Real Estate Investors plc (REI), the AIM-listed Birmingham based Real Estate Investment Trust, with a diverse Midlands property portfolio, has reported another impressive set of financial results for the year to 31 December 2017.
Pre-tax profits were £11.3 million, up 37.8%, and underlying profits up 19.2% to £6.2 million. Revenue was up 10.4% to £14.9 million with contracted rental income up 8.7% to £16.2 million.
REI has also increased its dividend payment for five consecutive years, rising a further 19% in 2017, with a final dividend of 0.875p.
Chief executive officer Paul Bassi said: “We are fortunate to be operating in a vibrant and expanding regional economy that is set to re-establish itself as a major national and international powerhouse.
He said that REI’s strong results were recorded against a continuing background of macro-economic uncertainty.
“REI has once again prospered. The continued uncertainty provides an ideal environment in which to secure further criteria compliant assets and make strategic sales by taking advantage of a strong investor market, and our privileged network and market reputation,” he said.
During 2017, REI achieved record gross property assets increasing to £213.1 million, up 5.5% and has agreed terms for a new five year facility of £10 million with RBS, which gives the business £20 million plus in cash and available facilities to pursue future opportunities to acquire properties that fit the firm’s investment criteria.
During the year, REI acquired £18.4 million of new property, net of acquisition costs, and capitalised on a strong investor market with sales of £13.5 million.
Paul Bassi added: “During 2017 we remained focused on capitalising on the opportunities provided by uncertain markets and we continue to build a successful and resilient business, founded on a diverse and carefully risked adjusted portfolio.
“We are selective buyers in a strong investment market and our acquisition strategy is based on our ability to add value through asset management and in securing sustainable income streams.”
He said REI’s impressive progress was in no small way aided by the resurgent Midlands economy.
“We are fortunate to be operating in a reinvigorated regional economy whose strong and arguably contrarian performance is set to benefit further from the arrival of HSBC, HS2 and HMRC.
“These successes, coupled with the success of Birmingham in being awarded the Commonwealth Games for 2022 and Coventry securing the City of Culture for 2021, will re-establish the Midlands economy both nationally and internationally.
“There is no doubt that the region’s manufacturers have benefitted from the added advantage of a weakened sterling.
“The automotive sector has seen continued sales growth at JLR group, with global sales in 2017 hitting 621,109 vehicles, a 7% increase on 2016 and we also continue to be one of the UK regions that is seeing house price growth and falling unemployment.
“We remain confident that we will extract further value from the existing portfolio and see our rental income grow further, enabling us to support our commitment to a progressive dividend policy,” he said.
He added that REI was also poised to take advantage of any market correction, or Brexit “cliff edge” opportunities.
“We anticipate political and economic uncertainty, but we remain confident about the performance of REI in 2018 and we look forward to another year of opportunity and sustainable growth,” he said.
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For further information, please contact:
Paul Bassi CBE DL D.UNIV,
Chief Executive, Real Estate Investors plc, 2nd Floor, 75/77 Colmore Row, Birmingham B3 2AP
0121 212 3446
Prepared and issued by Andy Skinner of ASAP, 01789 490786, mobile, 07990 978257
About Real Estate Investors Plc
Real Estate Investors Plc (REI Plc) is a publicly quoted, internally managed property investment company and REIT with a portfolio of 1.5 million sq ft of commercial property, managed by a highly-experienced property team with over 100 years of combined experience of operating in the Midlands property market across all sectors.
The Company’s strategy is to invest in well located, real estate assets in the established and proven markets of central Birmingham and the Midlands, with income and capital growth potential, realisable through active portfolio management, refurbishment, change of use and lettings. The portfolio has no material reliance on a single asset or occupier.
On 1st January 2015, the Company converted to a REIT. Real Estate Investment Trusts are listed property investment companies or groups not liable to corporation tax on their rental income or capital gains from their qualifying activities.
The Company aims to deliver capital growth and income enhancement from its assets, supporting a progressive dividend policy. Further information on the Company can be found at www.reiplc.com