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

Good day, ladies and gentlemen, and welcome to the Ethos Capital Full Year 2023 Results Webcast. [Operator Instructions]. Please note that this call is being recorded. I would now like to turn the conference over to Peter Hayward-Butt. Please go ahead, sir.

Thanks very much and thank you very much to all of our investors and stakeholders who have taken the time to listen in this morning or this afternoon. And in terms of the format of the presentation, relatively similar to previous years. I'll quickly give an executive summary of the performance and the outlook at the beginning. I think it's worth then -- spending a slide or 2, just reflecting on where Ethos Capital is in its investment journey, provide some analysis in terms of their group NAV performance, followed by an update of the Board's strategic direction. And I'll just finish off with giving a portfolio overview in a slightly more detail on the unlisted assets, but also the great performance. As in terms of the year, I think anyone who's taken the time just to read the annual report will -- recognize, I think it's been a tough year for investing globally and in private markets, in particular. I think the impact of higher interest rates, global inflation rates since the Ukraine crisis and certainly in the South African context, a decade low consumer producer confidence. Plus, if you overlay that with the exchange rate volatility has led for a pretty tough year in private equity globally, not just in sub-Saharan Africa, but across the markets of the world. I think if you overlay that from a South African context with obviously the lack of urgency that I think we're seeing from government in terms of policy transformation. And plus, obviously, the impact of load shedding, it has been a difficult environment. That said, I think the benefits of diversification in a portfolio can't be overstressed enough. I think that has helped us immensely. We have 22 assets in the Ethos Capital portfolio, many of which have performed very, very well throughout the year, which is great. And many have gone through pretty transformational, structural and strategic changes in those portfolio companies over the last 3 to 4 years to ensure that they are in a better position and some of the benefits of that have been reflected in the performance this year. I think it's been a transformational year for Brait. For those of you who follow Brait, we listed Premier at the back end of March in pretty difficult conditions. I think it was 1 of 5 IPOs done globally during that quarter, which is somewhat unheard of. And I think in total, about ZAR 7.8 billion of cumulative realizations in the Brait portfolio that have now been made. We repaid the RCF in Brait. So that leaves just the convertible bond outstanding from a debt perspective. So it really has been a transformational year. That hasn't reflected in the share price. Share price is down 20% year-on-year from this time last year, which has obviously had an impact on the Ethos Capital NAV. The non-Brait assets, though, have performed pretty well in pretty tough conditions. NAV of those assets up 14% versus a market benchmark ourselves against in the JSE of 4% and EBITDA across that portfolio grew by around 14%, which again, in a pretty difficult environment is a result that we are reasonably happy with. From a realization perspective, I do think we've turned the corner. We'll talk a bit about it in the Ethos Capital journey slide. But this year, with realizations of around about ZAR 268 million. That's nearly 25% of our market cap in proceeds that we realized throughout this year and a portion of that has been used to buy back shares during the course of the year. We'll talk a bit in the presentation about the Ethos Capital Board's deliberations under the strategy. I think they are looking to refine it and make relevant changes given the state of where Ethos Capital finds itself today. We'll touch on that in a couple of slides time. And from an output perspective, conditions have been tougher over the last 12 months. I would suggest that it's unlikely to ameliorate to any great extent over the next 12 months. I think the conditions will remain tough going forward. I think there are some green shoots and light at the end of the tunnel. But I think it's going to be another relatively tough year. That said, I think the impact of load shedding and particularly the CapEx that we had to spend across our portfolio of companies is likely to reduce in terms of the CapEx. I'm not saying the load shedding will decrease. And that should have a benefit year-on-year going forward. As you know, the Ethos Capital merger completed on the -- at the beginning of April. And that has gone through relatively seamlessly. There's been no change of personnel and the strategy remains one of ensuring that we can continue to generate returns for our investors. We'll talk a bit more detail about the strategy outlook going forward, but the Board's focus remains on 4 real key pillars in terms of that strategy. The first one is expediting the return of capital. The second is optimizing the balance sheet. Third one is unlocking value. And the last one is obviously driving investor returns, and we'll talk a bit more about that in detail. So on the highlights on the right-hand side, the group NAV per share up 1% to R8.56 over the course of the 12 months. The funds, excluding Brait's, the funds under co-investments grew at 14% this last year. It also grew at 14% over the last 3 years, which in a pretty challenging environment is not terrible. It's not what we would hope for, but it's certainly not a terrible outcome. Unfortunately, the listed value of the Brait portfolio decreased across those 2 exchangeable bond in the ordinary shares around 19% year-on-year, and that obviously resulted in a relatively flat group NAV per share. The unlisted portfolio companies grew their EBITDA by 14%. We'll talk a bit about that in a couple of slides' time. And as I mentioned, realization proceeds during the year of ZAR 268 million represents around about 25% of our market cap and more than 15% of our value. Cumulative buybacks over the course since we listed the business of just under ZAR 100 million. In terms of where are we in the journey? As I mentioned, I think it's worth reflecting on where Ethos Capital finds itself. If you took at the top left-hand side, it really talks to the 4 phases of private equity, the commitment phase where we've committed capital to various Ethos Funds. The second is the investment phase and the asset growth, where we put money -- the funds put money to work, or we put money into direct co-investments alongside the funds and the assets grew and we're now very well into the realization phase. We'll talk a bit about that just now. But since listing has been a cumulative ZAR 550 million of realization proceeds returned to Ethos Capital, ZAR 268 million of which came in the last 12 months. And then very importantly, in terms of the last bucket is capital allocation, and we'll talk a bit about that when we talk about strategy. And that really reflects where to from here, what do we do with the capital that comes back from the portfolio of investments that we have. In the top right-hand box, you can see the performance of the funds and co-investments. As I mentioned, 14% growth year-on-year, 14% growth over 3 years in that COVID quarter, which really was -- I think it was April to June in 2020. This portfolio was down 15.6%. I think if you then look at Brait, in contrast to that, the Brait's assets are down 19% year-on-year. Share price performance of the ordinary shares and the exchangeable bonds over the last 3 years have been broadly flat, down 1%. And that COVID quarter, which is obviously before the 3 years, that asset was -- the Brait's ordinary shares were down nearly 50% in that quarter, and they've never really recovered to be honest. If you contrast the performance of the funds and the investments of 14%, how does that benchmark versus the JSE index that we benchmark ourselves against? That was up just under 4% during the last 12 months and 13% over the last 3 years. So on both those metrics, the funds and co-investments have outperformed. Obviously, the Brait assets haven't. From a realizations perspective, as I mentioned, ZAR 550 million since listing and how has that translated from an exit perspective? So this is cash in, cash out. i.e., what cash we put into the investments and what we realized. And you can see across the portfolio, on average, realized returns have been 2.1x money back. So if you put in R100, you've got R210 back. And very importantly, at the bottom, an average realized and that's an important word, IRR of 30%. So again, not a bad track record around ZAR 550 million of our assets, and we need to continue to show that we can realize returns out of our portfolio. On the left-hand side, I think that reflects on where we are today. The green line sort of shows the cash in the business. So when would we be in a cash positive position, haven't paid down debt, the blue line is where we are today. And as you can say, in the relatively near future, based on the realizations received to date and going forward, we will be in a position where Ethos Capital has repaid its debt and, in a position to start allocating capital. From a performance overview of this year. As I mentioned, I think diversification has been the key driver of our performance this year, particularly if you exclude the Brait assets, obviously, tough macros overlaid with load shedding, et cetera. But overall, we've seen 14% -- 14%, growth in EBITDA -- actual EBITDA growth across the unlisted portfolio and a maintainable EBITDA growth of 4%. I'll touch on that a bit later. Overall, that's led to a 1% increase in NAV per share, where we use the Brait share price as part of that NAV per share calculation. And that's largely been driven -- the 14% growth has largely been driven by a partial exit of Optasia, where we had to mark-to-market that to the third-party price growth in Synerlytic, TymeBank and Gammatek offset by negative returns from Echo, Autozone and Vertice and we'll touch on all of those assets, in particular, later in the presentation. Listed portfolio, as I mentioned, declined by 20-odd percent, 18% down in the MTN Zakhele Futhi share price, 20% in Brait ordinary shares and 15% pre the receipt of coupons on the exchangeable bond. So just the constitution of the increases, obviously, new investments during the course of the year of ZAR 184 million really into e4, the mid-market fund its last investment. We put a small amount of money into Kevro as part of that restructuring. Crossfin’ take out some of the minorities and new investments in that asset. And then lastly, a small amount of money into Echo for working capital. That constituted ZAR 184 million of investments over the period. The FX movement largely relates to Optasia. We'll touch on that later. That reflects the fact that Optasia really has dollar-denominated EBITDA when we report. So obviously, when you convert that back into a weakening rand environment, that has been a positive from a valuation perspective. Earnings have driven ZAR 15 million of the increase in NAV. That's resulted from the 4% growth in maintainable EBITDA. And there's been a very significant increase from a multiple perspective and all of that is Optasia. We had to revalue the portfolio. It was done at a 23% premium the last transaction in Optasia, partial exit at a 23% premium to where we had it in the books. Because of accounting policy, we need to market to the last third-party price, and that has resulted in an increase in the valuation from a multiple perspective on Optasia. From a debt perspective, slightly increase in debt across the portfolio. And then from a distribution perspective, that's the distributions we received out in the portfolio, largely Gammatek, Optasia the exchangeable bonds in Brait. The listed portfolio, as I mentioned, down 19-odd percent, ZAR 148 million from an NAV perspective, really constituting the ordinary shares in Brait, the exchangeable in Brait and the MTN Zakhele Futhi shares in the mid-market fund. How does this benchmark versus the funds? We've shown this slide before, so I won't dwell on it for long. From a 1-year perspective, if you look at the Ethos benchmark and to remind people what that is, it's really an SA Inc. So what we remove is we remove mining stocks. We remove property stocks because we don't invest in those 2 sectors. And then we removed some of the international stocks like Naspers, Richemont, et cetera, to give us a proxy for SA Inc. SA Inc. over that period of time over the last 1 year has grown by 4%, 13% CAGR over the last 3 years. As I mentioned, from a funds perspective, they've grown at 14% over the last year, so a significant premium to where the benchmark is and over the last 3 years at 14%, so slightly ahead of the benchmark. Obviously, very disappointingly, the Brait share price performance hasn't matched the transformational nature of the year, which was down 19% year-on-year. From a multiples perspective, as you can see, over the last 12 months, been a pretty significant re-rating in EBITDA of our peer set from 12.7x to 14.3x, just about all of our assets, and I would say all, if not maybe all but one, have remained constant, except for Optasia. And Optasia, as I mentioned earlier, is a reflection of the fact that we needed to market to the last third-party price. Talking a bit about the portfolio, and we can stratify it based on 3 different buckets. The first one is the Brait bucket, which is about 22% of the NAV. NAV total is -- sorry, total assets is ZAR 2.7 billion, of which 22% is the ordinary shares in the Brait exchangeable. As I mentioned, that fell by 20% during the year. The exchangeable fell by 15%, these 2 assets together, based at the 30 of June contributed ZAR 608 million of NAV at the share -- relevant share prices. And the current discount inherent in the Brait share price to its NAV is 54%. And -- the current value of Premier, as you know, that makes up a significant part of the Brait portfolio at its current market price is ZAR 3.7 billion, which compares to the market cap of ZAR 4.2 billion for Brait. And obviously, there's still GBP 150 million of convertible bond outstanding. So overall NAV growth of that portfolio, if that's the right word, for the Brait, was down 19% year-on-year. The other private equity assets or all the assets that are exclusive of the AI themed assets, which we'll talk about below. Again, a pretty strong performance. EBITDA of this portfolio grew 20% year-on-year, with maintainable EBITDA growing by 5% year-on-year. The contributors to growth across this portfolio included Synerlytic and Gammatek with Echo, MTN Zakhele Futhi, Autozone being detracted to value growth over the 12 months. These assets, the unlisted assets in this private equity portfolio contributed about ZAR 843 million of NAV, which is the top 3 assets, Synerlytic, Echo and Gammatek constituting more than ZAR 500 million of that ZAR 843 million. Overall, across this portfolio, it was down 2% year-on-year. The bottom chart shows the AI themed assets, that's Optasia, Crossfin, Vertice and Tyme. These assets performed particularly well during the course of the last 12 months, to be honest, if you look at it over the 3 years, I think it's a relatively similar number in terms of growth. Optasia constitutes 31% of Ethos Capital's NAV and has continued to perform very well. Its valuation grew 30% year-on-year, reflective of the partial realization we concluded during the year. And the portfolio within Crossfin also performed particularly well during the year with good contributions from Adumo and [ Crossgate ]. And as you all know, Crossfin also sold its stake in retail capital at about an 80% premium -- 8-0% premium to the prevailing valuation at the time and realized 1.8x money back in less than a year on that particular asset. The Tyme Group has continued to perform well operationally. It's moved out of South Africa as well into the Philippines and that is going well over 1 million customers already in the Philippines in just over a year. And that business concluded another capital raise of Pre-Series C capital raise at a 23% premium to where we had the valuation in the books. Again, from an accounting convention perspective, we need to market to the third-party valuation. And so that value was up 44% year-on-year as it raised capital throughout the year. So these 4 assets together constituted 24% NAV growth. And that's relatively pleasing as part of the strategy discussion going forward, we see the AI themed assets being a player that we would like as the Board of Ethos Capital to spend more of our capital and hopefully realize similar returns. I won't dwell on this slide. It's more for information purposes. It gives you on the right-hand side the makeup of R8.56, NAV per share. As you can see at the bottom, we now have 253.9 million shares outstanding from 257.5 million, which reflects the buyback that we completed during the course of this year. The -- if I had to break down the portfolio from the perspective of revenue growth and EBITDA growth in the top 2 charts left and right, 80% of the portfolio by value grew at more than 15%. Now, it's easy to gloss over these charts, but I do think that's an important metric. If you look at our unlisted portfolio that 80% by value and -- what's at 8 of the 13 companies grew revenue by significantly more than inflation during the year. In fact, only 2 companies grew by less than 5%. If you talk about EBITDA growth, 65% of the portfolio grew EBITDA by more than 7.5%. We use 7.5% because that's effectively an inflation link. So effectively, 65% of our portfolio grew their EBITDA at above inflation. The average of the growth, as I mentioned before, was 14% across the unlisted portfolio. And on the bottom right, what we show there is the debt-to-EBITDA multiples, so how geared is the portfolio given that interest rates have gone up. That's a very big impact it has across global private equity investors. I think it's important to show that just about all of our companies are relatively lowly geared. So if you take -- if you look at it more than 75% of our companies have less than 1.5x gearing. So I think that does shield us to some extent from vagaries of increasing interest rates across the world. Moving on to the portfolio itself. I'll give you a very high-level overview of the assets, and then we can go into more detail later on. From a Optasia perspective, currently constitutes 31% of our total assets. The NAV return, as I mentioned over the year, was 30% up, largely driven by the partial realization. Its EBITDA growth in rand was up 9% year-on-year. And I think the important point, lots of good progress here on deployments across multiple countries and customers. Really strong EBITDA and revenue growth in local currencies, but there's been a very significant devaluation in some of the key countries. Nigeria is well known to many, South Africa, Zambia and Pakistan, all of which I think Nigeria was 10% to 11% before the float of the naira. South Africa was over 20% and Zambia and Pakistan had more than 40% devaluation on a year-on-year June to June basis. So despite that, you still have EBITDA growth of 9% was a very significantly positive performance. The micro financial services business continues to grow very strongly, grew at about 132% year-on-year compared to the previous year, and that's through new deployments and obviously growing existing deployments. The NAV increase was largely driven by the fact that we had a partial realization at a 22% premium to where we held Optasia in the books at the time of the transaction. From a Synerlytic perspective, which constitutes 8% of the portfolio, a very strong NAV both of 21% year-on-year, all driven by EBITDA growth. We'll talk a bit about that later. EBITDA growth and de-gearing, no multiple re-rating at all. And there was a very strong performance, not just across AMIS, which was there before, but across WearCheck and a significant investment was made into the reliability solutions part of that business 12 months ago. We adjusted the maintainable EBITDA at the time to reflect that. And we really -- it's really good to see that, that investment is paying off with EBITDA growth of 21% year-on-year. Vertice on the other hand, NAV growth, slightly down. We'll touch a bit on exactly the drivers of that going forward in a couple of slides time. Overall EBITDA growth was 6%. It was disappointing. Some of the large businesses, the cardiology business, orthopedic, surgical business, et cetera, performed well with really strong EBITDA growth but there are some of the smaller businesses underperformed in particular, the PSSG business. Management has taken some pretty key strides to solve those issues. And I think we were probably slightly over optimistic about how quickly elective surgeries would normalize. So as you remember, last year, we adjusted the maintainable EBITDA to reflect some of that. There are no adjustments in this year's EBITDA, but we were probably slightly over optimistic about how quickly electives would come back. That said, we are pleased to see that pretty much across most of the key markets, the electives now are back to normalized pre-COVID levels. From a Crossfin perspective, 6% of total assets, a 2% increase in NAV and EBITDA growth, obviously reflective of the fact that we had a significant payout from the retail capital realization. Offset against that was a significant new investments, about 300-odd million of new investments during the course of the year into that asset, not by us, but across the asset itself. And that has obviously, to some extent, reduced the return. Overall, EBITDA growth in that business is 5%. We'll talk a bit about the key drivers of that when we talk to this Crossfin in more detail. Gammatek continued to perform well, as you'll remember, it had a very strong year last year. We said it was unlikely to continue on that same trajectory. NAV return is up 14%, again, on the same multiple, which reflects the increase in maintainable EBITDA offset by -- well, included in that is a decrease in the debt as they paid some of the shareholder interest back. So EBITDA growth was up 3%, but obviously with the de-gearing NAV performance in that business was up 14%. And this business continues to be a strong cash generator, significant free cash flow out of the business, and some of that is now being returned to shareholders. So talking about the Brait portfolio quickly. Premier, which is 27% of Brait's NAV, not our NAV, Brait's NAV. NAV growth year-on-year was 7% down, reflective of the fact that when we listed the business, that valuation was lower than the valuation we had on the business in the prior year. The growth in that business has continued, very strong growth year-on-year, 16% up to the year-end to March. I'll talk a bit about that in more detail later on about how the business has performed, but the performance has continued with its year to September, half year to September. And that really has been across all of the products that we have, which is fantastic. So return on invested capital in that business, more than 19%. Again, that has been retained over the last 6 months. which is credit to the management team, we're really driving a fantastic result, both to March, but also looking like to September as well. From a listing perspective, as I mentioned, we raised ZAR 3.5 billion plus -- ZAR 3.6 billion [Technical Difficulty] ZAR 100 million through a special dividend and that saw a return of ZAR 4.5 billion to Brait, which is used to repay the existing RCF. From a Virgin Active perspective, the operational performance has continued. As it shows here, the NAV growth was up slightly year-on-year, to be honest, more reflective of the fact that of a weakening rand than real operational growth or valuation growth. But if you take the growth there, that's a revenue growth, 23% up year-on-year. We think it's a pretty good performance, particularly in the context that South Africa continues to be a tough place with consumers to continue to grow active members. That said, active memberships are up 14%, an increase of yield of 4% has led to an increase in revenue of 23% over that period of time. The business is now at group breakeven level, and we look forward to the operational leverage starting to work for us rather than against us as that business continues to grow. From a New Look perspective, I think anyone would know that the U.K. retail sector remains extremely challenging. I don't think that has changed. And for New Look to achieve a 68% growth in EBITDA year-on-year, I think it was a really positive performance from that business. That said, as we've said, a lot of that came from cost optimization and efficiencies in the business as the business -- as the retail sector really still remains a tough place to play. As I mentioned before, really from a Brait perspective, it's been a transformational year fully repaid the ZAR 3 billion RCF. And then over the last 3 years, we've seen ZAR 7.8 billion of proceeds realized from the portfolio and the Board remains focused on unlocking the remaining value in that portfolio and returning capital to shareholders. From an investment overview perspective, really, we bucketed the investments under 3 core buckets. The first is listed investments. I mean that's an obvious one, Brait's ordinary shares and the exchangeable bond fit in there as does MTN Zakhele Futhi. For those of you who don't know, MTN Zakhele Futhi will convert into MTN shares in September, so pretty much this time next year and then they will be freely traded. So the value of that can be unlocked literally in the next 12 months. Similarly, the Brait exchangeable bond has a maturity date of December 2024. In terms of the direct investments, these are assets that Ethos Capital holds directly. They hold assets into the funds in some cases, but also directly as a co-investor into Optasia, Vertice, Primedia and Kevro. So those 4 assets constitute 12% of the total assets of Ethos Capital. And the rest of the assets are fund investments. So these are assets which are earned indirectly through the funds. So Ethos capital invest into the various funds, Fund VI, mid-market fund, AI fund, et cetera. And that constitutes 64% of the total asset value. The top right-hand box really talks to the methods of valuation, and I drafted the slide after all the Twitter investors this time last year, 58% of the portfolio. And I repeat, 58% of the portfolio is valued based on listed valuations. We literally take it off the screen and put it into the valuation and third-party transactions. So those are things that the accountants won't let us change, quite frankly. So 58% of our portfolio there, as you see, between listed and third-party valuations are determined pretty much by market-related factors. That leaves 42% of the NAV to be determined by comparable companies' analysis and the DCFs that we do, which are all audited by Deloitte. In terms of performance and strategy. Before we get into the performance of the underlying assets, it's probably worth reflecting on the discussions that have been held at the Board and there's been a lot that's been said, not just in Ethos Capital's case, but across all investment holding companies around what drives investment holding company discounts. Now I'm not sure this is the full list of them, but I would suggest that most of the reasons for the discount are inherent in the 6 that we have here. And what we've tried to show here is what is the real relevance of those from an Ethos Capital perspective. So obviously, the first 0ne is Tax Leakage. As you know, Ethos Capital is a Mauritian entity doesn't pay capital gains tax. So I would suggest that tax leakage is not a great reason for any discount on Ethos Capital share price. The cost structure, as I mentioned, the operating management -- pre the management fees. So really, the cost of the Board, the auditors, the JSE listing fees, et cetera. it's about ZAR 9 million a year, which is 0.4% of NAV, which again, I don't think is necessarily the key driver of any major discount. The fees, the management fees. Effectively, the current management fee is just under 1% of invested capital, so not too dissimilar to the amount you would pay to have your money invested with asset managers. Again, obviously, an impact, to some extent, but not a significant impact, I would suggest, on the 50% Ethos Capital discount. As you can see from a listing jurisdiction, we've done a lot of work around SA listed holding companies versus U.K. and European listed private equity holding companies. And I think just things to take away is really around the discount to NAV. You can see in South Africa, that range is between 30% and 50%. In U.K. and Europe, that trades somewhere between 16% and 44%. Part of that is driven, I think, by the difference in the returns. As you can see, the South African listed investment holding companies have underperformed 6% across the 8 or 9 investment holding companies. Whereas the European and U.K. businesses over 3 years have grown NAV per share by 18%. Also, I think included in that is what average daily volume, which is effectively your liquidity measure. And as you can see, again, the size and liquidity of the U.K. and European businesses means that they also trade at a lower discount. The next is liquidity size and coverage. I mean as I mentioned before, from an Ethos Capital [Technical Difficulty] -- we have relatively low liquidity in our shares. I do think that does impact overall discount. So we need to think about how do we solve that problem. And then finally, which I think is the most important point, and I said it many times, is 2 things: the robustness of the NAV, do people really believe in your NAV, and second, your NAV per share performance going forward. So from a robustness of our NAV perspective, as I mentioned, 58% of our NAV is actually not based on what we think the assets are worth, but rather what the market thinks they are worth or recent transaction values. So only 42% of our portfolio is subject to the vagaries of Ethos Capital's views on value. From an NAV perspective or growth perspective, over the last 3 years, we've grown NAV per share at 11% per year. And the unlisted portfolio, i.e., excluding Brait, has grown at 14% a year. As we know, if your NAV per share growth is above your cost of equity in theory, you should trade at a premium. We believe our cost of equity based on our calculations is around 14%, maybe just over 14%. So effectively, over the last 3 years, the unlisted portfolio has effectively growing in line with our cost of equity. From an Ethos Capital perspective, as I mentioned, this is definitely work in progress. This is not the final view of the Board. But I think the Board is cognizant of the fact that we are at a different point in Ethos Capital's investment journey. And I think with that comes a different view on the strategy for the business going forward. At the top, I think there are 4 key pillars that the Board has recognized from the perspective of the strategy. The first is to expedite the return of capital to shareholders. The second is to optimize the balance sheet given the increasing interest rate environment. The next is to unlock value or to look for ways to unlock value. And the last one is how do you drive investor returns. So those are the 4 key pillars, the sort of changes that the Board is looking to make really revolve around the 5 things that we've talked about below that. From an investment mandate perspective, we believe it's time to transition from predominantly being a fund investor to increasingly focusing on secondary transactions, which happened at significant discounts to NAV, somewhere between 25% and 70% discounts to NAV for different reasons. We can touch on those later. But those obviously give you high velocity of capital and the discount enables you to get a significant return over a shorter period of time. Also, direct co-investment opportunities. The business has been very successful, where it has put money to work in its co-investment strategy, and we look to continue to do more of that as opposed to investing in longer-duration funds. And the last is taking a more sector-focused approach particularly around AI. We believe we've been focused -- successful in focusing on those assets together with Roger, Nick, Michael [indiscernible] and [ William Ross ] and the team, and that's something that the Board would look to strengthen going forward. From a capital allocation perspective, the Board would look to invest in fewer market moving investments rather than having a longer tail. We have 22 assets today. Maybe that number should be closer to 12 assets with a significantly more focus in terms of capital allocation to bigger moving assets. Very importantly, and I concentrate this enough from the Board's perspective is capital allocation between new investments, whether you decide to put new capital to work or to do share buybacks will be based on the new investments exceeding the buyback hurdle rate. And by that, I mean, if you trade at a 50% discount, your buyback hurdle rate is not your cost of equity of 15%. It's probably close to 22%, 23% because you can buy back your shares and obviously get more value from doing that than putting into an asset, which, for example, gave you a 20% return. So it's not to say the Board won't allocate new capital investments. They are absolutely looking to do so, but only to the extent that those new investments beat the buyback hurdle. From a shareholder alignment perspective, about 14% of Ethos Capital is owned either by Ethos Capital Partners -- Ethos Partners or the nonexecs. And I would suggest that gives a very significant alignment more so than just about any of our other companies between both the independent Board, the manager and the shareholders to ensure that they're aligned about creating shareholder value through this vehicle. In terms of the balance sheet, I think everyone recognizes with interest rates having been up just over 5% over the last 18 months or so, we've moved into an environment where we need to relook at how do we optimize the balance sheet. The Board is looking at alternatives around that and to ensure that we manage the mismatch between assets and liabilities maturing. Obviously, to the extent you've got longer-term assets, you need to match that with slightly longer-term maturities. So the Board continues to look at the ways to optimize the balance sheet now that we have a core level of debt in the business. And then the last key focus point is driving investor returns. The Board is looking at options to expedite return of capital to shareholders. There's the alternatives around that, that the Board is looking at. The Board is looking to focus on high velocity discounted entry points to drive returns, as I mentioned, secondary type transactions fit into that bucket. And then the last one is focusing on those sectors that have and will deliver in the future outsized investor returns. Talking a bit about the portfolio. And again, I will go through these slides relatively quickly and very happy to take questions at the end. From Optasia's perspective, again, a relatively strong performance in extremely difficult circumstances, particularly around currency devaluations in key countries. So strong airtime credit services revenues in local currencies, really strong ACS revenue in local currencies, but significant devaluation in the key countries that we operate in. So for example, year-on-year, over 20% devaluation in the rand, 11% in the naira pre the latest change to the [ peg ]. The 44% in Pakistan and 40% in Ghana. Those are very, very key countries for us, constituting 80% of our revenue base. So to still grow 7% in dollars despite that circa, I don't know what it is, yes 25% devaluation in the local currency is a very, very good result. From an MFS perspective, the micro financial services business, revenue grew at 135% in dollars, again, despite the devaluations and really talks to the new deployments that we're starting to see come out of the MFS business. So a very good result. Overall EBITDA post FX losses. And obviously, that talks a bit to the difference between the official and the unofficial exchange rates. EBITDA in dollars was down 5% year-on-year. But we have seen new deployments that money has been spent on over the course of the last 9 months starts to show positive contributions, and we should see that in the fourth quarter of '23, that those new deployments start to take shape. So from an Optasia perspective, valuation up 30% year-on-year. Again, as I mentioned, reflected really from the partial realization the multiple of invested capital. That means we've returned -- well, we are currently seeing a 3.1x the amount that we put in and really importantly, across all of micro-lending airtime credit and news data monetization strategies that we're engaging with MNOs on. It really has been a very good result, particularly in local currency. Moving to Synerlytic. Synerlytic contributes as I mentioned, 8% of the portfolio again, a relatively pretty good performance. Integration of the CDN business into The Particle Group. That's the Canadian business that we bought. It's performed significantly above budget, and that integration has gone fantastically well. It's added new strings to the bow for The Particle Group. So you've got AMIS and CND working together, and that's been very positive for The Particle Group. As I mentioned earlier, we -- the group invested very significantly behind WearCheck's business around the reliability solutions part of the business in the last 12 months, and it really has started to pay off, and we're [ take ] at a very strong performance over the last 12 months. But that's also been coupled with very strong cost management and central cost reductions across the business and a very client-centric approach to growing revenues sustainably. So as part of that, volumes have been up across the portfolio here despite the price increases that have happened over the last 12 months. Revenue was up 11%, with EBITDA up 21%. And maintainable EBITDA in this business was only up 11% because we made adjustments last year for the early investment in people. So we effectively increased the EBITDA last year as a maintainable number. So the actual increase this year is 21%, but maintainable EBITDA only went up by 11%. So that 11% growth at the same multiple including the decrease in the gearing in the business resulted in a 21% year-on-year return for Synerlytic. Vertice, again, I'll touch briefly here, I think elective did take longer to normalize than we had expected. As I mentioned, we normalized last year's EBITDA for that. It did take longer, which is, I think, reflected in the maintainable EBITDA this year being slightly lower than last year. Larger businesses performed strongly, as I mentioned, but some of the smaller businesses have either been restructured or sold or have had significant cost reductions taken out of them. So that will -- the benefit of that will only be seen going forward. And we have continued to make investments in this company into new verticals, which obviously comes at a cost to short-term profitability. So overall, from this business perspective, revenue was up 17%, -- 1-7% year-on-year. Actual EBITDA was up 6%, but from a maintainable EBITDA, it was actually down 5%, reflecting the fact that I think we over-egged last year's EBITDA because we thought electives would come back at a stronger pace than they actually did. So if you take the 5% decrease in maintainable EBITDA, multiple remained the same and some increased gearing due to the investment we've made in some of the other verticals. Overall, the 1-year return on this business was a disappointing 11% down. Moving to Crossfin, which, as you know, is an asset that we've now owned in the mid-market fund for about 2 years. A pretty strong performance across the portfolio. So the AKELO portfolio, which is the card issuing business. They opened up a new Cape Town-based card facility with some new customers attached to that, very, very strong growth in that business, which has been a positive. I think, exceeded the forecast that we made when we made that -- this relatively significant investment into this business. From [indiscernible] perspective, again, very good revenue growth year-on-year, up 28%, really on the back of increased marketing spend in that business, which impacts short-term EBITDA, but it's helped drive revenue growth, as I mentioned, at 28% in that business. And a pretty robust performance from the other Adumo units as well. The one business that hasn't performed particularly well is Sybrin, to be honest, due to delays in new projects. And it has underperformed. We have a new CEO in that business, but I do think it's going to take a bit of time to start to see the performance turn around in that unit. There's been a very strong push for further integration of the BUs, which has seen us throughout the course of the year, take out some of the minorities in some of the underlying businesses and therefore, increase our stake in those as a business. And as I mentioned earlier, we sold retail capital for 1.8x money back over less than 9 months of holding that asset. So overall, this business revenues were up 25% across the portfolio. EBITDA was only up 5%, largely driven, as I mentioned, by the fact that we continue to spend, I wouldn't say excessively, but excessive amounts on marketing to ensure that we continue to grow the top line. And exit proceeds that we received out of retail capital of around ZAR 157 million were offset by the new capital invested into this of ZAR 367 million. Those are group numbers, not Ethos Capital numbers. So a significant amount of money invested into the business resulted in a relatively flat valuation given that, obviously, that money that went in -- is still held at cost. From an Echo perspective, a bit of a tale of 2 halves here to the year end of June and then post year-end. To the year end of June, actually, the South Africa business performed pretty well, to be honest. Revenue was up 28% year-on-year. The pipeline was decent. And we've made quite a few investments into new deployments, which unfortunately are taking longer, but that obviously impacted the EBITDA growth in the South African business, which was only up 4%. And post year-end, unfortunately, for us, one of our bigger clients did an M&A transaction. And as part of that M&A transaction, they were required to switch provider. It was a condition for doing the deal. It's something that Ethos -- sorry, Echo could have done differently, quite honestly. So we lost a relatively significant customer. And as part of the valuation, which we talked to here, we've made an adjustment in advance of starting to see the impact of that on the business. From an international business perspective, volatile, yes, I think we have seen improvements, not across the board, but certainly in select countries. But lead times remain very long and continue to be long and cost reductions in this business have been required to ensure that the platforms are set up to -- for profitability. So there have been strategic and operational changes that have been required in these international operations. Those have been made, but it's true to say that those businesses are taking a lot longer to contribute positively to profit. So from a valuation perspective, we have made an adjustment given that we lost that client in the South African business in advance. So obviously, the EBITDA numbers whilst they look up, we've made a post year-end adjustment to reflect the fact that we will need to replace that client in EBITDA and we've also reduced the multiple to reflect the operational leverage in the business, i.e., if you lose a customer and you lose that revenue, it's going to have an impact on the bottom line. So a rather disappointing 21% decrease in the valuation of Echo reflecting that sort of post year-end adjustment that I mentioned. Moving on to e4. Again, I won't dwell on this. It's only 2% of Ethos Capital portfolio, but it's the latest addition in the mid-market fund. Effectively, e4 works with clients to solve solutions around mortgages, conveyances, use this platform together with banks, it's been largely a South African business and performed very, very well, but it's actually now grown into the U.K. as well and capital is being put to work there. So as you can see, we only concluded this deal at the back end of 2022, the year-on-year performance with EBITDA up slightly year-on-year as we continue to invest, particularly around the international platform in this business. An exciting opportunity here. It's a business that we've been looking at for some time. And we're very -- the management team will continue to grow this business and make a good return for investors. In terms of some of the other smaller assets, Gammatek, as I mentioned, had a good year, not as good as last year. Growth in revenue was up 25%, but we continue to invest into new products, some of which were lower margins. So the EBITDA growth was only 3% during the year. I think it's true to reflect on the fact that consumers are under pressure, and that does manifest itself in fewer new phones are being bought. And obviously, therefore, our products being attached to those new phones. So consumer sentiment and currency depreciation really did have a direct impact, particularly in the second half of the year on this business. That said, the equity valuation of Gammatek during the course of the year was up 14%, largely driven by de-gearing and some EBITDA growth in the business. TymeBank, I think I touched on before. It's a digital retail bank. It started in South Africa. It has now grown its network outside of South Africa into the Philippines, where in just over a year, it's acquired more than 1 million customers together with its partner the Gokongwei Group in the Philippines. It's been a very successful venture to date. And as part of that, we've seen a lot of international investors come in at significant premiums to where we held the asset to buy in as part of the strategy. There have been 3 different capital raises done and during the course of the year. And overall, the equity valuation of this business, which is going marked to the last third-party valuation on it increased by 44% over the course of the 12 months. Primedia, about 3% of our total assets. Primedia really has turned the corner. We're starting to see the broadcasting business start to perform well with decent market share gains over the last 12 months. And importantly, the out-of-home business, which I think was probably most impacted by COVID, has continued its upward trajectory over the last 12 months. So we've seen EBITDA in this business up by 15%, 1-5% year-on-year. Decent de-gearing in the business has also seen the equity valuation increase by 9% year-on-year. Now finally, on the unlisted portfolio, Kevro, which is around 2% of our portfolio. Kevro definitely has performed significantly better year-on-year. I mean, obviously, from a negative off a low base or negative base, it's difficult to show you a growth rates, but very, very significant performance increases across the portfolio. That said, during the course of July to back end of last year, we did a debt restructuring in that business. We converted some of the debt to equity and part of that equity dilution resulted in an equity value decrease, from an Ethos Capital perspective of 24% year-on-year, most of which was reflected in the first half of the year. Moving across to the Brait portfolio. I think I have touched briefly on Premier. Premier's performance, particularly to its financial year-end, which was March, leading up to the listing was fantastic. EBITDA as I mentioned, grew by 16% year-on-year. Return on invested capital in this business has grown from less than 10% to now 19% in the business, which is a sector high compared to any of its peers. And if you look at the net profitability, just under ZAR 800 million, which was 186% year-on-year growth in that. So a very strong performance, the recent performance has continued. The bakeries over the last 5 to 6 months have shown very good performance. There's definitely been a softening of commodity prices around wheat, et cetera. But this has been offset slightly by the volatile exchange rates. But certainly, we are starting to see commodity prices soften from the pre-Ukraine -- towards the pre-Ukraine crisis numbers. We continue to see volume growth in this business over the last 6 months, particularly around the Khatyn area and that's credit to the management and the capital that they've spent on that business in the Khatyn region. From a milling perspective? Wheat volumes have been growing as have maize volumes. And importantly, in this sector, we see margins hold up and remain strong through the last 6 months. So we've seen a strong performance from the Milling business continue. The other 3 businesses, HPC, particularly in the U.K., continued strongly. South Africa, slightly behind what is happening in the U.K., but the recent performance has ticked up as well. So again, we are starting to see the benefits of the changes that the management teams have made in the HPC business. From a confectionery perspective, it was a relatively slow start to the year that has seen a pickup recently, both in terms of the organic sales, but also new business wins, which wouldn't have been possible if we hadn't done the recent acquisition of Mister Sweet. And then lastly, the CIM business in Mozambique, difficult conditions remain, the macros there remain tough, but we are starting to see some of the green shoots of recovery, both in the macros, and that indirectly leads to an improved performance in CIM, but that is going to take some time. And just lastly, the last slide that you have to listen to me on is Virgin Active. We've been selling a relatively similar story for a while. If I'd say 4 key elements of this, certainly, sales remain very strong across all of the regions. So it's not a sales issue in the business particularly in Italy and the U.K. and Singapore, the sales have remained very, very strong, as they have to be honest in an SA context as well. That said, churn rates, particularly in SA remain elevated. We have seen a slight tick down of theirs, but I think it does talk to consumers being under pressure in the South African market. That said, overall, we've continued to see growth in our membership base. As you can see in the South African business, we're up to 84% of 2019 levels. In Italy, we've massively surpassed where we were on a pre-COVID basis at 109%, very significant growth and relatively low churn in our Italian business. And even in the U.K., we continue to see as we're back to 94% of where we were pre-COVID and I think it's been boosted by the performance of the inner-city gyms in London, which are starting to come back. From an APAC perspective, a bit of tale of 2 halves. Singapore performed very, very strongly. Thailand, not too bad after it's late, reopening. The Australian business remains under pressure, and we need to continue to find ways to cut costs in that business to rightsize it for the opportunity set. From a head office perspective, as Dean has mentioned to investors, there is a cost reduction exercise or cost optimization exercise underway and also centralization of the management structure across the group where it was regionally done. It's now centrally managed. And all of that will lead to relatively significant cost reductions across the group. From a CapEx perspective, CapEx will remain elevated over the last -- it has been and will remain elevated in the next 12 months really talks to maintenance CapEx. There is an element of catch-up, as we've mentioned, from a COVID perspective. Growth CapEx and rejuvenation CapEx still remain part of the way to grow this business. We've seen significant investment into their state. Plenty of those you have spent time at some of our new gyms. We've recently done up gyms. I think it really does go a long way to reducing churn and improving the membership experience in that business. And just to finish off with, in terms of the unlocked strategy, it's a slide I discussed when we showed the Brait results. A couple of points on the slide. As I mentioned, we are a long way down the line to the value unlock strategy, which started as you will remember, in April 2020. Since then, we've seen ZAR 7.8 billion of realizations across Iceland, Virgin Active, Consol and Premier. And I think that's a very significant number in the context of paying down the debt in this business. So we are now in a position where post the IPO of Premier. We repaid the RCF in full. We've hedged all of the coupons on the debt. And therefore, the only real debt outstanding remains the convertible bond given that the exchange will do exchange into equity. Obviously, there's a cash component to the extent that they are below the strike price. So where to from here. I mean from a perspective of the business, we remain on track to expedite the return of capital to shareholders here, and that revolves around getting Virgin Active into a shape where it can be listed and be seen as a stand-alone entity. As I mentioned on the previous slide, there is significant progress towards that, but it will take time, both around its capital structure, but also its operating performance. The New Look business is performing better. Is it a great time to be selling a U.K. retailer? Probably not. But we recognize that there's -- there will come a time when we need to realize value from that asset. And then obviously, we've got the Premier business, which is now listed and we have a listed currency to work with there. So in terms of summary, I think a decent performance from the unlisted assets, 14% growth year-on-year NAV, 14% [Technical Difficulty] in EBITDA. A disappointing performance from the Brait portfolio, which, as I mentioned, was down circa 20% in terms of its share price during the course of the year despite all the restructurings and the things that I've mentioned. And in terms of the outlook, whilst things remain tough, I think the fact that we have a diversified portfolio that we are spanned outside of South Africa, very significant, more than 40% of our portfolio value resides outside of SA, whilst we are subject to SA Inc issues, and we will always have to deal with those, there is an element of sector and geographic diversification of the portfolio. As I mentioned on the strategy, the Board remains committed to returning and expediting return of capital to shareholders and making sure that we can continue to generate alpha from the portfolio for our investors. And with that, I will stop and hand over to any questions.

[Operator Instructions] The first question we have comes from Gregory [indiscernible] from GLB Trading.

Peter, once again, it's always eloquent presentation, but I'm going to come back to what I always sort of ask you. On your sort of your rhetoric, your ongoing focus is maximizing and realizing value for investors, okay? So last at Brait, you basically unlocked ZAR 7.8 billion of existing assets. The shareholders in Brait have basically seen nothing of that. They've only seen really a diminution in value of their share price. So that begs the question once again is what would your plan be? Bearing in mind that you said your metric, if you look at massive discounts in that to invest. So I don't know how much you can allude to or not. What would your strategy actually be for Brait? Or are you going to just let it run out to the end of 2024 and then basically sail into the sunset. Because clearly, as shareholders -- I mean, the outlook for the share price is more negative than positive unless you have some unlocked strategy where you say, well, the discount is so big that in theory, we should actually do this -- this business. If you can maybe just shed some light on that?

Yes, Thanks, Greg. And I always appreciate your questions. I mean, look, on this answer on Brait the value unlock strategy is to return the shares to shareholders to unbundle the value and get rid of the discount and get rid of Ethos as a manager sitting in the middle, right? So if you had to say where? Look, the premier shares are worth what they're worth, right? I mean there's a market price for them, it's worth 3.7. As I said, our market cap is 4.3. So no one has to do lots of math to work out that there should be value [indiscernible] in the portfolio.

Sorry, your market cap is less than 4.3, it's 3.6.

So less than the value -- sorry, I was doing it at June because -- yes you're actually right. As of today, the market cap is the same value as the shares that we own in Premier so it illustrates the point that there absolutely should be value to be unlocked, Greg. I mean we vehemently believe as do third-party investors not just us that there is value in Virgin Active. We can debate exactly what that value is, but it's not worth 0, in my view. And therefore, my view is if we can get that business to be a listed business or we have someone who comes and says, listen, it's a very attractive portfolio of gyms across the world, and I want to buy it, that will unquestionably unlock value for investors. So I think the strategy remains to ensure that Virgin can be listed separately. And to be honest, there's still some work to be done there. I think if we had to bring it back to market right now, there's a lot of uncertainty there. I think Dean and his team are doing a great job of pushing that business towards being able to stand on its own 2 feet, but it's not there yet. But once it is there, and we can either list it or sell it, quite frankly, that will obviously, unlock value, because obviously the proceeds of that will be used to obviously repay the convertible bond and thereafter return to investors, both the exchangeable bond investors and ordinary shareholders. So I can't say more than that other than, I mean, I absolutely agree, the ZAR 7.8 billion. When we took over the business, it had ZAR 8.5 billion of debt, right? So it has, it's gone all to repaying debt. I mean that wasn't -- unfortunately, it was a problem we inherited, right? It had a significant amount of debt in this business. We've managed to sell off assets at premiums to their NAVs to repay the debt. And we're now left with the core assets, and we need to be able to return those to investors in a way that, that gives them value, right? I would suggest if anyone does the math, there is inherent value in it. But I'm not a market commentator. I can't tell you whether the share price is right or wrong. All I can say is we genuinely believe that the NAV is, which is where we mark this thing to market.

Well, I mean, just hypothetically speaking, we've had the conversation before, why don't you let the [ market ] take the [ net ] of the [ germs ]? You can do a book build at the Premier, you'll extinguish the convertible and let the market decide. And then if Virgin needs the right to issue whatever the case is, then the market will dictate. But what you're doing now is almost like you're waiting for the eventual outcome of saying, "Well, now I got rid of everything and we'll just give it to shareholders " which is another 16 months down the road, where -- I mean I'm just saying that isn't there ways -- aren't there ways to expedite what you want to do because effectively, whether you do it in a listed or unlisted form, it has a better bearing when it's much more transparent. And then the market can dictate whereas you keep justifying what you believe it's worth, but the market is telling you it's clearly not worth it...

So the point I keep coming back to is -- and this is not my view, right? This is a view based on 3 international banks and 2 local banks, right? -- who we're working with. You said Virgin is not able to be listed on its own today. So in theory, you're right, but you must not buy a dog and bark yourself, right? At the end of the day, we've got international people saying that investors will not buy into Virgin Active today as a listed entity on its own. Now mean I can say I don't need to listen to them. I mean that's a different point. But my point is, it will take us time. And I'm saying it's within the remit of the next before the December '24 numbers to get this business in a position where it can be listed, right? It's not listable today.

Okay. Now I fully appreciate that. But then what do you do in the interim? If you believe that it will be a listable business from an Ethos perspective. Shouldn't you be then buying because it fits your metric of a massive discount to the NAV, buying rate in the market? Just for argument sake, if you believe in your own story.

So let me devolve between my personal capacity and Ethos Capital. Ethos Capital, it's a Board decision, and there's not liquidity. I mean, you can see the numbers I showed you today. There's no liquidity to go and wait into the market and buy more Brait shares. Personally, I have bought Brait shares. I'm a big investor in the Brait business. So I can't speak for Ethos Capital. But in my personal perspective, I absolutely believe that this value -- at the share price is not a value to be had. But Greg should we -- I've got some other questions here as well. Are there any other questions on the call before I go to?

There are no further questions on the conference call.

Okay. So let me just go on to some of these questions from [ Sandile ] -- are there any -- on notable drag on the NAV, are there any value unlocking opportunities you see in this asset? I don't answer don't worry about that. What is your target contribution to NAV of the fintech businesses? Can you grow Fintech organically above 20% to 30% over the next years? How big is a non-rand-denominated debt in your capital structure? And do you have any plans to reduce this. Okay. So let me answer the question about the FinTech business. We absolutely see opportunities in this space. If I go back to that slide, which we showed around the portfolio and the performance. It absolutely is a sector which we have seen. This is not because we believe in the AI theme as of yesterday. But this is a sector which we've been investing in together with Nick and Roger for some time. So we believe that there is value in the sector. We continue to look for investment opportunities in this. Can it grow at 20% to 30%? I'm not going to give a forecast, but if we didn't believe assets that we were investing in could grow at 20% to 30%, then we should absolutely [Technical Difficulty] capital through buybacks, right, because you'll get a better than a 20% return from doing that. So we do believe there are opportunities there. You need to be selective. You need to play with people who really know what they're talking about. I think Roger, Nick, Michael, [indiscernible] and [indiscernible] are very good partners in that respect. So we very -- we remain very excited. We would like to see there contribution to overall NAV increase. How big is the non-rand denominated debt? 0 in Ethos Capital. So we don't have any non-rand denominated debt in Ethos Capital. Andre Stan. Thanks for reiterating the strategy of no new investments until realizations and returns to shareholders have been demonstrated. Please can you share with us what you think you need to do to demonstrate realizations and returns to shareholders? What is the quantitative guideline? What does the Chair mean when she says, our in-depth strategy review extends beyond preservation? If it comes to forward-looking evaluation of investment strategy in a changing landscape, exploration of new opportunities aligned with our core values and objectives -- how does this align the strategy of no new investments? So Andre, I think the words are no new fund investments until realization. So there's no commitment by Ethos Capital into new funds until we start to realize the assets in the portfolio. I don't think it's around no new investments at all. I think we've been very clear, and I've been clear in the presentation to say that the hurdle you need to achieve to put new money to work in a co-investment in a secondary and whatever type is your buyback hurdle, which means that you need to ensure that, that asset that you're putting money behind can make a better return than buying back your shares, right? So I don't think the Board has said that there's no new investments per se. I think it's no new investments into funds. That said, we've returned ZAR 550 million of realizations since -- well, we've had realizations of ZAR 550 million and ZAR 260 million in this year. As you know, we've currently got debt at the center, which obviously needs to be repaid before we can return the capital to ordinary shareholders. But I think we're well on the path. I mean, this year alone, we returned -- realized 25% of our market cap in realization. So I would suggest, as a Board, they're getting to the point that we will have surplus capital to allocate, which is when you start to make these considerations around whether you put into new assets or into buybacks. In terms of the chair strategy, I think it's exactly what I said. I said I think the chair is saying that we will continue to look at new strategies along the lines that I've been talking about, which is high velocity of capital deals, secondary type transactions, only to the extent that they beat the buyback hurdle, right, which is somewhat obvious and repetitive from my side. Andre again, what framework is the Board using when considering whether to make new commitments to new Ethos funds? Your returns on exit investors look impressive. This excludes those investments that have gone to 0 like [indiscernible] Now it appears Autozone 2 and also Premier. Your returns excluding Brait [Technical Difficulty] looks subpar -- your returns, excluding Brait of [indiscernible] look subpar, but of course, the total returns, including all of the bad stuff is poor. Is the Board waiting for Ethos to achieve more realizations and growth in NAV before committing? What is an acceptable rate of return to justify a new commitment? As I said, Andre, I think it's really dealt with by the Board. It's unlikely to be a big investor in any new funds, quite frankly. Okay? They may, but it's highly unlikely. If you look at the strategy that I put up a couple of slides back, really, they're talking to saying what they want to do is secondary type transactions at discounts on assets that they know well or continuation vehicles and the like, co-investments, again in assets that they like and then into sectors that they like. And by that, I really talk to, say, the AI themed assets that we talk to. I think it's highly unlikely that the Board would choose to invest in a new fund. So I don't think it's a framework for considering what that would be. I think it's relatively unlikely that they would invest significantly into new funds currently. Moving down one Mark Naramore, would you list Virgin Active outside of South Africa considering the growth in offshore exposure? I think the answer to that is yes, Mark. I think it is more likely to be a internationally listed business. There's lots of growth opportunities and interest in that sector internationally. It would obviously always have a secondary listing in South Africa, given the lot of the South African investors in Brait, I'm sure would remain as investors. But I think we would look at other jurisdictions to list the business. Graham Corner with EPE and Brait only listed entities that TRG are involved in, has TRG expressed a view on the merits of listed vehicles, especially given the deep discounts to NAV? How does this affirm the long-term outlook for EPE? I am not sure I understand exactly the question, but -- so look, TRG is extremely keen to support Ethos Capital, right? And whatever form that is, whether that be opportunities, whether it be capital, whatever, right? So I think they genuinely believe that these vehicles, if you continue to earn a return as they have in their funds, which we can share at some other point in time above their cost of equity, if you continue to do that, you should narrow the discount. Will it narrow it to 0? Probably not. Have there been times in the cycle when these investment holding companies have traded at premiums or very narrow discounts? Yes. Will we go back there? I don't know. But I think TRG believes that over the cycle, we should revert to the mean and if we do that, there will obviously be significant upside to investors, both in terms of NAV growth but also closing the discount. So we remain very committed, Graham, to this vehicle. And I think that's an asset positive for us as investors in this vehicle, quite frankly. Moving to Mark Naramore, Brait share price currently below the exchange price of the convertible, how does Brait deal with the shortfall? Mark, as we've asked, there is a -- below the strike price, you can settle the exchangeable bond by delivering the shares underlying the exchangeable bond to the exchangeable bond holders and topping up the difference between the prevailing share price at that point in time and the [4 and 37] strike price in cash. So it can be partially cash settled as the executive summary. Charles Bolt, Brait, it seems VA is unlikely to be listable on a standalone basis by 2024. Even if it has possible potential long term, this suggests that the plan to sell new Look Premier shares and leave VA listed is unlikely to be viable over the timeframe contemplated. Charles, I mean that's a view. I would differ from that potentially. And I think the advisers that we're working with may differ from that. But clearly, as the advisers to Brait, we need to ensure that all eventualities are looked at, right, and ensure that we do whatever is best for shareholders, if that is the answer. So I don't think it is the answer. But if it is the answer, then we need to come up with a plan of which there are many and which we are working on to ensure that we can elongate the period which we need to do it in, right? So what we don't want to do is find ourselves with our backs to the wall and not able to realize value for shareholders. So we are looking at a ton of different options. But hopefully, that won't need to be the case. And as I said, we are working with some reputable international investment banks. Willis Barnes. What do you consider the current buyback hurdle given that the share price is trading? Can any investment past this hurdle? Yes, they can Willis. The answer is simply put, if you do -- if you work the math side, right, you say your existing portfolio, let's say, has a 15% growth embedded in it, right? As we said, we achieved 14% over the last 3 years. So if you say your existing portfolio is going to grow at 15%, and you trade at a 50% discount, it's a math exercise, right? I think that number gets to 22%. I can't remember the exact numbers. I don't know it to hand right here that you would need to get more than in terms of a new investment opportunity rather than buying back your shares. Do we see deals that have more than a 22% return? Absolutely. So I would say this, it's not that it can't. It's just that it is a very high hurdle to overcome, which is why we have continued to buy back shares over the course of the last 12 months as the Board. And Graham Corner again. The liquidity suggests that the register is getting tighter. Could you give an idea of change over the rest over the last year and the feedback of core investors? I actually don't have it to hand, Graham and -- but the honest answer, there has been a decent churn of some of the existing investors, [Don] and obviously, new investors coming up, some of that being bought by existing investors, but also new investors into the register. But I just don't have the details to have Graham. I can take it offline and get the detail for you. Those are the only questions I have. I'm very happy to answer any others from the phone lines.

There are still no questions on the conference call.

Okay well, thank you very much to the investors. And again, as I mentioned, [ Ray ] and I remain open to ask -- answering any questions if there are any remain outstanding. So feel free to buzz us or drop us a line. And again, as I mentioned, we are very appreciative of the support of all stakeholders in the business and thank you very much for taking the time.

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