28th Jun 2019 10:29
(Alliance News) - Ground Rents Income Fund PLC on Friday said its interim loss narrowed, even as weaker market sentiment and lower transactional volumes led to a fall in the value of its portfolio, and in turn its net asset value.
The trust posted a pretax loss of GBP1.4 million for the six months to the end of March, compared to GBP5.0 million the year before. This was due to a narrowed loss on the revaluation of investment properties to GBP2.6 million from GBP6.6 million.
Ground Rents's portfolio value as at March 31 declined to GBP125.2 million from GBP127.5 million at the end of September, leading to a lower net asset value at 113.24 pence per share from 117.65p.
However, revenue edged up to GBP2.7 million from GBP2.6 million the year before.
Ground Rents declared an interim dividend of 1.96 pence per share, in line with the year before.
"We believe the long-term and inflation-hedged revenues generated by the company's underlying portfolio should support sustainable returns during an anticipated period of greater economic and political uncertainty," said Chair Malcolm Naish.
In August 2017, the UK Ministry of Housing, Communities & Local Governments launched a consultation on proposals to amend leasehold legislation, after leaseholders raised concerns over contracts which periodically double ground rents, potentially leading to huge costs.
"The investment manager and broader industry are continuing to engage constructively with the government to address concerns regarding leasehold practices. While the final outcome of leasehold reform remains uncertain, we remain confident that institutional management of ground rent assets on fair terms offers the best long-term outcome for consumers and other stakeholders," Naish added.
Shares in Ground Rents Income Fund were marginally higher at 89.02 pence on Friday.
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