3rd Apr 2025 14:21
(Alliance News) - Starwood European Real Estate Finance Ltd on Thursday reported a decline in profit during 2024, as it suffers a widened impairment loss and the firm progresses with its orderly realisation of assets.
Starwood European is a Guernsey-based investor that manages high quality senior and mezzanine real estate debt in the UK and Europe.
Pretax operating profit in 2024 fell 70% to GBP7.7 million from GBP25.9 million a year prior, on a total income decline of 40% to GBP21.7 million from GBP35.0 million.
This was partly due to a GBP10.7 million net impairment loss on loans advanced, compared to a GBP3.5 million loss the year before.
Since receiving shareholder approval at an extraordinary general meeting in January 2023, Starwood European has pursued a strategy of orderly realisation and return of capital over time to shareholders.
The firm reiterated that this will not result in its liquidation "in the immediate future or require the company to dispose of assets within a defined time frame". The realisation is expected to take place over a four to five year period
Net asset value total return for 2024 was 2.1%, against 6.6% in 2023, and net asset value per share at December 31 was 100.49 pence, down 3.7% from 104.35p the year before.
Starwood European declared a total dividend of 5.5p per share, cut from 6.0p in the prior year.
"During the year, 42% of the group's 31 December 2023 funded portfolio was repaid across five investments. Further post-period end, this positive momentum has been maintained with a significant GBP47.3 million loan repayment. All of these positive results have enabled us to return GBP125 million to shareholders in three instalments during 2024 and GBP46 million in 2025 to date," said Chair John Whittle.
"Save for the impact of the provision made in relation to the office portfolio, Ireland loan, I'm pleased to report that the loan book is performing broadly in line with expectations and that borrowers remain adequately capitalised.
"With only six investments now remaining in the portfolio, I look forward to keeping shareholders informed on our progress to realise the remaining investments and continue returning capital promptly to shareholders while sustaining regular quarterly dividend payments."
Shares in Starwood European were down 0.6% at 86.26 pence each in London on Thursday afternoon. The stock has fallen 7.3% over the past year.
By Emily Parsons, Alliance News reporter
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