Ground Rents Income Fund PLC Half year report (5844G)
July 20 2023 - 2:00AM
UK Regulatory
TIDMGRIO
RNS Number : 5844G
Ground Rents Income Fund PLC
20 July 2023
20 July 2023
Ground Rents Income Fund plc
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2023
Ground Rents Income Fund plc (the 'Company') announces its
unaudited interim results for the six months ended 31
March 2023, which are available on the Company's website, www.groundrentsincomefund.com .
Barry Gilbertson, the Company's Chair, commented:
" The significant activity carried out by the Board and
Schroders over the past several years means there is a clear
strategy to address the complex headwinds relating to Building
Safety and Leasehold Reform, and thereby to optimise value for
shareholders, whilst demonstrating best-in-class residential asset
management. We will continue to provide a high level of
transparency on progress implementing our strategy."
Financial Highlights:
-- Portfolio value increased GBP1.9 million, or 1.7%, to
GBP110.9 million (30 September 2022: GBP109.0 million), with 16%
(30 September 2022: 21%) of the portfolio by value subject to the
same Material Uncertainty Clause ('MUC') as in the 2022 Annual
Report relating to assets impacted by building safety related
defects. These impacted assets were subject to a negative valuation
adjustment of GBP9.3 million (30 September 2022: negative GBP11.4
million).
-- Progress made understanding the practical and financial
impact of the Building Safety Act 2022 on the portfolio, with a
further reduction in the asset value impacted by the MUC to 15%
post period end. Despite this progress, from discussion with the
Company's Auditors, the uncertainty that led to the Modified
Auditor's Report within the 2022 Annual Report remains
unchanged.
-- NAV of GBP90.2 million, or 94.3 pence per share ('pps'), an
increase of GBP1.7 million, or 1.8 pps (30 September 2022: GBP88.5
million, or 92.5 pps).
-- P ositive NAV total return of 3.3% (year to 30 September 2022: negative 7.4%).
-- Group Loan to Value ('LTV') of 18.9% with GBP21 million of
drawn debt, and an effective interest rate of 3.3%.
-- Following the launch of a consultation in December 2022, an
EGM was held in April 2023, with all proposals passed including a
Continuation Vote in December 2024 and a new Investment Policy
focussed on optimising value through a controlled and orderly asset
realisation, together with a continued focus on delivering best-in
class residential asset management.
-- Dividends paid over the period of GBP1.2 million or 1.25 pps.
New dividend policy approved by shareholders with dividends to be
paid on a semi-annual basis moving forward. As set out in the 2022
Annual Report, while the Modified Auditor's Report remains in
place, all future dividend payments must be withheld, despite the
Company having significant distributable reserves, cash available
to pay dividends, and good visibility on earnings.
Market context:
-- The six month period continued to be a challenging period due
to the complex issues arising from the introduction of the Building
Safety Act 2022 (the 'BSA'), the most significant regulatory reform
to the UK's built environment in almost 40 years.
-- Under the so-called 'Polluter Pays' principle, the Government
has introduced a legally binding pledge ('Pledge') that obliges
residential developers to remediate, at their own cost, all
life-critical fire-safety defects of buildings 11 metres and over
in height that they developed or refurbished in England over the
last 30 years. This includes reimbursing public funds where
relevant. To-date, 49 developers, including the top ten largest
house builders in the UK, have signed the Pledge. At the time of
writing, seven of these developers are relevant to the Company's
portfolio across 11 of the 23 currently affected assets. The
Government has also enhanced protections available to landlords who
did not develop their assets, such as the Company, from defective
building practices.
Enquiries:
Schroder Real Estate Investment Management Limited
Nick Montgomery / Matthew Riley / Chris Leek
020 7658 6000
FTI Consulting
Richard Gotla / Dido Laurimore
0203 727 1000 / Schroderrealestate@fticonsulting.com
Singer Capital Markets (Broker)
James Maxwell / Alaina Wong (Investment Banking)
Sam Greatrex (Sales)
020 7496 3000
Appleby Securities (Channel Islands) Limited (Sponsor)
Andrew Weaver / Michael Davies
01534 888 777
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