Ground Rents Inc Fnd - Full Year Results

Ground Rents Income Fund

17/12/2021 06:59

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RNS Number : 9658V  Ground Rents Income Fund PLC  17 December 2021

Ground Rents Income Fund plc

 

("GRIO"/ the "Company" / the "Group")

 

FULL YEAR RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2021

 

Progress delivering strategy in the face of challenging market headwinds

 

Ground Rents Income Fund plc (the "Company"), the real estate investment trust
("REIT") investing in long-term, ground rent assets across the United Kingdom,
announces its audited full year results for the year ended 30 September 2021.

Key financial highlights

·      Net Asset Value ("NAV") of £99.7 million (30 September 2020:
£102.6 million) or 103.1 pence per share ("pps") (30 September 2020:
105.7pps), a decline of 2.7 pps.

·      The NAV was positively impacted by the reversal of the £2.9
million provision in connection with Beetham Tower in Manchester and the share
buy back.  This was however offset by the uncovered dividend, valuation
discounts relating to building safety works and general market uncertainty
fuelled by regulatory headwinds.

·      Independent portfolio valuation of £119.4 million 30 September
2021, a decrease of 3.9% compared to 30 September 2020.

·      Dividends paid of £3.8 million or 3.96pps, which, together with
the share buy back delivered a NAV combined total return of 1.3%.

·      From December 2021, annual dividend to be rebased to 3.0 pps
which is expected to be fully covered by recurring earnings during the full
year ending September 2022.

·      Resilient balance sheet with a consolidated loan to value of
16.3%.

Key operational highlights

·      Resolution of the complex historic litigation at Beetham Tower
protects the Company and subsidiaries from related known litigation and
freeholder obligations.

·      Ground rent collection remained in line with pre-pandemic
collection rates at 93.8%.

·      46% of Company's ground rent income due to be reviewed in the
next five years of which 94% benefits from fixed or inflation-linked
increases, providing a solid base for a progressive future dividend.

·      Building remediation projects ongoing where successful Building
Safety Fund applications on behalf of leaseholders should mitigate valuation
discounts.

·      Ancillary income fallen to £751,139  (30 September 2020: £1.2
million) due to a challenging insurance market that has restricted
commissions, and lower aggregated consent fees due to subdued transaction
levels in the residential apartment market.

·      Significant work ongoing improving the liquidity of the ongoing
portfolio and preparing for enhanced regulatory requirements, including new
appointments with key service providers.

 

 Commenting, Barry Gilbertson, Chair, Ground Rents Income Fund plc, said:

"The Company is operating in a challenging environment with a high level of
regulatory and media scrutiny. Whilst the Government's leasehold reform
programme and emerging building safety 'polluter pays' principle both still
lack clarity, we are focussed on protecting shareholders' interests as well as
delivering best in class residential asset management.

"Notwithstanding the range of headwinds, rising inflation expectations and an
accommodative monetary policy have historically been supportive towards
long-term, inflation-linked, heavily collateralised assets such as a ground
rent portfolio. These economic circumstances should benefit the Company's
underlying cash flows, with 71% of the portfolio's ground rent income having
some form of inflation linkage."

The accounts for the year ended 30 September 2021 are available below, and
will shortly be available on Company's website, www.schroders.com/grio
(http://www.schroders.com/grio) .

http://www.rns-pdf.londonstockexchange.com/rns/9658V_1-2021-12-16.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/9658V_1-2021-12-16.pdf)

Enquiries:

Schroder Real Estate Investment Management Limited

Chris Leek / Nick Montgomery / Matthew Riley / James Lowe

020 7658 6000

 

Singer Capital Markets (Broker)

James Maxwell / Kailey Aliyar (Investment Banking)

Sam Greatrex (Sales)

020 7496 3000

 

Appleby Securities (Channel Islands) Limited (Sponsor)

Andrew Weaver / Chris Smedley

01534 888 777

 

FTI Consulting

Dido Laurimore / Richard Gotla/ Oliver Parson

0203 727 1000

 

 

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