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• Like-for-Like Rental Growth: 5.8% increase.

• Occupancy Rates: 96% in retirement and 100% in shared ownership.

• Rent Collection: 99% consistent collection rate.

• Adjusted Earnings Growth: 9% increase.

• Dividend Coverage: 124% coverage of the rebate dividend.

• Investment Valuations: Declined 3% like-for-like year-on-year.

• Total Upper NTA Return: -4% to 74.6p per share.

• Loan-to-Value (LTV): 52%.

• Retirement Revenue Growth: 8.4% year-on-year.

• Shared Ownership Rental Growth: 8.8% increase.

• Net Rental Income Growth: 5% increase from GBP18.1 million to GBP18.9 million.

• Gross Rental Revenue Increase: 7% increase.

• Net Finance Costs: Increased 4% to GBP6.7 million.

• Management Fees: Decreased 25% to GBP1.4 million.

• Dividend Declared: Q4 dividend of 103p per share.

• Debt Maturity: Weighted average of 20 years.

• Fixed Debt Rate: 51% of debt at a fixed rate of 3.5%.

• Warning! GuruFocus has detected 3 Warning Signs with HDB.

Release Date: January 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Residential Secure Income PLC (LSE:RESI) reported strong top-line growth with a 5.8% like-for-like rental increase.

• The company maintained high occupancy rates, with 96% in retirement and 100% in shared ownership.

• Adjusted earnings grew by 9%, comfortably covering the dividend by 124%.

• The company successfully disposed of local authority assets, generating GBP20.5 million in proceeds.

• The portfolio's energy efficiency is ahead of the market, with 98% of properties rated EPCC or above.

Negative Points

• The decision to wind down the trust was made due to challenges in scaling and market conditions.

• The trust has been trading at a significant discount to its net asset value, with low liquidity.

• Investment valuations declined by 3% year-on-year due to higher interest rates.

• Operating expenses increased by 11% in the retirement portfolio, driven by insurance and energy costs.

• The market backdrop remains difficult, with bond yield movements likely to pressure valuation yields.

Q & A Highlights

Q: What are the estimated costs of the wind down? A: Sandeep Patel, Finance Director, stated that while it's difficult to provide absolute numbers at this stage, ReSI is proactive in managing wind down costs. They have worked with the Board to agree on a budget for third-party advisers, aligning them with shareholder value maximization. Normal expenses expected during an orderly wind down, including legal, tax, and liquidation fees, will be incurred.

Q: Can you give more context about the Wesley House sale and the valuation achieved? A: Ben Fry, Fund Manager, explained that Wesley House was sold for net proceeds of GBP15 million, compared to a book value of GBP14.4 million as of September 31, 2023. The gross proceeds were about GBP15.3 million, with approximately GBP300,000 in legal and other transaction costs.