Living REIT (LIVE) H2 2023 earnings summary

Executive summary

• FY23 rental income rose 7% to £39.839m and operating profit increased 19% to £42.515m; EPRA NTA per share reached 113.76p, up 4% YoY.

• Portfolio value grew to £678.4m from £669.1m, while LTV eased to 37.0% from 37.4%.

• The 5.46p FY23 dividend target was maintained; dividend cover was 0.85x.

• Rental growth, inflation-linked income and long-term fixed-price debt supported resilience, while rent arrears and market-driven valuation yield movements remained pressures.

Financial highlights

• Rental income was £39.839m versus £37.300m in FY22; gross profit declined 2% to £27.038m.

• Operating profit rose 19% to £42.515m; net profit increased 41% to £34.989m, including a £15.477m fair value gain on investment properties.

• EPS was 8.81p versus 6.18p; EPRA EPS was 4.92p versus 4.78p, while adjusted EPS fell 5% to 4.61p.

• Net finance costs fell 31% to £7.526m from £10.833m; total expenses rose 4% to £8.208m.

• Net assets increased 2% to £447.6m; IFRS NAV and EPRA NTA per share each rose 4% to 113.76p.

Outlook and guidance

• Rental growth is expected to continue into 2024, alongside higher rent collection from My Space and Parasol.

• 64.6% of 2024 annual rent increases were linked to September 2023 CPI of 6.7%; the leases’ new clause limits increases to the lower of CPI/RPI or applicable government policy.

• Dividend cover is described as covered on a run-rate basis, with sustainable long-term cover expected.

• Strategic priorities include the new lease clause, Eco-Retrofit programme and Chorley forward funding.

• The 5.46p FY23 dividend was a target, not a forecast, with no assurance it would be met.