Final Results

Oct 11 2022 08:00 BSTSource: RNS

RNS Number : 4102C

PRS REIT PLC (The)

11 October 2022

PRSR.L

The PRS REIT plc

("PRS REIT" or "the REIT" or "the Company" or "the Group")

Audited Full Year Results

for the year ended 30 June 2022 & First Quarter Update

Portfolio now at 4,856 completed homes.

Assets are performing strongly, and rental demand continues to grow

KEY POINTS

Financial

	Year to 30 June 2022	Year to 30 June 2021	Change
Revenue	£42.0m	£26.6m	+58%
Net rental income	£34.3m	£21.5m	+60%
Operating profit	£127.0m	£53.7m	+136%
Profit after tax	£115.9m	£44.1m	+163%
Basic earnings per share	21.4p	8.9p	+140%
Adjusted earnings per share^{^[1]}	3.0p	1.2p	+150%
Net assets at 30 June	£639m	£490m	+30%
IFRS NAV and EPRA NTA per share^{^[2]}	116.4p	99.0p	+18%

Operational

	At 30 Sept 2022	At 30 June 2022	At 30 June 2021	Year-on-year change
Number of completed homes	4,856	4,786	3,984	+20%
Estimated rental value ("ERV") per annum*	£49.4m	£47.8m	£37.5m	+27%
Number of contracted homes	670	693	1,071	-35%
ERV per annum	£7.3m	£7.2m	£10.6m	-32%
Completed and contracted sites	70	68	64	+6%
ERV per annum of completed and contracted sites*	£56.7m	£55.0m	£48.1m	+14%
Rent collected (as a percentage of total rent invoiced for the period)	99%	99%	98%

*based on all completed units being occupied/income producing

· Net asset value up 30% year-on-year to £639m or 116.4p per share at 30 June 2022 (2021: £490m or 99.0p per share)

- reflects ERV increase, underpinned by strong rental growth

- EPRA NTA was 116.4p per share

· Assets continued to perform strongly, with rent collection at 99% for FY 2022 (2021: 98%) and occupancy at 98% at 30 June 2022 (2021: 98%)

- gross arrears remained low at £0.6m as at 30 June 2022 (30 June 2021: £0.4m)

- like-for-like blended rental growth over the year was 5.1% on stabilised sites (where all units have been completed and either all or nearly all have been let). Re-lets to new tenants achieved c.10% rental growth

- average tenant rental affordability ratio now at 25% in 2022 (2021: 29%), notwithstanding 5.1% rental growth, indicating a stronger tenant base

- operating costs reduced to 18.2% from 19.5%, reflecting the benefits of scale and close management

· Portfolio expanded with the addition of 802 homes in the year, taking the total number of completed homes to 4,786 at 30 June 2022

- ERV up 27% to £49.4m p.a. as at 30 June 2022

- a further 693 contracted homes with an ERV of £7.2m p.a. were under way at 30 June 2022

- portfolio total revised to c.5,600 homes with ERV of c.£57.5m p.a. (previously 5,700 homes, with ERV of c.£55.0m p.a.). This reflects price inflation on new sites and higher debt costs as well as significantly stronger rent

· Total dividends of 4.0p per share declared (2021: 4.0p)

- minimum dividend of 4.0p per share targeted for FY 2023

· Average net investment yield on the portfolio of 4.125% (30 June 2021: 4.25%)

· Gearing on portfolio (measured as net debt vs. investment value) low at 31%, with 62.5% of the existing £400m of investment debt fixed rate at an average of 2.9%

Outlook

· Portfolio to reach c.5,000 homes around the end of 2022 and completed assets are performing strongly

- portfolio as at 30 September 2022 increased to 4,856 completed homes, with an ERV of £49.4m p.a, and a further 670 homes with an ERV of £7.3m p.a. are under way

- four development sites were acquired in Q1 2023

- energy efficiency of homes is high - 86% have an EPC rating of 'A' or 'B'; the balance is rated 'C', running costs are c. 25% lower compared to homes built in 2010 according to independent survey.

- Q1 2023 asset performance was strong, with occupancy at 98% and rent collection at 99% as a proportion of rent invoiced during the last quarter

· UK rental market remains strong and there is a growing mismatch between supply and demand

- macro-economic environment - especially rising interest rates - is increasing the numbers moving from buying to renting

Steve Smith, Chairman of the PRS REIT, commented:

"We've had another successful period with just over 800 new rental homes added to the portfolio during the financial year. This has taken the number of completed homes in the portfolio at the end of September to 4,856. We expect to approach our 5,000^th home towards the end of 2022.

"We are now targeting 5,600 homes, providing over £1 billion of assets with an anticipated rental income stream of £57.5 million a year.

"The portfolio continues to perform very well. We have seen strong rental growth and anticipate increased occupier demand, particularly in a rising interest rate environment, which will make home ownership more unattainable for some. Affordability is more achievable for our customers. Our tenant base spends on average 25% of their income on rent, which is lower than last year's figure of 29%.

"While there are current challenges, we are well positioned to weather the current volatility. More than 60% of our long-term investment debt is at favourable fixed rates for an average 17 years, and the portfolio gearing is low at 31%.

"The structural shortage of high-quality rental homes in the UK and rising demand against a backdrop of higher interest rates continue to demonstrate a need for our model of high-quality, professionally-managed single family rental homes."

For further information, please contact:

The PRS REIT plc
Steve Smith, Non-executive Chairman

Tel: 020 3178 6378

(c/o KTZ Communications)

Sigma PRS Management Limited
Graham Barnet, Mike McGill

Tel: 0333 999 9926

Singer Capital Markets Securities Limited
James Maxwell, Asha Chotai (Investment Banking)

Alan Geeves, James Waterlow, Sam Greatrex (Sales)

Tel: 020 7496 3000

Panmure Gordon (UK) Limited

Chloe Ponsonby, Alex Collins

David Hawkins, Tom Scrivens (Sales)

Tel: 020 7886 2500

G10 Capital Limited (part of the IQEQ Group as AIFM)

Paul Turner

Tel: 020 3745 2826

KTZ Communications

Katie Tzouliadis, Dan Mahoney

Tel: 020 3178 6378

NOTES TO EDITORS

About The PRS REIT plc
www.theprsreit.com

The PRS REIT plc is a closed-ended real estate investment trust established to invest in the Private Rented Sector ("PRS") and to provide shareholders with an attractive level of income together with the potential for capital and income growth. The Company is investing over £1bn in a portfolio of high quality homes for private rental across the regions, having raised a total of £0.56bn (gross) through its Initial Public Offering, on 31 May 2017 and subsequent fundraisings in February 2018 and September 2021. The UK Government's Homes England has supported the Company with direct investments. On 2 March 2021, the Company transferred its entire issued share capital to the premium listing segment of the Official List of the FCA and to the London Stock Exchange's premium segment of the Main Market. Approaching its 5,000^th new rental home, which is expected at around the end of 2022, the Company believes its portfolio is the largest build-to-rent single-family rental portfolio in the UK.

LEI: 21380037Q91HU97WZX58

About Sigma Capital Group Limited
www.sigmacapital.co.uk

Sigma Capital Group Limited ("Sigma") is a PRS, residential development, and urban regeneration specialist, with offices in Edinburgh, Manchester and London. Sigma's principal focus is on the delivery of large-scale housing schemes for the private rented sector. The Company has a well-established track record in assisting with property related regeneration projects in the public sector, acting as a bridge between the public and private sectors.

Sigma has created an excellent property procurement and management platform, which sources sites and brings together construction resource to develop them, enabling Sigma to deliver an integrated solution to partners. As well as sourcing sites and managing all stages of the planning and development process, Sigma manages the rental of completed homes through its award-winning rental brand 'Simple Life'. The Company's subsidiary, Sigma PRS Management Limited, is Investment Adviser to The PRS REIT plc.

About Sigma PRS Management Limited

Sigma PRS Management Limited is a wholly-owned subsidiary of Sigma Capital Group Limited and is Investment Adviser to The PRS REIT plc. It sources investments and operationally manages the assets of The PRS REIT plc and advises the Alternative Investment Fund Manager ("AIFM") and The PRS REIT plc on a day-to-day basis in accordance with The PRS REIT plc's Investment Policy. The AIFM is G10 Capital Limited. Sigma PRS Management Ltd is an appointed representative of G10 Capital Limited, which is authorised and regulated by the Financial Conduct Authority (FRN:648953).

Chairman's Statement

Introduction

I am pleased to present The PRS REIT plc's ("the PRS REIT", or the "Company" or the "Group") audited financial results for the year ended 30 June 2022. Against a very turbulent backdrop, the Company has continued to successfully deliver its objectives and you will see throughout the Report the strong position that it has achieved and the positive actions that it has taken.

Largest portfolio of single-family rental homes in the UK

We have continued to increase the Company's portfolio of new, high-quality family rental homes, with 802 homes added during the financial year. This took the total number of completed homes in the portfolio to 4,786 by the financial year end, an increase of 20% (30 June 2021: 3,984 homes).

The estimated rental value ("ERV") from our 4,786 completed homes is £47.8 million per annum, a 27% rise on the same point last year (30 June 2021: £37.5 million per annum). The percentage increase in rental value over the year compared to the percentage increase in the number of completed homes over the year reflects rental growth over the period.

Of the 802 additional homes, 66 homes were added through the acquisition of two fully-developed and let sites from Sigma Capital Group Limited, which were bought after having been independently assessed and valued by Savills.

A further 693 homes, with an ERV of £7.2 million per annum, were contracted at 30 June 2022, and are at varying stages of the construction process.

Over the financial year, we acquired four sites, which we are now developing. They have a combined ERV of £3.3 million. We have acquired a further four development sites in the first quarter of the new financial year.

The Company's portfolio of high-quality single-family homes and apartments remains the largest of its kind in the UK. Our assets are geographically widely spread. Currently, we have 70 sites (2021: 64 sites) across the major regions of England and in Scotland. Sites are in the North-West, North-East, Yorkshire, the Midlands, and in the South-East (excluding London) and East of England, with one site in Central Scotland. We are now targeting approximately 5,600 homes with an ERV of around £57.5 million per annum once the homes are fully completed and let. This compares to the previous target of 5,700 homes with an estimated ERV of £55.0 million per annum immediately following our equity fundraise in September 2021. The revision takes into account price inflation on new sites and higher interest costs in relation to variable rate debt.

Strong asset performance

I am pleased to report that our assets have performed strongly throughout the year. Both occupancy and rent collection (which is measured as rent collected relative to rent invoiced in any given period) remained high. Rent collection for the year was 99% (2021: 98%) on this basis and occupancy stood at 98% at 30 June 2022 with 4,674 homes occupied out of the 4,786 completed homes (2021: 98%). Including those homes where a letting had been agreed but occupancy had not commenced, occupancy was 99%.

Net rental income for the financial year increased by 60% year-on-year to £34.3 million (2021: £21.5 million). This reflects the benefit of a full year's rental income on properties that had been completed and let part-way through the prior year, combined with both portfolio and rental growth.

Like-for-like rental growth on stabilised sites over the year was 5.1%¹. This reflects a blended rate of c.10% on re-lets to new tenants and c.4% on renewals with existing tenants during the period. Gross rent arrears remained modest despite the growth in the portfolio, standing at £0.6 million at 30 June 2022 (30 June 2021: £0.4 million).

The PRS REIT's average rental affordability ratio has improved to 25% in 2022 (2021: 29%). This is notwithstanding rental growth over the year and compares to Homes England's affordability target of 35%. We believe it indicates a stronger tenant base.

This strong asset performance demonstrates ongoing robust demand for our high-quality homes, which is also supported by the structural undersupply of family homes in the market.

In Propertymark's latest report on the lettings sector published in September, the leading membership body for the residential letting agents reported that the number of new tenants registered on average per member branch reached a new peak in August, at 141. At the same time, the supply of available homes to rent had not risen in the last three months. Propertymark predicted that this growing mismatch between supply and demand would exert upward pressure on rent. Approximately 77% of its members reported a month-on-month rent price increase in August.

The Company's Investment Adviser's report provides further commentary on housing delivery and asset performance over the year.

¹ Like-for-like rental growth on stabilised sites is defined as the annual rental growth on sites where all units have been completed and either all or nearly all have been let

Financial Results

Revenue, which is generated wholly from rental income, increased by 58% year-on-year to £42.0 million (2021: £26.6 million). This principally reflected a combination of the substantial increase in the number of rental homes making up the portfolio and strong rental growth. After the deduction of non-recoverable property costs, which were 18.2% of revenue (2021: 19.5%), net rental income for the financial year was £34.3 million (2021: £21.5 million), an increase of 60% over the year.

Expenses in the year rose to £7.5 million (2021: £7.1 million, which included £0.5 million of one-off expenses relating to the Company's migration to the Main Market). The increase over the prior year reflects the rise in the size and scale of the portfolio.

The gain from the fair value adjustment on investment property increased significantly from the prior year to £99.7 million (2021: £39.0 million). Almost 80% of this is attributable to higher ERV with almost 20% reflecting yield compression, whilst development surplus on assets under construction accounts for the remaining portion of the uplift. ERV is now approximately £2.7 million higher than passing rent on completed and let properties, reflecting the continuing demand for the Company's product. The fair value of investment property is based on ERV rather than passing rent.

Operating profit increased by 136% to £127.0 million (2021: £53.7 million), which reflected the increase in completed and let homes together with the rise in the portfolio valuation.

Finance costs were higher at £11.1 million (2021: £9.6 million) as we drew down and utilised investment debt facilities and arranged additional development debt funding during the year. Although interest rates rose towards and after the end of the financial year, the impact of this was relatively small during the period due to the quantum of fixed rate investment debt. Finance income from short-term deposits in the year was £4,000 (2021: £nil), again reflecting the low interest rate environment during the financial year.

Profit after taxation increased by £71.8 million or 163% to £115.9 million (2021: £44.1 million) while basic and diluted earnings per share rose by 140% to 21.4p (2021: 8.9p) on an IFRS basis.

The Group's IFRS net asset value ("NAV") per share and EPRA net tangible asset ("NTA") per share at 30 June 2022, both increased to 116.4p (31 December 2021: 104.3p and 30 June 2021: 99.0p). This is a year-on-year increase of 18% and a 12% increase over the prior six months.

Net assets at 30 June 2022 were 30% higher year-on-year at £639 million (30 June 2021: £490 million). This is after paying dividends of £21.4 million in the year (2021: £24.8 million).

Dividends

For the year to 30 June 2022, aggregate dividends of 4.0p per share were declared (2021: 4.0p per share) and paid to shareholders (2021: 5.0p per share). Due to the timing of dividend payments, the Company declared a total of 4.0p per ordinary share but paid a total of 5.0p per ordinary share during the prior year under review. Taking into account the dividend paid on 26 August 2022, total dividends paid since the Company's inception in May 2017 amount to 22.0p per share.

Following the September 2021 equity placing, the current dividend of 4.0p was almost fully covered on a run-rate EPRA EPS basis at the end of the financial year. Dividend cover will continue to grow as construction, completions and lettings advance.

Debt Facilities

The Company had £440 million of committed debt facilities available for utilisation as at 30 June 2022. Gearing on portfolio (measured as net debt vs. investment value) remains low at 31%, and 62.5% of the £400 million of investment debt is fixed rate at an average of 2.9%.

The £440 million of committed debt facilities comprised £400 million of investment debt facilities and £40 million of development debt facilities although a small portion of the investment debt facilities can also be utilised as development debt facilities.

Our lending partners are: Scottish Widows (£250 million); The Royal Bank of Scotland plc (£100 million); Lloyds Banking Group plc (£50 million); and Barclays Bank PLC (£40 million). £25 million of the Lloyds Banking Group/ RBS facility and the £40 million Barclays Bank PLC debt facility are available to be drawn as development debt facilities, which enables sites to be developed simultaneously.

The debt facilities are subject to the maximum gearing ratio of 45% of gross asset value. Approximately £350 million of these facilities have been drawn to date, with the remainder presently forecast to be utilised over the next 12 months as we finish the current phase of construction, completion and letting activity. The fixed interest long-term investment debt facilities of £250 million have an average term of 17.6 years and an average weighted cost of 2.9% once fully drawn.

Environmental, Social and Governance ("ESG") Practices

The PRS REIT is a member of the UK Association of Investment Companies and applies its Code of Corporate Governance to ensure best practice in governance.

The Board is responsible for determining the Company's investment objectives and policy and has overall responsibility for the Company's activities, including the review of investment activity and performance. The Board consists of five independent non-executive directors, who together bring significant and complementary experience in fund management (including listed funds), equity capital markets, public policy, operations and finance in the property and investment funds sectors.

The Board delegates the day-to-day management of the business, including the management of ESG matters, to the Investment Adviser, Sigma PRS Management Ltd ("Sigma PRS"), which is a subsidiary of Sigma, and a signatory and participant of the United Nations Global Compact. Sigma is part of PineBridge Investments, a private, global asset manager with over US$140bn in assets under management at June 2022.

Details of ESG policies and activities are contained in the Investment Adviser's Report. In that report, the results of our recently commissioned Energy Efficiency Study are recorded. Undertaken by Calfordseaden, a property and construction consultancy firm, it compared the energy consumption of the Company's properties with housing stock of various ages. We are pleased to highlight that it found that on average, the Company's homes were 74% cheaper to run on an annual basis than homes built between 1900-1929, with running costs 25% lower compared to homes built in 2010. Given the current energy crisis, this is a significant plus point for our tenants.

Outlook

The macro-economic environment has become more uncertain with the war in Ukraine, inflation and rising interest rates driving a more negative outlook in the UK and globally. In terms of the UK housing market, the impact of rising interest rates is expected to reduce mortgage affordability and drive demand in the rental sector as prospective homeowners turn to rental alternatives. We expect these factors, together with the existing structural shortage of quality family rental homes, to provide a strong underpinning to demand in the private rented sector.

Against this backdrop, our high-quality, well-located homes remain highly attractive to prospective renters. Our emphasis on customer service and strong promotion of a sense of community in our developments is also an important aspect of what our homes offer. In addition, the proven energy efficiency of our homes is particularly relevant with high and rising energy prices. The Board remains confident that its cashflow will be stable and sustainable.

The Company's exposure to interest rate increases is limited with approximately 60% of investment debt fixed. In addition, our fixed-price construction contracts will limit the Company's exposure to price inflation on existing contracts.

During the first quarter of the new financial year, another 70 new homes were added to the portfolio, taking the total number of completed homes at 30 September 2022 to 4,856 and the ERV of completed homes to £49.4 million per annum, up by 20%. This compares to 4,291 completed homes with a rental value of £41.1 million per annum at the same point last year. Another 670 homes, with an ERV of £7.3 million per annum, were contracted and under way at the end of the first quarter.

Asset performance remains strong. In the first quarter, rent collection was 99% (2021: 99%) and total occupancy at 98% (30 September 2021: 98%), with 4,774 homes occupied out of the total of 4,856. A further 45 were reserved for applicants who had passed referencing and paid rental deposits. Total arrears at 30 September 2022 were low at £0.6 million. Like-for-like blended rental growth on stabilised sites was 5.0%.

Towards the end of the calendar year, we expect the number of completed homes in the portfolio to near 5,000, which would take the value of completed assets close to £1bn and annual rental income to approximately £51.0 million.

We are targeting a minimum dividend of 4.0p per share* in the new financial year, and will declare the interim dividend for the first quarter of the financial year in October 2022.

On behalf of the Board, I would like to thank our investors, customers and everyone involved in the ongoing delivery and management of our rental portfolio, including our supporters in government and our partner housebuilders. Together we are creating attractive places to live and making an important contribution to the UK housing stock, the welfare of local communities and to families and individuals.

We expect to make further strong progress and look forward to the year ahead. We will continue to consult with investors, advisors and others as we assess the Company's next stage of development.

Steve Smith

Chairman

10 October 2022

* This is a target only and there can be no assurance that the target can or will be met and should not be taken as an indication of the Company's expected or actual future results. Accordingly, potential investors should not place any reliance on this target in deciding whether or not to invest in the Company or assume that the company will make any distributions at all and should decide for themselves whether or not the target dividend yield is reasonable or achievable.

IFRS AND EPRA PERFORMANCE MEASURES

Under the European Real Estate Association ("EPRA") best practice recommendations ("BPR") for financial disclosures by public real estate companies, three measures for reporting net asset value are available, EPRA Net Tangible Assets ("NTA"), EPRA Net Reinstatement Value ("NRV"), and EPRA Net Disposal Value ("NDV").

The Group considers EPRA NTA to be the most relevant measure for its operating activities, and has adopted this as the Group's primary measure of net asset value.

EPRA NRV is not considered an appropriate disclosure measure for the PRS REIT as the Group has acquired, constructed and developed the vast majority of assets and this would therefore equate to adjusted historic construction cost.

The valuation of the Group's assets is undertaken in accordance with RICS guidance. However, this does not include any adjustment to reflect the size and scale of the Group's overall portfolio of assets. The Board's view is that collective marketing of the portfolio would attract a higher valuation reflecting yield compression attributable to the size and scale of the overall portfolio. In the absence of comparable market evidence for such a portfolio, EPRA NDV is not considered an appropriate measure.

As in prior years, due to the stage of completion of the PRS REIT's development assets within the Group's portfolio, it is not considered appropriate to disclose the EPRA metrics of Net Initial Yield and Cost Ratio at this reporting date.

KPI	Explanation	Performance
KPI	Explanation	Year to 30 June 2022	Year to 30 June 2021
IFRS NAV (see note 8)	Unadjusted net asset value	116.4p per share	99.0p per share
EPRA NTA (see note 8)	EPRA Net Tangible Asset is net asset value adjusted to include properties and other investment interests at fair value and to exclude certain items not expected to crystallise in a long-term property business model	116.4p per share	99.0p per share
IFRS EPS (see note 4)	Unadjusted earnings per share	21.4p per share	8.9p per share
EPRA EPS (see note 4)	Earnings per share excluding investment property revaluations, gains and losses on disposals, changes in the fair value of financial instruments and associated close-out costs and their related taxation	3.0p per share	1.0p per share
Company specific adjusted EPS (see note 4)	EPRA EPS (as above) adjusted to exclude the non-recurring costs incurred by the Company in the previous year as part of the Migration to the Premium Segment of the Main Market	3.0p per share	1.2p per share
EPRA Earnings (see note 4)	EPRA Earnings is a measure of operational performance and represents the net income generated from the operational activities excluding changes in value of investment properties	£'000 16,162	£'000 5,130

Market Dynamics

The Build-to-Rent ("BTR") sector has been maturing as an asset class in the UK over the last 10 years. Nonetheless BTR remains a very small proportion of the wider private residential rental sector, at less than 2% in Q2 2022 according to Savills. More recently, the rate of entry of new participants into the BTR sector has increased together with the weight of capital. This trend reflects the magnitude of the opportunity in the UK and increasing recognition of the role of BTR in accelerating overall housing delivery. The Letwin Report into build out rates, published in October 2018, was one of the first independent reports to highlight its role.

The British Property Federation ("BPF") monitors BTR delivery and, at the end of April 2022, the BPF BTR Q2 2022 presentation, prepared for BPF by Savills, reported a 14% increase in the number of BTR homes delivered year-on-year, with a slight bias to regional delivery. In its Q1 2022 update, the BPF reported 73,000 BTR completions, 46,000 homes under construction, and a further 100,000 homes in planning. To provide context, the private rental sector as a whole comprises approximately five million homes, with the market fragmented and mainly comprising private landlords.

The major part of BTR delivery is still focused on apartments in major city centres. By contrast, the PRS REIT is focused on creating single-family homes in the suburbs. According to the BPF BTR Q2 2022 presentation, single-family home delivery reached approximately 8,500 homes in April 2022, with a further 9,500 units currently either under construction or in planning. This puts the PRS REIT at the forefront of this sector.

Demand in the private rented sector in recent years has been further fuelled by substantial house price growth, which has increased the hurdles to home ownership. According to the Office of National Statistics, at the end of 2021, the ratio of average house price to income in England was 9.1, up from 7.9 a year earlier. The cessation of the stamp duty incentive in June 2021 and closure of the Government's Help-to-Buy scheme to new applications on 31 October 2022, are likely to further increase demand in the private rented sector. While the Mini-budget proposals in September 2022 sought to help those looking to purchase homes, with changes to the stamp duty regime and an increase in the nil-rated threshold limit, rising interest rates are likely to have a more profound effect. Affordability remains the key constraint to home ownership, and recent increases in mortgage rates will result in further interest in the private rented sector.

Furthermore, as mortgage costs are rising sharply, it is evident that a greater volume of rental homes will be required, with the location and type of home also being important. There is a significant undersupply in the sector, created by the lack of new home delivery over many years and exacerbated in recent times by outflows from the buy-to-let ("BTL") sector, which we expect to be a significant market determinant in the coming period. The BTL sector has experienced increasing costs and a series of tax and regulatory changes, which has led to c.180,000 BTL mortgage redemptions since 2016, according to research undertaken by Savills. Further challenges are ahead for owners of older rental homes, with new regulation requiring all rental homes to possess an energy performance certificate ("EPC") of 'C' or above from 2025. The average EPC in the UK is 'D'. This new regulation is expected to lead to private landlords exiting the market, deterred by prohibitive upgrade costs. The PRS REIT's portfolio is unaffected since all of its homes are rated 'C' or above, with 86% rated 'A' or 'B'.

The lack of adequate rental supply and increasing tenant demand are likely to create further upward pressure on rents, especially for homes that are well-located and well-managed. While there are now more entrants in the single-family BTR sector, it continues to be significantly underserved.

Private Rented Sector Reform

In June 2022, the Government published a policy paper, which set out its long-term vision for the private rented sector. Titled "A fairer private rented sector", it contains plans to fundamentally reform the private rented sector in the country and level up housing quality.

A list of the main proposals set out in the white paper is below:

· All rental homes will be required to meet a 'Decent Homes Standard' for the first time.

· Section 21 of The Housing Act 1988 ('no-fault' evictions) is set to be abolished. This would remove a landlord's ability to seek possession after a fixed term has ended. Should a landlord have reasonable grounds to seek possession, then Section 8 of the Housing Act 1988 could be used.

· Fixed-term tenancies, both assured and assured shorthold, will be converted to periodic tenancies, so that tenancies will in effect be open-ended.

· Tenant rent increases will be limited to once a year.

· First-tier rent tribunal - powers will be given to confirm or reduce contested rents, but not to increase them (as is currently the case).

· Landlords and agents will not be able to institute blanket bans on renting to families with children, those in receipt of benefits and potentially other vulnerable groups.

· Tenants will be given the right to request a pet in their property, which cannot be unreasonably refused. The Tenant Fees Act 2019 will be amended so that landlords can request that their tenants buy insurance to cover any damage that pets may create.

Other proposals include a new single Ombudsman and a Property Portal, which will include a landlord registration scheme. Thought is also being given as to how tenants can 'port' their deposits to relieve them from having to find additional funds whilst the custodial scheme for their preceding dwelling is being resolved or arbitrated.

As a responsible and professional landlord with a high-quality product and an emphasis on customer care, we welcome the Government's desire to ensure that everyone has a right to a decent home and to support responsible landlords. Its proposals align with our own policies and therefore are unlikely to adversely impact the way the Company operates.

Extract from Portfolio Analysis

As at 30 June 2022, the valuation of the Group's property portfolio was £962 million (2021: £780 million) and the investment value of all sites under way at that date was £1 billion on completion (2021: £829 million) with their ERV on completion at £55 million (2021: £47 million).

Property Portfolio by Regional Split - at 30 June 2022

The regional split by investment value was - North West 54% (2021: 56%), West Midlands 17% (2021: 18%), South East 12% (2021: 13%), Yorkshire 9% (2021: 9%), North East 3% (2021: 3%), East Midlands 4% (2021: 1%) and Scotland 1% (2021: nil).

Other Metrics - at 30 June 2022

· The rent roll at 30 June 2022 was £47.8 million (2021: £37.5 million) and the average rent was £10,004 per annum or £834 per month (2021: £9,420 per annum or £785 per month).

· Forecast average rent across the current portfolio when complete is £10,500 per annum or £875 per month (2021: £10,188 per annum or £849 per month).

· The average size of site was 78 (2021: 79) housing units.

· The split between 1, 2, 3 and 4-bed properties was approximately 3%, 26%, 62% and 9% respectively (2021: 4%, 26%, 61% and 9% respectively).

· Contractor split was - Countryside 86%; Vistry 8%; Seddon 5% and EQUANS (formerly Engie) 1% (2021: Countryside 78%; Vistry 15%; EQUANS (formerly Engie) 4%; and Seddon 3%).

· The deduction from gross to net rent across the portfolio for the year ended 30 June 2022 was 18.2% (2021: 19.5%).

· Bad debts (net) for the year were £381,000 (2021: £4,000 net recovery) and the bad debt provision at the year-end was £281,000 (2021: £31,000) reflecting a prudent approach in the current economic climate.

Age Groupings

The largest age grouping across the customer base at the time of sampling on 30 June 2022 was 26-35 years. This grouping represented 41% of the total customer base, and is consistent with last year's sample. There was a small decrease in under 25s within the portfolio over the year, which is considered a fluctuation rather than indicative of any broader social or macro-economic trend.

Age	2022	2021
Under 25	23.1%	27.6%
26-35	38.3%	40.5%
36-45	20.9%	16.3%
46-55	10.0%	9.3%
56-65	5.7%	4.7%
65+	2.0%	1.5%

Household Income Bracket

There was very little change in the proportion of customers across the main income brackets when compared with the preceding year. The minor reduction of those earning under £25,000 as a proportion of the customer base would seem to correlate with the drop in residents under 25 years of age identified earlier. Those earning over £65,000 have slightly increased for the second year in succession. As a percentage of rent to household income, our portfolio has an average of 25% compared to 29% in the prior year. This indicates a stronger customer base and is after blended rental growth of 5.1%.

Annual Household Income	2022	2021
Under £25k	24.8%	25.6%
£25k-£35k	15.7%	19.6%
£35k-£45k	17.7%	18.5%
£45k-£55k	13.4%	13.6%
£55k-£65k	7.9%	6.9%
£65k+	20.5%	15.5%

Tenancies with Children

Whilst the portfolio comprises mainly family homes, only approximately 40% of households included children. Referring back to the age groupings, it could be assumed that the major cohort of 26-35 year-olds are moving into the Company's homes with the intention of starting a family. Of those residents with children, the two largest groupings are those with two or four children.

Children	2022	2021
None	58.5%	58.9%
One child	8.5%	8.3%
Two children	16.9%	16.9%
Three children	3.5%	3.0%
Four+ children	12.6%	13.0%

Distance Travelled

The distance travelled by customers from their previous address to their new 'Simple Life'¹ home is also recorded. The two largest categories are those travelling between 10-50 miles and greater than 50 miles. This supports growing national recognition of the Simple Life brand.

Distance Travelled	2022	2021
<3 miles	24.0%	30.4%
3-10 miles	27.0%	29.0%
10-50 miles	21.7%	23.8%
>50 miles	27.3%	16.8%

All 2022 statistics are based on new applicant data between July 2021 and June 2022 and include sites acquired from Sigma. The prior year's statistics are based on all successful Simple Life applications referenced between June 2019 and June 2021.

¹'Simple Life' - The PRS REIT's rental homes are marketed under the 'Simple Life' brand.

AWARDS

Scottish Home Awards

Large Development of the Year 2022 (Bertha Park)
(Winner)

Homes for Scotland Awards

Large Development of the Year 2022 (Bertha Park)
(Finalist)

NW Insider Residential Property Awards

Tech of the Year (My Simple Life Mobile App)
(Winner)

CENE Awards

Building Project of the Year 2022 (Kirkleatham Green)
(Shortlisted)

Property Week RESI Awards

Health and Wellbeing Award 2021
(Shortlisted)

Home Views

Top 20 Regional Developments 2021 (Prince's Gardens)

(Top 20 Finalist)

Property Week Resi Awards 2022

Landlord of the Year 2022 (Simple Life Homes)
(Winner)

NW Insider Residential Property Awards

Apartment Scheme of the Year 2022 (Empyrean)

(Shortlisted)

CENE Awards

Residential Project of the Year 2022 (Kirkleatham Green)
(Shortlisted)

Property Week RESI Awards

Residential Company of the Decade 2021 (Sigma Capital)

(Shortlisted)

Property Week RESI Awards

Best Covid Response 2021
(Winner)

Home Views

Top 5 National Management Companies (over 2000 units) 2021 (Simple Life Homes)

(Top 5 Finalist)

Investment Adviser's Report

Sigma PRS Management Ltd ("Sigma PRS"), a wholly-owned subsidiary of Sigma Capital Group Limited, is the Company's Investment Adviser, and is pleased to provide a report on the PRS REIT's activities and progress for the year ended 30 June 2022.

Operational Review

Development Activity and Acquisitions

A total of 802 homes were added to the PRS REIT's portfolio in the financial year to 30 June 2022. This compared with 1,902 in the prior year, and reflects the advanced stage of the rollout of the portfolio, with fewer sites under active development as the portfolio approaches maturity. Two fully-developed and let sites were acquired during the year, comprising 66 homes in total. Both sites were acquired from Sigma Capital Group Limited, having been independently assessed and valued by Savills before acquisition.

The total number of completed homes in the portfolio at the end of June 2022 stood at 4,786, an increase of 20% on the same point last year (2021: 3,984). The homes are located across six of the eight major regions of England and one region in Scotland, and their combined estimated rental value ("ERV") amounted to £47.8 million per annum as at 30 June 2022. This is a 27% increase in the portfolio's rental value over the year (30 June 2021: ERV of completed homes stood at £37.5 million per annum).

Four development sites were also acquired during the financial year. They have an ERV amount of £3.3 million, and we have acquired a further four development sites for the PRS REIT in the first quarter of the new financial year.

The Company's assets now reflect a difference between ERV, used for valuation, and anticipated rent paid by tenants. As at 30 June 2022, ERV was estimated to be £2.7 million higher than anticipated rent in aggregate. This reflects the strength of demand for the Company's portfolio of assets. The fair value of the Group's investment properties as at 30 June 2022, is based on ERV as opposed to anticipated rent.

The table below provides further information in summarised form of development activity over the financial year, and includes data for the first quarter of the new financial year as well as comparative data for the financial year ended 30 June 2021.

	At 30 September 2022	At 30 June 2022	At 30 June 2021
Number of completed homes	4,856	4,786	3,984
ERV per annum of completed homes	£49.4m	£47.8m	£37.5m
Completed sites	58	58	44
Contracted sites	12	10	20
Number of contracted homes	670	693	1,071
ERV per annum of contracted homes	£7.3m	£7.2m	£10.6m

Construction Resource

The construction resource provided by the Sigma PRS Platform has national reach. It underpins the continued expansion of the Company to key population centres in England and across the UK, supporting the creation of a geographically diverse portfolio.

There are many clear benefits for our construction partners in partnering with us. These include strengthening their ability to bid for land with local councils and improving operational efficiencies with their own housing delivery. This partnership approach is working well and the model we operate of using standard family house types, fixed price design & build contracts, together with standardised specification, helps to ensure that developments are built to budget and that our PRS assets can be maintained and managed efficiently.

Financial Results

Income statement

The Group's revenue (which is wholly derived from rental income) increased by nearly 60% over the year to £42.0 million (2021: £26.6 million). After the deduction of non-recoverable property costs, the net rental income was £34.3 million (2021: £21.5 million). Administration expenses were slightly higher at £7.5 million (2021: £7.1 million, which included non-recurring accounting and legal expenses of £0.5 million incurred in relation to the Company's migration to the Main Market).

The gain from the fair value adjustment on investment property was £99.7 million (2021: £39.0 million), with the majority of the increase attributable to higher rents and a small portion attributable to yield compression in the current financial year. Operating profit was £127.0 million (2021: £53.7 million).

Finance costs for the year were £11.1 million (2021: £9.6 million) reflecting the debt utilisation and associated costs during the year as well as an increase in interest rates on variable rate debt towards the end of the fiscal year. Finance income for the period from short-term deposits was £4,000 (2021: £nil). The profit after finance income and taxation was £115.9 million (2021: £44.1 million).

The basic and fully diluted earnings per share on an IFRS basis for the year were 21.4p (2021: 8.9p).

Dividends

The Company has declared a total of 4.0p (2021: 4.0p) per ordinary share for the year under review, which comprised the following:

· On 5 November 2021, the Company announced the declaration of a dividend of 1.0 pence per Ordinary Share in respect of the period from 1 July 2021 to 30 September 2021, which was paid on 3 December 2021 to shareholders on the register as at 19 November 2021.

· On 18 January 2022, the Company announced the declaration of a dividend of 1.0 pence per Ordinary Share in respect of the period from 1 October 2021 to 31 December 2021, which was paid on 11 February 2022 to shareholders on the register as at 28 January 2022.

· On 12 April 2022, the Company announced the declaration of a dividend of 1.0 pence per Ordinary Share in respect of the period from 1 January 2022 to 31 March 2022, which was paid on 13 May 2022 to shareholders on the register as at 22 April 2022.

· On 25 July 2022, the Company announced the declaration of a dividend of 1.0 pence per Ordinary Share in respect of the period from 1 April 2022 to 30 June 2022, which was paid on 26 August 2022 to shareholders on the register as at 5 August 2022.

Balance Sheet

The principal items on the balance sheet are investment property of £961.9 million (2021: £780.4 million), cash and cash equivalents of £48.7 million (2021: £86.4 million), long-term loans of £246.7 million (2021: £245.9 million), short term loans of £100.0 million (2021: £110.0 million) and trade and other payables, accruals and deferred income of £32.0 million (2021: £27.2 million).

Investment property includes completed assets and assets under construction at fair value. Trade and other payables include £4.9 million of development expenditure and £10.3 million for the acquisition of a completed site, which was acquired on 30 June 2022, and paid in July 2022.

Debt Financing

The PRS REIT has the following debt facilities:

· £150 million revolving credit facility with Lloyds Banking Group / RBS for an initial term of three years, which can be extended further for up to two years, matures February 2023. Interest is based on three-month Sterling Overnight Interbank Average Rate ("SONIA") plus applicable margin and the loan is secured over assets allocated to Lloyds Banking Group. As at 30 June 2022, £85.4 million had been drawn (2021: £68.6 million);

· £100 million term loan of 15 years with Scottish Widows, fully drawn as at 30 June 2022 (2021: fully drawn). Interest is fixed at 3.1%, matures June 2033 and the loan is secured over assets allocated to Scottish Widows;

· £150 million term loan of 25 years with Scottish Widows, fully drawn as at 30 June 2022 (2021: fully drawn). Interest is fixed at 2.8%, matures June 2044 and the loan is secured over assets allocated to Scottish Widows; and

· £40 million (2021: £50 million) development debt facility with Barclays Bank PLC, matures August 2025. Interest is based on three-month SONIA plus applicable margin and the loan is secured over assets allocated to Barclays Bank PLC. As at 30 June 2022, £15.2 million had been drawn.

The PRS REIT's aggregate borrowings will always be subject to an absolute maximum, calculated at the time of drawdown of the relevant borrowings, of not more than 45 per cent of the value of the assets.

Gearing on the portfolio, which is measured as net debt against investment value, remains low at 31%. Approximately 62.5% of the £400 million of investment debt is fixed rate at an average of 2.9%.

Key performance indicators

The Company's aim to deliver sustainable earnings and long-term capital growth through the execution of the Group's strategy is tracked by monitoring the below key performance indicators ("KPI") include:

KPI	June 2022	June 2021
Rental income (gross)	£42.0m	£26.6m
Average rent per month per tenant	£834	£785
Non-recoverable property costs as a percentage of gross rent (gross to net)	18.2%	19.5%
Fair value uplift on investment property	£99.7m	£39.0m
Operating profit	£127.0m	£53.7m
Dividends declared per share in relation to the period	4.0p	4.0p
Dividends paid during the period	4.0p	5.0p
Number of properties available to rent	4,786	3,984

All the KPIs are in line with management expectations. Rental income increases, non-recoverable property costs, operating profit, and the number of properties available to rent reflect the increased size of the portfolio and the progression of development sites.

It is also worth highlighting that the portfolio's average rental affordability ratio has improved to 25% in 2022 (2021: 29%), which is an indication of a stronger tenant base, and is after rental growth of 5.1% over the year (on stabilised sites).

Post Period Review

Over the first quarter of the new financial year, 70 new homes were added to the portfolio, taking the number of completed homes at 30 September 2022 to 4,856, providing an ERV of £49.4 million per annum. At the end of September 2022, contracted homes amounted to 670, with an ERV of £7.3 million per annum. The total ERV of contracted and completed homes at 30 September amounted to £56.7 million.

Following the September 2021 equity placing, the Company is targeting a portfolio of 5,600 homes once complete with an ERV of c.£56.0 million.

The table below provides further information of delivery activity over the first quarter of the new financial year.

	At 30 September 2022	At 30 June 2022
Number of completed PRS homes	4,856	4,786
ERV per annum of completed homes	£49.4m	£47.8m
Number of contracted homes	670	693
ERV per annum of contracted homes	£7.3m	£7.2m

Summary and Outlook

The long-term growth opportunity available to the PRS REIT remains substantial, driven by the strong underlying supply and demand fundamentals in the housing market. We also believe that PRS housing (at scale) can play a part in accelerating the overall delivery of new homes, a key agenda with local authorities and Central Government.

In addition, the track record that we have established in delivering high-quality new homes across multiple sites through our efficient supply chain platform places the Company in a strong position in the PRS market.

Notwithstanding current challenges and uncertainties, including the cost-of-living crisis, higher development costs and rising interest rates, we believe that the Company remains well-positioned to achieve its targets.

Environmental, Social and Governance

ESG statement

The Company's Investment Adviser ("IA"), Sigma PRS, undertakes the day-to-day management of the Company's ESG strategy and takes responsibility for managing the Company's ESG priorities at both a Company level and an asset level. Sigma PRS reports on ESG matters to the PRS REIT's Board on a quarterly basis.

Sigma PRS also utilises the services of EVORA Global, a leading sustainability consultant specialising in real estate solutions, to assist with the analysis of the Company's ESG performance and ongoing strategy.

Approach

The Company recognises that it is a long-term stakeholder in the communities and neighbourhoods it creates and takes this responsibility very seriously. In order to better achieve its ESG goals, its Investment Adviser engages with leading industry bodies that seek to promote high ESG standards and best practice.

· The IA is a signatory of the United Nations Global Compact ("UN Global Compact"), a voluntary initiative designed to encourage business leaders to implement universal sustainability principles and, in particular, the UN Global Compact's Ten Principles. These are derived from the Universal Declaration of Human Rights, the International Labour Organisation's Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption.

· The PRS REIT is a member of European Public Real Estate Association ("EPRA"), a not-for-profit association that represents the publicly-traded European real estate sector. Its mission is to promote, develop and represent the European public real estate sector by, amongst other things, providing better information to investors and stakeholders, actively engaging in public and political debate, and promoting best practices.

· The Company has submitted data for the first time to the Global Real Estate Sustainability Benchmark ("GRESB"). GRESB is an industry-led organisation, which provides ESG data to financial markets. It collects, validates, scores and benchmarks ESG data to provide business intelligence, engagement tools and regulatory reporting solutions for investors, asset managers and the wider industry.

Sigma PRS monitors the changing legislative and reporting landscape, including the EU Sustainable Finance Disclosure Regulation ("SFDR"), the UN Principles of Responsible Investment ("PRI"), and the Task Force on Climate-Related Financial Disclosures ("TCFD"), as well as national and city-level regulations, which are increasing.

It also uses the Social Value Portal ("SVP"), an online platform, which procures, measures, manages and reports social value and validates data.

The IA has incorporated ESG factors into its decision-making processes and operations. Its practices are based on the following policy approaches:

Opportunity review

· ESG risks are assessed, reviewed and monitored, and strategies for enhancement and/or mitigation are set. These strategies are based on recognised frameworks such as climate change and social needs.

Investment decisions

· ESG issues are listed and addressed in a summary investment paper, which informs decision-making at the Investment Committee approval stage;

· ESG costs, including for ongoing community involvement, are also determined and factored into investment decision-making processes.Asset management

· Appropriate governance structures are established.

· Relevant laws and regulations are adhered to.

· ESG issues are monitored and managed.

· Impacts on the natural habitat surrounding PRS assets are managed.

· Local community engagement and support plans are established, reviewed and developed.

· Due diligence is performed on third parties.

· Policy reviews and updates are ongoing.

· Good practice is established.

· Continued research and review of carbon reduction opportunities are ongoing.

· Investment restrictions are screened.

· The ability of investments to comply with ESG standards is assessed.

Processes and strategies

As an industry leader in the provision of private rental homes, the PRS REIT recognises its responsibilities towards, and also changing public priorities, regarding the environment. The Government's '10 Point Plan for a Green Industrial Revolution', established in November 2020 aims to accelerate the UK's attainment of net zero carbon emissions and encompasses energy, production, transport, innovation and the natural environment, with 2050 set as the endpoint of its net zero goal.

In the real estate sector, there is a need for action in areas such as energy and water consumption, non-fossil fuel heating provision and biodiversity. In working towards further developing the Company's ESG agenda, the IA has embedded best practices, and works closely with supply chain and construction partners to ensure that their policies and activities comply with the PRS REIT's commitment to the UN Global Compact.

Environmental Impact and Data

The Company is aware of the impact that its activities have on the environment, and is committed to taking action to minimise and mitigate any negative aspects as much as possible.

A particular focus for the Company is ensuring that the homes in its portfolio are highly energy efficient. As a result its portfolio more than meets the Government's requirement for all private rented sector homes to have an EPC rating of at least 'C' by 2030. The EPC data for the Company's homes is as follows:

EPC Rating	Total Homes	%
A	47	1%
B	4,058	85%
C	681	14%
	4,786	100%

The Company provides residents with access to clean and renewable energy through the installation of electric vehicle ("EV") charging facilities and photovoltaic panels where possible. To date, 188 homes have access to EV chargers, 255 homes have been installed with wiring looms, a specially designed wiring system, which provides for greater efficiency, protection and safety, and 18 EV chargers have been installed at apartment blocks. In addition, photovoltaic panels have been installed at close to 1,000 homes.

Homes with PV panels installed

% of portfolio with PV panels installed

Estimated generated kWh/yr

Estimated avoided CO2 emissions kg/yr

966.

21%

592,584

148,864

The Investment Adviser recently commissioned Calfordseaden, a property and construction consultancy firm, to undertake an Energy Efficiency Study to compare the energy consumption of the Company's properties with housing stock of various ages.

Four of the Company's core house types were reviewed and compared with comparable houses built in four age ranges from the start of the 1900's to 2010.

As the graph above demonstrates, the study showed that the running costs of the Company's homes were markedly cheaper than comparable homes built between the 1900's and 2010. This is primarily due to their energy efficiency. On average, the Company's homes were 74% cheaper to run on an annual basis than homes built between 1900-1929, with running costs 25% lower compared to homes built in 2010. With the recent increases in energy prices, the efficiency of the Company's homes is not only a major environmental positive, but it is also a benefit to residents.

Sigma PRS is also working closely with the Company's construction partners to monitor the greenhouse gas emissions and waste produced in the construction of homes. Data on waste and emissions for construction completed with Countryside Partnerships in FY21 can be found below.

Asset Environmental Construction Data - Countryside Partnerships
No. of units completed in FY21	Waste (tonnes)	Waste diverted from landfill (%)	Scope 1 (tCO2)	Scope 2 (tCO2)	Scope 3 (tCO2)
1,050	8,301	99.8	1,212	257	395

Scope 1 and 2 emissions are those owned or controlled by a company. Scope 3 emissions are a result of the activities of the company, but occur from sources not owned or controlled by the company. Examples of Scope 1 include direct emissions from fuel combustion on site such as boilers and fleet vehicles; Scope 2 relates to indirect emissions generated from purchased energy such as electricity; and Scope 3 relates to the emissions created by the products we buy and use from suppliers.

Further details on the PRS REIT's environmental, social and governance activities can be found in its annual ESG Report, which is available on the Company's website at www.theprsreit.com.

Social Engagement

A key focus for the Company is engaging with the wider community in which its developments are sited.

Over the last twelve months, the Company's Investment Adviser has supported over 20 charities and clubs across the country, either financially or practically. The Investment Adviser has sought to ensure that residents can readily identify with the charities and organisations that are selected and they are often involved in the selection process.

A wide range of organisations and social initiatives were supported over the year, from local clubs promoting girls' football, boxing and driving experiences for the disabled, to national charities, including The British Heart Foundation's Defibrillator Register project, and of the NSPCC's parenting skills project, 'Look, Say, Sing, Play' in Liverpool, and its adolescent sexual abuse project.

Engagement with charity partners is important and, during the year, visits were organised a number of charity partners, including Embassy Village, Atherton and Leigh Foodbank, Salford Loaves and Fishes, Barnardos Gap Homes Project, Speed of Sight, and Carluke Men's Shed. These occasions offer the opportunity for the Investment Adviser to discuss ongoing engagement and how best to provide support.

A particular initiative during the year, was the organisation of an Escape Room Roadshow for children, which was brought to 29 PRS REIT communities and 15 local schools. The Roadshow covered the themes of wellbeing, the environment, and literacy. Feedback on this initiative can be found at: https://www.clevercogz.com/simplelife2022roadshow

Comments from charities and organisations that Sigma PRS has been involved with are below.

David Hughes from Atherton and Leigh Foodbank said:

"On behalf of Atherton & Leigh Foodbank may I once again thank you and everyone concerned in providing this generous grant supporting our local Foodbank. Your valued donations this year will be utilised in keeping our vehicle on the road this year with repairs, fuel and insurance. Without a reliable vehicle the charity could not fulfil the collection of food from our collection points and deliver from our warehouse to our distribution centres. Furthermore especially this year, fuel, light and heating plus distribution centre rents all add to the fundraising necessary in order to keep the charity running efficiently."

Gill, Team Administrator, from the Speed of Sight Team said:

"Thank you for the message you sent in respect of the generous donation you want to make to us. That is absolutely fantastic. This gift will help us to continue to provide life-changing driving experiences for people with disabilities."

Paul Harrison, Head Coach at Doncaster Plant Works ABC said:

"Getting sponsorship like this is brilliant, really outstanding and it means such a lot to the club. I can't tell you how much we can do with funding like this. Not only will we be able to replace some of the windows at the club, we can also get more equipment, uniform and kit. But most of all it means that some of our boxers with real talent will get to compete in competitions as we can cover the entry costs and put them up. For some this will mean their first trip down to London and for others it'll be the first time they have been away at all."

Sara Benson, Corporate and Major Donor Fundraiser for Zoe's Place, Middlesbrough, said:

"Every single penny raised by Sigma Capital will go towards helping us provide these wide range of specialist services to all of our beautiful children for another day."

Resident feedback

All tenants automatically receive a tenant satisfaction survey email one week into their tenancy and then approximately six months later. This helps the Investment Adviser to monitor tenants' experience with the lettings and moving-in teams and to assess their experiences as settled residents.

The following information is based on tenant satisfaction results for the 12-month period from July 2021 to the end of June 2022.

Move in survey

6-month survey

Renewal survey

• 93% said the team made it easy to apply

• 88% said they were kept well-informed during the application process

• 84% said they received all the information they required

• 93% said the quality of the home met with their expectations

• 95% said they would recommend 'Simple Life'

• 95% said they are still happy with their home

• 89% said they are happy with the service provided

• 83% said they felt they have been kept well-informed

• 76% said they feel their Asset Manager is responsive and they are satisfied with the service they have provided

• 86% said the communal areas are well maintained

• 85% said they feel part of a community

• 76% said they feel their maintenance requests are fixed in a timely manner

• 94% said they would recommend 'Simple Life'

• 96% were happy with the experience they had with 'Simple Life' so far

• 49% of people renewed because they love the property

• 40% renewed because they love the area

• 9% renewed because of the rent (value for money)

• 2% renewed because 'Simple Life' offers a better service than a 'one-off' landlord

• 62% of people see themselves staying with 'Simple Life' for 4+ years (or 78% 3 or more years)

• 91% said they would recommend 'Simple Life'

All results are based on responses from neutral - strongly agree

The following information is based on tenant satisfaction results for the 12-month period from July 2020 to the end of June 2021.

Move in survey

10 month survey

• 96% said the team made it easy to apply

• 87% said they were kept well-informed during the application process

• 91% said they received all the information they required

• 89% said they found the process of moving into their home straightforward

• 89% said the quality of the home met with their expectations

• 96% said they would recommend 'Simple Life'

• 96% said they are still happy with their home

• 89% said they are happy with the service provided

• 79% said they felt they have been kept well-informed

• 88% said the communal areas are well maintained

• 86% said they feel part of a community

• 93% said they would recommend 'Simple Life'

All results are based on responses from neutral - strongly agree

Overall results from the latest survey are in line with those of the prior year, with some results showing an improvement in customer satisfaction. A number of new questions were added to the six-month survey to better assess customers' views on property management and maintenance.

The strength of the Simple Life brand continues to grow. Over the past 12 months the Simple Life website has had over two million page views and over 20,000 enquiry submissions. The number of leads coming through the website continues to slightly exceed enquiries coming from third-party websites, such as Rightmove. Site signage, recommendation and online search continue to be the largest sources of enquiries of those coming through the website.

Online reviews

Simple Life is registered with Trustpilot and routinely invites residents to leave reviews. This helps to identify any areas that need improvement. Simple Life now has just under 500 reviews on Trustpilot and has an overall rating of 4 stars out of 5, which is above the average of 3.7 for our business category of Property Rental Agency.

Simple Life developments are also now on Home Views, a dedicated review website for housing developments. Simple Life has an average score across all developments of 4.2 out of 5 from approximately 600 resident reviews, and 98% of residents rated their development average to excellent.

Customer testimonies

A selection of customer testimonies are reproduced below.

"We have found our experience with Simple Life so far to be of the highest standard. They are prompt in their responses and are always lovely on the phone. I hear lots of negative experiences people have when renting a property elsewhere but I feel secure in the knowledge that that won't be us!"

Amber, Prince's Gardens

"The best part is that it is a home that I have always dreamt of. Simple Life truly makes our life easy by providing such beautiful and affordable homes and 24-hour customer service."

Ipra, Shrewsbury Close

"Property is well-designed and superbly managed. The sleek, modern design of the properties make for outstanding value or money and make perfect homes as everything you need is built into the house. Overall, very impressive!"

Adam, Durban Mill

"Seamless, professional and super friendly service from all of colleagues I have spoken with in various departments at Simple Life. The whole experience and beginning of my journey as a tenant with Simple Life has more than met all of my expectations and more! Love the App, communication is so easy / any information I have asked for has been delivered almost immediately. They literally cannot be more helpful and my new home is literally fantastic. Thank you Simple Life :)"

Theresa, Ribblesdale Place

"We are currently in the process of our application. We contacted Simple Life about the scheme we were interested in and the information we received was very detailed. As previous Simple Life tenants, we can wholeheartedly recommend them ... hence our return to Simple Life for our potential new home!"

Josephine, on Trustpilot

"Been renting 2nd house now from Simple Life and I have never seen better service than this agency is providing. Replying to emails, returning calls and actioning everything within hours/days. Highly recommend."

Szymon, on Trustpilot

"Our landlord is absolutely fab and sorts any issues we have quickly and to a high standard."

Abbs, Base at Newhall on Home Views

"The activities you take time to plan are amazing. The fixflo website you have is good. Wouldn't want anyone else as a landlord. You've set the bar high."

Sabrina, Galton Lock on Home Views

Resident Focused Initiatives and Tech

Home Businesses

The pandemic has resulted in an increase in the number of people setting up businesses from home. Responding to this trend, we implemented a process requesting that tenants notify us of business operations from home. The principal aim of this is for the Investment Adviser to endeavour to ensure compliance with insurance requirements while supporting residents. We have also enabled residents to use our platforms to promote their businesses, and have established a Residents Business Directory, which often offers exclusive discounts to other residents in the area.

Property Alterations

We operate a property alterations request process, which provides residents with greater clarity over permissible property alterations as well as a better understanding of residents' obligations at the end of their tenancies.

Virtual Inspections

A system of virtual 'property health checks' continues to work well to identify and monitor issues and also to identify responsibility for repairs and maintenance. It enables residents to carry out certain property checks themselves and to make repairs at particular stages of their tenancy. This reduces disputes over deposit recovery at the end of a tenancy. In-person checks continue to be conducted on key dates, including at the end of and on the anniversaries of tenancies.

Outward Bound Trust

Sigma PRS launched an initiative with The Outward Bound Trust, called 'Building for My Future'. It enabled 10 young people, aged 15-19 years, from across the country, to test their resilience and learn new skills as they tackled a series of challenges on the water and in the mountains. The comments below from participants illustrate some of the lasting benefits.

"The confidence I gained was invaluable and it was the type that could only be achieved by taking that leap of faith, meeting new people and committing to challenges fully."

"Going forward in the future, I know that taking different paths (even if they are out of your comfort zone) can absolutely lead to great success and I know that even when I am put in the most stressful environments, I can overcome them and that is something to be proud of."

"I never thought one week could change the way I view things so much, but it definitely influenced a self-reflection on myself and my lack of connection with nature and the outdoors. It felt like a hard reset on myself and a detox from technology, even though this was not compulsory. I found myself never needing technology while hiking or cliff jumping."

Book Boxes and Guardians

In August 2021, Sigma PRS launched a Book Box programme across several developments to encourage residents to share books. To date, 17 book boxes have been installed serving over 30% of the portfolio, with residents signing up to be "guardians" of the boxes on each of these sites. The book boxes were sustainably made from 100% repurposed materials in partnership with a specialist recycling company.

Affordability Calculator

An affordability calculator, based on the Investment Adviser's referencing criteria, can be found on the Simple Life website. It is designed as an aid to assist prospective residents determine how much monthly rent they can afford relative to their earnings and outgoings.

Rental Availability

The Simple Life website now lists the availability of rental homes in real time. As well as giving potential renters a better service, it also facilitates a more efficient uptake of homes.

'My Simple Life' Mobile App

The Investment Adviser launched a bespoke resident mobile app in August 2021. Available on Google and Apple devices, it has been designed to provide a convenient and efficient 'one-stop shop' for residents' needs. It has been very well-received by residents to date, and provides:

· easy access to all important documents, including tenancy agreements, inventories, EPC, gas and EICR certificates;

· information on homes, including floorplans and measurements;

· information on home appliances, including manuals;

· access to statements of account, with certain payments enabled via the app;

· access to an open forum, enabling residents on the same development to engage with each other;

· the ability to report maintenance problems;

· exclusive affiliate offers and discounts;

· latest news;

· information on the local area; and

· the ability to leave feedback.

New services and facilities will be added to the app, with the following about to go live:

· content presentation by property type (apartment or house);

· notification log; and

· a new meter reading section, which allows residents to access easily their meter readings and request new meter readings.

Resident Affiliate Offers

Sigma PRS has increased the range of affiliate offers that are available to tenants, and the launch of the mobile app has created greater awareness of the offers available. Affiliate offers include discounts with Oddbox, Sky, Hussle, Argos, Dunelm, Wayfair, AO, Pretty Little Thing, Appleyard London Florists, and The Modern Milkman.

Podcast

In June 2021, the Investment Adviser launched the 'Simple Life Chat' podcast, hosted by radio presenter and journalist, Jen Thomas. It addresses the experience of renting and explores topics of interest to residents, with experts and residents participating in discussions.

Human Rights

The obligations under the Modern Slavery Act 2015 (the 'Act') are not applicable to the Company given its size. However, to the best of its knowledge, the Group is satisfied that its principal suppliers and advisors comply with the provisions of the Act.

The Company operates a zero-tolerance approach to bribery, corruption and fraud.

Health and Safety

In order to maintain high standards of health and safety for those working on sites, monthly checks by independent project monitoring surveyors are commissioned to ensure that all potential risks have been identified and mitigated. These checks supplement those undertaken by construction and development partners. The data is reported to the Board on a quarterly basis in the event of a nil return, and immediately in the event of an incident. There were no reportable incidents over the year (2021: none).

Governance

Strong governance is essential to ensuring that risks are identified and managed, and that accountability, responsibility, fairness and transparency are maintained at all times.

The Company is subject to statutory reporting requirements and to rules and responsibilities prescribed by the London Stock Exchange and the Financial Conduct Authority. The Board has a balanced range of complementary skills and experience, with independent Non-executive Directors who provide oversight, and challenge decisions and policies as they see fit. The Board believe in robust and effective corporate governance structures and are committed to maintaining high standards and applying the principles of best practice.

FINANCIAL STATEMENTS

Consolidated Statement of Comprehensive Income

For the year ended 30 June 2022

	Note	30 June 2022 £'000	30 June 2021 £'000

Rental Income		41,963	26,636
Non-recoverable property costs		(7,635)	(5,186)
Net rental income		34,328	21,450

Other income		470	353

Administrative Expenses
Directors' remuneration		(170)	(148)
Investment advisory fee		(5,158)	(4,362)
Other administrative expenses		(2,183)	(2,028)
Migration to Main Market expenses		-	(543)
Total administrative expenses		(7,511)	(7,081)

Gain from fair value adjustment on investment property	6	99,727	38,983
Operating profit		127,014	53,705

Finance income		4	-
Finance cost		(11,129)	(9,592)
Profit before taxation		115,889	44,113

Taxation	3	-	-
Profit after tax and Total comprehensive income for the year attributable to the equity holders of the Company		115,889	44,113

Earnings per share attributable to the equity holders of the Company:
IFRS earnings per share (basic and diluted)	4	21.4p	8.9p

All of the Group activities are classed as continuing and there were no comprehensive gains or losses in the period other than those included in the statement of comprehensive income.

Consolidated Statement of Financial Position

Company No. 10638461

As at 30 June 2022

	Note	2022 £'000	2021 £'000
ASSETS
Non-current assets
Investment property	6	961,915	780,366
		961,915	780,366
Current assets
Trade and other receivables		7,286	6,589
Cash and cash equivalents		48,682	86,414
		55,968	93,003

Total assets		1,017,883	873,369

LIABILITIES
Non-current liabilities
Accruals and deferred income		2,243	4,732
Interest bearing loans and borrowings	7	246,687	245,860
		248,930	250,592
Current liabilities
Trade and other payables		29,742	22,477
Interest bearing loans and borrowings	7	99,973	110,030
		129,715	132,507

Total liabilities		378,645	383,099

Net assets		639,238	490,270

EQUITY
Called up share capital		5,493	4,953
Share premium account		298,974	245,005
Capital reduction reserve		140,554	161,984
Retained earnings		194,217	78,328
Total equity attributable to the equity holders of the Company		639,238	490,270

IFRS net asset value per share (basic and diluted)	8	116.4p	99.0p

As at 30 June 2022, there is no difference between IFRS NAV per share and the EPRA NTA per share.

These consolidated group financial statements were approved by the Board of Directors and authorised for issue on 10 October 2022 and signed on its behalf by:

Steve Smith

Chairman

Consolidated Statement of Changes in Equity

For the year ended 30 June 2022

Attributable to equity holders of the Company

	Share capital	Share premium account	Capital reduction reserve	Retained earnings	Total equity
	£'000	£'000	£'000	£'000	£'000

At 30 June 2020	4,953	245,005	186,748	34,215	470,921
Comprehensive income
Profit for the year	-	-	-	44,113	44,113
Transactions with owners
Dividend paid	-	-	(24,764)	-	(24,764)
At 30 June 2021	4,953	245,005	161,984	78,328	490,270

Comprehensive income
Profit for the year	-	-	-	115,889	115,889
Transactions with owners
Issue of ordinary shares	540	53,969	-	-	54,509
Dividend paid	-	-	(21,430)	-	(21,430)
At 30 June 2022	5,493	298,974	140,554	194,217	639,238

Consolidated Statement of Cash Flows

For the year ended 30 June 2022

	Note	30 June 2022 £'000	30 June 2021 £'000

Cash flows from operating activities
Profit before tax		115,889	44,113
Finance income		(4)	-
Finance costs		11,129	9,592
Fair value adjustment on investment property	6	(99,727)	(38,983)
Cash generated by operations		27,287	14,722

Decrease / (increase) in trade and other receivables		124	(1,805)
Increase in trade and other payables		4,795	3,295

Net cash generated from operating activities		32,206	16,212

Cash flows from investing activities
Purchase of investment properties		(81,822)	(164,264)
Finance income		4	-
Net cash used in investing activities		(81,818)	(164,264)

Cash flows from financing activities
Proceeds from issue of Ordinary Shares		55,593	-
Cost of share issue		(1,084)	-
Bank and other loans advanced		89,624	233,119
Bank and other loans repaid		(100,014)	(22,134)
Finance costs		(10,809)	(11,059)
Dividends paid	5	(21,430)	(24,764)
Net cash generated from financing activities		11,880	175,162

Net (decrease) / increase in cash and cash equivalents		(37,732)	27,110
Cash and cash equivalents at beginning of year		86,414	59,304

Cash and cash equivalents at end of year		48,682	86,414

The accompanying notes are an integral part of this cash flow statement.

Notes to the Financial Statements

1. General information

This final results announcement was approved for issue by a duly appointed and authorised committee of the Board of Directors on 10 October 2022.

2. Basis of preparation

The financial information set out in this announcement does not constitute statutory financial statements for the year ended 30 June 2022 and year ended 30 June 2021. The financial information in this announcement has been derived from the statutory accounts for the year ending 30 June 2022 and year ending 30 June 2021. The report of the auditor on the statutory financial statements for the year ended 30 June 2022 and year ended 30 June 2021 was (i) unqualified; (ii) did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying their report; and (iii) did not contain statements under section 498(2) or (3) of the Companies Act 2006. The statutory financial statements for the year ended 30 June 2022 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The statutory accounts for the year ending 30 June 2021 have been delivered to the Registrar of Companies.

3. Taxation

As a UK REIT, the Group is exempt from corporation tax on the profits and gains from its property investment business, provided it meets certain conditions as set out in the UK REIT regulations. For the current year and prior year, the Group did not have any non-qualifying profits and accordingly there is no tax charge in the period. If there were any non-qualifying profits and gains, these would be subject to corporation tax.

It is assumed that the Group will continue to be a UK REIT for the foreseeable future, such that deferred tax has not been recognised on temporary differences relating to the property rental business. No deferred tax asset has been recognised in respect of the unutilised residual current period losses from non-qualifying activities as it is not anticipated that sufficient residual profits will be generated from these in the future.

4. Earnings per share

Earnings per share ("EPS") amounts are calculated by dividing profit for the period attributable to ordinary equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period. As there are no dilutive instruments, basic and diluted earnings per share are the same for both the current and prior periods.

The calculation of basic and diluted earnings per share is based on the following:

	2022	2021
	£'000	£'000

Earnings per IFRS income statement	115,889	44,113

Adjustments to calculate EPRA Earnings:
Changes in value of investment properties	(99,727)	(38,983)
EPRA Earnings:	16,162	5,130
Company specific adjustments: Non-recurring costs incurred by the Company as part of the Migration to the Premium Segment of the Main Market	-	543
Company Adjusted Earnings	16,162	5,673


Weighted average number of ordinary shares	535,203,388	495,277,294
IFRS EPS (pence)	21.4	8.9
EPRA EPS (pence)	3.0	1.0
Company specific Adjusted EPS (pence)	3.0	1.2

5. Dividends

The following dividends were paid during the current year and prior year:

	2022	2021
	£'000	£'000
Dividends on ordinary shares declared and paid:
Dividend of 1.0p for the 3 months to 31 March 2020	-	4,952
Dividend of 1.0p for the 3 months to 30 June 2020	-	4,953
Dividend of 1.0p for the 3 months to 30 September 2020	-	4,953
Dividend of 1.0p for the 3 months to 31 December 2020	-	4,953
Dividend of 1.0p for the 3 months to 31 March 2021	-	4,953
Dividend of 1.0p for the 3 months to 30 June 2021	4,953	-
Dividend of 1.0p for the 3 months to 30 September 2021	5,492	-
Dividend of 1.0p for the 3 months to 31 December 2021	5,492	-
Dividend of 1.0p for the 3 months to 31 March 2022	5,493	-
	21,430	24,764

Proposed dividends on ordinary shares:
3 months to 30 June 2021: 1.0p per share	-	4,953
3 months to 30 June 2022: 1.0p per share	5,493	-
	5,493	4,953

See note 10 for further information on proposed dividends.

6. Investment property

The freehold/heritable, leasehold and part freehold part leasehold interests in the properties held within the PRS REIT were independently valued as at 30 June 2022 by Savills (UK) Limited, acting in the capacity of External Valuers as defined in the RICS Red Book (but not for the avoidance of doubt as an External Valuer of the PRS REIT as defined by the Alternative Investment Fund Managers Regulations 2013). The valuations accord with the requirements of IFRS 13 and the Royal Institution of Chartered Surveyors' ("RICS") Valuation - Global Standards, effective from 31 January 2022, incorporating the IVSC International Valuation Standards (the "RICS Red Book"). The valuations were arrived at predominantly by reference to market evidence for comparable property.

Savills (UK) Limited are an accredited External Valuer with recognised and relevant professional qualifications and recent experience of the location and category of the investment property being valued.

The valuations are the ultimate responsibility of the Directors. Accordingly, the critical assumptions used in establishing the independent valuation are reviewed by the Board.

	Completed Assets	Assets under Construction	Total
	£'000	£'000	£'000

At 30 June 2020	231,302	345,817	577,119
Properties acquired on acquisition of subsidiaries	42,275	-	42,275
Property additions - subsequent expenditure	-	121,989	121,989
Change in fair value	13,408	25,575	39,983
Transfers to completed assets	246,789	(246,789)	-
At 30 June 2021	533,774	246,592	780,366

Properties acquired on acquisition of subsidiaries	14,820	11,526	26,346
Property additions - subsequent expenditure	-	55,476	55,476
Change in fair value	69,461	30,266	99,727
Transfers to completed assets	222,300	(222,300)	-
At 30 June 2022	840,355	121,560	961,915

The historic cost of completed assets and assets under construction as at 30 June 2022 was £785.0 million (2021: £704.2 million).

The carrying amount of investment property pledged as security as at 30 June 2022 was £823.6 million (2021: £719.0 million).

The Group has recognised a right-of-use ("ROU") asset within investment property in relation to ground rents payable on certain investment property sites. The net book value of the ROU asset was £1 million as at 30 June 2022 (2021: £1 million).

A potential planning issue has been identified in the development of one of the Company's sites. The Investment Adviser is actively working with the relevant house builder and council to remedy the matter and anticipates that this will be resolved in the near term. In the unlikely event that the issue is not resolved as anticipated, the Company would have rights of recourse against the house builder.

Fair Values

IFRS 13 sets out a three-tier hierarchy for financial assets and liabilities valued at fair value. These are as follows:

Level 1 quoted prices (unadjusted) in active markets for identical assets and liabilities;

Level 2 inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 unobservable inputs for the asset or liability.

Investment property falls within Level 3.

The investment valuations provided by the external valuation expert are based on RICS Professional Valuation Standards, but include a number of unobservable inputs and other valuation assumptions. The significant unobservable inputs and the range of values used are:

Type	Range
	2022	2021
ERV per unit	£7k - £22k	£6k - £21k
Investment yield	3.75% to 4.50%	4.00% to 4.75%
Gross to net assumption	22.5% to 25.0%	22.5% to 25.0%

Development assets are valued based on total development cost plus expected final uplift in valuation multiplied by % of site development completed. The range of % completions as at 30 June 2022, was from 7% to 99% (2021: 36% to 99%). The final investment value uses the assumptions stated above. An increase of 2% in the gross development cost would reduce the fair valuation of these assets by c.£2 million.

The impact of changes to the significant unobservable inputs for completed and development assets are:

	2022 Impact on statement of comprehensive income	2022 Impact on statement of financial position	2021 Impact on statement of comprehensive income	2021 Impact on statement of financial position
	£'000	£'000	£'000	£'000

Improvement in ERV by 5%	48,213	48,213	39,007	39,007
Worsening in ERV by 5%	(48,223)	(48,223)	(39,002)	(39,002)
Improvement in yield by 0.125%	30,124	30,124	23,619	23,619
Worsening in yield by 0.125%	(28,359)	(28,359)	(22,264)	(22,264)
Improvement in gross to net by 1%	12,492	12,492	10,850	10,850
Worsening in gross to net by 1%	(12,402)	(12,402)	(9,369)	(9,369)

7. Interest bearing loans and borrowings

	Group 2022	Company 2022	Group 2021	Company 2021
	£'000	£'000	£'000	£'000
Current liabilities
Bank loans at 1 July	109,998	-	-	-
Loans advanced in the year	89,624	-	133,119	-
Loans repaid in the year	(100,014)	-	(22,134)	-
Capitalised loan costs	333	-	(987)	-
Bank loans at 30 June	99,941	-	109,998	-

Lease liability	32	-	32	-
Total loans and borrowings	99,973	-	110,030	-

Non-current liabilities
Bank loans at 1 July	244,875	-	144,226	-
Loans advanced in the year	-	-	100,000	-
Capitalised loan costs	809	-	649	-
Bank loans at 30 June	245,684	-	244,875	-

Lease liability	1,003	-	985	-
Total loans and borrowings	246,687	-	245,860	-

Bank loans

Through its subsidiaries the Company has granted fixed and floating charges over certain investment property assets to secure the loans. At 30 June 2022 and 30 June 2021, the only other asset secured was £25 million of cash collateral.

The Group's borrowing facilities are with Scottish Widows, Lloyds Banking Group plc / RBS plc and Barclays Bank PLC. At 30 June 2022, these comprised the following:

Lender	Loan facility	Balance drawn 30 June 2022	Loan period	Interest rate (all in)		Maturity
Scottish Widows	£100 million	£100 million	15 years	3.14%	Fixed	June 2033
Scottish Widows	£150 million	£150 million	25 years	2.76%	Fixed	June 2044
Lloyds Banking Group plc /RBS*	£150 million	£85.4 million	3 years	3.16%	Variable	February 2023
Barclays Bank PLC	£40 million	£15.2 million	3 years	4.66%	Variable	August 2025

*£150 million revolving credit facility. £75 million available in first 2 years for development debt purposes, reduced to £25 million from 1 January 2022.

The Group's maximum loan to value ratio can be no more than 45%. As at 30 June 2022 the Group's loan to value was 31% (2021: 42%).

Reconciliation of movements of borrowings to cash flows arising from financing activities:

	2022	2021
	£'000	£'000

Balance as at 1 July	354,873	144,226
Proceeds from borrowings	89,624	233,119
Borrowings repaid	(100,014)	(22,134)
Interest paid	(9,825)	(8,706)
Non-utilisation fees paid	-	(895)
Arrangement and commitment fees paid	(846)	(1,504)
Finance costs	11,813	10,767
Balance as at 30 June	345,625	354,873

8. Net Asset Value

The Group adopted the EPRA issued new best practice guidelines in the year ending 30 June 2021. EPRA Net Tangible Assets ("NTA"), is considered to be the most relevant measure for the Group and replaces the previously reported EPRA NAV. The underlying assumption behind the EPRA NTA calculation assumes entities buy and sell assets, thereby crystallising certain levels of deferred tax liability. Due to the PRS REIT's tax status, deferred tax is not applicable and therefore there is no difference between IFRS NAV and EPRA NTA.

Basic IFRS NAV per share is calculated by dividing net assets in the Statement of Financial Position attributable to ordinary equity holders of the parent by the number of Ordinary Shares outstanding at the end of the year. As there are no dilutive instruments, only basic NAV per share is quoted below.

Net asset values have been calculated as follows:

	2022	2021

IFRS Net assets at 30 June (£'000)	639,238	490,270
EPRA adjustments to NTA	-	-
EPRA NTA at 30 June	639,238	490,270

Shares in issue at end of year	549,251,458	495,277,294

Basic IFRS NAV per share (pence)	116.4	99.0
EPRA NTA per share (pence)	116.4	99.0

The NTA per share calculated on an EPRA basis is the same as the IFRS NAV per share for the year ended 30 June 2022 and the year ended 30 June 2021.

9. Transactions with Investment Adviser

On 31 March 2017, Sigma PRS was appointed the Investment Adviser of the Company. A new Investment Adviser Agreement with Sigma PRS was signed in January 2021.

For the year ended 30 June 2022, fees of £5.2 million (2021: £4.4 million) were incurred and payable to Sigma PRS in respect of investment advisory services. At 30 June 2022, £0.9 million (2021: £1.5 million) remained unpaid.

For the year ended 30 June 2022, development fees of £2.5 million (2021: £4.6 million) were incurred and payable to Sigma PRS. At 30 June 2022, £0.1 million (2021: £0.3 million) remained unpaid.

For the year ended 30 June 2022, administration and secretarial services of £85,000 (2021: £90,000) were incurred and payable to Sigma Capital Property Ltd, a fellow subsidiary of the ultimate holding company of the Investment Adviser. At 30 June 2022, £49,000 (2021: £40,500) remained unpaid.

During the year ended 30 June 2021, Sigma PRS acquired 1,500,000 shares in the Company in the market. The shares purchased were acquired in the market at an average price of 76.4 pence per share. Sigma PRS's shareholding as at 30 June 2022 was 5,889,852 (2021: 5,889,852), which represents 1.07% (2021: 1.19%) of the issued share capital in the Company. All the shares acquired in the prior year were in accordance with the Development Management Agreement between the Company and Sigma PRS.

For the year ended 30 June 2022, Sigma PRS received dividends from the Company of £236,000 (2021: £249,000).

During the year, the Company acquired the following subsidiaries from Sigma Capital Group Limited, the ultimate holding company of the Investment Adviser:

Name of entity	Consideration
Sigma PRS Investments (Bury St Edmunds Parcel D) Limited Sigma PRS Investments (Bury St Edmunds Parcel D II) Limited	£4.5 million
Sigma PRS Investments (Plough Hill Road) Limited Sigma PRS Investments (Plough Hill Road II) Limited	£10.2 million
Sigma PRS Northern (Bertha Park) Limited	£4.8 million
The PRS REIT (Drakelow Park) Limited	£8.0 million
Total	£ 27.5 million

10. Post balance sheet events

Development site acquisitions

During August and September four development sites were acquired for a total consideration of £5.9 million.

Dividends

On 25 July 2022, the Company declared a dividend of 1.0p per ordinary share in respect of the fourth quarter of the current financial year. The dividend was paid on 26 August 2022, to shareholders on the register as at 5 August 2022.

Taxation

The UK Government announced on the 23rd September 2022, that the increase in corporate tax rate from 19% to 25% which is effective from 1 April 2023 will now not go ahead. There is no impact on the financial statements as at 30 June 2022 as a result of this announcement.

11. Availability of statutory financial statements

Copies of the full statutory financial statements will be available no later than 26 October 2022 and will be available on the Company's website at www.theprsreit.com.

12. Annual General Meeting

The Annual General Meeting of the Company will be held at the offices of Singer Capital Markets, 1 Bartholomew Lane, London EC2N 2AX on Monday 28 November 2022 commencing at 1.30 pm.

^{^[1]} A full reconciliation between IFRS profit and Adjusted earnings can be found in note 4 of the Financial Statements

^{^[2]} A reconciliation of IFRS NAV to EPRA NTA can be found in note 8 of the Financial Statements

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

FR URVRRUKURAUA

Company Announcements

Final Results

KEY POINTS

Chairman's Statement

Introduction

IFRS AND EPRA PERFORMANCE MEASURES

Market Dynamics

Private Rented Sector Reform

Extract from Portfolio Analysis

Property Portfolio by Regional Split - at 30 June 2022

Other Metrics - at 30 June 2022

Age Groupings

Household Income Bracket

Tenancies with Children

Distance Travelled

Investment Adviser's Report

Environmental, Social and Governance

ESG statement

FINANCIAL STATEMENTS

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

Bank loans

Development site acquisitions