HGCapital Trust PLC · LSE:HGT
HGCapital Trust — H1 2009 Earnings Presentation
34 slides from HGCapital Trust's earnings presentation, June 2009
Slide 1: Interim results for the six months ending 30 June 2009
HgCapital Trust plc Interim results for the six months ending 30 June 2009
Slide 2: Contents
HgCapital Contents Trust plc Summary Performance Portfolio Review Investment Activity Manager Update Conclusion Appendices © Copyright 2009 HgCapital 2
Slide 3: Summary
HgCapital Summary Trust plc The portfolio is compact and appropriately valued. Action has been taken within the investment portfolio to cut costs and conserve cash. We retain significant liquid resources (46% of assets) to support and build our winners. We are beginning to see interesting new invest
Slide 4: Contents
HgCapital Contents Trust plc Summary Performance Portfolio Review Investment Activity Manager Update Conclusion Appendices © Copyright 2009 HgCapital 4
Slide 5: Financial Highlights
Performance Financial Highlights ASSETS AT 30 JUNE 2009 AT 31 DEC 2008 % CHANGE Net assets (£’000) 221,163 234,094 (5.5) Net assets per share 878.1p 929.4p (5.5) Cash and government securities per share 399.7p 515.6p (22.5) Share price (mid-market) 786.0p 668.5p 17.6 Discount (%) 10.5% 28.1% n/a © C
Slide 6: NAV Analysis
Performance NAV Analysis AT 30 JUNE 2009 AT 31 DEC 2008 £m % £m % Unlisted Investments 121.4 55.0% 108.9 46.5% Listed Investments 0.1 - - - Cash/Government securities 100.7 45.5% 130.0 55.5% Other net liabilities (1.0) (0.5%) (4.8) (2.0%) Net assets 221.2 100.0% 234.1 100.0% © Copyright 2009 HgCapit
Slide 7: Total Return
Performance Total Return 6 MONTHS TO 1 YEAR TO 3 YEARS TO 30 5 YEARS TO 10 YEARS TO 30 JUNE 2009 30 JUNE 2009 JUNE 2009* 30 JUNE 2009* 30 JUNE 2009* Net asset value (2.9%) (12.6%) 10.6% 18.7% 13.5% Share price 21.2% (5.4%) 9.9% 19.6% 15.6% FTSE All-Share Index 0.8% (20.5%) (6.5%) 3.1% 0.1% FTSE Smal
Slide 8: Analysis of net asset value movements
Performance Analysis of net asset value (NAV) movements for the six months ending 30 June 2009 Opening NAV Current NAV £234.1m £221.2m - - (2,000) (4,000) (6,000) (6,297) 3,026 (2,962) 485 (7,183) (12,931) Change in NAV £'000 (8,000) (10,000) (12,000) (14,000) Dec 2008 NAV * Dividends paid Accrued i
Slide 9: Analysis of unrealised movements in investment portfolio
Analysis of unrealised movements in investment portfolio Performance (including accrued interest movement of £2.9 million) for the six months ending 30 June 2009 Opening valuation Current valuation £108.9m £121.5m 18,000 15,933 (5,833) 3,611 (3,959) 16,000 14,000 2,780 12,532 12,000 10,000 Changes i
Slide 10: Realised and unrealised movements in investment portfolio
Realised and unrealised movements in investment portfolio Performance (including accrued interest) during the first six months © Copyright 2009 HgCapital 10
Slide 11: Contents
HgCapital Contents Trust plc Summary Performance Portfolio Review Investment Activity Manager Update Conclusion Appendices © Copyright 2009 HgCapital 11
Slide 12: Portfolio Review: top investments
Portfolio Portfolio Review Top 10 buy-out investments and the RPP fund investment represent over 85% of value INVESTMENT INVESTMENT SECTOR VALUE* AT VALUE* AT % OF INVESTED CUMULATIVE PRINCIPAL REASON FOR CHANGE DATE 31/12/08 30/06/09 PORTFOLIO VALUE % £m £m 30/06/09 Pulse 1999 Healthcare 12.9 22.3
Slide 13: Valuation Basis and Vintage
Portfolio Valuation Basis and Vintage Review As at 30 June 2009 by value VALUATION BASIS VINTAGE Year Year2009 2009 Net assets Other Pre Pre 2005 2005 2009 12% 1%12% 15% 15% 6% pre 2005 9% Year Year 2008 2008 2008 Cost 21% 12% 12% Year Year 2005 2005 13% 9% 10% 10% Year Year2007 2007 23% 23% Year Ye
Slide 14: Sector coverage of investments
Portfolio Sector coverage of investments Review As at 30 June 2009 by value BY VALUE BY NUMBER Services Fund Renewable Energy Renewable Energy 1% 4% 3% 6% Services Industrials 11% 23% Industrials TMT 9% 32% Fund 11% Consumer Consumer & Leisure & Leisure 20% 14% TMT 22% Healthcare Healthcare 16% 28%
Slide 15: Geography and Stage
Portfolio Geography and Stage Review As at 30 June 2009 by value BY GEOGRAPHY BY STAGE Renewable Expansion Benelux North America Fund Europe Energy 1% 2% 1% 1% 6% 6% Germany 14% Buyout 92% UK 56% Nordic Region 21% © Copyright 2009 HgCapital 15
Slide 16: Contents
HgCapital Contents Trust plc Summary Performance Portfolio Review Investment Activity Manager Update Conclusion Appendices © Copyright 2009 HgCapital 16
Slide 17: Investments
Investment Investments Activity COST COMPANY SECTOR ACTIVITY DEAL TYPE £’000 New Investments A private car fleet services electronic Epyx TMT Buyout 10,826 marketplace Total new Investments 10,826 Further Investments HgRPP LP Renewable Energy Renewable Energy Fund Fund 3,007 SHL Services Psychometri
Slide 18: Realisations
Investment Realisations Activity RESIDUAL COST BOOK VALUE AT PROCEEDS CUMULATIVE CURRENT YEAR COMPANY SECTOR EXIT ROUTE 31 DEC 2008 GAIN/(LOSS)** GAIN/(LOSS)*** £’000 £’000 £’000 £’000 £’000 Partial realisations Hirschmann Industrials Release of escrow - 819 1,165 1,165 346 Other 956 177 774 (182) 5
Slide 19: Portfolio Outlook
Portfolio Portfolio Outlook Review Trading conditions continue to be very tough for industrials and business services; much less so for healthcare, consumer and TMT investments, which continue to produce healthy growth. Our management teams have taken an aggressive stance to the downturn, rapidly re
Slide 20: Investment Prospects
Portfolio Investment Prospects Review Our assumption is that we will see a very weak and fragile recovery across most of Europe and that there is a material risk of price deflation across many product markets; falling prices are unequivocally bad for leveraged deals. We see many opportunities for pr
Slide 21: Events since June 2009
Portfolio Events since 30 June 2009 Review Net asset value at 31 July 2009 was £221.9 million, 881.0 pence per share. Cash balances at the end of July 2009 were £101.5 million (46% of net assets), equating to 402.8 pence per share. © Copyright 2009 HgCapital 21
Slide 22: Contents
HgCapital Contents Trust plc Summary Performance Portfolio Review Investment Activity Manager Update Conclusion Appendices © Copyright 2009 HgCapital 22
Slide 23: HgCapital Update
Manager HgCapital Update Update MANAGER STATUS We are taking advantage of a weak labour market and weakness of competitors by hiring to build out our investment team. Yet our focus remains tightly directed at NW European mid market. We will complete unleveraged buy outs and minority investments with
Slide 24: Contents
HgCapital Contents Trust plc Summary Performance Portfolio Review Investment Activity Manager Update Conclusion Appendices © Copyright 2009 HgCapital 24
Slide 25: Conclusion
HgCapital Conclusion Trust plc Compact portfolio, correctly valued and under control. A strong belief that we are entering a buyer’s market because economic conditions will continue to be tough and equity is in short supply. We have significant cash resources, and an experienced, deep team with plen
Slide 26: Contents
HgCapital Contents Trust plc Summary Performance Portfolio Review Investment Activity Manager Update Conclusion Appendices © Copyright 2009 HgCapital 26
Slide 27: Share Price and NAV Performance against the Index
Appendices Share Price and NAV Performance against the Index (Total Return) Performance over 10 Years (total return) 500 450 400 Performance Index 350 300 250 200 150 100 50 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 NAV FTSE ALL SHARE PRICE FTSE Small CAP © Copyrig
Slide 28: Analysis of Movement in NAV
Appendices Analysis of Movement in NAV £’000 Opening net asset value as at 1 January 2009 234,094 Realised proceeds in excess of book value at 31 December 2008 (excludes gross revenue) 485 Net unrealised depreciation of investments (excluding accrued interest) (7,183) Gross revenue 3,659 Priority pr
Slide 29: Portfolio by Sector: June 2009
Appendices Portfolio by Sector: 30 June 2009 Investment Year of Residual cost Total valuation* Valuation basis Portfolio value % Investment £’000 £’000 TMT Investments Visma 2006 Earnings 14,609 18,581 15.3% Epyx 2009 Cost 10,826 10,826 8.9% Achilles 2008 Cost 5,226 5,226 4.3% Elite 2005 Written dow
Slide 30: Portfolio by Sector: June 2009
Appendices Portfolio by Sector: 30 June 2009 Investment Year of Residual cost Total valuation* Valuation basis Portfolio value % Investment £’000 £’000 Consumer & Leisure Investments Sporting Index 2005 Earnings 7,092 7,607 6.3% Schleich 2006 Earnings 4,634 7,337 6.0% Americana 2007 Earnings 4,625 6
Slide 31: Portfolio by Sector: June 2009
Appendices Portfolio by Sector: 30 June 2009 Investment Year of Residual cost Total valuation* Valuation basis Portfolio value % Investment £’000 £’000 Renewable Energy Investments HgRPP LP 2006 Net assets 7,416 7,138 5,9% Total Renewable Energy 7,416 7,138 5.9% Services Investments SHL 2006 Written
Slide 32: HgCapital strategy
Appendices HgCapital strategy STRATEGY Mid-Market £50 million - £500 million EV buyouts/buy-ins: − Consistently strong deal-flow − Multiple exit options − Not overly dependent on capital markets (for returns, financing or exit) − Defensible market positions / proven records − Ability to attract high
Slide 33: Tactical advantage
Appendices Tactical advantage TACTICS Sector-focused 4 dedicated sector teams (developed over 11 years) covering c.70% of the market Annual business planning process drives agenda for each team Strategy superseding geography in investment targeting Intensive post-transaction planning and management
Slide 34: HgCapital Disclaimer
HgCapital Disclaimer HgCapital’s communications are only directed at eligible counterparties and professional clients. HgCapital acts for its investors and for no one else in relation to its business. It will not advise, provide services to or be responsible for providing customer protections to any