TIDMGRIO
RNS Number : 9658V
Ground Rents Income Fund PLC
17 December 2021
Ground Rents Income Fund plc
("GRIO"/ the "Company" / the "Group")
FULL YEAR RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2021
Progress delivering strategy in the face of challenging market
headwinds
Ground Rents Income Fund plc (the "Company"), the real estate
investment trust ("REIT") investing in long-term, ground rent
assets across the United Kingdom, announces its audited full year
results for the year ended 30 September 2021.
Key financial highlights
-- Net Asset Value ("NAV") of GBP99.7 million (30 September
2020: GBP102.6 million) or 103.1 pence per share ("pps") (30
September 2020: 105.7pps), a decline of 2.7 pps.
-- The NAV was positively impacted by the reversal of the GBP2.9
million provision in connection with Beetham Tower in Manchester
and the share buy back. This was however offset by the uncovered
dividend, valuation discounts relating to building safety works and
general market uncertainty fuelled by regulatory headwinds.
-- Independent portfolio valuation of GBP119.4 million 30
September 2021, a decrease of 3.9% compared to 30 September
2020.
-- Dividends paid of GBP3.8 million or 3.96pps, which, together
with the share buy back delivered a NAV combined total return of
1.3%.
-- From December 2021, annual dividend to be rebased to 3.0 pps
which is expected to be fully covered by recurring earnings during
the full year ending September 2022.
-- Resilient balance sheet with a consolidated loan to value of 16.3%.
Key operational highlights
-- Resolution of the complex historic litigation at Beetham
Tower protects the Company and subsidiaries from related known
litigation and freeholder obligations.
-- Ground rent collection remained in line with pre-pandemic collection rates at 93.8%.
-- 46% of Company's ground rent income due to be reviewed in the
next five years of which 94% benefits from fixed or
inflation-linked increases, providing a solid base for a
progressive future dividend.
-- Building remediation projects ongoing where successful
Building Safety Fund applications on behalf of leaseholders should
mitigate valuation discounts.
-- Ancillary income fallen to GBP751,139 (30 September 2020:
GBP1.2 million) due to a challenging insurance market that has
restricted commissions, and lower aggregated consent fees due to
subdued transaction levels in the residential apartment market.
-- Significant work ongoing improving the liquidity of the
ongoing portfolio and preparing for enhanced regulatory
requirements, including new appointments with key service
providers.
Commenting, Barry Gilbertson, Chair, Ground Rents Income Fund
plc, said:
"The Company is operating in a challenging environment with a
high level of regulatory and media scrutiny. Whilst the
Government's leasehold reform programme and emerging building
safety 'polluter pays' principle both still lack clarity, we are
focussed on protecting shareholders' interests as well as
delivering best in class residential asset management.
"Notwithstanding the range of headwinds, rising inflation
expectations and an accommodative monetary policy have historically
been supportive towards long-term, inflation-linked, heavily
collateralised assets such as a ground rent portfolio. These
economic circumstances should benefit the Company's underlying cash
flows, with 71% of the portfolio's ground rent income having some
form of inflation linkage."
The accounts for the year ended 30 September 2021 are available
below, and will shortly be available on Company's website,
www.schroders.com/grio .
http://www.rns-pdf.londonstockexchange.com/rns/9658V_1-2021-12-16.pdf
Enquiries:
Schroder Real Estate Investment Management Limited
Chris Leek / Nick Montgomery / Matthew Riley / James Lowe
020 7658 6000
Singer Capital Markets (Broker)
James Maxwell / Kailey Aliyar (Investment Banking)
Sam Greatrex (Sales)
020 7496 3000
Appleby Securities (Channel Islands) Limited (Sponsor)
Andrew Weaver / Chris Smedley
01534 888 777
FTI Consulting
Dido Laurimore / Richard Gotla/ Oliver Parson
0203 727 1000
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