The key message from ICG Enterprise Trust plc (LON:ICGT) FY’24 results (to January) is the continued strength of the operating companies, which keep delivering mid-teen EBITDA growth. Despite challenging markets, margins have widened, which should help allay some concerns over the impact of the higher-rate environment. Target returns are “broadly unchanged”. FY’24 saw about half the usual investment and realisation activity (and fewer realisations saw less NAV uplift on exit). A degree of volatility is to be expected, and the five- and 10-year total annualised NAV per share return (14.6% and 13.2%, respectively) are a better reflection of what investors are getting from the defensive growth strategy. ICGT has a balanced capital return policy.
- ICG Enterprise Trust’s investment approach: We detail, below, how the trust’s defensive growth strategy works in practice and why it has delivered long-term EBITDA outperformance. Consistency in performance greatly enhances compounding effects. This has led to double-digit share price returns (five-year 11.2% annualised).
- Capital allocation: Shareholders saw distributions of £35m (FY’23 £22m) with a 10% increase in dividend, to 33p, and an increase in the long-term buyback programme. It also announced an opportunistic up-to £25m buyback programme to take advantage of the current, unusually high, level of discount.
