EPE Capital Partners Ltd (EPE.JO) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Ethos Capital interim results. [Operator Instructions] Please note that this call is being recorded. I would now like to hand the conference over to Peter Hayward-Butt. Please go ahead, sir.

Thank you very much. And again, thank you very much to all our investors and stakeholders for taking the time, and good afternoon to everybody. I will go through the presentation and spend obviously a significant amount of time on the underlying portfolio companies and their performance. But just to start off and to give you an overview of the performance over the last 6 months and 12 months, there's been a very strong growth in our unlisted assets. And remember, we've got 2 portfolios; one is the unlisted assets, the private equity investments; the other is Brait, which is obviously a listed asset and we market to market. The growth in the unlisted assets over the last 6 months was 8% and 17% over the last 12 months, which compared to most indices has been a very strong performance. And very pleasingly, this has been driven by EBITDA growth, 16% EBITDA growth across the portfolio on an attributable basis, plus an uptick in the Optasia, the channel for VAS realization, partial realization, which we saw during the last 6 months. Very pleasingly, we've seen the cycle of private equity come to fruition and the fact that we had ZAR 214 million of proceeds, which is about 15% of our market cap over the last 6 months or so, all at very significant premiums to the NAV. And again, I will touch on that in the presentation. And then pleasingly, again, a lot of progress has been made on the Brait's value unlock. We announced earlier this week or backend of last week, the resuscitation of the Premier listing. I will touch on that during the presentation. And also, very pleasingly, the performance of Virgin Active certainly over the last quarter has been very, very strong. The proceeds that we've received, the ZAR 214 million, will be used to repay the existing debt that we have and the Board has undertaken to institute a buyback program post the results today once we receive the proceeds of the Optasia realization. In terms of my presentation today, I will talk a bit about the portfolio performance at a high level before going into the underlying portfolio of companies, talk very briefly about the outlook for the liquidity, and then finally, an outlook for the portfolio going forward for the next 12 months. In terms of the -- at a very high level, the performance, the NAV per share as of the 31st of December was ZAR 10.80. The NAV per share on the basis of using Brait at its share price was ZAR 8.51 which, as I mentioned, gives growth relatively flat through the last 6 months, although the unlisted portfolio, as I mentioned, grew 8% over the last 6 months and 17% over the last 12 months. Really, the flat performance was due to the underperformance of the Brait share price and the exchangeable bond. In terms of the carrying value of the invested capital as at December was ZAR 2.6 billion with 100% of that invested in total assets. And as I mentioned, what has been pleasing over the last 12 months, both on revenue and EBITDA perspective, is the broad growth in both revenue and EBITDA. So the portfolio companies, on an attributable basis, grew revenues at 15% and EBITDA at 16% over the last 12 months despite as I think everybody knows, pretty difficult operating conditions, particularly in the South African context. Realizations of ZAR 214 million, largely from the Optasia transaction. I'll touch on that during the presentation, which increased the multiple of invested capital, the times money back on that asset up to 3x, which is again pretty pleasing. Ethos Capital continues to trade at a discount of around about 50% to the ZAR 10.80. And the current market implied valuation is about 5.5x LTM EBITDA for the portfolio. And again, there's a slide I will touch on during the presentation. Where are we in terms of the strategy? I think I mentioned in my introduction, the lifespan of the private equity portfolio starts with the commitment phase where we gave commitments to invest into certain funds of Ethos back in 2016 and 2017. We have about ZAR 130 million of outstanding net commitments. So that's all we have left for the existing fund commitments. Then you're going to investment phase with those funds, investors get capital into various assets. That leads on to an asset growth phase when once that asset is in the ground, how do you grow that portfolio? And if you look now, we have about 12 of our assets or 78%, just under 80% of the portfolio, it sits in the asset growth bucket. The average age of those assets is about 4.5 years. And then you move into a bucket, which is called realization. So that's what we call the exit lounge. We've now got probably 8 assets that we have in various phases of the realization process. It's about 16% of our total assets, and the average age of that consort is around about 7 years. Obviously, once you realize those assets that sits under the capital allocation bucket -- as I mentioned, we received ZAR 214 million of our from realizations over the last 6 months, that's about 15% of our market cap. And that then sits in the capital allocation bucket. You can either return the capital to shareholders, again, in the form of dividends or, in our case, probably in the form of a buyback. We'll then start to look at reinvesting partly of those portfolio proceeds into portfolio alpha generation. So the long-term strategy to drive market-leading shareholder returns, I'll touch a bit on that on how we perform relative to the market. We have seen -- we've gone through the cycle, and we're starting to see those capital allocations and capital allocation come to fruition, and that will formulate in the form of a buyback program, which has been instituted post these results. From a -- moving on to the perspective of how it's performed versus the market. As I mentioned, we measure ourselves based on what we call the Ethos benchmark, which is the JSE all share, excluding international stocks given that we can't invest internationally, Naspers and mining and real estate because we can't invest in those portfolios. So that leaves you with about 170 companies. How those companies performed over the last 6 months, 1 year and 3 years? As you can see there, pretty flat over the last 6 months, down 6% over the last year and pretty flat over the last 3 years. To give you some idea of how Ethos Capital's NAV per share performed over those periods, on an alpha basis, relatively well, although I think, massively underperformed what we would hope to achieve. 1% growth over the last 6 months, 7% over the last year and over the last 3 years, a CAGR of 7%. So certainly alpha compared to the market. And to give you some idea, most of that underperformance has been driven by the listed portfolio. The unlisted portfolio grew 8% over the last 6 months relative to the 2% of the market and 17% over the last 12 months compared to minus 6% for the benchmark. As you can see, the underlying funds there, the biggest exposure we have is to fund -- for Ethos Capital is to Fund VII and the AI fund and those have performed very well. The Brait ordinary shares have performed relatively poorly from an NAV growth perspective, and we'll touch a bit on that. From a perspective of the multiple -- the increase in the multiple, the market increased slightly over the last 6 months by about 3% from 12.7% to 12.8%. The Ethos Capital multiple increased, and that was solely the function of the fact that we had to mark-to-market the Optasia transaction, which was done at a 20% premium to the multiple that we held it at. So all of the other multiples have remained flat to down. The only increase really over the last 6 months has been having to mark-to-market versus the partial realization we did in Optasia. From a constituent parts, as you can see, the under support value grew 8%, largely driven by a multiple increase, and that's to do with Optasia as I mentioned, some FX movement that really, again, also relates to a weakening of the rand over the last 6 months compared to the Optasia valuation, which is based in dollars. Earnings are down slightly, and that's as we've grown into the maintainable earnings, again, I will touch on that during the presentation. And then if you look on the right-hand side, the listed portfolio, which is effectively the Brait portfolio and MTN Zakhele Futhi is down ZAR 86 million, down 11%, largely driven by a 17% decrease in the exchangeable bond valuation or share price, a decrease in the Brait share price and also a 17-odd-percent decrease in the MTN Zakhele Futhi share price over the last 6 months. From a portfolio perspective, from a liquidity perspective, we remain fully invested. We have ZAR 2.6 billion of assets invested. We have -- at the time of -- in December, ZAR 323 million of debt that has been reduced to ZAR 250 million with the Optasia proceeds, and we have committed facilities of ZAR 450 million. And we currently have net undrawn facilities of ZAR 131 million outstanding. From an investment perspective, during the course of the year, Ethos Funds invested -- sorry, over the 6 months Ethos Funds invested ZAR 152 million. Our share is Ethos Capital, of that was ZAR 61 million. We received gross proceeds of ZAR 214 million, largely from the Optasia transaction, at Crossfin, which sold retail capital and returns of capital to shareholders, a dividend from Gammatek, and obviously, the coupon on the exchangeable bond. The Optasia deal -- and we'll talk a bit about it in more detail -- were sold to a new consortium investors who came into the business. It was sold at a 20% premium to the valuation where we were carrying it as of the 30th of June 2022. In addition, Retail Capital, which was a business that Crossfin owned -- we've owned Crossfin for about a year. Crossfin sold that business to TymeBank during the course of the last 6 months at a 55% premium to the current carrying value at the point in time. From a strategic outlook perspective, as we have focused on -- I've mentioned before -- portfolio optimization continues. We really have seen strong growth in the unlisted portfolio, EBITDA growth of 16% over the last 12 months, and we're starting to look at the number of exits. We've seen some of those happen already. As I mentioned, ZAR 214 million of proceeds returned over the course of the last 6 months. From a perspective of narrowing the discount, which is obviously a key focus of the Board, as I mentioned, the Board has approved the introduction of a buyback program, which will kick off post the results. Just giving you a very quick update on the key portfolio companies. We will go into these in a bit more detail. Optasia, which is the Channel VAS -- it used to be called Channel VAS -- again, another very strong performance, up 26% in the last 12 months in dollars in terms of revenue, driven by both the airtime credit services business and very pleasingly, a very strong performance in the MFS business. So that's been driven by advances growth and obviously, higher services penetration. As we've been flagging for some time, the FX losses effectively predominantly out of Nigeria and to some extent Ghana, have obviously negatively impacted the EBITDA growth. We look at EBITDA pre and post, the FX losses on a pre basis, it's grown ahead of the 26%, on a post basis is growing at about 7% for there. And that's largely been driven by the devaluation in the naira. As I mentioned in many calls before, we've taken a hit to maintainable earnings over the past 2 years or 3 years to reflect the fact that we saw the naira devaluation coming. So obviously, the impact on maintainable earnings is significantly lesser than it is on actual earnings. The business development pipeline remains very robust with very strong opportunities, both geographically and by product diversification across the portfolio. From a Synerlytic perspective, again, a very good performance year-on-year, really driven by a turnaround in the WearCheck business. The last 12 months revenue, up 11%, but more pleasingly, EBITDA up 20%. And some of that has been from the upfront investment we made over the last 18 months in people and value creation initiatives, particularly in the WearCheck business. The Particle Group, which is the old AMIS business, which consolidated with the Canadian business CDN to be renamed The Particle Group has, again, continued very strongly in terms of its operational results to drive the overall performance in Synerlytic. Echo, again, no different to where it was 6 months ago. Very, very strong performance in the South African business. EBITDA materially up year-on-year in the South African business, offset by very poor performance. The international business, management are looking at ways to change the trajectory of that international business. But effectively, the sales cycles are very long. It takes quite a long time to convert the pipeline. And we are looking both organically and inorganically to try and find ways to ensure that those subscale economic -- subscale international business will return to profitability. From a Vertice perspective, it's been amazing to see how slowly actually, in most cases, the surgeries have returned. So elective surgeries in particular, that has started to normalize. So the last couple of months have been much better for the Vertice business. But over the last 12 months, the larger businesses within Vertice have performed very, very well and above budget, particularly the cardiology and cardiovascular businesses. And we've run a strategic review, or the business has run a strategic review on the smaller underperforming businesses, a number of which have been sold. From a Crossfin perspective, again, we've invested heavily behind that business, very strong revenue growth. EBITDA has slowed, but that's really due to a very significant increase in the marketing spend, particularly in the Adumo business and in the iKhokha business as well. The Crossgate business performed very well. We just opened up a new banking facility in Cape Town, which should continue to drive profit in that business. Moving just quickly to the Brait portfolio. Premier has continued -- I've got the chart here for the numbers for the last 16 months -- sorry, 6 months of 16% growth in EBITDA. As we mentioned in results announcement for Brait, about a week ago, that has continued up until December. Very strong growth in market share, volume growth. And we've been able to see input costs passed on to the consumer with very little impact on the overall volumes in the business. So again, a very strong performance, which has continued. Good contributions from all businesses, but particularly the baking business has performed strongly. We declared a dividend in late November for about ZAR 950 million, which was declared and paid to shareholders. Very pleasingly, the business has already repaid ZAR 300 million of the ZAR 950 million that drew down on over the past 3 months. So very strong cash generation in Premier over the last quarter. And as you will have seen at back end of last week, we announced the intention to float off Premier. We were approached by a number of institutions who committed to following and participating in the IPO such that the free float was met which was the reason we had to pull the IPO in November. That was announced on Friday and all things going according to plan. Premier should be listed before the end of March. That will realize another ZAR 3.6 billion of proceeds for Brait, which combined with our share of the ZAR 950 million means that Brait will have received around about ZAR 4.5 billion of proceeds in the last 6 months. From a Virgin Active perspective -- and I haven't been able to say this since we took over 3 months ago, the week before COVID, but very positive membership growth over the last quarter, and that's very pleasingly across all territories. The U.K. had a very, very strong performance both in January and February. Italy is absolutely shooting the lights out and has continued to do so. And the South African business has had a good January and February. We've seen 66,000 increase in net members. So that's new sales, less terminations in the last 2 months. And to give you some idea, that's an 8% growth in our membership base over the last 2 months. And all key territories -- and by that, we really mean the U.K., Italy and South Africa -- are either at or above EBITDA breakeven or forecast to be certainly before the end of the year. And as we've mentioned, the APAC business is recovering, but that is likely to take a bit longer. The new strategy under the new management team is starting to bear fruit. We've seen the state renewal and the impact that's had on memberships. There's a new app being launched probably in the next month or so, which we believe will enhance membership engagement and significant investment in our digital capabilities in that business. And obviously, there's cost to be taken out of the business, particularly around the central and head office costs. The Real Foods business that we bought, acquired new business at the back end about a year ago, performing very, very strongly, certainly above budget and really is assisting us in the shift that we've talked about of moving Virgin Active into the wellness space from just being a gym operator. New Look. Again, despite the very difficult operating conditions in the U.K. has had a very strong performance for the first 3 months of the year -- sorry, first 3 quarters of the year. It's got a March year-end. The results will be up very significantly over last year, which is pleasing, despite the fact that obviously, footfall is under pressure in the U.K. and many of the supply chain issues that have plagued the industry have continued. So the business recovery remains on track, and the outlook -- whilst the outlook remains challenging, we do believe from a perspective that this business has performed its peers. Just briefly in terms of where are we on the progress on Brait from a value realization perspective. If you look at the chart on the left, not forgetting the fact that we sold the Iceland business at about a 70% premium to NAV, that business, if anyone who's continued to follow it, is under severe pressure in the U.K. at the moment. So I think we're fortunate to exit at the time. The bonds are currently trading at a very significant discount to par, which says something about the equity value in the business. The DGB business that we sold at NAV and the Consol business, which we sold at the back end of last year at about double the NAV that we took it on. From a Premier perspective, the current times money back compared to when we start the business is 2x Virgin Active and New Look at 0.8x each. So from a realization perspective, as I mentioned, we've managed to exit 3 of the core assets at a very significant premium to our entry NAV. We degeared very significantly, both through the rights issue and the exchangeable bond during the course of the last 3 years and about ZAR 7 billion of disposals if we include the Premier deal. So if you combine the ZAR 8.5 billion we've raised with the ZAR 7 billion of disposals, that's ZAR 15.5 billion that we've managed to refinance. From an operations perspective, we've reduced the costs in that business by just under ZAR 0.5 billion on an annual basis. And from a portfolio perspective, a very significant time and effort has been invested in turning around the Virgin Active and New Look businesses, and we're very pleased when we look at the results today that some of those efforts are coming to fruition. I get asked all the time around our NAV. I've updated this chart. I think the key to focus here is on the new funds post 2016, and the reason we use 2016 is obviously that was when the launch of Ethos Capital. So when that came into fruition, these are all of the exits on assets. Not selectively, all of the assets that we've realized value either partially or wholly on since then. And if you look at the average of those, the value uplift has been 43%. By that, we mean if we had the valuation in our books at 100, we sold the asset for 143. So a very significant premium to where we had it in our books. The IRR on a realized basis across those assets is 30% per annum and the multiple of invested cost is about 2.1x. So again, on all those metrics, relatively similar to where we've achieved in our funds, Fund III, IV and V. And we believe this will continue. I've said it many times, I've only been in Ethos since 2016, we have never, since I've been here, sold an asset at below the NAV we have it in our books. And according to Rowan, I think if you look across all of our portfolio companies over 30 years, more than 90% of those have been sold at a premium to our NAV. So I think we are confident that our NAV is broadly in the ballpark, and we would hope to see some uplift when we exit assets going forward. From a portfolio perspective, again, just touching on the total portfolio. And I won't -- I'll focus on the dotted lines, the changes in half 1. So over the last 6 months, as you can see from a revaluation perspective, Optasia was up ZAR 184 million. That was the increase over our costs as at June based on the current transaction, I'll go into that in more detail. We distributed ZAR 182 million of value. So if you look at the valuation of Optasia, ZAR 765 as at June, ZAR 767 as at 31st of December, they look exactly the same, but you've got to take into account we distributed ZAR 182 million. So broadly flat despite the fact that we've sold a portion of our stake in the business. The only other one they to focus on, I think, is if you look at the exchangeable bond for Brait, the revaluation of that is down ZAR 52 million. That's due to the share price going from ZAR 110 to ZAR 90 on the exchangeable bond as of December. And you will see there from an Ethos Fund VII debt perspective, we've repaid ZAR 42 million of the debt facility that we took on in Fund VII to do the exchangeable bond, and that's largely been from the proceeds of the Optasia transaction. As you can see on the bottom right, under the December 31, 2022 numbers, we've got ZAR 3.1 billion or ZAR 3.2 billion of assets, if you assume Brait at its NAV per share, or 2.6% if you assume Brait at its share price. And the net debt in the business, including the Black Hawk, as I mentioned, if you add those 2 together, it's about ZAR 500 million. That's been significantly repaid down as part of the Optasia proceeds. Looking at the portfolio, again, 28% of the NAV remains in the Optasia portfolio -- sorry, company. And about 27% of the portfolio is in the Brait stable. So if you take Premier, Virgin, the Brait exchangeable bond and a small amount for New Look, that's around about 27% of the overall portfolio. 55% of our NAV is in SA with about 45% of the business, either in sub-Saharan Africa or internationally, mostly in the case of the Brait portfolio. In terms of where the performance of the various companies, what we're trying to do is we break it down by a number of companies, but also by value. And if you look at the top left-hand chart, the LTM revenue growth, you can see 75% of the companies that we are invested in grew revenues by more than 15%, 70% by value growth, more than 25% over the last 12 months. So a very good performance from the unlisted portfolio. And similarly, from an EBITDA perspective, 60% of our portfolio -- well, 98% of the portfolio grew EBITDA and 38% of the portfolio grew EBITDA by more than 15% over the last 12 months. From the perspective of growth returns, investment returns over the last 6 months, Optasia was the leading one, and we'll again touch on that later. That was through the partial realization, which we saw a 24% increase in the valuation. Synerlytic was up 11% due to its strong performance, largely driven by its EBITDA growth; Gammatek largely driven by its de-gearing and dividends paid up 9%; and Chibuku, which is a business that sits in the mezzanine fund had a strong revaluation through its performance over the last 6 months. In terms of the detractors, [indiscernible] ready to point out our MTN Zakhele Futhi, the Brait share price and the Brait exchangeable bond. The bottom 2, together, those constitute about ZAR 89 million of devaluation. We mark those to market. We can't do anything other than that. So that's about ZAR 0.35 in terms of NAV. And the other businesses that were detractors from value were Autozone, which ran out of sales process which didn't come to fruition. We decided to mark that value down and take a hit on the valuation of that and Vertice, which we'll touch on during the presentation. Just in terms of how does the market -- what are the market implied multiples, we consistently showed this to the market. These are effectively price earnings PR ratios. So the current portfolio is trading at about 6x on a PE basis. You can go through the various assets and look at them in your own time. But you can see the effective PE ratios that is implied by the discount to the current share price across the Brait and Ethos Capital portfolios. From a perspective of NAV composition between Optasia and Brait, which, as I mentioned before, is call it together 50-odd-percent of the portfolio. Those 2 assets combined equate to the current market capitalization of Ethos Capital. The other assets, as you can see there, based on the current market cap were 0, but you can see the constituent parts of that up to the attributable NAV with Brait trading at its NAV per share. Just touching briefly on the various portfolio companies. Firstly, starting with Optasia. As we mentioned, Optasia's results continue to be very strong. From an Ethos Capital value perspective, it achieved a 24% return over the last 24 months, largely driven by the partial realization, which I will touch on over the page. We can thank [indiscernible] for his -- the new Investor Relations guy at Abax who gave us some comments on our slides. We've tried to simplify what the companies actually do so people can half understand it. So from this business' perspective, Optasia really does 3 things. It's a micro lender. So it lends, together with other MNOs, it lends small amounts to customers of those MNOs. From an airtime credit perspective, it lends airtime credit to customers of MNOs. And then in partnership with some of those MNOs, it monetizes the data. It's effectively an AI technology credit scoring platform. That's what we've got. And we use those, really those 3 key metrics in the business. From a TMB perspective, this business is currently 3x more than what we invested. So we've returned 3x. So we're valuing the business at 3x what we were when we got in, and we've effectively returned about 100% of what we put in the first place. Over the last 2 years, this business has grown -- just if we rebased revenues back to $100, from $100 to $161, 26% of that growth has come over the last 12 months in dollars. As I mentioned, the LTM pre-FX losses has grown more than 26%. But if you take the FX losses into account, which largely was driven by the year's devaluation in the naira, there's obviously a very significant impact. And the LTM revenue over the last 12 months is up 7%. Very pleasingly, the MFS business, the Mobile Financial Services or the micro lending business has continued to see very strong momentum, both from existing and new deployments and the growth rates on that have exceeded the ACS business, which has been very pleasing. From a valuation perspective, our valuation will be broadly flat. But obviously, including the proceeds that we've received over the past 6 months, it's up 24% for the last 6 months. So to touch on the transaction, we received an opportunistic approach from an existing consortium member who had put together a consortium to buy from all shareholders, 20% of Optasia. This is a very sophisticated investor group. They know the asset very, very well. They've been invested with us for some time. And the valuation represented, that they were prepared to come in represented a 20% premium to where we held it in our books. We only sold 14%, 14% of our stake. And in addition to that, Optasia geared up by ZAR 40 million and paid a special dividend. So from an Ethos Capital perspective, we received $184 million of proceeds, and the unrealized value will remain largely flat in our books despite obviously a slightly lower stake that we have. As I mentioned today, the investment has delivered an MOIC of 3x, of which just about 1x has been realized. So effectively, the money we put in originally has been returned to us, and we have an asset that is 3x more valuable than when we started. We started in quarter 4 2018. That's when we made the investment. So you can see the MOIC at 1x. It was valued at ZAR 379 million. That was our investment at the time. From then to June 2022, there was a value uplift of ZAR 560 million, partly ZAR 175 million of that came through proceeds and the rest came through fair value uplift. From June to December, as I mentioned, there was a 20% premium paid for a portion of our stake. So we marked it to market. We received proceeds of about ZAR 184 million. And so you can see the multiple of invested capital has increased from 2.5x in June to about 3x. So a very significant uplift in the valuation of the portfolio, which again, I was asked lots of questions about how do we value this portfolio. I said I wasn't too worried about the valuation at the time. And I think it's been brought to fruition by a sophisticated investor buying in at a significant premium to our NAV. Touching on Echo quickly. The business, again, I think I've mentioned, is really a tale of 2 halves. On the right-hand side, just so that people know, it's effectively a corporate internet service provider. For those of you who don't know, it aggregates third-party networks, at times, manage networks for clients, connectivity, cloud hosting and security products and services, has been very, very successful, particularly in the South African context. If you look over the last 12 months, the South African business has increased revenue by 28%, which is really driven by new customer wins and also growth in new products to the existing customer base. And very pleasingly, in the South African business, EBITDA up 30% year-on-year, again, driven by the strong revenue growth and, obviously, costs being contained. The other side of that equation is the international business, which has performed poorly. A very long sales cycles and slow pipeline conversion, which I mentioned. We are looking at ways to expedite the growth back to profitability in these businesses. But we have taken a reduction in the multiple of this business despite the strong performance of the South African business to reflect the international business poor performance. So over the last 6 months, we've reduced the valuation by 7%, which might be conservative, but we think until we start to see the turnaround in the international business, we think a lower multiple is the right way to value the business. Now moving to Synerlytic. As I mentioned, a very strong performance, valuation up 11% over the last 6 months. driven by both parts of the business; The Particle Group, which, as I mentioned, is both the South African and Canadian business, which we bought at the back end of 2021. Both continue to perform very strongly. And very pleasingly, the WearCheck business, which is effectively the leading oil condition monitoring specialist in South Africa and on the continent, has turned around and has a very strong performance. And as you can see, from the LTM revenue over the last 12 months, up 11%, but probably more pleasingly, given the costs that we've taken out of the business despite the investment we've had in the front office, EBITDA being up 20% year-on-year. WearCheck has recovered well. And as I mentioned, both AMIS and CDN continue to exceed their budget. So from a value perspective, this business is up 11%, largely driven by the increase in the maintainable earnings that I mentioned, but also the very strong cash generation. And that takes the times money back or the multiple of invested costs in this business up to 1.83x. From a Vertice perspective, again, somewhat it's taken longer, as I mentioned, for the elective surgeries to come back. That said, the larger and more specialized businesses, with CVG, ONS surgery, et cetera, performed very well, and all ahead of budget. And those are 80-odd-percent of the business. Some of the mid-tier or smaller parts of the business, which were parts of businesses that we bought have underperformed. We have exited a number of those, particularly those that were subscale and didn't help with the overall strategy of the Vertice business. But overall, the valuation we've decreased over the time, really reflecting the fact that we think it's going to take longer for the maintainable EBITDA to be achieved and for elective surgeries to come back. So whilst we have seen over probably the last quarter a pickup in elective surgeries, it hasn't happened as quickly as we had forecast coming out of COVID. From a Crossfin perspective, again, very strong performance in some of its assets. Really, there's 5 or 4 key parts of the business: the Adumo business, which is the acquiring part of the business, payment gateways, et cetera, point-of-sale software provision; the Akelo part of the business, which is really around providing card, mobile processing platforms to customers; Sybrin, which is a software business that was bought at the back end of last year; and iKhokha, which is a point-of-sale -- iKhokha, which is a point-of-sale business providing mobile-centric point-of-sale hardware and software to customers. Across the group, revenues were up very significantly, 16% year-on-year, very pleasingly. The EBITDA is down 6%, but I do think we've taken account of a very significant increase in the marketing spend, particularly in the iKhokha business, which is partially driven that 16% increase in revenue. Adumo has been impacted by loadshedding, obviously, as many of our businesses have and the increased marketing spend. But the Crossgate business has sort of offset that by performing very strongly. So overall, a pretty strong performance just in the 6 months. The last 6 months, the Retail Capital business was sold out of the business. As I mentioned, it was sold at a very significant premium to what we bought in at and a premium to what we had it in the books at the time of the transaction, I think a 55% premium to the NAV at the time of the transaction. That business now resides in TymeBank and is performing very strongly within that business. In terms of some of the other smaller companies, Gammatek, which is about 5% of our assets, a very strong performance. It's a leading distributor of mobile accessories and low technology products. EBITDA is up 14%. The business took a decision at the back end of last year to invest heavily in stock, given that many of its competitors couldn't. And that has paid off very well. We've seen valuations -- well, the valuation up slightly 9% over the last 6 months, largely driven by the gearing in the business and strong EBITDA performance. From a Primedia perspective, again, quite pleasingly, EBITDA was up 15% over the last 12 months. The Autozone business really has turned around strongly, which was a laggard in our performance over the last 2 or 3 years. And the recovery, whilst it has been soft in broadcasting, is definitely on the right trajectory. The equity value over the last 6 months, we've increased by 6%, largely driven by the EBITDA performance. TymeBank, which is a big digital retail bank, its customer base is now over 6 million customers. I have to sort of blink every time I see that number. It's amazing performance. And even its active accounts are up to nearly 2 million, which is significantly ahead of where I think many market commentators would have believed this business could get to. Also, very pleasingly, the launch of the Philippines equivalent of TymeBank, called GoTyme alongside another coinvestor in Philippines has gone very, very well, and we're starting to see traction on that business. And the acquisition of Retail Capital has been a very, very strong contributor to the success certainly since it's been integrated and completed over the last 6 months. We've got the equity value constant. We haven't moved it in constant currency terms. From the Premier perspective, as I mentioned before, a very strong performance. These numbers here are to 30th of September, 16% increase in EBITDA. That performance has continued for the 9 months to December and has continued both in January and February. Very strong performance across most of the categories, particularly in the MillBake part of the business. As you can see there, the adjusted return on invested capital up to 14.9%, call it 15%. That's continued to increase over the last couple of months and is approaching somewhere between 16% and 17%. So a very strong performance in the business. We were very pleased to receive the interest from the 5 or 6 institutions who have cornerstoned the listing, and we were very pleased to see this business come on to the JSE, hopefully by the end of the month. From a Virgin Active perspective, again, it's a long time since I've been able to say this, or in fact, I've never been able since we took years ago, but from a membership rebuild perspective and a yield perspective, we really are starting to see the benefits. I'll turn over the page and give you the exact numbers. The focus has been on getting people back into the gyms. We've seen that happen. We've seen it happen very strongly over the last couple of months, which has continued into March. So that's been pleasing. Operating cost optimization, we've absolutely focused -- and when I say we, I'm euphemistically talking about management -- on cost optimization in the businesses, significant costs coming out of the APAC business and now a very significant commitment to reducing central costs in the business, which is happening as we speak. And I think those will largely offset some of the inflationary cost increases that we have seen, which we think have peaked across the various territories. From an IT platform, we've invested very, very significantly in both capital and time in a membership engagement and an IT platform. The app is going to be launched probably in the next month or so. We really do believe it will be best in breed. It will ensure that we have much better contact and engagement with our membership base. It will talk to gamification, all of those things that get people, their competitive juices, playing when they're in the gym. And I think this provides us with much more data on what do our customers want and our customers with much more data and information on what they can get out of the whole Virgin Active group. From a capital allocation and liquidity perspective, there are growth opportunities out there. The team and -- one of them traveled down to the Australia business and the Singapore business at the back end of last month. There are lots of growth opportunities. We need to be very clear about getting the right return on invested capital. But I think if we want to expedite the trajectory back to and beyond pre-COVID levels, we do need to continue to invest in this business rather than waiting. And there's some exciting opportunities, which we think can be announced relatively soon. In terms of growth, as I mentioned, there are lots of opportunities to do that. We need to do it quantitatively and ensure that we're investing in the right clubs and in the right territories. But if we can get it right, and we can continue to see the trajectory of our membership growth, we believe this business really is back on a trajectory towards 2019 and beyond. Again, just touching quickly on the numbers for the last 12 months. Last 12 months, we've increased memberships from, I think it was 790 million in February '22, just to give you a 12-month picture to 956 million. So 17% over the last 12 months. 50%, more than 50% of that has come in the last 2 months. So we grew from 890,000 members to 956,000 members over the last 2 months. And really, that's been across all of the territories. Very strong performance in Italy, strong performance in the U.K. and South Africa and certainly in January, a very strong performance in the APAC business. And if you go back for 2 years, if you go back to February 2021, we've increased the membership by 60% over that base, which I do think there were a lot of people asking, did gyms have a place in a post-COVID world? I think we can categorically say that they do. We are starting to see members come back very significantly over the last 2 months. And very pleasingly, from a perspective in the U.K. and to some extent, in Australia, in the city gyms, we have started to see people come back. And again, for the first time in a long time, we can say an above-budget performance in the city gyms. Just moving on to, from a liquidity perspective, I showed a similar slide to this and the last time we presented. As with all private equity businesses, there's 3 phases. The first is the investment phase. Effectively, when we were Ethos Capital and we raised the capital, we had a significant amount of cash held before we invested into the various portfolio companies. You then go through the J curve as you invest those into the assets. Where are we? I think you can see the red blob there moves across to the right. As I mentioned, we had ZAR 214 million, 15% of the market cap returned to us over the last 6 months. I think we are getting close to that point somewhere in 2024 where we will see very significant returns on invested capital. As you can see on the bottom left, we have surplus commitments. That means we have enough facilities, more than enough facilities and surplus facilities over and above our net undrawn commitments. Clearly, we still have debt in the business that we need to pay down. But very pleasingly, there's no issue from a liquidity perspective. And on the right-hand side, I've changed the chart to show a calendar year because people keep confusing '24 with our financial year of '24. These are calendar years. What that does show -- and again, I keep referring to this as an Excel spreadsheet. There is nothing linear about private equity. But if you believe the Excel spreadsheet, which we do on an asset-by-asset basis, as I mentioned in the chart at the top, certainly by '24 in the calendar year '24, we start to see very significant returns of capital and seeing Ethos Capital in a very positive cash position certainly by 2025. From an outlook perspective, it's always easy to put this into positive and negatives, and I always try to focus on both equally. From a positive perspective, I think what are we pleased about, I think the broadness of the recovery of the portfolio. As I mentioned 16% EBITDA growth over the last 12 months. Operating conditions, I think has never been more difficult in South Africa. I'll be honest with you, whether it be loadshedding, whether you can take one of 20 different things that have impacted our portfolio companies. You've got to take your head off to the management teams who've driven EBITDA growth and revenue growth in extremely difficult conditions. So that's been a very big positive and I think significantly ahead of what I think our peers have performed, which I think shows the benefit of active management. We have continued to see significant alpha generation from an NAV perspective from the unlisted portfolio. As I mentioned over the last 12 months, 17% up in NAV growth compared to a market which was down 6%. So on an alpha generation perspective, north of 20%. Clearly, we need to look absolutely as well as on a relative basis, and we continue to need to see growth certainly in excess of our cost of equity. Pleasingly, we've seen ZAR 212 million of capital returns to us, both through dividends and realizations. And all of those, and I repeat all of those, have been at significant premiums to our current valuations. Very strong membership growth, as I mentioned. At Virgin Active has been a positive. I think it does show the strength of the company's position. You only have to go and visit the gyms, like I've now done. I think I've been to just to what every gym that we have now in the portfolio. We have an unbelievable portfolio in great locations. In many cases, well capitalized, probably outside of some of the U.K. estate. And I do think we have a proposition that is attractive to members, and we're starting to see members come back. And I'm certainly, from my perspective, have never been more positive about Virgin Active. From a Brait perspective, when the proceeds are received from the IPO, which will hopefully be by the end of this month, there will be very significant proceeds for Brait, ZAR 4.5 billion, raised over the last 6 months. That will be used to repay debt, and we'll put Brait effectively into a position with the capital that it has to offset the convertible bond in a very strong capital position. As many of you will have seen the recent announcements of a merger between TRG, which is a large emerging market private equity firm based out of New York and Ethos private equity, that will probably complete by the end of the month. We've seen very, very strong interest from LPs. And I think what it will do for Ethos Capital shareholders in time is broaden the optionality for Ethos Capital investors to invest not just into Ethos products and portfolios, but across the whole TRG portfolio across many, many emerging markets where they are very strong and have very strong performance indicators. So we will need to obviously come back to shareholders to get the approval to broaden the MOI and the business. But to the extent we can, I think it will provide very significant optionality for Ethos Capital shareholders in time. As I mentioned at the beginning, the Board has approved a buyback program. I think the discount at the 50-odd-percent that we talked to just is not the right number. The Board is absolutely convinced that this is a way to drive NAV per share growth, and that will be implemented post the Optasia proceeds having been received, which they have and post this presentation. From a negative perspective, in terms of outlook, I think we continue to see the impact of high inflationary, the impact that had on all of our portfolio companies and also growth, I think, quite frankly, across all emerging markets. The Eskom loadshedding and -- less the loadshedding, but just policy and decision remains the most key impediment to business growth across not just our portfolio but every portfolio. I wouldn't be the only person telling still that let's hope he and his team find ways to resolve this issue. It's having a massive impact on not just performance but consumer sentiment. The decrease of the valuations in the listed portfolio -- by that, I mean, Brait, Brait exchangeable and MTN Zakhele Futhi were obviously detracted from an NAV perspective. That's why we were flat. Otherwise, we would have been up. As I mentioned, that is disappointing. There's not a lot we can do about it. Hopefully, with the things that are happening at Brait, that will turn around relatively shortly. Exits remain difficult. To be honest, we've run a number of exit process on 1 or 2 assets. Exits remain difficult for 2 reasons. I think the fickleness of international investor interest. 6 to 9 months ago, I was sitting here talking about the Consol deal where we had just sold a deal to Consol and we had interest from international investors into some of our portfolios, it's amazing how quickly that cap gets turned off. Largely because of loadshedding I think and policy and decision. And we really need to get sort of investor interest to come back into the South African market for us to get exits away. That said, we are running a number of processes now. And I think there are -- there is capital to deploy into these, but it's always better when we have international interest. Obviously, the share price discount will continue to impact capital allocation decisions. It's extremely difficult to invest into new opportunities unless there at significant discounts when you are trading at a discount to your own NAV. And as I mentioned, one solution to that is obviously the buyback program, which will hopefully drive the NAV per share. Again, thank you very much for taking the time and very happy to answer any questions.

[Operator Instructions] Since we have no questions at the moment from the conference call, I would now like to hand over to the webcast questions.

Let me read the one that I got and is from Dave Eborall at SaltLight Capital Management. Could you comment on how much of the portfolio is in the AI fund? There were some announcements -- sorry -- last week of a new $200 million AI fund with some of the Ethos AI team members. Is EPE, Ethos Private Equity, participating in the fund? If not, are the team members still with Ethos? So let me go through the questions. Firstly, of what's -- how much of the portfolio is in the AI fund? It's ZAR 150 million at cost, but I think it's at 2x. I would say rough number is ZAR 300 million of value, Dave, out of the $2.6 billion to give you some idea. But we also co-invest in a number of the assets, obviously, the biggest one of those being Optasia. So the AI fund is probably ZAR 300 million out of our ZAR 2.6 billion as a percent in terms of current capital. There were announcements last week of a new team to raise -- of a new fund to raise $200 million for some of the Ethos AI team. Absolutely, Dave. We are -- as Ethos Private Equity, we are a 20% shareholder in that vehicle that is raised. We are on the investment committee with the team. They remain alongside us exactly as they have been before. From a question of is Ethos Capital participating? Clearly, we would need to take any participation to the Ethos Capital Board. They would need to make the decision. The AI fund has been massively successful as we know. We really do believe in the theme. This business has co-invested alongside Ethos and just about all of its investments to date and we'll continue to do so. They see massive value in having Ethos as their execution partner. We see massive value in having them and their AI expertise, including Michael Jordan and [indiscernible], who joined with Nick and Roger. So yes, we continue to work with them. We are shareholders in the business together with them. We would love to participate, and we will look to raise funds alongside them in their new fund. And Ethos Capital can make a decision at the Board as to whether it decides to invest in the fund or not. Those are the only questions I have unless there are any others on the call?

Yes, we have a question from Nick [indiscernible] of Signal Asset.

I've got a few questions. So I just -- can I ask them one by one? My first question is what investments are you the most excited about today?

Okay. Look, the easy one is always going to be one that's performing fantastically well. And the Optasia business is a fantastic business. It really is. It's proven through extremely difficult times operationally that it can grow its business. If you look at -- whether you look at the number of deployments, whether you look at the number of customers effectively has, whether you and look at the number of partners it has in the form of MNOs or whether you look at the financial performance of the business, it's a scalable business that can go into new continents, into new territories with relatively low costs and continue to grow. It effectively can follow its partners wherever they go. So we remain very excited about that business. I was excited last time when we spoke, and I was asked to some of the question at the time. Someone asked me about the valuation. Since then, a very sophisticated investor group has paid a 20% premium to what we had in our books. We think there's value upside from here. There are a number of initiatives in that business that I think will continue to grow value then as opposed to just the organic growth. So that's clearly an easy one to say yes to. The other business if you had to say to me today, I'm probably most excited about, it's got a long way back, but I'm most excited I've been in a long time it's actually about the Virgin Active business. That business is a fixed cost business, 90% of new revenue falls to the bottom line. To give you some idea, just in the last -- as I mentioned 66,000 new members in the last 2 months adds in the region of -- if you take the yield on those customers and annualize it -- probably in the region of GBP 25 million to GBP 30 million to your bottom line. It's an amazing business on the way up as we found to our detriment on the way down. And I think Dean and his team are doing a fantastic job there around reconfiguring that business to appeal to a broader set of people to ensure that we engage better with our members and keep them and reduce churn. And the new territories or the parts of those territories that we're already in that we can grow into, and particularly how well invested the estate is, I think, gives me huge potential upside on that business. I think there's a number of other businesses. I don't want to spend time getting to talk about all of our businesses. The one that I think has got potential clearly is the Echo business. We really do need to sort out the international business there. But the South African business has performed significantly ahead of what we would have hoped when we bought into the business, which has credit to Angus MacRobert and his team there. We really do need to sort out the international business. But I think that business has shown it can broaden its customer set. And in doing so, if we can then export that to the continent, I think there's lots of upside in that business as well. So look, I'll just give you 3 examples. We remain convinced and only because of history that the valuations that we hold these portfolio companies that are conservative just because we've never sold an asset at below our NAV. And as you can see, we sell them at a significant premium. But what we need to do is get those assets into a position where we can sell them, get a significant bunch of people interested in buying those assets. And then I'd be very convinced that we can exit these assets at premiums to where we hold them today.

So my next question is on Optasia. It's a very interesting business, but it's very difficult to get data on the business. I agree it was nice to get more disclosure today. But maybe there can be an Investor Day where we can maybe have access to the management team there just to better understand the business. And one of the gaps in my knowledge is how much activity -- how active are they in South Africa at the moment? And my guess is they're not really active. And so the media question is why are they not -- if I'm correct, why they're not really active in South Africa?

They are very active in South Africa. They've turned together with Vodacom, they've -- I mean if you read Vodacom's results and then they talk there around the partner -- I think they talked to in terms of their fintech business. That partner is Optasia. It's turned around their business from a perspective of airtime credit services. It's done fantastically well for them. They will not look to do that together with MTN as well. It doesn't do it with MTN currently in South Africa for the reasons that they gave a contract to someone else. I think that may change in time. So look, on your question of -- we will -- we are definitely trying to put a day together for 2 things. One is around Virgin Active to get Dean to come and present to the Brait and Ethos Capital investors, and the other would be on Optasia. Trying to put those 2 together so that we use the best time of our investor base. It's what's proving a bit tricky, but we absolutely want to have an Optasia Capital Markets Day together probably with the Virgin Active Capital Markets Day.

Okay. That's great. I mean it obviously shows the gap of my knowledge that I thought they were pretty absent in South Africa and you're corrected me there. I think it'd be nice to know more about the business. So my next question is on Capitec or doing a deal now with Cell C and that they also want access to this data. I think they want to try and get into that same business. Will Capitec be using Optasia or are they going to be building their own systems? How do you see this developing?

Look, I don't think they are using Optasia. Capitec, I presume that -- I would imagine that as a bank, they were trying to use their own systems. Look, I mean, in every single market we operate we have competitors. There isn't a market that we're in where we don't. I think the trick to this business is Optasia has data on 580 million customers. I'll repeat that 580 million customers, which it runs its AI technology platform of every single day. So it's got a massive customer base, not just Cell C's customer base in SA, but across 28 countries, et cetera. And the quality of that data is what ensures that your loss ratios when you're lending are as low as they are. So I'm sure Capitec has fantastic data. No doubt. But I think it will be quite difficult to compete with data on 580 million customers across not just this continent, but many continents. And in doing so, seeing what spending patterns are, should you be lending to those customers or not, those are the decisions which get your loss ratios below 1%, which is what you need in this business to be profitable.

Yes. I think the Capitec -- maybe make it clear. The MVNO that's setting up with Cell C, I think the major goal of that MVNO is to get the data. But it's great to get the data, now you need the systems on top of that to help you make decisions. And I mean I think they're targeting initially about 8 million customers. So that's quite a big target. So when you say Optasia is going to -- intention to start using Optasia, isn't that going to be a big kind of hockey stick growth for Optasia or how do you -- how must I think about that arrangement for MTN in South Africa?

Yes. Look, yes, MTN has been a very big and very loyal and supportive partner of Optasia for many years and will continue to be. I think we see a closer relationship with them going forward rather than a more distant relationship. So there are opportunities that the business is looking at to grow the business together. Obviously, it's to MTN's benefit if we do it together and we make good investment decisions and good capital allocation decisions together. So I'm not going to give numbers to it, but I think we are very positive about the relationship we have with MTN, not just in South Africa in terms of ability to grow, but in other countries where we're not represented as their partners. So we are -- when I say we, again, euphemistically the business -- looking at many opportunities to continue to grow our exposure and relationship with MTN as we do with many of the other MNOs. It's not an exclusive relationship by any means, but we have a very strong, long-standing partnership with MTN, which I think if it continues, as we hope it will, will bring lots of benefit to them and to the Optasia business.

And then my third line of questions are on the Premier listing. I mean I suppose the one concern I have for the Premier listing is going to be 2 entry points into Premier. They can either buy through Brait or can buy on the market. And that's never really a good idea for the ratings of these shares. I think there might be some concern in the market that Premier might just be this overhang on the stock as it might be unbundled. And you kind of then think, well, maybe I should unbundle this thing and get them over with rather than just letting it linger. What is your opinion on these 2 different entry points and the possible overhang?

Yes. Look, there's obviously likely to be common overlap between people who are interested in investing in Brait because 54% of the NAV is constituted in the form of Premier, right? But there's a lot of investors who are going to invest in Brait because of Virgin Active and the potential recovery there as well. So the point is, Nick, we can't unbundle it until we repay the convertible bond. I've been explicit in this in every Brait presentation I've done is to say until we pay the convertible bond back, which is GBP 150 million sitting in the U.K., we cannot unbundle Premier. If we could, we would. Okay? We cannot unbundle it until such time as we set it. Now part of this whole disposal proceeds will give us ZAR 4.5 billion, okay? What's the current RCF? The revolving credit facility is ZAR 2 billion. So you can do the math of what the excess capital is that we would raise. Now once we settle the convertible bond, and we've got until December 24 to do that because that's when it matures, we will absolutely unbundle and return the capital to shareholders. So we can't do it today. I don't think this issue of a double entry is a big issue. Is it an issue? Of course, on the margin, it would be. We were approached by investors, most of whom are Brait investors who said, guys, we believe that Premier would be a fantastic business to list on the exchange. It's outgrown its competitors. It continues to invest in its business and the 3 years of capital investment it's made has positioned the business well for growth. And those investors came to us and said, guys, we want to see this thing on the JSE and he has a commitment to getting it done. So it's step 1 of a multistep process to unlock value for Brait shareholders. But if we can get it away, it will go a long way to realizing value for Brait and paying down the existing debt, which will enable us to unbundle. I don't think unbundling will lead to an overhang at all. And the reason for that is if you're buying into Brait today, you're buying into Brait because you believe that Premier is a company that's worth something, right? Given it's 54%, 55% of the NAV. Why would you sell those shares the day you get them if the asset that you're investing into in the form of Brait get unbundled to you? I think it's a highly unlikely proposition that most invested would then just would sell their stocks. So I don't think the issue is around an overhang or unbundling. I actually think the unbundling will create more liquidity in the stock, more investor interest. And hopefully, that will have a rerating at the time.

Yes. I'm thinking more about the unbundling. We listed Premier, but there's always uncertainty by when Brait will unbundle the rest of it. And so that weighs on the rating on the [indiscernible] of the existing listing.

Look, Nick, you got better at these comments investing. My view is, again, totally different there. When we unbundle -- there's no overhang. We unbundle the shares in 6 months' time, 12 months' time or unlikely in 18 months' time, those shares, why would it cause the de-rating if those guys don't then sell their shares? It will cause more liquidity in the stock. So I don't think you should be a worry about that. But, look, I'm not the investor here. We've considered all of these concerns. It's the only way to manage this process. To be honest, I don't think we have any other options. So it's the best that we can do to unlock value for Brait.

No, I just I was hoping you could just that to get over and done with and get that uncertainty out the way, and run on its own theme and not -- there's no double entry point. I could rather buy Brait instead of buying Premier. That's never greatest in my experience. But I understand that -- my idea is can get us done quicker rather than, faster rather than slower? That's my only point but I've heard what you said.

We've got a couple of other questions quickly on -- from Mark Hodgson. What is the rough quantum of the funds available for a buyback? As you can see in the numbers, there's obviously a relative there's debt in the Ethos Capital balance sheet, which we will use to repay. I would suggest that the number -- it's not a fixed number per se. What we have given, the Board has given us permission to undertake is firstly a ZAR 20 million buyback to see how things work. Obviously, we will then monitor going forward what realizations are coming out of the portfolio and what impact the buyback has had on NAV per share growth and narrowing the discount. But if you look at the volume currently in Ethos Capital, that's a very significant number of trading days to invest that sort of quantum, and that's really what we're playing with. So based on what the current volume, that's around about somewhere between 70 and 90 trading days of volume if we're about 30% of the market. Wallace Barnes from Steyn. Can you elaborate on the inorganic opportunities that you're looking at Virgin Active? Wallace, there's many different things. Dean and the team are looking at many different options, right, from -- simply put, going into new territories and running on a franchise model where someone else puts in all of the capital, and we put in the management and the expertise of running gyms. That's one. Obviously, there are acquisition opportunities where you could create scale in the market by buying EBITDA and going concern business. And the other really is -- it's less inorganic, but it's around investment into the portfolio. What we've seen unequivocally on every single gym where you go and invest fresh capital into to rejuvenate the gym is an increase in yield, increase in memberships, lower churn. And in doing so, you get a very decent return on your invested capital. So I think selectively across a number of gyms, particularly in the U.K., which is probably our most underinvested estate, we may look to take selective gyms there, invest quite heavily behind them and then change the yield. I'll give you an example again of Wimbledon, for example. It's a gym. We think we can invest a relatively small amount of money and -- well, a decent amount of capital in -- really improve the membership experience and then be able to increase the yield and get a very good return. Those are the sort of examples. So between the sort of franchise type models across either new territories or products, but helping in a case in point versus going into new territories or not necessarily to new territory, but interesting territories through acquisition. But probably most of it is talking really around investing into the estate. The next question is, would you realize further value in Optasia if the opportunity arose? It's difficult to say. You never want to say no to these things. It was massively opportunistic when before it wasn't just us we sold, everybody had to sell down pro rata. So all the shareholders took their pro rata share off the table. So it wasn't just Ethos Capital. And it was at, as I mentioned, the 22% premium to our current valuation for 14%, 14% of our stake. So we thought that was a good return on capital. If you look at that and you can use some of that capital for buybacks, your return is multiplicative, as you know. So I would suggest that would we -- I mean, if someone comes today and offers us a massive value for the stake, of course, we will look at it. But it's not something we are actively engaging on today. We remain firmly of the view that it's a great business. We think in time, it could be a good listing on an international -- which will create value. Frederic Bouchard from Florin Capital Management. Will Ethos take up shares in the Premier listing? How does the listing valuation compare with Ethos valuation on an NAV per share basis? I don't know if you talk about Ethos or Ethos Capital. Ethos Capital won't be taking up shares in the listing. It's invested indirectly into Brait. So if you're referring to Ethos Capital, Ethos Capital won't be investing directly into the Premier listing. I think investing into other liquid listed stocks is not what the mandate is for Ethos Capital. The valuation -- if you look at the valuation range we came out with in November, the range was rough numbers 54 to -- don't quote me -- 62 or 63, I think it was. You remember that when we pulled the listing in November, the fallback was to sell a 50% stake to Titan at the bottom end of the range. The IPO that we're currently looking at now is at the same valuation we were selling it to [indiscernible] at the bottom end of the price range, which is lower than the valuation in our NAV from a Brait perspective. Those are the only questions I have. So if there are any others from the call?

We have no further questions from the conference call.

Thank you very much for everyone again for taking the time. We really do appreciate it. As we said, feel free to reach out to either Ron or I if there's any other follow-up questions. We really appreciate the engagement. And thank you very much again. Thank you.

Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.