Trading update

RNS Number : 2265M

PRS REIT PLC (The)

20 September 2021

 

PRSR.L

The PRS REIT plc

("the Company" or "the PRS REIT")

Trading Update and Net Asset Value Update

The PRS REIT, the closed ended real estate investment trust that invests in high-quality, new-build family homes for the private rented sector ("PRS"), is pleased to provide an update on activity since the financial year end to 31 August 2021, including the immediate pipeline of development opportunities, and unaudited NAV for the financial year ended 30 June 2021.

	At 31 Aug 2021	At 30 Jun 2021	At 31 Mar 2021
Number of completed homes	4,227	3,984	3,590
Estimated rental value ("ERV") per annum	£40.3m	£37.5m	£33.3m
Number of contracted1 homes2	828	1,096	1,536
ERV per annum	£7.7m	£10.8m	£15.8m
Completed and contracted1 sites	64	64	65
ERV of completed and contracted sites*2	£48.0m	£48.3m	£48.8m
	2 months Jul and Aug 2021	Year to 30 Jun 2021	9 months to 31 Mar 2021
Rent collected as percentage of rent invoiced	98%	98-%	99%

 *ERV as at current rental levels .

Construction activity continues to progress well, with 243 new homes added to the portfolio since the end of the financial year to 30 June 2021. This takes the total portfolio to 4,227 completed homes with an ERV of £40.3m as at 31 August 2021, with a further 828 homes contracted and at varying stages of the construction process.

Of the 4,227 homes completed, 4,081 (97%) were occupied at 31 August 2021, with a further 80 homes reserved for qualified applicants with rental deposits received. Demand is high, and rent collection in July and August remained strong, with 98% of rent collected (as a percentage of rent invoiced in the period). Total arrears remain very low at £0.4m as at 3 September 2021.

As at 30 June 2021, the PRS REIT's unaudited NAV was 99.0 pence per ordinary share (31 December 2020: 96.1 pence per ordinary share). 

The Company is now approaching its initial target of creating a portfolio of c.5,200 homes, with an ERV of around £50m per annum³, which will be delivered utilising the Company's existing resources, from a combination of its existing contracted sites and developments in the Investment Adviser's pipeline.

In addition to these, the Investment Adviser has identified a pipeline of six additional sites, with the potential for 670 new homes with a total ERV of c.£6.5m per annum. Three of these six sites (providing 383 homes at a total gross development cost ("GDC") of c.£58.7m) are available for immediate acquisition and construction commencement, with pricing agreed. Three further sites (representing 287 homes with a GDC of c.£43.8m) are scheduled to be available for acquisition within the next six months. As with all of the Group's sites, these opportunities will be developed under fixed-price design and build contracts.

The Board is exploring the most appropriate way of raising additional capital to fund the six sites identified with a view to delivering further value for shareholders. A further announcement will follow in due course.

Dividends

The Company has paid dividends totalling 4.0 pence per share for the year ended 30 June 2021, and the annual dividend is expected to be fully covered on an EPRA EPS basis by 31 December 2021. As previously stated, the Board continues to target a minimum dividend of 4.0 pence per ordinary share for the year ending 30 June 2022³.

Publication of full year audited results

The Company expects to publish its full year audited results in mid-October. 

NOTES

  _1.   Contracted refers to sites under construction (under design & build contracts), which have been either purchased by the PRS REIT or purchased by the PRS REIT's Investment Adviser and forward sold to the PRS REIT.

2. Due to the replotting of units on a contracted site, the number of completed and contracted homes has reduced slightly by 30 units with a commensurate drop in ERV of £0.3m between 30 June 2021 and 31 August 2021. For the same reason, the number of completed and contracted homes reduced by 46 units between 31 March 2021 and 30 June 2021.  

3. This is a target only and there can be no assurance that the target can or will be met and should not be taken as an indication of the Company's expected or actual future results. Accordingly, potential investors should not place any reliance on this target in deciding whether or not to invest in the Company or assume that the Company will make any distributions at all and should decide for themselves whether or not the target dividend yield is reasonable or achievable.   

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014 (MAR).

For further information, please contact:

The PRS REIT plc Steve Smith, Non-executive Chairman	Tel: [phone] (c/o KTZ Communications)
Sigma PRS Management Limited Graham Barnet, Mike McGill	Tel: [phone]
Singer Capital Markets James Maxwell, Hannah Woodley, Asha Chotai (Investment Banking) Alan Geeves, James Waterlow, Sam Greatrex (Sales)	Tel: [phone]
Panmure Gordon (UK) Limited Chloe Ponsonby (Corporate Broking), Alex Collins (Corporate Finance) Tom Scrivens (Sales)	Tel: [phone]
G10 Capital Limited (part of the IQEQ Group as AIFM) Paul Turner	Tel: [phone]
KTZ Communications Katie Tzouliadis, Dan Mahoney	Tel: [phone]

NOTES TO EDITORS

About The PRS REIT plc
www.theprsreit.com  

The PRS REIT plc is a closed-ended real estate investment trust established to invest in the Private Rented Sector and to provide shareholders with an attractive level of income together with the potential for capital and income growth. The Company is investing £0.9bn in a portfolio of high quality homes for private rental across the regions, having raised a total of £0.5bn (gross) through its Initial Public Offering, on 31 May 2017, and a subsequent placing in February 2018. Both fundraisings were supported by the UK Government's Homes England with direct investments. 

LEI:  21380037Q91HU97WZX58

About Sigma Capital Group plc
www.sigmacapital.co.uk

Sigma Capital Group plc ("Sigma") is a PRS, residential development, and urban regeneration specialist, with offices in Edinburgh, Manchester and London. Sigma's principal focus is on the delivery of large scale housing schemes for the private rented sector. The Company has a well-established track record in assisting with property related regeneration projects in the public sector, acting as a bridge between the public and private sectors.

Sigma has created an unrivalled PRS platform, which sources sites and brings together construction resource to develop them, enabling Sigma to deliver an integrated solution to partners. As well as sourcing sites and managing all stages of the planning and development process, Sigma also manages the rental of completed homes through its award winning rental brand 'Simple Life'. The Company's subsidiary, Sigma PRS Management Limited, is Investment Adviser to The PRS REIT plc.

About Sigma PRS Management Limited

Sigma PRS Management Limited is a wholly-owned subsidiary of Sigma Capital Group plc and is Investment Adviser to The PRS REIT plc. It sources investments and operationally manages the assets of The PRS REIT plc and advises the Alternative Investment Fund Manager ("AIFM") and The PRS REIT plc on a day-to-day basis in accordance with The PRS REIT plc's Investment Policy. The Investment Manager is G10 Capital Limited. Sigma PRS Management Ltd is an appointed representative of G10 Capital Limited, which is authorised and regulated by the Financial Conduct Authority (FRN:648953)

 

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