Molten Ventures (LSE:GROW) — FY25 Interim Results

0:01 Good morning, ladies and gentlemen, and welcome to the MOLTEN VENTURES PLC interim 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 is appropriate to do so. And before we begin, as usual, we would just

0:32 like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. I would now like to hand you over to the executive management team from MOLTEN VENTURES PLC. Ben, good morning, sir. Good morning. Thank you very much, and welcome everybody to interim results presentation. I'm Ben Wilkinson, the CEO of MOLTEN VENTURES. I recently moved into this role having been eight years as the CFO, so I know our business very well. It's a privilege to take over the responsibility for guiding MOLTEN in the next stage of the journey. We've got an incredible platform to build from and a team with a unique skill set. So I think the excitement that I feel is shared amongst the team as we can scale and grow from here and also thinking around some of the areas we'll touch on today, the upcoming cycle in the market that we think will deliver great opportunities for us.

1:29 I'm joined today by Andrew Zimmerman, who I'll introduce himself, but Andrew is moving up from the FD position to be alongside me as as the interim CFO.

1:41 Good morning, everyone. Yeah. I'm Andy. I joined MOLTEN just about a year ago, just as they were announcing the FORWARD Partners, acquisition, in fact. So, it's been an interesting year already.

1:54 I've got a mix of public and private markets background. I've worked in a family office. I've worked for Schroders. I've worked for Carlyle Group and PE, Alliance Trust, and the investment trust sector. So think a good mix of of background that has led me into this role, and I'm, really enjoying it and looking forward tomorrow. Super. Thank you, Andy. So with that, we'll move across to the interim results. These are capturing the six month period up to the end of September. We are describing that period as active and has really been active from the perspective of investing where we've had 51,000,000 of capital put to work. A large proportion of that has been into secondaries, and we'll we'll come into some of that detail for for the why we think those areas are exciting at the moment. But we've also seen a period with unrealizations coming through the portfolio as the m and a market has has begun to to open up. Very much an active period.

2:56 In turn in terms of the broader economic climate that we've been all been dealing with, this has been not just particular to MOLTEN, but I would say across the the sectors. We've seen evidence of stabilizing and stabilized and some signs of improvements, particularly as we've described with m and a coming through to the portfolio. Everything's been somewhat pushed out with elections and views on interest rates. And so, obviously, that impacts on our market as much as it does on on others as well. But I think the the view for the coming year is that we're we're in a position where things are likely to be improving on '24. The question of how much that improves and and the timing of that is is not precise, but we're seeing evidence of fundraisings occurring in private markets. Therefore, more capital coming into into private venture capital funds and and ourselves seeing that liquidity re being recycled from the m and a, which gives us more capital to to deploy into into investments and also executing on our capital allocation policy, which we outlined in the alongside our full year results in June.

4:07 And with that, we've executed on the 10,000,000 share buyback program, which was broadly 10% of the realizations that we've had to date, slightly ahead of capital that's already come in. We've had a management transition, which we've already somewhat described, But, also, alongside that, we've been integrating the forward partners portfolio that we acquired in March, closed that transaction

4:34 in March. That's been very much a smooth transition of both team and and the assets that we've brought brought into the portfolio, and they've been embedded now within in a broader MOLTEN group. Secondaries, we're gonna come back to in a bit more detail, but that's been very much a continuation of the focus there. We still think that's a great part of the market to be deploying capital As liquidity starts to come back through but hasn't yet come through in these markets to a significant extent, there's still significant sort of disconnects, if you like, on the pricing that's available for secondary portfolios. That's an area that we we continue to focus on. And we've been continually focusing on the management of our portfolio, ensuring that we give capital to the right companies, but making sure that that's managed well.

5:21 And so we've stated we'll have around 20,000,000 of capital going into our existing portfolio this year, and we should be able to hit that target. But we've also ensured that we've got a well funded and diversified broad portfolio, and we'll come into some of that detail of where where the movements have been in this period in terms of value, but also looking a little bit more at the shape of the portfolio and the the future value potential as well. Importantly, we're leaving this interim position in in a strong financial state with 82,000,000 of of cash at the period end. We'll have an additional realization, bringing more capital coming in, but also an undrawn revolving credit facility, which is an additional 60,000,000, so leaving the period in a in a stable position.

6:13 With that, I will hand over to you, Andy, to go through the the highlights of the interims for the period. Thanks, Ben. Ben has alluded to some of these points already, but I'll just counter through it just to give you the highlights. So we've at the half year, we've already done 76,000,000 of realizations and files we have is pending regulatory approval. We we've actually just heard that reg that final regulatory approval has come through, so that deal should complete by the end of the month and take us up to about a 124,000,000, of proceeds. So a good strong half. We announced a share buyback program, capital allocation policy, at the year end.

7:00 Post that, we did, 10,000,000 of buybacks that completed around about September. We've also deployed 51,000,000, into, the portfolio during the year and an additional 12,000,000 from EIS and VCT funds, and we'll talk a little bit more about that in later slides. So we're in a good cash position, 82,000,000, at the end of September. That's before, the m file proceeds come in. And we also obviously have the extended debt facility there, with an RCF, which is not drawn. In terms of the middle row here, there was a 20,000,000 gross portfolio value, uplift. There there was a mixed performance behind that in terms of there was about a 110,000,000 of uplifts and about 90,000,000 of downward valuations.

7:52 And, again, further slide, coming also of talking about the main ones that happened there. There was an overall, a small, negative GPV movement. So although there was an uplift in the portfolio, the FX headwinds kind of pulled us back a bit. So 20,000,000 of fair value uplift, but 30,000,000 of FX going against us, which gave us a small negative position. So just down, from the year end GPV, 1,340,000,000.

8:23 After you deduct carry, tax and so on and the net cash position, you end up with a net asset position of 1,200,000,000, which translates to 646 per share. And then the last three numbers here are just sort of some headlines on the portfolio. So the weighted average core revenue growth is 48%. That slowed a bit from, before. That's happened across the sector, and also the maturity profile of the core is just advancing slightly. So that is not growing quite as fast as before, but in a very good position for where they are. The margins, again, given the nature of the portfolio are very solid, so they're they're, being maintained. And our core portfolio cash runway, again, is really good. 75%, I think 78% is the exact number, have more than twelve months cash runway.

9:18 And the ones that are under twelve months are all actively raising and doing well. So we we don't have any concerns about those. This table really is just kind of a summary. I won't dwell on this too much. This is kind of all the numbers that I've just ran through already with a comparison from last year. So just on to the next slide.

9:45 Okay. This one, again, it just gives you a bit of context in terms of, what we've been doing, since IPO. So on the left hand chart there, you can see, average returns are starting to stabilize after quite a difficult period in f y twenty three. We obviously have a target return of 20% through the cycle, and we are still maintaining an average return of 28%. Then you can see from the shape of the the green line there that hopefully things are gradually moving back up as as things stabilize and into a more positive environment. In terms of the realizations, they're they're obviously lumpy, but, again, you can see, the trend in terms of the time. It it has slowed a bit in the last couple of years, but, again, there's a bit of a pickup, and we're still well ahead of our target.

10:39 We've got cash realizations of 15%, versus the target of 10%, and that h y 25 bar will obviously pick up now, following the m files completion.

10:54 Okay. Next one. This is what we've been doing in the year. So the twenty one million of direct deployment is split 13,000,000, into primary investments and 8,000,000 into follow ons. So the light blue ones are the new primary investment. So Sales Ape, is an AI powered sales assistant. So, it's doing really well. Lots of interest in anything AI. One data similar similarly is AI powered data management. So, again, strong interest in the sector. And SiteLine is in the climate theme, so, marketplace intelligence around that. The the dark blues are follow ons, you know, mainly defensive, helping these entities to stabilize and grow.

11:42 And the green one is obviously Connect Ventures, which we announced previously, 19,000,000 for an acquisition of Connect Ventures Fund one, and we we have a site about that further on as well. So 51,000,000 deployed in the year, and realizations. And files again will now become that solid pink box like the other ones now that that's completed.

12:10 Secondary acquisition, we've done, this Connect Ventures fund one with a 2012 vintage. We acquired 97% of it. One LP has retained their stake, a very small stake, but we've acquired it at what we thought was a good price of 19,000,000. Eight assets. The two main ones are, Soldo, a payment platform, and Typeform, which I'm sure everyone's used. There's a lot of websites in terms of helping people, complete the forms on this on the sites.

12:45 Thank you, Andy. I think with that, I'll just remind people of the sort of shape of the portfolio. We have a cadence of investing roughly ten, twelve, up to 15 new deals a year, which tend to split between sort of early stage and more growth profile investments. And then we will follow on into the existing portfolio for a similar number. Alongside that with the acquisition of FORWARD, we've added more companies into the portfolio. And so now the breadth of the portfolio is around 110 companies. The The way that we characterize these tends to be across their end user. And so you can see here with consumer technology that's focused on who the end user is being a consumer and then that applies with enterprise focusing on the enterprise acquirer of those technologies and the end user.

13:38 Hardware and deep tech can cover quite a few broad areas while digital health is looking at the intersection of where data comes into the healthcare systems. It's very much therefore in line with our investment thesis and understanding of technology companies focusing on data led solutions. And I think the shape of the portfolio, it's worth reminding everybody just the pace of innovation that we're seeing in technology as a solution for the largest problems faced by society, whether that be productivity or supply chains or even labor resource. I think we're seeing that the pace of innovation has has has continued to increase. And on the back of a technological shift led by AI more recently, I think some of the companies that are being built today will be the companies that disrupted tire industries.

14:29 And so it's important for us to be continually investing in those markets and ensuring that we're backing the new technologies and the new vintages of companies that come through.

14:41 On the next slide here, I actually break down a little bit further. So we have these four board categorizations that we just looked at, but I think there's a risk that people could lose sight of the the subsectors of technology that we're investing within. So we're a generalist technology investor, but we're giving our shareholders access to all of these themes that we constantly hear about, and these are the themes that are disrupting entire markets at the moment. So our portfolio is very much a a lens on fintech, be that consumer for things like Revolut and N26 and free trade, or be that more enterprise scale being the infrastructure that powers the bank's core core banking systems like FormMachine or payments architecture like like Form three.

15:28 And in a similar way, looking at the climate change, clearly, those are shifting economies as as economies decarbonize, and that's creating opportunities as new assets come into the market from an infrastructure perspective. But the the intelligence that's needed to manage and invest in those assets is all driven by data, be that market intelligence or in the case of b zero, whether that's creating carbon markets. And so this is an area that we've been spending a lot of time on over the last few years and making investments into into these companies. Space technology has also been a significant feature. We have company Eyesight, which has a constellation of satellites getting up to 40 satellites in low Earth orbit, and the data that comes from those companies can be used for products that are sold into enterprises.

16:22 And in the case here, specifically on imaging, but also on the data that can support insurance claims for floods and for fire risk. And so the the technology is is opening new categories of solutions to to problems that we we already face today. And that goes across health care and and similarly, the noise around AI and and and and quantum computing. These are technological shifts which are generational and therefore create incredible investment cases for us to to look to give access to our shareholders, but also incredible upside potential for those those those innovations that come through and are driving the the shifts in the spending patterns of consumers, but also in the productivity solutions for enterprises that are so needed.

17:17 With that lens on the portfolio, we're gonna come back to some of the activity in the year. We wanted to talk here around the sort of salient features of the six months being the the realizations. We started in in the the financial year with the statement that we wanted to have over 100,000,000 as a target for realizations in this coming year. That was really to demonstrate the shift in the confidence we had around generating liquidity out of the portfolio over the last couple of years preceding that. It's been a much quieter market, very much muted on the m and a front. And therefore, we have been unable to recycle capital from realizations. But importantly also, as we're selling assets, demonstrate the

18:05 nature of our NAV being robust. And that's an important feature of any realization is selling those assets at or above the holding value where we have them, and we're pleased to say that we have these four transactions in mind when we came out with that 100,000,000 target, and we obviously create a bit of a a buffer within the targets that we put out. And we set we always try to outperform those if it's if it's possible. And we're pleased to see that the four have have come through with MFOR's about to complete in the next in the next week or so. It's also instructive to look at the the returns on those because I think there's a tendency to focus on just the the the top companies in the call, but it's important to look at the breadth of the portfolio and and the breadth of where the returns are coming from. And I would say that as a team, we've been very much differentiated versus some of our competitors in the market and that we work very hard on on the entirety of the portfolio, specifically on the companies that we'll we'll look to exit.

19:05 We'll spend up to a couple of years thinking about the solutions for those businesses and ensuring that they can find the right homes and and attract the right values. In the case of Perkbox, we had a return of just over 1.3 x, which gives you a sense, we'll come in a moment, of how that sits within previous ranges of realizations. But it's important to bring back capital above our holding value. And in in the same sense, we had Graphcore, which was really a demonstration of downside protection. It wasn't the the out outcome we were hoping for, obviously, when Graphcore was raising capital at higher levels. But importantly, we moved down the valuation of the company as we weren't seeing proof points in the commercial model.

19:51 And that meant that when it was ultimately sold, it was sold above or, in this case, at the holding value that we had it held up. And the preference share structure that we had in place then meant that we were somewhat protected on the downside, and therefore we got the majority of our cost out of out of that investment. On the more positive front, EndoMAG sold in the period almost 36 just over 36,000,000 of of capital coming back and a 3.9 x multiple. And then more recently, we'll we'll be closing on we've already announced we're closing on the transaction of M Files, and that will be a 7.4x multiple. And if we look at the next slide, that really brings us into a point of context where you see that with over 600,000,000 of capital realized back to the balance sheet since we listed in 2016.

20:47 These are the cohorts of returns that that we point to from the invested capital perspective, but you can see where those four transactions sit within these cohorts as well. From the returns profile here, what's instructive is on the right hand side, you can see that this is very much typical venture capital returns in the sense that there's a power law. The majority of the returns are skewed to those winners. It's 30% of our invested capital is going to drive the majority of the over 600,000,000 of returns. And those companies scale and grow, and our job is to ensure that we're supporting those businesses on that journey, but also ensuring that we can hold those companies for longer. And as they start to scale and grow, we can identify them as as winning companies and provide more capital to to increase our return profile.

21:39 At the other end of the spectrum, venture is a risky asset class in that you will get some zeros, which is why it's important to invest in managers that have a long track record in the markets and and of different cycles, but also have an understanding of portfolio management. And so you will have some that go to zero here. And what I would say about the two middle cohorts is we work those very hard to ensure that we'll get value coming back from those companies. These are companies which are still have significant IP, which can have good business models, but but just aren't scaling fast enough to be on that right hand side of the chart. And so they're valuable to somebody, and so we will work with those companies and with their management teams and the rest of the shareholder group to find a suitable outcome. But importantly, that also generates returns proceeds

22:27 back to us that we can recycle into into new investments. And similarly, in what is crucial about the working of those businesses is that there's an opportunity cost of our investment team's time sat on the borders of those companies where they could be finding new investments or or working on the ones the businesses that will will sit in the right hand side of that chart. So it's very important for us as a group to be continually focused on the broader portfolio and managing those companies through to a a successful outcome. So thinking about the portfolio, I'll hand back to Andy to take us through some of the key movements in the six months from the from the call. Thanks, Ben.

23:13 So we've got this plan graph, which I think is a good way of of showing, the the growth in the portfolio across the core. And then the the one at the right hand side there is the the rest of the portfolio, the the tail there. The the main ones to call out, I think, for everyone, obviously, this big green one on the left

23:31 is Revolut. People have heard about that in the news. There was a secondary during the year, which implied the valuation of about 45,000,000,000, made a lot of headlines at the time. That was a small secondary, so it wasn't like a a full raise. It was really restricted to employees. So, you can't take that valuation per the guidelines. But if if you were able to do that, that would have implied probably about another 35 or 40,000,000 on top of the fair value that we're recognizing there. Revolut, so we're you know, the news flow is really good. It's starting to hit its proof points. Customer growth is good. Revenue growth is good. It's got a UK banking license now. It's making good progress across its markets.

24:19 So we're confident that that one will continue to grow into its proof points. Probably, our exit will be an IPO in in a couple of years, but you we'll we'll see how that, grows with, Revolut.

24:31 Another one to call out in the green is, Ledger. That's a a crypto hardware and software business. They've got really nice, crypto wallet product, and they've had some they brought in an Apple designer, Tony Fidel, and they've launched two products, Stacks and Flex, that that as well has been really good products look really nice. So the sales of those have been strong. People are using them to trade as well, and so they're making, revenue through the software associated with that. And, obviously, there's been quite a lot of noise around crypto with the US elections and just generally more volume. Bitcoin's obviously been trading at record levels, which helps grow that business, in terms of the market they're in.

25:19 And then one other, green one, to call out there is Aircall, software company sales and client service. Again, it's growing really well. They they're beating their targets. So in terms of how they're doing versus market comps, they're they're getting a premium. So, again, that business keeps growing. Hopefully, IPOs in a couple of years probably in The US, but they just need to keep it in those targets. In terms of the the ones that we've pulled back the valuations on, the the big one there is thought machine. That one is done on market comps because the last round was back in 2022. The premium that that has been applied to those has been pulled back a bit, not because of anything wrong with the company or what they're doing. We're we're very confident in the software and their progress, but the time to implement the software with the tier one banks that they've signed up has just taken longer than planned.

26:18 But they are signing up the tier one banks, get really good banks like JPM, Bankcap, Intesa, Sao Paulo. And as they complete those implementations, the the ARR really picks up. It's lumpy. So that'll it's about 70,000,000 ARR just now. That should continue to grow. And as that happens and they keep signing the tier ones, which they have a good pipeline of, that will continue to go, and that valuation should walk back up. The other one, just to call out there where we've pulled the value back, is Ivan. Similar similar story in some ways. You know, the company is still doing well, but the rate of growth that you need to have, to to keep up with the, comps from the the last raise that they did in 2022 is high, and they just haven't quite been able to hit that. But they are taking, actions to try and grow that. And as they pick up the revenue growth again, we, again, we would hope to be able to walk that valuation, back up.

27:20 Then maybe just one other one to point out is that a number of the portfolio have done, raises externally in the year. About 800,000,000 has been raised, and they've all been, at or above value. So some of that has helped under, under pinup lists and things like, Riverlane, which is a quantum computing company, and you can see the green there. I think that's the main ones to highlight there. So this is about valuation methodology. So I'll try not to be too technical and talk about IPEV guidelines too much, but we obviously have to apply those to our portfolio. You can see from that right hand graph, there's quite an even mix in terms of whether reviews calibrated to the last round or market comps.

28:11 And so there's a good spread. That's as we sort of come out of the, down cycle and more things are raised, we should have that more even spread. And, hopefully, companies will continue to raise as they grow, and you'll you'll have more last time points to mark too. In terms of the two tables on the left, there's the points to highlight probably at the range of discounts in that middle, table there. It's fairly consistent, but you can see the weighted average discount taken has been pulling back slightly. And that's, highlighting companies are are proving the valuation point so the the discount is not, as high as before.

28:59 In terms of the market comps, the multiples have been compressing, so they've gone down from seven and a half to six, and that's just in line with the with the, cloud index there. So it's our portfolio is consistent with what we're seeing across the wider industry and tech.

29:20 Thank you, Andy. So with that, I think I will touch a little bit more on context for the wider European markets. We were talking around messages of stabilization and an improving environment, and I think it's helpful to look at this context for how Europe has grown and scaled. Since 2016 when we IPO ed, you could see there's about 20,000,000,000 of capital being deployed across that European market. That capital has been consistently growing and scaling until we hit the 2122 period where there was an influx of capital coming from other sources like US investors, but also from crossover investors from the public market that we're investing in the private sphere. A lot of that capital would have gone into later stage growth companies.

30:07 What's therefore interesting to see as we look at the last couple of years, clearly, had that significant drop off, and that was largely reflecting the shift in the market as interest rates increased, technology valuations fell, and therefore we saw a retrenchment in the capital that was being deployed. And this final bar shows you a nine month view up to September. When you extrapolate that forward, it should come to a full year equivalent almost to '23. And if you ignore those two peak periods of 2122, you'll see there's a continual trend of of of maturing and growth in that European space. For context, Europe is about a third the size of The US, continues to be around a third the size of the capital deployed.

30:52 But I think the opportunity in Europe is to see that our capital increasing in in scale, particularly as we see our own government, but also governments across Europe looking to unlock the availability of pension capital to come into private markets. And so VENTURE will will will be a beneficiary of of some of that capital coming through as pension funds are aggregated and as they, have restrictions on where they can invest being being loosened, which means that they can hopefully take advantage of the, more significant growth that's remaining in the private markets, and that will be to the benefit of, pension savers for their retirement outcomes, but also will be to the benefit of European technology companies.

31:38 And if you layer on the lens of capital to the IP that we create and the culture of entrepreneurship that we have in Europe, you see already that the European environment is creating more companies, more early stage companies than in The US. It's just that we haven't been good enough at supporting them with capital at each of the stages of their growth. And in particular, the stage where MOLTEN invests, this is a part of the market that has a gap to capital. And we would like to clearly see that being filled with our own growth, but also just growth in capital coming into the market. On the right hand side here, you can see fundraising activity. I touched on this a little earlier. That clearly dropped off for VC funds. This is an aggregate across Europe, but we're starting to see that picking up. And that will then lead to more capital being deployed, getting back to more stabilized rates, which will hopefully mean that the deployment of that capital will be more uniform across across the space rather than being concentrated into fewer companies. We've seen the number of companies invested in reduced while the while the quantum of capital has remained, and that's because a lot of that capital is going into perceived tier one investments, particularly in the sphere of AI. And I think that more uniformity of of deployment will will

33:01 hopefully come in as we see more capital being raised. But there's clearly a lag effect that occurs. There's a lag effect that occurs with the capital being deployed, but there's also a lag effect that occurs from liquidity coming into these markets with m and a. And that lag effect is an opportunity for us looking at, for example, secondary investments like the Connect deal where we can provide liquidity to a part of the market and and we can access mature companies that are at a later stage of their journey, and we're able to therefore have a lens of recycling them into realizations within a three to four year horizon rather than the seven to ten year horizon you'll have with a primary investment, a new investment. So just finishing off moving from the market. I think the the messages we'd like to leave you with are that picture of stabilization and improving investment climate.

33:59 We as a team are very much focused on our core mission, which is supporting great founders into the best innovative technologies across Europe. And by doing that and supporting them with both capital and with knowledge and resource, we're able to grow these businesses and provide enhanced returns to our shareholders. And and and that sort of core mission remains very much our focus. And we have the opportunity by focusing on that to grow and scale our own vehicle and and growing it to the next cycle of the market is something that we're very much excited about. And we think that there's a lot of opportunities to come, particularly focusing on on those new innovative technologies and being consistent about our vintage creation of of our portfolio as well as managing effectively in the the existing portfolio, which has a lot of remaining upside potential.

34:55 To do that, we obviously need to focus on our own capital position, and it's pleasing to say that we're well capitalized as we come out of this period and ready for the anticipated opportunities that we see are available, and we'll continue to to make that our our focus as a team. So with that, I was gonna hand back to Jake because we think we've left enough time for, hopefully, a good amount of questions. And and therefore, Jake, if you're willing to to triage with that for us, we'll we'll start the questions. Absolutely, Ben, Andy. That's great. And if I may just jump back in there, thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I'd just like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can all be accessed via your investor dashboard.

35:55 Guys, as you can see there, we have received a number of questions throughout your presentation this morning. And thank you to all of those on the call for taking the time to submit their questions. But Andy, Ben, at this point, if I may just hand back to you just to read out those questions and make your responses where it's appropriate to do so. If I pick up from you at the end, that'd be great. Thank you. Super. Thank you. So questions here, I'll read them out, and then we'll come to answer them. We'll split them between Andy and myself. What are the prospects for the NAV per share increase for the year ahead? I would probably describe that as if you consider our target returns of 20% per annum, this is this is lumpy, so we talk about it through the cycle. But the NAV returns are driven by the growth in the underlying companies. And technology valuations at the moment are currently below ten year averages, so there is clearly opportunity for those to to elevate.

36:51 But even if the multiples remain the same, we should have the growth coming through our businesses. And the average growth rates in the core are reflective of a broader technology market where companies are now much more focused on capital efficiency and not growth at all costs. So some of those growth rates have come down. However, the average for the core is is still 48%. And so it's that growth which will then be translated, all things being equal, into NAV growth. And, obviously, over the last couple of valuation periods, we've seen some net reductions. You'll see from the slides we've shown today, we took the majority of those reductions very quickly as the market turned coming out of 2021 and the public market valuation comps reduced.

37:41 We reflected those public market movements through our portfolio very quickly. And in the last couple of valuation periods, we've had slightly more muted, they call it stabilized adjustments that have come through. So going forward, we feel like the portfolio growth will naturally lead to NAV accretion. And then as Andy described earlier, as companies start to raise additional capital, quite often that capital is being raised at uplifts to the values that we hold them up, and that gives us further opportunity to move those those companies up. Andy, do wanna take there's a question here on what are the runway lengths of the core portfolio. I think we've we've probably got to start the press. I'll let you cover that. Yeah. And actually, there's a slide, I think, number 34 in the deck actually has this in there.

38:31 So, about three quarters of the portfolio have, more than twelve months cash runway, 78%, in fact. And of the the balance, the the 22%, they're all in active raises, and all the indications are that they're gonna be at or above value again. So the core portfolio is in a strong position with its cash runway. We obviously continue to monitor that monitor that closely and work with the companies, but they're they're all taking action where required, and most of them have a very good runway already. Great. Thank you. Next next question on my screen is related to share buybacks reflecting on the 50% discount to asset value that the shares are currently trading at in the market.

39:19 And June, alongside our annual results, we put out a capital allocation policy for how we would deal with the capital that's coming back through to the balance sheet from those those realizations that we've been making. We stated that we're gonna continue to look at primary and secondary investment opportunities. The primary investments, as I've described, are important for vintage creation and for ensuring that we're in the best technologies that are coming through to the market at any particular time. And those are the growth levers that come two, three years down the line. But that's an important part of venture capital to be consistent in those vintages and ensure that you don't miss out on any particular pockets of of of innovation. So we'll continue to focus there. Secondary is as as we've described, create significant value. We think there are a point in time now where they those discounts that we're able to achieve are more elevated. And therefore, before liquidity comes back into this market, that's a significant investment opportunity for us.

40:21 And then we will also, as part of the policy, ensure that we continue to manage our own liquidity for an eighteen month plus period where we're looking at our operating costs, but also our debt service payments. And then outside of that, we're saying 10% of our realizations will go to share buybacks where that discount persists. And we've had roughly 76,000,000 of capital that's come back into the into the balance sheet, and we'll have more coming with the M Files deal, which is closing shortly. But we've already done 10,000,000 of realizations, so we're ahead of that sort of 10% range. And I think we will clearly be looking at that buyback schedule again if we have more significant realizations coming through.

41:08 So with the ones that we've announced, we're not planning to engage in any further buybacks. But if we have more significant realizations coming through, we'll continue to follow that capital allocation policy and and support the the buying of the shares. The next question I'm just reading it. It's quite a long one. Just give me one second. This is this is related to running your winners. So the question is around why don't you hold companies when they move to public IPOs? And we have a stated policy where if companies in our portfolio like we had with Trustpilot IPO, we will have a sort of a two year window where we'll sell down in a in a sensible manner. We feel that as a private market investor, our information arbitrage and our networks are are more applicable to private markets, and we think that our shareholders can own public businesses directly.

42:05 So we wouldn't be holding them for long periods of time once they go public. In actual fact, it's a very small proportion of our realizations that turn to liquidity through public routes. It tends to be around 80% of those businesses will be trade sales. And, actually, in terms of returning value, that's a much more effective route for us as well because in the public market route, we are exposed to lockups for periods of time. And we we also have given that we're a private investor, that creates the sense of a perceived overhang on those those stocks. And so the performance of the share price volatility can be increased. So I think the policy we've we've had of running our winners, but if they IPO, then we'll get our own in a sensible two year window is is appropriate.

42:58 And then there's a question on how to how to value MOLTEN VENTURES on a sum of the parts basis. This is an important question because we, as a group, put out reporting information with as much granularity as we feel is is is needed, but also as much granularity as we feel is is appropriate for our investors to be able to look through and see the value drivers often have. And we therefore have a core suite of companies where we show line by line granularity on our holding value and a range of our equity ownership. And the reason that we don't put out all of the private companies' data is because it is their data, and they are private for a reason. And, actually, we will be taking away some of their advantages of being private by putting out a commercial information to the public market.

43:46 It would also be a commercial disadvantage to us trying to win new investments because our competitors would rightly point to the fact that they say, oh, if you take an investment ticket from MOLTEN, you'll have to put all of your information into the public markets. And so I think we get the right balance of aggregating the growth criteria of our companies, the growth drivers of those businesses, but without displaying their own private data into the public domain. So we'll continue to do that. We do take feedback with the the level of disclosure that that we provide. But, again, I think in the main, investors have said that that we've probably got that at the right balance in terms of how much information is is given. There was a question on CEO change, which I'll address.

44:42 As our new chair, Lawrence, came into the business in January, he was obviously spending time with Martin, the former CEO, and looking at the the shape of the business over the next coming period for the for the change that we believe will happen in the cycle. Hopefully, better markets, but really the lens of venture capital investing is that you're looking very much to the the long term. So what would the next five years look like? That led to sort of an orderly succession and and announcements that we've made with me stepping up to the CEO role and Martin remaining alongside us as a support for a six month period to ensure that we have a proper handover. And that was the announcement we made to the market just a few weeks ago now. There is a question on outstanding options and deferred shares. We'll report everything that would be needed to report now into into the annual report. So as we come into the June period next year, the annual report will have all of the disclosure that's required on anything like that.

45:48 Is question on anticipating market conditions and and when there's kind of timing of pension funds coming into into this sphere? Think I I've sort of described the conditions that we think will be coming, which will be an increasing capital availability, but also hopefully more stable market and less elections and visibility on interest rates, which means that there's an alignment between buyers and sellers of assets in terms of how to price them. The timing of that is inevitably unclear. It's it's something that we we feel is coming. But like 2024, there's been a few moments where people feel a little bit more confident, and then it gets somewhat pushed out geopolitical events, overtake, or just macro macro events. So at the moment, we can't put a specific timing on it, but we're clearly looking ahead to a more favorable market that we we feel will come.

46:51 I'm just reading the next one. European IPOs in our sector and whether the market is open or not for tech IPOs. This is a debate that's perennially had with with the bankers that we spend time with. I would say that the lens of the market is more favorable for IPOs coming into next year. There's a lot of companies that are looking at the processes or have got themselves ready for an IPO. The question then is just whether there's a a sufficient market appetite and a stable enough market environment for those to to go. But I think the overall sentiment is that there should be a pickup into next year. Not saying that gets us back to normal levels, but we're coming off a very low base, and therefore, the expectation is for further activity.

47:39 In terms of technology specifically, and the question here is into European IPOs, there'll be some companies that are appropriate for European exchanges, be they London or into broader Europe. And then there'll be others which will look to The US because of the deeper pools of capital. So I think we'll continue to see a split in in where the companies decide to to go public. And the final question I can see on my screen is, have we identified the reasons that lead to market to value the company at a 50% discount to NAV? What I would say here is that this isn't specific just to MOLTEN. This is a sector wide issue that we're seeing. I I often believe the fundamental reasons of these disconnects in value is is related to capital and flows of capital.

48:27 We've seen that The UK market has had outflows in terms of the equity funds since around 2021. So that's that's been a really tough period for the markets. And as our shareholders, even if they're supportive of MOLTEN as a company, have redemptions in their own funds, they do have to manage that liquidity profile, which often means selling across their portfolios. And and that's been a feature that's affected, as I say, not just MOLTEN, but the the broader publicly listed ventures that invest into private markets. Those discounts are more elevated than they have been historically, but I would say they have been persisting for a couple of years. And I think in terms of what we can control, the the realizations at or above holding value give confidence to the market around the the value of the the the NAV, we'll continue to work on those realizations as as we've described and give that confidence.

49:28 Also, the second part of of of those realizations is creating liquidity, and so ensuring that we have sufficient liquidity to continue to support our portfolio and to invest in those new vintages is is a feature as well. So all we can do is continue to ensure the business performs well and then ensure that we work as hard as we can to to get to the conversation with the right people to explain the the quality of our companies and the quality of the opportunity. And it's those marginal buyers that will ultimately close that gap to to NAV. And as I say, some of that will be individual investment decisions, and some of that will be flows of capital. Ben, Andy, if I may just jump back in there. Thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors this morning. And 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 and, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform.

50:30 But, Ben, 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'd be great. Thank you very much. I'd like to thank everyone for their time. We we really value the engagement with our shareholders, be they institutional or or retail. We try to make use of our time to give you as much visibility as possible, both in terms of the material that we we have available and the material that exists on our own website, which I recommend you to go and take a look at. There are videos on there that we've put up over the past year giving you a bit more in-depth on some of our investment theses as well. We welcome the feedback, as as Jake's described, and we're very grateful for the time you're you've given us today and the continued support from MOLTEN. So thank you very much.

51:22 Perfect. That's great. Ben, Andy, thank you once again for updating investors this morning. Could I please ask investors not to close this session? You'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of MOLTEN VENTURES PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.