Ip Group (LSE:IPO) — Full Year Results

0:02 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, we'll and publish those 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 once again hosting this live update. It's open to all shareholders and and prospective potential shareholders and a mark of our continuing commitment to transparency in reporting.

1:02 With me on today's full year results call,

1:05 I'm joined by our managing partner, Mark Reilly, and our CFO, David Baines. 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, 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 and a. As always, as Jake said, please do post questions in the q and a section, and we'll endeavor to cover all of them either live if time allows or otherwise, we'll do it via the via via the platform.

2:10 So I'll start with that full year overview. So I think for those of you who joined us for the 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 I'm obviously pleased to report that we did indeed complete a number of further exits during the second half of twenty four, and that resulted in a total of a 183,000,000 of cash proceeds realized for the year. And indeed, this performance was significantly ahead of what was again, you know, pretty sluggish period for liquidity across the venture capital market.

3:06 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 £30,000,000 worth of shares during calendar twenty four, and then we announced further buybacks totaling up to, 70,000,000, which we, you know, continue to implement during, 2025. Now in today's release, you'll see that given the persistent discount of 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.

3:59 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 10,000,000 to our buyback program such that the commitment on the current program now totals up to £80,000,000. And to put that in context, that represents that 80,000,000 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.

4:46 But as you would expect, this performance is both disappointing, and it's 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 this 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 a quarter on an annualized basis at the end of twenty twenty four. And while we've had a small number of companies that has failed during the period, many of the fair value reductions represent reversals of previous fair value increases. So, you know, several of our portfolio companies raised money in 2021 and early twenty two, 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 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 back per share performance.

5:52 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 435,000,000 Aussie dollars for Post Plus, one of Australia's leading superannuation funds. We continue to believe there's a significant opportunity to to continue to build out those relationships in Australia. And while things are definitely moving more slowly here in The UK, 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 management has compact and as a result of the other pension fund reforms.

6:43 So I'll cover these in a in a little bit more detail. First of all, I'll turn to one of the, you know, sort of standout successes of 2024. That was our investment in feature space 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 a 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 seven 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 coinvestors, including the likes of Insight Partners, Highland, and TTV, and that is a is a a network that we will continue to coinvest within the future.

7:34 And we consistently guided that feature space revenue should be approaching sort of a $100,000,000 each on a run rate basis by twenty twenty five, twenty six. And I said, you know, the decent revenue multiple, company value of about a billion dollars 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 two ahead of, of what we were planning. We were the largest shareholder in in the company, at exit at about 20%, and we will receive, total proceeds of 134,000,000 having invested about 23,000,000. And it's worth pointing out that 134,000,000 is about 80% higher than our carrying value at the start of 2024.

8:26 And we consider that that six times multiple and high twenties percent IRR or annualized return represents a great financial return for our for our shareholders. But it's also important from an impact perspective that feature spaces, 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 twenty twenty four in terms of cash realizations in July, and we realized £9,000,000 from a partial partial exit of Nasdaq listed Sentessa. 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.

9:16 And the majority of that 134,000,000 of cash proceeds for feature space we received in December. You can see that there, a 119,000,000, and the balance of 15,000,000 will be received in two tranches in '25 and '26. In December, we also announced the secondary sale of some minority holdings in nine portfolio companies across the group's balance sheet and our managed funds. And through this transaction, we expect to generate up to approximately 15,000,000 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 we've completed about half of this figure to date, and we continue to work on the balance during '25.

10:02 So that that positive momentum on exits continues with the completion in early twenty five of a number of exits that we announced in 2024, and we've now received more than 20,000,000 cash from exits so far in '25, which has led to the additional 10,000,000 that we're allocating to our buyback program. And although I'm very limited on what we can say due to SEC rules, 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. The the pitch book MVCA report, you know, generally describing conditions in The US, which are pretty applicable to The UK and Europe as well, noted that, you know, extra activity has been the blockade limiting BC for the past three years, and return generating exits for the market have been few and far between.

11:09 And you can see this in the chart here. So in on the the chart on the left shows our exit performance for the past few years. That's in pounds, millions, over the past few years. And on the right, albeit with different units of measure, you

11:22 can see the total value of exits across the VC market in The US as a whole. You And can see that 2024 remains less than half the value seen in 2019 and 2020. Interestingly, the pitch, but did note that during the past two 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 return. So as as Douglas notes in his chair statement today, the gap between our share price and our net assets remains sort of stubbornly and frustratingly in place. And while this is also largely the case for our 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. Of course, at all times, 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.

12:39 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 two new updates on that front today. And, 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 20,000,000 or so realizations today, having a further 10,000,000 to our buyback program. So we completed about 30,000,000 of of buying back shares during 2024, so we've got a further 50,000,000 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 on the MarSafe Harbor rules of about 25% of rolling volume.

13:39 At these levels, at these share price levels, hopefully, they it 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 it's in fact, it's worth saying to to all shareholders, and 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 with a 17%, 17p per share reduction. Now Mark and David can talk a bit about that and the but I'll I'll cover a couple of the key areas. So first of all, the largest overall contributor was Oxford Nanopore.

14:39 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's sort of business performance, I've made sort of three 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

15:19 more regulated end markets. Secondly, Singapore announced several big landmark contracts and sort of strategic collaborations that included with the UK government, UK Biobank, and Precision Health in in Singapore, and that adds to existing relationships with the likes of the Mayo Clinic in The US for precision medicine in cancer and 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 BioMeria and strategic relationships that the business has with NVIDIA and Apple. That that Novo investment was part of a small primary fundraise, and our modeling now shows that the company can comfortably trade to its 2028 cash flow breakeven.

16:16 Now the more recent results have evidently disappointed the market. In our view, know, the company's taken an appropriately prudent view of the impact of NIH budgetary challenges in The US and 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 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 Dave's gonna talk about this a bit more in the financial results relates to is the sort of the the knock on effect of this ongoing tougher funding environment for growth stage companies, on those businesses that need to raise capital reasonably imminently.

17:06 And a number of these businesses have highly differentiated product offerings and 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 Okser, 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 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 it's largely down to specific issues for the company. This includes companies like Ultraleak, which is developing this sort of world leading hand tracking technology, which has some commercial setbacks. Again, Mark will talk about that one. And another example of this category

17:52 is, of course, Esteso, and this is this is one where we did have a technical setback. This is our single largest largest private company holding by value. Of course, during the year, we were frustrated as were shareholders that ESTESO was not in a position to release any data from its phase two b RA study. However, in February this year, ESTESO did provide an update, and it was it was disappointing that it didn't achieve the primary endpoint. However, it was also encouraging that the trial results reinforced, loramestat, 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, for patients.

18:46 Now the the company will publish full study results shortly and plans further phase two studies to to further evaluate the the unique potential of that drug to promote what's called adaptive tissue repair, both in RA and in other conditions. And in our 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 ESTESO is sufficiently funded to conduct those additional studies, which the phase two b justified. However, given this setback and the the knock on implications for monetizing the compound, we reviewed the carrying value including with the support of Deloitte and with review from our orders at APMG and reduced the fair value by about 32,000,000 or 3p per share.

19:45 So as we entered '24, we recognized that the appetite for for higher risk and early stage assets was likely to remain cautious, and and, you know, there were there's a lot going on in the world, lots of elections and disruptions to trade and investment flows and and and lots of geopolitical tension and military conflicts. And we were also, you know, very aware of the the continued discount between our share and our share price. 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.

20:19 And first of all, as I as I mentioned, we 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 invested about 63,000,000 down from 70 odd million, which is less than 10 percent again of the total capital, 780,000,000 raised by the portfolio as a whole. And we also were successful in raising

20:47 a further 95,000,000 of additional managed private capital partly through part walk and partly through an extension of our relationship with host plus. And even these actions have have yet to have a sustained impact on that per share or our share price indeed. So we 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.

21:21 So just a quick summary of of how the business is now set up. Know, we've we've clearly sought to reduce net overheads and and to access additional private capital. This is the way that the group is now structured, and and and increasingly, we're making the bulk of our early stage investments through our platform here on the left. Here, there is a lower cost of capital arising from EIS tax reliefs, and it's very well suited to pre seed and seed investment. Even in these the sort of, the challenge markets for raising EIS and VCT funding, we tend to raise about 30 to 40,000,000 per year. This provides management and performance fees to 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 is as you'll see in in Mark's slide is in businesses that we anticipate have the opportunity to exit within the next sort of two to three years.

22:25 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 UK, 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 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, Hartwalk's about 500,000,000, sterling of assets under management. The balance sheet's about 1,000,000,000, and we're aiming to scale what is an existing few 100,000,000 on the private fund side to at at at least the same level as the balance sheet over time.

23:21 And then finally, I said earlier that that we have seen an overall reduction in NAV per share, but we continue to see this significant opportunity to deliver positive NAV share performance that will be enhanced for long term shareholders by our current active buyback program. I've covered Oxford, NADPOR, and Astesso. They're the two largest holdings by value. Each represents about 10% of our NAV per share. I'm now gonna pass on to Mark to cover the next few as well as touching on some of those companies that I mentioned had seen a a

23:51 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 Riley. 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, Beachespace and and Garrison in 2024, and prior

24:22 to that, the WaveOptics, which we sold for over $500,000,000. So intending and hoping to bring that that success across the the group level portfolio. Regrettably, my first job is to convey to you a a a write down. As Greg said, the drivers for that were a continued drop in the price of our holding in Oxonanaport. That was the largest contributor, but also there were market headwinds and a and a contraction in the availability of co investment capital, the associated price erosion that that 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 and and deliver upside on on the rest of the portfolio. Inevitably, some of those challenges fall first in the sort of fluctuating journey.

25:22 So those outcomes can be a tough one

25:23 as we've we've seen this year, but we do continue to have a whole stable of candidates to be the assets that deliver that really sort of high outsized return to to to to deliver return right across the portfolio. And, of course, the degree to which that potential is priced into the the current value fluctuates with the market, but it's high a few years ago. It was lower this year, but the fact is that that that potential remains. Picked out a few of our sort of most mature assets to to to exemplify that and to to to really sort of characterize that potential. All of the assets on this slide are delivering transformative products in multibillion, $10,000,000,000 plus market opportunities. Picking out the first one, you may already be familiar with Hisatta, which is our hydrogen electrolyzer company. Electrolyzer is basically a unit that converts that creates hydrogen. It's how you perform hydrogen, and

26:20 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 high the high starter 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 a scale up version of their device at the moment. And those technical milestones are hit and

26:49 the the data is looking good so far, then there is a very sort of immediate opportunity to to gain customer traction with that device, and they're selling into a $17,000,000,000 projected market in twenty twenty thirty 2030 for high spin electrolyzers. So we see see a lot of upside in that opportunity.

27:09 The second asset covered on this slide is Arteos. They are developing DNA damage response pathway drugs for treatment of cancer. They had already published some early data in in late twenty twenty three. They published some data where they said that durable confirmed responses were observed, and so we take that to mean that that they're seeing a reduction in visible effect on on tumors. And so now they are doing their phase one stroke two trial to which is expected to complete this year to to prove that that effect out in the larger cohort of patients. The third asset on this slide is Pulmicide. So pumiceide make a drug that treats treats a fungal infection of the lung.

27:56 There's a fungus called aspergillus, which we all inhale it. It's naturally occurring in soil and in 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.

28:12 And fulmacyte have 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 than existing drugs. And their phase three trial is due to readout next year. So they're getting a lot of interest already in their their progress. In health, we, as Rick said, we can't settle the voucher to SEC rules with another company targeting a very large market.

28:48 So that's the that sort of exemplifies 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 none of them, there were some private companies that we wrote down, But all of these companies still have that existing opportunity that they they have an opportunity to to deliver upside for us and to they were not write downs because these companies have failed. They were write downs because they had challenges or or setbacks or markets,

29:15 contraction or access to funding challenges, but some they are not write offs. They they still give us an opportunity to to retain value. UltraLeaf had commercial 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. I mean, 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 ESTESO.

30:01 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 that there's something compelling from a patient perspective with this drug. And so we now learned a lot, and we know what we're gonna apply to the next stage of trialing the drug, so there's still a of potential there.

30:22 First Life Fusion, they frankly failed to raise money with the the largest quantum that they wanted to raise. They had a business model that relied on 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 fusion reactors, the people who are developing fusion as an energy source. So much more of picks and shovels play that allows them to get supply to the market, and in fact, it's already generating revenue today. So good opportunity there to to take value in that company. And finally, ops are on this slide. So they raised money in a in a in a market that was very, very, very strong.

31:10 We're we've been circumspect about this. They're 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 the the price of that round the

31:18 end. And so we've taken a small impairment on this, but it's 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 that's one of the few companies to go through a system integrator to put into a a vehicle in that way and and to run their software on the road and and 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

31:52 uptake of that that technology and operate applications like airports and ports and 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 candidates 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.

32:20 I've just picked out a few of those, but there are a lot to to to cover. Intrinsyc 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 set random access memory on the same chip as processors until you have a bottleneck in your processing. And Intrinsyc has a technology that's 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, then it's it's the the technical parameters of that technology are hit, then we have a very compelling technology to completely transform a 100 mill $100,000,000,000 market opportunity in our our volatile memory.

33:11 OxyHealth and other companies are doing very well. Well into revenue now supplying 50% of NHS England's mental health trusts, and they have customers in The US 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 and others. So the the point being, there's a lot of kind of potential set beneath that that that the large component of value in the portfolio in that quarter of the portfolio that's made up by our sort of smaller, at least earlier stage assets. There are a lot of candidates that jump up into those those high value buckets.

33:47 And so in summary, a lot of candidates that deliver 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 to the future.

34:06 Over to you, David. Thank you. Thanks very much. Hi, everybody. Good to be with you again. Just quickly go through the financial results. I mean, 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 60,000,000, 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. The assets as we heard less positive down to 97p per share from about £1.14 this time last year. It's about a a 15% reduction in that per share. It's about a £200,000,000 loss over the period. Net overhead slightly down in the period. We'll talk about that in the net down from 22 to 19. They're actually at the year end lower number again. I'll talk about that briefly when I do costs. So really probably comes with the main messaging, which is what is in that loss effectively.

34:55 So on the green side, on the positive side there on the left hand side of the screen then, all the features basically the key parts at about 56,000,000 in that 66. There were a couple of which

35:09 made it up to about $66,000,000. On top of there's some other quotes companies in Nextdoor box. Touch and Artesan, for example, in the Sentessa went up in the these are companies which we either exit or sold partially. So about 80,000,000 buckle on the left hand side of the screen. In the middle, the actual basic up rounds, down rounds, other movements on on platforms. Example, relatively neutral, actualists sort of canceled themselves out. So probably where the main story is, I'm afraid, on the write down is on the

35:35 right hand side of our screen. We've talked about Oxford Nanopore. It's a publicly listed company. Actually, it's trading over good. Actually, it's been achieving the numbers it said it would do. But in this difficult market, it it hasn't performed well and then share prices down, and there's 66,000,000 of euros in one go. And then leading to the presentation market just gave, there's kind of category of company that actually is extremely strong. We're still very excited about some of that stuff like Fusion and Oxford, which 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 write down. It's hard to carry evaluations sometimes relatively old. Both cases, one funding round is '21, one was '22. So relatively old, you can't lie on them anymore, haven't yet completed another funding round. And therefore, you really have to take decision to be pretty prudent and take relatively significant write downs.

36:28 Very much hope when subsequent funding grants happen, which we believe they will on both companies, we're hoping to be being relatively prudent. But that is about four 40,000,000 ads. That's like Fusion, for example, and Optus is about a third. So that really accounts for that. And you have about a 100,000,000, a little bit over a 130,000,000 where there are actually, like, I would say, can be setbacks. So we've heard about the. Obviously, very unusual in that missed its primary endpoint. A lot of very interesting and really disruptive sounds in its secondary endpoints in terms of bone repair.

36:58 Unavoidably though, we had to rerun those numbers, and and we've had to write that down by by about £31,000,000 in the period. And ultimately, Mark just explained to you, still an exciting company with interest in new business models of generating license income. But given the primary market hasn't been successful, we had no choice to do a significant like that, and we wrote that down by about 26,000,000. And then the last one in that category, 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 very prudent view and actually written most of that loss. So that really explains you've covered nearly all that loss in in those small number of companies. Next slide. Actually, that's what I give pretty much every year. It it it's pretty simple.

37:45 Our numbers are actually pretty simple, which is good news for CFO. And you they probably don't have a balance sheet. You have a cash position, even small amounts of liabilities. Most of which, by the way, are contingent on exits. So you don't get to pay if you get exits. Items such as carrying. You can see their reduction from that 1.2 to just under 1,000,000,000 in NAV. In terms of on the right, the actual distribution 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, you know, very model, have a lot of companies that feel very exciting early stage. Mark just explained three companies a moment ago. Actually, a lot of the value is really restricted and focused on a fairly small number of companies. And then not too much on the right to this slide. I'll add to this. We talk about each time. Normally, where we normally fund the arm, we've got about a third of the portfolio that is funded. Doesn't need to raise more money. It might raise money if it wants to. Doesn't need to raise money. And then we normally have about a third funding this year and a third next year. And as it stands, we've a relatively small amount this year, but they were enough as you've heard to I mean, we broke down some of our bigger assets. But most throughout '26, pretty hopeful we get those assets funded in the first half, and then you should have a relatively small amount of required 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 have cash performed. A quick look at numbers. We'll see we invested about 63,000,000.

39:07 A little bit less than yours. We've seen we're investing between 70 and 90, but about 63,000,000 invested. Very good realizations underpinned a lot by that feature space exit, but also in there and a number of other exits, meaning we generated over a 183,000,000 proceeds there. So so three times what we invested. We've heard about share buyback program. We bought back 30,000,000. We're still committed to about 50,000,000. Our overheads at 19, over a minute, gonna be lower soon. And little bit of debt, very small amount of debt funding, other working capital items that occurs because on occasions on the licensing side, we collect money on behalf of other parties that we're gonna have to distribute. So you have to have working capital movement. But actually, India, we're trying 85,000,000, which obviously is very strong. Probably worth making a point. We're still strong today. It's 277,000,000 in the bank as I speak to you.

39:56 So that although we're three months later, that position has remained pretty strong. I think last for me, just to remind the evidence I touched on during the year, we did do a very comprehensive review of both heads. We have reduced them relatively 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 it made most 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 16 to 7,000,000 net costs as opposed to about 22.1 at the beginning of last year. And we've achieved that by focusing on our strategy, being more efficient, relying more on the part of the sourcing, and that's allowed us to actually reduce our cost of that across the group without actually significantly detrimenting our ability to perform, and we hope start delivering good returns going forward.

40:53 So with that, I'll hand you back into a question list 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 and a section, which is very good. Thank you, everyone. So I guess, firstly, just to highlight that there will be there's there's more than 35 milestones of various descriptions coming up across that balance sheet portfolio during 2025. Obviously, some will be good, Some may be bad, including on the on the clinical side of things given the the, you know, sort of statistical outcomes that are that are possible there. But as Miles 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 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. You know, as I as I mentioned in '24, our main priority really was was being able to deliver profitable cash exits, and I think we delivered on that despite a tough market.

42:19 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, those cash exits, possible cash exits. We can see line of sight on, 250,000,000 from the private portfolio by the end of twenty seven, and we do, you know, do have, line of sight on 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, you know, 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, you know, we are doing this by way of a buyback at the moment. The the eventual game plan, you know, 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 and when when the share price isn't at such a significant discount to to NAV, that's obviously what the board will consider and look at.

43:35 Another area that we're targeting is to access further private scale up capital. And as I said, I I do believe that there's a 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 UK. That's not to say that we don't have support from UK long term capital. Railpen, one of the most active DB schemes in The UK is our largest shareholder. We have a number of other shareholders on the register from that that that investor group. We have Phoenix, the biggest DC provider in The UK, which is which provides our long term debt. And we also have co investors in a number of our funds. So there are many ways that the, the sort of matching house compact, etcetera, can be delivered through IP GROUP, and we're working hard to do that. It is it is slow, but we're seeing increasing signs that some of that capital may start to flow, whether it'll be this year or early next. Not sure.

44:33 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 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 UK. And then I just wanna 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 gonna deliver NAV per 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 park walk managed funds.

45:21 We do 20 to 30 new spinouts a year through that. And and while the strategy that I described, which is to use the the part the part funds as a sort of sourcing engine and then fund from the balance sheet, we haven't actually done many of those because the level of capital that we're allocating to to new deals is is very low at the moment. We think that's the appropriate balance for for delivering value to shareholders, delivering NAV per share. But as as we are successful, we will be able to to do that in the future. And so to to summarize the the key messages, you know, you hopefully, by now, you'll you'll have these sort of drummed into you, but, you know, we 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 50,000,000 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 gonna have an impact on on share price, a positive impact on share price, of course.

46:31 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 right 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 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, you know, obviously, the most important k p a KPI for shareholders, myself included. So with that, I will now move to q and a. Dave, would you I you do a great job every time. Thank you very much. Jake and Donohue here. No. I I will okay. Right. So looking ahead, everybody, we we're forty five minutes in.

47:24 We I will warn you, we'll 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's up, those that might need to go. So I've got 28 of these to go through. Number one, what I'll answer this. What are the annual costs among the company, and are they justifiable given the poor performance over the year? It's a very fair question. I just explained the cost base a moment ago down from 22.1 probably to about 17,000,000 this year. It's a quite a significant reduction during the period. So we have implemented quite a big cut. We think it is right sized. 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 your costs. Among the key thing we need to is make sure they don't start creeping up again. So we're quite focused on that.

48:20 Second question, I'm gonna pass it to you, Mark. We high we high start. I've been presubscribed, so I don't know who submitted them. We high start up. Where do you see the global hydrogen market developing? Quite a big question. Yep. Yeah. So I I mentioned this figure of $17,000,000,000 market by 2030. We it's one of the biggest markets in in clean tech. There are no practical alternatives to hydrogen, but zero carbon production of steel and shipping and ammonia fertilizer production, methanol production. Between those sort of obvious adopters of of green hydrogen, there is a a about 12% of global carbon emissions. They they account for about 12% of global carbon emissions. So those four sectors alone have demand for something like 200 megatons of zero carbon hydrogen hydrogen that was produced using renewable energy sources.

49:14 So, clearly, a company with disruptive efficiency much more efficient electrolyzer has the opportunity to take advantage of that. There's obviously some of that we're also kind of re re recalibrating our our assessment of the market opportunity in regard to The US because there are some headwinds there and challenges in adoption of of clean technology. But what we've observed in clean tech over the past decade is that people quietly get on and do what is most economically effective, but and economically efficient. And, of course, I start to deliver a much more efficient solution. So we think that there is a very large market in Europe and big opportunity there, a very large market in The US as well, and a lot to go at for for Hyster. Thank you, Mark. I'm gonna go this is a question from Ken Phee.

50:03 I'm gonna go your direction, Greg. Is delisting Oxford and growing the company privately a solution envisaged by IP GROUP? Can you answer that to some extent? Look. I wouldn't get to some extent. I mean, we we tend not to comment on specific companies as regard to corporate transactions like that. I mean, we we obviously, as a as a major shareholder, look at all of these things and and obviously speak to the other major shareholders at at Nanopore as well as engaging very regularly with the with the management team and the and the senior team. So, I guess, sort of no options are off the table as is the case for any, any, public business. Thank you. This question is from MB.

50:48 Again, you, Rick. The company is managing third party funds. Host plus is mentioned. Our investment position is made in a way that equally respects the interest for shareholders and third parties, and it's okay. Can you explain that? Yeah. It's it's a good question. We've taken this very seriously, obviously, because, you know, lots of managing capital is a is a regulated activity, and and we have regulated businesses here in The UK. Parkwalk's an example and regulated businesses in Australia. The 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. 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 SCA 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 that considers where we're making co investments.

51:57 I mean, it 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 of doing it. And there is benefit to a healthy degree of sort of collaboration, but also appropriate differentiation of of decision making. So that's that's how we manage it. Moving on. Quite a long question, but I'll read in full. Again, I'm gonna point it to you, Greg. Yeah. Yeah. Yeah. Should do all my. Shy of buyback program in the year a success?

52:43 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 director sold shares in the air but did not buy shares other than receiving any paid options. Well, clearly, the 30,000,000 hasn't had enough of an impact yet, has it? That's why we're doing more and why we're accelerating more. Mean, this this question probably came in a little bit ten ten o seven. So it came in, I think, a bit before we talked about, you know, what we're doing to accelerate that buyback further and to continue to retire more than 10% of our share capital again. So we are, you know, we we are doing this aggressively given that significant discount, persistent discount to NAV. We we do always consider purchasing shares. I've I've done it regularly and and certainly, would look at it again now that we're outside of our closed period.

53:37 On on the not necessarily to comment too much on REM policy because I'm not sure how how appropriate that is, but it is the the reason that we have these disclosures around directors sort of receiving options and buying and selling shares, the we've set up our remuneration to be as long term as possible through a long term business. And so our bonus opportunity is the the max bonus opportunity, I think, I'm right in saying is the lowest bonus opportunity on the FTSE 255%. 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 and, obviously, it contributes to our minimum shelving requirement, but the the intent is it's it's sort of locked up for a further two 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, you know, sort of a purchase or a gain of shares and then a sale. We're looking at whether or there's a way to make that a bit more efficient in terms of the the mechanism because I think it does it's unhelpful to make it appear that we're selling shares.

54:54 Actually, all 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, at buying shares, for for sure and understand that, you know, that sort of signaling. Yeah. Thanks very much. I'm gonna highlight, where I think the questions are coming from analysts. I've been asked from the past to make it clear for analyst questions. And I think this is Paul C, which I'm guessing if you, Paul Cotton. Thank you for being here. Quite a few, Greg. Any prospects for additional secondary sales of minority position within as we did in the year? Well, we continue to to look at that all the time. We looked at a number of of possibilities last year, and all the time, you're balancing, you know, sort of the 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 for share buybacks or other returns.

55:48 So we continue to look at it, obviously, when we've got some progress on that front. If we if we find something that works, then then we will we'll, of course, do that again because we if we can deliver value to shareholders in that way, we'll we'll absolutely do it. A second one for Paul. Again, I'm pointing to you, Greg. Any interest from Big Pharma in a secondary endpoints? Understanding maybe what you can say about a portfolio company. Well, I mean, the the short answer is is yes. And as yet insufficient to result in a in in something commercial. But but, yes, I mean, there was a there's a significant amount of interest, the company intends to make some 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 for us to talk about in in in coming weeks. So we'll we'll definitely update more on that at the half year.

56:50 Thank you. And next, 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 200,000,000 in exits by the end of twenty seven and a promising pipeline of realizations. Can you talk about the visibility you have on this? To what extent does it rely on a pickup in public private market something to support exit? I'm gonna chuck that ball to you, Mark. Yeah. Exactly. So well, I've I've talked in the presentation about a lot of the highest prospect assets that we think have a a midterm realization prospect. It's hard to pin down precisely when that's coming. I wouldn't have predicted exactly that feature space was gonna sell in '24, but we thought that that was one that was coming up in a sort of three year window and indeed, that 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 in the near term.

57:44 And those the question just disappeared. I can't I can't answer the second bit of it now. But I think it was about what public and private Yeah. The funding environment. So we have already seen m and a interest in several of those assets that we we talked about. Does it rely on the the funding environment picking up? I I mean, it it relies on third party funding. I don't think it necessarily relies on it. It's it's only gonna 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 gonna have a sort of major problem unless there is a pickup in the in the availability of gaps. Yeah. Again, know that we're talking about the realization from the private portfolio as well. So we're not seeing any public companies included in that number. Might be marked.

58:39 I might make that one. Although, I'm sorry. If if a company were potentially to IPO, we might become one. It might become one that we would enact. We're going back to Paul Cullen. You're back. Nice to have you. I'm gonna go this to you, Greg. When do you think the proposals in the Mansion House compact could start to be implemented? And what would it mean for backing visionary ventures in The UK? I don't know. I mean, we'd we'd obviously hoped sooner than than I suppose that my observation is the nature of the conversation. 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 for this was being put in place, speaking to, potential signatories to the to the Imagine House Compact and and others who manage money for them.

59:27 There still are a number of changes, particularly to regulations around things like fee caps, etcetera, that are that are that are being pushed through or or going through government and legal changes. So that is still to happen, which is which is sort of causing some tardiness, I would say, on on the delivery. So I hope in '25 I mean, the the match has gone back, had a 2030 backstop date, so time is getting somewhat tight on this for those who who have committed to that. But I I think the nature of the conversations we're having is starting to move more towards the implementation. So sort of hopefully second half of this year.

1:00:14 What does it mean for back in visionary ventures in The UK? 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 UK, and it's very, very prominent beyond series b. The UK is very well set up actually for early stage investment, particularly through EIS, and more can be done and more is being done and then more continues to be done and we'll continue to do that. But the real opportunity is is backing businesses to scale so more companies can get to the scale that feature space did before they exit. And a great example is Yassa Motors, which we backed through REIS funds, and that achieved a sort of a $102,100,000,000 company valuation on exit.

1:01:05 It's now a core part of savings, Ben's, Daimler's delivery of of electric drivetrains. Fortunately, that one is still here in The UK, and and we're backed through again through Parkwalk and other spin out of that of that technology from that business. So so hopefully soon. I'm gonna gently move on to the radio. I've got 24 questions. Just so everyone's aware, it's 11:00. So I don't understand people who are booked for the hour would be quite understandable. We're 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 turn cash to shareholders in the way that dividend would. Why not we state the latter? I have some sympathy for your point. I I understand the point entirely. We we think it does still remain the most efficient way to return capital at the moment. You could argue if you take out cash and let's say now, which is obviously a liquid position, some of our best is consider our discount and have to be as much as 80%.

1:02:03 I bet it was an 80% position. And so by using our cash to rebuy the shares, we are actually getting an immediate return. We believe in our land, which we do, and we believe it endorsed by the fact that every time we sell assets over the last three or four years, we sell them at a premium. It's a consistent pattern. Twenty twenty one, two, three, and very much last year again. I think consistently sells the premium seems to support our values when we have realizations. It does make economic sense to buy them back this way. It should be over time that the residual value to all the remaining shareholders has gone up and the remaining NAV per share for each individual does go up and and actually should improve your position in time. And that's why we we we maintain with it. Don't know. Next question is how much of this is Sam again.

1:02:51 You, Sam. How much the portfolio needs to raise capital in 2025? And how are you thinking about the valuations these businesses might achieve relative to last time there is money? Just factor into calculations. And that's yes. Very much it. I actually had a slide earlier which shows you something like about 45%, I believe. It's not so much this year. It's it's quite a big percent next year. It does need to raise money. So sorry. I apologize. '25. This year, there isn't very much just that. We've only got a small amount remaining in the first half, and it relatively small amount in the second half of the year. Most of it's now moved into next year. It's 26. Sorry. But we very much do factor in what we think companies will raise money at. One of the things that's quite difficult is when you're doing this process is actually knowing what the value's likely to be until it kinda hoops into view, if you see what mean.

1:03:37 Something that may not raise money till '26, it's actually very hard to determine what their current balance can be like, whether the company achieves its milestones, and what value you'd 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 write downs in companies we still believe in option 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 prime factors that we actually factor in when we're when we're considering evaluation. Next one, I might pass to you, Mark. Let's see. How many part I think we covered this one. I mean, think I covered it already. How many part work any stage investments have I been directly invested? Do you mention a number? Can't remember. In series a over the last three years. It's a bit of an exact question.

1:04:24 I don't know want to answer that bit or I don't have the number in front of me. I was just trying to talk to somebody to come up with the co investments. I've invested six or seven here that That's right. We've invested in in last few years with them. So I I mean, it depends on your definition of series a, but it's we've certainly brought a lot of assets alongside. Next, I think I've sort of covered it. They don't mind me too deep. I mean, just given given the board thinks share price doesn't reflect the company's true value, is the board person investing in shares other than through purchase? I can't find any information after April 24 on director dates. I think it's fair to say we did answer that. Next one is has I already just jumped? So the next one is Andrew m. Thank you. Obviously, the priority is to support the existing portfolio and realize their value. However, the paid share buyback has been given the scale of discount plan. Returns to shareholders are rightly focused on share buybacks rather than in some category when the discount is so large. But in absence of dividends, the way to share buyback has been far too slow. The pace has even slowed in March. The daily purchase should be at least up. I'll answer that one. Yeah. It's fair.

1:05:36 One of the reasons it slowed recent in last month was we go into what's called a closed period. And during the closed period, we're creatures of being inside. People beginning to get an idea of what our results look like. That meant we weren't able to change any instructions that we share buyback. And we actually set it at 6%. We've been buying back about 15% of the of the previous thirty days average deal flow. We are likely to increase. In fact, we can increase that this morning. So we'll increase that then. Bit tech or but the thing called safe harbor, the maximum you really meant to do. And we've increased that max, and 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, it should have seen going through, I would expect to see us buying back at a faster pace. And last time we're in the situation, similar to back end of last year, we began to buy it for $8,900, even a million shares a day. And, course, if you start buying it that way, you're buying, what, a percent every two weeks. We think that probably it's built in that you'll start seeing an increase in the meat which we are buying back.

1:06:35 Next one, David b. Hello. With a is the effect of the treatment potentially slower to emerge than the timeline of the primary endpoint, or is the effect of treatment different to that originally being done? So I'll give that to you perhaps Greg on the board of the test. I'll say it again. No. No. I've it. You've Yeah. I understand the question. Yes. Great great question, David. We think that that might be the case. Yes. And that the the phase two b was done over effectively a three month period for various reasons, ethics, and the fact that all the phase two drugs that have in RA that have gone through in the past two, three, four years were done on that same time frame. However, it that that could well be an explanation, I'll 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 is a that's a that's a a very good observation, and we think we think that is potentially what's going on. When you cure the underlying condition, the physical symptoms take a little bit longer to to be reduced.

1:07:45 I can give this one to you as well, Greg. Andrew M, thank you. Please expand on how the group scale up fund will operate. Well, so the scale up fund is an opportunity here in The UK primarily focused at series b and beyond. And the the intent, as I said, on the on on the sort of funding strategy slide is to add additional capital at the series b b plus stage. And sort of series all have different definitions depending 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 50,000,000 to, say, $102,100,000,000 of of funding. And there is a very big gap in the market for that type of funding, which is particularly acute here in The UK. And 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, Andrea. And the second question, might share this one a bit, Mark. How realistic is AXA valuation given lack of contract awards over the last six months?

1:08:57 Well, I think it's the right valuation. It's got a lot of investor interest. It's got very exciting commercial traction. See a lot of high prospects with that company. I don't wanna 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 spend a lot of time on these valuations, and we think it's the right right front. Yeah. I agree entirely. That people looked at. We're we're we're relatively well informed. There's funding potential funding rounds going on. We're relatively well informed, and so we had an eye to that. So I think we feel relatively comfortable doing it, but you never know. It is it is a very difficult process back in these companies even when, you know, you're quite imminent to something else. You never know for sure. So we'll see, but we're relatively confident we've got that one right.

1:09:43 This is a kind of it's a Terry question from Davinet. Thank you. I'll give it to you, Greg. We might all join in. Mhmm. Why continue to share buyback? Not improve share price rather than investing further in new companies, which given the chance to improve NAV, what what is the principal objective of IP GROUP? Good question. Gavin, this is the this is the the regular debate or decision that the board of IP GROUP has to take with guidance from the executive team who are who are managing the business from day to day, and it it is a balance. So we've 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.

1:10:31 At the moment, we think that the the level that the shares are at represents very compelling value, but we do also need to invest in the portfolio to deliver now. So we're we're doing this from a now per share point of view or a share price point of view. So, obviously, buying and retiring shares at a discount to NAV per share inherently improves the the the NAV per share. That's the that's the intent, but you can't do that ad infinitum because then the portfolio NAV per share will reduce at a greater level than the the cash that you're using. So we we do agree the principal objective of IPO is to deliver investment returns. However, given the given the discount to NAV, we've we've been more we're using more of our capital to seek to address that discount. Yep. Thank you very much.

1:11:25 And, Andrew, another question. Sorry. Andrew, I had another question. This is I think to me, write down in first sight fusion valuation following 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 come You know, obviously, the potential for first light fusion achieving some kind of fusion breakthrough is absolutely immense. If it can be achieved over the next ten, fifteen years, it's got completely whole new alternative energy source for the earth that could power power humanity incredibly cheaply. Actually, what was a terminal value that is hard to measure. And it makes it very, very difficult to actually work out, you know, what a likely ultimate valuation would be. We originally did put value up considerably at the end of twenty one, early twenty two when it achieved fusion and perhaps in time hindsight that was too much. I think now we're now much more anchored to realistic kind of funding round valuations.

1:12:23 However, every year, we very diligently have third party valuations, and we've tried to juggle this this 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 which are probably at the time of the future being achieved all those years ago. But that aside, I I do think we we managed to try and get it relatively fairly valued. 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 got a fairly good. You, Mark. Yeah. That that well, good. Another Andrew m. Again to me, what further measures on cost reduction in 2025? I sort of covered that thing. We're not going to have a big reductions we've done. I think we're well sort of scaled for business. However, as I said, we do need to keep a sharp eye on cost. They can creep up supply with inflation.

1:13:10 So then we will still be keeping a very sharp eye on on what we allow to add to our overall running cost, and we'll try and keep it the level we have it at. I guess worth saying you'll see from the results, although small impact, you know, the the the board and the exec and having no pay rises again this year so that that mitigates some of the effects of inflation. Yeah. That's right. We'll see that in the remuneration. You'll see that in the policies when they come. You won't actually see that yet, but that is right. We will certainly board level, we're increasing again for the second year, which it does seem appropriate in form. Andrew, again, this is you, Mark. Definitely you. First line focused on revenues. What realistic time frame? Yeah. I suppose they're kind of under 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.

1:14:05 But there are a lot of people making very serious efforts to develop fusion. They need improved technologies to to to help improve their their the power of their systems and to to to improve the to amplify the the effect of the reactions that they're they're generating, which is what some first light fusion does. And so the the company is projecting a 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 three year time horizon. Thank you. Andrew again. What's I think, Mark, what is the major area of investment in 2025? Yes. This is we spent a lot of time thinking about where our thematic focus areas should be.

1:14:53 We have other seminars on this topic because the teams intermittently run seminars of 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 Intrinsyc, the semiconductor memory, a technology company that enables us to have computing that will service the increasingly intense needs of 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 clean tech. However, political fluctuations are affecting that industry, we still see a a steady march towards a clean energy adoption, and we have technologies that are very compelling and exceed the benefits of fossil fuels in in those domains.

1:15:50 And so that's that's sort of some of the key areas for us, but we could spend a lot of time back in the team and to to talk about those. Next, it's gonna be a very short question because you can't answer it. Any sense of time for Hinge? No. We we don't actually and not really come up. We know we know more from you. John H, sort of covered this. When will you reinstate and suspend a dividend? Many holders require just by holding the shares. They cover this one. I've you know, we it's it's a balance. Lots of different views on this. I definitely understand the position of retail holders, myself included, obviously. I think the right thing at the moment is the is is using the the capital for buybacks. There is an intention over the, you know, the long term if the share price gets back to closer to NAV, then dividends are an efficient mechanism for for a category of shareholders to to receive cash returns. We have said that way. Well, it's more than 20% discount. We're gonna maintain the form of buybacks this way rather than.

1:16:51 Next one, 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? Yeah. I mean, every every business is an AI business or or will be soon. We're it's a it's a sort of enabling technology in the same way that the Internet was in in 2000. So it's not quite the way I think of it in in terms of our own investments. I wouldn't say it's a trend that I've noticed. I wouldn't say anything has swung me up and said we're not gonna invest in your in your your portfolio company because we're diverting all our capital into AI. It's possible. That's the a a sort of market mentality, but a lot 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 a value proposition for people investing in AI as opposed to losing out to to that. Fair enough. The next one, I'm gonna point you, but it may not be going too long because it's really it's the same question, and it's the tension between should you be doing buybacks or should you be investing in your own portfolio? We have sort of covered. But from Andrew M again, massive growth cash balances 05/21/2025.

1:18:08 Please highlight what portfolio companies can give a better return every twelve months than just substantially increasing the rate of share buybacks. I don't if you wanna come with any particular ones or feel we've covered that anyway. We probably covered. I'm happy to move on. Happy to come. And we have covered that quite a lot. I'm trying to get that balance right. And I go p. Perhaps this one's a twenty ninth question. What's your plan regarding ONT? Will this continue to be a strategic long term investment? Would 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 opportunist takeover bid? Probably a new CEO, Greg. Right? Yeah. Mark Mark, I have a view on this as well. I mean, all all companies in the portfolio are up for sale at the right price, and that's definitely the 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 better to monetize it partially or in full for sure. Absolutely, if that's the case. How do you protect against Danaport being subject to an opportunistic take out bid?

1:19:19 I mean, the the truth is you don't. The there are and I I mentioned earlier, there are a number of what I consider to be strategic holders on the register, people like BioMeria and Novo Holdings, and as an institute of technology, Us, 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's there are some strategic holders on the register, but, you know, as as an investor in that business, you've always gotta consider whether monetizing it is the right strategy, and and we'll do that, you know, as as as that's appropriate. I'm gonna push on food. You've ever wanna go in. It's about 11:20. We'll we'll definitely finish at 11:30. I think probably an hour and a half. We'll have had our our share. So let's try and get to the remaining seven or eight questions.

1:20:12 Please, missus Philip then, just who exactly is selling the shares? Who are the main sellers? I could start on that. Like, I'm not gonna name individual institutions. We all we have this ourselves. We get shares at least once every month. We analyze it every month. We look at it. And in most months, there are not consistent. So that's not consistent. During the year, this year, gone by since '24, there were a couple of institutions. Normally, in one case because the family retired and they closed the funds and allocate they reallocated their funds. They did actually reduce their positions in the year, and that's why we saw junior. There were a couple of occasions where it's quite big lumps came to market. So 10 and 12,000,000 trading in a day. But generally, an ongoing basis, it's more, I think, a lack of buyers from sellers, I think, probably. There's not a persistent seller at the moment over the 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 it.

1:21:07 Next question. How are your peers performing in terms of NAV per share and funding challenges? Probably not. Not. Really, 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 some period now since interest rates turned, been suffering relatively big discounts and that. I think that's a fair. Probably comment. Russell h of question 32. Can you give us an idea when you believe or how long it will take for the NAV discount to justify it may disappear? You must discuss this. Does it be on a regular basis? I don't know. I think we've just and this was a question that came in at half an hour ago at 10:52. So my my 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, you know, it influences our capital allocation decisions significantly.

1:22:07 So so very regularly as for when it will return, that's that's a difficult one to call. John H, a slightly more robust question. The discounting have remained massive and the management failed to address this. The shares trade at close to an all time low back when the company existed. Isn't it time to wind up the company and distribute the proceeds? Well, and, also, can we have a vote on this? I mean, the the as I said during the presentation, we 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 for shareholders, and we're very focused on delivering shareholder value.

1:22:53 And we see there's a number of growth drivers over the coming months and years. So, you know, we we continue to keep this this under review and regularly reviewing our existing strategy amongst a range of other options. Russell Edge, for you for you, Mark, again, you may still resolve this. They're actually this is after you had talked about your pipeline a bit. Can you tell us a little bit about the next set of companies we're looking to invest in and start ups or early stage businesses to become the next big business over the next five to ten years? I know you can touch on three d. It was after the that but since then, I've gone through all sort of focus areas and opportunities to see an AI and so on. So yeah. You feel that's covered. Thank you. Last two, we actually go again. The last two were some more, like, comments. John h, it's a balance on dividends, but no no reason not to do both anytime we do. But fair enough, I think it'd be significant level of discount at the moment of it. Send to see the buybacks, the reason I've given.

1:23:48 And the last and not least, non suspend dividends to your buybacks. Okay. It's the same. I think it's the point, the same person, John H. Thank you very much for that. And, hopefully, we we've covered that with the answers we've given. I can report we have finished all 36 questions. Jake, I think we do we hand over to you or does Greg work out now? Yeah. Absolutely. Greg, David, Mark, if I may just jump back in there. And 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'd be great.

1:24:36 Yeah. Thank thank you, everyone. Thank you for your time, and thank you for your support this year. You know, mixed year this year, we've outperformed on exits. We've accelerated buybacks, obviously, as we've discussed in the q and a session, and 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 that's currently more than sort of 10% of our shares an issue, and the NAV per share decline is is definitely not what we're targeting, and we're working very hard. We've made changes in the year. We continue to to change that forward looking strategy. We're seeking to access further and scale up capital. But I 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 and our share price. And, you know, we we do recognize that is the most important KPI for shareholders, and the board is fully aware of it. And and we're working very hard to deliver returns for shareholders. So thank you all for your time, and I look forward to updating you at the next set of results.

1:25:49 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? She'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.