IP Group Plc (IPO) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the IP Group Plc Full Year Results Investor Presentation. [Operator Instructions] I would now like to hand you over to CEO, Greg Smith. Greg, good morning, sir.

Good morning, and good morning. Welcome, everyone, to IP Group's 2023 Full Year Results Presentation. As always, really pleased to be working with the Investor Meet company team, these live updates and they're open to all shareholders, to all potential shareholders. They reflect our ongoing commitment to transparency and enabling a deeper understanding of the group of our investment sectors and our key portfolio companies. And as many of you will know, we've continued to invest time and we've had a very active year in terms of a year-round program of IR activities. And in fact, we more than doubled IR activity in 2023 compared to the prior year. The presentation, I will just quickly skip on to the disclaimer. I know this is quite challenging to read on screen, but the presentation will be uploaded on to the IR section of our website as usual. I'm pleased to note the usual disclaimers around the nature of this update, particularly any reference to forward-looking statements that might be contained within. So today's presentation will comprise a short overview from me. That's on the key messages for 2023 and the opportunity that we are pursuing as a group. The bulk of today is then focused on 2 main areas, really. The first is our portfolio progress in the year and the many forthcoming inflection points this year and beyond. And then the second is a summary of our financial results. We'll then have a short summary and outlook, and then we'll save, hopefully, time for Q&A. As Jake said in the intro, please do post questions in the Q&A section. And as always, we'll endeavor to cover all of them. We might group them by theme, but we'll endeavor to cover all of them. And Dave, as always, will chair that session for us. In terms of today's speakers, you have myself, the Group Chief Executive. We have David Baynes, our CFOO. He will be running us through the numbers shortly; and Sam Williams is our Managing Partner of Life Sciences, and he will be talking particularly about the many milestones that we have approaching in that part of our portfolio over the next year or 2. And I'm also delighted, so I'll introduce him properly later, but we have a guest speaker today joining us from Australia, a former colleague of ours, Paul, who is now Founder and CEO of Hysata, one of our most exciting companies, and Paul will be and giving us a rundown of the opportunity that Hysata is pursuing. I should also say we do have Mark Reilly, as usual, our Managing Partner in Technology. He will be with us for the Q&A section in case there's any tricky questions on AI and the applications thereof. So on to an overview. And so this is an overview of the business and the year to 2023. And the key things that you should take away from today are that we have a focused business and portfolio with multiple upcoming milestones. We have maintained our financial strength, and we have maintained our commitment to shareholder returns. So taking each of those 3 points in turn. The strategy of the business in the last 2 years has really been one of increased focus. And to try and put that into context, almost half of our investment in the past 24 months has been into 8 companies. More than 90% of our portfolio value is in 40 holdings. So as a result, we are well positioned going into 2024 with many milestones in our portfolio to create both impact and shareholder returns. Specifically, on geography, we've taken decisive action in the year to deprioritize further investment in the Longview platform in the U.S., and we've decided not to proceed with our plans to raise the fund in China. And while these are not easy decisions, we believe they are the right decisions in the current environment. They are taken to focus our resources and our capital on to the highest growth opportunities. And mark -- on the portfolio side, a mark of the quality of the portfolio is the breadth and the quality of our co-investment partners. The portfolio, as a whole, as you see there on the slide, raised about GBP 0.7 billion in the year, and that came from over 50 co-investors. That includes the likes of Bosch and BP Ventures on the cleantech side, and the likes of Merck and Pfizer and Roche and others on the Life Sciences side. On the second point, we've maintained our financial strength during the year. This was building on the proactive steps we took in 2022 to secure a fixed rate private market debt issue. And our level of investment was somewhat lower in 2023 at GBP 73 million. Our NAV per share was 115p at 31st of December. Now our overall financial performance for the year, which was a negative return of 13% on NAV per share, was disappointing and definitely below our long-term aspirations. And Dave is going to cover the main elements of what comprised that shortly. But you will see that the biggest element, maybe around 10p a share, is where we've taken fair value reductions in the portfolio where funding has been delayed or it's reflective of the more challenging and current environment. We are confident that the milestones ahead in the portfolio, a number of which you're going to hear about today, give us the opportunity for significant NAV appreciation in the future. And then the final point, and the third point there is our continued commitment to shareholder returns. And no one understands the importance of shareholder returns more than me. And in practical terms, as I mentioned, we've doubled our IR engagement during the year, and we engage extensively with our larger shareholders during the year. That included things like structure. And I was pleased to be able to announce an updated approach to shareholder returns in December, where we are focusing on buyback rather than dividend for cash returns where the share price discount to NAV is greater than 20%. A big, big focus for I and the team this year is proactively driving value maximizing cash exits. The venture market, as a whole, has seen pretty significant and sustained reduction in exits over the last 2 years. However, we are laser-focused on this. We intend to maintain that capital allocation approach of using a proportion of realizations to support NAV per share growth with cash returns. And since 2021, as you can see there, we've returned more than GBP 75 million to shareholders. So those are the key elements of this year's financial results. Before I get into the sectors and the portfolio, I just want to remind the listeners of our position in the market and why we focus on those companies that are driving a healthier future, a tech enriched future, and indeed, a regenerative future. So over the last 20 years, IP Group has played a leading role in creating a really vibrant ecosystem for science and technology commercialization in the U.K. We took a pioneering role more than 20 years ago in partnering with the University of Oxford. We were founders in a number of the now dedicated investment vehicles in the space such as Oxford Sciences Enterprises, Cambridge Innovation Capital, the UCL Tech fund. And to this day, we are the U.K.'s most active investor in science and innovation companies. And we are also the most active backer of university spin-outs in the U.K., and that's primarily through our market-leading EIS fund manager, Parkwalk Advisors. We're creating a similar ecosystem in Australia, where, actually, the early returns from that portfolio amongst the strongest in the group. And why does that matter? What's the context? Well, it matters because this activity is a really key focus for building the economies of the future. The U.K. has been particularly focused on the commercialization of scientific research, and there are lots of initiatives underway, many of which we are actively engaging with such as the Mansion House reforms. I'm very pleased to say we have a number of the sort of U.K. pension fund pioneers in this space as investors. That includes the likes of Railpen, Phoenix, Schroders, M&G, Border to Coast. And we think there is an opportunity to do much more, and we are well positioned to work, to co-invest and to partner with others in the space or who are interested in getting into the space, so this is the really important context. Now those of you who know the group well will be well aware of this, well aware of our investment focus. Our business model is actually really quite simple. We are aiming to be the leading value add backer of impactful early-stage innovation. We target opportunities at the intersection of huge societal need, huge commercial opportunity and the group's strengths. And our USPs are built on understanding and backing breakthrough innovation and using the technical acumen and the sector insights of our experienced teams to better assess the value and the risk-reward profile of innovation. And these teams are focused on companies in these 3 areas. And the investment profile over the next years is, largely, as I reported in August, I said over the next sort of 18 to 24 months, these will be the main drivers. That remains the case, and I'll come on to each of those shortly. And why are we in this space? Well, part of the rationale for the focus on those areas is because they represent very significant markets, high opportunity markets. Now I'm really conscious that sort of big market numbers on the slide can be somewhat meaningless. But these ones are particularly relevant to the IP Group investment case. I'm just going to pick on 2. So in context, first, I'm going to start down at the bottom in the regenerative future section with green hydrogen. And it's worth saying, green hydrogen itself really came into focus following the commitment of many countries to Net Zero at COP in 2015. And then as things progress through 2018 and the IPCC were asked to look at , well, how does this work, there was a pretty groundbreaking report from a group called the ETC. And one of our Kiko partners, Robert Trezona, he's a commissioner there, and there was a report produced on the so-called hard-to-evade taxes. That's things like steel manufacture, heavy transport, and it set out this sort of huge role for hydrogen in the transition to Net Zero. And the numbers I have on here are actually from Goldman Sachs, and they represent -- they estimate that about GBP 1.7 trillion of investment in electrolyzers is needed out to 2015. That's -- it's a big number, and it's arguably a long way out. But you will see, from Paul shortly, about the immediacy of the opportunity that is facing my staff in this area and how they are delivering against that. And then secondly, back up to the top, in the healthier future area, the interesting thing here is there's a very well documented and huge innovation opportunity in how we understand, how we treat and how we prevent disease. However, for us, the most important market context comes from the fact that while worldwide drug prescription sales currently exceed $1 trillion, there is a very well documented patent cliff for blockbuster drugs that is putting tens of billions of that at risk. As a result, Ernst & Young, or EY, is I think they're now called, estimate the biopharma companies, the top 20 biopharma companies, have about $1.4 trillion in so-called firepower for business development and for licensing of potential new drugs. So our portfolio is very well positioned for this opportunity with 10 companies in clinical studies and expecting data by the end of 2025. So in that context, I will pass on to Sam to talk about a few of those opportunities in the healthier future section. Sam?

Thanks, Greg. So good morning, everyone. So I'd just talk for a moment about our broad life science portfolio. And I think we're really excited about that portfolio at the moment, because we do believe it is well-placed to deliver some very significant milestones over the coming 2 years. So a couple of points to consider about the portfolio. This portfolio has now been 10 years in the making. It's had an almost $1.5 billion invested in it over that period, obviously, not just by us, but by the syndicate of investors that we work with, and that includes international life science, investment funds and also global pharmaceutical companies that we partner with in financing these companies. And it happens that we come to a moment in time where many of those companies are at a point of delivering milestones in the coming 2 years that will provide significant evidence of the efficacy of their drugs or their technology platforms, whichever it may be, and assuming success, will drive significant valuation uplifts or potentially cash exits. And so this specific slide here shows the therapeutics portfolio. So therapeutics comprises probably the majority of our life science portfolio. And in fact, we now have 14 companies that have products in clinical studies. And the important thing is these are all critical clinical studies. So even though quite a few of them are still in Phase I, these tend to be Phase I cancer studies which are conducted in patients. And that means that we will achieve data from these studies that will tell us and tell the pharmaceutical companies that they're looking potentially to partner with some of these products -- or on some of these products if the drugs actually work because the trials are being conducted in patients. So those are going to be important readouts. And in a couple of cases, we think directly, if positive, could lead to partnering saturations with the pharmaceutical industry. And then we also have a couple of companies in Phase II studies in chronic diseases. And the data from those studies will tell us whether those drugs warrant going into Phase III clinical studies, which, obviously, when you go into Phase III, that comes with a significant uplift in valuation. And then, for example, in the case of Pulmocide, we have, there, a company that's actually in Phase III with its lead drug and with a successful data that could actually lead to market launch in that disease area. So just -- we'll focus on a couple of companies for a moment. If we talk about Pulmocide, which I just mentioned, so Pulmocide, as I said, they have a product in Phase III clinical studies, pivotal clinical studies for those who aren't familiar with the drug discovery and development pathway. Phase III is the final assessment that one does in the clinic before applying to the regulators for market access. Now this is an interesting drug. It's an entirely novel agent for the treatment of a relatively rare disease, which is an infection of the respiratory tract called invasive pulmonary Aspergillus. The drug is entirely differentiated from the current standard of care, where ,really, in the current situation, the response rate to current drugs is about 30%. And this is a very nasty disease, so most of the patients with this condition face a very serious morbidity and mortality situation. And with the Pulmocide drug, in early-stage clinical studies, in a very small number of patients, we were able to show that this drug brought about an almost complete resolution of disease and saved the lives of about 10 or 11 patients in what's known as a special-need situation. And on the back of that, we were able to go to the FDA and get approval to go straight into a large pivotal clinical study, which will read out in 2025. So we've got about 1.5 years to wait for those data. But the exciting thing about this area in the respiratory infection space is that the pharmaceutical industry is becoming increasingly interested in this area. And we've seen that manifest itself in a couple -- in fact, 3 or 4 very significant transactions between pharmaceutical companies and biotech companies with drugs like Pulmocide in the last couple of years. So we're really excited about the prospects for Pulmocide. We think there is the possibility that we could generate quite a bit of corporate interest in that drug before the data actually come in 2025. But at the very least, we'll be seeing that data, we hope, around the middle of 2025. Another one I'd like to focus on is Crescendo, which works in the field of monoclonal antibodies and has a novel agent for the treatment of prostate cancer. So this particular monoclonal -- this particular class of antibodies and, in fact, known as bispecific antibodies, it's a very technical area, but suffice to know that this has become, again, another area of significant interest for the pharmaceutical industry with multiple billion-dollar valuation deals being struck over the last few years for products like Crescendos that have shown efficacy in the cancer setting. And so Crescendo's study is a Phase I open-label study. The significance of that is it's in patients, but we'll be seeing data as the trial progresses over the course of this year. And again, if the data proves to be positive, we would expect to see significant corporate interest in the product and in the company. So there are a number of different examples here, really, very exciting products that we expect to play out over the next couple of years. But it's not all just about therapeutics. We also have some very exciting companies in the broader life sciences space. One I will mention is Genomics Plc. So this is actually a private company focused on advanced genetic screening to try and identify risk of developing chronic disease. So the company has published, really, some quite beautiful scientific papers, showing that its approach to this genetic screening can increase the sensitivity of current protocols and current methods that are used to predict the risk or identify the risk or quantify the risk of developing conditions such as cardiovascular disease, cancer, rheumatoid arthritis and other autoimmune conditions, diabetes and so on. And that's incredibly valuable. When you think about the huge amount of money that is spent on caring for people who have developed cardiovascular complications or complications as a consequence of diabetes or have developed full-scale autoimmune conditions or cancer because of a lack of early screening, with the Genomics' approach, you have the potential to manage health care in a way that you can avoid the development of disease at an early stage and start with intervention in disease at an early stage so you avoid later-stage cost. And the company has recently started to hit a very nice vein of commercial success. It has just started executing on its business model of partnering with global insurance companies to make its technology available to life insurance customers who can then have access to the Genomics' technology to help them identify risk of disease and manage that risk appropriately. And then also is talking to a number of pharmaceutical companies about applying its technology to drug discovery and development. So we're very excited about Genomics and expect to see significant commercial traction continue across the course of this year. And then I'll come on to one of our major names in the portfolio, Istesso, which I think you've all heard quite a bit about. So Istesso is significant because it's actually our biggest holding within the life science portfolio after Oxford Nanopore. And what's significant here is that the company will be having data from its Phase IIb clinical study for its lead drug, MBS2320 in rheumatoid arthritis, and those data are due at some point in the second quarter of this year. And that's significant because these data will tell us whether MBS2320 is efficacious in the treatment of rheumatoid arthritis, will also tell us which dose it's efficacious at, and those data are very important for the company's plan for the drug, which involves preferably partnering with a pharmaceutical company before going into Phase III clinical studies at some point during the course of next year. So we're really excited about those data. Again, expecting those in the second quarter. The drug is entirely differentiated from the current range of drugs for the treatment of rheumatoid arthritis, which is a huge market, about a $25 billion market. It's differentiated because -- mainly because it is able to repair the bone damage that you see in rheumatoid arthritis that none of the current drugs address. So the drug has also shown promise in other conditions related to rheumatoid arthritis in the autoimmune and other chronic disease settings. So one example is pulmonary fibrosis of the lungs, where the drug has shown an ability to resolve fibrosis in the lung. And that's something that you don't see with the existing $4 billion class of drugs. So the FDA, on the back of those data, has granted the company fast track designation for 2320, and that will be starting a clinical study in pulmonary fibrosis over the next couple of months. So we're really excited about 2320 and looking forward to the data in Q2. And with that, I will hand back to Greg.

Thanks very much, Sam. Just to say there'll be questions -- time for questions at the end, if anyone has any questions on the life sciences side. So on to the second of our themes, tech-enriched future. This is really about the global so-called digital transformation. So this is the comprehensive integration and, really, sort of relentless increase in sophistication of digital technologies in pretty much every aspect of society and business. We think this is one of the most profound and pervasive megatrends that's really shaping the future of our world. Numbers, astronomical, $2 trillion, $3 trillion by the middle of 2020s. And clearly, emerging artificial intelligence technologies represent some of the most profound technological trends that are really shaping the evolution of this whole sector. If you want to know more about, say, the theme of AI and the Internet, I would really encourage you to access -- we did a deep-dive webinar on this last September on our website with a few of our portfolio companies, really fascinating. You can access that via the website. And one of the things you'll see from that is the IP Group has been investing in AI-related companies for getting on for 20 years, and we're now very well positioned to support the fundamental technologies that will enable the transition to an ever more intelligent computation at every layer of the sort of the computation stack, computing stack. So if I come and try and sort of explain that a little bit in terms of our portfolio and the relevance to us, if you start kind of at the bottom of the stack, the communications layer, innovation here is going to be needed to support all of the huge data loads and the rapid response times and the ubiquity literally everywhere. It's demanded by next-generation intelligent computing. So that's up in the top right-hand corner there, and that's why we're investing in companies like AccelerComm. They are building advanced signal processing and error correction solutions, and that really improves the throughput of wireless comms. And another good example that I've got there on the slide is a business called Deep Render. They -- that was a new investment in the last year or 2, and they are using AI to compress online video and they're already getting traction with some of the world's largest online video companies. If you then sort of move up the stack to the computing layer, AI algorithms, and this is something that if you watch the webinar, you'll see, they place a very different demands on computing hardware. We'll need new processing and new memory technologies to support this sort of vast amounts of parallel processing and to reduce bottlenecks in memory. And all of this is going to be done in a very energy-efficient way. And that's why we're investing in companies like Intrinsic up there that you can see. That's a UCL spinout and they're developing some silicon oxide-based memory. It's a nonvolatile memory. And it overcomes the sort of the current limitations of flash memory chips. And the market for this, again, a huge -- so there's $150 billion by 2030. But the current state-of-the-art flash memory, it can't adequately support the demands of AI computation, so the chips that Intrinsic are developing, they offer far higher performance compared to flash while using about 100x less energy, so really, really important in that space. As you probably know, we also have exposure to quantum computing and to some of the nearer-term emerging technologies like optical computing that's being developed by one of our Oxford spinouts, Lumai. If you then move up the stack again, the human machine interface is changing fundamentally. You've heard Mark talk about this many times, becoming more human-like, as computing -- to interface with more human-like computers. And the whole sort of extended reality, AR, VR, XR market has seen some false starts in recent years. But the release of the Apple Vision Pro this year is, I think, just the beginning of an era of more immersive computing. And we've anticipated it for some time. You remember we sold our business WaveOptics a couple of years ago, and we've been nurturing Ultraleap, which you see here on the slide, and this offers the most advanced hand-tracking technology in the world, better than that shipped by both Apple and Meta. And Ultraleap is now starting to ship royalty-generating extended reality headsets, and we see a big growth opportunity as the next wave of device manufacturers enters the market and license that Ultraleap hand-tracking tech. And then finally, at the top of the stack, around the wheel, the software layer, and this is where we're investing in AI companies where the -- sort of the application of AI is either delivering new insights or capability with a clear economic benefit. And a good example here is Featurespace. Featurespace is a company that we've highlighted before, that CEO, Martina, brilliant CEO, Martina, she gave a great overview of this business at one of our results presentations a couple of years ago. Again, recording on our website if you want to know more and hear a sort of a deeper dive into the business. And on this one, again, starting with the market opportunity, the numbers I have back on the previous slide, we're talking about the sort of the overall data analytics market, that sort of GBP 40 billion, GBP 50 billion, but specifically to Featurespace, Forrester anticipates that spending on enterprise software solutions in this area would reach by about GBP 8 billion by the middle of the 2020s. So the market opportunity is more than sufficient to support growth into the high tens of millions of revenue, and indeed, into the hundreds of millions. And what Featurespace have is the -- they have an applied AI solution. And what it does is it learns ordinary behavior of a customer or a person, me or people like me, and that enables it to more quickly identify unusual or abnormal transactions. And so it automatically kind of evaluates and then reduces our financial crime risk. The scale of this, in terms of impact, is really significant. You can -- based on the data that the company has from all of its various partners, they process close to 50 billion events -- 50 billion sort of payment events each year, protecting more than 0.5 billion consumers from risk. In terms of value, clearly, the value driver here is around continued strong revenue growth. They grew revenues to $34 million in 2022 and continued double-digit growth in 2023. That was across a range of significant blue chip customers. And encouragingly, recurring revenues are now up to 80% of that number. So this is a very strong company operating in a big market. And they have a very clear strategy to be the most valued and respected technology partner in the payments industry, so one to watch and progressing very well. And on finally to the regenerative future, our sort of cleantech theme. And in this space, we invest primarily through our market-leading cleantech platform Kiko Ventures. And Kiko is focused on the U.K. and a small number of European countries like Germany and the Nordics where uptake of climate technology is significant from a consumer point of view. And with the company we are highlighting today actually originated from our Australian business, which, I mentioned earlier, has some of the best early returns in the group at the moment. We work very closely with the team at Hysata going from patent in 2021 to the business that it is today. And so it's really with great pleasure that I introduce Paul. Paul is a former colleague of ours from the Australian team, joining us from Australia, and he is now CEO and Founder of Hysata. Paul, welcome. Great to see you.

Greg. Real pleasure. Great to chat with you today and to the audience as well. And so while you're pulling up my slide, maybe I'll start with the background I've got here. So we're a Sydney area-based company in Australia, and this is our facility, just over my shoulder here. So we have an 8,500 square meter big kind of beachside shed that gives us the room to grow our manufacturing facility. So it's a really beautiful location that I think is fittingly is a great home for us as we grow. So I want to spend just a couple of minutes talking a little bit about the business and what we do, why green hydrogen is important than kind of the road ahead for Hysata. So firstly, for your listeners, Hysata, we're an electrolyzer company. And electrolyzers are the machines that split water, H2O, into hydrogen and oxygen. And as Greg said in some of his opening remarks, when you power an electrolyzer with renewables, you can make green hydrogen. And on the path to Net Zero in 2050, green hydrogen is a vital energy vector to help deeply decarbonize the hard-to-evade sectors. So these are sectors that are in everyday life that are very difficult to electrify. So this is things like steel manufacturer, the steel that's in our buildings on our cars; chemical manufacturer that is in everyday life, including the fertilizers that make our food; high-grade industrial heat and heavy transportation like shipping and aviation. And green hydrogen is really the backbone to deeply decarbonize those sectors. And they're pretty big emissions. The emissions in those sectors are about 20% of the world's emissions. So fast forward 2050, green hydrogen, as an energy vector, will be about 10% to 15% of all the world's energy, in this case, chemical energy. And what got us really excited about the Hysata electrolyzer is it's really, really differentiated. So as Greg mentioned, I found this opportunity in the University of Wollongong, which is back 50 kilometers south of Sydney with a prof I've known for 10 years. And this prof has have 30 years' experience in electric chemistry and hydrogen generation. And he called me one day and said, "Paul, I've got this super exciting idea. You've got to come to my lab and see the performance," and I was absolutely blown away by the performance of the system. And it's really the performance metric here is efficiency. We need less energy to make green hydrogen than an incumbent electrolyzer. And it's a pretty big giant leap. It's 20% less energy than an incumbent electrolyzer. And if you tease that through the kind of economics of green hydrogen production, the, actually, biggest expense in making green hydrogen is actually the cost of renewables. So the solar and the wind is the most expensive part. And we use 20% less energy to make a certain mass of green hydrogen, you need 20% less renewables. So this really redefines the economics of green hydrogen production. And this is translating to the really big traction globally. So at Hysata, we're really focused on major global blue-chip companies, in those sectors I mentioned, that are deeply committed to decarbonizing their operations. And our business model is to manufacture these electrolyzers. Our first units will be manufactured in, like, building over the shoulder, and ship these electrolyzers to our customers. And just for the audience to visualize, these units will be shipping container size. And a typical blue-chip company will need hundreds of these shipping container-sized units to decarbonize their operations. So -- and these are pretty big orders, multibillion-dollar potential orders with these customers. And what's really enabled it is, not only capital from our investor group, including IP Group, but it's also the team. So the team is something I'm really proud of what we've built. So we have about 70 people at the moment, all working out of this building, and close to 60 of them are in product engineering. So this is a laser-focused organization on scaling this technology so we can get it into the field with the customers. And there's probably 2 major elements to our -- I think, our team and, to some extent, our culture. One is science excellence, which is the efficiency and the differentiation I talked about, but also a focus on ability to mass manufacture. And we've been focused on both since the outset, and we've really got a unique electrolyzer architecture that lends itself really well to hyperscaling, which is more of a software term, but we've got a really capital-efficient way of scaling our manufacture of our product in that space, not only on supply chain and materials we've selected, but also designing for mass manufacturer from inception. And in that team, probably I'd highlight one person, our Chief Engineering Officer who has a PhD in Stanford, with 30 years of high-tech manufacturing, including the hard drive industry where he ran a manufacturing division, first hard drive company in Japan. And he also worked at Apple, designing and mass manufacturing the haptic devices that go in the watches and phones we use today. So he brings a volume manufacturing mindset right from inception that we've really been able to piggy back off and give this company a really outstanding roadmap to scale the manufacturing. So if I distill that all together, our value proposition is multifaceted, but it really comes down to that efficiency, and our customers will need less renewables to power the electrolyzers. That efficiency also translates to simplification of the system. We have less waste heat to we've got a simplified balance of plant. So we win on OpEx with efficiency. We win on CapEx with the intrinsic simplicity. And in this pathway to manufacturing is also a really differentiating factor that excites our customers because we're one of the few that can really get the scale really quickly. And so I probably have a lots more to say, but I thought that was probably a good overview, and happy to take a few questions from you, Greg, now or at the end of the session.

That's excellent. Thank you very much, Paul. Very exciting opportunity. We'll hit all the Q&A. You're good to hang around for a little bit, aren't you? So we'll hit the Q&A and at the end, I'm sure some of the viewers may have questions as well. So I will, with that, turn to David to give us a summary of the financial results.

Really good to be back with you again. I'll go through this relatively quickly. I can summarize the financial position and a few key messages fairly briefly. As we've said already, we've maintained our financial strength. So we still have gross cash of GBP 227 million. As you can see, there's only a relatively small reduction from what we had last, only about GBP 15 million less than what we had last year. I'll explain that in a minute over all the cash bridge, which explains quite simply how we achieved that. We have had a reduction of about 13% reduction in NAV. We've gone from about GBP 1.33 a share, down to GBP 1.15 a share. That's a right down the portfolio of GBP 160 million. And I'll look at that projected loss of about GBP 175 million. However, given our strong cash position and the fact that, actually, the share price has remained stubbornly low, so about 50p, net well below half of our net, we have commenced a GBP 20 million share buyback, which Greg will talk about a bit more in a minute. If we look at how we can sort of summarize, it's got of GBP 160 million that I mentioned, has been a reduction in value in the portfolio, and we've summarized in the bucket trend. Probably the major feature, which Greg has already touched on is that, actually, the biggest area has really been about the delayed fundraising. So not that we've actually crystallized a reduction yet, but where we've got some delay in the fundraising, and therefore, we've made provision over 2 biggest items in this, First Light Fusion and also our American platform, Longview. First Light, you may remember if you've been with us long enough, when they achieved Fusion there, which was great tech, great for we did, at that time, double the value. We took from that GBP 57 million to GBP 114 million. We've actually chose -- [indiscernible] about GBP 50 million reduction in that number there, because we're taking the view, until we actually get a firm valuation number, it will be right to carry it back where it was before, actually near its previous valuation number. But obviously, hopefully, during this year, the kind of valuation [indiscernible] Similar in America. In America, that's a platform, we plant from this and there are other LP investors that they've called to invest in that platform. That sort of venture LP market in America, despite public market being strong, that early-stage benchmark is still very flat, very hard to make money. It's not just our platform. It's true across the board for that kind of type of investment. And for that reason, we've taken a more prudent view and have actually gained -- made down by approximately half which is actually about GBP 40 million out of that value, which again is once we get some, in fact, more fundraising, we'd have a better idea of the valuation there. When you actually look next much more capital at actual [ variance ], where you've had a funding round and the prices being lower, actually in recent about GBP 27 million of the reduction. And then again, small accounted market-based, some event that actually happened in the company or something specific as well. So in that category, you have things where it actually changed our assessment of what the likely sort of revenue multiples are going to be. But again, there are relatively small amounts compared actually with, actually, delayed fundraisings and such. Another cash recourse, that's around [indiscernible] predominantly around our sales, which we've heard such an uplift, a little bit over GBP 40 million. So fund raising has not yet completed, details of that aren't in the public domain yet, but actually, that's kind of the main area where we've seen that have some value. Very quickly looking at that, of course, that reduction of about GBP 175 million overall. You can see a factor there, the total now going from GPB 1.4 billion to GBP 1.2 billion. Perhaps more interestingly, you look at what we call the donut graph on the right there. We made this type before, even at lower value, about GBP 115 million, we've actualized share price at only 50p. You can see that, actually, [indiscernible] thinking about 9p in net cash, 9p. You only have to add up the next 4 companies in the portfolio down Hysata, a net of 50p in value. At the moment, the market index [indiscernible] none of them are vehicle business or any of the top trending or any of the rest of the portfolio. So I'm sure we'll talk about that a little bit as questions come in. The next slide, really, again, very simple point we want to make here. If you look on the right, again, the donut, you can see that we're increasingly concentrating on our top assets. The message is very clear. We're focusing on the more mature assets. A lot of our time, effort, money are going into those. The top 20 companies now represent sort of 76% of our whole portfolio. You had on the remaining, tiered at top 40, but 90% of all our banks is focused very much in that -- those top companies. We do still have a total of about 85 companies. That's in the model. We invested a lot of relatively early stage, very disruptive and interesting technology, so a very valuable pipeline in that 10%, but actually the value and the money is really much more mature companies. And then I have a quick point to make. It's fairly consistent, the way the portfolio breaks down. When you add life sciences now onboard together, you have about 50p of value, with both teams that can be capping that 20% to 25%. So it's fairly evenly balanced and that can be seen, really, for a while now. I thought I'd quickly explain cash. It's actually relatively easy to do here. We invested about GBP 73 million, and we have a net EBIT about GBP 22.5 million. Well, if you add up the loan, we drew down GBP 60 million, plus the realizations of GBP 38 million, you get about GBP 95 million. So effectively, it was funded by those 2 [indiscernible]. The only real reduction has been in the dividend payment, but obviously, it's financially good and that pretty much reconciles directly to the reduction in cash that we've had in the period. Just a few last points to make. The portfolio is actually still relatively well funded, actually. We've only got 13% that needs to fund in the next year. There's a 35% number, which is one they don't need to. They might fund, they might but they don't need to. So about 13%, they say they do. Clearly, next year, by next year, they're thinking, proportionately, you got about 41% of the portfolio will need funding then. That's still a year away, and we anticipate that, hopefully, there may be some recovery in the market as well, which may well help that. But in the short term, we remain pretty robust, good cash on balance sheet, a company relatively well-funded and not too many need in funding. Valuation approach. I won't -- we did a deep dive on this last year. Very well attended by the Investor Meet community. Just to make the point that, actually, still the same valuation process. We're still getting an opinion for the auditors where we're mildly cautious in our valuations. And you can see here, about 17% in market know that. And then, actually, that plus adding on one where based upon the recent funding, under the last funding, there may be some small adjustment. You actually get 80%. How about that. So a lot of our values are, actually, you can touch back to a relatively recent event, an enriching event, although we are still in the process of externally valuing it and we're [ bumping ] these companies, so it's a very comprehensive valuation process and remain confident in those values. So the last points I'll make, which we said before, we have this debt facility of GBP 120 million. Through down in the year, second tranche of GBP 60 million. Those are payable for some time in '27, '28, '29 and on favorable interest rate, paying about 5.25%. We are actually in a benign position of generating more income. We're actually paying on our loan setting and they're loading payments coming in tranches in each payment. And with that, I'll pass back to Greg.

Thanks, Dave. So into the last few points of the presentation there, so a quick reminder that we aim to deliver returns to shareholders, primarily in the form of capital appreciation. However, we seek to support that with an element of cash returns, and this comes from cash proceeds. We will typically reinvest most of the proceeds, but use a proportion of that to deliver returns to shareholders. And the Board remains very committed to that approach. And in fact, in December, following quite a wide and continued consultation with our larger shareholders, and very mindful, as Dave said, if that continued discount to NAV, we'd decide to change the mechanism for this so that the cash returns in the future will typically be made in the form of share buybacks, where we have a greater than 20% share price discount to NAV. And in those circumstances, we will sustain the dividend, and that's why we haven't proposed a full year dividend for 2023. And at the time of that announcement, we talked about a further GBP 20 million buyback. It's underway. It's progressing slowly for various technical reasons. Now the results are out of the way, we will be picking that one up and we continue to try to complete that during the course of this year. And it's just important, as a reminder, since we introduced this approach, we've returned more than GBP 75 million to shareholders since 2021. And the GBP 20 million buyback is in addition to that. So to leave time for questions, a very quick summary. I mean, the first is a summary of a recap of some of the catalysts that we've got in 2024. You've heard about those. Sam talked about that number of events in the therapeutic side of the portfolio, which is some of which we've highlighted here. I talked about that great opportunity in AI across the compute stack, but particularly Featurespace and its continued revenue growth. And you heard, today, from Paul about one of our most exciting breakthrough companies, Hysata. So I come back to those 3 key messages that I started with. Our portfolio is now entering a very milestone-rich window. We are focused. We're focused in terms of investment, with over half of our investment over the last couple of years into 8 companies, and we're focused in terms of geography and we're focused on delivering cash exits. And we've maintained our financial strength, although that minus 13% return is well below where we're aiming particularly with those many forthcoming milestones. And when we're successful in delivering cash exits. We'll continue to use a portion of those to support capital returns with the cash element and the current GBP 20 million buyback is adding to that GBP 75 million return to shareholders since 2021. So with that, I and the team, thank you all very much for listening, and we've got at least 10 minutes for questions.

Great. Thank you. Thank you. Shall I take over there and just take you through the questions. We've got quite a lot of questions, by the way. We do endeavor to answer all of them as a rule, and we will try to do that. I'll let you know when we get to 10. For those of you who have to drop off at 10, we quite understand. We won't get so offended. But what we'll probably do, if we do everyone, we'll carry on with the other questions. Anyway, without further ado, I'll try and move on. So the first one, I think I'll point to you, Sam, if that's okay. Question comes from Steve Y. Given the frozen U.K. IPO market and the U.S. focus on tech, realistic tech valuations, do an IPO plan target using NASDAQ as a route to market for our more advanced portfolio assets? I'd point that to you, because, obviously, that's a baseline, Sam, [indiscernible] particularly [ revised ].

Yes. I mean, yes, not necessarily for the reasons you raised, but we have all -- particularly in the biotech therapeutic side, I mean I don't think there's -- the AIM market has been quite useful for a number of companies at an earlier stage of development as a capital-raising forum. And that has worked quite well. But I think for our bigger therapeutics companies that we expect or that may generate some of that -- some of those good data that I was alluding to earlier, I think the right market would be NASDAQ. Again, nothing -- just simply because there is the bigger pool of investors who understand these sort of companies, the very East technology-involved and speak the language, et cetera. So it's just a more sort of natural market. But as you can see with a company like ONT, obviously, we went for London, and companies that have a story that is based more on a revenue growth-type profile rather than a sort of milestone-driven therapeutics play, London may still offer an interesting opportunity. But for most of our mainstream biotech companies, I think NASDAQ is ultimately always the end market. And that's reflecting the fact, although they're U.K. companies, we usually have international syndicates backing those companies, so there are already U.S. investors involved who would be the natural partners when it came to crossover rounds and then floating on NASDAQ. I hope that answers the question.

Thank you, Sam. Very comprehensive. John H. Are we this involved? It said, if you really understood shareholder returns, you would not have suspended the dividend for some funds that require dividend-paying investments to divest. I've never really seen it before. Why did you need to suspend the dividend? Don't you need to create a history of reliable -- unique vector history of reliable dividends to attract new investors? It's not like you haven't got enough cash, GBP 200 million. I might -- maybe, Greg, you'd like to refer to that first?

Yes. I mean, I think the balance of exactly how you have your mix of returns to shareholders is something that we are trying to optimize. We spoke to a number of the major shareholders and, obviously, analyzed our register very significantly. There are actually very few holders who have either joined the register or been on the register since we introduced the dividend policy. And we felt that it offered greater value for all of our shareholders, taking into account the different stakeholder needs, including the fact that tax is different. There is no perfect solution to this, but it felt to us that the right approach at this stage was where we have such a significant and persistent discount on NAV per share, that we should be using the buyback mechanism. So the impact in terms of our existing shareholder base means that actually, there aren't that many funds that are holding us as a dividend stock. So -- and that impact is quite minimal.

If I remember, it was actually money moved out to actually -- so we said, we never like buybacks, never recommend them. In your case, make an exception given the difference between your NAV and your share price, we would actually understand why you would do it. Interesting. I'll move on to the next question given time, which -- and, again, I'll point this to you, Greg, if you don't mind. Share price is at the same level as it was 10 years ago, so where is value for shareholders given some discount of 60% as stated now?

Well, that's what we're seeking to address, both through primarily portfolio performance and generating cash exits, and then through that approach to support share price with some cash returns, including the buyback that's in good need to both improve the NAV per share through performance and we need to close the gap between NAV per share and those are the actions that we've taken as a Board over the course of the last 12 months.

Thank you. Benjie, again, this is to you, Greg, if that's all right. What is your geographic strategy with a significant presence in the U.K. and feel very good success in Australia?

I think -- I don't know if that was post the summary or not. I mean, the geographic focus for the group is U.K. predominantly, with a strong business and growing the smaller business in Australia, particularly given superannuation funds over there with whom we have great relationships and are also a unique position in Australia. This is -- as I said in the presentation, this is all about focus. We could play in lots of places, be it geographic or technology areas. We are increasingly focused as a group, and we are focusing our effort and our capital on to the areas that we think reflects the highest value opportunities for shareholders.

Paul Stevens, really one of our analysts, I suspect almost everyone here. I'll have a go at this one. Now third parties has defined GBP 650 million, past GPB 700 million, is that outflow or portfolio value reductions? If it was the latter, is this concentrated in a small number of holdings? Actually, mainly the former, actually. Onetime, they -- our Ox side, they are able to raise money at one stage earlier in the year. It's rated slightly lesser than we expected. We also had some exits. So it's not really valuation reductions as such. I think we are very focused on increasing funds on the third-party management. And hopefully, we will see that increase, actually, in the coming years.

Yes, there's a sort of positive element to that, isn't there, by positive reduction in -- or the reason the part didn't go up so much was because they had some successful exits and the model is to return capital, which then is reinvested. And there is some exposure, I think, to Oxford Nanopore in one of the third-party funds. Obviously, that's had an impact.

And you, again, Paul. I'm delighted to stand on line for this one. MBS2320, that seems right. The expectations that you've had with ACR20 response rates, with successfully greater than 40% response rate versus the increasing dose? Have U.S.-based principal investigators shown interest in central future studies?

Yes. Thanks, Paul. Last bit first, yes, very much so, as you can imagine, you're more familiar with this drug than most. People are very excited about the drug because it's the only non-immunosuppressive in development for the treatment of RA, so it's very significant when you think about the side effect burden that current drugs carry with them. So yes, there's a lot of interest in the drug from potential investigators for the Phase III. And then look, I think the whole landscape is shifting quite a bit, so you'll be familiar with the recent combination data that J&J put out for a couple of the other autoimmune drugs. Sanofi has been quite public in talking about combination -- looking for combinations in RA. And the story has been that these companies are willing to sacrifice efficacy with one of the combination agents in order to be able to bring about a combination, because obviously, if you want to reduce the side effect burden, you need to dial down dose, and then you're going to compromise on efficacy, but you hope that the synergy of putting 2 drugs together will outweigh that. So the beauty of 2320 is we don't need to dial down dose to address any sort of safety issue because there is no safety issue in our view. So it's perfectly positioned for a combination as that becomes something that people strive for. And so actually, increasingly, I'm not concerned about -- I'm not particularly -- I mean, I think it will be important to get an ACR result, which for everyone else is typically is the primary end point in these studies. But I think if you're thinking about combination, co-formulations, adjunct therapy, then actually what you want to see is a differentiated profile, a differentiated profile. And that will come through the secondary endpoints, things like bone erosions, disability index, et cetera. So I think any ACR results will be a positive one, but I don't think that's the way our potential partners are thinking about this. This doesn't need to go head-to-head with existing agents on the standard end point. It needs to tick boxes, but what it needs to do is show a differentiated profile so that you can believe if you put an existing standard of care together with 2320, you're going to get a differentiated profile.

Thank you very much. I'm going to point the next one to you, Greg. Just so people are aware, it's now 10:00. So if people do have other points to go to, it's 10:00. We're going to carry on and we'll try and answer as many of the questions as we can in a sensible time line. Over to you Greg. Post Mansion House, pretty quite sure [ access fund ]. Have you yet seen any areas of increased pension fund access in what you see?

Not yet. I mean, look, we think there's a big opportunity here. It's got to be done appropriately. Now the FCA makes these points that it's around balancing risk and reward. We think there's a big opportunity here. I heard the chance, at the last budget talk, about trying to make the U.K. pension environment more like that in Australia as much as it pains us to say that the Aussies have been ahead of us on anything, so I think there is opportunity. We do engage on this. There's various measures that hopefully, all taken together, improve the conditions for the U.K. to be a place for the best companies to start, to grow, to scale and to stay, but there's quite a long journey there, and there's various initiatives that we are trying to get behind. And hopefully, over time, this both encourages long-term capital to come in. In addition to that, which is already here, I mentioned Railpen and Phoenix and others who are already big supporters of the group. So we are -- we're very well positioned for that, and we are actively partnering and actively co-investing.

Next one, I'll have a go at fairly quickly from Charles W. Could you please highlight the company's greatest revenue growth across alongside your shareholdings in them? Very briefly, I mean, one shouldn't forget Oxford Nanopore, which, although it has a disproportionate share [indiscernible] GBP 170 million this year. Still expecting depending on which analysts you believe, something like GBP 190 million next year. We still own just under 10% of that. Featurespace, a company which we've referred to today, we don't talk about revenues normally but in the public domain, as I think we've mentioned in the report from a couple of years ago, we think about GBP 28 million. That's grown significantly since that time. We own 20% of that one. Hinge Health, again, not a public domain, but only over hundreds of millions, truly a business growing very fast. And we do own a small amount, 2% of that. That's for the valuable holding as a result of -- because it's such a significant revenue and speed of growth. In fact the last one I mentioned is [indiscernible] we own 33% of that one. And that growth again, it's in our documents. It's going for a relatively small start, so over 60% compounded over the last 4 years. So that trends to make good growth. It will be probably lower as you'd expect going forward, but that's another very fast-growing business, I think, in our portfolio. The list isn't exhaustive, of course. I'm going to move on to -- I'm going to give it to you, Greg. Sam, might have an opinion or Mark at some point. This is from Charles A. A recent article in the Spectator by Matt Ryan suggests that subsidizing industries may kill off developing emerging technology companies. How do you protect your portfolio from this crushing of innovation exists? On the other side, how do you decide to abandon investment because you can seem to have been overtaken. That second bit might be on to Sam and Mark -- a statement to you, Greg.

Yes. Thanks. Well, I'll get -- Mark's here. Let's -- I'll add to Spectator, but let's -- Mark?

Thank you. I'm not sure I accept the premise. I know that I haven't read the article, but I know it really is used to lobbying on behalf of the coal industry and have a taken perspective on the energy [indiscernible]. I'm assuming this is directed at some subsidies for the declining technologies. And let's say it's not our experience with subsidies that handle innovation in that sector. I suspect that the innovators in our portfolio -- we find that suggestion quite amusing actually given the pace of progress that we've seen in some of those subsidized sectors. And if you look at countries where those sectors have been subsidized, that sort of correlates with innovation in all of those areas. I'm not sure I agree with that. [indiscernible] that was not the case. I don't. And second question, the answer is sort of in the question when we see that the investor will be able to take it, then it is time to relinquish our interest in it. We -- for every new investment we make, we make it on the basis of a bottom-up analysis of the viability of the technology and the competitiveness of the technology. Not -- we don't base our decisions on some costs. We look at its current position in the market and sometimes we do have to make a hard decision.

Thanks, Mark. Paul, I don't know, it's sort of 9:00 at night. There's a couple of that one may be and then -- sorry, you stolen your...

No. I'm very happy with that. Paul. Yes, you're on. [ Sansa ], has there been interest from India, China that are ramping investments in coal?

Yes. Thanks. Still wide awake. No problem. Yes. We've had huge global interest and are really around that value proposition. So the phone rings pretty hot. We've got a pretty focused strategy around Europe, U.S., parts of the Middle East and Australia, but also demand in India and China as well, where there's huge deployment of renewables going on over the last few years.

Great. Thank you very much. I'm going to be very simple. I'm going to move on, if I may, try to keep the momentum going. This is so much this year. So again, an analyst, thank you for being here. You've got 3 questions. Just keeping on my toes. First one is for Greg. Given you've been involved, you've covered some of already, but given you've been involved in the case here? How should we think about matching house fall time line for implementation? A similar question. And how soon we [indiscernible].

I think we've probably covered that one. I think the thing is to keep an eye on the progress of the various bills and initiatives moving through parliament and then hopefully further announcements of investment and commitment to investment in the space. I think one of the things we recently was talking about the disclosure requirement for pension funds, talk about how much they've got in private and how much they've got in U.K., for example, some of those measures may be, but it's quite a long burn as well.

Yes. And one for me. What was the total impact for write-downs that you took through as a result of third-party valuations? Well, I'm glad you asked that because I looked at this at about 7:00 last night and it was about GBP 80 million of that both write-downs actually came through from that part. And then the last question for you, Sam, from [ Odysseus ] on Istesso. Could you please remind us on your conviction on Phase IIb? Have you managed to recruit less of their RA patient group? And should we expect some better efficiency numbers from Phase IIa in the results?

I think conviction is pretty high given the amount of money we've invested in Istesso over the last 12 months. The -- I can't comment on anything from the study at all because obviously, that's all under wrap. But we do expect the patient population to be more normal. We've built in procedures, et cetera, into the protocol in the management of the study to make sure that the patients are more like a normal Phase II patient population compared to that Phase IIa where it was skewed towards very severe patients. And what was -- sorry, what was the last bit of the question? Yes, better efficacy. Well, I mean, I like to believe so. I'm optimist, but we'll find out in Q2.

Brilliant. Thanks, Sam. Next one, moving on. We've sort of done it. I'm going to point it to you, Greg. It's more of a statement to give Richard a chance to say it. It's holding in an item, no tax on dividends, so why using buyback? Private shareholders have been [indiscernible]

Yes. I mean, my own holding has the same impact. I've got to try and balance the overall return of value to shareholders. And the decision we took was in that context.

I think that's fair. How much do you expect to invest in '24? And how much will be divided in the follow-ons? Probably one for me. Well, so we invested about GBP 73 million this year. We're kind of now in the range of investing sort of between that GBP 90 million. I would guess we'll be somewhere in that range is what we'd anticipate. Changes all the time, depending on the mix. You have to give a fairly sharp high on the exit in your liquidity position. But at least somewhere in that sort of range. And new investments, we're still making new investments. We are very much focused in the later stage in the developed portfolio as we've talked about. But I would anticipate something like about GBP 10 million amount going into new investments consequently. [ Martel ] [indiscernible] share you buy back, are you keeping on the balance sheet or canceling them? We are keeping them on the balance sheet at the moment. We haven't canceled any yet. And they get used to some issues, but at the moment, we're keeping on the balance sheet. I think this might be one for you, Paul. I haven't seen this one. Are you aware of considered VIVOTEK? The intersection of hydrogen and vehicle emission reduction. Or maybe Mark, can you be on the that one.

Yes, I'm almost certain that our fintech team would be aware from the [indiscernible] team be aware of them, but I will pass on the name to make sure that they're aware of it. I don't want to set a precedent for this being [indiscernible] pipeline to IP Group, but I will pass on.

Yes. We're aware of them. They're a fuel cell company. And so for the audience, it's fuel cell takes, hydrogen feedstock. It converts it -- combining it with oxygen from air into electrical energy. So they have a fuel cell, I think, drivetrain for heavy vehicles. So we're aware of that space. Hysata is really focused now on those industrial sectors and that's hard to abate. So steel, chemicals, high-grade industrial heat and heavy transportation, more like shipping. So we're not focused on that area, but aware of the technology sector.

Okay. I've got a quick question. Any update [indiscernible] funding. I think I've already mentioned that [indiscernible] in hand. I don't know if Mark wants to add anything to that. If not, we'll probably move on. No? Fair enough. A question about cost base. Well, how is the cost base addressed in '23 and '24? Well, we expect to remain pretty level year-on-year. I would say we want to keep it a fixed kind of percentage of NAV, which we are currently doing at 1.8. We have a question about share buyback [ on if ] the shares are canceled. They're not at the moment, but there's always that option at the moment we're still holding them. What's -- this is from Andrew M. What technical factors have held back [ rate ] to share buyback? You might regret asking this, I'll quickly do it. I'll do it as succinctly as I can. We've been in a closed period. We treat ourselves as closed. We're actually a bit stricter on ourselves than actually the market requirements. We take the view that from the end of our actual accounting period 31st December, we're in a closed period. So in that period, we weren't allowed to give instructions to our broker to change to change the amount of shares they're buying back because we're effectively -- inside, that logic follows. So we gave them a fixed percentage to buy back. They've been doing that. And there's another -- for another time, a quite complicated thing, it involves auction -- at the end of the day involves an auction process. Quite a lot of the volume you see going through when you look at daily volumes actually relate to that auction at the end of the day. You can't guess what that's going to be. So they don't buy 15% of that. They're buying 15% in what's in the daily total. So you'll see a slightly lower than 15%. Clearly, now as of this morning, we're no longer in a closed period, and we will be able to have a more direct input on that [indiscernible] buyback. Needless to say, we still anticipate the course of this year, but we will complete that GBP 20 million share buyback. Next question about buybacks. A quick one to you maybe, Greg, similar cash buybacks are not actually [ driving ] share price appreciation. What's the point on that one?

Well, there are some quite wide views on whether buybacks, dividends, et cetera, make any difference. We are trying to have a consistent capital allocation approach, which balances primarily portfolio and share price return with some cash return to shareholders from exit. It may not be having a point, but it's hard to evaluate the counterfactual if we weren't doing it. We don't know what the situation would be. So we think this is an appropriate balance. We are frustrated by the discount to NAV per share and we're using that mechanism as a contributing factor to try and reduce it.

Yes. I'll say -- next I'm going to [ ask another ] question. Great presentation, guys. Well done. I'll take that one. Thank you, Lucas. The next one was [indiscernible] Hinge Health shareholding not sold years ago, when you first indicated, suggesting being it nonetheless a loss in value. Mark, would you like to refer to that? Maybe Greg or I can refer...

On Hinge. Well, we have sold when we've had the opportunity to do so. So we've taken secondary liquidity where we can. It's not always possible to sell private companies. We always are actively in discussions on secondary exit opportunities for our companies, whether they are public or private. So we have taken cash off the table. I think each of the most recent funding rounds and we continue to focus on cash exits in the portfolio that deliver value for shareholders. It's a big focus for us this year.

And if I -- should think, Sam...

The other thing to say, I did not -- in my portfolio the company continue to perform very well in the time we've held it and the market is [ contracted ], the valuations are down but the company continues to be very...

Its performance is actually truly remarkable, isn't it? I've rarely seen a company grow as fast as that company, I say. And with extraordinary profitability as well at the gross profit line. Yes, and Greg's already said, it's not a public company. So you have much less chances to trade in certain cases. I'm going to move on down a bit. I'm not sure -- it's a question about -- but I'll quickly do it. Nanopore, and this is a quote, Andrew, from our report accounts. We remain convinced by long-term value of investment statements have been made since IPO. Share buyback from supporting existing development company have been a better investment we would suggest throughout this period. Well, it's not really a question, I don't think -- unless anyone thinks, for me to answer that. One for Hysata [indiscernible]. What's the rough timetable for Hysata to deliver products to customers?

Well, that's our laser focus. So we've got commercial scale building blocks at the moment, a really exciting mix of strategic customers. And if you look at the market, a lot of these big green hydrogen projects are going FID, final investment decision, over the next several years, and we'll be really well placed to participate in some pretty big transactions around those.

A bit of a general question, the M&A market is apparently showing signs of life, according to the banks. Has the company seen any approaches to portfolio companies, could be hard to answer that specifically -- from the general account on that, Greg?

Well, yes, you wouldn't expect us to go to talk about specifics, but we, too, are seeing some signs of life in terms of inbound and also outbound. I mean, obviously, a number of our companies, as they're maturing, are thinking very carefully and some of them have Board committees that are dedicated to the exit opportunities and the strategic partners for those companies. So I think I would say that's a fair reflection of what we've seen some signs of life, some green shoots.

Next one is a tricky question, but I'm going to give it you Greg anyway, we're near the end. From Luca D. Which are sectors you invest in you expect to perform best in '24? And why?

Well, look, the idea is to allocate the capital to those highest opportunity areas. As I said, we've been very focused, and 8 companies have had about 50% of the cash invested over the course the last 24 months. In terms of the sort of the shorter term, the identifiable catalysts are very significant in the healthier future part, the Life Sciences side. Does that mean that we're then going to turn those into commercial deals and cash exits? That's the job that we need to do if the data are good. So I think that looks very compelling. On the deeptech side, we've got some fantastic businesses like Hysata that are accelerating growth. That AI opportunity across the stack is also significant. And then cleantech, we've got some incredible companies there. Hysata, particularly, as one of those. So all 3 areas offer really compelling returns. We're in 3 because we think it operate -- it offers a balance of focus and diversification. So yes, I wouldn't -- we will reflect that in our capital allocations, and you'll see those over the course of this year and beyond.

Yes. Actually [indiscernible] Robert, a neat question. I've got one last one, which I think is actually a statement, but I'll read it anyway. Question 31 for those that are counting. It says, I'm happy with buybacks. So not all [indiscernible]. Open brackets. No need to read this out, but I thought I would anyway. So that, I'm glad to say we are at the last question. I think I'll briefly hand back to Jake at this stage. That's the last question. Thank you.

David, that's great. Thank you all of you for being so generous of your time in addressing all of those questions that came in from investors. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended, just for you to review to then add any additional responses, of course, where it's appropriate to do so, and we'll publish all those responses out on the platform. But Greg, perhaps before really just looking to redirect those on the call to provide you with 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.

Thank you. Well, closing. IP Group offers liquid diversified exposure to investments making impactful returns. The key messages are that our portfolio is increasingly focused, and there are many portfolio milestones to drive those positive impactful returns. We're financially strong, and we're very focused on delivering profitable cash exits. With those exits, we'll continue our commitment to delivering shareholder returns. And we very much look forward to updating you on our progress throughout the year. Thank you all for your time.

Great. That's great and thank you once again for updating investors this morning. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it 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 morning to you all.