Secure Income REIT posts impressive half-year results – that included a 3.4% uplift in net asset value (NAV) per share and a total shareholder return of 8.2%.
The company, which invests in long-term index-linked income producing property, reported adjusted earnings per share of 8.1p for the six months to 30 June 2019, a 30.6% jump compared to first six months of 2018. Dividend per share was 30.9% up year-on-year to 7.9p.
Its portfolio, which predominantly comprises healthcare, leisure and budget hotels, increased in value by 2% to £2.05bn, mainly off the back of a 1.9% uplift in rents.
Post-period, in July, the company sold a portfolio of eight hospitals to MPT, a US specialist healthcare REIT, for £347m – 16% above its 30 June 2019 book value. The sale means the company is sitting on a cash reserve of £232m.
At its results presentation today, Nick Leslau, chairman of Prestbury Investments – Secure Income REIT’s adviser, said this gave it great “optionality” in an uncertain landscape.
“We do not want cash sitting around doing nothing,” he said. “If things get really bad and an opportunity pops up, we’ll use it. If things get really, really bad we have that there to provide comfort. We have to react to the circumstances before us.”
The company said it could also return the money to shareholders as a special dividend and or capital return.
[QD comment: The sale of the portfolio of hospitals was seen by many in the property industry as Nick Leslau calling the top of the market. In reality, it is just Secure Income REIT doing really good business. It was first approached by MPT a year ago with a proposition to buy all of Secure Income REIT’s hospital portfolio. That was rebuffed but it returned this year seeking a deal for part of the portfolio. Secure Income REIT put a portfolio together of its eight least performing assets and put a premium price on it and the deal was struck – a whopping 16% ahead of a valuation that was given just days before. The cash reserves it now has gives Secure Income REIT the ability to act fast and pounce on any opportunities that may arise during the next few months as Brexit plays out.
The majority of the company’s income (59%) is subject to upward-only RPI-linked rent review – not a bad position to be in with the likely inflationary pressures that a no-deal Brexit or a Corbyn government would bring.]
SIR : Secure Income REIT posts impressive half-year results
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