HgCapital Trust plc Regulatory News (HGT)

7 Nov 2008 07:00

HgCapital Trust plc - Interim Management Statement 7th November 2008

HgCapital Trust plc ("the Company"), today issues its Interim Management Statement in accordance with FSA Disclosure and Transparency Rule 4.3. This statement relates to the period from 1 July 2008 to 5 November 2008 and incorporates the Company's calculation of its net asset value at 31 October 2008, in the same form as is issued following the end of each month. The Net Asset Value (NAV) at October is based on the valuations of unquoted investments as at 30 June, as set out in the half yearly report issued in August, but is adjusted for realisations, exchange rates, changes in value of quoted securities, and net revenues during the period.

Investment activity during the period

Since the 30 June 2008 the Company has completed the realisation of Addison and sold its quoted shares in Clinphone plc, in addition to completing the realisation of Rolfe and Nolan as described in the half yearly report and accounts. Including deferred proceeds, a total of ‚£23.1 million cash proceeds has been received by the Company. Two acquisitions, of Achilles Group Holdings Limited and King Luxembourg SARL (KVT), have been completed, with the Company investing a total of ‚£10.7 million.

Performance since the 30 June 2008

Since 30 June the total return (NAV plus dividend) was 5.3%, compared with the negative total return of -22.6% of the FTSE All-Share Index. The Company's share price at the end of October was 725.0 pence, a discount of 33.3% against the NAV of 1,086.80 pence. The Company's share price (on a total return basis) fell by 15.4% over the four months to 31 October, in a period when the FTSE All-Share Index and FTSE SmallCap Index declined by 22.6% and 31.6% respectively.

Performance year to date (1 January - 31 October 2008)

The total return (NAV plus dividend) since 1 January was 17.5%, compared with the negative total return of -31.3% of the FTSE All-Share Index. The Company's share price (on a total return basis) decreased by 4.6% over the ten months to 31 October while the FTSE All-Share Index and FTSE SmallCap Index declined by 31.3% and 41.8% respectively.

Current trading

The Company's manager, HgCapital, is represented on the board of every material investment in the portfolio and receives monthly management accounts from all the businesses in which the Company is invested. These are regularly discussed with the Board, together with other information about the strategy and prospects of each business. The latest available trading figures, to the end of September, show some minor slowing in sales growth in a few of the businesses most exposed to a general economic downturn.

Share price and valuation

The discount of the Company's share price against published Net Asset Value has widened, but the discount is lower than that of most other private equity investment trusts. This may reflect the Company's holdings of cash and other liquid assets which, following recent realisations, represent 45.3% of the net assets. The book value of the unquoted portfolio will next be reviewed, as usual, at 31 December in accordance with IPEVCA guidelines.

Investment objective

HgCapital Trust plc gives the investor access to a private equity portfolio run by an experienced and well-resourced Manager that makes investments in fast growing companies over a number of geographies and sectors.

The objective of the Company is to provide shareholders with long-term capital appreciation in excess of the FTSE All-Share Index by investing in unquoted companies. The Company provides investors with exposure to a diversified portfolio of private equity investments primarily in the UK and Continental Europe.

The Company's Benchmark is the FTSE All-Share Index.

Performance

All information is at 31 October 2008 and is unaudited.

Performance at month end with net income reinvested

One Three One year Three Five month months years years Net asset value 3.2% 4.7% 31.1% 100.3% 224.9% Share price -8.3% -15.0% -10.0% 31.8% 198.2% FTSE All-Share Index -11.9% -19.7% -34.4% -9.3% 21.3%

Sources: HgCapital, Capital Economics

ResultsAt 31 October 2008Net asset value:* 1,086.80p Share price: 725.0p Discount 33.3% Total assets: ‚£273.7m Net yield: 3.4% Gearing: Nil% Ordinary shares in issue: 25,186,755 * includes 10 months net revenue of 50.4p.

Unaudited Net Asset Value per Share

The investment portfolio has not been revalued at 31 October 2008. The unaudited Net Asset Value at 31 October is based on the Net Asset Value at 30 June 2008 adjusted to reflect purchases and sales of investments, currency movements and bid values in respect of listed investments. The unaudited Net Asset Value at 31 October 2008 was 1,086.80 pence per share by comparison with 1,032.2 pence at 30 June 2008, an increase of 5.3%. This is after making provision for a carried interest liability of 24.9 pence.

Net revenue for the ten months to 31 October 2008 was 50.4p.

Balance Sheet

At 31 October 2008, the Company's summary balance sheet was as follows:

‚£m % Unquoted investments 136,340 49.8 ----------- ------ Total investment portfolio 136,340 49.8 Cash/Gilts 123,973 45.3 Other net assets 13,416 4.9 ----------- ------ Net Asset Value 273,729 100.0Investments

Two new investments were completed during the period.

The Company invested ‚£5.2 million in Achilles Group Holdings Limited, a global leader in services for sustainable procurement focusing on buyer-sponsored supplier data management and validation services, with an enterprise value of ‚£ 75 million.

King Luxembourg SARL (KVT), the Swiss fastenings and sealing technology products group, was jointly acquired with Capvis for an enterprise value of ‚£ 260 million. The Company invested ‚£5.5 million.

Realisations

During the period, the Manager completed the sales of Rolfe & Nolan and Addison and sold its quoted shares in Clinphone, returning a total of ‚£23.1 million to the Company, including deferred proceeds. This represents an uplift of over 60.0% of the carrying value as at 30 June 2008.

PortfolioTen Largest InvestmentsCompany Total Assets % Sector VISMA 5.5 TMT Voyage Healthcare 3.2 Healthcare Casa Reha 3.1 Healthcare BMFCO UA t/a Fabory 3.0 Services Atlas t/a Atlas 3.0 Services Interactive Mondo Minerals Co-op 2.9 Industrials Elite 2.8 TMT Sporting Index 2.6 Consumer & Leisure Pulse Staffing 2.5 Services SHL 2.5 Services Total 31.1 Sector Total Assets % TMT 9.9 Industrials 10.0 Consumer & Leisure 8.2 Healthcare 6.5 Services 13.0 Renewable Energy 1.4 Other 0.8 Fixed Interest 45.3 Net current assets 4.9 Total 100.0

This statement is a general description of the financial position and performance of the Company for the period from 1 July 2008 to 31 October 2008. It does not contain any profit forecast or forward looking information. Future performance and share price is likely to be affected by a number of factors, including (but not limited to) general economic and market conditions and specific factors affecting the financial performance or prospects of individual investments within the Company's portfolio.