Sirius Real Estate Ltd reported on Monday its interim profit nearly halved as a result of the revaluation of investment properties, and indicated it intended to raise capital for acquisitions.

The London and Johannesburg-listed property investor said pretax profit was €39.8 million for the six months that ended September 30, down 47% from €75.7 million a year before.

This was mainly due to a loss on revaluation of investment properties of €10.1 million, from a gain of €26.8 million previously.

Revenue was up 7.3% to €140.1 million from from €130.6 million.

Sirius reported an increase in like-for-like rent roll of 7.7%, compared to 6.9%, demonstrating the quality of the assets and continued occupier demand. In Germany, like-for-like annualised rent roll rose 7.0% to €122.5 million from €114.5 million, and was 9.0% lower in the UK to £50.7 million from £46.5 million.

Funds from operations grew 9.8% to €53.0 million from €48.5 million, reflecting ‘robust’ rental growth.

Sirius declared 3.00 euro cents interim dividend, up 11% from 2.70 cents.

EPRA net tangible assets per share was 108.51 cents as at September 30, up slightly from 108.11 cents as at March 31.

‘The business has delivered another six months of strong operational performance. Dividend and FFO growth is being supported by continued robust trading, with occupier demand for our high quality affordable products underpinning rental growth and keeping us on track to deliver our tenth consecutive year of greater than 5% like-for-like rent roll increases,’ Chief Executive Officer Andrew Coombs said.

On Monday, Sirius said it sought to conduct a non-pre-emptive placing of new shares to raise about £145 million to allow it to buy new properties.

The property group said it had identified a pipeline of eight attractive acquisition opportunities that met its criteria. Of these, four are based in Germany and would require around £85 million, and four are located in the UK and would require some £45 million.

Over the last four months, it acquired assets in Liverpool, Barnsley and three in North London for a combined £45 million.

Berenberg, Gossler & Co KG and and Peel Hunt LLP are acting as joint global coordinators and joint bookrunners, together with Panmure Gordon (UK) Ltd.

Sirius also said on Monday it planned a conditional offer for subscription of new shares via PrimaryBid.

The company is also conducting an institutional placing of new shares by way of an accelerated bookbuilding process and a placing of new shares to selected qualified investors in South Africa.

Certain directors and senior employees of the company will also be subscribing for new shares at the placing price directly with the company.

Looking ahead, Sirius said it expects to trade in line with management expectations for full-year to March 31.

Shares in Sirius shed 3.6% at 88.10 pence each in London on Monday. But they were 1.3% higher at R 20.23 in Johannesburg.

Copyright 2023 Alliance News Ltd. All Rights Reserved.