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27 Apr 2009 13:40
Foresight VCT plc
Annual Financial Report of the Company for the year ended 31 December 2008
Summary
• Net asset value per Ordinary Share as at31 December 2008 was 42.2p (compared to 60.5p as at 31 December 2007).
• A final dividend of 1.0p per Ordinary Share will be paid on 29 May 2009.
• Proceeds of £1,323,236 realised from the sale of Telecom Plus plc (£1,182,242) as well as partial realisations of Actimax (£133,333) and Mirada plc (formerly YooMedia plc) (£7,661).
• Three new environmental infrastructure investments made in Closed Loop Recycling Limited (£1,000,000), Lynwood Group Holdings Limited (£300,000) and Silvigen Limited (£250,000).
• Current top-up offer, launched in October 2008, £204,375 raised as at 31 December 2008.
• Linked Offer which closed on 30 April 2008, raised gross proceeds of £1,979,376 for Foresight VCT.
• The Company made follow-on investments during the year totalling £1,277,469. These were Aquasium Technology (£530,000), Aigis Blast Protection (£195,580), SkillsMarket (£160,488), Clarity Commerce Solutions plc (£100,000), Oled-T (£70,993), Alaric Systems (£132,907), Sarantel Group plc (£50,001), and High Integrity Solutions (£37,500).
Portfolio Review
During the year under review, stock markets experienced adverse conditions primarily as a result of the crisis in the banking sector and the resulting effect this had on both businesses and consumers. These financial difficulties combined with volatile commodity prices resulted in a particularly difficult trading background in many sectors of the economy. While these market conditions have, as yet, had a limited effect on the unquoted holdings within our investments, several AIM quoted holdings have fallen sharply as a result of the general market decline. Against this background your Company's net asset value fell to 42.2p per share from 60.5p per share twelve months earlier, although this does not take account of the 5.0p per share of dividend paid to shareholders in March 2008.
During the year under review the performance of a number of portfolio companies continued to improve, reflecting growing demand and strong sales pipelines, most notably Trilogy Communications, DCG, Infrared Integrated Systems (IRISYS), Actimax and Aquasium.
Trilogy performed strongly during 2008 with 2008/09 figures showing turnover growth of 17% to £6.5m. Over the last four years the business has grown consistently at an average annual rate of 19%. Importantly, this growth drove the business into operational profitability, a major milestone. The company has been reorganised into two core product divisions, Trilogy Network Centric Communications and Trilogy Broadcast, to more closely align the business with its customers. Further progress is anticipated in 2009 with a number of new product lines being introduced during the year and a strong sales pipeline, particularly into the US market.
DCG performed robustly and to date its revenues are currently 11% higher than in the previous year, primarily due to the take-up of its managed services offering. Nevertheless, reflecting a common trend amongst all portfolio companies, the company is taking steps to adjust its cost base.
IRISYS had a record year in 2008 with revenues of £12.5 million, almost 40% up on the previous year's £9 million. On the back of this substantial revenue growth, IRISYS generated profits of £863,000 for 2008 compared to a small loss in 2007. The company's cash position is strong but given the current economic environment it takes a cautious view about the prospects for the current year.
Actimax has continued its sales growth in the year ended 31 December 2008 with revenues in excess of £6 million and operating profits close to £300,000. The first quarter of 2009 has started well.
Aquasium Technology Limited returned to profitability in its financial year ended 31 December 2008. The UK business started 2009 with a healthy order book and Aquasium's Directors are optimistic in relation to the full year.
Demand from recruitment companies for Skillsmarket's products and services is suffering as a consequence of general trading conditions within the recruitment industry. Reflecting the difficult trading outlook, the company has initiated a substantial cost-cutting programme, resulting in a significant number of job cuts being made, including a number of senior management positions. Accordingly, a provision has been made against this investment. A further £1 million was successfully raised from existing shareholders in two tranches in December 2008 and February 2009. Significant contracts were won in Australia during the year while the acquisition of Purple Passport has opened new related markets, particularly in the public sector. The impending launch of iPlaceWeb, a new software as a service offering, is expected to open the large market for small and medium sized recruitment companies which prefer to pay for a regular service rather than acquire the full Recruiter enterprise software suite.
AIM listed Oxonica announced significantly higher revenues for 2008 (excluding the aborted Petrol Ofisi contract) over the previous year, reduced losses and a lower cash burn as a result of a successful cost cutting exercise. Its share price, however, has fallen to 14.25p per share as at 31 December 2008 from 24.0p as at 31 December 2007. The company has recently sold its biodiagnostics division for $7 million (plus a future royalty stream) to Becton Dickinson, an existing strategic partner. The company has a strong pipeline of customers for its fuel efficiency additive, Envirox, which increased sales by 49% over the prior year. The company is, however, contesting a patent dispute over Envirox. Sales of Optisol, the company's UV absorber, have been disappointing in the current year to date. In the year to December 2008 sales of the security division doubled to £1.5 million and letters of intent totalling $4 million have already been received for 2009.
In its annual results announced on 2 March 2009, ANT announced significantly improved results for the year ended 31 December 2008. The company confirmed that royalty income from licensees continued to grow and, in addition to recently announced contract wins, the company has a strong pipeline of new business opportunities.
Sarantel announced that revenues for the year to 30 September 2008 were approximately £1.9 million, which was ahead of market expectations. In the second half of the financial year, demand from smaller niche GPS customers remained resilient largely offsetting a slowdown in orders from larger GPS customers. Its third generation GPS antenna has started to gain traction and the company is also in advanced discussions to develop multiple antennas for a number of customers in the satellite phones and military sectors. Sarantel raised £3.4 million in April 2008 and believe it "has sufficient funds to last for the foreseeable future".
Foresight VCT invested £195,580 into AIGIS Blast Protection as part of a £750,000 follow-on funding round to provide additional funds to invest in its sales resource and accelerate growth. Reflecting lower than expected sales growth in recent years, this round has been completed at a lower valuation than before and a provision has been made against the previous value of the investment. The company has a strong pipeline of opportunities for 2009.
As a result of a new funding round of £2 million at a reduced price in Nanotecture, in which Foresight VCT did not participate, a provision of approximately £500,000 has been made against the original value of the investment.
Provisions of 25% of cost have been made against the values of Infrared Integrated Systems (IRISYS) and AlwaysON Group as a result of concerns about the impact of the current economic climate. These provisions resulted in aggregate falls totalling £141,277.
Investment Activity
The level of new investment activity has started to pick up again, with three new investments being made totaling £1,550,000. In line with Foresight's increasing focus on investing in the environmental infrastructure and sustainable sector, investments were made in Closed Loop Recycling, (£1,000,000) Lynwood Group Holdings, (£300,000) and Silvigen (£250,000).
Closed Loop Recycling is a business at the leading edge of plastics recycling in the UK. The company is initially focused on producing food grade recycled PET (polyethylene terephthalate) and HDPE (high density polyethylene). PET is the clear plastic used in over 50% of soft drinks bottles, with over 300,000 tonnes used per annum in the UK but none is currently recycled for use as food grade plastic. HDPE is the white plastic used in milk bottles. Closed Loop Recycling has completed its first recycling plant in Dagenham (East London) and is constructing a second facility in the North West. Initial commissioning of the first plant has commenced which is expected to come fully on-stream in the near future, initially with PET and then with HDPE.
Lynwood is an established business in the plastic building products market and has made the transition to using waste plastic streams as its raw material. Lynwood acquired a small business with specialist expertise in manufacturing wood profile and wood replacement products from waste plastic and believes it is now one of the better equipped plastic recycling manufacturing operations in the UK. The company is well positioned in a growing market for recycled and sustainable products such as wood replacement, which offer considerable economic and environmental advantages.
Silvigen has positioned itself to supply the important biomass fuel needs of the UK power generation sector and the developing industrial heat sector, both of which are driven by a number of regulatory incentives.
Several small follow-on investments were also made during the year under review. A further £530,000 was invested in Aquasium Technology to provide ongoing funding to the business needed as a result of the long lead time between project work being undertaken and payment.
Clarity Commerce Solutions undertook a rights issue in which the company invested £100,000 in order to support the new management team and their plans to return the business to profitability. Initial signs of progress are positive and several new contract wins with large clients have been confirmed.
A total of £50,001 was invested in Sarantel Group plc, which raised £3.4 million in April 2008 from existing and new shareholders. Although it announced results ahead of market expectations and the underlying business appears to be making progress in its core GPS antenna market, its share price has fallen as a result of market conditions.
Disappointingly, despite our ongoing support for High Integrity Solutions (£37,500 invested in the period) the company was placed into administration during the period as a result of losing a major contract with BAE Systems. OLED-T did not make the necessary commercial progress with its proprietary chemicals for improving the colour and life of displays on mobile phones and similar electronic equipment as quickly as envisaged. The company sold its IPR assets to chemical company Merck and entered administration. As a result Foresight has provided in full against the value of both of these two investments.
Foresight contributed £132,907 to a small funding round in Alaric Systems as part of an ongoing plan to support the business through a period of transition. Early signs are that a significant cost-cutting exercise and increased focus on sales are having a positive effect on the business's underlying profitability. A partial provision has been made against the previous value of the investment to reflect recent trading. The company is now, however, trading profitably.
Realisations
Unquoted
Actimax achieved sales of over £6 million in the year to 31 December 2008 with operating profits of almost £300,000. The company has continued to win new orders in the current year and is optimistic about its full year prospects. Actimax made £133,333 in loan repayments to Foresight VCT in the period.
Quoted
During January, the remaining holding in Telecom Plus plc was sold for net proceeds of £1,182,242 representing a return in excess of five times the original cost of £233,259. In addition, there was a small realisation, at a loss, of £7,661 from the sale of Mirada plc (formerly YooMedia plc).
Results
The results for the period from 1 January 2008 to 31 December 2008 are set out below. The net asset value per Ordinary Share as at 31 December 2008 fell to 42.2p (31 December 2007: 60.5p) resulting from the payment of the 5.0p per share dividend during March 2008, general falls in the AIM market and the provisions against several unquoted companies. The total return (after tax) attributable to Ordinary Shareholders was a loss of 14.1p (31 December 2007: loss of 19.9p).
Dividends
The Company's dividend policy is to aim to distribute a steady flow of dividends from income and realised capital gains.
The Board is recommending the payment of a final dividend of 1.0p per Ordinary Share on 29 May 2009 for the year ended 31 December 2008. The ex dividend date will be 13 May 2009 and the record date will be 15 May 2009.
Recently we have become aware of other investment companies experiencing unsuccessful attempts at dividend cheque fraud through the presentation of fake copies of dividend cheques at banks.
Please phone investor relations at Foresight Group if you become aware or suspicious of any similar activity and please be on guard against such fraudulent acts.
Valuation Policy
Investments held by the Company have been valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEVC) developed by the British Venture Capital Association and other organisations, under which investments are valued, as defined in the guidelines, at "fair value". Ordinarily, unquoted investments will be valued at cost for the 12 months following the date of acquisition as the most suitable approximation of fair value unless there is an impairment in value during the period. Quoted investments and investments traded on AIM and PLUS Markets are valued at the bid price as at 31 December 2008. The portfolio valuations are prepared by Foresight Group and are subject to approval by the Board.
Share Issues and Share Buy-backs
The current top-up offer, launched in October 2008, raised gross proceeds of £204,375 as at 31 December 2008 through the issue of 436,999 ordinary shares at prices ranging between 47.0p and 48.0p per share. The top-up offer is being run in conjunction with top-up offers for Foresight 2, Foresight 3 and Foresight 4 and is expected to close on 30 April 2009.
The previous linked offer for subscription (January 2008) between Foresight VCT, Foresight 2, Foresight 3 and Foresight 4 had raised £7,917,503 when it closed on 30 April 2008. The proceeds of the offer were equally split between the four Foresight funds with Foresight VCT receiving total gross proceeds of £1,979,376, through the issue of 3,102,896 ordinary shares at prices ranging between 61.0p and 72.0p per share. These funds enabled your Company to remain an active investor in the current market and take advantage of new opportunities.
Additionally, 209,325 shares were issued under the dividend reinvestment scheme at 61.05p per share raising proceeds of £127,793.
All of these share issues were under the new VCT provisions that commenced on 6 April 2006, namely: 30% upfront income tax relief which can be retained by qualifying investors if the shares are held for the minimum five year holding period.
As part of the Company's active buy-back programme, during the year 1,396,461 Ordinary Shares were purchased for cancellation at a cost of £525,000.
Annual General Meeting
The Company's Annual General Meeting will take place on 18 May 2009. I look forward to welcoming you to the meeting, which will be held at 2.00 pm at the offices of Closed Loop Recycling, 16 Choats Road, Dagenham, Essex, RM9 6LF.
Outlook
The extreme volatility of the financial markets as well as the increasing inability of companies to raise debt finance has proved a double edged sword for the Company. On the one hand Foresight Group's deal flow of companies seeking investment, particularly in the environmental infrastructure sector, is stronger than ever as potential investee companies are finding financial institutions currently less inclined to invest than in the recent past. On the other hand, there is evidence of trade sales within the portfolio being delayed or terminated as a result of the lack of finance available to potential acquirers.
The Board and Foresight Group are conscious that we are in a period of economic slowdown and tight credit conditions. In this environment all investee companies will be encouraged to keep a tight control on costs and conserve cash.
The market in which Foresight VCT operates continues to be encouraging in terms of potential new investment opportunities, as evidenced by the current deal flow being reviewed by Foresight Group. Foresight VCT will have access to this deal flow of new opportunities as a result of the new funds raised alongside some reinvestment of the proceeds from successful realisations.
Peter Dicks
Chairman
24 April 2009
For further information please contact:
Gary Fraser, Foresight Fund Managers Limited Tel: 01732 471800
The Disclosure and Transparency Rules ("DTR") of the UK Listing Authority require certain disclosures in relation to the annual financial report, as follows:
Principal risks, risk management and regulatory environment
The Board believes that the principal risks faced by the Company are:
Economic risk - events such as an economic recession and movement in interest rates could affect smaller companies' valuations.
Loss of approval as a Venture Capital Trust - the Company must comply with Section 274 of the Income Tax Act 2007 which allows it to be exempted from capital gains tax on investment gains. Any breach of these rules may lead to the Company losing its approval as a VCT; qualifying shareholders who have not held their shares for the designated holding period having to repay the income tax relief they obtained; and future dividends paid by the Company becoming subject to tax.
Investment and strategic - inappropriate strategy, poor asset allocation or consistent weak stock selection might lead to under performance and poor returns to shareholders.
Regulatory - the Company is required to comply with the Companies Acts, the rules of the UK Listing Authority and United Kingdom Accounting Standards. Breach of any of these might lead to suspension of the Company's Stock Exchange listing, financial penalties or a qualified audit report.
Reputational - inadequate or failed controls might result in breaches of regulations or loss of shareholder trust.
Operational - failure of the Adviser's accounting systems or disruption to its business might lead to an inability to provide accurate reporting and monitoring.
Financial - inadequate controls might lead to misappropriation of assets. Inappropriate accounting policies might lead to misreporting or breaches of regulations.
Market risk - investment in AIM traded, PLUS traded and unquoted companies by nature involve a higher degree of risk than investment in companies traded on the main market. In particular, smaller companies often have limited product lines, markets or financial resources and may be dependent for their management on a smaller number of key individuals. In addition, the market for stock in smaller companies is often less liquid than that for stock in larger companies, bringing with it potential difficulties in acquiring, valuing and disposing of such stock.
Liquidity risk - the Company's investments may be difficult to realise. The fact that a share is traded on AIM does not guarantee its liquidity. The spread between the buying and selling price of such shares may be wide and thus the price used for valuation may not be achievable.
The Board seeks to mitigate the internal risks by setting policy, regular review of performance, enforcement of contractual obligations and monitoring progress and compliance. In the mitigation and management of these risks, the Board applies rigorously the principles detailed in the 'Turnbull' guidance.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Directors' Report and the financial statements, in accordance with applicable United Kingdom law and United Kingdom Generally Accepted Accounting Practice. Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of its profit or loss for that period.
In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent; and
state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report (including Business Review), Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Financial Statements are published on www.foresightgroup.eu
Responsibility Statement of the Directors in respect of the Annual Financial Report
We confirm that to the best of our knowledge:
- the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
- the Directors' Report includes a fair review of the development and performance of the business and the position of the issuer together with a description of the principal risks and uncertainties that they face.
Additionally, the Directors confirm to the best of their knowledge that the annual financial report includes a fair review of the development, performance and position of the Company as required by DTR 4.1.8 to 4.1.12.
Audited Profit and Loss Account
for the year ended 31 December 2008
| Year to | Year to | |||||||
| 31 December 2008 | 31 December 2007 | |||||||
| Revenue | Capital | Total | Revenue | Capital | Total | |||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||
| Unrealised losses on investments | - | (6,332) | (6,332) | - | (10,176) | (10,176) | ||
| Realised (losses)/gains on investments | - | (487) | (487) | - | 1,855 | 1,855 | ||
| Income | 490 | - | 490 | 527 | - | 527 | ||
| Investment management fees | 44 | 131 | 175 | (209) | (625) | (834) | ||
| Other expenses | (336) | - | (336) | (382) | - | (382) | ||
| Profit/(loss) on ordinary activities before taxation | 198 | (6,688) | (6,490) | (64) | (8,946) | (9,010) | ||
| Tax on ordinary activities | - | - | - | - | - | - | ||
| Profit/(loss) for the year | 198 | (6,688) | (6,490) | (64) | (8,946) | (9,010) | ||
| Earnings per share | 0.4p | (14.5)p | (14.1)p | (0.1)p | (19.8)p | (19.9)p | ||
All items in the above statement derive from continuing operations. The total column represents the Company's profit and loss account. The supplementary revenue and capital columns are presented for information purposes as recommended by the Guidance note issued by the Association of Investment Companies.
There are no other gains or losses in the year.
Audited Reconciliation of Movement in Shareholders' Funds
for the year ended 31 December 2008
| Called-up share capital | Share premium account | Special distributable reserve | Capital reserve | Distributable reserve | Capital redemption reserve | Total | |||
| £'000 | £'000 | £'000 | £'000 | £'000 | £,000 | £'000 | |||
| As at 1 January 2008 | 440 | 8,626 | 19,619 | (1,549) | (498) | - | 26,638 | ||
| Share issues in the period | 37 | 2,148 | - | - | - | - | 2,185 | ||
| Expenses on share issues | - | (83) | - | - | - | - | (83) | ||
| Repurchase of shares | (14) | - | (525) | - | - | 14 | (525) | ||
| Dividend paid | - | - | - | (2,155) | - | - | (2,155) | ||
| Dividend reinvested | 1 | 126 | - | (127) | - | - | - | ||
| Net realised losses on investments | - | - | - | (487) | - | - | (487) | ||
| Net decrease in the value of investments | - | - | - | (6,332) | - | - | (6,332) | ||
| Capitalised management fees | - | - | 131 | (131) | - | - | - | ||
| Management fees charged to capital | - | - | - | 131 | - | - | 131 | ||
| Return for the period | - | - | - | - | 198 | - | 198 | ||
| As at 31 December 2008 | 464 | 10,817 | 19,225 | (10,650) | (300) | 14 | 19,570 | ||
| Called-up share capital | Share premium account | Special distributable reserve | Capital reserve | Distributable reserve | Capital redemption reserve | Total | |||
| £'000 | £'000 | £'000 | £'000 | £'000 | £,000 | £'000 | |||
| As at 1 January 2007 | 498 | 7,014 | 23,786 | 8,099 | (2,740) | - | 36,657 | ||
| Share issues in the period | 20 | 1,612 | - | - | - | - | 1,632 | ||
| Deferred shares written off | (46) | - | 46 | - | - | - | - | ||
| Repurchase of shares | (32) | - | (1,907) | - | - | - | (1,939) | ||
| Write off to special reserve | - | - | (2,306) | - | 2,306 | - | - | ||
| Dividend paid | - | - | - | (702) | - | - | (702) | ||
| Net realised gains on investments | - | - | - | 1,855 | - | - | 1,855 | ||
| Net decrease in the value of investments | - | - | - | (10,176) | - | - | (10,176) | ||
| Management fees charged to capital | - | - | - | (625) | - | - | (625) | ||
| Loss for the period | - | - | - | - | (64) | - | (64) | ||
| As at 31 December 2007 | 440 | 8,626 | 19,619 | (1,549) | (498) | - | 26,638 | ||
Audited Balance Sheet
at 31 December 2008
| As at | As at | |||||
| 31 December 2008 | 31 December 2007 | |||||
| £'000 | £'000 | |||||
| Non-current assets | ||||||
| Assets held at fair value through | ||||||
| profit and loss - investments | 15,512 | 20,776 | ||||
| Current assets | ||||||
| Debtors | 1,423 | 782 | ||||
| Money market and other investments | 2,750 | 5,220 | ||||
| Cash | 94 | 41 | ||||
| 4,267 | 6,043 | |||||
| Creditors | ||||||
| Amounts falling due within one year | (209) | (181) | ||||
| Net current assets | 4,058 | 5,862 | ||||
| Net assets | 19,570 | 26,638 | ||||
| Capital and reserves | ||||||
| Called-up share capital | 464 | 440 | ||||
| Share premium account | 10,817 | 8,626 | ||||
| Special distributable reserve | 19,225 | 19,619 | ||||
| Capital reserve | (10,650) | (1,549) | ||||
| Distributable reserve | (300) | (498) | ||||
| Capital redemption reserve | 14 | - | ||||
| Equity shareholders' funds | 19,570 | 26,638 | ||||
| Net asset value per share | 42.2p | 60.5p | ||||
Audited Cash Flow Statement
for the year ended 31 December 2008
| Year to | Year to | |
| 31 December 2008 | 31 December 2007 | |
| £'000 | £'000 | |
| Cash flow from operating activities | ||
| Investment income received | 213 | 220 |
| Deposit and similar interest received | 248 | 276 |
| Investment management fees paid | (272) | (866) |
| Secretarial fees paid | (59) | (59) |
| Other cash payments | (252) | (555) |
| Net cash outflow from operating activities and | ||
| returns on investment | (122) | (984) |
| Taxation | - | - |
| Returns on investment and servicing of finance | ||
| Purchase of unquoted investments and investments quoted on AIM | (2,827) | (1,618) |
| Net proceeds on sale of unquoted investments | 133 | 5,114 |
| Net proceeds on sale of quoted investments | 1,190 | 1,030 |
| Net capital (outflow)/inflow from financial investment | (1,504) | 4,526 |
| Equity dividends paid | (2,282) | (702) |
| Management of liquid resources | ||
| Movement in money market and other deposits | 2,470 | (2,626) |
| 2,470 | (2,626) | |
| Financing | ||
| Proceeds of fund-raising | 1,956 | 1,925 |
| Expenses of fund-raising | (72) | (293) |
| Dividends reinvested | 127 | - |
| Repurchase of own shares | (520) | (1,839) |
| 1,491 | (207) | |
| Increase in cash | 53 | 7 |
| Reconciliation of net cash flow to movement in net cash | ||
| Increase in cash for the year | 53 | 7 |
| Net cash at start of year | 41 | 34 |
| Net cash at end of year | 94 | 41 |
| Reconciliation of net income to net cash flow from | ||
| operating activities | ||
| Total deficit before taxation | (6,490) | (9,010) |
| Unrealised losses on investments | 6,332 | 10,176 |
| Realised losses/(gains) on investments | 487 | (1,855) |
| Increase/(decrease) in creditors | 13 | (496) |
| (Increase)/decrease in debtors | (464) | 201 |
| Net cash outflow from operating activities | (122) | (984) |
| Analysis of changes in net debt | |||
| At 1 January | Cash | At 31 December | |
| £'000 | £'000 | £'000 | |
| Cash at 1 January 2008 | 41 | 53 | 94 |
Notes
1. The audited preliminary results have been prepared on the basis of accounting policies set out in the statutory accounts of the Company for the year ended 31 December 2008. 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. Quoted investments are stated at bid prices in accordance with the IPEVC guidelines and Generally Accepted Accounting Practice.
2. These are not statutory accounts in accordance with section 240 of the Companies Act 1985. The full audited accounts for the year ended 31 December 2007, which were unqualified and did not contain and statements under S237(2) of Companies Act 1985 or S237(3) of Companies Act 1985, have been lodged with the Registrar of Companies. Statutory accounts for the year ended 31 December 2008 including an unqualified audit report and containing no statements under S237(2) or (3) of the Companies Act 1985 will be delivered to the Registrar of Companies in due course.
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 ECA Court, South Park, Sevenoaks, Kent TN13 1DU and can be accessed on the following website: www.foresightgroup.eu
4. Net asset value per Ordinary Share is based on net assets at the year end of £19,570,000 (2007: £26,638,000) and on 46,375,790 (2007: 44,023,031) Ordinary Shares being the number of Ordinary Shares in issue at that date.
5. Earnings per share
| Year to | Year to | |
| 31 December 2008 | 31 December 2007 | |
| £'000 | £'000 | |
| Total earnings after taxation | (6,490) | (9,010) |
| Basic earnings per share (note a) | (14.1)p | (19.9)p |
| Net revenue from ordinary activities after taxation | 198 | (64) |
| Revenue return per share (note b) | 0.4p | (0.1)p |
| Total capital return after taxation | (6,688) | (8,946) |
| Capital return per share (note c) | (14.5)p | (19.8)p |
| Weighted average number of shares in issue in the year | 46,155,407 | 45,227,061 |
Notes:
a) Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue.
b) Revenue return per share is net revenue after taxation divided by the weighted average number of shares in issue.
c) Capital return per share is total capital return after taxation divided by the weighted average number of shares in issue.
6. The Board is recommending the payment of a final dividend of 1.0p per Ordinary Share on 29 May 2009 for the year ended 31 December 2008. The ex dividend date will be 13 May 2009 and the record date will be 15 May 2009.
7. Related Party Transactions: With the exception of Bernard Fairman, no Director has an interest in any contract to which the Company is a party. Bernard Fairman is managing partner of Foresight Group, which acts as investment manager to the Company in respect of its venture capital investments and which earned fees of £600,496 during the year (2007: £833,907). Foresight Fund Managers Limited, Company Secretary, received fees of £87,965 (2007: £58,751) during the year.
8. The Annual General Meeting will be held at 2.00pm on 18 May 2009 at the offices of Closed Loop Recycling, 16 Choats Road, Dagenham, Essex, RM9 6LF.
9. Income
| Year to | Year to | |
| COMPANY | 31 December 2008 | 31 December 2007 |
| £'000 | £'000 | |
| - Dividends | - | 115 |
| - Money-market funds (OEICs) | 210 | 153 |
| - Loan stock interest | 225 | 237 |
| - Interest received on VAT refunded | 28 | - |
| - Bank deposits | 18 | 12 |
| - Other | 9 | 10 |
| 490 | 527 |
10. Investments
| COMPANY | Listed equity investments | Quoted on AIM | Unquoted | Total | |
| £'000 | £'000 | £'000 | £'000 | ||
| Book cost as at 1 January 2008 | 233 | 12,424 | 16,461 | 29,118 | |
| Unrealised appreciation/(depreciation) | 891 | (6,589) | (2,644) | (8,342) | |
| Valuation at 1 January 2008 | 1,124 | 5,835 | 13,817 | 20,776 | |
| Purchases at cost | - | 150 | 2,677 | 2,827 | |
| Sale proceeds | (1,182) | (7) | (133) | (1,322) | |
| Realised gains/(losses) | 949 | (936) | (500) | (487) | |
| Unrealised losses | (891) | (1,547) | (3,844) | (6,282) | |
| Valuation at 31 December 2008 | - | 3,495 | 12,017 | 15,512 | |
| Book cost at 31 December 2008 | - | 11,631 | 18,505 | 30,136 | |
| Unrealised depreciation | - | (8,136) | (6,488) | (14,624) | |
| Valuation at 31 December 2008 | - | 3,495 | 12,017 | 15,512 | |
END