Shareholders in Honeycomb Investment Trust have rejected a resolution to wind down the company during the annual general meeting (AGM) yesterday (8 June).
98.55 per cent of the company’s investors voted against the resolution, with just 1.45 per cent voting in favour of the company’s wind-down.
The special resolution was triggered by a clause in the company’s articles of association, which requires that “where in a financial year of the company ending on or after 31 December 2016 the ordinary shares have traded, on average over that financial year, at a discount in excess of 10 per cent to the net asset value (NAV) per ordinary share, the directors shall propose a special resolution at the company’s next AGM for the discontinuation of the business of the company in its present form.”
During the company’s full year 2020 results presentation, chairman Robert Sharpe confirmed that “the company is required to propose a discontinuation vote at the upcoming AGM given the shares have traded at an average of more the 10 per cent discount to NAV in the period.”
Honeycomb’s portfolio hit a low of £509m in August 2020, as it cut back on new investments and focused on existing commitments getting repaid during the Covid-19 pandemic.
The trust also incurred a series of one-off costs last year, including a bill of £585,000 for Honeycomb’s failed merger with Pollen Street Secured Lending, as well as the cost of joining the FTSE All Share Index in October.
This resulted in a dip in annual profits, from £31.2m in 2019 to £20.7m in 2020.
At the AGM, shareholders voted in favour of all other resolutions, approving director bonus payments, and a new share buyback programme.