Capital Markets Day
02/03/2022 07:00
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RNS Number : 2994D Honeycomb Investment Trust PLC 02 March 2022
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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
(http://www.honeycombplc.com/documents/) .
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
£361.8 million, and on an ex-income basis was 1,019.1 pence, based on a NAV
of £359.3 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 (£615m in December, to £579m in January) driven
predominately by the repayment of a £30m 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 (mailto: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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