REG - HgCapital Trust PLC - 1st Quarter Results

HgCapital TrustAnnouncement

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RNS Number : 3146D  HgCapital Trust PLC  07 May 2026

HgCapital Trust plc

Results FOR THE THREE MONTHS ENDED 31 MARCH 2026

 

CONTINUED STRONG TRADING delivered FROM a RESILIENT PORTFOLIO OF TECHNOLOGY
and serviceS businesses IN CHALLENGING CONDITIONS

 

London, 7 May 2026:  HgCapital Trust plc ('HgT'), today announces its results
for the three months ended 31 March 2026.

 

HgT provides investors with a listed vehicle to invest in one of the largest
and fastest growing portfolios of unquoted technology companies in Europe,
managed by Hg*.

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 companies where value can be created through strategic and
operational change.

This objective has been demonstrated with a 10-year share price total return
of +15.4% p.a., outperforming the FTSE All-Share Index by +6.7% p.a. over this
period.

Key highlights for Q1 2026 include:

 

§ NAV per share total return decreased by 5.4% over the period, and as a
result, at 31 March 2026 stood at £5.28 with net assets of £2.4 billion

§ A material contraction in valuation multiples reduced the value of the
portfolio by 9%. This was partially offset by a positive contribution of 5%
from trading

§ The share price total return showed a decrease of 22.9% year-to-date at
£3.88 per share; market capitalisation at 31 March 2026 was £1.8 billion

§ The weighted average EV/LTM EBITDA multiple stood at 24.0x at 31 March
2026, down from 25.2x at the start of 2026, and from 26.1x at the start of
2025

§ Strong underlying performance from the portfolio with LTM revenue and
EBITDA growth of 16% and 19% and margins of 34% for the overall portfolio; in
line with prior period figures

§ Investments of £42 million made and realisation proceeds of £91 million
generated over the first quarter of 2026

§ Realisations over the period included Intelerad at an uplift of >60% to
book value, and the partial exit of Septeo (in which HgT converted its fund
exposure into a fee-free co-investment of a similar amount)

§ In March, HgT announced the exit of Geomatikk, (due to complete in Q2 2026)
at a small uplift to its December 2025 carrying value

§ Pro-forma available liquid resources of £297 million (12% of NAV), which
includes a £375 million credit facility, of which £259 million is undrawn

§ Pro-forma outstanding commitments to Hg funds totalling £2.1 billion (88%
of NAV), of which £1.6 billion relates to recent commitments to Hg's
2025/2026 vintage funds which are expected to be called over the next five to
six years

§ Share buyback programme initiated on 6 February 2026, with £19 million
re-purchased to date

Based on HgT's share price at 31 March 2026 and assuming all historic
dividends have been reinvested, an investment of £1,000 twenty years ago
would now be worth £9,254, a total return of 825%. An equivalent investment
in the FTSE All-Share Index would be worth £3,599.

Jim Strang, Chairman of HgT, commented:

"Despite the challenging macro-environment backdrop and ongoing volatility in
the public software markets, key operating metrics across the HgT portfolio
continued to show encouraging progress in Q1. Specifically, companies reported
LTM sales growth of 16% and EBITDA growth of 19% respectively, while EBITDA
margins were 34%. The portfolio continues to grow significantly faster than
typical public companies and to generate significant free cash, a trend that
has been in place for some time.

 

The broad-based sell-off in the software sector, substantively driven by fears
over the disruptive threat of AI to existing businesses, has been largely
indiscriminate with little distinction between the many different types of
businesses that are found across the software sector. Hg targets a range of
technology related investments according to a disciplined investment model
focused on vertical software companies with very specific characteristics:
notably those with proprietary datasets, where outputs must be 100% accurate
and where deep, embedded customer and domain knowledge are defining factors.
While all technology assets will be impacted by the adoption of AI, the Hg
portfolio companies are well placed to see their specific value propositions
enhanced by AI integration rather than to be replaced altogether. Indeed, Hg
continues to lead the thinking on how such effective augmentations and
collaborations can be made.

 

Recent exit events, where strategic buyers have acquired assets at premiums to
their carrying values, serve to demonstrate not only the appropriateness of
the Hg valuation approach but also the success Hg have had in developing a
portfolio which is positioned to be a net beneficiary of the AI transformation
across the software industry. The level of time and resource Hg are investing
in this initiative is of real significance with peer investors looking to Hg
as 'leading the thinking' in how to drive successful AI transformation at
scale.

 

Nonetheless, over the course of the period, the positive effect of continued
strong trading performance (+5% contribution) was offset by a material
contraction in the valuation multiples of comparable companies that make up
the peer valuation baskets according to the HgT valuation policy.
Historically, we have observed that c.20-40% of the movement in public market
valuation multiples flows through to HgT portfolio valuations, both in
positive and negative markets. The average multiple for the IGV software index
declined by c.25% in Q1, with the -9% impact on HgT's portfolio from multiples
towards the top of this range, and in-line with the guidance provided with the
release of the Company's FY25 annual report.

 

The impact of these combined effects, resulted in a NAV per share decrease of
5.4% for the quarter while HgT's share price declined by 22.9% over the
period, broadly in line with the decline in the IGV index.

 

At this time of elevated risks and uncertainty, the Board remains focussed on
four major areas. These are monitoring the portfolio trading performance, the
capital structures of the portfolio companies, ensuring the Hg deal machine
continues to operate effectively and finally, and most importantly of all,
taking all necessary steps to support the long-term success of HgT."

 

 

*By Enterprise Value, Source: Hg, Factset

Note: All references to total return allow for all historic dividends being
reinvested

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 and investors may not get back the amount
they originally invested.

 

 

- Ends -

 

The Company's Q1 2026 Report and full presentation to accompany the results
are available to view at:  http://www.hgcapitaltrust.com/
(http://www.hgcapitaltrust.com/)

 

 

For further details:

HgCapital Trust

George Crowe

george.crowe@hgcapital.com

+44 7774 617 150

 

Laura Dixon

laura.dixon@hgcapital.com

+44 7824 592 894

 

Hg

Tom Eckersley

tom.eckersley@hgcapital.com

 

Sam Ferris

sam.ferris@hgcapital.com

 

Cadarn

Lucy Clark

lucy@cadarncapital.com

+44 7984 184 461

 

David Harris

david@cadarncapital.com

+44 7368 883 211

 

About HgCapital Trust plc

 

HgCapital Trust plc, whose shares are listed on the London Stock Exchange
(ticker: HGT.L), gives investors exposure through a liquid vehicle to a
portfolio of high-growth private companies in the software and services
sector. The selection of new investments and creation of value in these
businesses are 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. For further details, please see
www.hgcapitaltrust.com.

 

For further details, see www.hgcapitaltrust.com
(http://www.hgcapitaltrust.com) and www.hgcapital.com
(http://www.hgcapital.com)

 

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