IP Group Plc (IPO) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the IP Group Plc Full Year 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 can review all questions submitted today and we'll publish their responses where it's appropriate to do so on the Investor Meet Company platform. Before we begin, as usual, we would just like to submit the following poll. And if you'd give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from IP Group Plc. Greg, good morning, sir.

Thank you very much, Jake, and thank you all to everyone at Investor Meet Company for once again hosting this live update. It's open to all shareholders and prospective potential shareholders and a mark of our continuing commitment to transparency in reporting. With me on today's full year results call, I'm joined by our Managing Partner, Mark Reilly; and our CFO, David Baynes. So as usual, this presentation will be available on the IR section of our website. And before I go any further, please note the usual important disclaimers about the information that will be in this update and particularly the nature of any forward-looking statements that might be contained within. So in terms of what we'll cover today, I will provide an overview of the group's performance in 2024. I'll then pass on to Mark, who will provide an update on a number of our key balance sheet portfolio company holdings. David will then run you through the financial results, and then we'll return for a summary and into Q&A. As always, as Jake said, please do post questions in the Q&A section, and we'll endeavor to cover all of them either live if time allows or otherwise, we'll do it via the platform. So I'll start with that full year overview. So I think for those of you who joined us for the half year results presentation, you'll recall that I highlighted the focus that was being placed by me and the team on delivering cash exits as sort of a major priority for this year and that the maturity of our portfolio was sort of beginning to translate into portfolio exits, and that momentum appeared to be building into the second half with a number of potential further exits anticipated. And I'm obviously pleased to report that we did indeed complete a number of further exits during the second half of '24, and that resulted in a total of GBP 183 million of cash proceeds realized for the year. And indeed, this performance was significantly ahead of what was again a pretty sluggish period for liquidity across the venture capital market. Now this outperformance on profitable cash exits enabled us to continue to deliver on our commitment to make cash returns to shareholders. And as you'll have seen, we've significantly accelerated our buyback program during the year. We bought back GBP 30 million worth of shares during calendar '24, and then we announced further buybacks totaling up to GBP 70 million, which we continue to implement during 2025. Now in today's release, you'll see that given the persistent discount at which our shares continue to trade, we now intend to allocate 50% of all realizations achieved during 2025 to cash returns to shareholders. As always, we'll continue to review this proportion as a Board based on the relative attractiveness of all of our various capital investment opportunities. You'll also have seen in today's release that as a result of further good progress on realizations during 2025 to date, we've added a further GBP 10 million to our buyback program, such that the commitment on the current program now totals up to GBP 80 million. And to put that in context, that represents -- that GBP 80 million represents almost 20% of our current market capitalization. And since the commencement of our buyback program, we've now bought back and canceled more than 10% of the group's shares in issue. Now despite this outperformance on exits and our accelerating buyback, our underlying NAV per share performance was minus 15%. I, David and Mark will cover the main contributors to this performance shortly. But as you would expect, this performance is both disappointing and it's well below what we believe is achievable with our business and our portfolio. As a result, and as I described at the half year, we've taken steps to proactively address the structure that we operate under and our capability and our cost base, and this has resulted in a reduction in our net overheads run rate of approximately 1/4 on an annualized basis at the end of 2024. And while we've had a small number of companies that have failed during the period, many of the fair value reductions represent reversals of previous fair value increases. So several of our portfolio companies raised money in 2021 and early '22 and some haven't grown into those valuations. As we'll describe later, although we've seen a fair value reduction for those companies, in many cases, this represents a resetting of value, and there remains a significant value creation opportunity for those companies given the size of the markets that they address. And overall, we continue to see a significant opportunity to deliver positive NAV per share performance. Mark will talk more to this shortly. And then finally, as shareholders, regular listeners will know, we've been building out our relationships with pension funds in Australia to manage private capital, and that includes managing a commitment of AUD 435 million for Hostplus, one of Australia's leading superannuation funds. We continue to believe there's a significant opportunity to continue to build out those relationships in Australia. And while things are definitely moving more slowly here in the U.K., we're increasingly confident that long-term private capital will start to flow towards scaling the types of science and technology companies that IP Group helps to create, fund, nurture and grow, and that includes under initiatives such as the Mansion House compact and as a result of the other pension fund reforms. So I'll cover these in a little bit more detail. First of all, I'll turn to one of the sort of standout successes of 2024. That was our investment in Featurespace and our support of that business through to its sale to Visa, which completed in December. As I said at the half year, this is a very compelling business, which is addressing growing multibillion-dollar markets in fraud. This was a business that we first invested in, in 2012, and we supported the company across 7 financing rounds with a senior member of our investment team, John Eddington, being a key member of the Board. We were joined on that journey by a strong syndicate of co-investors, including the likes of Insight Partners, Highland, GTV, and that is a network that we will continue to co-invest with in the future. We consistently guided that feature space revenue should be approaching sort of $100 million on a run rate basis by 2025, '26. And I said a decent revenue multiple, a company value of about $1 billion was realistic at that point. Now as it transpired, the company with our full support achieved approximately that exit level to Visa, and we were delighted to announce that in September, and that was in 2024, so a year or 2 ahead of what we were planning. We were the largest shareholder in the company at exit at about 20%, and we will receive total proceeds of GBP 134 million, having invested about GBP 23 million. It's worth pointing out that GBP 134 million is about 80% higher than our carrying value at the start of 2024. And we consider that, that 6x multiple and high 20s percent IRR or annualized return represents a great financial return for our shareholders. But it's also important from an impact perspective that Featurespace's anti-fraud and anti-financial crime tools will now be rolled out across Visa to protect a much wider group of customers. So that was a standout success. That said, it was achieved during a very active second half of 2024 in terms of cash realizations in July, and we realized GBP 9 million from a partial exit of NASDAQ-listed Centessa. We completed the sale of Garrison that we've announced in the first half. And then in October, another exit from the therapeutics portfolio in the form of Kynos Therapeutics. And the majority of that GBP 134 million of cash proceeds for Featurespace we received in December. You can see that there, GBP 119 million, and the balance of GBP 15 million will be received in 2 tranches in '25 and '26. In December, we also announced the secondary sale of some minority holdings in 9 portfolio companies across the group's balance sheet and our managed funds. And through this transaction, we expect to generate up to approximately GBP 15 million of cash proceeds and all of those sales overall were at a small premium to our half year balance sheet holding values. As you can see from the slide, we've completed about half of this figure to date, and we continue to work on the balance during '25. So that positive momentum on exits continued with the completion in early '25 of a number of exits that we announced in 2024, and we've now received more than GBP 20 million cash from exits so far in '25, which has led to the additional GBP 10 million that we're allocating to our buyback program. And although I'm very limited on what we can say due to SEC rules, and we've also noted that Hinge Health made a recent announcement that it intends to list on the New York Stock Exchange. So I mentioned earlier that delivering these cash exits is one of our sort of most important objectives during 2024. And it's worth pointing out that this was achieved despite continued challenges from a liquidity point of view in the VC market. and the Pitchbook NVCA report, which generally describing conditions in the U.S., which are pretty applicable to the U.K. and Europe as well, noted that exit activity has been the blockade limiting VC for the past 3 years and return-generating exits for the market have been few and far between. And you can see this in the chart here. So on the chart on the left shows our exit performance for the past few years that's in pound millions over the past few years. And on the right, albeit with different units of measure, you can see the total value of exits across the VC market in the U.S. as a whole. And you can see that 2024 remains less than half the value seen in 2019 and 2020. Interestingly, the Pitchbook did note that during the past 2 years, the largest exits, both in terms of public listings and acquisitions tended to concentrate in health care and information technology, which you can see from the previous slide, was also our experience, and we believe this continues to support our conviction around the value that can be delivered in these sort of subsectors of deep tech in which we operate. Moving to shareholder returns. So as Douglas notes in his Chair statement today, the gap between our share price and our net assets remain sort of stubbornly and frustratingly in place. And while this is also largely the case for a few of our listed peers on the London Stock Exchange and indeed for some much larger balance sheet investment businesses globally, we've been taking increasing steps to retire capital at prices that we consider to represent very compelling long-term value. Now of course, at all times, we have to balance this opportunity with the fact that almost all of our portfolio companies require further funding. And in most cases, some of that is likely to need to come from the group. But our success in generating liquidity has enabled us to continue to return cash from exits to shareholders, and we have significantly accelerated our buyback program during 2024. As I mentioned, we've announced 2 new updates on that front today. Firstly, given that persistent discount, we will now allocate 50% of realizations achieved during 2024 to cash returns to shareholders We'll obviously review this, and we'll update on our plans for 2026 and beyond in due course. And then secondly, as I mentioned, we're applying that approach to the GBP 20 million or so realizations to date, adding a further GBP 10 million to our buyback program. So we completed about GBP 30 million of buying back shares during 2024. So we've got a further GBP 50 million to go. And following the release of our results this morning, we are doing so again at the sort of maximum allowable pace under the safe harbor rules of about 25% of rolling volume. At these levels, at these share price levels, hopefully, they won't all be done at these levels, but we'd be retiring about another 10% of our market cap in addition to the 10% already retired. And in fact, it's worth saying to all shareholders, the level of shares that we have bought back is now approaching the level of authority that you approved at our AGM in 2024. So to ensure we actually have the right authorities to execute the current program, we actually need to seek further shareholder approval, and we'll be doing that at a one-off general meeting towards the end of April. The notice of that general meeting is being posted out to shareholders today. So I mentioned that we outperformed on exits, but we underperformed on overall NAV per share returns with a 17p per share reduction. Now Mark and David can talk a bit about that and -- but I'll cover a couple of the key areas. So first of all, the largest overall contributor was Oxford Nanopore. And while we saw something of a fair value improvement from the position at the half year, the overall reduction in the year was still around 7p per share. In terms of Nanopore sort of business performance, I'd make sort of 3 observations. Firstly, the company did deliver good growth in 2024, about 23% in constant currency. That was significantly ahead of its peers, and this was a result of their focus on expanding presence into high-value applied areas such as clinical, biopharma and applied industrial, which now make up about 30% of the company's revenues. New product launches, particularly the lockdown Q line series are essential for delivering some of these more regulated end markets. Secondly, Nanopore announced several big landmark contracts and sort of strategic collaborations that included with the U.K. government, U.K. Biobank and Precision Health in Singapore, and that adds to existing relationships with the likes of the Mayo Clinic in the U.S. for precision medicine in cancer and genetic disorders. Those collaborations will add revenue and expected to advance genomics-driven health care innovation around the world. And then my third observation is Novo Holdings joined the register as a major shareholder during the year and the Ellison Institute of Technology is now the single largest holder at 11%. This is in addition to BioMéria and strategic relationships that the business has with NVIDIA and Apple, that Novo investment was part of a small primary fund raise and our modeling now shows that the company can comfortably trade to its 2028 cash flow breakeven. Now the more recent results have evidently disappointed the market. In our view, the company has taken an appropriately prudent view of the impact of NIH budgetary challenges in the U.S. and sales restrictions in China, but it means 2025 growth is anticipated to be nearer that achieved in '24 than the 30% median target. Although we think that the recent cost control measures mean the bottom line impact is likely to be minimal. So we can still see how the company achieves its anticipation of EBITDA breakeven in 2027. Now the second category, and David is going to talk about this a bit more in the financial results relates to -- is the sort of the knock-on effect of this ongoing tougher funding environment for growth stage companies on those businesses that need to raise capital reasonably imminently. And a number of these businesses have highly differentiated product offerings and address multibillion markets. However, nonetheless, that funding environment is definitely more challenging than a couple of years ago. And this includes businesses such as Oxa, which is our world-leading industrial autonomy software business, and Mark will provide some further color on that one shortly. And then the third major driver is sort of commercial delays or technical setbacks specific to a particular company. And of course, the challenging funding environment doesn't help, but it's largely down to specific issues with the company. And this includes companies like Ultraleap, which is developing the sort of world-leading hand tracking technology, which had some commercial setbacks. Again, Mark will talk about that one. And another example of this category is, of course, Istesso. And this is one where we did have a technical setback. This is our single largest private company holding by value. And of course, during the year, we were frustrated as were shareholders that Istesso was not in a position to release any data from its Phase IIb RA study. However, in February this year, Istesso did provide an update, and it was disappointing that it didn't achieve the primary endpoint, however, it was also encouraging that the trial results reinforced leramistat, which is the name of their compound. It reinforced that novel mechanism of action and its effectiveness in both protecting the bone of people living with rheumatoid arthritis. And we also saw statistically significant improvements in things like bone erosions and improvements in disability and fatigue in patients, and that is a huge positive impact for patients. Now the company will publish full study results shortly and plans further Phase II studies to further evaluate the unique potential of that drug to promote what's called adaptive tissue repair, both in RA and in other conditions. And in our initial review of the data, both sort of internally from our team and from independent external specialists confirms that there is genuinely something unique about the mechanism of this drug. And so we are supportive of the company continuing to pursue this development. We're also pleased to report that Istesso is sufficiently funded to conduct those additional studies, which the Phase IIb justifies. However, given the setback and the knock-on implications for monetizing the compound, we reviewed the carrying value, including with the support of Deloitte and with the review from our auditor, KPMG, and reduced the fair value by about GBP 32 million or 3p per share. So as we entered '24, we recognized that the appetite for higher risk and early-stage assets was likely to remain cautious, and there's a lot going on in the world, lots of elections and disruptions to trade and investment flows and lots of geopolitical tension and military conflicts. And we were also very aware of the continued discount between our NAV per share and our share price. And so as a result, we agreed with the Board a number of priorities for us to deliver in '24 to seek to address that and optimize the group for growth. And first of all, as I mentioned, we proactively delivered on profitable realizations. We continue to focus down our investment strategy, and we extended our buyback, as I mentioned, we reduced our net overheads. And we've maintained investment discipline, worth saying that we've invested about GBP 63 million down from GBP 70-odd million, which was less than 10% again of the total capital, GBP 780 million raised by the portfolio as a whole. And we also were successful in raising a further GBP 95 million of additional managed private capital, partly through Parkwalk and partly through an extension of our relationship with Hostplus. And even these actions have yet to have a sustained impact on NAV per share or our share price indeed. So we continue to work tirelessly to deliver against these and others including now using our capital to even more aggressively retire our shares at these prices. And as you would expect, the Board continues to review all options to deliver shareholder value. So just a quick summary of how the business is now set up. We've clearly sought to reduce net overheads and to access additional private capital. This is the way that the group is now structured. And increasingly, we're making the bulk of our early-stage investments through our Parkwalk platform here on the left. Here, there is a lower cost of capital arising from EIS tax relief, and it's very well suited to preseed and seed investment. Even in the sort of the challenged markets for raising EIS and BCT funding, we tend to raise about GBP 30 million to GBP 40 million per year. This provides management and performance fees for the group as well as a very differentiated investment pipeline. The next stage of funding after that tends to come from the balance sheet, and we're doing later stage Series A and on from the permanent balance sheet. This offers capital returns to shareholders directly. And a lot of the value, as you'll see in Mark's slide, is in businesses that we anticipate have the opportunity to exit within the next sort of 2 to 3 years. And then finally, on the right-hand side, this is where as businesses start to scale, it's certainly something which is a target in the U.K., they need further capital beyond the level that we can provide from the balance sheet. And so we've complemented the balance sheet with private scale-up funds, and that generates management and performance fees for the business, but it also helps to ensure that as those companies mature, they can get better access to growth capital, hopefully generating better returns for shareholders. In terms of scale, Parkwalk is about GBP 0.5 billion of assets under management. The balance sheet is about GBP 1 billion, and we're aiming to scale what is an existing few hundred million on the private fund side to at least the same level as the balance sheet over time. And then finally, I said earlier that we have seen an overall reduction in NAV per share, but we continue to see this significant opportunity to deliver positive NAV per share performance that will be enhanced for long-term shareholders by our current active buyback program. I've covered Oxford Nanopore and Istesso. They're the 2 largest holdings by value. Each represents about 10% of our NAV per share. I'm now going to pass on to Mark to cover the next few as well as touching on some of those companies that I mentioned have seen a resetting of value for this year for various reasons and yet continue to have very significant upside potential. So Mark, over to you.

Thank you, Greg. Good morning, everybody. My name is Mark Reilly. I've recently taken over the responsibility of running the whole group portfolio. You may recall, I've been on these calls before when I was running the technology side of IP Group's business where, of course, we've delivered quite a lot of success in recent years with the exits that Greg talked about, Featurespace and Garrison in 2024 and prior to that, the WaveOptics, which we sold for over $0.5 billion. So intending and hoping to bring that success across the group level portfolio. Regrettably, my first job is to convey to you with contrition a write-down. As Greg said, the drivers for that were a continued drop in the price of our holding in Oxford Nanopore. That was the largest contributor, but also there were market headwinds and a contraction in the availability of co-investment capital and the associated price erosion that causes as well as some commercial setbacks in the portfolio, and I'll go into a little bit more detail on that. But the positive message is that those were setbacks, they weren't write-downs, they weren't write-offs, they weren't sort of complete loss of opportunity. And history tells us that venture capital as a business model relies on outsized returns from one or a small number of assets that pay back and deliver upside on the rest of the portfolio. And inevitably, some of those challenges fall first and the sort of fluctuating journey to those outcomes can be a tough one as we've seen this year. But we do continue to have a whole stable of candidates to be the assets that delivers that really sort of high outsized return to deliver return right across the portfolio. And of course, the degree to which that potential is priced into the current value fluctuates with the market, but it was high a few years ago, it was lower this year, but the fact is that, that potential remains. And I picked out a few of our sort of most mature assets to exemplify that and to really sort of characterize that potential. All of the assets on this slide are delivering transformative products in multibillion, $10 billion-plus market opportunities, picking out the first one you may already be familiar with Hysata, which is our hydrogen electrolyzer company. Electrolyzer is basically a unit that converts -- that creates hydrogen. It's how you form hydrogen. And they are commercializing a new type of hydrogen electrolyzer that is far more efficient than you can currently buy. If you buy an electrolyzer today, it will be about 75% efficient if it's a good one. And the Hysata electrolyzer, they've shown that it's capable of 95% efficiency and they have some milestones coming up this year, technical milestones that are sort of validation points for their device. They're building a scale-up version of their device at the moment. And if those technical milestones are hit and the data is looking good so far, then there is a very sort of immediate opportunity to gain customer traction with that device, and they're selling into a $17 billion projected market in 2030 for hydrogen electrolyzers. So we see a lot of upside in that opportunity. The second asset covered on this slide is Artios. They are developing DNA damage response pathway drugs for treatment of cancer. They have already published some early data in late 2023. They published some data where they said that durable confirmed responses were observed. And so we take that to mean that they're seeing a reduction in visible effect on tumors. And so now they are doing their Phase II trial to -- which is expected to complete this year to prove that effect out in a larger cohort of patients. The third asset on this slide is Pulmocide. So Pulmocide make a drug that treats a fungal infection of the lung. There is a fungus called aspergillosis, which we all inhale. It is naturally occurring in soil and in fertilizer, and it doesn't usually do you any harm, but if you have a reduced immune system or other sort of lung conditions, then this can be very dangerous and in fact, fatal. And pulmocide has a drug, an inhalable drug, which is a sort of novel mechanism for treating this condition, which is showing very promising signs. They have already done some trials on this drug and they showed that it potentially has fewer side effects, better efficacy and improved patient outcomes in existing drugs and their Phase III trial is due to read out next year. So they're getting a lot of interest already in their progress. Hinge Health, we -- as Greg said, we can't sell about due to SEC rules for another company targeting a very large market. So that's sort of exemplified the opportunity. But I also wanted to emphasize this point that, yes, we have had some write-downs in the portfolio this year. In addition to Nanopore, there were some private companies that we wrote down. But all of these companies still have that existing opportunity that they have an opportunity to deliver upside for us and to -- they were not write-downs because these companies have failed. They were write-downs because they've had challenges or set back to market, contraction or access to funding challenges, but they are not write-offs. They still give us an opportunity to retain value. Ultraleap had setbacks simply because the market for virtual and augmented reality technologies has developed a lot more slowly than anybody, including Apple and Meta and all the top players in this space anticipated and didn't get the market traction that they hoped for in the time scale that they hoped for. But they have a huge family of very fundamental patents in this area of hand tracking and haptic feedback, and we will use hand tracking for interfacing with computers in the future. And so we have formed a partnership to monetize that patent portfolio, and there remains good potential for us to get a return on our investment in that asset. Greg talked about Istesso. Obviously, disappointing not to have hit the primary endpoint in that trial, but it did generate a lot of encouraging signs that there is something really fundamentally exciting happening with this drug and there's something compelling from a patient perspective with this drug. And so we now learned a lot and we know what we're going to apply to the next stage of trial the drug. So there's still a lot of potential there. First Light Fusion, they frankly failed to raise money with the largest quantum that they wanted to raise. They had a business model that relied on building a fusion reactor and having not been able to raise money to do that, they have now completely pivoted their business model to be a specialist equipment or specialist component supplier to the people who are building infusion reactors, the people who are developing usually Fusion as an energy source, sort of much more a picks and shovels play that allows them to be supplied to the market and in fact, is already generating revenue today. So a good opportunity there to value in that company. And finally, Oxa on this slide, so they raised money in a market that was very, very strong. We've been circumspect about this. They're coming up to raise money again. We don't know how that will play out. We expect that they will raise money, but we don't know how the price of that round yet and so we've taken a small impairment on this, but it's still very exciting from a commercial perspective. They have software deployed in vehicles that are running carrying passengers today. One of the few sort of system integrators one of the few companies to go through a system integrator to put into a vehicle in that way and to run their software on the road and in lots of off-road applications. They have several partnerships that are going through trials at the moment that have very large upside if those trials are successful and sort of early signs of promising uptake of that technology and operate applications like airports and ports and so on. And finally, the -- in addition to these sort of high-value companies, the ones that sit at the top of our portfolio by value, there is a whole stable of assets that have the potential to be the next candidate to sit in that sort of a near-term exit category. We have lots of exciting companies coming through, again, targeting very valuable areas of the market. I've just picked out a few of those, but there are a lot to cover. IntrinSic is a semiconductor company that is making smaller feature memory technology. So at the moment, we have a limitation in the feature size that we can apply to random access memory, and that gives us a constraint that we can't sit random access memory on the same chip as processors and so you have a bottleneck in your processing. And IntrinSic has a technology of the only 12-nanometer nonvolatile memory in the world at the moment, and that should take out later this year. And so if that is successful and the technical parameters of that technology are hit, then we have a very compelling technology to completely transform a $100 billion market opportunity in [indiscernible] memory. Oxehealth another company is going very well, well into revenue, now supplying 50% of NHS England's mental Health Trust, have customers in the U.S. as well. Genomics uses genetic databases and advanced algorithms to understand the genetic component of disease. They have some very compelling partnerships with the likes of GSK, Vertex and others. So the point being there's a lot of kind of potential set beneath the large component of value in the portfolio and that quarter of the portfolio that's made up by our sort of smaller earlier-stage assets. There are a lot of candidates to jump up into those high-value buckets. And so in summary, a lot of candidates that delivered that upside return. The write-downs were write-downs. They weren't write-offs, the opportunity remains and a lot of assets in the lower value portfolio that have the potential to deliver future returns as well. Over to you, David.

Thank you. Thanks very much. Hello, everybody. Good to be with you again. Just quickly go through the financial results. I mean it's a relatively short section, but I'll give you a quick summary of the key points. Cash, very good, as you heard, very strong, up about GBP 60 million, up about 25% and we'll look at the kind of cash waterfall in a minute and be able to see the bridge from last year to this year. Net assets, as we heard, less positive, down to 97p per share from about GBP 1.14 this time last year. It's about a 15% reduction in NAV per share. It's about a GBP 200 million loss over the period. Net overhead slightly down in the period. We'll talk about that in the net down from 22 to 19. Now actually at the year-end, a lower number again, but I'll talk about that briefly when I do costs. So really probably come to the main messaging what is in that loss effectively. So on the green side, on the positive side on the left-hand side of the screen now, obviously, feature space is a key part of that about GBP 56 million of that GBP 66 million. There are a couple of [indiscernible] which made it up to about GBP 66 million. On top of that, there's some other quoted companies in the next door box, in terms for example, doubled in the year and these are the companies which we either exited or sold partially. So about GBP 80 million but lists on the left-hand side of the screen. In the middle, the actual basic up rounds, down rounds, other movements on platforms, for example, relatively neutral, actually always sort of cancel themselves out. So probably where the main story is, I'm afraid on the write-down is on the right-hand side of our screen. We've talked about Oxford Nanopore. It's a publicly listed company. Actually, it's trading rather good. Actually it's been achieving the numbers it said it would do. But in a difficult market, it hasn't performed well and the share price is down, there's EUR 66 million of one go. And then leading to the presentation Mark just gave the kind of cash flow of company actually is extremely strong. We're still very excited about some of like Fusion and Oxa, which is mainly due to the funding environment. So in both cases, those companies have actually funded later than we expected. So they haven't yet fully funded where we want to at this stage. When you're in that situation, it's quite difficult to do anything else than have a wind-down. It's hard to carry valuation sometimes relatively old, both cases, one funding round for '21, one was '22. So relatively old, you can't buy on them anymore. We haven't yet completed another funding round. And therefore, you really have to take a decision to be pretty prudent and take relatively significant write-downs. We very much hope when subsequent funding rounds happen, which we believe they will on both those companies, we hope being relatively prudent. But that's about GBP 40 million that Fusion, for example, and Oxford is about 1/3. So that really accounts for that. And then you have about GBP 100 million, a little bit over GBP 130 million where there are actually I would say setbacks. So we've heard about obviously very unusual in that missed primary endpoint, but a lot of very interesting and really disruptive sites in secondary endpoints in terms of bone repair. Unavoidably though, we had to rerun those numbers, and we've had to write that down by about GBP 31 million quid in the period. Ultraleap, as Mark just explained to you still an exciting company, interesting new business model for generating license income. But given the primary market hasn't been successful, we had no choice but to do a significant [indiscernible] down by about GBP 26 million. And then the last one in that category, a company called Crescendo, which is a drug company, actually a prostate cancer trial did have some good evidence of success, but unfortunately, not enough -- not over enough patients to make it competitive with other drugs in the market. And as a result, we've taken a very prudent view actually written most of that. So that really explains you come in all that loss in those small number of companies. Next slide, actually, just one I give pretty much every year. It's pretty simple. Our numbers are actually pretty simple, which is good news for CFO. predominantly balance sheet, we have a cash position in a small amount of liabilities, most of which, by the way, are contingent on exits. So you get paid if you get exit items such as [indiscernible]. You can see the reduction from about GBP 1.2 billion to just under GBP 1 billion of NAV. In terms of on the right, the actual distribution of portfolio is still pretty similar actually. They've got the vast majority, 83% of it in the top 40 companies. So we are although having in our very model, we have a lot of companies, but we have a lot very exciting stage stuff as Mark explained 3 companies a moment ago. Actually, a lot of the bank is really restricted and focused on a fairly small number of companies. And then not too much on to this slide, we talk about each time. Normally, where we normally fund we are, we've got about 1/3 of the portfolio is funded. It doesn't need to raise more money. It might raise money if it wants to, but it doesn't need to raise money. And then we normally have about 1/3 funding this year and 1/3 next year. Actually, as it stands, a relatively small amount this year, but there were enough as you've heard to mean we broke down some of our bigger assets. But most are actually out of '26, pretty hopeful we'll get those assets funded in the first half and then you should have a relatively small amount that require funding in the second half of the year, which, of course, is a good place to be combined with our strong cash. So this is what cash performed. A quick look at the numbers. We'll see we invested about GBP 63 million, a little bit less than years recently. We're investing between GBP 70 million and GBP 90 million, but about GBP 63 million invested, very good realizations, underpinned a lot by that Featurespace exit, but also Garrison in there and a number of other exits, meaning we generated over GBP 183 million of proceeds there. So 3x what we invested. We've heard about share buyback program. We bought back GBP 30 million. We're still committed to GBP 60 million. Overhead at GBP 19 million as we'll hear in a minute, going to be lower soon, little bit of debt, very small amount of debt funding and other working capital items that on occasion on the licensing side, we collect money on behalf of other parties that we have to distribute working capital movement. But actually, in the year, we GBP 85 million, which obviously is very strong, probably making point still strong today, GBP 277 million in the bank as I speak to you. So that -- although we're 3 months later, that position has remained pretty strong. I think last for me, just around the overhead that I touched on during the year, we did a very comprehensive review of overhead. We have reduced significantly, down by about 23%. You don't see that in the numbers. You only see a 13% reduction in the numbers year-to-date. And that's because we made most of reductions in the second half, and therefore, we haven't had a full year impact. As at the year-end, the run rate has reduced by about 23%, which means that we've got about [indiscernible] million net costs as opposed to GBP 22.1 million at the beginning of last year. And we've achieved that by focusing on our strategy, being more efficient, relying more for sourcing, and that's allowed us to actually reduce our cost across the group without actually significantly detrimenting our ability to perform, and we hope start delivering good returns going forward. So with that, I'll hand you back into your questions to Greg.

Thanks very much. Dave, very good right. Just very quickly to summarize and then get on to questions. We've got a number of questions in the Q&A section, which is very good. Thank you, everyone. So I guess, firstly, just to highlight that there will be -- there's more than 35 milestones of various subscriptions coming up across that balance sheet portfolio during 2025. Obviously, some will be good, and some may be bad, including on the clinical side of things, given the sort of statistical outcomes that are possible there. But as Mark mentioned, a number of them are also product launches, technical updates. And indeed, included in that is first revenues for our Fusion business, First Light Fusion, consistent with that now becoming a specialist component supplier. So there will be plenty of milestones to mark us against during the portfolio over the course of the year. I did also want to give shareholders visibility on what we are prioritizing for 2025 and beyond. As I mentioned, in '24, our main priority really was being able to deliver profitable cash exits. And I think we delivered on that despite a tough market. Clearly, the priority for '25 is to get the NAV per share moving positively again. We talk in the release also about continuing to deliver those cash exits, profitable cash exits. We can see line of sight on GBP 250 million from the private portfolio by the end of '27. And we do have line of sight on which companies are potential contributors to that. Of course, the timing and the outcome of those companies is always the most difficult thing to predict, but we do have a very strong pipeline across a number of companies that we are working towards. As I mentioned in the release, we are upping the level of our cash exits that we are using for cash returns to shareholders, which we are doing this by way of a buyback at the moment. The eventual game plan as a shareholder myself is that we get back to a position where we're not trading at a significant discount to NAV. And at that point, we can reconsider using mechanisms such as the dividend, which pays back cash to all shareholders equally. And when the share price isn't at such a significant discount to NAV, that's obviously what the Board will consider and look at. Another area that we're targeting is to access further private scale-up capital. And as I said, I do believe that there's a great opportunity in Australia. Ironically, we're having more success with the Australian superannuation funds than we are with those in the U.K. That's not to say that we don't have support from U.K. long-term capital. Railpen, one of the most active DB schemes in the U.K. is our largest shareholder. We have a number of other shareholders on the register from that investor group. We have Phoenix, the biggest DC provider in the U.K., which provides our long-term debt. And we also have co-investors in a number of our funds. There are many ways that the sort of Mansion House Compact, et cetera, can be delivered through IP Group, and we're working hard to do that. It is slow, but we're seeing increasing signs that some of that capital may start to flow, whether it will be this year or early next, not sure. We're definitely working towards it being this year. So I think we can access further private scale-up capital. I've got greater visibility, as I said, on those relationships in Australia, which, of course, is relevant for companies that we have across the portfolio. But hopefully, that will be joined by the U.K. And then I just want to also -- I made this point a bit at the half year. And at the moment, we are very much focusing our balance sheet capital, as Mark said, on delivering those companies that are going to deliver NAV share returns and cash returns in the next few years, which does mean we have deliberately scaled down the number of new investments that we make on balance sheet. But that's not to say that we don't have a rich pipeline. Most of that opportunity pipeline is being delivered through our Parkwalk managed funds. We do 20 to 30 new spin-outs a year through that. And while the strategy that I described, which is to use the Parkwalk funds as a sort of sourcing engine and then funds from the balance sheet, we haven't actually done many of those because the level of capital that we're allocating to new deals is very low at the moment. We think that's the appropriate balance for delivering value to shareholders, delivering NAV per share. But as we are successful, we will be able to do that in the future. So to summarize the key messages, hopefully, by now, you'll have these sort of drummed into you, but we did outperform an exit despite the market being tough from a liquidity point of view for VC generally. That's led us to primarily accelerate our buybacks. We've got a GBP 50 million program still outstanding at the moment, which is more than 10% of our existing market cap. And that's having already retired and canceled 10% of our shares, we hope that, that's going to have an impact on share price, a positive impact on share price, of course. Our NAV per share did decline. I hope that Mark has been able to set out to you the reasons why we're confident that in many cases, those are resetting of value and setbacks rather than write-off of opportunity. And so we do believe that there is a very significant opportunity to deliver these positive NAV per share performance and the fact that we're doing buybacks at these levels will enhance the NAV per share return for shareholders. And that will hopefully yield results in our share price. And that is, obviously, the most important KPI for shareholders, myself included. So with that, I will now move to Q&A. Dave, would you -- you do a great job every time.

[indiscernible] But no, I'll go. So looking ahead, everybody, we're 45 minutes in. I will warn you, we will probably overrun the hour. We will carry on and do all the questions. That's what we endeavor to do. I'll let you know when the hour is up, those that might need to go. So I've got 28 of these to go through. Number one, what are -- I'll answer this. What are the annual costs of the company? And are they justifiable given the poor performance this year? It's a very fair question. I just explained the cost base a moment ago down from GBP 22.1 million, probably to about GBP 17 million this year. So quite a significant reduction during the period. So we have implemented quite a big cut. We think it is rightsized. We always have to review the costs, but we think what we did was right at the time and remains right today. It's not something you want to do often or regularly. And we think given our belief in the future growth of the company, we are about right sized as we stand. But as always, we'll be watching all costs. And one key thing we need to do is make sure they don't start creeping up again. So we're quite focused on that. Second question, I'm going to pass it to you, Mark. [indiscernible], I don't know who submitted them. [indiscernible], where do you see the global hydrogen market developing? Quite a big question.

Yes. Yes. So I mentioned this figure of GBP 17 billion market by 2030. We think it's one of the biggest markets in cleantech. There are no practical alternatives to hydrogen for zero carbon production of steel and shipping in ammonia, fertilizer production, methanol production between those sort of obvious adopters of green hydrogen, there is about 12% of global carbon emissions, they account for about 12% of global carbon emissions. So those 4 sectors alone have demand for something like 200 megatons of zero carbon hydrogen, hydrogen that is produced using renewable energy sources. So clearly, a company with disruptive efficiency, much more efficient electrolyzer has the opportunity to take advantage of that. But its obviously -- we're also kind of recalibrating our assessment of the market opportunity in regard to the U.S. because there are some headwinds there and challenges in adoption of clean technology. But what we've observed in cleantech over the past decade is that people quietly get on and do what is most economically effective and economic efficient. And of course [indiscernible] delivers a much more efficient solution. So we think that there is a very large market in Europe and a big opportunity there, a very large market in the U.S. as well and a lot to go up for high stuff.

Thank you, Mark. I'm going to go ahead. This is a question from [ Ken C. ]. I'm going to go your direction, Greg. Is delisting Oxford Nanopore and growing the company privately a solution envisaged by IP Group? Can you answer that to some extent?

Look, we can to some extent. I mean we tend not to comment on specific companies as regard to corporate transactions like that. I mean we obviously, as a major shareholder, look at all of these things and obviously speak to the other major shareholders at Nanopore as well as engaging very regularly with the management team and the senior team. So I guess no options are off the table as is the case for any public business.

This question is from [ MB ]. Again to you Greg. The company is managing third-party funds. Hostplus is mentioned. Our investment decisions made in a way that equally respect the interest for shareholders and third parties? And if so, can you explain that?

Yes, it's a good question. We take this very seriously, obviously, because lots of managing capital is a regulated activity, and we have regulated businesses here in the U.K. Parkwalk is an example, and regulated businesses in Australia. There's a number of mechanisms as to how this is done in terms of the investment mandate for each of those different pools of capital and the investment decision-making body, i.e., the investment committees for each of those pools of capital tend to be different. So for example, in Parkwalk, we have a separate IC -- it's a separate FCA authorized entity, a separate IC, which takes decisions that are in the best interest of the EIS investors in those funds. And we have a separate investment decision here on the balance sheet side, for example, that considers where we're making co-investments. I mean it is something that needs to be managed by all businesses that are managing pools of capital for different stakeholders, and we've got good experience of doing it, and there is benefit to a healthy degree of sort of collaboration, but also an appropriate differentiation of decision-making. So that's how we manage it.

Moving on quite a long question, but I'll read in full. Again, I'm going to point it to you, Greg. [indiscernible], Mark says, the share price discount to NAV reported at the end of '24 is still too wide at circa 44.8%. We agree. It was circa 49% at the end of 2023. Do the Board consider the actions taken to reduce discount by way of the GBP 30 million share buyback program in the year a success? If not, would they consider purchasing shares themselves with actual cash to signify to the market their confidence in the company. It is noted that the directors sold shares in the year, but did not buy shares other than receiving their non-paid options.

Well, clearly, the GBP 30 million hasn't had enough of an impact yet, has it? That's why we're doing more and why we're accelerating more. This question probably came in a little bit -- it came in, I think, a bit before we talked about what we're doing to accelerate that buyback further and continue to retire more than 10% of our share capital again. So we are doing this aggressively given that significant discount and persistent discount to NAV. We do always consider purchasing shares. I've done it regularly and certainly, we look at it again now that we're outside of our close period. On the -- not necessarily to comment too much on rent policy because I'm not sure how appropriate that is. But it is -- the reason that we have these disclosures around directors sort of receiving options and buying and selling shares, we've set up our remuneration to be as long term as possible to a long-term business. And so our bonus opportunity is -- the max bonus opportunity, I think, I'm right in saying is the lowest bonus opportunity on the FTSE 250 by percent. We've done that deliberately and not only that the amount that we make in any given year, 50% of it is deferred into shares that then obviously, it contributes to our minimum shareholding requirement, but the intent is it's sort of locked up for a further 2 years to make it even more long term in nature. The mechanism to do that, unfortunately, is to grant nil price options that then have to be exercised and then much like a bonus, you pay your tax on it, but it shows up as a sort of a purchase or a gain of shares and then a sale. We're looking at whether or not there's a way to make that a bit more efficient in terms of the mechanism because I think it does -- it's not unhelpful to make it appear that we're selling shares. Actually, what we're doing is covering the tax, which we would have paid had we received the bonus in cash. So -- but we do definitely look at buying shares for sure and understand that that's sort of signaling.

Yes. Thanks very much. I'm going to highlight where I think the questions are coming from analysts. I've been asked in the past to make it clear for analyst questions. And I think this is Paul C, which I'm guessing is you, Paul Cuddon. Thank you for being here. Probably for you, Greg, any prospects for additional secondary sales of minority positions within as we did in the year?

Well, we continue to look at that all the time. We looked at a number of possibilities last year. And all the time, you're balancing sort of the pricing and what's offered and the terms versus what we think we can deliver and how it compares to using the returns to pay for share buybacks or other returns. So we continue to look at it. Obviously, when we've got some progress on that front, if we find something that works, then we will, of course, do that again. If we can deliver value to shareholders in that way, we'll absolutely do it.

A second one from Paul. Again, I'm pointing it to you, Greg. Any interest from big pharma in [indiscernible] secondary endpoints, understandably maybe limited to what can you say about a portfolio company.

I mean the short answer is yes. And as yes, insufficient to result in something commercial. But yes, I mean, there's a significant amount of interest and the company intends to make some much fuller disclosures around particularly those secondary endpoints and what they mean both in RA and in other indications, and that should be available for us to talk about in the coming weeks. So we'll definitely update more on that at the half year.

Thank you. And next, a different analyst, Sam England from Berenberg. Thank you for being here, Sam. We appreciate it. You mentioned in the release that you are targeting more than GBP 200 million in exits by the end of '27, and a promising pipeline of realizations. Can you talk about the visibility you have on this? And to what extent does it rely on a pickup in public private market to support exits? I'm going to chuck that ball to you, Mark.

So well, I've talked in the presentation about a lot of the highest prospect assets that we think have a midterm realization prospect. It's hard to pin down precisely when that's coming. I wouldn't have predicted exactly that Featurespace was going to sell in '24, but we thought that, that was one that was coming up in a sort of 3-year window and indeed, it was a great outcome there. So similar now, we have a stable of assets that sit in the category of having the potential to deliver in the near term. And those questions disappeared, I can't answer the second bit of it. But...

I think it was about what public and private...

Yes, the funding environment. So we have already seen M&A interest in several of those assets that we talked about. Does it rely on the funding environment picking up? I mean it relies on third-party funding. I don't think it necessarily relies on -- it's only going to be delivered if there is a complete sea change in the availability of capital. I think that these are strong companies and even in relatively difficult markets, strong mature companies with a near-term exit potential tend to raise money. And so I don't envisage that we're going to have a sort of major problem unless there is a pickup in the availability of capital.

And also, we're talking about the realizations from the private portfolio as well. So we're not seeing any of our public companies included in that number [indiscernible]. I might make that...

If a company were potentially to IPO might become one that we could [indiscernible].

Going back to Paul Cuddon. You're back. Nice to have you. I'm going to go this to you, Greg. When do you think the proposals on the Mansion House Compact could start to be implemented? And what would it mean for backing visionary ventures in the U.K.?

I don't know. I mean we obviously hoped sooner. I suppose that my observation is the nature of the -- I spoke on the last year's full year results and at the half year about it felt like sort of some of the plumbing so this was being put in place, speaking to potential signatories to the Mansion House Compact and others who manage money for them. There still are a number of changes, particularly to regulations around things like fee caps, et cetera, that have been pushed through or going through government and legal changes. So that is still to happen, which is sort of causing some tardiness, I would say, on the delivery. So I hope in '25, I mean, the Mansion House Compact had a 2030 backstop date. So time is getting somewhat tight on this for those who are committed to that. But I think the nature of the conversations we're having are starting to move more towards the implementation. So sort of hopefully, second half of this year. What does it mean for back in visionary ventures in the U.K.? I mean, there is a huge opportunity here to deliver growth and to deliver investment returns. We've done work with PitchBook to look at what's the nature of the funding gap in the U.K., and it's very, very prominent beyond Series B. The U.K. is very well set up actually for early-stage investment, particularly through EIS and more can be done and more is being done and will continue to be done, and we'll continue to do that. But the real opportunity is backing businesses to scale, so more companies can get to the scale that Featurespace did before they exit. A great example is YASA Motors, which we back through our EIS funds, and that achieved a sort of GBP 100 million, GBP 200 million company valuation on exit. It's now a core part of Mercedes-Benz [indiscernible] and delivery of electric drivetrains. Fortunately, that one is still here in the U.K. and we've backed through -- again through Parkwalk another spinout of that technology from that business. So hopefully, soon...

Gently move on to [ 34 ] questions. Just so everyone is aware, it's 11:00. I do understand people who've booked for the hour, we quite understand may need to fall away. We're going to carry on and try and get through all of our questions. Perhaps I'll have a go at this one. David C, thank you for this. Buybacks don't really return cash to shareholders in the way the dividend would. Why not to take the latter? I have some sympathy for your point. I understand the point entirely. We think that will still remain the most efficient way to return capital at the moment. You could argue if you take out cash and let's say, [ Nanopore ], which is obviously a liquid position, some investors consider our discount have to be as much as 80%, [ better than ] 80% position. And so by using our cash to rebuy the shares, we are actually getting an immediate return. If you believe in [indiscernible] we do, and we believe it endorsed by the fact that every time we sell assets over the last 3 or 4 years, we sell them at a premium consistent pattern in 2021 through '23, and very much last year again, consistently sold the premium and seem to support our values when we have realizations. It does make economic sense to buy them back this way. It should you know over time that the residual value to all remaining shareholders has gone up as the remaining NAV per share for each individual does go up and actually should improve our position in time. And that's why we maintain with it. And next question is how much -- this is Sam again. Sam England. How much of the portfolio needs to raise capital in 2025? And how are you thinking about the valuations these businesses might achieve relative to the last time they raised money? Is this factored into cash [indiscernible]. Yes, it very much is. I actually had a slide earlier, which shows you something like about 45%, it's not so much this year, but it's quite a big percent next year that does need to raise money. So -- sorry, I apologize, 25%. This year, there isn't very much. We've only got a small amount remained in the first half and the relatively small amount in the second half of the year. Most of it's now moved into next year, '26, but we very much do factor in what we think companies will raise money at. One of the things that's quite difficult when you're doing this process is actually knowing what the value is likely to be until it kind of hooves into view if you see what I mean. Something that may not raise money until '26, it's actually very hard to determine what the economic environment is going to be like, whether the company achieves its milestones and what value you like to get. When they become more imminent as in this year, you begin to get a much better idea. And I think I explained during my short presentation, but a number of those sort of write-downs in companies we still believe a lot in actually was because we need to factor in what the potential future funding round might be at. So it's very much one of the primary factors that we actually factor in when we're considering a valuation. Next one, I might pass to you, Mark, let's see. How many early-stage investments are directly invested? Did you mention the number, I can't remember, in Series A over the last 3 years? It's bit of an exact question, I'd like to [indiscernible].

I don't have the number in front of me. I was trying to off the top of my head to come up with the co-investments I've listed, 6 or 7 here that we've co-invested in over the last few years. So I mean it depends on your definition of Series A, but we certainly got a lot of assets alongside.

I think I've sort of covered you don't mind me just given the Board think the share price doesn't affect the company's true value, is the Board personally investing in shares other than through regular purchase. I can't find any information after April '24 and directed deals. I think it's fair to say we did answer that. Next one is -- so the next one is Andrew, and thank you. Obviously, the priority is to support the existing portfolio and realize their value. However, the pace of share buybacks has been slow given the scale of discount to NAV. Return to shareholders are rightly focused on share buybacks rather than dividends, I'm glad to agree when the discount is so large. But in absence of dividend, the rate of share buyback has been far too slow. The pace has even slowed in March. The daily purchase should at least double. I'll answer that one. Yes, it's fair. One of the reasons it slowed in the last month was we go to what's called a close period. And during the close period, we're accretive being in sight because we're beginning to get an idea what our results look like. That meant we weren't able to change any instructions of the share buyback. And we actually set it at 6%. We've been buying back about 15% of the previous 30 days average deal flow. We are likely to increase, in fact, we did increase that this morning. So we'll increase that then a bit technical, but the thing called safe harbor, the maximum you really meant to do. And we've increased to that max. So we'll start buying back at about 25%. I think given the very low price, I think given the rather high volumes in the last couple of months, should have seen going through, I would expect to see us buying back at a faster pace. And last time in the situation similar to the back end of last year, we've begun to buy for 800,000, 900,000 even 1 million shares a day. And of course, if you start buying at that way we're buying 1% every 2 weeks, so we think that probably it's built in that you'll start seeing an increase in the rate at which we are buying back. Next one, David D. with Istesso, is the effect of the treatment potentially slower to emerge than the time line of the primary endpoint? Or is the effect of the treatment different to that originally being targeted? I'll give that to you perhaps, Greg, on these [indiscernible], if that's okay.

No, I understand the question. Great question, David. We think that, that might be the case, yes. And the Phase IIb was done over effectively a 3-month period for various reasons, ethics and the fact that all the Phase II drugs in RA that have gone through in the past 2, 3, 4 years were done on that same time frame. However, that could well be an explanation. And I'll leave it at that for now because there will be more information on this, as I said, from the company in sort of coming weeks, but that's a very good observation. And we think that is potentially what's going on when you cure the underlying condition, the physical symptoms, and take a little bit longer to be reduced.

I'm going to give this one to you as well, Greg. Andrew M., thank you. Please expand on how the group scale-up fund will operate?

The scale-up fund is an opportunity here in the U.K., primarily focused at Series B and beyond. And the intent, as I said on the sort of the funding strategy slide is to add additional capital at the Series B plus stage and sort of series all have different definitions depending on who you talk to. But effectively, as businesses hit the point of commercial traction, they often need to raise rounds that are in the order of magnitude of sort of GBP 50 million to, say, GBP 100 million, GBP 200 million of funding. And there is a very big gap in the market for that type of funding, which is particularly acute here in the U.K. The intention is that, that would be a product that addresses that. It's also better suited to sort of a [ fixed life ] fund being done privately. So that's the intent.

Thank you, Andrew. And the second question, might share this one a bit, Mark. How realistic is Oxa valuation given the lack of contract awards over the last 6 months?

Well, I think it's the right valuation. It's got a lot of investor interest. It's got very exciting commercial traction. I see a lot of high prospects with that company. I don't want to be specific about the -- where they are commercially because that's confidential to the company, and they wouldn't want us to share some of that. But we spent a lot of time on these valuations and we think it's the right...

Yes, I agree with that. We're relatively well informed as funding -- potential funding rounds going on, we're relatively well informed and so we have an eye to that. So I think we feel relatively confident in it, but you never know. It is a very difficult process finding these companies even when you're quite imminent of something else, you never know for sure. So we'll see, but we're relatively confident we've got that one right. This is quite an esoteric question from Gavin A, thank you. I'll give it to you, Greg, and Mark will join. Why continuing with share buybacks not improved share price rather than investing further in new companies, which given the chance to improve NAV. What is the principal objective of IP Group?

Gavin, this is the regular debate or decision that the Board of IP Group has to take with guidance from the executive team who are managing the business from day-to-day. And it is a balance. So we've historically sought to invest 80% of our proceeds back into the portfolio and use 20% to return cash in some form to shareholders. At the moment, we think that the level that the shares are at represents very compelling value, but we do also need to invest in the portfolio to deliver NAV. So we're doing this from a NAV per share point of view and share price point of view. So obviously, buying and retiring shares at a discount to NAV per share inherently improves the NAV per share. That's the intent. But you can't do that [indiscernible] because then the portfolio NAV per share will reduce at a greater level than the cash that we're using. So we do agree principal objective of IPO is to deliver investment returns. However, given the discount to NAV, we're being more -- we're using more of our capital to seek to address that discount.

Thank you very much. And Andrew, another question -- sorry, Andrew M., another question. This is, I think to me, write-down in First Light Fusion valuation following a large write-down last year, raises questions about valuation accuracy. Quite a question, but I get your point. Without sounding too defensive, it is probably one of the hardest [indiscernible] to value. Obviously, the potential for First Light Fusion achieving some kind of fusion breakthrough is absolutely immense. If it can be achieved over the next 10, 15 years, it's completely whole new alternative energy source for the earth that could power managing incredibly cheaply. Actually, what terminal value that is hard to measure. And it makes it very, very difficult to actually work out what a likely ultimate valuation will be. We originally did put the value up considerably at the end of '21, early '22 when it achieved fusion and perhaps in hindsight that was too much. I think now we're now much more anchored to realistic kind of funding round valuations. However, every year, we diligently have third-party valuations, and we tried to juggle this difficult asset value. And I think we've done a relatively good job. I accept in hindsight, we wouldn't have taken that significant increase we took probably at the time of future being achieved all those years ago. But that aside, I do think we managed to try and get relatively fairly valued.

I think the other thing to say is it's a very different company to the one that it was a year ago, it's had a complete pivot in its business model and we've valued it differently.

Thank you, Mark. Yes, that's well put. Another one from Andrew M., again to me, what further measures on cost reduction in 2025? I sort of covered that. We're not going for another, I think, reduction. We've done particularly well to scale the business. However, as I said, we do need to keep a sharp eye on cost. They can creep up surprisingly with inflation. So we will still be keeping a very sharp eye on what we allow to add to our overall running cost, and we'll try and keep it at the level we have it at.

I guess worth saying you'll see from the results, although a small impact the Board and the exec and having no pay rises again this year. So that mitigates some of the effect of inflation. You'll see that in the remuneration.

You'll see that in the glosses when they come. You won't actually see that yet, but that's right. We will, certainly at Board level, not increase again for the second year. It does seem appropriate given the performance. Andrew M., again, this is to you, Mark, definitely you. First Light is focused on revenues. What realistic time frame?

Yes. I suppose the kind of under premise of the question is that Fusion is still an emerging area, and there isn't a large market for Fusion power production today, but there are a lot of people making very serious efforts to develop Fusion. They need improved technologies to help improve the power of their systems and to amplify the effect of the reactions that they're generating, which is what First Light Fusion does. And so the company is projecting good revenue growth over the next few years. They're already in revenue today and have the prospects of generating millions of pounds of revenue in sort of 3-year time horizon.

Andrew M., again. What -- I think, Mark, what is the major area of investment in 2025?

Yes, this is -- we spend a lot of time thinking about where our thematic focus areas should be. We have other seminars on this topic because the teams intermittently run seminars communicating our focus areas. So we're very interested in the impact of AI, and we have a lot of investments in the impact of AI in the compute stack. So I talked about Intrinsic, the semiconductor memory technology company, that enables to have computing that will service the increasingly intense needs of AI processing. We also have technologies that sit within the communications network because our demands on our communication network will change a lot as a result of AI. We remain very focused on cleantech, whatever political fluctuations are affecting that industry, we still see a steady march towards a clean energy adoption, and we have technologies that are very compelling and exceed the benefits of fossil fuels in those domains. And so those are sort of some of the key areas for us, but we could spend a lot of time getting the team to talk about those.

Next, it's going to be a very short question because [indiscernible]. Any sense of time range? No. We don't actually and [ we know more than you ]. John H., sort of covered this. When will you reinstate suspended dividend? Many holders require just by holding shares.

I'll cover this one. It's a balance, lots of different views on this. I definitely understand the position of retail holders, myself included, obviously. And I think the right thing at the moment is using the capital for buybacks. There is an intention over the long term share price gets back to closer to NAV, then dividends are an efficient mechanism for a category of shareholders to receive cash returns.

We have 10%, don't we? Well, it's more than a 20% discount, we're going to maintain the buyback this way rather. Next one, Milosz, nice to have you. Another analyst, analyst from Edison. Thank you for being here. This is going your way, Mark. Have you seen any impact on funding rounds due to investors diverting capital into AI businesses?

Yes. I mean every business is an AI business or will be soon. It's sort of enabling technology in the same way that the Internet was in 2000. So it's not quite the way I think of it in terms of our own investments. I wouldn't say it's a trend that I've noticed. I wouldn't say anybody [indiscernible] me up and said we're not going to invest in your portfolio company because we're diverting all our capital into AI. It's possible. That's a sort of market mentality. But a very large cohort of our businesses are either enablers of the opportunity in AI or have the opportunity to leverage AI to enhance their own product proposition. So I see it as we have a value proposition for people investing in AI as opposed to losing out to that.

Fair enough. The next one, I'm going to point to you, but it may not go on too long because it's really it's the same question, it's a tension between should you be doing buybacks or should you be investing in your own portfolio, which we have sort of covered. From Andrew M., again, massive gross cash balances 21st of May '25. Please highlight what portfolio companies can give a better return every 12 months than just substantially increasing the rate of share buybacks? I don't know if you want to come with any particular ones or we've covered that anyway. We probably covered that -- we have covered that quite a lot trying to get that balance right. Michail P. have seen us from 29th question. What's your plan regarding ONT? Will this continue to be a strategic long-term investment? Or you prefer to monetize it partially or in full? Should the share price move closer to its fair value? How do you protect against ONT being subject to an opportunistic takeover bid, probably for you, Greg.

Yes, Mark, I have you on this as well. I mean all companies in the portfolio are up for sale at the right price, and that's definitely the mandate of the business for sure. So if the share price was closer to what we consider to be fair value or indeed reflected what we consider to be a good price, then yes, we would be prepared to monetize it partially or in full for sure. Absolutely, that's the case. How do you protect against being subject to an opportunistic takeout bid? I mean the truth is you don't. There are -- and I mentioned earlier, there are a number of what I consider to be strategic holders on the register, people like [indiscernible], Novo Holdings, Ellison Institute of Technology, us, and who clearly have got views on the long-term value of the business, but also have the same financial objectives that other shareholders have. So I think there are some strategic holders on the register. But as an investor in that business, you've always got to consider whether monetizing it is the right strategy, and we'll do that as that's appropriate.

I'm going to push on through, give everyone the guide, it's about 11:20. We'll definitely finish at 11:30. I think probably 1.5 hours will have had our share. So let's try and get to the remaining 7 or 8 questions. Please, this is Phillip N. Just who exactly is selling the shares? Who are the main sellers? I could start on that. I'm not going to name individual institutions. We have this ourselves. We get share at least once every month. We analyze it every month. We look at it. And in most months, that are not consistent. So that's not consistent. During the year, this year gone by from '24, there were a couple of institutions. Normally in one case because the fund manager retired and they closed the fund. In another case, they reallocated the funds, they did actually reduce their positions in the year. And that's why we saw during the year there were a couple of occasions where quite big lumps came to the market. So 10 million, 12 million trading in a day, but generally, on an ongoing basis, it's more, ironically, a lack of buyers with sellers, I think probably. There's not a persistent seller at the moment over and above those kind of instances where we saw out in the year. I won't name those funds, but you'll see them drop off the register if you look at that. Next question, how are your peers performing in terms of NAV per share and funding challenges?

Not for us to comment on the peers.

Probably not. The only thing I might say is in the sector, these discounts are relatively consistent. We're not the only people in this sort of sector who have, for some period now since interest rates turned, been suffering relatively big discounts on that. I think that's a fair comment. Okay. Russell H., question 32. Can you give us an idea when you believe or how long it will take for the NAV discount to justifiably disappear? You must discuss this presumably on a regular basis.

I think this was a question that came in half an hour ago at 10:52. So my guess is that we've covered the vast majority of our views on this. I mean, yes, we discuss it very regularly, every Board meeting, and it influences our capital allocation decisions significantly. So very regularly as to when it will return, that's a difficult one to call.

John H., a slightly more robust question. The discount NAV remains massive and Mansion failed to address this. The shares trade at close to an all-time low when the company listed. Isn't it time to wind up the company and distribute the proceeds?

And also, can we have a vote on this? I mean the -- as I said during the presentation, we, the Board are reviewing all options all the time as you would expect any public company Board to do. We consider that the company has the opportunity to deliver value for shareholders, long-term value for shareholders, and we're very focused on delivering shareholder value, and we see there a number of growth drivers over the coming months and years. So we continue to keep this under review and regularly reviewing our existing strategy amongst a range of other options.

Russel H., to you Mark. Again, you may have answered this. So actually, this is after you talked about your pipeline. Can you tell us a little bit about the next set of companies we're looking to invest in startup or early-stage businesses to become the next big business over the next 5 to 10 years. I know you did touch on...

It was after that, but since then I've gone through our sort of focus areas and so on [indiscernible].

Lastly, we actually go again here. The last 2 with some more like comments. John H., it's a balance on dividends, but no reason not to do both, but fair enough, I've been giving significant level of discount at the moment to the buybacks for the reason I've given. And the last and not least, none suspended dividends to buybacks. Okay. It's I think at the same point, the same person, John H. Thank you very much for that. And hopefully, we've covered that in the answers we've given. I can report we have finished all 36 questions. Jake, I think we do hand over to you or Greg now.

Yes, absolutely. Greg, David, Mark, if I may just jump back in there. Thank you very much indeed for your presentation and for being so generous of your time then addressing all of those questions that came in this morning. 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. But Greg, perhaps before really now 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 just to wrap up with, that would be great.

Yes. Thank you, everyone. Thank you for your time. Thank you for your support this year. Mixed year this year. We've outperformed on exits. We've accelerated buybacks. Obviously, as we've discussed in the Q&A session, there's a lot of debate that goes on internally about that capital allocation and what's the right balance and what's the right mechanism. But we do have an active buyback program that's currently more than sort of 10% of our shares in issue. And the NAV per share decline is definitely not what we're targeting, and we're working very hard. We've made changes in the year. We continue to change that forward-looking strategy. We're seeking to access further scale up capital. But I hope what you take away from this is that both the buyback reducing our share count and the strong portfolio upside potential that we have in a number of those leading companies will yield results both in terms of NAV per share performance this year and our share price. And we do recognize that is the most important KPI for shareholders, and the Board is fully aware of it, and we're working very hard to deliver returns for shareholders. So thank you all for your time and look forward to updating you at the next set of results.

Perfect. Greg, that's great. And thank you all 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 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.