STRONG TRADING IN THE UNDERLYING PORTFOLIO CONTINUES TO DRIVE GROWTH
London, 29 July 2024: HgCapital Trust plc (‘HgT’) today announces a preliminary trading update for the six months ended 30 June 2024.
HgT provides investors with a listed vehicle to invest in unquoted businesses managed by Hg, Europe’s largest investor in software & services companies.
The objective of HgT is to provide shareholders with consistent long‑term returns in excess of the FTSE All‑Share Index by investing predominantly in unquoted businesses where value can be created through strategic and operational change.
Highlights for H1 2024 include:
- Estimated Net Asset Value (‘NAV’) per share of 524.0 pence (unaudited)
- Estimated NAV return per share, on a total return basis, of 5.6%1
- Total share price return of 12.7%1
- Discount narrowed from 13% to 7%
- LTM revenue and EBITDA growth of 20% and 25% for the top 20 companies (78% of the portfolio)
- Investments of £310 million and realisations of £347 million
- Available liquid resources of £550 million (including a £375 million undrawn credit facility as at 30 June 2024)
- Outstanding commitments to Hg funds of £847 million
NAV growth
HgT’s unaudited estimated net assets of £2.4 billion as at 30 June 2024, represent an estimated NAV per share of 524.0 pence, based on portfolio company valuations at 30 June and reviewed by the HgT Audit, Valuation and Risk Committee. This growth was driven predominantly by strong trading performance in the underlying portfolio.
Investment activity
- New and follow-on investments made during the first half of 2024 totalled £310 million, including Visma, IRIS, GGW, CUBE, CINC and Induver.
- Post-period investment of £108 million from new investments in Focus Group and AuditBoard which were signed but had not completed as at 30 June 2024.
Realisation activity
- Proceeds from exits and refinancings during the period of £347 million. This includes proceeds from Visma, IRIS and GGW which had been signed during 2023 and closed during the first half of 2024, and the full realisation of Argus which was signed and closed during the period.
- Estimated proceeds of £71 million to be received from the post-period realisations of F24, TeamSystem and team.blue
- Full and partial realisations signed in 2024 were at an average uplift of 13% to their carrying value.
Pro-forma balance sheet
Allowing for all transactions announced as at the date of this trading update:
- Pro-forma available liquid resources of £508 million (including a £375 million credit facility of which £67 million has been drawn post 30 June 2024)
- Pro-forma outstanding commitments to Hg funds of £725 million
Hg TRANSACTION ACTIVITY OVER 2024 CONTINUES TO HIGHLIGHT THE STRENGTH OF Hg’s DISCIPLINED INVESTMENT AND REALISATION STRATEGY
As reported in the full year results, exit activity has continued within the portfolio, including most recently the full realisations of F24 and TeamSystem and the partial realisation of team.blue.
Including these realisations, Hg has achieved 40 liquidity events since the start of 2022, the equivalent of more than one per month, generating proceeds of over $16 billion over this period.
This record of realisations achieved stands out as the industry continues to find generating liquidity events challenging, highlighting the fundamental strengths and attractiveness of the underlying portfolio to both trade and financial buyers.
Investment activity increased during 2024, with a continued focus on companies within the end market, mission-critical software and services ‘clusters’ which Hg has tracked for many years. In addition to the investments that completed in the first half of the year, in July 2024, Hg completed the investment in AuditBoard. The previously announced investment in Focus Group is also expected to close in the coming months.
HgT will report its interim results to 30 June 2024 on 16 September 2024.
1 Total return assumes that all historical dividends have been re-invested.