Fair Value Reit (F:FVIG) Q116 results are consistent with our full year forecasts, towards the top end of management guidance, and we have made no material changes to our estimates.
2015 saw FVI raising capital and moving into a growth phase after several years of focusing on portfolio optimization. It acquired a majority holding in a new subsidiary, increased participation in existing subsidiaries and directly acquired properties previously held within subsidiaries.
The capital base is sufficient to support further similar significant growth that is not yet reflected in our base case forecasts.
On track for full year
We have made no material changes to our estimates. Q1 earnings and EPS represented c 25% of our full year forecast. Gross rental income was at a similar level to Q1 2015, but additional property-related expenses left net rental income 7% lower. Expense control was good and net interest expense before the c €0.25m convertible bond redemption cost fell.
Underlying profit on an EPRA basis (or FFO), which excludes the one-off items and valuation movements, was up 53% at €1.6m or €0.11 per share (similar to Q115 as a result of the increased number of shares resulting from last year’s capital increase).
Q1 saw none of the investment activity that we expect (but do not include in our base forecasts), while two non-core property assets held for sale were disposed of.
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