Register Log-in Investor Type

News

Honeycomb Investment Trust taking advantage as banks retreat from speciality space

Honeycomb Investment Trust taking advantage as banks retreat from speciality space – Honeycomb Investment Trust (HONY) has released its financials covering the year to December 31, 2018. The company had a good year with its asset secured lending model in the speciality space demonstrating the ability to withstand the many economic, political and market challenges that surfaced through the year.

HONY’s shares traded at a premium to NAV through 2018. The company invests in the UK, targeting smaller businesses that are underserved by traditional banking infrastructure. HONY believe the ongoing shift away from speciality lending by banks to be a structural rather than cyclical process.

Financial highlights

  • NAV return of 8.43 per cent for the year
  • Investment income during 2018 was £50.9m (2017: £31.8m), an increase of 60 per cent, which has been driven by balances of net investment assets increasing to £586.5m at the year-end (2017: £356.8m )
  • Earnings for the year were £28.2m (2017: £21.0m ), an increase of 34 per cent which is reflective of low levels of impairments and leverage of the fixed cost base
  • The dividend has remained at 20.00 pence per share for each quarter in the year to provide the targeted 8.0 per cent annualised dividend

Outlook

Discussing their outlook, the fund said the following in their annual report: “To date, we have seen minimal direct impact from the UK referendum vote to leave the European Union. However, looking ahead, we continue to position ourselves to address the economic challenges and opportunities that may arise as the long-term effects of Brexit become clearer. We believe that relatively short average remaining term and high proportion of the portfolio that benefits from structural protection or seasoning will provide downside protection and protect the company from economic shock. We believe that the company’s business model, combined with our approach to risk, sets it in good stead to find suitable pockets of risk adjusted return. We believe that our ability to invest in structured facilities, combined with our focus on underserved specialist markets, will allow us to continue to deploy the company’s funds and deliver strong returns. We continue to view the future with confidence.”

HONY: Honeycomb Investment Trust taking advantage as banks retreat from speciality space

Leave a Reply

Your email address will not be published. Required fields are marked *

Please review our cookie, privacy & data protection and terms and conditions policies and, if you accept, please select your place of residence and whether you are a private or professional investor.

You live in…

You are a…