HgCapital Trust (HGT) Q4 2024 earnings summary

Executive summary

• Achieved a 25.7% total share price return and 10.4% NAV per share growth for 2024, with net assets reaching £2.5bn and a focus on profitable, growing B2B software and services companies with resilient, recurring revenue models.

• HgT remains the largest client and LP investor in Hg, Europe's largest software investor.

• Discount to NAV narrowed from 13% to a 2% premium by year-end.

• Portfolio consists of 55 investments, diversified by sector, geography, and investment vintage, with top holdings in Tax & Accounting, ERP & Payroll, and Legal & Regulatory Compliance.

• Long-term outperformance versus FTSE All-Share Index, with a 10-year share price total return of +20.5% p.a.

Financial highlights

• NAV per share at 31 December 2024 was 545.5p, up 10.4% year-over-year; share price at year-end was 539.0p, up 25.7%.

• Portfolio valuation increased from £2,947m to £3,400m, driven by £319m unrealised gains and strong trading.

• £606m was invested in 2024, including £109m of co-investment, and £508m of realisations (22% of opening NAV) were achieved, with an average uplift to carrying value of 15%.

• Net assets increased by £206m to £2.5bn.

• Ongoing charges reduced to 1.4% from 1.7% in 2023.

Outlook and guidance

• Management expects resilient trading performance to continue, underpinned by mission-critical products and services.

• Improving deal environment and increased investment committee activity are anticipated to drive further investment.

• Focus remains on consistent realisations and long-term NAV growth, with further liquidity events expected.

• Cautiously optimistic outlook for 2025, with ongoing focus on risk management amid elevated geopolitical and cyber risks.