from Grit Real Estate Income Group (isin : GG00BMDHST63)
Abridged Unaudited consolidated results for six months ended 31 December 2024
Grit Real Estate Income Group (GR1T)
ABRIDGED UNAUDITED CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
Grit Real Estate Income Group Limited, a leading Pan-African real estate company focused on investing in, developing and actively managing a diversified portfolio of assets underpinned by predominantly US Dollar and Euro denominated long-term leases with high quality multi-national tenants, today announces its results for the six months ended 31 December 2024. Bronwyn Knight, Chief Executive Officer of Grit Real Estate Income Group Limited, commented: “As part of the Group’s journey to recovery, we progressed in our cost reduction programme, strengthened the balance sheet through active interest rate risk management and improved the portfolio across key metrics, underpinned by strong leasing and asset management efforts. Although several initiatives already implemented will only realise full value over the medium term, net operating income benefitted from an increased contribution from the Data Centres and Healthcare segments. Our portfolio remains defensive by geographic and asset class diversification, with a significant percentage of income under long-term hard currency leases. This provides a foundation for income generation and a resilient platform from which to capitalise on growth opportunities through active management and sector-focused development structures.” Financial and Portfolio highlights
Notes
Summarised results commentary:
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NOTES: Grit Real Estate Income Group Limited is the leading Pan-African real estate company focused on investing in, developing and actively managing a diversified portfolio of assets in carefully selected African countries (excluding South Africa). These high-quality assets are underpinned by predominantly US$ and Euro denominated long-term leases with a wide range of blue-chip multi-national tenant covenants across a diverse range of robust property sectors. The Company is committed to delivering strong and sustainable income for shareholders, with the potential for income and capital growth. The Company holds its primary listing on the Main Market of the London Stock Exchange (LSE: GR1T and a secondary listing on the Stock Exchange of Mauritius (SEM: DEL.N0000). Further information on the Company is available at www.grit.group. Directors: Peter Todd (Chairman), Bronwyn Knight (Chief Executive Officer) *, Gareth Schnehage (Chief Financial Officer) *, David Love+, Catherine McIlraith+, Cross Kgosidiile, Lynette Finlay + and Nigel Nunoo+. (* Executive Director) (+ independent Non-Executive Director) Company secretary: Intercontinental Fund Services Limited Corporate service provider: Mourant Governance Services (Guernsey) Limited Registered office address: PO Box 186, Royal Chambers, St Julian's Avenue, St Peter Port, Guernsey GY1 4HP Registrar and transfer agent (Mauritius): Onelink Ltd SEM authorised representative and sponsor: Perigeum Capital Ltd UK Transfer secretary: Link Market Services Limited Mauritian Sponsoring Broker: Capital Markets Brokers Ltd
This notice is issued pursuant to the FCA Listing Rules, SEM Listing Rules 15.24 and 15.44 and the Mauritian Securities Act 2005. The Board of the Company accepts full responsibility for the accuracy of the information contained in this communiqué. A Company presentation for all investors and analysts via live webcast and conference call The Company will host a live webcast and conference call on Friday, 14 February 2025 at 11:30 Mauritius time / 09:30 SA time / 07:30 UK time via the Investor Meet Company platform, with the presentation being open to all existing and potential shareholders . Pre-registration is advised via: https://www.investormeetcompany.com/grit-real-estate-income-group-limited/register-investor
Investors who already follow Grit Real Estate Income Group Limited on the Investor Meet Company platform will automatically be invited. A playback will be accessible on-demand within 48 hours via the Company website: https://grit.group/financial-results/
CHIEF EXECUTIVE OFFICER’S STATEMENT Introduction
Grit is a leading, woman-led real estate platform, delivering property investment and associated real estate services across Africa. We recognise our responsibility in shaping the built environment for long-term sustainability, with a strong focus on impact, energy efficiency, and carbon reduction across our portfolio. In addition, we remain committed to diversity and empowerment, with women holding over 40% of leadership positions, and we continue to make a meaningful difference through extensive community engagement and social impact initiatives across the continent. Over the past 24 months, the Board introduced and remains focused on the Group’s Grit 2.0 strategy, with its capital allocation strategy, cost reduction drive, active interest rate management and portfolio optimisation increasingly reflected in the composition of Group net operating income, with earnings from diplomatic housing, healthcare, and data centres replacing those from previously disposed assets in hospitality and LLR.
Operational review The Group’s journey was challenged by various exogenous factors during the reporting period, including a higher for longer interest rate environment, local currency declines, rental reversions as well as geopolitical headwinds, particularly in Mozambique.
These challenges impacted our net asset value, with EPRA NRV per share contracting by 12.4% to US$50.70 cents. Delays in development projects adversely affected revenue generation and portfolio growth. Notwithstanding these challenges, NOI from ongoing operations grew by 13.0% to US$35.1 million (H1FY24: US$31.1 million) in the six months to December 2024, driven predominantly by the positive contribution arising from the consolidation of GREA and supported by inflation-linked contractual lease escalations.
Rental collections improved to 92.1% from 91.1% at 30 June 2024, whilst 94% of the Group’s revenue is earned in hard currency or from hard currency-linked long-term leases with mainly multinational, blue-chip tenants. Portfolio occupancy, excluding vacancies at ENEO CCI and VDE, remained stable at 94.5%.
The Group’s retail portfolio continued to experience value compression, driven mainly by Anfaplace Mall, whilst the renegotiation of long-term leases on the Group’s Vodacom (5 years) and Imperial (10 years) assets in Mozambique and Kenya impacted valuations in the office and Industrial segments respectively. Considering the prevailing macro-economic environment, the Group believes that the benefits of a more stable weighted average lease expiry (“WALE)” outweigh the impact of rental reversions from these contract negotiations.
The valuation movement in the Medical segment is as a result of the reclassification of the Group’s Artemis Curepipe Hospital asset to “non-current asset held for sale” as part of the Group’s asset recycling initiatives. Cost containment On a like-for-like basis, administrative costs decreased by 19.1% compared to the prior period. As a result, administrative expenses as a percentage of total income-producing assets declined to 1.5% as of 31 December 2024, down from 1.85% as at 30 June 2024. This demonstrates strong progress in cost reduction initiatives, notwithstanding the smaller asset base following negative fair value adjustments. The Group continues to advance towards its strategic objective of reducing administrative costs as a percentage of total income-producing assets to 1.25% over the short term and ultimately to 1% over the medium term.
Stakeholders are further referred to the AGM Business Update published on RNS on 13 December 2024 for more information on the Group’s strategic outsourcing agreement with Broll Property Group, who will assume responsibility for the property and facilities management of Grit’s assets valued at US$754 million as at 31 December 2024. This partnership is expected to deliver annual cost savings of approximately US$1 million and streamline operational efficiencies, enabling the Group to focus on its core expertise in impact real estate development, strategic asset management and retaining key tenant relationships. The effective date of this partnership will be 1 February 2025, preceded by a seamless transition phase to ensure uninterrupted operations. Finance costs Net finance costs increased substantially by 38.6% to US$29.8 million, mainly due to the full period impact of finance costs associated with the GREA acquisition being included in the period ended 31 December 2024, whilst the comparative period only included 1 month’s impact following the consolidation of GREA on 30 November 2023. Annual contractual lease escalations over the portfolio that are mostly linked to US consumer price inflation partiall |