REPEAT: Ground Rents Value Falls Amid Leasehold Reform Uncertainty

(Alliance News) - Ground Rents Income Fund PLC on Thursday reported a 4.6% drop in annual net ...

Alliance News 12 December, 2019 | 6:35PM
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(Alliance News) - Ground Rents Income Fund PLC on Thursday reported a 4.6% drop in annual net asset value mainly due to a reduction in the value of its investment portfolio.

The property income fund said its NAV at September 30 fell to 111.3 pence per share from 116.6p a year ago. The NAV total return, including dividends of GBP2.9 million, was negative 2.1%.

"The residential ground rent sector continues to be negatively impacted by uncertainty relating to leasehold reform. Against this background the group experienced a 3.6% decline in the value of the underlying portfolio over the year. This contributed to a 4.6% decline in the group's net asset value to GBP108 million or 111.3 pence per share as at 30 September 2019, which compares with GBP113.2 million or 116.6 pps at the start of the financial year," said Chair Malcolm Naish.

"The short-term outlook for the group will be influenced by further developments in the current leasehold reform which could, in turn, be impacted by a change in government policy. While we support reform that addresses unfair leasehold terms and practices, we will continue to advocate for leasehold reform that strikes a fair balance for all stakeholders in the sector, supports the legitimate value of the Group's portfolio and continues to provide differentiated and attractive returns to shareholders," Naish added.

For the year to September-end, the company recorded a pretax loss of GBP2.9 million, significantly narrowed from GBP10.7 million loss in the comparative period. Revenue increased to GBP5.6 million from GBP5.4 million.

The narrowed pretax loss was mainly due to a sharp fall in losses on revaluation of investment properties to GBP4.9 million from GBP14.2 million.

Shares in the trust closed 0.7% higher at 92.60 pence each on Thursday in London.

By Ife Taiwo;

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Ground Rents Income Fund Plc 83.50 GBX -0.60 -

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