Home REIT (HOME) H2 2022 earnings summary

Executive summary

• The period was marked by severe operational and financial challenges, including tenant arrears, liquidations, share suspension, and investigations into alleged wrongdoing by former advisers and management.

• A comprehensive review led to restated accounts, revised accounting policies, and a significant write-down in asset values.

• The company transitioned to a managed wind-down strategy after failing to secure refinancing, with the aim of selling assets to repay debt and return capital to shareholders.

Financial highlights

• Loss before tax of £474.8 million for FY22, compared to a profit of £16.1 million in FY21.

• Net asset value (NAV) per share fell 57.5% to 43.76p (2021: 103.03p), driven by a £452.9 million decrease in property fair value.

• Portfolio independently valued at £414.3 million, just 45.5% of historical acquisition costs.

• Loan-to-value ratio rose to 60.3%, breaching policy and covenants.

• Dividends paid for the year totaled 5.50p per share.

Outlook and guidance

• The company is executing a managed wind-down, aiming to sell all assets by June 2025 and repay all debt by December 2024.

• Capital returns to shareholders will be constrained by ongoing litigation and an FCA investigation.

• No further investments or dividends are planned until debt is repaid and contingent liabilities are resolved.