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 will 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. I would now like to hand you over to the Executive Management Team from IP Group. Greg, good morning, sir.
Thank you very much, Jake, and thank you all to everyone at Investor Meet Company for once again hosting this live update. It is open to all shareholders and prospective potential shareholders and a mark of our continuing commitment to transparency in reporting. With me on today's full-year results call, I am joined by our Managing Partner, Mark Riley, and our CFO, David Baynes. This presentation will be available on the IR section of our website. Before I go any further, please note the usual important disclaimers about the information that will be in this update, and particularly the nature of any forward-looking statements that might be contained within. In terms of what we will cover today, I will provide an overview of the group's performance in 2024.
I'll then pass on to Mark, who will provide an update on a number of our key balance sheet portfolio company holdings. David will then run you through the financial results, and then we'll return for a summary and into Q&A. As always, as Jake said, please do post questions in the Q&A section, and we'll endeavour to cover all of them, either live if time allows, or otherwise we'll do it via the platform. I'll start with that full-year overview.
I think for those of you who joined us for the half-year results presentation, you'll recall that I highlighted the focus that was being placed by me and the team on delivering cash exits as a 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. I'm obviously pleased to report that we did indeed complete a number of further exits during the second half of 2024, and that resulted in a total of GBP 183 million of cash proceeds realised for the year. Indeed, this performance was significantly ahead of what was, again, a pretty sluggish period for liquidity across the venture capital market.
Now, this outperformance on profitable cash exits enabled us to continue to deliver on our commitment to make cash returns to shareholders. As you'll have seen, we've significantly accelerated our buyback program during the year. We bought back GBP 30 million worth of shares during calendar 2024, and we announced further buybacks totaling up to GBP 70 million, which we've continued to implement during 2025. In today's release, you'll see that given the persistent discount at which our shares continue to trade, we now intend to allocate 50% of all realizations achieved during 2025 to cash returns to shareholders. As always, we'll continue to review this proportion as a board based on the relative attractiveness of all of our various capital investment opportunities.
You'll also have seen in today's release that as a result of further good progress on realisations during 2025 to date, we've added a further GBP 10 million to our buyback programme such that the commitment on the current programme now totals up to GBP 80 million. To put that in context, that GBP 80 million represents almost 20% of our current market capitalisation. Since the commencement of our buyback programme, we've now bought back and cancelled more than 10% of the group's shares in issue. Now, despite this outperformance on exits and our accelerating buyback, our underlying NAV per share performance was minus 15%. I, David, and Mark will cover the main contributors to this performance shortly, but as you would expect, this performance is both disappointing and it's well below what we believe is achievable with our business and our portfolio.
As a result, as I described at the half-year, we have taken steps to proactively address this structure that we operate under, our capability and our cost base. This has resulted in a reduction in our net overhead run rate of approximately a quarter on an annualized basis at the end of 2024. While we have had a small number of companies that have sort of failed during the period, many of the fair value reductions represent reversals of previous fair value increases. Several of our portfolio companies raised money in 2021 and early 2022, and some have not grown into those valuations. As we will describe later, although we have seen a fair value reduction for those companies, in many cases, this represents a resetting of value, and there remains a significant value creation opportunity for those companies given the size of the markets that they address.
Overall, we continue to see a significant opportunity to deliver positive out-per-share performance. Mark will talk more to this shortly. Finally, as shareholders, regular listeners will know, we have been building out our relationships with pension funds in Australia to manage private capital, and that includes managing a commitment of AUD 435 million for Hostplus, one of Australia's leading superannuation funds. We continue to believe there is a significant opportunity to continue to build out those relationships in Australia. While things are definitely moving more slowly here in the U.K., we are 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. That includes under initiatives such as the Mansion House Compact and as a result of the other pension fund reforms.
I'll cover these in a little bit more detail. First of all, I'll turn to one of the sort of standout successes of 2024. That was our investment in Features pace and our support of that business through to its sale to Visa, which completed in December. As I said, at the half-year, this is a very compelling business, which is addressing growing multi-billion 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 co-investors, including the likes of Insight Partners, Hyland, TTV, and that is a network that we will continue to co-invest with in the future.
We'd consistently guided that Features pace revenue should be approaching sort of $100 million-ish on a run rate basis by 2025-2026. I said the decent revenue multiple accompanied 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. That was in 2024, so a year or two ahead of what we were planning. We were the largest shareholder in the company at exit at about 20%, and we will receive total proceeds of $134 million, having invested about $23 million. It's worth pointing out that $134 million is about 80% higher than our carrying value at the start of 2024.
We consider that that six times multiple and high 20% IRR or annualized return represents a great financial return for our shareholders. It is also important from an impact perspective that Features pace's anti-fraud and anti-financial crime tools will now be rolled out across Visa to protect a much wider group of customers. That was a standout success. That said, it was achieved during a very active second half of 2024 in terms of cash realizations. In July, we realized GBP 9 million from a partial exit of Nasdaq-listed Centessa. We completed the sale of Garrison that we had announced in the first half, and in October, another exit from the therapeutics portfolio in the form of Kymab Therapeutics.
The majority of that $134 million of cash proceeds for Features pace we received in December, you can see that there, $119 million, and the balance of $15 million will be received in two tranches in 2025 and 2026. 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. Through this transaction, we expect to generate up to approximately $15 million of cash proceeds. 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 have completed about half of this figure to date, and we continue to work on the balance during 2025.
That positive momentum on exits continues with the completion in early 2025 of a number of exits that we announced in 2024, and we've now received more than $20 million cash from exits so far in 2025, which has led to the additional $10 million that we're allocating to our buyback programme. Although I'm very limited on what we can say due to SEC rules, we also noted that Hinge Health made a recent announcement that it intends to list on the New York Stock Exchange. I mentioned earlier that delivering these cash exits was 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 PitchBook MVCA report, which generally describing conditions in the U.S., which are pretty applicable to the U.K. and Europe as well, noted that exit activity has been the blockade limiting VC for the past three years, and return-generating exits for the market have been few and far between. You can see this in the chart here. The chart on the left shows our exit performance for the past few years. That is in GBP millions over the past few years. On the right, albeit with different units of measure, you can see the total value of exits across the VC market in the U.S. as a whole. You can see that 2024 remains less than half the value seen in 2019 and 2020.
Interestingly, PitchBook did note that during the past two years, the largest exits, both in terms of public listings and acquisitions, tended to concentrate in healthcare and information technology, which you can see from the previous slide, was also our experience. We believe this continues to support our conviction around the value that can be delivered in these sort of subsectors of deep tech in which we operate. Moving to shareholder returns. 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.
While this is also largely the case for a few of our listed peers on the London Stock Exchange, and indeed for some much larger balance sheet investment businesses globally, we've been taking increasing steps to retire capital at prices that we consider to represent very compelling long-term value. Of course, at all times, we have to balance this opportunity with the fact that almost all of our portfolio companies require further funding, and in most cases, some of that is likely to need to come from the group. 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.
Firstly, given that persistent discount, we will now allocate 50% of realisations 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. Secondly, as I mentioned, we're applying that approach to the $20 million or so realisations to date, adding a further $10 million to our buyback programme. We completed about $30 million of buying back shares during 2024, so we've got a further $50 million to go. Following the release of our results this morning, we are doing so again at the sort of maximum allowable pace under the Marseille Harbour rules of about 25% of rolling volume.
At these levels, at these share price levels, hopefully 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. In fact, it's worth saying to all shareholders, the level of shares that we have bought back is now approaching the level of authority that you approved at our AGM in 2024. To ensure we actually have the right authorities to execute the current programme, 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. I mentioned that we outperformed on exits, but we underperformed on overall NAV per share returns with a 17 pence per share reduction.
Now, Mark and David are going to talk a bit about that, but I'll cover a couple of the key areas. First of all, the largest overall contributor was Oxford Nanopore. 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 seven pence 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 PromethION Q-line series, are essential for delivering some of these more regulated end markets.
Secondly, Oxford Nanopore announced several big landmark contracts and sort of strategic collaborations. That included with the U.K. government, U.K. Biobank, and Precision Health in Singapore. That adds to existing relationships with the likes of the Mayo Clinic in the U.S. for precision medicine in cancer and genetic disorders. Those collaborations will add revenue and expect it to advance genomics-driven healthcare innovation around the world. 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 bioMérieux and strategic relationships that the business has with Nvidia and Apple. That Novo investment was part of a small primary fundraise, and our modelling now shows that the company can comfortably trade to its 2028 cash flow break-even.
Now, the more recent results have evidently disappointed the market. In our view, the company's taken an appropriately prudent view of the impact of NIH budgetary challenges in the U.S. and sales restrictions in China, but it means 2025 growth is anticipated to be nearer that achieved in 2024 than the 30% median target. Although we think that the recent cost control measures mean the bottom line impact is likely to be minimal, we can still see how the company achieves its anticipation of EBITDA break-even in 2027. Now, the second category, and Dave's going to talk about this a bit more in the financial results, relates to the sort of knock-on effect of this ongoing tougher funding environment for growth stage companies on those businesses that need to raise capital reasonably imminently. A number of these businesses have highly differentiated product offerings and address multi-billion markets.
However, nonetheless, that funding environment is definitely more challenging than a couple of years ago. This includes businesses such as Oxa, which is our world-leading industrial autonomy software business, and Mark will provide some further color on that one shortly. The third major driver is sort of commercial delays or technical setbacks specific to a particular company. Of course, the challenging funding environment does not help, but it is largely down to specific issues with the company. This includes companies like Ultraleap, which is developing this sort of world-leading hand tracking technology, which had some commercial setbacks. Mark will talk about that one. Another example of this category is, of course, Oxford Nanopore. This is one where we did have a technical setback. This is our single largest private company holding by value.
Of course, during the year, we were frustrated, as were shareholders, that Obsidian Therapeutics was not in a position to release any data from its phase 2B RA study. However, in February this year, Obsidian Therapeutics did provide an update, and it was disappointing that it did not achieve the primary endpoint. However, it was also encouraging that the trial results reinforced lorlatinib, 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. We also saw statistically significant improvements in things like bone erosions and improvements in disability and fatigue in patients. That is a huge positive impact for patients.
Now, the company will publish full study results shortly and plans further phase 2 studies to further evaluate the unique potential of that drug to promote what's called adaptive tissue repair, both in RA and in other conditions. In our initial review of the data, both sort of internally from our team and from independent external specialists, confirms that there is genuinely something unique about the mechanism of this drug. We are supportive of the company continuing to pursue this development. We're also pleased to report that Obsidian is sufficiently funded to conduct those additional studies, which the phase 2B justified. However, given this setback and the knock-on implications for monetizing the compound, we reviewed the carrying value, including with the support of Deloitte and with the review from our auditor, KPMG, and reduced the fair value by about $32 million or 3 pence per share.
As we entered 2024, we recognized that the appetite for higher risk and early stage assets was likely to remain cautious. There was a lot going on in the world, lots of elections and disruptions to trade and investment flows, and lots of geopolitical tension and military conflicts. We were also very aware of the continued discount between our NAV per share and our share price. As a result, we agreed with the board a number of priorities for us to deliver in 2024 to seek to address that and optimize the group for growth. First of all, as I mentioned, we proactively delivered on profitable realizations. We continue to focus down our investment strategy, and we extended our buyback, as I mentioned. We reduced our net overheads, and we've maintained investment discipline.
Worth saying that we invested about $63 million, down from $70 million, which was less than 10% again of the total capital, $780 million raised by the portfolio as a whole. We also were successful in raising a further $95 million of additional managed private capital, partly through Park Walk and partly through an extension of our relationship with Hostplus. Even these actions have yet to have a sustained impact on NAV per share or our share price indeed. 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. As you would expect, the board continues to review all options to deliver shareholder value. Just a quick summary of how the business is now set up.
We've clearly sought to reduce net overheads and to access additional private capital. This is the way that the group is now structured. Increasingly, we're making the bulk of our early stage investments through our Park Walk 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 the sort of challenge markets for raising EIS and VCT funding, we tend to raise about $30-$40 million 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, as you'll see in Mark's slide, is in businesses that we anticipate have the opportunity to exit within the next sort of two to three years. Finally, on the right-hand side, this is where, as businesses start to scale, and it's certainly something which is a target in the U.K., they need further capital beyond the level that we can provide from the balance sheet. We have complemented the balance sheet with private scale-up funds, and that generates management and performance fees for the business, but it also helps to ensure that as those companies mature, they can get better access to growth capital, hopefully generating better returns for shareholders. In terms of scale, Park Walk's about GBP 500 million of assets under management.
The balance sheet's about $1 billion, and we're aiming to scale what is an existing few hundred million on the private fund side to at least the same level as the balance sheet over time. Finally, I said earlier that we have seen an overall reduction in NAV per share, but we continue to see this significant opportunity to deliver positive NAV per share performance that will be enhanced for long-term shareholders by our current active buyback program. I've covered Oxford Nanopore and Obsidian. They're the two largest holdings by value. Each represents about 10% of our NAV per share. I'm now going to pass on to Mark to cover the next few, as well as touching on some of those companies that I mentioned had seen a resetting of value for this year for various reasons, and yet continue to have very significant upside potential.
Mark, over to you.
Thank you, Greg. Good morning, everybody. My name's 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, Features pace and Garrison in 2024, and prior to that, the Wave Optics, which we sold for over $500 million. Intending and hoping to bring that success across the group level portfolio. Regrettably, my first job is to convey to you with contrition a write-down. As Greg said, the drivers for that were a continued drop in the price of our holding in Oxford Nanopore.
That was the largest contributor, but also there were market headwinds and a contraction in the availability of co-investment capital and the associated price erosion that that causes, as well as some commercial setbacks in the portfolio. I'll go into a little bit more detail on that. The positive message is that those were setbacks. They were not write-downs. They were not write-offs. They were not sort of complete loss of opportunity. History tells us that venture capital as a business model relies on outsized returns from one or a small number of assets that pay back and deliver upside on the rest of the portfolio. Inevitably, some of those challenges fall first, and the sort of fluctuating journey to those outcomes can be a tough one, as we've seen this year.
We do continue to have a whole stable of candidates to be the assets that deliver that really sort of high outsized return to deliver return right across the portfolio. Of course, the degree to which that potential is priced into the current value fluctuates with the market, but it was high a few years ago. It was lower this year, but the fact is that that potential remains. I picked out a few of our sort of most mature assets to exemplify that and to really sort of characterise that potential. All of the assets on this slide are delivering transformative products in multi-billion, $10 billion-plus market opportunities. Picking out the first one, you may already be familiar with Hysata, which is our hydrogen electrolyser company. Hydrogen electrolyser is basically a unit that creates hydrogen. It's how you form hydrogen.
They are commercialising a new type of hydrogen electrolyser that is far more efficient than you can currently buy. If you buy an electrolyser today, it will be about 75% efficient if it's a good one. The Hysata electrolyser, they've shown that it's capable of 95% efficiency. They have some milestones coming up this year, technical milestones that are sort of validation points for their device. They're building a scale-up version of their device at the moment. If those technical milestones are hit and the data is looking good so far, there is a very sort of immediate opportunity to gain customer traction with that device. They're selling into a $17 billion projected market in 2030 for hydrogen electrolysers. We see a lot of upside in that opportunity. The second asset covered on this slide is Artios.
They are developing DNA damage response pathway drugs for treatment of cancer. They have already published some early data in late 2023. They published some data where they said that durable confirmed responses were observed. We take that to mean that they're seeing a reduction in a visible effect on tumors. Now they are doing their phase 1/2 trial, which is expected to complete this year to prove that effect out in a larger cohort of patients. The third asset on this slide is Pulmocide. Pulmocide makes a drug that treats a fungal infection of the lung. There is a fungus called Aspergillus, which we all inhale. It's naturally occurring in soil and in fertilizer, and it doesn't usually do you any harm.
If you have a reduced immune system or other sort of lung conditions, then this can be very dangerous and in fact fatal. Pulmocide has a drug, an inhalable drug, which is a sort of novel mechanism for treating this condition, which is showing very promising signs. They have already done some trials on this drug, and they show that it potentially has fewer side effects, better efficacy, and improved patient outcomes than existing drugs. Their phase 3 trial is due to be out next year. They are getting a lot of interest already in their progress. In health, we said we can't settle without due to SEC rules for another company targeting a very large market. That sort of exemplifies the opportunity. I also wanted to emphasize this point that, yes, we have had some write-downs in the portfolio this year.
In addition to Nanopore, there were some private companies that we wrote down. All of these companies still have that existing opportunity that they have an opportunity to deliver upside for us. They were not write-downs because these companies have failed. They were write-downs because they have had challenges or setbacks or market contraction or access to funding challenges. They are not write-offs. They still give us an opportunity to retain value. Ultraleap 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 and did not get the market traction that they hoped for in the timescale that they hoped for. They have a huge family of very fundamental patents in this area of hand tracking and haptic feedback.
We will use hand tracking for interfacing with computers in the future. We have formed a partnership to monetize that patent portfolio. There remains good potential for us to get a return on our investment in that asset. Greg talked about Istesso. Obviously, disappointing not to have hit the primary endpoint in that trial, but it did generate a lot of encouraging signs that there is something really fundamentally exciting happening with this drug and that there is something compelling from a patient perspective with this drug. We now have learned a lot, and we know what we are going to apply to the next stage of trialing the drug. There is still a lot of potential there. First Light Fusion, they frankly failed to raise money with the largest quantum that they wanted to raise.
They had a business model that relied on building a fusion reactor. 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 nuclear fusion as an energy source, a sort of much more of a picks and shovels play that allows them to be a supply to the market. In fact, it is already generating revenue today. Good opportunity there to retain value in that company. Finally, Oxford on this slide. They raised money in a market that was very, very strong. We have been circumspect about this. They are coming up to raise money again. We do not know how that will play out.
We expect that they will raise money, but we do not know the price of that round yet. We have taken a small impairment on this, but it is 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 is one of the few companies to go through a system integrator to put into a vehicle in that way and to run their software on the road and in lots of off-road applications. They have several partnerships that are going through trials at the moment that have very large upside if those trials are successful and sort of early signs of promising uptake of that technology in off-road applications like airports and ports and so on.
Finally, in addition to these sort of higher 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 near-term exit category. We have lots of exciting companies coming through again, targeting very valuable areas of the market. I've just picked out a few of those, but there are a lot to cover. Intrinsic is a semiconductor company that is making smaller feature memory technology. At the moment, we have a limitation in the feature size that we can apply to random access memory. That gives us a constraint that we can't sit random access memory on the same chip as processors. You have a bottleneck in your processing. Intrinsic has technology.
It's the only 12 nanometer non-volatile memory in the world at the moment. That should take out later this year. If that is successful and the technical parameters of that technology are hit, then we have a very compelling technology to completely transform a $100 billion market opportunity in non-volatile memory. OxHealth, another company, is going very well, well into revenue, now supplying 50% of NHS England's mental health trusts. They have customers in the U.S. as well. Genomics uses genetic databases and advanced algorithms to understand the genetic component of disease. They have some very compelling partnerships with the likes of GSK, Vertex, and others. The point being, there's a lot of kind of potential sat beneath the large component of value in the portfolio and that quarter of the portfolio that's made up by our sort of smaller earlier stage assets.
There are a lot of candidates to jump up into those higher value buckets. In summary, a lot of candidates to deliver that upside return. The write-downs were write-downs. They were not write-offs. The opportunity remains. A lot of assets in the lower value portfolio have the potential to deliver future returns as well. Over to you, David.
Thank you. Thanks very much. Hello, everybody. Good to be with you again. Just quickly go through the financial results. It is a relatively short section, but I will give you a quick summary of the key points. Cash, very good, as you heard. Very strong, up about $60 million, up about 25%. We will look at a kind of cash order form 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 97 pence per share from about GBP 1.14 this time last year. It's about a 15% reduction now per share. It's about a GBP 200 million loss over the period. Net overhead slightly down in the period. We'll talk about that in a minute, down from 22 to 19. They're actually at the year-end, a lower number again. I'll talk about that briefly when I do costs. Really, probably coming to the main messaging, what is in that loss effectively? On the green side, on the positive side, on the left-hand side of the screen there, obviously, Features pace is a key part of that, about GBP 56 million, about GBP 66 million. There were a couple of Kynos and Said, which made it up to about GBP 66 million. I'll drop that. There's some other quoted companies in the next door box.
Intelligent Arctic Sound, for example, doubled in the year. Centessa went up in the year. And these are companies which we either exited or sold partially. So there's about GBP 80 million buckets on the left-hand side of the screen. In the middle, the actual basic up rounds, down rounds, other movements on platforms, for example, relatively neutral. Actually, almost sort of cancelled themselves out. Probably where the main story is, I'm afraid, on the write-downs is on the right-hand side of our screen. We've talked about Oxford Nanopore. It's a publicly listed company. Actually, its ratings are good. Actually, it's been achieving the numbers it said it would do. In this difficult market, it hasn't performed well. The share price is down. There's EUR 66 million in one go.
Then leading to the presentation Mark just gave, there's a kind of category of companies actually that's extremely strong. We're still very excited about some of those like Fusion and Oxa, which mainly due to the funding environment. In both cases, those companies have actually funded later than we expected. 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 other than have a write-down. It's hard to carry. Valuation is sometimes relatively old. Both cases, one funding round was 2021, the other was 2022. Relatively old. You can't rely on them anymore. You haven't yet completed another funding round. Therefore, you really have to take the decision to be pretty prudent and take relatively significant write-downs.
We very much hope when subsequent funding rounds happen, which we believe they will on both those companies, we hope we'll be relatively prudent. That is about GBP 40 million at First Light Fusion, for example, and Oxford's about a third. That really accounts for that. You have about GBP 100 million, a little bit over GBP 130 million, where there are actually, I would say, some common setbacks. We've heard about Istesso. Obviously, very unusual in that it missed its primary endpoint, but a lot of very interesting and really disruptive stance in its secondary endpoints in terms of bone repair. Unavoidably, though, we had to rerun those numbers, and we've had to write that down by about GBP 31 million in the period. Ultraleap, we might have just explained to you, still an exciting company with interesting new business models of generation licensing come.
Given the primary market has not been successful, we had no choice but to do a significant write-down. We wrote that down by about $26 million. The last one in that category, a company called Crescendo, which is a drug company, actually a prostate cancer trial, did have some good evidence of success, but unfortunately, not enough, not over enough patients to make it competitive with other drugs in the market. As a result, we have taken a very prudent view and actually written most of that off. That really explains you cannot really all that loss in those small number of companies. Next slide. Actually, that is what I give pretty much every year. It is pretty simple. Our numbers are actually pretty simple, which is good news for CFO. You have got a balance sheet.
You have for cash position, even smaller amounts of liabilities, most of which, by the way, are contingent on exits. You only actually pay them if you get exits, items such as carrying. You can see their reduction from about $1.2 billion to just under . In terms of on the right, the actual distribution of portfolio is still pretty similar, actually. They have the vast majority, 83%, of it, in the top 40 companies. We are, although having in our very model, we have a lot of companies, but we have very exciting early stage stuff, as Mark just explained in three companies a moment ago. Actually, a lot of the value is really restricted and focused on a fairly small number of companies. Not too much on our end to this slide, either. We talk about each time.
Normally, where we normally find the R, we've got about a third of the portfolio that is funded. It doesn't need to raise more money. It might raise money if it wants to. It doesn't need to raise money. We normally have about a third funding this year and a third next year. Actually, as it stands, we've got a relatively small amount this year, but they were enough, as you've heard, to mean we broke down some of our bigger assets. Most are actually out of 26. Pretty hopeful we'll get those assets funded in the first half. You should have a relatively small amount that requires funding in the second half of the year, which, of course, is a good place to be combined with our strong cash. This is what cash performed. A quick look at numbers.
We'll see we invested about GBP 63 million, a little bit less than previous years. Recently, we're investing between GBP 70 million-GBP 90 million, but about GBP 63 million invested. Very good realisations. Underpinned a lot by that Features pace exit, but also Kymab in there, and a number of other exits, meaning we generated over GBP 183 million proceeds there. Sort of three times what we invested. We've heard about the share buyback program. We bought back GBP 30 million. We're still committed to about GBP 50 million. Overheads at GBP 19 million, as we'll hear in a minute, going to be lower soon. A little bit of debt, very small amount of debt funding, and other working capital items, that curve, because on occasion, it's on the licensing side. We collect money on behalf of other parties that we're going to have to distribute. You have kind of working capital movement.
Actually, we're in the year with GBP 285 million, which obviously is very strong. Probably worth making a point. We're still strong today. It's GBP 277 million in the bank as I speak to you. That, although we're three months later, that position has remained pretty strong. I think last for me, just talking about the overheads that I touched on, during the year, we did do a very comprehensive review of overheads. 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. That's because we made most of the reductions in the second half. Therefore, we haven't had a full year impact.
As at the year-end, the runway has reduced by about 23%, which means that we've got about $16 million-$7 million net costs as opposed to about $22.1 million at the beginning of last year. We've achieved that by focusing on our strategy, being more efficient, relying more in part on sourcing. That's allowed us to actually reduce our costs across the group without actually significantly detrimenting our ability to perform. We hope to start delivering good returns going forward. With that, I'll hand you back and to a question from Mr. Hugh Green.
Thanks very much, Dave. Very good. Right. Just very quickly to summarize and then get on to questions. We've got a number of questions in the Q&A section, which is very good. Thank you, everyone.
I guess firstly, just to highlight that there will be more than 35 milestones of various subscriptions coming up across that balance sheet portfolio during 2025. Obviously, some will be good, some may be bad, including on the clinical side of things, given the sort of statistical outcomes that are possible there. As Mark's mentioned, a number of them are also product launches, technical updates. Indeed, included in that is first revenues for our Fusion business, First Light Fusion, consistent with that now becoming a specialist component supplier. There will be plenty of milestones to mark us against during the portfolio over the course of the year. I did also want to give shareholders visibility on what we are prioritizing for 2025 and beyond. As I mentioned, in 2024, our main priority really was being able to deliver profitable cash exits.
I think we delivered on that despite a tough market. Clearly, the priority for 2025 is to get the NAV per share moving positively again. We talk in the release also about continuing to deliver those cash exits, profitable cash exits. We can see line of sight on GBP 250 million from the private portfolio by the end of 2027. We do have line of sight on which companies are potential contributors to that. Of course, the timing and the outcome of those companies is always the most difficult thing to predict. We do have a very strong pipeline across a number of companies that we are working towards. As I mentioned in the release, we are upping the level of our cash exits that we are using for cash returns to shareholders, which we are doing this by way of a buyback at the moment.
The eventual game plan, as a shareholder myself, is that we get back to a position where we're not trading at a significant discount to NAV. At that point, we can reconsider using mechanisms such as the dividend, which pays back cash to all shareholders equally. When the share price isn't at such a significant discount to NAV, that's obviously what the board will consider and look at. Another area that we're targeting is to access further private scale-up capital. As I said, I do believe that there's a great opportunity in Australia. Ironically, we're having more success with the Australian superannuation funds than we are with those in the U.K. That's not to say that we don't have support from U.K. long-term capital. Railpen, one of the most active DB schemes in the U.K., is our largest shareholder.
We have a number of other shareholders on the register from that investor group. We have Phoenix, the biggest DC provider in the U.K., which provides our long-term debt. We also have co-investors in a number of our funds. There are many ways that the sort of Mansion House Compact, etc., can be delivered through IP Group. We are working hard to do that. It is slow, but we are seeing increasing signs that some of that capital may start to flow, whether it will be this year or early next, not sure. We are definitely working towards it being this year. I think we can access further private scale-up capital. I have got greater visibility, as I said, on those relationships in Australia, which, of course, is relevant for companies that we have across the portfolio. Hopefully, that will be joined by the U.K.
I just want to also make I made this point a bit at the half year. At the moment, we are very much focusing our balance sheet capital, as Mark said, on delivering those companies that are going to deliver NAV 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. That is not to say that we do not have a rich pipeline. Most of that opportunity pipeline is being delivered through our Park Walk managed funds. We do 20-30 new spinouts a year through that.
While the strategy that I described, which is to use the Park Walk 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 new deals is very low at the moment. We think that's the appropriate balance for delivering value to shareholders, delivering NAV to share. As we are successful, we will be able to do that in the future. To summarize the key messages, hopefully by now, you'll have these sort of drummed into you. We did outperform on exits 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 million program still outstanding at the moment, which is more than 10% of our existing market cap.
That is having already retired and cancelled 10% of our shares. We hope that is going to have an impact on share price, a positive impact on share price, of course. Our NAV per share did decline. I hope that Mark has been able to set out to you the reasons why we are confident that in many cases, those are resettings of value and setbacks rather than write-off of opportunity. We do believe that there is a very significant opportunity to deliver these positive NAV per share performance. The fact that we are doing buybacks at these levels will enhance the NAV per share return for shareholders. That will hopefully yield results in our share price. That is obviously the most important KPI for shareholders, myself included. With that, I will now move to Q&A. Dave, you do a great job every time of.
Thank you very much. Jason's on the peer review. No, I will. Okay. Right. Looking ahead, everybody, we're 45 minutes in. 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 for those that might need to go. I've got 28 minutes to go through. Number one, I'll answer this. What are the annual costs of 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 GBP 22.1 million, probably to about GBP 17 million this year. Quite a significant reduction during the period. We have implemented quite a big cut. We think it is right-sized. We always have to review the costs.
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. We think, given our belief in the future growth of the company, we are about right-sized as we stand. As always, we'll be watching your costs. One of the key things we'll need to do is make sure they don't start creeping up again. We're quite focused on that. Second question. I'm going to pass it to you, Mark. Hysata. Please subscribe. I don't know who has submitted them. Hysata, where do you see the global hydrogen market developing? Quite a big question.
Yeah. I mentioned this figure of $17 billion market by 2030. We think it's one of the biggest markets 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 green hydrogen, there is about 12% of global carbon emissions. They account for about 12% of global carbon emissions. Those four sectors alone have demand for something like 200 megatons of zero carbon hydrogen, hydrogen that was produced using renewable energy sources. Clearly, a company with disruptive efficiency, much more efficient electrolyser, has the opportunity to take advantage of that. It is obviously sort of we're all kind of recalibrating our assessment of the market opportunity in regard to the U.S. because there are some headwinds there and challenges in adoption of clean technology.
What we've observed in clean tech over the past decade is that people quietly get on and do what is most economically effective and economically efficient. Of course, Hysata delivers a much more efficient solution. We think that there is a very large market in Europe, a big opportunity there, a very large market in the U.S. as well. A lot to go up for Hysata.
Thank you, Mark. I'm going to go on. This is a question from Ken C. I'm going to go your direction, Greg. Is delisting Oxford Nanopore and growing the company privately a solution envisaged by IP Group? Can you answer that to some extent?
Look, I wouldn't be guaranteed to some extent. I mean, we tend not to comment on specific companies as regard to corporate transactions like that.
I mean, we obviously, as a major shareholder, look at all of these things and obviously speak to the other major shareholders at Nanopore, as well as engaging very regularly with the management team and the senior team. I guess sort of no options are off the table, as is the case for any public business.
Thank you. This question is from MB. Again, to you, Greg. The company is managing third-party funds. Hostplus is mentioned. Are investment decisions made in a way that equally respects the interests of shareholders and third parties? If so, can you explain how?
Yeah, that's a good question. We take this very seriously, obviously, because lots of managing of capital is a regulated activity. We have regulated businesses here in the U.K., Park Walk is an example, and regulated businesses in Australia.
There's a number of mechanisms as to how this is done in terms of the investment mandate for each of those different pools of capital. The investment decision-making body, i.e., the investment committees for each of those pools of capital, tend to be different. For example, in Park Walk, we have a separate IC. It's a separate FCA authorised entity, a separate IC, which takes decisions that are in the best interests of the EIS investors in those funds. We have a separate investment decision here on the balance sheet side, for example, that considers where we're making co-investments. I mean, it is something that needs to be managed by all businesses that are managing pools of capital for different stakeholders. We've got good experience of doing it. There is benefit to a healthy degree of sort of collaboration, but also appropriate differentiation of decision-making.
That is how we manage it.
Moving on. Quite a long question, but I'll read it in full. Again, I'm going to point it to you, Greg. We could all might want to answer. Mark C, the share price discount announced, reported at the end of 2024, is still too wide at circa 44.8%. We agree. It was circa 49% at the end of 2023. Do the board consider the actions taken to reduce the discount by way of the GBP 30 million share buyback program in the year a success? If not, would they consider purchasing shares themselves with actual cash to signify to the market their confidence in the company? It is noted that the director sold shares in the year but did not buy shares other than received in their normal paid options.
Clearly, the GBP 30 million has not had enough of an impact yet, has it?
That's why we're doing more and why we're accelerating more. I mean, this question probably came in a little bit 10:07 A.M.. It came in, I think, a bit before we talked about what we're doing to accelerate that buyback further and to continue to retire more than 10% of our share capital again. We are doing this aggressively given that significant discount and persistent discount to NAV. We do always consider purchasing shares. I've done it regularly. Certainly, we're looking at it again now that we're outside of our close period. Not necessarily to comment too much on REM policy because I'm not sure how appropriate that is. The reason that we have these disclosures around directors sort of receiving options and buying and selling shares, we've set up our remuneration to be as long-term as possible to a long-term business.
Our bonus opportunity is the max bonus opportunity, I think I'm right in saying is the lowest bonus opportunity on the FTSE 250 by %. We've done that deliberately. Not only that, the amount that we make in any given year, 50% of it is deferred into shares that then obviously it contributes to our minimum shelving requirement. The intent is 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. Much like a bonus, you pay your tax on it. It shows up as sort of a purchase or a gain of shares and then a sale.
We are looking at whether or not there is a way to make that a bit more efficient in terms of the mechanism because I think it is unhelpful to make it appear that we are selling shares. Actually, all we are doing is covering the tax, which we would have paid had we received the bonus in cash. We do definitely look at buying shares for sure and understand that that is sort of signaling.
Yeah. Thanks very much. I am going to highlight where I think the questions are coming from analysts. I have been asked in the past to make it clear for analyst questions. I think this is Paul C, which I am guessing is you, Paul Cudden at Numis. Thank you for being here. Probably for you, Greg, any prospects for additional secondary sales or minority positions as we did in the year?
We continue to look at that all the time. We looked at a number of possibilities last year. All the time, you're balancing sort of the pricing and what's offered and the terms versus what we think we can deliver and how it compares to using the returns to pay for share buybacks or other returns. We continue to look at it. Obviously, when we've got some progress on that front, if we find something that works, then we will, of course, do that again. If we can deliver value to shareholders in that way, we'll absolutely do it.
A second one from Paul. Again, I'll point it at you, Greg. Any interest from Big Pharma in Istesso's secondary endpoints? Understanding maybe limited what you can say about a portfolio company.
I mean, the short answer is yes.
As yet, insufficient to result in something commercial. Yes, I mean, there is a significant amount of interest. The company intends to make some much fuller disclosures around particularly those secondary endpoints and what they mean, both in RA and in other indications. That should be available for us to talk about in coming weeks. We will definitely update more on that after half year.
Thank you. Next, a different analyst, Sam England from Berenberg. Thank you for being here, Sam. We appreciate it. You mentioned in the release that you are targeting more than $200 million in exits by the end of 2027 and a promising pipeline of realisations. Can you talk about the visibility you have on this? To what extent does it rely on a pickup in public-private market funding for exits?
I'm going to chuck that ball to you, Mark, if you don't mind.
Yeah, absolutely. I talked in the presentation about a lot of the highest prospect assets that we think have a near-term realisation prospect. It's hard to pin down precisely when that's coming. I wouldn't have predicted exactly that Features pace was going to sell in 2024. We thought that that was one that was coming up in a sort of three-year window. Indeed, that was a great outcome there. Similar now, we have a stable of assets that sit in the category of having the potential to deliver in the near term. The question has disappeared. I can't answer the second bit of it now. I think it was about what public and private investors did they need to pick up. Yeah. Of the funding environment.
We have already seen M&A interest in several of those assets that we talked about. Does it rely on the funding environment picking up? I mean, it relies on third-party funding. I do not think it necessarily relies on it only going to be delivered if there is a complete sea change in the availability of capital. I think that these are strong companies. Even in relatively difficult markets, strong, mature companies with a near-term exit potential tend to raise money. I do not envisage that we are going to have a sort of major problem unless there is a pickup in the availability of capital.
No, I agree. Also, we were talking about the realisations in the private portfolio as well. We are not seeing any of our public companies included in that number. I might pick that one. Or the finance side.
If a company were potentially to IPO, it might become one. It might become one that we would exit.
Go back to Paul Cudden. You're back. Nice to have you. I'm going to go this to you, Greg. When do you think the proposals in the Mansion House Compact could start to be implemented? What would it mean for backing visionary ventures in the U.K.?
I don't know. I mean, we'd obviously hoped sooner. I suppose my observation is the nature of the conversation. I spoke on the last year's four-year results, Hannah, 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 Mansion House Compact and others who manage money for them, there still are a number of changes, particularly to regulations around things like fee caps, etc., that have been pushed through or going through government and legal changes. That is still to happen, which is sort of causing some tardiness, I would say, on the delivery. I hope in 2025, I mean, the Mansion House Compact had a 2030 backstop date. Time is getting somewhat tight on this for those who have committed to that. I think the nature of the conversations we're having are starting to move more towards the implementation. Hopefully, second half of this year. What does it mean for backing visionary ventures in the U.K.? I mean, there is a huge opportunity here to deliver growth and to deliver investment returns.
We've done work with PitchBook to look at what's the nature of the funding gap in the U.K. It is very, very prominent beyond Series B. The U.K. is very well set up, actually, for early-stage investment, particularly through EIS. More can be done. More is being done. More continues to be done. We will continue to do that. The real opportunity is backing businesses to scale so more companies can get to the scale that Features pace did before they exit. A great example is YASA Motors, which we backed through our EIS funds. That achieved a sort of $100 million-$200 million company valuation on exit. It is now a core part of Mercedes-Benz, Daimler's delivery of electric drivetrains. Fortunately, that one is still here in the U.K. We are backed through, again, through Park Walk and another spin-out of that technology from that business.
Hopefully soon.
Gently move on to the remainder of the 34 questions. Just so everyone's aware, it's 11:00 A.M. I do understand people who are booked for the hour, we quite understand they need to fall away. We're going to carry on and try and get through all of our questions. Perhaps I'll have a go at this one. David C, thank you for this. Buybacks don't really turn cash to shelters in the way that dividend would. Why not instead the latter? I have some sympathy for your point. I understand the point entirely. 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 Oxford Nanopore, which is obviously a liquid position, some of our investors consider our discounts and have to be as much as 80%.
I bet you with an 80% position. By using our cash to rebuy the shares, we are actually getting an immediate return. If you believe in our analysis, we do. We believe it is endorsed by the fact that every time we sell assets over the last three or four years, we sell them at a premium. It is a consistent pattern in 2021 through 2023. Very much last year again. We have been consistently sold at a premium seen to support our values when we have realisations. It does make economic sense to buy them back this way. It should be over time. The residual value to all the remaining shareholders has gone up. The remaining NAV per share for each individual does go up and actually should improve your position in time. That is why we maintain with it.
Next question is, how much does—this is Sam again, Sam England. Thank you, Sam. How much does the portfolio need to raise capital in 2025? How are you thinking about the valuations these businesses might achieve relative to last time they raised money? Is this factored into calculations? Yes, it very much is. I actually had a slide earlier which showed you it's something like about 45%, I believe. It's not so much this year. There's quite a big percent next year. It does need to raise money. Sorry. I apologize. 2025. This year, there isn't very much, is there? We've only got a small amount remaining for the first half and a relatively small amount in the second half of the year. Most of it's now moved into next year, into 2026. Sorry.
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 is likely to be until it kind of hoves into view, if you see what I mean. Something that may not raise money till 2026, it's actually very hard to determine what the economic advance is going to be like, whether the company achieves its milestones, and what value you're likely to get. When they become more imminent, as in this year, you begin to get a much better idea. I think I explained in my short presentation. A number of those sort of write-downs and companies we still believe a lot in actually was because we need to factor in what the potential future funding round might be at.
It is very much one of the primary factors that we actually factor in when we're considering evaluation. Next one. I might pass to you, Mark. Let's see.
I think we've covered this one. I think we've covered it already.
How many Park Walk early-stage investments have I readily invested in? You mentioned a number. I can't remember. In Series A over the last three years? It's a bit of an exact question. I don't know if you want to answer that bit or who.
I don't have the number in front of me. I was trying to off the top of my head to come up with the co-investments. I've listed six or seven here that we've co-invested in over the last few years with them. I mean, it depends on your definition of Series A. But we've certainly put a lot of assets alongside.
The next one, I think I've sort of covered with that in my meeting today. I really just, given the board thinks the share price doesn't reflect the company's true value, is the board personally investing in shares other than through regular purchase? I can't find any information after April 2024 on direct deals. I think we failed to say we did answer that. The next one is, sorry, I just jumped. Sorry. The next one is Andrew M. Thank you. Obviously, the priority is to support the existing portfolio and realize their value. However, the pace of share buybacks has been slow given the scale of discounts now. Returns to shareholders are rightly focused on share buybacks rather than dividends, like Andrew agreed, when the discount is so large. In the absence of dividends, the rate of share buyback has been far too slow.
The pace has even slowed in March. The daily purchase should at least double. I'll answer that one. Yet it's fair. One of the reasons it slowed recently in the last month was we're going to what's called a close period. During the close period, we're treated as being in silent. People are beginning to get an idea of what our results look like. That meant we weren't able to change any instructions over the share buyback. We actually set it at 6%. We've been buying back about 15% of the previous 30 days' average deal flow. We are likely to increase. In fact, we did increase that this morning. We'll increase that. There's a bit technical. There's a thing called a safe harbour, the maximum you're really meant to do. We've increased to that maximum. 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, which we've seen going through, I would expect to see us buying back at a faster pace. Last time, we were in a situation similar to back in the last year. We began to buy it for 800,000, 900,000, even 1 million shares a day. Of course, if you start buying it that way, you're buying what, 1% every two weeks. We think that probably it's built in that you'll start seeing an increase in the rate at which we are buying back. Next one, David Baynes. Hello. With a step through, is the effect of the treatment potentially slower to emerge than the timeline of the primary endpoint? Or is the effect of the treatment different to that originally being targeted?
I'll give that to you. Perhaps Greg, I know you sit on the board of STEFCO. Shall I say it again?
No, no. I've got it. Yeah. I understand the question. Yes. Great question, David. We think that that might be the case, yes. The phase 2B was done over effectively a three-month period for various reasons, ethics, and the fact that all the phase 2 drugs that have in RA that have gone through in the past two, three, four years were done on that same timeframe. However, that could well be an explanation. 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. That's a very good observation. We think that is potentially what's going on.
When you cure the underlying condition, the physical symptoms take a little bit longer to be reduced.
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.
The scale-up fund is an opportunity here in the U.K., primarily focused at Series B and beyond. The intent, as I said on the sort of the funding strategy slide, is to add additional capital at the Series B plus stage. Series all have different definitions depending on who you talk to. Effectively, as businesses hit the point of commercial traction, they often need to raise rounds that are in the order of magnitude of $50 million to, say, $100 million-$200 million of funding.
There is a very big gap in the market for that type of funding, which is particularly acute here in the U.K. The intention is that that would be a product that addresses that. It is also better suited to sort of a fixed-life fund and being done privately. That is the intent.
Thank you. Andrew M. A second question. Might share this one a bit, Mark. How realistic is Oxa valuation given lack of contract awards over the last six months?
I think it is the right valuation. It has got a lot of investor interest. It has got very exciting commercial traction. I see a lot of high prospects with that company. I do not want to be specific about where they are commercially because that is confidential to the company. They would not want us to share some of that. We spend a lot of time on these valuations.
We think it's the right price.
Yeah. I agree entirely with that. We've looked at we're relatively well-informed of potential funding rounds going on. We're relatively well-informed. We've had an eye to that. I think we feel relatively confident in it. You never know. It is a very difficult process, I think, with companies. Even when you're quite imminent to funding rounds, you never know for sure. We'll see. We're relatively confident we've got that one right. This is a kind of esoteric question from Davin S. Thank you. I'll give it to you, Greg. We might all join in. Why continue with share buybacks, which have not improved share price, rather than investing further in new companies, which give them the chance to improve NAV? What is the principal objective of IP Group?
Good question. Yeah.
Gavin, this is the regular debate or decision that the board of IP Group has to take with guidance from the executive team who are managing the business from day to day. It is a balance. We've historically sought to invest 80% of our proceeds back into the portfolio and use 20% to return cash in some form to shareholders. At the moment, we think that the level that the shares are at represents very compelling value. We do also need to invest in the portfolio to deliver NAV. We're doing this from a NAV per share point of view and a share price point of view. Obviously, buying and retiring shares at a discount to NAV per share inherently improves the NAV per share. That's the intent.
You can't do that ad infinitum because then the portfolio NAV per share will reduce at a greater level than the cash that you're using. We do agree the principal objective of IP Group is to deliver investment returns. However, given the discount to NAV, we're using more of our capital to seek to address that discount. Yep. Thank you very much. Andrew, another question. Sorry, Andrew M., another question. This is, I think, to me, write-down in First Light Fusion valuation following a large write-down last year raises questions about valuation accuracy. Not quite a question, but I get your point. Without sounding too defensive, it is probably one of the hardest companies of any that obviously the potential for First Light Fusion and achieving some kind of fusion breakthrough is absolutely immense.
If it can be achieved over the next 10-15 years, it's a completely whole new alternative energy source for the Earth that could power humanity incredibly cheaply. Actually, what the sort of terminal value of that is hard to measure. It makes it very, very difficult to actually work out what a likely ultimate valuation would be. We originally did put the value up considerably at the end of 2021, early 2022, when it achieved fusion. Perhaps in hindsight, that was too much. I think now we're now much more anchored to realistic kind of funding round valuations. However, every year, we very diligently have third-party valuations. We've tried to juggle this difficult asset to value. I think we've done a relatively good job.
I expect in hindsight, we wouldn't have taken that significant increase we took probably at the time of fusion being achieved all those years ago. That aside, I do think we managed to try and get it relatively fairly valued.
I think the other thing to say is it's a very different company to the one that it was a year ago. It's had a complete pivot in its business model. We've valued it differently.
Thank you, Mark. Yeah. That's well put. Another, Andrew M. Again to me, what further measures on cost reduction in 2025? I sort of covered that. I think we're not planning another big reduction to be done. We think we'll well sort of scale up the business. However, as I said, we do need to keep a sharp eye on costs. They can creep up surprisingly with inflation.
We will still be keeping a fairly sharp eye on what we allow to add to our overwhelming costs. We'll try and keep it at the level we have it at.
I guess what I'm saying you'll see from the results, although a small impact, the board and the exec and having no pay rises again this year. That mitigates some of the effect of inflation.
Yeah. That's right.
You'll see that in the remuneration.
You'll see that in the glosses when they come. You won't actually see that yet. That is right. We will certainly, at board level, we won't increase them again for the second year. I'm sure it does seem appropriate to inform. Andrew M. Again, obviously, a few marks. Definitely you. First Light focused on revenues. What realistic timeframe?
Yeah.
I suppose the kind of premise of the question is that fusion is still an emerging area. There isn't a large market for fusion power production today. There are a lot of people making very serious efforts to develop fusion. They need improved technologies to help improve the power of their systems and to amplify the effect of the reactions that they're generating, which is what First Light Fusion does. The company is projecting good revenue growth over the next few years. They're already in revenue today and have the prospects of generating millions of pounds of revenue in a sort of three-year time horizon.
Thank you. Andrew M. Again, I think, Mark, what is the major area of investment in 2025?
Yes. We spend a lot of time thinking about where our thematic focus areas should be.
We have other seminars on this topic because the teams intermittently run seminars communicating our focus areas. We are very interested in the impact of AI. We have a lot of investments in the impact of AI in the compute stack. I talked about Intrinsic, the semiconductor memory technology company that enables us to have computing that will service the increasingly intense needs of AI processing. We also have technologies that sit within the communications network because our demands on the 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 steady march towards clean energy adoption. We have technologies that are very compelling and can exceed the benefits of fossil fuels in those domains. That is sort of some of the key areas for us.
We could spend a lot of time getting the team in to talk about those.
Next, it's going to be a very short question because we can't answer it. Any sense of time with a hinge? No. We don't actually. And not the additional comment. We know no more than you. John H. sort of covered this. When will you reinstate the suspended dividend? Many holders require a dividend to justify holding the shares.
I covered this one. It's a balance. Lots of different views on this. Definitely understand the position of retail holders, myself included, obviously. I think the right thing at the moment is using the capital for buybacks. There is an intention over the long term if the share price gets back to closer to NAV, then dividends are an efficient mechanism for a category of shareholders to receive cash returns.
We have said no, it is more than a 20% discount. We are going to maintain the form of buybacks this way rather than dividends. Next one, Milos. Nice to have you. Another 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 business is an AI business or will be soon. It is a sort of enabling technology in the same way that the internet was in 2000. It is not quite the way I think of it in terms of our own investments. I would not say it is a trend that I have noticed. I would not say anybody has phoned me up and said, "We are not going to invest in your portfolio company because we are diverting all our capital into AI." It is possible.
That's a sort of market mentality. 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 propositions. I see it as we have a value proposition for people investing in AI as opposed to losing out to that.
Fair enough. The next one, I'm going to point to you, but it may not go on too long because it's really the same question here. It's the tension between, should you be doing buybacks or should you be investing in your own portfolio, which we have sort of covered. From Andrew M. Again, massive growth cash balances 21st of May 2025. Please highlight what portfolio companies can give a better return over 12 months for just substantial increase in the rate of share buybacks.
I don't know if you want to come with any particular ones or feel we've covered that anyway. We've probably covered them. I'm happy to move on. We're happy to cover them. We have covered that quite a lot trying to get that balance right. Igor P. Hanson, this one's a 29th 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 you've seen your great bank.
Yeah. Mark, I have a view on this as well. I mean, all companies in the portfolio are up for sale at the right price. I mean, that's definitely the mandate of the business for sure.
If the share price was closer to what we consider to be fair value or indeed reflected what we consider to be a good price, then yes, we would be prepared to monetize it partially or in full for sure. Absolutely, that's the case. How do you protect against Standard Port being subject to an opportunistic takeout bid? I mean, the truth is you don't. I mentioned earlier there are a number of what I'd consider to be strategic holders on the register, people like bioMérieux, Novo Holdings, Ellison 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. I think there are some strategic holders on the register. As an investor in that business, you've always got to consider whether monetizing it is the right strategy.
We'll do that as that's appropriate.
I'm going to push on through to give everyone a go. It's about 11:20 A.M. We'll definitely finish at 11:30 A.M. I think probably an hour and a half if we'll have had our share. Let's try and get through the remaining seven or eight questions. Please, this is Philip N. Just who exactly is selling the shares? Who are the main sellers? I could start on that. I'm not going to name individual institutions. We have this ourselves. We get share rates at least once every month. We analyze it every month. We look at it. In most months, there are not consistent sellers. Not consistent, no doubt. During the year, this year gone by, I think 2024, there were a couple of institutions.
Normally, in one case, because the founder manager retired and they closed the fund and reallocated their funds, they did actually reduce their positions in the year. That is where we saw during the year. There were a couple of occasions. There were really quite big lumps game, I've argued. We saw 10, 11, 12 million trading in a day. Generally, on an ongoing basis, it is more iconically a lack of buyers and sellers, I think, probably. There is not a persistent seller at the moment. Over and above those kind of instances where we saw out in the year where we named those funds. You will see them drop off the register if you look at it. Next question. How are your peers performing in terms of NAV per share and funding challenges?
Probably not for us to comment on the peers, is it?
Probably not. Probably not.
The only thing I might say is in the sector, these discounts are relatively consistent. We're not the only people in this sort of sector who have for some period now, since interest rates turned, been suffering relatively big discounts in NAV. I think that's a fair, probably comment on this. Okay. Russell H., question 32. Can you give us an idea of when you believe or how long it will take for the NAV discount to justifiably disappear? We must discuss this presumably on a regular basis. Another go.
I think we've discussed this was a question that came in at half an hour ago at 10:52 A.M. 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. It influences our capital allocation decisions significantly.
Very regularly as for when it will return, that's a difficult one to call.
John H., the same or robust question. The discount in NAV remains massive and the management has failed to address this. The shares trade at close to an all-time low back when the company was listed. Isn't it time to wind up the company and distribute the proceeds?
Also, can we have a vote on this? I mean, as I said during the presentation, we, the board, are reviewing all options all the time, as you would expect any public company board to do. We consider that the company has the opportunity to deliver value for shareholders, long-term value for shareholders. We are very focused on delivering shareholder value. We see there are a number of growth drivers over the coming months and years.
We continue to keep this under review and regularly reviewing our existing strategy amongst a range of other options.
Russell H., for you, Mark, again, you may feel we've answered this. 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, the startups or early-stage businesses to become the next big business over the next 5 to 10 years? I know you did touch on 3D, didn't you?
It was after that. Since then, I've gone through our sort of focus areas and opportunities to see an AI and things like that and so on. Yeah.
You feel that's covered. Thank you. Lastly, we actually are getting there. Lastly, with some more like comments.
John H., it's a balance on dividends, but now nobody's not looking both. Many companies do. Fair enough. I think at the significant level of discount at the moment, it makes sense to do the buybacks, the reason I've given. The last and not least, none suspend dividends through buybacks. Okay. It's the same. I think it's the same point with the same person, John H. Thank you very much for that. Hopefully, we've covered that with the answers we've given. I can report we have finished all 36 questions. Jake, I think we do hand over to you or does Greg wind up now?
Yeah, absolutely. Greg, David, Mark, if I may just jump back in there. Thank you very much indeed for your presentation and for being so generous of your time then addressing all of those questions that came in this morning.
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. 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.
Yeah. Thank you, everyone. Thank you for your time. Thank you for your support this year. Mixed year this year. We've outperformed on exits. We've accelerated buybacks, obviously, as we've discussed in the Q&A session. There's a lot of debate that goes on internally about that, capital allocation and what's the right balance and what's the right mechanism.
We do have an active buyback program that is currently more than 10% of our shares in issue. The NAV per share decline is definitely not what we're targeting. We're working very hard. We've made changes in the year. We continue to change that forward-looking strategy. We're seeking to access further and scale up capital. I hope what you take away from this is that both the buyback, reducing our share count, and the strong portfolio upside potential that we have in a number of those leading companies will yield results both in terms of NAV per share performance this year and our share price. We do recognize that is the most important KPI for shareholders. The board is fully aware of it. We're working very hard to deliver returns for shareholders. Thank you all for your time.
I look forward to updating you at the next set of results.
Perfect. Greg, that's great. Thank you all once again for updating investors this morning. Could I please ask investors not to close this session? It will now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of the management team of IP Group, we would like to thank you for attending today's presentation. That now concludes today's session. Good morning to you all.