Honeycomb sees investment income and profits fall
Honeycomb Investment Trust saw investment income and profits fall during the first half of the year, which its chairman blamed on challenging macroeconomic conditions.
The London-listed trust, which is set to acquire its investment manager Pollen Street Capital at the end of the month, posted investment income of £25,045, down from £29,479 in the first half of 2021.
Profit was down 12 per cent, from £15.5m to £13.7m over the same comparative period.
“There has been extensive disruption in the macroeconomic environment over the first half of 2022”, said Robert Sharpe, chairman of Honeycomb, in his statement on the half-year results.
“The war in Ukraine has led to an unsettled geo-political environment and considerable market volatility. Alongside that, there are concerns about inflation, rising interest rates, as well as continued pressure across supply chains. These have all exacerbated uncertainty.”
However, he added that Pollen Street had continued to grow, with assets under management increasing to £3.2bn by 30 June 2022 from £3bn at 31 December 2021.
The investment trust’s dividend yield of eight per cent remained stable across the first half of the year, as has NAV per share of 1,019.7p.
Read more: Honeycomb to buy Pollen Street Capital
In June, shareholders voted in favour of a resolution to combine Pollen Street Capital and Honeycomb Investment Trust.
The new entity will move from being an investment trust to a commercial company but will continue to invest in direct lending opportunities.
Pollen Street has been Honeycomb’s investment manager for the past six years. The combination is expected to complete this month, following approval of the transaction by regulators.
Read more: Honeycomb increased NAV last year
The firm reported no change in gearing from the end of last year. Net debt to equity was 63.6 per cent by 30 June 2022, down from 70.9 per cent on 31 December 2021.
Sharpe said that following the combination with Pollen Street, net debt to tangible equity is targeted to remain between 50 per cent to 75 per cent.
The firm is also targeting increasing the dividend in 2022, with total dividends of £30m for the period, compared to £28m in 2021. These are intended to increase again to £32m in 2023 and at least £33m in 2024.
Read more: Pollen Street praised as Honeycomb NAV return grows
