Figures ramping up for PRS housebuilder
PRS REIT, the Manchester-based closed-ended real estate investment trust established to invest in new-build homes in the Private Rented Sector (PRS), revealed strong first half results today.
In the six months to December 31, 2018, gross rental income leapt from £600,000 the previous year to £2.3m, while pre-tax profits of £7.5m compared with £500,000 a year ago.
Total dividends paid since the company launch in May 2017 is 7p per share. The target total dividend for the full year 2019 is 5p per share.
By the end of the first half period the company completed 775 PRS housing units on 43 sites.
It said it is continuing to make good progress and has achieved its initial target of committing gross funds of £900m to create a portfolio of newly-built rental homes across the UK.
Its completed assets are performing well and demand for its well-located, professionally-managed houses remains high.
The company warned that some “short term headwinds” are anticipated from expected planning approval delays, but added that the family rental housing remains critically undersupplied and the drivers underpinning rising demand are unchanged.
Chairman Steve Smith said: “The PRS REIT made pleasing progress in the first half, and the growth in the number of completed rental homes is showing through in these financial results.
“We closed the half year with about 3,575 homes either built or under construction, with that number now at around 3,951.
“Looking over the remainder of the financial year, we anticipate short term headwinds that are likely to cause some delays to current construction schedules.
“We have, therefore, re-estimated our stabilised covered dividend target taking this into account, and now estimate it to be around 5.5p per share from 6p previously.
“Our dividend targets for the current financial year and each year thereafter until stabilisation is 5p per share.
“Outside these delays, the model is working well, with delivery and operational costs in line with expectations, continuing high demand for our homes, and good visibility on the deployment of the remaining tranches of our gross capital.”
He added: “Housing for the family rental market remains critically undersupplied and the opportunity for the company to establish itself as a major provider of high quality, professionally-managed houses in the UK remains substantial.
“Consequently, the board continues to view long term prospects with confidence.”
