Residential Sec Regulatory News (RESI)

29 April 2019

Residential Secure Income plc

Net Asset Value & Corporate Update

Residential Secure Income plc ("ReSI") (LSE: RESI), which invests in affordable shared ownership, retirement and local authority housing, is pleased to announce its unaudited net asset value ("Net Asset Value" or "NAV") as at 31 March 2019 and to provide an update on its corporate activity since 31 December 2018.

Financial highlights:

· IFRS NAV per share increased to 107.9 pence1 (31 December 2018: 105.9 pence), resulting in a NAV total return for the quarter of 3.2 p and taking the NAV total return to 4.7p for the year to date and 14.1p since the admission of ordinary shares on 12 July 2017

· Total property portfolio value of £260.7 million, reflecting an increase in the like-for-like value of £4.2 million and net additions of £6.6 million, primarily in the retirement homes portfolio

· The increase in like-for-like value of £4.2 million is driven by a valuation uplift across the portfolio resulting from contractual inflation-linked growth of rent, together with the effect of the previously announced lease extensions within the retirement homes portfolio

· A further £60 million capital committed for the acquisition of 132 apartments at Clapham Park, for delivery as Shared Ownership utilising government grant funding. The apartments were purchased from Metropolitan Thames Valley Housing, one of the UK's largest Housing Associations, who will retain management of the portfolio

· Interim dividend announced of 1.25 pence per Ordinary Share announced for the period from 1 January 2019 to 31 March 2019, in line with the target of 5.0 pence per Ordinary Share for the current financial year2 

Update on corporate activity since 31 December 2018:

· £300 million Housing Investment Partnership agreement entered into with Morgan Sindall Investments to initially target 1,500 new Shared Ownership homes

· Extended the lease term on 279 long leasehold retirement properties to 150 years, increasing the average unexpired lease term of the 2,100 leasehold units in the portfolio to 131 years and enhancing portfolio valuation

· £14.5 million debt facility secured against 289 units in ReSI's local authority housing portfolio

· £4.0 million debt facility secured against 102 units in ReSI's retirement housing portfolio

1 Reflecting an independent valuation of the property portfolio prepared on an IFRS basis.

2 These are targets only and not a profit forecast. There can be no assurance that the targets will be met.

The movement in NAV since publication of annual results is as follows:

Ben Fry, of ReSI Capital Management Ltd, ReSI's fund manager, said:

"The increase in NAV over the period primarily reflects the valuation uplift mainly resulting from contractual inflation-linked rental growth in the retirement and local authority housing portfolios, together with the previously announced lease extensions we secured within the retirement homes portfolio.

Having successfully amassed a significant portfolio of income producing retirement homes and local authority housing working only with investment grade counterparties, we are now predominantly focused on building further scale with a portfolio of Shared Ownership properties, contributing positively to the delivery of affordable housing in the UK whilst growing income and delivering enhanced returns for shareholders. We have an exciting pipeline of Shared Ownership opportunities to grow the portfolio with a range of institutional partners, including Metropolitan Thames Valley Housing, Morgan Sindall and Crest Nicholson, in an increasingly vital residential use tenure."

The NAV has been calculated in accordance with International Financial Reporting Standards and incorporates the independent valuation on a "sum of the parts" basis, in accordance with, and required by, international accounting standards. The NAV does not include a provision for the interim dividend for the period from 1 January 2019 to 31 March 2019.

FOR FURTHER INFORMATION, PLEASE CONTACT: 

FTI Consulting +44 (0) 20 3727 1000

Richard Sunderland Email: resi@fticonsulting.com

Claire Turvey

Richard Gotla

About Residential Secure Income plc

Residential Secure Income plc (LSE: RESI) is listed on the premium segment of the Official List of the UK Listing Authority and was admitted to trading on the Main Market of the London Stock Exchange in July 2017.

ReSI invests in shared ownership and rental portfolios of Homes across residential asset classes that comprise the stock of Housing Associations and Local Authorities throughout the UK. To date it has committed c. £300 million, comprising a portfolio of 2,674 properties, across a mixture of shared ownership, local authority and retirement housing.

ReSI is managed by ReSI Capital Management Limited, a wholly owned subsidiary of TradeRisks Limited which has an 18 year track record of executing transactions within the UK social housing sector and, to date, has arranged funding of over £10 billion in the social housing, care and other specialist residential property sectors.

ReSI seeks to deliver secure, long-dated, inflation-linked income returns through investment in UK social housing. It aims to meet demand from housing developers (Housing Associations, Local Authorities and private developers) for long-term investment partners who support them to accelerate development of socially and economically beneficial new housing making a meaningful contribution to the UK housing shortage.

Homes acquired by ReSI are predominantly be on a freehold or long leasehold basis (typically 99 years or more to maturity) and benefit from long term (typically 20 years plus) inflation-adjusted cash flows. Acquisitions by ReSI are limited to homes with sufficient cashflows, counterparty credit quality and property security that allow the Fund Manager to arrange long-term investment grade equivalent debt.

Further information on ReSI is available at www.resi-reit.com