Residential Secure Income PLC · LSE:RESI
Residential Secure Income — H1 2023 Earnings Presentation
19 slides from Residential Secure Income's earnings presentation, June 2023
Slide 1: Residential Secure Income plc (ReSI plc) H1 2023 Results presentation
Residential Secure Income plc (ReSI plc) Aiming to generate secure inflation-linked returns while accelerating the development of socially and economically beneficial new housing H1 2023 Results presentation June 2023 For professional investors only. Capital at risk.
Slide 2: Important Legal Notice
IMPORTANT LEGAL NOTICE THIS PRESENTATION IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, BY ANY MEANS OR MEDIA TO US PERSONS IN OR INTO, THE UNITED STATES, AUSTRALIA, SOUTH AFRICA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE
Slide 3: Risk Warnings
RISK WARNINGS Important information You should not rely on any information or opinions contained in this For a full list of risks, please read the Prospectus and KIID by visiting: presentation in making an investment or other decision but should obtain greshamhouse.com/real-assets/real-estate-invest
Slide 4: Presentation Team
PRESENTATION TEAM Mike Adams Ben Fry Sandeep Patel Managing Director, Lead Fund Manager Finance Director Real Estate 4
Slide 5: Highlights
HIGHLIGHTS
Slide 6: H1 2023 Highlights
H1 2023 HIGHLIGHTS +6.2% >99% -3% 86% Like-for-like EPRA Adjusted Dividend Rent collection rental reviews1 Earnings growth Coverage -7.2% -13.7% / 89.0p 52% 90% / 21 years Like-for-like H1 2023 total return / Loan to fixed or inflation-linked valuation decrease EPRA NTA p per share Value debt for 21
Slide 7: Portfolio Overview and Performance
PORTFOLIO OVERVIEW AND PERFORMANCE
Slide 8: A Diversified UK Housing Portfolio
A DIVERSIFIED UK HOUSING PORTFOLIO Focused on two resilient sectors of affordable housing1 to deliver 97% inflation-linked income2 Diversified by tenure and location 3,298 homes3 5 Independent retirement living £355mn valuation3 19 89.0p EPRA NTA4 ▪ Fit-for-purpose homes 259 ▪ Affordable rents with
Slide 9: Shared Ownership Portfolio Performance
SHARED OWNERSHIP PORTFOLIO PERFORMANCE H1 2023 key metrics Accelerating demand Homes / Value 769 / £125mn ▪ £35mn of acquisitions compared to previous year % leased or reserved1 99% ▪ Portfolio is now 99% sold or reserved1 Rent Reviews +7.0% (1 April 2023) ▪ Rising mortgage rates and private rents f
Slide 10: Retirement Portfolio Performance
RETIREMENT PORTFOLIO PERFORMANCE UK’s largest independent retirement portfolio for private rent H1 2023 key metrics Homes / Value 2,240 / £209mn Top line growth offset by cost pressure Occupancy 94% ▪ 5.6% rental revenue growth1 Rent Reviews +5.7% ▪ Record 94% occupancy1 Margin (excl. ground rent) 5
Slide 11: Sustainable Investment Highlights
SUSTAINABLE INVESTMENT HIGHLIGHTS Social impact Environmental impact Saving on annual housing costs compared to alternative tenures Monthly saving on energy Shared owner vs. Shared owner bills and carbon emission for 32% outright owner 21% vs. renter £84 | 200kg CO2 shared ownership residents4 Custo
Slide 12: H1 2023 Financial Results
H1 2023 FINANCIAL RESULTS
Slide 13: H1 2023 Income
H1 2023 INCOME Higher expenses and floating rate financing costs more than offset 10% growth in gross rental income H1 2023 H1 2022 Change Net rental income (£mn) Gross rental income £13.6mn £12.4mn +10% Net rental income1 £8.8mn £8.1mn +8% First tranche sales profits2 £0.2mn £0.3mn -31% Net finance
Slide 14: Adjusted EPRA Earnings
ADJUSTED EPRA EARNINGS Movement in Adjusted EPRA Earnings (pence per share) H1 2023 dividend cover: 86% ▪ Coverage diluted by 0.5p /18% due to: ‒ Retirement energy costs 0.1p above forecast ‒ Finance costs attributable to floating rate debt ‒ Fund management fees, as a result of being charged in adv
Slide 15: European Real Estate Association Net Tangible Assets (EPRA NTA)
EUROPEAN REAL ESTATE ASSOCIATION NET TANGIBLE ASSETS (EPRA NTA) H1 2023 movement in NTA (pence per share) H1 2023 total return: (14.5)p 15.3p share ▪ £4.1mn/2.2p per share net income valuation change ‒ c.86% dividend cover for the half-year ▪ 15.3p per share valuation decline (7.2% like-for-like val
Slide 16: Ultra-Long Investment-Grade Debt
ULTRA-LONG INVESTMENT- GRADE DEBT 21 years1 47%1 c.43%1 52% 46%2 Average debt maturity Fixed (3.5% coupon) Inflation linked (5.5% cap) LTV (50% target) Reversionary LTV (1.1% coupon) Debt maturities schedule 20,000,000 c.£82,000,000 ▪ c. £10mn of liquidity post near- term maturities3 15,000,000 ▪ 90
Slide 17: ReSI Debt Covenants
RESI DEBT COVENANTS Aside from Santander LTV covenant, ReSI plc has ample room in debt covenants Loan Covenants by Portfolio - most recently reported covenants1 ▪ Valuation yield could widen by a Shared Ownership / Retirement / Local Authority / Total Portfolio / further c.20 bps (c.£12mn of Covenan
Slide 18: Outlook
OUTLOOK
Slide 19: Outlook
OUTLOOK ▪ Growing demand and structural undersupply underpin market ▪ Strong top line performance expected to continue ▪ Focus on retirement portfolio performance whilst continuing to protect residents ▪ Sale of non-core assets to pay down floating rate debt will reduce volatility and increase susta
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