16th Sep 2019 12:19
(Alliance News) - Real Estate Investors PLC on Monday hiked its dividend and said it performed in line with expectations during the first half of 2019, despite Brexit uncertainty subduing the property market.
In the six months to June 30, the company recorded an 8.4% year-on-year revenue rise to GBP8.1 million from GBP7.4 million. Real Estate Investors also reported a 7.6% rise in contracted rental income to GBP17.0 million from GBP15.8 million.
However, pretax profit fell year-on-year to GBP1.7 million from GBP5.3 million. The company incurred a GBP2.1 million loss in fair value of its investment properties compared with a GBP1.5 million gain in the first half of 2018.
On an underlying basis, pretax profit rose by 18% to GBP4.0 million from GBP3.4 million.
The Midlands-focused real estate investment trust upped its first half dividend by 7.1% to 1.875 pence per share from 1.75p.
The company's gross property assets slipped by 1.6% to GBP221.1 million from GBP224.8 million, Real Estate Investors said this reflected the GBP2.1 million sale of the Metro Court property in West Bromwich, West Midlands and a GBP2.8 million reduction in its retail valuations.
The firm's EPRA net asset value per share at June 30 fell to 68.8p, 0.7% down on the 69.3p from the end of December.
Shares in the company were 4.4% higher at 53.22p apiece in London on Monday afternoon.
Looking ahead, the company expects the value of its retail assets to recover and said that due to its GBP25 million of cash and agreed bank facilities, it is "well positioned to make opportunistic acquisitions". The firm predicts that economic uncertainty, due to Brexit, will provide it with opportunities to make acquisitions in the "coming months".
Turning to disposals, Real Estate Investors expects to complete the GBP2.6 million sale of an office building in Leicester on September 29. The company will sell City Gate House to a residential developer.
Chief Executive Paul Bassi said: "Our portfolio remains robust with inherent potential growth embedded within the portfolio for Permitted Development opportunities. The Midlands has begun the process of preparation for the 2022 Commonwealth Games and the Coventry City of Culture in 2021 and Real Estate Investors is well placed to benefit from the increased activity and opportunities that such major initiatives and events bring to an already vibrant region.
"The appeal of Birmingham continues to increase with a recent study showing that for people leaving London, Birmingham is the most popular city to move to. These trends are fuelling the region's ongoing growth and we are confident in our future prospects."
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