(Alliance News) - Grit Real Estate Income Group Ltd on Monday said it remains confident in its strategy while maintaining an "appropriately cautious stance" in light of potential longer-term effects from Covid-19.
The pan-African real estate investment and management company reported profit from operations for the six months ended December 31 of USD12.9 million, up 20% from USD10.7 million in the same period of 2019, as a result of "strong operating cost control and robust portfolio revenue performance that offset revenue weakness in the retail sector."
Gross rental income in the period was USD31.6 million, down 0.1% from USD31.7 million a year prior, with a 19% decline in revenue from the retail sector, amounting to USD1.9 million, being offset by acquisitions and additions worth USD1.9 million. Grit said revenue in retail, office and corporate accommodation sectors was hurt by lower operating costs, which are recovered from tenants.
Adjusted EPRA earnings per share was 3.16 US cents, which was down 44% from 5.67 cents in 2019 as a result of one-off gains a year before that did not repeat.
EPRA net asset value per share was 124.4 US cents at Dec 31, up 6.3% from 117.1 cents at June 30, with the growth helped by currency movements and by operating earnings offsetting negative valuation impacts on retail assets, Grit said.
Grit said its loan to value on December 31 was 49.3%, down from 50.2% on June 30 as a result of part disposals of Acacia Estates and reductions in revolving credit facility balances.
The company declared a 1.50 US cents dividend for the six months to December 31, down from 5.25 USD cents a year before. The amount of the dividend, though down from a year before, was made possible by recent strong rent collections, Grit said. It also will consider a further one-off quarter-end dividend in 2021, which will depend on continued progress towards Grit's loan-to-value target of 45% and sustained strong cash collections.
"With our expertise in African real estate, and our team's experience, knowledge, skill sets and relationships in various regions, we will continue to optimise assets and create value through proactive asset management and risk-mitigated pre-funding models to support NAV growth. The company aims to return to paying an attractive income distribution and generating total annual return growth and is well positioned to capitalise on significant recovery potential of the African continent from its unique high-quality portfolio of properties. We are assessing a wide number of options to fund our refocused investment pipeline of high-quality accretive assets leased to multinational corporates and attracting hard currency rental streams, including further asset recycling and hybrid instruments," said Chief Executive Bronwyn Knight.
"The recent transfer to the premium segment of the official list of the Financial Conduct Authority, and the migration of our corporate seat to Guernsey is expected to facilitate Grit's inclusion in the FTSE Indices. This, in turn, is anticipated to help raise Grit's profile with investors, improve liquidity in Grit's shares and place Grit in an enhanced position to fund its accretive pipeline of investments," she added.
Grit said it has moved its corporate domicile to Guernsey from Mauritius this month to satisfy a key eligibility requirement for inclusion in FTSE indices, which relates to a company's nationality. Grit will maintain its secondary listing on the Stock Exchange of Mauritius, where it is an SEM10 Index constituent.
Shares in Grit Real Estate Income were up 1.9% at 53.00 pence in London on Monday, giving a market capitalisation of GBP175.6 million.
By Zoe Wickens; zoewickens@alliancenews.com
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Grit Real Est. (GR1T)