Residential Secure Income PLC NAV and Corporate Update (4688O)

TIDMRESI

RNS Number : 4688O

Residential Secure Income PLC

30 January 2019

30 January 2019

Residential Secure Income plc

Net Asset Value & Corporate Update

Residential Secure Income plc ("ReSI") (LSE: RESI), which invests in residential asset classes that comprise the stock of UK social housing providers, is pleased to announce its unaudited net asset value ("Net Asset Value" or "NAV") as at 31 December 2018 and to provide an update on its corporate activity since 30 September 2018.

Highlights:

-- IFRS NAV per share increased to 105.9 pence(1) (30 September 2018: 105.1 pence), resulting in a NAV total return for the quarter of 1.5% and taking the NAV total return since the admission of ordinary shares on 12 July 2017 to 11.1%

-- Total portfolio value of GBP249.9 million, reflecting an increase in the like-for-like value of GBP0.9 million

-- First shared ownership transaction with GBP16.5 million purchase of portfolio of 34 new build homes from Crest Nicholson, following July announcement that ReSI's wholly owned subsidiary ReSI Housing Limited had achieved Registered Provider status with the Regulator of Social Housing

-- Acquisition of a 39-unit Leased Rental Homes portfolio for a total consideration of GBP6.5 million

   --      GBP40 million of 25-year fixed rate debt secured against 823 retirement homes portfolio 

-- Interim dividend announced of 1.25 pence per Ordinary Share, in line with the 5 pence per Ordinary Share target for the current financial year reaffirmed in the 30 September 2018 accounts(2)

-- Post period GBP300 million Housing Investment Partnership agreement entered into with Morgan Sindall Investments to initially target 1,500 new shared ownership homes

(1) Reflecting an independent valuation of the property portfolio prepared on an IFRS basis.

(2) These are targets only and not a profit forecast. There can be no assurance that the targets will be met.

The movement in NAV since publication of annual results is as follows:

 
                                 GBPm    Pence per 
                                          share 
 Net Asset Value as at 30(th) 
  September 2018                 183.6   105.1 
                                ------  ---------- 
 Net Income for period           1.3     0.8 
                                ------  ---------- 
 Valuation change                0.9     0.5 
                                ------  ---------- 
 Dividend paid                   (1.3)   (0.7) 
                                ------  ---------- 
 Net capital reduction           (3.4)   (2.0) 
                                ------  ---------- 
 Impact of reduction in 
  number of shares(3)                    2.2 
                                ------  ---------- 
 Net Asset Value as at 31(st) 
  December 2018                  181.1   105.9 
                                ------  ---------- 
 

(3) The increase in Net Asset Value per share from the share buyback was due to purchasing shares at a discount to NAV.

Ben Fry, of ReSI Capital Management Ltd, ReSI's fund manager, said:

"The increase in NAV over the period primarily reflects the net rental income from acquisitions, together with the valuation uplift from rental growth in the retirement and local authority housing portfolios. After successfully amassing a significant portfolio of income producing retirement homes and local authority housing, we are now predominantly focused on building further scale with a portfolio of shared ownership properties. Having become, through our wholly owned subsidiary ReSI Housing Limited, the first listed investment fund to achieve Registered Provider status in July 2018, we are well positioned to take advantage of the structural drivers underpinning the housing market whilst leveraging the strength of our public and private sector relationships."

The NAV has been calculated in accordance with International Financial Reporting Standards and incorporates the independent valuation on a "sum of the parts" basis, in accordance with, and required by, international accounting standards. The NAV does not include a provision for an interim dividend for the period from 1 October 2018 to 31 December 2018.

FOR FURTHER INFORMATION, PLEASE CONTACT:

 
   ReSI Capital Management Limited 
    Ben Fry 
    Jonathan Slater 
    Alex Pilato 
    Mark Rogers 
    Richard Stubbs                    [phone] 
 
   Jefferies International Limited 
    Stuart Klein 
    Gary Gould                        [phone] 
 
 

FTI Consulting [phone]

Richard Sunderland Email: [e-mail]

Claire Turvey

Richard Gotla

NOTES:

Residential Secure Income plc (LSE: RESI) is listed on the premium segment of the Official List of the UK Listing Authority and was admitted to trading on the Main Market of the London Stock Exchange in July 2017.

ReSI has been established to invest in portfolios of Homes across residential asset classes that comprise the stock of Housing Associations and Local Authorities, comprising Shared Ownership Homes and Rental Homes (being Market Rental Homes, Functional Homes and Sub-Market Rental Homes) throughout the UK.

ReSI is managed by ReSI Capital Management Limited, a wholly owned subsidiary of TradeRisks Limited which has a 17 year track record of executing transactions within the UK social housing sector and, to date, has arranged funding of over GBP10 billion in the social housing, care and other specialist residential property sectors.

ReSI seeks to deliver secure, long-dated, inflation-linked income returns through investment in UK social housing. It aims to meet demand from Housing Associations and Local Authorities for alternative equity-like financing sources that allows them to recycle capital back into socially and economically beneficial new housing, making a meaningful contribution to the UK housing shortage.

Homes acquired by ReSI will predominantly be on a freehold or long leasehold basis (typically 99 years or more to maturity) and benefit from long term (typically 20 years plus) inflation-adjusted cash flows. Acquisitions by ReSI will be limited to Homes with sufficient cashflows, counterparty credit quality and property security that allow the Fund Manager to arrange long-term investment grade equivalent debt.

Further information on ReSI is available at www.resi-reit.com

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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January 30, 2019 02:00 ET (07:00 GMT)