PRS REIT, the residential investor facing pressure from shareholders to restructure, has reported a positive set of figures for the year ended 30 June.
The group recorded a 17% increase in revenue to £58.2m, with net rental income up by 18% to £47.3m. Pretax profit more than doubled from £42.5m to £93.7m.
Some 316 homes were added to the company’s portfolio over the period, taking its portfolio to 5,396 homes, a 6% year-on-year increase.
Rent collection remained high at 99% with occupancy at 96%.
Looking ahead, the group said trading remained “very strong”, with like-for-like rental growth of 12% in the first three months of its new financial year.
Outgoing chairman Steve Smith said: “These are truly excellent numbers reflecting the efficacy of the strategy and the hard work and commitment of the board, our investment adviser Sigma, our investors, banking and housebuilding partners, and local and central government supporters.
“To be in position to deliver a set of results of this quality after so many obstructions along the way, notably Covid and debt cost inflation, is a great achievement. The company is perfectly poised for its next phase of growth; investors are in a very strong position, with multiple options and, on a personal note, I sincerely hope that investors grasp the opportunity to enable the business to achieve its full potential.”
He added: “The board remains confident about prospects, with affordability – average rent as a proportion of gross household income – and asset performance both very strong. In line with our announcement issued on 13 September, the newly-constituted board intends to review the company’s strategy and will provide an update when appropriate. The company is fully focused on maximising value for all shareholders.”
In August, shareholders in PRS REIT requisitioned an EGM to vote on the removal of Smith as chairman and the implementation of a strategic review of the business. The calls came in response to the continuing discount to NAV at which PRS REIT’s shares trade.
Shareholders want a review of the business to be undertaken that could lead to a sale of its assets to repay debt where the cost of debt exceeds the net rental yield, a buyback of shares to target a discount to NAV of 10% or lower, or the potential sale of the whole business.
The group also wants to review all contracts between PRS REIT and its investment adviser Sigma PRS Management to ensure the REIT has received sufficient value from transactions and that contracts contain robust provisions to enable Sigma to be held to account.
The shareholders said they believed there would be a “significant improvement in the value of the shares of PRS REIT” as a result of their proposed actions and they “strongly encourage all PRS REIT’s shareholders to support their proposals for change”.
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