IP Group Plc (IPO) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the IP Group plc Final Results Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand you over to CEO, Greg Smith. Good morning, sir.

Thank you very much. And welcome, everyone, to our 2022 Full Year Results Presentation. Thank you very much to everyone that's currently online or indeed, if you're watching this as a recording. Thank you for your time to hear our update. And this is the fourth time now that we've used Investor Meet to do our results presentation, and this is very much part of our continuing efforts to sort of dial up our IR activities and to get the IP Group story to as many shareholders and potential shareholders as possible. We've got a very active program of IR events this year, and we will summarize those right at the end of the session. And on today's call, we've got myself, Greg Smith, the Chief Executive. I'm joined by David Baynes, the CFO and Mark Reilly, who is our Managing Partner of technology. And the 3 of us are here at our head office in London and the backdrop. And remind me here -- it reminds us something that one of our shareholders said to me recently as to why he holds IP Group as a stock, and he said, it offers him a window on the future. And behind me on my shoulder, you can see the construction of the giant Google building behind us. And so perhaps it's a view of a certain asset of sort of technology-led future. Also joined online by Sam Williams, who is the Managing Partner of Life Sciences. And we're also delighted to be joined by Gavin Jackson, who is the CEO of Oxbotica, and they are one of our most exciting companies in our Kiko cleantech portfolio, and he'll be giving us an update later. Obviously, as a public company, we've got our presentation up on the IR section of our website. And I would just ask you to please note the usual disclaimers about the nature of this update in any forward-looking statements, and you can review those online. So in terms of content and the running order for today, I plan to cover a short overview and update on how we are successfully delivering on the strategy that I set out this time last year, including progress in our 3 investment focus areas. And then as a bit of a leading indicator of success for the future. I'm going to give you an update on progress in some of our priority companies and Gavin will speak to Oxbotica at that point. And Dave will then run through the financial results for the year before I wrap up with a summary and outlook and then on to questions. And as usual, and please post the questions in the Q&A, and we will endeavor to answer all of them. And if we can't, then we will respond to them within the system. So before I get into the results for the year, I really wanted to give a short reminder of what we are. The key elements that enable the operational delivery of our business and what we do at IP Group, which is a very specialist activity, but we are a leading investor in breakthrough science and innovation companies with the potential to create a better future for all. And you can see the main elements down the right-hand side of the slide down and one that I will particularly draw attention to is the expertise and the experience of our team that is being built over many years and through many investment cycles. And I can't underestimate the importance of that sort of industry insight for the current environment in which we operate. We are an impactful investor. We are trying to deliver both financial returns and societal and environmental benefits. We benefit from being an international group. We've got a network of relationships, particularly on the capital side, which is vital at this point in the cycle. We have a permanent capital structure, which gives us numerous advantages over the fixed life model. And that has enabled us, those ingredients have enabled us to build a portfolio which has been built around access to leading science and technology. And we have a strong track record today, 3 unicorns or billion dollar plus companies that we've created to date. And I hope you'll see over the course of this presentation, there are a number of prospects for others within the portfolio. And there's been a lot in the press recently on sort of early stage and venture investing, but a subject has been really, really prominent here in the U.K. is this concept of a science superpower or innovation nation and the government this week announced and released its science and technology framework and right at the start of the framework, it's set out the reason for doing so and it said science and technology will be the major driver of prosperity, power and history-making events this century. And our view is that science and technological innovation creates hope and innovation plus capital creates growth and value. And through IP Group, this is one of the few ways that you can invest in that type of science and technology that is the subject of this focus. And as I and the team will demonstrate today, we'll be -- and as we'll be doing over the course of our road shows over the coming couple of weeks in institutional and investors, we believe now represents a very compelling time to invest in this theme through IP Group. So in terms of the overview, the financial overview for this year. I mean, firstly, we reported a significant loss for the full year, and this was flagged at the half year, and it was driven significantly by the reversal of about GBP 370 million of gains on our holding in Oxford Nanopore. However, we've now completed our rigorous and as the auditors call it, multi-cautious annual valuation process and reconfirmed our NAV per share at 133p per share. Importantly, for the future, I'm pleased to be able to report strong progress in the underlying business and indeed in the delivery of our strategy. And in fact, sort of to exemplify that a bit in numbers. If you exclude that fair value reduction on Nanopore, we actually made a modest profit. So if you take Nanopore out of the numbers for this year and last year, both periods were profitable, so the underlying business is strong. And another indicator of delivery of our strategy is the increase in our third-party assets under management, our managed funds, which grew by about 20% in the year to GBP 700 million. And then finally, and I think critically for the current environment, your company is well financed, has strong liquidity, and we've maintained our focus on a sustainable approach to shareholder returns. And I've talked about liquidity as a strategic asset, and we continue to believe that this is the case today. And during the current environment, during the current year, we responded quickly to reduce our investment levels, and we have a strong cash and net cash position due to success in realizations in recent years and also the additional long-term debt placement that we announced in August and Dave will refresh on that shortly. In terms of the approach to shareholder returns, we take this sort of sustainable approach, and it's centered around NAV per share growth, which is fueled by delivery of returns on NAV. We do aim to supplement capital growth with some cash returns each year through dividends and other tools, and we reserve a proportion of all exits for this purpose. And we don't have a fixed proportion. But as a guide, in 2021, we returned about 20% of realizations. This year, total realizations were GBP 28 million. And we're continuing with our policy to pay a modest and growing dividend, recommending a total dividend of 1.26p per share, which is an increase on the prior year, but this represents just under half of our 2022 realizations, just reflecting our commitment to a growing dividend. So those are the key elements of our financial results. I just wanted to talk about the strategy before I do, I wanted to quickly update on what we are seeing in the early-stage venture markets in which we predominantly operate. And I think for those who follow the space, it won't be that much of a surprise, but the impact of economic uncertainty and inflation and therefore, the higher cost of capital is likely to have a longer run effects on the public and private markets overall. So I would say it's definitely a tougher environment generally. I'd say that the industry is experiencing a bit of a shakeout following a period of relative exuberance, and this is particularly true in the later stage. And so we're seeing more discipline around valuations, particularly on the later stage of sort of Series C and beyond. But for many of our companies are before this stage, and the U.K. hasn't seen such significant valuation increases. So as an example, PitchBook data shows that combined seed and Series A valuations in the U.K. are on average about 70% less than in the U.S. So there's further protection there. And in our portfolio, we've seen some funding rounds delayed, particularly around finding a lead. But the vast majority of these that have completed have been at or above the last funding round, which again, Dave will come on and show in our financial results. Realizations, IPOs and sales are significantly reduced as you've seen in our portfolio and in our numbers. And so what does it mean? What does that mean for IP Group? Well, it means tech differentiation in the companies is key and will likely matter even more when there's less capital around, it's focusing on the top companies. And the good news is that our investment approach means that our companies are funded and founded on genuine technology differentiation. I think you'll hear that when Gavin speaks later. And another key element is that co-investors and co-investment capital are critical, and our portfolio raised around GBP 1 billion last year, of which we did just under GBP 100 million. So that's a critical element of the business, including our third-party funds under management. And then I think it's important to point out about our team is experienced in investing through a number of cycles and so we will manage our resources appropriately while ensuring that we maximize the opportunity for our leading companies like Oxbotica, like Istesso, and we will continue to have a strong financial position. And then finally, we continue to see strong fundamental demand for our products and services across life sciences, Cleantech and Deeptech and then you'll always get some subsectors like the recent huge amount of interest in Generative AI and Applied AI. We -- that's a big theme of ours and so inevitably, and we're seeing that. And again, Gavin will cover that in his talk. So how are we setting out to capture this opportunity and to deliver value? Well, the business is now fully aligned behind delivering our purpose to accelerate the impact of science for a better future. The key activities and the deliverables to build a sustainable, resilient and successful business -- investment business are aligned under these 5 key pillars of work. Now you'll be pleased to know I'm not going to talk through all of those, but I think as a shareholder, it's important to know that there is a guiding long-term framework to align the efforts of our people. . And the one that I will pick out though is that we want IP Group to be front of mind for incremental investments from shareholders, front of mind for the best talent and front of mind for co-investors and industry. And so building a distinctive reputation is an important lever in this and it also drives deal flow. And when I first took over as CEO, I was told by a couple of stakeholders that IP Group is the best company that no one had ever heard of. And so following an appropriate level of investment, we now have a new look and feel and brand identity to help change this. But the main pillars I want to focus on today is around accelerating value creation. And of course, a key tenet of that is our investment focus and approach. And I've spoken about this before, but our business model is really very simple. We are looking for opportunities that sit at the intersection of huge commercial opportunity, huge societal need and IP Group's distinctive strengths. And we back innovation, and we use the technical acumen and the sector insights of our experienced teams to better assess value and the risk reward of that innovation. And that leads us to these 3 thematic focus areas. And I think hopefully, each of those 3 has a pretty distinct and complementary investment profile over the next 1 to 2 years. And I'm just going to take each in turn. So if we take -- turn to healthier future first, having consolidated the life sciences portfolio down into about sort of 20 or so poor holdings. There are now 8 companies that are targeting key clinical milestones over the next 1 to 2 years, as you can see here and they are spread across oncology and inflammation primarily. And the team will be focusing resources and capital to support the delivery of these milestones, and of course, then driving commercial value for each company. And while also looking at sort of an appropriate level of new opportunities. And then just have mentioned, obviously, on the health care side, continuing significant revenue growth is the key driver and focus of value for companies like Oxford Nanopore and Hinge Health. In terms of the tech-enriched future, the Deeptech portfolio, so a number of our leading companies, Featurespace, SaltPay, Garrison, you can see at the top of the list there. They are targeting value creation through continued double-digit revenue growth. And then there's earlier companies like Diffblue, which I mentioned is our generative AI company which is writing Tesco for software, Audioscenic and Ultraleap are seeking to grow early revenues. And of course, the team continues to assess an appropriate level of new opportunities. And then finally, on regenerative future. I mean this -- you can call it climate tech or Cleantech or sustainable investing. We made a deliberate strategic choice to double down on one of the most compelling parts of the business in line with our strategy. And this team which is very experienced and it's a relatively small team, as you can see from the photo, but combined, it's got more than almost a century of investing experience in Cleantech, and they have a very strong track record. You see in the results, it was more than 100% return. And this year, but overall, the gross historic IRR is in excess of 30%. And so we think that now is the time to be doubling down on that performance. A focus for 2023 will be adding new companies to the portfolio but also in the existing portfolio, First Light is planning to raise further capital following its inertial fusion result that I'll come on to in a moment, and Hysata is seeking to derisk its breakthrough hydrogen electrolyzer technology. So 3, really clear set out themes and investment and value creation opportunities across our 3 main areas of the business. I do also just want to talk about this other element of the accelerating value creation, and this is around growing our access to co-investment capital. And I said earlier that capital is and will remain a strategic asset and is a fundamental resource for our business. And we've always maintained access to diverse sources of capital, be that plc, be it debt, be it co-investors and an area where I still think there is a huge amount of opportunities growing this third-party private capital partnerships. I'm very pleased to report good progress on that in the year-to-date with a 20% increase in our assets under management. . And so we've been building out our expertise and our track record here. And I think the opportunity remains significant. In 2021, we invested about GBP 100 million out of about GBP 2 billion into the portfolio. I mean, even during 2022, we invested about GBP 90 million out of GBP 1 billion. So there continues to be a big opportunity to do more in this space. And I will also say we continue to engage significantly with government, with HM Treasury and around long-term capital providers around these proposed reforms to financial regulation that might allow long-term capital to support this kind of activity in the U.K. And I think maybe our success to date and the additional resilience that this gives the group maybe something that the market is missing at the moment. So I will be making sure that that's very clear as we go on the road. In terms of impact in ESG, it's a fundamental driver of the business. the elements of sort of strong governance and they're just a minimum requirement really as a quoted company. I think the opportunity for us is sort of really twofold. It's one around accessing capital and two around delivering outsized returns. And I think the -- the key to that really is around measuring driving and reporting against impact. And so the 2 main focuses for the business this year are on sort of developing and delivering on that framework, and we'll be working with some of our lion shareholders such as Liontrust, M&G, EdenTree and others as we continue to do so. And then the second area of focus is to maintain our current outperforming position with the ESG rating agencies, which means that you get it into the indices, et cetera. So if you're interested in this work, then we produce a separate sustainability report each year and things like our ethical investment framework are all disclosed publicly and on the website. So we're progressing really well against the strategy and to give you some sort of leading indicators of that success within those 3 themes, and we try to evidence progress through a handful of priority companies that will drive returns across the group. And I showed this slide last year, and I wanted to just report back on a handful of those companies. So I've -- we're going to talk about Istesso and First Light and then, of course, Gavin is going to talk about Oxbotica. But before I do that, I just want to quickly give an update on Oxford Nanopore. And I think the thing to say about Oxford Nanopore, we continue to have a deep and long-standing relationship with Oxford Nanopore and the management team there having been the first investor in 2005. As a reminder, we've invested almost GBP 80 million in the company and realized over GBP 100 million. So we've already covered our costs in full, and we remain the largest shareholder in the business at 10%. In terms of the company's progress. I mean they're making strong progress technically, but importantly, very strong progress in terms of revenue growth. They continue to target compound annual growth in excess of 30% through the medium term, and we -- fundamentally, we continue to hold Oxford Nanopore because we believe the business to be undervalued at this point. Underlying growth is better than any of their peers, but the multiples don't sufficiently reflect this at the moment. And our strong capital position means that we don't need to be for sellers at these prices. And so we will seek to optimize the timing of exit over the medium term because as I've said before, it's not our primary role to have large holdings in large listed companies. The next update from Oxford Nanopore is on the 21st of March, and Gordon will be coming to speak at our AGM update in June. So do please come along or dial in through the platform. So that's Oxford Nanopore. I'll quickly now talk about Istesso. So Istesso is our leading -- I spoke about 8 companies in the portfolio that are working towards and clinical milestones and events over the course of the next 12 to 24 months. And Istesso is the largest of those and probably represents the biggest opportunity. They -- and during the year, we've had great progress. So we -- the company entered into Phase IIb trials for rheumatoid arthritis, which is a huge market. . And also in the second half of the year, they achieved fast track and designation and orphan drug designation from the U.S.'s FDA for the treatment of a new area, IPF or a second indication which is another condition with very high unmet needs and a multibillion market opportunity. In terms of upcoming milestones for this year, we -- the company intends to commence a Phase IIb trial in IPF in the summer. And then the readout from our rheumatoid arthritis trial is due in the first half of next year and then the IPF trial in the second half of next year. So 2 very big important value drivers for the group and a huge opportunity here to create both significant value but also to have a huge impact on the hundreds of millions of people who suffer from autoimmune and chronic diseases. First Light, I spoke about this one a little bit at the half year, and that was mainly because shortly after our financial results. And this time last year, First Light achieved world first, projectile fusion results proving that you could create fusion from their unique approach to doing so through projectile impact onto a fuel pellet since the half year actually and sort of quite helpfully for First Light, many of you would have seen that at the Lawrence Livermore National Laboratory in the U.S., the National Ignition Facility achieved gain using the same underlying physics. So not just fusion, not fusing 2 [ particles ] together, but actually getting more energy out than in the target, in the cell. And that's -- I mean, the thing that's really interesting about that from a First Light point of view is the underlying physics are the same. The mechanism to create the impact is different. They use large lasers, but it proves that the underlying physics actually works. And so First Light have entered into a partnership with Canadian Nuclear Laboratories to help build out and develop their pilot plant where they will then be seeking to achieve gain. And in order to do so, as people would have read, they are planning to do a significant funding raise in order to allow them to build and develop that pilot plant. And I mean, this is an incredible scientific achievement and a huge amount of value that could be created here over the longer term. And then the third company, this isn't one that I highlighted last year, but it had such a good year that we thought we should get Gavin to come and give an update. So we were the first institutional investor into Oxbotica back in 2018. We supported the Series C through Kiko and also through our Hostplus co-investment relationships, some of our assets under management. and the Series C took them to a total of GBP 225 million raised. And that new funding is going to drive Oxbotica's geographical expansion into North America and EMEA, into APAC and accelerate the deployment of its autonomy software. Gavin joined as CEO in December 2021, and he previously overseen EMEA operations for Amazon Web Services and was Microsoft U.K.'s Managing Director. So he really has been literally driving Oxbotica's mission to make the earth move. So I will just ask Gavin to outline the investment case for Oxbotica. Thank you, Gavin.

Super. Thank you very much, indeed, Greg, and thank you, everybody, for taking the time with Oxbotica here. So we are Oxbotica. And as Greg points out, we are changing how the earth moves. And our mission ultimately is to unlock the benefits of self-driving technology to every person and organization on the planet. And we think that applied the right way those benefits are profound for the entire world. the impacts that we think we'll have on safety of industrial mobility and passenger mobility is profound. We think that the impact that we can have on the carbon footprint for all forms of mobility can be profound. And of course, we think that through productivity and through different types of business models that will exist in the world, through autonomy, we think that there are trillions of dollars worth of economic value be created as a result of autonomy. . And we can do all of these things and apply the broadest brush for this software technology called self-driving because we have developed the world's first and only operating system for universal autonomy, which means that with a singular technology, software technology stack, we can apply that technology to make any vehicle of any size and substance that performs any industrial or passenger job in any vertical market to move autonomously at scale. And so we have built the operating system, and we've applied that in the real world, which basically then gives us a great deal of optionality as to how we enter the market and how we actually turn on that value for the world and create value for Oxbotica, our customers and our shareholders. And it's most assuredly in the self-driving space, not in the area of passenger cars and robotaxis, where really that drives a continuation of single occupancy journeys, which the world doesn't need and it won't return any form of a benefit for the world or for stakeholders until after 2050 at best. So what we do focus on, however, is applying that technology where there is the most urgent and persistent need for automation in the value chain. And that is up and down the supply chain in first mile logistics in the ports and airports as goods arrive on the world shores. It is in middle of mile logistics, where there's a shortage of drivers and increasing in just in time, just enough supply chain, and connecting hubs in hub to hub trucking. It's in last-mile delivery, where there's an expectation on the consumer these days that goods arrive again, on time and efficiently. And so driving that type of application is how we mine the world for the materials that we need to heal ourselves and to energize ourselves and to enable, if you will, to build world is in construction and the safety areas of construction and the productivity that we need there. is how we feed the world in agriculture. The farmers of the world are sort of migrating away from that particular trade. So automation is an inevitability. The vehicles need to do more without human intervention. And yes, there is also the opportunity to move people in shared mobility sectors, but that's leveraging a different type of infrastructure, if you will, to what it would be in passenger cars and in the robotaxi application. This is leveraging bus lanes and fixed routes, which is an infinitely more accessible market and more nearer-term market than anything else. And our market entry points for this singular software platform to unlock the benefits in each of those different areas is to find and partner and go really deep with category-defining anchor customers. that will then lift us and accelerate the application of autonomy in that particular space. So good examples of that are in the first, middle and last mile logistics with Ocado. Ocado both a grocery chain and an online only grocery chain. So the extent to which they can move goods in and around that value chain and get them to customers in a speedily way with good margins is profoundly impacted by autonomy. Ocado are both a customer and an investor in Oxbotica. And so that's a great example of a category-defining anchor customer. ZF is a multinational or indeed a global automotive company headquartered in Germany, multibillion-dollar institution. And they are creating the shuttles that will move in a shared mobility sector that will move people autonomously around cities and connect cities and provide more accessibility for the world. We're working with -- in the industrial sectors, we're working with the likes of BP for light industrial applications with mixed fleets of vehicles doing mix of jobs across the entire value chain of BP. And they are both, again, an investor and a customer. [ Kalmar ], a FTSE 100 company focused on safety and sustainability, providing autonomy systems for their customers. Trimble, an expert in agriculture, a multibillion-dollar publicly listed U.S. company, experts in construction, heavy industry and agriculture as our sort of technology partner and route to market for those markets. And indeed, the likes of Google, who we partner with to distribute our technology in a very sustainable way. And again, Google are both an investor and a partner of Oxbotica. And actually, our business model is very analogous to Google, which is one of the reasons I think that we come together so well in that if you think about the Android operating system, it's a singular piece of software that can operate any hand device. And then third parties build applications, they build value on top of that platform and make those solutions available in Google Play. So it's the same is true for Oxbotica in our singular operating system for universal autonomy, the driving system for vehicles can drive any vehicle. And with our anchor customers, they're developing the application, the value case for autonomy and those solutions are then curated and available for customers that look like them in Oxbotica marketplace as well, which makes it again infinitely scalable. Last thing I'll say just very quickly is a little bit on the business model. So we are a pure-play open software provider. We don't make any hardware. We don't make vehicles. We partner. We're at the center of the ecosystem and the value chain and the flywheel for autonomy. Our software is a license -- is a software-only license and it's on a per vehicle per year basis for the life of the vehicle. And we have, at this point in time, we have circa $4 billion worth of pipeline and over 0.5 million vehicles that are driven by Oxbotica in that pipeline, and that's a recurring software license for the duration of that vehicle's life. We also have software that enables end users like Ocado to control those autonomous vehicles and build those applications and workflows for sending the vehicle to go and do the job that it was intended to do. And then finally, we are leveraging the metaverse and generative AIs to make sure that, a, we're able to accelerate the development of the technology in the places that we are deploying it so that we can eat out all of those nasty edge cases that stops self-driving from happening. We can do all of that in the metaverse. But it also provides the world's first and only assurance platform for run time. So when vehicles are operating in industrial sectors or on public highways, the meta driver will actually give assurance that the vehicles are running safely and inside of the envelope of what is insurable. And that's the world first as well for this industry. . So we're really excited about the opportunities. The $140 million that we've raised, as Greg pointed out, is going to increase our penetration into the markets and continue to accelerate and build the moats around our business that we think we've built up to this point. And ultimately, we aim to be a generational company that will outlive all of us and create, as I say, trillions of dollars worth of value for the world and for our stakeholders. And with that, I'll hand back to you, Greg.

Thank you very much, Gavin. A really exciting journey that the business is on. I seem to end up saying drive and journey, et cetera, it's not deliberate, but we think there's a huge value creation opportunity here. And I think as Gavin pointed out, also a massive impact opportunity and in terms of efficiency and use of vehicles. So they were the 3 sort of leading indicators of success in the portfolio. I just wanted to touch on one, which has had quite a bit of news in the last few weeks. And I guess, sort of no presentation from [indiscernible] be complete without a bit of future technology. This is a small part of our portfolio. You can see in the bottom right-hand corner there, it's about 0.5p a share, a little bit more than that. But this company always sort of captures imagination, and it reminds me of a quote from Peter Thiel, he was a legendary VC investor back in 2013, who said, we wanted flying cars, but instead, we got 140 characters. And so for the first time, Australia is a step closer to getting flying cars through our portfolio company, AMSL Aero. And I guess now they get 280 characters to tweeted about it if they wanted to as well. They've had a huge amount of coverage, having completed their first maiden test flights, and it was obviously in accordance with all of the and the safety regulations over in Australia. And the idea here is that this will create a sort of a zero carbon emission vehicle with a room for 4 passengers and a pilot that will have a cruising speed of sort of a few hundred kilometers an hour. And by the time you start using hydrogen fuel, it will be able to fly up to 1,000 kilometers, which is about 3x the range of any other E vehicle out there. So just very briefly, I thought we'd just play a minute's worth of video to give you an idea of some of recoveries. This is on our socials, et cetera. But I thought it would be helpful just to sort of set the opportunity in context and a bit of the excitement that we've seen around [indiscernible]. [Presentation]

So just one of the exciting things that you as shareholders are backing through your exposure to IP Group. So that hopefully has given you an indication of some of the leading indicators of future success in the portfolio. And I will now pass on to Dave to talk about the financials.

I'm David Baynes, I'm the Chief Finance and Operating Officer. Good to be with you. That's a bit of a hard act to follow up, of course. And I'll just quickly for about 5 or 10 minutes take through the key numbers. So the first of 4 key messages I'd like you to take on board. If you get these that will be good really. . First, we're on the gross cash of GBP 242 million, also with access to another GBP 60 million of debt that we have lined out. So about GBP 300 million worth actual growth cash of interest. We're in a good, strong position from a cash point of view. Secondly, our net assets of GBP 1.4 billion despite the reduction in the year are still very significant. We saw a significant portfolio and significant sized business. [indiscernible] assets made up at GBP 1.33 per share. So when we look at the underlying assets, it's actually GBP 1.33 per share of asset against each share despite this morning, only trading at about 58p. As you've heard, it was a significant loss in the period, about GBP 345 million. But as you all know that can accounted for by Nanopore. Nanopore represented a GBP 370 million of that. And if you do exclude that, we actually have a very small [profit] about GBP 25 million, also perhaps worth making, maybe all that happened in the first half of the year, actually at the half year we were about GBP 310 million loss. So the second half has been relatively flat. And last year, as you've already heard, we're maintaining kind of our focus on shareholders. So we're still paying out dividend of 1.26p, which is a small increase from last year to keep that kind of shareholder-friendly approach. This slide really explains it, it was a key -- yes, in too hard to hear. The public companies were down significantly. You can see down by GBP 428 million down the year, where the private companies are actually up there by [ GBP 100 million ] in the period and that -- which gives you a net position. And when you look down, as I've already mentioned, you can see those key movements by sector. Nanopore down by its own about GBP 370 million. Life science is again down, but really relation to our public companies [indiscernible] all of that reduction due to that. Deeptech relatively flat, but the outstanding performer was Cleantech, and that was relating to [indiscernible], Fusion which you've heard about, and also Oxbotica, 2 really exciting companies, and you can see really why those upwards values have come Australia, America, relatively flat, a pretty strong performance overall in Australia, which is up about GBP 10 million on only about GBP 30 million of assets. So they had a very strong year. Again, during the same information really, you can see again that these key companies that really swung in the year, [indiscernible], First Light, Oxbotica whereas the public companies coming down. Worth mentioning briefly Hinge Health. We've got Hinge Health actually had a very strong year. It's got fantastic financial performance. We can actually report it's got potential, it's got very strong growth. But we look at a number of our companies, which had external valuations and because some companies in the public domain, particularly in the private sector, there been a reduction in kind of the value against the turnover. We've taken a reduction, we take into the most end of the range of value, but still a very promising company. And I've already talked about Oxford Nanopore. Now that really does lead us I think that enhances to looking to our valuation. Obviously, that's one of the key things have value in our portfolio. We take the view, and I hope we can demonstrate, but we have a very conservative approach to that. So if you look at that pie chart, the top right there, that's effectively representing our net assets. So how much of that -- how do we value each component of that net? So what was the cash, value of the cash, and I'm thinking 100% as your cash and a small amount of working capital items. Then you've quoted -- 17% is quoted. So again, that's mark-to-market. There's no dispute, there's nothing really doing that. We have 21% that's actually been financed in the period. So that's something we've actually raised money a material amount from third parties. And then we've marked it to that value having done a pretty good endorsement of that company work, people prepared to put their own money into it. And actually, it's interesting to observe and you can see on those bar charts at the bottom. But actually, our experience in private market hasn't really been reductions in that. You see either up rounds or flat rounds, we have sort of 90% of the [indiscernible] flat rate, 10% actually down. and that didn't change from first and second half hasn't weakened particularly in the second half, it's pretty much consistent during the two-thirds. And of course, because we have Parkwalk that was a very heavy investor in this sector. You also have their experience where their investments [indiscernible] So it seems pretty consistent across the sector. And that last 35%, that big sector there is external valuations. So what we did for it because obviously, valuation is very safe at this time, we went out for the next 10 biggest assets. We've got third-party valuations. So 35% is valued by third party in every case because they always provide you with a range, you get a range of values. In every case, we never take a move in the middle of the range. We've never gone above the middle. And #3 of the 10, we had actually at the bottom of the range as you go further on. And on average, we were about 1/3 of the way up, so we tended to be conservative even against 6 of those as we have. And then last, finally, there was actually 19% of our portfolio that has been valued internally. And again, all of those open subject to investment committees as a guidance and the auditors to the extensive work on us, the companies that we provide them to audit made up over 90% of all of our portfolio, so virtually the whole portfolio has also been reviewed by the auditors as well. But as you heard from Greg, say we are multi-cautious. So I think we feel very confident with our valuations. And that GBP 1.33, which underpins our actual net assets. Looking very quickly, we have very simple set of financial accounts really. There's 2 key features. The portfolio, the companies we've invested in and then there's a cash. And you can see effectively, we have significant increase in last year, in 2021, and also they fallen back but not as far as 2020, so the GBP 100 million not from there. And as we've already heard, most of that does really relate to Nanopore, which we remain obviously big supporters of them. We believe we will cover the next year or so. The slide on the right is quite interesting, in fact, because it sort of tells something that perhaps the market is not really picking up. I've already mentioned about GBP 1.33 per share. And this sort of shows you where it's coming from. So 15p of it is a cash. Nanopore much lower values, it's 20p. And then if you look at those other companies we just talked about today, First Light [indiscernible], they make up enough to get to about 61p. So just what we've talked about in cash represent considerably more than the current market cap, share price. The remaining [ 76p ] it's all the rest of the company that you've heard about. And at the moment in this current market, that's not factored into our share price at all. So that will include all of the 4 companies that have double-digit growth in the deep tech side. It's 7 of the therapeutic assets in clinical trials are going to read out over the next 2 years. And all the other companies, we actually have 95 companies in total. So you have 91 companies. That gives you a good idea that we believe there's great potential for an increase in the value of our shares. I'm not going to spend too long on this slide. I'll go through it relatively quickly. [indiscernible] takeaway show the portfolio of GBP 1.3 billion. The shape hasn't changed too much. Nanopore is [ 31% ] but [indiscernible] 16%. Meanwhile, tech have come up a lot. That was [ 27% ] this time last year when we spoke, and obviously, that now increased significantly since that period. If you look to the right, other thing to take away is, actually, although we have a big portfolio [ 95 ] I spoke about, actually, most of the value is concentrated in that top small sort of top 20 companies in [indiscernible] 76% of all the portfolio. Perhaps the key takeaways from this size, if you want to get access to some of the most exciting funds in the U.K. for a single investment in a public company in this country. We are unquestionably the best investment. And we also have exposure to America and Australia as well. So it's one of the most interesting deep tech science in the world. And really, we are at the best place to come to find it. Final slide -- one more slide after this. This is cash flow. And this cash flow kind of - this is the story of the year in single slide I have to say. So I'll just quickly run across. We invested down to GBP 3 million a year. That's actually down from what we thought we're going to invest at the beginning of the year, and we have been talking this time last year. And that's because we very quickly started where the women's planning, where the market was going, by January, we can see. So we made significant reductions in our planned investment, which proved to be a wise move because we could see that the kind of exits [indiscernible], you may remember, we did [ 119 ] and then -- GBP 191 million, sorry and then GBP 214 million of exits over the last 3 years. We can see they were going to fall and sure enough, we actually only had GBP 28 million of exits during the current year. So we've adjusted for that -- we've maintained our dividends as we've spoken about and a small amount of share buyback, which we completed, meaning we paid out GBP 20 million to shareholders. Overheads are pretty much consistent. Overheads, we were GBP 19.1 million this time last year, we are on the GBP 20 million now. Actually, there has been a small increase during the period. This is slightly guided by the fact that we deconsolidated the merit at the end of last year. So about $4 million of expenses dropped out. There's not been a significant increase, and we still believe this is a sensible level of overhead for the business. The last thing, which I'll go on to the next slide is really the debt . We managed to access another GBP 120 million of debt during the year. We are in a very strong financial position. We're into half of that, which means although we pay some of the European loans options, and some interest payments, actually a net increase on the debt side of GBP 30 million. But we've got another GBP 60 million to take down. So it means that we really got about GBP 300 million of cash that we can access. So you've heard this slide before I talked about it at the interim, but just going through it one more time because I think it's worth reiterating. We're delighted to have facility. I think we did a good thing by getting it early in the year. Again, at the same time as we've decided to moderate the level of investment, we decided to make sure we have sufficient financing as well. So what you can see was going to be a difficult through year in terms of exit. We got [ 5.256% ] on it, which put that perspective, we're currently getting 4.6% on the money we're depositing. So it's almost our funding around 30. We paid a little bit after the European Investment Fund. So we've got GBP 105 million net increase. And we're delighted that it's been provided most of that mix. We're very pleased to have that relationship, both just trying to make sustainable investments. Two tranches, one to go, as I said, and a nice good long term. We don't have to repay until all of it until the end of 2029. So it's well-priced, decent-sized facility for a long term. With that, I'll hand you back to Greg.

Thanks, Dave. So just to quickly summarize before we move on to questions then, I thought quickly a reminder of the 3 main headlines. So the financial result is definitely disappointing and reflects the overall macro environment, particularly Oxford Nanopore. I hope that you will agree that we've made significant progress in the underlying business and in our delivery of our strategy. I think crucially for the current environment that we're in, we're a very well-financed company and we've continued our sustainable realizations led approach to returns to shareholders. And before we move on to Q&A, I wanted to do 2 quick things. One was to reiterate this slide, and I think the key thing that I want to highlight again is our expertise, our experience, our insight and our knowledge of the sector that's been built over many years, which we think will allow us to continue to build our portfolio, deliver returns and deliver a track record, which ultimately is the way that we create value for shareholders by driving that NAV per share and that is a singular focus of the business at the moment. And then the second thing I just want to remind you, I do think science and technology or innovation creates hope, innovation plus capital creates growth and value. And as Dave said, IP Group is one of the few listed companies that you can play that investment theme in a diversified way and at scale. And so we believe we're very well placed given the prospects for the portfolio to deliver substantial returns out to 2025. And I thought I would just and highlight a few of the businesses that have got upcoming catalysts or value drivers underneath those 3 themes, which I set out the prospects for you. So Life Sciences as a reminder, clinical trial progress and revenue growth and see some examples there. And technology, our deep tech is all about revenue growth, continuing the double-digit revenue growth of those top businesses. And then on the Cleantech side, an element of technical progress and significant fundraisings and a focus on new pipeline. So thank you very much for your attention, everybody, and we will now turn to the Q&A.

Great. That's great. And David and Gavin as well. Thank you very much indeed for your presentation this morning. If I may ask the rest of the team just to bring up your cameras on for the Q&A, that would be great. [Operator Instructions] I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q&A can be accessed via your investor dashboard. David, we did receive a number of pre-submitted questions ahead of today's event. And as you can see there on the Q&A tab, we've also received a number of questions throughout your presentation this morning as well. So firstly, thank you to all of those on the call for taking the time to submit their questions. And David, perhaps if I just hand over to you to share the Q&A session with the team and then I'll pick up from you at the end.

Of course. Great. Thank you very much, Liz. Yes, no, we've got a very impressive display of questions. So thanks everybody for that. I'll go through and I'll try and dish them out as I go. The first one is, can you provide an update on the prospect of doing share buybacks policy and progressive dividend payments. Shall I perhaps do that in the financial [indiscernible], perhaps, I'll do that in first. .

Well, I think you just covered, you probably covered that in the presentation. I'll do about 25 questions.

Yes. Okay. Fair enough. No, people have that. I think that's probably covered. The next one is probably one for -- another keep coming. Yes, one for Sam probably. It says that we were targeting some sales maybe in shelfs some time ago, why did it not happen? And there's -- why we don't need to have a more aggressive approach to selling our shareholders where the Board has minimal influence on the management strategy. Would you like to comment on that at all, Sam? .

Well, I'll take the first half of that. I don't think we ever explicitly said we are targeting to sell our Hinge Health stake. We did take some off the table at the time of the company's Series E financing at the end of 2021, I believe it was, and we stated that we would look for other opportunities potentially to take down our holding if and when they arose. But as you will know, that the market forum for all tech and growth companies has hardened or softened depending on which way you look at it since that time. So there really hasn't been an opportunity to do that. But we're actually very happy with Hinge Health. It's performing fundamentally very well. And again, if and when the opportunity arises, we would potentially look at taking some more off the table.

Thank you, Sam. Can you answer this one very quickly? Can you provide an update on the lockup constraints of any on the sale of Nanopore? There aren't any. I'll move on to that one, if that's okay. Please outline some important cost-cutting measures that the Board has actioned at the group level. I'll very quickly answer that one. Actually, in the current year, we haven't made significant reductions in costs. And the reason for that is we actually did it over the last 2 or 3 years. So last 3 years, we were refining our [indiscernible] may not remember it. We actually reduced the head count by about 40 staff when we stopped doing a debt direct tech transaction, which is Imperial innovation, for example. So actually, we really have a cost base in very good shape before we turn in the market. So we haven't found the 2 this year. Next one, can the Board -- I'll give this to you, Greg if that's. Okay.

Of course.

Can the Board explain its understanding of the continuing discount to the share price in light of the fact that because it's a quite a long time, has the Board considered a more aggressive approach perhaps to asset disposals?

Yes. I mean the discount to NAV is a challenge for the business, and it's very disappointing as a shareholder myself and the company that we trade at such a significant discount. I think our observations on it, and we discussed this with shareholders, potential shareholders, and we are very focused on reducing that discount to that. And I think the comments I'd make are one, long-dated returns at the moment are quite out of favor for -- in terms of being an asset class. So fundamentally, we have to continue delivering against our strategy and delivering shareholder returns. We have to grow our NAV and investors will take a view on whether or not that's going to be an attractive investment proposition. . The way that we are growing our NAV through the strategy is to focus down on those investment areas where we see the greatest opportunity where we've got best track record. So an example is in Cleantech and also on the companies that we think are going to drive returns, and I've tried to set out in the presentation and in the results, the key value drivers for each of those 3 areas of the business. But we think there are very compelling returns we had. And in terms of narrowing the discount to NAV, we've done 2 things. One is to have a clear sustainable approach to shareholder returns. That's based on realization. So when we make realizations, we will use a proportion of those realizations to make cash returns to shareholders. And as I said, in 2021, it was about 20% of our realizations given realizations were lower during 2022. We actually returned about 50% or just under 50% of our realizations. And that was by way of a dividend, and we will continue and to employ that policy. And then the other thing that we're doing is we want to ensure that we are front of mind and have spoken to and made the investment case to as many shareholders as possible who would hold this asset class. And so when the investment appetite in the space increases, we are front of mind and buy our shares. So that's definitely the way we said we've got a long-term approach, and we've got a short-term tactical approach as well. And I think that will be over the next question. .

The next question, yes. So the question is, I'll do very quickly, which is one talking about it's a bit about share buybacks, equity, saying you've had some exits of GBP 28 million. We don't seem to have done any more share buybacks. That's because we've never set a formal number publicly. We never stated publicly, but we do consider the dividends, we do think being part of the distribution of those exit. So in the years, we're going to paying out dividend in that GBP 13.5 million as we think that's a big unproportionate effect with exits in the year. So that's why. So you want to get about the bigger number like we didn't previously get, you start getting in excess to share buybacks over and above the dividends. How do you -- I'll do it quickly, how do you allocate new investments between IT and third-party managed accounts? Would like to, Greg, perhaps?

Well, I mean, we can do the -- I mean, at the moment, we have way more investment opportunity than we have capital for across both balance sheet and our managed funds. The they're relatively clearly defined. So Parkwalk starts very early with EIS funds and the balance sheet as its 3 dramatic focus areas and some of our growth capital relationships like with Hostplus tend to come in at a later stage of development. and there's no sort of crowding or risk of sort of conflict there. So they're very complementary capital as and when we achieve what I'm setting out to achieve and have much more third-party capital and much more balance sheet capital, then obviously, we'll be developing sort of fair allocation policies. But at the moment, we've got more opportunity than we've got capital for.

And then is the [ RIN-related ] on, and I'll summarize a bit, it's quite a long question, but the point it basically says the [ MD ] of Saga, so the LSE-listed company in the office next door this as I sit here. I have directed this Board to say that they need to buy shares, and they also have to have a minimum holding of share or we get to the same [indiscernible]? So I talk very briefly on that. We don't stipulate that we have to buy shares of that but we don't do, but we do have a minimum holding only relates to the executive directors, myself and Greg, obviously. But -- and so we do have to have a minimum holding. So any shares we do accumulate, we can't sell unless it's more than a certain amount of our salaries, so we do have that. And some time, I'm sure we will buy shares. We haven't made it a requirement to buy. But a chunk of our remuneration is in shares, which means if we get them, you sell them because you've got the whole requirement which is entirely reasonable than I do.

Yes. I target, it's only 3.5x my salary and shares. I bought shares a couple of times last year. And as Dave said, I'm sure I will buy some shares this year, any bonuses that we get half is deferred into shares. So we have tried to make our remuneration policy as aligned as possible with the very long-term business model that we have. And I think when we did the consultation with major shareholders, they agreed that we were being, I think, quite sort of thought leading in this space by waiting the majority of our remunerations towards the long term, which I think is fitting for the type of business that we run.

Yes. Another one I'll give to you, Greg, if I may. How do you see the balance of investment between the key theme sectors changing over the next 5 years?

Yes. It's quite an interesting one. I mean we -- the approach to capital allocation is we do both bottom up and top down, as you would expect. And in some cases, we then make some sort of directional strategic allocations. And an example of that would be the allocation to Cleantech, where we have deliberately focused more capital because of the opportunity and the quality of the team and the quality of the deal flow that we see there. And I think we should build a business and we are proud of building a business which has got this diversification across 3 themes. And so I would expect the 3 themes to be major components of the business in 5 years' time. I think you can see -- or at least I hope you can see from the way that we describe the value opportunity in each of those 3 sector areas. The Life Sciences, particularly has got a number of companies, which are existing portfolio. And the real focus for that is to get those 8 clinical stage companies through their clinical trials and then to deliver value from those. And that's quite a different approach to, say, the technology side where we -- where the key driver of value and growth there is growing revenues. And so the team is focused on helping those businesses to grow revenue. So I would say we continue to have an approach, which focuses on those 3 thematic areas. And I'd envisage that being the case in 5 years' time.

Next one, I've not been calling out people's names to keep you animate. But this one, I will say this is Ken, one of the analysts who follow us. Nice to have you Ken. Could you give an indication of how much capital the existing portfolio would require in the next year or so? I see your budgets based on maintaining your selling or other assumptions. I'll do this one. Shall I? We would be glad to say, Ken, we do have budgets. Yes, we certainly do. Obviously, we're looking all the time. We've got a contact capital allocation process. We're always looking at least 3 years ahead at our requirements, capital requirements and what the exits are. Obviously, the portfolio could take an enormous amount of money. But we always get all it was. It clearly about saying. But what I can say is I think over the next 1 or 2 years, we'd expect to maintain the sort of level of investment we're making maybe slightly more as well. So the sort of level of investment you see is what we'll be making in the portfolio is probably a fair thing to say. Gavin, I'm delighted to take this question. Oxbotica, time lines to commercial rollout and revenue generation, please?

Absolutely. So we are already in the phases of commercialization. So we're already generating revenues today. I think the way to think about this is to be distinct between 3 categories of revenue generation. One category is in the products that we sell to customers that are data-centric. So is our driving technology itself, and that is generating revenue. There are no barriers, if you will, to entry in providing data in exchange for revenues. And the second part is in the industrial sector, where we're applying the technology is starting to scale now. So again, we've been commercializing that for the last 18 to 24 months. And now we're in the phases of scaling that up -- and so in the off public highway areas of industrial applications, that is where we are really focused now whether the nearest and clearest value creation is happening. And then the third dimension is on public highway where essentially the revenues that we are also generating on public highways are really about developing long-term strategic and deep programs with our customers that apply autonomy in their space. The shuttle program and the goods delivery program are good examples of that. And they are ultimately rate limited and accelerate once you have harmonization on regulation, which we believe will happen during the course of 2025. And so that's when we think that we'll intersect with the then decades long tailwinds that come with having a fully assured and fully validated on-road self-driving technology that can expand to many, many markets on the public highways down the line. But in the meantime, in that particular space, we're monetizing the development of those areas with those first category-defining customers.

Thank you, Gavin. There's 2 more come, as you speak, 2 more coming here, and I'm sorry about that. Just so everyone knows, we're going to carry on this pattern. As we know we've gone over the allotted time, I quite understand that to drop out of. But we'll keep going through this and try and answer everyone's questions if we can. So 2 more came in on Oxbotica. You may not be able to answer it Gavin, so keep saying no, if you don't want to. They're both basically about revenue. What was the revenue in '22? The presentation suggest there'd be several billions in the future? Can you give us some idea of current revenues [indiscernible] you could comment on that?

Yes, it is hard for us to comment on that, but just to say that we've really been in the stage of commercialization since early 2021. and that is increasing exponentially, and we expect that it will continue to increase exponentially for the foreseeable future. And when I say exponentially, I actually mean exponentially, not in the figurative speech, is actually doubling and then doubling again in every area that we're operating in. And so I cannot break out what that looks like today. But needless to say, we are really hurtling towards in the end, mass-scale production of all of these different applications to apply our technology, our singular software technologies of all those applications.

Excellent. Thank you very much. One for you, Sam. How Istesso fund the IPF studies now that fast-track designation and orphan status has been secured?

Yes. There's a second question on Istesso funding, so I'll address them both at the same. I mean, ensure a mixture of funding from IP Group and external funding. And actually, in reference to the second question, yes, it's late-stage development, which we're very excited by. But at the same time, it's actually not egregiously expensive, just to give you an idea that the Phase IIb rheumatoid arthritis study is costing about GBP 15 million, which is obviously a lot of money, but in the ground scheme of things, is not hugely -- it's not in the sort of GBP 40 million sort of GBP 100 million that you get into some Phase IIb studies or even Phase III. So -- and IPF would be a sort of similar magnitude. So we're pretty confident that funding IPF is not going to be an issue.

Thank you very much. There's one about how many shares that the management team holds. It's a relatively small percentage of scope of that account.

Yes, it's managed.

Yes. Will IP Group commit to a progressive dividend policy? Well, at the moment, that is our policy. We have a distinct policy and we are increasing each year. That's currently where we are at the moment.

There's another one on discount to NAV. I think we've covered the sort of the that [indiscernible].

Yes, we covered that. The majority of your investments in this year seems to be on companies outside of your top 20 holdings. Could you give us a bit more color on what the sector theme focus for your investments were? Mark, would you like to comment on -- Mark and Sam, perhaps you can comment on your investments in the year?

Current year 2022 you're talking about?

'22.

'22. So yes, they're looking at the end.

Yes. The sort of the statistics on this tends to be quite difficult and quite few individual assets that are in particular the state of the funding cycle so there were a couple that got funded the previous year that then didn't need cash in '22. And so that sort of skews, that skews the numbers a bit. I mean, our focus is largely concentrating capital towards the assets of the [indiscernible] as the successful assets also trying to bring up the next tier of assets into that high growth category and so we concentrated quite a lot of capital in that area last year, whilst a small amount goes into sort of seeding new stuff and developing very early stage portfolio last year. There were a couple of quite large investments in assets that we've got very high potential and the opportunity to grow rapidly.

Sam, would you like to comment on some of the investments you made in the year?

I missed the question, sorry.

The question said, you didn't seem to be investing that much in the top 20 in your investment margin. Can you comment on what your ...

We have definitely -- I think if you look at our budget, most of it has gone into the top 20. We did make a few -- a small number of new investments last year, which are looking very good, and that was extremely strong investment case for each one, but they're very judiciously chosen. In Life Sciences, which is the biggest portfolio we are reaching a point, as Greg suggested earlier in his talk with a number of companies that are entering or will be delivering key clinical data over the next sort of couple of years. So we think there'll be a number of opportunities to exit some of those companies or see liquidity in some form, and that will enable us to recycle some of that money and start investing in more new opportunities. But at the moment, we're focused on playing out the existing portfolio with some very judiciously chosen new investments.

Thank you, Sam. I appreciate that. That's quite a long question. I would say all the questions about fab, but obviously, we're trading a significant discount, which we know what reassurance can you provide that we can expect the some profitable exits in the coming year of driving positive shareholder returns? Would you like to take that Greg?

Well, I mean we anticipate more exits this year than we did last year, but we don't expect the level of exits that we saw in 2020 and 2021. So that's why we've got the capital position that we've got. And we have a very proactive approach to realization opportunities. And I think the -- well, it's by sector, really, so Life Sciences. The opportunities will primarily be driven around those clinical trial successes. On the tech side, it's predominantly around achieving the revenue growth. I mean on the Cleantech side, they're really in a sort of an earlier phase of investment now having made significant realizations, think about GBP 160 million of realizations over the last few years from Cleantech side with those top 2 or 3 companies, Oxbotica and First Light Fusion and Hysata developing there. So that's how we think about the profitable exits, but the pipeline of exits looks very strong, particularly into '24 and '25. We're just -- we're mindful of we don't want to -- we want to have a capital position that means that we're not selling companies at the bottom.

I've got 2 from [indiscernible] and other analysts, love you to have you with us today. Of course, you mentioned a few funding rounds have been delayed. These are both capital allocation questions. So perhaps I'll take them. Take this into account, along with your funding round in terms of '23, does it look like it's going to be a busier year than '22? And do you plan to continue focusing efforts on your top 20? We're definitely focusing on our top what we can call our priority assets that we're certainly doing. And we also -- yes, there are some investments carried over. As I said already, I think we're going to invest a little more in the last year, but it won't be significantly more, but we probably invested a bit more in the last year, yes. And then the other one, I think, again, [indiscernible] given discount in your share price and NAV, what are your thoughts around the expense of the buyback. We sort of touched on that. We do still have a policy on buyback. if we make big enough , it's over and above the dividend that we paid, there will be some even buyback. So that is still there, but that will be dependent on significant exits, which did not this current year. And we're not really projecting to the 2023, not expecting the market to significantly change during the course of this year. This is probably one, again, probably a quick Mark and Sam on next. Can you give us an insight to some of the companies you're looking to invest in, in the next year, some of the companies you are looking to invest in with the cash you have available? I guess you pretty much covered that. And if you want to have any comments you'd like to make on that? Any new companies, perhaps touch on new companies.

Yes, a couple of new opportunities in the portfolio invested in the compression company called [indiscernible] that we're very excited about. We are closing investment round in [indiscernible] which is up-and-coming asset from the Deeptech portfolio. So there's is so exciting stuff for us coming through some less on end of the portfolio.

Sam, would you like any comment about any new things you may be doing in the year?

No. As I said, we're focused on the existing portfolio. There might be 1 or 2, again, carefully chosen new investment, but most of our investment budget will be going into those companies that are going to play out over the next couple of years and ensuring that we have maximized our position in those companies so that we are well positioned to benefit from success.

Very true. So I didn't need to get you off. Another one for Greg, I think really points out, obviously, the post listed performance of [ONT] has been a little bit difficult. Has that changed your view about IPOs as a route as partial exit?

Yes. I mean we've done far fewer IPOs in the recent past than we had sort of early in IP Group's life. We definitely learned that aim was a difficult market for these businesses. And so the idea with Nanopore really was to list the company only once if it got a sufficient scale that it was doing more than GBP 100 million of revenue. You had well-defined customer base, and we had hoped that, that would mean that it was a company that would be appropriate for the London markets. And indeed, you'll remember, we had an awful lot of pressure on both us and the Nanopore management team to list that business and there's a lot of why haven't they listed yet and the management team and I said, when the company is mature enough to do so. So I think our approach on IPOs is that we will only do that when the companies are mature enough to be on the public markets. And I think in the case of Nanopore, they certainly need the wider market and their peers who have come up significantly as a result of a big reduction in risk appetite. So I don't think it changes the -- that sort of -- that fundamental learning around the company should come to the public markets when they are mature, and we believe that was the case with Nanopore.

Thank you. One for you, Sam, I think, probably, it's really on ONT themselves, but it's really how well ONT doing compared to their peers on revenue?

And on revenue CAGR partially, which is how we look at it. Yes, Sam, can talk to.

Well, the -- I mean, obviously, I think their results. Their trading update was taken relatively negatively by the market because the revenue came in at the bottom end of the revenue guidance. However, that was still a pretty healthy representative is still a pretty healthy growth rate compared to their peers, most of whom had to downgrade their growth forecast during but downgraded their first -- their growth forecast during the course of 2022 or some -- a couple of them actually withdrew forecast altogether. So ONT is still growing on at a very strong relative basis, the market is probably more focused on revenue multiples. And actually now at the current price, the company is trading about in line with its peer group, it was a little bit higher earlier before themselves, but it's now trading in line and that doesn't take into account the higher growth rate. So it fundamentally is doing well as a business. We think it's undervalued here. But obviously, we're in a tough market, it -- anyone's guess is as good as mine as to how long it will take for that to correct. But I think if they can get through the first half of this year and show that they continue to demonstrate growth kind of in the high teens, possibly into the 20s, then I think -- then we think that the stock is well positioned and the company is well positioned.

Thanks, Sam. One for you, Mark, if that's all right. First Light is in the process of a large fundraising, generally what's the current funding market like?

Well, the statistics suggest it's more hostile than it was a year ago. And if you read the state even report obviously the other day say sort of pretty much valuations down. I think there's a lot of nuance to that sort of overall market pattern. And I think one of the nuances is that the better companies are still getting funded and it's sort of the latter end of the spectrum the start of money. And we certainly think the First Light falls into that category. So we're optimistic about them raising money and we've done that got good interest, as you'd expect. I think it is something so exciting last year. And of course, having a sale validation resulting additions to that. So there's good interest in that company but the timelines are this year and the next several months that we're working through that fundraise, obviously it attracts a specialist type of investor and not every investor is able to invest in asset like First Light Fusion, so I wouldn't say here sort of guarantee the outcome what it might be a number, it might be, but there's good progress they've made on that.

Thanks, Mark. I think one for Greg. Are you still planning on pushing ahead with the Chinese investment platform, the current political climate?

Yes. That's a great question. I mean, it's one that we -- we continue to see Asia and China as being a huge part of the global economy. And you'll remember when we -- well, you may not remember, but when we started looking at what activities we should carry out in and that part of the world, we can -- we -- our view was that it was an area of potential capital, and it was an area of potential growth that our businesses sell into and the political climate has definitely changed over the course of the last couple of years. We're taking a long-term view with sort of credible local partners and they're taking, I guess, I would describe them in a sort of measured steps with that strategy so that we're building out our capital partners and our relationships over there. And if it holds true that over the next 5, 10, 15, 20 years, this remains a huge part of the world economy, which we think it will be then making sort of judicious and managed steps into having a business presence there makes sense, but we are very aware of the sort of political climate at the moment.

Thank you. I'm going to give you another one. Quite a tricky big one. Please articulate the case for investing in IP Group over a VCT team, which has tax incentives?

Yes, the tax incentive points are really definitely an interesting one. I mean, as shareholders, you may well know that we operate one of the biggest platforms in the U.K., most successful platforms in the U.K. for EIS investing, which is Parkwalk advisers and they provide vital capital relatively early on in the process. I mean we're not an investment trust. We're not a VCT. Being a VCT means you have to hold shares in the company for 5 years in order to retain all of the tax incentives and there are a few other bits and pieces that you have to adhere to. So I mean it's a fair point and the tax incentives are quite attractive for this area. We're a broader and more diversified player on the portfolio that we operate. And we continue to look at things like structure of the business, et cetera. But the tax incentive is definitely helpful provided you are happy to hold the shares for 5 years. And we have liquidity all the time at IP Group.

And another question, which I think with you Greg as well. Is there any tangible progress being made by the U.K. government on helping to build large technology businesses particularly to improve access to funding through the scale gap? Could IP Group benefit from this in terms of managing funds? Conversely, could the potential R&D tax credit change hurt U.K. companies?

I don't know if that is another one of the analyst who follows this who's asked that question because it's very knowledgeable question. So we engage a lot with U.K. government and HMT on what the industry and what the financial services industry could do to free up an appropriate proportion. This isn't sort of like lows and lows, but an appropriate proportion of long-term capital, particularly in the U.K. to help fund the scale-up of businesses. There are many, many conversations. And in terms of tangible progress that we haven't seen anything sort of significant announce where we are -- and this is one of the areas of engagement that we are driving. And I'm hopeful that there will be further signs of change towards the financial regulations in the budget and in the budget at the end of the year. But we continue to try to be positioned so that we could benefit from that if it happens. But as many people have said in the past, you shouldn't base your strategy on sort of government policy and changes in government policy. So we don't, but we would hope to be well positioned if those changes come through, and we're certainly helping to push for them. On the R&D tax credit change, I mean that had -- that sort of almost sent shockwaves through the early stage industry. Almost all of our portfolio companies in the U.K. benefit from that. . And we and many others in our sector have made representations to the government and to the treasury around those changes. And we support the principle of trying to get fraudulent and incorrect claims on R&D out of the system, but the manner in which it was done. I think it was a bit extreme. So we're hopeful that they will listen to the industry and that we'll get a better structure as a result. But yes, we very much engaged on both of those fronts.

I'll go to that some fairly quickly. I think I'll quickly deal with how many people does IP Group employ? And what happened to the head count and overall operating cost? I kind of touched on that. We have about 100 people, it's 99 on average over the year. And actually, we really adjusted our cost before this year. So we haven't made any significant changes in the current year. Perhaps, one for you, Greg. How have you considered a U.S. listing in the light of more favorable valuations and shareholder recognition the mix of your assets?

Yes. I mean, we and our portfolio companies are always looking at this. I'm not sure we want to add another layer of complexity to the IP Group business at this point in time. We're really, really focused on delivering against the portfolio over the next 1, 2, 3 years. We do look at that as a listed company, of course, we do. But I think fundamentally, we want to drive value in the underlying businesses.

Thank you. Sorry, have you considered the U.S. listing? I apologize -- the portfolio looks really exciting. And clearly, your investment across a wide universe. Why would you not buy back your shares, so it is a share buyback one, I apologize. Well, I think we probably cover that. If don't, if there's anything else you'd like to say about share buyback?

I mean we do look at it. I mean -- we think that we've spoken to all of our major shareholders. Capital is clearly a strategic asset at the moment and the approach, the sustainable approach to shareholder returns, i.e., based on realizations and a proportion of realizations is the policy that we think is the best for delivering long-term value to shareholders. That will include buybacks and similar mechanisms when we have significant realizations to return a proportion.

Well, we've got a question probably again to you, Greg, but probably I think you've covered the one we've just had, just said, could you redirect potentially Chinese investments to Korea or Japan to political risk. I don't want to make any comment on that at all.

Probably not my place to comment on sort of political side. Our China operation would be investing locally in China, not using balance sheet funds. So I think it's measured and appropriate steps for the longer term.

And only 2 to go, one of which we've already done. [indiscernible] also play on R&D tax credits in the U.K., I think we've covered that comprehensively. Last question from Mark, I think. Can you talk a bit more about Hysata, given the recent fundraising and the significant acceleration of interest in green hydrogen over the last 2 years? How quickly could [indiscernible] products available for evaluation by prospective customers?

Yes. So one of the earlier stage companies that we are excited about that we've got potential in market opportunity. It is an Australian-based company, and when I was hesitating slightly because I'm not quite sure what they said publicly about their time line for products in the public domain. I think that it -- I'm safe to say that sort of 24-month time scale is reasonable for our expectation of those kind of early products being available for evaluation for customers. Greg, in fact, you were in their company more recently than me, having visited the company. I don't know if you've got any additional insight that you think.

Yes. No. I think that's -- we think that there will be a particular pickup or the industry thinks there will be a particular pickup in demand for their products around 2025, 2026, and technical program and the scale-up program is aiming to be ready for when we think that pickup will be the next milestones for that business over the course of the coming year are and basically to prove that you can scale the business from a single electrolyzer to an array of electrolyzers. And if we can do that, then the prospects look very, very good. I mean there's still technical risk there for sure. But it's got the greatest level of inbound market interest in terms of sort of conditional orders, if you like, of any business that we've seen. So they've got to get through and prove that they can scale technology up. But if that's the case, then we think we'd be very well set to have products available.

And then just I thought I've killed it, one more on that, but I think we have covered it as well. It's really all the state and the same, but in your current situation, there must be some opportunities for share buybacks. I think we already covered that question.

Yes. Our policy -- I mean, I'm very happy to repeat that our policy is to have a sustainable approach to cash returns, and we do this based on a proportion of realizations that we made from the business and we continue to discuss that with our major shareholders and think that's the best way to build and generate return and value for shareholders, which ultimately is what we're here to do.

I think it's all the questions. I'll hand back to you, Greg.

Greg, David, Gavin, Mark, and Sam, thank you very much indeed for being so generous for your time and addressing all of those questions that came in from investors this morning. Greg, just before redirecting those on the call to provide you their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments to wrap up with, that would be great.

Yes. Well, I mean, I think I'll go back to that point that I said early, we -- this focus on science and technology. We think innovation creates hope but innovation plus capital creates growth and value. And if you believe in that, then IP Group is one of the few listed companies that you can make an investment into back science and technology in a diversified way at scale. And we believe our prospects for the portfolio as we've set out, including fantastic businesses like Oxbotica and give us the opportunity for substantial returns out to 2025 and beyond. So we're pleased with our financial position and look forward to the future with confidence. And on the IR front and as I said at the start, we continue to make sure that we are front of mind and engaging with as many potential shareholders in IP Group as possible. and there's a list of upcoming events, the most of which you can see from the stars are available to all shareholders and most of those will be broadcast through the excellent Investor Meet company platform. So thank you very much for hosting us, and we appreciate your support.

Greg, that's great. And thank you once again for the rest of the team for updating investors this morning. Could I please ask investors not to close this session as you will now be automatically redirected for the opportunity to provide your feedback in order to the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of IP Group plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.

Thank you.

Thank you.