HgCapital Trust reports lower NAV despite growth across its software portfolio

HgCapital Trust ($HGT) posted a first-half net-asset-value total return of negative 4.9%, with NAV of 530.7 pence per share. Underlying portfolio revenue and EBITDA grew 16% and 19% respectively, but falling software valuation multiples outweighed that trading growth. The weighted valuation multiple declined to 22.9 times EBITDA from 25.2 times.

The trust declared an unchanged 2 pence interim dividend. Manager Hg intends to increase its aggregate strategic ownership from roughly 6% to more than 15% over the medium term, with market purchases underway. The trust also reported an expanded revolving facility after the period. These are support and financing measures, not a guarantee that the discount to NAV will close or that valuations have recovered.

Sources:

• HgCapital Trust — interim report and dividend