REG - Residential Secure - 1Q25 NAV and corporate update

Residential Secure IncomeAnnouncement

07/02/2025 07:00

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RNS Number : 2615W  Residential Secure Income PLC  07 February 2025

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

FOR IMMEDIATE RELEASE

 

7 February 2025

Residential Secure Income plc

 

Net Asset Value and corporate update

 

Residential Secure Income plc ("ReSI plc") (LSE: RESI), which is pursuing a
full realisation of its independent retirement living and shared ownership
investment portfolios, is pleased to announce its unaudited first quarter net
asset value ("Net Asset Value" or "NAV") and provide an update on corporate
activity between 30 September 2024 and 31 December 2024 (the "Period").

 

Ongoing strong operational performance, reflecting defensive nature of assets

·      Secure rent collection at over 99% for the quarter.

·      Rental growth of 3.3% on 472 properties (25% of portfolio).

·      Shared ownership portfolio fully occupied with retirement
occupancy continuing at record 97% levels.

 

Valuation decline in the period, driven by impact of rising government bond
yields

·      Total EPRA return for the quarter of (5.5)% (4.5p), to give EPRA
NTA of 69.6p (£128.8mn) as at 31 December 2024.

·      Driven by a 6p, or 3.5%, decrease in like-for-like investment
property values, as follows:

o 0.9p increase from inflation-linked rent reviews in the quarter;

o 6.9p decrease due to a further 25 basis points outward yield shift.

·      Annualised net rental yields now 6.4% in retirement and 4.2% in
shared ownership.

 

Interim dividend of 1.03 pence per share declared today

·      141% dividend cover from Adjusted EPRA earnings of 1.46p.

·      During the realisation period, dividends will continue to be paid
quarterly.

·      Board will continue to monitor dividend levels in reference to
overall profitability, realisation progress, portfolio capital investment
needs to enhance sale value, and maintaining REIT status.

 

Completion of local authority portfolio sale and progress on sales of
remaining portfolios

·      Full divestment of the local authority portfolio was achieved in
January 2025, as announced.

o  Remaining asset sold for a net consideration of c.£15.0mn, marginally in
excess of both March 2024 and September 2023 carrying values.

o  Proceeds have been used to repay drawn floating rate debt which is due to
mature in March 2025.

·      Completed tender process for potential sales agents and other key
advisers.

o  As guided at year-end, formal launch timing being evaluated in line with
the Board's aims to maximise total shareholder returns.

o  Inbound enquiries are being shortlisted and assessed by sales agent (Jones
Lang LaSalle) and Investment Manager.

·      99.7% of shareholders voted in favour of managed wind-down and
portfolio realisation strategy the December 2024 General Meeting.

·      In dialogue with current and prospective lenders for a new
revolving credit facility.

 

 

NAV movement

The movement in NAV during the period is as follows:

 

                                 EPRA NTA                          IFRS NAV
                                 £'mn    Pence per Ordinary Share  £'mn    Pence per Ordinary Share
 NAV at 30 September 2024        138.2   74.6                      151.0   81.6
 Net income for the Period       2.8     1.5                       2.8     1.5
 Dividend paid                   (1.9)   (1.0)                     (1.9)   (1.0)
 Property valuation change       (11.1)  (6.0)                     (11.1)  (6.0)
 Debt valuation / indexation(*)  0.9     0.5                       -       -
 NAV at 31 December 2024         128.8   69.6                      140.8   76.0
 Total return                    (8.3)   (4.5)                     (7.5)   (4.0)

*In accordance with the EPRA Best Practice Recommendations, EPRA NTA reflects
the amortised cost of indebtedness, rather than its fair value, and thus the
EPRA NTA movement reflects the indexation of USS debt.

 

Rob Whiteman, ReSI PLC Chairman, commented:

 

"Both the Investment Manager and the Board remain focussed on driving earnings
growth, as evidenced this quarter through high levels of rent collection,
sustained record occupancy and rent growth, while balancing maximising returns
for shareholders with timing of disposals, ensuring the interests of our
residents are protected throughout."

 

- Ends -

 

The information contained within this announcement constitutes inside
information. The person responsible for arranging for the release of this
announcement on behalf of the Company is Charles Gorman of KL Communications.

 

LEI: 213800D24WA531LAR763

 

 

 

For further information, please contact:

 

 Gresham House Real Estate

 Ben Fry                    +44 (0) 20 7382 0900

 Sandeep Patel

 Peel Hunt LLP

 Luke Simpson               +44 (0) 20 7418 8900

 Huw Jeremy

 KL Communications          gh@kl-communications.com (mailto:gh@kl-communications.com)

 Charles Gorman             +44 (0) 20 3995 6673

 Charlotte Francis

 

 

About ReSI plc

ReSI plc (LSE: RESI) is a real estate investment trust (REIT) focused on
delivering secure, inflation-linked returns with a focus on two residential
sub-sectors in UK residential - independent retirement rentals and shared
ownership - underpinned by an ageing demographic and untapped and strong
demand for affordable home ownership.

 

ReSI plc's purpose is to deliver affordable, high-quality, safe homes with
great customer service and long-term stability of tenure for residents. We
achieve this through meeting demand from housing developers, housing
associations, local authorities, and private developers for long-term
investment partners to accelerate the development of socially and economically
beneficial affordable housing.

 

ReSI plc's subsidiary, ReSI Housing Limited, is registered as a for-profit
Registered Provider of social housing and so provides a unique proposition to
its housing developer partners, being a long-term private sector landlord
within the social housing regulatory environment. As a Registered Provider,
ReSI Housing can acquire affordable housing subject to s106 planning
restrictions and housing funded by government grant.

 

In December 2024, shareholders voted for and accepted a new investment
objective which seeks to realise all the existing assets in the Company's
portfolio in an orderly manner. The Company will pursue its investment
objective by effecting an orderly realisation of its assets while seeking to
balance maximising returns for Shareholders against timing of disposals whilst
ensuring the interests of residents are protected. Capital expenditure will be
permitted where it is deemed necessary or desirable in connection to the
realisation, primarily where such expenditure is necessary to protect or
enhance an asset's realisable value, to comply with statutory or regulatory
obligations, to protect other stakeholders, to comply with the terms of any
funding arrangement or to facilitate orderly disposals.

 

About Gresham House and Gresham House Real Estate

Gresham House is an alternative asset manager committed to operating
responsibly and sustainably, taking the long view in delivering sustainable
investment solutions.

 

Gresham House Real Estate offers long-term equity investments into UK housing,
through listed and unlisted housing investment vehicles, each focused on
addressing different areas of the affordable housing problem. Each fund aims
to deliver stable and secure inflation-linked returns whilst providing social
and environmental benefits to its residents, the local community, and the
wider economy.

 

Further information on ReSI plc is available
at http://www.greshamhouse.com/real-assets/uk-housing/residential-secure-income-plc/
(http://www.greshamhouse.com/real-assets/uk-housing/residential-secure-income-plc/)
, and further information on Gresham House is available
at www.greshamhouse.com (http://www.greshamhouse.com/)

 

 

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