Half-year Report

13 June 2025

Ground Rents Income Fund plc

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2025

Ground Rents Income Fund plc ('GRIO' or the 'Company') announces its unaudited half year results for the six months ended 31 March 2025, which are available at schro.link/griohyr2025 or on the Company's website: www.groundrentsincomefund.com.

Barry Gilbertson, the Company's Chair, commented:

"The Board and Manager remain committed to optimising the net realisation value of the Company's investments amid ongoing regulatory and market challenges. Whilst we have experienced a like-for-like decline in our unaudited portfolio valuation, we have executed disposals totalling £9.2 million during the period, and since the period end, enabling significant debt repayments that have improved our financial position. Looking ahead, we will continue to execute our shareholder-approved strategy, including addressing the impacts of Leasehold Reform and Building Safety Regulations, but we are experiencing delays due to factors largely outside of the Company's control."

Key points:

· Unaudited portfolio valuation of £56.8 million, representing a like-for-like reduction of £6.4 million, or 10.1% (30 September 2024: £71.5 million, or £63.2 million on a like-for-like basis).

· Net Asset Value ('NAV') decreased to £50.4 million or 52.7 pence per share ('pps') (30 September 2024: £56.5 million or 59.0 pps). Dividends remain withheld due to the Modified Auditors' Report in the Company's last Annual Report to 30 September 2024.

· Continuation of the shareholder-approved strategy to realise assets to optimise the net realisation value of the Company's investments. 

· £9.2 million of disposals during the period and since the period end (representing a 1.8% discount to the independent valuation as at 30 September 2024), which, coupled with a decision to hold less cash, enabled debt repayments totalling £11.3 million. Following post period end sales and debt repayments, based on the independent valuation as at 31 March 2025, the Company's consolidated loan to value (net of £4.8 million held in cash) is 6%, fully compliant with our loan covenants.

· Loan balance therefore reduced by £11.3 million from £19.5 million (as at 30 September 2024) to £8.2 million at today's date, reducing loan interest by approximately £814,000 per annum.

· Earnings impacted by higher operating costs in managing headwinds associated with Leasehold Reform and Building Safety Regulation, as well as professional advice fees associated with the unsolicited possible offer for the Company that failed to proceed.

· Work ongoing to protect the Company from what we believe are unlawful enfranchisement provisions within the Leasehold and Freehold Reform Act 2024 (the 'Act').

· Reduction in number of properties affected by Building Safety remediation requirements, from 23 as at 30 September 2024 to 20, as at today's date (31 March 2025: 22), reflecting progress with building projects.

Change of Company Secretary:

With effect from 12 June 2025, JTC (UK) Limited was appointed as Company Secretary to the Company. The Company's registered office address remains unchanged.

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Enquiries:

Schroder Real Estate Investment Management Limited

Matthew Riley / Chris Leek

020 7658 6000

FTI Consulting

Richard Gotla / Oliver Parsons

0203 727 1000 / [email protected]

Singer Capital Markets (Broker)

James Maxwell / Alaina Wong (Investment Banking)

Sam Greatrex (Sales)

020 7496 3000

Appleby Securities (Channel Islands) Limited (Sponsor)

Andrew Weaver / Michael Davies

01534 888 777

JTC (UK) Limited

Christopher Gibbons

[email protected] / 0207 409 0181

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Notes to editors:

Ground Rents Income Fund plc is a closed-ended real estate investment trust, listed on The International Stock Exchange and traded on the SETSqx platform of the London Stock Exchange.

Schroder Real Estate Investment Management Limited (the 'Manager') was appointed as the Company's Alternative Investment Fund Manager in May 2019 to support the Company's Board with the headwinds related to building safety and leasehold reform.

In 2023, the Board and Manager carried out an extensive shareholder consultation on proposals to change the Continuation Vote mechanism included in the Articles dating from 2012, as well as proposed changes to the Investment Policy. These proposals received strong support from shareholders and resulted in a new Continuation Resolution and Investment Policy. The new Investment Policy adopts a strategy of realising the Company's assets in a controlled, orderly and timely manner for shareholders, whilst continuing to deliver best-in-class residential asset management including fairness, transparency, and affordability for leaseholders.

In November 2023 the previous Government published a consultation on restricting existing residential ground rents payable, without compensation to freeholders (the 'Consultation'). This represented a significant shift in the Government's approach to leasehold reform and led the Company's independent valuer, Savills, in conjunction with other valuers and the Royal Institution of Chartered Surveyors, to adopt a Material Valuation Uncertainty Clause ('MUC') across the entire residential ground rent market. The Company submitted a comprehensive response to the Consultation in January 2024 and has kept shareholders informed of the Government's leasehold reform agenda, including various regulatory announcements, which can be found at: www.groundrentsincomefund.com

Since November 2023, political upheaval resulted in an accelerated enactment of the Leasehold and Freehold Reform Act 2024 (the 'Act') in May 2024, which may represent a better outcome than the worst-case scenarios contemplated in the Consultation.

The current Government has emphasised a more measured approach to reforming, what it acknowledges to be 'an incredibly complicated area of property law'. Consequently, it intends to take the necessary time to ensure that reforms are 'fit for purpose'. It remains committed to implementing the Act and intends to introduce further reform to provide homeowners with greater rights and protections. This includes addressing 'unregulated and unaffordable' existing ground rents payable and to make commonhold the default tenure for new apartments in the future.

Working with other institutional freeholders to defray costs, the Company is pursuing a Judicial Review of the enfranchisement provisions within the Act, which the Board and Manager believe to be unlawful, and is engaging positively with the Government to advocate for wider leasehold and building safety reforms that fairly balance the interests of the Company's shareholders and leaseholders.

An Extraordinary General Meeting ('EGM') took place on 18 November 2024 where a Continuation Resolution was passed, with 92% of voting shareholders voting 'For' the continuation of the Company. The next Continuation Vote will need to be held on or before 17 November 2027.

Please see the Company's website for more information: www.groundrentsincomefund.com

Ends.