The PRS REIT (PRSR) H2 2023 earnings summary

Executive summary

• Market leader in single-family rental homes, with over 5,000 completed homes and strong demand driving high occupancy and rental growth.

• Portfolio is geographically diversified, primarily in the North and Midlands, with a target of 5,500+ homes and ERV of £60.7m per annum.

• Award-winning 'Simple Life' brand underpins high tenant satisfaction and strong asset performance.

• Dividend of 4p per share for FY2023, targeting full coverage on an EPRA run-rate basis in FY2024.

• High resilience due to diversified income, strong affordability, and energy-efficient homes.

Financial highlights

• Revenue rose 18% to £49.7m year-over-year, driven by portfolio growth and rental demand.

• Net rental income up 17% to £40.2m; operating profit down 54% to £58.9m due to one-off gains in prior year.

• Profit after tax fell 63% to £42.5m; basic EPS down 64% to 7.7p; EPRA EPS up 3% to 3.1p.

• Net assets increased 3% to £660m (120.1p per share); portfolio gearing low at 37%.

• 4p dividend declared, with 90% coverage on an EPRA run-rate basis.

Outlook and guidance

• Portfolio performance expected to remain strong, with continued rental growth and high occupancy.

• UK rental growth forecasted at over 9% for 2023 and 5-6% for 2024, led by regional markets.

• Dividend target of 4p per share for FY2024, expected to be fully covered.

• Reducing interest rates anticipated to enhance refinancing opportunities and sector yields.

• Funding for remaining portfolio delivery is available and committed.