Results for the full year ended 31 December 2024

The Company's NAV as at 31 December 2024 was £297.3 million (or 34.4p per share), representing a decline in both fair value and total return of -£389.0 million (-45.0p per share, or -56.7%) compared to 31 December 2023 (£686.3 million, or 79.3p per share). The December 2024 NAV was based on a comprehensive bottom-up valuation of underlying assets completed by InfraRed and supported by an independent review from a newly appointed valuation expert.

Of the £389.0 million fair value reduction, £344.2 million (-39.8p per share) was attributable to adjustments for agreed divestment considerations, related mostly to Aqua Comms, and to a lesser extent EMIC-1. Changes in key assumptions relating to Arqiva contributed a decline in fair value of -£83.0 million, or 9.6p per share.

The remaining change in fair value reflected finance expenses, as well as changes in fair value attributable to Elio Networks, SeaEdge UK1 and the potential Verne Earn-Out. Further detail on the underlying assumptions and methodology of the valuation process is provided in the Company's Annual Report.

The Verne transaction closed on 15 March 2024 and generated total gross cash proceeds of $440 million (£347 million at the time of the transaction), of which £321 million was used to pay down the RCF. The Verne transaction also triggered the recognition of a potential earn-out payment based on the underlying performance of Verne in 2026. The Verne Earn-Out valuation as of December 2024 is based on the contractual mechanism of the Earn-Out, adjusted for current market and business specific dynamics.

Given the significant reductions in Company valuation since December 2023, the Directors and Investment Manager have undertaken a detailed investigation which has identified potential issues with the prior year valuations ("PYA Review"). Given that neither the current Board nor InfraRed were part of the December 2023 valuation process, the Directors have elected to appoint an independent expert to review the valuations for this period. The quantum of any potential valuation adjustment is to be determined by this independent expert working with the Board and Investment Manager, and as such no prior year adjustment has been made in the accounts issued today. Further detail on this PYA Review is set out in the Annual Report.

The Board has determined that it is in shareholders' best interests not to publish a full breakdown of the NAV by each portfolio company to protect the Company's commercial position during live divestment processes. The valuation of Arqiva has been provided. At the point when the Company's commercial position changes, the Board will provide the customary transparency on asset valuations.

As announced on 14 March 2025, the Company refinanced the £53 million principal outstanding on its RCF facility with its existing lender group. The renewed RCF has been made available to the Company for a committed three-month term expiring 16 June 2025, and two further three-month extension period options, subject to lender agreement at the time.

The Company expects to repay the balance of the new facility through receipt of the EMIC-1 proceeds, as well as further divestment proceeds and working capital surpluses expected before expiry of the RCF.

Aqua Comms: on 17 January 2025, the Company announced a binding agreement for the divestment of Aqua Comms for $48 million (c. £40 million¹), net of transaction costs. Completion is subject to multi-jurisdictional regulatory approvals including competition clearances, which are expected to take approximately 12 months from signing of the agreement.

EMIC-1: binding agreement for the divestment of EMIC-1 was signed on 31 December 2024 for a consideration of $42 million (c. £33 million¹), net of transaction costs. As at the approval of the accounts proceeds have yet to be received due to the procedural and administrative closing process for the transaction but are expected ahead of RCF expiry.

SeaEdge UK1: the divestment process is progressing well with value realisation expected in the near term.

Elio Networks: the divestment process has been paused until a later date, whilst the Company undertakes value-add initiatives ahead of a later exit. Work on these initiatives has commenced, and it is expected that value can be optimised within a similar timeframe to the Arqiva exit.

Arqiva Group: the Board believes that pursuing a sale of the Company's stake in Arqiva at this time would not yield an acceptable outcome for shareholders as clarity is needed on key broadcasting contract renewals in order for value to be optimised. The realisation process is not expected to occur before 2027, upon agreement of terms of key broadcasting contract renewals.

Verne Earn-Out: the Company, in conjunction with its advisers, is assessing the terms of the mechanism and relevant facts to determine the optimum route to realising value from the Verne Earn-Out. This includes continuing to hold, or the potential for an early settlement. Adjustments have been made to the valuation to reflect this.

As discussed previously, the Board is continuing to negotiate termination arrangements with D9's previous investment manager, Triple Point Investment Management LLP ("Triple Point").  The Board has provided in full for the amount considered to be due under the contract with Triple Point but expects to negotiate a much lower amount than this.

Additionally, the Board had also made it clear to Triple Point that a loss of US$ 2.8 million incurred by a wholly owned subsidiary in the D9 Group in the financial year ended 31 December 2023, as a result of an external fraud, should be borne by Triple Point. The Company is in discussion with Triple Point in relation to reimbursement including under insurance arrangements, but as at the date of signing of the Company's accounts, the amount had not been paid by Triple Point to the Company and the amount has not been recorded as part of the net assets of subsidiaries.