HgCapital Trust PLC has released its annual results for the year ended 31 December 2023, showcasing resilient NAV performance driven by strong trading in the underlying portfolio and continued realization activity in a challenging macro environment. The company provides investors with a listed vehicle to invest in unquoted businesses managed by Hg, Europe's largest investor in software & services companies. HgT aims to provide shareholders with consistent long-term returns in excess of the FTSE All-Share Index by investing predominantly in unquoted businesses where value can be created through strategic and operational change.
In 2023, HgT demonstrated a 10-year share price total return of +18.8% p.a. The company reported a total return NAV increase of 11.1%, closing the year at 500.5p NAV per share and net assets of £2.3 billion. The share price total return was +26.2% over the year, closing at 434.5p per share and a market capitalization of £2.0 billion. The discount narrowed from 23% to 13%. HgT also made continued investments, with £74 million of new and further investments across the core investment clusters targeted by Hg, with a further estimated £148 million of transactions signed pending closing in 2024. Additionally, £324 million of realizations were made, with full and partial realizations at an average uplift of 25% to the carrying value at 31 December 2022.
For the third year in a row, HgT tops a list of investment companies that would have made investors more than £1 million. Jim Strang, Chairman of HgT, commented on the company's resilient performance in 2023, noting the strong underlying performance of the portfolio with sales and EBITDA across the top 20 investments growing at 25% and 30% respectively. David Toms, Head of Research at Hg, highlighted the resilience of the Hg portfolio during a period of increased volatility, with valuations and profitability remaining stable.
The company reported net assets of £2.3 billion, with continued long-term outperformance of the FTSE All-Share over various periods. HgT also announced a proposed final dividend of 4.5p per share, with a full-year dividend of 6.5p per share. The top 20 portfolio showed strong double-digit growth, with revenue and EBITDA growth of 25% and 30% respectively over the last twelve months. HgT also continued portfolio activity and commitments to drive future value, including £324 million of realizations, continued investment, and further commitments of approximately £183 million to Hg Funds.
As of 29 February 2024, HgT reported a pro forma NAV per share of 500.4p and pro forma net assets of £2.3 billion, with a share price of 440.p, representing a performance of +1.3% since 31 December 2023. Realizations and investments post-period included the sale of Argus, representing the fourth material realization event announced by Hg.