Half Yearly Report

RNS Number : 2373M

HgCapital Trust PLC

22 August 2013

 



HgCapital Trust plc

Interim Results for the six months ended 30 June 2013

London, 22 August 2013:  HgCapital Trust plc ("the Trust"), which provides investors with a listed vehicle to invest in all private equity deals managed by HgCapital, today announces its interim results for the six months ended 30 June 2013.

Summary performance

	31 July 2013	30 June 2013	31 December 2012	% Total return*
Share price	1,205.0p	1,132.0p	1,016.0p	+13.6%
NAV per share (diluted)	1,177.4p	1,172.8p	1,221.7p	-2.2%
FTSE All-Share Index				+8.5%
				Movement
Market Capitalisation	£449.8m	£422.5m	£361.3m	+£61.2m
Net Asset Value	£439.5m	£437.7m	£438.0m	-£0.3m

* Assuming reinvestment of all dividends

Financial Highlights

·      Solid revenue and EBITDA growth of 8% and 5% respectively across the top 20 buyout investments over the last 12 months to 30 June 2013.

·      A valuation multiple of 10.8x EBITDA and net debt multiple of 3.9x EBITDA as at 30 June 2013.

·      The period ended with liquid resources of £135.6 million and outstanding commitments of £352.0 million. By 31 August 2013, liquid resources are estimated (including all post period transactions) to be £124.0m (28% of NAV), with expected outstanding commitments of £316.2m (72% of NAV).

·      19.4% p.a. 10-year compound annual growth rate of the share price vs. 9.0% p.a. from the FTSE All-Share Index, both calculated on a total return basis to 30 June 2013.

Operational Highlights

·      Consistent and encouraging growth from the majority of investments.

·      Decision to write-down under-performing investments has materially impacted the half year results:

-      Lumesse and NetNames are experiencing short term performance issues, leading us to reduce the valuation of the Trust's holding by £13.0 million (3% of NAV); in both cases the Manager believes that the investment case for each of these companies remains sound

-      Consumer facing businesses, Teufel and Americana, have continued to perform poorly and we have fully provided against their remaining value, reducing the Trust's NAV by a further £4.6 million (1% of NAV).

·      £46.5m returned to the Trust so far in 2013 including:

-      £7.3 million returned to the Trust from the sale of CSH in March;

-      £22.4 million received from the sale of ATC in August; and

-      £11.6 million from the refinancing of Manx Telecom and Epyx.

·      European bond markets have enabled the refinancing of Voyage Care and TeamSystem, through public bond issues, reducing their debt servicing costs and providing financial flexibility to enable future growth.

·      Three new buy-out investments completed during July and August 2013, deploying £35.0 million for the Trust.

Manager Outlook

·      We have already started to make a number of new investments and, based on our current pipeline, we would expect to complete more new investments over the next six months.

·      A clear area of focus is on the existing portfolio. We are happy with the level of revenue growth but are not yet seeing the operational leverage coming through that we expect.

·      Over the next twelve months we want to see a return on the investment we are making across the portfolio which, if delivered, will see the rate of profit growth accelerate.

·      Where companies have performed behind plan, we are actively working with the management teams to get the businesses back on track.

·      We believe that the above, together with continuing to realise investments for good value, will deliver steady NAV progression over the next couple of years and therefore we are confident that we will continue to reward our investors with superior returns.

Roger Mountford, Chairman of the Trust, commented:

"Our buyout portfolio continues to trade well overall. The Trust's commitments, supported by the Manager's investment in resources across all its chosen sectors, make it well placed to take advantage of opportunities to buy good businesses at reasonable prices over the next three to four years."

- Ends -

The Trust's 2013 Interim Report and a webcast from the Manager to accompany the results are available to view at:  http://www.hgcapitaltrust.com/.

For further details:

HgCapital
Stephen Bough              (CFO, HgCapital)	[phone]
Roger Mountford          (Chairman, HgCapital Trust plc) Maitland	[phone]
Peter Ogden Tom Eckersley	[phone] [phone]

About HgCapital Trust plc

HgCapital Trust plc is an investment trust whose shares are listed on the London Stock Exchange. The Trust gives investors exposure, through a liquid vehicle, to a portfolio of high-growth private companies, managed by HgCapital, an experienced and well-resourced private equity firm with a long-term track record of delivering superior risk-adjusted returns for its investors.

For further details, see www.hgcapitaltrust.com and www.hgcapital.com

Neither the contents of HgCapital's website, HgCapital Trust's website nor the contents of any website accessible from hyperlinks on the websites (or any other website) is incorporated into, or forms part of, this announcement.

 

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