TIDMHONY
RNS Number : 0513A
Honeycomb Investment Trust PLC
31 January 2022
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, ANY MEMBER STATE OF THE
EUROPEAN ECONOMIC AREA (OTHER THAN THE UNITED KINGDOM), CANADA,
AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER
JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE
UNLAWFUL
31 January 2022
Honeycomb Investment Trust plc
Honeycomb Investment Trust plc (the "Company" or "Honeycomb")
announces that the Investment Manager's monthly factsheet for 31
December 2021 is now available on its website at
http://www.honeycombplc.com .
Net Asset Value per Share
The Company delivered a NAV return of 0.69% for the month, which
is equivalent to 8.1% per annum. This brings total NAV return for
2021 to 8.49%. This represents the strongest annual NAV return
since 2017 and has been achieved through strong underlying Credit
Asset returns of 9.6%.
2021 Performance
2021 has been a year of execution and consistency for Honeycomb
Investment Trust. The Company entered 2021 in a strong position
with a robust credit portfolio, long term debt facilities and a
strong pipeline of compelling investment opportunities.
Over the course of 2021 HONY remained fully invested with
investment assets increasing to GBP615m from GBP571m in December
2020 with total deployment of c.GBP250m as capital was reinvested
from loans that repaid.
Through 2021 the Portfolio continued to deliver on the strategy,
focusing on senior asset secured exposures and reducing the direct
unsecured consumer exposure in the portfolio. In line with this
secured strategy, the Investment Manager sold the remaining direct
unsecured consumer portfolio in December 2021 for carrying value,
with the proceeds reinvested in senior secured positions. This
completes the final phase of the planned focus of Honeycomb's asset
base onto senior and asset secured debt with 78% of the credit
portfolio in senior assets and 100% structurally secured.
As a result of this strategy, impairment charges continued to
reduce throughout 2021. In addition, the Company's listed bond
portfolio was sold in June realising a small profit.
The portfolio has performed well throughout 2021 despite
uncertainty in the macro environment. The Company's ability to
continue to deliver uninterrupted strong performance has
demonstrated the portfolio's consistent income generation, and the
stability of the returns are a result of the diligent investment
approach that focuses on senior investments secured on diverse
pools of assets with strict risk adjusted returns criteria and
strong credit quality. Proactive portfolio management lies at the
heart of the investment philosophy and the Manager's senior secured
strategy protects the Company from underperformance in the asset
base. There have been no significant changes to the debt facilities
and the Company remains in a strong liquidity position.
Going in to 2022 the pipeline of new deals is strong at
GBP1.5bn, with a number of opportunities in the sustainability
sector.
2022 Outlook & Opportunities
As private lending markets continue to evolve in and beyond
2022, Pollen Street Capital continually assess how structural
shifts in consumer behaviour and markets create attractive
opportunities for Honeycomb Investment Trust. Below we explore the
transition to a more sustainable ecosystem.
Sustainability
The rapid pace of the global sustainability transformation
continues to outweigh the availability of finance for driving
social and the environmental impact. At Pollen Street, we see this
structural shift as a huge opportunity to be part of the solution
and deliver a positive impact for society and our investors. In our
view, structural shifts will create opportunities within three key
segments:
1. Decarbonising the economy - Transport
An important part of the shift to a net zero emission economy is
replacing high emission diesel and petrol vehicles with electric
vehicles. Electric vehicles (EVs) are typically more expensive than
their fossil fuel equivalents, increasing the need for financing
solutions encouraging the transition. The Investment Manager sees
two core customer bases with clear appetite for finance; consumers
and ride-share drivers. Our focus within this sector is to provide
senior facilities to operators of electric vehicle fleets, with our
latest investment in the sector being a facility to Onto, the
largest pure-play electric vehicle subscription business in Europe
secured on their fleet of EVs. The Investment Manager continues to
see opportunities in this sector, and expects it to form an
integral part of 2022 deal flow. There are also growing
opportunities in the electric micro-mobility sector for senior
facilities collateralised by fleets, offering attractive return
profiles with strong downside protection.
2. Energy efficiency - Home / Development
Newly constructed homes are on average 60%+ more energy
efficient than the existing housing stock. Our focus for real
estate investment is in financing the construction of new
residential housing, thereby improving the energy-efficiency of
buildings and reducing carbon emissions. In particular, we see
clear and significant benefits in adopting modern construction
methods, including modular housing, and specific guidance and
government targets to ensure efficiency and sustainable build
qualities.
3. Renewable energy
The transition towards a more sustainable society necessitates
immediate action to replace polluting energy sources, with greener,
more sustainable fuels. Research suggests that the UK is on course
to double its solar capacity by 2030, but will need to treble it if
the nation is to meet its net-zero target for 2050. Large scale
renewable energy focused infrastructure projects are typically well
funded through institutional and governmental capital, smaller more
granular projects remain underfunded. For example, home-installed
solar panels typically require significant upfront cost, and so are
unaffordable for many households, yet create material energy
savings, and are in many cases cash generative as excess
electricity is sold to the grid. This creates an attractive
opportunity to provide funding for the installation of the panels,
helping customers save money while moving to more sustainable
energy sources.
4. Sustainability Linked Loans
As the ESG lending space continues to grow, we see innovative
Sustainable Finance products developing to align a company's ESG
strategy with its financing structure. Sustainability Linked Loans
(SLL) have become increasingly popular and are at the forefront of
this trend. SLL differ from traditional green financing in that
they have no restriction on the use of funds and are more akin to a
traditional debt product. The key difference is that an SLL aligns
a borrowers financing to one or more sustainability performance
targets (SPTs) which are targets relating to ESG specific KPIs. The
loans include downward ratchets on margins if these pre-determined
KPIs are met thereby incentivising borrowers to improve their
sustainability impact through a reduction in the cost of
borrowing.
According to Dealogic global SLL issuance in FY20 was in excess
of $150bn and we see more growth ahead for Sustainability Linked
Loans and Bonds. The Investment Manager already applies an impact
lens and standard ESG diligence as part of the investment process.
These SLLs are an opportunity for asset managers to further
influence and help drive the positive impact of their credit
partners. Clearly the benefits are broad, with increased
transparency allowing borrowers to demonstrate their ESG credential
in a way that allows investors to measure and understand the impact
of their investments.
For further information about this announcement please
contact:
Pollen Street Capital - Investment Manager
Matthew Potter / Julian Dale: +44 (0)20 3728 6750
Liberum Capital Limited - Joint Broker
Chris Clarke: +44 (0)20 3100 2000
Cenkos Securities plc - Joint Broker
Justin Zawoda-Martin: +44 (0)20 7397 8900
Link Company Matters Limited - Corporate Secretary
hitcosec@linkgroup.co.uk
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
NAVEAPFPAELAEFA
(END) Dow Jones Newswires
January 31, 2022 01:59 ET (06:59 GMT)
Honeycomb Investment (LSE:HONY)
Historical Stock Chart
From Sep 2024 to Oct 2024
Honeycomb Investment (LSE:HONY)
Historical Stock Chart
From Oct 2023 to Oct 2024