TIDMFSG
RNS Number : 1062S
Foresight Group Holdings Limited
12 July 2022
LEI: 213800NNT42FFIZB1T09
12 July 2022
Foresight Group Holdings Limited
Full year results for the year ended 31 March 2022
Delivered on strategic targets in our first full year as a
public company with significant progress made post year end
Foresight Group Holdings Limited ("Foresight", "the Group"), a
leading infrastructure and private equity manager with a
long-established focus on ESG and sustainability-led strategies, is
pleased to announce its results for the year ended 31 March 2022
("FY22").
STRATEGIC AND FINANCIAL HIGHLIGHTS
Achieving on all four of our strategic targets:
-- 23% increase in Assets under Management ("AUM") to GBP8.8 billion,
in line with our ambitious target of 20-25% annual growth in
AUM; 30% increase in Funds under Management ("FUM") to GBP6.7
billion
-- High quality recurring revenues comprised 87% of total revenue,
comfortably within our 85-90% target range
-- 37% core EBITDA pre-Share Based Payments ("SBP") margin delivered
through a combination of strong revenue growth and cost discipline,
well on track to meet our 43% medium term target
-- Final dividend of 9.8p , supported by a robust closing cash
position; the resulting 13.8p total dividend per share is in
line with our 60% target payout ratio
Key Financial Metrics 31 March 2022 31 March 2021 Change
---------------------------------- ------------- ------------- --------
Year-end AUM (GBPm) 8,839 7,193 +22.9%
Year-end FUM (GBPm) 6,675 5,132 +30.1%
Total Revenue (GBPm) 86.1 69.1 +24.6%
Recurring Revenue (% of Total) 86.9% 90.3% -3.4 pts
Core EBITDA pre-SBP [1] (GBPm) 31.8 23.9 +33.1%
Core EBITDA pre-SBP(1) margin (%) 37.0% 34.6% +2.4 pts
Earnings per Share (p) 23.2p 14.9p +8.3p
Dividend per Share (p) 13.8p 1.7p +12.1p
---------------------------------- ------------- ------------- --------
Operational Highlights
The significant FY22 AUM and revenue growth delivered across all
three of Foresight's business divisions reflects the excellent
progress made by the Group towards achieving our strategic
objectives.
Infrastructure
-- Infrastructure AUM and revenue increased to GBP6.3 billion and
GBP50.8 million respectively (FY21: GBP5.4 billion and GBP43.4
million)
-- Significant and diverse fundraising achieved, including further
closes of the Foresight Energy Infrastructure Partners fund
which reached a total of EUR851.4 million (70% ahead of target)
and the successful listing of our dedicated UK forestry fund,
Foresight Sustainable Forestry Company ("FSFC")
-- Investment into core asset classes, including forestry and fibre
networks, while expanding into new and adjacent assets such
as geothermal energy, pumped hydro, interconnectors and hydrogen.
Largely achieved through further investment in development platforms
which involve moderate initial deployments with substantial
opportunities for further future deployments
-- FY22 deployment figures reflect the investment in development
platforms, with 41 transactions at a total value of GBP484 million
coupled with substantial future deployment rights of GBP427
million, giving a total of GBP911 million (FY21: 46 transactions,
GBP595 million deployed, future deployment rights of GBP47 million)
Private Equity
-- Private equity AUM and revenue increased to GBP0.9 billion and
GBP23.9 million respectively (FY21: GBP0.7 billion and GBP18.2
million)
-- GBP216 million raised across regional private equity strategies
-- GBP81 million deployed across 53 equity transactions (FY21:
GBP59 million deployed across 41 equity transactions)
-- Strong performance by the Group's first North West fund (FRIF)
exceeded expectations, generating performance fees in FY22 and
already delivering a gross cash return of 1.8x total fund cost
after three realisations with 14 portfolio companies remaining
Foresight Capital Management ("FCM")
-- FCM AUM and revenue increased to GBP1.6 billion and GBP11.4
million respectively (FY21: GBP1.1 billion and GBP7.5 million)
-- Net inflows and performance of GBP455 million in the year ended
31 March 2022. This includes GBP72 million of net inflows and
performance in Q4 FY22, a strong result given the challenging
market backdrop
-- Expansion of the OEIC offering in Q4 FY22 with the launch of
the award-winning FP Foresight Sustainable Future Themes Fund
Current Trading and Outlook
The Group delivered a resilient trading performance in the three
months to 30 June 2022, achieving AUM growth in line with our
annualised target despite challenges in listed market valuations.
This reflects the strength of Foresight's diversified approach with
both real assets and unquoted investments performing strongly.
-- AUM increased to GBP9.4 billion [2] , up 20% on the three months
to 30 June 2021 (GBP7.8 billion)
-- FUM increased to GBP7.2 billion(2) , up 27% on the three months
to 30 June 2021 (GBP5.7 billion)
-- Foresight's private equity AUM increased to over GBP1.2 billion
-- First close reached for the AIB Foresight Impact Fund launched,
our private equity team's first expansion outside the UK,
with a local office in Dublin due to open shortly
-- First close reached for two additional UK regional funds,
Foresight West Yorkshire SME Investment Fund and Foresight
Regional Investment IV, which will focus on the North East
and Yorkshire
-- Completed our first strategic acquisition post-IPO, with the
acquisition of the technology ventures division of Downing
LLP including the management of Downing's Venture Capital
Trusts and its Enterprise Investment Scheme to create a leading
ventures proposition
-- Having fully deployed the GBP130 million raised in its IPO,
FSFC successfully raised a further GBP45 million [3] in June
2022 which will be used to acquire further properties within
its imminent pipeline of forestry and afforestation assets
Bernard Fairman, Executive Chairman of Foresight Group Holdings
Limited, commented:
"I am delighted to report that Foresight's first full year as a
public company was highly successful and saw us deliver on the
promises we made when we listed in February 2021. Our financial
performance was ahead of our expectations set out at the time of
the IPO and we made significant progress towards achieving our
strategic priorities to grow, diversify and expand the
business.
Our expertise and track record enable us to access the
increasing number of high-quality investment opportunities in
rapidly growing markets across both public and private vehicles.
Although the decarbonisation of energy generation and the shift to
a more sustainable society is accelerating, these changes continue
to present multi-year opportunities for us. We are confident that
the outlook for Foresight in the coming year and beyond continues
to be very positive."
Analyst Presentation
A pre-recorded presentation will be available to view on the
Company's website (https://www.fsg-investors.com) on 12 July
2022.
This presentation will be played at the start of a webcast from
9.00 a.m. (UK time) on 12 July 2022 and be followed by live Q&A
for analysts hosted by Bernard Fairman (Executive Chairman) and
Gary Fraser (CFO and COO).
Those wishing to join should register via the following
link:
Register here
For further information please contact:
Foresight Group Investors Citigate Dewe Rogerson
Liz Scorer Caroline Merrell / Toby Moore
+44 (0) 7852 210329 / +44 (0) 7768
+44 (0) 7966 966956 981763
ir@foresightgroup.eu caroline.merrell@citigatedewerogerson.com
/
toby.moore@citigatedewerogerson.com
------------------------- -----------------------------------------
About Foresight Group Holdings Limited
Foresight Group was founded in 1984 and is a leading listed
infrastructure and private equity investment manager. With a
long-established focus on ESG and sustainability-led strategies, it
aims to provide attractive returns to its institutional and private
investors from hard-to-access private markets. Foresight manages
over 330 infrastructure assets with a focus on solar and onshore
wind assets, bioenergy and waste, as well as renewable energy
enabling projects, energy efficiency management solutions, social
and core infrastructure projects and sustainable forestry assets.
Its private equity team manages ten regionally focused investment
funds across the UK and an SME impact fund supporting Irish SMEs.
This team reviews over 2,200 business plans each year and currently
supports more than 200 investments in SMEs. Foresight Capital
Management manages four strategies across six investment vehicles
with an AUM of over GBP1.6 billion.
Foresight operates from 12 offices across six countries in
Europe and Australia with AUM of c. GBP9.4 billion as at 30 June
2022 [4] . Foresight Group Holdings Limited listed on the Main
Market of the London Stock Exchange in February 2021.
https://www.fsg-investors.com/
Disclaimer
Inside information
This announcement contains information, as that term is defined
in the UK version of the Market Abuse Regulation (Regulation (EU)
No 596/2014 of the European Parliament and of the Council of 16
April 2014), which is incorporated into English law by virtue of
the European Union (Withdrawal) Act 2018
Forward-looking statements
This statement, prepared by Foresight Group Holdings Limited
(the "Company"), may contain forward-looking statements about the
Company and its subsidiaries (the "Group"). Such forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "projects",
"estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
various or comparable terminology. Forward-looking statements
involve known and unknown risks, uncertainties, assumptions and
other factors which are beyond the Company's control and are based
on the Company's beliefs and expectations about future events as of
the date the statements are made. If the assumptions on which the
Group bases its forward-looking statements change, actual results
may differ from those expressed in such statements. There are a
number of factors that could cause actual results and developments
to differ materially from those expressed or implied by these
forward-looking statements, including those set out under
"Principal Risks" in the Company's annual report for the financial
year ended 31 March 2022. The annual report can be found on the
Company's website (www.fsg-investors.com). Forward-looking
statements speak only as of the date they are made. Except as
required by applicable law and regulation, the Company undertakes
no obligation to update these forward-looking statements. Nothing
in this statement should be construed as a profit forecast.
EXECUTIVE CHAIRMAN'S STATEMENT
Introduction
It is rarely the case that any business benefits from all its
divisions performing strongly at the same time, with an
accommodative policy background, but that is how we are positioned
right now. The diversity of Foresight's offering, with over 35
retail and institutional solutions, also provides a high degree of
resilience against changing market conditions and positions us well
for continued success.
This was our first full year as a public company and I am
delighted to report that it was highly successful, as we delivered
on the promises we made when we listed in February 2021. Our
financial performance was ahead of our expectations, reflecting the
quality of our business, and we achieved strong growth in AUM.
We also made excellent progress with implementing our strategic
objectives as we launched new funds, further diversified our
investor base, successfully deployed significant amounts of capital
into both infrastructure and private equity and expanded into new
asset classes. Following the year end we also completed our first
strategic acquisition post-IPO as described in Post year end events
below.
To support our growth, it is important to align our people
strategies with our strategic objectives. This year we have
strengthened and expanded our executive leadership team by adding
Ricardo Piñeiro (Co-Head of Infrastructure), Matt Smith and James
Livingston (Co-Heads of Private Equity) (subject to FCA
approval).
These promotions reflect the key contributions and impact each
of these individuals have made to our success to date and the depth
of management strength we have built at Foresight over the past 38
years. Their contribution to the executive leadership team will
enrich our business and shape the future of Foresight.
The Group is a key player in two markets that are growing
rapidly: worldwide renewable energy infrastructure and UK-based
regional private equity. Renewable energy infrastructure is being
driven by favourable economics, as well as the heightened focus on
energy security, following Russia's invasion of Ukraine.
This benefits both our infrastructure funds and our
sustainability -- orientated investment products within the
Foresight Capital Management division.
In Private Equity, the economic impact of the pandemic has
further increased the need for capital to flow to SMEs in the UK
regions, and our work here aligns with the government's agenda to
reduce regional inequalities and create new jobs. These macro
trends will present opportunities for Foresight for many years to
come.
Operational and financial highlights
The Group generated significant organic growth across our
international footprint during the year, resulting in an improved
competitive position. The substantial AUM growth we delivered
during the year, at GBP1.6 billion, reflect our position as a
player of increasing scale that is well positioned to take
advantage of growing markets.
AUM rose by c.23% to GBP8.8 billion (31 March 2021: GBP7.2
billion), with FUM up 30% to GBP6.7 billion (31 March 2021: GBP5.1
billion).
Revenues increased by 25% to GBP86.1 million (31 March 2021:
GBP69.1 million), largely driven by higher management fees as a
result of the growth in FUM. Recurring revenues were 86.9% of the
total, within our expected range of 85-90%. Total revenues include
performance fees, principally from one of our private equity funds
(Foresight Regional Investment Fund) which exceeded its performance
hurdles and our expectations.
Core EBITDA pre share-based payments grew 33% to GBP31.8 million
(31 March 2021: GBP23.9 million), reflecting the revenue increase
and the operational gearing inherent in the business. This resulted
in an associated margin of 37% (31 March 2021: 34.6%).
More information on our financial and operational performance
can be found in the Financial Review and Business Review sections
of our FY22 Annual Report.
Dividend
The Board targets a total dividend payout of 60% of profit after
tax, paying approximately one-third of the total dividend for the
year as an interim dividend and approximately two-thirds as a final
dividend. In line with this policy, we have declared a final
dividend of 9.8 pence per share. Combined with the interim dividend
of 4.0 pence per share, this gives a total in respect of the year
of 13.8 pence per share. The final dividend will be paid on 14
October 2022 based on an ex -- dividend date of 18 August 2022,
with a record date of 19 August 2022. Moving forward, the Board's
intention is that the interim dividend will represent 30% of the
prior year's total dividend.
People and culture
Foresight is a people business and we continue to build on our
people strategies to attract, retain, develop and engage with the
talented and ambitious people we employ. As we grow the business,
we look to give people increased opportunity to make a sustainable
impact, to achieve collective success working for one of the market
leaders and create relationships based on integrity. This year, we
have invested significant time in developing our employee value
proposition, which is covered in more detail on page 16 of our FY22
Annual Report within the investment case.
As the pandemic abated and allowed us to return to our offices,
we were proud to achieve our highest-ever employee engagement
score, at 83%. This reflects our focus on creating a sustainable
culture, where everyone who joins us is given the opportunity to
thrive.
Sustainability
Our belief is that sustainability and economics are interlinked
which means that first and foremost, the projects and companies we
invest in must generate attractive returns for our investors. Only
by achieving these returns will we be able to raise further capital
and continue to deliver important benefits to society. At the same
time, we believe that sustainable businesses are better businesses
and will deliver superior returns, particularly over the long term.
It is this combination of economics and sustainability that
underpins the culture we are so proud of at Foresight.
Our Infrastructure investments are playing a key role in the
transition to a low-carbon power system, while in Private Equity we
have a rigorous approach to helping investee companies manage their
approach to sustainability and ESG. We are also addressing our own
environmental performance, having offset our scope 1, 2 and 3
emissions(1) this year and initiated a plan to reach net zero by
2050.
In addition, we agreed an innovative collaboration with the Eden
Project in June 2022, which will start with the creation of a
nature recovery approach for Foresight. This will define how
businesses such as ours can respond to nature recovery, demonstrate
tangible positive outcomes for nature through our portfolio of
assets and engage with communities and stakeholders to create
action.
Further details on this exciting new partnership for the Group
can be found in our Sustainability section of the FY22 Annual
Report on pages 48 to 81, which also includes information on our
continued support for the UN Global Compact.
Post year end events
Following the year end we had further significant success in our
private equity fundraising activity with the launch of two new UK
regional funds and our first non -- UK fund in partnership with AIB
in Ireland.
We were also able to announce our first strategic acquisition
post-IPO with the acquisition of the investment mandates of
Downing's ventures businesses. These provide an excellent strategic
fit for Foresight, complementing our existing portfolio and adding
scale. This transaction represents a significant strategic step
and, in conjunction with the new funds, takes our private equity
AUM to over GBP1.2 billion.
Outlook
We have excellent positions and proven expertise in sustainable
infrastructure and UK regional private equity. The UK Government's
levelling up agenda, supporting business growth in the regions and
the growing demand for sustainable investments and OEIC products
are just two examples of the long-term structural trends in our
core markets that combine to create a rapidly growing opportunity
for Foresight, as evidenced by the recent expansion in our private
equity footprint.
In addition, we believe that the energy transition will affect
many sectors in addition to energy itself, including industry and
transport. We also expect increased appreciation of the importance
of natural capital, from more sustainable farming practices to the
critical role of forests, soil and oceans in tackling climate
change and promoting biodiversity. We will be launching new funds
to address these incredibly important markets soon.
While the decarbonisation of energy generation and the shift to
a more sustainable society are accelerating, these changes cannot
happen instantly and they present multi -- year opportunities
across our international footprint, which we remain committed to
expanding. We are therefore confident that the outlook for the
Group in the coming year and beyond continues to be very
positive.
1. Excluding category 15, emissions from investments.
BUSINESS REVIEW
Foresight's investment strategies are designed to generate
long-term investment returns that have a positive impact on the
world and create a sustainable legacy for future generations.
INFRASTRUCTURE
Market opportunity
The infrastructure market is characterised by powerful long --
term structural trends, in particular the transition to a low --
carbon energy system. We are also seeing increasing emphasis on
sustainable agriculture, aquaculture and natural capital, including
the role of forests, soil and oceans in sequestering carbon and
maintaining biodiversity.
-- Strong global decarbonisation and green recovery agendas
-- Energy security is a much greater priority for many governments,
following Russia's invasion of Ukraine
-- Sustainability-led investment is increasing across key markets
-- Investors increasingly attracted to uncorrelated returns offered
by sustainable infrastructure
Overview
As one of Europe's most established real assets investors, we
provide a complete end -- to -- end solution for retail and
institutional investors, from investment origination and execution,
including sourcing and structuring the transaction, to the ongoing
and active technical asset management of operating assets.
An important part of our approach is utilising our international
presence to access the best available markets at any given time and
originate new deals through established networks. Due to the
Infrastructure Team's extensive experience and track record,
Foresight is able to deploy and manage capital across a wide range
of infrastructure sectors at various stages of an asset's life,
from development, construction and operational. This creates
further investment opportunities and generates strong returns on
investment.
The asset management process focuses on operational performance,
asset optimisation, commercial management and useful life
enhancement, with the objective of generating sustainable long-term
asset operations and associated economic benefits.
As at 31 March 2022, Foresight Infrastructure had AUM of GBP6.3
billion. The portfolio comprised 337 infrastructure assets across
15 asset classes, with a total installed capacity of 3.1GW. This
included GBP4.0 billion of renewable generating assets in the UK,
Europe and Australia, with 2.6GW of capacity, as well as 572MW of
flexible generation and 11,385 hectares of forestry assets.
Sustainability at the heart of the investment process
To ensure that all Infrastructure investments meet our high
standards of sustainability and ESG-related performance, we
evaluate them using our Sustainability Evaluation Tool ("SET"). Our
SET provides an objective view of sustainability credentials and
performance through the use of recognised quantitative KPIs,
guiding our team to the areas that require the most attention. The
output from our SET forms an integral part of the investment
approval process at Foresight.
We score investments against key assessment parameters, across
five areas:
-- Sustainable development contribution: contribution towards decarbonisation
-- Environmental footprint: localised environmental impacts
-- Social engagement: role in the local communities
-- Governance: compliance with laws and regulations
-- Third-party interactions: supply chain sustainability
All KPIs are weighted based on internal prioritisation and
materiality assessments and scored from one to five. While we do
not have a minimum score against each assessment parameter, we aim
for all our assets to score at least an average of three out of
five after mitigation and be consistent with the sustainability and
ESG standards across the Foresight portfolio.
Once we have acquired an asset, our asset management team
monitors performance and continually investigates ways to improve
the asset's sustainability. During the year, we created a new
module for sustainability KPIs within our management system. This
allows us to centralise data on key environmental and social
metrics and analyse our performance.
Capital deployment and fundraising
Foresight Infrastructure performed very well during the year.
The team continues to position itself as a sustainability-led
partner for projects in the low-carbon energy generation and
enabling infrastructure, natural capital and social and core
infrastructure sectors.
We invested across a wide range of funds and across multiple
sectors and geographies. We invested further into our core asset
classes, including solar, wind and forestry, continued our rollout
of compressed natural gas fuelling stations and grew our footprint
in biomass, which enables 24/7 energy generation. We also invested
further in fibre networks in underserved communities, which will
help people gain access to services and support economic levelling
up.
The Infrastructure Team also expanded its investments into new
asset classes, such as geothermal energy, pumped hydro,
interconnectors and hydrogen, which are described in case studies
in the FY22 Annual Report on pages 29, 31 and 33. These
transactions have enabled us to develop platforms requiring
development capital, while giving us access to large, long-term
capital projects. As a result, we expect these asset classes to
become part of our core business, as we add scale through
diversification.
In total, we completed 41 transactions during the year,
committing GBP484 million of capital.
The transactions also incorporate substantial future deployment
rights totalling GBP427 million, to give a total potential
investment secured in the year of GBP911 million. This is a
significant increase on the total for FY21 of GBP642 million, which
comprised GBP595 million of deployment and GBP47 million of future
deployment rights, across 46 transactions.
Fundraising was strong during the year. Foresight Energy
Infrastructure Partners ("FEIP") completed its final close on 14
September 2021, securing total commitments of EUR851.4 million, 70%
over the original EUR500 million target. Including co --
investments to date of EUR170 million, this represents a total
capital pool in excess of EUR1 billion for Foresight's energy
transition strategy. Commitments were made by over 35 leading
institutional investors from the UK, Europe and North America.
In November 2021, Foresight Sustainable Forestry Company Plc
("FSFC") successfully listed on the London Stock Exchange, raising
gross proceeds of GBP130 million. This is the Group's first
investment vehicle dedicated to forestry and offers a different
economic profile to most listed funds, based on long -- term
capital growth and yield.
We also completed fundraises across a number of our existing
funds, including strong additional fund flows from retail
investors, who tend to generate relatively consistent inflows for
us throughout the financial year.
During the year we had one mandate transfer to another
investment manager, representing less than 3% of Foresight's
AUM.
Infrastructure market outlook
The sustainability transition
The overall transition to sustainable energy and infrastructure
can be categorised into three distinct phases, which frame the wide
range of opportunities resulting from it. These phases are shown in
the table below. We provide our institutional and retail investors
with access to investment opportunities that address these three
phases, as well as the broader core and social infrastructure
markets. As we leverage our expertise and grow the scale of our
investments in phases 2 and 3, they will increasingly become part
of our core asset classes, continuing our growth.
Phase 1: Phase 2: Phase 3:
------------------------------- -------------------------------------- ------------------------------------------------
Initial power transition Systemic power transition Wider sustainable transition
------------------------------- -------------------------------------- ------------------------------------------------
Phase 1 was characterised As power systems in Europe, In addition to energy,
almost entirely by renewables North America, China we need to address the
being added to power and elsewhere increasingly c.70% of emissions from
grids, with no particular decarbonise, there is other segments of the
need to upgrade systems more focus on taking global economy. Financing
to accommodate them. a systemic view of electricity decarbonisation of these
During this phase, renewables production. This particularly sectors is likely to
became a mature and highly relates to energy storage be more complex than
popular asset class for and grid flexibility, renewables but represents
institutional investors. and new power transmission a large opportunity for
Phase 1 continues to and distribution infrastructure. investors.
present significant investment This informs the strategy
opportunities for us of funds such as FEIP.
over the coming years.
------------------------------- -------------------------------------- ------------------------------------------------
Sectors of opportunity: Sectors of opportunity: Sectors of opportunity:
------------------------------- -------------------------------------- ------------------------------------------------
* Solar * Battery storage * Controlled environment food production (e.
g.
high-tech glasshouses, vertical farms or o
* Onshore and offshore wind * Offshore wind transmission links nshore fish
farms)
* Bioenergy * Interconnector cables
* Clean and advanced transport (e.g. sustain
able
* Hydro * Geothermal energy biofuels and electric vehicles)
* Pumped hydro * Industrial decarbonisation
* Electric vehicle charging * Hydrogen
* infrastructure
------------------------------- -------------------------------------- ------------------------------------------------
Market developments in FY22
During the period, there were a number of government and other
announcements that supported Foresight Infrastructure's aim to
decarbonise the energy system. These are summarised below:
-- In April 2021, the UK Government announced a more ambitious
climate change target, to reduce emissions by 78% by 2035 compared
to 1990 levels. This will take the UK more than three-quarters
of the way to reaching net zero by 2050. In the Balanced Net
Zero Pathway set out in the Carbon Budget, in-year capital investment
increases significantly during the 2020s and early 2030s, from
around GBP10 billion in 2020 to around GBP50 billion by 2030.
-- In July 2021, the European Commission unveiled its plan to meet
its target of reducing emissions by 55% by 2030, as a first
step towards carbon neutrality in 2050. The Commission proposed
to increase the binding target for renewable energy in the EU's
energy mix to 40%. To fund this, it is estimated that annual
investment in the European energy system will need to increase
by around EUR350 billion in the decade to 2030.
-- In November 2021, government officials from around the world
met at COP26 in Glasgow to discuss plans for tackling the climate
crisis. This included an agreement to end and reverse deforestation
by 2030, signed by countries covering 85% of the world's forests.
FSF intends to invest up to 10,000 hectares into afforestation
projects in its first year, contributing c.1/3rd of the annual
target of the UK Government.
More recently, Russia's invasion of Ukraine has caused a
significant increase in governments' focus on energy security,
particularly in Europe, where a number of countries are reliant on
Russian fossil fuels. This has given even greater momentum to
policy changes driving the transition to clean energy.
In April 2022, the UK Government published its energy security
strategy. In addition to measures to improve energy efficiency and
support investment in nuclear power and network infrastructure,
this included, among other things:
-- Increasing deployment of offshore wind by 25%, to deliver up
to 50GW by 2030
-- Targeting a five-fold increase in solar capacity by 2035
-- Setting an ambition for 10GW of hydrogen production by 2030
In May 2022, the European Commission presented its REPowerEU
plan, "to rapidly reduce dependence on Russian fossil fuels and
fast forward the green transition". Among a wide range of measures,
this included:
-- An EU Solar Strategy, to double solar photovoltaic capacity
by 2025 and install 600GW by 2030
-- Measures to integrate geothermal and solar thermal energy in
modernised district and communal heating systems
-- Tackling the slow and complex issue of permits for major renewable
projects
-- Targeting 10 million tonnes of domestic renewable hydrogen production
by 2030, with additional funding of EUR200 million for research
Delivering the objectives of REPowerEU requires additional
investment of EUR210 billion by 2027.
Elsewhere, the Australian general election in May 2022 is likely
to lead to a material change in the country's energy policy. The
victorious Labor Party's Powering Australia plan is intended to
stimulate AUSEUR76 billion of investment to provide cheaper
renewable energy. The plan targets an increase in the share of
renewable electricity to 83% by 2030.
The combination of the requirement to decarbonise the power
system, increase energy security and shift to a sustainable society
more generally means that Foresight Infrastructure's offering has
become even more valuable in the last year, across all the sectors
that we invest in. These changes will require growing amounts of
private capital to deliver public infrastructure projects and the
outlook for Foresight Infrastructure is therefore highly
positive.
PRIVATE EQUITY
Market opportunity
Foresight Private Equity has a UK regional focus, which we
believe is a key strength and differentiator. We target investment
in sectors with favourable long-term trends and structural growth
drivers. Investments cover a range of maturity profiles, from early
stage to more mature small companies. Annual revenues at portfolio
companies are typically in the GBP2 million to GBP20 million range,
although venture and seed investments can be into high tech, pre --
revenue companies, which include university spin -- outs.
-- Our analysis shows that more than 80% of all UK SMEs are based
outside London and the South East
-- Foresight's regional focus aligns with the UK Government's agenda
to invest in and grow regional economies outside London and
the South East
-- Foresight believes transactions requiring between GBP1 million
and GBP5 million are the least competitive and most attractive
in the UK private equity market, from a value creation perspective
-- The funding gap for SMEs has further widened in the aftermath
of COVID-19
-- Opportunities are increasing in the specialist lending market,
as SMEs look for alternatives to the high street banks for borrowing
Overview
Foresight Private Equity manages investments in 131 UK SMEs,
across a range of sectors. AUM at 31 March 2022 stood at GBP930
million, up 30% from GBP714 million at 31 March 2021.
We use a broad mix of product types to facilitate fundraising
from both institutional and retail investors, with 11 different
investment vehicles including Venture Capital Trusts, regional
institutional funds, Enterprise Investment Schemes and Inheritance
Tax Solutions.
ESG considerations are core to Foresight's investment management
approach. Our Private Equity Team makes sustainable growth
investments into SMEs that have the potential to create broad,
long-term ESG benefits through their operations and continuous
improvement.
We understand that many SMEs struggle to adopt ESG best
practices and we work in partnership with our portfolio companies
to put ESG principles at the heart of their decision making. This
improves performance, differentiates them from their competitors
and drives real value at the time of exit.
The Private Equity Team's approach to ESG is under continuous
review and development, with a view to making regular improvements
reflecting market best practice. The Private Equity Team reviews
investments across four Sustainable Development Goal aligned
Themes, to understand where each investment may have the greatest
impact:
-- Health
-- Research and Innovation
-- Quality employment at scale
-- Local infrastructure and the environment
The investment team then use five ESG principles to evaluate,
monitor and encourage portfolio companies to make improvements:
1. Awareness: ESG/sustainability issues on the agenda at board
meetings
2. Environmental: Environmental policies and track record
3. Social engagement: Community and stakeholder engagement
4. Governance: Policies and risk management
5. Third-party interactions: Supply chain transparency,
including modern slavery
Foresight Private Equity received ESG Champion of the Year at
the Growth Investor Awards 2021, reflecting its ongoing success
with driving ESG performance.
Performance
The Private Equity Team had another active year, with SMEs more
able to focus on their corporate strategies as the uncertainties
created by COVID-19 eased. In total, the team deployed GBP81
million across 53 equity transactions (FY21: GBP59 million deployed
across 39 businesses, through 41 equity transactions). Foresight
Private Equity also significantly increased its provision of
capital to specialist lenders to SMEs, investing GBP47 million in
the year, up from GBP13 million in FY21.
The funds deployed come from 13 vehicles of which 11 continue to
make new investments and cover a wide variety of sectors and
investment types. All our funds are making good progress with
deployment, investing capital at the rate we expected, and our
strong exit returns track record was further enhanced. This
supports both our earnings and our ability to raise further money
in the future.
During the year, the Private Equity Team completed successful
realisations from both retail and institutional funds. Notable
examples include:
-- Mologic, a health diagnostics company providing contract research
services for clients and developing its own range of proprietary
point-of-care diagnostics products. The company was sold to
Global Access Health, a not -- for -- profit company financed
by the Soros Economic Development Fund, returning 3.1x to Foresight
funds, inclusive of expected deferred consideration.
-- Poppy & Jacks, a nursery chain, was sold to national chain Kids
Planet Day Nurseries, returning 2.5x the initial investment.
-- DA Languages, a Manchester -- based business providing translation
and interpretation services.
Following the DA Languages disposal, and supported by the two
previous strong exits, the Foresight Regional Investment Fund LP
("FRIF") has already delivered a gross cash return of 1.8x total
fund cost, with 14 portfolio companies remaining. FRIF is based in
the North West and was the first in a series of regional investment
funds for Foresight, with different geographic remits across the UK
(see Fundraising).
During the year, portfolio companies have had to continue to
adapt to challenges stemming from COVID-19 and the Brexit
transition, including disruptions to supply chains which are
leading to longer lead times for certain goods and inflationary
pressures. At the same time, so far portfolio companies are
generally proving able to maintain their gross margins through
price increases, while some leisure and industrial companies are
currently benefiting from the substantial pent-up demand caused by
the COVID-19 shutdowns.
Our analysis of the portfolio has shown very limited direct
impact of the Russia-Ukraine war on our portfolio companies.
However, all businesses will face the indirect impact of increasing
inflation, including energy costs, over the coming months.
As a result of these economic conditions, we have encouraged
companies to closely monitor cost pressures in the supply chain and
to implement long-term pricing strategies, ensuring they have plans
to manage a variety of future inflation scenarios.
Fundraising
In the retail funds market, Foresight VCT plc and Foresight
Enterprise VCT plc launched offers for subscription during the
year. At the date of this report, these offers had raised
approximately GBP24 million, with the Foresight Enterprise VCT
offer for subscription remaining open.
In May 2021, Foresight held the first close of its latest
regional private equity fund, the North West-focused Foresight
Regional Investment Fund III LP. The Fund raised an initial GBP66
million from institutional investors, exceeding the size of the
previous Foresight fund focused on this region, and increased to
GBP83 million with a second close post year end. The Greater
Manchester Pension Fund is the cornerstone investor, with support
from Clwyd and Merseyside Pension Funds. Like its predecessor, the
Fund is targeting investments in established SMEs valued at up to
GBP30 million in North West England, North Wales and beyond. This
is the third fund in the series of regional investment funds,
following the initial North West fund and a second fund focused on
the East of England.
Post period end
Since the end of the financial year, we have announced our
appointment by Allied Irish Banks ("AIB") to manage a new equity
fund which will support SMEs across Ireland. AIB will be a
cornerstone investor in the fund, which aims to stimulate job
creation and deliver a more sustainable future. The fund will
typically provide equity investments of EUR2 million to EUR5
million and should close imminently, subject to customary
regulatory approvals.
AIB has signed an initial commitment of EUR30 million to the
fund, which will target a total raise of EUR75 million over time.
Foresight will shortly open an office in Dublin to support the
delivery of the fund and is actively seeking investment
opportunities. This is our first expansion into Ireland and the
first fund outside the UK for the Private Equity Team. The fund is
positioned to benefit from Foresight's breadth of experience across
both private equity and infrastructure, leveraging their
specialisms to deliver attractive risk -- adjusted returns to its
investors.
We had further significant success in our fundraising activity
with the launch of two new UK regional funds covering the North
East, Yorkshire and West Yorkshire regions. These strategically
important funds will support the establishment of new offices in
Leeds and Newcastle.
We were also able to announce the acquisition of the investment
mandates of Downing's ventures businesses, which provide an
excellent strategic fit for our business, complementing our
existing ventures portfolio and adding scale. The transaction
represents a significant strategic step and, in conjunction with
the new funds, takes our private equity AUM to over GBP1.2
billion.
Private equity market outlook
The UK remains an excellent place to start, scale and sell a
business, with broad pools of talent and an entrepreneurial
culture. Our analysis shows that more than 80% of the UK's SMEs are
outside London and the South East, presenting a significant base of
potential investments for us. The markets we target have varying
levels of competition and we continue to be a leader in the
provision of capital in those markets, particularly for sub-GBP5
million investments.
The government remains supportive of driving investment in
businesses throughout the UK regions, through the British Business
Bank among other mechanisms. The Chancellor of the Exchequer has
also encouraged local government pension schemes to invest more
locally, although it remains to be seen if this will lead to
greater activity.
The equity gap we fill with our investments remains firmly in
place and has only been increased by COVID-19. Forward-thinking
companies that used government support during the pandemic, which
was primarily in the form of debt, are now looking to raise equity
to strengthen their balance sheets ahead of expansion. New
investments will be well positioned to benefit from the growth
phase of the next economic cycle. SMEs are also looking for
alternatives to the high street banks for borrowing, increasing the
potential for us in the specialist lending market.
We also see many corporates and large private equity investors
looking to deploy capital. This means the M&A market for SMEs
remains open and we have a promising pipeline of potential
exits.
Foresight Capital Management
Market opportunity
There is growing demand, both in the UK and internationally, for
retail and institutional investors to be able to access
sustainability -- oriented investment products that hold listed
securities. FCM has a differentiated approach to this market, being
able to draw on the Group's experience in investing in private
markets through Foresight's Infrastructure and Private Equity
divisions, and apply those skills and knowledge to investing in
public markets. This gives FCM capabilities that are hard to
replicate.
-- Raised net inflows into all our strategies, pointing to strong
demand for our open ended funds
-- International investors also increasingly demanding access to
sustainable investment strategies
-- Opportunity for FCM to launch further investment vehicles to
provide access to its existing strategies
-- FCM's platform is scalable and has significant capacity for
further growth in AUM
-- Potential to target a wider range of investors, in addition
to the current focus on IFAs and wealth managers
Overview
FCM has a team of nine investment professionals, who follow an
active, hands-on investment process. The team is highly focused on
the underlying assets and regularly visits companies around the
world, reflecting its global investment remit. As a
sustainability-led investor, FCM has a clear view of the speeds at
which different sectors in different geographies are addressing
sustainability risks and opportunities. The investment approach is
bottom-up and conviction-based, allowing FCM to invest in the best
opportunities, wherever it finds them.
FCM primarily distributes its products through intermediaries,
principally independent financial advisers ("IFAs"), wealth
managers and private banks. The division works to develop strong
relationships with these intermediaries, aiding capital retention
and making these assets less volatile than is often seen with
direct-to-consumer distribution.
At 31 March 2022, FCM had GBP1.6 billion of AUM, up 43% during
the year (31 March 2021: GBP1.1 billion). This reflected robust
inflows during the year and the benefit of investment
performance.
FCM has dedicated internal resource focused on sustainability
due diligence and analysis. Several of FCM's strategies are aligned
with a bespoke sustainable investment policy, which alongside
active engagement with investee management helps to ensure we vote
in a manner that is consistent with widely accepted ESG practices.
If an investment fails to meet our sustainable investment criteria
and that company chooses not to engage, we will consider
divestment.
Investment strategies and funds
FCM offers four investment strategies, which clients can access
through five UK and one Luxembourg domiciled fund:
Strategy Funds Investment focus
---------------------- ------------------------------ -----------------------------------------------
Foresight FP Foresight UK Infrastructure Harnesses Foresight's infrastructure
UK Infrastructure Income Fund ("FIIF") investment expertise and taps into the
demand for low-volatility, predictable
inflation-linked income. Launched in
2017, the strategy has grown to total
net assets of GBP780.9 million at 31
March 2022. The portfolio comprises listed
companies active across renewable energy,
core infrastructure and real estate,
with a UK focus.
---------------------- ------------------------------ -----------------------------------------------
Foresight FP Foresight Global Real Invests in the publicly traded shares
Global Infrastructure Infrastructure Fund ("GRIF") of companies located in developed economies,
VAM Global Infrastructure which own or operate real infrastructure
Fund ("VAM") or renewable energy assets anywhere in
Foresight Global Real the world. With a growth -- focused investment
Infrastructure (Lux) Fund objective, the strategy was launched
("Foresight SICAV") in June 2019 and has grown its total
net assets to GBP679.3 million at 31
March 2022.
---------------------- ------------------------------ -----------------------------------------------
Foresight FP Foresight Sustainable This strategy was launched in June 2020
Sustainable Real Estate Securities to provide investors with exposure to
Real Estate Fund ("REF") a highly liquid and globally diversified
portfolio of Real Estate Investment Trusts.
Given the lack of OEICs in the UK that
are addressing both sustainability and
real estate, REF is a highly differentiated
strategy which has delivered both strong
returns and low-risk characteristics
since launch. As at 31 March 2022, the
strategy's total net assets were GBP144.5
million.
---------------------- ------------------------------ -----------------------------------------------
Foresight FP Foresight Sustainable This strategy was launched in March 2022.
Sustainable Future Themes Fund More information can be found in the
Future Themes case study on page 45 of the FY22 Annual
Report.
---------------------- ------------------------------ -----------------------------------------------
Performance
This was a transformational year for FCM. In addition to
achieving a material increase in AUM, the division built a platform
for future growth, with the launch of a new investment strategy and
new funds, the diversification of its sources of capital through
the sub-advisory mandate with VAM (see below) and investment in its
team.
Against a backdrop of challenging markets, in which equity funds
as an asset class saw net outflows, FCM achieved total net inflows
and performance of GBP455 million, with net inflows across each of
its funds. Retail fundraising delivered net inflows of GBP455
million and in addition GBP25 million was raised into VAM by its
distribution team.
At the start of the year, FCM had three established UK OEICS -
FIIF, GRIF and REF. All three remain on track to deliver their
investment objectives, with positive total returns during the year
and since inception.
Fund Inception date 12-month TSR TSR since inception
----- ---------------- ------------ -------------------
FIIF 4 December 2017 10.65% 41.38%
GRIF 3 June 2019 7.51% 47.14%
REF 15 June 2020 19.54% 25.67%
----- ---------------- ------------ -------------------
Investment performance during the year added GBP94 million to
FCM's AUM, resulting in a total increase in AUM across the year of
GBP455 million.
New fund launches
In June 2021, Foresight announced the launch of the VAM Global
Infrastructure Fund, a Luxembourg UCITS V Fund, through a new
partnership with VAM Funds, a Luxembourg-based fund management
company. FCM has been appointed the fund's investment manager and
the fund is being distributed in Europe, South Africa, Singapore
and the Middle East, through VAM Funds' established global
distribution platform. The fund gives investors in these
geographies access to FCM's Global Infrastructure strategy. The
partnership has already delivered positive net inflows of GBP24.7
million since launch. Investors in VAM have included clients in
South Africa and the Middle East, where Foresight has not
previously raised retail capital.
In November 2021, FCM launched a new Luxembourg-domiciled SICAV
with UK tax reporting status. This will initially provide investors
with access to the Global Infrastructure investment strategy. The
medium -- term growth strategy includes adding further strategies
to the SICAV, such as Sustainable Real Estate Securities. The SICAV
has generated inflows from international investors, following our
initial focus on offshore jurisdictions such as the Channel Islands
and the Isle of Man, and we are planning to target Europe and other
geographies during FY23.
In March 2022, FCM launched a new investment strategy,
Sustainable Future Themes, and a new UK OEIC, the FP Foresight
Sustainable Future Themes Fund.
FCM expands into sub-advisory market
In June 2021, following a competitive selection process, FCM was
appointed as the Investment Adviser to the VAM Global
Infrastructure Fund ("the VAM Fund"), a Luxembourg SICAV managed by
global fund management group VAM Funds. The VAM Fund reflects FCM's
Global Real Infrastructure strategy and receives the same
investment resource and portfolio management resource as
Foresight's UK-domiciled vehicle. The VAM Fund provides IFAs,
wealth managers and other investors in global markets with the
ability to allocate to a differentiated portfolio of real asset
owning infrastructure, renewables and real estate companies.
Multi-decade investment themes driving the energy transition,
societal resilience and infrastructure renewal are all addressed
through the VAM Fund, and strong early fundraising suggests
appetite from investors.
VAM Funds is a Luxembourg-based fund manager with global
distribution capabilities that have extended FCM's strategies into
markets such as South Africa, Europe and Asia. As at 31 March 2022,
the VAM Fund had grown to net assets of GBP33 million with strong
potential for further growth as VAM Funds continue to expand their
own distribution capability. Sub-advisory represents an efficient
and scalable channel for FCM to further grow assets, particularly
where distribution markets are unlocked in geographies where
Foresight Group has not been historically active.
FCM market outlook
The outlook for FCM is highly positive. There is growing demand
for OEICs in the UK and the launch of VAM and the Foresight SICAV
during the year have opened up new international sources of
institutional and retail investment. The business is highly
scalable, with the Global Infrastructure, Sustainable Real Estate
and Sustainable Future Themes strategies each having the potential
to reach in excess of GBP1 billion of AUM. FCM has invested in its
business during the year to ensure it has the capacity to
successfully manage its growth, which it expects to lead to rising
profit margins, reflecting the operational gearing in its business
model.
FCM also has scope to broaden its distribution. Having to date
focused on IFAs and wealth managers, we see good potential for
distributing our funds through private banks and to family offices,
as well as establishing a greater presence in direct-to-consumer
sales, as the Foresight brand becomes increasingly recognised.
FINANCIAL REVIEW
Building on the Group's enhanced profile following our IPO in
February 2021, the business increased AUM, revenue and Core EBITDA
year-on-year, in line with our expectations.
Key financial metrics
31 March 31 March
2022 2021
------------------------------------------------ -------- --------
Year-end AUM (GBPm) 8,839 7,193
Year-end FUM (GBPm) 6,675 5,132
Average AUM (GBPm) 8,108 6,547
Average FUM (GBPm) 6,015 4,691
Total revenue (GBP000) 86,071 69,098
Recurring revenue (GBP000) 74,825 62,379
Recurring revenue/total revenue (%) 86.9% 90.3%
Core EBITDA pre share-based payments (GBP000) 31,825 23,910
Core EBITDA pre share-based payments margin (%) 37.0% 34.6%
------------------------------------------------ -------- --------
Highlights during the year
-- May 2021 - Achieved first close on Foresight Regional Fund III
at GBP66 million
-- September 2021 - Reached final close on FEIP at EUR851.4 million,
exceeding target by 70%
-- November 2021 - Successful IPO of Foresight Sustainable Forestry
Company
-- December 2021 - Performance fee generated following successful
first three exits from FRIF
-- March 2022 - GBP0.6 billion of net retail inflows achieved,
in line with prior year
Summary
The year ended 31 March 2022 was another successful period for
the Group. We achieved the AUM and recurring revenue targets we
outlined at IPO; continued our progression towards our medium-term
Core EBITDA pre share -- based payment ("SBP") margin target; and,
subject to Shareholder approval at the forthcoming AGM, will
continue with the 60% dividend payout ratio established in last
year's Annual Report.
Revenue for the year was GBP86.1 million (31 March 2021: GBP69.1
million) with total comprehensive income of GBP24.9 million (31
March 2021: GBP14.9 million), an increase of 68%. Further details
on the key areas that have driven this financial performance are
outlined below.
Assets Under Management/Funds Under Management ("AUM/FUM")
AUM again grew significantly, from GBP7.2 billion at the start
of the year to GBP8.8 billion at 31 March 2022, an increase of
c.23% in the middle of our ambitious 20%-25% target range. We
achieved this substantially through organic growth driven by net
retail inflows of GBP0.6 billion, net institutional inflows of
GBP0.3 billion and favourable fund performance of GBP0.7
billion.
Net inflows
Our Retail Sales Team, which distributes our VCT, EIS, Business
Relief and OEIC products, had another successful year of
fundraising, with total net inflows of GBP0.6 billion, of which
GBP0.4 billion related to our OEIC products. Net inflows from our
OEIC products were impacted in the final quarter of the year by
wider macroeconomic factors resulting from the conflict in Ukraine,
but our tax-based products mitigated this by performing strongly in
the run-up to the tax year end, again demonstrating the advantage
of managing a diverse pool of funds.
On the institutional side, we benefited from closes from our
FEIP and FRIF III institutional funds in H1, as highlighted in our
Half-year Report, as well as the IPO of our new Forestry fund in
October 2021 (GBP0.1 billion) and the acquisition of the other 50%
of our JV in Italy (GBP0.1 billion). This was offset by a
non-strategic mandate moving to a different fund manager towards
the end of the year (GBP0.2 billion).
Post year end, we announced the launch of the AIB Foresight
Impact Fund, broadening our regional Private Equity strategy into a
new geography, Ireland. This fund will provide equity investments
of between EUR2 million and EUR5 million, supporting Irish
businesses to contribute to a more sustainable, low carbon future.
We also announced the first close of two further UK regional funds
in the North East and Yorkshire regions, totalling GBP58
million.
Summary Statement of Comprehensive Income
31 March 31 March
2022 2021
GBP000 GBP000
----------------------------------------------------------------------------- -------- --------
Revenue 86,071 69,098
Cost of sales (5,106) (4,639)
----------------------------------------------------------------------------- -------- --------
Gross profit 80,965 64,459
Administrative expenses (54,398) (48,883)
Other operating income 250 394
----------------------------------------------------------------------------- -------- --------
Operating profit 26,817 15,970
Finance income and expense (651) (707)
Fair value gains on investments 638 192
Share of post-tax profits of equity accounted joint venture 53 26
Gain on business combination 1,012 174
----------------------------------------------------------------------------- -------- --------
Profit on ordinary activities before taxation 27,869 15,655
Tax on profit on ordinary activities (2,793) (481)
----------------------------------------------------------------------------- -------- --------
Profit 25,076 15,174
Other comprehensive income
Translation differences on foreign subsidiaries (138) (293)
----------------------------------------------------------------------------- -------- --------
Total comprehensive income 24,938 14,881
----------------------------------------------------------------------------- -------- --------
Core EBITDA calculation
Total comprehensive income 24,938 14,881
Adjustments:
Non-operational staff costs 728 3,186
Non-operational legal costs - 2,744
Profit on disposal of tangible fixed assets and gain on business combination (979) (344)
Other operating income (250) (394)
Finance income and expense 651 707
Tax on profit on ordinary activities 2,793 481
Depreciation and amortisation 3,485 2,649
----------------------------------------------------------------------------- -------- --------
Core EBITDA 31,366 23,910
Share-based payments 459 -
----------------------------------------------------------------------------- -------- --------
Core EBITDA pre share-based payments(1) 31,825 23,910
----------------------------------------------------------------------------- -------- --------
1. In line with previous periods, and for comparability, we
continue to quote Core EBITDA pre-SBP to assess the financial
performance of the business. This measure was introduced as our key
performance measure because the Group believes this reflects the
trading performance of the underlying business, without distortion
from the uncontrollable nature of the share-based payments charge.
This measure is a non -- IFRS measure because it excludes amounts
that are included in the most directly comparable measure
calculated and presented in accordance with IFRS. The specific
items excluded are non-underlying items, which are defined as
non-trading or one-off items where the quantum, nature or
volatility of such items are considered by the Directors to
otherwise distort the Group's underlying performance. While the
Group appreciates that APMs are not considered to be a substitute
for or superior to IFRS measures, we believe the selected use of
these provides stakeholders with additional information which will
assist their understanding of the business.
Segmental Core EBITDA pre share-based payments is set out
below:
31 March 31 March
2022 2021
GBP000 GBP000
----------------------------- -------- --------
Infrastructure 17,805 15,854
Private Equity 11,376 6,940
Foresight Capital Management 2,644 1,116
----------------------------- -------- --------
31,825 23,910
----------------------------- -------- --------
Revenue
31 March 31 March
2022 2021
GBP000 GBP000
----------------------------- -------- --------
Management fees 70,906 50,245
Secretarial fees 1,413 9,828
Directors' fees 2,506 2,306
----------------------------- -------- --------
Recurring fees 74,825 62,379
Marketing fees 5,046 2,841
Arrangement fees 2,964 3,858
Performance and other fees 3,236 20
----------------------------- -------- --------
Total 86,071 69,098
----------------------------- -------- --------
Total revenue increased by 25% year-on-year to GBP86.1 million
(31 March 2021: GBP69.1 million) with recurring revenue increasing
by 20% to GBP74.8 million (31 March 2021: GBP62.4 million). The
Group has continued to focus on recurring revenue and remained
within our 85%-95% target range, despite recognising some one-off
performance fee income, which is covered in more detail below. The
year finished with 86.9% of our revenue being classified as
recurring.
As a result of FUM growth, the largest increase year-on-year was
again from management fees. The growth in Foresight Capital
Management ("FCM") FUM to GBP1.6 billion at year end (31 March
2021: GBP1.1 billion) generated an additional c.GBP4 million of
gross revenue. NAV growth across our ITS, VCT, EIS and
infrastructure investment trusts resulted in c.GBP11 million of
additional management fees. The increase in ITS management fees was
partly offset by lower secretarial fees as a result of the fee for
that fund being restructured towards the end of FY21, as disclosed
in last year's Annual Report. The further closes on our FEIP fund
resulted in catch-up management fees of c.GBP1.7 million, while the
annualised impact of the PiP acquisition in August 2020 contributed
c.GBP1.1 million to the increase.
Marketing fees are the initial fees recognised as a percentage
of funds raised on our tax-based retail products. The increase
year-on-year reflects a return to business-as-usual for meetings
between our Retail Sales Team, financial intermediaries and their
clients.
Other fees in FY22 principally consisted of a performance fee
generated from our first North West regional fund, following a
successful exit from that portfolio during H2. As our Private
Equity regional strategy begins to mature, we expect to generate
further performance fees from successful exits in the medium term,
whilst still maintaining our 85%-90% recurring revenue target.
Cost of sales
Cost of sales comprises insurance costs associated with our
Accelerated ITS product and authorised corporate director costs
payable to a third party in relation to our OEIC products. The
increase reflects the continuing growth in FCM.
Administrative expenses
31 March 31 March
2022 2021
GBP000 GBP000
------------------------------ -------- --------
Staff costs 35,395 33,751
Depreciation and amortisation 3,485 2,648
Legal & professional 6,067 5,984
Other administration costs 9,451 6,5001
------------------------------ -------- --------
54,398 48,883
------------------------------ -------- --------
1. Adjusted for gain on business combination from PiP
acquisition (now disclosed on a separate line in the primary
statements).
Year-on-year, the overall cost base increased by c.11%. Our
largest expense, staff costs, increased by c.GBP1.6 million, due to
the annual pay review process, the implementation of the staff PSP
scheme and an increase in FTE of 26.1. This increase in FTE was
predominantly in the high-growth areas across the business: FCM as
our net inflows continue to increase and we launch new funds;
Infrastructure in line with our increase in AUM and the number of
assets in the portfolio; and Retail Sales, where we have expanded
the team to drive further inflows.
Legal & professional costs were in line with the prior year.
While the comparative figure included c.GBP2.3 m of one-off IPO
costs, this year included one-off costs of c.GBP2 million
associated with developing and launching new funds, such as our
listed Forestry fund which launched in November and the further
closes on FEIP.
The largest increase year-on-year was in Other administration
costs, which rose by c.GBP2.9 million primarily due to an increased
irrecoverable VAT charge. As with most financial services
businesses, we cannot recover all the VAT on our purchases because
some of our revenue streams are VAT exempt. The management fees
from FCM's OEIC funds are VAT exempt and their continued strong
growth has driven the increase in the irrecoverable VAT charge.
Also within Other administration costs, travel and entertainment
costs rose by c.GBP0.5 million as the UK COVID-19 restrictions were
relaxed, enabling our staff to return to face-to-face meetings with
investors and portfolio companies.
Core EBITDA pre share-based payments
The Group uses Core EBITDA pre share-based payments as one of
its key performance metrics, as it views this as the profitability
number that is most comparable to the Group's recurring revenue
model (i.e. a cash profit number after taking out any one -- offs,
both positive and negative).
Core EBITDA pre share-based payments increased 33% year-on-year
to GBP31.8 million (31 March 2021: GBP23.9 million), with the
margin percentage improving to 37.0% (31 March 2021: 34.6%) as we
continue our progression towards our medium-term target of 43%. The
margin percentage for the full year was slightly lower than the
38.3% reported at the half year, due to the timing of the FEIP
catch-up fees recognised in H1, one-off costs incurred on the
launch of our new Forestry investment trust and preparation of new
fund launches in H2, and a full six months of salary costs in H2
for staff who joined us in H1.
The Group has determined that the following are non-underlying
items for the purposes of calculating Core EBITDA pre share-based
payments:
Non-operational staff costs
The non-operational staff costs in the year relate to retention
payments made to key members of staff and a severance package for a
leaver.
The equivalent cost in the prior year related to pre-IPO profit
share for FY20. These distributions made to members were classified
as remuneration expenses under IFRS but were considered to be
equity transactions for the purposes of calculating Core
EBITDA.
Non-operational legal costs
There were no costs of this nature in the year ended 31 March
2022. The prior year figure included c.GBP2.3 million of IPO costs,
c.GBP0.2 million of redundancy costs and c.GBP0.2 million of legal
transaction costs.
Profit on disposal of tangible fixed assets and gain on business
combination
The Group had a 50% holding in FV Solar Lab SRL before it
acquired the remaining 50% in January 2022. The Group fair valued
the assets and liabilities of FV Solar Lab SRL on the date of
acquisition using the acquisition method, which gave rise to a
bargain purchase. This resulted in a credit being recognised in the
Statement of Comprehensive Income. In the prior year, there was an
equivalent gain on bargain purchase from the acquisition of PiP
Manager Ltd.
Other operating income
In the year ended 31 March 2022, the other operating income
arose from the final fee received in relation to the development of
a reserve power plant in Shirebrook, Derbyshire, on behalf of the
Foresight ITS product. This is considered non-core as it was a
non-recurring transaction outside the normal course of
business.
In the prior year, GBP46k related to grant income from the
Coronavirus Job Retention Scheme, with the remainder relating to
the first part of the development fee received from the Shirebrook
project described above.
Interest, tax, depreciation and amortisation
The major variance in these line items year-on-year relates to
tax. As noted in last year's Annual Report, historically, taxation
on the Group's profits was generally the personal liability of the
members of Foresight Group LLP, which generates the majority of the
Group's profits. Following the IPO, more of the Group's profits are
subject to corporation tax, as demonstrated by the charge
recognised in the period.
Share-based payments
The share-based payments charge in FY22 relates to the SIP and
PSP schemes implemented in the period. Please read more about our
SIP and PSP schemes in the remuneration report of our FY22 Annual
Report on pages 126 to 136.
Summary Statement of Financial Position
31 March 31 March
2022 2021
GBP000 GBP000
--------------------------------------------------------- -------- --------
Assets
Property, plant and equipment 2,656 3,012
Right-of-use assets 8,260 9,120
Intangible assets 4,431 3,012
Investments 2,781 2,326
Deferred tax asset 615 977
Contract costs 4,555 837
Trade and other receivables 21,207 19,881
Cash and cash equivalents 54,289 39,431
Net assets of disposal group classified as held for sale 64 64
--------------------------------------------------------- -------- --------
Total assets 98,858 78,660
--------------------------------------------------------- -------- --------
Liabilities
Trade and other payables (24,042) (20,939)
Loans and borrowings (3,690) (4,324)
Lease liabilities (10,408) (12,019)
Deferred tax liability (1,198) (1,581)
Provisions (933) -
--------------------------------------------------------- -------- --------
Total liabilities (40,271) (38,863)
--------------------------------------------------------- -------- --------
Net assets 58,587 39,797
--------------------------------------------------------- -------- --------
Key balance sheet items and their year-on-year movements are
summarised below:
Intangible assets
This comprises capitalised software development costs and other
intangibles recognised in relation to the management contract
acquired as part of the PiP acquisition in August 2020 and the
acquisition of the remainder of our JV with FV Solar Lab SRL in
January 2022.
Investments
This contains the Group's co-investment positions across our LP
funds, plus investments in joint ventures. The movement in the year
has been driven by deployment across our LP funds and is broken
down as follows:
31 March 31 March
2022 2021
GBP000 GBP000
----------------------------------------- -------- --------
Investment in securities
Foresight Energy Infrastructure Partners 571 423
Foresight VCT portfolio companies 458 296
Foresight Nottingham Fund 435 264
Italian Green Bond Fund 421 355
Foresight Regional Investment Fund 292 344
Midlands Engine Investment Fund 274 223
Foresight Regional Investment Fund II 118 76
Northern Ireland Opportunities Fund 85 23
Foresight Regional Investment Fund III 33 -
Northern Ireland Opportunities Fund II 30 -
Other 64 71
----------------------------------------- -------- --------
Investment in joint ventures
FV Solar Lab JV - 251
----------------------------------------- -------- --------
Total investments 2,781 2,326
----------------------------------------- -------- --------
Contract costs
The increase of GBP3.7 million is due to the incremental
placement agency fees on the further closes of FEIP in the year (as
explained further in note 18 to these accounts).
Cash and cash equivalents
The cash balance has increased due to positive cash generation
from a strong trading performance. Operating cash flows generated
cash of c.GBP29.1 million offset by tax payments of c.GBP3.4
million, interest on lease liabilities of GBP0.6 million, investing
activities of c.GBP0.8 million and financing activities of c.GBP9.4
million.
Investing activities included further co-invest payments of
c.GBP0.7 million although this was offset by proceeds of c.GBP0.7
million. There was an outflow of c.GBP0.5 million in relation to
the acquisition of assets and the net cash outflow on the
acquisition of FV Solar Lab SRL was c.GBP0.3 million.
Financing activities included c.GBP6.2 million of dividend
payments, c.GBP2.1 million of lease repayments, c.GBP0.6 million of
loan repayments and purchase of own shares of c.GBP0.5 million.
Loans and borrowings
This balance relates to founder loans taken on as part of the
consideration for the PiP acquisition in August 2020. The movement
in the year is due to the first annual payment made under that
agreement.
Lease liabilities
This relates to the liabilities arising from IFRS 16 lease
accounting. The year-on-year decrease is a result of lease
repayments offset by an increase in liability in relation to our
new office in Luxembourg.
Dividends
As noted in last year's Annual Report, the Board decided to
increase and maintain the dividend payout ratio at 60% (versus the
target of 50% moving to 60%, as outlined at IPO).
An interim dividend of 4.0 pence per share was paid on 25 March
2022, with an ex-dividend date of 10 March 2022 and a record date
of 11 March 2022.
As noted in the Executive Chairman's statement, the Board has
recommended a final dividend payment of 9.8 pence per share for
approval by Shareholders at the upcoming AGM. If approved, the
dividend will be paid on 14 October 2022, based on an ex-dividend
date of 18 August 2022, with a record date of 19 August 2022.
Going forward, we intend to link interim dividends to the
prior-year profits, paying out 30% of the total dividend from the
prior year. These interim dividends will be paid in January each
year. The balance of the 60% target will then be recommended to
Shareholders each year at the AGM as a final dividend.
Going concern
The financial statements have been prepared on a going concern
basis. In adopting this basis, the Directors have reviewed the
financial processes and controls embedded across the business and
examined the three -- year plan. They have considered the business
activities as set out on pages 24 to 47 of the FY22 Annual Report,
and the principal risks and uncertainties also disclosed in the
FY22 Annual Report on pages 102 to 105, and concluded that the
adoption of a going concern basis, covering a period of at least 12
months from the date of this report, is appropriate.
Outlook
The Group is well positioned to continue with further AUM,
revenue and profit growth, as we progress towards our medium-term
Core EBITDA pre-SBP margin target of 43%. Our strong balance sheet
puts us in a good position to be able to capitalise on any future
M&A opportunities that may arise, to supplement our recent
strong organic growth.
FINANCIAL STATEMENTs
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2022
31 March 31 March
2022 2021
as restated
Note GBP000 GBP000
------------------------------------------------------------ ---- -------- -----------
Revenue 4 86,071 69,098
Cost of sales (5,106) (4,639)
------------------------------------------------------------ ---- -------- -----------
Gross profit 80,965 64,459
Administrative expenses 6 (54,398) (48,883)
Other operating income 10 250 394
------------------------------------------------------------ ---- -------- -----------
Operating profit 26,817 15,970
Finance income 11 2 3
Finance expense 11 (653) (710)
Fair value gains on investments 16 638 192
Share of post-tax profits of equity accounted joint venture 17 53 26
Gain on business combination 31 1,012 174
------------------------------------------------------------ ---- -------- -----------
Profit on ordinary activities before taxation 27,869 15,655
Tax on profit on ordinary activities 12 (2,793) (481)
------------------------------------------------------------ ---- -------- -----------
Profit for the period attributable to Ordinary Shareholders 25,076 15,174
Other comprehensive income
Items that will or may be reclassified to profit or loss:
Translation differences on foreign subsidiaries (138) (293)
------------------------------------------------------------ ---- -------- -----------
Total comprehensive income for the period 24,938 14,881
------------------------------------------------------------ ---- -------- -----------
Earnings per share attributable to Ordinary Shareholders
Profit or loss
Basic (GBP) 13 0.23 0.15
Diluted (GBP) 13 0.23 0.15
------------------------------------------------------------ ---- -------- -----------
The notes to the financial statements form part of this
financial information.
Details of the restatement are provided in note 36.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 March 2022
31 March 31 March
2022 2021
as restated
Note GBP000 GBP000
----------------------------------------------- ---- -------- -----------
Non-current assets
Property, plant and equipment 14 2,656 3,012
Right -- of -- use assets 23 8,260 9,120
Intangible assets 15 4,431 3,012
Investments at FVTPL 16 2,781 2,075
Investments in equity accounted joint ventures 17 - 251
Deferred tax asset 25 615 977
Contract costs 18 3,976 712
Trade and other receivables 19 3,260 3,411
----------------------------------------------- ---- -------- -----------
25,979 22,570
----------------------------------------------- ---- -------- -----------
Current assets
Contract costs 18 579 125
Trade and other receivables 19 17,947 16,470
Cash and cash equivalents 20 54,289 39,431
----------------------------------------------- ---- -------- -----------
72,815 56,026
Assets and liabilities of disposal group
classified as held for sale 32 64 64
----------------------------------------------- ---- -------- -----------
Current liabilities
Trade and other payables 21 (23,978) (20,644)
Loans and borrowings 22 (660) (688)
Lease liabilities 23 (2,302) (2,157)
----------------------------------------------- ---- -------- -----------
(26,940) (23,489)
----------------------------------------------- ---- -------- -----------
Net current assets 45,939 32,601
Non-current liabilities
Trade and other payables 21 (64) (295)
Loans and borrowings 22 (3,030) (3,636)
Lease liabilities 23 (8,106) (9,862)
Provisions 24 (933) -
Deferred tax liability 25 (1,198) (1,581)
----------------------------------------------- ---- -------- -----------
(13,331) (15,374)
----------------------------------------------- ---- -------- -----------
Net assets 58,587 39,797
----------------------------------------------- ---- -------- -----------
Equity
Share capital 27 - -
Share premium 27 32,040 32,040
Own share reserve 27 (454) -
Share-based payment reserve 27 481 -
Group reorganisation reserve 27 30 30
Retained earnings 27 26,490 7,727
----------------------------------------------- ---- -------- -----------
Total equity 58,587 39,797
----------------------------------------------- ---- -------- -----------
The financial statements were approved and authorised for issue
by the Board of Directors on 11 July 2022 and were signed on its
behalf by:
Gary Fraser Geoffrey Gavey
Chief Financial Director
Officer
The notes to the financial statements form part of this
financial information.
Details of the restatements are provided in note 36.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2022
Group
Share-based re-
Share Share Own share payment organisation Retained Total
capital premium reserve reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------- -------- ------- --------- ----------- ------------ -------- -------
At 1 April 2021 - 32,040 - - 30 7,727 39,797
Profit for the period - - - - - 25,076 25,076
Other comprehensive
income - - - - - (138) (138)
---------------------- -------- ------- --------- ----------- ------------ -------- -------
Total comprehensive
income - - - - - 24,938 24,938
Contributions by
and distributions
to owners
Dividends - - - - - (6,175) (6,175)
Purchase of own
shares - - (454) - - - (454)
Share-based payments - - - 459 - - 459
Deferred tax - - - 22 - - 22
At 31 March 2022 - 32,040 (454) 481 30 26,490 58,587
---------------------- -------- ------- --------- ----------- ------------ -------- -------
Group
Share-based re-
Share Share Own share payment organisation Retained Total
capital premium reserve reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------- ------- ------- --------- ----------- ------------ -------- --------
At 1 April 2020 1 - - 101 30 15,701 15,833
Profit for the period - - - - - 15,174 15,174
Other comprehensive
income - - - - - (293) (293)
----------------------------- ------- ------- --------- ----------- ------------ -------- --------
Total comprehensive
income - - - - - 14,881 14,881
Contributions by
and distributions
to owners
Premium on issue
of shares - 35,000 - - - - 35,000
Share issue costs - (2,960) - - - - (2,960)
Dividends and distributions
to equity members - - - - - (18,229) (18,229)
Share-based payments - - - 35 - - 35
Share buyback (cancellation) - - - - - (10) (10)
Transfer of share-based
payments to retained
earnings on vesting
of Foresight Plans - - - (26) - 26 -
Transfer of share-based
payments to retained
earnings on cessation
of Foresight Plan - - - (110) - 110 -
Premium on redemption
of Preference Shares - - - - - (4,752) (4,752)
Redemption of Preference
Shares (1) - - - - - (1)
----------------------------- ------- ------- --------- ----------- ------------ -------- --------
At 31 March 2021 - 32,040 - - 30 7,727 39,797
----------------------------- ------- ------- --------- ----------- ------------ -------- --------
The notes to the financial statements form part of this
financial information.
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2022
31 March 31 March
2022 2021
as restated
Note GBP000 GBP000
--------------------------------------------------- ---- -------- -----------
Cash generated from operations 29,130 17,268
Tax paid (3,399) (174)
Other interest paid 11 (4) (7)
Loan interest paid (97) -
Interest on lease liabilities (564) (621)
--------------------------------------------------- ---- -------- -----------
Net cash from operating activities 25,066 16,466
--------------------------------------------------- ---- -------- -----------
Cash flows from investing activities
Acquisition of property, plant and equipment 14 (398) (141)
Acquisition of intangible assets 15 (171) (48)
Acquisition of investments at FVTPL 16 (712) (881)
Sale of investments at FVTPL 752 230
Proceeds on disposal of fixed assets 3 450
Interest received 11 2 3
Proceeds on disposal of Group entities - 819
Acquisition of subsidiaries 31 (339) 2,348
--------------------------------------------------- ---- -------- -----------
Net cash from investing activities (863) 2,780
--------------------------------------------------- ---- -------- -----------
Cash flows from financing activities
Dividends and distributions to equity members 28 (6,175) (18,229)
Share buyback 28 - (10)
Shareholder loan repaid - (750)
FGLLP members' capital contributions 61 1,455
Redemption and premium on redemption of Preference
Shares 28 - (4,753)
Purchase of own shares 27 (454) -
Repayment of lease liabilities (principal) (2,155) (2,570)
Repayment of loan liabilities (principal) (622) -
Gross proceeds of IPO share issue 27 - 35,000
Costs of IPO share issue 27 - (2,960)
--------------------------------------------------- ---- -------- -----------
Net cash from financing activities (9,345) 7,183
--------------------------------------------------- ---- -------- -----------
Net increase in cash and cash equivalents 14,858 26,429
Cash and cash equivalents at beginning of
period 39,431 13,002
--------------------------------------------------- ---- -------- -----------
Cash and cash equivalents at end of period 54,289 39,431
--------------------------------------------------- ---- -------- -----------
Reconciliation of profit before tax to cash
generated from operations
Profit before taxation 27,869 15,655
Gain on business combination (1,012) (174)
Profit from share in joint venture (53) (26)
Fair value gains on investments (638) (192)
Finance costs 11 653 710
Finance income 11 (2) (3)
Share-based payment 8 459 35
Depreciation and amortisation 3,485 2,648
Loss/(profit) on disposal of tangible and
intangible fixed assets 33 (170)
Gain on disposal of investments at FVTPL (108) -
Foreign currency losses (163) (295)
(Increase)/decrease in contract costs (3,718) 19
Increase in trade and other receivables (222) (4,526)
Increase in trade and other payables 2,547 3,587
--------------------------------------------------- ---- -------- -----------
Total 29,130 17,268
--------------------------------------------------- ---- -------- -----------
The notes to the financial statements form part of this
financial information.
Details of the restatements are provided in note 36.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2022
1. Corporate information
Foresight Group Holdings Limited (the "Company") is a public
limited company incorporated and domiciled in Guernsey and
whose
shares are publicly traded on the Main Market of the London
Stock Exchange. The registered office is located at Ground Floor,
Dorey
Court, Admiral Park, St Peter Port, Guernsey GY1 2HT. The
consolidated financial statements (the "Group financial
statements") comprise the financial statements of the Company and
its subsidiaries. Details of subsidiaries are disclosed in note
16.
The Group is principally involved in the provision of the
management of infrastructure assets, private equity investments and
OEICs on behalf of both institutional and retail investors using
ESG-oriented strategies.
Going concern
These financial statements have been prepared on the going
concern basis.
The Directors of the Group have considered the resilience of the
Group, taking into account its current financial position and the
principal and emerging risks facing the business, including the
impact of COVID-19 on global markets and potential implications for
the Group's financial performance. The Board reviewed the Group's
cash flow forecasts and trading budgets for a period of at least 12
months from the date of approval of these accounts, and concluded
that, taking into account plausible downside scenarios that could
reasonably be anticipated, the Group will have sufficient funds to
pay its liabilities as they fall due for that period. Taking into
consideration the impact of COVID-19 on the wider economic
environment, the forecasts have been stress tested to ensure that a
robust assessment of the Group's working capital and cash
requirements has been performed. The stress test scenarios adopted
involved severe but plausible downside scenarios with respect to
the Group's trading performance. Downside scenarios included a
material reduction in revenues through lower fundraising and
deployment and lower valuations. Worst case scenarios included the
loss of key management contracts and a terrorist attack on the
Shard. Any mitigating actions available to protect working capital
and strengthen the balance sheet, including deferring non-essential
capital expenditure and increased cost control, were also taken
into account.
In considering the above, the Directors have formed the view
that the Group will generate sufficient cash to meet its ongoing
liabilities as they fall due for at least the next 12 months;
accordingly, the going concern basis of preparation has been
adopted.
2a. Basis of preparation
The Group financial statements have been prepared in accordance
with International Financial Reporting Standards ("IFRS") as
adopted by the European Union.
The Company has taken advantage of the exemption in section 244
of the Companies (Guernsey) Law, 2008 (as amended) not to present
its own individual financial statements or related notes.
The Group did not implement the requirements of any other
standards or interpretations that were in issue; these were not
required to be adopted by the Group for the year ended 31 March
2022. No other standards or interpretations have been issued that
are expected to have a material impact on the Group's financial
statements.
The consolidated financial statements have been prepared on a
historical cost basis, except for investments that have been
measured at fair value.
The financial information is presented in sterling, which is the
Company's functional currency. All information is given to the
nearest thousand (except where specified otherwise).
2b. Basis of consolidation
The consolidated financial statements comprise the financial
statements of the Company and its subsidiaries as at 31 March 2022.
Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if, and only
if, the Group has:
-- Power over the investee (i.e. existing rights that give it the
current ability to direct the relevant activities of the investee)
-- Exposure, or rights, to variable returns from its involvement
with the investee
-- The ability to use its power over the investee to affect its
returns
Generally, there is a presumption that a majority of voting
rights results in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of
an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
-- The contractual arrangement(s) with the other vote holders of
the investee
-- Rights arising from other contractual arrangements
-- The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the
subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in
the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income
("OCI") are attributed to the equity holders of the parent of the
Group. When necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies in
line with the Group's accounting policies. All intra-group assets
and liabilities, equity, income, expenses and cash flows relating
to transactions between members of the Group are eliminated in full
on consolidation.
A change in the ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises
the related assets (including goodwill), liabilities, non --
controlling interest and other components of equity, while any
resultant gain or loss is recognised in profit or loss. Any
investment retained is recognised at fair value.
3. Accounting policies
This section sets out the accounting policies of the Group that
relate to the financial statements. Where an accounting policy is
specific to one note, the policy is described in the note to which
it relates. The accounting policies have been applied consistently
to all periods presented within the financial information.
This section also details new accounting standards that have
been endorsed in the period and have either become effective for
the financial period beginning on 1 April 2021 or will become
effective in later periods.
New standards, interpretations and amendments adopted from 1
April 2021
There were no new standards adopted during the year.
New standards not yet implemented
There were no standards or interpretations that were in issue
and required to be adopted by the Group as at the date of
authorisation of these consolidated financial statements. No
standards or interpretations have been issued that are expected to
have a material impact on the Group's financial statements.
A. Foreign exchange
Monetary assets and liabilities in foreign currencies are
translated into sterling at the rates of exchange ruling at the
Statement of Financial Position date. Transactions in foreign
currencies are translated into sterling at the rate of exchange
ruling at the date of transaction. Exchange differences are taken
into account in arriving at the operating result.
The assets and liabilities of Group entities that have a
functional currency different from the presentational currency are
translated at the closing rate at the balance sheet date, with
transactions translated at average monthly exchange rates.
Resulting exchange differences are recognised as a separate
component of other comprehensive income and are recycled to the
income statement on disposal or liquidation of the relevant branch
or subsidiary.
B. Use of judgements and estimates
The preparation of the financial statements requires the
Directors to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the Statement of
Financial Position date, amounts reported for revenues and expenses
during the year, and the disclosure of contingent liabilities at
the reporting date. However, uncertainty about these assumptions
and estimates could result in outcomes that require a material
adjustment to the carrying amount of the assets or liabilities
affected in the future.
Where the estimate or judgement is specific to one note, the
judgement is described in the note to which it relates.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of
causing material adjustment to the carrying amount of assets and
liabilities are as follows:
Share-based payments - see note 8
Recognition and measurement of intangible assets - see notes 15
and 31
Valuation of investments - see note 16(a)
Key judgements
These are as follows:
Consolidation of VCF Partners
VCF Partners was a general partnership of which Gary Fraser and
David Hughes were the sole members and was used to hold certain of
Foresight Group's leasehold interests. Soon after the IPO, these
leasehold interests, together with the other assets and liabilities
of VCF Partners, were transferred to VCF II LLP.
Despite it being a general partnership and not a subsidiary, VCF
Partners was considered to meet the requirements for consolidation,
on the basis that VCF Partners was judged to be effectively
controlled by the Company and is therefore included in the
consolidated financial statements. Following the transfer of assets
and liabilities to VCF II LLP, VCF Partners has now been
closed.
Impairment of intangible assets - see note 15
Contract costs - see note 18
Deferred tax assets - see note 25
IPO costs - see note 27
4. Revenue
Accounting policy:
IFRS 15 establishes a comprehensive framework for determining
whether, how much and when revenue is recognised. The core
principle of IFRS 15 is that an entity should recognise revenue to
depict the transfer of promised goods or services to customers in
an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services.
The Group's revenue is measured based on the consideration
specified in a contract with a customer and excludes amounts
collected on behalf of third parties. Revenue represents the fair
value of the consideration receivable in respect of services
provided during the period, exclusive of value added taxes.
A contract with a customer is recognised when a contract is
legally enforceable by the Group; this will be prior to the
commencement of work for a customer and therefore before any
revenue is recognised by the Group. Performance obligations are
identified on a contract -- by -- contract basis; where contracts
are entered into at the same time with the same customer at
differing rates, these may be considered a single contract for the
purposes of revenue recognition.
The Group does not provide extended payment terms on its
services and therefore no significant financing components are
identified by the Group. Revenue is only recognised on contingent
matters from the point at which it is highly probable that a
significant reversal in the amount of cumulative revenue recognised
will not occur.
The principal components of revenue comprise management fees,
secretarial fees, Directors' fees, marketing fees, arrangement fees
and performance incentive fees.
Management fees and most secretarial fees are generally based on
a percentage of fund Net Asset Value ("NAV") or committed capital
as defined in the funds' Prospectus and/or offering documents, with
some secretarial fees being based on an agreed fixed rate.
Directors' fees are based on a specified fixed fee agreed with the
customer.
Management, secretarial and Directors' fees are recognised over
time to the extent that it is probable that there will be economic
benefit and income can be reliably measured. This revenue is
recognised over time on the basis that the customer simultaneously
receives and consumes the economic benefits of the provided asset
as the Group performs its obligations.
Marketing fees are based on a rate agreed with the customer and
recognised at the point in time when the related funds have been
allotted.
Arrangement fees are based on a set rate agreed with the
customer and recognised at the point in time when the related
service obligations have been achieved.
Performance incentive fees are based on the returns achieved
over a predetermined threshold as defined in the funds' Prospectus
or offering documents and are recognised only at the point in time
when management have certainty as to the receipt of such revenue,
such that it is highly probable that a significant reversal in the
amount of revenue recognised will not occur.
Other income is based on the contract agreed before services are
provided and is recognised in line with the delivery of the
services provided.
31 March 31 March
2022 2021
GBP000 GBP000
--------------------------- -------- --------
Management fees 70,906 50,245
Secretarial fees 1,413 9,828
Directors' fees 2,506 2,306
--------------------------- -------- --------
Recurring fees 74,825 62,379
Marketing fees 5,046 2,841
Arrangement fees 2,964 3,858
Performance incentive fees 3,232 -
Other income 4 20
--------------------------- -------- --------
86,071 69,098
--------------------------- -------- --------
The timing of revenue is as follows:
31 March 31 March
2022 2021
GBP000 GBP000
------------------------------------------ -------- --------
Timing of transfer of goods and services:
Point in time 11,246 6,719
Over time 74,825 62,379
------------------------------------------ -------- --------
86,071 69,098
------------------------------------------ -------- --------
Contract balances are as follows:
31 March 31 March
2022 2021
Contract Contract
liabilities liabilities
GBP000 GBP000
----------------------------------------------------------- ----------- -----------
At beginning of period (541) (73)
Amounts included in contract liabilities that were
recognised as revenue during the period 541 73
Cash received in advance of performance and not recognised
as revenue during the period (134) (541)
----------------------------------------------------------- ----------- -----------
At end of period (134) (541)
----------------------------------------------------------- ----------- -----------
The timing of revenue recognition, billings and cash collections
results in either trade receivables, accrued income or deferred
income in the Statement of Financial Position. For recurring fees,
amounts are billed either in advance or in arrears pursuant to a
management or advisory agreement. The contract liabilities above
reflect the deferred income in trade and other payables.
5. Business segments
Accounting policy:
Segment information is provided based on the operating segments
which are reviewed by the Executive Committee ("Exco"), which is
considered to be the Chief Operating Decision Maker. These
operating segments, which comprise Infrastructure, Private Equity
and Foresight Capital Management ("FCM") are aggregated if they
meet certain criteria. Segment results include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis. No disclosure is made for net
assets/liabilities as these are not reported by segment to
Exco.
Management monitors the performance and strategic priorities of
the business from a business unit ("BU") perspective, and in this
regard has identified the following three key "reportable
segments": Infrastructure, Private Equity and FCM.
FCM had previously been included within Infrastructure but, as
reported in the Business Review in the Annual Report for the year
ended 31 March 2021, from FY22 onwards it is to be treated as a
separate business unit. Accordingly, segmental revenue has been
re-presented for the year ended 31 March 2021.
FCM commenced in 2017 and had FUM of GBP1.1 billion at 31 March
2021 which had grown further to GBP1.6 billion at 31 March
2022.
The Group's senior management assesses the performance of the
operating segments based on revenue.
Revenue is measured in a manner consistent with that in the
income statement. Segmental revenue is set out below:
31 March 31 March
2022 2021
GBP000 GBP000
----------------------------- -------- --------
Infrastructure 50,753 43,392
Private Equity 23,874 18,225
Foresight Capital Management 11,444 7,481
----------------------------- -------- --------
86,071 69,098
----------------------------- -------- --------
Revenue by region is summarised below:
31 March 31 March
2022 2021
GBP000 GBP000
--------------- -------- --------
United Kingdom 78,562 65,999
Italy 778 1,177
Luxembourg 5,312 676
Spain 568 533
Australia 851 713
--------------- -------- --------
86,071 69,098
--------------- -------- --------
In accordance with IFRS 8 paragraph 34, the Group has a single
customer with revenues which amount to 10% or more of Group
revenue. Total revenues from this customer in FY22 were
GBP23,555,000, of which GBP19,147,000 was attributable to
Infrastructure, GBP3,225,000 to Private Equity and GBP1,183,00 to
FCM.
Non-current assets (excluding deferred tax assets, contract
costs and trade and other receivables) by region are summarised
below:
31 March 31 March
2022 2021
GBP000 GBP000
----------- -------- --------
UK 14,016 15,397
Italy 2,021 808
Luxembourg 1,521 778
Spain 566 486
Australia 4 1
----------- -------- --------
18,128 17,470
----------- -------- --------
The Statement of Financial Position is reported to the Board on
a single segment basis. No further segmental information is
provided as this would not aide strategic and financial management
decisions.
6. Administrative expenses
Accounting policy:
The Group's administrative expenses are recognised as the
services are received by the Group. Staff costs are the largest
component of the Group's operating costs and include salaries and
wages, together with the cost of other benefits provided to staff
such as pensions and bonuses.
31 March 31 March
2022 2021
as restated
GBP000 GBP000
------------------------------ -------- -----------
Staff costs 35,395 33,751
Depreciation and amortisation 3,485 2,648
Legal and professional 6,067 5,984
Other administration costs 9,451 6,500
------------------------------ -------- -----------
54,398 48,883
------------------------------ -------- -----------
Details of the restatement are provided in note 36.
Other administrative costs mainly relate to irrecoverable VAT,
computer maintenance, conferences, minor capital purchases written
off, bank charges and sundries.
Specific administrative expenses are as follows:
31 March 31 March
2022 2021
GBP000 GBP000
------------------------------------------ -------- --------
Auditor's remuneration 587 419
Net foreign exchange gains (222) (251)
Low-value and short-term lease expenses 117 241
Bad debt write-offs 138 112
Loss/(profit) on disposal of fixed assets 33 (170)
------------------------------------------ -------- --------
Auditor's remuneration is further disclosed as follows:
31 March 31 March
2022 2021
GBP000 GBP000
-------------------------------------- -------- --------
Audit services
Statutory audit - Company 77 124
- Subsidiaries 238 109
-------------------------------------- -------- --------
Total audit services 315 233
-------------------------------------- -------- --------
Non-audit services
Regulatory assurance services 34 13
Other assurance services 133 196
Other services 105 35
Total non-audit services 272 244
-------------------------------------- -------- --------
Total audit and non-audit services 587 477
-------------------------------------- -------- --------
In FY21, total auditor's remuneration was GBP477,000 of which
GBP419,000 was expensed in the Statement of Comprehensive Income
and GBP57,500 was taken to share premium. This was due to the
attribution of IPO costs between the issuing and listing of shares
(see note 27) as GBP115,000 of auditor's remuneration related to
interim audit services specifically for the IPO.
Non-audit services included the following:
-- Regulatory assurance services: These services are for CASS
assurance audits for Foresight Group LLP and PiP Manager Limited
-- Other assurance services: These services are for the ISAE 3402
assurance report on the internal controls of Foresight Group
LLP, in FY22 the interim review of the Half-year Report and
in FY21 the interim non-statutory audit work in relation to
the IPO
-- Other services: These services are in respect of an offer for
new shares in Foresight VCT plc, Foresight Enterprise VCT plc
and Foresight Solar & Technology VCT plc (FY22 and FY21)
7. Staff costs and Directors' remuneration
The average number of employees was:
31 March 31 March
2022 2021
Number Number
-------------------- -------- --------
Operations 135 135
Sales and Marketing 46 40
Administration 70 58
-------------------- -------- --------
251 233
-------------------- -------- --------
Their aggregate remuneration comprised:
31 March 31 March
2022 2021
GBP000 GBP000
---------------------------------- -------- --------
Wages and salaries 29,556 26,666
Social security costs 2,744 2,380
Pension costs 608 601
Other staff costs 2,028 1,323
---------------------------------- -------- --------
34,936 30,970
Distributions - 2,746
Share-based payments (see note 8) 459 35
---------------------------------- -------- --------
Total staff costs 35,395 33,751
---------------------------------- -------- --------
Details regarding the total remuneration paid to Directors is
disclosed in the Remuneration Committee Report (see pages 126 to
136 of the FY22 Annual Report).
8. Share-based payments
Accounting policy:
The Group engages in share-based payment transactions in respect
of services receivable from certain employees by granting the right
to either shares or options over shares, subject to certain vesting
conditions and exercise prices. These have been accounted for as
equity-settled share-based payments.
The fair value of the awards granted in the form of shares or
share options is recognised as an expense over the appropriate
performance and vesting period. The corresponding credit is
recognised in retained earnings within total equity. The fair value
of the awards is calculated using an option pricing model, the
principal inputs being the market value on the date of award and an
adjustment for expected and actual levels of vesting which includes
estimating the number of eligible employees leaving the Group and
the number of employees satisfying the relevant performance
conditions. Shares and options vest on the occurrence of a
specified event under the rules of the relevant plan.
Estimation uncertainty and judgements:
The Group's Performance Share Plan allows for the grant of nil
cost options with vesting dependent on the performance of the Group
and continued service by the participant. The first grant of
options under the plan was made on 6 September 2021 as approved by
the Remuneration Committee. The number of options awarded totalled
1,071,830 and have been fair valued using a Monte-Carlo simulation
and appropriate retention rate % based on historical evidence. The
assumptions used in the Monte-Carlo simulation are described
below.
31 March 31 March
2022 2021
GBP000 GBP000
----------------------- -------- --------
Performance Share Plan 299 -
Share Incentive Plan 160 -
Foresight Plan - 35
459 35
----------------------- -------- --------
Performance Share Plan
The Remuneration Committee approved the implementation of the
Performance Share Plan ("PSP") during the year. Options are granted
under the plan for no consideration, carry no dividend or voting
rights and are linked to an absolute total shareholder return
("TSR") of 6% compound growth per annum over a three year period.
The absolute TSR condition vests over a range as set out in the
Remuneration Committee Report. The exercise price is GBPnil. The
Group is allowed to issue new shares to satisfy the share schemes
which must not exceed 10% of the issued share capital in any
rolling ten year period. The Group's position against the dilution
limits at 31 March 2022 since Admission was 1%.
Details of movements in the number of shares are as follows:
31 March 2022 31 March 2021
---------------------- -------------------------
Average Average
exercise exercise
price
Number per share Number price per
of shares option of shares share option
granted GBP granted GBP
------------------------------------ ---------- ---------- ---------- -------------
At the beginning of period - - - -
Granted 1,071,830 - - -
Vested - - - -
Extinguished - - - -
------------------------------------ ---------- ---------- ---------- -------------
Awards outstanding at end of period 1,071,830 - - -
------------------------------------ ---------- ---------- ---------- -------------
No options expired during the periods covered by the above
table.
Share options outstanding at the end of the year have the
following expiry dates and exercise prices:
Share
options Share options
Exercise 31 March 31 March
Grant date Expiry date price 2022 2021
------------------------- ------------------- ------------- ---------- -------------
4 September 2022 31 July 2024 - 1,071,830 -
------------------------- ------------------- ------------- ---------- -------------
Weighted average remaining contractual life of options 2.33 years -
outstanding at end of period
------------------------------------------------------------- ---------- -------------
Fair value of options granted
The assumptions used in the Monte-Carlo simulation were as
follows:
-- Starting share price of 378.4 pence (the three month average
share price of the Company on the date of grant)
-- Annual volatility of 40% (based on volatility of share price
from IPO to grant date)
-- Vesting period of three years
-- Holding period of two years with associated 30% deduction for
lack of marketability (based on empirical studies)
-- Exercise price of 0 pence
-- Risk-free rate of 1% per annum which has been used as a discount
factor (based on government bond yields)
-- Annual dividend of 14 pence per annum
The simulation based on these assumptions resulted in a fair
value of 143.83 pence per option.
Share Incentive Plan
Under the Foresight Share Incentive Plan ("SIP"), for each one
partnership share that an employee buys, Foresight offers two free
matching shares. In each tax year, employees can buy up to GBP1,800
or 10% of salary (whichever is lower) of partnership shares from
their pre-tax salary. If an employee leaves the Group, any matching
shares held for less than three years will be withdrawn, i.e. the
vesting period of the matching shares is three years with the
performance condition of continuous service. The SIP shares are
held in trust by Yorkshire Building Society (the SIP Trustee).
Voting rights are exercised by the SIP Trustee on receipt of
participants' instructions.
As the SIP options have a zero strike price and the participant
is entitled to dividends during the vesting period, the fair value
of the award is indistinguishable from the share price. Therefore,
the share price on the award date is used when calculating the
share-based payment expense.
At 31 March 2022, the number of matching shares purchased for
GBP454,000 was 107,769. An additional 45,000 shares were
transferred into trust from Foresight Guernsey Limited (see IPO
Prospectus) so that the total matching shares held in trust was
152,769.
Foresight Plan
The Foresight Plan was introduced in 2014 and provided for the
grant of shares to members of staff. Shares granted under the
Foresight Plan vested after the members of staff had reached an
uninterrupted period of service of ten years with Foresight Group
(or any of its subsidiaries). Shares granted under the Foresight
Plan were accounted for as equity-settled. The Foresight Plan
ceased in February 2021.
The equity-settled payments below represent the share-based
payments related to the Foresight Plan. The valuation attributed to
the payments was on an EBITDA market multiple basis; this did not
take into consideration any future dividends or other features of
equity instruments in determining this valuation.
Total expense for each year in which shares were granted
(excluding national insurance) was as follows:
31 March 31 March
2022 2021
Year of grant GBP GBP
------------------------------------------------------------------------------ --------- --------
2014 - -
2015 - 6,589
2016 - -
2017 - 587
2018 - 5,721
2019 - 7,577
2020 - 14,752
2021 - -
------------------------------------------------------------------------------ --------- --------
Total Foresight share-based payments expense reported in comprehensive income - 35,226
------------------------------------------------------------------------------ --------- --------
Unvested shares outstanding under the Foresight Plan were as
follows:
31 March 2022 31 March 2021
------------------- ---------------------
Weighted Weighted
Number Number
of average of average
share
shares price shares share price
granted GBP granted GBP
------------------------------------ -------- --------- -------- -----------
At the beginning of period - - 45,605 6
Granted - - 11,654 4
Vested - - (1,830) (12)
Extinguished - - (55,429) (4)
------------------------------------ -------- --------- -------- -----------
Awards outstanding at end of period - - - -
------------------------------------ -------- --------- -------- -----------
9. Core EBITDA
The Group uses Core EBITDA and Core EBITDA pre share-based
payments as two of its key metrics to measure performance because
it views these as the closest profitability number comparable to
the Group's recurring revenue model (i.e. a cash profit number
after removing/adjusting for any one-offs, both positive and
negative). Core EBITDA pre share-based payments is shown as the
Group considers that there is no cash alternative to the
share-based payments and due to their uncontrollable nature. Core
EBITDA and Core EBITDA pre share-based payments may not be
comparable to other similarly titled measures used by other
companies and they have limitations as an analytical tool and
should not be considered in isolation or as a substitute for
analysis of the Group's operating results as reported under
IFRS.
The specific items excluded from Core EBITDA and Core EBITDA pre
share-based payments are non-underlying items. Non-underlying items
are non-trading or one-off items disclosed separately below, where
the quantum, nature or volatility of such items are considered by
the Directors to otherwise distort the underlying performance of
the Group. The Group has assessed that the following items are
non-underlying items for the purposes of calculating Core EBITDA
and Core EBITDA pre share-based payments:
-- Non-operational legal costs. These are costs related to a series
of proposed corporate transactions over the period and redundancy
costs relating to a restructuring of the business. The corporate
transaction costs relate to professional and other costs incurred
in preparing the Group for an IPO and therefore are not considered
to be related to the Group's ongoing business operations. Non-operational
legal costs of GBP2.7 million in the financial year ended 31
March 2021 related to IPO costs
-- Distributions made to members classified as remuneration expenses
under IFRS have been added back as these are considered to be
equity transactions. These expenses were related to distribution
of the Group profit. They were variable as they were dependent
on Group profit and also the timing of when the distributions
were made
-- Staff advances expensed have been added back as these are not
deemed to reflect the core underlying performance of the business
-- Other operating income as per note 10 below which is not expected
to recur. This relates to Shirebrook development fees and grant
income from a government support programme introduced in response
to the COVID-19 global pandemic
-- Profits or losses on disposal of fixed assets are added back
as these are classed as non -- recurring
-- Profits or losses arising on acquisition of subsidiaries are
added back as these are classed as non -- recurring
-- All depreciation and amortisation costs are added back
-- All financing and taxation costs are added back
A reconciliation of retained profit to Core EBITDA and Core
EBITDA pre share-based payments is set out below:
31 March 31 March
2022 2021
GBP000 GBP000
----------------------------------------------------- -------- --------
Net profit after other comprehensive income 24,938 14,881
Add back depreciation and amortisation 3,485 2,649
Add back non-operational staff costs
Distributions - 2,746
Staff advances expensed 580 440
Other 148 -
Add back non-operational legal costs - 2,744
Loss/(profit) on disposal of tangible and intangible
fixed assets 33 (170)
Gain on business combination (1,012) (174)
Deduct other operating income (250) (394)
Add back financing 651 707
Add back tax 2,793 481
Core EBITDA 31,366 23,910
Share-based payments 459 -
Core EBITDA pre share-based payments 31,825 23,910
----------------------------------------------------- -------- --------
10. Other operating income
Accounting policy:
Government grants are recognised where there is reasonable
assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an
expense item, it is recognised as income on a systematic basis over
the periods that the related costs, for which it is intended to
compensate, are expensed. When the grant relates to an asset, it is
recognised as income in equal amounts over the expected useful life
of the related asset.
31 March 31 March
2022 2021
GBP000 GBP000
--------------------------------------------- -------- --------
Fees arising from the Shirebrook development 250 348
Grant income - 46
--------------------------------------------- -------- --------
250 394
--------------------------------------------- -------- --------
Fees arising from the Shirebrook development
The Group is managing the development of a reserve power plant
site in Shirebrook, Derbyshire on behalf of the Foresight ITS
product. Development fees have been accounted for as other
operating income when it is virtually certain that relevant
contractual conditions have been met. At 31 March 2022, total fees
of GBP2.4 million had been recognised, which reflects total
contractual fees on the development.
Grant income
The Group applied for a government support programme introduced
in response to the COVID-19 global pandemic in the year ended 31
March 2021. It related to the payroll of the Group's employees and
the Group does not have any unfulfilled obligations relating to
this programme.
11. Finance income and expense
Accounting policy:
Finance income
Finance income comprises interest receivable on cash deposits.
Interest income is recognised in profit or loss as it accrues using
the effective interest method.
Finance costs
Finance costs comprise interest payable on leases, borrowings
and direct issue costs and are expensed in the period in which they
are incurred.
31 March 31 March
2022 2021
GBP000 GBP000
-------------------------------------------------------------------------- -------- --------
Finance income
Bank interest receivable 2 3
Total finance income 2 3
-------------------------------------------------------------------------- -------- --------
Finance expenses
Other interest payable 4 7
Loan interest (accrued) 85 82
Interest on lease liabilities 564 621
-------------------------------------------------------------------------- -------- --------
Total finance expense on financial liabilities measured at amortised cost 653 710
-------------------------------------------------------------------------- -------- --------
Net finance expense recognised in the Statement of Comprehensive Income (651) (707)
-------------------------------------------------------------------------- -------- --------
The above finance income and expense includes the following in
respect of assets (liabilities) not at fair value through profit or
loss:
31 March 31 March
2022 2021
GBP000 GBP000
----------------------------------------------- -------- --------
Total finance income on financial assets 2 3
Total finance expense on financial liabilities (653) (710)
----------------------------------------------- -------- --------
(651) (707)
----------------------------------------------- -------- --------
12. Taxation
Accounting policy:
Current tax
The tax expense represents the current tax relating to the
corporate subsidiaries. The current tax expense is based on taxable
profits of these companies for the year. Taxable profit differs
from net profit as reported in the Statement of Comprehensive
Income because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items
that are never taxable or deductible. The current tax liability is
calculated using tax rates that have been enacted or substantively
enacted by the Statement of Financial Position date. Current tax
assets and liabilities are offset only when there is a legally
enforceable right to set off the amounts and the Group intends to
either settle on a net basis or realise the asset and settle the
liability simultaneously.
A provision is recognised for those matters for which the tax
determination is uncertain, but it is considered probable that
there will be a future outflow of funds to a tax authority. The
provisions are measured at the best estimate of the amount expected
to become payable. The assessment is based on the judgement of tax
professionals within the Group supported by previous experience in
respect of such activities and in certain cases based on specialist
independent tax advice.
Deferred tax
Deferred tax is recognised on differences between the carrying
amount of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of taxable
profit and is accounted for using the Statement of Financial
Position liability method. Deferred tax is calculated using tax
rates that have been enacted or substantively enacted by the
reporting date. Deferred tax is charged or credited to the
statement of profit or loss, except when it relates to items
charged or credited to other comprehensive income or directly to
equity, in which case the deferred tax is also dealt with in the
Statement of Other Comprehensive Income or directly in equity. See
note 25.
31 March 31 March
2022 2021
GBP000 GBP000
-------------------------------------------------------- -------- --------
Current tax
UK corporation tax 3,098 -
Foreign taxation 66 111
Adjustments in respect of prior periods (foreign tax) 5 134
-------------------------------------------------------- -------- --------
Total current tax charge 3,169 245
-------------------------------------------------------- -------- --------
Deferred tax
Origination and reversal of temporary differences (376) 236
Total deferred tax (376) 236
-------------------------------------------------------- -------- --------
Tax on profit on ordinary activities 2,793 481
-------------------------------------------------------- -------- --------
Total tax expense
From above 2,793 481
Share of tax expense of equity accounted joint ventures 21 14
-------------------------------------------------------- -------- --------
2,814 495
-------------------------------------------------------- -------- --------
The effective tax rate has varied through the historical period,
and is explained as:
31 March 31 March
2022 2021
GBP000 GBP000
----------------------------------------------- -------- --------
Profit for the year 25,076 15,174
Add back total tax 2,814 495
----------------------------------------------- -------- --------
Profit before all tax 27,890 15,669
----------------------------------------------- -------- --------
Profit before tax at 19% 5,299 2,977
Profits not assessable to corporation tax (762) (405)
Profit share allocation from partnership funds 654 (78)
Unrecognised deferred tax 350 (446)
Adjustments to previous periods 5 134
Differences on overseas tax rate (4,126) (2,213)
Remeasurement of deferred tax 150 -
Expenses not deductible for tax purposes 1,482 579
Other - share-based payments (46) (20)
Gain on business combination (192) (33)
----------------------------------------------- -------- --------
Total tax charge 2,814 495
----------------------------------------------- -------- --------
The Company is resident for taxation purposes in Guernsey and
its income is subject to income tax in Guernsey, presently at a
rate of 0% per annum. The tax reconciliation for the Group has been
prepared using the current UK corporation tax rate of 19%, as most
of the Group's trading activities are carried out in the UK.
13. Earnings per share
Accounting policy:
Basic earnings per share is calculated by dividing the profit
attributable to the owners of the parent company by the weighted
average number of shares in issue during the period less the
weighted average number of own shares held (see note 27).
Diluted earnings per share is calculated by dividing the profit
attributable to the owners of the parent company by the weighted
average number of shares for the purposes of the basic earnings per
share plus the weighted average number of shares that would be
issued on the conversion of dilutive potential Ordinary Shares into
Ordinary Shares (see note 8 for Performance Share Plan).
31 March 31 March
2022 2021
GBP000 GBP000
----------------------------------------------------------------------------------------------- -------- --------
Earnings
Earnings for the purposes of basic earnings per share, being profit attributable to the owners
of the parent company 25,076 15,174
----------------------------------------------------------------------------------------------- -------- --------
31 March 31 March
2022 2021
'000 '000
------------------------------------------------------- -------- --------
Number of shares
Weighted average number of shares in issue during
the period 108,333 101,780
Less time apportioned own shares held (133) -
------------------------------------------------------- -------- --------
Weighted average number of Ordinary Shares for the
purpose of basic earnings per share 108,200 101,780
Add back weighted average number of dilutive potential
shares 608 -
------------------------------------------------------- -------- --------
Weighted average number of Ordinary Shares for the
purpose of diluted earnings per share 108,808 101,780
------------------------------------------------------- -------- --------
Earnings per share Group (Basic) (GBP) 0.23 0.15
------------------------------------------------------- -------- --------
Earnings per share Group (Diluted) (GBP) 0.23 0.15
------------------------------------------------------- -------- --------
14. Property, plant and equipment
Accounting policy:
Property, plant and equipment are stated at cost less
accumulated depreciation and any recognised impairment loss.
Depreciation is provided on all property, plant and equipment at
rates calculated to write off the cost less estimated residual
value of each asset evenly using a straight-line method over its
estimated useful life (charged through administrative expenses) as
follows:
-- Fixtures and fittings:
- Office equipment over ten years
- Computer equipment over five years
-- Short leasehold property over term of lease
-- Long leasehold flat over term of lease
-- Motor vehicles over four years
The carrying values of items of property, plant and equipment
are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.
The gain or loss arising on the disposal or retirement of an
asset is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in the
Statement of Comprehensive Income.
Short Long
Fixtures,
fittings leasehold leasehold Motor
and equipment property flat vehicles Total
GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------- ------------- --------- --------- -------- ------
Cost
At 1 April 2021 341 5,385 - 15 5,741
Additions 308 90 - - 398
Foreign exchange movement (2) (1) - - (3)
Disposals (193) - - - (193)
--------------------------------- ------------- --------- --------- -------- ------
At 31 March 2022 454 5,474 - 15 5,943
--------------------------------- ------------- --------- --------- -------- ------
Depreciation
At 1 April 2021 193 2,531 - 5 2,729
Depreciation charge for the year 172 576 - 3 751
Disposals (191) - - - (191)
Foreign exchange movement (1) (1) - - (2)
--------------------------------- ------------- --------- --------- -------- ------
At 31 March 2022 173 3,106 - 8 3,287
--------------------------------- ------------- --------- --------- -------- ------
Net book value at 31 March 2022 281 2,368 - 7 2,656
--------------------------------- ------------- --------- --------- -------- ------
Short Long
Fixtures,
fittings leasehold leasehold Motor
and equipment property flat vehicles Total
GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------- ------------- --------- --------- -------- ------
Cost
At 1 April 2020 322 5,364 326 15 6,027
Additions 113 28 - - 141
Foreign exchange movement - (7) - - (7)
Disposals (94) - (326) - (420)
--------------------------------- ------------- --------- --------- -------- ------
At 31 March 2021 341 5,385 - 15 5,741
--------------------------------- ------------- --------- --------- -------- ------
Depreciation
At 1 April 2020 139 1,960 20 2 2,121
Depreciation charge for the year 145 575 26 3 749
Disposals (93) - (46) - (139)
Foreign exchange movement 2 (4) - - (2)
--------------------------------- ------------- --------- --------- -------- ------
At 31 March 2021 193 2,531 - 5 2,729
--------------------------------- ------------- --------- --------- -------- ------
Net book value at 31 March 2021 148 2,854 - 10 3,012
--------------------------------- ------------- --------- --------- -------- ------
15. Intangible assets
Accounting policy:
Intangible assets in respect of customer contracts (acquired)
reflect the fair value of the investment management contracts
obtained, which is equal to the present value of the earnings they
are expected to generate. This is on the basis that it is probable
that future economic benefits attributable to the investment
management contracts will flow to the Group and the fair value of
the intangible asset can be measured reliably.
Computer software (internally generated) represents software
licences and development costs to bring software into use. Costs
associated with developing or maintaining computer software
programmes that do not meet the capitalisation criteria under IAS
38 are recognised as an expense as incurred.
Amortisation is provided, where material, at rates calculated to
write off the cost, less estimated residual value, of each asset
evenly using a straight-line method over its estimated useful life
(charged through administrative expenses) as follows:
-- Customer contracts over remaining term of investment management contract
-- Computer software over three to four years
The carrying values of customer contracts (acquired) and
computer software (internally generated) are reviewed for
impairment when events or changes in circumstances indicate that
the carrying value may not be recoverable. If any such indication
exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where the
asset does not generate cash flows that are independent from other
assets, the Group estimates the recoverable amount of the cash --
generating unit to which the asset belongs. Recoverable amount is
the higher of fair value less costs to sell and value in use. If
the recoverable amount of an asset is estimated to be less than its
carrying amount, the carrying amount of the asset is reduced to its
recoverable amount. An impairment loss is recognised as an expense
in the Statement of Comprehensive Income immediately.
The gain or loss arising on the disposal or retirement of an
asset is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in Statement
of Comprehensive Income.
Estimation uncertainty and judgements:
Acquisition of FV Solar Lab S.R.L.
The valuation of investment management contracts represents an
estimation of the present value of the earnings that those
contracts were expected to generate at the completion date. The net
present value was calculated using a discounted profitability
model, with reference to the projected profitability of the fund
over three years based on internal forecasts and a weighted average
cost of capital ("WACC") of 7% using various inputs to reflect the
operations which are principally based in Italy.
A 1% increase in the WACC would result in a decrease in the
intangible asset recognised by GBP26,000; likewise, a 1% decrease
would result in an increase of GBP27,000. The intangible asset is
amortised over three years. An impairment review was undertaken by
reference to the ongoing revenue to which the investment management
contracts relate. There were no indicators of impairment of the
asset at the reporting date.
Acquisition of PiP Manager Limited
The valuation of investment management contracts represents an
estimation of the present value of the earnings that those
contracts were expected to generate at the completion date. The net
present value was calculated using a discounted profitability
model, with reference to the projected profitability of the fund
over 20 years based on internal forecasts and a weighted average
cost of capital ("WACC") of 13.75% using various inputs to reflect
the operations which are principally based in the UK.
A 1% increase in the WACC would result in a decrease in the
intangible asset recognised by GBP123,000; likewise, a 1% decrease
would result in an increase of GBP133,000. The intangible asset is
amortised over 20 years. An impairment review was undertaken by
reference to the AUM of the funds to which the investment
management contracts relate. There were no indicators of impairment
of the asset at the reporting date.
Impairment of intangible assets
In determining whether there are indicators of impairment of the
Group's intangible assets, the Directors take into consideration
various factors including the economic viability and expected
future financial performance of the asset and, when it relates to
the intangible assets arising from investment management contracts,
the expected future performance of the contract acquired.
Computer Customer
software contracts Total
GBP000 GBP000 GBP000
-------------------------------- -------- --------- ------
Cost
At 1 April 2021 479 2,914 3,393
Additions 171 - 171
Business combinations - 1,679 1,679
Disposals - (35) (35)
-------------------------------- -------- --------- ------
At 31 March 2022 650 4,558 5,208
-------------------------------- -------- --------- ------
Amortisation/impairment
At 1 April 2021 289 92 381
Charge for the year 105 292 397
Disposals - (1) (1)
-------------------------------- -------- --------- ------
At 31 March 2022 394 383 777
-------------------------------- -------- --------- ------
Net book value at 31 March 2022 256 4,175 4,431
-------------------------------- -------- --------- ------
Computer Customer
software contracts Total
GBP000 GBP000 GBP000
-------------------------------- -------- --------- ------
Cost
At 1 April 2020 663 - 663
Additions 13 35 48
Business combinations - 2,879 2,879
Disposals (197) - (197)
-------------------------------- -------- --------- ------
At 31 March 2021 479 2,914 3,393
-------------------------------- -------- --------- ------
Amortisation/impairment
At 1 April 2020 391 - 391
Charge for the year 95 92 187
Disposals (197) - (197)
-------------------------------- -------- --------- ------
At 31 March 2021 289 92 381
-------------------------------- -------- --------- ------
Net book value at 31 March 2021 190 2,822 3,012
-------------------------------- -------- --------- ------
The table below shows the carrying amount assigned to each
component of customer contracts and the remaining amortisation
period.
Carrying Remaining
value amortisation
GBP000 period
------------------------------------------------- -------- ------------
Acquisition of PiP Manager Limited (see note 31) 2,644 14 years
Acquisition of FV Solar Lab S.R.L. (see note 31) 1,531 2.5 years
------------------------------------------------- -------- ------------
4,175
------------------------------------------------- -------- ------------
The remaining element of intangible assets relates to
capitalised software costs, which are amortised over five years.
The amortisation charges above are recognised within administrative
expenses in the Statement of Comprehensive Income.
16(a). Investments at FVTPL
Accounting policy:
Investments at FVTPL are recognised initially at fair value,
which is normally the transaction price. Subsequent to initial
recognition, investments at FVTPL are measured at fair value with
changes recognised in the Statement of Comprehensive Income.
Estimation uncertainty and judgements:
Fair value is calculated as the share of net assets of the
underlying fund to which the investment relates. The underlying
fund values its investments in accordance with International
Private Equity and Venture Capital ("IPEV") Valuation Guidelines
(December 2018 and further COVID-19 guidance for March 2020)
developed by the British Venture Capital Association and other
organisations.
While valuations of investments are based on assumptions that
the Directors consider are reasonable under the circumstances, the
actual realised gains and losses will depend on, amongst other
factors, future operating results, the value of the assets and
market conditions at the time of disposal, any related transaction
costs and the timing and manner of sale, all of which may
ultimately differ significantly from the assumptions on which the
valuations were based. Further details on the key assumptions made
and a sensitivity analysis are set out in note 30.
31 March 31 March
2022 2021
GBP000 GBP000
----------------------- -------- --------
At beginning of period 2,075 1,233
Additions 712 881
Fair value movements 638 192
Sales proceeds (617) (231)
Disposal (27) -
----------------------- -------- --------
At end of period 2,781 2,075
----------------------- -------- --------
Investments comprise investments in underlying funds which are
measured at fair value.
16(b). Investments in subsidiaries
The Company has investments in the following undertakings:
Country of
Entity Domicile Type registration Interest
Subsidiary undertakings
Foresight Solar Australia (UK)
Limited UK Company England & Wales 100%
FGB S.à r.l. Luxembourg Company Luxembourg 100%
Foresight Group Holdings (UK) Limited UK Company England & Wales 100%
Foresight Asset Management Limited UK Company England & Wales 100%
Foresight Fund Managers Limited UK Company England & Wales 100%
Foresight Group (SK) Limited UK Company England & Wales 100%
Pinecroft Corporate Services Limited UK Company England & Wales 100%
Foresight Environmental GP Co.
Limited UK Company Scotland 100%
Foresight NF GP Limited UK Company England & Wales 100%
Foresight Environmental FP GP Co.
Limited UK Company Scotland 100%
Foresight NF FP GP Limited UK Company England & Wales 100%
Foresight Company 1 Limited UK Company England & Wales 100%
Foresight Company 2 Limited UK Company England & Wales 100%
Foresight Regional Investment General
Partner LLP UK LLP Scotland 100%
Foresight Impact Midlands Engine
GP LLP UK LLP Scotland 100%
Foresight Regional Investment II
General Partner LLP UK LLP Scotland 100%
Foresight Group Equity Finance
(SGS) GP LLP UK LLP Scotland 100%
NI Opportunities GP LLP UK LLP Scotland 100%
Foresight Legolas Founder Partner
GP LLP UK LLP Scotland 100%
Foresight Regional Investment III
General Partner LLP UK LLP Scotland 100%
AIB Foresight SME Impact General
Partner LLP UK LLP Scotland 100%
Foresight West Yorkshire Business
Accelerator General Partner LLP UK LLP Scotland 100%
AIB Foresight SME Impact Fund GP
Limited Ireland Company Ireland 100%
Foresight Infra Hold Co Limited UK Company England & Wales 100%
PiP Manager Limited UK Company England & Wales 100%
PiP Multi-Strategy Infrastructure
Limited UK Company England & Wales 100%
PiP Multi-Strategy Infrastructure
(Scotland) Limited UK Company England & Wales 100%
PiP Multi-Strategy Infrastructure
GP LLP UK LLP England & Wales 100%
Foresight Group CI Limited Guernsey Company Guernsey 100%
Foresight European Solar Fund GP
Ltd Jersey Company Jersey 100%
Foresight Holdco 2 Limited UK Company England & Wales 100%
VCF II LLP UK LLP England & Wales 100%
Foresight Group LLP UK LLP England & Wales 100%
Foresight Group Promoter LLP UK LLP England & Wales 100%
Foresight Investor LLP UK LLP England & Wales 100%
Foresight Group S.R.L. Italy Company Italy 100%
FV Solar Lab S.R.L. Italy Company Italy 100%
Foresight Group Australia Pty Limited Australia Company Australia 100%
FGA Ventures Pty Ltd Australia Company Australia 100%
Above It Pty Ltd Australia Company Australia 100%
Foresight Group Australia Services
Pty Limited Australia Company Australia 100%
Foresight Group Iberia SL Spain Company Spain 100%
Foresight Energy Infrastructure
Partners GP S.à r.l. Luxembourg Company Luxembourg 100%
Foresight Group S.à r.l. Luxembourg Company Luxembourg 100%
Foresight Group Luxembourg S.A. Luxembourg Company Luxembourg 100%
Foresight Solar LLP UK LLP England & Wales 100%
Foresight European Solar Fund CIP
GP Limited UK Company Scotland 100%
Foresight 1 VCT Limited UK Company England & Wales 100%
Foresight Energy VCT Limited UK Company England & Wales 100%
In liquidation
Foresight Metering Limited UK Company England & Wales 100%
17. Investments in equity accounted joint ventures
Accounting policy:
Joint ventures are accounted for using the equity method, where
the Group's share of post -- acquisition profits and losses and
other comprehensive income is recognised in the Statement of
Comprehensive Income.
31 March 31 March
2022 2021
GBP000 GBP000
-------------------------- -------- --------
At beginning of period 251 235
Share of post-tax profits 53 26
Foreign exchange movement - (10)
Disposal (304) -
-------------------------- -------- --------
At end of period - 251
-------------------------- -------- --------
The investment in joint venture related to a joint venture
entered into by Foresight Group S.R.L. which held a 50% holding in
FV Solar Lab S.R.L.
Joint venture
FV Solar Lab S.R.L. is a separate structured vehicle
incorporated and operating in Italy. It was set up by the Group and
VEI Green on commencement of ForVEI II, an investment platform
which specialises in acquiring solar assets in Italy. The platform
was managed by the Group and VEI Green who shared equally in the
assets and liabilities of FV Solar Lab S.R.L. and under IFRS 11
this joint arrangement was classified as a joint venture and was
included in the consolidated financial statements using the equity
method.
On 21 January 2022, the Group acquired VEI Green's 50% holding
in FV Solar S.R.L.; see note 31 for business combinations.
Consequently, FV Solar Lab S.R.L. ceased to be accounted for as a
joint venture under IFRS 11 but as a subsidiary under IFRS 10.
Summarised financial information in relation to the joint
venture is presented below up to 21 January 2022:
31 March 31 March
2022 2021
GBP000 GBP000
------------------------------------------------ -------- --------
Profit or loss 53 26
Other comprehensive income
Translation differences on foreign subsidiaries - (10)
------------------------------------------------ -------- --------
Total comprehensive income 53 16
------------------------------------------------ -------- --------
18. Contract costs
Accounting policy:
The Group may enter into placement agency agreements with
providers who will seek to raise investor monies. Where placement
agency fees are incremental to obtaining, extending or modifying a
contract with a customer, these fees are capitalised and then
amortised on a systematic basis consistent with the pattern of
transfer of the services to which the asset relates. Where
placement agency fees are not considered to be incremental, these
are expensed as they are incurred. Capitalised placement fees are
included within contract costs.
Retainer amounts paid to placement agents are recognised as an
asset. Where the placement agent is successful in obtaining a
contract with a customer, the retainer amounts are offset against
the gross placement agency fees when incurred. If unsuccessful, the
retainer amounts are expensed.
Estimation uncertainty and judgements:
When deciding whether placement agency fees are incremental to
obtaining, extending or modifying a contract with a customer, the
Group must consider whether an individual investor is the customer
or whether the fund that the investor is investing into is the
customer. Where the individual investor is the customer, the fees
will be incremental. Where the customer is the fund, the fees for
the individual investor would not be incremental.
31 March 31 March
2022 2021
as restated
GBP000 GBP000
--------------------------------------------- -------- -----------
Incremental placement agency fees, of which: 4,555 837
Non-current assets 3,976 712
Current assets 579 125
---------------------------------------------- -------- -----------
Incremental placement agency fees have arisen from further
interim and final closes of Foresight Energy Infrastructure
Partners. See note 36 for explanation for adjustment to
corresponding amounts.
19. Trade and other receivables
Accounting policy:
Trade and other receivables are recognised initially at
transaction price less attributable transaction costs. Subsequent
to initial recognition they are measured at amortised cost using
the effective interest method, less any impairment losses. For
trade receivables this is because they meet the criteria set out
under IFRS 9, being assets held within a business model that give
rise to contractual cash flows and are solely payments of principal
and interest ("SPPI"). If the arrangement constitutes a financing
transaction, for example if payment is deferred beyond normal
business terms, then it is measured at the present value of future
payments discounted at a market rate of interest for a similar debt
instrument.
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses. The expected credit losses are estimated
using a provision matrix by reference to past default experience
and an analysis of the receivables' current financial position,
adjusted for factors that are specific to the receivable, general
economic conditions of the industry and an assessment of both the
current as well as the forecast direction of conditions at the
reporting date. This encompasses trade receivables and balances
within other receivables such as recharges yet to be invoiced to
funds and investee companies.
Additionally, when a trade receivable is credit impaired, it is
written off against trade receivables and the amount of the loss is
recognised in the income statement. Subsequent recoveries of
amounts previously written off are credited to the Statement of
Comprehensive Income. In line with the Group's historical
experience, and after consideration of current credit exposures,
the Group does not expect to incur any credit losses and has not
recognised any ECLs in the current year (2021: GBPnil).
Amortised cost
The amortised cost of a financial asset is the amount at which
the financial asset is measured at initial recognition, minus
principal repayments, plus or minus the cumulative amortisation
using the effective interest method of any difference between the
initial amount recognised and the maturity amount, minus any
reduction for impairment.
Derecognition
The Group derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows in a transaction in
which substantially all of the risks and rewards of ownership of
the financial asset are transferred or in which the Group neither
transfers nor retains substantially all of the risks and rewards of
ownership and does not retain control of the financial asset. On
derecognition of a financial asset, the difference between the
carrying amount of the asset (or the carrying amount allocated to
the portion of the asset that is derecognised) and the
consideration received (including any new asset obtained less any
new liability assumed) is recognised in the Statement of
Comprehensive Income. Any interest in such transferred financial
assets that is created or retained by the Group is recognised as a
separate asset or liability.
Prepayments arise where the Group pays cash in advance for
services. As the service is provided, the prepayment is reduced and
the operating expense is recognised in the statement of profit or
loss.
31 March 31 March
2022 2021
as restated
GBP000 GBP000
------------------------- -------- -----------
Trade receivables 13,383 10,988
Other receivables 2,310 4,255
Prepayments 2,050 1,958
Staff advances 2,880 2,680
Tax receivable 584 -
Less non-current assets:
Trade receivables 1,120 1,471
Other receivables - -
Prepayments - -
Staff advances 2,140 1,940
Tax receivable - -
Current assets:
Trade receivables 12,263 9,517
Other receivables 2,310 4,255
Prepayments 2,050 1,958
Staff advances 740 740
Tax receivable 584 -
------------------------- -------- -----------
17,947 16,470
------------------------- -------- -----------
The Directors consider that the carrying value of trade and
other receivables approximates to their fair value. Staff advances
have been made in order to retain key staff and are expensed over
five years in line with the contractual terms of the advances but
are repayable if the relevant individual leaves the Group. See note
36 for explanation for adjustment to corresponding amounts.
The ageing profile of the Group's trade receivables is as
follows:
31 March 31 March
2022 2021
GBP000 GBP000
----------- -------- --------
Current 7,254 7,139
Overdue
< 30 days 705 101
30-60 days 449 526
60-90 days 81 77
> 90 days 4,894 3,145
----------- -------- --------
13,383 10,988
----------- -------- --------
The movement in the impairment allowance for trade receivables
is as follows:
31 March 31 March
2022 2021
GBP000 GBP000
----------------------------------------------- -------- --------
At beginning of period 232 532
Written off during the period as uncollectible (159) (355)
Increase during the period 140 55
----------------------------------------------- -------- --------
At end of period 213 232
----------------------------------------------- -------- --------
Trade receivables include amounts which are past due at the
reporting date but against which the Group has not recognised a
provision for impairment as there has been no significant change in
credit quality and the amounts are still considered
recoverable.
In determining the recoverability of trade receivables the
Directors considered any change in the credit quality of the trade
receivable from the date the credit was initially granted up to the
reporting date. Such changes would include when one or more
detrimental events have occurred, such as significant financial
difficulty of the counterparty or it becoming probable that the
counterparty will enter bankruptcy or other financial
reorganisation. As the majority of trade receivables are fees
settled directly from the assets of the respective funds, the
credit risk is considered to be very low. When trade receivables
are fees settled directly from investee companies, i.e. Directors'
fees there is the possibility of financial difficulty, however
these fees individually are not significant. See note 30 for
management of credit risk.
20. Cash and cash equivalents
Accounting policy:
Cash and cash equivalents comprise cash on hand and cash at
banks.
31 March 31 March
2022 2021
GBP000 GBP000
----------------------------------------------------- -------- --------
Cash and cash equivalents per Statement of Financial
Position 54,289 39,431
Cash and cash equivalents per Cash Flow Statement 54,289 39,431
----------------------------------------------------- -------- --------
21. Trade and other payables
Accounting policy:
Trade and other payables are recognised initially at transaction
price plus attributable transaction costs. Subsequent to initial
recognition they are measured at amortised cost using the effective
interest method.
Amortised cost
The amortised cost of a financial liability is the amount at
which the financial liability is measured at initial recognition,
minus principal repayments, plus or minus the cumulative
amortisation using the effective interest method of any difference
between the initial amount recognised and the maturity amount.
Derecognition
The Company derecognises a financial liability when its
contractual obligations are discharged or cancelled or expire.
31 March 31 March
2022 2021
GBP000 GBP000
---------------------------------- -------- --------
Trade payables 1,322 1,175
Accruals 12,459 8,697
Deferred income 134 541
Other payables 4,716 5,244
VAT and PAYE 3,234 3,520
Corporation tax 497 143
Partnership capital contributions 1,680 1,619
Less non-current liabilities:
Trade payables - -
Accruals 64 295
Deferred income - -
Other payables - -
VAT and PAYE - -
Corporation tax - -
Partnership capital contributions - -
Current liabilities:
Trade payables 1,322 1,175
Accruals 12,395 8,402
Deferred income 134 541
Other payables 4,716 5,244
VAT and PAYE 3,234 3,520
Corporation tax 497 143
Partnership capital contributions 1,680 1,619
---------------------------------- -------- --------
23,978 20,644
---------------------------------- -------- --------
Trade and other payables comprise amounts outstanding for trade
purchases and ongoing costs.
The Directors consider the carrying amount of trade and other
payables approximates to their fair value when measured by
discounting cash flows at market rates of interest as at the
Statement of Financial Position date. Deferred income relates to
fees received in advance. Partnership capital contributions relate
to contributions by members to Foresight Group LLP. The main
component of accruals are bonuses relating to the financial period
but substantially settled in July in the following financial
year.
22. Loans and borrowings
Accounting policy:
Loans and borrowings are recognised initially at fair value, net
of transaction costs incurred. Loans and borrowings are
subsequently carried at amortised cost; any difference between the
proceeds (net of transaction costs) and the redemption value is
recognised in the Statement of Comprehensive Income over the period
of the borrowings using the effective interest method.
Loans and borrowings are derecognised from the Statement of
Financial Position when the obligation specified in the contract is
discharged, is cancelled or expires.
The difference between the carrying amount of a financial
liability that has been extinguished or transferred to another
party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss
as other operating income or finance costs.
Loans and borrowings are classified as current liabilities
unless the Group has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting
period.
Loans and borrowings arose from the acquisition of PiP Manager
Limited in the year ended 31 March 2021 (seen note 31).
31 March 31 March
2022 2021
GBP000 GBP000
------------------------ -------- --------
Current liabilities
Loans and borrowings 660 688
Non-current liabilities
Loans and borrowings 3,030 3,636
------------------------ -------- --------
3,690 4,324
------------------------ -------- --------
Terms and debt repayment schedule
31 March
2022
Nominal Carrying
interest Year of amount(1)
Currency rate maturity GBP000
--------------- --------- -------- -------- ---------
Unsecured loan GBP 2% 2027 3,690
--------------- --------- -------- -------- ---------
2. The carrying amount of these loans and borrowings equates to the fair value.
The movement on the above loans may be summarised as
follows:
31 March 31 March
2022 2021
GBP000 GBP000
----------------------- -------- --------
At beginning of period 4,324 -
At acquisition - 4,242
Interest 85 82
Repayment (719) -
----------------------- -------- --------
At end of period 3,690 4,324
----------------------- -------- --------
For more information about the Group's exposure to interest rate
and foreign currency risk, see note 30.
23. Lease liabilities
Accounting policy:
Applying IFRS 16, for all leases, the Group:
-- Recognises right-of-use assets and lease liabilities in the
Statement of Financial Position, initially measured at the present
value of the future lease payments
-- Recognises depreciation of right -- of-use assets and
interest on lease liabilities in the Statement of Comprehensive
Income
-- Separates the total amount of cash paid into a principal
portion (presented within financing activities) and interest
(presented within operating activities) in the Cash Flow
Statement
Right-of-use assets are measured at cost less accumulated
depreciation and impairment losses. The carrying value is also
adjusted for any remeasurement of the lease liability. The entity
has chosen to apply the practical expedient in C3 of IFRS 16 to not
reassess whether a contract is, or contains, a lease at the date of
initial application. The lease liability is measured in subsequent
periods using the effective interest rate method and adjusted for
lease payments.
Lease incentives (e.g. rent-free periods) are recognised as part
of the measurement of the right-of-use assets and lease
liabilities, whereas under IAS 17 they resulted in the recognition
of a lease incentive, amortised as a reduction of rental expenses
on a straight-line basis. For short-term leases (lease term of 12
months or less) and leases of low-value assets, the Group has opted
to recognise a lease expense on a straight-line basis as permitted
by IFRS 16.53 (c). This expense is presented within administrative
expenses in the Statement of Comprehensive Income.
The cost of any contractual requirements to dismantle, remove or
restore the leased asset, typically dilapidations, are to be
included in the initial recognition of right-of-use assets.
Estimation uncertainty and judgements:
The Group cannot readily determine the interest rates implicit
in the leases; therefore, it uses its incremental borrowing rate
("IBR") to measure lease liabilities. The IBR is the rate of
interest that the Group would have to pay to borrow over a similar
term, and with a similar security, the funds necessary to obtain an
asset of a similar value to the right-of-use asset in a similar
economic environment. The IBR therefore reflects what the Group
"would have to pay", which requires estimation when no observable
rates are available (such as for subsidiaries that do not enter
into financing transactions) or when they need to be adjusted to
reflect the terms and conditions of the lease (for example, when
adjustments are required to reflect the underlying economic market
where overseas subsidiaries are located).
The Group estimates the IBR using observable inputs (such as
market interest rates) when available and is required to make
certain entity -- specific estimates (such as the subsidiary's
standalone credit rating).
Set out below are the carrying amounts of the right-of-use
assets recognised and associated lease liabilities (included under
current and non-current liabilities) together with their movements
over the period. The leases all relate to the offices of the Group
as follows:
VCF II LLP
-- 23rd Floor Shard, London
-- 18th Floor Shard, London
-- Park Row, Nottingham 3rd Floor
-- Park Row, Nottingham 4th Floor
Foresight Group LLP
-- George Street, Edinburgh, Scotland
-- Station Road, Cambridge
-- King Street, Manchester
Foresight Group S.R.L.
-- Piazza Barberini, Rome
Foresight Group Iberia SL
-- Planta Tercera, Madrid
New lease in year ended 31 March 2022:
Foresight Group Luxembourg S.A.
-- Europe Building, Allee Scheffer, Luxembourg
The leases are typically of ten years' duration.
31 March 31 March
2022 2021
GBP000 GBP000
----------------------- -------- --------
Right-of-use asset
At beginning of period 9,120 10,346
Additions 1,477 486
Depreciation (2,337) (1,712)
----------------------- -------- --------
At end of period 8,260 9,120
----------------------- -------- --------
Lease liability
At beginning of period 12,019 13,498
----------------------- -------- --------
Current 2,157 1,945
----------------------- -------- --------
Non-current 9,862 11,553
----------------------- -------- --------
Additions 544 486
Lease payment (2,719) (2,570)
Interest 564 621
Foreign exchange - (16)
----------------------- -------- --------
At end of period 10,408 12,019
----------------------- -------- --------
Current 2,302 2,157
----------------------- -------- --------
Non-current 8,106 9,862
----------------------- -------- --------
10,408 12,019
----------------------- -------- --------
The table below summarises the maturity profile of the Group's
lease liabilities based on contractual undiscounted payments at 31
March 2022.
One to Two to
Less than two five More than
Total one year years years five years
GBP000 GBP000 GBP000 GBP000 GBP000
------ --------- ------ ------ ----------
11,634 2,799 2,800 5,172 863
------ --------- ------ ------ ----------
The table below summarises the maturity profile of the Group's
lease liabilities based on contractual undiscounted payments at 31
March 2021.
One to Two to
Less than two five More than
Total one year years years five years
GBP000 GBP000 GBP000 GBP000 GBP000
------ --------- ------ ------ ----------
13,817 2,712 2,735 7,289 1,081
------ --------- ------ ------ ----------
The following are the amounts recognised in the Statement of
Comprehensive Income:
31 March 31 March
2022 2021
GBP000 GBP000
-------------------------------------------- -------- --------
Depreciation expense on right-of-use assets 2,337 1,712
Interest expense on lease liabilities 564 621
-------------------------------------------- -------- --------
2,901 2,333
-------------------------------------------- -------- --------
The weighted average incremental borrowing rate applied to lease
liabilities recognised in the Statement of Financial Position at
the date of initial application was 4.79%.
In accordance with IFRS 16.53(c), (d) and (e) (in respect of
short-term, low-value and variable lease expenses), the Group has
opted to recognise a lease expense on a straight-line basis as
permitted by IFRS 16 for these items. This expense is presented
within administrative expenses in the Statement of Comprehensive
Income as follows and for the year ended 31 March 2022 was
GBP117,000 (2021: 241,000).
In the financial period, the Group recognised dilapidation
provisions on its offices of GBP933,000 as right-of-use assets and
a depreciation charge of GBP528,000.
24. Provisions
Accounting policy:
A provision is recognised in the Statement of Financial Position
when the Group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation. If the
effect is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and, when
appropriate, the risks specific to the liability. The increase in
the provision due to the passage of time is recognised in finance
costs.
31 March 31 March
2022 2021
GBP000 GBP000
------------------------- -------- --------
Dilapidations provisions 933 -
------------------------- -------- --------
Dilapidations provision
As part of its operating lease agreement for its various
premises, the Group has an obligation to pay for dilapidation costs
at the end of the lease term. Independent surveyors carried out
inspections during the period to assess the likely dilapidations
which the Group has now included provisions for.
25. Deferred tax assets and liabilities
Accounting policy:
Deferred tax is recognised based on differences between the
carrying value of assets and liabilities for accounting purposes
and their tax values (see note 12). Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are only recognised to the extent that the
Group considers them to be recoverable, which is determined by
reference to estimates that future taxable profits will be
available against which deductible temporary differences can be
utilised.
The carrying amount of deferred tax assets is reviewed at each
Statement of Financial Position date and reduced to the extent that
it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Estimation uncertainty and judgements:
Judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing and the
level of future taxable profits.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates (and tax
legislation) that have been enacted or substantively enacted at the
Statement of Financial Position date.
The movement on the deferred tax account is as shown below:
31 March 31 March
2022 2021
GBP000 GBP000
------------------------------------------------ -------- --------
At beginning of period (604) 20
Recognised in Statement of Comprehensive Income
Tax expense 376 (236)
Foreign exchange 26 -
------------------------------------------------ -------- --------
402 (236)
Recognised in equity
Share-based payment reserve 22 -
Arising on business combination
Intangible asset (see note 31) (403) (547)
Other temporary and deductible differences - 159
------------------------------------------------ -------- --------
At end of period (583) (604)
------------------------------------------------ -------- --------
The movements in deferred tax assets and liabilities during the
period are shown below:
(Charged)/
credited (Charged)/
to profit credited
Asset Liability Net or loss to equity
2022 2022 2022 2022 2022
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------------------------------------ ------ --------- ------- ---------- ----------
Other temporary and deductible differences 615 (178) 437 582 22
Business combinations - intangible asset - (1,020) (1,020) (87) -
Business combinations - other temporary and deductible differences - - - (119) -
------------------------------------------------------------------ ------ --------- ------- ---------- ----------
615 (1,198) (583) 376 22
------------------------------------------------------------------ ------ --------- ------- ---------- ----------
(Charged)/
credited (Charged)/
to profit credited
Asset Liability Net or loss to equity
2021 2021 2021 2021 2021
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------------------------------------- ------ --------- ------ ---------- ----------
Other temporary and deductible differences 858 (1,051) (193) (213) -
Business combinations - intangible asset - (530) (530) 17 -
Business combinations - other temporary and deductible differences 119 - 119 (40) -
------------------------------------------------------------------- ------ --------- ------ ---------- ----------
977 (1,581) (604) (236) -
------------------------------------------------------------------- ------ --------- ------ ---------- ----------
26. Employee benefits
Accounting policy:
The Group operates a defined contribution pension plan. A
defined contribution plan is a pension plan under which the Group
pays fixed contributions to a third party. The Group has no legal
or constructive obligations to pay further contributions if the
fund does not hold sufficient assets to pay all employees the
benefits relating to employee service in the current and prior
periods.
The Group has no further payment obligations once the
contributions have been paid. The contributions are recognised as
an employee benefit expense when they are due. Prepaid
contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
The amounts charged to the Statement of Comprehensive Income in
respect of these schemes represents contributions payable in
respect of the accounting period. The total annual pension cost for
the defined contribution schemes for the year ended 31 March 2022
was GBP608,000 (2021: 601,000).
27. Share capital and other reserves
Accounting policy:
Ordinary Shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in share
premium as a deduction from the proceeds.
Ordinary Shares and Preference Shares
31 March 31 March
2022 2021
GBP GBP
----------------------------------------- --------- --------
Share capital
Ordinary Shares - -
----------------------------------------- --------- --------
Preference Shares at beginning of period - 849
Preference Shares redeemed - (849)
----------------------------------------- --------- --------
Preference Shares at end of period - -
----------------------------------------- --------- --------
Ordinary Shares
31 March 31 March 31 March 31 March
2022 2022 2021 2021
Number GBP Number GBP
-------------------------------- ----------- -------- ----------- --------
Ordinary Shares of no par value
In issue at start of the year 108,333,333 - - -
Redesignated - - 1,000,000 -
Subdivided - - 99,000,000 -
Issued - - 8,333,333 -
In issue at end of the year 108,333,333 - 108,333,333 -
A shares of no par value
In issue at start of the year - - 1 -
Cancelled during the year - - (1) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
B shares of no par value
In issue at start of the year - - 539,840 -
Issued during the year - - 464,215 -
Cancelled during the year - - (4,055) -
Redesignated during the year - - (1,000,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
D shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
F shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
H shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
I shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
J shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
L shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
M shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
N shares of no par value
In issue at start of the year 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
P shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
Q shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
R shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
S shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
T shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
U shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
V shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
W shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
X shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
Y shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
Z shares of no par value
In issue at start of the year - - 1,000 -
Cancelled during the year - - (1,000) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
AA shares of no par value
In issue at start of the year - - 500 -
Cancelled during the year - - (500) -
In issue at end of the year - - - -
-------------------------------- ----------- -------- ----------- --------
Rights for each Ordinary Share class
Ordinary Shares
The rights attaching to the shares are uniform in all respects
and they form a single class for all purposes, including with
respect to voting and for all dividends and other distributions
declared, made or paid on the Ordinary Share capital of the
Company.
Subject to any rights and restrictions attached to any shares,
on a show of hands every Shareholder who is present in person shall
have one vote and on a poll every Shareholder present in person or
by proxy shall have one vote per share.
Except as provided by the rights and restrictions attached to
any class of shares, Shareholders are under general law entitled to
participate in any surplus assets in a winding up in proportion to
their shareholdings.
Note that for all share classes discussed below in the following
sub-section, these shares were cancelled at the date of the IPO and
replaced with the new Ordinary Shares discussed above.
A shares
Rights:
Income - entitled to receive and participate in dividends or
other distributions attributable to the A shares resolved by the
Board to be so distributed in respect of any accounting period or
any other income or right to participate therein.
Capital - entitled on a winding up or sale to participate in the
distribution of capital in the manner described in Companies Law
and solely in respect of amounts paid up on such A shares.
Voting - entitled to receive notice of and to attend general
meetings of the Company but not vote at such meetings.
B shares
Rights:
Income - entitled to receive and participate in dividends or
other distributions attributable to the B shares resolved by the
Board to be so distributed in respect of any accounting period or
any other income or right to participate therein.
Capital - entitled on a winding up or sale to participate in the
distribution of capital in the manner described in Companies Law
and in proportion to the number of B shares held by them.
Redemption - redeemable at the option of the Company upon the
member ceasing to be an employee or ceasing to hold the shares for
an employee.
Voting - entitled to receive notice of and to attend and vote at
general meetings of the Company.
D to AA shares ("Alphabet shares" - each a separate share
class)
Rights:
Income - entitled to receive and participate in dividends or
other distributions attributable to the respective class of the
Alphabet shares resolved by the Board to be so distributed in
respect of any accounting period or any other income or right to
participate therein.
Capital - entitled on a winding up or sale to participate in the
distribution of capital in the manner described in Companies Law
and solely in respect of amounts paid up on such Alphabet
shares.
Voting - entitled to receive notice of and to attend general
meetings of the Company but not vote at such meetings.
Dividends paid on the above shares are included in note 28
below.
Preference Shares
31 March 31 March
2022 2021
GBP GBP
-------------------------------------------------- --------- --------
Allotted, called up and fully paid
Redeemable shares of no par value paid up at GBP1
per share
At beginning of period - 849
Fully redeemed and cancelled during the year - (849)
-------------------------------------------------- --------- --------
At end of period - -
-------------------------------------------------- --------- --------
These were held in the books of Foresight Group CI Limited
("FGCI") for the benefit of Beau Port Investments Limited. The
redeemable shares were redeemable at the sole option of FGCI, had
no par value and had no voting rights, save in respect of any
resolution to change the rights attached to them.
The Articles of Association of FGCI gave it the power to issue
an unlimited number of shares of no par value as permitted by
law.
The redemptions of Preference Shares over the period are
included in note 28 below.
The Preference Shares were fully redeemed during the year ended
31 March 2021 (pre-IPO).
Share premium
Accounting policy:
Ordinary Shares issued by the Group are recognised at the
proceeds or fair value received, with the excess of the amount
received over nominal value being credited to the share premium
account (net of the direct costs of issue).
Estimation uncertainty and judgements:
The costs incurred for the IPO have been accounted for under IAS
32 as follows:
Incremental costs that were directly attributable to the issuing
of new shares have been taken to equity (share premium). Costs that
relate to the listing, or are otherwise not incremental and
directly attributable to issuing new shares, have been recorded as
an expense in the Statement of Comprehensive Income.
Where costs relate to both share issuance and listing, these are
required to be allocated on a rational and consistent basis between
the two functions. The Directors considered that an appropriate
allocation basis would be the objectives of the IPO where 50% of
the objectives were for the benefit of the Group and have therefore
allocated 50% of the costs to equity (share premium).
31 March 31 March
2022 2021
GBP000 GBP000
----------------------------------- -------- --------
At beginning of period 32,040 -
Cash on primary raise - 35,000
Transaction costs of primary raise - (2,960)
----------------------------------- -------- --------
At end of period 32,040 32,040
----------------------------------- -------- --------
The total transaction costs relating to the IPO amounted to
GBP5.275 million, of which GBP2.96 million was taken to the share
premium account and GBP2.3 million was expensed through
administrative expenses in the Statement of Comprehensive Income in
the year ended 31 March 2021.
Own share reserve
The Group operates a Share Incentive Plan as per note 8. The
Group operates a trust which holds shares that have not yet vested
unconditionally to employees of the Group. These shares are
recorded at cost and are classified as own shares.
At 31 March 2022, the total number of shares held in trust was
228,838, including 152,769 of matching shares. Of the 152,769
matching shares, 45,000 had been transferred from Foresight
Guernsey Limited (see IPO Prospectus) and 107,769 shares had been
purchased at a cost of GBP454,000.
Share-based payment reserve
The share-based payment reserve represents the cumulative cost
of the Group's share-based remuneration schemes and associated
deferred tax; see note 8.
Group reorganisation reserve
The Group reorganisation reserve consists of the Ordinary Share
capital of FGCI. As there is no investment in FGCI held in the
books of any holding companies (Foresight Group Holdings Limited)
this balance is left as a Group reserve.
Retained earnings
Includes all current and prior period retained profits and
losses.
28. Dividends and redemptions
Accounting policy:
Equity dividends are recognised when they become legally
payable. Interim dividends are recognised when they are paid. Final
equity dividends are recognised when approved by the Shareholders.
Redemptions of Preference Shares were recognised when approved by
the Directors of Foresight Group CI Limited upon request from the
Shareholder. Share buybacks are recognised in equity when approved
by the Directors.
31 March 31 March
2022 2021
GBP000 GBP000
---------------------------------------------- -------- --------
Distributions subsequent to the IPO
Interim dividend 4,303 -
Final dividend 1,872 -
Distributions prior to the IPO
Dividends and distributions to equity members - 18,229
Share buybacks - 10
---------------------------------------------- -------- --------
6,175 18,239
---------------------------------------------- -------- --------
Set out below are the details of all equity dividends,
distributions and share buybacks for the year ended 31 March 2022
and year ended 31 March 2021. On IPO, there was a restructuring of
the share capital of the Company so that dividends per share pre
and post-IPO would be incomparable. Therefore, the disclosure of
dividends per share has not been made for pre-IPO equity dividends
as it would be both unhelpful and misleading and not reflective of
future dividend policy.
Year ended 31 March 2022
Ordinary Shares
-- A final dividend of 1.7 pence per share in respect of the year
ended 31 March 2021 was paid on 24 September 2021 with an ex-dividend
date of 9 September 2021 and a record date of 10 September 2021
-- An interim dividend of 4.0 pence per share in respect of the
year ended 31 March 2022 was paid on 25 March 2022 with an ex-dividend
date of 10 March 2022 and a record date of 11 March 2022
Year ended 31 March 2021
A shares
-- On 22 May 2020, the Company declared dividends of GBP137,500
in respect of the Company's A shares
-- On 21 August 2020, the Company declared dividends of GBP137,500
in respect of the Company's A shares
-- On 26 November 2020, the Company declared dividends of GBP183,333
in respect of the Company's A shares
-- On 1 February 2021, the Company declared dividends of GBP8,870,838
in respect of the Company's A shares
Alphabet shares
-- On 1 February 2021, the Company paid dividends of GBP16,561
in respect of the Company's Alphabet shares
Distributions
-- During the financial year, Foresight Group LLP paid distributions
of GBP8,792,208 to its members
-- During the financial year, VCF Partners paid distributions of
GBP91,117 to its members
Share buyback
-- On 9 February 2021, the Company enacted a share buyback of GBP10,000
per share, in respect of one of the Company's A shares
Preference Shares
Redemptions on Preference Shares were as follows:
31 March 31 March
2022 2021
GBP000 GBP000
-------------------------------- --------- --------
Redemption of Preference Shares - 4,753
-------------------------------- --------- --------
In terms of Preference Shares redemptions, these all took place
prior to the IPO via arrangements in place between Beau Port
Investments Limited ("BPIL") and Foresight Group CI Limited. These
arrangements were all terminated before the date of the IPO and all
Preference Shares were fully redeemed and cancelled.
Year ended 31 March 2021
-- On 31 July 2020, Foresight Group CI Limited exercised its right
to redeem one redeemable share for a total consideration of
GBP2,750,000
-- On 17 December 2020, Foresight Group CI Limited redeemed two
redeemable shares for a total consideration of GBP2,003,191
-- On 28 January 2021, Foresight Group CI Limited redeemed the
remaining 846 redeemable shares for nil value and these were
subsequently cancelled
-- The value of these redemptions was determined by the Board of
Directors of FGCI after taking into account FGCI's profits and
working capital requirements
29. Commitments and contingencies
There were no capital commitments or contingencies at 31 March
2022 or 31 March 2021.
30. Financial instruments - classification and measurement
Financial assets
Financial assets comprise cash and cash equivalents, trade
receivables and other receivables (at amortised cost) and
investments at FVTPL, as follows:
31 March 31 March
2022 2021
GBP000 GBP000
---------------------------- -------- --------
Trade and other receivables 18,573 17,923
Cash and cash equivalents 54,289 39,431
Investments at FVTPL 2,781 2,075
---------------------------- -------- --------
75,643 59,429
---------------------------- -------- --------
Financial liabilities
Financial liabilities measured at amortised cost comprise trade
payables, other payables, loans and borrowings and lease
liabilities as follows:
31 March 31 March
2022 2021
as restated
GBP000 GBP000
--------------------- -------- -----------
Trade payables 1,322 1,175
Other payables 6,396 6,863
Loans and borrowings 3,690 4,324
Lease liabilities 10,408 12,019
--------------------- -------- -----------
21,816 24,381
--------------------- -------- -----------
Financial liabilities for the year ended 31 March 2021 have been
restated due to incorrect inclusion of statutory obligations and
exclusion of loans and borrowings and lease liabilities.
Financial risk management
The Group's activities expose it to a variety of financial
risks: market risk (including cash flow interest rate risk),
liquidity risk and credit risk. Risk management is carried out by
the Board of Directors. The Group uses financial instruments to
provide flexibility regarding its working capital requirements and
to enable it to manage specific financial risks to which it is
exposed.
(a) Market risk
(i) Market price risk
Market price risk arises from uncertainty about the future
prices of financial instruments held in accordance with the Group's
investment objectives. It represents the potential loss that the
Group might suffer through holding market positions in the face of
market movements.
The investments in equity and loan stocks of unquoted companies
are rarely traded and as such the prices are more difficult to
determine than those of more widely traded securities. In addition,
the ability of the Group to realise the investments at their
carrying value will at times not be possible if there are no
willing purchasers. The potential maximum exposure to market price
risk, being the value of the investments as at 31 March 2022, was
GBP2.8 million (2021: GBP2.1 million).
(ii) Interest rate risk
The Group has only GBP3.7 million of external debt, related to
the PiP acquisition during the year ended 31 March 2021 (see notes
22 and 31) with a fixed interest rate. As the interest rates on
Shareholders' loans and lease contracts are also fixed, interest
rate risk is considered to be very low. Cash and cash equivalents
include an interest-bearing deposit account which earned interest
at 0.05% per annum at 31 March 2022. As at 31 March 2022, if the
interest rate increased or decreased by ten basis points the
interest earned would increase or decrease by GBP7,000.
(iii) Foreign exchange risk
The Group is not exposed to significant foreign exchange
transaction risk as the Group's activities are primarily within the
UK. Foreign exchange risk is therefore considered immaterial.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group
maintains
significant liquid resources in the form of cash or cash
deposits in order to meet working capital and regulatory needs.
Foresight is predominantly financed through a combination of share
capital, undistributed profits and cash.
The contractual maturities (representing undiscounted
contractual cash flows) of financial liabilities are contained in
the respective note for each category of liability as follows:
Trade and other payables - see note 21
Loans and borrowings - see note 22
Lease liabilities - see note 23
(c) Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group. In order to minimise the risk, the Group endeavours only to
deal with companies which are demonstrably creditworthy and this,
together with the aggregate financial exposure, is continuously
monitored. The maximum exposure to credit risk is the value of the
outstanding amount.
The Group does not consider that there is any concentration of
risk within either trade or other receivables.
Credit risk on cash and cash equivalents is considered to be
very low as the counterparties are all substantial banks with high
credit ratings.
Capital risk management
The Group is predominantly equity funded and this makes up the
capital structure of the business. Equity comprises share capital,
share premium and retained profits and is equal to the amount shown
as "Equity" in the balance sheet.
The Group's current objectives when maintaining capital are
to:
-- Safeguard the Group's ability as a going concern so that it
can continue to pursue its growth plans
-- Maintain adequate financial flexibility to preserve its ability
to meet financial obligations, both current and long term
-- Maintain regulatory capital
-- Provide a reasonable expectation of future returns to Shareholders
The Group sets the amount of capital it requires in proportion
to risk. The Group manages its capital structure and makes
adjustments to it in the light of changes in economic conditions
and the risk characteristics of underlying assets. In order to
maintain or adjust the capital structure, the Group may issue new
shares or sell assets to reduce debt.
During the year to 31 March 2022, the Group's strategy remained
unchanged and all regulatory capital requirements of subsidiaries
in the Group were complied with. Foresight Group LLP has documented
its Pillar III disclosures required by the Financial Conduct
Authority under BIPRU 11. These are available on the Foresight
Group website or from its registered office.
Fair value hierarchy
Unquoted investments represents the Group's share of the value
of the underlying investments held across various Funds Under
Management. These unquoted investments are valued on a net asset
basis by the Group. The actual underlying investments are valued in
accordance with the following rules, which are consistent with the
IPEV Valuation Guidelines. When valuing an unquoted investment at
fair value the following factors will be considered:
i) Where a value is indicated by a material arms-length
transaction by an independent third party in the shares of a
company, this value will be used
ii) In the absence of (i), and depending upon both the
subsequent trading performance and investment structure of an
investee company, the valuation basis will usually move to
either:
a) an earnings multiple basis. The shares may be valued by
applying a suitable multiple to that company's historic, current or
forecast earnings before tax, interest, depreciation and
amortisation (the ratio used being based on a comparable sector but
the resulting value being adjusted to reflect points of difference
identified compared to the sector including, inter alia,
illiquidity); or
b) where a company's under-performance against plan indicates a
diminution in the value of the investment, a write down against
cost is made, as appropriate. Where the value of an investment has
fallen permanently below cost, the loss is treated as a permanent
write down and as a realised loss, even though the investment is
still held. The Group assesses the portfolio for such investments
and, after agreement with the relevant manager, will agree the
values that represent the extent to which a realised loss should be
recognised. This is based upon an assessment of objective evidence
of that investment's future prospects, to determine whether there
is potential for the investment to recover in value
iii) Premiums on loan investments are accrued at fair value when
the Company receives the right to the premium and when considered
recoverable
iv) Where an earnings multiple or cost less impairment basis is
not appropriate and overriding factors apply, discounted cash flow,
a net asset valuation, or industry specific valuation benchmarks
may be applied. An example of an industry specific valuation
benchmark would be the application of a multiple to that company's
historic, current or forecast turnover (the multiple being based on
a comparable sector but with the resulting value being adjusted to
reflect points of difference including, inter alia,
illiquidity)
The following table shows financial instruments recognised at
fair value, analysed between those whose fair value is based
on:
-- Quoted prices (unadjusted) in active markets for identical assets
or liabilities (Level 1)
-- Inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (as prices)
or indirectly (derived from prices) (Level 2)
-- Inputs for the instrument that are not based on observable market
data (unobservable inputs) (Level 3)
Level Level Level
1 2 3 Total
As at 31 March 2022 GBP000 GBP000 GBP000 GBP000
-------------------------- ------- ------- ------- ------
Unquoted investments - - 2,781 2,781
-------------------------- ------- ------- ------- ------
Net financial instruments - - 2,781 2,781
-------------------------- ------- ------- ------- ------
Level 1 Level 2 Level 3 Total
As at 31 March 2021 GBP000 GBP000 GBP000 GBP000
-------------------------- ------- ------- ------- ------
Unquoted investments - - 2,075 2,075
-------------------------- ------- ------- ------- ------
Net financial instruments - - 2,075 2,075
-------------------------- ------- ------- ------- ------
Transfers
During the period there were no transfers between Levels 1, 2 or
3.
The unobservable inputs may be summarised as follows:
31 March
Change
2022 Significant in
fair value unobservable Range Sensitivity fair value
Asset class and valuation GBP000 inputs estimates factor GBP000
-------------------------- ---------- ------------ --------- ----------- ----------
Net financial instruments 2,781 NAV 1x +/-5% +/- 139
-------------------------- ---------- ------------ --------- ----------- ----------
As can be seen in the table above, the most significant
unobservable input is in relation to the NAV of the relevant
investments. A change of 5% to this assumption would increase or
decrease the value of these investments by GBP139,000.
31. Business combinations
Accounting policy:
The acquisition of subsidiaries is accounted for using the
acquisition method. The cost of the acquisition is measured as the
aggregate of the fair values, at the date of exchange, of assets
given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the acquiree. The
acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3
are recognised at their fair value at the acquisition date.
Acquisition-related costs are expensed as incurred and included
within administrative expenses in the Statement of Comprehensive
Income.
Where applicable, the Group applies the optional concentration
test to assess whether an acquired set of activities is not a
business. If the concentration test is not met, the Group then
determines that it has acquired a business when the acquired set of
activities and assets include an input and a substantive process
that together significantly contribute to the ability to create
outputs.
Goodwill
Goodwill arising on consolidation represents the excess of the
cost of acquisition over the Group's interest in the fair value of
the identifiable assets and liabilities of a subsidiary, associate,
or jointly controlled entity at the date of acquisition. Goodwill
is initially recognised as an asset at cost assessed for impairment
at each reporting date and is subsequently measured at cost less
any accumulated impairment losses. Any gain on bargain purchase is
credited to administrative expenses in the Statement of
Comprehensive Income in the year such gain on bargain purchase
arises.
Any impairment is recognised immediately in profit or loss and
is not subsequently reversed. On disposal of a subsidiary,
associate or jointly controlled entity, the attributable amount of
goodwill is included in the determination of the profit or loss on
disposal.
Acquisitions in the year ended 31 March 2022
Details of the acquisition in the year ended 31 March 2022 are
as follows:
Country of Nature of Date of Consideration Percentage
Business incorporation activity acquisition GBP000 ownership
------------- -------------- ------------------- ------------ ------------- ----------
Asset management
and investment
advisory services
FV Solar Lab to ForVEI 21 January
S.R.L. Italy II 2022 557 100%
------------- -------------- ------------------- ------------ ------------- ----------
The entity was acquired via direct investment in the share
capital of the target. The Group previously held 50% ownership as
per note 17. The acquisition represented an opportunity for the
Group to expand its Italian business by becoming the sole manager
of ForVEI II which presented growth opportunities and secured
additional recurring revenue. By completing the transaction, AUM
increased by GBP0.1 billion.
The carrying amount of assets and liabilities in the books of
the acquiree at the date of acquisition was as follows:
GBP000
---------------------------- ------
Trade and other receivables 520
Cash and cash equivalents 218
Trade and other payables (141)
---------------------------- ------
Total carrying value 597
---------------------------- ------
Purchase consideration was GBP557,000 and there were no
transaction costs.
The above acquisition is reflected in the Cash Flow Statement as
follows:
GBP000
------------------------------------------- ------
Cash paid (557)
------------------------------------------- ------
(557)
Cash acquired on acquisition of subsidiary 218
------------------------------------------- ------
Total per Cash Flow Statement (339)
------------------------------------------- ------
The following intangible assets were recognised at
acquisition:
GBP000
---------------------------------- ------
Intangible asset - customer lists 1,679
---------------------------------- ------
The fair values of the assets and liabilities arising from the
acquisition are as follows:
GBP000
------------------------------------------ ------
Intangible asset 1,679
Trade and other receivables 520
Cash and cash equivalents 218
Trade and other payables (141)
Deferred tax liability - intangible asset (403)
------------------------------------------ ------
Total fair value 1,873
------------------------------------------ ------
The fair value of the intangible asset above was derived from
cash flow forecasts for the FV Solar Lab S.R.L. standalone
business, being the fees arising from management contracts for
ForVEI II using a 7% discount rate based on the weighted average
cost of capital ("WACC") derived from a capital asset pricing model
("CAPM"). The intangible asset is being amortised over the
remaining life of the ForVEI II contracts.
The gain on disposal of the Group's existing interest in FV
Solar Lab S.R.L is as follows:
GBP000
----------------------------------------------------------------- ------
Fair value of investment in joint venture 937
Less carrying value of investment in joint venture (see note 17) (304)
Gain on disposal of investment in joint venture 633
----------------------------------------------------------------- ------
The gain on the acquisition of FV Solar Lab S.R.L. is as
follows:
GBP000
--------------------------------------------------------------- ------
Fair value of net assets acquired 1,873
Less fair value of previously held investment in joint venture (937)
Less consideration (557)
Gain on bargain purchase 379
--------------------------------------------------------------- ------
Total gain arising from business combination achieved in
stages:
GBP000
------------------------------------------------ ------
Gain on disposal of investment in joint venture 633
Gain on bargain purchase 379
------------------------------------------------ ------
Total gain 1,012
------------------------------------------------ ------
The Group has credited this total gain to the Statement of
Comprehensive Income during the year ended 31 March 2022. Due to
the materiality of the gain, this is shown as a separate line item
in the Statement of Comprehensive Income.
Amounts that the acquisition contributed to both Group revenue
and profit in the post-acquisition period are as follows:
GBP000
------------------------------- ------
Revenue contribution 148
Profit before tax contribution 65
------------------------------- ------
Had the acquisition occurred at the start of the period, the
acquisition would have made the following contributions to both
Group revenue and profit:
GBP000
------------------------------- ------
Revenue contribution 806
Profit before tax contribution 230
------------------------------- ------
Acquisitions in the year ended 31 March 2021
Details of the acquisition in the year ended 31 March 2021 are
as follows:
Country of Nature of Date of Consideration Percentage
Business incorporation activity acquisition GBP000 ownership
------------ -------------- ----------------- ------------ ------------- ----------
Asset management
PiP Manager services to 18 August
Limited UK pension funds 2020 5,339 100%
------------ -------------- ----------------- ------------ ------------- ----------
The entity was acquired via direct investment in the share
capital of the target. The following subsidiaries of PiP Manager
Limited were also acquired:
-- PiP Multi-Strategy Infrastructure Limited
-- PiP Multi-Strategy Infrastructure (Scotland) Limited
-- PiP RP-MA GP LLP
-- PiP Multi-Strategy Infrastructure GP LLP
-- PiP WM-MA GP LLP
The carrying amount of assets and liabilities in the books of
the acquiree at the date of acquisition was as follows:
GBP000
---------------------------- ------
Trade and other receivables 377
Cash and cash equivalents 3,446
Trade and other payables (362)
Non-current payables (439)
Deferred tax asset 50
---------------------------- ------
Total carrying value 3,072
---------------------------- ------
Purchase consideration was GBP1.1 million of cash and GBP4.2
million of loans due to the vendors taken on by the Group at
acquisition (further details of these loans are included in note 22
above). Transaction costs of GBP184,000 (which have been expensed)
comprise adviser fees, including financial, tax and legal due
diligence costs. Consideration is broken down as follows:
GBP000
----------------------- ------
Cash paid 1,098
----------------------- ------
1,098
Founder loans taken on 4,241
----------------------- ------
Total consideration 5,339
----------------------- ------
The above acquisition is reflected in the Cash Flow Statement as
follows:
GBP000
------------------------------------------- -------
Cash paid (1,098)
------------------------------------------- -------
(1,098)
Cash acquired on acquisition of subsidiary 3,446
------------------------------------------- -------
Total per Cash Flow Statement 2,348
------------------------------------------- -------
The following intangible assets were recognised at
acquisition:
GBP000
---------------------------------- ------
Intangible asset - customer lists 2,879
---------------------------------- ------
The fair values of the assets and liabilities arising from the
acquisition are as follows:
GBP000
----------------------------------------------- ------
Intangible asset 2,879
Trade and other receivables 377
Cash and cash equivalents 3,446
Trade and other payables (362)
Non-current payables (439)
Deferred taxation asset 159
Deferred taxation liability - intangible asset (547)
----------------------------------------------- ------
Net assets acquired 5,513
Consideration 5,339
----------------------------------------------- ------
Gain on bargain purchase (174)
----------------------------------------------- ------
Transaction costs 184
----------------------------------------------- ------
The fair value of the intangible asset above was derived from
cash flow forecasts for the PiP standalone business, over a 20 year
period using a 13.75% discount rate based on the weighted average
cost of capital ("WACC") derived from a capital asset pricing model
("CAPM"). The intangible asset is being amortised over a useful
life of 20 years.
The acquisition of PiP resulted in a small gain on bargain
purchase as a result of the assessment of fair value of assets
acquired and liabilities assumed marginally exceeding the total of
the fair value of the purchase consideration. The Group has
credited the gain on bargain purchase to the Statement of
Comprehensive Income during the year ended 31 March 2021, as a
separate line item in the Statement of Comprehensive Income within
gain on business combination (due to the materiality of the gain in
FY22).
Amounts that the acquisition contributed to both Group revenue
and profit in the post-acquisition period are as follows:
GBP000
------------------------------- ------
Revenue contribution 1,432
Profit before tax contribution 212
------------------------------- ------
32. Assets and liabilities of disposal group as held for
sale
Accounting policy:
The Group classifies non-current assets and disposal groups as
held for sale if their carrying amounts will be recovered
principally through a sale transaction rather than through
continuing use. Non-current assets and disposal groups classified
as held for sale are measured at the lower of their carrying amount
and fair value less costs to sell. Costs to sell are the
incremental costs directly attributable to the disposal of an asset
(disposal group), excluding finance costs and income tax
expense.
Assets and liabilities classified as held for sale are presented
separately as current items in the Statement of Financial
Position.
A disposal group qualifies as a discontinued operation if it is
a component of an entity that either has been disposed of, or is
classified as held for sale, and:
-- Represents a separate major line of business or geographical area of operations
-- Is part of a single co-ordinated plan to dispose of a
separate major line of business or geographical area of
operations
Or
-- Is a subsidiary acquired exclusively with a view to resale
Discontinued operations are excluded from the results of
continuing operations and are presented as a single amount as
profit or loss after tax from discontinued operations in the
Statement of Comprehensive Income.
The assets and liabilities of operations classified as a
disposal group are as follows:
31 March 31 March
2022 2021
GBP000 GBP000
--------------------------- -------- --------
Assets
Current assets
Cash 65 65
--------------------------- -------- --------
Total assets 65 65
--------------------------- -------- --------
Liabilities
Current liabilities
Trade and other payables (1) (1)
Total liabilities (1) (1)
--------------------------- -------- --------
Net assets and liabilities 64 64
--------------------------- -------- --------
The assets above at 31 March 2022 and 2021 relate to residual
cash balances in Foresight Metering Limited. The liabilities at the
same dates relate to accruals made for liquidator costs.
33. Related party transactions
Transactions between the parent company and its subsidiaries,
which are related parties, have been eliminated on consolidation
and are not disclosed.
Transactions with key management personnel
The Group considers the Executive Committee ("Exco") members as
the key management personnel and the table below sets out all
transactions with these personnel and the Directors:
31 March 31 March
2022 2021
GBP000 GBP000
------------------------- -------- --------
Emoluments 1,240 1,050
Partnership profit share - 3,217
Equity dividends - 9,319
Capital redemptions - 4,763
Other benefits 23 25
IPO proceeds - 148,070
------------------------- -------- --------
Total 1,263 166,444
------------------------- -------- --------
Staff advances
Accounting policy:
Advances to staff (including Partners of Foresight Group LLP)
are accounted for as employee benefits under IAS 19. In line with
IAS 19, the advance is initially recognised as a financial asset
and then as an expense when services are provided, also taking into
account the contractual terms of the advances.
Staff advances are made to various members of Foresight Group
LLP or employees to be expensed over five years in line with the
contractual terms of the advances but are repayable if the relevant
individuals leave the Group. During the year ended 31 March 2022, a
further GBP1,000,000 (2021: GBP1,500,000) of advances were made by
Foresight Group LLP and GBP580,000 (2021: GBP440,000) of the
advances were expensed.
Disposal of long leasehold property
On 2 February 2021, the leasehold interest for Flat 18, Railway
& Bicycle, 205 London Road, Sevenoaks was purchased from
Foresight Group LLP by Julia Fairman, the wife of the Executive
Chairman of the Group, for GBP450,000 (being the fair market value)
resulting in a profit on disposal of GBP170,000. As part of this
transaction, it was agreed that Foresight Group LLP will continue
to pay any council tax, utilities, services charges and rates
payable in connection with the flat for as long as Bernard Fairman
acts as Executive Chairman of FGHL. These expenses are included
above in other benefits and amount to GBP6,000 (2021:
GBP1,000).
Other related party transactions
At 31 March 2021, the Company owed Beau Port Investments
Limited, a privately owned company of Bernard Fairman, GBP530,000
in unpaid dividends. This balance was fully repaid by March
2022.
34. Ultimate holding company
Foresight Group Holdings Limited is the ultimate parent company
of a group of companies that form the Group presented in this
financial information. The Company is a company incorporated and
domiciled in Guernsey.
35. Subsequent events
Subsidiaries
On 1 April 2022, FV Solar Lab S.R.L. merged with Foresight Group
S.R.L..
Business combinations
On 13 June 2022, the Group announced the acquisition of the
technology ventures division of Downing LLP, including the
management of Downing's venture capital trusts, Downing ONE VCT
Plc, Downing FOUR VCT Plc, and the Downing's Ventures Enterprise
Investment Scheme, representing a combined AUM of c.GBP275 million.
The Group paid an initial consideration of c.GBP13.6 million, with
a further consideration of up to GBP4.2 million payable over a
three year period subject to the achievement of certain criteria,
and an additional capped fee sharing arrangement in respect of
future performance and other fees. The acquisition will be funded
from existing financial resources and will diversify the Group's
existing ventures offering.
Completion of the acquisition was on 4 July 2022. Accordingly,
at the date these consolidated financial statements were authorised
for issue, it was impracticable to disclose all the information
required by IFRS 3 Business Combinations as the Group has not
completed its initial accounting of the business combination
including the purchase price allocation. More specifically, the
valuation of investment management contracts acquired, and
valuation of the deferred consideration, has not yet been
finalised. The Group will provide this finalised information in its
Half-year Report for the six months ended 30 September 2022.
The acquisition is expected to contribute GBP4.8 million and
GBP1.6 million to Group revenue and profit respectively in the
post-acquisition period to 31 March 2023. Annualised contribution
to Group revenue and profit is expected to be GBP5.6 million and
GBP2.1 million, respectively.
36. Restatement of corresponding amounts
Consolidated Statement of Comprehensive Income
As restated As reported Change
31 March 31 March 31 March
2021 2021 2021
GBP000 GBP000 GBP000
----------------------------- ----------- ----------- --------
Administrative expenses (48,883) (48,709) (174)
Gain on business combination 174 - 174
----------------------------- ----------- ----------- --------
Corresponding amounts in the Consolidated Statement of
Comprehensive Income to 31 March 2021 have been restated due to
reclassification of amounts presented in administrative expenses to
a new line in the primary statement "Gain on business combination".
In the annual financial statements for the year ended 31 March
2021, gain on business combination was included in administrative
expenses as it was not material for separate disclosure.
Consolidated Statement of Financial Position
As restated As reported Change
31 March 31 March 31 March
2021 2021 2021
GBP000 GBP000 GBP000
--------------------------------------------------- ----------- ----------- --------
Non-current assets
Contract costs - incremental placement agency fees 712 - 712
--------------------------------------------------- ----------- ----------- --------
Trade and other receivables - trade receivables 1,471 - 1,471
Trade and other receivables - staff advances 1,940 - 1,940
--------------------------------------------------- ----------- ----------- --------
Current assets
Contract costs - incremental placement agency fees 125 - 125
--------------------------------------------------- ----------- ----------- --------
Trade and other receivables - trade receivables 9,517 10,988 (1,471)
Trade and other receivables - prepayments 1,958 2,795 (837)
Trade and other receivables - staff advances 740 2,680 (1,940)
--------------------------------------------------- ----------- ----------- --------
31 March 31 March 31 March
2020 2020 2020
GBP000 GBP000 GBP000
--------------------------------------------------- -------- -------- --------
Non-current assets
Contract costs - incremental placement agency fees 765 - 765
--------------------------------------------------- -------- -------- --------
Trade and other receivables - trade receivables 573 - 573
Trade and other receivables - staff advances 1,280 - 1,280
--------------------------------------------------- -------- -------- --------
Current assets
Contract costs - incremental placement agency fees 91 - 91
--------------------------------------------------- -------- -------- --------
Trade and other receivables - trade receivables 6,269 6,842 (573)
Trade and other receivables - prepayments 2,042 2,898 (856)
Trade and other receivables - staff advances 320 1,600 (1,280)
--------------------------------------------------- -------- -------- --------
Corresponding amounts in the Consolidated Statement of Financial
Position to 31 March 2021 have been restated due to
reclassification of amounts presented in current assets to
non-current assets and amounts presented in trade and other
receivables to contract costs. These reclassifications are as
follows:
-- The adjustment to contract costs arises from the reclassification
of capitalised incremental placement agency fees from trade
and other receivables - prepayments. In the annual financial
statements for the year ended 31 March 2021, capitalised incremental
placement agency fees were included in trade and other receivables
- prepayments as they were not material for disclosure as contract
costs
-- The adjustment to trade and other receivables - trade receivables
from current to non-current arises as amounts were not expected
to be recovered within 12 months of the reporting date in respect
of Foresight Williams Technology EIS Fund management fees
-- The adjustment to trade and other receivables - staff advances
from current to non-current arises as the amounts were not expected
to be released to the Statement of Comprehensive Income within
12 months of the reporting date
[1] SBP equal to GBP0.5 million in the year ended 31 March
2022.
[2] Unaudited AUM and FUM as at 30 June 2022, includes assets
from the AIB Foresight Impact Fund and the Downing acquisition
which were both announced in the quarter and completed post quarter
end.
[3] Including GBP13.5 million from Foresights Inheritance Tax
Solutions product.
[4] Unaudited AUM as at 30 June 2022.
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END
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