26th Sep 2014 07:41
LONDON (Alliance News) - Public Service Properties Investments Ltd Friday said profit dipped in the first half of the year, as its German and UK portfolio experienced contrasting fortunes.
The real estate investment and financing company posted pretax profit of GBP874,817 for the six months to June 30, down from GBP1.7 million a year earlier, as revenue remained broadly flat at GBP3.4 million. Finance income was lower at GBP580,789 during the half, compared with GBP1.5 million a year earlier.
Public Services Properties, which owns portfolios of care homes in the UK and Germany, generated rental income of GBP3.5 million and finance lease income of GBP500,000. The group's property portfolio remains fully let and all rental income continues to be paid in full.
All of the UK assets are leased and licensed to the Embrace Group which recently completed a restructure.
AIM-listed Public Services Properties said its net asset value per share remained unchanged at 49.2 pence compared with December 31, 2013.
However, the group's investment properties, excluding the finance lease asset was valued at GBP70.3 million compared with GBP72.1 million at the end of December. Part of the reduction is due exchange rate differences, the company said.
The UK portfolio was valued at GBP40.5 million, up GBP2.5 million, following a re-assessment of the covenant risk of the company's tenant after its restructuring, which was announced in April. The German portfolio, on the other hand, was valued GBP4.6 million lower at GBP29.8 million.
"The decline in the value of the German investment portfolio reflected an increase in the average capitalisation rate from 8.5% at December 31, 2013 to 9.4% at June 30, 2014," the company said.
Financially, the company said it continues to generate sufficient cash to meet all of its scheduled interest payments, debt repayment obligations and other operational costs.
"It is pleasing to note that the restructuring of Embrace, the tenant of all our UK properties, has been completed, and this should free up management time to focus more on its day-today operations, although significant challenges remain," Chairman Patrick Hall said in a statement.
"The improvement in occupancy at the group's UK care homes in the second quarter of 2014 and which has continued into the third quarter is encouraging and, if continued, should lead to improved rent cover over time."
The stock was untraded Friday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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