Fri, 23/11/2012 - 11:47
Real Estate Credit Investments (RECI) made a net profit of GBP9.4m for the first half-year ended 30 September 2012, including a profit of GBP8.7m for the second quarter.
The total return in the first half of the financial year was 21.3 per cent, comprising an increase in net asset value (NAV) of 18.2 per cent and 3.1 per cent in ordinary share dividends.
Bond repayments totalled GBP16.1m in the quarter ended 30 September 2012 equal to 20.2 per cent of the value of the bond portfolio.
The real estate bond portfolio has embedded value of GBP119.8m versus a market value of GBP79.5m as at 30 September 2012.
RECI is declaring a 17.6 per cent increased dividend of 2.0p per share (equating to a six per cent annualised yield on NAV) in respect of RECI ordinary shares for the quarter ended 30 September 2012.
RECI has recorded three consecutive quarters of profit and NAV growth, supported by significant bond repayments of approximately 20 per cent of the value of the bond portfolio. These principle repayments stemmed from bonds that RECI had purchased at a weighted average purchase price of 82 per cent of par.
The company sold a significant loan secured by UK residential properties and made two new loans secured by Dutch commercial property and a London office property.
With GBP17.0m of cash available as at 31 October 2012 (GBP5.6m as at 30 September 2012), the company is focussed on identifying new investments in real estate loans and bonds, and has identified opportunities which it aims to complete before the end of December 2012. All will be secured against UK real estate and will have expected yields in excess of 10 per cent.
Tom Chandos, chairman of RECI, says: “Capital returns and fair value gains in the first half of the year underline how RECI’s investment strategy continues to demonstrate significant potential for NAV growth. The company will retain its focus on securing attractive real estate debt opportunities in Europe.”
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