Ground Rents Income Fund has announced its annual results for the year ended 30 September 2015. The NAV per share at 30 September 2015 was 114.2p (2014: 104.3p), an increase of 9.5%. Profit before tax (including a £9.19m valuation gain) was £12.5m for the period (FY 2014: £4.7m (which included a £2.62m valuation gain). Basic earnings per share was 13.82p, an increase of 82.3% year-on-year (FY 2014: 7.58p). Dividends of 3.538p per share have been paid which represents a gross yield (based on issue price) of 3.44%. (FY 2014: 3.868 pence; 3.8%).
The company has completed acquisitions during the year of £27.8m as is now fully invested although the directors say that they continue to look for suitable acquisitions and have a pipeline of around £6mk of committed purchases that are expected to complete in the current financial year. These will be financed using the group’s existing cash resources, which are derived from short term loans drawn down during the year. The company says that a further £3m of acquisitions are being negotiated but that it has undrawn facilities with which it can finance these.
The company says that the market for ground rent investment is buoyant and values have increased significantly over the last year. They say that the upper end of the market is dominated by a handful of buyers who have the liquidity to purchase £1m plus portfolios quickly. They say that they have seen pricing moving up significantly with RPI reviewable rents being particularly in demand and that the traditional 25 year reviews with rents doubling have also seen a significant yield shift from around 6% in March 2012 to around 4% today. The valuation of the company’s portfolio has increased from £67m to £104m over the year. However, taking into account the cost of acquisitions during the period, the increase in the value of assets held was £10.9m, or 16%. The say that they feel the prospects for the company are positive and that the trend of increasing market values, coupled with a growing income each year, it is hoped, will have the intended effect of a growing net asset value.
Ground Rents Income posts 9.5% NAV growth for year: GRIO