REG-Irish Residential Properties REIT plc Q3 Trading Update

Irish Residential Properties REITAnnouncement

22/11/2024 07:15

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   Irish Residential Properties REIT plc (IRES)
   Q3 Trading Update

   22-Nov-2024 / 07:00 GMT/BST

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                     Irish Residential Properties REIT plc

                                        

                               Q3 Trading Update

                                        

     Continued strong operational delivery, good progress against strategic
                                  initiatives

                                        

   22 November 2024,  Dublin |  Irish Residential Properties  REIT plc  (“the
   Company”  or  “I-RES”),  Ireland’s  largest  provider  of  private  rental
   accommodation, today provides a trading update for the three months ending
   30 September 2024  (the “third quarter”  or “Q3”), along  with a  progress
   update on initiatives announced as part of the Company’s Strategic  Review
   (“the Strategic Review”), which concluded in August.

    

    

   Operating Highlights

    

     • Occupancy levels across  the portfolio continue  to remain strong  and
       stood at 99.4%  at 30  September 2024  (30 June  2024: 99.6%).  Market
       leading occupancy reflects  the high  quality of  our properties,  the
       efficiency of our operating platform,  and the exceptional demand  for
       rental properties in Dublin.

    

     • The Company remains on course to  deliver a full-year 2024 Net  Rental
       Income (“NRI”) margin broadly in line with the margin reported in  the
       first half of the year (H1 2024: 76.5%), which includes the impact  of
       strategically identified disposals completed during the year.

    

     • The Company remains in a  strong financial position, underpinned by  a
       robust balance sheet.  Reflecting the impact  of the below  disposals,
       LTV1 has reduced to 45.0% at 21 November 2024 (45.4% at 30 June 2024),
       well below the 50% limit set  out by the Company’s debt covenants  and
       Irish REIT legislation.

    

    

   Progress on Strategic Review Initiatives

    

     • The Company  has  made  significant progress  in  advancing  Strategic
       Review initiatives, including as follows:

          ◦ The Company has now completed the disposal of 37 units in total
            as part of the previously announced target of 315 units, selling
            20 assets in line with book value in a bulk sale and selling a
            further 17 units to individual purchasers achieving sales
            premiums2 of c. 25%.
          ◦ Completion of the investment sale of 25 units outside of the
            315-unit programme, also in line with book values2.
          ◦ The Company expects to complete the disposal of at least a
            further 50 units in 2025, at an average sales premium2 of between
            15% and 20%.
          ◦ In total, the above disposals are expected to generate total
            gross sales proceeds of between €35 and €37 million.
          ◦ Based on the initial success of the programme, the Company is
            actively reviewing how best to accelerate and increase the scale
            of the programme where value for shareholders can be achieved in
            line with strategic objectives and good asset management.

    

     • The Company is in the  early stages of implementing additional  income
       generating  and  cost  reduction  initiatives  as  identified  in  the
       Strategic Review and has  successfully executed initiatives across  c.
       4% of the portfolio, with an expected annualised NRI increase of 8-10%
       for these units.

    

     • The Company has now completed a  strategic exit from the Cork  market.
       This is  an  important  step towards  improving  cost  structures  and
       margins. Focusing on  the greater Dublin  area maximises  efficiencies
       and the future operating leverage of the Group.

    

    

   Capital Allocation

    

     • The Board remains committed to  maximising value for shareholders  and
       addressing  the  discount   between  the   Company’s  current   market
       capitalisation and  Net  Asset Value.  In  line with  this  objective,
       proceeds from the previously  announced asset recycling programme  are
       expected to be deployed towards:

          ◦ Continuing to actively manage LTV within the Board’s target range
            of between 40% and 45%, and subsequently;
          ◦ Prioritising excess capital towards enhancing shareholder returns
            through an efficient return of capital to shareholders.

    

     • Management will continue to concentrate  on the above value  accretive
       capital allocation strategies for so long as the share price trades at
       a steep discount to Net Asset Value.

    

     • The Company expects to provide  shareholders with a further update  on
       progress around  the  scale of  excess  capital  and how  it  will  be
       deployed in relation to  the above initiatives at  the release of  the
       2024 full year results in February 2025.

    

    

   Eddie Byrne, CEO of I-RES, commented:

    

   “We are  pleased  to report  strong  progress with  our  strategic  review
   initiatives and are encouraged by  the positive momentum of the  business.
   The execution  of  our  recycling  programme  is  ahead  of  our  expected
   timeframe and will  further strengthen  our financial  position. While  we
   will continue to consider all opportunities to enhance shareholder  value,
   we  are  confident  about  the  long-term  market  opportunity  which   is
   underpinned by  our high-quality  portfolio and  market leading  operating
   platform.”

    

    

    

   1 LTV net of cash based on portfolio valuation at 30 June 2024

   2 Based on 30 June 2024 book values

   END

   For further information please contact:

   For Investor Relations:

   Irish Residential Properties REIT plc     

   Luke Ferriter,  Director Investor  Relations     1 investors@iresreit.ie  
    Tel: +353 (0) 1 563 4000

   Eddie Byrne, Chief Executive Officer                  Tel: +353 (0) 1  557
   0974

    

   For Media Queries:

   Jonathan Neilan,  FTI Consulting     2 ires@fticonsulting.com   Tel:  +353
   (0) 86 231 4135 

   Sam Moore, FTI Consulting      Tel: +353 (0) 87 737 9089 

    

   About Irish Residential Properties REIT plc

   Irish Residential Properties REIT plc (“I-RES”) is a growth oriented  Real
   Estate Investment Trust providing quality professionally managed homes  in
   sustainable communities in  Ireland. The Group  owns 3,672 apartments  and
   houses for private  rental in  Dublin. I-RES aims  to be  the provider  of
   choice for the Irish  living sector, known for  excellent service and  for
   operating responsibly, minimising its environmental impact, and maximising
   its contribution  to the  community. The  Company's shares  are listed  on
   Euronext Dublin. Further information at  3 www.iresreit.ie.

    

    

   This note applies  if and  to the  extent that  there are  forward-looking
   statements in this Announcement.

    

   This  Announcement  may  contain  forward-looking  statements,  which  are
   subject to risks  and uncertainties because  they relate to  expectations,
   beliefs, projections, future plans  and strategies, anticipated events  or
   trends, and similar expressions concerning matters that are not historical
   facts. Such forward-looking  statements involve known  and unknown  risks,
   uncertainties and  other  factors, which  may  cause the  actual  results,
   performance or achievements  of the Company  or the industry  in which  it
   operates, to be materially different from any future results,  performance
   or achievements expressed or  implied by such forward-looking  statements.
   The forward-looking statements referred to in this paragraph speak only as
   at the date  of this Announcement.  Except as  required by law  or by  any
   appropriate regulatory  authority,  the  Company will  not  undertake  any
   obligation  to  release  publicly  any   revision  or  updates  to   these
   forward-looking  statements  to  reflect  future  events,   circumstances,
   unanticipated events, new information or otherwise.

    

    

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   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   ISIN:           IE00BJ34P519
   Category Code:  TST
   TIDM:           IRES
   LEI Code:       635400EOPACLULRENY18
   OAM Categories: 3.1. Additional regulated information required to be
                   disclosed under the laws of a Member State
   Sequence No.:   360663
   EQS News ID:    2035991


    
   End of Announcement EQS News Service

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References

   Visible links
   1. mailto:investors@iresreit.ie
   2. mailto:ires@fticonsulting.com
   3. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=69193c58673bda82b8867e09925c0315&application_id=2035991&site_id=refinitiv~~~790ea929-3c21-49b8-8ff9-1aed464daef1&application_name=news


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