Ground Rents Income Fund PLC Unaudited Net Asset Value at 30 September 2017 (1253U)
October 20 2017 - 1:00AM
UK Regulatory
TIDMGRIO
RNS Number : 1253U
Ground Rents Income Fund PLC
20 October 2017
Ground Rents Income Fund plc
(the "Company")
Unaudited Net Asset Value at 30 September 2017
Ground Rents Income Fund plc (LSE: GRIO), a listed real estate
investment trust (REIT) investing in UK ground rents, announces its
unaudited Net Asset Value ("NAV") as at 30 September 2017.
Highlights:
-- NAV per ordinary share of 131.7 pence as at 30 September 2017 (31 March 2017: 138.35 pence)
-- Diluted NAV per ordinary share of 130.2 pence as at 30
September 2017 (31 March 2017: 135.31 pence)
The unaudited NAV per share as at 30 September 2017 was 131.7
pence. This represents a decrease of 4.8% from the unaudited NAV of
138.35 pence per share at 31 March 2017.
The decrease in the NAV reflects the reduction in the
independent portfolio valuation by Savills Advisory Services
Limited ("Savills") as at 30 September 2017.
The NAV is in line with the Directors' View expressed in the 31
March 2017 unaudited NAV announcement on 12 June 2017. The
Directors expected a reduction in the valuation of the portfolio of
approximately GBP5.5-6.0 million, which would have reduced the NAV
to approximately 132 pence per share, with the diluted NAV reducing
to approximately 130 pence per share.
The Directors are of the view that the valuation as at 30
September 2017 takes full consideration of the market conditions
over the last six months and reflects the underlying value of the
portfolio as at 30 September 2017.
Savills' market commentary:
"Under VPGA 10 (Valuation Practice Guidance Applications) of the
RICS Valuation Global Standards 2017 we are required to bring to
your attention "Matters that may give rise to material valuation
uncertainty".
GRIO will be fully aware of the Government consultation paper -
"Tackling unfair practices in the leasehold market" which covers a
number of issues which could affect demand and the operation of the
ground rent investment market. GRIO have been fully engaged in this
process and have submitted its own response to this paper. Until
the Government decides on a course of action there is now valuation
uncertainty for some ground rent types.
For clarity, there continues to be an active market for less
onerous review types, such as RPI linked ground rents, but there is
a material change in the perception of investment quality for
investments with aggressive review patterns, leasehold houses and
those with ground rents which are high in comparison to the
property's capital value. Some investors have either reduced their
bids for these assets or withdrawn from buying them altogether.
GRIO's portfolio has only limited exposure to this type of asset
and so the valuation uncertainty is reduced. Nevertheless, some
market uncertainty exists and reference to VPGA 10 is
appropriate."
Breakdown of NAV movement
A breakdown of the change to the unaudited NAV per share
calculated under International Financial Reporting Standards
("IFRS") for the period from 1 April 2017 to 30 September 2017 is
set out below:
Net assets per unaudited interim GBP129.2m
accounts as at 31 March 2017
Profit for the period 1 April 2017 GBP1.7m
to 30 September 2017 (H2 2017)
Revaluation loss plus costs of acquisition (GBP5.0m)
Issue of ordinary share capital GBP3.3m
- exercise of warrants
Dividends paid during H2 2017 (GBP1.8m)
Net assets as at 30 September 2017 GBP127.4m
The net asset values and diluted net asset values are calculated
under IFRS and are unaudited. The NAV per share is calculated using
96,712,100 ordinary shares of 50 pence each, being the number in
issue on 30 September 2017. The diluted NAV per share is calculated
using 4,718,273 warrants, being the number in issue on 30 September
2017.
Contacts:
Ground Rents Income Fund
plc
020 7499
Simon Wombwell (Director) 6424
Brooks Macdonald Funds Limited
020 7659
James Agar (Director) 3454
N+1 Singer (Broker)
020 7496
James Maxwell / Liz Yong 3000
Tavistock (Media)
020 7920
Jeremy Carey / James Whitmore 3150
Appleby Securities (Channel
Islands) Limited
Kate Storey / Danielle Machon 01481 755600
This announcement is released by Ground Rents Income Fund plc
and contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 ("MAR"), encompassing
information relating to the NAV described herein, and is disclosed
in accordance with the Company's obligations under Article 17 of
MAR.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of the Company by Simon Wombwell, Director.
END OF ANNOUNCEMENT
This information is provided by RNS
The company news service from the London Stock Exchange
END
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