16 Jul 2021 07:00
RM Secured Direct Lending Plc | ||||||||||
("RMDL" or the "Company") | ||||||||||
LEI: 213800RBRIYICC2QC958 | ||||||||||
Net Asset Value | ||||||||||
NAV The Company's NAV % Total Return for the month of June was +0.83%, which brings the NAV % Total Return for the quarter to +3.63%. The Ordinary Share NAV as at 30th June 2021 was 95.25 pence per share. This monthly NAV return of -0.828 pence per share arose primarily from the ex-dividend effect of the 1.625 pence per share total ordinary dividend for the period Q1 2021, declared in May and paid in June 2021. Otherwise, there was positive interest income, net of expenses, of 0.517 pence per share and an increase in portfolio valuations of 0.262 pence per share.
Company Activity During the period the Company declared and paid a 1.625 pence per share dividend in respect of Q1 2021. This marks the 17th distribution for the Company all being at or above the Company's stated target. The Company's Zero Dividend Preference shares ("ZDPs") matured in April 2021 and were repaid with a final capital entitlement payable of 110.91p per ZDP share. The ZDPs were repaid from a new credit facility with OakNorth Bank which at the time of closing was neutral in terms of the Company's existing gross borrowings (9.90% on a net basis after taking account of cash balances). Buyback Programme No shares were repurchased by the Company during the period as the share price discount was within the target range of not greater than 6% discount. It is pleasing to see the discount below the 6% target and the Board and the Investment Manager remain focused on the share price returning to trading at a premium to NAV, as was the case for the first 36 months following IPO. Post quarter end the Board of the Company have announced and implemented a closed period buyback programme.
Portfolio Update
Investment Performance Overall, it was a very strong quarter for the portfolio with a NAV % total return of 3.63% which is significantly ahead of the observable liquid high yield and leverage loan indices referred to within the Market Update section above. This above target return was largely due to a partial revaluation of investments which had been conservatively marked lower during the pandemic. The continued trajectory of the remaining investments which were marked lower during the pandemic is positive and valuations will be further reviewed by the independent valuation agent as 1) the economy continues to re-open post the lockdowns and 2) the underlying credit and financial metrics improve.
New Investments - Execution and rotation towards Social & Environmental Investments During the period, several investments were made which align with the updated investment focus communicated by the Company and Investment Manager. These include investments across the social infrastructure segment, with each Investment secured over all assets of the borrower including property.
§ Social Infrastructure> Education: (CBILS) £2m loan (loan ref 91) to a UK Education provider, secured over the school campus. § Social Infrastructure> Aged Care: £13m commitment (loan ref 88). Loans to a modern care home development, with approximately 200 beds. § Social Infrastructure> Student Accommodation: (CBILS) £5.0m loan (ref 92) secured over a portfolio of student accommodation assets across the UK.
In each instance the Investment Manager has underwritten the Loans against a variety of financial, business and credit metrics, and, where possible, eligible borrowers accessed the CBILS scheme, providing a further credit enhancement for the Investment Trust. CBILS Loans The CBILS scheme closed to new applications on the 31st March 2021, but pre-qualified prospective investments were permitted a grace period to reach financial close under the scheme rules. The portfolio CBILS exposure increased over the quarter from £19.5m to £32m with CBILS partially government guaranteed loans now representing 25% (from 15.8% at end of Q1) of the gross assets of the portfolio. All CBILS loans benefit from a UK Government Guarantee, protecting a minimum of 80% of the principal and 100% of the first year's interest.
Existing portfolio Accommodation > Student Accommodation During the quarter, the recovery against Loan ref 68 Student Accommodation in Coventry was completed. The asset is now fully owned by the Company. An Operations and Maintenance ("O&M") Contract was signed with a reputable student accommodation provider (the "Operator") to manage the lettings process. The asset is currently valued on a "day 1 basis", i.e. open but with no trading history. The Investment Manager expects NAV growth from this asset in time, as occupancy becomes established and stabilised. The Investment Manager is encouraged by the valuations attached to both private and public transactions within the UK student accommodation sector. Within the short space of time since appointment the Operator reports pre-lettings for 2021/22 is currently at 20%, with the expectation of increased pre-lets during the summer period. Non-Core > Manufacturing Bienbauer's (Loan ref: 39) performance continues to benefit from the economic reopening in Germany. The borrower's management team notified the lending group of its intention to revert to paying the original loan payment terms of 50% cash / 50% PIK from Q3. This this will significantly reduce the overall percentage of the portfolio which is paid in PIK as they were the largest contributor to this during 2020. Health & Well Being > Gym Royalty's/Franchise Energie Fitness (Loan ref:76) has seen significant growth in membership numbers which are now back above the 100,000-member level and are expected to be back at pre-lockdown levels by Q4 2021. Overall, the business is performing well with the recently announced Iberia Master Franchise entering pre-sales period for membership sales, multiple new UK site franchise agreements signed and the launch of the Empowered Brands concept, which seeks to partner with established health and wellness businesses to rollout UK and International franchises.
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The Company also announces that the Monthly Report for the period to 31 May 2021 is now available to be viewed on the Company website: | ||||||||||
https://rmdl.co.uk/investor-centre/monthly-factsheets/ | ||||||||||
END | ||||||||||
For further information, please contact: | ||||||||||
RM Capital Markets Limited - Investment Manager | ||||||||||
James Robson | ||||||||||
Pietro Nicholls Thomas Le Grix De La Salle | ||||||||||
Tel: 0131 603 7060 | ||||||||||
International Fund Management - AIFM | ||||||||||
Chris Hickling | ||||||||||
Shaun Robert | ||||||||||
Tel: 01481 737600 | ||||||||||
Tulchan Group - Financial PR | ||||||||||
James Macey White | ||||||||||
Elizabeth Snow | ||||||||||
Tel: 0207 353 4200 | ||||||||||
PraxisIFM Fund Services (UK) Limited - Administrator and Company Secretary | ||||||||||
Brian Smith | ||||||||||
Ciara McKillop | ||||||||||
Tel: 020 4513 9260 | ||||||||||
Singer Capital Markers Advisory LLP - Financial Adviser and Broker | ||||||||||
James Maxwell | ||||||||||
Asha Chotai | ||||||||||
Tel: 020 7496 3000 | ||||||||||
Peel Hunt LLP - Financial Adviser and Broker | ||||||||||
Luke Simpson | ||||||||||
Liz Yong | ||||||||||
Tel: 020 7418 8900 | ||||||||||
About RM Secured Direct Lending | ||||||||||
RM Secured Direct Lending Plc ("RMDL" or the "Company") is a closed-ended investment trust established to invest in a portfolio of secured debt instruments. | ||||||||||
The Company aims to generate attractive and regular dividends through loans sourced or originated by the Investment Manager with a degree of inflation protection through index-linked returns where appropriate. Loans in which the Company invests are predominantly secured against assets such as real estate or plant and machinery and/or income streams such as account receivables. | ||||||||||
For more information, please see | ||||||||||
https://rmdl.co.uk/investor-centre/monthly-factsheets/ | ||||||||||