TIDMRECI
RNS Number : 9843M
Real Estate Credit Investments Ltd
15 May 2020
15 May 2020
Real Estate Credit Investments Limited
Dividend Declaration, Company Update Presentation and Financial
Reporting Calendar
Real Estate Credit Investments Limited ("RECI" or "the Company")
is pleased to update investors on: the declaration of its fourth
quarter dividend; confirmation of its financial reporting calendar;
the release of its Company Update Investor Presentation; and the
release of the March Quarterly Report.
Declaration of fourth interim dividend for the financial year
ended 31 March 2020:
The Company's investment objective is to provide Shareholders
with attractive and stable returns, primarily in the form of
quarterly dividends. To provide certainty for our Shareholders, the
Board has brought forward the date of declaration of the fourth
interim dividend and is pleased to announce that it has declared a
fourth interim dividend of 3.0 pence per ordinary share (a total
amount of GBP6,879,974.34) for the year ended 31 March 2020. The
dividend is to be paid, consistent with the Company's normal
financial calendar, on 30 July 2020 to Shareholders on the register
at the close of business on 3 July 2020. The ex-dividend date is 2
July 2020.
Payment of the fourth interim dividend will complete the payment
of dividends totalling 12 pence per ordinary share in respect of
the financial year ended 31 March 2020.
Following a comprehensive review exercise carried out by the
Board and the Investment Manager, more details of which are
contained in the Company Update Investor Presentation released
today, the Board confirms that there will be no change to its
dividend policy for the current financial year ending 31 March
2021, and that the Company intends to continue to pay a stable
quarterly dividend.
Financial Reporting:
The Board notes that the Financial Conduct Authority, responding
to the impact of the COVID-19 pandemic, announced that companies
would be granted an additional two months to allow publication of
their final results, within six months of a company's year end. The
Board confirms that it expects the Company to publish its final
results for the year ended 31 March 2020 around the end of June, in
line with its normal financial calendar.
Company Update Investor Presentation:
Given the heightened uncertainty evolving from the COVID-19
pandemic, RECI's Investment Manager has carried out a detailed
review of the Company's portfolio, to provide investors with:
-- an update of the position of the Company as at 30 April 2020;
-- a detailed review of the positions held by the Company; and
-- detail of the Company's strategy with regards to dividends,
leverage, liquidity and the new emerging opportunities in real
estate credit markets commensurate with the Manager's revised risk
assessment.
The Company is pleased to announce that its Investment Manager's
Company Update Investor Presentation is now available on the
Company's website at:
http://recreditinvest.com/PDFs/2020/05/RECI-May-2020-Company-Update-Presentation.pdf
An extract from the Summary section of the Company Update
Investor Presentation is set out for investors in the Appendix to
this announcement.
March Quarterly Report:
The Company is also pleased to announce that its Investment
Manager's Quarterly Presentation for the quarter ended 31 March
2020 is now available on the Company's website at:
http://recreditinvest.com/PDFs/2020/05/RECI-Mar-2020-Quarterly-Update.pdf
This announcement has been prepared by, and is the sole
responsibility of, Real Estate Credit Investments Limited. This
announcement has been released by Chris Copperwaite of Aztec
Financial Services (Guernsey) Limited, Secretary of the
Company.
For further information, please contact:
Broker: Richard Crawley / Richard Bootle (Liberum Capital) +44
(0)20 3100 2222
Investment Manager: Richard Lang (Cheyne) +44 (0)20 7968
7328
Appendix: Company Update Investor Presentation Extract
Summary: Portfolio Construction and Investment Approach
-- RECI's investment focus is on European real estate credit
comprising loans (mainly senior loans) and bonds.
-- The investment objective of the Company is to provide
Ordinary Shareholders with attractive and stable returns, primarily
in the form of quarterly dividends.
-- Since the 2016 Brexit vote, RECI has benefited from pivoting
its investment strategy away from mezzanine (and subordinate) loans
towards lower risk senior loans and bonds.
- This repositioning reflected the fact that global volatility
and uncertainty were likely to persist and economic cycles were
likely to be increasingly short.
-- As the Company has grown, it has also moved its origination
away from the small / mid market borrowers and towards the larger,
well capitalised and experienced borrower counterparties.
-- RECI's balance sheet leverage and liquidity have been managed
to position it well for periods of stress.
- Coming into this crisis, RECI had gross leverage of 25.3% (net
leverage of 9.5%) as at 29 February. As at 30 April 2020, the
Company's leverage was just 15% of NAV or 1.15x (6% of NAV or 1.06x
on a net look through basis).
-- Despite achieving a lower risk profile in this period, RECI
has continued to generate an attractive income profile.
- Its senior loans have been originated at a WA yield of 8% - 9%
for LTV ranges of 50% - 70% whilst its bond portfolio generated an
ungeared income of around 4% from a portfolio LTV of around
55%.
Summary: Actions Against COVID-19
-- Since the onset of this crisis and the resultant market
turbulence, RECI has moved to take the following measures:
- An evaluation of each of its positions in light of the likely
long term impact of the crisis on operating models and valuations
and hence recovery prospects for the individual positions. The
output of this analysis was to write down the value of just two of
its mezzanine positions. These impairments are not realised losses,
but provisions for potential losses recognised today.
- Engaged positively with every one of its borrower counterparts
to put in place mitigation and de-risking strategies for the long
term.
- Improved the resilience and flexibility of the Company by
increasing its cash balances and reducing its net leverage to just
1.06x as at 30 April 2020. This was achieved by a combination of
repayments of loans as well as sales of select liquid bonds,
raising GBP24.3m. The net realised loss from the latter was limited
to 2.1 pence per Ordinary Share.
- Performed a granular analysis of the future liquidity profile
of the Company. A detailed cashflow profile of each investment was
completed, incorporating the probability of likely delays to
repayments (and additional cash needs).
- Withdrew from progressing on its significant pipeline of
senior loans to refocus on new investment targets with more
attractive risk and return characteristics.
Summary: Positioned to Capitalise on Opportunities
-- Since 29 February, RECI's NAV has declined by 16.2 p per
share. The majority of this reduction comprises the un-realised
mark to market decline on its bond portfolio (8.9 p), the fair
value adjustment on its mezzanine loans (6.2p) with just 2.1p being
the realised loss on sales made.
-- Despite the NAV decline, RECI is well positioned to address
future market uncertainty, with a strong portfolio profile and
modest leverage comprising:
- Senior loans and bonds account for 76% of its NAV
- The WA LTV of its book is 64.1%
- The portfolio is concentrated on credits to large institutional borrowers
- Its balance sheet leverage as at 30 April 2020 is 1.15x gross (1.06x net of cash held)
- It retains cash on balance sheet of GBP31.3m
-- The Company has good visibility on its liquidity and income
profile for the year and is able to bring forward the declaration
of the dividend of 3p per ordinary share announced on 15 May
2020.
-- The portfolio construction and approach since 2016, combined
with recent work to strengthen the Company with the onset of
COVID-19, has positioned the Company to take advantage of a new
pipeline of opportunities:
- The new pipeline being developed by RECI now comprises 3
senior loans with Loan to Costs (LTC) in the range of 50% - 70%, to
institutional borrowers. The rates of return being charged are 2% -
3% higher than achievable just 2 months ago.
- The opportunities in CMBS bonds are likely to become
particularly attractive and abundant as rating downgrades and
liquidity needs bring forward further bouts of financial market
stress.
- RECI will selectively, and gradually, seize these
opportunities over time to further strengthen its income and NAV
growth profile.
-- RECI has benefited from prior periods of economic crises by
virtue of its flexible approach to real estate credit . It is
capable of addressing the dislocations in liquid bond markets
(where the distress is becoming especially acute now) to the
provision of loan capital to institutional borrowers and projects
desperately in need of expert financing solutions.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
DIVAIMMTMTABTAM
(END) Dow Jones Newswires
May 15, 2020 02:00 ET (06:00 GMT)
Real Estate Credit Inves... (AQSE:RECI.GB)
Graphique Historique de l'Action
De Jan 2025 à Fév 2025
Real Estate Credit Inves... (AQSE:RECI.GB)
Graphique Historique de l'Action
De Fév 2024 à Fév 2025
