HGCapital Trust PLC · LSE:HGT
HGCapital Trust — H1 2015 Earnings Presentation
28 slides from HGCapital Trust's earnings presentation, June 2015
Slide 1: Interim Results Presentation June 2015
Interim Results Presentation June 2015 This document accompanies the Interim Report & Accounts for the six months ended 30 June 2015 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 Overview 3 Financial highlights 4 Portfolio review 6 Conclusion 14 Appendix 16 Sector expert investors supporting management to grow industry champions © Copyright 2015 HgCapital 2
Slide 3: HgCapital Trust Overview
HgCAPITAL OVERVIEW TRUST PLC The Trust gives investors access to a diversified portfolio of HgCapital managed private equity investments Established in 1989, HgCapital Trust has been managed by HgCapital for over 20 years 11% p.a. NAV per share HgCapital is a leading European mid-market investor
Slide 4: Key Financial Highlights
FINANCIAL KEY FINANCIAL HIGHLIGHTS HIGHLIGHTS Strong trading results from the majority of the portfolio has driven positive performance over the period +4% NAV per share of £12.93, Net assets of £483 million NAV per share 31 July NAV per share of £12.87 +7% 30 June share price of £11.01 Share
Slide 5: Key Drivers of NAV per Share Increase Over the Period
FINANCIAL KEY DRIVERS OF NAV PER SHARE INCREASE OVER THE PERIOD HIGHLIGHTS Primarily reflecting strong unrealised portfolio trading performance The majority of the unrealised portfolio has seen an increase in value (+£52m) driven by: +12% - Robust sales and profit growth; Growth in the underlying
Slide 6: Top 20 Buyouts (87%): Portfolio Trading
PORTFOLIO TOP 20 BUYOUTS (87%): PORTFOLIO TRADING REVIEW Aggregate sales of £2.0 billion and profits of £442 million, average margins of 22% +11% Strong revenue growth over the LTM Average growth We have continued to see consistent robust double-digit performance in many of our larger companies
Slide 7: Similar Business Models Across Different Sectors
PORTFOLIO SIMILAR BUSINESS MODELS ACROSS DIFFERENT SECTORS REVIEW A deep sector focus helps us find companies attractive to future buyers RECURRING SALES INTELLECTUAL PROPERTY Sector focus helps …investments attractive FRAGMENTED CUSTOMER BASE us find… to future buyers BUSINESS CRITICAL, LOW SPEND P
Slide 8: Investment Activity: The Foundry
PORTFOLIO INVESTMENT ACTIVITY REVIEW £20 million invested on behalf of the Trust into The Foundry Vertical application software has been one of the cornerstones of the TMT team investment strategy since the early 2000s. The Foundry provides mission critical software for its customers in the film pro
Slide 9: Investment Activity: A-Plan
PORTFOLIO INVESTMENT ACTIVITY REVIEW £15 million invested on behalf of the Trust into A-Plan The Services team identified the insurance broking sub-sector as attractive for potential investment in 2011, as it is characterised by businesses with high levels of recurring revenues; providing a non-disc
Slide 10: Investment Activity: Eucon
PORTFOLIO INVESTMENT ACTIVITY REVIEW £4 million invested on behalf of the Trust into Eucon The investment in Eucon results from considerable sector work undertaken in recent years in automotive information and software and follows prior investments in the automotive space including: Epyx (an electro
Slide 11: Trading Performance Overview of Top 20 Buyout Investments
PORTFOLIO TRADING PERFORMANCE OVERVIEW OF TOP 20 BUYOUT INVESTMENTS (87%) REVIEW Aggregate sales of £2.0 billion and profits of £442 million, average margins of 22% Year of Investment Pre-2010 2010 - 2012 2013 - 2014 2015 STRONG PERFORMANCE 64% BY VALUE £262m LOWER GROWTH 7% BY VALUE, £31m INVESTING
Slide 12: IRIS Continues to See Double Digit Revenue and EBITDA Growth
PORTFOLIO IRIS CONTINUES TO SEE DOUBLE DIGIT REVENUE AND EBITDA REVIEW GROWTH IRIS is one of the earliest examples of our focus on business critical software firms operating in attractive, predictable end-markets. The business model is attractive with: high levels of subscriptions revenues; high cus
Slide 13: JLA Continues Robust Organic Sales and Profit Growth
PORTFOLIO JLA CONTINUES TO EXPERIENCE YEAR-ON-YEAR ROBUST ORGANIC REVIEW SALES AND PROFIT GROWTH JLA has a long track record of unbroken double digit growth. JLA demonstrates many of the business model characteristics that HgCapital looks for: a diverse customer base; a product that is critical to i
Slide 14: Outlook & Prospects
OUTLOOK & PROSPECTS CONCLUSION Confidence in a portfolio with strong earnings and cash generation driving further NAV value We have maintained a disciplined approach in selecting and investing in companies, and continue to see opportunities to make selective high quality investments in sub-sectors
Slide 15: Total Return Performance
TOTAL RETURN PERFORMANCE CONCLUSION The Trust continues to deliver long term growth 11.2% Ten year CAGR of the NAV per share 10.2% Ten year CAGR of the share price 14.8% Twenty year CAGR of the share price Six months to One Three Five Ten Twenty 30 June 2015 year years years years years % % % p.a. %
Slide 16: Appendix Contents
APPENDIX CONTENTS PAGE Top 20 mid-market buyout companies 17 Renewable energy investments 19 Trading performance of the top 20 mid-market buyouts 20 Valuation and gearing of the top 20 mid-market buyouts 21 Portfolio analysis 22 Cash and Commitments 23 The Investment Manager 24 Contact 26 Sector exp
Slide 17: Mid-Market Buyout Portfolio (Top 10)
MID-MARKET BUYOUT PORTFOLIO APPENDIX The top 10 buy-out investments represent 62% 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 1 IRIS 2011 TMT UK 25,598 56,677 12.0% 1
Slide 18: Mid-Market Buyout Portfolio (11-20)
MID-MARKET BUYOUT PORTFOLIO APPENDIX The top 20 buy-out investments represent 87% 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 Radius 2013 Services UK 17,966 17,832
Slide 19: Renewable Energy Fund Investments
RENEWABLE ENERGY FUND INVESTMENTS APPENDIX High quality European renewable energy projects currently representing 2% of NAV The Trust is invested via limited partnership interests in HgCapital’s two Renewable Energy Funds, RPP1 (2006) and RPP2 (2010) Exposure to renewable power assets anticipate
Slide 20: Trading Performance of Top 20 Buyout Investments
TRADING PERFORMANCE OF TOP 20 BUYOUT INVESTMENTS APPENDIX 11% sales and 10% EBITDA growth over last twelve months +11% Average growth in sales +10% Average growth in EBITDA * Excluding one investment valued on a basis other than earnings All figures are for the twelve months to 30 June 2015 Sector e
Slide 21: Valuation and Gearing - Top 20 Buyout Investments
APPENDIX VALUATION AND GEARING - TOP 20 BUYOUT INVESTMENTS 13.7x average valuation multiple / 4.6x average debt multiple 13.7x Average ratings multiple 4.6x Average debt to EBITDA multiple *Excluding two investments valued on a basis other than earnings Sector expert investors supporting management
Slide 22: HgCapital Trust PLC Portfolio Analysis
HgCAPITAL TRUST PLC PORTFOLIO ANALYSIS APPENDIX As at 30 June 2015 * Excluding carried interest provision Sector expert investors supporting management to grow industry champions © Copyright 2015 HgCapital 22
Slide 23: Cash and Commitments
APPENDIX CASH AND COMMITMENTS £23m Representing 5% of NAV, reduction in cash over last year, primarily due to dividend payments and investment activity Liquid resources available for Pro-forma cash as at 31 July of £41m (9% of NAV)* investment £169m Representing 35% of NAV, majority of commitm
Slide 24: The Investment Manager
APPENDIX THE INVESTMENT MANAGER Delivering sustainable growth Mid-market private equity firm with £5.4 billion AUM, primarily focused on Northern Europe Deep sector focus across TMT, services, industrials and renewable energy - Mid-market, control buyouts across TMT, services and industrials (EV
Slide 25: The Investment Manager
APPENDIX THE INVESTMENT MANAGER Sector expert investors supporting management to grow industry leaders SECTOR FOCUS PORTFOLIO MANAGEMENT RESOURCES Broad market coverage through 3 dedicated Dedicated Portfolio Management team to c. 100 employees (incl. more than 65 sector teams, developed since
Slide 26: 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 27: 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 28: 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