• Diversified portfolio of 21 actively managed companies.
  • Net Asset Value per Share increased by 1.1p to 70.7p as at 30 September 2018. The portfolio has seen an uplift in valuation of £1.8 million over the period.
  • The Company completed five new investments, totalling £3.5 million and exited one investment, realising £1.3 million.
  • One follow-on investment of £0.5 million was made during the period.
  • A total of £29 million was raised under the offer for subscription that closed on 18 May 2018. £14.7 million has been raised during the period under the new offer which launched on 14 June 2018.
  • The Tender Offer, which launched on 16 July 2018, was fully subscribed and 7,788,768 Shares were bought back for £5 million.
  • A further £7.3 million raised through the issue of Shares post period end, bringing the total raised under the current offer to £22 million.
  • On 19 October 2018, an interim dividend of 4.0p per Share was paid based on an ex-dividend date of 4 October 2018 and a record date 5 October 2018.

Chairman’s Statement

In line with the Board’s objective on dividend payments, an interim dividend of 4.0p per Share was declared on 16 August based on an ex-dividend date of 4 October 2018 and a record date of 5 October 2018. The dividend was subsequently paid on 19 October 2018.

Top-up Share Issues and Share Buy-backs
On 16 July 2018, a Tender Offer of up to £5 million was launched, providing investors with an opportunity to sell their Shares back to the Company at a discount to NAV of 7.5%. This took place on 17 September and 7,788,768 Shares were repurchased at 64.20p per Share.

Other Share buybacks took place on 7 August 2018 (500,000 Shares at 62.50p per Share), 26 September 2018 (180,000 Shares at 62.25p per Share) and 28 September 2018 (209,185 Shares at 62.25p per Share), all of which have enabled the Company to achieve its target discount to NAV.

Over the next twelve months the Board will look to reduce the discount to NAV from 10% to 7.5%.


The offer for subscription dated 19 May 2017, which raised £29 million, closed on 18 May 2018.

The Company is currently seeking to raise up to £50 million (with a £30m over-allotment facility) through the current offer for subscription dated 14 June 2018, which will close on 30 April 2019. This provides existing Shareholders and new investors
with the opportunity to invest in the Company and benefit from the tax reliefs available to qualifying investors. As at 29 November 2018, £22 million had been raised. Funds raised under both of these offers have allowed the Company to take advantage of attractive investment opportunities and to increase portfolio diversification in line with the ongoing strategy of the Company. The new offer will result in further opportunities for the Company. Full details of the new offer can be found in the Prospectus issued by the Company on 14 June 2018, which is also available on Foresight Group’s website.

Performance and Portfolio Activity
During the period, the net asset value per Share increased by 1.6% to 70.7p from 69.6p.

At the end of the period the Company held 21 investments in UK based businesses across a wide range of sectors. The performance of the portfolio has been steady during the period, with an increase of £1.8 million in value. Positive progress made by companies including Datapath, Specac and FFX has been offset by lower valuations for CoGen and Biofortuna, as detailed in the Manager’s1 Review and the Top Ten Investment sections of this report.

Five new investments were completed during the period under review amounting to £3.5 million. Namely, Luminet Networks (a provider of fixed wireless access across central London), Mologic (a health diagnostics company based in Bedford), The Naked Deli (a Newcastle-based group of ‘cleaneating’ restaurants), Codeplay (a software developer specialising in Artificial Intelligence) and Accrosoft (a software company providing Applicant Tracking Systems and communication software for schools). One follow-on investment of £0.5 million was made in molecular diagnostics business Biofortuna. Foresight Group continues to see a strong pipeline of potential investments sourced through its regional networks and well-developed relationships with advisors and the SME community. Following the successful fundraise launched in May 2017, the Company is in a position to fully exploit these attractive investment opportunities.

In the period to 30 September 2018, one realisation took place, generating total proceeds of £1.3 million.

Shareholder Communication
As part of its ongoing commitment to high quality investor relations, the Board encourages you to attend one of the popular Investor Forums hosted by Foresight Group. In addition to the annual event in London, Foresight Group has started to hold a series of regional Investor Forums around the country. Details of regional events will be sent to Shareholders resident in the locality as and when they are organised.

The Board believes that the Company now has the platform from which Foresight Group can build improving performance driving Net Asset Value growth.

Facilitated by the liquidity provided by the issue of new shares, the Company will be able to capitalise on the strong pipeline of attractive investment opportunities that Foresight Group continues to see in smaller, growth businesses across the UK.

Raymond Abbott
30 November 2018

Manager’s Review

Portfolio Summary
As at 30 September 2018 the Company’s portfolio comprised 21 actively managed investments with a total cost of £48.5 million and a valuation of £68.6 million. The portfolio is diversified by sector, transaction type and maturity profile.

Portfolio review

New investments and follow-on funding
It has been a busy period for investment activity, with the Company committing a total of £4 million to five new investments and one follow-on funding round since the beginning of April. Further details of the new investments are provided below.

The Company made a £600,000 development capital investment into Luminet, an award-winning provider of commercial wireless broadband solutions. Founded in 2005, Luminet has grown its client base to more than 550. The new Chairman introduced by Foresight Group has been helping to clarify Luminet’s strategy and has been introducing some potentially significant partners from his network, developed as a long standing senior manager at BT.

The Company invested £1,059,000 in Bedford-based Mologic as part of a £4,000,000 growth capital investment round. Mologic provides contract research and manufacturing services and is developing a promising portfolio of proprietary products, including diagnostics for infectious diseases, respiratory disease exacerbations and sepsis. Since the investment in April, Mologic has been building its team and continuing to work with the Bill & Melinda Gates Foundation to develop rapid diagnostic test technology.

The Naked Deli
In May 2018, the Company completed a £750,000 growth capital investment in The Naked Deli, a Newcastle-based group of ‘clean eating’ restaurants offering eat-in casual dining and grab-and-go options. Established in 2014, The Naked Deli serves a tasty range of healthy gluten and dairy-free, vegan and paleo dishes. Since investment, the pipeline of new potential sites has been extended and in July 2018 the company’s fourth outlet was opened, at Newcastle Airport.

In July the Company invested £300,000 in Edinburgh-based Codeplay, a software developer specialising in Artificial Intelligence. Building on its proven expertise in the fields of games and mobile phones, Codeplay has developed a new technology which supports the deployment of Artificial Intelligence applications into mass produced devices, with an initial focus on the automotive sector and, specifically, Advanced Driver Assistance Systems (“ADAS”) and autonomous vehicles.

In August, the Company invested £750,000 in Accrosoft, which provides Software as a Service (“SaaS”) products targeted at the recruitment and education sectors. Based in Loughborough, Accrosoft was founded in 2008 by experienced SaaS entrepreneurs Alex Khakbiz and Mitesh Chauhan. The business will use the investment to drive continued growth across both sectors. Foresight Group has introduced Tim Duffy, founder of Meeting Zone and ex-Chairman of Esendex, as Chairman to support this.

Foresight Group continues to see a strong pipeline of potential investments. Opportunities are originated by a growing investment team of 24 experienced professionals, operating from five offices in the UK. In the year to September, over 1,400 business plans were reviewed, allowing Foresight Group to select only the highest quality prospects for the Company. The team’s origination strategy is focused on building relationships with advisors and professional service firms at a national and local level, attending and organising networking events, as well as approaching businesses directly.

Foresight Group is one of the most active private equity investors in its preferred market, focusing on SMEs in all sectors across the UK, seeking funding of £1-5 million. 2018 has been the team’s busiest year to date, completing investments across a number of funds under management. The significant number of transactions completed each year supports Foresight Group’s reputation in the market and helps the team deliver proprietary, off-market deals, through a proactive and structured approach.

At 30 September 2018, the Company had cash in hand of £20.7 million. This, together with proceeds from the current fundraising which closes in April 2019, will be used to fund new and follow-on investments, buybacks and running expenses. The Company remains well positioned to continue pursuing the potential investment opportunities in the pipeline.

Exits and realisations
Foresight Group continues to engage with a range of potential acquirers of several portfolio companies, with demand for these high growth businesses demonstrated by both private equity and trade buyers.

During the period, proceeds of £1,266,727 were generated from the successful sale of facilities management business Thermotech, which provides customised air conditioning and fire sprinkler systems. The company was acquired by Servest Group, a facilities management group headquartered in South Africa, generating a return of 2.1x Under the Company’s ownership Thermotech was able to expand its high-quality customer base, which includes M&S, John Lewis and Selfridges, and develop further recurring maintenance revenue streams.

Disposals in the period ended 30 September 2018

Company Detail Original Cost/ Take-On Value £’000 Proceeds on exit £’000 Gain/(loss) £’000 Valuation at 31 March 2018
Thermotech Limited Full disposal 1,000 * 2,067 ** 1,067 1,285
Total   1,000 2,067 1,067 1,285

*£800,000 of loans were repaid in 2016.
**In addition £53,410 of deferred consideration was received in July 2018.

Deferred consideration of £81,224 was also received by the Company from the sale of ICA Limited in May 2018.

Key Portfolio Developments
The valuation of the portfolio has shown a total increase of £1.8 million over the period. Material changes in valuation, defined as increasing or decreasing by £0.5 million or more since 31 March 2018, are detailed below. Updates on these companies are included in the Top Ten Investments section on pages 10 to 14 of the Interim Report, with the exception of CoGen Limited, which has declined in valuation by £1.5m.

CoGen recently completed the sale of one of its development projects but the business still carries significant overheads and continues to operate at a loss. The company is now delivering operations contracts at two plants, which could help generate future improvements in cashflow. However, further support will be required from other shareholders to continue developing the pipeline of new opportunities.

Company Basis of Valuation Valuation Change (£)
Datapath Group Limited Discounted earnings multiple 1,414,418

FFX Group Limited Discounted earnings multiple 774,409

Specac International Limited Discounted earnings multiple 581,618

Biofortuna Limited Discounted revenue multiple (1,247,144)

CoGen Limited Discounted cashflow (1,471,636)


Galinette Limited, increased in value by £797,480 over the period due to proceeds received on the restructuring and sale of Industrial Efficiency II Limited.

6. Outlook
Foresight Group remains positive about the prospects of the existing portfolio and continues to see encouraging levels of activity from smaller UK companies seeking capital to grow and develop their businesses. Inevitably though, the current lack of certainty around the outcome of ongoing Brexit negotiations remains a preoccupation throughout the UK economy.

At the time of writing, potential acquirers of portfolio companies also continue to be active. Your investment management team remains focused on targeting companies in markets with sound fundamentals, with attractive growth attributes and strong management teams. Foresight Group are working with the portfolio to plan for various Brexit scenarios and will continue to monitor and adapt to market and regulatory changes to ensure the Company and its portfolio is well-placed to deliver returns to its investors.

Foresight Group CI Limited
30 November 2018

Unaudited Half-Yearly Results and Responsibility Statements

Principal Risks and uncertainties

The principal risks faced by the Company are as follows:

  • Performance;
  • Regulatory;
  • Operational; and
  • Financial.

The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Accounts for the year ended 31 March 2018. A detailed explanation can be found on page 23 of the Annual Report and Accounts which is available on Foresight Group’s website 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 the interim management report
  4.  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 2018 Annual Report. In addition, the Annual Report includes the Company’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its exposures to credit risk and liquidity risk.

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

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

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

On behalf of the Board

Raymond Abbott
30 November 2018

Financial Statements
Unaudited Income Statement
for the six months ended 30 September 2018

  Six months ended Six months ended Year ended
  30 September 2018 30 September 2017 31 March 2018
  Revenue Capital Total Revenue Capital Total Revenue Capital Total
  £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investment holding gains -   887 887 -   190   190 - 596 596
Realised gains on investments - 1,201 1,201 - 738 738 - 1,059 1,059
Income 340 - 340 78 - 78 629 - 629
Investment management fees (223) (669) (892) (160) (481) (641)  (344)  (1,033) (1,377)
Other expenses (348) - (348) (585) - (585)  (792) - (792)
(Loss)/return on ordinary activities before taxation (231) 1,419 1,188 (667) 447 (220) (507) 622 115
Taxation - - - - - - 96 (96) -
(Loss)/return on ordinary activities after taxation (231) 1,419 1,188 (667) 447 (220) (411) 526 115
(Loss)/return per share (0.2)p 1.0p 0.8p (0.8)p 0.5p (0.3)p (0.4)p 0.5p 0.1p

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

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

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

Unaudited Balance Sheet
at 30 September 2018

  Registered Number: 03506579
  As at As at As at
  30 September 2018 30 September 2017 31 March
  £'000 £'000 £'000
Fixed assets    
Investments held at fair value through profit or loss 68,552 64,593 64,092
Current assets    
Debtors 13,205 450 3,790
Money market securities and other deposits 16,072 2,089 9,822
Cash 4,583 695 833
  33,860 3,234 14,445
Amounts falling due within one year (770) (602) (600)
Net current assets 33,090 2,632 13,845
Net assets 101,642 67,225 77,937
Capital and reserves    
Called-up share capital 1,438 968 1,121
Share premium   42,856   39,854 51,186
Capital redemption reserve 459 354 372
Profit and loss account 56,889 26,049 25.258
Equity shareholders' funds 101,642 67,225 77,937
Net asset value per share 70.7p 69.4p 69.6p

Unaudited Reconciliation of Movements in Shareholders’ Funds
for the six months ended 30 September 2018

  Called-up share capital Share premium account Capital redemption reserve Profit and loss account Total
  £'000 £'000 £'000 £'000 £'000
As at 1 April 2018 1,121 51,186 372 25,258 77,937
Share issues in the period 404 28,941 - - 29,345
Expenses in relation to share issues - (1,133) - - (1,133)
Repurchase of shares (87) - 87 (5,557) (5,557)
Expenses in relation to tender offer - (138) - - (138)
Cancellation of share premium - (36,000) - (36,000) -
Return for the period - - - 1,188 1,188
As at 30 September 2018 1,438 42,856 459 56,889 101,642

Unaudited Cash Flow Statement
for the six months ended 30 September 2018

  Six months ended Six months ended Year ended
  30 September 2018 30 September 2017 31 March 2018
  £'000 £'000 £'000
Cash flow from operating activities      
Investment income received 276 192 806
Dividends received from investments 7 8 46
Deposit and similar interest received 54 1 4
Investment management fees paid (1,016) (633) (1,315)
Secretarial fees paid (83) (81) (163)
Other cash payments (322) (640) (837)
Net cash outflow from operating activities (1,084) (1,153) (1,459)
Returns on investing activities    
Purchase of unquoted investments (3,947) (674) (674)
Net proceeds on sale of investments 1,267 8,689 9,843
Net proceeds on deferred consideration 134 6 165
Net cash (outflow)/inflow from investing activities (2,546) 8,021 9,334
Proceeds of fund raising 19,960 - 8,318
Expenses of fund raising (587) (17) (125)
Repurchase of own shares (5,739) (5,310) (6,525)
Expenses in relation to tender offer (38) - (131)
Equity dividends paid 34* (4,229) (4,229)
Movement in money market funds (6,250) (1,251) (8,984)
Proceeds of Foresight 3 VCT plc pre merger allotments - 3,372 3,372
Cash acquired on merger with Foresight 3 VCT plc - 472 472
Net cash inflow/(outflow) from financing activities 7,380 (6,963) (7,832)
Net increase/(decrease) in cash in the period 3,750 (95) 43

*Dividends unclaimed after twelve years, returned to the Company.

Reconciliation of net cash flow to movement in net cash    
Increase/(decrease) in cash for the period 3,750 (95) 43
Net cash at start of the period 833 790 790
Net cash at end of period 4,583 695 833

Notes to the Unaudited Half-Yearly Results
for the six months ended 30 September 2018

  1. The Unaudited Half-Yearly results have been prepared on the basis of accounting policies set out in the statutory accounts of the Company for the year ended 31 March 2018. Unquoted investments have been valued in accordance with IPEV Valuation guidelines. Quoted investments are stated at bid prices in accordance with IPEV Valuation guidelines and UK Generally Accepted Accounting Practice.
  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 2018 and 30 September 2017 has been neither audited nor formally reviewed. Statutory accounts in respect of the year ended 31 March 2018 have been audited and reported on by the Company’s auditors and delivered to the Registrar of Companies and included in 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 2018 have been reported on by the Company’s auditors or delivered to the Registrar of Companies.
  3. Copies of the Unaudited Half-Yearly Financial Report 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.
  1. Net asset value per Share

The Net Asset Value per share is based on net assets at the end of the period and on the number of Shares in issue at the date.

  Net Assets  

  £'000 in issue
30 September 2018 101,642 143,783,031
30 September 2017 67,225 96,846,130
31 March 2018 77,937 112,052,405
  1. Return per Share
  Six months ended 30 September 2018 Six months ended 30 September 2017 Year ended March 2018
  £'000 £'000 £'000
Total return/(loss) after taxation 1,188 (220) 115
Total return/(loss) per share 0.8p (0.3)p 0.1p
Revenue loss from ordinary activities after taxation  (231)  (667) (411)
Revenue (loss)/return per Ordinary Share (note b)  (0.2)p  (0.8)p (0.4)p
Capital return from ordinary activities after taxation 1,419 447 526
Capital return per Ordinary Share (note c) 1.0p 0.5p 0.5p
Weighted average number of Ordinary Shares in issue in the
135,704,832 83,536,454 94,123,649

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

  1. Income
  Six months ended Six months ended Year ended
  30 September 2018 30 September 2017 31 March 2018
  £'000 £'000 £'000
Loan stock interest 278 39 544
Dividends 7 37 81
Bank interest received 4 - -
Overseas based Open Ended Investment Companies (“OEIC’s”) 51 2 4
  340 78 629
  1. Investments held at fair value through profit or loss


  Unquoted Total
  £'000 £'000
Book cost at 1 April 2018 44,719 44,719
Investment holding gains 19,373 19,373
Valuation at 1 April 2018 64,092 64,092
Movements in the period:   
Purchases at cost 3,947 3,947
Disposal proceeds (1,267) (1,267)
Realised gains * 1,067 1,067
Investment holding gains ** 713 713
Valuation at 30 September 2018 68,552 68,552
Book cost at 30 September 2018 48,466 48,466
Investment holding gains 20,086 20,086
Valuation at 30 September 2018 68,552 68,552

* Realised gains on investments in the income statement include deferred consideration of £134,000 received in the period.
** Investment holding gains in the income statement include the increase in deferred consideration debtor of £174,000.

  1. Transactions with Foresight Group

Foresight Group Cl Limited, which acts as investment manager to the Company, earned fees of £892,000 during the period (30 September 2017: £641,000; 31 March 2018: £1,377,000).  

Foresight Group LLP, which acts as company secretary to the Company, earned fees of £83,000 during the period (30 September 2017: £81,000; 31 March 2018: £166,000).

The company secretary changed to Foresight Group LLP from Foresight Fund Managers Limited in November 2017.

At the balance sheet date there was £470,000 due to Foresight Group Cl Limited (30 September 2017: £11,000 due to Foresight Group Cl Limited; 31 March 2018: £163,000 due to Foresight Group Cl Limited) and £41,000 due to Foresight Group LLP (30 September 2017: £nil; 31 March 2018: £nil). No amounts have been written off in the period in respect of debts due to or from related parties.

  1. Post balance sheet events

Post the period end there was an allotment of 4,846,700 Shares on 4 October 2018 with a further 1,918,335 Shares being allotted on 26 October 2018.