1st Quarter 2022 NAV and Corporate Update
27 January 2022
Residential Secure Income plc
Net Asset Value & Corporate Update
Residential Secure Income plc (LSE: RESI), which invests in independent retirement living and shared ownership to deliver secure, inflation-linked returns, is pleased to announce its unaudited first quarter net asset value ("Net Asset Value" or "NAV") as at 31 December 2021 and to update on recent corporate activity for the period.
Income/Dividends
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Dividend of 1.29p paid out in line with increased target [1] of 5.16p per shareto be paid in FY22 and a second dividend of 1.29p declared today |
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Dividend 98% covered by recurring income during the quarter |
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in line with target 1 to be at least fully covered for the year (with majority of rental income increases typically in second half of ReSI's financial year) |
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inflation linked rental income provides ongoing platform for dividend progression |
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99% rent collection maintained, in line with historic and pre-pandemic levels |
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Resilient Financial Position
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EPRA Net Tangible Assets total return for the quarter of 1.7% (1.8 pence per share) |
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Total property portfolio of 3,050 homes with a value of £351 million [2] up 0.4% or £1.4 million on a like-for-like fair value basis |
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the portfolio has an average EPRA NIY of 3.9% driven by increasing rent as shared ownership portfolio becomes fully occupied |
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portfolio is focused on £216millionof independent retirement living and £104million shared ownership homes |
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valuation movement driven by like-for-like rental growth from ReSI's inflation-linked leases |
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ReSIcontinues to maintain a robust balance sheet with a loan to value ratio of 47%. Total debt was £169million at 31December 2021 with a long average 22 year maturity and low weighted average cost of 2.3% |
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Further operational delivery
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Retirement voids continue to be maintained at pre-pandemic average of 7% |
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20 occupied shared ownership homes acquired (£1.9million), out of total of 46 committed at year end |
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Rent roll increased by 2.9% during the quarter, driven by |
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completions on shared ownership homes and |
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like for like rental growth of 2.8% due to inflation linked rent reviews on 514 properties in the quarter (20% of rent roll). |
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NAV Movement
The movement in NAV since 30 September 2021 is as follows:
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IFRS NAV |
EPRA NTA |
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£'m |
Pence per share |
£'m |
Pence per share |
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Net Asset Value at 30 Sept 2021 |
182.4 |
106.6 |
184.7 |
107.9 |
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Net Income for period |
2.2 |
1.3 |
2.2 |
1.3 |
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Valuation change * |
0.0 |
0.0 |
1.1 |
0.6 |
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Revaluation of trading properties |
n/a |
n/a |
-0.2 |
-0.1 |
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Purchase Costs / Transfer tax |
n/a |
n/a |
0 |
0 |
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Total Return |
2.2 |
1.3 |
3.1 |
1.8 |
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Dividend paid |
-2.2 |
-1.3 |
-2.2 |
-1.3 |
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Net Asset Value at 31 December 2021 |
182.4 |
106.6 |
185.6 |
108.4 |
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* Valuation change for EPRA NTA excludes the movement in fair value of financial instruments |
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Outlook
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Inflation-linked dividend and capital growth supported by stable, resilient cash-generative assets, including shared ownership leases of over 100 years |
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Strong governance through our wholly owned Registered Provider of Social Housing |
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Ongoing shortage of UK affordable housing, creating attractive investment opportunities |
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Strongly positioned for further growth and to meet the housing market's two biggest problems |
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inability to access home ownership, which is getting worse; and |
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growing elderly population requiring affordable, independent later living |
Ben Fry, Head of Housing Investment at Gresham House, commented:
"ReSI plc has delivered another resilient quarter, with increasing income continuing to support our increased inflation-linked dividend. Rent collections, at 99% of rents, remain as robust as during and before the pandemic.
"The secular tailwinds remain strong. As the nation continues to adapt to post-pandemic working and living patterns, the ageing population and rising house prices continue to drive demand for high quality retirement property and affordable homes.
"With our portfolio of inflation-linked rental housing continuing to deliver both inflation-protected income and meet homeowners' needs for affordable rents, ReSI plc is well placed for future capital, income and portfolio growth."
For further information, please contact:
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ReSI Capital Management Limited / Gresham House Housing Ben Fry Alex Pilato
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+44 (0) 20 7382 0900
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Jefferies International Limited Stuart Klein Tom Yeadon
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+44 (0) 20 7029 8000 |
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KL Communications Charles Gorman Will Sanderson Millie Steyn |
+44 (0) 20 3995 6673
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Notes to Editors
Residential Secure Income plc (LSE: RESI) is a real estate investment trust (REIT) focused on delivering secure, inflation-linked returns with a focus on two resident 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 targets1 a secure, long-dated, inflation-linked dividend of 5.16 pence per share p.a. (paid quarterly) and a total return in excess of 8.0% per annum. Including recently committed acquisitions, ReSI's portfolio comprises 3,050 properties, with an (unaudited) IFRS fair value as at 31 December 2021 of £351m [i] .
ReSI'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'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.
Acquisitions by ReSI are limited to homes with sufficient cashflows, counterparty credit quality and property security to be capable of supporting long ‑ term investment grade equivalent debt. ReSI does not manage or operate stock and uses experienced and credit-worthy managers.
ReSI is managed by ReSI Capital Management Limited, whose immediate parent company, TradeRisks Limited, has been active within the social housing sector for over 20 years as a funding arranger and advisor and, over the last five years, as an investor through ReSI.
ReSI Capital Management and its parent, TradeRisks, were acquired by Gresham House in March 2020, further increasing the investment expertise available to ReSI. The housing investment team at Gresham House has 19 members and growing, with an average of 18 years' relevant experience, covering fund management, housing investment, social housing management and financial and risk expertise.
Gresham House plc is a London Stock Exchange quoted specialist alternative asset manager committed to operating responsibly and sustainably, taking the long view in delivering sustainable investment solutions.
Further information on ReSI is available at www.resi-reit.com , and further information on Gresham House is available at www.greshamhouse.com
[1] This is a target only and not a profit forecast. There can be no assurance that this target will be met.
[2] Excluding the finance lease gross up and including £7m of committed acquisitions
[i] excluding the finance lease gross up and including £7m of committed acquisitions
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