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Chairman’s Statement
I Summary
• Net asset value per Ordinary Share as at 31 August
2008 was 104.4p (compared to 110.2p as at
29 February).
• An interim dividend of 5.0p per share dividend will be
paid on 19 December 2008.
• Two new investments totalling £500,000 were made in
Lynwood Group Holdings Limited (£250,000) and
Silvigen Limited (£250,000).
• Proceeds of £2,103,110 were realised from two
investments: £1,952,800 from the sale of Utarget and
a further £150,310 from the ongoing realisation of
Casella Group’s assets.
• As a result of the Linked Offer, Foresight 4 VCT raised
gross proceeds of £1,979,376 as at 30 April 2008
when the offer closed.
• The Company made seven follow-on investments
totalling £1,311,961: Closed Loop London (£503,333),
Advanced Visual Technology (£300,000), O-Gen
(£210,000), The Bunker Secure Hosting (£118,700),
Global Immersion (£66,670), Vectorcommand
(£60,000) and Oled-T (£53,258).
• The Company continues to exceed the 70%
requirement for investment in Qualifying Holdings as
set by HM Revenue & Customs.
I Portfolio Review
During the six months under review, stock markets
continued to experience adverse conditions primarily as a
result of the unprecedented difficulties in the US and UK
banking sectors and the resulting effect this had on both
businesses and consumers. These financial difficulties
when combined with volatile commodity prices,
principally due to record prices for oil and gas as well as
increased food prices have resulted in a particularly
difficult backcloth for trading for many sectors of the
economy. Whilst this market turmoil has not materially
affected the unquoted holdings within our investments,
several investments have suffered indirectly as a result of
the fallout from uncertain trading conditions. Against this
background your Company’s net asset value has fallen to
104.4p per share from 110.2p per share six months
Peter Dicks
Chairman
Half-yearly Financial Report for the six months ended 31 August 2008
01
earlier, as a result of fair value adjustments against
companies whose results were poorer than expected.
After several years of building revenues and investment in
product development, Eqos has had a difficult 2008 as
customers delay capital expenditure on large software
systems. The company is considering moving from large
one-off sales to a subscription usage model for its
software to counter the current downturn in trading.
This would require additional funding as the subscription
usage model would take some time to build up.
OLED-T has not made 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 had originally been envisaged or
to support further investment. The company has recently
sold its IPR assets to chemical company Merck and is in
administration and being wound up. As a result Foresight 4
has provided in full against the value of this investment.
Despite the difficult trading conditions, the performance of
a number of portfolio companies continues to improve,
reflecting growing demand and strong sales pipelines,
most notably Adeptra, Datapath, Probability, Infrared
Integrated Systems (IRISYS) and Ixaris. Adeptra is enjoying
growing sales for its automated alert services, in particular
winning more contracts from major financial institutions in
the USA, UK and now Europe. Adeptra achieved sales of
£5 million in the 6 months to 30 June 2008 and EBITDA of
£278k. Datapath achieved profits in excess of £2.5 million
for the year ended 31 March 2008 and is on track for
another very profitable year to 31 March 2009. Probability
recently announced its annual results which showed a
152% increase in revenues, a doubling of its customer
base to 414,000 and monthly profitability towards the end
of the current year. Probability is forecasting that its next
financial year to 30 June 2009 will show, in aggregate, a
profit for the full year. IRISYS core footfall business
continues to grow and has recently closed a significant
contract with a large supermarket chain.
Ixaris’s sales progress has continued throughout the
seven months of the current year showing an increase of
over 180% on the previous year as well as achieving a
reduction in underlying losses. The company is focusing
on growing its sales team to continue its recent progress
and diversify into new markets.