Sirius Real Estate Limited, a leading operator of branded business and industrial parks in Germany and the UK, has reported a solid performance for its half-year results. The company saw its funds from operations (FFO) increase to €53 million, marking a significant year-over-year growth. This financial upturn has also led to an enhanced dividend of 3.00 cents per share, an 11.1% rise compared to the previous year.
The positive results are underpinned by substantial rent roll expansions in both Germany and the UK. In Germany, the rent roll reached €122.5 million, while in the UK it amounted to £50.7 million (€58.6 million), laying the groundwork for rental growth across its properties.
Despite these operational successes, Sirius Real Estate observed a reduction in operating profit which settled at €47.5 million. This was attributed to past valuation gains, which also influenced a decrease in basic earnings per share (EPS) to 2.70 cents. However, headline EPS experienced an upswing of 11.2%, rising to 4.06 cents.
Looking ahead, Sirius has set ex-dividend dates for its shareholders: December 12 for those in South Africa and December 14 for shareholders in the UK, with record dates following on December 14 and December 15 respectively.
Andrew Coombs, CEO of Sirius Real Estate, highlighted the company's resilience in delivering strong returns through asset management initiatives amid market volatility. The firm's financial prudence is evident with a slight improvement in net loan-to-value (LTV), which was reduced from 41.6% in March 2023 to 40.8%.
Furthermore, post-balance sheet transactions totaling €100 million demonstrate Sirius's adeptness at asset recycling—selling assets worth €47.4 million in Germany and acquiring new ones for €52.9 million in the UK.
For investors interested in dividend options, Sirius Real Estate declared that dividends are due on the last Thursday of January for shareholders registered by mid-December in South Africa or the UK. The company offers a Dividend Reinvestment Plan (DRIP) as an alternative to scrip dividends, with currency conversions fixed from November's third Friday at £0.87566 for Sterling elections and a € to ZAR rate of 19.99090.
The cash distribution comprises an 82% Property Income Distribution (PID) subject to UK withholding tax—with eligibility for exemptions—and an 18% non-PID portion. South African non-residents must comply with Exchange Control Regulations regarding dividends and reinvested shares.
Ex-dividend trading will start in mid-December; during this period, share certificates cannot be altered in South Africa. DRIP elections are due by the first Tuesday of January, with payment processing beginning on the last Thursday of that month and settlements extending into early February—dates will vary depending on the shareholder registry involved.
This robust financial reporting positions Sirius Real Estate as a strong player in the real estate investment sector, capable of navigating economic fluctuations while continuing to deliver value to its shareholders.
InvestingPro Insights
Drawing from the latest data from InvestingPro, Sirius Real Estate (SREJ) has demonstrated a consistent commitment to its shareholders, having raised its dividend for nine consecutive years, a fact that aligns well with the company's recent announcement of an enhanced dividend. This consistency in dividend growth is an encouraging sign for long-term investors.
InvestingPro data also reveals a declining trend in earnings per share for SREJ, which correlates with the reported reduction in the company's operating profit and decrease in basic EPS. However, the company has remained profitable over the last twelve months, a testament to its resilience in the face of market volatility.
An intriguing InvestingPro Tip is that SREJ is a prominent player in the Real Estate Management & Development industry, which is reflected in its robust rent roll expansions in both Germany and the UK, and its adeptness at asset recycling.
For those interested in gaining more insights like these, InvestingPro offers a wealth of additional tips. Currently, there are eight more tips available for SREJ. As part of a special Black Friday sale, subscriptions to InvestingPro are now available at a discount of up to 55%. This is a valuable opportunity for investors looking to stay informed and make data-driven decisions.
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