Residential Secure Income PLC · LSE:RESI
Residential Secure Income — FY2019 Earnings Presentation
20 slides from Residential Secure Income's earnings presentation, Nov 21, 2019
Slide 1: Residential Secure Income plc Annual results 2019
Residential Secure Income plc Generating secure inflation-linked returns while accelerating the development of socially and economically beneficial new housing Annual results for the year ended 30 September 2019 21 November 2019
Slide 2: Disclaimer
Disclaimer For Investment Professionals (as defined under FSMA 2000 Individuals without professional experience in matters relating to investments should not rely on this information By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be boun
Slide 3: Overview of ReSI
Overview of ReSI SUMMARY Residential Secure Income plc (“ReSI”) is a UK REIT listed on the main market of the London Stock Exchange providing a highly scalable, long term investment opportunity that will generate secure, inflation-linked returns from a highly defensive asset class ReSI aims to m
Slide 4: 2019 Financial Results: NAV bridge
2019 Financial Results 115 113 0.2 1.1 111 4.5 3.9 108.6 109 107 Pence per share 2.8 105.1 105 103 101 99 97 95 Net Asset Value as at Net income Valuation change Valuation Change (one Share buy backs Dividends paid Net Asset Value as at 30/09/2018 (inflation linked) off) 30/09/2019 4
Slide 5: Strong performance positions ReSI for future growth
Strong performance positions ReSI for future growth Strong financial performance with 3.3% NAV growth driven by a 3.9% valuation uplift 8.0% annualised NAV total return from inception and 5p dividend declared both in line with IPO target £83 million committed during the year to 332 homes the m
Slide 6: Portfolio Overview
Portfolio Overview ReSI’s investment strategy is to deliver a secure income stream from a residential social housing portfolio benefitting from: Below market rents ensuring on-going demand; Diverse income stream from tenants with lower exposure to the economic cycle; and/or Strong counterparty
Slide 7: Capital now substantially deployed
Capital now substantially deployed 350 300 250 Oct 2018: £16m Totteridge Place Shared Ownership 200 £million 150 Nov 2017: £101m Retirement Homes Portfolio Mar 2019: £60m Clapham Park Shared Ownership 100 50 Jun 2018: £21m Wesley House Local Authority Housing 0 Cumulative amount deployed Full deploy
Slide 8: Supporting future dividends
Supporting future dividends Deployment Profile 350 300 250 200 £million 150 100 50 - Sep 2017 Dec 2017 Mar 2018 Jun 2018 Sep 2018 Dec 2018 Mar 2019 Jun 2019 Sep 2019 Dec 2019 Mar 2020 Jun 2020 Sep 2020 Dec 2020 Mar 2021 Jun 2021 Sep 2021 Full deployment Cumulative amount deployed Deployment of IPO p
Slide 9: Portfolio delivers £731m social impact over 25 years
Portfolio delivers £731m social impact over 25 years, equivalent to £4.27 per share ReSI is committed to accelerating the development of socially and economically beneficial new housing to make a meaningful contribution to the UK housing shortage. The Social Profit Calculator have quantified ReSI’s
Slide 10: Operational Highlights
Operational Highlights Investments Asset Management Personnel Developments • First shared ownership transaction • Extended lease term on 279 long • David Orr, former CEO of the National with £16.5m purchase of 34 new build leasehold retirement properties to Housing Federation, appointed as homes fro
Slide 11: Registered Provider unlocks social and shareholder value
Registered Provider unlocks social and shareholder value Shared Ownership case study: Totteridge Place • £16.5m purchase of 34 1,2 and 3 bed apartments from Crest Nicolson in October 2018 Shared Owner • Located in Totteridge Place Development, a 7 minute walk from the Profile: underground station 80
Slide 12: Shared Ownership: Initial rental yield of 3.2% p.a.
Shared Ownership: Initial rental yield of 3.2% p.a. contractually increasing at RPI+0.5% Purchase discount and grant funding enable ReSI Homes to generate 3.2% net initial rental yield, from 2.7% gross rent £100 £14 Bulk Discount Staircasing Gains £90 £6 Grant £80 Rent paid at 2.7%, £70 rising annua
Slide 13: Shared owners buy over time at open market value
Shared owners buy over time at open market value releasing bulk discounts to investors • Shared Owners can increase their ownership stake through staircasing • Staircasing (and first tranche sales) is at open market value • Crystallises value for ReSI from bulk purchase discounts plus any growth in
Slide 14: Financial Highlights
Financial Highlights Key Performance Indicators 108.6p £321.3m 36% Net Asset Value per Share Value of Investment Property GAV Leverage Ratio (Sep 2018: 105.1p) (Historical cost: £297.7m) (Sep 2018: 19%) IFRS Net Asset Value per share, an increase of Fair Value of investment property at 30 Ratio of t
Slide 15: Shareholder Returns in line with IPO target
Shareholder Returns in line with IPO target Dividend Valuation Gains NAV Shareholder Return • Total dividends of 5.0p declared for the • £8.6m/3.9% increase in fair value of • NAV Shareholder Return of 8.0p per share year, in line with IPO target (2018: 3.0p) properties during the year (2018: £14.8m
Slide 16: Debt Overview
Debt Overview Investment grade debt ensures asset quality • Investments limited to properties where terms for long-term matched investment grade equivalent debt funding can be obtained at acquisition • ReSI benefits from due diligence undertaken by debt investors who know the sector very well Low an
Slide 17: Strong performance positions ReSI for future growth
Strong performance positions ReSI for future growth Strong financial performance with 3.3% NAV growth driven by a 3.9% valuation uplift 8.0% annualised NAV total return from inception and 5p dividend declared both in line with IPO target £83 million committed during the year to 332 homes the m
Slide 18: Appendices
Appendices
Slide 19: Statement of Comprehensive Income
Statement of Comprehensive Income Year to 30 12 July 2017 to 30 September 2019 September 2018 Variance 6.7p £’000s £’000s Recurring Earnings per share (FY2018: 2.1p) Gross Rental Income 19,621 10,418 Property Operating Expenses (7,504) (4,719) Operating income per share plus valuation gains due to c
Slide 20: Statement of Financial Position
Statement of Financial Position 30 September 30 September 2019 2018 Variance 108.6p £’000s £’000s Net Asset Value per Share (Sep 2018: 105.1p) Investment Property (Savills valuation) 260,629 225,160 15.8% Finance Lease Asset* 29,532 27,715 IFRS Net Asset Value per share, an increase of 3.5p or 3.3%
Residential Secure Income — FY2019 Earnings Presentation on 6ix