Earnings Call: H1 2025

Mar 13, 2025

Summary

NAV per share rose above its issue price, while the share price stayed nearly flat and the discount remained wide. Management sees rising European defense spending as a tailwind for the dual-use portfolio, while prioritizing existing holdings and funding needs.

Good morning, everyone, and welcome to the Seraphim Space Investment Trust interim results webinar. I will shortly hand over to the Chief Executive, Mark Boggett, Chief Investment Officer, James Bruegger, Chairman, Will Whitehorn, and Chief Operating Officer, Sarah Shackleton, to run through the results presentation. Once the presentation has concluded, the team will be available for questions. If you do have a question, please type it into the Q&A box and we will answer them. I will now pass you on to Will to begin the presentation. Good morning, everybody, and welcome to the highlights of the Seraphim Space Investment Trust interim results. You could say these are tumultuous times, but that would be an understatement. One thing is clear through these tumultuous times that we are facing, space will increasingly take center stage in government defense spending, both in the U.S., Europe, and indeed, the Middle East and Asia, the entire world. I was at a space conference at the beginning of this week in London at the ExCeL, which was more attended than anything I have ever been to in the space industry, and all the major space agencies, government agencies were there, and procurement is underway. If you look at share prices of the very few quoted companies in Europe that are space related and have some defense capability in them, like AAC Clyde Space AB of Sweden and Eutelsat, their share prices have gone through the roof. We are really in a fundamentally changed situation. The new U.S. administration has expressed strong support for these sort of innovative commercial new space providers, which Seraphim is very invested in. These providers will be crucial in realizing the ambitious goals that the U.S. has for manned missions to Mars, science, and of course, its defense and Earth monitoring capabilities. Amid the uncertainty that surrounds the U.S.'s commitment to European security, and in the light of the ongoing conflict in Ukraine, European nations are really gearing up and ramping up their defense budgets, and Mark will say more about that shortly. These are going to levels I have certainly never seen in my working life. I have been on the board of the Royal Air Force, and budgets are going through the roof at the moment. This situation that we are in, though, does highlight the early and urgent need for the European nations and the EU to develop their own capabilities in terms of intelligence and communications, because it is no longer possible that you can rely entirely on the U.S., as events have proved. Our portfolio is incredibly well-positioned in this situation. Our three largest holdings, ICEYE, D-Orbit, and ALL.SPACE, are basically all European companies with world-leading capabilities that are already being procured, interestingly, by defense departments in both Europe and the U.S., which puts them in a very strong position. Despite this turbulence in these global events and the resulting volatility in public markets, we really do foresee significant opportunities ahead for our portfolio. While defense-related stocks have shown some strength in recent weeks, the share price of the Trust has remained out of kilter and flat. With the discount now still near record highs, I will now hand over to Mark Boggett, CEO of the manager, to provide more insight into the results and explain why, given the strong commercial outlook and the underlying fundamentals of the portfolio, why we remain so optimistic that the discount should narrow now over time. Thank you. Thank you, Will. Before going into our results, I wanted to take just a few moments to address the impact of recent world events and what they are having on the space sector, and by extension, our portfolio. Events in recent weeks are potentially fundamentally shaping the world order that has been in place since the end of World War II. There is widespread recognition that Europe will no longer be able to rely so heavily on the U.S. for its security. There is an urgent need to dramatically increase pan-European levels of defense spending, as evidenced by the recent announcement by the EU of an EUR 800 billion defense initiative. SpaceTech is intrinsic to reset this European security, and I therefore wanted to remind everyone of why SpaceTech plays such an integral role in defense, and how this role is rapidly changing as a result of the Ukrainian conflict. SpaceTech is inherently dual use. This means that there are both defense and commercial applications of the same technology. Very often, new space technologies are initially developed for military applications, with the Departments of Defense being both the earliest and biggest customers. SpaceTech is of such strategic importance today because it underpins most of every facet of how modern militaries operate. This slide shows the three areas of interest. Intelligence, surveillance, and reconnaissance, ISR. Satellites are key to collecting wide-scale, regular, reliable, actionable intelligence. This encompasses both government spy satellites and increasingly, operators such as those in the SSIT portfolio. These same capabilities are also directly applicable to areas such as combating climate change, disaster relief, agriculture, and much more. Secure communication. Militaries cannot function without having reliable, secure communication. For decades, this has meant relying on government-owned communication satellites. But increasingly, it also now means leveraging connectivity from commercial players whose capabilities can also be used for a myriad of terrestrial applications, such as broadcast television, and helping billions of people get online for the first time. Of course, navigation. GPS was developed by the U.S. DOD, but today it is a bedrock of technology in the modern world, and this includes military, who rely on it for both navigation and for targeting. The Ukraine conflict has shown just how rapidly modern warfare is evolving to exploit the latest technology innovations, and with the importance of SpaceTech only growing. To highlight some of the ways that this has been manifested in the U.K., I've set out this slide. Let me talk you through that. Cyber. Increasing attacks on critical national infrastructure. One of the first things that Russia did when it originally invaded Ukraine was to hack the satellite network from Viasat that the Ukrainian military and government relied upon. This indicates just how reliant governments and militaries are on space to be able to operate efficiently. Commercial space. The Ukraine conflict has been a watershed moment for the SpaceTech ecosystem. Capabilities of emerging new players are being fully embraced for the first time by governments. This include, of course, the role of SpaceX and Starlink, and how they've played to ensure that the Ukraine government and armed forces have been able to continue to operate in the face of the Russian onslaught. It also includes the various commercial Earth observation constellations that have been providing invaluable intelligence collected via their satellites to complement those of the government satellites. The image you can see here is of damage to a nuclear power plant in occupied Ukraine, captured by the small sat operator, Planet. Drone warfare. The future face of conflicts is now irrecoverably changed by the advent of drone warfare. In the Ukraine, both manually controlled and semi-autonomous drones have been used by both sides. In the case of the Ukrainians, this is only made possible by having access to the SATCOM network required to control and operate these drones. Electronic warfare. This typically involves flooding an area with radio frequency signals to impact the ability of various electronic equipment to function. It also includes GPS jamming and spoofing. Russia has made widespread use of electronic warfare, both in an offensive capacity to degrade Ukrainian systems, but also in a defense capacity to disguise their own activities. The image you can see here is from portfolio company HawkEye 360, which uses its listening satellites to track and identify sources of electronic interference. These sorts of insights have been crucial, enabling Ukrainian forces to destroy large amounts of Russian equipment. SSIT's portfolios have been directly applicable in each of these areas, and in many instances, have already been involved with supporting Ukraine's efforts to defend itself. With European defense budgets, and by extension, space budgets, now expected to increase very significantly, we believe that our portfolio is very well-positioned to help boost European security. I'm now going to turn to the latest set of results for the period ending December 31, 2024. Let's start with the headlines. Firstly, we're really pleased to report that NAV per share is now back above the GBP 1 issue price, having risen from 96p to GBP 1.01 over the six-month period. However, our share price has remained broadly flat over this period, reaching 54.4p versus 54.6p as at June 30, 2024. As a consequence of this, the shares continue to trade at a significant discount to NAV. Today, 46.2%, with the net assets of GBP 240 million being valued at just GBP 129 million. We continue to believe that this discount is not reflective of the true underlying value, with the NAV having remained robust on the back of our portfolio having consistently shown strong growth metrics and the ability to access further capital when they need. The share price performance of SSIT typically correlates with our AIC peer group. That is companies like Chrysalis and Schiehallion. However, as can be evidenced by the chart on the right-hand side, we have seen greater share price volatility over the course of the last 12 months. Let us delve into the details, starting with the attribution analysis table. The value of the portfolio has increased from £201.5 million to £216.3 million during the period. It now stands at 112% versus cost. £5.1 million of follow-ons more than offset £3.5 million in proceeds from disposals in the period. Increases in unrealized fair value of £12.9 million, a minimal unrealized FX gain more than offset the £1 million of realized fair value loss during the period. Next, turning to the balance sheet as at the 31st of December, this table sets out the NAV bridge. The NAV has increased by 5.1% over the period to £239.7 million from £228.1 million. The portfolio fair value, including FX movements, increased by £14.1 million over the period. The NAV per share increased from 96.18p to 101.04p over the period. Importantly, I wanted to note that the portfolio is well capitalized. We hold 10% of NAV in cash, £24 million at the 31st of December, and we continue to support the portfolio in the year ahead, with a further £14.1 million of potential liquidity via holdings in listed companies within the portfolio. Now, let us turn to a snapshot of some of the key portfolio statistics. Besides the £15 million increase in fair value of the portfolio, the snapshots shown here are largely unchanged over the six-month period. Our top 10 holdings continue to account for more than 80% of the overall value, and the portfolio value now stands at 130% versus cost. I am pleased to say we have also seen a recovery in the value of the listed portfolio over the period, but that is now still standing at 37% versus cost. That brings us to the key figure on this page, which is 61%. Let me unpack this figure. It is a testament to the maturing of the portfolio. The management teams of eight of our portfolio companies, representing 61% of the fair value of the portfolio, believe that their companies are now fully funded based on their own latest projections. Building on these figures, half of the portfolio, representing 71% of fair value, is now either fully funded or has over 12 months of cash runway. Then with the companies that are not fully funded, they have got an average of nine months of cash runway. These figures will hopefully give you some confidence that the SSIT portfolio is maturing. Let us turn next to the investments that we have made over the period. Four transactions, £5.1 million invested. Whilst SSIT investment was modest, 13 companies in the portfolio attracted nearly $400 million in additional capital over the six-month period to the 31st of December. That included two of the top 10 globally funded deals for calendar year 2024. Important to draw out that valuations have remained robust, with two-thirds of the price rounds either flat or up compared to previous rounds. Looking at the table, in August, the company completed a $5 million follow-on funding into ALL.SPACE alongside other existing investors. This additional funding extends the runway as the company stands at a potentially critical inflection point as it starts to ramp up production. In December, we completed a $1 million investment into Xona Space Systems and their £12.5 million equity round alongside a number of existing and new investors. With this funding, Xona Space Systems will place orders and secure launch slots for its next four production satellites. Both of these companies are great examples of how well-aligned the portfolio is with the shifting geopolitical environment. I will come back to talk about, in more detail, ALL.SPACE's satellite terminals and the unique capabilities that they have developed specifically to support military. Xona is developing the world's first commercial GPS constellation that will offer highly secure, centimeter-level accurate positioning capabilities for a broad gamut of defense and commercial applications. Finally, the company also made two modest follow-on investments into Skylo and ChAI. In the period, the company received £3.5 million in proceeds from disposals relating to the partial realization of the fund's investment in Astroscale following its IPO on the Tokyo Stock Exchange in June. The Astroscale share disposal during the period was equivalent to 78% of the original sterling cost of investment of those shares that we sold at a 22% premium over the IPO price. It has been a busy period outside of the range with a range of notable developments that are worth calling out. In January, Voyager, which has been rebranded as Voyager Technologies, submitted a filing to the U.S. SEC for their planned IPO on NASDAQ later this year. The quantum and the pricing of this IPO are yet to be announced. Pixxel successfully launched their first three satellites of its hyperspectral constellation. Once operational, this will provide the highest resolution hyperspectral imaging available commercially today. Skylo's commercial partner, Verizon, launched their first mobile phones with Skylo satellite connectivity in the U.S. market. Astroscale signed a $78 million binding contract with the Japanese government to support its development of their in-space refueling capabilities. AST SpaceMobile obtained a temporary license from the U.S. FCC for initial operations with its partners AT&T and Verizon. They are all the good things that have happened. One negative is, however, relating to portfolio companies Spire Global. They previously announced the sale of their maritime business unit for $241 million, that they were going to use the proceeds to restructure outstanding debt facilities and refocus on their core activities. During the period, they disclosed that the prospective buyer had failed to consummate the transaction despite all of the closing conditions having been met. Now Spire has commenced legal proceedings against that buyer. Let us turn to the snapshot of the portfolio. Drawing out some insights from the donuts on the left-hand side there. Let us look into the ecosystem chart on the top right, and you can see that more than half of the portfolio is invested in platform, and this means constellations. These are the businesses that are developing the digital platform in the sky, providing capability of data and insights from large fleets of low-cost satellites. The biggest customers today for these businesses is defense, given the considerable increase in defense budgets since the Ukraine war has broken out. This is what is really driving the growth of these companies. In relation to geography, you will see that nearly three-quarters of the current value of the portfolio is in companies based in either the U.K. or in Europe, reinforcing our view that the portfolio is very well-positioned to benefit from the expected EUR 800 billion increase in defense spending that has recently been announced. Turning our attention to NAV chart on the right, the top 10 companies dominate NAV, accounting for 76% of NAV with 10% cash. Seven of the top 10 companies, defense is the key customer. What I am now going to do is take some time to delve into our top three holding, all of which are European companies that together account for 47% of NAV, nearly half of NAV in those three companies. We are going to focus on the role that they are playing in supporting European security. Let us start with ICEYE. This is our most important and one of our best-performing companies. Let me give some deeper understanding. Most satellites use optical cameras like those in the smartphone to capture images of Earth. The problem is that they do not work for two-thirds of the time when the world is either at night or covered in cloud. If you are trying to collect intelligence, it is essential that you can do this regularly and reliably. ICEYE's satellites enable this because they use radar to create synthetic images that work both day and night and in any weather. ICEYE operates the world's largest constellation of synthetic aperture radar satellites, SAR satellites. They support governments and militaries gathering intelligence by selling images that they have taken by their satellites, but also by selling to nation states their own satellites, where there is a growing need for sovereign control. ICEYE estimates that the annual opportunity just for selling its satellites to governments is $8 billion-$10 billion per annum, and that is actually based on known programs worldwide. This is absolutely massive. ICEYE's government customers span North and South America, Europe, the Middle East, the Far East. ICEYE is able to serve customers worldwide because unlike American-based competitors, they are not restricted by U.S. ITAR export control. This makes ICEYE a blueprint for success of Europe's domestic SpaceTech and defense emerging players. Its customers include, in Europe, different European nation states and supernational bodies. Something that we expect will increase significantly over the next one to two years, given recent geopolitical events. To put this in context, the scale of the challenge European faces in migrating its reliance from the U.S., let me just put into context the number of launches that were undertaken last year. The U.S. launched 122 defense payloads into orbit versus just one single payload for defense launched into orbit by European countries. We are very proud of the fact that ICEYE is the only commercial satellite operator to have provided their satellites directly to Ukraine. The image you can see here is of Kerch Strait Bridge in Crimea undertaken by ICEYE. Ukrainian government representatives have said in public that their capabilities provided by ICEYE have enabled them to destroy thousands of Russian targets and equipment worth many billions of dollars. We believe that could be a transformational year for ICEYE that could put the business on a clear trajectory to an IPO or even potentially M&A from the acquisitive defense global market. Next of all, let us dig into ALL.SPACE. This is a U.K. company. It's the developer of the world's most advanced SATCOM antenna for resilient communication. As I've already explained, militaries rely heavily on SATCOMs to be able to operate, and that's as a result of SATCOM operators themselves becoming increasingly potential targets for adversaries. Although there's an abundance of connectivity from many different SATCOM operators, militaries are currently constrained by their ability to fully avail of this due to the antennas, known as ground terminals. These are required to connect to each separately to operator's satellite network. Most of the existing ground terminals used by militaries are parabolic dishes. These are a bit like the ones that we use for Sky TV. These are large, expensive, power-hungry, and cumbersome, and are not suitable for many mobile platforms such as vehicles or tanks. Crucially, they can typically only connect to one satellite at a time, with different terminals required for each different operator. With space becoming an increasingly contested domain, and with the rise of electronic warfare potentially interfering with critical communication systems, modern militaries have a pressing need for resilient communication. The key to resilient communication is the ability to simultaneously connect to multiple different satellites from different operators. This means that if one operator is attacked or jammed, communication can still be possible via other satellites the antenna's connected to. ALL.SPACE has developed a flat panel antenna designed to fit on virtually any mobile platform, cars, boats, trains, planes, Humvees, and they provide exactly this capability. As illustrated in the picture, ALL.SPACE's antennas are unique in their ability to simultaneously connect to multiple different satellites in different orbits and different frequencies. Unlike other providers, ALL.SPACE's antennas are also software defined. This means that they can provide a range of high-value software applications, using the antennas as an alternative for GPS navigation in areas where GPS may have been jammed. These are game-changing capabilities, and it's the reason why ALL.SPACE has already been selected by several different branches of the U.S. DOD. The business also counts UK MOD amongst its existing customers. To put into context the scale of the opportunity ALL.SPACE is addressing, the U.S. Army alone has nearly 15,000 legacy antennas that they need to replace. Each one with an ALL.SPACE unit selling for six figures. That's just the existing install base with one customer in one market. Having now proven its technology, they're shipping product to multiple different customers. The business has seen a surge in interest over the last year. We're currently supporting the business to fundraise to scale up its manufacturing capacity to enable it to meet this increasing demand. We anticipate that ALL.SPACE will now start to see adoption by European and NATO stakeholders that will mirror the success that it's already had in the U.S. with the DOD. Finally, D-Orbit, the Italian global leader in the space logistics market. D-Orbit's core proposition is its ION space taxi. You can see images of them here on the screen. Each ION hosts a number of different passengers. These are satellites that sit within the vehicle. The ION hitches a ride to orbit on a rocket like SpaceX, and it then delivers each of its passengers quickly to their desired destination, i.e. the specific orbit that they need to operate in. D-Orbit's completed 16 missions to date with 100% success rate. It successfully delivered to orbit more than 180 payloads, launched for over 100 customers from 28 different countries. While the achievement of D-Orbit's space-based last mile delivery are impressive, the core reasons why we back the company is what you can do with the ION platform after it's completed its primary mission. In essence, D-Orbit has developed a highly capable, highly flexible, maneuverable platform in space. As well as being a delivery service, each ION can be customized to include a range of ancillary capabilities, such as sensors, AI chips, laser communications, even robotic arms. This unlocks multiple secondary use cases, many of which are directly relevant to defense. For example, D-Orbit recently won a EUR 120 million contract with the European Space Agency to develop and launch an in-orbit satellite servicer. Having a highly maneuverable platform designed to dock and attach to other satellites has obvious defense application. Other examples involve using IONs as a warehouse to hold a cluster of small satellites in space, which can be deployed in the eventuality of an attack on government satellite assets. Or by using IONs to intercept communications by transmitting from adversary satellites or even using cameras on the ION to monitor the movements of rivals' satellites. With unrivaled space heritage amongst European new space companies, and having already several large institutional contracts, we believe that D-Orbit is very well-placed to help Europe address its SpaceTech capability deficit. This is the final slide before we open to Q&A. 2024 was a year of significant growth and achievements, both for the SpaceTech ecosystem as well as SSIT's portfolio. A record 601 SpaceTech deals were completed during the year, representing a 50% year-on-year increase. The amount of investment likewise increased substantially, growing 25% to reach $8.6 billion. This growth in investment activity is a reflection of the growing recognition from investors worldwide of the strategic importance of space and how this is now translating into compelling investment opportunities. Looking forwards over the year ahead, the next 12 months is going to be significantly influenced by President Trump's policies, and particularly concerning tariffs and European security. Ongoing global challenges in Israel and Ukraine, these must be addressed, and the resulting geopolitical shifts are going to have lasting consequences. Europe and NATO are especially compelled to tackle their historical defense under-investment. This generational transformation in defense spending, coupled with revised procurement practices favoring SMEs, has a strong emphasis on digitization and AI integration, and we believe that this will undoubtedly benefit new space companies. While space has long supported global security through navigation, signals intelligence, satellite imagery, and SATCOM, the ultra-low-cost, ultra-high-resolution AI-enabled capabilities of new space firms are creating new demands in the defense sector. SSIT represents a unique way to get diversified exposure to defense and the growth in Europe, and how that EUR 800 billion budget that's going to be invested to catch up on defense spending. Overall, the SSIT portfolio is well-positioned, with unique capabilities that align with defense customers' needs. The fund is already well capitalized at each portfolio level following strong performance last year. Thank you for your attention. Myself and James Bruegger and Sarah Shackleton will now take your questions. Thank you, Mark. We will now open the floor to questions, as Mark said. As a reminder, if you do have a question, please enter it into the Q&A box and we will read it out and answer it. The first one here says, "You've pivoted your narrative to the defense story for obvious reasons. But does this change your thinking about the future balance of the portfolio? Will you deliberately target more defense-oriented opportunities in the future? I'll ask Sarah and James to answer these questions. James, do you want to take that one? Yeah, I'll take the first one. I would contest that we've pivoted to focus on a defense narrative. I think we've been very consistent quarter on quarter for the last three years, that there are really a combination of two very strong secular tailwinds that are driving the space sector. Namely, defense and global security on the one hand, and climate on the other. Both of which are underpinned by significant increases in budgets from governments to procure the sort of unique capabilities that Mark's been outlining in the portfolio. What we've clearly looked to do with this set of results, given recent world events, is to remind everyone of just how well positioned the portfolio is in regards to defense. In answer to the second part of the question around whether there's any fundamental change in our investment strategy, the short answer to that is no. As Mark mentioned at the start of his presentation, intrinsically, virtually every space business that we've invested in is dual use. That means it has joint applications for both servicing governments and in particular, departments of defense, whilst also having commercial applications. The companies that we're backing, we're typically looking for companies that can address both sides of that equation. We wouldn't foresee any material changes in strategy. We will remain principally focused on the existing portfolio that we have and supporting their efforts, particularly in the case of Europe, to help boost Europe's security in the potentially difficult weeks, months, and years ahead. Thank you, James. The next question is saying, "It's really fascinating to hear all the stories about your big successful holdings. There are bound to be some risks of failure, though. What do you identify as the biggest risks facing you at the moment? I will take the first part of that and maybe get Sarah Shackleton to chime in on what some of the risks are. I would remind the audience that we have had very few failures in the life of SSIT to date. Virtually all of our companies, since the trust went public in the middle of 2021, have been able to access the capital that they need to be able to continue to operate. Mark Boggett has reported that our companies collectively raised $400 million through both public and private capital markets over the last six months. That builds on the near $1 billion that they collectively managed to raise in the year to June 2024 that we previously reported on. We remain very optimistic about the overall prospects for the portfolio. We are seeing strong growth in the portfolio. We are seeing their continued ability bucking trends of the wider venture ecosystem of being able to attract consistently new arm's length investors who are typically paying either an equivalent price or a premium to the most recent round. We believe that the NAV that we are reporting is robust, and we remain pretty positive about the outlook for the rest of the year. Sarah Shackleton, I will give you a chance to comment on what you would see as being any of the potential risks that investors might want to be mindful of. Thanks, James. I think, look, the companies not accessing funding is one of the bigger ones, which you have already covered. Also, the other thing is the trust currently has limited cash, but we do also have listed holdings. We still feel very comfortable with what we have available for the next 12 months, so that we will be able to support the portfolio when it needs to raise more funding. Thank you, Sarah. The next question is, Mark Boggett recently revealed in a podcast that five portfolio companies are currently planning for IPO. How many of these are in the top 10 holdings? I will have first go at that. Voyager Technologies itself, which Mark Boggett has alluded to, is obviously not a top 10 holding. The guidance that we can give is that the other four companies, the majority of those are within the top 10. Thanks, James Bruegger. The next one here is, could you provide some more context to the rationale of holding the Seraphim Space Ventures II fund? Will shareholders effectively be paying management fees twice to Seraphim in this instance, once through the holding of the second and once through SSIT? Do you want me to take that one? Sarah, do you want to take that one? Yes, please. Yeah. So no, the answer is no, there are no double fees. The trust does not pay a fee for its holding in that venture fund. The rationale for it is that there is still access to deal flow for when those earlier stage companies raise later stage rounds and the venture fund is focused on more early-stage transactions, but the trust is still able to get access to exposure there and the deal flow in the future. Thank you. The next one here is, how frustrating is it that you cannot raise more equity capital? I'll have first go at responding to that. Firstly, to reinforce the message that the capital reserves that we have in terms of cash and equivalents, plus the potential additional liquidity from our listed holdings, is sufficient to be able to support our existing portfolio for the foreseeable future. So we're selectively choosing which companies to support based on where there is a need and the greatest conviction. Clearly, if we had access to greater amounts of capital, that would enable the trust to be able to continue to build greater exposure to a broader range of companies. Our rate of deployment has been broadly consistent since the beginning of 2022 based on, I believe, judicious management of the cash reserves that we have got. Clearly we would like to have access to more capital, but we are sober to the realities of where our share price is relative to NAV at the moment, which is likely to preclude us from being able to access additional primary capital in the near term. Thank you. The next one here is, what year does SSIT's convertible debt for ICEYE mature? I will clarify that. The trust does not hold any convertible debt within ICEYE. It holds equity only. The next one here. Why do you think the NAV underperformed the wider gains in listed defense stocks? I'll take that. We simply do not have an answer for that. We have seen companies like Clyde Space and Eutelsat quadruple in recent weeks. Our portfolio and share prices remained flat, and we sit on this 47% discount. We are scratching our heads as to understand why. Just to chime in, the obvious answer here is that it's a function of the broader malaise within the investment trust market of limited liquidity. The discount range that we are in is relatively well-calibrated against our peers. Unfortunately, the investment trust sector as a whole has been challenged in terms of the performance, particularly of those funds that are focused on growth and high risk. We are unfortunately a victim of that. As we've articulated, we do not believe that the discount is justified and believe that given the significant but diversified exposure that our portfolio has to some very attractive broader market attributes, that we would hope that that discount will narrow over time. Thank you. The next one here is, can you provide an update on the progress of PlanetWatchers, please? On PlanetWatchers. PlanetWatchers. PlanetWatchers. I think it must be- No, I think it's PlanetWatchers. PlanetWatchers is the company that we're invested in. So that business is addressing the agricultural insurance market, of which it is well positioned with a number of key customers. I'm afraid I can't go into specific details, but there are some exciting new initiatives underway with that business that are seeing it expand out its capabilities and enhance it with an AI-related offering, which I would hope to be able to report on in more detail in due course. Perfect. The next one is, one way to close the NAV gap is to sell assets at fair value and better. What is the runway over the next 12 months to sell assets for a profit? I'll take first go at that. Again, just to build on earlier answers, number one, we believe that we have sufficient cash to be able to support our companies for the foreseeable future. We believe that there is very significant upside in our key holdings. As a reminder, our top 10 holdings account for nearly 85% of the fair value of the portfolio. The short answer is, we don't believe it would ultimately be in the interests of shareholders to sell our key assets right at the point that they're at a key inflection point, and right at a point that the market conditions are really falling into line to really hopefully turbocharge their performance. We do obviously have some companies that are potentially providing liquidity through IPO. There may be M&A opportunities within the portfolio over the year ahead, but we are mindful of not looking to realize holdings prematurely, thereby not delivering the full value to our shareholders. Thank you. The next one here is, have the likes of the Hollywood fires given a boost to insurance uses for sats among rather conservative big insurance? The trust has some exposure through its investment into Seraphim Space Ventures II, to a company called Delos Insurance that is using a combination of satellite data and AI to deliver wildfire home insurance, specifically within the Californian market. They are one of very few insurers that are willing and able to insure in California, which has obviously had longstanding problems with wildfires. I can give guidance that in the case of Delos, which is, as I say, an indirect holding, they had a 0% loss ratio as a result of the recent devastating fires in Los Angeles, which I think provides a pretty compelling point of evidence for just how strong their offering is. The general theme of climate mitigation is one that thematically we continue to believe is going to be one of the key drivers of the portfolio, and we have a number of businesses that in addition to addressing governments are also playing to climate. Thank you. That marks all the time we have for the Q&A section. I will now pass quickly back to Mark for some closing comments, and then we will end the webinar. Thank you. Thanks. As hopefully we have demonstrated during the presentation today, the world has changed very significantly over the last handful of weeks. With the U.S. withdrawing its defense support in Europe, this has led to the European countries realizing that they have very significant gaps in their own defense capability. The genie is out of the bottle here. The European industry is now looking to address these gaps and have rapidly pulled together an EUR 800 billion additional budget to address this. Defense and space are inextricably linked, and the types of companies that we invest into are really at the tip of the spear for defense. We have talked about our portfolio has got 78% of NAV focused on defense, 65% of NAV in Europe, including the U.K. We believe that we are very well positioned to benefit from these new budgets that will see growth in our underlying portfolio. Investors in other parts of the market, in other space specific companies such as Eutelsat and Clyde Space have seen their share prices quadruple as a consequence of these game changing new budgets that have been announced. Yet, the SSIT share price has remained flat and has remained consistently at a 40% plus discount, which we think is out of kilter with the position of our portfolio and the outlook for the market in the years ahead. Thank you everyone for your time today and for your interest in SSIT.