RCS - HgCapital Trust PLC - Edison issues update on HgCapital Trust (HGT)

HgCapital TrustAnnouncement

16/11/2022 07:00

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RNS Number : 5051G  HgCapital Trust PLC  16 November 2022

London, UK, 16 November 2022

 

Edison issues update on HgCapital Trust (HGT)

HgCapital Trust (HGT) posted a 2.3% increase in NAV per share total return
(TR) in Q322, as positive earnings growth across the portfolio over the last
12 months (LTM) again outweighed multiple contraction. Despite the latter, the
average EV/LTM EBITDA across HGT's top 20 holdings stands at 28.8x vs 27.4x at
end-2021 (see our previous note for a discussion on HGT's valuations). The
weaker global economy and tightening credit conditions weigh on both HGT's
near-term portfolio performance outlook and private equity deal activity.
Still, the secular digitalisation trend remains intact with, as Gartner
forecasted in October 2022, growth in global software and IT services spending
of 11.3% and 7.9% in 2023, respectively. HGT's shares trade at a 18% discount
to NAV, while they traded close to NAV in 2021.

 

HGT closed £221m of new investments in Q322 (mostly related to IFS/Workwave
and Ideagen). A further £231m was invested post period-end, though we note
that most of it is the refinancing of Access (see our previous note for
details) completed in October 2022, which overall resulted in net realisation
proceeds (before carried interest) of c £84.0m for HGT. We calculate that
HGT's net investment from the remaining transactions post end-September 2022
was c £66.5m. Except for the £9m investment in TrustQuay, a technology
provider to the trust, corporate and fund services industry (completed in
October 2022), all the other deals were already made public at the time of the
H122 results release in September 2022. Meanwhile, HGT also announced the
merger of Ideagen and ProcessMAP, two of its portfolio companies, resulting in
a combined uplift of 6% to end-August 2022 valuations.

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(mailto:investmenttrusts@edisongroup.com)
Katherine Thompson +44 (0)20 3077 5720 investmenttrusts@edisongroup.com
(mailto:investmenttrusts@edisongroup.com)

 

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