TIDMHOME
RNS Number : 2947J
Home REIT PLC
12 December 2022
12 December 2022
Home REIT plc
("Home REIT" or the "Company")
DIVID ANNOUNCEMENT AND FURTHER UPDATE
Further to the Company's announcement released on 30 November
2022, fully responding to the publishing of a short selling report
(the "Report") and in view of the further allegations raised since
that date, the Board reiterates that it believes that all
allegations are without substance.
Dividend announcement
Following its internal investigations, the Board reaffirms that
the Company's portfolio fulfils its sole focus of providing safe
and secure accommodation to some of the most vulnerable in society,
whilst generating shareholder value.
In view of the Company's robust rental income as disclosed in
the announcement on 30 November 2022, as well as its strong balance
sheet and conservative leverage position, the Board today declares
an interim dividend of 1.38 pence per Ordinary Share in respect of
the period from 1 June to 31 August 2022, as scheduled below:
Ex-Dividend Date 22 December 2022
Record Date 23 December 2022
Payment Date 20 January 2023
The dividend will be paid as a Property Income Distribution
("PID") in respect of the Company's tax-exempt property rental
business.
The dividend is the fourth quarterly dividend declared in
respect of the 12-months to 31 August 2022 and takes the total
dividends paid and declared in respect of the financial year to 5.5
pence per Ordinary Share, and represents achievement of the
Company's annual dividend target for the second year running.
Further update and accounts
Whilst the Company remains of the view that the allegations made
in the Report and subsequent publications are without foundation
and have caused unnecessary and significant disruption and losses
to the Company and its shareholders, the Board has taken steps to
maintain and enhance shareholder confidence.
In view of the Report, the Company's auditor is carrying out
enhanced audit procedures, which include a detailed review of the
material allegations made against the Company and its advisers. The
Company continues to work constructively with its auditor to ensure
that the full year results for the period to 31 August 2022 can be
published as soon as practically possible and expects this to be no
later than 31 January 2023.
The Company's portfolio continues to operate effectively, with
rents flowing from tenants, and continues to fulfil its objective
of providing high quality, safe and secure accommodation with
genuine social impact.
The Board, alongside Alvarium Home REIT Advisors Limited (the
"Investment Adviser"), have undertaken a series of investor
engagement meetings and presentations following the allegations to
canvas investor feedback. In light of the feedback and requests
received, following the publication of the Report, the Company
provides the following updates and commitments to its
stakeholders:
Resourcing and governance
-- The Investment Adviser has taken on board recent investor
feedback and has committed to invest materially in further
resourcing its dedicated in-house team, including hiring additional
senior level investment professionals, to work alongside Charlotte
Fletcher and Alex Baker, the Senior Fund Managers. Charlotte has
also decided to reduce her maternity leave, returning to work in
January 2023.
-- The Company will also appoint, at the sole cost of the
Investment Adviser, an experienced and specialist national Property
Management firm, to carry out a full suite of property management
services, including rent invoicing and collection and tenant
liaison and monitoring.
-- The Investment Adviser is aligned with shareholders in
regards to seeking strong financial and operational performance by
the Company and re-iterates its statements, from 30 November 2022,
that it does not have any non-standard connections or conflicts
with the developers from which the Company acquires assets. The
Investment Adviser is also conscious that the additional measures
required as a result of the Report represent significant additional
costs for the Company and to clearly demonstrate its ongoing
alignment, these costs will be reimbursed in full by the Investment
Adviser and will therefore come at no cost to shareholders.
-- Given the growth of the Company, the Board had already
commenced a review of skills and capability at Board level. To that
end, the Company has now employed an independent and external
executive search agency in order to recruit an additional
Non-Executive Director with a particular focus on direct experience
in property and ESG matters. A further announcement on this is
expected in January 2023.
Portfolio disclosure and due diligence
-- The Investment Adviser and the Board are undergoing a
thorough review of their diligence procedures. Whilst the
procedures adopted to date represent normal market practice, the
Investment Adviser expects to implement several enhancements to be
enacted over the medium term, including:
o Working with tenants to improve their asset monitoring
procedures so that rare and ad hoc contractual breaches, for
example with residents sub-letting rooms, are identified, and
addressed more efficiently.
o Enhancing tenant reporting requirements to the Company, if
necessary, through additional landlord protection clauses in tenant
leases.
o The Company will commission an independent valuation on all
property acquisitions prior to purchase from a valuer other than
its own external valuer to provide additional assurance in relation
to both purchase price and subsequent valuations.
-- The Company will also provide enhanced disclosures relating
to its portfolio and, more specifically, around the underlying
operational performance of its assets. This will include, inter
alia, additional disclosure around geographic locations of the
assets and a list of the Company's largest development partners, as
well as providing stakeholders with further opportunities to meet
the Company's tenants and visit properties where possible.
-- The Company will continue to work with the Good Economy
Partnership Limited, the impact advisory firm, to independently
assess the Company's social impact on homeless people who are
accommodated in the Company's properties, and publish a related
report on an annual basis.
Financial Information
-- The Board takes further comfort in its balance sheet which
benefits from a low LTV ratio, 100% fixed all-in cost of debt of
2.3% per annum and no debt maturities until 2032. Likewise, the
additional layer of review and independent analysis by the
Company's lender, Scottish Widows, and its valuers, ensures further
robustness.
-- The Board notes the technical requirements of DTR 4.1.3
around publishing year end accounts within four months, in the case
of the Company this date being 31 December 2022. If this deadline
is not met, the FCA will temporarily suspend the Company's listing
until the audited accounts are published.
-- The Company expects to publish its audited accounts prior to
31 January 2023 and continues to work tirelessly alongside its
auditors to reduce this timeline (which, as noted above, has been
unusually protracted due to enhanced audit procedures resulting
from the Report).
FOR FURTHER INFORMATION, PLEASE CONTACT:
FTI Consulting (Communications HomeREIT@fticonsulting.com
Adviser) +44 (0)20 3727 1000
Dido Laurimore
Eve Kirmatzis
Ellie Perham-Marchant
Oliver Harrison
The Company's LEI is: 213800A53AOVH3FCGG44.
For more information, please visit the Company's website:
www.homereituk.com
About Home REIT plc
The Company is now providing 11,861 beds, across 2,473
properties spread throughout 137 Local Authorities, to homeless
people in the UK, where the demand for long-term high quality and
affordable homeless accommodation continues to far outweigh the
supply. With over 320,000 people sleeping rough, in homeless
shelters or other temporary housing in Great Britain and in England
a household became homeless every four minutes (only exacerbated by
the cost of living crisis) this is a huge, growing problem in the
UK, which Home REIT is proud to help alleviate. There is also a
focus on training and rehabilitation at the properties by the
Tenants to provide individuals with the skills and confidence to
reintegrate back into society. With the obligation for Local
Authorities to secure accommodation for homeless people from 2018
cross-party legislation, Home REIT's properties offer significant
savings to local authorities of 65 per cent. via lower rents and
better-quality accommodation versus expensive alternatives e.g. bed
& breakfast.
Home REIT plc seeks to contribute to the alleviation of
homelessness in the UK, whilst targeting inflation-protected income
and capital returns, by funding the acquisition and creation of a
diversified portfolio of high-quality accommodation assets across
the UK which are dedicated to providing accommodation to homeless
people. The accommodation assets are let or pre-let on very long
(typically 20 to 30 years) leases, containing inflation-linked or
fixed uplift rent review provisions, to registered charities,
housing associations, community interest companies and other
regulated organisations which have a proven operating track record
in providing low-cost accommodation to homeless people and which
receive exempt housing benefit or comparable support from local or
central government to fund the provision of such accommodation to
homeless people.
There is a critical need for further accommodation for homeless
people in the UK, due to an increasing homeless population and a
lack of available and affordable high-quality, fit-for-purpose
stock to address the problem. Local housing authorities are under a
statutory duty to secure accommodation for individuals who are
unintentionally homeless and in priority need but current
accommodation for homeless people is limited in quantum and often
sub-standard and uneconomical.
The Company focuses on investing in and creating well-located
properties that provide a sustainable level of rent for the Tenant.
Within the homeless accommodation assets, there is a focus on care,
support, training and rehabilitation to provide vulnerable homeless
people with the skills and confidence to find long-term
accommodation and enable them to reintegrate back into society.
Savings are expected to be made to local authorities and other
providers of accommodation to homeless people via lower rents
versus more expensive alternative accommodation.
The Company is listed on the premium segment of the Official
List of the UK Financial Conduct Authority and its Ordinary Shares
were admitted to trading on the main market of the London Stock
Exchange, premium segment, on 12 October 2020.
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