REG - Real Estate Investrs - Final Results
25/03/2025 07:00
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RNS Number : 9521B Real Estate Investors PLC 25 March 2025
Real Estate Investors Plc
("REI", the "Company" or the "Group")
Final Results
For the year ended 31 December 2024
STRATEGY ON TRACK, WITH ONGOING SALES PROGRESS AND DEBT REDUCTION
Real Estate Investors Plc (AIM: RLE), the UK's only Midlands-focused Real
Estate Investment Trust (REIT) with a portfolio of commercial property, is
pleased to report its final results for the year ended 31 December 2024:
Targeted Sales Above Book Value & Debt Reduction
· Completed sales of £18.9 million (an aggregate uplift (pre-costs) of
6.95% above December 2023 valuations)
· Disposal proceeds used to pay down £15.2 million of debt, reducing
total debt to £39.2 million (FY 2023: £54.4 million)
· Improved LTV (net of cash) to 26.4% (FY 2023: 32.4%)
· Average cost of debt of 6.5% (FY 2023: 3.7%)
· Revenue of £10.8 million (FY 2023: £11.5 million) with decrease
predominantly due to loss of rent from sales
· Underlying profit before tax of £3.4 million (FY 2023: £4.5
million)
· EPRA** EPS of 1.9p (FY 2023: 2.6p)
· Basic loss per share of (1.3p) (FY 2023: (5.4p)
· Loss before tax of £2.4 million (FY 2023: loss of £9.4 million),
primarily as a result of a revaluation deficit of £6.3 million on investment
properties (FY 2023: £13.2 million revaluation deficit) (non-cash item)
· EPRA** Net Tangible Assets ("NTA") per share of 51.3p (FY 2023:
54.9p)
· £6.9 million cash at bank as at 31 December 2024 (FY 2023: £8
million)
· Gain in market value of hedging instrument of £282,000 (FY 2023:
deficit of £499,000) (non-cash item)
Fully Covered Dividend
· Final quarterly dividend in respect of 2024 of 0.4p per share,
payable in April 2025 as an ordinary dividend
· Total fully covered dividend for 2024 of 1.9p per share (FY 2023:
2.5p) reflecting a yield of 6.7% based on a mid-market opening price of 28.5p
on 24 March 2025. The level of dividend for 2025 will be subject to the pace
of further disposals
· £53.9 million total declared/paid to shareholders since commencement
of dividend policy in 2012
Diverse and Resilient Portfolio
· Gross property assets of £124.6 million (FY 2023: £145.5 million)
with 36 assets and 132 occupiers
· Like-for-like portfolio valuation down by 4.93% to £122.2 million
(FY 2023: £128.5 million)
· Continued robust rent collection levels with overall rent collection
for 2024 of 99.94%
· Completed 47 lease events during the year
· Improved WAULT*** of 5.76 years to break and 6.99 years to expiry (FY
2023: 5.24 years and 6.01 years)
· Contracted rental income of £9.0 million p.a. (FY 2023: £10.9
million p.a.) net of disposals
· Portfolio occupancy of 82.04% (FY 2023: 83.03%)
Post Year End Activity
· Additional £1.6 million of completed and contracted sales since year
end (an aggregate uplift, pre-costs, of 7.47% above December 2023 valuations)
· Sale agreed on Kingston House at £2.7 million, dependent upon
planning permission which was granted on 13 March 2025, with expected
completion by end of Q2 2025, which will materially reduce holding costs
· Further £1 million of debt repaid since year end, resulting in
reduced debt of £38.2 million
· Healthy pipeline of new income to the portfolio of £230,110 p.a in
legals
· In March 2025, the Group extended the £12.6 million facility with
Lloyds Banking Group Plc for a further 12 months to 29 May 2026 and the £24
million facility with National Westminster Bank Plc for a further 12 months to
1 June 2026. As with the previous refinancing in 2024, the facilities have
each been extended on a short term basis to reflect the Group's intention to
repay debt as a priority using disposal proceeds
Paul Bassi, Chief Executive, commented: "Despite the early general election
and the negative impact of the Autumn budget on the property market and
economic sentiment, we completed £18.9 million of targeted sales aimed at the
private investor market achieving 6.95% (pre-costs) above our December 2023
valuations, allowing us to repay £15.2 million of debt and reduce our total
debt by almost a third to £39.2 million, improving our LTV (net of cash) to
26.4%.
There are signs that the investment market is bottoming out and we anticipate
stable and improving values ahead. We are optimistic that, with the
anticipated improvements to the property market and against a backdrop of
gradually reducing interest rates, planned sales to private investors in H1
2025 and larger asset sales in H2 2025, along with further debt reduction will
be achieved.
We are on track with our 3 year orderly sales programme and strategic
objective of repaying all our borrowings from targeted sales and will commence
our capital repayment programme in due course, whilst continuing to pay a
dividend and remaining committed to maximising value for our shareholders."
Financial and Operational Results
31 December 2024 31 December 2023
Revenue £10.8 million £11.5 million
Pre-tax loss (£2.4 million) (£9.4 million)
Underlying profit before tax* £3.4 million £4.5 million
Contracted rental income £9.0 million £10.9 million
EPRA EPS** 1.9p 2.6p
Basic loss per share (1.3)p (5.4p)
Dividend per share 1.9p 2.5p
Average cost of debt 6.5% 3.7%
Like-for-like rental income £9.03 million £9.49 million
31 December 2024 31 December 2023
Gross property assets £124.6million £145.5 million
EPRA NTA per share 51.3p 54.9p
Like-for-like capital value psf £119.51 psf £125.70 psf
Like-for-like valuation £122.2 million £128.5 million
Tenants 132 183
WAULT to break*** 5.76 years 5.24 years
Total ownership (sq ft) 1.04 million sq ft 1.24 million sq ft
Net assets £89.5 million £95.6 million
Loan to value 32.0% 38.0%
Loan to value net of cash 26.4% 32.4%
Definitions
* Underlying profit before tax excludes profit/loss on revaluation and
sale of properties and interest rate swaps
** EPRA = European Public Real Estate Association
*** WAULT = Weighted Average Unexpired Lease Term
Enquiries:
Real Estate Investors Plc +44 (0)121 212 3446
Paul Bassi/Marcus Daly
Cavendish Capital Markets Limited (Nominated Adviser) +44 (0)20 7220 0500
Katy Birkin/Ben Jeynes
Panmure Liberum Limited (Broker) +44 (0)20 3100 2000
Jamie Richards/William King
About Real Estate Investors Plc
Real Estate Investors Plc is a publicly quoted, internally managed property
investment company and REIT with a portfolio of mixed-use commercial property,
managed by a highly-experienced property team with over 100 years of combined
experience of operating in the Midlands property market across all sectors.
The portfolio has no material reliance on a single asset or occupier. On
1(st) January 2015, the Company converted to a REIT. Real Estate Investment
Trusts are listed property investment companies or groups not liable to
corporation tax on their rental income or capital gains from their qualifying
activities. The Company announced in January 2024 that it would be
undertaking an orderly strategic sale of the Company's portfolio over three
years, disposing of assets individually or collectively, at or above book
value, to optimise returns to shareholders. The pace of the disposal
programme will be dictated by market conditions, with an initial focus on
repaying the Company's debt. In the meantime, it is the Board's intention to
continue paying a fully covered quarterly dividend. Further information on
the Company can be found at www.reiplc.com (http://www.reiplc.com) .
CHAIRMANS AND CHIEF EXECUTIVES STATEMENT
The year presented numerous challenges, including global conflicts, UK and US
elections, persistent inflation, and uncertainties around interest rates.
Additionally, Q3 2024 was marked by heightened market disruption and
subsequent low investor confidence following a poorly received UK Budget.
Mindful of the above, as per our stated strategy in January 2024, we continued
with our anticipated sales programme targeted at private investors and owner
occupiers which resulted in sales of £18.9 million during 2024. This was
achieved at an aggregate uplift of 6.95% above our 2023 year end valuations,
plus post-period sales of £1.6 million, making total sales since January 2024
of £20.5 million.
Using receipts from disposals during the period, we repaid £15.2 million of
debt, resulting in reduced total debt of £39.2 million (FY 2023: £54.4
million), representing a reduction of 27.9%. A post-period debt repayment of
£1 million has further reduced total debt to £38.2 million.
The portfolio saw a 4.93% valuation reduction on a like-for-like basis in 2024
which was a direct result of market sentiment and challenges faced by the UK
commercial property sector over the last 12 -18 months. We believe there are
positive prospects of recovering valuations through improved market conditions
and reducing interest rates.
Our asset management team has focussed on enhancing the rental income and
capital value of our remaining properties, whilst preparing identified assets
for future sales. With the benefit of an active occupier market, the team
completed 47 lease transactions, representing £1.1 million per annum of new
income to the portfolio and offsetting some of the lost income due to asset
sales.
Our robust portfolio continued to perform well, with 99.94% overall rent
collection in 2024. At the year end contracted rental income was £9.0 million
per annum (FY 2023: £10.9 million per annum), with an improved portfolio
WAULT of 5.76 years to break and 6.99 years to expiry and occupancy at 82.04%,
all of which are in line with management's expectations due to disposals,
known lease events and securing vacant possession for onward agreed sales
during 2025.
Post-period, occupancy is now 82.74% and contracted rental income has reduced
to £8.9 million (due to sales), with WAULT now at 5.69 years to break and
6.97 years to expiry. We have sought full or part vacant possession on
selected assets with a view to completing specific asset management
initiatives or to meet conditions of sale and we anticipate that as these
properties sell, our occupancy rate will improve and our void costs will
substantially decrease. The completion of lettings in our legal pipeline
will also positively contribute to rental income and occupancy levels, subject
to the rate of our ongoing disposal programme.
Revenue for the year was £10.8 million (FY 2023: £11.5 million), with the
reduction predominantly due to income loss following the sale of properties.
Underlying profit before tax was £3.4 million (FY 2023: £4.5 million) with a
pre-tax loss of £2.4 million, primarily due to a £6.3 million non-cash loss
on property revaluations. A provision has been made for the Company's
Shorter Term Incentive Plan (STIP) of £300,000 (announced in January 2024),
although payment is deferred until completion, as per the STIP rules.
Despite the loss of income from sales, the robust operational performance of
the business resulted in an uninterrupted, fully covered dividend of 1.9p per
share for 2024. A total of £53.9 million has been paid/declared to
shareholders since the commencement of the dividend policy.
Whilst Q1 2025 has seen the continuation of weak market sentiment from 2024,
expectations of falling interest rates and sector rental growth should lead to
market improvements. According to Colliers, investment volumes in 2025 are
forecasted to meet or exceed 2024 levels, potentially reaching between £45
billion and £50 billion. We have already completed additional asset sales
amounting to £1.6 million since the year end. In addition to sales
completed this year, we have a healthy pipeline of disposals currently in
legals that are expected to complete in Q2 2025.
We remain optimistic about H2 2025 and expect some investors that have been
absent to return to the market as conditions slowly improve. Improved market
activity and the emergence of larger institutional investors and funds would
allow us to accelerate our disposals programme by marketing our larger
oven-ready assets for disposal with a view to achieving stronger pricing.
This would result in the Company's debt being repaid more rapidly and the
fulfilment of the Company's strategy.
Management are committed to leveraging positive market sentiment and
continuing to deliver value for our shareholders via our quarterly dividend,
whilst remaining open to a portfolio or corporate transaction that aligns with
shareholder interests and accelerates the Company's strategy.
Dividend
Despite market uncertainty and significant disposals during 2024, the
Company's dividends remained uninterrupted. The first three quarterly
dividend payments in respect of 2024 were paid at a level of 0.5p per share
and were fully covered. Due to the level of disposals, the final dividend in
respect of 2024 is confirmed at 0.4p per share, reflecting a total, fully
covered dividend payment for 2024 of 1.9p (FY 2023: 2.5p) (the basis for 2025
dividend to be agreed/discussed, subject to the pace of further disposals) and
a yield of 6.7% based on a mid-market opening price of 28.5p on 24 March
2025. The Board remains committed to paying a fully covered dividend,
subject to business performance and the pace of further disposals.
The proposed timetable for the final dividend, which will be an ordinary
dividend, is as follows:
Ex-dividend date: 3 April 2025
Record date: 4 April 2025
Dividend payment date: 30 April 2025
Outlook for 2025
The Board remains firmly committed to maximising shareholder returns by
implementing proactive asset management, making targeted sales in an orderly
manner, whilst prioritising the repayment of debt and returning capital to
shareholders in due course.
We are expecting market improvement ahead as interest rates gradually reduce,
enabling us to expedite our sales programme and sell larger corporate and
institutional-grade assets as 2025 progresses, albeit the pace of the sales
programme is wholly dependent on investors returning to the market.
In the interim, we remain open to exploring corporate transactions, including
the potential sale of the entire portfolio, provided it aligns with the best
interests of our shareholders.
Our Stakeholders
We sincerely thank our shareholders, advisers, tenants and staff for their
ongoing support.
William
Wyatt
Paul Bassi CBE D. Univ
Chairman
Chief Executive
24 March
2025
24 March 2025
UK Property Overview
Despite high interest rates, a change in UK government and a negative Autumn
budget suppressing commercial property investment activity throughout the
year, UK commercial property rebounded in 2024. According to a report by
Carter Jonas, a total of over £40 billion of commercial property was traded
in the year, an increase of 20% compared with 2023. The industrial sector
attracted the most investment, followed by the retail and office sectors.
Capital growth performance varies considerably across the main commercial
property sectors. Industrial and retail are outperforming the all-property
average, with annual growth in December 2024 standing at 3.9% and 3.0%
respectively. In contrast, office capital values are continuing to fall on an
annual basis, at -5.7% over the 12 months to December 2024. During the
period September to December 2024, industrial capital values rose by 2.3%,
retail increased by 1.7%, and the fall in the office sector was only -0.3%.
Indeed, office capital values have now broadly levelled off, posting a modest
rise of +0.1% during December 2024.
The value of the REI portfolio reduced on a like for like basis by 4.93%,
largely due to market sentiment towards the office sector and reduced investor
confidence. The consensus in today's market is that valuations have now
broadly bottomed out and that investor confidence is returning.
Portfolio Disposals
As with last year, we capitalised on the ability to break up several of our
portfolio assets and targeted the strong private investor market and owner
occupiers, to achieve premium pricing. During the year we disposed of 20
units/assets for a total of £18.9 million at an aggregate uplift of 6.95%
(pre-costs) above our 2023 year end valuations. Of these sales, 52.87%
comprised break ups of retail units, 9.92% of entire retail assets, 8.46%
drive-thru units and 28.75% offices (office disposals were to owner
occupiers).
Post Year End Disposals
Since the year end, we have capitalised on improving market sentiment and have
disposed of a further £1.6 million of assets. We have further completions
expected before the conclusion of H1 2025 that are currently in legals. The
reduction in interest rates is expected to pave the way for buyers to return
to the market and acquire larger lot sizes in H2 2025.
The REI Portfolio
The REI portfolio, comprising of 36 assets with 132 occupiers, has a net
initial yield of 6.92% and a reversionary yield of 9.02%. Valuations have seen
a decline of 4.93% on a like-for-like basis to £122.2 million (FY 2023:
£128.5 million). Management intend to continue with asset management
initiatives to maximise income, occupancy and capital value.
The current portfolio sector weightings are:
Sector Income by Sector (£) Income by Sector (%)
Office 4,266,720 47.28
Traditional Retail 1,275,436 14.13
Discount Retail - Poundland/B&M etc 882,500 9.78
Medical and Pharmaceutical - Boots/Holland & Barrett etc 526,749 5.84
Restaurant/Bar/Coffee - Costa Coffee etc 284,286 3.15
Financial/Licences/Agency - Bank of Scotland etc 129,500 1.43
Food Stores - Co-op, Iceland etc 406,544 4.50
Other - Hotels (Vine Hotels etc), Leisure (Luxury Leisure), Car parks, AST 1,253,803 13.89
Total 9,025,538 100.00
Asset Management
Despite the business primarily focussing on sales, 2024 was a successful year
for the asset management team, completing 47 lease events and securing £1.1
million in new letting income. This activity resulted in improved WAULT of
5.76 years to break and 6.99 years to expiry (FY 2023: 5.24 years and 6.01
years). Occupancy levels however reduced to 82.04% from 83.03% at December
2023, largely driven by intentional decisions to secure vacant possession on
some assets such as Kingston House, West Bromwich to allow sales to complete.
Key asset management initiatives undertaken during the year (and to the date
of this announcement) include:
Kingston House, West Bromwich
Vacant possession was secured to facilitate the sale of this 43,000 sq ft
office asset for residential conversion at £2.7 million. The sale is agreed
dependent upon planning permission which was granted on 13 March 2025, with
expected completion by end of Q2 2025. This sale will materially reduce
holding costs.
Birch House, Oldbury
Following the complete refurbishment of Birch House, DHU took occupation of
the entire 35,749 sq ft building, at a contracted rent of £625,608 p.a.
Peat House, Leicester
Fairfield School of Business took a new lease on the 4(th) floor at £145,120
p.a. The letting, that was in line with the ERV, represented just under 25%
of the building, which is now fully let, producing a total rent of £556,052
p.a.
Topaz Business Park, Bromsgrove
Following the news that Costa was opening a drive-thru at the site, a number
of lettings totalling £76,774 p.a. were completed. Further lettings in H1
2025 will see this asset fully let. The Costa unit has since been sold for
£1.6 million.
Jasper Retail Park, Tunstall
McDonalds signed a new 20-year lease at £55,000 p.a. This was a positive
letting and has enhanced the offer at the scheme, leading to increased
footfall for the other tenants.
Market Shopping Centre, Crewe
Following lengthy discussions, British Heart Foundation signed a 10-year lease
at £57,500 p.a., taking just under 11,000 sq ft at the scheme.
Post Year End Activity and Sentiment
There are currently £230,110 p.a. of pipeline lettings that will improve our
occupancy and contracted rental income levels and will reduce void costs
across the portfolio.
Portfolio Summary
Value (£) Area (Sq ft) Contracted Rent (£) ERV (£) NIY (%) EQY (%) RY (%) Occupancy (%)
Portfolio 122,200,000 1,037,965 9,025,538 11,769,356 6.92% 9.09% 9.02% 82.04%
Land* 2,403,962
Total 124,603,962 1,037,965 9,025,538 11,769,356 6.92% 9.09% 9.02% 82.04%
*Land holdings are excluded from the yield calculations
Environmental, Social and Governance ("ESG")
Whilst managements' primary focus is asset management, the sale of assets and
debt repayment in line with the stated strategy, the business continues to
recognise the importance of incorporating ESG into the working practices at
REI. The ESG Committee, formed in 2021, continues to implement the ESG
framework for the business.
The reduction of the portfolio's carbon footprint remains a priority for the
business. Working with Systemslink, we can confirm an 18.24% reduction in
carbon emissions for electricity and gas (for landlord-controlled areas only)
between 1 January 2023 and 31 December 2024. This reduction is in part due
to our tenants being more aware and conscientious, proactive initiatives such
as LED lamp replacement and boiler upgrades and, the fact that we have sought
vacant possession on some assets in readiness for sale. Going forward, as
energy contracts expire, they are being replaced with 100% green-only
electricity contracts where possible.
Carbon Emissions 1 Jan 2023 - 31 Dec 2023 1 Jan 2024 - 31 Dec 2024
Scope 1 475 MTCO2e* 367 MTCO2e*
Scope 2 753 MTCO2e* 637 MTCO2e*
Total Scope 1 & Scope 2 1,228 MTCO2e* 1,004 MTCO2e*
*applies to 0.9 million sq ft of the portfolio that is classed as
landlord-controlled areas
Portfolio Energy Performance Certification
REI continues to ensure our assets meet the UK statutory regulations for
EPCs. We will continue to upgrade assets when required. An overview of the
asset EPC ratings across the portfolio is noted below:
% of portfolio (by sq ft)
EPC Rating A B C D E F G Total
31 Dec 2024 2.52 36.05 26.07 33.38 1.98 0 0 100
31 Dec 2023 2.25 36.88 22.71 35.13 3.03 0 0 100
31 Dec 2022 1.36 22.99 31.18 37.49 6.98 0 0 100
FINANCIAL REVIEW
Overview
In line with the Company's strategic objective of an orderly sale of the
Company's portfolio, we disposed of assets worth £18.9 million, leading to a
24% decrease in underlying profit before tax to £3.4 million (FY 2023: £4.5
million). Investment property sales during the year realised a surplus of
£631,000 (FY 2023: £182,000 loss).
The loss before tax was £2.4 million (FY 2023: £9.4 million loss), impacted
by a £6.3 million revaluation deficit on investment properties (FY 2023:
£13.2 million deficit), a non-cash item.
In line with our strategy, receipts from disposals were used to repay £15.2
million of debt. This reduced our total debt to £39.2 million (FY 2023:
£54.4 million), improving the loan-to-value (LTV) ratio (net of cash) to
26.4% (FY 2023: 32.4%). REI continues to maintain relationships with three
lenders, and continues to comfortably meet all banking covenants, with
headroom and cure facilities in place.
As anticipated, contracted rental income decreased to £9.0 million (FY 2023:
£10.9 million), largely due to disposals and some reduction from lease events
across the portfolio. Occupancy levels remained strong at 82.04% (FY 2023:
83.03%). The reduction in contracted rental income, although expected,
contributed to a decrease in total revenue to £10.8 million (FY 2023: £11.5
million). Our like-for-like rental income also dropped to £9.0 million per
annum (FY 2023: £9.5 million per annum).
Despite the reduction in revenue due to disposals, we maintained dividend
payments throughout the year, with 0.5p per share paid in Q1, Q2, and Q3, all
fully covered. The final dividend for 2024 is confirmed at 0.4p per share,
resulting in a fully covered total dividend of 1.9p for the year (FY 2023:
2.5p).
31 December 2024 31 December 2023
Gross property assets £124.6 million £145.5 million
Underlying profit before tax £3.4 million £4.5 million
Pre-tax loss (£2.4 million) (£9.4 million)
Revenue £10.8 million £11.5 million
EPRA EPS 1.9p 2.6p
EPRA NTA per share 51.3p 54.9p
Net assets £89.5 million £95.6 million
Loan to value 32.0% 38.0%
Loan to value net of cash 26.4% 32.4%
Average cost of debt 6.5% 3.7%
Dividend per share 1.9p 2.5p
Like-for-like rental income £9.03 million £9.49 million
Like-for-like capital value psf £119.51 psf £125.70 psf
Like-for-like valuation £122.2 million £128.5 million
Results for the Year
The loss before tax for the year was £2.4 million (FY 2023: £9.4 million
loss), primarily driven by a £6.3 million revaluation deficit on investment
properties (FY 2023: £13.2 million deficit), a £631,000 surplus on the sale
of investment properties (FY 2023: £182,000 loss), a provision for the STIP
of £300,000 (FY 2023: £Nil), and a £282,000 gain in the market value of our
interest rate hedging instruments (FY 2023: £499,000 loss). Underlying profit
decreased to £3.4 million (FY 2023: £4.5 million).
Revenues reduced to £10.8 million (FY 2023: £11.5 million), largely due to a
loss of £1.9 million in rental income, primarily from disposals and
anticipated lease events.
Administrative and overhead costs were reduced to £2.3 million (FY 2023:
£2.6 million). The overall reduction in overheads was £600,000 mainly due to
the reduction in executive salaries of £300,000 but then offset by a
provision of £300,000 for STIP costs (FY 2023: £Nil) which was introduced
during the year, although payment is deferred until completion as per the STIP
rules.
The Group focused on using the proceeds from the sale of investment property
to repay debt of £15.2 million during the year. However, interest costs
increased to £3.3 million (FY 2023: £2.4 million) as favourable fixed rates
on the loan facilities matured.
(Loss)/earnings per share were:
Basic: (1.35)p (FY 2023: (5.4p))
Diluted: (1.35)p (FY 2023: (5.4p))
EPRA: 1.9p (FY 2023: 2.6p)
Shareholders' funds decreased to £89.5 million at 31 December 2024 (FY 2023:
£95.6 million) primarily as a result of the loss on property portfolio
revaluation.
Basic NAV: 51.3p (FY 2023: 55p)
EPRA NTA: 51.3p (FY 2023: 54.9p)
Finance & Banking
After achieving sales of £18.9 million in 2024 and repaying £15.2 million in
debt, total debt as of 31 December 2024 stood at £39.2 million (FY 2023:
£54.4 million). This amount has been further reduced to £38.2 million
following the year end. As at 31 December 2024, the Group held £6.9 million
in cash with three banking partners, continuing to comfortably meet all
banking covenants.
During the period, the cost of debt was maintained at 6.5% with 25% of the
portfolio's debt fixed. Management are encouraged by reducing interest rates
and debt repayment remains management's priority. At this time, it is
prudent to maintain a strong cash reserve in case the business needs to
provide bank security in the form of cash. The Company continues to maximise
returns on its cash holdings, with £6.9 million in cash at the year end, most
of which is on deposit earning an interest rate of 4% with instant access.
The LTV as at 31 December 2024 was 32.0% (FY 2023: 38%) and the LTV (net of
cash) was 26.4% (FY 2023: 32.4%). The Group's hedge facility improved by
£282,000 for the year to 31 December 2024.
Lender Debt Facility (£m) Debt Maturity Amount Fixed (£m)
National Westminster Bank 24 June 2026 0
Lloyds Banking Group 12.6 May 2026 10
Barclays 2.6 June 2025 0
Refinancing
In March 2025, the Group extended the £12.6 million facility with Lloyds
Banking Group Plc for a further 12 months to 29 May 2026 and the £24 million
facility with National Westminster Bank Plc for a further 12 months to 1 June
2026. As with the previous refinancing in 2024, the facilities have each
been extended on a short term basis to reflect the Group's intention to repay
debt as a priority using disposal proceeds.
Going Concern
The consolidated financial statements for the Group have been prepared on a
going concern basis.
Taxation
The Group converted to a Real Estate Investment Trust (REIT) on 1 January
2015. Under REIT status the Group does not pay tax on its rental income
profits or on gains from the sale of investment properties. The Group
continues to meet all REIT requirements for REIT status.
Dividend
Under the REIT status the Group is required to distribute at least 90% of
rental income taxable profits arising each financial year by way of a Property
Income Distribution. Quarterly dividends commenced in 2016.
Despite rental income reducing as our strategic disposal programme progressed,
dividend payments continued without interruption in 2024 due to a robust
operational business performance. The first three quarterly dividends for 2024
were paid at 0.5p per share, fully covered, with the final dividend for 2024
set at 0.4p per share. This results in a total, fully covered, uninterrupted
dividend payment of 1.9p for 2024 (FY 2023: 2.5p). Based on a mid-market
opening price of 28.5p on 24 March 2025, this equates to a yield of 6.7%.
The dividend for 2025 will depend on the pace of further disposals.
The final 2024 dividend will be paid on 30 April 2025 as an ordinary dividend,
to all shareholders on the register as at 4 April 2025 with an ex-dividend
date of 3 April 2025. The Board remains committed to paying a fully covered
dividend, subject to the rate of disposal of assets.
Marcus Daly, Finance Director
24 March 2025
Real Estate Investors plc
Consolidated statement of comprehensive income
For the year ended 31 December 2024
Note 2024 2023
£000 £000
Revenue 10,772 11,513
Cost of sales (2,220) (2,232)
Gross profit 8,552 9,281
Administrative expenses (2,312) (2,616)
Gain/(deficit) on sale of investment properties 631 (182)
Deficit in fair value of investment properties (6,334) (13,197)
Profit/(loss) from operations 537 (6,714)
Finance income 163 177
Finance costs (3,339) (2,371)
Gain/(deficit) on financial liabilities at fair value through profit and loss 282 (499)
Loss before taxation (2,357) (9,407)
Income tax charge - -
Net loss after taxation and total comprehensive expense (2,357) (9,407)
Total and continuing earnings per ordinary share
Basic 3 (1.35)p (5.44)p
Diluted 3 (1.35)p (5.44)p
The results of the Group for the current and prior year related entirely to
continuing operations.
Real Estate Investors plc
Consolidated statement of changes in equity
For the year ended 31 December 2024
Share Share Capital Share-based payment reserve Retained Total
capital premium redemption Earnings
account reserve
£000 £000 £000 £000 £000 £000
At 1 January 2023 17,266 51,829 1,463 759 37,648 108,965
Share issue 119 215 - (334) - -
Dividends - - - - (4,000) (4,000)
Transactions with owners 119 215 - (334) (4,000) (4,000)
Loss for the year and total comprehensive income - - - (9,407) (9,407)
-
17,385 52,044 1,463 425 24,241 95,558
At 31 December 2023
Share issue 54 129 - (183) - -
Dividends - - - - (3,702) (3,702)
Transactions with owners 54 129 - (183) (3,702) (3,702)
Loss for the year and total comprehensive expense - - - - (2,357) (2,357)
At 31 December 2024 17,439 52,173 1,463 242 18,182 89,499
Real Estate Investors plc
Consolidated statement of financial position
At 31 December 2024
Note 2024 2023
£000 £000
Assets
Non-current
Intangible assets - -
Investment properties 4 122,200 143,105
Property, plant and equipment 1 2
122,201 143,107
Current
Inventories 2,404 2,395
Trade and other receivables 2,444 2,550
Cash and cash equivalents 6,876 7,981
11,724 12,926
Total assets 133,925 156,033
Liabilities
Current
Bank loans (39,196) (54,407)
Trade and other (5,081) (5,637)
payables
(44,277) (60,044)
Non-current
Derivative financial liabilities (149) (431)
(149) (431)
Total liabilities (44,426) (60,475)
Net assets 89,499 95,558
Equity
Share capital 17,439 17,385
Share premium account 52,173 52,044
Capital redemption reserve 1,463 1,463
Share-based payment reserve 242 425
Retained earnings 18,182 24,241
Total Equity 89,499 95,558
Net assets per share 51.3p 55.0p
Real Estate Investors plc
Consolidated statement of cash flows
For the year ended 31 December 2024
+
2024 2023
£000 £000
Cash flows from operating activities
Loss after taxation (2,357) (9,407)
Adjustments for:
Depreciation 1 1
Net deficit on valuation of investment property 6,334 13,197
(Gain)/deficit on sale of investment property (631) 182
Finance income (163) (177)
Finance costs 3,339 2,371
(Gain)/loss on financial liabilities at fair value through profit and loss (282) 499
Increase in inventories (9) (6)
Decrease in trade and other receivables 106 560
Decrease in trade and other payables (359) (624)
5,979 6,596
Cash flows from investing activities
Expenditure on investment properties (3,109) (733)
Proceeds from sale of investment properties 18,311 17,279
Interest received 163 177
15,365 16,723
Cash flows from financing activities
Interest paid (3,339) (2,371)
Equity dividends paid (3,900) (3,721)
Payment of bank loans (15,210) (17,064)
(22,449) (23,156)
Net (decrease)/increase in cash and cash equivalents (1,105) 163
Cash and cash equivalents at beginning of year 7,981 7,818
Cash and cash equivalents at end of year 6,876 7,981
NOTES:
Cash and cash equivalents consist of cash in hand and balances with banks
only.
Real Estate Investors plc
Notes to the preliminary announcement
For the year ended 31 December 2024
1. Basis of preparation
The financial statements have been prepared under the historical cost
convention, except for the revaluation of properties and financial instruments
held at fair value through profit and loss, and in accordance with
international accounting standards in conformity with the requirements of the
Companies Act 2006.
It should be noted that accounting estimates and assumptions are used in
preparation of the financial statements. Although these estimates are based
on management's best knowledge and judgement of current events and actions,
actual results may differ from those estimates. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements, are set out in the Group's annual
report and financial statements.
The consolidated financial statements incorporate the financial statements of
the Company and its subsidiaries made up to 31 December each year. Material
intra-group balances and transactions, and any unrealised gains arising from
intra-group transactions, are eliminated on consolidation. Unrealised losses
are also eliminated unless the transaction provides evidence of an impairment
of the asset transferred.
The principal accounting policies are detailed in the Group's annual report
and financial statements.
Going concern
The Group has prepared and reviewed forecasts and made appropriate enquiries
which indicate that the Group has adequate resources to continue in
operational existence for the foreseeable future, being a period of 12 months
from the date of approval of these financial statements to 31 March 2026.
These enquiries considered the following:
· the significant cash balances the Group holds and the low levels of
historic and projected operating cash outflows
· any property purchases will only be completed if cash resources or
loans are available to complete those purchases
· the Group's bankers have indicated their continuing support for the
Group. In March 2025, the Group extended the £12.6 million facility with
Lloyds Banking Group Plc for 12 months to 29 May 2026.
· In March 2025, the Group extended the facility of £24 million with
National Westminster Bank PLC by a further 12 months to 1 June 2026.
· The directors have at the time of approving these financial
statements, a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future being a period of
not less than 12 months from the date of approval of these financial
statements.
For these reasons, the Directors continue to adopt the going concern basis in
preparing the financial statements.
2. Gross profit
2024 2023
£000 £000
Revenue Rental income 10,237 10,919
Surrender premiums 535 594
10,772 11,513
Cost of sales Direct costs (2,220) (2,232)
Gross profit 8,552 9,281
3. Earnings per share
The calculation of earnings per share is based on the result for the year
after tax and on the weighted average number of shares in issue during the
year.
Reconciliations of the earnings and the weighted average numbers of shares
used in the calculations are set out below.
2024 2023
Earnings Average Earnings per Average Earnings
number of share Earnings number of per share
shares shares
£000 £000
Basic loss per share (2,357) 174,181,683 (1.35)p (9,407) 172,909,757
(5.44)p
Dilutive effect of share options - - - - - -
Diluted loss per share (2,357) 174,181,683 (1.35)p (9,407) 172,909,757 (5.44)p
The European Public Real Estate Association indices below have been included
in the financial statements to allow more effective comparisons to be drawn
between the Group and other business in the real estate sector.
EPRA EPS per share
2024 2023
Earnings Shares Earnings Shares Earnings
per share Earnings per share
£000 No p £000 No P
Loss per share (2,357) 174,181,683 (1.35) (9,407) 172,909,757 (5.44)
Net deficit on valuation of investment properties 6,334 13,197
(Gain)/deficit on disposal of investment properties (631) 182
STIP provision 300 -
(Gain)/loss in fair value of derivatives (282) 499
EPRA earnings per share 3,364 174,181,683 1.93 4,471 172,909,757 2.68
3 Earnings per share (continued)
NET ASSET VALUE PER SHARE
The Group has adopted the new EPRA NAV measures which came into effect for
accounting periods starting 1 January 2020. EPRA issued new best practice
recommendations (BPR) for financial guidelines on its definitions of NAV
measures. The new NAV measures as outlined in the BPR are EPRA net tangible
assets (NTA), EPRA net reinvestment value (NRV) and EPRA net disposal value
(NDV).
The Group considered EPRA Net Tangible Assets (NTA) to be the most relevant
NAV measure for the Group and we are now reporting this as our primary NAV
measure, replacing our previously reported EPRA NAV and EPRA NNNAV per share
metrics. EPRA NTA excludes the intangible assets and the cumulative fair value
adjustments for debt-related derivatives which are unlikely to be realised.
31 December 2024
EPRA NTA EPRA NRV
EPRA NDV
£'000 £'000 £'000
Net assets 89,499 89,499 89,499
Fair value of derivatives 149 149 -
Real estate transfer tax - 6,110 -
EPRA NAV 89,648 95,758 89,499
Number of ordinary shares issued for diluted and EPRA net assets per share 174,738,511 174,738,511
174,738,511
EPRA NAV per share 51.3p 54.8p 51.2p
The adjustments made to get to the EPRA NAV measures above are as follows:
• Real estate transfer tax: Gross value of property portfolio as provided in
the Valuation Certificate (i.e. the value prior to any deduction of
purchasers' costs).
• Fair value of derivatives: Exclude fair value financial instruments that
are used for hedging purposes where the company has the intention of keeping
the hedge position until the end of the contractual duration.
31 December 2023
EPRA NTA EPRA NRV
EPRA NDV
£'000 £'000 £'000
Net assets 95,558 95,558 95,558
Fair value of derivatives 431 431 -
Real estate transfer tax - 8,586 -
EPRA NAV 95,989 104,575 95,558
Number of ordinary shares issued for diluted and EPRA net assets per share 174,702,476 174,702,476 174,702,476
EPRA NAV per share 54.9p 59.8p 54.7p
3 Earnings per share (continued)
31 December 2024 31 December 2023
No. of shares No. of shares
Number of ordinary shares issued at end of period 174,381,971 173,844,434
Dilutive impact of options 858,042
356,540
Number of ordinary shares issued for diluted and EPRA net assets per share
174,738,511 174,702,476
Net assets per ordinary share
EPRA NTA 51.3p 54.9p
EPRA NRV 54.8p 59.8p
EPRA NDV 51.2p 54.7p
4. Investment properties
Investment properties are those held to earn rentals and for capital
appreciation.
The carrying amount of investment properties for the periods presented in the
consolidated financial statements is reconciled as follows:
£000
Carrying amount at 1 January 2023 173,030
Additions - subsequent expenditure 733
Disposals (17,461)
Change in fair value (13,197)
Carrying amount at 31 December 2023 143,105
Additions - subsequent expenditure 3,109
Disposals (17,680)
Change in fair value (6,334)
Carrying amount at 31 December 2024 122,200
5. Publication
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in section 434 of the Companies Act
2006. The consolidated statement of financial position at 31 December 2024
and the consolidated statement of comprehensive income, the consolidated
statement of changes in equity, the consolidated statement of cash flows and
the associated notes for the year then ended have been extracted from the
Group's financial statements upon which the auditor's opinion is unqualified
and does not include any statement under section 498 of the Companies Act
2006. The statutory accounts for the year ended 31 December 2024 will be
delivered to the Registrar of Companies following the Company's Annual General
Meeting.
6. Copies of the announcement
Copies of this announcement are available for collection from the Company's
offices at 2(nd) Floor, 75-77 Colmore Row, Birmingham, B3 2AP and from the
Company's website at www.reiplc.com (http://www.reiplc.com) . The report and
accounts for the year ended 31 December 2024 are available from the Company's
website and will be posted to shareholders in April 2025.
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