ReSI outperforms its expectations- Residential Secure Income plc (“ReSI”) (RESI) outperforms its expectations for the year since its IPO in July 2017. The NAV total return for the year was 9.5% which exceeded the 8%+ target set at IPO. This was driven by 7.0% uplift in portfolio valuation to £225.2 million compared to their acquisition costs. The share price increased to 105.1 pence per share which is a 7.3% increase since IPO. Earnings per share for the year was 9.0 pence. The income from rental properties was £10.5 million which is representing a 5.0% net yield on capital deployed. The dividends for the year were 3.0 pence per share. The buy back program from April 2018 resulted in 9,304,729 shares purchased at 92.5p. ReSI is targeting a 5% yield for the year starting on 1 October 2018 with a target return of 8%+ per year.
Since IPO, ReSI has invested £234 million in acquiring a portfolio of 2,435 residential units serving retirement, Local Authority housing and shared ownership tenants. ReSI deployed funds of £184 million through four separate transactions where they acquired a portfolio of 2,112 residential retirement units across England, Wales, and Scotland. ReSI made two acquisitions in the Local Authority housing sector totalling £34 million which consist of 289 self-contained flats in the centre of Luton and are leased to Luton borough Council. They also made two acquisitions after their fiscal year in shared ownership housing in the London Borough of Barnet. The acquisition consists of 34 newly built homes with a purchase price of £16.45 million.
ReSI Housing Limited (subsidiary of ReSI) also became the first publicly listed company to be a Registered Provider with the Regulator of Social Housing.
ReSI was also able to raise £93 million of 25 year fixed rate debt (including £40 million post fiscal year) at a blended rate of 3.47%.
Jonathan Slater, Chief Executive of ReSI Capital Management, had this to say about the performance this year:
“After a slower than expected start, the pace of investment accelerated significantly in the second half of the period and has continued since, allowing us to build a large and diverse portfolio of high quality, immediately income producing properties. In addition to adding value to the portfolio through our asset management, we have continued to build a pipeline of investments that meet our strict investment criteria and have identified and negotiated transactions, currently undergoing detailed due diligence, which would deploy all of ReSI’s remaining capital with a predominate focus on Shared Ownership.
“With the Company achieving the landmark of becoming the first publicly listed investment fund to become a Registered Provider of Social Housing, through its ReSI Housing subsidiary, ReSI is now able to acquire properties designated as affordable and which are funded by government grant. This has significantly expanded ReSI’s pool of potential investments in a sector which offers clear potential to grow the Company’s portfolio and generate visible and sustainable income on behalf of our shareholders, while supporting the delivery of much needed affordable accommodation across the UK.”
Robert Whiteman, Chairman of ReSI plc, added:
“There continues to be a shortage of housing in many parts of the United Kingdom, resulting in high levels of demand, and ReSI has seen strong appetite from Housing Associations, Local Authorities and private developers for new sources of capital to invest in these areas. As a result of this demand the business is well positioned to build on the strong financial performance delivered during the period and continue growing in a disciplined manner.
“Given the solid progress in building our portfolio, its performance and the outlook for the Company, the Board reaffirms its target dividend yield of 5% per annum, which we expect to increase broadly in line with inflation, and its target total return of in excess of 8% per annum.”
RESI- ReSI outperforms its expectations