September 2020
Ordinary FWT Shares
Shares Fund Fund
GBP'000 GBP'000
Fixed assets
Investments held at fair value
through profit or loss 24,499 --
Current assets
Debtors 449 50
Cash and cash equivalents 131 3,819
580 3,869
Creditors
Amounts falling due within one
year -- (161)
Net current assets 410 3,708
Net assets 24,909 3,708
---------------------------------- ------------ ----------
Capital and reserves
Called-up share capital 354 38
Share premium -- 1,377
Capital redemption reserve 200 --
Distributable reserve 36,265 2,313
Capital reserve (12,366) (20)
Revaluation reserve 456 --
Equity shareholders' funds 24,909 3,708
---------------------------------- ------------ ----------
Number of shares in issue 35,460,961 3,818,311
Net asset value per share 70.2p 97.1p
At 30 September 2020 there was an inter-share debtor/creditor of
GBP121,000 which has been eliminated on aggregation.
Unaudited Non-Statutory Analysis of the Share Classes
Reconciliations of Movements in Shareholders' Funds
for the six months ended 30 September 2020
Called-up Share Capital
share premium redemption Distributable Capital Revaluation
Ordinary Shares Fund capital account reserve reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------
As at 1 April 2020 354 6,967 200 12,853 (12,226) 17,639 25,787
Expenses in relation to
prior year share issues -- (7) -- -- -- -- (7)
Cancellation of share premium -- (6,960) -- 6,960 -- -- --
Investment holding losses -- -- -- -- -- (17,183) (17,183)
Foreign exchange gains -- -- -- -- 2 -- 2
Dividends paid -- -- -- (709) -- -- (709)
Management fees charged
to capital
Revenue profit for the -- -- -- -- (142) -- (142)
period -- -- -- 17,161 -- -- 17,161
--------------------------------- -----------
As at 30 September 2020 354 -- 200 36,265 (12,366) 456 24,909
---------------------------------
Called-up Share Capital
share premium redemption Distributable Capital Revaluation
FWT Shares Fund capital account reserve reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April 2020 11 1,134 -- (8) (1) -- 1,136
Share issues in the period 27 2,721 -- -- -- -- 2,748
Expenses in relation to
share issues -- (75) -- -- -- -- (75)
Cancellation of share premium -- (2,403) -- 2,403 -- -- --
Management fees charged
to capital -- -- -- -- (19) -- (19)
Revenue loss for the period -- -- -- (82) -- -- (82)
----------------------------------- -----------
As at 30 September 2020 38 1,377 -- 2,313 (20) -- 3,708
-----------------------------------
Unaudited Income Statement for the six months ended 30 September 2020
Six months ended Six months ended Year ended
30 September 2020 30 September 2019 31 March 2020
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment holding
(losses)/gains -- (17,183) (17,183) -- 36 36 -- (7,881) (7,881)
Realised losses on
investments -- -- -- -- -- -- -- (941) (941)
Income 16,275 -- 16,275 341 -- 341 3,385 -- 3,385
Foreign exchange
gains -- 2 2 -- -- -- -- -- --
Investment management
fees (53) (161) (214) (76) (228) (304) (147) (440) (587)
Interest payable 1,109 -- 1,109 (200) -- (200) (397) -- (397)
Other expenses (252) -- (252) (221) -- (221) (449) -- (449)
------------------------
Profit/(loss) before
taxation 17,079 (17,342) (263) (156) (192) (348) 2,392 (9,262) (6,870)
Taxation -- -- -- -- -- -- -- -- --
------------------------
Profit/(loss) after
taxation 17,079 (17,342) (263) (156) (192) (348) 2,392 (9,262) (6,870)
------------------------
Profit/(loss) per
share:
Ordinary Share 48.4p (48.9)p (0.5)p (0.4)p (0.4)p (0.8)p 5.6p (21.6)p (16.0)p
FWT Share (3.2)p (0.7)p (3.9)p n/a n/a n/a (0.7)p (0.1)p (0.8)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: 07289280
As at As at As at
30 September 30 September 31 March 2020
2020 (unaudited) 2019 (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Fixed assets
Investments held at fair
value through profit or
loss 24,499 54,023 42,170
Current assets
Debtors 378 221 293
Cash 3,950 3,358 1,802
4,328 3,579 2,095
Creditors
Amounts falling due within
one year (210) (17,837) (17,342)
Net current
assets/(liabilities) 4,118 (14,258) (15,247)
Net assets 28,617 39,765 26,923
--------------------------- ----------------- ----------------- --------------
Capital and reserves
Called-up share capital 392 430 365
Share premium 1,377 7,026 8,101
Capital redemption reserve 200 124 200
Distributable reserve 38,578 17,703 12,845
Capital reserve (12,386) (11,074) (12,227)
Revaluation reserve 456 25,556 17,639
Equity shareholders' funds 28,617 39,765 26,923
Net asset value per share
Ordinary Share 70.2p 92.6p 72.7p
FWT Share 97.1p n/a 99.1p
Unaudited Reconciliation of Movements in Shareholders' Funds for the six
months ended 30 September 2020
Called-up Share Capital
share premium redemption Distributable Capital Revaluation
capital account reserve reserve* reserve* reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April 2020 365 8,101 200 12,845 (12,227) 17,639 26,923
Share issues in the
period 27 2,721 -- -- -- -- 2,748
Expenses in relation
to share issues -- (75) -- -- -- -- (75)
Expenses in relation
to prior year share
issues -- (7) -- -- -- -- (7)
Cancellation of share
premium -- (9,363) -- 9,363 -- -- --
Investment holding
losses -- -- -- -- -- (17,183) (17,183)
Foreign exchange
gains -- -- -- -- 2 -- 2
Dividends paid -- -- -- (709) -- -- (709)
Management fees charged
to capital -- -- -- -- (161) -- (161)
Revenue profit for
the period -- -- -- 17,079 -- -- 17,079
As at 30 September
2020 392 1,377 200 38,578 (12,386) 456 28,617
--------------------------- --------- -------- ----------- --------------- ---------- ----------- --------
*Total distributable reserves at 30 September 2020 were GBP26,192,000
(31 March 2020: GBP618,000).
Unaudited Cash Flow Statement for the six months ended 30 September 2020
Year
Six months Six months ended
ended ended 31 March
30 September 30 September 2020
2020 (unaudited) 2019 (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Deposit and similar interest received -- 4 11
Investment management fees paid (216) (311) (600)
Secretarial fees paid (87) (64) (128)
Other cash payments (267) (356) (387)
Net cash outflow from operating activities (570) (727) (1,104)
------------------------------------------ ----------------- ----------------- ----------
Cash flow from investing activities
Net proceeds on sale of investments 488 2,780 5,280
Investment income received 274 544 3,129
Net cash inflow from investing activities 762 3,324 8,409
Cash flow from financing activities
Proceeds of fund raising 2,714 -- 1,162
Expenses of fund raising (49) (6) (26)
Repurchase of own shares -- (273) (6,390)
Equity dividends paid (709) (1,294) (2,583)
Net cash inflow/(outflow) from financing
activities 1,956 (1,573) (7,837)
Net inflow/(outflow) of cash in the
period 2,148 1,024 (532)
Reconciliation of net cash flow to
movement in net funds
Increase/(decrease) in cash for the
period 2,148 1,024 (532)
Net cash at start of period 1,802 2,334 2,334
Net cash at end of period 3,950 3,358 1,802
At 1 At 30
April September
2020 Cash Flow 2020
GBP'000 GBP'000 GBP'000
Cash and cash equivalents 1,802 2,148 3,950
Notes to the Unaudited Half-Yearly Results for the six months ended 30
September 2020
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 nine months ended 31 March 2020. Unquoted investments
have been valued in accordance with International Private Equity and
Venture Capital 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 nine months 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 for the six
months ended 30 September 2020 have been sent to shareholders and are
available for inspection at the Registered Office of the Company at The
Shard, 32 London Bridge Street, London, SE1 9SG. Copies are also
available electronically at www.foresightgroup.eu.
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 that date.
Ordinary Shares FWT Shares
Number of Number of
Net assets Shares in Net assets Shares in
GBP'000 issue GBP'000 issue
30 September
2020 24,909 35,460,961 3,708 3,818,311
30 September
2019 39,765 42,953,814 n/a n/a
31 March 2020 25,787 35,460,961 1,136 1,145,927
5 Return per share
The weighted average number of shares used to calculate the respective
returns are shown in the table below:
Ordinary Shares FWT Shares
Number of Shares Number of Shares
------------------ ---------------- ----------------
30 September 2020 35,460,961 2,536,809
30 September 2019 43,116,781 n/a
31 March 2020 42,897,610 1,145,927
------------------ ---------------- ----------------
6 Income
Six months
Six months ended ended 30 Year ended
30 September September 31 March 2020
2020 (unaudited) 2019 (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Loan stock interest 230 337 609
Dividends received 234 -- 2,765
Bank interest -- 4 11
Other income* 15,811 -- --
16,275 341 3,385
*Other income in the year relates to the release of the Company's
liability from its wholly owned subsidiary, Youtan Limited. The release
had an equal and opposite effect on the carrying value of Investments,
resulting in a nil impact for the NAV of the Company.
7 Investments held at fair value through profit or loss
Ordinary Shares FWT Shares Company
GBP'000 GBP'000 GBP'000
Book cost as at 1 April
2020 24,531 -- 24,531
Investment holding gains 17,639 -- 17,639
Valuation at 1 April
2020 42,170 -- 42,170
Movements in the period: --
Purchases at cost -- -- --
Disposal proceeds* (488) -- (488)
Realised losses -- -- --
Investment holding gains (17,183) -- (17,183)
Valuation at 30 September
2020 24,499 -- 24,499
Book cost at 30 September
2020 24,043 -- 24,043
Investment holding gains 456 -- 456
Valuation at 30 September
2020 24,499 -- 24,499
*Disposal proceeds relate to the repayment of shareholder loans from the
Company's portfolio companies.
8 Transactions with the manager
Details of arrangements with Foresight Group LLP and Foresight Group CI
Limited are given in the Annual Report and Accounts for year ended 31
March 2020, in the Directors' Report and Notes 3 and 13. All
arrangements and transactions were on an arms length basis.
Foresight Group CI Limited, which acted as investment manager to the
Company until 27 January 2020 when Foresight Group LLP was appointed as
Investment Manager, earned fees of GBPnil in the six months ended 30
September 2020 (six months ended 30 September 2019: GBP304,000; year
ended 31 March 2020: GBP491,000). Foresight Group LLP, which was
appointed as Investment Manager on 27 January 2020 earned fees of
GBP214,000 in the six months ended 30 September 2020 (six months ended
30 September 2019: GBPnil; year ended 31 March 2020: GBP96,000).
Foresight Group LLP, to whom the Manager delegated the function of
Company Secretary, earned fees amounting to GBP84,000 in the six months
ended 30 September 2020 (six months ended 30 September 2019: GBP64,000;
year ended 31 March 2020: GBP131,000).
At the balance sheet date there was GBPnil (30 September 2019: GBP8,000;
31 March 2020: GBP112,000) due from Foresight Group CI Limited and
GBP73,000 (30 September 2019: GBPnil; 31 March 2020: GBP86,000) due from
Foresight Group LLP. No amounts have been written off in the year in
respect of debts due to or from related parties.
9 Related party transactions
There were no related party transactions in the period.
10 Post balance sheet event
In October and November 2020, the FWT Shares purchased investments in
Additive Manufacturing Technologies Limited, Audioscenic Limited and
Refeyn Limited totalling GBP1.1m.
In November and December 2020, under the offer for subscription to raise
up to GBP20 million FWT shares (with an overallotment facility to raise
up to a further GBP10 million), the Company issued a total of 1,667,810
shares based on a price of 100.0p.
In December 2020, the Ordinary Shares' portfolio companies completed the
sales of the Littlewood and Telecomponenti assets.
END
(END) Dow Jones Newswires
December 22, 2020 09:33 ET (14:33 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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