25th May 2016 09:10
LONDON (Alliance News) - Ground Rents Income Fund PLC on Wednesday said a large revaluation gain in its first half saw its pretax profit almost double, as it said investors are looking for defensive stability within the markets.
The real estate investment trust, which invests in UK ground rents, posted a pretax profit of GBP6.1 million for the six months to March 31, up from GBP3.3 million a year earlier, as it recorded a GBP4.3 million revaluation gain, much higher than the GBP1.8 million seen a year earlier.
Revenue grew to GBP2.3 million for the period, ahead of the GBP2.0 million reported the prior year, whilst net assets grew to GBP110.7 million at March 31, up from GBP106.2 million on September 30. Ground Rents's portfolio value rose to GBP111.5 million, up from GBP104.2 million at the end of September, the company added.
Ground Rents said there were two interim dividends paid during the period, of 0.952 pence per share on December 31 and 0.9646p per share on March 31.
"As investors look for defensive stability within the markets following a sustained period of volatility since the start of 2016, many of the specialist REITs continue to perform well whilst maintaining their premium to net asset value. We believe the UK will see interest rates staying low for longer, with gilt and bond yields following a similar trend, subject to a vote to remain in the forthcoming EU referendum," said James Agar, investment director of Brooks Macdonald Funds, which acts as investment adviser to Ground Rents.
"Ground Rents offers investors protection against short term deflationary pressures, as within its ground rent portfolio the income is upwards only and largely index-linked. Ground rents provide stable and secure income streams, which is clearly attractive in the context of the recent market volatility, whilst the sustained performance of the net asset value is reflected in the increasing trading activity in Ground Rent's stock," Agar added.
Shares in Ground Rents were up 0.1% at 117.65p on Wednesday.
By Hannah Boland; [email protected]; @Hannaheboland
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