Edison issues update on HgCapital Trust (HGT)

RNS Number : 5937V

HgCapital Trust PLC

14 December 2021

 

London, UK, 14 December 2021

Edison issues update on HgCapital Trust (HGT)

HgCapital Trust (HGT) delivered a strong NAV total return of c 36% in the first nine months of 2021, including c 12% in Q321, driven primarily by double-digit earnings growth across the portfolio (LTM EBITDA for top 20 holdings up 29% yoy). Its transaction activity remains high, with the volume of completed and announced investments and realisations at £378m and £204m, respectively in 2021 so far (vs £403m and £364m in the record-high 2020). HGT's coverage ratio was a healthy c 85% at 10 December 2021 and its liquidity position has been supported with tap equity issues (c £126m in 2021 to 10 December) and a £200m credit facility, £45m of which was undrawn as at 15 November 2021.

The listed software and services sector has remained supportive for HGT's portfolio. That said, HGT's NAV total return (TR) in 2021 to end-September was largely driven by earnings growth across portfolio companies and the company continues to report healthy uplifts on exits to end-2020 carrying values (c 47% on average in 2021 so far vs c 50% in FY20), suggesting a relatively conservative portfolio valuation policy. We believe that its focus on resilient sectors and strong NAV TR over the short, medium and long term to end-September compared to its peers has been reflected in its shares trading in line with NAV (vs a c 20% average discount for PE peers although in line with HGT's historical trading).

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