AUS
NZ
UK
CA
USA
IND
Highlights
- Earnings Growth: EPRA adjusted earnings rose by 9% to £9.5 million, driven by strong rent growth and operational efficiency.
- Robust Portfolio Performance: 5.8% like-for-like rent growth, record retirement occupancy at 97%, and 99% rent collection for the year.
- Strategic Transition: Local authority portfolio fully divested, and a new investment policy approved to wind down the portfolio with long-term debt secured at favorable terms.
Residential Secure Income plc (LSE:RESI), a specialist in independent retirement living and shared ownership, has announced its financial results for the year ending September 30, 2024. The company highlighted strong operational performance and provided updates on its strategic pivot toward portfolio realisation and wind-down.
Financial Performance
ReSI achieved a 9% growth in EPRA adjusted earnings, reaching £9.5 million, up from £8.7 million in FY23. This growth was fueled by a 5.8% like-for-like rent increase and stringent cost management. Dividend coverage rose significantly to 124% (FY23: 91%), even as total dividends paid decreased to 4.12p per share from 5.16p in the previous year.
Despite positive earnings, EPRA Net Tangible Assets (NTA) total return fell by 3.7%, though this marks a significant recovery from the 18.1% decline in FY23. The impact of higher long-term gilt yields continued to weigh on valuations, resulting in a 3% like-for-like decline and a 60-basis-point outward yield shift.
ReSI maintained a Loan-to-Value (LTV) ratio of 52% (FY23: 50%) with a 20-year average debt maturity. The IFRS NAV benefited from a £12.8 million uplift related to the valuation of USS debt, adding 6.9p to the IFRS total return.
Operational Achievements
The portfolio, comprising 2,975 homes valued at £326 million, demonstrated resilience and growth. Key achievements included:
- Record Retirement Occupancy: Average occupancy rose to 96%, with a peak of 97% in September 2024.
- Shared Ownership Success: The shared ownership portfolio remained fully occupied throughout the year.
- High Rent Collection: Over 99% rent collection was achieved, matching FY23 levels.
- Resident Satisfaction: 80% satisfaction was recorded with the in-house retirement property management team.
Additionally, the portfolio offers an £89 million reversionary surplus, representing a 29% uplift in vacant possession value compared to fair value.
Strategic Updates and Outlook
Post-balance sheet, ReSI completed the divestment of its local authority portfolio, generating £15 million in net proceeds, slightly above FY23 book value. Floating rate debt was fully repaid, leaving the company with only long-term drawn debt. The largest loan, fixed at 3.5%, matures in 2043, supporting financial stability during the portfolio wind-down process.
Shareholders have approved a new investment policy aimed at realising the portfolio's value and winding down the company. Key steps include the appointment of sales agents and preparation for formal sale processes.
