Despite the most challenging year in living memory for business, Real Estate Investors plc (REI) delivered underlying profits of £8.1 million for the year to 31 December 2020 with revenue stable at £16.4 million.
Paul Bassi, chief executive of REI, said: “In spite of everything the economy and Brexit could throw at us, we have delivered a solid performance, reflecting the strength of the business in its diversity and mix of assets throughout the Midlands.
“This was a resilient operational performance under uniquely difficult circumstances which has produced stable underlying profits of £8.1 million, up 1.2% from last year. This has only been possible due to the diversity of our portfolio, resulting in a covered dividend of 3p for the year.”
An accounting non-cash loss of £20.2 million is accounted for by revaluations of property and hedge costs, which are expected to return to pre-pandemic levels as the economy recovers.
“Valuation declines are symptomatic of market uncertainty and sentiment, caused on this occasion by the impact of a global pandemic.
“They are understandable and we expect them to reverse as investment activity recommences. We can already see from the prices achieved in the marketplace, that confidence in the Midlands property market is returning, alongside the Government’s timetable for the lifting of lockdown restrictions.
“Our management team is currently focused on certain sales to satisfy investor demand, which will further assist in reducing the company’s gearing, leaving existing cash and bank facilities available to make strategic and opportunistic acquisitions.”
He added: “We also carried out a share buyback costing £2 million during the year, and have retained our dividend policy, while others have withheld, paying a total dividend per share of 3p for 2020 – making a total of £36.4 million paid out since we commenced paying dividends.”
Earlier this month, REI announced it had renewed part of its banking facilities of £51 million with NatWest on favourable terms.
And this leaves REI poised to take advantage of the regional economic bounce back anticipated in the second half of 2021.
Mr Bassi said: “Our regional economy looks set to recover from the pandemic and looks forward to the economic boost from HS2, Coventry City of Culture 2021 and the Commonwealth Games 2022.
“Our business remains well positioned to capitalise on a growing occupier demand for the convenience and neighbourhood assets and our out-of-town offices.
“As the marketplace normalises, we anticipate a healthy recovery in valuations and sales at pre-COVID-19 levels with a strong investor demand for regional assets that performed well during the global pandemic, supported by high levels of equity and low costs of debt available for real estate.
REI ended 2020 with £9.725 million of property sales which have unconditionally exchanged contracts and completion is expected in 2021. They include an Aldi store in Birmingham which the supermarket chain is acquiring for £5.35 million.
The company has also announced the well-known Birmingham lawyer and businessman John Crabtree OBE is to retire as chairman in May 2021, with longstanding non-executive director William Wyatt assuming the role.