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Highlights
- Net Asset Value (NAV) remains steady at 85p per share; property assets grow by 2%.
- 100% rent collection from Specialist Supported Housing tenants reflects portfolio stability.
- Company faces rising operational costs and liquidity challenges in the public market.
Walls & Futures REIT plc (LSE:WAFR), the Ethical Housing Investor and developer, has released its unaudited interim results for the six months ending 30 September 2024. Despite navigating a challenging economic environment, the company reported resilient performance, emphasizing its commitment to long-term value creation in the social housing sector.
The company’s Net Asset Value (NAV) remained steady at 85p per share, unchanged from 31 March 2024, while property assets saw a modest increase of 2% (£40,000). WAFR achieved a profit of £8,590 during the period, a decline compared to the £45,508 profit recorded in the same period last year. Notably, the company maintained a 100% rent collection rate for its Specialist Supported Housing portfolio, demonstrating the reliability of its tenant base and the strength of its assets.
CEO’s Perspective
In his statement, CEO of WAFR highlighted the resilience of the company’s portfolio despite the broader economic stagnation and uncertainty. He expressed optimism about future growth opportunities, particularly in light of the UK government’s ambitious plan to construct 1.5 million new homes over the next five years. With a focus on social and affordable housing, WAFR sees a unique opportunity to leverage policy changes aimed at unlocking private capital for addressing the housing crisis.
However, the CEO acknowledged macroeconomic headwinds, including the slower-than-expected reduction in the Bank of England’s Base Rate, which has tempered optimism in the real estate market and delayed the company’s plans to raise fresh equity.
Operational Challenges
WAFR continues to grapple with rising costs associated with being a publicly listed company, particularly in regulatory and audit fees. A report from the Quoted Companies Alliance noted a 127% average increase in audit fees between 2017/18 and 2022/23, with smaller companies like WAFR experiencing significant impacts.
Liquidity remains a critical challenge for the company. The CEO noted that limited share liquidity has caused substantial discounts between WAFR’s share price and its Net Asset Value. To address this issue, the company has engaged with the Exchange and its Corporate Adviser to explore strategies for improving market liquidity.
