HgCapital Trust Q4 NAV Grows Amid Software Sector Woes

HgCapital Trust Posts Strong Q4 NAV Growth

HgCapital Trust Plc (LON:HGT) announced a net asset value (NAV) per share of 561.9p for the quarter ending December 31, 2023, marking a 2.2% return. This performance comes amid notable volatility in the software sector. The trust also initiated a significant share buyback program.

Portfolio Performance Overview

The investment trust's portfolio demonstrated robust health with last-twelve-months revenue growth of 17% and EBITDA growth of 20% as of November 30, 2023. The EBITDA margin improved slightly to 34%. During the quarter, the trust invested £1.3 million and realized £43 million from its holdings.

Financial Position and Strategic Moves

HgCapital's liquidity remains strong, with a total of £410 million available from cash reserves and its credit facility. Post-period transactions included further investments of £93 million and the completed exit from Interlad, valued at approximately £52 million. The new share buyback program, prompted by a 28% discount to NAV, allows for repurchasing up to 14.99% of issued shares.

Summary and Outlook

Despite strong Q4 results, HgCapital's performance is viewed against the backdrop of a recent sell-off in software stocks. The trust noted that valuation multiples for its portfolio companies are typically impacted by 20% to 40% of the movements seen in public comparable companies, a key factor to watch in the upcoming quarters.

FAQ

Q: What was HgCapital Trust's NAV per share for Q4 2023?

A: The net asset value per share was 561.9p as of December 31, 2023, a 2.2% return for the quarter.

Q: Why did HgCapital initiate a share buyback program?

A: The program was likely triggered by the company's shares trading at a significant 28% discount to its net asset value.

Source: Investing.com