HgCapital Trust - 2023 Preliminary Trading Update

HgCapital Trust PLC

05 February 2024

 

HgCapital Trust plc

PRELIMINARY TRADING UPDATE FOR THE YEAR ENDED 31 DECEMBER 2023

RESILIENT ESTIMATED NAV PERFORMANCE IN A CHALLENGING MACRO ENVIRONMENT DRIVEN BY STRONG TRADING IN THE UNDERLYING PORTFOLIO

London, 5 February 2024: HgCapital Trust plc ('HgT') today announces a preliminary trading update for the 12 months ended 31 December 2023.

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 2023 include:

·    Estimated Net Asset Value ('NAV') per share of 498.6 pence (unaudited)

·    Total estimated NAV return per share, on a total return basis, of 10.7%¹

·    Total share price return of 26.2%¹

·    Discount narrowed from 23% to 13%

·    Top 20 (77% of the portfolio) LTM revenue and EBITDA growth of 25% and 28% respectively for the year ended 31 December 2023

·    Investments of £71 million and realisations of £343 million

·    Year-end available liquid resources of £625 million (including a £350 million undrawn credit facility)

·    Year-end outstanding commitments to Hg funds of £1.0 billion

NAV growth

HgT's unaudited estimated NAV as at 31 December 2023 was £2.3 billion, which represents an estimated NAV per share of 498.6 pence, based on portfolio company valuations at 31 December and reviewed by the HgT AVRC. This growth was predominantly driven by strong trading performance in the underlying portfolio.

Investments and realisations

·    HgT's share of deployment from new and follow-on investments made during 2023 was £71 million, including GTreasury, Nomadia, JTL, P&I and Howden

·    HgT's share of proceeds from exits and refinancings during the period was £343 million, including secondary sales from Hg Genesis 8 and Hg Saturn 3, as well as the full exits of Transporeon and Commify. Full and partial exits represented an average uplift of 25% to their carrying values at 31 December 2022

Post- period balance sheet adjustments

Allowing for all transactions announced and not completed at the end of 2023:

·    Available liquid resources of £735 million (including a £350 million undrawn credit facility)

·    Outstanding commitments of £808 million

Hg REALISATION ACTIVITY CONTINUES TO HIGHLIGHT THE FUNDAMENTAL STRENGTH OF THE UNDERLYING PORTFOLIO

The sale of Argus announced in January 2024 represented the fourth material realisation event announced by Hg over the prior four weeks, resulting in c. $3.5 billion of proceeds that will be returned to Hg clients, including c. £295 million to HgT, once these transactions close in 2024.

This realisation represents Hg's 13th liquidity event since the start of 2023 and the 29th liquidity event completed over the last two years, the equivalent of more than one per month and representing proceeds from nearly half of the Hg portfolio over this period. 

This realisation activity sets Hg apart in a year when many other private equity firms struggled to generate liquidity from their portfolios. Hg believes its realisation activity in 2023 was a clear differentiator for HgT, highlighting the fundamental strengths and attractiveness of the underlying portfolio to both trade and financial buyers.

HgT will report its full year audited results for 2023 on 11 March 2024.

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For further information please contact:

For further details:

HgCapital Trust plc    

Laura Dixon (Senior Investor Relations Manager, Hg)          [phone]

Brunswick

Sofie Brewis                                                                            [phone]

Notes:

1.   Please be advised that this announcement may contain inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019.

2.   This announcement may include "forward-looking statements". These forward-looking statements are statements regarding the Company's objectives, intentions, beliefs or current expectations with respect to, amongst other things, the Company's financial position, business strategy, results of operations, liquidity, prospects and growth. Forward-looking statements are subject to risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.  Accordingly, the Company's actual future financial results, operational performance and achievements may differ materially from those expressed in, or implied by, the statements. Given these uncertainties, prospective investors are cautioned not to place any undue reliance on such forward-looking statements, which speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the Company's expectations with regard to them or any change in events, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Listing Rules or Prospectus Regulation Rules of the Financial Conduct Authority or other applicable laws, regulations or rules.

3.   Past performance is not a reliable indicator of future results. The value of shares and the income from them can go down as well as up as a result of market and currency fluctuations. You may not get back the amount you invest.

 About HgCapital Trust plc

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

Further information on HgT including a short introduction video is available here: https://www.hgcapitaltrust.com/

 

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