HGCapital Trust PLC · LSE:HGT
HGCapital Trust — H1 2014 Earnings Presentation
26 slides from HGCapital Trust's earnings presentation, August 2014
Slide 1: Interim Results Presentation June 2014
Interim Results Presentation June 2014 This document accompanies the Interim Report & Accounts for the six months ended 30 June 2014 and contains a summary of information set out in that document. Reference should be made to the full Report & Accounts rather than relying on this summary. The reader’
Slide 2: Contents
HgCapital Contents Trust plc PAGE Financial highlights 3 Portfolio review 4 Investment activity 6 Mercury TMT Fund 9 Renewables 10 Conclusion 11 Appendices 13 Sector expert investors supporting management to grow industry champions © Copyright 2014 HgCapital 2
Slide 3: 2014 Interims: Financial Highlights
Financial 2014 Interims: Financial Highlights Highlights Six months to June 2014 PERFORMANCE NAV per share (total return) +5.8% to £12.18; net assets of £445m June 2014 share price +2.5.% to £10.07 on a total return basis; market capitalisation of £376m Special dividend of 19 pence per share,
Slide 4: Key drivers of valuation change in the unrealised portfolio
Portfolio Key drivers of valuation change in the unrealised portfolio Review Six months to 30 June 2014 The majority of the portfolio has seen an increase in value through strong profit growth, both organic and through acquisition Acceleration of growth at TeamSystem and SimonsVoss Improving perform
Slide 5: Trading performance of Top 20 mid-cap buyout investments
Portfolio Trading performance of Top 20 mid‐cap buyout investments Review Aggregate sales of £2.1 billion and profits of £466 million, average margins of 22% Pre-Hg6 (Pre-2009) Hg6 (2009) Hg7 (Nov 2013) >1 YEAR <1 YEAR STRONG PERFORMANCE 55% BY VALUE, £185m STABLE, LOWER GROWTH 17% BY VALUE, £55m IN
Slide 6: Investment Activity: Investments
Investment Investments Activity £72 million deployed on behalf of the Trust so far in 2014 ACQUISITIONS TO 30 JUNE 2014 Trust’s share of investment £m % of NAV Zenith, one of the UK’s largest independent leasing, fleet management and vehicle outsourcing businesses was acquired in February 2014. At t
Slide 7: Investment Activity: Realisations
Investment Realisations Activity £78 million estimated on agreed sales to be realised on behalf of the Trust so far in 2014 REALISATIONS TO 30 JUNE 2014 Uplift to book value (Dec 2013) Investment Trust proceeds £m % multiple Gross IRR Completed IPO on AIM of Manx Telecom at a market capitalisation £
Slide 8: Re-investment in Visma
Investment Re‐investment in Visma Activity REALISATION Uplift to book value (Dec 2013) Investment Trust proceeds £m % multiple Gross IRR In April we announced the sale of Visma (completed in August), a leading provider of business management software and services in £41.4 million £9.7 million 31% 5.
Slide 9: The Mercury Fund
The Portfolio The Mercury Fund Lower mid-market TMT investments primarily focused on Northern Europe In 2011 the Trust made a £60 million commitment to HgCapital’s Mercury TMT Fund which specialises in TMT buyouts primarily in Northern Europe, with an EV of between £20 million and £80 million. S
Slide 10: Renewable Energy Fund Investments
Renewable Energy Fund Investments The Portfolio High quality European renewable energy projects with minimal GDP and technology risk currently representing 3% of NAV The Trust is invested via limited partnership interests in HgCapital’s two Renewable Energy Funds, RPP1 (2006) and RPP2 (2010) Exp
Slide 11: Conclusion: Outlook & Prospects
Conclusion Outlook & Prospects Confidence in a strong portfolio of companies that will create value for our investors We have made a number of interesting acquisitions over the last year, with a clear plan on how to create value within these businesses. Whilst we remain cautious on the market en
Slide 12: Total return performance
Conclusion Total return performance The Trust continues to deliver long term growth 13.4% Ten year CAGR of the share price 13.7% Ten year CAGR of the NAV per share 4.8% Ten year outperformance over the FTSE All Share £3,510 How much an investment of £1,000 made ten years ago in the Trust would now b
Slide 13: Appendices Contents
Appendices Contents PAGE Top 20 mid-market buyout companies 14 Trading performance of the top 20 mid-market buyouts 16 Valuation and gearing of the top 20 mid-market buyouts 17 Portfolio analysis 18 Balance sheet 19 Realised and unrealised movements in the portfolio 20 Analysis of NAV movements 21 T
Slide 14: Mid-Market Buyout Portfolio
Appendix Mid‐Market Buyout Portfolio The top 10 buy-out investments represent 66% of the portfolio value Residual Total Portfolio Cumulative Change in Cost valuation value value value over Investment Year of investment Sector Location £’000 £’000 % % 6 months 1 2011 TMT UK 25,598 35,890 9.5% 9.5%
Slide 15: Mid-Market Buyout Portfolio
The Portfolio Mid‐Market Buyout Portfolio The top 20 buy-out investments represent 89% of the portfolio value Residual Total Portfolio Cumulative Change in Year of Cost valuation value value value over Investment investment Sector Location £’000 £’000 % % 6 months 11 2011 TMT UK 14,249 12,292 3.3% 6
Slide 16: Trading Performance of Top 20 Mid-Market Buyout Investments
Appendix Trading Performance of Top 20 Mid‐Market Buyout Investments Robust and improved trading in the unrealised portfolio will help to drive NAV growth TOP 20 LTM SALES GROWTH +10% Aggregate sales of £2.1 billion Strong year-on-year revenue growth, slightly up from 2013 Top 10 (66%) sales g
Slide 17: Valuation and Gearing - Top 20 Buyout Investments
Appendix Valuation and Gearing ‐ Top 20 Buyout Investments As at 30 June 2014 TOP 20 EV TO EBITDA MULIPLE 12.4x Valuation multiple increased from 11.6x (Dec 2013) to 12.4x Multiple reflects: - Investment in high growth companies - Increase in ratings of market comps 2 companies in top 20 not v
Slide 18: HgCapital Trust plc Portfolio Analysis
Appendix HgCapital Trust plc Portfolio Analysis As at 30 June 2014 Sector expert investors supporting management to grow industry champions © Copyright 2014 HgCapital 18
Slide 19: Liquid resources and outstanding commitments
Appendix Liquid resources and outstanding commitments AS AT AS AT AS AT 31 JUL 2014 30 JUN 2014 31 DEC 2013 £m % of NAV £m % of NAV £m % of NAV ACTIVELY INVESTING FUNDS HgCapital 71 150.8 33.2% 171.5 37.7% 182.5 41.4% HgCapital Mercury 41.9 9.2% 47.0 10.3% 49.5 11.2% Hg RPP2 2 14.2 3.1% 14.3 3.2% 17
Slide 20: Analysis of NAV movements
Appendix Analysis of NAV movements For the six months ended 30 June 2014 Sector expert investors supporting management to grow industry champions © Copyright 2014 HgCapital 20
Slide 21: Attribution analysis of unrealised movements in the portfolio
Appendix Attribution analysis of unrealised movements in the portfolio For the six months ended 30 June 2014 Sector expert investors supporting management to grow industry champions © Copyright 2014 HgCapital 21
Slide 22: HgCapital - The Manager
Appendix HgCapital – The Manager Delivering sustainable long-term growth Mid-market private equity firm with £5.2 billion AUM, primarily focused on Northern Europe Deep sector focus across TMT, services, industrials and renewable energy - Mid-market, control buyouts across TMT, services, industr
Slide 23: Similar business model characteristics across different sectors
Appendix Similar business model characteristics across different sectors A deep sector focus helps us find companies attractive to future buyers RECURRING SALES INTELLECTUAL PROPERTY PROTECTION Sector focus …investments helps us FRAGMENTED CUSTOMER BASE attractive to find… future buyers BUSINESS CRI
Slide 24: Contact
Appendix Contact For further information on HgCapital Trust plc, please visit our website: www.hgcapitaltrust.com Or contact Laura Dixon +44 (0)20 7089 7888 investorrelations@hgcapitaltrust.com For more information on Listed Private Equity, please visit the LPEQ website www.lpeq.com Sector expert in
Slide 25: Disclaimer
HgCapital Disclaimer Trust plc NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR WITHIN THE UNITED STATES OR TO “US PERSONS” (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR INTO OR WITHI
Slide 26: Disclaimer
HgCapital Disclaimer Trust plc These materials include statements that are, or may be deemed to be, "forward-looking statements" which are based on current expectations and projections about future events. In some cases, these forward-looking statements may be identified by the use of forward-lookin