Real Estate Investors has announced its interim results for the six months to 30 June 2016. The company says that the period has seen record rental income, portfolio and dividend growth although the company’s EPRA NAV per share fell by 2.2% to 63.5p (31 December 2015: 64.5p).
At the end of the period the company’s gross property assets were £194.5m, an increase of 23.5% (31 December 2015: £157.5m). Revenue was £6.0m, up 58% (H1 2015: £3.8m), whilst EPRA EPS was up 160% year-on-year to 1.3p per share (H1 2015: 0.5p). The company paid a second quarter dividend of 0.625p, making total dividend for the first half of 1.25p. This represents a 25% increase year-on-year (H1 2015: 1.0p).
The company says that its profit before tax, revaluation and loss on valuation of interest rate swaps of £2.4m is an increase of 60% (H1 2015: £1.5 million). However, it incurred a pre-tax loss of £560,000 (H1 2015: profit £8.1 million) due to loss on revaluation of interest rate swaps of £1.2m (H1 2015: £690,000 surplus) and property revaluation loss of £1.8m (H1 2015: £5.9m surplus), both of these being non-cash items. The average cost of debt was reduced to 4.1% (FY 2015: 5.7%) and it has cash and available facilities of £14m (FY 2015: £11m).
From an operational perspective, total acquisitions of £37.3m (inclusive of costs) were made during H1. The company says that uncertainty around the EU referendum allowed it to secure these assets. The company also says that, with a combined income of £3.6 million and a potential reversion to £3.8 million, the acquisitions represent a 9.1% net initial yield and 10.2% reversionary yield (excluding land acquisition). They also say that the acquisitions have significant asset management potential. The company’s annualised contracted rental income has increased to £15.6 million, up 31% (FY 2015: £11.9 million), whilst overall occupancy increased to 92.6% – (FY 2015: 89%). The number of tenants has increased by 14.2% to 241 (2015: 211) whilst the WAULT has fallen to 4.8 years (31 December 2015: 5.2 years). The company says that there were 19 new lettings and 3 lease renewals in H1 2016.
In terms of outlook, the company’s CEO, Paul Bassi, says that there remains a positive appetite for quality income producing assets in their region, as demand continues to outstrip supply for investment property of most types and there is almost no sign of distressed vendors or discounted asset sales. He says that they will consider sales at a surplus to existing valuations, subject to acquiring further property to maintain the company’s income levels.
Real Estate Investors announces record rental income, portfolio and dividend growth : RLE