The PRS REIT (PRSR) H1 2023 earnings summary

Executive summary

• Portfolio reached 5,526 completed and contracted homes as of 31 Dec 2022, targeting 5,600 homes and £57.9m ERV p.a., largest UK single-family rental platform.

• High occupancy (97%) and rent collection (98%) rates maintained, with low arrears at 1% of ERV and average rent about 25% of household income.

• Portfolio geographically diversified mainly in the North and Midlands, managed under Simple Life brand, with strong ESG credentials: 86% homes rated EPC A or B.

• Dividend target of 4p per share for FY2023, expected to be almost fully covered by earnings on an annualised basis.

• Net assets £643m at 31 Dec 2022, up 12% year-over-year; IFRS and EPRA NTA per share 117.1p.

Financial highlights

• H1 2023 revenue £24.2m, up 22% year-over-year; net rental income £19.6m, up 20%.

• Operating profit £22.7m, down 48% year-over-year due to lower fair value gains (£5.5m vs £31.1m prior year); adjusted operating profit up 31% to £16.9m.

• Profit after tax £14.7m, down 62% year-over-year; basic EPS 2.7p, down 64%; EPRA EPS at 1.6p.

• Other income of £1.3m from compensation for delayed housing delivery.

Outlook and guidance

• Final phase of c.620 homes underway; portfolio c.90% complete as of March 2023, targeting 5,600 homes and £58m ERV.

• Rental demand remains strong amid national housing undersupply, cost-of-living pressures, and rising interest rates, supporting upward rent pressure.

• Dividend target of 4p per share for FY2023 expected to be almost fully covered by earnings by year-end.

• Portfolio expected to deliver stable, long-term income and capital growth.

• Board confident in meeting financial year targets and maintaining high occupancy and rent collection.