TIDMHONY
RNS Number : 2994D
Honeycomb Investment Trust PLC
02 March 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NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR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
02 March 2022
Honeycomb Investment Trust plc
("Honeycomb" or the "Company")
Capital Markets Day
As previously communicated, Honeycomb and Pollen Street will
host a Capital Markets Day today at 10:30am GMT. A presentation
will be published on the website ahead of the start.
Monthly Factsheet
Honeycomb announces that the Investment Manager's monthly
factsheet for 31 January 2022 is now available on its website at
http://www.honeycombplc.com .
Net Asset Value per Share
The Company announces that its unaudited Net Asset Value ("NAV")
per share as at 31 January 2022 on a cum-income basis was 1,026.1
pence, based on a NAV of GBP361.8 million, and on an ex-income
basis was 1,019.1 pence, based on a NAV of GBP359.3 million. The
NAVs have been calculated by Apex Fund Services (UK) Ltd.
Honeycomb delivered a NAV return of 0.69% for the month, which
is equivalent to 8.1% per annum.
NAV return was driven by strong risk adjusted yield of 9.1%. Net
Investment Assets reduced in the month (GBP615m in December, to
GBP579m in January) driven predominately by the repayment of a
GBP30m structured facility as the business was acquired by a
bank.
Comment from the Chairman
Combination with Pollen Street
On 15 February 2022, the board of Honeycomb announced that it
had reached agreement on the terms of a recommended all share
combination with Pollen Street Capital Holdings Limited, the parent
company of the investment manager. Under the terms of the
agreement, Honeycomb will acquire the entire issued share capital
of Pollen Street Capital Holdings Limited in exchange for shares in
the combined group such that the Honeycomb and Pollen Street
businesses will be combined into a premium listed entity, owned by
the shareholders of Honeycomb and Pollen Street. The combination is
conditional on shareholder and regulatory approval. At
announcement, shareholders representing c.56% of Honeycomb's issued
share capital have given their support for the transaction.
As shareholders know, Honeycomb has been delivering strong and
stable performance since inception in 2015, consistently delivering
a net investment return of c.8%.
We feel privileged to have many supportive shareholders and
thank them for their longstanding support.
I strongly believe that this is an extremely attractive
opportunity for shareholders, as a combination with Pollen Street
will accelerate growth and unlock value, delivering recurring
income, retaining an attractive dividend yield (anticipated to be
6.5% and 6.6% in 2022 and 2023 respectively ([1]) , on the basis of
Pollen Street shareholders having agreed to waive dividends on 50%
of consideration shares issued to them through 2022 and 2023)
whilst presenting strong growth opportunities. The transaction is
also expected to be EPS accretive in the second full year post
closing for Honeycomb's shareholders ([2]) .
Pollen Street is a highly successful and fast-growing
alternative asset manager with:
- deep capabilities in both Private Equity and Credit with
well-established and outperforming flagship strategies
- a business that is benefiting from strong tailwinds from
investor demand in its products; and
- a business that is at an inflexion point with highly visible growth ahead
The Board conducted extensive due diligence and believes that
the combination will generate substantial value for shareholders,
both because of the attractive valuation on which Honeycomb is
acquiring the Pollen Street business compared to listed peers in
the alternative asset management sector, and because of the profile
of the combined group going forward. In particular the combined
group will have:
- a balance of recurring fee income and interest income that
delivers an attractive and growing revenue profile; and
- exciting potential to accelerate high quality growth as
Honeycomb's capital can be deployed to unlock a multiplier effect
on capital raising and, in doing so, accelerate the growth of new
strategies
- The combined business will benefit from a complementary set of
investment management and balance sheet activities, with strong
earnings growth. The investment portfolio will continue to be
predominantly invested in high quality, diversified and low risk
asset based direct lending investments, generating stable returns.
The investment portfolio profile of the combined group is expected
to remain in line with the investment profile of Honeycomb on a
stand-alone basis.
The transaction creates a business with a rare combination of
high growth and high income yield. It also presents strong benefits
for shareholders from a public market perspective:
- increased investor universe providing opportunity to diversify the share register;
- scale and growth expected to attract greater analyst coverage; and
- possibility for increased liquidity on account of the larger
market cap and potential future FTSE 250 inclusion.
A shareholder circular will be published in due course and sent
to shareholders to provide further details of, and request
shareholder approval for the transaction.
Buyback Programme
A separate RNS has been released detailing the Company's buyback
programme
Robert Sharpe
Chairman
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
(1) (Based on the Honeycomb share price of) 967.5 pence on 14
February 2022 (being the last business day prior to
announcement).
([2]) (The statement that the combination is expected to be EPS
accretive should not be construed as a profit forecast and should
not be interpreted to mean that the EPS in any future financial
period will necessarily match or be greater than those for any
preceding financial period.)
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END
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