PRS REIT posts solid interim results as sale process continues

(Sharecast News) - PRS REIT posted a robust set of interim results for the six months to 31 December, underpinned by solid rental growth, strong occupancy and disciplined cost management, as the company neared completion of its development programme and continued to explore strategic options including a potential sale. The FTSE 250 company said revenue rose 17% year-on-year to £32.9m, while net rental income increased by 16% to £26.6m, driven by continued rental growth and a full period contribution from units completed in the prior year.

Operating profit climbed 44% to £56.3m and profit before tax rose 52% to £46.2m.

EPRA earnings per share were up 17% to 2.1p, supporting an increased dividend of 2.1p for the period, fully covered by earnings.

At 31 December, the portfolio comprised 5,437 completed homes with an estimated rental value (ERV) of £68.6m per year.

A further 41 homes were underway, expected to complete by 30 June, at which point the portfolio would total 5,478 homes with an ERV of approximately £70m.

Average net investment yield remained unchanged at 4.6%, while net asset value per share increased 5% to 139.6p, supported by growth in underlying property valuations.

Operational performance remained strong, with 96% physical occupancy - 97% including reserved units - rent collection at 99%, and like-for-like rental growth of 10.8%, reflecting rental uplifts on both renewals and new lettings.

Arrears remained low at around £1.0m, and affordability metrics continued to show average rents at 23% of gross household income, well below the ONS 30% threshold.

The company said it was also progressing its strategic review and formal sale process, initiated during the period.

Several non-binding proposals were received in February, mostly at a premium to the then share price but below the June net asset value.

Selected parties were currently undertaking due diligence, with the board continuing to evaluate all options to maximise shareholder value.

An update was expected by the end of the second quarter of 2025.

The board said rental demand for high-quality family homes remained strong amid structural undersupply, elevated interest rates and ongoing cost-of-living pressures.

Early 2025 data indicated continued robust performance, with rent collection at 101% and occupancy at 96% as of late February.

"Interim results are excellent, reflecting the continued strong performance of the company's portfolio of rental homes, the largest of its kind in the UK," said non-executive chair Geeta Nanda.

"The final tranche of new homes is now due by the end of June, at which point the PRS REIT's portfolio will amount to 5,478 completed homes with an estimated rental value of around £70m per annum."

Nanda said the shortage of high-quality family rental homes in the UK combined with rising demand continued to favour prospects for the PRS REIT.

"The strategic review and formal sale process remain in process and further updates will be made in due course, and by no later than the end of the calendar second quarter."

Reporting by Josh White for Sharecast.com.