LONDON (Alliance News) - Honeycomb Investment Trust PLC on Wednesday reported a drop in net asset value per share in the first half of the year due to fundraising.
During the six months to June 30, Honeycomb issued 9.5 million shares at 1,050 pence each to raise GBP100.0 million. This brought the number of shares in issue 39.4 million from 29.9 million. As a result, NAV per share declined to 1,016.1p on June 30 from 1,018.3p the year prior.
The company, which acquires consumer and small business loans, said its total net assets stood at GBP400.9 million on June 30, up 32% year-on-year from GBP304.7 million. This was attributed to a strong portfolio with significant coverage of bad debts.
"Underlying investment asset income yield and bad debt performance of 11.4% and 1.2% with risk adjusted yield of 10.2% provides the company with significant coverage of bad debts and a stable and attractive portfolio from which it can continue to grow," the company said.
Total income increased to GBP21.7 million from GBP13.3 million.
Honeycomb is targeting an 8% annualised dividend, and as such has declared a 20.00p per share interim dividend for the second quarter. This is equal to both its first quarter dividend and the dividend paid for the 2017 second quarter.
"We believe that the company's business model, combined with our approach to risk, puts it in good stead to find suitable pockets of risk adjusted return. We believe that our ability to invest in structured facilities, combined with our focus on specialist markets where we expect enhanced credit performance, will allow us to continue to deploy the company's funds and deliver strong returns. We continue to view the future with confidence," said Honeycomb.