8th Oct 2024 09:44
(Alliance News) - PRS REIT PLC on Tuesday said its annual profit doubled following strong growth in rental income and cost management efforts.
The Manchester, England-based real estate investment trust said pretax profit more than doubled to GBP93.7 million in the financial year ended June 30, from GBP42.5 million a year ago. Rental income rose 17% to GBP58.2 million from GBP49.7 million.
PRS REIT increased its portfolio at June 30 by 6.2% to 5,396 homes, up from 5,080 at the same time last year. Since June, the company has increased the number of completed homes a further 0.5% to 5,425, and once all existing sites are completed the portfolio will comprise 5,600 homes in total.
The group's affordability ratio for the year was 23%, up from 22% the year before, due to a strong tenant base and wage increases. This was "well within" the Office for National Statistics guidance for rent to be less than 30% of tenants' gross household income.
Estimated rental value per annum also grew 18% to GBP65.1 million year-on-year from GBP55.0 million, whilst fair value adjustments on investment property were up at GBP73.4 million, nearly triple the GBP25.4 million reported last year.
"Tight cost management" by the group's investment manager also contributed to the increase in profit, PRS REIT said, which together with rental income growth offset higher costs and additional homes coming out of warranty.
Chair Steve Smith said: "The board remains confident about prospects, with affordability - average rent as a proportion of gross household income - and asset performance both very strong. In line with our announcement issued on September 13, the newly-constituted board intends to review the company's strategy and will provide an update when appropriate."
The total dividend for financial 2024 remained unchanged at 4.0 pence per share.
PRS REIT are currently reviewing its target dividend for financial 2025, and expects to provide an update to the market in its first quarter trading update shortly.
Shares in PRS REIT were up 1.1% at 100.00 pence each in London on Tuesday morning.
By Emily Parsons, Alliance News reporter
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