HgCapital Trust plc
Results for the three months ended 30 September 2024
Continued double-digit trading growth
Delivered from a resilient portfolio of software and services businesses
Highlights:
- The share price showed a positive development in the quarter, appreciating by 6.6% while the discount narrowed from 7% to 1%. The share price has appreciated 20.1% overall year to date.
- Trading performance across the portfolio continues to be strong and in-line with that seen in recent quarters, contributing 5% to NAV growth in the quarter, however in aggregate HgT’s NAV declined by 0.9% over the period. This decline was substantively driven by adverse FX movements. As a result, at the quarter end HgT’s NAV per share stood at £5.21 with net assets of £2.4 billion.
- Continued long-term performance driven by robust trading with the top 20 investments (76% of the portfolio by value) seeing last 12 months sales and EBITDA1 growth of 20% and 24% respectively, with EBITDA margins of 34%.
- Robust balance sheet with available liquid resources (comprising all announced transactions and the dividend paid in October) of £420 million (18% of NAV), including a bank facility of £375 million of which £312 million is currently undrawn, and commitments to Hg funds of £720 million (30% of NAV), to be invested over the next three to four years.
- Investments completed in Q3 deploying £213 million, including £66m of co-investment (free of management fees and carried interest). Co-investments now represent 10% of portfolio value, increasing from 5% at the start of the year.
- Hg continues to screen an attractive pipeline of investment opportunities and further liquidity events are expected over the next six to twelve months.
Based on HgT’s share price at 30 September 2024 and assuming all historic dividends have been reinvested, an investment of £1,000 twenty years ago would now be worth £22,406, a total return of 2,141%. An equivalent investment in the FTSE All-Share Index would be worth £4,044.
1 Excluding two investments from the Top 20 valued on a basis other than earnings