2nd Aug 2016 08:21
LONDON (Alliance News) - Specialist Investment Properties PLC on Tuesday said it is planning a number of property purchases, some of which will be funded under a new framework agreement, after noting its first half revenue and profit figures were not indicative of its performance.
The company completed a capital raising and a change of name in February in its relaunch as an investment property company acquiring and holding freehold properties in specialised sectors of the property market.
In its first set of interim results since the capital reorganisation, Specialist Investment posted revenue of GBP25,000 for the six months ended June 30, compared to no revenue a year earlier, and its pretax loss narrowed to GBP57,000 from GBP66,000.
However, Specialist Investment said it made its first property purchases on March 1 and then a further three properties acquired later in the period, meaning its revenue for the six months ended June 30 did not give a "steady state picture". Total annualised rent for the six properties currently held is GBP184,500, Specialist Investment said.
The company noted that its loss also was reflective of the limited amount of time for which the properties acquired were held and the low yield on cash balances held for property purchases in the pipeline.
Specialist Investment said its Investment Advisor Puma Investment Management Ltd has identified a number of properties for acquisition, which it has approved for purchase subject to satisfactory due diligence.
Exclusivity arrangements have been entered into with the vendors, and the acquisitions are in legal process, Specialist Investment added.
The company said these potential purchases are mostly larger buildings divided into individual flats primarily for those with physical or mental difficulties. Some are completed and others are under construction, the company said, noting that it intends to buy the properties with a long term full repairing and insurance lease in place to a care operator or housing association.
"If the potential acquisitions in the pipeline are all acquired, it would commit the entire residual funding currently available to the company after allowing for a modest working capital buffer," Specialist Investment said, noting that there are further potential acquisitions which would require more finance than it has available.
"The board has discussed these opportunities and considers that it would be advantageous also to proceed with these additional investments," the company said, in light of which it has agreed a new framework agreement with its lender Heritage Square Ltd to draw down additional bridging loans up to GBP2.5 million.
"Having established a solid platform for executing its initial investment strategy, the board believes that the company has made very good progress to date. Completing the pipeline it has in legal process and the additional deals identified will transform Specialist Investment's outlook and make it a high-yielding investment for its shareholders with both strong defensive characteristics and good prospects for capital growth," said Non-Executive Director John Le Poidevin.
Shares in Specialist Investment were untraded on Tuesday, having last traded at 15.48 pence.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.