(Alliance News) - Residential Secure Income PLC on Friday said its net asset value declined in its first quarter, with a drop in the value of its retirement homes portfolio.
The real estate investment trust, which focuses on affordable share ownership, retirement, and local authority housing, posted an IFRS NAV of 107.7 pence as at December 31, the end of its first quarter. This completes to a 108.6p IFRS NAV on September 30.
Overall, Residential Secure's total property portfolio value fell by GBP500,000 on a like-for-like basis to GBP260.3 million due to a drop in the value of its retirement homes portfolio.
The company explained that the change resulted from "an industry-wide clarification" from UK tax agency HMRC, stating that from the start of October 2018, value added tax would be "chargeable on property managers' salaries".
This clarification hurt fourth quarter performance, having been reflected in higher service charges payable by Residential Secure.
Residential Secure declared an interim dividend of 1.25 pence per share for the three months to December 31, on track for its 5.0p per share target for its current financial year to September 2020.
In its first quarter, Residential Secure has purchased 59 apartments located at Clapham Park, London, which are to be used for shared ownership. More than half of the units purchased have been reserved at a prices in line with the target set at acquisition and leases are on track to complete starting February.
By the end of March, Residential Secure expected to have purchased the other remaining Clapham Park units, of which there are 73. Work on shared ownership debt is now in the "final stages" with completion to coincide with the remaining unit acquisitions.
Shares in Residential Secure were down 0.3% at 98.42 pence in London on Friday.
By Anna Farley; annafarley@alliancenews.com
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Residential Sec (RESI)