29th Apr 2019 15:13
LONDON (Alliance News) - Honeycomb Investment Trust PLC on Monday reported a a sharp rise in net assets in 2018, achieving its target dividend return.
Honeycomb is an investment trust dedicated to investing in credit assets originated by non-bank lending platforms and other originators of specialist lending assets, primarily in the UK.
At December 31, Honeycomb's NAV per share cum income stood at 1,015.7 pence, slightly below the 1,018.4p reported the year before.
The company's net asset value cum income increased 31% to GBP400.7 million from GBP304.8 million. Honeycomb's shares in issue increased by 9.5 million during the period.
Honeycomb's NAV total return in 2018 was 8.4%, behind the 9.1% reported in 2017.
"The company has performed well in the year driven by the consistent application of our business model which has provided a strong base of investments made in the past along with the ability to carefully select assets with attractive risk-adjusted returns," said Chair Robert Sharpe.
Honeycomb's investment manager said: "The company performed well in the year with underlying investment asset income yield and bad debt performance of 11.6% and 1.6%, respectively giving a risk adjusted yield of 10.0% providing the company with significant coverage of bad debts and a stable and attractive portfolio to contribute to the target return.
"The company continued to deliver asset growth while maintaining stable returns. It has delivered strong growth in the year with investment assets increasing from GBP366 million to GBP609 million. The company believes the portfolio is well positioned with over 75% of the credit assets benefiting from either senior secured status or are well-seasoned portfolios."
Consumer loans make up 48% of Honeycomb's portfolio, with property loans representing 39% and SME loans making up 11%. The remaining 2% is made up of equity holdings.
Honeycomb targets an 8% dividend return target, which it achieved in 2018. Honeycomb declared four quarterly dividends of 20p in 2018.
Honeycomb has also declared an interim dividend of 20p for three months to March 31, 2019.
Sharpe added: "The company has continued to deploy capital swiftly and effectively without compromising returns. We believe that the retrenchment of mainstream lenders from specialist markets continues to present a structural, not cyclical opportunity, to engage with customers in markets which are underserved by traditional lenders and platforms."
Shares in Honeycomb were untraded Monday but last closed at 1,130.00 pence each.
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