Final Results

FORESIGHT VCT PLC
LEI: 213800GNTY699WHACF46
15 April 2024

Final results
31 December 2023

Foresight VCT plc, managed by Foresight Group LLP, today announces the final results for the year ended 31 December 2023.
These results were approved by the Board of Directors on 15 April 2024.

The Annual Report will shortly be available in full at www.foresightgroup.eu. All other statutory information can also be found there.

Financial Highlights

• Total net assets £219.1 million.
• A final dividend of 4.4p per share was paid on 30 June 2023, costing £10.7 million.
• A special interim dividend of 4.0p per share was paid on 18 August 2023, costing £9.8 million.
• Net Asset Value per share decreased by 1.8% from 87.5p at 31 December 2022 to 85.9p at 31 December 2023. After adding back the payments of a 4.4p dividend made on 30 June 2023 and a 4.0p dividend made on 18 August 2023, NAV Total Return per share was 94.3p, bringing the total return in the year to 7.8%.
• Nine new investments costing £11.5 million and nine follow-on investments costing £8.8 million were made during the year.
• The value of the investment portfolio rose by £1.6 million in the year to 31 December 2023. This was driven by an increase of £14.8 million in the valuation of investments, plus £20.3 million of new and follow-on investments offset by sales of investments totalling £33.2 million and loan repayments totalling £0.3 million.
• The offer for subscription launched in November 2023 was closed to further applications on 26 January 2024 and raised a total of £23.9 million after expenses.
• The Board is recommending a final dividend for the year ended 31 December 2023 of 4.4p per share, to be paid on 28 June 2024.

Chair's Statement

I am pleased to present the Company’s audited Annual Report and Accounts for the year ended 31 December 2023 and to report a Net Asset Value Total Return of 7.8% for the year and a dividend yield of 10.7% including a special dividend.

Overview of 2023
The Net Asset Value ("NAV”) Total Return per share of 7.8% for 2023 represents another good investment performance by the Company despite the continuing challenges of the current macroeconomic environment.

The UK’s economy fell into a recession in the second half of 2023, with GDP contracting in the two last quarters. At the start of the year Inflation remained stubbornly high but gradually fell to 4% by year end, closer to the Bank of England's inflation target of 2%. Nonetheless the Bank of England, still wary of embedded inflation, maintained interest rates at 5.25% from August onwards and there is still uncertainty over the timing of future interest rate cuts, despite a further fall in reported inflation to 3.4% in February. On a global level, the continuing war in Ukraine and the more recent conflict in the Middle East have increased geopolitical concerns and heightened nervousness in the financial markets. Against this backdrop, understandably consumer and business confidence in the UK remains fragile.

Nevertheless, the performance of the Company’s portfolio in aggregate throughout the year has remained healthy against this unpromising background.

The Manager has continued to work closely with the individual investee companies and developed a good understanding of their changing business requirements. Many of the portfolio companies successfully adapted to the new economic landscape, with some performing extremely well and demonstrating the strength of their management teams. A minority struggled as a result of a fall in consumer demand, inflationary pressures, surging energy prices, labour shortages and more limited fundraising opportunities. The overall solid performance of the Company through 2023, however, demonstrates the advantages of a well-constructed and diversified portfolio. 

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

• Growth in Net Asset Value Total Return above a 5% target
• Payment of annual ordinary dividends of at least 5% of the NAV per share per annum (based on the latest announced NAV per share)
• The implementation of a significant number of new and follow-on qualifying investments every year, exceeding deployment requirements to maintain VCT status
• Maintaining a programme of regular share buybacks at a discount of no less than 7.5% (2022: 10.0%) to the prevailing NAV per share

The Board and the Manager believe that these key objectives remain appropriate and the Company’s performance in relation to each of them over the past year is reviewed in more detail below.

Net Asset Value and dividends
The NAV of the Company grew over the financial year from £191.7 million to £219.1 million at 31 December 2023. At the end of 2023, nearly four-fifths of the Company’s assets were already invested, and the Board believed it would be in the Company’s best interest to raise further funds to provide liquidity for its activities in 2024 and beyond. On 15 November 2023, the Company launched an offer for subscription to raise up to £20 million, with an over-allotment facility to raise up to a further £5 million, through the issue of new shares. The offer was closed to applications on 26 January 2024 having raised gross proceeds of £25.0 million, £23.9 million after expenses.

During the year, the previous offer was closed to applications on 13 April 2023 and raised gross funds of £24.1 million. We would like to thank those existing shareholders who supported these offers and welcome all new shareholders to the Company.

The Company paid two dividends during the year: an ordinary dividend of 4.4p per share paid on 30 June 2023 which represented 5% of the NAV per share as at 31 December 2022 and a special dividend of 4.0p per share paid on 18 August 2023, following the successful sales of Mowgli, Innovation Consulting Group and Datapath. The distribution of both these dividends reduced the NAV per share to 85.9p at 31 December 2023, a reduction of 1.6p from 87.5p at 31 December 2022. After adding back both dividends, the NAV per share for the year was 94.3p, representing a total return of 7.8%.

The total return per share from an investment in the Company’s shares made five years ago is 47.0%, which is well above the minimum target return set by the Board of 5% per annum. Exceeding this target is at the centre of the Company’s current and future portfolio management objectives.

The Board is recommending a final dividend for the year ended 31 December 2023 of 4.4p per share, to be paid on 28 June 2024 based on an ex-dividend date of 13 June 2024, with a record date of 14 June 2024. At the year end, distributable reserves totalled £52,046,000 (2022: £64,303,000).

The Company continues to achieve its target dividend yield of 5% of NAV, which was set in 2019 in light of the change in portfolio towards earlier-stage, higher-risk companies, as required by the VCT rules. This level may be supplemented in future by payment of additional special dividends as and when particularly successful portfolio disposals are achieved.

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

The value of the investment portfolio rose by £1.6 million in the year to 31 December 2023. This was driven by an increase of £14.8 million in the valuation of investments, plus £20.3 million of new and follow-on investments, offset by sales of investments totalling £33.2 million and loan repayments totalling £0.3 million.

In brief, during the year under review, the Manager completed nine new investments, in a range of sectors, and nine follow-on investments deploying £11.5 million and £8.8 million respectively. The Board and the Manager believe that a similar number of new and follow-on investments can be achieved in 2024. The Company also exited six investments, generating proceeds of £33.2 million with a further £1.7 million of deferred consideration included within debtors at the year end. These sales produced net gains in valuation of £4.5 million in the year and represented in total a combined return multiple of 3.4 times over the life of the investments. Of particular note was the successful sale of Datapath Group Limited in September 2023, which generated a multiple of over 11.6 times the original cost of £1.0 million. Further details of these particular investments and realisations can be found in the Manager's Review.

After the year end, the Company made three new and two follow-on investments totalling £8.2 million. Furthermore, in March 2024, the Company realised its holding in Specac International Limited. The exit generated proceeds of £11.2 million at completion. When added to £1.5 million of cash returned to date, this implies a total cash-on-cash return of 10.3 times the initial investment, equivalent to an IRR of 34%.

The Company and Foresight Enterprise VCT plc have the same Manager and share similar investment policies. The Board closely monitors the extent and nature of the pipeline of investment opportunities and is reassured by the Manager’s confidence in being able to deploy funds without compromising quality and to satisfy the investment needs of both companies.

Responsible investing
The analysis of environmental, social and governance ("ESG”) issues is embedded in the Manager’s investment process and these factors are considered key in determining the quality of a business and its long-term success. Central to the Manager’s responsible investment approach are five ESG principles that are applied to evaluate investee companies, acquired since May 2018, throughout the lifecycle of their investment, from their initial review and acquisition to their final sale. Every year, these portfolio companies are assessed and progress is measured against these principles. More detailed information about the process can be found on pages 46 to 49 of the Manager’s Review of the Annual Report.

Buybacks
During the year the Company repurchased 6,784,285 shares for cancellation at an average discount of 7.5%, achieving its revised objective of maintaining regular share buybacks at a discount of 7.5%. As noted above and in the November 2023 Prospectus, the Board now has a current objective of maintaining a programme of regular share buybacks at a discount of no less than 7.5% to the prevailing NAV per share. The Board and the Manager consider that the ability to offer to buy back shares at no less than 7.5% is fair to both continuing and selling shareholders, and continues to help underpin the discount to NAV at which the shares trade.

Share buybacks are timed to avoid the Company’s closed periods. Buybacks will generally take place, subject to demand, during the following times of the year:

• April, after the Annual Report has been published
• June, prior to the half-yearly reporting date of 30 June
• September, after the Half-Yearly Report has been published
• December, prior to the end of the financial year

Management charges, co-investment and performance incentive
The annual management fee is an amount equal to 2% of net assets, excluding cash balances above £20 million, which are charged at a reduced rate of 1%. This has resulted in ongoing charges for the period ended 31 December 2023 of 2.2%, which is at the lower end of the range when compared to competitor VCTs.

Since March 2017, co-investments made by the Manager and individual members of the Manager’s private equity team have totalled £1.3 million alongside the Company’s investments of £101.3 million. The co-investment scheme requires that the individual members of the private equity team invest in all of the Company’s investments from that date onwards and prohibits selective "cherry picking” of co-investments. If any individual team member opts out of co-investment, they cannot invest in anything during that year. The Board believes that the co-investment scheme aligns the interests of the Manager's team with those of shareholders and has contributed to the improvement in the Company’s investment performance.

A new performance incentive scheme was formally approved by shareholders at a general meeting of the Company held on 15 June 2023 and has now replaced the original scheme which was approved on 8 March 2017. The revised arrangements were designed to be simpler to implement and understand and to cap the maximum annual payment under the scheme, whilst continuing to incentivise the Manager’s performance and align with the interests of shareholders. The new arrangements will be subject to continual review by the Board to ensure they meet these objectives. The new arrangements have superseded the previous scheme and any potential outstanding liabilities relating to it have ended. The Manager will now be able to earn an annual performance fee as summarised below.

A performance incentive fee will be payable in respect of each financial year commencing on or after 1 January 2023, where the Company achieves an average annual NAV Total Return per share, over a rolling five-year period, in excess of an average annual hurdle of 5% (simple not compounded). If this hurdle is met, the Manager would be entitled to an amount equal to 20% of the excess over the hurdle, subject to a cap of 1% of the closing Net Asset Value for the relevant financial year. No fee will become due in excess of this cap. 75% of the performance incentive fees are payable to the private equity team and the balance of 25% to the Manager.

Where there is a negative annual return in the last year of the rolling five-year period, no fee shall be payable, even if the five-year average hurdle is exceeded. However, in such circumstances the potential fee will be carried forward and may become due at the end of the next financial year if certain criteria are met. Any such catch-up fees shall be paid alongside any fee payable for the next financial year, subject to the 1% cap applying to both fees in aggregate.

Any such catch-up fees cannot be rolled further forward to subsequent financial years.

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

A performance fee of £1.5 million is due in respect of the 2023 financial year, based on the outperformance of the average five-year annual NAV Total Return per share as described above. Over the last five years the NAV Total Return per share has increased by 37.2p (47.6%), representing an average of 7.4p each year. This exceeds the average annual 5% hurdle by 3.5p per share and represents a period of strong performance by the Company.

Board composition
The Board continues to review its own performance and undertakes succession planning to maintain an appropriate level of independence, experience, diversity and skills in order to be in a position to discharge its responsibilities.

2023 has seen some planned changes to the composition of the Board. The Board was delighted to appoint David Ford and Dan Sandhu as Non-Executive Directors in January 2023.  After over 16 years as a Non-Executive Director, including nearly 12 years as Chair of the Audit Committee, Gordon Humphries did not stand for re-election at the AGM on 15 June 2023. On behalf of the Company, I would like to thank Gordon for his significant contribution and dedication to the Company over many years. We are very pleased to remain in contact with him in his new role as Chair of the AIC where his VCT experience will continue to benefit the VCT sector.

Gordon has been succeeded as Chair of the Audit Committee by Patricia Dimond, who has already served on the Board for over three years.

Jocelin Harris, who has served on the Board since December 2015, will be retiring from the Board at this year’s AGM. Jocelin’s commercial and investment experience, combined with his legal training, have been of enormous benefit to the Company. On behalf of the Board and shareholders, I would like to thank Jocelin for his valuable contribution to Board discussions and his wise counsel during his many years of service. He will be greatly missed and we wish him the very best for the future.

Shareholder communication
We were delighted to meet with some shareholders in person at the AGM last year. We hope many of you will be available to attend this year’s AGM on 4 June 2024, as detailed below.

Annual General Meeting
The Company’s Annual General Meeting will take place at the Company's registered office on 4 June 2024 at 2:00pm and we look forward to meeting as many of you as possible in person. Please refer to the formal notice on page 107 of the Annual Report for further details in relation to the format of this year’s meeting. We would encourage you to submit your votes by proxy ahead of the deadline of 2:00pm on 31 May 2024 and to forward any questions by email to InvestorRelations@foresightgroup.eu in advance of the meeting.

VCT Sunset clause
A condition of the European Commission’s State Aid approval of the UK’s VCT scheme in 2015 was the introduction of a retirement date for the current scheme at midnight on 5 April 2025, known as the "Sunset clause”. This "Sunset clause" for VCT reliefs therefore needs to be extended or cancelled by the government before this expiry date or the income tax relief given to VCT subscriptions made after this date would no longer be available to investors. I am pleased to report that during the Autumn Statement delivered by the government in November 2023, Chancellor Jeremy Hunt announced the extension of the "Sunset clause" applying to VCTs for another ten years to April 2035. The UK should be able to extend the scheme through secondary legislation without European Commission approval, clarified by the Northern Ireland Protocol, the Windsor Framework announced during the year.

Outlook
Experience has taught us that it is not possible to predict outcomes in an uncertain world, particularly in a year when nearly half the population will have the opportunity to vote in elections and potentially introduce radical political change. However, it is not unreasonable to expect that growth in the UK is likely to continue to be weak in 2024 against a background of macroeconomic and political uncertainty: ongoing inflationary pressures, tight monetary policies and supply chain issues, labour shortages and a lack of bank lending appetite may all continue to dampen economic recovery. We are conscious that such conditions could prove challenging for our investee companies which are unquoted, small, early-growth businesses and, by their nature, entail higher risk and lower liquidity levels than larger listed companies.

On the other hand, these younger companies may prove more agile and creative in their approach and better able to adapt their operations and develop new products and services in response to the uncertain circumstances. A difficult funding environment can create good opportunity for smart deployment.

The Manager understands well the management and business requirements of each of the companies within the investment portfolio and is working closely with them to help them adapt to, and grow within, this changing environment. The Company’s current portfolio of investments is well diversified by number, business sector, size and stage of development and overall has already demonstrated its relative resilience in the face of economic and geopolitical difficulties. We are confident that this approach will continue to provide some protection in volatile market conditions.

The Manager is continuing to see a promising pipeline of potential investments, both new and follow-on. The fundraising referred to earlier will provide additional resources to make selective investments and enable the Company to continue to take advantage of the increasing numbers of opportunities that are now emerging out of the recent disruption. Although we anticipate there will be considerable economic headwinds in the year ahead, we believe the Company’s generalist, diversified portfolio is well positioned to continue to generate long-term value for shareholders.

Margaret Littlejohns
Chair

15 April 2024

Manager's Review

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

Portfolio summary
As at 31 December 2023, the Company’s portfolio comprised 53 investments with a total cost of £103.9 million and a valuation of £171.3 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 30 to 34 of the Annual Report.

In the year to 31 December 2023, the value of the investment portfolio rose by £1.6 million as a result of an increase of £14.8 million in the valuation of investments, plus £20.3 million of new and follow-on investments offset by strong sales of several investments realising £33.5 million. Overall, the portfolio has performed well despite uncertainty in the market with significant geopolitical issues and continued domestic price inflation, coupled with high interest rates.

In line with the Board’s strategic objectives, the Manager remains focused on growing the Company through further development of Net Asset Value Total Return. In the year, Net Asset Value Total Return was 7.8% and net assets increased by 14.3% to £219.1 million after the payment of dividends, meaning that the Company has successfully met this objective in the period under review.

New investments
2023 was characterised by higher interest rates and cost inflation, although this began to stabilise during the latter part of the year leading into 2024. Many investee management teams have successfully steered their businesses through the uncertainty of the year, whilst developing clearer medium and longer-term growth plans.

The Manager has continued to invest in its deal origination capabilities and identified a large number of potentially attractive investment opportunities during the year.

Over the course of 2023, nine new investments were completed, investing a total of £11.5 million. New investments were across recruitment software, industrials, financial planning, health services, communications and technology. Behind these, there continues to be a strong pipeline of opportunities that the Manager expects to convert during the next 12 months. Follow-on investments totalling £8.8 million were also made in nine existing investee companies.

Sprintroom Limited
In January 2023, the Company invested £1.0 million of growth capital in Sprintroom, which trades as Sprint Electric. The business designs and manufactures drives for controlling electric motors in light and heavy industrial applications, as well as recovering and reusing otherwise lost energy. The investment will be used to further develop and commercialise novel alternating current variable speed drive technology.

Red Flag Alert Technology Group Limited
In March 2023, the Company invested £1.7 million in Reg Flag Alert Technology Group, a Manchester based proprietary SaaS intelligence platform with modular capabilities spanning compliance, prospecting, risk management and financial health assessments. The growth capital will be used to support further product development and expand its commercial capabilities.

Firefish Software Ltd.
In March 2023, the Company invested £1.5 million in Firefish Software, a Glasgow-based customer relationship management and marketing software platform targeting the recruitment sector. The funding will be used to support the company in its growth plans.

The KSL Clinic Limited
In April 2023, the Company invested £1.0 million in the KSL Clinic, a leading provider of hair replacement treatments, with clinics in Manchester and Kent. The investment will enable the company to grow its medical team and expand its geographic presence.

Five Wealth Limited
In March 2023, the Company invested £0.7 million in Five Wealth, an established boutique financial planning business operating across the North West of England. Five Wealth’s service offering is focused on the provision of independent private client financial advice and wealth planning. This growth capital investment will be used to accelerate Five Wealth’s ambition to help more people reach their financial planning goals.

Loopr Ltd
In September 2023, the Company invested £1.7 million in Loopr Ltd, trading as Looper Insights, a fast-growing, London-based technology business providing data analytics to digital content distributors and streaming services. The investment will enable Looper to increase the solution’s automation and customer integration and accelerate rollout of its products internationally.

Live Group Limited
In December 2023, the Company invested £1.4 million in Live Group, a global events and communications agency selling digital and live communications and events services. The company has developed a proprietary delegate management platform to collect attendee data, share content and enhance engagement with delegates. The investment will be used to enhance and further develop the platform whilst supporting growth plans, including international growth.

Kognitiv Spark Inc
In December 2023, the Company invested £1.0 million in Kognitiv Spark, a developer of augmented reality software that enables the remote sharing of critical data to on-site employees. Developed specifically for industrial communications, the company’s core product offers superior performance in terms of data compression and visualisation. The funding will be used to expand the management team and explore new commercial opportunities.

Navitas Digital Safety Limited 
In December 2023, the Company invested £1.5 million in Navitas Digital Safety, a digital food safety management business. The company uses a combination of hardware and software to provide a complete food safety management solution to hospitality sector customers. The investment will support the company’s effort to expand its commercial capabilities and further develop the platform.

Follow-on investments
Given the expansion of the portfolio, there has been an increase in follow-on investments during the year. These follow-on investments are to support further growth initiatives within the portfolio. The Manager is pleased to report that despite continuing macroeconomic uncertainty and stubbornly high interest rates and inflation, the portfolio remains resilient overall.

The Manager has made follow-on investments in nine companies during 2023, totalling £8.8 million. Further details of each of these are provided below.

The additional equity injections in the year were used to support further growth plans, such as launching new products or opening new sites and providing cash headroom for further growth. In view of the economic outlook, which remains challenging, the Manager continued to be vigilant about the health of the rest of the portfolio and the need for follow-on funding over the coming months.

Mizaic Ltd (formerly IMMJ Systems Limited)
In February 2023, £0.6 million was invested in Mizaic, a clinical electronic document management solution for the NHS. The investment was used to back the new leadership team and enhance the product roadmap, bolstering the business’ ability to support digitising patient records. Mizaic’s principal product, MediViewer, saves time and costs for the NHS and improves the outcomes for the clinician-patient experience.

NorthWest EHealth Limited ("NWEH”)
In March 2023 and October 2023, the Company invested a further £2.5 million total in aggregate in NWEH, which provides software and services to the clinical trials market, allowing pharmaceutical companies and contract research organisations to conduct feasibility studies, recruit patients and run trials. The investment provided support to the delivery of a number of new real-world trials, while also enabling the company to complete its ConneXon platform.

Ten Health & Fitness Limited
In March 2023, Ten Health & Fitness, a multi-site operator in the boutique health, wellbeing and fitness market, received an additional investment of £0.6 million. The funding enabled the company to complete its new flagship Kings Cross site and support the company’s growth strategy. 

Additive Manufacturing Technologies Ltd ("AMT”)
In April 2023, the Company invested £0.1 million in AMT, which manufactures systems that automate the post-processing of 3D printed parts. See the Key valuation changes in the period section below for further details.

Ollie Quinn Limited
In April 2023, the Company invested £1.0 million in Ollie Quinn, a branded retailer of prescription glasses, sunglasses and non-prescription polarised sunglasses based in the UK and Canada. The investment provided the cash headroom and time to explore longer-term financing initiatives in its continuing search for growth opportunities.

viO HealthTech Limited
In September 2023, the Company invested £35k in viO HealthTech Limited, a developer of innovative medical devices that allow women to predict and detect ovulation with a high degree of accuracy. The funding will support the business in the next stage of market testing.

Weduc Holdings Limited
In October 2023, the Company invested £0.6 million in Weduc Limited, a communication platform enabling smoother communication between parents, teachers and students, alleviating the administrative burden for teachers and improving parent and student engagement. The investment will be used to support the continued growth of the platform.

Callen-Lenz Associates Limited
In December 2023, the Company invested £2.5 million in Callen-Lenz Associates Limited. Callen-Lenz develops, designs and manufactures air vehicles, vehicle components and navigation and communication software for high performance unmanned aerial vehicles ("UAVs") globally. The investment will support the continued rapid growth of the business.

Clubspark Group Ltd
In October 2023, the Company invested £0.9 million in Clubspark Group Ltd, a sports club management and reporting platform for local organisations and national governing bodies. The funding will provide further cash headroom to support Clubspark’s continued growth. 

Realisations
The M&A climate has proved more challenging than in recent years in light of the macroeconomic conditions of high interest rates and geopolitical uncertainty. Despite this, the Manager was pleased to report some particularly strong realisations, as well as the disposal of one challenged business within the portfolio. The Manager continues to engage with a range of potential acquirers of several portfolio companies and to carefully consider the timing of exit for each. Demand remains for high-quality, high-growth businesses from both private equity and trade buyers.

Mowgli Street Food Group Limited
In January 2023, the Company announced the successful exit of casual Indian food chain Mowgli to TriSpan, a global private equity firm with extensive restaurant expertise. The Manager invested in 2017, when the business had three restaurant sites. It has since grown to 15 sites nationally. The Manager introduced Dame Karen Jones, co-founder of Café Rouge and the Pelican Group, as Chair. The Manager also introduced Matt Peck as Finance Director and helped recruit Lucy Worth as Operations Director and, together with this team, built a market-leading hospitality brand. The business also shared the Manager’s commitment to sustainability, creating more than 500 jobs and ranking 16th best UK company to work for in 2022, owing to its focus on employee welfare, local charity support and sustainable sourcing.

The exit resulted in proceeds of £5.2 million, including £0.8 million which was received in July 2023 and £0.8 million which was received in February 2024. When added to the £0.1m cash returned pre-exit, this implied a total cash-on-cash return of 3.5x on the original investment, equivalent to an IRR of 25% since the initial investment.

Datapath Group Limited
In March 2023, the Company exited Datapath, a global leader in the provision of hardware and software solutions for multi-screen displays. The transaction generated proceeds of £5.1 million at completion and a further £0.3 million was received in November 2023. An additional £0.9 million is payable over 24 months following exit.

The investment in Datapath was initially held by Foresight 2 VCT plc ("F2”) and was transferred to the Company on the merger with F2 on 17 December 2015. F2 initially invested £1.0 million into the business in 2007. The accounting cost of £7.6 million refers to the value at which F2's holding was transferred to the Company.

When added to £5.4 million of cash returned pre-exit, this implies a total cash-on-cash return of 11.6x the original investment of £1.0 million, equivalent to an IRR of 37% since the initial investment in 2007.

Since the original investment, the Manager had supported Datapath through a period of material growth with revenues growing from approximately £7.0 million to £25.0 million. Datapath has developed a market-leading hardware and software product suite for the delivery of multi-screen displays and video walls which are sold globally to a diverse customer base across a range of sectors.

Innovation Consulting Group Limited ("GovGrant”)
In March 2023, the Company announced the exit of GovGrant to Source Advisors, a US corporate buyer backed by BV Investment Partners. GovGrant is one of the UK’s leading providers of R&D tax relief, patent box relief and other innovation services. The transaction generated proceeds of £6.8 million at completion. When added to £0.5 million of cash returned to date, this implies a total cash-on-cash return of 4.4x the capital of £1.65 million invested in October 2015, equivalent to an IRR of 24%.

Since the original investment in 2015, the Manager had helped GovGrant through a period of material growth during which it supported the R&D activities of a growing number of customers. GovGrant’s high levels of service and innovative products, such as the growing patent box offering, have contributed to driving innovation in the UK economy. The Manager had taken a proactive approach to supporting the exceptional senior management team, all of whom were introduced to the business during the investment period.

Protean Software Limited
In July 2023, the Company achieved a successful exit of its holding in Protean Software to Joblogic, a UK-based direct provider of Field Service Management software to SMEs, and Protean’s direct competitor. The Company invested in Protean in July 2015 as one of the last buyouts prior to the changes in VCT legislation. Over the holding period, the Manager helped Protean transition its highly featured legacy product into modern software sold on a SaaS basis. The transaction generated proceeds of £5.9 million on completion. When added to the £0.2 million cash returned pre-exit, this implies a total cash-on-cash return of 2.4x on the original investment, equivalent to an IRR of 12% since the initial investment.

Fresh Relevance Ltd
In September 2023, the Company announced the successful exit of Fresh Relevance, an email marketing and e-commerce personalisation platform which provides online retailers with tools to improve customer retention and acquisition. The transaction generated proceeds of £10.6 million at completion. When added to £0.2 million of cash returned pre-exit, this implies a total cash-on-cash return of 3.8x, equivalent to an IRR of 27%.

The sale to Dotdigital Group PLC follows the growth of the business since the original investment in 2017, with follow-on investment provided in 2021. With the Company's investment, Fresh Relevance tripled revenues and created close to 40 high-quality, sustainable jobs, positively impacting the local economy in Southampton.

Luminet Networks Limited   
In October 2023, the Company announced the exit of Luminet, London’s largest fixed wireless network operator and leading business-to-business internet provider. The transaction generated proceeds of £4.7 million at completion. This implies a total cash-on-cash return of 1.2x the original investment, equivalent to an IRR of 5%.
The Company's investment helped the company to scale up by adding additional base stations to the existing infrastructure, as well as navigate through the challenging period of COVID-19 related uncertainty.

Realisations in the year ended 31 December 2023

Company	Detail	Accounting cost at date of disposal (£)	Proceeds3 (£)	Realised gain/(loss) (£)	Valuation at 31 December 2022 (£)
Fresh Relevance Ltd	Full disposal	2,860,324	10,226,288	7,365,964	5,935,427
Innovation Consulting Group Limited	Full disposal	1,605,000	6,138,615	4,533,615	5,474,353
Protean Software Limited	Full disposal	2,500,000	5,291,070	2,791,070	4,382,049
Datapath Group Limited¹	Full disposal	7,563,365	5,049,691	(2,513,674)	5,245,695
Luminet Networks Limited	Full disposal	3,783,251	3,433,268	(349,983)	2,472,529
Mowgli Street Food Group Limited²	Full disposal	1,526,750	3,101,743	1,574,993	5,183,006
200 Degrees Holdings Limited	Loan repayment	225,000	225,000	—	225,000
Positive Response Corporation Ltd	Loan repayment	100,000	100,000	—	100,000
Total disposals		20,163,690	33,565,675	13,401,985	29,018,059

1. Excludes £292,000 of deferred consideration which was received in November 2023. A further £875,000 of deferred consideration has been recognised within debtors. The accounting cost of £7.6 million includes the valuation of the F2 investment at the point it was transferred to the Company.
2. Excludes £824,000 of deferred consideration which was received in July 2023. A further £824,000 of deferred consideration has been recognised within debtors.
3. Proceeds on exit excluding interest, dividends and exit fees where applicable.

Pipeline
At 31 December 2023, the Company had cash reserves of £46.2 million, which will be used to fund new and follow-on investments, buybacks, dividends and corporate expenditure. The Manager is seeing a strong pipeline of new opportunities, with several opportunities in due diligence or in exclusivity, with further deal completions expected to be announced in the months to follow.

Stubbornly high interest rates and inflation have created challenging trading conditions for many companies, with inflation of wages and input prices of particular concern. Interest on bank debt remains at a significantly higher level than 18 months ago; however, the Manager notes that the cautious approach to leveraging portfolio companies provides some protection here. Continuing geopolitical concern surrounding conflicts in Ukraine and the Middle East have also caused supply chain disruption. These challenges create opportunities to source attractive investments, however, with many companies seeking to strengthen their balance sheets.

The Manager continues to see an attractive pipeline of opportunities and does not see this changing in the medium term. The Company is able to access these opportunities through its wide and proprietary network across the country, supported to a greater extent by its network of regional offices. The Manager considers the Company’s strategy to be well-suited to market volatility, due to its balanced mix of companies across sectors and stages, experienced investment team and network of high-quality non-executives.

Post year end activity
Family Adventures Group Limited
In January 2024, the Company invested £2.5 million of growth capital in Family Adventures Group Limited, a provider of daycare nurseries and children’s leisure sites that combines soft play areas with role play facilities. All inspected sites have been rated "Good” by Ofsted and have an average score of 9.9/10 on daynurseries.co.uk; whilst the leisure sites have market leading Net Promoter Scores ("NPS") and high repeat visits. The investment will be used to aid the business with a continued rollout of nursery and leisure sites across the South West and Midlands.

Ollie Quinn Limited
In January 2024, following a period of challenging trading, the Manager exited the UK division of Ollie Quinn, a branded retailer of prescription glasses, sunglasses and non-prescription polarised sunglasses based in the UK and Canada. The exit returned £0.2 million on completion. A sale of the majority of the remaining Canadian business was completed by the management team in February 2024, unlocking the necessary third-party funding to take the business forward whilst retaining the potential for future upside for the Company.

Lepide Group Holding Company Ltd
In March 2024, the Company invested £1.9 million in Lepide, a cyber security software solution that helps organisations to protect their unstructured data. Lepide actively monitors event logs within Windows Active Directory in order to detect suspicious activity and help organisations to manage over-exposure of data. The investment will help scale the business and accelerate growth initiatives.

Evolve Dynamics Limited
In March 2024, the Manager completed a £2.0 million investment in Evolve Dynamics Limited. Founded in 2016, the company designs and manufactures smaller Unmanned Aerial Systems ("UAS”) with capabilities for Intelligence, Surveillance, Target Acquisition and Reconnaissance ("ISTAR”). The investment will help scale the business and aid in new product launches.

Homelink Healthcare Limited
In March 2024, the Company completed a £1.0 million follow-on investment in Homelink Healthcare Limited. Foresight first invested into HomeLink in March 2022. Contracting with the NHS, the business provides patients with wound care, physiotherapy and intravenous therapies in their own home. HomeLink is also a leader in remote monitoring practice and offers a virtual ward solution. The investment will support the organic expansion of the company.

Sprintroom Limited
In March 2024, the Company completed a £0.8 million follow-on investment in Sprintroom Limited, which trades as Sprint Electric. The business designs and manufactures drives for controlling electric motors in light and heavy industrial applications, as well as recovering and reusing otherwise lost energy. The investment will be used to drive continued revenue growth.

Specac International Limited
In March 2024, the Manager announced the sale of Specac International, a leading manufacturer of high specification sample analysis and preparation equipment used in testing and research laboratories worldwide, primarily supporting infrared spectroscopy. The transaction generated proceeds of £11.2 million at completion. When added to £1.5 million of cash returned pre-exit, this implies a total cash-on-cash return of 9.4x. equivalent to an IRR of 33%. Since investment, the business has grown to sell globally through both original equipment manufacturers ("OEMs”) and distributors. The Manager also engaged with the team to support management team changes, improvements in governance, headcount and numerous product launches. The exit will facilitate the continued growth of the business.

Key portfolio developments
Material changes in valuation, defined as increasing or decreasing by £1.0 million or more since 31 December 2022, are detailed below. Updates on these companies are included below, in the Post year end activity section on pages 24 and 25, or in the Top Ten Investments section on pages 30 to 34 of the Annual Report.

Key valuation changes in the year

Company	Valuation methodology	Net movement  (£)
Callen-Lenz Associates Limited	Discounted offer received	9,512,985
Aquasium Technology Limited	Discounted earnings multiple	4,836,061
Hospital Services Group Limited	Discounted earnings multiple	1,790,599
Fourth Wall Creative Limited	Discounted revenue multiple	1,452,191
TLS Management Limited	Net assets	1,274,590
Copptech UK Limited	Discounted revenue multiple	(1,013,332)
Crosstown Dough Ltd	Discounted revenue multiple	(1,145,347)
Nano Interactive Group Limited	Discounted revenue multiple	(1,211,595)
Aerospace Tooling Corporation Limited	Discounted earnings multiple	(1,340,079)
So-Sure Limited	Nil value	(1,584,158)
Additive Manufacturing Technologies Ltd	Price of last funding round	(1,779,015)
Ollie Quinn Limited	Discounted offer received	(4,028,399)

Copptech UK Limited
Copptech has developed a series of antimicrobial technologies using copper, zinc and organic active ingredients. The active ingredient is added to polymers, plastics or dispersions such as varnish and kills bacteria, fungi and viruses on contact.

31 December 2023 update
Sales in the 12 months to 31 December 2023 were in line with the prior year but behind plan. The company’s EBITDA loss was driven by investment in overhead and a drop in gross margin as finished goods sales were prioritised to build strategic relationships. The management team continues to review costs and the level of R&D.

Crosstown Dough Ltd
Crosstown began trading in 2014 and has a portfolio of 31 sites, including a mix of bricks and mortar, food trucks and market stalls. Crosstown’s core product are fresh sourdough doughnuts made at its central production unit in Battersea. Crosstown has also developed an online presence, via its website and other delivery providers, as well as a wholesale offering.

31 December 2023 update
Crosstown participated in The Mother of the Nation Festival in Abu Dhabi in December, helping to build the brand internationally and presenting future growth opportunities. Management continues to focus on improvements to the existing retail network to return to like-for-like growth, as well as selective new site opportunities. Crosstown continues to invest in its digital business, following the recruitment of a new Head of E-commerce.

So-Sure Limited
So-Sure is an insurance technology company acting as "Managing General Agent" for insurers, offering a more trusted proposition, greater pricing transparency and improved customer experience through its customer-centric digital platform.

31 December 2023 update
So-Sure has not performed in line with the management plan presented to the Manager's Investment Committee at the time of the initial investment and was fully written off in the quarter.

Aerospace Tooling Corporation Limited
ATL provides specialist inspection, maintenance, repair and overhaul ("MRO") services for components in high-specification aerospace and turbine engines.

31 December 2023 update
Sales were in line with the prior year. ATL has implemented improvements in its processes and internal systems which have led to improvements in gross margin. There remains a focus on the delivery of a growing order book, which is expected to result in an uplift in sales for 2024. Some challenges remain over equipment reliability issues and the Board has implemented a plan to resolve these.

Additive Manufacturing Technologies Limited
AMT is developing machines for post-production of 3D printed parts: removal of excess polymer ("depowdering"), surface smoothing/polishing, colouring and inspection. AMT’s goal is to provide a fully automated end-to-end post-production system, the "DMS”, with robots linking each stage. 

31 December 2023 update
A significant cost reduction exercise has been implemented, with the full impact continuing to be realised in the business. The Manager continues to support the business with its restructuring plan and progress towards a break-even position. The business recently released a smaller version of its machine to market which has been well received, with strong order intake received in the first few months.

Outlook
Global economies demonstrated some recovery in 2023 with signs of stability returning; however, the UK is proving slower to recover. The FTSE 100 grew by just 4%, whilst the MCSI World Index grew by c.20% during the year and many global indexes surpassed this, including the S&P 500 and Nasdaq – the latter seeing 45% growth.

Consumer confidence has remained relatively weak in the face of inflation, which fell steadily throughout 2023 to 4% but remained high by recent standards. To combat this, interest rates increased from 3% to 5.25% throughout the year, eroding consumer spending power and putting leveraged businesses under financial pressure. At a global level, the ongoing conflict in Ukraine and emerging conflict in the Middle East have led to continuing supply chain uncertainty and volatility in oil and gas prices. Overall, the UK economy experienced stagnation during 2023 and entered a technical recession in the latter half of the year, although many commentators expected this to be shallow by historic standards. As a result of these factors, M&A volumes dropped noticeably in 2023.

Despite this challenging backdrop, the Company has performed well in the year, achieving a 7.8% NAV Total Return for shareholders. Strong exits were achieved, to both trade and PE buyers and across various sectors, demonstrating that demand remains for high-quality assets that are well prepared for sale. The exits of Datapath, GovGrant, Fresh Relevance and Mowgli from across a range of sectors, significantly contributed to the Company’s total dividends of 8.4p per share for the year, delivering an attractive dividend yield of 10.7% and exceeding the Company’s target. The Company retains a portfolio that is well balanced across sectors and stages, with some companies delivering strong profitability whilst other earlier-stage investments continue to display strong growth. The Manager’s cautious approach to taking on leverage has protected many portfolio companies from concerns surrounding rising interest rates.

Looking forward to 2024, considerable uncertainty remains in the UK economy. The UK’s economic activity was subdued during 2023. This had an effect on lenders’ confidence which had also been challenged by high interest rates and inflation. Interest rates are set to remain above recent norms for the foreseeable future, impacting consumer spending power. The forthcoming general election, which will be announced at some point this year, will only add to the sense of uncertainty, although it seems likely the government will seek to reduce the tax burden to the degree possible in the run up to an election.

More broadly there is cause for optimism, however. The UK continues to be a global leader in key sectors such as technology, life sciences and financial services. There is a strong and established network of support for growing young companies and world-class universities continue to nurture exciting spin-outs. Multinationals continue to see the UK as an attractive place to invest and grow their businesses. The strength of the US technology and finance sectors in recent years has made UK valuations seem relatively cheap by comparison, offering attractive opportunities for sale to international buyers.

The Manager is pleased with the performance in the year, especially against the backdrop of a challenging macroeconomic picture. Looking forward, with the economy returning to some growth and interest rates and inflation having likely peaked, there is potential for continued good performance over the medium term. The Company’s strong performance has improved its position in the VCT market, which is an increasingly attractive and visible source of capital for the UK’s ambitious entrepreneurs. The portfolio remains diversified and resilient to macroeconomic headwinds, supported by a collaborative, hands-on approach from the Manager.

James Livingston
on behalf of Foresight Group LLP
Co-Head of Private Equity
15 April 2024

Income Statement
For the year ended 31 December 2023

		Year ended 31 December 2023			Year ended 31 December 2022
		Revenue	Capital	Total	Revenue	Capital	Total
		£’000	£’000	£’000	£’000	£’000	£’000
Realised gains on investments		—	14,573	14,573	—	13,207	13,207
Investment holding gains		—	2,833	2,833	—	2,138	2,138
Income		5,372	—	5,372	1,536	—	1,536
Investment management fees		(1,004)	(4,481)	(5,485)	(949)	(2,550)	(3,499)
Other expenses		(817)	—	(817)	(680)	—	(680)
Return/(loss) on ordinary activities before taxation		3,551	12,925	16,476	(93)	12,795	12,702
Taxation		(476)	476	—	—	—	—
Return/(loss) on ordinary activities after taxation		3,075	13,401	16,476	(93)	12,795	12,702
Return/(loss) per share		1.3p	5.6p	6.9p	(0.1)p	5.9p	5.8p

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

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

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

The Company has only one class of business and one reportable segment, the results of which are set out in the Income Statement and Balance Sheet.

There are no potentially dilutive capital instruments in issue and, therefore, no diluted earnings per share figures are relevant. The basic and diluted earnings per share are, therefore, identical.

The notes on pages 89 to 106 of the Annual Report form part of these financial statements.

Reconciliation of Movements in Shareholders’ Funds

Year ended 31 December 2023		Called-up share capital £’000	Share premium account £’000	Capital redemption reserve £’000	Distributable reserve1 £’000	Capital reserve1 £’000	Revaluation reserve £’000	Total £’000
As at 1 January 2023		2,192	56,380	1,195	47,701	16,602	67,659	191,729
Share issues in the year2		428	37,827	—	—	—	—	38,255
Expenses in relation to share issues3		—	(1,441)	—	—	—	—	(1,441)
Repurchase of shares		(68)	—	68	(5,369)	—	—	(5,369)
Realised gains on disposal of investments		—	—	—	—	14,573	—	14,573
Investment holding gains		—	—	—	—	—	2,833	2,833
Dividends paid		—	—	—	(20,531)	—	—	(20,531)
Management fees charged to capital		—	—	—	—	(4,481)	—	(4,481)
Revenue return before taxation for the year		—	—	—	3,551	—	—	3,551
Taxation for the year		—	—	—	(476)	476	—	—
As at 31 December 2023		2,552	92,766	1,263	24,876	27,170	70,492	219,119

1. Reserve is available for distribution; total distributable reserves at 31 December 2023 total £52,046,000 (2022: £64,303,000).
2. Includes the dividend reinvestment scheme.
3. Expenses in relation to share issues includes trail commission for prior years’ fundraising.

The notes on pages 89 to 106 of the Annual Report form part of these financial statements

Year ended 31 December 2022		Called-up share capital £’000	Share premium account £’000	Capital redemption reserve £’000	Distributable reserve1 £’000	Capital reserve1 £’000	Revaluation reserve £’000	Total £’000
As at 1 January 2022		2,056	34,954	1,081	75,591	5,945	65,521	185,148
Share issues in the year2		250	22,084	—	—	—	—	22,334
Expenses in relation to share issues3		—	(658)	—	—	—	—	(658)
Repurchase of shares		(114)	—	114	(8,980)	—	—	(8,980)
Realised gains on disposal of investments		—	—	—	—	13,207	—	13,207
Investment holding gains		—	—	—	—	—	2,138	2,138
Dividends paid		—	—	—	(18,817)	—	—	(18,817)
Management fees charged to capital		—	—	—	—	(2,550)	—	(2,550)
Revenue loss for the year		—	—	—	(93)	—	—	(93)
As at 31 December 2022		2,192	56,380	1,195	47,701	16,602	67,659	191,729

1. Reserve is available for distribution; total distributable reserves at 31 December 2023 total £52,046,000 (2022: £64,303,000).
2. Includes the dividend reinvestment scheme.
3. Expenses in relation to share issues includes trail commission for prior years’ fundraising.

The notes on pages 89 to 106 of the Annual Report form part of these financial statements.

Balance Sheet
At 31 December 2023

		As at 31 December 2023 £’000	As at 31 December 2022 £’000
Fixed assets
Investments held at fair value through profit or loss		171,348	169,775
Current assets
Debtors		3,510	3,037
Cash and cash equivalents		46,200	19,525
		49,710	22,562
Creditors
Amounts falling due within one year		(1,939)	(608)
Net current assets		47,771	21,954
Net assets		219,119	191,729
Capital and reserves
Called-up share capital		2,552	2,192
Share premium account		92,766	56,380
Capital redemption reserve		1,263	1,195
Distributable reserve		24,876	47,701
Capital reserve		27,170	16,602
Revaluation reserve		70,492	67,659
Equity shareholders’ funds		219,119	191,729
Net Asset Value per share		85.9p	87.5p

The financial statements were approved by the Board of Directors and authorised for issue on 15 April 2024 and were signed on its behalf by:

Margaret Littlejohns
Chair
15 April 2024

Registered number: 03421340

The notes on pages 89 to 106 of the Annual Report form part of these financial statements.

Cash Flow Statement
For the year ended 31 December 2023

		Year ended 31 December 2023 £’000	Year ended 31 December 2022 £’000
Cash flow from operating activities
Loan interest received from investments		2,212	1,249
Dividends received from investments		1,525	132
Other income received from investments		284	—
Deposit and similar interest received		1,326	220
Investment management fees paid		(4,014)	(3,789)
Secretarial fees paid		(130)	(130)
Other cash payments		(631)	(457)
Net cash inflow/(outflow) from operating activities		572	(2,775)
Cash flow from investing activities
Purchase of investments		(19,352)	(11,051)
Proceeds on sale of investments		33,566	21,922
Proceeds on deferred consideration		1,171	266
Net cash inflow from investing activities		15,385	11,137
Cash flow from financing activities
Proceeds of fundraising		33,547	18,531
Expenses of fundraising		(599)	(473)
Repurchase of own shares		(5,755)	(9,234)
Equity dividends paid		(16,475)	(15,182)
Net cash inflow/(outflow) from financing activities		10,718	(6,358)
Net inflow of cash in the year		26,675	2,004
Reconciliation of net cash flow to movement in net funds
Increase in cash and cash equivalents for the year		26,675	2,004
Net cash and cash equivalents at start of year		19,525	17,521
Net cash and cash equivalents at end of year		46,200	19,525

Analysis of changes in net debt

	At 1 January  2023  £’000	Cash flow £’000	At 31 December 2023 £’000
Cash and cash equivalents	19,525	26,675	46,200

The notes on pages 89 to 106 of the Annual Report form part of these financial statements.

Notes

1. These are not statutory accounts in accordance with S436 of the Companies Act 2006. The full audited accounts for the year ended 31 December 2023, which were unqualified and did not contain statements under S498(2) of the Companies Act 2006 or S498(3) of the Companies Act 2006, will be lodged with the Registrar of Companies. Statutory accounts for the year ended 31 December 2023 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 December 2023. All investments held by the Company are classified as ‘fair value through the profit and loss’. Unquoted investments have been valued in accordance with IPEV guidelines. Quoted investments are stated at bid prices in accordance with the IPEV guidelines and Generally Accepted Accounting Practice.

3. Copies of the Annual Report will be sent to shareholders and can be accessed on the following website: www.foresightvct.com.

4. Net Asset Value per share
The Net Asset Value per share is based on net assets at the end of the year and on the number of shares in issue at that date.

	31 December	31 December
	2023	2022
Net assets	£219,119,000	£191,729,000
No. of shares at year end	255,218,477	219,151,944
Net Asset Value per share	85.9p	87.5p

5. Return per share

	Year ended	Year ended
	31 December	31 December
	2023	2022
	£’000	£’000
Total return after taxation	16,476	12,702
Total return per share (note a)	6.9p	5.8p
Revenue return/(loss) from ordinary activities after taxation	3,075	(93)
Revenue return/(loss) per share (note b)	1.3p	(0.1)p
Capital return from ordinary activities after taxation	13,401	12,795
Capital return per share (note c)	5.6p	5.9p
Weighted average number of shares in
issue in the year (note d)	240,044,732	218,519,391

Notes:
a) Total return per share is total return after taxation divided by the weighted average number of shares in issue during the year.
b) Revenue return/(loss) per share is revenue loss after taxation divided by the weighted average number of shares in issue during the year.
c) Capital return per share is capital return after taxation divided by the weighted average number of shares in issue during the year.
d) The weighted average number of shares is calculated by taking the number of shares issued and bought back during the year, multiplying each by the percentage of the year for which that share number applies and then totalling with the number of shares in issue at the beginning of the year.

6. Annual General Meeting 
The Annual General Meeting of the Company will be held at the offices of Foresight Group LLP, The Shard, 32 London Bridge Street, SE1 9SG on 4 June 2024 at 2.00pm. Details will be published on both the Company’s and the Manager’s website at www.foresightvct.com.

7. Income

	Year ended	Year ended
	31 December	31 December
	2023	2022
	£’000	£’000
Loan stock interest	2,237	1,184
Dividends receivable	1,525	132
Deposit and similar interest received	1,326	220
Other income	284	—
	5,372	1,536

8 Investments held at fair value through profit or loss

	31 December	31 December
	2023	2022
	£’000	£’000
Unquoted investments	171,348	169,775
		£’000
Book cost as at 1 January 2023		103,766
Investment holding gains		66,009
Valuation at 1 January 2023		169,775
Movements in the year:
Purchases at cost		20,342
Disposal proceeds1		(33,566)
Realised gains²		13,402
Investment holding gains3		1,395
Valuation at 31 December 2023		171,348
Book cost at 31 December 2023		103,944
Investment holding gains		67,404
Valuation at 31 December 2023		171,348

1. The Company received £33,566,000 (2022: £21,922,000) from the disposal of investments during the year. The book cost of these investments when they were purchased was £20,164,000 (2022: £8,981,000). These investments have been revalued over time and until they were sold, any unrealised gains or losses were included in the fair value of the investments.
2. Realised gains in the Income Statement include deferred consideration receipts from Accrosoft Limited (£13,000), Datapath Group Limited (£292,000) and Mowgli Street Food Group Limited (£824,000), and completion proceeds received from Datapath Group Limited (£39,000) and Protean Software Limited (£3,000).
3. Investment holding gains in the Income Statement include the deferred consideration debtor increase of £1,438,000. The debtor movement reflects the recognition of amounts receivable from Datapath Group Limited (£1,170,000) and Mowgli Street Food Group Limited (£1,647,000), offset by receipts from Accrosoft Limited (£13,000), Datapath Group Limited (£292,000) and Mowgli Street Food Group Limited (£824,000). The Codeplay Software Limited debtor increased due to its foreign exchange movements (£100,000), and provisions have been made against balances potentially due from Ixaris Systems Ltd (£40,000), FFX Group Limited (£70,000) and Mologic Ltd (£240,000).

9. Related party transactions
No Director has an interest in any contract to which the Company is a party other than their appointment and remuneration as Directors.

10.Transactions with the Manager
Foresight Group LLP was appointed as Manager on 27 January 2020 and earned fees of £4,018,000 during the year (2022: £3,499,000). A performance incentive fee of £1,467,000 was also accrued at 31 December 2023. Further details are included in note 13 of the Annual Report.

Foresight Group LLP is the Company Secretary (appointed in November 2017) and received accounting and company secretarial services fees of £130,000 (2022: £130,000) during the year. At 31 December 2023, the amount due to Foresight Group LLP was £4,000 (2022: £nil).

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

END

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