Schroders Reit swings from profit to £10.8m loss

Schroders Reit’s net asset value was 45.1p per share for the 12 months to the end of March, compared with 50.6p for the year to 31 March 2012.

The Reit reported a loss before tax of £10.8m, compared with a profit before tax of £12.1m for the year to 31 March 2012.

A dividend of 3.52p per share was paid for the 12 months to 31 March 2013 - the same amount as was paid for the previous year.

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During the year the Reit disposed of seven properties for £67m reflecting a 6 per cent average premium compared with the valuations as at 31 March 2012, with proceeds used to pay down £59m of securitised debt.

On 16 April 2013 a new £129.6m long term loan facility was concluded with Canada Life allowing repayment of the remaining £114.5m securitised loan in full that matured in July 2014.

The new loan is at a total margin of 4.77 per cent compared with the securitised loan margin of 5.72 per cent, generating a saving in interest and related costs of about £800,000 a year.

Andrew Sykes, chairman of the Reit board, said the dividend had been revised to a more sustainable level of 0.62p per share per quarter, which, together with the refinancing, put the company on a solid platform to take advantage of future opportunities.

Mr Sykes said: “Economic uncertainty has continued to weigh on market sentiment, with average UK commercial property values falling 4.9 per cent since October 2011.

“Since the start of 2013 there have been some more encouraging signals, with some of the downside risks to GDP growth receding. While this is positive, a sustained period of economic growth will be required for a broader recovery in rental and capital values across the UK property market.

“The company’s near term growth prospects will depend in part on the successful completion of key asset management initiatives such as delivering a residential planning consent at Reynards Trading Estate in Brentford.

“A modest recovery in the UK economy could also now start to provide support to the company’s wider strategy and improve shareholder returns.”