Social Housing Reit (SOHO) H1 2024 earnings summary

Executive summary

• Achieved resilient financial performance with increased rent collection and strong rental growth, despite sector challenges and modest outward yield movement.

• Portfolio value at £652.7m as of 30 June 2024, down from £678.4m at year-end due to reclassification of 13 assets as held for sale; total return since IPO reached 49.13% including dividends.

• Strategic initiatives included successful lease transfers (notably Parasol to Westmorland), portfolio sale agreements, and progress on sustainability projects such as the Eco-Retrofit pilot.

• Contracted rental income rose to £41.2m per annum, with 100% of leases inflation-linked; dividend cover improved to 1.0x for the period.

• Rent collection increased to 93.3% (up from 90.2% at year-end), supported by lease transfers and ongoing engagement with My Space.

Financial highlights

• Rental income increased by 4.9% year-over-year, driven by index-linked uplifts; portfolio value at £652.7m, a 0.5% like-for-like reduction.

• Adjusted EPS rose to 2.74p (from 2.10p in H1 2023); EPRA EPS up 33% year-over-year; dividend target of 5.46p fully covered (1.0x).

• Net profit was £5.3m (EPS 1.35p), down 64% year-over-year due to fair value loss on properties.

• EPRA NTA per share at 112.38p (down from 113.76p at year-end), reflecting a 0.5% like-for-like portfolio value reduction.

• Cash at 30 June 2024 was £29.3m, with strong liquidity and dividend cover.

Outlook and guidance

• Priorities for H2 2024: resolve My Space arrears, complete portfolio sale (>£20m), return capital via share buyback, and roll out wider Eco-Retrofit project.

• Focus remains on maximizing rental income and maintaining strong dividend cover, supported by lease transfers and cost savings.

• Expectation of continued strong rental growth in H2 2024, with 50.4% of annual lease rent increases linked to 6.7% CPI.