Ip Group (LSE:IPO) — Final results

0:01 Good morning, ladies and gentlemen, and welcome to the IP Group PLC full year results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. 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 those responses where it's appropriate to do so on the investor meet company platform. Before we begin, I would just like to

0:33 submit the following poll, and 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 twenty twenty three full year results presentation. As always, really pleased to be working with the investor meet company team. These these these live updates, and they're open to to all shareholders, to all potential shareholders. They they reflect our ongoing commitment to to transparency and enabling a deeper understanding of the group, of our investment sectors, and our key portfolio companies. And as as many of you will know, we've continued to invest time, and we've had a, you know, very active year in terms of a a year round program of IR activities. And in fact, we've more than doubled IR activity in 2023 compared to the prior year.

1:28 At 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 onto the IR section of our website as usual. And please do 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 a short overview from me that's on the key messages for 2023 and the opportunity that we are pursuing as a group. The the bulk of today is then focused on two main areas, really.

2:13 The the the first is our portfolio, progress in the year, and the 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 and a. As Jake said in the intro, please do post questions in the q and 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 you have myself, the group chief executive, and we have David Baines, our CFOO. He will be running us through the numbers shortly. 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 two.

3:08 And I'm also delighted to 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 giving us a rundown of the opportunity that Hysata is pursuing. I should also say we do have Mark Reilly, as as usual, our managing partner in technology. He will be with us for the q and a section, in case there's any tricky questions on AI and the applications thereof. So on to, an overview. So this is an overview of the of the business and the year to 2023, and the the key things that you should take away from today are that we have a a focused business and portfolio with multiple upcoming milestones.

4:01 We have maintained our financial strength, and we have maintained our commitment to shareholder returns. So taking each of those three points in turn, the the strategy of the business in the last two years has really been one of increased focus. And to to try and put that into context, almost half of our investment in the past twenty four months has been into eight 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.

4:43 Specifically on on geography, we've taken decisive action in the year to deprioritize further investment in the Longview platform in The US, and we've decided not to proceed with our plans to raise a fund in China. And and while these are not easy decisions, we believe they are the right decisions in the current environment, and they are taken to focus our resources and our capital onto the highest growth opportunities. A mark on the portfolio side, a mark of the quality of the portfolio is is the breadth and the quality of our co investment partners. The portfolio as a whole, as you'll see there on the slide, raised about 700,000,000 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.

5:35 On the second point, you know, 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 73,000,000. Our NAV per share was, 115p at December 31. Now our overall financial performance for the year, which was a negative return of 13% on NAV per share, was disappointing and and definitely below our long term aspirations. Dave is gonna cover the main elements of of what comprised that shortly, but you will see that the 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 the more challenging current environment.

6:31 We are confident that the milestones ahead in the portfolio, a number of which you're gonna hear about today, give us the opportunity for significant NAV appreciation in the future. And then the final point, 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 in practical terms, I mentioned, we 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 on buyback rather than dividend for cash returns where the share price discount to NAV is greater than 20%.

7:18 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 two 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 75,000,000 to shareholders. So those are the key elements of this year's financial results. Now before I get into the sectors and the portfolio, I just want to remind the the the 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 twenty years, IP GROUP has played a leading role in creating a really vibrant ecosystem for science and technology commercialization in The UK.

8:27 We took a pioneering role more than twenty years ago in partnering with the University of Oxford. We were founders in a number of the 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 UK's most active investor in science and innovation companies, and we're also the most active backer of university spinouts in The UK, 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 are amongst the strongest in the group.

9:08 And 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 UK 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 Manchin House reforms. I'm very pleased to say we have a number of, the the sort of UK pension fund pioneers in this space as investors. That includes the likes of RailPen, Phoenix, and Schroders, M and G, Border to Coast, and we think there is an opportunity to do much more, and we are well positioned to to to work, to coinvest, and to partner with others in the space or who are interested in in getting into the space.

9:55 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 to is is is actually really quite simple. You know, 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 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 the value and the the risk reward profile of innovation. And these teams are focused on companies in these three areas.

10:43 And the investment profile over the next years is largely, as I reported in August, I said over the next sort of, eighteen to twenty four months, these would be the main drivers. That remains the case, and I'll come on to each of those shortly. And 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, you know, sort of big market numbers on a slide can be, somewhat meaningless, but these, these ones are particularly relevant to the IP GROUP investment case. I'm just gonna pick on two. So I'm, in context, first, I'm gonna I'm gonna start down at the bottom, in the regenerative future section with green hydrogen.

11:31 And it's 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 progressed through 2018 and the IPCC were asked to look at, you know, what how does this work? There was a pretty groundbreaking report from a group called the ETC, one of our key co partners, Rob Trozzona, he's a he's a commissioner there, and there was a report produced on the so called hard to abate sectors. That's things like steel manufacture, heavy transport, and it set out this sort of huge role for hydrogen in in the transition to net zero. And the numbers I have on here are actually from from Goldman Sachs, and they they represent they they estimate that about 1,700,000,000,000 of investment in electrolysis is needed out to 2050. That's a it's a big number, it's arguably a long way out, but you will see from Paul shortly about the meet the immediacy of the opportunity that is facing ISARTA in this area and how they are delivering against that.

12:34 And then secondly, back up to the top, in the healthier future area,

12:40 The the interesting thing here is there is you know, there's a there's a very well documented and huge innovation opportunity in how we 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 $1,000,000,000,000, 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 and Young or I think they're now called, estimate that biopharma companies, the top 20 biopharma companies, have about 1,400,000,000,000 in so called firepower for business development and for licensing of potential new drugs.

13:26 So our portfolio is is very well positioned for this opportunity with 10 companies in clinical studies and expecting data by the end of twenty twenty five. So in 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, just talk for a moment about, our broad, life science, portfolio. And I and I think we 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 two years. So a a couple of points to consider about the portfolio.

14:15 This portfolio has now been ten years, in the making. It's had, almost, 1,500,000,000 invested in 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 that we partner with in in financing these companies. And, and and and it happens that we've come to a moment in time where many of those companies are, at a point of delivering milestones in the coming two years that will provide significant evidence, of the efficacy of their drugs or their techno technology platforms, whichever it may be, and assuming success will drive significant, valuation uplifts or potentially cash, exits.

15:14 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 and and the important thing is these are all critical clinical studies. So even though quite a few of them are still in phase one, these tend to be phase one cancer studies, which are conducted in patients. And that means that we will,

15:44 achieve data from these, studies that will tell us, and tell the pharmaceutical companies that are that are looking potentially to to partner with some of these products or on some of these products if the drugs actually work because the the the the trials are being conducted in patients. So those are gonna be important readouts. And in a couple of cases, we think directly if positive could lead to partnering situations with the pharmaceutical industry. And then we also have a couple of companies in phase two studies in chronic diseases, and and and the data from those studies will tell us whether those drugs warrant going into phase three clinical studies, which obviously when you go into phase three, that comes with a significant uplift in valuation.

16:31 And then, for example, in the case of pulposide, we have there a company that's actually in phase three with its lead drug, and what successful data could actually lead to market launch in that disease area. So we just we'll focus on a couple of companies for a moment. If we talk about Palmicide, which I've just mentioned. So Palmicide, as I as I said, they have a product in phase three clinical studies, pivotal clinical studies for those who aren't familiar with the drug discovery and development pathway. Phase three 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.

17:26 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 thirty percent. 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 Pulmicide 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 in what's known as a special needs situation. And on the back of that, we're able to go to the FDA and get approval to go straight into a large pivotal clinical study, which will read out in 2025.

18:18 So we've got about a year and a half 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, three or four very significant transactions between pharmaceutical companies and biotech companies with drugs like Palmicides, in the last, couple of years. So we're really excited about the prospects, for Palmicide. 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 two thousand and twenty five. Another one I'd like to focus on is Crexendo, which works in the field of monoclonal antibodies and has a novel agent for the treatment of prostate cancer.

19:14 So, this particular monoclonal this particular class of antibodies, in 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,

19:33 billion dollar valuation deals being struck over the last few years for products like Crexendo's that have shown efficacy, in the cancer setting. And so Crexendo's, study is a phase one, open label study. The significance of that is that it's in patients, but we'll be get we'll be seeing data as the trial progresses over the course of this year. And again, if the data proved to be positive, we would expect to see significant corporate interest in the in the product and in the company. So there there there's a number of different examples here of really, very exciting, products that we expect to play out over the next couple of years. But it's not all just about, therapeutics.

20:18 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 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.

21:30 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 really, 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 genomic genomics technology to help them identify risk of disease and manage that risk appropriately.

22:16 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 a significant commercial traction continue across the course of this

22:31 year. And then I'll come on to one of our major names in the portfolio, Esteso, which I think you've all heard quite a bit about. So Esteso is significant because it's 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 two b clinical study for its lead drug, m b s two three two o 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 m b s two three two o, is, efficacious, in the treatment of rheumatoid arthritis. We'll 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 three 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.

23:43 The drug is, entirely differentiated from the current range of drugs for the treatment of rheumatoid arthritis, which is a huge market, about a $25,000,000,000 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 $4,000,000,000 class of drugs. So the FDA on the

24:29 back of those data has granted the company fast track designation for two three two o, and that will be starting a clinical study in pulmonary fibrosis over the next couple of months. So we're we're very excited about two three two o and looking forward to the data in q two. And with that, I will hand back to Greg. Thanks very much, Sam. And just to say there'll be questions time for questions at the end, if if anyone has any questions on the, the life sciences side. So on to, the second of our themes,

25:00 tech enriched future. This is really about the the global so called digital transformation. So this is the, you know, the comprehensive integration and and really sort of relentless increase in sophistication of of of digital technologies in 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, two, three trillion by, you know, the the the middle of the twenty twenties. And and, clearly, emerging artificial intelligence technologies represent some of the most, you know, profound techno technological trends that are really shaping the evolution of this whole sector.

25:46 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

25:54 last September on our website with a few of our portfolio companies. Really fascinating. You can access that via the website. And 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 twenty 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 of the of the sort of, you know, the computation stack, computing stack.

26:24 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 the communications layer, innovation here is gonna be needed to support all of the huge data loads and the rapid response times and the ubiquity, you know, literally everywhere that's demanded by next generation intelligent computing. So that's up in the the top right hand corner there, That's and why we're investing in companies like Xelicom. They are building advanced signal processing and error connect correction solutions,

26:58 and that really improves the throughput of wireless comms. Another good example that I've got there on the slide is is a business called Deep Render. They that's that was a new investment in the last year or two, 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.

27:17 You then sort of move up the stack to the the the computing layer, AI algorithms, and and this is something that that if you if you watch the 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 amount of parallel processing and to reduce bottlenecks in in memory, and all of this has gotta be done in a very energy efficient way. And that's why we're investing in companies like Intrinsyc

27:48 up there that you can see. That's a that's a a UCL spinout, and they're develop developing, some silicon oxide based, memory. It's a a nonvolatile memory, and it it overcomes the sort of the current limitations of flash memory chips. And the market for this, again, is huge. It's sort of into the, you know, 100 and 100,150,000,000,000 by, 2030. But the the current state of the art flash memory, it can't adequately support the demands of AI computation. So the chips that Intrinsyc are develop developing, they offer far higher performance compared to flash while using about a 100 times 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, Lumi.

28:41 If you then move up the stack again, the the human machine interface is changing fundamentally. You've heard Mark talk about this many times, becoming more human like as computing, to to interface with more human like computing. And the the whole, sort of extended reality ARVR XR market has seen some false starts in 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

29:14 some time. You remember we sold, our business WaveOptics a couple of years ago, and we've been nurturing UltraLeak, which is there 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 ultra leap hand tracking tech. And then finally, at the top of the stack or round round the wheel,

29:46 the software layer, and this is where we're investing in AI companies where the 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 and hear a sort of a deeper dive into the business.

30:21 And on this one, again, starting with the market opportunity, the the numbers I have back on the previous slide, we're talking about, you know, the sort of the overall data analytics market, that sort of $4,050,000,000,000. But specifically to feature space, Forrester anticipates that spending on enterprise software solutions in this area would reach by about 8,000,000,000 by the middle of the twenty twenties. 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 an applied AI solution, and what it does is it learns ordinary behavior of a of a of a customer or a person, me or people like me, and if that enables it to more quickly identify unusual or abnormal transactions. So it automatically kind of evaluates and then reduces

31:17 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 50,000,000,000 events, 50,000,000,000 sort of payment events each year protecting more than half a billion consumers from risk. In terms of value, clearly, value driver here is around continued strong revenue growth, and they grew revenues to 34,000,000

31:48 in 2022 and continued double digit growth in 2023. That was across a range of significant blue chip customers. 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 to be the most valued and respected technology partner in the payments industry. So one to one to watch and and progressing very well.

32:19 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, Keiko Ventures. Keiko is focused on The UK and a small number of European countries like Germany and The Nordics where uptake of climate technologies is significant from a consumer point of view. But the company we are highlighting today actually originated from our Australian business, which I mentioned earlier has some of the the best early returns

32:50 in the group at the moment. And we work very closely with the team at ISATA going from patent in 2021 to the business that it is today. And so it's 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 ICESat. Paul, welcome. Great to see you. Greg, real pleasure. Great to chat with you today and and to the audience as as well. And so so while you're pulling up my slide, maybe I'll start with the background I I've got here. So we're a a Sydney area based company in in Australia, and this is our facility just over my shoulder here. So we have an 8,500 square meter big kinda beach side 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 as as we grow.

33:54 So I wanted to spend just a couple of minutes talking a little bit about the business and and what we do, why green hydrogen's important, and kind of the the road ahead for Hysata. So firstly, for your listeners, Hysata, we're an electrolyzer company, and electrolyzers are the machines that split water, h two o, 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 abate sectors. So these are sectors that are in everyday life that are very difficult to electrify. So this is things like steel manufacture, the steel that's in our buildings and our cars, chemical manufacturer that is in everyday life including the fertilizers that that make our food,

34:50 a high grade industrial heat, and heavy transportation like 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 HiSat electrolyzer is it's really, really differentiated. So as as Greg mentioned, I found this opportunity at a university in at the University of Wollongong, which is about 50 kilometers south of Sydney with a professor I'd known for ten years.

35:37 And this professor has, you know, thirty years experience in electrochemistry and hydrogen generation. And he called me one day and said, Paul, listen. I got this super exciting idea. You've gotta come to my lab and see the performance and was absolutely blown away by the performance of the system. And it 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 the renewables. So the solar and the wind is the most expensive part. And when you use 20% less energy to to make a certain mass of green hydrogen, you need 20% less renewables. So this really redefines the economics of of green hydrogen production.

36:34 And this is translating to to 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 their operations. And our business model is to manufacture these electrolyzers. Our our first units will be manufactured in my building over the shoulder and ship these electrolyzers to our customers. And 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 size units to decarbonize their operations. So and these are pretty big orders, multibillion dollar potential orders with with these with these customers.

37:23 And what what's really enabled it is is not only the capital from our investor group, including IP GROUP, but it's also the team. So 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 with the customers. And there's probably two major elements to our, I think, our team and and to some extent, 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 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.

38:19 But we've got a really capital efficient way of of scaling our and manufacture of our product, and that's based 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 Stanford, but thirty years of high-tech manufacturing, including the hard drive industry where he ran a manufacturing division for his hard drives company in in Japan. And he also worked at Apple designing and mass manufacturing the haptic devices that that go in the watches and phones we use today. So he brings a, you know, volume manufacturing mindset right from inception that we've really been able to piggyback off and give this this company a a really outstanding road map to to scale the the the manufacturing.

39:12 So if I distill that altogether, our our value proposition is is multifaceted, but it really comes down to that efficiency. And our customers will need less renewables to power their electrolyzers. And that efficiency also translates to simplification of the system. We have less waste heat, so we've got a simplified balance of plant. So we win on OpEx with efficiency. We win on CapEx with the intrinsic simplicity. And then 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 to scale really quickly. So I probably have lots more to say, but I thought that was probably a good overview. And happy to take few questions from you Greg now or at the end of the session.

39:59 That's excellent. Thank you very much, Paul. Very exciting opportunity. Well, let's we'll fit all the Q and A. You're good to hang around for a little bit, aren't you? So we'll fit the Q and A and at the end, I'm sure some of the viewers may have questions as well. So what I will, with that, turn to, to David to give us a summary of the, financial results. Great. Yes. Hello. Really good to be back with you again. I'll go through this relatively quickly. I can summarize the financial position, a few key messages fairly briefly. As we've said already, we've maintained our financial strength, so we still have gross cash of 227,000,000. As you could see, that's any relatively small reduction from what we had last year, only about 15,000,000 less than we had last year. I'll explain that in a minute over a little cash bridge, which explains quite simply how we achieved that. We have had a reduction about 13% reduction in in NAV. We've gone from about £1.33 a share down to £1.15 a share. That's a write down the portfolio of 160,000,000, and I'll look at that. That's a total loss of about 175,000,000.

40:59 However, given our strong cash position and the fact that actually the share price has remained stubbornly low, still about 50p and, like, well below half of our NAV, we have commenced a 20,000,000 share buyback, which Greg will talk about a bit more in a minute. So first, we look at how we can try and summarize this kind of a 160,000,000 number I mentioned. There's been some reduction in value of the portfolio, and we've and we've summarized in the bucket thread. And probably the major feature, which Greg has already touched on, is that actually that the biggest area has really been about delayed fundraising. So not where we've actually crystallized the reduction yet, but where we've got some delay in fundraising, and therefore, we've made provision Probably two 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 is a great technical breakthrough, we did that time double the value, which is from about 57,000,000 to a 114.

41:51 We've actually chose to do it much that back down, about 50,000,000 reduction in that number there because we're taking the view until we actually get a firm valuation number. It's probably right to carry it back at where it was before. Actually, we knew it's previous valuation number. But, obviously, hopefully, during this year, we've got a valuation. We're confirm another number. Similar in America. In America, that's a a platform. We can't fund it, and there are other LP investors as they're called to invest in that platform. That sort of venture LP market in America, despite public markets being strong, that early stage venture market is still very flat, very hard to raise money. It's not just so our platform is 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 again, made it down by approximately half. We've taken about 40,000,000 out of that value, again is, you know, once we get some perhaps more fundraising, we have a better idea of the valuation there.

42:42 When you actually look next, much more casual actual down ramp where you've had a funding round and the price has been lower, actually, they represents about 27,000,000 of a of a reduction. And then, again, small account is market based, some event has actually happened in the company or something specific as well. So, in in that category, you have things where actually we changed our assessment of what the likely sort of revenue multiples are gonna be. But, again, they're relatively small amounts compared actually with, with actually delayed fundraising and such. And then I'll catch up up rounds. There are some up rounds predominantly around our sales, which we've heard shed check and uplift a little bit over 40,000,000. So funding rounds not yet completed, so there's no details of that. Didn't public domain yet, but but actually, that's kind of the main area where we've seen that happen in value.

43:28 Very quickly looking at that, of course, that reduction of about 175,000,000 overall, you can see reflected there. The total now going from 1.4 to 1.2. Perhaps more interesting, you look at what we call the donut graph on the right there. We've made this point before. Even at its lower value, about 115,000,000, we've actually our share price at only 50p. You can see that actually what cash representing about 9p, even net cash about 9p. You only have to add up the next four companies in the portfolio down to high starter, and there's a 50 p value. At the moment, the market isn't actually valuing any of the rest. Not none of our autonomous vehicle business or any of the other top 20 or any of rest of the portfolio. So I'm sure we'll talk about that a little bit as as questions come in. The next slide, really, again, very simple point we wanna make here. If you look on the right now, again, at doughnut graph, 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 76% of our whole portfolio. You add on the remaining to get at top 40, but 90% of all our value is focused very much in that those top companies.

44:36 We do still have a total of about 85 companies that's in the model. You know, we're interested in lots of relatively early stage, very disruptive and interesting technology. So have a very valuable pipeline in that 10%, but actually the value and the money is really much more mature companies. And then the other quick point to make is fairly consistent the way the the portfolio breaks down. When you add life sciences and all together, you have about 50% of our value with both cleantech and deep tech being about 20 to 25%. So it's fairly evenly balanced, and that's the pattern we've seen really, for a while now. I thought I'd quickly explain cash. It's actually relatively easy to do here. We, invested about 73,000,000, and we have a net of about 22. It's about 95,000,000. Well, if you add up the loan, we drew down 60,000,000 plus the realizations of 38. You get about 95,000,000.

45:25 So effectively, it was funded by those two mechanisms. The only real reduction has been in that dividend payment balance. The money has gone out to the group, and that pretty much reconciled 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 one says don't need to. They might fund. They might. They might choose to maybe they don't need to. It's about 13% this year they do. Clearly, next year. By next year, they're big proportion. We've got about 41% of portfolio will need funding then. It's still a year away, and we anticipate, yeah, hopefully, there may be some recovery in the market as well, which may well help that. But in the short term, we remain, you know, pretty robust, good cash on balance sheet. Our company is relatively well funded, not too many needing funding.

46:16 Valuation approach, I won't we did a deep dive in this last year. Very well attended by, the investor community. I'll just make the point that, actually, still the same valuation process. We're still getting an opinion for the auditors. We're were wildly cautious in our valuations. And you can see here about 17% of mark markets, and you know that. And then actually, that plus adding on ones where based upon the recent funding round or the last funding round or maybe some small adjustments, you actually get 80% of our value. So a lot of our values are actually, you can touch back to a relatively recent valuation event. Although we are still in the process of externally valuing 11 of our biggest companies. So we do do a very comprehensive valuation process and remain confident in those values. So, again, the last point I'll make, which we said before, we have this debt facility of 120,000,000, true down in the year, second tranche of 60,000,000.

47:07 Those aren't prepared for some time in '27, '28, '29, and are on favorable interest rate paying about 5.25%. We are actually in that other benign position of generating more than our income from actually paying on our loan facility, and then those repayments come in chunks in a. With that, I'll pass that 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 and the board remains very committed to that approach.

47:56 And in fact, in December, following, quite a a wide and continued consultation with our larger shareholders, I'm very mindful, as Dave said, of that continued discount. And now if we we decided 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 suspend 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 20,000,000 buyback. It's underway. It's progressing slowly for various technical reasons. Now that the results are out of the way, We will be be picking that one up, we continue to plan 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 75,000,000 to shareholders since 2021, and the 20,000,000 buyback is is in addition to that.

48:54 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. And I talked about that that great opportunity in AI across the compute stack, but particularly feature space and its continued revenue growth. And you heard today from Paul about one of our most exciting breakthrough companies, Isata. So I come back to those three 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. We're with over half of our investment over the last couple of years into eight companies, and we're focused in terms of geography, and we're focused on delivering cash exits.

49:45 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 a cash element, and the current 20,000,000 buyback is adding to that 75,000,000 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 ten minutes for questions. Great. Thank you. Thank you, Rob. Or shall I take over from 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 ten. For those of you who have to drop off at ten, we quite understand. We won't be talking offended, but what we'll probably do, if we do overrun, we'll carry on doing some 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.

50:41 Question comes from Steve White. Given the frozen UK IPO market The US focus on tech and realistic tech valuations, do IPO plan to target using Nasdaq as a route to market for a more advanced portfolio assets? I put that to you because obviously that's a a place where life science companies in particular. Yeah. I I mean, yes. Not not necessary for the reasons you you raised, but we have all particularly in the biotech therapeutic side, I mean, I I I don't think there's the the the AI market has been quite useful for a number of companies at a 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 or that may generate, you know, some of that some of those good data that I was alluding to earlier, I think the right market would be Nasdaq.

51:43 Again, nothing just simply because there is the bigger pool of investors who understand these sort of companies, the very isoteric technology involved and speak the language, etcetera. So it's just a more sort of natural market. But as you can see with a company like ONT, obviously, we 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, the end market. And and that's reflecting the fact, you know, although they're UK companies, we usually have international syndicates, backing those companies. So there are already US investors involved who would be the natural partners when it came to, you know, crossover rounds and then and then floating on Nasdaq. I hope that answers the question.

52:48 Thank you, Sam. Very comprehensive. John H, I'll read this in full. It said, if you really understood shareholder returns, you would not have suspended a dividend, forcing funds that require dividend paying investments to divest. I've never really seen it before. Why did you need to suspend the dividend? Do you need to create a history of reliable you need to create a history of reliable dividends to attract new investors? It's not like you haven't got enough cash, 200,000,000. I might I'm I'm gonna be very honest. I think maybe Greg would like to refer to that first. Yeah. I mean, it's a the 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.

53:33 There are 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 in NAV per share that we should be using the buyback mechanism. So the so the impact in terms of the our existing shareholder base is that actually that there aren't that many funds that are holding us as a as a dividend stock. So and that impact is is is quite minimal.

54:19 If I remember, it was actually money who does. We actually so we said we never like buybacks, never recommend them. In your case, make an exception given the the the difference between your NAV and your share price, we would actually understand why you would do. Interesting. I'll move on to the next question given time, which then again, I'll probably throw it this to you, Greg, if don't mind. Price is at the same level as it was ten years ago. So where is that for shareholders given some discount of 50% to the stake in NAV? Well, that's 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 been good need 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 as a board over the course of the last twelve months.

55:11 Thank you. Benjie, I got to address you, Greg. That's alright. What is the geographic strategy with a significant present presence in The UK and still very good success in Australia? I I think I can't. I don't know if that was post post the summary or not. I mean, the the geographic focus for the group is UK predominantly with a strong business and growing but smaller business in Australia, particularly given superannuation funds over there with whom we have great relationships and 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 we are increasingly focused as a group, and we are focusing our effort and our capital onto the areas that we think reflect the the highest value opportunities for shareholders.

56:04 Paul Stevens, I believe, one of our analysts, I suspect. Hello, Paul. Nice to have you on here. I'll have a go at this one. Nagging third parties is declined 650,000,000. It's about 700. Is that outflow or portfolio value reductions? If it was the latter, it's concentrated in a small number of holdings. Actually, mainly bought actually in one side of the park Walk side. They are unable to raise money at one stage earlier in the year, which may be raised slightly less 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 in increase that in in coming years. Yeah. There's a there's a sort of positive element to that, isn't there? Like, part of the reduction in in, or the reason the par ball didn't go up so much was because they had some successful exits, and the model is to return capital, which then, is reinvested.

56:54 And there and there is some exposure, I think, to Oxford Nanopore in one of the third party funds. Obviously, that's that's had an impact. And then, you again, Paul. I'm delighted Sam's online for this one. MBS, $23.20, that's the Stereso drug. The expectations of placebo is ACR twenty response rates. Would success be greater than forty percent response rate, versus the increasing dose? Have US based principal investigators shown interest in potential future studies? Yep. Thanks, Paul. Yeah. Last bit first. Yes. Very much so. And then as you can imagine, you know, what and you're 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.

57:40 So it's very significant when you think about the side effect burden, that current drugs carry with them. So so, yes, there's a lot of interest in the drug from, potential investigators for the phase three. And then, look, I think the the the the the whole landscape is shifting quite a bit. So you'll be familiar with the recent combination data that J and J put out, for a couple of the auto autoimmune drugs. Sanofi has been quite public and talking about combination looking for combinations in RA. And the 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 gonna compromise on efficacy. But you hope that the synergy of putting two drugs together will outweigh that.

58:36 So the the the beauty of two three two o is we don't need to dial down dose, to address any sort of safety issue because there is no safety issue in in our in our view. So it's, like, it's perfectly positioned for for combination as that becomes something that people strive for. And so, actually, increasingly, I'm not concerned about I'm not particularly folk I mean, I think it will be important to get an ACR result, which for everyone else is it it typically is is the primary endpoint in these studies. But I think if you're thinking about combination co formulations, adjunct therapy, then actually what do you want what you wanna see is differentiated profile, a differentiated profile. And that will come through the secondary endpoints, things like bone erosions, disability index, etcetera.

59:28 So I think any ACR result 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 endpoint. It needs to tick boxes, but 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 two three two o, you're gonna get a differentiated, profile. Thank you very much. I can pass the next one to you, Greg. Just so people are aware, it's now 10:00. So if people do have other appointments to go to, it's 10:00. We're gonna carry on, and we'll try and answer as many of the questions as as we can in a sensible timeline. Over to you, Greg. Post mansion house, pretty quite short answers on one. Have you yet seen any evidence of increased pension fund activity in BC?

1:00:15 Not not yet. I mean, look. We we think there's a big opportunity here. It's got to be done appropriately. You know, the FCA makes these points that it's, you know, it's it's around balancing risk and reward. We think there's a big opportunity here. I heard the chancellor at at the last budget talk about trying to make The UK pension environment more like that in Australia much as it pains us to say that the Aussies have been been ahead of us on anything. So I think there is there is opportunity. We do engage on this. There's there's various measures that hopefully will taken together improve the conditions for The UK to be a place for for the best companies to to to start, to grow, to scale, and to stay. But there is 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, we are, you know, actively partnering and actively co investing.

1:01:24 Brilliant. Next one, I'll I'll do, have a go at fairly quickly, from Charles W. Thank you. Could you please highlight the company's the greatest revenue growth across the board, though, alongside your shareholding in them? Very briefly, I mean, one shouldn't forget also Nanopore, which, although it has the the different forms of share price, did still send over about a 170,000,000 this year. Still expecting, depending on which analyst you believe, to something like a 190,000,000 next year. We still owe you just under a 1010% 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 you've mentioned in the report, from a couple of years ago, it's been about 28,000,000 That's growing considerably since that time. We own 20% of that one. Hinge Health, again, not a public domain, but turning over hundreds of millions. Extraordinary business growing very fast.

1:02:16 And we do own a small amount, 2% of that. That's still a valuable holding as a result of because it's such a significant revenue and speed of growth. And perhaps the last one I mentioned is Garrison. Garrison, we own 23% of that one, and that's grown. I think, again, it's in our documents. It's growing from a relatively small start. It's a very 60% compound over the last four years. So that's showing some very good growth. It'll be probably lower if you expect going forward, but that's another very fast growing business, I think, in our book. Okay? The list isn't exhausted, of course. I'm gonna move on to I'm gonna give it to you, Greg. Sam might have an opinion or mark at some point. This is from Charles H. A recent article in the spectator by Matt Ryan suggests that subsidizing industries may kill off developing innovative technology companies.

1:03:02 How do you protect your portfolio from this squashing of innovation that you're creating exists? On the other side, how do you decide to abandon investment because you can see if it'll be overtaken? That second bit might be understandable. Mark, first, maybe to you, Greg. Yeah. Thanks, Doug. Well, I'll get Mark's here. Let let's I'll have to spectate it, but let's Mark? Yeah. I'm not sure I accept the premise. I I know that haven't read the article, but I know that really has been accused of lobbying on behalf of the coal industry and has a particular perspective on the energy charges. I I assume that this is directed at some subsidies for the the climate technologies, and I say I it's not our experience that subsidies to angle innovation in that sector. I suspect that the innovators in our portfolio several of would 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 that sort of correlates with with innovation in all of those areas. I'm I'm not sure I agree with that. Interested here if Paul felt that was the the case, but I I don't.

1:04:03 And second question, the answer sort of in the question when when we see that some that the investment will be overtaken, and it is time to to relinquish our our interest in it. We for every new investment we make, we make it on the basis of a 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 cost. We look at its current position in the market, and sometimes we do have to make a hard decision that's longer needed. Thanks, Mark. Paul, I don't know. It's sort of 09:00 at night. There's a couple that that that one maybe, and then sorry, Dave. You're Yeah. I'm trying to grab that. Stolen your I don't know. Can't. I'm very happy yeah, you're wrong. Hi, Fata. Has there been interest from India or China that are ramping investments in coal?

1:04:53 Yeah. Thanks, Steve. Still wide awake, so so no problem. Yeah. We we've had huge 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, US, parts of 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 gonna me finish that, Paul. I'm gonna move on if I may. Keep trying to keep momentum going with. This is from Odysseus. So, again, an analyst, thank you for being Odysseus. He's got three questions just to keep you on my toes. First one's for Greg. Given you've been involved you've covered some of this already, but given you've been involved in discussions here, how should we think about mansion house reforms, timelines, implementation? Very similar question. And how soon will was the event fitting, which is the same question then? I think I that probably covered that one. I think the thing is to keep keep an eye on the progress of the various bills and initiatives moving through parliament and then, hopefully, further announcements of of of investment and commitment to investment in the space. I think one of the things was recently was talking about the disclosure requirement for pension funds to talk about how much they've got in privates and how much they've got in UK, for example. Some of those measures maybe, but it's it's quite a long burn, this one.

1:06:17 Yep. And one for me. What was the total impact for write downs that you took through '23 as a result of third party evaluations? Well, I'm glad you asked that because I looked at it at about 07:00 last night. It was about exactly 80,000,000 of that of those write downs actually came through from that part. And then the last question for you, Sam, from Odysseus. On ESTESTO, could you please remind us on your conviction on phase two b? Have you managed to recruit less of their RA patient group, and should we expect some better efficiency numbers from phase two a as a result? I think conviction is pretty high given the amount of money we've invested in this test over the last twelve 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 norm more normal.

1:07:08 We've built in procedures, etcetera, into the protocol and the management of the study to make sure that the patients are more like a normal phase two patient population compared to that phase two a where it was skewed towards very severe patients. And what was sorry. What was the last bit of the question? Yeah. Better efficacy. Well, I I mean, I I I like to believe so. I'm an optimist, but, you know, we'll find out in q two. Brilliant. Thanks, Sam. Next one moving on. Sort We of done it. I'm point it to you, Greg. It it's more of a statement to give Richard a chance to say it. If holding in a nicer, no tax and dividends, so why using buyback? Private Shell just have been slightly disadvantaged. Yeah. I mean, my own holding has the same impact. I've gotta try and balance the the overall return of value to to shareholders, and we the decision we took was in in that context.

1:08:04 I think it's fair. Melozz, another one. It's good to see you. Hang on. Hello. How much do you expect of less than 24, How much will this be divided into follow ons? Probably one for me. Well, if you saw, we invested about 73,000,000 this year. We're kind of now in the range of investing for between that and 90,000,000 a year. I would guess we'll be somewhere in that range is what we'd anticipate. Changes all the time depending on the mode of exits. We have we have to keep a a fairly sharp eye on the exits, 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 portfolios we've talked about, but I would anticipate something like about 10,000,000 amount going into new investments across the group. Marginal, what happens to the shares 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 we they get used downtime for some issues, but at the moment, we're keeping them on balance sheet.

1:08:59 I think this might be one for you. Paul, haven't seen this one. Are you aware of considered Varitech? The intersection of hydrogen and vehicle emission reduction. I don't or maybe Mark, maybe you've got view on that. Yeah. It's almost certain that our fintech team would be aware of them. The key convention team would be aware of them, but I will pass on the name to make sure that they're they're aware of that. Don't wanna set a precedent for this being the route to bring pipeline to IP group, but I will pass. Yeah. We're aware of them. They're fuel cell company. And so for the audience, fuel cell takes hygienist feedstock and converts it, combining it with oxygen from air into electrical energy. So they're they have a a fuel cell, I think, drivetrain for for heavy vehicles. So we're aware of that space. Hysat is really focused, though, on those industrial sectors and those heart of the bait. 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 the technology sector.

1:09:53 Okay. I've got a quick question. Any update on First Life Fusion funding? I think I've already mentioned that hasn't happened yet. It's still in hand. I don't know if Mark wants to add anything to that. It's not probably moved on. No. Fair enough. A question about cost base. Well, how is the cost base addressed in '23 and '24? Well, we expect it to remain pretty level year on year, I would say. We wanna keep it a fixed kind of percentage of NAV, which which we are currently doing, about 1.8. Another question about the share buyback and whether the shares are canceled. They're not at the moment, but there's always that option at the moment as to holding them. What this is from Andrew. What technical factors have held that rate of share buyback? You might regret asking this. I'll quickly do it. I'll do it as as I we've been in a close period. We treat ourselves as close. We're actually a bit stricter on ourselves than actually the market requirements are.

1:10:45 We take the view that from the end of our actual accounting period, so December 21, we're in a close period. So in that period, we weren't allowed to give instructions to our broker 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, quite complicated, they've been involved with auction. At the end of the day, you've got an auction process. Quite a lot of the volume you see going through when you look at the daily volumes actually relate to that auction at the end of the day. You can't catch up where that's gonna be. So if they don't buy 15% of that, they're buying 15% what's in the in the daily totals. So you'll see a slightly lower number than 15%. Clearly now, as of this morning, but no longer in the closed period, and we will be able to have a more direct input on that group buyback. Needless to say, we still anticipate the course of this year, but we will complete that 20,000,000 share share buyback.

1:11:40 Next question about buybacks. Quick one to you, maybe Greg. Similar cash buybacks are not actually doing share price appreciation. What's the point? Well, there there are some quite wide views on whether buybacks, dividends, etcetera, make any difference. We are trying to have a, you know, consistent cash allocation approach, which balances primarily portfolio and share price return with some cash return to shareholders from from exit. It it may not be having a point, but it's hard to it's hard to evaluate the counterfactual if we weren't doing it. We don't know what the what situation would be. So we we think this is an appropriate balance. We we are frustrated by the discount to NAV per share, and and we're using that mechanism as a as a as a contributing factor to to try and reduce it.

1:12:31 Yep. I'll say next one, I'm gonna read out some question. Great presentation, guys. Well done. So we'll take that one. Thank you, Lucas. The next one was why is Hinge Health shareholding not sold years ago when first indicated, suggestion being if none less a loss in value. I I I Mark, would you like to refer to that? Maybe Greg or I can refer to that. On on Hinge, well, we we have sold when we've had the the opportunity to to do so. So we, you know, we've we've taken secondary liquidity where we can. It's not always possible to to sell private companies. We we always are actively in in discussions on secondary exit opportunities for our companies, whether they're public or private.

1:13:21 So we we we have taken cash off the table. I think each of the the most recent funding rounds, and we continue to to to focus on on cash exits in the portfolio that that deliver value for shareholders. It's big focus for us this year. And so I should've said that. It's like my The other thing to say, I did not know my portfolio, but the other thing to say is the company's continued to perform very well. It's time that we've we've held it, and the market has contracted. The valuations are down, but the company continues to be very It's performance is actually true. The market is now I've I've rarely seen a company grow faster than that company. I'm saying with extraordinary profitability as well at the gross profit line. And it's great what he said. It's not public company, so you have much less chances to to trade. You know, you're gonna trade certain certain cases. I'm gonna move on down a bit. I'm not sure if it's a question, but I'll quickly do it. Nanopore, and this is a quote, Andrew, from our report accounts.

1:14:11 We remain convinced by long term value of investment. Statement has been made since IPO. Share buybacks and supporting existing development companies have been a better investment, we would suggest, throughout this period. Well, I'm not really a question I don't think, and if anyone thinks there's something to answer that. One one for Hysata, Paul, if that's alright. What's the rough timetable for Hysata to deliver products to customers? Well, that 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 in some pretty big transactions, around those.

1:15:01 A bit of a general question. The m and a market is apparently showing signs of life according to the banks. Has the company seen any approaches for both credit companies? To be able to answer that specifically, don't know from the general accounts on that, Craig. Well, yes, we wouldn't expect us to be able to talk about specifics, but, we 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 have you know, some of them are board committees that are dedicated to the exit opportunities and the strategic partners for those companies. So, I think I would I would say that's a fair reflection of what we've seen, some signs of life, some green shoots. Next one's tricky question, but I'll give I'm gonna give it to Greg, anyway. We're near the end. From Luca d, which of the sectors you invest in you expect to form best at '24 and why?

1:15:59 Not all. Well okay. Look. No. The idea is to allocate the capital to those highest opportunity areas. As I said, we've been very focused. I mean, eight companies have had about 50% of the cash invested over the course of the last twenty four 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 deep tech side, you know, we've got some fantastic businesses like Hysata that are accelerating growth, but that that AI opportunity across the stack is is also significant.

1:16:48 And then Cleantech, we've got some incredible companies there. HySata, particularly, as one of those. So so, you know, all three areas offer really compelling returns. We're in three because we think it operate it offers a balance of focus and diversification. So, yeah, I I I wouldn't we we will we will reflect that in our capital allocations, and you'll you'll see those over the course of this year and beyond. Yeah. Actually, I'd rather a neat question. I've got one last one, which I think is actually a statement, but I'll read that anyway. Question 31 for those accounting. It says, I'm happy with buybacks. So not all fall shallows are negative on this issue. Open brackets. No need to read this out. But I thought I would anyway. So that, I I'm glad to say we are at the last question. I think I briefly hand back to Jake at this stage.

1:17:37 Okay. That's the last question. Thank you. Perfect. David, that's great. And thank you all of you for being so generous of your time then 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.

1:18:35 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. Greg, 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 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'll 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.