Honeycomb delivers on dividend amid strong numbers and low bad debts

By Daniel Lanyon on 5th September 2018

Alternative Credit

As the fund plans to ramp up its SME lending book, its consumer and property book are also performing strongly.

Honeycomb delivers on dividend amid strong numbers and low bad debtsImage source: https://goo.gl/fXiV1e

The £499m Honeycomb investment trust has clocked up a 4.5 per cent return in the first six months of the year, according regulatory filings, and declared an interim dividend of 20p per ordinary share for the three-month period to 30 June 2018.

The fund, which invests in a broad range of alternative credit assets, is looking to increase its SME lending exposure in the coming months

Analysts at the investment bank Liberum say that the portfolio generated an annualised net return of 10.2 per cent after losses in the period, after factoring in a gross yield of 11.4 per cent and bad debts of 1.2 per cent.

Following on from a £100m cash raise in during the first six months of the year, the fund’s investment manager pointed to some cash drag on returns.

Liberum’s analysts say with bad debt costs of 1.2 per cent across the portfolio, the portfolio performing strongly when compared to peers.

“[It] is well below the level experienced by the peer group and is the key reason for the fund's superior performance to date. This reflects the manager's financial services expertise and differentiated origination capabilities."

“Honeycomb is on track to deliver another year of strong performance in 2018 following returns of 7.8 per cent and 9.1 per cent in 2016 and 2017, respectively.”

Its shares currently trade on a 10 per cent premium to NAV with a 7.1 per cent dividend yield).


The Digital Wealth Forum

Join us at AltFi’s second Digital Wealth Forum to hear understand the latest trends and meet the newest entrants to the market.

2nd October 2018

Companies in this Article:


More like this:

Funding Circle fund's returns slow in August

17th September 2018
Daniel Lanyon

Family office seeds new private credit firm

11th September 2018
Daniel Lanyon

Private debt market grows to record size

7th February 2018
Daniel Lanyon