HgCapital Trust plc Regulatory News (HGT)

28 Aug 2009 07:00



HgCapital Trust plc

Interim Results for the six months ended 30 June 2009

London, 28 August 2009: HgCapital Trust plc ("the Trust" or "the Company"), the Private Equity Investment Trust managed by HgCapital (or the "Manager"), the European sector-focused private equity investor, announces interim results for the six months ended 30 June 2009.

Financial highlights

NAV decreased by 2.9% (total return basis) to £221.2 million (31 December 2008: £234.1 million) due to further provisions against a small number of investments, FX movements and payment of the dividend of 25.0 pence per share.

Total return (share price plus dividend) over the period was 21.2% compared with 0.8% for the FTSE All-Share Index and 22.7% for the FTSE Small-Cap Index. 

Consistent returns: share price growth (total return) over ten-year period of +15.6% per annum against +0.1% per annum for the FTSE All-Share Index for the same period.

£100.7 million in liquid resources, equating to £4.00 per share, (c. 46% of net assets) available to deploy in attractive opportunities.

Ten year investment return of 4X for every £1 invested.

Operational Highlights

Invested £16.9 million including participation in one new buyout investment, Epyx, a private electronic marketplace serving the contract car hire and leasing market.

Post period end

NAV at 31 July 2009 was £221.9 million, 881.0 pence per share.

Economic Outlook

We see significant opportunities for private equity arising from the current and prospective economic environment. Lower availability of debt finance, coupled with reduced competition should present better valued opportunities; risk adjusted prices should fall and returns on equity increase.

With a compact and disciplined portfolio, HgCapital is well positioned for the challenging economic conditions. A cautious approach is to be maintained, although as visibility and stability improve the Company expects to deploy more capital.

While current conditions persist, we do not expect to see a significant number of exits in the near term, but will continue to evaluate all options for the portfolio and exit opportunities.

Roger Mountford, the Chairman, commented:

"Following the long series of successful realisations between 2005 and 2008 the Company entered this severe downturn of the economic cycle with substantial holdings of cash and a compact portfolio of investments.  In anticipation of better investment opportunities becoming available over the months to come, the Manager made only one investment. As a result, the Company ended the period with liquid funds of more than £100 million, representing 46% of net assets."

"In the current environment, we have two priorities: to preserve value through active support of portfolio companies; and to build a pipeline of high quality acquisition opportunities to take advantage of this liquidity at the right time. 

"The Board has consistently said that an allocation to private equity was sensible for investors able to take a long term view. We hold to this opinion despite the ending of the long bull market and stress the importance of selecting investments with a resilient business model, sensible use of leverage and continuous focus on operational performance."

For further details: 

About HgCapital

HgCapital is a private equity investor in the European mid-market. We focus on investments with an enterprise value in the range of £50-500 million. Our business model combines sector specialisation with dedicated, proactive support to our portfolio companies as well as the application of significant human resource and the corresponding management expertise across all phases of the investment process. HgCapital manages more than £2.4 billion for some of the world's leading institutional and private investors. Our goal is to achieve outstanding results for our investors, management teams and intermediaries.

For further details, see www.hgcapital.com