GCP Infrastructure Investments discusses social housing in results announcement – GCP Infrastructure Investments (GCP) has reported half-yearly results for the period ended 31 March 2019.
Key numbers from the period include:
- Shareholder total return for the period of 4.5% (31 March 2018: -3.8%).
- Profit for the period of £33.6m (31 March 2018: £39.5m).
- Loans advanced totalling £39.1m, secured against UK renewable energy, social housing and PFI projects.
- Company NAV per ordinary share at 31 March 2019 of 112.54 pence per share (31 March 2018: 112.39 pence per share).
Pausing growth of social housing business but still attracted to its model
In his statement, GCP’s chairman, Ian Reeves CBE, discussed the trust’s exposure to the social housing sector: “The regulator for social housing (“RSH”) published a note in April detailing its assessment of long-lease models of finance in the supported living sector. The company is exposed to loans totalling 15% of total assets secured against this model of financing. The RSH has noted a number of concerns relating to the financial viability and governance of a certain number of registered providers (“RPs”) operating in this sector. This principally relates to the sensitivity of such RPs to changes to housing benefit linked to the low operating margins and small balance sheets of such entities. The company does not consider this to be a new risk and has adopted the view that the continuation of housing benefit in the supported living sector represents an attractive investment model. Whilst the company’s position remains unchanged in this respect, we are actively working with investee companies and the associated RPs to seek to address the regulators concerns. Until such concerns are resolved, the company does not intend to make material new investments in this sector.”
GCP: GCP Infrastructure Investments discusses social housing in results announcement