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Peer2Peer Finance News | September 19, 2019

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Honeycomb sees investment income and earnings soar in first half of 2019

Honeycomb sees investment income and earnings soar in first half of 2019
Jordan Bintcliffe

HONEYCOMB Investment Trust reported a 30 per cent rise in investment income and a 20 per cent increase in earnings in the first half of 2019, which it said reflects “high levels of deployment and strong underlying asset performance”.

The London-listed trust, which invests in loans originated by alternative lenders, issued a half-year report on Tuesday that showed its investment income rose to £28.3m and earnings increased to £15.1m, up from £21.7m and £12.6m respectively in the first half of 2018.

The trust’s net investment assets grew to £570.6m, up from £483.3m at the same time last year.

Honeycomb said that its financial performance over the first half of the year had been “strong” but said it has been increasing its focus on investments with structural protections in light of Brexit uncertainty.

Read more: Honeycomb NAV returns to 2019 high

Structural protections can take the form of security, seniority or covenants on loans.

“We believe that the company’s business model, combined with our approach to risk, stands it in good stead to find suitable pockets of risk adjusted return so that we can continue to deliver the target returns to shareholders,” Honeycomb said.

“The company’s continued focus on increasing the 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 our ability to invest in structured facilities, combined with our focus on specialist markets where we expect enhanced credit performance, will allow us to continue to deploy the company’s funds and deliver returns to shareholders in line with the prospectus.”

Annualised net asset value returns (cumulative of income) were 7.5 per cent, down from nine per cent at the same time last year.

Read more: Honeycomb and P2PGI end £1bn merger talks over Woodford concerns

Almost half of Honeycomb’s portfolio is invested in consumer lending, while 42 per cent is invested in property loans and 10 per cent is allocated to small- and medium-sized enterprise loans.

Read more: Honeycomb Investment Trust premium under threat from Woodford sell-off