20 December 2017
DRIP REIT - RNS Results to 30 September 2017
Drum Income Plus REIT plc
Report & Financial Statements for the period to 30 September 2017
Drum Income Plus REIT was established in May 2015 to provide investors with a regular dividend income, together with the prospect of income and capital growth over the longer term, by investing in regional real estate assets. I am pleased to present the annual report for the year ended 30 September 2017.
The Group’s net asset value (NAV) at 30 September 2017 was 94.0 pence per share an increase of 0.5% over the comparative figure in 2016. When the dividends paid during the period are taken into account the NAV total return for the twelve months to 30 September 2017 is 6.3%
As at 30 September 2017 the share price was 95.5 pence, a decrease of 8.2% over the year. The share price stands at 94.5 as I write, representing a 0.5% premium to the 30 September NAV.
The Company has paid four quarterly dividends each of 1.375 pence per share, making total dividends in respect of the year to 30 September 2017 of 5.50 pence per share, an increase of 4.8% on the dividends paid in respect of the previous year.
The dividends were fully covered by revenue earnings per share of 6.65 pence for the year. In the absence of unforeseen circumstances the Board continues to expect to pay dividends totalling at least 6.0 pence per share in respect of the year ending 30 September 2018.
During the year your Investment Adviser continued to implement the investment strategy outlined in the Company’s prospectuses. One further property was acquired taking the total number of property assets in the portfolio to 10. The properties are all in strong regional locations and are occupied by 92 tenants.
In addition to the new purchase, the Investment Adviser has been active in managing the existing properties. Many of the initiatives implemented have proved successful and have resulted in an increase in the value of the properties owned. These initiatives are discussed in greater detail in the Investment Adviser’s report.
Following the purchase of the Kew Retail Park in Southport in May, the Company had invested all of the proceeds of its equity raisings and utilised to the full its bank facilities. The Group has a £25 million 3 year revolving credit facility with Royal Bank of Scotland and has drawn down £22.8m, representing a gearing percentage of 39.1% - directly in line with the level of long term gearing that was suggested in the company’s prospectuses.
It is useful to highlight that over the 12 month year under review the valuation increase of the property portfolio was circa £1.4m - much of this due to the active management initiatives implemented by your adviser. The acquisition costs incurred in relation to the purchase of Kew Retail Park were £526,000, equivalent to 1.4 pence per share.
The Company has now completed the investment of its equity proceeds and associated debt. This process has been conducted very much in line with the expectations set out in the prospectuses both in terms of the spread of assets purchased and the investment yields achieved. The dividends paid to shareholders have been ahead of those forecast.
The Board believes that the outlook for the regional property market remains robust. The Company has numerous asset management opportunities across its portfolio and I look forward to seeing these coming to fruition.
20 December 2017
Report & Financial Statements click here