Honeycomb Investment Trust increased its net asset value (NAV) return to 8.5 per cent last year – up from 7.7 per cent in 2020.
According to the company’s latest financial statement, by the end of 2021 the firm had recorded consistent monthly performance, with full-year profits of £30.3m. Profits for 2020 were £20.7m.
The trust said that this growth was driven by an increase in the average investment assets, with an average value of £601.8m during the year. In 2020 the average value of its investment assets was £560.9m.
Honeycomb’s chairman Robert Sharpe said that the stability of the returns is a testament to the company’s successful investment strategy.
“In an environment where the economy and businesses were cautiously returning to a ‘new normal’ of trading, Honeycomb Investment Trust has continued to perform well throughout the year executing on a strong pipeline of opportunities,” said Sharpe.
“The company started the year with a robust cash position, and a pipeline of opportunities presenting strong underlying asset returns, and as a result of this was able to produce the strongest year since 2017.
“2021 has been a year of execution and consistency for Honeycomb. Having demonstrated the stability of the strategy over 2021 the board is confident the company will continue to deliver attractive investment returns.”
Honeycomb’s share price closed the year at 945p, representing a discount of 7.3 per cent to NAV.
The investment trust primarily backs alternative lenders, and it noted that since the trust’s formation, non-bank lending has become “an integral part of the lending landscape”.
“The company continues to aim to be the finance partner of choice for the non-bank sector,” added Sharpe.
“Thanks to deep expertise and relationships, the investment manager is able to source most investments internally and negotiate bi-laterally.”
Earlier this year, Honeycomb announced the acquisition of its investment manager, Pollen Street Capital. Following the completion of the deal, the new entity will cease to operate as an investment trust and will become a commercial company instead.
Sharpe told shareholders that he believes the deal will “accelerate growth and unlock value, delivering recurring income.”
He added that he expects to retain “an attractive dividend yield” which is anticipated to be 6.5 per cent in 2022 and 6.6 per cent in 2023.