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QuotedData’s morning briefing 6 September 2021

HgCapital Trust exercises option over Allocate Software HGT

In QuotedData’s morning briefing 6 September 2021:

  • Late on Friday Custodian REIT (CREI) and Drum Income Plus REIT (DRIP) announced they had reached agreement on a recommended all-share acquisition of DRIP by CREI. DRIP shareholders will be entitled to 0.53 new CREI shares for each DRIP share, which values DRIP at £21.4m based on the closing CREI share price on 3 August (date of the possible offer announcement) of 105.8p. DRIP shareholders will vote on the acquisition and more than 75% need to approve the deal.
  • The Renewables Infrastructure Group (TRIG) has acquired four solar PV sites in Cadiz, Spain, with a total capacity of 234MW. Completion of the acquisition is subject to certain conditions being satisfied and the transaction is expected to complete in respect of three projects that are ready-to-build in Q3 2021. The fourth project is expected to complete in Q1 2022 once development activities are finalised and it is ready-to-build. The projects have been developed and are being built by Statkraft (a major Norwegian state-owned utility). On completion, these projects are expected to represent collectively approximately 6% of TRIG’s portfolio value. The investment will be funded from any of the company’s revolving credit facility (currently £141m drawn), retained earnings or capital raised from equity issuance.
  • HgCapital (HGT) has posted its interim results for the six months to 30 June 2021. During the period, its NAV total return was 21.4% while its share price total return was 17.4%, significantly outperforming the FTSE All-Share. HGT maintained its interim dividend of 2p per share and achieved revenue and EBITDA growth of 20% and 27% respectively across the top 20 investments (80% of the portfolio) over the 12 months to 30 June 2021. Chairman, Jim Strang, said: “As we now begin to see some form of a recovery from the COVID-19 pandemic, your Board believes the prospects for HGT remain attractive with a strong portfolio of assets enjoying good positive momentum and an active new deal pipeline. The impressive performance that the companies within the portfolio have demonstrated over recent months reflects the value that they bring to their customers and the strength of their respective business models. Despite the strong performance and the robustness of the portfolio, your Board remains focused on the risks that prevail in the current climate and remains actively engaged with Hg to understand and manage these risks as best possible, while endeavouring to drive future returns for our shareholders.”
  • Schiehallion (MNTN) has published its half-year report for the six months to 31 July 2021. Its NAV per share increased from 146.99c at the end of January 2021 to 164.19c at the end of July. Meanwhile its share price increased from 180c to 203c. Its premium also increased from 22.5% to 23.6%. Managers Peter Singlehurst and Robert Natzler, said: “Across the portfolio, many of our holdings have continued to perform extremely strongly, the difficulties of the Covid-19 era notwithstanding. In the last six months, we have taken advantage of opportunities to put more capital to work in existing holdings, including Workrise, Tanium, Stripe, SpaceX, Northvolt and Epic Games – all cases where our conviction in the upside has deepened faster than their valuations have risen. Other holdings have had a tougher time of it, with the focus remaining on keeping their organisations and balance sheets stable through the pandemic. Here, as before, our conversations with management teams have focused on the importance of retaining key employees and customer relationships, preserving their ability to grow profitably as economic conditions improve.”
  • International Public Partnerships (INPP) has made further investments in Angel Trains, as part of a consortium. The acquisition, leveraging INPP’s existing shareholding position, will increase its shareholding and provide it with further governance rights through direct board representation. Since making its original acquisition in 2008, Angel has been a successful investment for INPP, delivering both capital growth and strong yield. It is the largest rolling stock company in the UK, serving the passenger rail sector with a diversified fleet of c.4,300 vehicles, the majority of which are electric multiple units. Mike Gerrard, chair of INPP, said: “We are delighted to have been able to increase our position in Angel Trains.  As the UK seeks to deliver its 2050 net zero commitments, in conjunction with our co-shareholders, we welcome the opportunity to further develop this strategically important transportation investment.”

We also have full year results and a new acquisition from Digital 9 Infrastructure and another intention to float from Foresight Sustainable Forestry Company.

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