Honeycomb returns rise despite Covid crisis

Honeycomb Investment Trust boosted its net asset value (NAV) return to 9.1 per cent on an annualised basis in June, as the portfolio recovered from a temporary coronavirus-related lag.

This is equivalent to a NAV return of 0.75 per cent for the month, up from 0.42 per cent the previous month.

Honeycomb’s investment managers said that June’s returns would have been higher if it weren’t for a number of one-off expenses such as the repurchase of 735,000 of the company’s own shares as part of its “active discount management program”. The trust also incurred the final costs associated with the extension of a debt facility in June.

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“The portfolio has remained stable throughout the Covid crisis, with the underlying return increasing from April and May as many customers are ending their forbearance plans and returning to full payments across all sectors,” said the trust’s managers in their monthly statement.

“The reduced underlying return was largely as a result of reduced investment assets as the Trust has continued to use cash generation to reduce the outstanding debt and to execute value accretive buybacks where possible.”

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Honeycomb invests in consumer, property and small business loans. In March, the trust paused all new investments and the monthly NAV dropped to 0.25 per cent, in a reflection of the forbearance measures which were being offered to many borrowers. However, throughout April and May many customers ended their forbearance plans and returned to full payments across all sectors.

The total value of the portfolio’s investment assets reached a peak of £595m in February. By the end of June, investment assets were valued at £550.9m.

Read more: Honeycomb portfolio “robust” despite forbearance requests