Foresight 4 VCT plc - Annual Financial Report

Final Results
8 July 2019

Foresight 4 VCT plc, managed by Foresight Group CI Limited, today announces the final results for the year ended 31 March 2019.

These results were approved by the Board of Directors on 8 July 2019.

You may, in due course, view the Annual Report in full at All other statutory information can also be found there.

Summary Financial Highlights

• Total net assets £117.6 million.

• Net Asset Value per share increased by 3.2% to 71.8p as at 31 March 2019 from 69.6p, before paying a 4.0p dividend during the year. After payment of the dividend NAV per share at 31 March 2019 was 67.8p.

• The portfolio has seen an uplift in valuation of £4.3 million over the year.

• Nine new investments of £7.8 million and one follow-on investment of £0.5 million were made during the year.

• £2.1 million was realised from sales and loan redemptions from two portfolio companies.

• The Tender Offer, which launched on 16 July 2018, was fully subscribed and 7,788,768 shares were bought back for £5.0 million.

• A dividend of 4.0p per share was paid on 19 October 2018 based on an ex-dividend date of 4 October 2018 and a record date 5 October 2018.

• £51.5 million raised during the year through the issue of shares, £16.9 million under the May 2017 offer and £34.5 million under the June 2018 offer.

• A further £16.6 million raised through the issue of shares post year end bringing the total raised under the June 2018 offer to £51.1 million.

• Since the end of the reporting period, the Company has completed two new investments, totalling £3.6 million.

Chairman's statement

I am pleased to present the audited Annual report and accounts for Foresight 4 VCT plc for the year ended 31 March 2019. I am also pleased to welcome our new shareholders to the Company following a successful share issue.


In line with the Board’s objective on dividend payments, an interim dividend of 4.0p per share was declared on 16 August 2018 based on an ex-dividend date of 4 October 2018 and a record date of 5 October 2018. The dividend was paid on 19 October 2018. Developments in VCT investment rules have caused the Manager to focus investments in earlier stage companies. Due to the nature of these types of investments, the Board will continually review the level of dividends paid to reflect the likely increase in returns from realisations as and when they occur and the corresponding reduction in returns from income generated from investments.


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 for 7,788,768 shares at 64.195p. Other share buybacks took place on

• 7 August 2018 (500,000 shares at 62.5p),

• 26 September 2018 (180,000 shares at 62.25p),

• 28 September 2018 (209,185 shares at 62.25p),

• 14 December 2018 (469,788 shares at 60.00p),

• 28 February 2019 (500,000 shares at 60.25p) and

• 29 March 2019 (652,702 shares at 60.25p)

All of which have enabled the enlarged VCT to achieve its target discount to NAV.


The offer for subscription dated 19 May 2017, which raised £29m, closed on 18 May 2018. The offer for subscription dated 14 June 2018, which sought to raise up to £50 million (with a £30m over-allotment facility), closed on 12 April 2019 having raised £51.1 million. 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.


During the year, the net asset value per share increased by 3.2% to 71.8p from 69.6p, before paying a 4.0p dividend during the year.

At the year end the Company held 30 investments with carrying values in UK based businesses across a wide range of sectors. The performance of the portfolio has been steady during the year, with an increase of £4.3 million in value. Positive progress made by companies including TFC Europe, Specac International and FFX Group has been offset by lower valuations for Datapath, Procam and Biofortuna, as detailed in the Investment Manager’s Review and Top Ten Investment sections of this report.

Nine new investments were completed during the year amounting to £7.8 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 ‘clean-eating’ restaurants),

• Codeplay Software AG (a consulting business for software and tools),

• Accrosoft (a software company providing Applicant Tracking Systems and communication software for schools),

• Fertility Focus (a leading fertility monitoring technology company),

• Spektrix (the UK’s leading provider of cloud based ticketing),

• Clubspark (a specialist software company providing sports management software to sports clubs) and

• Steamforged Games (developer and retailer of tabletop games).

One follow-on investment of £0.5 million was made in to molecular diagnostics business Biofortuna. The Manager 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 fundraises launched in both May 2017 and June 2018, the Company is in a position to fully exploit these attractive investment opportunities.

In the year to 31 March 2019, two realisations took place, generating total proceeds of £2.1 million.


As part of its commitment to high quality investor relations, Foresight Group continues to host its popular investor forums. In addition to an annual event in London, several regional investor forums have been or will be held around the country. Details of regional events will be sent to shareholders resident in the locality as and when they are organised.


The Company’s Annual General Meeting will take place on 17 September 2019 at 1.00pm. I look forward to welcoming you to the Meeting, which will be held at the offices of Foresight Group in London.

Prior to the formal business of the Annual General Meeting, the Manager will give a presentation.


The Board believes that the Company now has the platform from which the Manager can build on, 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 the Manager continues to see in smaller, growth businesses across the UK.

Raymond Abbott
8 July 2019

Manager's Review

The Company has appointed Foresight Group CI Limited as its manager (“The Manager”) to provide investment management and administration services. Foresight Group CI Limited has appointed Foresight Group LLP to be its investment adviser. The Manager has also delegated secretarial, accounting and other administration services to Foresight Group LLP. References to “the Manager” throughout this report refer to the activities of Foresight Group CI Limited and include the activities of Foresight Group LLP when acting as the Manager’s investment adviser and administrative delegate.

Portfolio Summary

As at 31 March 2019 the Company’s portfolio comprised 25 actively managed investments with a total cost of £49.9 million and a valuation of £74.6 million. The portfolio is diversified by sector, transaction type and maturity profile.


As at 31 March 2019 the Company’s portfolio comprised 25 actively managed investments with a total cost of £49.9 million and a valuation of £74.6 million. The portfolio is diversified by sector, transaction type and maturity profile. Details of the ten largest investments by valuation, including an update on their performance, are provided on pages 10 to 14. The Company invested a total of £8.3 million during the year to 31 March 2019. This included, £7.8 million in relation to nine new investments: Luminet Networks, a provider of fixed wireless internet access, Mologic, a health diagnostics company, The Naked Deli, a Newcastle-based group of ‘clean eating’ restaurants, Codeplay, a software developer and consultancy specialising in Artificial Intelligence, Accrosoft, a software provider with a focus on HR and education sectors, Fertility Focus, an ovulation monitoring company, Spektrix, a performing arts software business, Clubspark, a sports management software company, and most recently Steamforged Games, a developer and retailer of tabletop games.


In April 2018, the Company committed £0.6 million to a Foresight-led £3.0 million development capital investment into Luminet Networks, an award-winning provider of connectivity and managed IT services to businesses. Founded in 2005, Luminet was one of the first companies to offer commercial wireless broadband solutions to businesses and has grown its client base to more than 550.


Also in April 2018, the Company committed c.£1.1 million to a Foresight-led £4.0 million growth capital investment round in Bedford-based Mologic. The business is a Point of Care diagnostics company that provides contract research and manufacturing services, as well as developing proprietary diagnostics.


In May 2018, the Company completed a £0.75 million 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. The group uses unprocessed whole and natural state foods, with a clear pathway from origin to plate. Since investment management have continued to extend the pipeline of new potential sites and in December 2018, opened a fifth site in Newcastle City centre.


In July 2018 the Company invested £0.3 million in 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 2018, the Company completed a new investment totalling £0.75 million in Accrosoft. Based in Loughborough, Accrosoft offers two Software AG as a Service (“SaaS”) products currently, Vacancy Filler, an Applicant Tracking System which improves the recruitment process for organisations and Weduc, an engagement tool to enable parent-teacher communication. The business will use the investment to drive the continued growth across both products through new hires and initiatives.


In December 2018, the Company invested c.£0.4 million in Fertility Focus, a leading fertility monitoring technology company that has developed OvuSense, a registered medical device that enables women to predict ovulation. Fertility Focus was established in 2005 to commercialise the intellectual property developed by a team from Bristol University that identified the ability to determine and predict ovulation. The growth capital investment will be primarily used to invest in sales and marketing and will also fund a clinical trial to further prove the benefits of OvuSense as a tool to diagnose ovulatory issues.


Also in December 2018, the Company invested £1.5 million in Spektrix, the UK’s leading provider of cloudbased ticketing, marketing and fundraising software for the arts sector. Founded in 2007, Spektrix was an early pioneer in bringing cloud technology to the arts. The investment will be used to accelerate product development and support Spektrix’s international expansion, particularly in North America where it is already working with nearly 100 arts organisations.


In January 2019 the Company made a c.£0.9 million investment into Sportlabs Technology Limited, trading as ClubSpark, a specialist software company providing sports management software to sports clubs, venues, coaches and participants. ClubSpark was founded in 2012 by two ex-Lawn Tennis Association employees who spotted an opportunity to develop a platform to manage operations for the LTA member clubs. The investment will be used to establish an international presence, enhance the platform and expand into new sports markets.


In March 2019 the Company invested £1.6 million in Steamforged Games, a developer and retailer of tabletop games with a portfolio of miniature role playing, board and card games. Founded in 2014, Steamforged Games has successfully carved out a niche in the market developing tabletop games based on popular video game titles, as well as their own original content. The investment will be used to fund growth through product development and international expansion.


Post-period end, the Company invested £2.0 million in Fourth Wall Creative, a technology-led sports merchandising business based in Merseyside. Founded in 2010, their core business is the design and distribution of membership welcome packs on behalf of football clubs. The investment will fund growth through development of new services, winning new customers and exploring other sports opportunities.


In June 2019, post year-end, the Company invested £1.6 million in Ten Health, a group of boutique fitness studios offering a range of services including physiotherapy, massage therapy and fitness classes. Founded in 2007, Ten Health was developed to bridge the gap in the market between traditional healthcare and mainstream fitness. The investment will be used to further develop Ten Health’s non-fitness services and to support a roll-out of new studios.


A follow-on investment of c.£0.5 million was also made into one existing portfolio company throughout the year.


In August 2018, molecular diagnostics business, Biofortuna, drew down the second tranche of the 2017 round of investment, with the Company providing £0.5 million of capital. This investment round was focused on supporting the growth of a differentiated contract services business, under new stronger management, and maximising value from the potential product collaboration with a global diagnostics company.


Foresight Group continues to see a strong pipeline of potential investments and has started the year with a number of opportunities under exclusivity or in due diligence. Our investment team currently consists of 24 experienced private equity professionals operating from five offices in the UK, due to be expanded to seven in 2019. During 2018 we reviewed nearly 1,500 business plans of potential investee companies, with an increasing number of prospects originated directly by our investment team, which will continue to be at the core of our investment sourcing strategy. The Company focuses on SME’s in all sectors across the UK, seeking funding of £1-5 million.

At the time of writing, the Company has cash balances of £37.8 million, which will be used to fund new and follow-on investments, buybacks and running expenses.


During the year, total proceeds of £2.1 million were generated from the disposal of two investments.

In May, the Company completed the successful sale of facilities management provider Thermotech to Servest Group, a global facilities management group headquartered in South Africa, generating a return of £1.3 million (2.3x cost). Thermotech, in which the Company invested in August 2013, provides customised air conditioning and fire sprinkler systems for retail, commercial and residential properties, with clients including M&S, John Lewis and Selfridges & Co. Under the Company’s ownership Thermotech was able to expand its high-quality customer base and develop further recurring maintenance revenue streams, as well as complete a strategic acquisition.

In December, the Company disposed of CoGen, a developer of Waste to Energy plants in the UK. CoGen, largely financed to date by loans from other shareholders, carries significant costs and overheads as plants are developed and built and had been operating at a loss. Further funding would have been required from other shareholders to continue to develop the pipeline of new opportunities. In these circumstances, to avoid further dilution, Foresight sought to realise the investment. The Company received c.£0.8 million for its holding.

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.


CompanyDetailOriginal Cost/ProceedsGain/(loss)Valuation at
  Take-On Value£’000£’000*31 March 2018
  £’000**  £’000
CoGen LimitedFull disposal1,939795(1,144)1,972
Thermotech Solutions LimitedFull disposal2001,2671,0671,285
Total disposals   2,139   2,062   (77)   3,257

*In addition to the above, the Company received deferred consideration of £232,133 (O-Gen Acme Trek), £145,836 (The Message Pad Limited), £53,409 (Thermotech Solution Limited) and £81,224 (ICA Limited) as well as proceeds from warrants of £20,767 (Hallmarq Systems Limited) and a loss on dissolution of £969,000 (Andromaque Limited).


Overall, the value of investments held rose to £74.6 million, driven by a deployment of £8.3 million and an increase in the value of existing investments by £4.3 million since 31 March 2018. Material changes in valuation, defined as increasing or decreasing by £1.0 million or more since 31 March 2018, are detailed below. Updates on actively managed companies that do not feature in the Top Ten are included below.

CompanyValuation MethodologyValuation Change (£)
Specac International LimitedDiscounted earnings multiple2,727,912
TFC Europe LimitedDiscounted earnings multiple2,231,546
FFX Group LimitedDiscounted earnings multiple1,195,339
Iphigenie LimitedNet assets1,177,083
Galinette LimitedNet assets1,116,710
Procam Television Holdings LimitedDiscounted earnings multiple(1,143,104)
Biofortuna LimitedDiscounted revenue multiple(1,327,457)
Datapath Group LimitedDiscounted earnings multiple(2,000,894)


Procam Television is a leading broadcast hire company, supplying equipment and crew for location TV production. The reduction in valuation reflects a challenging year of trading to 31 March 2019, with both sales and gross margins lower than budget.


Whilst UK inflation falls to a two-year low, the jobs market remains robust as the UK reaches record levels of employment. The demand for labour continues to bolster wage growth, as real wages climbed at their strongest pace since 2016. However, the backdrop of Brexit means that consumer and business confidence is weakening in the UK amid ongoing uncertainty over the UK’s future trading position with Europe, and indeed the rest of the world. There is a likely period of volatility ahead, nonetheless Foresight Group remains positive about the prospects of the existing portfolio and continues to see encouraging levels of activity from smaller UK companies seeking growth capital, as well as from potential acquirers of portfolio companies. Your investment management team remains focused on targeting companies in markets with sound fundamentals, with attractive growth attributes and strong management teams. Foresight Group will continue to monitor and adapt to market and regulatory changes to ensure the Company’s portfolio is well-placed to deliver returns to its investors.

Russell Healey
Partner and Head of Private Equity
Foresight Group LLP
8 July 2019


Audited Income Statement
for the year ended 31 March 2019

   Year ended Year ended
   31 March 2019 31 March 2018
   Revenue Capital Total RevenueCapitalTotal
   £'000 £'000 £'000 £'000£'000£'000
Investment holding gains  - 5,292 5,292 -  596  596
Realised (losses)/ gains on investments    (514) (514) -1,0591,059
Income  744 - 744 629-629
Investment management fees  (498) (1,494) (1,992) (344)(1,033)(1,377)
Other expenses  (568) - (568) (792)-(792)
(Loss)/profit on ordinary activities before taxation  (322) 3,284 2,962 (507)622115
Taxation  - - - 96(96)-
(Loss)/profit on ordinary activities after taxation  (322) 3,284 2,962 (411)526115
(Loss)/profit per share:           
   (0.2)p 2.2p 2.0p (0.4)p0.5p0.1p

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 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.


Audited Reconciliation of Movements in Shareholders' Funds


Year ended 31 March 2019
Called-up share capital
Share premium account
Capital redemption reserve
Special distributable
Capital reserve*
Revaluation reserve
As at 1 April 20181,12151,18637246,898(41,098)19,45877,937
Share issues in the year71850,748----51,466
Expenses in relation to share issues-(2,125)----(2,125)
Repurchase of shares(103)-103(6,541)--(6,541)
Expenses in relation to tender offer-(133)----(133)
Cancellation of Share Premium-(36,000)-36,000---
Realised losses on disposal of investments----(514)-(514)
Investment holding gains-----5,2925,292
Dividends paid---(5,941)--(5,941)
Management fees charged to capital----(1,494)-(1,494)
Revenue loss for the year---(322)--(322)
As at 31 March 2019 1,736 63,676 475 70,094 (43,106) 24,750 117,625



Year ended 31 March 2018
Called-up share capital
Share premium account
Capital redemption reserve
Special distributable
Capital reserve*
Revaluation reserve
As at 1 April 20175745,11226558,374(41,028)18,86242,159
Foresight 3 VCT plc merger48334,762----35,245
Share issues in the year17111,760----11,931
Expenses in relation to share issues-(317)----(317)
Repurchase of shares(107)-107(6,836)--(6,836)
Expenses in relation to tender offer-(131)----(131)
Realised gains on disposal of investments----1,059-1,059
Investment holding gains-----596596
Dividends paid---(4,229)--(4,229)
Management fees charged to capital----(1,033)-(1,033)
Tax credited to capital----(96)-(96)
Revenue loss for the year---(411)--(411)
As at 31 March 2018 1,121 51,186 372 46,898 (41,098) 19,458 77,937

*Reserve is available for distribution, total distributable reserves at 31 March 2019 are £26,988,000 (2018: £5,800,000).


Audited Balance Sheet
at 31 March 2019                                                                                        Registered number: 03506579

  As at 31 March 2019 £’000As at 31 March 2018 £’000
Fixed assets   
Investments held at fair value through profit or loss 74,61564,092
Current assets   
Debtors 10,3313,790
Cash and Cash Equivalents 33,18510,655
Amounts falling due within one year (506)(600)
Net current assets 43,01013,845
Net assets 117,62577,937
Capital and reserves   
Called-up share capital 1,7361,121
Share premium account 63,67651,186
Capital redemption reserve 475372
Special distributable reserve 70,09446,898
Capital reserve (43,106)(41,098)
Revaluation reserve 24,75019,458
Equity shareholders’ funds 117,62577,937
Net asset value per share:   

The financial statements were approved by the Board of Directors and authorised for issue on 8 July 2019 and were signed on its behalf by:

Raymond Abbott
8 July 2019


Audited Cash Flow Statement
for the year ended 31 March 2019

 Year endedYear ended
 31 March 201931 March 2018
Cash flow from operating activities  
Investment income received 549 806
Dividends received from investments 35 46
Deposit and similar interest received 149 4
Investment management fees paid (2,104) (1,315)
Secretarial fees paid (166) (163)
Other cash payments (450) (837)
Net cash outflow from operating activities (1,987) (1,459)
Cash flow from investing activities  
Purchase of investments (8,281) (674)
Net proceeds on sale of investments 2,082 9,843
Net proceeds on deferred consideration 513 165
Net cash (outflow)/ inflow from investing activities (5,686) 9,334
Cash flow from financing activities   
Proceeds of fund raising 43,562 8,318
Expenses of fund raising (972) (125)
Repurchase of own shares (6,480) (6,525)
Expenses in relation to tender offer - (131)
Equity dividends paid (5,907) (4,229)
Proceeds of Foresight 3 VCT plc allotments received after the merger - 3,372
Cash acquired on merger with Foresight 3 VCT plc - 472
Net cash inflow from financing activities 30,203 1,152
Net inflow of cash for the year 22,530 9,027


Reconciliation of net cash flow to movement in net funds  
Increase in cash and cash equivalents for the year22,5309,027
Net cash and cash equivalents at start of year10,6551,628
Net cash and cash equivalents at end of year 33,18510,655


Analysis of changes in net debtAt 1 April 2018
Cash flow
At 31 March 2019
Cash and cash equivalents10,65522,53033,185


1.     These are not statutory accounts in accordance with S436 of the Companies Act 2006. The full audited accounts for the year ended 31 March 2019, 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 March 2019 including an unqualified audit report and containing no statements under the Companies Act 2006 will be delivered to the Registrar of Companies in due course. 

2.    The audited Annual Financial Report has been prepared on the basis of accounting policies set out in the statutory accounts of the Company for the year ended 31 March 2019.  All investments held by the Company are classified as ‘fair value through the profit and loss’. Unquoted investments have been valued in accordance with IPEVC guidelines.

3.   Copies of the Annual Report will be sent to shareholders and will be available for inspection at the Registered Office of the Company at The Shard, 32 London Bridge Street, London, SE1 9SG and can be accessed on the following website:

  1. Net asset value per share

Net asset value per share is based on net assets at the year end of £117,625,000 (2018: £77,937,000) and on 173,570,806 (2018: 112,052,405) shares, being the number of shares in issue at that date.

  1. Return per share
 Year ended
31 March 2019
Year ended
31 March 2018
Total profit after taxation2,962115
Total profit per share (note a)2.0p0.1p
Revenue loss from ordinary activities after taxation(322)(411)
Revenue loss per share (note b)(0.2)p(0.4)p
Capital profit from ordinary activities after taxation3,284526
Capital profit per share (note c)2.2p0.5p
Weighted average number of shares in issue in the year147,007,15594,123,649


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

The Company's Annual General Meeting will take place on 17 September 2019 at 1.00pm at the offices of Foresight Group in London. Details can be found on page 68 of the Annual Report and Accounts.

  1. Income
 Year ended
31 March 2019
Year ended
31 March 2018
Loan stock interest560544
Dividends receivable3581
Deposit and similar interest received 1494


8.       Investments held at fair value through profit or loss



Unquoted investments 74,61564,092


Book cost as at 1 April 2018  44,719
Investment holding gains  19,373
Valuation at 1 April 2018  64,092
Movements in the year:   
Purchases at cost  8,281
Disposal proceeds  (2,062)
Realised losses*  (1,046)
Investment holding gains**  5,350
Valuation at 31 March 2019   74,615
Book cost at 31 March 2019  49,892
Investment holding gains  24,723
Valuation at 31 March 2019  74,615

*Realised losses in the income statement include deferred consideration received of £232,133 (O-Gen Acme Trek Limited), £145,836 (The Message Pad Limited), £53,409 (Thermotech Solutions Limited) and £81,224 (ICA Limited) as well as proceeds from warrants of £20,767 (Hallmarq Systems Limited).

**Investment holding gains in the income statement have been reduced by the decrease in deferred consideration debtor of £58,350 (ICA Limited).

9.    Related party transactions

No Director has an interest in any contract to which the Company is a party, other than their appointment as directors.

10.  Transactions with the manager

Foresight Group CI Limited, which acts as investment manager to the Company earned fees of £1,992,000 during the year (2018: £1,377,000). No performance fee was paid or accrued for the period (2018: £nil).

Foresight Group LLP was appointed Company Secretary in November 2017 and received fees of £166,000 (2018: £55,000, plus Foresight Fund Managers received £111,000 until November 2017) during the year.

At the balance sheet date there was £nil (2018: £163,000) due to Foresight Group CI Limited and £nil (2018: £nil) due to Foresight Group LLP. No amounts have been written off in the year in respect of debts due to or from related parties.