In the spirit of previous posts about Phil King from Regal Partners, I thought I would start off my VG1 valuation with a cringeworthy addition:

At VG1, the crown’s in play - Paul Moore came to seize the day.

The King held on tight, but the board couldn’t ignore, the Opthea losses stacked at the door.

With funds to guard there was no time to fumble, scrambling fast to avoid a significant tumble.

With Paul’s steady hand and investment force, the new king of throne will aim to change VG1's future course.

Summary of their FY results:

• VG1 reported a net loss after tax of $17.6 million in FY25 (benefitting from $11m in tax benefits), reversing from a $64.1 million profit in FY24.
• The portfolio delivered a net return of -3.0% due largely to the full write-down of their investment in Opthea.
• Net tangible assets per share at $2.06 post-tax (down 7.6% YoY), which has increased by a few cents since 30 June.
• Financial assets at fair value plummeted from $686m to $485mil from the previous year
• Despite losses and market challenges, the Board is retaining its dividend of 6.0 cents per share for this half.

My take:

With the significant losses of Opthea in the rear view mirror, VG1 have appointed an impressive manager to take over the helm. Since starting their Global Fund (net of fees) Paul has delivered an annual growth rate of 10.9% per annum.

There could be a few skeletons in the closet with the undisclosed short positions, however all in all I believe that the trajectory of this stock will be on the rise from here.

VG1 also has 6c per share in deferred losses at 30 June 2025 after the Opthea writedown for the next financial year, which is not reflected in the post NTA per share calculations on their website and report.

Currently VG1 is trading at a 13% discount to the Post-Tax NTA per share, and approximately 16% if you include the benefit of future tax losses. When flying at its highest, VG1 didn’t trade at a discount at the dividend date, but historically sits around that 10% discount from the Post-Tax NTA per share.

Dividend yield of 3.3c at the current price, which grosses out to 4.8% with franking credits.

Valuation:

Post Tax NTA as at 18/9: $2.09 (post tax benefit cancelled out by 6c dividend to be paid)

Est Value based on 10% NTA discount: $1.88

However until the market gets a bit more familiar with Paul's results, I'm expecting this one to hover somewhere between the 10-14% discount rate.

Value Range: $1.76 to $1.85

Disc: Held IRL and on SM