Strong foundations provide annual boost for housebuilder
PRS REIT, the Manchester-based housing group, has reported strong annual results today.
In the year to June 30, the group achieved revenues of £12.9m, a 115% increase on last year’s £6m figure.
The pre-tax profit of £16.407m compared with £14.571m the previous year.
It said it has achieved good progress despite the impact of the COVID-19 pandemic, with 909 new rental homes added over fiscal year 2020, compared with 768 in 2019, to take the portfolio at year end to 2,082 completed homes, up from 1,173 in 2019, with a further 2,803 homes at various stages of the delivery process, compared with a figure of 3,196 at the same stage last year.
The national lockdown and resultant delivery disruption is estimated to have delayed the completion of a further 600 homes in 2020.
Despite this, in the first quarter of its 2021 fiscal year, 552 new homes were added to take the portfolio of completed homes at September 30, 2020 to 2,634, with estimated rental value (ERV) at £24.3m per annum.
Rental income and demand for properties remained strong over the year and in the first quarter of the 2021 financial year.
The company’s financial position is very robust, with net rental income covering cost base, low gearing of 25% and headroom on committed bank facilities.
Total dividends paid were 4.0p per share (2019: 5p), in line with the revised strategy taking into account the pandemic impact.
Today’s announcement revealed that 96% of the company’s net funding has now been deployed, with the portfolio now comprising 5,003 completed and contracted homes, including sites under forward contracts for purchase.
Rental values have remained strong, and at September 30, a further 145 qualified applicants were due to take occupancy.
PRS REIT said the long-term opportunity is strong with the family rental housing market remaining critically undersupplied.
Chairman Steve Smith said: “The PRS REIT plc continued to make good progress in its third year of activity, despite the impact of the COVID-19 pandemic.
“While construction was suspended in the fourth quarter, we reached the milestone of our 2,000th completed rental home by mid-June, and over the year as a whole added 909 new homes.
“We are now at 2,634 completed homes, with a further 2,369 homes under way as we approach our target of 5,200 rental homes.”
He added: “There are significant macroeconomic uncertainties ahead, but the company is well positioned financially, and our risk-mitigated model and the scale and geographic spread of our portfolio limits our exposures.
“Demand for our properties remains strong and the undersupply of good quality, well-located and professionally managed homes is significant. We are, therefore, confident in long-term prospects for The PRS REIT plc.”
