Ground Rents Income Fund (GRIO) is a closed-end real estate investment trust (Reit) that does what it says on the tin, generating rental income from a portfolio of residential properties. And in the six months to March 2017, this grew to £2.18m, up a shade from £2.05m a year earlier. Pre-tax profits were significantly higher, but that's after including a valuation uplift of £6.3m on the £143m portfolio.
However, 18 per cent of the portfolio's capital value is made up of 'doubling' ground rent agreements (whereby the ground rent on a property doubles every set number of years), and given the level of criticism that these have attracted, the company now believes this could trim up to £6m off the portfolio valuation, which would leave net asset value unchanged from a year earlier. These are only estimates, and the next valuation date is 30 September 2017.
Further freeholds were purchased costing £10.9m, and a further £6m of purchases have been agreed through either the exchange of contracts or option agreements, of which £3.3m are expected to be completed in the current financial year, ending in September 2017. These will be financed through a newly secured five-year £19.5m loan facility, and there is an additional £7.4m of further acquisitions under negotiation.
GROUND RENTS INCOME FUND (GRIO) | ||||
---|---|---|---|---|
ORD PRICE: | 133.5p | MARKET VALUE: | £125m | |
TOUCH: | 132-135p | 12-MONTH HIGH: | 141p | LOW: 117p |
DIVIDEND YIELD: | 3.0% | DEVELOPMENT PROP: | nil | |
DISCOUNT TO NAV: | 3% | |||
INVESTMENT PROP: | £143m | NET DEBT: | 13% |
Half-year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2016 | 132 | 6.1 | 6.6 | 1.9166 |
2017 | 138 | 8.0 | 8.5 | 2.004* |
% change | +5 | +30 | +29 | +5 |
Ex-div:- Payment:- Quarterly dividends paid in the half-year. Third-quarter dividend of 0.98p payable on 30 Jun |