London, UK, 5 February 2024

Edison issues flash on HgT (HGT): Preliminary FY23 NAV total return of 10.7%

HgT’s preliminary unaudited FY23 trading update reported a 10.7% net asset value total return (NAV TR) in FY23 (of which c 1% in Q423). This was supported by continued strong trading across its portfolio, with the top 20 holdings (representing 77% of the portfolio’s value) posting average revenue and EBITDA growth of 25% and 28% respectively. HgT therefore sustained its multi-year track record of delivering c 20–30% pa revenue and EBITDA growth. Despite muted global M&A activity and private equity exits, HgT had a good level of liquidity events in FY23 with £343m of proceeds from exits and refinancings. The discount narrowing from 23% to 13% during FY23 (now c 14%) translated into a share price TR of 26.2%.

HgT was cautious in terms of new and follow-on platform investments in FY23, with total investments of £71m, including GTreasury, Nomadia, JTL, P&I and Howden. That said, it had previously highlighted the attractive pricing and strong flow of opportunities for smaller bolt-on acquisitions throughout 2023. After accounting for all the transactions agreed but not yet closed at end-2023, HgT’s available liquid resources stand at £735m (including £350m of undrawn credit facility). This compares with its £808m outstanding commitments, which should be drawn over the next few years.

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