Residential Sec Regulatory News (RESI)

31 January 2020

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 first quarter net asset value ("Net Asset Value" or "NAV") as at 31 December 2019 and to provide an update on its corporate activity.

Financial highlights:

·; IFRS NAV per share of 107.7 pence1 (30 September 2019: 108.6 pence), resulting in a total return for the quarter of 0.4 pence.

·; Total property portfolio value of £260.3 million, reflecting a decrease in the like-for-like value of £0.5 million, primarily in the retirement homes portfolio. The change in valuation was due to an industry-wide clarification from HMRC2 that from 1 November 2018 VAT is chargeable on property managers' salaries. This has impacted this quarter after being reflected in increased service charges payable by ReSI.

·; Interim dividend announced of 1.25 pence per Ordinary Share for the period from 1 October 2019 to 31 December 2019, in line with the target of 5.0 pence per Ordinary Share for the current financial year3.

Update on corporate activity since 30 September 2019:

·; On the 29th January 2020, ReSI completed its purchase of 59 apartments at Clapham Park intended for shared ownership. Over half of the purchased units are already reserved by customers at sales price at least in line with the target at acquisition, who are expected to complete on shared ownership leases in February 2020 from when the units will be income producing. The purchase of the remaining 73 units at Clapham Park that ReSI has committed to (bringing the total to 132 units) will complete before the end of March 2020, in line with expectations set out in the 2019 Annual Report.

·; The work on the shared ownership debt has advanced to final stages and is now expected to complete simultaneously with the completion of the remaining 73 units at Clapham Park.

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

2 Customs and Excise Brief 03/94

3 This is a target only and not a profit forecast. There can be no assurance that this target will be met.

The movement in NAV since 30 September 2019 is as follows:

*Please note that values do not sum to total due to rounding differences  

FOR FURTHER INFORMATION, PLEASE CONTACT: 

NOTES:

Residential Secure Income plc (LSE: RESI) is a real estate investment trust (REIT) listed on the premium segment of the Main Market of the London Stock Exchange with the objective of delivering secure inflation linked returns by investing in affordable shared ownership, retirement and Local Authority housing throughout the UK.

ReSI targets a secure, long-dated, inflation-linked dividend of 5.0 pence per share p.a. (paid quarterly) and a total return in excess of 8.0% p.a. and has to date committed c. £300 million, assembling a portfolio of 2,680 properties.

ReSI aims to make a meaningful contribution to alleviating the UK housing shortage by meeting demand from housing developers (Housing Associations, Local Authorities and private developers) for long-term investment partners to accelerate the development of socially and economically beneficial new affordable housing.

ReSI's subsidiary, ReSI Housing Limited, is registered as a for-profit Registered Provider of Social Housing, and so provides a unique proposition to its housing developer partners, being a long term private sector landlord within the social housing regulatory environment. As a Registered Provider, ReSI Housing can acquire affordable housing subject to s106 planning restrictions and housing funded by government grant.

ReSI is managed by ReSI Capital Management Limited, a wholly-owned subsidiary of TradeRisks Limited which has a 19 year track record of executing transactions within the UK social housing sector and, to date, has arranged funding of over £11 billion in the social housing, care and other specialist residential property sectors.

Acquisitions by ReSI are limited to homes with sufficient cashflows, counterparty credit quality and property security to be capable of supporting long‑term investment grade equivalent debt.

ReSI does not manage or operate stock and uses experienced and credit-worthy third party managers.

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