Residential
Secure
Income plc
Annual Report & Accounts
30 September 2024
Purpose
Residential Secure Income plc (ReSI or the Company)
(LSE: RESI) is a real estate investment trust (REIT)
focused on delivering secure, inflation-linked returns in
two sub-sectors in UK residential housing; independent
retirement rentals and shared ownership, which are
underpinned by an ageing demographic and untapped,
strong demand for affordable homes.
ReSI’s subsidiary, ReSI Housing Limited (ReSI Housing),
is registered as a for-profit Registered Provider of social
housing, and so provides an attractive proposition to its
housing developer partners, being a long-term private
sector landlord within the social housing regulatory
environment. As a Registered Provider, ReSI Housing
can acquire affordable housing subject to s106 planning
restrictions and housing funded by government grant.
On 6 December 2024, shareholders voted for and
accepted a new investment objective which seeks
to realise all the existing assets in the Company’s
portfolio in an orderly manner. The Company will
pursue its investment objective by effecting an orderly
realisation of its assets while seeking to balance
maximising returns for shareholders against timing of
disposals whilst ensuring the interests of residents are
protected. Capital expenditure will be permitted where
it is deemed necessary or desirable in connection to
the realisation, primarily where such expenditure is
necessary to protect or enhance an asset’s realisable
value, to comply with statutory or regulatory obligations,
to protect other stakeholders, to comply with the
terms of any funding arrangement or to facilitate
orderly disposals.
Contents
01
Strategic Report
Strategy and Performance
Investment Portfolio snapshot 3
Our portfolio focus 4
Chairman’s Statement 5
Financial highlights 8
Investment portfolio 10
Independent retirement rental housing 10
Strategic review
KPI measures 18
Fund Manager’s Report 22
Environmental, Social and Governance
ReSI’s approach to environmental and social impact 32
Section 172 Statement and Stakeholder Engagement 37
Risk Management
Principal Risks and Uncertainties 41
Going Concern and Viability Statement 46
02
Governance
Board of Directors 49
ReSI Housing Non-Executive Directors 51
Directors’ Report 52
Corporate Governance Statement 60
Report of the Audit Committee 67
Directors’ Remuneration Implementation Report 70
Directors’ Responsibilities 73
Independent Auditors’ Report 75
03
Financials
Consolidated Statement of Comprehensive Income 83
Consolidated Statement of Financial Position 84
Consolidated Statement of Cash Flows 85
Consolidated Statement of Changes in Equity 86
Notes to the Consolidated Financial Statements 87
Company Statement of Financial Position 120
Company Statement of Changes in Equity 121
Notes to Company Financial Statements 122
Supplementary information 125
04
Other Information
Glossary 133
Company Information 135
Notice of Annual General Meeting 136
1
Annual Report & Accounts 2024
01
Strategic
Report
Investment Portfolio snapshot
Our portfolio delivers secure,
inflation-linked income
2,975
*
Portfolio Highlights
£16.2mn
*
Annualised net rental income*
Year to 30 September 2023: £16.0mn*
See note 10 Supplementary Financial Information on page 129
5.3%
*
Annualised net rental yield
**
30 September 2023: 4.7%*
2,617
*
Counterparties
30 September 2023: 2,626*
4
16
92
545
72
88
51
589
464
258
796
Homes
30 September 2023: 3,006*
Portfolio value (Investment Property &
Assets Held for Sale)
30 September 2023: £345mn
See note 14 on page 100
Unique UK property locations
30 September 2023: 935
£326mn
921
*
64%
36%
Portfolio split
by valuation
£198.4mn Independent retirement rentals
£112.2mn Shared ownership
* Excludes local authority portfolio which is now held as asset held for
sale and sold on 10 January 2025.
** Alternative performance measure
3
01 Strategic Report
Annual Report & Accounts 2024
Our portfolio focus
ReSI has a diversified, secure, inflation-linked income stream
from residential sub-sectors with strong supply and demand
imbalances and supportive property fundamentals.
1. Assuming no staircasing
2. Represents the rent growth for homes that were occupied and eligible for a rent review during the year ended 30 September 2024
3. 1.1% coupon with principal increasing with RPI + 0.5% (with a 0.5% floor and 5.5% cap)
4. Based on annualised Net Operating Income over fair value at September 2024 as measured by an independent third-party valuer
5. Shared ownership vacant possession value includes both the value of ReSI’s 64% average equity position, and the 36% owned by the residents
6. Debt/Equity split is as per IFRS balance sheet, with properties held at fair value at September 2024 as measured by an independent third-party
valuer, and debt at amortised cost
Independent retirement living housing
(£198mn GAV/2,224 homes/64% of portfolio)
Shared ownership housing
(£112mn GAV/751 homes/36% of portfolio)
Driver Booming and increasingly lonely older
population
Huge untapped demand for affordable
homeownership
Summary Let to elderly residents with affordable rents
and assured tenancies
Provides fit-for-purpose homes for retired
people, allowing them to maintain their
independence without care provision
Homebuyers acquire, from ReSI, a share in a
residential property and rent the remainder
Helps house buyers acquire homes they would
otherwise be unable to buy
Capital grant funding from government drives
a c.30% living-cost discount compared to
market level rents
Rent growth Increase with RPI each year, generally capped
at 6%
Increase contractually by RPI+ 0.5% each year
Secure income Secure rental income paid from pensions
andwelfare
Subsidised, below-market rents
Homebuyer equity stake
ReSI’s origination
advantages
Scale: UK’s largest private independent
retirement rentals business
Specialist in-house 40-person team with over
20-year track record
ReSI Housing: a for-profit Registered Provider
of Social Housing
Investment Partner of Homes England and the
Greater London Authority for delivery of new
affordable housing
Average vacant
possession value
c.£110,000 per home c.£340,000 per home
5
Net yield 6.1%
4
4.1%
4
Average debt coupon 3.5% 1.1% with principal increasing with RPI + 0.5%
(with a 0.5% floor and 5.5% cap)
3
Levered yield 8.3%
4,6
9.2%
4,6
Average customer
stay/length of lease
1
6 years 248 years
Like-for-like rental
reviews
2
4.8% 8.8%
September 2024
occupancy
97% 100%
Rent collection 99% 100%
Annual Report & Accounts 2024
4
01 Strategic Report
Rob Whiteman CBE
Chairman
For shared ownership, most of the population lives in
areas where home purchase is unaffordable for average
earners. Continued inflation, rising mortgage rates and the
consistent demand for a permanent home have increased
demand for shared ownership as the most affordable
homeownership option particularly for first-time buyers
with limited budgets. Housing associations, which have
historically been the primary investors in new affordable
housing, are now refocusing to investing in their existing
social rented housing, allocating c.£10bn for fire safety
and c.£25bn to upgrade energy efficiency by 2030. These
financial pressures impact housing associations’ ability to
continue to fund their 43,000 homes per year development
programmes, with many now looking to bring in partners to
acquire some of their existing 200,000 shared ownership
homes. This is continuing to drive demand and opportunity
for further long-term investment into the sector – both to
fund new homes and acquire existing shared ownership
portfolios providing capital to housing associations to
invest back into their social rented stock.
The structural drivers, underpinning ReSI’s investment
portfolio, have supported ReSI to deliver record occupancy
and rent collection levels along with 5.8% like-for-like rent
reviews this year. Demand for affordable accommodation
has been strong vindication of the Company’s original
investment thesis and an enabler for earnings growth.
Chairman’s Statement
Introduction
ReSI launched in 2017 with the purpose of
delivering affordable, high-quality, safe homes
with great customer service and long-term
stability of tenure for its residents. Since
launch, ReSI plc has assembled a residential
portfolio across the independent retirement
rental, shared ownership and local authority
accommodation sub-sectors, which, as
at 30 September 2024, comprised 3,109
homes (2,224 independent retirement rental
homes, 751 homes shared ownership homes
and 134 homes providing local authority
accommodation).
ReSI’s sole remaining local authority asset was divested on
10January 2025, enabling the full repayment of the Group’s
floating rate debt. ReSI plc’s portfolio is now concentrated
in its two core residential sub-sectors – independent
retirement rental and shared ownership – where ReSI
plc’s high-quality portfolios are underpinned by key
demographic drivers, inflation linked leases and long-term
leverage, supporting shareholder returns.
ReSI is the UK’s largest provider of private independent
retirement rental homes. The UK population is rapidly
ageing, with the demographic over 65 expected to
increase by almost 50% by 2060
1
. Social isolation can
have a material impact on the health of the elderly, driving
demand for independent retirement accommodation
where customers can enjoy the benefits of living and
socialising with other like-minded individuals. Our customer
survey illustrates how we can and are helping with this,
indicating that 84% of our residents have been equally or
more socially active since moving in, and 63% saying their
mental health has improved. We believe that our offering
is the best way to allow people on lower to average means
to focus on enjoying an active and social retirement,
without the hassles of maintaining a home. The Board and
Fund Manager believe there will be huge growth in this
sector of the market.
1. Cushman & Wakefield - Housing_For_An_Ageing_Population_
Report_In_Association_With_The_BPF 2023
5
01 Strategic Report
Annual Report & Accounts 2024
Despite these achievements and the validation of the
investment thesis, however, a notable gap between the
Company’s NAV and its market valuation persists. The
Board does not believe this accurately reflects the strength
of the ReSI portfolio and original investment strategy, but
instead is a result of its modest size and inability to grow to
an economically efficient size in the medium term.
ReSI continues to deliver strong operational
performance, with high levels of rent
collection, occupancy, rent growth and
stabilisation of operating costs. Coupled
with Gresham House agreeing to reduce
fund management fees and reducing
the composition of the board from four
non exec directors to three, this has led
to adjusted earnings growing by 9%,
to comfortably cover our dividend.
The underlying operational performance of
the company has been robust throughout
the year. We have successfully reduced
costs, executed the sale of the local authority
portfolio (as a post balance sheet event)
fl
Despite these positive moves, the company
faces the same challenges faced by other
smaller Investment Trusts. The modest
market capitalisation of the company and
persistent discount to NAV undermines
the Company’s ability to raise more capital
ffiffi
manage the portfolio in the medium-term and
ffi our investors.
“
As such, the Board concluded that it is in
the best interests of shareholders to move
towards an orderly realisation of assets,
fi
general meeting held on 6 December 2024.
On behalf of the Board, I would like to thank
our shareholders for their continued support
of the Company and its portfolio, and
Gresham House Asset Management our Fund
Manager for its active management of the
portfolio and paramount focus on delivering
in the best interests of our shareholders.
01 Strategic Report
6 Annual Report & Accounts 2024
Summary and outlook
Looking ahead, our primary goal is to progress the orderly
realisation of the ReSI portfolio. We aim to optimise value
from the portfolio with the objective of concluding the
disposals efficiently and responsibly, maximising proceeds
for our shareholders.
On behalf of the Board, I would like to thank our
shareholders for their continued support of the
Company and its portfolio during this period of transition,
and Gresham House Asset Management our Fund
Manager for its active management of the portfolio and
paramount focus on delivering in the best interests of
our shareholders.
Rob Whiteman
Chairman
Residential Secure Income plc
21 January 2025
Having engaged with its shareholders and advisers to
consider the optimal route forward to realise shareholder
value, the Board concluded that a proactive approach,
executing a managed wind-down and portfolio realisation
strategy, which prioritises maximisation of proceeds from
portfolio sales whilst ensuring the interests of residents
are protected, and a subsequent return of capital to
shareholders is the appropriate course of action and in the
best interests of the Company’s shareholders.
Our shareholders accepted a new investment objective,
via a general meeting on 6 December 2024, which
seeks to realise all the existing assets in the Company’s
portfolio in an orderly manner. The Company will pursue its
investment objective by effecting an orderly realisation of
its assets while seeking to balance maximising returns for
shareholders against timing of disposals whilst ensuring
the interests of residents are protected. Capital expenditure
will be permitted where it is deemed necessary or desirable
in connection to the realisation, primarily where such
expenditure is necessary to protect or enhance an asset’s
realisable value.
Financial and dividend outlook
We will continue to look at how we can deliver the best
value for shareholders, with a constant focus on driving
portfolio performance thorough the realisation process
which is facilitated by inflation linked rental revenue.
Future dividend payments will be evaluated on a quarterly
basis, taking into full account the payout level required to
maintain real estate investment trust status, progress of
asset realisations and overall profitability.
01 Strategic Report - Chairman’s Statement
7Annual Report & Accounts 2024
Financial highlights
as at 30 September 2024
Income
Adjusted Earnings Per Share*
5.1p +8.5%
EPRA Adjusted Earnings Per Share Year ended
30September 2023: 4.7p
See note 13 on page 99
IFRS Loss Per Share
-5.4p
Year ended 30 September 2023: -12.5p
See note 13 on page 99
Like-for-like rent growth*
5.8%
Year ended 30 September 2023: 6.1%
Dividend per share – paid
4.12p
Year ended 30 September 2023: 5.16p
Dividend coverage*
124%
Year ended 30 September 2023: 91%
See note 13 on page 99
Recurring profit before change in
fair value and property disposals*
£9.5mn +9.2%
Year ended 30 September 2023: £8.7mn
See note 13 on page 99
* Alternative performance measure
01 Strategic Report
Annual Report & Accounts 20248
Capital
Total Return
(on Opening NTA)
*
-3.7%
Year ended 30 September 2023: -18.1%
See Supplementary Information note 11 on page 129
IFRS Net Asset Value per share
81.6p -10.4%
30 September 2023: 91.1p
See note 29 on page 118
Value of investment property
&Assets Held for Sale
£326mn
30 September 2023: £345mn
See note 14 on page 100
Total IFRS Return
(on Opening NAV)
-6.0%
Year ended 30 September 2023: -11.5%
See Supplementary Information note 12 on page 130
Fund Manager Shareholding
3.0% (5.6mn shares)
Of the total number of shares held by the Fund Manager,
Persons Discharging Managerial Responsibilities, and
directors of ReSI plc as at the date of this Annual Report
(30 September 2023: 2.6% or 4.9mn shares)
Loan to Value Ratio (LTV)
52%
30 September 2023: 50%
See Supplementary Information note 13 on page 99
Weighted Average
Remaining Life of Debt
20 years
30 September 2023: 21 years
EPRA Net Tangible Asset Value
(NTA) per share*
74.6p -8.8%
30 September 2023: 81.8p
See note 29 on page 118
01 Strategic Report - Financial highlights
Annual Report & Accounts 2024 9
4
16
231
88
338
23
56
51
523
708
186
£198mn
Gross Asset Value
2,224
homes
64%
of portfolio
£878
average monthly rent
Investment portfolio
Independent retirement rental housing
Geographical dispersion of retirement portfolio
Annual Report & Accounts 2024
10
01 Strategic Report
Number of UK residents over 65 years old
l
65 to 74
l
75 to 84
l
85 and over
85 and over
75 to 84
65 to 74
20662041201619911966
0
5
10
15
20
25
% of population
Source ONS
Just 1% of over 60s in the UK live in purpose-built
retirement housing, compared to 13% in Australia and
17% in the USA.
There is a very limited pipeline of retirement developments
in the UK, with only 3% of consented developments being
designed specifically for the elderly. Furthermore, this
construction activity is primarily focused on the top end
of the market and not competitive with ReSI’s relatively
affordable price points.
Specialist retirement housing is accessible (e.g., with
lifts) and easy to manage, enabling people to live
independently in their own living space to a greater age,
whilst still having access to some level of day-to-day and
emergency support.
According to Age UK, over onemillion older people say they
always or often feel lonely
4
. Boomer & Beyond estimates
that nearly one third of UK residents aged 70 and older
identify as ‘modestly satisfied’ to ‘not at all satisfied’ with
life
5
. Nearly half of older people in the UK (49% of over 65s)
say that television or pets are their main form of company,
with one research report claiming that loneliness can be
as harmful for our health as smoking 15 cigarettes a day.
Specialised retirement accommodation helps to foster a
sense of community by offering shared spaces such as a
residents’ lounge and communal gardens.
4. https://www.ageuk.org.uk/latest-news/archive/1-million-older-
people-feel-lonely/#:~:text=Age%20UK%20is%20calling%20
for,loneliness%20is%20in%20the%20UK
5. Boomer & Beyond quantitative research study 2022
Independent living for retirees
Our portfolio provides an affordable rental
independent living solution for retirement with
lifetime tenancies.
In summary, the portfolio:
1 is let to elderly residents with affordable rents and
lifetime tenancies;
2 provides fit-for-purpose homes for retirees, allowing them
to maintain their independence without care provision;
3 frees up larger homes for families;
4 generates stable and secure rental income paid from
pensions and welfare;
5 rents increase with RPI (capped at 6%) each year and are
often set around Local Housing Allowance levels: and
6 is managed by our in-house 40-person property
management and lettings team, operating under the ‘My
Future Living’ brand.
An increasingly lonely and growing older
population provides huge and growing
demand for independent retirement renting
There has been a steady upward trend in life expectancy
in the UK, and the average remaining life expectancy of
a person reaching retirement age exceeds 20 years
1
.
As a result, 20% of the UK population is expected to be
over 65 by 2026
2
.
In particular, the core market of over 75’s is projected to
nearly double from 2020 to 2050
3
.
1. ONS, Past and projected period and cohort life tables: 2020-based,
UK, 1981 to 2070, January 2022
2. ONS, 2020-based Interim National Population Projections,
January 2022
3. ONS, 2020-based Interim National Population Projections,
January 2022
11
01 Strategic Report - Investment portfolio
A
nnual Report & Accounts 2024
Case Study
Mr & Mrs Jones
Trading a Victorian house for freedom and savings: One Couple’s journey to Retirement Rentals
Facing spiralling rent and the
ever-growing burden and cost
of maintaining their spacious
Victorian house and managing
the large garden, Paul Jones, a
68-year-old retired landscape
gardener and his wife Lindsey, a
63-year-old part-time nurse realised
something had to change.
“The cost-of-living crisis was pushing
our rent up,” Paul explains, “and the
house upkeep was getting too much,
especially after I had Covid-19 which
has left me with weaker lungs. We
decided it was time to downsize and
find a home that was cheaper and
easier to manage.”
Unfamiliar with retirement rentals,
Paul and Lindsey found My Future
Living online, the UK’s leading
retirement rental specialist. After
exploring various options with the
company, their search led them
to a one-bedroom apartment in
a retirement development called
Hometor House in Exmouth – a
town Lindsey had always dreamed
of calling home.
Beyond the beautiful scenery,
their new apartment has offered
unexpected financial advantages.
“It’s much cheaper to run,” Paul says.
“The apartment is highly insulated
which means it scores high on
energy efficiency. We have really
noticed this in our bills, and keeping
these as low as possible is important
when you have retired.”
Paul and Lindsey rent on an assured
‘lifetime’ tenancy through My
Future Living, which gives them the
reassurance they do not have to
move again (providing they keep
up with the terms of their tenancy
agreement). Also, they do not have
to worry about major rent increases
as the annual rent increases are
also low and are linked to the Retail
Price Index (RPI).
Paul says, “Before we moved Lindsey
had started to worry about how
much our rent kept going up. Now,
not only do we benefit from a lower
rent due to downsizing, but we know
what to expect in terms of increases.
The assured tenancy gives us extra
peace of mind too. As we get older,
we don’t want the stress of knowing
we might have to move again.”
Downsizing was not just about
finances; it has also unlocked a
vibrant community. As Lindsey still
works, Paul has embraced their
new social life. “Being part of this
community is great,” he shares. “We
have tea parties and bingo nights
and even enjoyed a Christmas dinner
dance in Dawlish, just across the
water from us in December.
Looking back, their decision to
downsize and embrace retirement
rentals is one they wholeheartedly
recommend. “It’s worked brilliantly
for us,” Paul concludes. “We love
our new life, the community, and the
freedom it brings.
01 Strategic Report - Investment portfolio
Annual Report & Accounts 202412
27
4
207
49
32
66
88
278
£112mn
Gross Asset Value
751
homes
36%
of portfolio
£526
average monthly rent
Shared ownership housing
Geographical dispersion fo shared ownership portfolio
13
01 Strategic Report - Investment portfolio
An
nual Report & Accounts 2024
Shared ownership housing
Part-buy, part-rent model makes shared ownership the affordable
homeownership solution
ff
households through a part buy, part rent model with subsidised rents and low deposit requirements.
In summary, the shared owner:
1 purchases an equity stake in their new home at open
market value. This is known as the “first tranche sale” and
is often a minimum of 25% of the value of the property;
Shared owner
first tranche
25%
Part-buy
ReSI Housing’s stake
75%
Part-rent
M
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2 pays a subsidised rent c.30% below market rent on the
remaining part of the home, which increases annually at
RPI+0.5% for existing leases and CPI + 1% for new leases;
3 has the option to incrementally purchase additional
shares in their home at the prevailing open market value
(known as “staircasing”);
4 typically finances their initial stake with a
90% mortgage; and
5 is responsible for maintenance, repair and insurance,
creating strong alignment of interest.
Shared ownership is required to be affordable to incoming
shared owners, which typically means no more than 40% of
post-tax income of new shared owners can be spent on total
housing costs (i.e. mortgage, rent and any service charge).
There are 252,000 shared ownership homes across
England
1
, and around 20,000 new shared ownership homes
are delivered annually
2
, making it one of the faster growing
housing tenures.
1. ONS, Registered Provider social housing stock and rents in
England 2022 to 2023
2. ONS, Affordable Housing Supply, 2021 - 2022
ff
demand for shared ownership
Due to lower deposit requirements and discounted rental
payments, shared ownership addresses the affordability
barrier that forces people into a lifetime of private
market-rented accommodation with no certainty of
tenure, which makes it more difficult to feel like a member
of the community.
The graph below sets out the smallest amount of deposit
required and the minimum income requirement to purchase
a home worth £300,000 under shared ownership and
outright homeownership. Shared ownerships part-buy
part-rent model reduces both deposit and minimum
income requirements, providing an affordable route to
homeownership for a potential additional 8.2million people
3
across the country.
ff
l
Outright Purchase
l
Shared Ownership
Shared Ownership
Outright Purchase
Minimum IncomeMinimum Deposit
£0
£10,000
£20,000
£30,000
£40,000
£50,000
£60,000
£70,000
£80,000
£30,000
£67,500
£42,300
£7,500
3. Gresham House and Office for National Statistics. Assumptions:
Initial Property OMV £300k; first tranche sale percentage 25%; initial
mortgage LTV 90%; mortgage term 30 years; mortgage interest 4.5%;
service charge £1,500 p.a, shared ownership rent 2.75%; maximum
housing costs as a percentage of net income 40%; assumes 1.5x
earners per home
Annual Report & Accounts 2024
14
01 Strategic Report - Investment portfolio
Shared ownership increases homeownership eligibility
Shared OwnershipOutright Purchase
0mn
2mn
4mn
6mn
8mn
10mn
12mn
14mn
16mn
8.2mn more
People
The chart below illustrates how homeownership rates have
declined across age cohorts despite the fact that 76% of
non-homeowners in Great Britain want to own a home
4
. We
expect that declining homeownership rates and outright
purchase affordability worsening will continue to drive
demand for shared ownership.
Historical UK homeownership rates by age cohort
l
1981
l
2020
2020
1981
35-44 year olds25-34 year olds16-24 year olds
10%
30%
50%
70%
90%
32%
62%
69%
41%
56%
14%
Demand for shared ownership in the current
economic climate
Although interest rates have started to come down from
their peak, they are still elevated compared to their level
prior to the Truss budget in 2022.
4. YouGov (May 2021) ‘Who does - and doesn’t - want to own a home?’
Higher interest rates make the ambition of homeownership
more expensive for all first-time buyers, however the impact
is less severe for shared owners compared to those who
own outright. This is because as shared owners only initially
acquire a portion of their home, the size of the mortgage
required to purchase their equity stake is typically much
lower than someone buying a property outright.
As a result, prospective shared owners are much less
exposed to elevated interest rates compared to typical
first-time buyers, with the cost increase for new shared
owners as a result of a rise in interest rates one quarter
of the increase experienced by a first-time buyer
buying outright.
Annual cost increase from a 2% increase rate rise
???
Prospective Shared OwnersTypical First Time Buyers
???
Prospective Shared OwnersTypical First Time Buyers
£3,676
£919
£3,676
£919
With the Help-to-Buy scheme having ended in March
2023, shared ownership has become the only affordable
route onto the housing ladder for an increasing number of
people. There will be some residents who are no longer able
to afford shared ownership in the current economic climate,
however this has been outweighed by the new market of
higher income residents keeping demand for the tenure
strong, despite the worsening affordability outlook.
15
01 Strategic Report - Investment portfolio
An
nual Report & Accounts 2024
Interview with Dominic*
A shared ownership resident
Before moving into his shared ownership home at
Clapham Park, Dominic was renting a room in a house
share in Forest Gate. Fed up of not having his own
space, he heard about the shared ownership homes
being delivered to Clapham Park and was able to save
enough for a deposit on his shared ownership home by
reducing his outgoings.
Dominic was at-tracted to the location by both its
connectivity, being within walking distance of multiple
tube stations, and the quality if the apartments.
Security of tenure: “I feel really proud that I now
own my own home – I have always rented rooms in
London with other people, so it is exciting to finally
have my own space”
Quality: “The quality of my home is second to none. You
can really see the care that has gone into the apartment
and the wider development too.”
Ability to staircase: “The flexibility of the scheme means
that I can increase my shares over time and hopefully
staircase to full ownership.”
* Not his real name
Case Study
01 Strategic Report - Investment portfolio
16 Annual Report & Accounts 2024
17
01 Strategic Report - Investment portfolio
Annual Report & Accounts 2024
Income returns
ReSI’s key performance indicators (KPIs) are aligned to our business strategy. These measures are used by the Board and
senior management to actively monitor business performance.
Adjusted EPRA
earnings*
(£mn)
Net rental
income
(£mn)
Like-for-like
rental reviews
(%)
EPRA cost
ratio
(%)*
Loss before
tax
(£mn)
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
9.5 8.7 17.9 17.1 5.8 6.1 34% 39% (10.0) (23.2)
fi
Adjusted EPRA
earnings, excluding
valuation movements
on investment assets
and debt, and other
adjustments, that
are one-off in nature,
which do not form
part of the ongoing
revenue or costs of
the business.
Net rental income after
deducting property
operating expenses
including ground
rentpaid.
Like-for-like average
growth on rent reviews
across the portfolio.
Administrative and
operating costs
(including costs
of direct vacancy)
divided by gross
rentalincome.
Loss before tax
is a statutory
IFRS measure as
presented in the
Group’s Consolidated
Statement of
Comprehensive
Income.
Comment
2024 earnings
bolstered by a
net rental growth
supported by 5.8%
inflation linked like-
for-like rent growth
and lower fund
operating costs and
management fee
rebasing to average
of NAV and market
capitalisation.
Adjusted EPRA
Earnings covered
124% of dividends in
the year.
Increase of 5%
delivered during the
period as a result of
organic growth from
the portfolio due
to 5.8% like for like
rent increases and
acquisitions in FY23.
5.8% like-for-like
rental reviews
growth achieved
for properties that
were eligible for rent
increases during the
year ended September
2024.
2024 cost ratio
improvement
driven by vigilance
on fund operating
expenses, reduction
in management fee
and retirement net rent
expansion with gross
rent growth outpacing
increases in service
charges.
Loss before tax
driven by £12.8mn
property valuation
loss reflecting market
repricing due to higher
interest rates. We
expect the attractive
characteristics of
residential property
assets, in conjunction
with the supply/demand
imbalance and lack of
affordable housing, to
continue to appeal to a
wide range of property
investors resulting in
relatively resilient yields
compared to other
property sectors.
See note 13 to the
Financial Statements
See note 6 to the
Financial Statements
See Glossary on
133 for definition
and calculation basis.
See note 7
Supplementary
Financial Information
See Consolidated
Statement of
Comprehensive
Income on page 83
KPI measures
* Alternative performance measures
Annual Report & Accounts 2024
18
01 Strategic Report
Capital returns
The following KPIs focus on ReSI’s strategic priority to increase overall income returns and improve the resilience and
efficiency of the business model which will support increasing dividend distributions.
EPRA NTA
per share*
(pence)
IFRS NAV
per share
(pence)
Total Return
on NTA
(%)*
Loan to
Value (LTV)
(%)
Weighted Average
Remaining Life of
Debt (Years)
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
74.6 81.8 81.6 91.1 (3.7) (18.1) 52 50 20 21
fi
EPRA NTA (Net
Tangible Assets) is
the market value of
property assets, after
deducting deferred tax
on trading assets, and
excluding intangible
assets and derivatives.
IFRS NAV (Net Asset
Value) per share at the
balance sheet date.
Return on NTA is total
return for the year,
prior to payment of
dividends (excluding
movements in
valuation of debt and
derivatives), expressed
as a percentage of
opening NTA.
Ratio of net debt to
the total assets less
finance lease and cash
on a consolidated
Group basis.
Average remaining
term to loan maturity.
Comment
8.8% reduction in
the year ended 30
September 2024
driven by fair value
through profit and loss
movements.
Recurring Earnings of
5.1p covered 124% of
dividends in the year.
Returns of minus
5.6p per share in the
year reflecting EPRA
earnings of 5.0p offset
by 6.9p property
valuation decline,
and 3.7p loss in debt
valuation.
Returns of minus 3.7%
in the year reflecting
5.1p of earnings offset
by 6.9p property
valuation loss.
Property valuation loss
was driven by a 60bps
outward yield shift,
leading to a 9p decline,
which was partially
offset by inflation-
linked rent growth
which was additive to
valuations by 2.1p.
Increase in LTV
reflecting outward
valuation yield shift
as a result of market
repricing due to higher
gilt yields.
20 years remaining
life of debt reflecting
the long-term nature
of ReSI’s fixed and
inflation-linked debt
secured on the
retirement and shared
ownership portfolios.
See note 2
Supplementary
Financial Information for
reconciliation from IFRS
to EPRA performance
measures
See Consolidated
Statement of Financial
Position on page
84
S
ee note 11
Supplementary
Financial Information
for calculation.
See note 13
Supplementary
Financial Information
for calculation.
See note 20 for
information on the
Group’s Borrowings
19
01 Strategic Report - KPI measures
An
nual Report & Accounts 2024
The European Public Real Estate Association (EPRA) is the body that represents Europe’s listed property companies.
The association sets out guidelines and recommendations to facilitate consistency in listed real estate reporting, in turn
allowing stakeholders to compare companies on a like-for-like basis. As a member of EPRA, the Company is supportive of
EPRA’s initiatives and discloses measures in relation to the EPRA Best Practices Recommendations (EPRA BPR) guidelines.
Additional detail is provided in supplementary information on 125.
1. EPRA Earnings per share
fi Purpose Result
EPRA Earnings per share excludes gains
from fair value adjustment on investment
property that are included under IFRS.
A key measure of a company’s
underlying operating results and
an indication of the extent to which
current dividend payments are
supported by earnings.
5.0 per share for the period
30September 2024. (30September
2023: 4.1p)
Adjusted EPRA Earnings per share
excluding one off costs and including
first tranches sales for the period
were 5.1p (30September 2023: 4.7p)
2. EPRA Net Asset Value (NAV) metrics
fi Purpose Result
EPRA Net Reinstatement Value (NRV):
Assumes that entities never sell assets
and aims to represent the value required
to rebuild the entity.
EPRA Net Tangible Assets (NTA):
Assumes that entities buy and sell
assets, thereby crystallising certain
levels of unavoidable deferred tax.
EPRA Net Disposal Value (NDV):
Represents the shareholders’ value
under a disposal scenario, where
deferred tax, financial instruments and
certain other adjustments are calculated
to the full extent of their liability, net of
any resulting tax.
The EPRA NAV set of metrics make
adjustments to the NAV per the
IFRS financial statements to provide
stakeholders with the most relevant
information on the fair value of the
assets and liabilities of a real estate
investment company, under different
scenarios.
EPRA NTA £138.2mn or 74.6p
per share at 30September 2024
(£151.4mn or 81.8p per share at
30September 2023)
EPRA NRV £138mn or 74.6p per
share at 30September 2024
(£151.4mn or 81.8p per share at
30September 2023)
EPRA NDV £172mn or 93p per share
at 30September 2024 (£195.3mn or
105.5p per share at 30September
2023)
3. EPRA Net Initial Yield (NIY)
fi Purpose Result
Annualised rental income based on the
cash rents passing at the balance sheet
date, less non-recoverable property
operating expenses, divided by the
market value of the property, increased
with (estimated) purchasers’ costs.
A comparable measure for portfolio
valuations. This measure should
make it easier for investors to judge
for themselves how the valuation of a
portfolio compares with others.
5.1% at 30September 2024
(5.2% at 30September 2023)
4. EPRA ‘Topped-Up’ NIY
fi Purpose Result
This measure incorporates an
adjustment to the EPRA NIY in respect
of the expiration of rent-free periods (or
other unexpired lease incentives such as
discounted rent periods and step rents).
The topped-up net initial yield is
useful in that it allows investors to see
the yield based on the full rent that is
contracted at the end of the period.
5.1% at 30September 2024
(5.2% at 30September 2023)
Annual Report & Accounts 2024
20
01 Strategic Report - KPI measures
5. EPRA Vacancy Rate
fi Purpose Result
Estimated Market Rental Value (ERV)
of vacant space divided by ERV of the
whole portfolio.
A ‘pure’ percentage measure of
investment property space that is
vacant, based on ERV.
2.6% at 30September 2024
(3.5% at 30September 2023)
6. EPRA Cost Ratio
fi Purpose Result
Administrative and operating costs
(including and excluding costs of direct
vacancy) divided by gross rental income.
A key measure to enable meaningful
measurement of the changes in a
Company’s operating costs.
EPRA Cost Ratio (including direct
vacancy costs) 34% at 30September
2024 (39% at 30September 2023)
EPRA Cost Ratio (excluding
direct vacancy costs) was 33%
at 30September 2024 (36% at
30September 2023)
7. EPRA LTV
fi Purpose Result
Net debt divided by total property value. A key (shareholder-gearing) metric
to determine the percentage of debt
comparing to the appraised value of
the properties.
54% at 30September 2024
(51% at 30September 2023)
21
01 Strategic Report - KPI measures
An
nual Report & Accounts 2024
Ben Fry
Managing Director, Housing
Fund Manager’s Report
The underlying dynamics for the broader UK Living sector
remain positive; particularly in the sub-sectors where the
company is focused where long-term demographic and
economic drivers support demand. We believe that the
underlying portfolios, remain a compelling investment
opportunity given the increasing focus by institutional
investors into the UK living sector.
Update to arrangements for asset
management services
Gresham House and Thriving Investments announced a
new partnership to create a dedicated shared ownership
and affordable housing fund management platform in
the UK on 1stNovember. Under this arrangement, I and
a number of the existing housing team have transferred
to Thriving investments. I will continue to serve as lead
fund manager for ReSI plc under secondment to Gresham
House for an initial term of nine months and oversee
the orderly realisation of assets and maximising return
for shareholders.
Introduction
Our thesis at IPO was to focus on the
underserved markets of affordable purpose-
built retirement living and providing affordable
homeownership to young families and key
workers. This thesis is as valid as ever in 2024.
Addressing the country’s acute supply and demand
imbalance is at the centre of the new Government’s
plans, with the reintroduction of housing targets that aim
to deliver 1.5million homes in the next five years. This
aspiration would see affordable housing supply more than
double. In the Autumn budget, the Government solidified
plans with the inclusion a £500mn top-up to the existing
Affordable Homes Programme for new social housing and
share ownership, as well a commitment to a new long-term
Affordable Homes Programme from 2026 to be introduced
in the Spring. Initiatives such as these will facilitate
investment opportunities for registered providers such as
ReSI Housing, the regulated entity which holds all of ReSI’s
shared ownership homes.
The UK’s housing market for retirement homes continues
to be vastly underserved, with only 3% of new housing
completions being senior living units. The over-65
population is expected to grow at three times the national
average over the next decade. These factors have
supported the demand for our retirement portfolio which
has seen record occupancy of 97% for FY24.
While there are strong and compelling tailwinds supporting
ReSI’s portfolio and earnings, in recognition of the
persistent share price discount to net asset value, limiting
ReSI’s ability to grow to an economically efficient size,
limited share trading liquidity and after a review of strategic
options, we worked in conjunction with Board and agreed
an orderly realisation of assets is in the best interests of our
shareholders and residents.
Annual Report & Accounts 2024
22
01 Strategic Report
Statement of Comprehensive Income
2024
(£’000)
2023
(£’000) Variance
Net rental income 18,922 18,097 5%
First tranche sales profits 41 417 -90%
Net finance costs (6,74 0) (6,500) 4%
Management fees (1,411) (1,885) -25 %
Overheads (1,344) (1,456) -8%
Adjusted Earnings/Adjusted EPRA E arnings 9,468 8,673 9%
Adjusted EPS 5.11p 4.68p 9%
Dividend coverage 124% 91% +33%*
Property valuation movements (12,796) (38,944) -67%
Debt valuation movements (6,814) 7,747 -18 8%
Profit/(Loss) on property disposal 258 (11) -2,345%
One-offs (164) (619) -74%
IFRS Loss (10,048) (23,154) -57%
IFRS EPS (5.4)p (12.5)p -57%
* Change in %
The quality of ReSI’s operational business
model, demonstrated by 5.8% like-for-
like rental growth, consistently strong
rent collection of over 99%, and record
occupancy of 97% in retirement and 100%
fl
the strength of the underserved markets of
ff
ff
young families and key workers.
Completion of the £15mn sale of our local
authority assets in January 2025, marginally
in excess of September 2023 book value, has
fl
as targeted earlier in the year.
Despite higher gilt yields continuing to impact
our valuations, the sector outlook remains
ff
and an ageing population driving higher
demand, amid the persistent shortfall in new
housing. In this environment, the strategic
real estate market with stable long term cash
flbecome particularfi
We will continue to drive earnings growth
and advance the sales of the retirement and
shared ownership portfolios in an orderly
manner which prioritises shareholder
returns whilst ensuring the interests of
residents are protected.
“
23
01 Strategic Report - Fund Manager’s Report
An
nual Report & Accounts 2024
Strong Operational Performance
driving earnings growth
During the year, ReSI has continued to deliver strong rental
growth, rent collection and occupancy through FY24.
The excessive cost pressure that was seen in FY23 has
eased, which has ensured this strong rental growth has
converted into net rental income growth of 5%. Average
interest rates, on the 7.6% of debt that was floating rate
in the period, were 1.4% higher in the period than during
FY23, but this was largely offset through the reduction we
agreed in our fund management fees at the start of the year
to ensure net rental growth was converted into bottom line
growth with Adjusted Earnings up by 9%.
Dividend coverage
ReSI’s dividend was 124% covered by recurring income in
FY24, up 33% compared to FY23.
The 33% increase in coverage comprised 25% due to
the dividend rebasing to 4.12 pence per share in FY24
(5.16 pence per share FY24) and 8% via the growth in
Adjusted Earnings.
Dividend coverage
l
Increase
l
Decrease
l
Total FY24 Dividend 4.1p
FY24
EPRA
Adjusted
Earnings
Fund
management
fee
Net
Finance
Costs
Retirement
Cost Inflation
Retirement
Void
Management
Retirement
Rent
Inflation
First
Tranche
sales
Net Shared
Ownership/
Rent
FY23
EPRA
Adjusted
Earnings
% of population
0.0p
1.0p
2.0p
3.0p
4.0p
5.0p
6.0p
4.7p
0.3p
0.6p
0.4p
-0.2p
-0.8p
-0.1p
0.2p
5.1p
Valuations continue to be impacted
by increased gilt yields
As with other high-quality assets that deliver long-term
inflation linked income, our investment valuations continue
to be impacted by the impact of increased gilt yields with
our investment portfolio valuation yield rising to 5.3%
from 4.7% in September 2024 (both figures exclude the
local authority portfolio). Our strong rental growth of 5.8%
has partially mitigated the impact of higher long-dated
gilt yields leading to a 3% like-for-like valuation decline of
£13mn to £325mn, taking EPRA NTA to 74.6p per share
down from 81.8p at 30September 2023. The USS debt
is held at mark to market value in IFRS NAV and so the
decrease in the same duration long dated gilt yield over the
period increased its net present value giving an IFRS loss of
9.5p vs EPRA NTA.
Net rental income
Net rental income before ground rents (NRI) grew by
4.6% year-over-year to £18.9mn, driven by the following
underlying factors:
Retirement rent growth of 6% to £11.8mn with strong like-
for-like rent review growth of 4.8%, augmented by higher
average occupancy and reduced void weeks, being
partially offset by 11% cost inflation
Shared ownership rent growth of 11% from £5.0mn
to £5.5mn due to:
– £0.2mn from 8.8% like for like rental increases; and
– £0.3mn annualised income of our shared ownership
portfolio from units which leased up during FY23.
Local authority asset sale reducing net rental income
from £1.9mn to £1.6mn
These factors were also underpinned by:
Consistent rent collection of over 99%
Annual Report & Accounts 2024
24
01 Strategic Report - Fund Manager’s Report
Net Rental Income – £mn
l
Increase
l
Decrease
l
Total
FY24Sared
ownership
– leasing
Shared
ownership
– rent growth
Local
Authority
– asset sale
Retirement
– cost
inflation
Retirement
– Void
Management
Retirement
– rent growth
FY23
18.1
1.0
-1.1
0.7
-0.3
0.4
0.1 18.9
0
5
10
15
20
25
1. Top-line retirement
growth flowing through
despite higher costs
Income growth delivered:
£0.6mn/1%/0.1 pence per share
1
Retirement gross rental revenue grew 8.4% year-over-year
to £22.3mn, ahead of the 6.4% growth in the prior year.
This was driven by 4.8% like-for-like rent growth, reflecting
the RPI-linked rental increases, combined with an average
occupancy of 96% (FY23: 94%) and a 21% improvement in
void weeks, which reduced to 11.5 weeks (FY23: 14.6 weeks).
Void weeks represent the average time a property is not
income generating between tenancies and reflects time to
refurbish apartments and re-let them to new residents.
Occupancy growth has continued to improve throughout
the year and reached a record level of 97% at year end,
reflecting the great customer service of ReSI’s in-house
property manager, My Future Living. Revenue growth was
offset by 11% year-over-year operating expense growth
to £10.5mn, which was primarily driven by a 32% increase
in energy costs for common areas and a 15% increase in
insurance premiums.
We continue to work closely with My Future Living across
several asset management initiatives and will continue
to do so through the realisation period, in order to boost
income and offset cost inflation. These include:
continued improvement in retirement re-letting timing
to continue driving occupancy growth, which involves
improving start times on refurbishment works for
unit turnovers;
completing capital works and energy efficiency
improvement projects; and
rationalising the footprint of the retirement portfolio via
selective disposals and recycling capital into core areas
to drive local economies of scale.
1. FY23 versus FY24
2. Strong rent growth in
shared ownership
Income growth delivered:
£0.4mn/0.2 pence per share
2
Shared ownership rents within the portfolio, usually
increase annually on 1April generally with RPI + 0.5%,
and grew by 8.8% like-for-like to £4.6mn compared to the
prior year. In April 25 year rents are due to increase by
3.2% on 1April.
3. Full occupancy and annualised
impact of our shared
ownership portfolio
Income growth delivered:
£0.1mn/0.1 pence per share
3
ReSI’s portfolio is now fully occupied and benefited from
full-period income from the Brick By Brick homes that were
acquired and leased during FY23.
2. FY23 versus FY24
3. FY24 versus FY24
25
01 Strategic Report - Fund Manager’s Report
An
nual Report & Accounts 2024
4. Consistent rent collection
ReSI’s cash flow is supported by a highly diversified set
of income streams from residents who pay affordable
rents. Our retirement residents typically pay their rent from
pensions and savings, and residents benefitted from an
8.5% increase in state pensions in April 2024, compared to
the FY24 4.8% average like for like rental growth across our
retirement portfolio. On average, ReSI’s shared ownership
residents own c.36% of their homes and generally
pay below-market rent. The remainder of ReSI’s rental
income, during the period, originated from local authority
housing, which was leased to Luton Borough Council.
ReSI has no leases with asset-light, lease-funded, housing
associations or charities.
ReSI’s rent collection rate exceeded 99% in FY24 and
the affordability of ReSI’s rents, as well as the strength of
creditworthiness in ReSI’s counterparties has helped keep
rental arrears at c.1% of rent roll in 2024. To address those
arrears, we are working with residents to find solutions
that benefit both parties, which can include buying back
part of shared owners’ home equity to provide liquidity,
helping retirement residents utilise all government welfare
resources and subsidies available to them, or occasionally
helping residents find local authority accommodation if
they cannot afford to remain living in their home.
First tranche sales profits
First tranche sales profits reduced by 90% to £0.04mn.
This reflects the gain on cost we recognise by selling a
portion of a shared ownership home to the occupiers and is
thereafter replaced by ongoing net rental income from the
shared owner. The reduction in this line reflects the removal
of sales risk within the shared ownership portfolio with the
homes fully occupied.
Net finance costs
Net finance costs increased by 4% to £6.7mn, caused
by an 1.4% increase in the average interest rate on the
8% of debt which is not fixed, with ground rent expenses
remaining at £1.0mn.
ReSI completed the full disposal of its local authority
housing portfolio, post balance sheet date, in January 2025
which enabled the pay-down of floating rate debt, leaving
the Company with long-term fixed or inflation-linked debt
with a weighted average maturity of 20 years.
Administrative and other expenses
Recurring overheads, excluding management fee and one
offs, have reduced 8% in FY24 to £1.3mn. The decrease has
been attributable to lower costs in relation the governance
of our Registered Provider of Social Housing, ReSI Housing.
Management fees reduced 25% in the year to £1.3mn. Prior
to 1 Jan 2024, the management fee was based exclusively
on net asset value. As announced during the FY23 results in
December 2023, acknowledging the significant share price
discount to net asset value, the Fund Manager agreed to
reduce its management fee and charge the fee in reference
to the average of market capitalisation and net asset value.
Total return
ReSI delivered an EPRA NTA total return of negative
3.1pence per share, which comprised of:
5.1p of Adjusted EPRA Earnings (see note 13 – adjusted
earnings per share), with recurring income of £9.5mn; less
6.9p impact of the 3.8% like-for-like decrease in
investment property values, as assessed by Savills, to
£326mn as at 30September 2024. This decrease was
primarily driven by a c.60 bps increase in the weighted
average valuation yield since September 2023 to 5.3%,
despite like-for-like income growth of 5.8%; and
1.3p impact of USS debt indexation (£2.4mn), reflecting
the index-linked nature of the debt which follows
the increase in shared ownership rent reviews up to
a cap of 5.5%.
The movement in the EPRA NTA position during the
year, from 81.8p to 74.6p per share, is after total dividend
payments of 4.12p per share (£7.6mn).
Annual Report & Accounts 2024
26
01 Strategic Report - Fund Manager’s Report
Movement in EPRA NTA pence per share for the year
l
Increase
l
Decrease
l
Total
EPRA NTA at
30 September 2024
Debt
indexation
Movement in Fair
Value of Investment
Properties
Dividend
paid
Net
income
EPRA NTA at
30 September 2023
81.8
5.1
-4.1
-6.9
-1.3
74.6
60
65
70
75
80
85
90
A total IFRS return of -5.6p per share (-6.0%) was delivered for the year. The difference to EPRA NTA returns reflects a
decrease in the fair value of debt (IFRS) of 3.7p (£6.8mn) versus the amortised cost value of debt (EPRA) caused by the c.9%
decrease in the comparable duration gilt yield over the year, which increased the mark to market value of the USS debt. The
IFRS NAV decreased by 9.5p after dividends paid.
Movement in IFRS NAV pence per share for the year
l
Increase
l
Decrease
l
Total
NAV at
30 September 2024
Debt
valuation
change
Movement in Fair
Value of Investment
Properties
Dividend
paid
Net
income
NAV at
30 September 2023
91.1
5.1
-4.1
-6.9
-3.6
81.6
60
65
70
75
80
85
90
95
100
27
01 Strategic Report - Fund Manager’s Report
An
nual Report & Accounts 2024
Balance Sheet
2024
(£’000)
2023
(£’000) Variance
Total Investments inc. Available for Sale 325,684 345,138 -6%
Inventories – First tranche Shared Ownership properties
available for sale – 431 -100%
Cash and cash equivalents 11,091 8,805 26%
Borrowings amortised cost (193,004) (199,039) -3%
Other (5,615) (3,882) 45%
EPRA Net Tangible Assets 138,156 151,453 -9%
EPRA NTA per share (pence) 74.6 81.8 -9%
EPRA Net Disposal Value (NDV) 172,243 195,303 -12%
EPRA NDV per share (pence) 93.0 105.2 -12%
IFRS NAV 151,001 168,679 -10%
IFRS NAV per share (pence) 81.6 91.1 -10%
Book Value of Debt 179,740 181,747 -1%
Savills Advisory Services Limited (Savills) are appointed to
value the Company’s property investments, in accordance
with the Regulated Investment Company requirements, on
a quarterly basis. ReSI’s property valuation, as assessed
by Savills, decreased by £12.7mn during the year – a 3.8%
decrease on a like-for-like fair value basis to a total of
£326mn as of 30September 2024. This was driven by
c.60bps increase in the weighted average valuation yield
applied to the portfolio, with both shared ownership and
retirement valuation yield shifts of c.60 bps to 6.1% and
4.0% respectively. This shift in valuation yields has been
partially negated via the rental growth of 5.8% on 2,843
properties (96% of portfolio).
Inventories reflect the unoccupied shared ownership
properties. As at 30September 2024 the portfolio was fully
sold and rental income generating.
Total borrowings (amortised cost) decreased by £6mn
during the year to £193mn as of 30September 2024,
primarily due to £6mn repayment of the Santander
RCF. The £193mn amortised cost of ReSI’s debt has a
weighted average life of 20 years, and the value of this
debt is recognised with a mark to market value of £160mn,
representing £33mn of value for shareholders compared to
raising new debt today. This £33mn of value is recognised
in ReSI’s NDV of 93.0p per share and £13m is recognised
in ReSI’s £180m book value and 81.6 IFRS NAV per share.
ReSI’s lenders have change of control provisions in the
debt and so this value may not be realised on a sale of the
underlying portfolios.
The IFRS NAV includes the present value of the USS debt,
but not the long-term debt with Scottish Widow, and so
at £180mn is part way between the full amortised cost
(£193mn) and mark to market (£160mn).
The EPRA NTA and IFRS NAV measures exclude the
reversionary surplus in our portfolio which stands at £89mn.
This represents the difference between the market value of
our assets used in our balance sheet and the value we could
realise if they became vacant. Overall, our portfolio is valued
at a 29% discount, on average, to its reversionary value.
Financing and Capital Structure
At the 30September 2024 balance sheet date, ReSI had
c.£180mn (book value) of debt in place, of which 92%
is either long-term fixed rate or inflation linked. LTV has
increased by 2% from 50% to 52% over the year and is
broadly in line with the 50% leverage target.
The increase in LTV is attributable to the c.60 basis
points outward yield shift reducing valuation of the ReSI
property portfolio.
ReSI completed the full disposal of its local authority
housing portfolio, post balance sheet, in January 2025
which enabled the pay-down of floating rate debt, leaving
the Company with long-term fixed or inflation-linked debt
with a weighted average maturity of 20 years.
The £180mn book value of ReSI’s debt has a weighted
average life of 20 years, and the value of this debt is
recognised with a mark to market value of £160mn, within
EPRA NDV, representing £20mn of value for shareholders
compared to raising new debt today versus the £180m
book value. ReSI’s lenders have change of control
provisions in the debt and so this value may not be realised
on a sale of the underlying portfolios. We are in dialogue
with lenders regarding their intention on realisation of
the portfolios.
Annual Report & Accounts 2024
28
01 Strategic Report - Fund Manager’s Report
The limit on the floating rate revolving capital facility was
reduced from £25mn to £15mn on 30September 2024. The
facility matures in March 2025, and we are in discussions
with the lender regarding a term extension to facilitate the
retirement asset management programme and provide
flexibility as we enter a managed wind-down.
Our reversionary loan-to-value is 43% when taking into
account the £415mn vacant possession value of the
portfolio. This £89mn reversionary surplus (compared to
£326mn of fair value) represents the difference between the
market value of our assets used in our balance sheet and
the value we could realise if they became vacant. Overall,
our portfolio is valued at a 29% discount, on average, to its
reversionary value.
FY24 FY23
Total debt £180mn £182mn
LTV (target 50%) 52% 50%
Leverage on reversion value 43% 44%
Weighted average fixed-debt
coupon (51% of ReSI’s debt)
3.5% 3.5%
Weighted average inflation-
linked debt coupon (42% of
ReSI’s debt)
1.1%
1
1.1%
Weighted average maturity 20 years 21 years
The drop in property investment values and increase in
debt fair value has narrowed headroom in the Santander
working capital facility’s loan-to-value covenant, which at
the balance sheet date £15mn was drawn, and represents
8% of ReSI’s outstanding debt balance. The facility was
repaid in full, before the signing of the accounts following
the local authority disposal.
As at 30September 2024, the working capital facility’s LTV
level was 54%, with c.£8mn of property value headroom
(3%) before a covenant breach is triggered. We estimate
that ReSI’s weighted average valuation yield would need
to shift outward by a further c.14bps for this valuation
loss to be realised, on top of the c.60bps widening since
September 2023. Post balance sheet the facility has been
repaid in full therefore the LTV covenant pressure has
been extinguished.
ReSI’s other LTV covenants and ICR covenants still have
ample headroom and ReSI’s USS debt on its shared
ownership portfolio is fully amortising and so does not have
a loan-to-value debt covenant. The LTV reported below
are based on the 30September 2024 fund valuations as
opposed to the private bank valuations.
Covenant
Loan covenants by portfolio
2
Shared
Ownership/USS
Retirement/
Scottish Widows
Total Portfolio/
Santander
30 September 2024 debt balance
3
£73mn £93mn £15mn
LTV – Threshold N/A <58% <55%
LTV – Fund Value N/A 47% 54%
Value – Headroom (%) N/A 19% 2%
Value – Headroom (£) N/A £38mn £8mn
ICR/DSCR – Threshold >0.95x >2.0x >1. 5x
ICR/DSCR – Reported 1.2x 3.4x 2.0x
NOI – Headroom 20% 42% 24%
SONIA Interest Rate – Breach Threshold
4
Fixed-rate coupon Fixed-rate coupon 28%
1. 1.1% coupon with principle increasing with RPI + 0.5% (with a 0.5% floor and 5.5% cap)
2. Based on 30 September 2024 fund valuations. The covenants presented do not represent a comprehensive set of debt covenants. This is not
a performance forecast and there can be no guarantee that ReSI will continue to meet its debt covenants in the future
3. As at 30 September 2024. USS debt balance shown at fair value, reflecting the impact of recurring quarterly indexation and movements in gilt
yields and credit spreads
4. Interest rate breach threshold based on last-twelve-month net rental income
29
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Social and environmental
We remain committed to delivering measurable
social and environmental impact for the benefit of our
residents and the UK.
Ensuring that our homes remain affordable to residents
is a core focus of the Fund Manager, as not only does
this deliver good outcomes for residents, but we believe
this will contribute to delivering long-term, stable
returns to investors.
Our shared ownership rents have increased by an average
of 8.3% on 1April 2024. We took the decision to increase
rents by the full contractual amount of RPI + 0.5% because
it broadly aligned with wage growth of 8.0%
1
and growth
in private sector rent levels of 10.5%
2
over the reference
period. As the 2023 rent increase was capped below the
contractual level, we had the option to recover the rent
increase foregone of 6.1% through this year’s rent increase,
however we have waived this option so that we are not
raising rents significantly above income growth.
Our retirement residents benefitted from an 8.5%
increase in state pensions in April 2024, compared to the
FY24 4.8% average like for like rental growth across our
retirement portfolio.
To ensure that our intended social impact outcomes
are being experienced by residents, ReSI conducted its
annual survey of its shared ownership and retirement
rental residents in 2024. Highlights from the survey results
are shown below.
Shared ownership Retirement
75%
Residents of RPML managed properties who are happy or
not dissatisfied with the service provided by ReSI Housing
90%
Residents that are happy or not dissatisfied with their
property management service
60%
Shared owners satisfied their home is the same or better
value for money than their previous residence
93%
Residents who said their retirement home is at least as
stable as their previous residence
82%
Residents satisfied that their home is as or more energy
efficient than their previous residence
63%
Residents who reported improvement in their mental
health since moving into their retirement home
These positive survey results help to confirm that
the outcomes that ReSI intends to deliver are being
experienced by residents. We aim to continue delivering
high-quality of service to our residents as a best-in-class
provider of affordable housing.
ReSI continued to invest in improving the energy efficiency
of its retirement portfolio and is targeting upgrading all
directly rented properties to at least a C, with 98% now at
this target. We believe energy efficiency will continue to be
a focus for residents and reducing energy bills will support
affordability and help drive long-term value for our portfolio.
For the whole portfolio, 93% of the properties are rated C or
higher, leaving ReSI well ahead of the average for the social
sector and the overall UK housing market
3
.
1. UK total pay growth (including bonuses), September 2023, ON
2. Zoopla UK Rental Market Report – September 2023 3. As defined in the English Housing Survey, 2022
Annual Report & Accounts 2024
30
01 Strategic Report - Fund Manager’s Report
ReSI plc EPCs: Comparison to Wider Market
l
B and above
l
C
l
D
l
E and below
UK Average - All Tenures
(1)
UK
Average - Social Sector
(1)
ReSI plc - All Properties
ReSI plc Directly Rented
0% 20% 40% 60% 80% 100%
3%
1%
34%
27%
45%
35%
59%
71%
43%
51%
6%
2%
9%
12%
1%
(1)
English Housing Survey, 2022
Investing in the energy efficiency of our properties is one
important step in our broader net zero plan for ReSI. In
2023, the consultancy Kamma Data, produced a report that
assessed the retrofitting works required to upgrade the
energy efficiency of ReSI’s properties to their full potential.
Kamma’s report found that whilst improving property
energy efficiency will drive a significant reduction in carbon
emissions, it is not possible for the portfolio to reach
net zero through retrofitting alone. To reach operational
net zero, ReSI will either have to wait until the national
grid is fully decarbonised, which is expected to be in
2035, or it will have to directly procure renewable energy
sources for its properties. This is an option that the Fund
Manager will continue to explore as part of the managed
wind-down strategy.
Summary and outlook:
The investment thesis ReSI set at IPO is as relevant today
as it was in 2017. The shortage of fit for purpose homes
for independent living through retirement and the lack
of affordable homeownership routes for young families
and key workers are strong underlying fundamentals.
The strategic investments made by the Group, since IPO,
in high‐impact, and high‐growth sectors of the UK real
estate market with stable long term cash flows become
particularly significant.
During FY24 ReSI has delivered strong like-for-like rental
growth of 5.8% whilst achieving record occupancy and with
rent collection stable at almost 100% reflecting our focus
on individual resident contractual relationships. This flowed
through to a 9% increase in adjusted earnings and 124%
dividend coverage.
Despite higher gilt yields continuing to impact our
valuations the fundamentals underpinning ReSI’s portfolios
continue to remain strong and provide substantial
opportunity to drive strong operating performance.
Our focus is to progress the orderly realisation of the
ReSI portfolio with diligence. We aim to optimise value
from the portfolio with the objective of concluding the
disposals efficiently and responsibly, maximising proceeds
for our shareholders whilst ensuring the interests of
residents are protected.
As always, we are very grateful for the support of our
shareholders during this period of transition.
Ben Fry
Fund Manager, ReSI plc
21 January 2025
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This section covers some of the key areas
of implementation and other ongoing
social impact and environmental initiatives
during the year. There is also further detail
relating to the impact of the Company on
its major stakeholders in the Section 172
statement on page37.
The Board and the Fund Manager believe that sustainable
investment involves the integration of Environmental,
Social and Governance (ESG) factors through all stages of
the investment process and that these factors should be
considered alongside financial and strategic issues during
the initial assessment and at all stages of the investment
process. The Fund Manager incorporates such ESG factors
into the investment process through the ESG decision tool,
developed by Gresham House’s dedicated Sustainable
Investment Team (see ESG Decision Tool section). Ongoing
monitoring of ESG related risks is carried out through
investment reviews.
The Board and the Fund Manager recognise their responsibility
to manage and conduct business in a socially responsible
way and many of the Company’s investors, residents and
other counterparties have the same values. Good governance
and social responsibility require that the Company seeks to
implement a collaborative approach to understanding and
improving environmental and social performance through
engagement with counterparties on such matters.
The Fund Manager gives appropriate consideration
to corporate governance and the representation of
shareholder interests. This is applied both as a positive
consideration and to exclude certain investments where
the Fund Manager does not believe the interests of
shareholders will be prioritised.
The Fund Manager’s parent, Gresham House has a clear
commitment to sustainable investment as part of its
business mission. Based on its Sustainable Investment
Framework, it has developed a range of policies and
processes for all asset classes which the Fund Manager
uses to integrate sustainability into its investment
approach. More details can be found in the Housing
Sustainable Investment Policy here.
Housing Sustainable Investment Framework
At Gresham House, we break down the key environmental and social factors of our investment strategy into six themes,
which form the Housing Sustainable Investment Framework (the Housing Framework). Measurable objectives and KPIs
have been identified for each theme.
Target outcome Measure of success
Additionality
Increase the supply of UK affordable
housing
No. of new homes delivered
ff
Construct new, high-quality housing
affordable to low and average workers
% of affordable homes
Affordability metrics – house price and ongoing costs
Customer
service
Achieve best-in-class customer service
Customer survey results
Staircasing/moving home
Resident
experience
Ensuring delivery of high quality,
safehomes
No. of homes with access to outdoor
and working space
Walk score
Environmental
fi
Ensure new builds are energy-efficient and
manage environmental footprint
% of homes with renewable generation on site
% EPC A+, A and B
Community
regeneration
Investments that regenerate a particular
site/area
% of housing in areas of need as defined by
local authority
ReSI’s approach to environmental
and social impact
Annual Report & Accounts 2024
32
01 Strategic Report
Gresham House is a signatory to the UK Stewardship
Code. In July 2024, it was announced that Gresham House
has met the expected standard of reporting for 2023 and
remained a signatory to the UK Stewardship Code 2020 for
the fourth year in a row.
More information on Gresham House’s approach to
sustainable investment can be found in its Sustainable
Investment Report.
Environmental impact
It is estimated that carbon emissions produced by
residential buildings account for 20%
1
of all carbon
emissions in the UK and as a result, decarbonisation of the
housing sector is a key focus of the government’s net zero
strategy. ReSI recognises that as a responsible landlord,
it has a role to play in reducing the emissions produced
by its portfolio and ultimately the wider housing sector.
To this end, ReSI has partnered with the consultancy,
Kamma Data (Kamma) to estimate the Scope 1, Scope 2
and Scope 3 carbon emissions generated by its property
portfolio in the period.
Assessing the energy efficiency of
ReSI’s portfolio
ReSI monitors the energy efficiency of its portfolio
using information gathered from property level Energy
Performance Certificates (EPC). EPC ratings are a measure
of a property’s energy efficiency, assigning a Standard
Assessment Procedure (SAP) rating of 1 to 100 (higher
indicates a more environmentally friendly building) and
a corresponding letter grade between A and G. EPC
assessments are performed by third party assessors
and therefore provide an externally-verified method of
quantifying the energy efficiency of each home.
1. Department for Business, Energy and Industrial Strategy
This year’s reporting of the Company’s performance
against the measures of success has been focused on
those measures that relate to the ongoing management
of the portfolio. The key measures of success relating to
ongoing management are EPC ratings and the results of
the customer survey. ReSI’s performance against these
metrics is detailed in the Fund Manager’s report. The
Company has not committed to any new acquisitions
during the year and hence hasn’t reported on its
performance against the measures of success that relate
to new acquisitions.
ESG Decision Tool
The Fund Manager has developed the ESG Decision Tool
(the Tool), which is used by the investment team to assess
the performance of prospective investments against six
core themes in the Housing Framework and to identify
potential ESG risks and opportunities. The Tool contains
two core sections:
Initial evaluation – An initial assessment of the
investment’s performance against the six core social
and environmental factors in the Housing Framework.
The investment will be assessed against measures of
success which have been developed for the six core
social and environmental factors, ensuring that outcomes
can be measured and compared to other investments.
Detailed questionnaire – This assesses ESG risks in
more detail by guiding the Investment team through
a series of potential ESG risks. The completed
questionnaire highlights specific ESG risks that are the
most relevant to the asset.
The investment team is required to mitigate the ESG risks
identified by the Tool as part of the due diligence process
for the investment to be approved.
The Tool helps to ensure that ESG risks and opportunities
are considered from the beginning of the investment
process. These risks and opportunities are then
continuously tracked, monitored and managed after the
acquisition phase.
Gresham House Sustainable Investment
The Fund Manager’s parent, Gresham House, has been a
signatory to the United Nations supported Principles of
Responsible Investment (UN PRI) since February 2018.
For 2023, Gresham House was awarded four or five stars,
out of a maximum of five stars, for all relevant modules.
Gresham House scored significantly higher than our
peer group for each of the six modules. For Real Estate
specifically, Gresham House scored 89% versus a median
for the sector of 63%.
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An
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Government requirements
and proposals
In the UK it is a legal requirement that unless exempt, all
directly-rented residential properties must have an EPC
rating of at least E.
The current government proposal is that all directly rented
properties will need to have a minimum EPC of C by 2028.
This proposal is not expected to apply to shared ownership
which is classified as owner-occupied rather than
rented accommodation.
The delay to government policy has not changed ReSI’s
target to upgrade 100% of its directly rented EPC D
rated units to a minimum of C by 2025 as part of Project
D, described in the Targets and Progress section of this
Annual Report. We believe energy efficiency will continue
to be a focus for residents and reducing energy bills
will support affordability and help drive long-term value
for our portfolio.
Calculating ReSI’s
environmental impact: energy
efficiency ratings (EPCs)
At the year-end date, 93% of ReSI’s portfolio was EPC
rated C or higher, up from 86% last year. This rises as
a result of exiting the Local Authority portfolio and
continuing to reduce the number of directly-rented homes
rated D or below.
1% of ReSI’s properties are E rated, with 100% of directly-
rented properties rated at D or above. The remaining E rated
properties are primarily shared ownership houses that
were acquired as part of the acquisition of older, tenanted
properties from Orbit.
ReSI plc EPCs: Comparison to Wider Market
l
B and above
l
C
l
D
l
E and below
UK Average - All Tenures
(1)
UK Average - Social Sector
(1)
R
eSI plc Directly Rented - FY23
R
eSI plc Directly Rented - FY24
ReSI plc - All Properties - FY23
ReSI plc - All Properties - FY24
0% 20% 40% 60% 80% 100%
3%
1%
27%
27%
45%
35%
71%
13%
6%
71%
43%
51%
2%
31% 55% 1%
34% 59% 1%
9%
12%
3%
(1)
English Housing Survey, 2022
The table above evidences that the efficiency of ReSI’s
portfolio is well above the UK average, however whilst we
are pleased with progress in this area, we recognise that
there is more work to be done.
Total properties 2,975, sample of 96% assessed
Total directly-rented properties 1,907, 100% of
properties assessed
Our targets and progress
ReSI is committed to positioning its portfolio ahead of
government requirements, not only to prevent homes
with poor energy efficiency ratings from being rented,
but because we believe improving the efficiency of our
homes will increase demand from residents. To this
end, the following steps have been taken in FY24 as
part of Project D.
Directly Rented Units: ReSI has continued to make
progress on Project D, the workstream to upgrade
100% of its non-exempt directly rented properties to a
minimum of EPC C. During the year, the number of directly
rented properties rated D or below was reduced by
34% from 50 to 34.
Properties have been upgraded through a combination of
retesting and retrofitting works, such as replacing older
heating systems and fitting insulating heat jackets on
water heaters. The energy efficiency improvements carried
out during the year came at a cost of £295k, evidencing
ReSI’s commitment to reducing carbon emissions
across the portfolio.
Annual Report & Accounts 2024
34
01 Strategic Report - ReSI’s approach to environmental and social impact
Scope 1 emissions have reduced due to a lower number
of shared ownership properties which use gas being
vacant during the period. Scope 2 emissions have
decreased due to reduced consumption from the vacant
retirement properties.
The work performed by Kamma evidences that the
Scope 1 and 2 emissions generated by ReSI are very
small compared to the Scope 3 emissions generated
by its properties. Nonetheless, ReSI will continue
to explore methods of reducing its Scope 1 and 2
emissions going forward.
Scope 3 emissions – third-party providers
ReSI is responsible for indirect emissions through its
service contracts with third party providers. The emissions
of the Fund Manager will be reported as part of Gresham
House’s 2023 annual reporting.
None of ReSI’s properties were in development during the
financial year and hence Scope 3 emissions from embodied
carbon emitted during the development process were zero
for the period.
Scope 3 emissions – residents and
shared owners
The carbon emissions produced by residents in ReSI’s
properties are classified as Scope 3, as they are generated
and paid for by residents.
Kamma has estimated the Scope 3 operational carbon
emissions generated by ReSI’s property portfolio using
data extracted from Energy Performance Certificates.
ReSI’s carbon emissions have been calculated in line with
the PCAF Global GHG Accounting and Reporting Standard.
These values are presented for 3,109 properties that ReSI
had acquired at 30September 2024 on an annualised
basis, regardless of whether ReSI owned the home
for the entire period, and no adjustment is made for
property void periods.
Calculating ReSI’s environmental
impact: carbon emissions
Kamma have estimated the carbon emissions produced
by ReSI during the period. Emissions are broken down into
three categories by the Greenhouse Gas Protocol:
Scope 1 – All direct emissions from the activities
of the Company or under its control. This includes
fuel combustion on site such as gas boilers and air-
conditioning leaks.
Scope 2 – Indirect emissions from electricity purchased
and used by the Company. Emissions are created
during the production of the energy and eventually used
by the Company.
Scope 3 – All other indirect emissions from activities of
the Company, occurring from sources that it does not
own or control.
ReSI’s carbon emissions for the period are disclosed
in line with the recommended EPRA disclosures in
the section below.
The Company invests in UK residential real estate only and
hence all emissions disclosed relate to UK residential real
estate investment.
Scope 1 and 2 emissions
EPRA Sustainability Best Practice
Recommendations (sBPR) Performance Measures
Assessed: GHG-Dir-Abs
Where ReSI is financially responsible for the energy
consumption of communal areas and vacant properties
within its property portfolio, the emissions generated
by these activities fall under Scope 1 and 2. Where gas
is the heating source for these emissions, as is the case
for some shared ownership properties that were vacant
during the year, they are classified as Scope 1. Where the
heating source is electricity, they are classified as Scope 2.
Individual property energy usage is the responsibility of the
tenants however and therefore classified under Scope 3.
ReSI doesn’t have any office premises of its own and its
operations are performed by the Fund Manager, which
is part of Gresham House, and other third parties as
necessary. As a result, the Company’s Scope 1 and 2
emissions are equivalent to the landlord’s emissions.
Emissions Category
The Landlord’s Carbon
Emissions – Tonnes CO
2023 2024
Scope 1 11.7 0.3
Scope 2 51.0 32.8
Tot al 62.7 33.1
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Total Scope 3 Operational Portfolio Emissions
EPRA sBPR Performance Measures Assessed: GHG-Indir-Abs
2023 2024
Number of
1
properties
Total Energy
Consumption
(GWh)
Tonnes CO
emissions
Number of
properties
Total Energy
Consumption
(GWh)
Tonnes CO
emissions
ReSI plc 3,295 38 3,552 3,10 9 37 2,643
Scope 3 Emissions Intensity
EPRA sBPR Performance Measures Assessed: Energy-Int, GHG-int
2023 2024
Tot al
m
2
Energy
Intensity
(kWh/m
2
)
Emissions
Intensity
(Kg CO/m
2
)
Tot al
m
2
Energy
Intensity
(kWh/m
2
)
Emissions
Intensity
(Kg CO/m
2
)
ReSI plc 162,260 239 21 156,18 0 237 17
Energy consumption per floor area across the portfolio has decreased by 1% and carbon emissions per floor area have
decreased by 20%. The large decrease in emissions per floor area is due to the inefficient homes in the Local Authority
portfolio being sold during the year and the national grid continuing to decarbonise.
Energy consumption by energy source
2
EPRA sBPR Performance Measures Assessed: Elec-Abs, Fuels-Abs
2023 2024
Gas Electricity LPG Renewable Tot al Gas Electricity LPG Renewable Tot al
ReSI plc (GWh) 7.28 31.68 0.16 0.00 39.12 5.73 31.37 0.06 0.00 37.16
There has not been a material change in the source of the energy used by the Company. The energy used by the company
materially comes from gas and electricity, with consumption from both sources decreasing marginally during the year.
Total carbon emissions summary
Emissions Category EPRA Disclosure Code
Total Carbon Emissions – Tonnes CO
2023 2024
Scope 1 GHG-Dir-Abs 11.7 0.3
Scope 2 GHG-Dir-Abs 51.0 32.8
Scope 3 GHG-Indir-Abs 3,418.4 2,643.2
Total carbon emissions 3,481.1 2,676.3
ReSI will continue to push forward with its sustainable investment targets in FY25, with the intention of reducing its carbon
emissions further.
1. Number of properties excludes committed investments in 2022
2. Includes Scope 1, 2 and 3 emissions
Annual Report & Accounts 2024
36
01 Strategic Report - ReSI’s approach to environmental and social impact
Section 172 Statement and Stakeholder Engagement
This section of the Annual Report covers the Board’s considerations and activities in discharging their duties under s.172(1)
of the Companies Act 2006 to promote the success of the Company for the benefit of members as a whole.
This statement includes consideration of the likely consequences of the decisions of the Board in the longer term and how
the Board has taken wider stakeholders’ needs into account.
The Board is ultimately responsible for all stakeholder engagement. However, as an externally managed investment
company, ReSI does not have any employees and engages third party providers as required including for fund
management, secretarial, administration, broking, depositary and banking services. All these service providers help the
Board fulfil its responsibility to engage with stakeholders and it should be noted are also, in-turn, stakeholders themselves.
In addition to promoting the success of the Company for the benefit of members as a whole, section 172 of the Companies
Act 2006 requires the Board to have regard to the following:
Section 172 element ReSI comment
The long term (s.172(1)(a)) Since launch, the Board has sought to consider the long-term. Under the
previous Investment Policy, it was intended that investments were generally held
for the long term and the Group secured leverage with an average debt maturity
of 20 years.
The Board has since proposed a managed wind-down, concluding that this is in
the best interests of the Company’s shareholders long-term, taking into account
the alternative options available to the Company.
The interests of ReSI’s employees
(s.172(1)(b))
As an externally managed AIF, this is not applicable to ReSI.
Relationships with suppliers,
customers and others (s.172(1)(c))
See the discussion regarding the following major stakeholders – “Fund Manager”,
“Property Managers & Developers”, “Key Service Providers”, “Grant providers”
and “Residents”.
The community and the
environment (s.172(1)(d))
All investment decisions taken by the Fund Manager on behalf of ReSI are taken
in accordance with its sustainable investment framework.
Moreover, shared ownership investments, through ReSI Housing, benefit
from the Fund Manager’s proprietary shared ownership customer charter and
environmental charter, under which the Group seeks to offer shared ownership
leases of 250+ years and not charge event fees.
The Fund Manager created these charters in 2020 to formalise its existing
process and practices that went above and beyond the requirements of the
model form shared ownership lease, ultimately benefitting the Group’s shared
owners and comprising part of the Company’s social outcome.
High standards of business
conduct (s.172(1)(e))
See the section titled “Governance and ethics”.
The need to act fairly between
members (s.172(1)(f))
See the discussion regarding “Shareholders” as a major stakeholder.
Annual Report & Accounts 2024
37
01 Strategic Report
The Board has identified the following major stakeholders in the Company’s business.
On an ongoing basis the Board and Fund Manager monitor both the potential and actual impacts of decisions made upon
these major stakeholders.
Major
Stakeholder Why is it important to engage? How have the Directors and Fund Manager engaged?
Shareholders As a public company listed on the
London Stock Exchange, ReSI is
subject to the Listing Rules and
the Disclosure Guidance and
Transparency Rules.
The Listing Rules include a listing
principle that a listed company must
ensure that it treats all holders of the
same class of shares that are in the
same position equally in respect of the
rights attaching to such shares. With
the assistance of regular discussions
with and the formal advice of ReSI’s
legal advisors, company secretary and
corporate broker, the Board abides
by the Listing Rules at all times. For
information on shareholder engagement
please see the Governance section
of this Annual Report which contains
further information on shareholder
engagement.
The Fund Manager and with ReSI’s corporate broker regularly
engage with ReSI’s shareholders to provide corporate updates
and to foster regular dialogue. The Chair also meets separately
with ReSI’s largest shareholders on ad hoc basis.
The Board encourages shareholders to attend and participate in
ReSI’s Annual General Meeting (AGM). ReSI values any feedback
and questions it may receive from shareholders ahead of and
during the AGM.
ReSI’s Annual and Interim reports are made available on ReSI’s
website and then are circulated to shareholders as requested,
providing shareholders with an in depth understanding of the
Company’s financial position and portfolio.
ReSI also make available RNS and other business and market
updates on ReSI’s website.
Residents ReSI’s residents are integral to the
business model. The importance of
engaging with residents cannot be
understated; strong relationships
have been shown to improve tenant
retention, rent collection rates,
overall tenant satisfaction and ReSI’s
impact on the community.
ReSI is committed to accelerating
the development of socially and
economically beneficial new housing
to make a meaningful contribution
to the UK housing shortage. ReSI’s
homes deliver a social benefit
through providing wellbeing
improvements to residents (e.g. by
providing the security of a home
for life and helping retirees live with
likeminded peers), fiscal savings (e.g.
lower costs for housing those at risk
of homelessness and savings to the
NHS), and wider economic benefits
(e.g. by enabling people to live and
find work in otherwise unaffordable
parts of the country). The social
impact delivered by ReSI is reported
on .
ReSI works with trusted partners to manage its relationships
with all residents on all tenures. ReSI’s property managers are in
regular contact with residents, and residents are also provided
with contact details and are able to contact dedicated teams to
discuss any problem that they might have.
The Fund Manager reviews detailed affordability assessments
before a resident is selected, and throughout the lease term a
close relationship is maintained through ongoing engagement.
The Fund Manager expects, and monitors, the property
managers to encourage feedback from residents including
suggestions for service improvement and to learn from any
complaints about service delivery. The safety and wellbeing
of residents is of the highest priority and when making an
investment the Fund Manager is rigorous in using the skills and
expertise of its property team to provide high quality homes and
identify and mitigate all risks to residents.
In addition, the Fund Manager conducts an annual satisfaction
survey for ReSI’s retirement and shared ownership residents,
affording these residents an opportunity to comment on the
services received. This is supported by, in the case of shared
ownership residents, opportunities to speak at ReSI Housing’s
Service Improvement panel, established as part of its Customer
Engagement Strategy.
The Fund Manager considers residents’ changing needs and
uses their expertise to assist them. ReSI’s lifecycle plans for
accommodation includes a conservative approach to the long-
term costs of ownership to ensure that the standard of quality
is maintained or improved throughout the life of the property. At
the same time, the Fund Manager only works with well-regarded
and established partners to ensure all routine and other
maintenance is undertaken promptly and properly.
Annual Report & Accounts 2024
38
01 Strategic Report - Section 172 Statement and Stakeholder Engagement
Major
Stakeholder Why is it important to engage? How have the Directors and Fund Manager engaged?
Fund
Manager
The most significant service provider
for ReSI’s long-term success is the
Fund Manager.
The Fund Manager performs
investment management services
to ReSI in accordance with the
Alternative Investment Fund
Managers Regulations 2013, as
amended, the Financial Services
and Markets Act 2000 and the FUND
Sourcebook in the FCA Handbook.
The Board regularly monitors the Company’s investment
performance in relation to its objectives and investment policy
and strategy.
The Board receives and reviews regular reports and
presentations from the Fund Manager and seeks to maintain
regular contact to maintain a constructive working relationship.
Property
Managers
ReSI’s property managers are
experienced in managing tenants’
needs to ensure a good quality
of service and to ensure that the
regulatory risk is minimised.
ReSI always seeks to work with well-regarded partners to ensure
that its homes are fit for purpose and maintained at a high
standard in order to meet the needs of lessees and occupiers,
as well as sustaining value over the long-term.
The Fund Manager has regular contact with property managers
and estate managers and takes a proactive approach to working
with third parties.
Key Service
Providers
A list of the Company’s key service
providers can be found on 135
of this Annual Report.
As an externally managed real estate
investment trust, the Company
conducts all its business through
third-party service providers.
Before the engagement of a service provider, the Board ensures
that the relevant service provider’s services are appropriate, and
values are aligned.
On an annual basis the Board reviews the continuing
appointment of each service provider to ensure that the
continued appointment is in the best interests of the Company’s
shareholders. Throughout the year-ended 30September
2024, the Board had strong working relationships with the
Fund Manager, broker, company secretary, administrator and
depositary and receives reports on the performance of the key
service providers by the Fund Manager and company secretary.
Separately, the Auditor is invited to attend the Audit Committee
meeting at least once per year.
The Audit Committee Chair maintains regular contact with
the audit partner to ensure the audit process is undertaken
effectively.
Regulator
of Social
Housing
ReSI Housing is a wholly-owned
subsidiary of ReSI and is registered
with, and regulated by, the Regulator
of Social Housing (the “RSH”) as a
for-profit registered provider.
As a regulated entity, ReSI Housing
is able to offer shared ownership
properties, which are central to its
future investment strategy and other
regulated tenures.
The Fund Manager and ReSI Housing’s Board each maintains
strong lines of communication with the Regulator and is
transparent in all dealings.
The Fund Manager, in conjunction with the Board of ReSI
Housing, keeps ReSI Housing’s compliance with its regulatory
obligations under constant review, with input from such external
advisers as may be necessary.
The Board of ReSI Housing contains independent non-executive
directors with enhanced responsibilities for ReSI Housing’s
compliance with the RSH’s regulatory regime.
39
01 Strategic Report - Section 172 Statement and Stakeholder Engagement
An
nual Report & Accounts 2024
Major
Stakeholder Why is it important to engage? How have the Directors and Fund Manager engaged?
Grant
Providers
To enable delivery of shared
ownership homes, ReSI Housing is
an investment partner of multiple
grant providers, including the Greater
London Authority (GLA) and Homes
England, and has accessed grant
funding under their standard form
grant agreements.
Each of these grant providers is a
long-term investment partner in
ReSIHousing.
The Company engages the Fund Manager and third-
party service providers to assist with compliance of grant
requirements. Any correspondence from a grant provider is
responded to promptly.
HMRC If ReSI fails to remain qualified as a
REIT, its rental income and gains will
be subject to UK corporation tax.
ReSI corresponds with its contacts at HMRC regularly and is
transparent in all dealings.
The Directors and the Fund Manager at all times conduct the
affairs of ReSI so as to enable it to remain qualified as a REIT for
the purposes of Part 12 of the CTA 2010.
Lenders Members of the Group have raised
secured debt and entered into a
working capital facility.
The Fund Manager, on behalf of ReSI’s subsidiaries, reports to
the Group’s lenders in line with the covenants entered into and
engages as may be required on an ad hoc basis.
Principal Decisions
ReSI’s Directors are cognisant of their duties under Section 172 and decisions made by and discussions of the Board take
into account the interests of all the Company’s key stakeholders.
The following is an example of how the Board managed their Section 172 obligations in the context of decisions that were
anticipated to have a material impact on ReSI and its key stakeholders.
Discussion item Stakeholders Decision and rationale
Orderly
Realisation of
Assets
Shareholders
& Residents
The key decision taken during the year by the Board, was proposing a change
of investment object to enable the Company to embark upon an orderly wind-
down of the Company.
Given the Company’s persistent discount to NAV, the Board closely monitored
shareholder feedback and noted a number of shareholders had indicated a
proactive approach to resolving the discount should be taken that takes into
account all available options.
Following the feedback received, the Board and Fund Manager reviewed the
Company’s strategic options.
It was determined that the most responsible course of action, both financially
and in terms of shareholder value, would be to initiate a wind-down. Following
the publication of the Circular on November 2024, the Company engaged with
shareholders and the feedback was almost overwhelmingly positive.
Amendment
Manager’s fee
Shareholders
& Fund Manager
During the year the Board amended the Fund Management agreement
to amend the management fee to further align the Fund Manager with
shareholders. From 1 January 2024, the management fee has been calculated
by reference to the average of ReSI plc market capitalisation and net asset value
for the relevant quarter, rather than applied to the quarterly NAV only.
Annual Report & Accounts 2024
40
01 Strategic Report - Section 172 Statement and Stakeholder Engagement
The Board recognises the importance of risk management in achieving ReSI’s strategic aims.
The Fund Manager, whose services are overseen by the Board, has responsibility for identifying potential risks at an early
stage, escalating risks (and changes to risks) and implementing appropriate mitigations, all of which are recorded in ReSI’s
risk register. Where relevant, the Company’s financial model is stress-tested to assess the potential impact of a potential
risk taking into account the likelihood of occurrence.
Risk is a standing agenda item at all meetings of the Audit Committee and all meetings of the Board.
The Board takes a proactive view when assessing and mitigating risks. The Board regularly reviews the risk register to
ensure that identified risks and mitigating actions remain appropriate.
ReSI’s risk management process is designed to identify, evaluate and mitigate (rather than eliminate) the significant and
emerging risks that it faces and that evolve as the business and operating environment changes. The risk management
process ensures a defined approach to decision-making but can only provide reasonable, and not absolute, assurances.
Taking into account the new investment objective and policy approved by shareholders on 6 December 2024, the
Board considers the following to currently be the principal risks and uncertainties. As the Company transitions from an
active phase to a wind-down phase, certain risks identified in last year’s annual report are no longer relevant and have
been reconsidered. As a result of the change of investment strategy, new risks have emerged that more accurately
reflect the current status and challenges of the anticipated wind-down process. The Company, with input from the
Fund Manager, aims to ensure that the risk management framework remains relevant and responsive to the Company’s
evolving circumstances.
This annual report highlights the principal risks we have identified as being material to the successful execution of the new
investment strategy and therefore are being monitored closely by the Board. It should be noted that there is a broader set
of lower-rated risks, that are actively being managed and monitored by the Fund Manager. Should there be a deviation in
the assessment or materiality of these lower-rated risks, the Fund Manager will ensure suitable notification to awareness
outside of the usual reporting cycle:
Risk Risk mitigation
Party
responsible
Party
responsible
for
monitoring
Change in
risk over last
fi
assets – value & timing
The Company’s assets
may not be realised at
their carrying value or
in a timely fashion, due
to a range of factors
including macroeconomic
considerations, the
nature of the investments,
changes in economic,
fiscal, or political
policy, operational
mismanagement, structure
of contracts, unexpected
market conditions, quality
of competing portfolios or
quality of counterparties.
The Fund Manager and the Company’s
advisers and soon to be appointed
sales agents are closely monitoring
market conditions and will adjust the
timing and strategy of the asset sales
as considered necessary to balance
maximising returns for shareholders
and the timeframe for disposal.
The Board will have regular meetings
with advisers and the Fund Manager to
oversee progress.
Efforts will be made in the individual
sales processes to engage with
multiple potential buyers to enhance
competitive tension and secure
favourable prices.
Fund Manager Board New
Principal Risks and Uncertainties
41
01 Strategic Report
An
nual Report & Accounts 2024
Risk Risk mitigation
Party
responsible
Party
responsible
for
monitoring
Change in
risk over last
fi
Volatility in the Net Asset
Value and/or share
price may result from
changes to the portfolio
structure as the wind-
down is implemented. The
Company may be focussed
in one sub-sector for a
prolonged period and/or
be affected by a loss of
confidence in valuations,
a loss of liquidity,
underperformance,
and decreased investor
confidence.
The quarterly valuation process is
robust, supported by an independent
valuer and with challenge from
the Board and bi-annually by
the auditors. The Fund Manager
implements robust risk management
strategies and closely monitors the
portfolio’s performance.
There is transparent communication
with shareholders on underlying
performance and asset management
initiatives will continue for each
portfolio until the date of sale.
Fund Manager Board New
Failure to optimally
manage the wind-
down and disposal
processes, including
inadequate strategies
to create and maintain
competitive tension,
operational failures,
resource constraints
and sub-standard
marketing, negotiation
and implementation, may
result in a failure to balance
maximising returns for
shareholders and the
timeframe for disposal.
The appointment of a third-party sales
agent is designed to facilitate the
sales process. These are expected
to result in enhanced marketing
efforts and lead to engagement with
a broader spectrum of potential
buyers than would otherwise be the
case, enhancing the Company’s
negotiation capabilities.
Fund Manager Board New
The Group’s lenders
are creditors senior
to shareholders and,
absent commercial
agreement, will be repaid
in priority to distributing
to shareholders, with
break costs. Prepayment
amounts due to lenders
will be a function of
various macro-economic
indicators such as interest
rates and rates of inflation,
that are outside of the
Company’s control.
The Fund Manager monitors macro-
economic factors regularly and reports
to the Board as required.
The Fund Manager seeks to maintain
transparent and co-operative dialogue
with the Group’s funders.
Fund Manager Board New
Annual Report & Accounts 2024
42
01 Strategic Report - Principal Risks and Uncertainties
Risk Risk mitigation
Party
responsible
Party
responsible
for
monitoring
Change in
risk over last
fi
New real estate
acquisitions and capital
expenditure are permitted
in limited circumstances
only but there can be
no assurance that such
investments will protect
or enhance the portfolio,
protect or enhance an
asset’s realisable value or
facilitate a disposal.
The Fund Manager conducts thorough
due diligence on portfolio assets and,
when appropriate, advises the Board
to engage legal and financial advisors
to navigate potential regulatory
challenges and valuation disputes.
A structured wind-down plan is being
implemented by the Fund Manager with
input from sales agents and advisers
to facilitate timely and accurate
transactions that benefit the portfolio.
Fund Manager Board New
The Company may incur
additional post-sale liability
due to the disposal of,
damage to or delays or
deferred consideration
in sales of investments,
leading to a potential
increase in financial
obligations post-disposal.
Third-party advisers and Fund
Manager will carefully evaluate
potential liabilities before finalising
sales and negotiate terms to limit post-
sale obligations. Provisions are made
to cover any unforeseen liabilities.
Fund Manager Board New
dificompliance with REIT regime during wind-down
Asset diversification will be
reduced as investments are
realised and the portfolio
focusses, potentially
becoming concentrated in
fewer holdings, resulting in
stranded assets that may
reduce the overall value of
the portfolio, potentially
impacting compliance with
UK REIT regime.
The new Investment Policy to
implement the wind-down was
approved by shareholders.
A structured wind-down process
is being managed and overseen to
maximise values.
A delisting will take place once the
members’ voluntary liquidation process
starts at the end of the wind-down.
The conditions for UK REIT eligibility
will be monitored throughout the
realisation period.
Fund Manager Board New
43
01 Strategic Report - Principal Risks and Uncertainties
An
nual Report & Accounts 2024
Risk Risk mitigation
Party
responsible
Party
responsible
for
monitoring
Change in
risk over last
fi
expenses related to the wind-down
There can be no assurance
that the costs and
expenses incurred in the
orderly wind-down of the
Company will not exceed
the amounts currently
estimated or that there
will not be additional and
unforeseen expenses.
All such costs and
expenses may adversely
affect the performance
of the Company and/
or the amount available
for distribution to
shareholders.
The Board intends to have appropriate
arrangements in place to manage
the expected costs and expenses
in relation to the disposal and wind-
down, seeking benchmarking and
competitive quotes before incurring
costs and looking to leverage
economies of scale where possible.
Fund Manager Board New
ffi
Failure to maximise tax
efficiency during wind
down, due to inadequate
tax planning, lack of
specialised tax knowledge,
failure to identify and apply
tax reliefs and exemptions,
poor coordination between
tax advisors and other
professionals, and/or
insufficient time allocated
for thorough tax planning,
leading to increased tax
liability, decreased financial
performance, regulatory
penalties, reduced investor
confidence, and missed
opportunity costs.
Specialist tax advisors have been
engaged to ensure comprehensive tax
planning on the wind-down.
Regular reviews and updates on
tax strategies will be conducted to
identify and apply relevant tax reliefs
and exemptions.
Co-ordination between advisors is
prioritised to optimise tax efficiency.
Fund Manager Board New
The Group has no
employees and is reliant
on the performance of
third-parties, such as the
Fund Manager, property
managers, sales agents,
and service providers, for
all day-to-day services.
The Group has engaged experienced
third-party providers who have the
relevant experience that are either
recommended to or known to the Fund
Manager in advance of engaging.
Service provider evaluations are
reviewed annually by the Board.
ReSI Housing has independent
directors to enhance governance and
independent scrutiny.
Fund Manager Board No
Annual Report & Accounts 2024
44
01 Strategic Report - Principal Risks and Uncertainties
Risk Risk mitigation
Party
responsible
Party
responsible
for
monitoring
Change in
risk over last
fi
loan covenant and lock-up risk
The Group’s revolving
working capital loan and
long-term project finance
indebtedness each contain
covenants and events of
default, breach of which
risk acceleration and
security enforcement.
Strong suite of covenant reporting
prepared quarterly
Ongoing Fund Manager review of loan
performance and covenant headroom
Liability management under
constant review
Board is kept up-to-date
Fund Manager Board No
regulatory standards
ReSI Housing is a
registered provider
regulated by the RSH.
Failure to comply with
the RSH’s regulatory
framework would impact
ReSI Housing’s ability to
access new grant and the
Group’s reputation.
The Fund Manager continues to
develop ReSI Housing’s governance
and operational structure with third
parties, reflecting the maturity and
growth of its portfolio.
Fund Manager Board No
Emerging Risks
Emerging risks are characterised by a degree of uncertainty and the Fund Manager and the Board consider new and
emerging risks every six months. These risks typically have a longer time horizon and are difficult to accurately assess
when they would impact the risk exposure. Given the change in strategic direction, there are no specific emerging risks
that are of material concern to the Board other than those outlined above. Emerging risk will continue to feature in Board
discussions, especially if the orderly realisation of assets becomes protracted. We are vigilant to aspects that may
influence our ability to deliver the best possible outcomes for shareholders.
45
01 Strategic Report - Principal Risks and Uncertainties
An
nual Report & Accounts 2024
Going Concern and Viability Statement
The Directors, with support of the Fund
Manager, have carried out a robust
assessment of the emerging and principal
risks facing the Group that would threaten
its business model, future performance,
solvency or liquidity.
The Board normally conducts a going concern and viability
review, however following the results of the General
Meeting on 6 December 2024 where shareholders
approved the managed wind-down, the Company is
no longer a going concern and therefore a viability
statement has been prepared for a period of three
years from the balance sheet date of 30September
2024 as developments are considered to be reasonably
foreseeable over this period. A period of three years is
deemed appropriate as this incorporates headroom, on
the anticipated time frame to complete realisation of the
retirement and shared ownership portfolios based on
discussion with third party advisers. Furthermore, if the
sale of the retirement and shared ownership portfolios
is delayed beyond the next financial year, the three-year
period should offer sufficient time to complete the disposal
of the full portfolio and complete the liquidation process.
The Board considers that the Group, will remain viable until
the point at which its assets are fully sold, and the voluntary
liquidation is completed.
While the timing of the wind down is uncertain, it is
anticipated it will conclude prior to the contractual maturity
of the USS debt which is secured via a first charge over
the shared ownership portfolio and the Scottish Widows
debt which is secured via a first charge over the retirement
portfolio. Both debt facilities, are subject to the Significant
Prepayment Event Notification System (SPENS), which may
affect the value of any potential debt repayments.
In making the viability assessment, the Board and
Fund Manager have taken the following factors
into consideration:
the nature and liquidity of the retirement and shared
ownership portfolio;
the sales process to realise the Group’s investments;
the potential impact of the principal risk
and uncertainties;
operating expenditure, particularly the costs associated
with the orderly wind-down process; and
future dividends.
The viability analysis has been prepared on the assumption
that the Group’s long-term structural retirement and
shared ownership debt is repaid in full, upon realisation of
the assets, and the revolving credit facility is refinanced
or remains undrawn, and the Groups investments are fully
income generating well in excess of the expected wind
down period, the voluntary liquidation and the three-year
period. The Group benefits from long-term cash flows and a
set of risks that can be identified and assessed.
ReSI’s portfolio provides a very secure income stream.
This is due to the defensive nature of ReSI’s portfolio,
the diversity of ReSI’s counterparties and the resilience
of ReSI’s tenants’ incomes. Tenants’ incomes are
predominantly from pensions/savings and are checked for
affordability. The secure long-term nature of the income is
further evidenced by:
the Company’s shared ownership portfolio is fully
occupied, and rents are typically 30% below market value;
the Company’s stabilised retirement portfolio occupancy
rates are typically in excess of 94%, and currently at 97%,
with the empty time primarily reflecting time to refurbish
properties when a tenant vacates;
a rent collection level for the year of 99%;
the average residency period of a retirement portfolio
tenant is six years; and
Shared ownership customer leases ranging from
between 130 and 999 years with annual increases
generally at RPI +0.5%.
The Board is satisfied that, prior to their anticipated sale,
the Groups investment portfolio will continue to be cash
generative enabling the Group to meet all its financial
obligations. Furthermore, the Group holds sufficient cash
reserves with a total cash and cash equivalents of £11.7mn
at January 2025, which is deemed sufficient to support
the Group during the managed wind-down period under
a stressed scenario during the review period. The sale
proceeds will add to the available cash balances.
Going Concern
At the General Meeting on 6 December 2024, the Directors
proposed an orderly wind-down of the Company as the
best course of action and shareholders voted in favour of
this proposal. Accordingly, the Group’s financial statements
have been prepared on a basis other than that of going
concern (see note 2 (b) of the financial statements).
Annual Report & Accounts 2024
46
01 Strategic Report
Covenants and stress testing
The ReSI portfolio delivers high-quality cash flows that are
resilient through economic cycles. ReSI also has headroom
on its financial covenants and, after conducting various
stress tests and sensitivity analyses, could withstand a
prolonged drop in net income of 24% without breaching
any loan covenant.
As the property investment values of ReSI’s retirement
and local authority portfolios are primarily calculated with
reference to future cash flows, not house prices, volatility
in house prices does not have a substantial impact on the
value of its property assets.
At 30September 2024, the Group’s tightest loan to value
covenant is in its working capital facility with Santander,
54% compared to the covenant of 55%. Sensitivity analysis
shows that a fall of more than 2% in the value of the
secured assets would result in a loan covenant breach. We
estimate that ReSI’s weighted average valuation yield would
need to shift outward by a further c.15bps for this valuation
loss to be realised, on top of the c.60bps widening since
September 2024.
Following the sale of the local authority asset and full
repayment of Santander facility on 13 January 2025, the
LTV headroom has been extinguished. ReSI’s other LTV
covenants, based on the fund valuations, still have ample
headroom and ReSI’s USS debt on its shared ownership
portfolio is fully amortising and so does not have a loan to
value debt covenant.
Conclusion
The Directors believe that the Company is well placed
to manage its business risks successfully. Based on the
results, the Board confirms that, taking into account the
Company’s current position and subject to the principal
risks faced by the business, the Company will be able to
meet its liabilities as they fall due for a period of at least
three years from the balance sheet date, notwithstanding
that the Group is currently undergoing a managed
wind-down and expects to enter voluntary liquidation in
this timeframe.
Rob Whiteman
Chairman of the Board of Directors
21 January 2025
47
01 Strategic Report - Going Concern and Viability Statement
An
nual Report & Accounts 2024
02
Governance
Rob Whiteman CBE
Non-executive Chairman
Appointed: 9 June 2017
Robert Gray
Senior Non-Executive Independent Director
and Chairman of the Audit Committee
Appointed: 9 June 2017
49
02 Governance
Board of Directors
Skills, competence and experience:
Significant knowledge of public service finances and reform
and a strong background in public financial management
and governance.
Presently Chief Executive of the Chartered Institute of
Public Finance & Accountancy (CIPFA) and previously
Chief Executive of UK Border Agency (UKBA), Improvement
and Development Agency (IDeA), and London Borough
of Barking and Dagenham. He previously held various
positions in the London Borough of Lewisham from
1996-2005, latterly as Director of Resources and Deputy
Chief Executive.
He has been a technical adviser to the board of the
International Federation of Accountants (IFAC) in New
York since 2013.
Educated at the University of Essex where he gained a BA
(Hons) in Economics and Government and is a qualified
Chartered Public Finance Accountant (CPFA).
Skills, competence and experience:
Extensive business experience, including experience in
debt finance and capital markets.
Robert has held roles at J.P. Morgan, and later at HSBC
Markets Limited and HSBC Investment Bank in London
working initially as Managing Director in Global Capital
Markets and subsequently as Vice Chairman for Client
Development. Robert was also Chairman, Debt Finance &
Advisory at HSBC Bank plc. As Director and Chair of the
Overseas Promotion Committee of TheCityUK Robert
served as financial services sector adviser to the UK
Minister for Trade & Investment.
Robert was Chairman of the International Primary Market
Association and Vice Chairman and Chairman of the
Regulatory Policy Committee of the International Capital
Market Association.
Robert was educated at Sherborne School and St. John’s
College, Cambridge University where he gained a MA
(Hons) in History.
Other roles:
Director of CCAB Limited
Director of CIPFA Business Ltd
Director of the Koru Project CIC F
Director of Eagles Crest (Poole) Limited
Director of Lilliput Advisory Ltd
Director of Housing & Finance Institute Limited
Chair, University Hospitals Dorset NHS Foundation Trust
Other roles:
Director and Chair of the Audit Committee of the Arab
British Chamber of Commerce
Trustee of Allia Limited
Director and Company Secretary of Prospekt
Medical Limited
An
nual Report & Accounts 2024
Annual Report & Accounts 2024
50
02 Governance - Board of Directors
Elaine Bailey
Non-executive Director
Appointed: 27 April 2020
Skills, competence and experience:
Significant housing and construction experience,
with a strong background running complex
organisations and projects.
Previously the Chief Executive of Hyde Group, the G15
Housing Association with over 50,000 properties providing
housing to 100,000 residents, a position she held for
five years until 2019. During this time Elaine oversaw
the establishment of a five-year development pipeline
of 11,000 homes and the launch of several innovative
partnerships with housebuilders, contractors, local
authorities and other housing associations. Elaine also
previously worked in the construction and government
services sectors; and worked for some years at Serco.
Actively involved in the government’s Building Safety
Programme, including as a member of the Industry Safety
Standards Steering Group, and a former Non-Executive
Director of the Health and Safety Executive Board.
Elaine was educated at Southampton University, where she
gained a civil engineering degree and holds an MBA from
Imperial College.
Other roles:
Director of Andium Housing Association
Director of McCarthy & Stone Shared Ownership Division
Director of MJ Gleeson plc
Trustee of Greenslade Family Foundation
Annual Report & Accounts 2024
51
02 Governance
ReSI Housing Non-Executive Directors
ReSI owns ReSI Housing Limited, a for-profit registered
provider of social housing. The ReSI Housing Board
contains independent directors (who are independent of
the Fund Manager and ReSI) and Fund Manager directors.
The Board of ReSI Housing is comprised of David Orr,
Gilian Rowley, Ben Fry, Mark Rogers, Pete Redman and
Sandeep Patel. The independent Directors control the
Board on matters that they consider may affect ReSI
Housing’s compliance with the regulatory standards
of the Regulator of Social Housing. ReSI Housing’s
non-executive directors are:
David Orr, CBE
Non-executive Director
Appointed: 2 October 2018
Skills, competence and experience:
David is an experienced leader in both executive and non-
executive roles. He has over 30 years’ experience in Chief
Executive roles, most recently at the National Housing
Federation. He is Chair of Clarion Housing Association,
Chair of the Canal & River Trust, is a previous President of
Housing Europe and previous Chair of Reall, an international
development housing charity. He is also chair of The
Good Home Inquiry, co-chair of #Housing 2030, a joint
project for Housing Europe and UNECE, and a member
of the Archbishop of Canterbury’s Housing, Church and
Community Commission. David frequently speaks on
the challenge of optimistic leadership and the critical
importance of governance. He has wide ranging media
experience, is a well-regarded commentator and blogger
and has extensive expertise navigating the world of politics
and government. In June 2018 David was awarded a CBE.
Other roles:
Chair of Clarion Housing Association
Chair of The Canal & River Trust
Chair of The Good Home Inquiry
Co-chair of #Housing 2030
Board member of Clanmil Housing Association Trustee
National Communities Resource Centre
Gillian Rowley
Non-executive Director
Appointed: 11 March 2019
Skills, competence and experience:
Gillian brings to ReSI Housing over 30 years of housing
and housing finance expertise, with a focus on policy
development within the framework of regulatory standards.
She served as the Non-Executive Director for The Housing
Finance Corporation from 2006 – 2012, where she was
heavily involved in business strategy, financial policy and
governance. This overlapped with her role as the Head of
Private Finance at the former social housing regulator, the
Homes & Communities Agency, where for 13 years she
was responsible for relationships with lenders, investors,
advisers, and credit rating agencies operating in the social
housing sector. She has also been an authority on all
aspects of social housing finance policy, including advising
government departments, focusing on areas of regulatory
standards, and being responsible for social housing sector
guidance on treasury management.
Mark Rogers
Non-executive Director
Appointed: 31 August 2023
Skills, competence and experience:
Mark was previously an Executive Director of ReSI Housing
and part of the team at Gresham House, having joined
TradeRisks and ReSI Capital Management in 2018 to lead
the acquisitions function.
Mark stepped down from his executive role, over the
summer of 2023, but continues as a non-executive director
of ReSI Housing. Prior to joining, TradeRisks and ReSI
Capital Management in 2018, Mark spent 12 years as a
Chief Executive of Circle Housing Group, a 65,000 unit
housing association, before merging it into the Clarion
Group, the largest housing association in the UK. Prior to
that, Mark held Chief Executive roles at Anglia Housing
Group and Nene Housing Society. He has been a member
of the Chartered Institute of Housing since 1986 and has
39years of social housing experience.
Annual Report & Accounts 2024
52
02 Governance
Directors’ Report
The Directors are pleased to present their
report and accounts, together with the audited
financial statements of the Company, for the
year ended 30September 2024.
Residential Secure Income plc, company number:
10683026, (the Company) is a Real Estate Investment Trust
(REIT) listed on the equity shares of commercial companies’
segment of the Main Market of the London Stock Exchange.
The Company’s investment strategy focuses on, delivering
secure inflation-linked returns from investing in affordable
shared ownership, retirement and local authority housing
throughout the UK.
The Board is ultimately responsible for all aspects of the
Company’s affairs, including setting the parameters for
monitoring the investment strategy and the review of
investment performance and policy. The Board also has
ultimate responsibility for all strategic policy issues, the
timing, price and volume of any buybacks of Ordinary
Shares, corporate governance matters and dividends.
Further information on the Board’s role is provided in the
Corporate Governance Statement beginning on 60,
which forms part of the Directors’ Report.
Powers of the Board
The general powers of the Directors are set out in Article
100 of the Company’s Articles of Association. This Article
provides that the business of the Company shall be
managed by the Board, which may exercise all the powers
of the Company, subject to any limitations imposed by
applicable legislation, the Articles and any directions given
by special resolution of the shareholders of the Company.
Results
The Group’s IFRS loss for the year was £10.0mn
(30September 2023: £23.2mn) and the IFRS loss per share
were 5.4p (30September 2023: 12.5p).
The results for the year are shown in the financial
statements. Commentary on the results, future
developments and post balance sheet events can be found
in the Strategic Report, Chairman’s Statement and Fund
Manager’s Report.
Investment property
A summary of the Group’s investment property portfolio
is included on . A full portfolio listing can be made
available on request.
Dividend policy
Future dividend payments will be evaluated on a quarterly
basis, taking into full account the payout level required to
maintain real estate investment trust status, progress of
asset realisations and overall profitability.
When the Company pays a dividend, that dividend is a
Property Income Distribution (PID) to the extent necessary
to satisfy the 90% distribution condition. If the dividend
exceeds the amount required to satisfy that test, then
depending on the circumstances the REIT may determine
that all or part of the balance is a non-PID dividend. Subject
to certain exceptions, PIDs will be subject to withholding tax
at the basic rate of income tax (currently 20%).
If the Company ceases to be a REIT, dividends paid by the
Company may nevertheless be PIDs to the extent they are
paid in respect of profits and gains of the Property Rental
Business whilst the Company was within the REIT Regime.
Dividends paid in the year ended
30September 2024
In line with the Company’s historic dividend policy and
target, four equal dividends of 1.03p per Ordinary Share
were paid during the year, totalling 4. 1 2 p per Ordinary
Share, of which 4.12p was paid as PID. These were declared
in December 2023 and January, June and August 2024 with
the first being the fourth interim dividend for the year ended
30September 2023.
The Board declared a fourth interim dividend in respect of
the quarter to 30September 2024 of 1.03p per Ordinary
Share, which will be payable on 21February 2025 to
shareholders on the register at the close of business on
31January 2025. The ex-dividend date is 30January 2025
and the full amount will be paid as PID.
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Management – Fund Manager
During the year under review, Gresham House Asset
Management Limited (GHAM) was engaged as the
Company’s alternative investment fund manager (the Fund
Manager), pursuant to a Fund Management Agreement
originally dated 16June 2017 (as amended), to advise
the Company and provide certain investment and risk
management services.
Gresham House Asset Management Limited is authorised
and regulated by the Financial Conduct Authority (FCA) as a
‘full scope’ UK alternative investment fund manager for the
purposes of the UK AIFM Regime.
The Fund Manager is appointed under a contract subject
to twelve months’ written notice with such notice not to
expire prior to the fifth anniversary of first admission of the
Ordinary Shares to trading on the London Stock Exchange,
which was in July 2022.
Fund Management Fee
The Fund Manager is entitled to remuneration calculated
in respect of each quarter, based the average of ReSI
plc market capitalisation and Net Asset Value, at a rate
equivalent to 1% (if under £250mn), 0.9% (if over £250mn),
0.8% (if over £500mn) or 0.7% (if over £1bn).
The Fund Management Fee shall be paid quarterly in advance,
with 75% of the total Fund Management Fee payable in
cash and 25% of the total Fund Management Fee (net of any
applicable tax) payable in the form of Ordinary Shares. During
the period, 611,942 Ordinary Shares were awarded to the Fund
Manager as part of the Fund Management Fee.
The Fund Manager is also entitled to a debt arrangement
fee in respect of debt arranged by the Fund Manager for
ReSI or its subsidiaries. The debt arrangement fee is equal
to 0.04% p.a. levied on the notional amount outstanding
of any bond or private placement financing. There is no
debt arrangement fee payable in respect of any bank debt
financing the Fund Manager may arrange for the Group.
Related to the Fund Manager is ReSI Property Management
Limited (RPML), a wholly owned subsidiary of the Fund
Manager that provides property management services
to parts of the Group on a cost pass through basis with
no profit margin. During the year, RPML charged fees of
£2,173,000 (2023: £1,978,000) in respect of costs incurred
in providing property management services and £nil (2023:
£155,000) in respect of non-recurring costs.
On 6 December 2024, 99.7% of shareholders voted for
a Managed Realisation and Wind-down together with
associated amendments to Company’s Investment Policy.
Effective from this date, the Company will be managed
with the intention of realising all the existing assets in its
portfolio in an orderly manner and with a view to making
timely returns of capital to shareholders while aiming to
obtain the best achievable value for the Company’s assets
at the time of their realisations. The Company and the Fund
Manager have also agreed to amend the terms of the Fund
Manager’s fee arrangements so as to ensure that the Fund
Manager is appropriately incentivised to maximise the value
received from the Company’s assets in a timely manner.
Under this new fee structure, the Fund Manager will
continue to be paid its current Fund Management Fee,
which was rebased, effective 1 January 2024, to the
average of the Company’s Market Capitalisation and the
Net Asset Value for the relevant quarter (the Current Fund
Management Fee), in addition to a new incentivisation fee
which will comprise a disposal base fee (the Base Fee) and
a conditional disposal fee (the Conditional Disposal Fee
and, together with the Base Fee, the Incentivisation Fee),
where fees will be linked to both the execution and the net
realised value of asset sales accounting for the repayment
or transfer of outstanding debt and any taxes payable, as
described below.
In addition to the below, the Company and the Fund
Manager have agreed that the notice period under the
Fund Management Agreement will be reduced from twelve
months down to three months.
The Fund Manager’s existing fee arrangement will be
replaced, effective from 1 January 2025, with the following:
1 the Current Fund Management Fee on that part of the
Net Asset Value up to and including £250mn, being
an amount equal to 1% per annum of such part of the
average of the Company’s Market Capitalisation and
Net Asset Value. The Current Fund Management Fee is
paid quarterly in advance. 75% of the total Current Fund
Management Fee is payable in cash (the Cash Fee) and
25% of the total Current Fund Management Fee (net of
any applicable tax) is payable in the form of Ordinary
Shares rather than cash (the Equity Element); and
2 the Incentivisation Fee payable in connection with the
Managed Realisation and Wind-Down, consisting of:
a.
the Base Fee, being a fee of £700,000 (plus VAT,
if applicable), payable in two equal instalments of
£350,000, on completion of the sale of each of the
Shared Ownership portfolio and the Retirement
Living portfolio; and
An
nual Report & Accounts 2024
b. the Conditional Disposal Fee, being a maximum fee
of £500,000, first accruing if net disposal proceeds
received from 1 January 2025 after repayment
or transfer of debt and any taxes payable by the
Company but before transaction costs and debt break
fees (Net Disposal Proceeds) are equivalent to not
less than 90% of the Company’s EPRA Net Tangible
Assets as at 30 September 2024 (the Benchmark
EPRA NTA), and moving on a straight-line basis from
90% to 100% of the Benchmark EPRA NTA, which
shall be payable on liquidation of the Company.
For the avoidance of doubt, the sum of the Base Fee and
Conditional Disposal Fee shall not exceed £1,200,000.
Depositary
During the year under review, Indos Financial Limited
was appointed as depositary to provide cash monitoring,
safekeeping and asset verification and oversight functions
as prescribed by the UK AIFM Regime.
Company Secretary
Computershare Company Secretarial Services Limited
has been appointed as the Company Secretary of the
Company and provides company secretarial services and a
registered office to the Company.
Administrator
MGR Weston Kay LLP has been appointed as administrator
to the Company. The administration of the Company is
delegated and performed in consultation with the AIFM and
the Fund Manager. Financial information of the Company is
prepared by the administrator and is reported to the Board.
Share capital and shareholders
As at 30September 2024, the Company’s issued share
capital comprised 194,149,261 Ordinary Shares, each of
1p nominal value, including 8,985,980 Ordinary Shares
held in Treasury. As at 30September 2024, the Company’s
total shares in issue with voting rights, excluding treasury
shares, were 185,163,281. As at the date of this Annual
Report, there has been no change to the Company’s
issued share capital, total voting rights or Ordinary Shares
held in Treasury.
Each Ordinary Share held entitles the holder to one vote.
Treasury shares do not hold any voting rights. All shares,
excluding those held in Treasury, carry equal voting rights
and there are no restrictions on those voting rights.
There are no restrictions on the transfer of Ordinary
Shares, nor are there any limitations or special rights
associated with the Ordinary Shares. All shareholders
have the opportunity to attend and vote, in person or by
proxy, at the AGM. For further information on the details of
the forthcoming AGM and ways to engage with the Board,
and the Fund Manager, please refer to 136. Voting
deadlines are stated in the notice of meeting and form of
proxy and are in accordance with the Companies Act 2006.
Authority of Directors to allot shares
The authority to issue new shares granted at the Annual
General Meeting (AGM) held on 22February 2024 will expire
at the conclusion of the forthcoming AGM. The forthcoming
AGM will consider the authority for Directors to allot further
shares in the capital of the Company under section 551 of
the Companies Act 2006 up to 37,032,656 Ordinary Shares
(excluding shares held in Treasury) in the capital of the
Company (equivalent to approximately 20% of the Ordinary
Shares in issue at the date of the notice of this meeting).
If the Directors wish to offer shares (or sell treasury shares
which the Company may purchase and elect to hold as
treasury shares) for cash, company law requires that unless
shareholders have given specific authority for the waiver of
their statutory pre-emption rights, the new shares must be
first offered to existing shareholders in proportion to their
existing holdings. There may be occasions, however, when
the Directors will need the flexibility to allot new shares
(or to grant rights over shares) for cash or to sell treasury
shares for cash without first offering them to existing
shareholders in proportion of their holdings in order to
make investments in line with the Company’s investment
policies. This cannot be done unless the shareholders have
first waived their pre-emption rights.
Accordingly, the AGM will consider two separate
resolutions relating to the Director’s ability to allot shares
for cash or sell treasury shares for cash up to an aggregate
nominal value of £370,326.56 which is equivalent to
approximately 20% of the Company’s issued Ordinary
Share capital (excluding shares held in Treasury) as at
the date of the notice of this meeting. This will allow the
Company to carry out one or more tap issues, in aggregate,
up to 20% of the number of Ordinary Shares in issue at the
AGM and thus to pursue specific investment opportunities
in a timely manner in the future and without the requirement
to publish a prospectus and incur the associated costs.
The Directors are aware that the combined authority to
dis-apply pre-emption rights in respect of up to 20% of
the Company’s issued Ordinary Share capital sought
under resolutions 10 and 11 is higher than the 10%
typically sought by investment companies. However, the
Directors believe that a higher authority is justified to
enable the Company to satisfy its investment policy and
current strategy.
Annual Report & Accounts 2024
54
02 Governance - Directors’ Report
In accordance with UK Listing Rules, the Company will only
issue Ordinary Shares pursuant to this authority at a price
that is not less than the prevailing net asset value per share
of the Company calculated in accordance with its IFRS
accounting policies at the time of issue.
Discount management
The Board makes use of its share buyback powers as a
means of correcting any imbalance between supply of and
demand for the Ordinary Shares. In deciding whether to
make any such repurchases, including the timing, volume
and price of such repurchases of Ordinary Shares, the
Directors have regard to the Company’s REIT status and
what they believe to be in the best interests of shareholders
as a whole and in compliance with the Articles, the Listing
Rules, Companies Act 2006 and all other applicable legal
and regulatory requirements. During the year ended
30September 2024, the Company did not purchase any of
its own Ordinary Shares for holding in treasury.
The timing, price and volume of any buybacks of Ordinary
Shares will be at the discretion of the Directors and
is subject to the working capital requirements of the
Company and the Company having sufficient surplus cash
resources available. Directors will only buyback shares
at a discount to the then prevailing net asset value of
the shares. Under the Listing Rules, the maximum price
(exclusive of expenses) which may be paid for an Ordinary
Share must not be more than the higher of: (i) 5% above
the average of the mid-market values of the Ordinary
Shares for the five Business Days before the repurchase is
made; or (ii) the higher of the price of the last independent
trade and the highest current independent bid for
Ordinary Shares.
The authority for the Company to purchase its own shares
granted by the AGM held on 22February 2024 will expire
at the conclusion of the forthcoming AGM. The Directors
recommend that a new authority to purchase up to 14.99%
of the Ordinary Shares in issue (subject to the condition
that not more than 14.99% of the Ordinary Shares in issue,
excluding treasury shares, at the date of the AGM are
purchased) is granted and a resolution to that effect will
be put to the AGM to be held on 29 January 2025. Any
Ordinary Shares purchased will either be cancelled or, if the
Directors so determine, held in treasury.
Treasury shares
The Company is permitted to hold Ordinary Shares
acquired by way of market purchase in treasury, rather
than having to cancel them. Such Ordinary Shares may be
subsequently cancelled or sold for cash. Holding Ordinary
Shares in treasury enables the Company to sell Ordinary
Shares from treasury quickly and in a cost-efficient manner
and provides the Company with additional flexibility in the
management of its capital base.
Unless authorised by shareholders, Ordinary Shares held
in treasury will not be sold at less than Net Asset Value
per Share unless they are first offered pro rata to existing
shareholders. The Company will not hold treasury shares
in excess of 10% of the Ordinary Share capital of the
Company from time to time.
Appointment and replacement
of directors
In accordance with the Company’s Articles of Association,
Directors may be appointed by the Board to fill a vacancy
following which they will be elected by shareholders
by ordinary resolution at an Annual General Meeting or
General Meeting of the Company.
Insurance and indemnity provision
A policy of insurance against Directors’ and Officers’
liabilities is maintained by the Company.
Articles of Association
The Company’s Articles of Association can only be
amended by Special Resolution at a shareholders meeting.
Financial Instruments
The Company’s financial instruments comprise its share
portfolio, cash balances, borrowings, debtors and creditors
that arise directly from its operations, profit or loss
balances on derivative instruments and accrued income
and expenses. The financial risk management objectives
and policies arising from its financial instruments and
exposure of the Company to risk are disclosed in note 21 to
the financial statements.
Post year end events
Details of all significant post balance sheet events are set
out in note 32 of the financial statements.
Going Concern
The Directors’ assessment of the going concern of the
Company is set out on 46 to 47.
Viability
The Directors’ assessment of the viability of the Company
is set out on 46 to 47.
55
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Continuation vote
Under the Articles of Association of the Company, the
Directors are required to propose an ordinary resolution at
the Annual General Meeting following the fifth anniversary
from its initial public offering that the Company should
continue as presently constituted and at every fifth
AGM thereafter.
The first continuation resolution was presented and passed
by shareholders at the AGM on 31 January 2023, with
99.96% of proxy votes cast in favour of the resolution.
As the Company announced a proposed managed wind-
down and portfolio realisation strategy to return of capital
to shareholders on 3October 2024, subject to this being
approved by shareholders, the next continuation vote that
is scheduled to be presented to shareholders at an AGM
in 2028, however in light of the proposed wind down of the
Company, this is not expected.
Significant shareholdings
As at 30September 2024, the Directors have been notified
of the following shareholdings comprising 3% or more
of the issued share capital (excluding treasury shares)
of the Company:
Shareholders Holding
Percentage
of voting
rights
Schroders plc 19,793,262 10.69%
Close Asset Management
Limited
16,616,479 8.97%
CG Asset Management
Limited
13,074, 826 7.06%
Gravis Capital Management 11,323,366 6.12%
City of Bradford – West
Yorkshire Pension Fund
9,750,000 5.27%
BlackRock 6,372,656 3.44%
Since 30September 2024 and the date of this Annual
Report, the Company has not been notified of any changes
to its significant shareholdings.
Settlement of ordinary
share transactions
Ordinary share transactions in the Company are settled by
the CREST share settlement system.
Anti-bribery and corruption
It is the Company’s policy to conduct all of its business in
an honest and ethical manner (see for a discussion
on the governance of the company). The Company takes
a zero-tolerance approach to bribery and corruption
and is committed to acting professionally, fairly and with
integrity in all its business dealings and relationships. The
Company’s policy and the procedures that implement it are
designed to support that commitment.
As a result, the Company can confirm that there were
no legal actions, fines or sanctions relating to anti-
corruption, anti-bribery, anti-competitive behaviour or
anti-trust or monopoly laws or regulations in the year to
30September 2024.
Environmental, Social and
Governance (ESG) matters
The Company, the Fund Manager and the broader
Gresham House group believe that it is essential to
incorporate environmental and social considerations
into the Company’s business model and decision-
making processes.
Gresham House has a clear commitment to sustainable
investment as part of its business mission and has
achieved a score of 4 out of 5 stars in its most recent PRI
(Principles for Responsible Investment) assessment report.
The Company always seeks to work with well-regarded
partners to ensure that its investments are fit for purpose
and maintained at a high standard in order to meet the
needs of lessees and occupiers as well as sustaining their
value over the long term.
As a result, the Company can confirm that there
were no legal actions, fines or sanctions relating to
environmental, social or governance matters in the year to
30September 2024.
Through ReSI Housing, the Company is able to acquire
and hold assets within the social housing regulatory
environment, which focusses on good governance and
financial viability.
All of the Group’s day to day operations and activities are
outsourced to third-parties. As such the Group does not
have any employees or operations of its own and does not
generate any direct greenhouse gas or other emissions
or consume any energy reportable under the Companies
Act 2006 (Strategic Report and Directors’ Report)
Regulations 2013 or the Companies (Directors’ Report) and
Limited Liability Partnerships (Energy and Carbon Report)
Regulations 2018, implementing the UK Government’s
policy on Streamlined Energy and Carbon Reporting.
Information regarding the portfolio’s carbon emissions can
be found on 35.
Annual Report & Accounts 2024
56
02 Governance - Directors’ Report
Under UK Listing Rule 11.4.22, the Company, as a
closed ended investment fund, is currently exempt
from complying with the Task Force on Climate related
Financial Disclosures.
For more information on the Company’s environmental and
social impact, please see 32 to 36.
Employees
The Company has no employees and no share schemes.
The Company does not therefore calculate or disclose
employee turnover rates, its share of temporary staff or
employee training hours. The Board’s policy on Diversity
is contained in the Corporate Governance Statement on
pages 62 to 63.
The Board is also not entitled to participate in any bonus
scheme, with Directors compensated according to
the Company’s Net Asset Value, ensuring a long-term
alignment of interests.
Modern Slavery Act 2015, Bribery Act
2010 and Criminal Finances Act 2017
The Company is not within the scope of the UK Modern
Slavery Act 2015 because it does not have employees,
customers or meet the turnover threshold, the Company
is therefore not obliged to make a slavery and human
trafficking statement.
However, the Directors and Fund Manager are satisfied that,
to the best of their knowledge, the Company’s principal
suppliers, as listed in the Directors’ report on 52
to 57 comply with the provisions of the Modern Slavery
Act 2015 and maintain adequate safeguards in keeping
with the provisions of the Bribery Act 2010 and Criminal
Finances Act 2017.
Annual General Meeting
The AGM of the Company will be held on 27 February 2025
at 1:00pm. The Notice convening the AGM is contained in
this Annual Report and can be found on the Company’s
website at https://greshamhouse.com/real-assets/real-
estate-investment/residential-secure-income-plc/
The Board is of the opinion that the passing of all
resolutions being put to the AGM would be in the best
interests of the Company and its shareholders. The
Directors therefore recommend that shareholders vote
in favour of resolutions 1 to 13, as set out in the Notice
of Meeting, as they intend to do in respect of their
own shareholdings.
Political donations
The Company’s policy is not to make any direct or indirect
political donations. No political donations were made during
the year under review and no political donations will be paid
during the forthcoming year (2023: nil).
Future developments
The outlook for the Company is discussed in the Chairman’s
Statement on .
Independent Auditor
BDO LLP have expressed their willingness to continue in
office as Independent Auditor and a resolution to re-appoint
them will be put to shareholders at the AGM.
Disclosure of information to the
Independent Auditor
Each of the Directors at the date of the approval of this
Annual Report confirms that:
i.
so far as the Directors are aware, there is no relevant
audit information of which the Company’s independent
Auditor is unaware; and
ii.
the Directors have taken all steps that ought to
have been taken as Directors to make themselves
aware of any relevant information and to establish
that the Company’s Independent Auditor is aware of
that information.
This confirmation is given and should be interpreted in
accordance with the provisions of Section 418 of the
Companies Act 2006. In accordance with Section 489 of
the Companies Act 2006, a resolution to re-appoint BDO
LLP as the Company’s Independent Auditor will be put
forward at the forthcoming AGM.
57
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Regulatory disclosures – information to be disclosed in accordance with
UKListing Rule 6.6.1:
The following table provides references to where the information required by UK Listing Rule 6.6.1 is disclosed:
UK Listing Rule
6.6.1 (1) – Capitalised Interest The Company has not capitalised any interest in the year under review.
6.6.1 (2) – Unaudited Financial
Information
The Company publishes a quarterly NAV statement. The Company
published its interim report and unaudited financial statements for the
period from 1October 2023 to 31March 2024.
6.6.1 (3) – Incentive Schemes The Company has no incentive schemes in operation.
6.6.1 (4) and (5) – Emolument Waivers No Director of the Company has waived or agreed to waive any current or
future emoluments from the Company.
6.6.1 (6), (7) and (8) – Share Issuance During the period, the Company has not issued or allotted any equity
securities within the meaning of UKLR 6.6.1 (6), (7) and (8).
6.6.1 (7) and (8) – Companies Part of
Not applicable.
fi During the period under review, there were no contracts of significance
subsisting to which the Company is a party and in which a Director of
the Group is or was materially interested or between the Company and a
controlling shareholder.
6.6.1 (10) – Controlling Shareholders The Company is not party to any contracts for the provision of services to
the Company by a controlling shareholder.
6.6.1 (11) and (12) – Waiving Dividends During the period under review, there were no arrangements under which a
shareholder has waived or agreed to waive any dividends or future dividends.
6.6.1 (13) – Board Statement re
fi
Not applicable.
There are no other disclosures to be made under UKLR 6.6.1.
By order of the Board
For and on behalf of
Computershare Company Secretarial Services Limited
Company Secretary
21 January 2025
Annual Report & Accounts 2024
58
02 Governance - Directors’ Report
Introduction
In this statement, the Company reports on its
compliance with the principles and provisions
of the Association of Investment Companies
Code of Corporate Governance (the AIC Code),
as published in February 2019 which provides
a framework of best practice for investment
companies. The Board is committed to high
standards of corporate governance and the
Directors are accountable to shareholders for
the governance of the Company’s affairs.
Statement of Compliance
The AIC Code addresses the principles and provisions set
out in the UK Corporate Governance Code (the UK Code),
as well as setting out additional provisions on issues that
are of specific relevance to the Company.
The Board considers that reporting against the principles
and provisions of the AIC Code, which has been endorsed
by the Financial Reporting Council (FRC), provides more
relevant information to its shareholders. The FRC has
confirmed that AIC member companies, such as ReSI plc,
which report against the AIC Code will be meeting their
obligations in relation to the UK Code and the associated
disclosure requirements under paragraph 6.6.6 of the
UK Listing Rules.
The UK Code is available on the FRC website
(www.frc.org.uk). The AIC Code is available on the
AIC website (www.theaic.co.uk), which includes an
explanation of how the AIC Code adapts the principles and
provisions set out in the UK Code to make them relevant
for investment companies.
Throughout the year ended 30September 2024, the
Company has complied with the principles of the AIC Code
which incorporates the UK Code, except as set out below:
Executive Directors – The UK Code includes provisions
relating to the role of the chief executive and executive
directors’ remuneration. For the reasons as set out in
the AIC Guidance, the Board considers these provisions
are not relevant to the Company. ReSI is an externally
managed company with a Board comprising entirely
of Non-Executive Directors and it does not have any
employees, therefore it does not have any executive
Board members or a chief executive.
Internal audit function – The UK Code includes
provisions for an internal audit function. For reasons
set out in the AIC Code, the Board considers that these
provisions are not relevant to the Company as it is an
externally managed investment company. In particular,
all of the Company’s day-to-day management and
administrative functions are outsourced to third-party
service providers, all of which have their own internal
audit function. As a result, the Company has no internal
operations. The Board has therefore determined that
it is not necessary for the Company to have its own
internal audit function, although this is reviewed on
an annual basis.
The Company has therefore not reported further, in respect
of these provisions.
The Board of Directors
The Company has a robust corporate governance
framework with oversight provided by a highly experienced,
fully independent Board. The Board consists of three
Non-Executive Directors including the Chairman. All of the
Directors have served during the entire year. The Directors
are collectively responsible for determining the investment
policy and strategy and have overall responsibility for the
Company’s activities. The names and biographical details
of the Directors, including a list of their other directorships
and significant commitments is shown on 49 to 50.
The Board believes that during the year ended
30September 2024 its composition was appropriate for a
REIT of the Company’s nature and size. The Directors have
a broad range of relevant business and financial knowledge,
skills and experience to meet the Company’s requirements
and all of the Directors are able to allocate sufficient time to
the Company to discharge their responsibilities effectively.
Reflecting on the current economic environment and the
impact this has had on the growth of the Company, the
Board decided to take steps to reduce the size the Board
as well as balance the diversity of the Board for the benefit
of the Company’s members and to help promote the
success of the Company. With this in mind, John Carleton
retired as a Director of the Company with effect from
22February 2024.
In accordance with the UK Listing Rules that apply
to closed-ended investment entities, and taking into
consideration the AIC Code, the Board has reviewed
the status of its individual Directors and the Board as a
whole. No Director of the Company has served for nine
years or more and all Directors remain independent
of the Company’s Fund Manager. Accordingly, all
Directors are considered to be independent in both
character and judgement.
Corporate Governance Statement
Annual Report & Accounts 2024
60
02 Governance
The Board leads the appointment process of new
Directors, as and when vacancies arise in accordance
with the Directors’ ongoing succession planning. A
formal process for the selection and appointment of new
Directors to the Company is followed by the Board. New
Director appointments shall be made on the basis of merit
against objective criteria as identified by the Board as
being desirable to complement the skills and experience
of the existing Directors whilst having regard for all
diversity factors.
In regards to tenure, the Board considers it to be
inappropriate to set a specific tenure limit for any individual
Director or the Chairman of the Board and instead, as
set out in the Board tenure and re-appointment policy
(Board Tenure Policy), the Board will seek to recruit a new
Director on average every 2-4 years to regularly bring the
challenge of fresh thinking into the Board’s discussions.
The Board recognises the benefits of regular refreshment
and diversity which brings new perspectives and challenge,
whilst also maintaining stability and continuity of corporate
memory through longer serving Directors. Through the
Board Tenure Policy the Board seeks to achieve a range
of skills, experience, backgrounds and lengths of services
among its members. This approach will likely result in an
average tenure of 3-5 years. The Board does not believe
that length of service in itself necessarily disqualifies a
Director from seeking reappointment but, when making
a recommendation, the Board will take into account the
requirements of the AIC Code. Information in respect of the
Company’s Board Diversity Policy can be found on 62
of this Annual Report.
In accordance with the Company’s Articles of Association,
Directors may be appointed by the Company by ordinary
resolution or by the Board. If appointed by the Board, a
Director shall hold office only until the next AGM and shall
not be taken into account in determining the number of
Directors who are to retire by rotation. In line with best
practice and the Board Tenure Policy, Directors will stand
for annual re-election and the performance of each
Director will be appraised by the Board annually, prior to the
AGM. Accordingly, resolutions to re-elect Rob Whiteman,
Robert Gray and Elaine Bailey are contained within the AGM
Notice of Meeting. The Directors have appointment letters
which do not provide for any specific term. Copies of the
Directors’ appointment letters are available for inspection
on request at the registered office of the Company and
will be available at the AGM. Upon joining the Board, new
Directors receive a formal induction and relevant training is
available to Directors on an ongoing basis.
Insurance and indemnity provisions
A policy of insurance against Directors’ and Officers’
liabilities is maintained by the Company.
Responsibilities of the Chairman and
Senior Independent Director
The Board appointed Robert Whiteman as Chairman of
the Company, in March 2018. The Chairman is responsible
for leading the Board and for its overall effectiveness
in directing the affairs of the Company. The Chairman
ensures that all Directors receive accurate, timely and
clear information and help promote a culture of openness
and debate in Board meetings by facilitating the effective
contribution of other Directors. The Chairman also takes
a leading role in ensuring effective communications with
shareholders and other stakeholders.
Robert Gray was appointed Senior Independent Director
of the Company on 16September 2021. The Senior
Independent Director provides a channel of communication
for any shareholder concerns regarding the Chairman and
leads the Chairman’s annual performance evaluation.
In accordance with the AIC Code, the Board has reviewed
and approved a policy setting out the responsibilities of the
Chairman and the Senior Independent Director.
Audit Committee
The Board delegates certain responsibilities and functions
to the Audit Committee as is clearly set out and defined
in its terms of reference, which can be inspected at the
registered office of the Company and viewed on the
Company’s website (https://greshamhouse.com/real-
assets/real-estate-investment/residential-secure-
income-plc/). In accordance with the AIC Code, the Audit
Committee comprises the whole Board, all of whom are
independent and have relevant financial expertise. Robert
Gray who is the Chairman of the Audit Committee has
relevant financial experience and has held similar roles
at other organisations. The Committee as a whole has
competence relevant to the sector in which the Company
operates. The Committee meets at least twice a year to
review the integrity and content of the interim and annual
financial statements, including the ongoing viability of the
Company. The Committee also reviews the scope and
results of the external audit, its cost effectiveness, quality
and the independence and objectivity of the external
Auditors, including the provision of non-audit services. A
report of the Audit Committee is included in this Annual
Report as set out on 67 to 69.
Other Committees
The fully independent Board additionally fulfils the
responsibilities of a nomination committee and
remuneration committee. Given the size of the Board
and the size and nature of the Company, which has
no employees or executive directors, it has not been
considered necessary by the Board to establish separate
nomination or remuneration committees at this time.
61
02 Governance - Corporate Governance Statement
An
nual Report & Accounts 2024
It is the responsibility of the Board as a whole to determine
and approve the Directors’ fees, following proper
consideration and having regard to the industry generally,
the role that individual Directors fulfil in respect of Board
and committee responsibilities, the time committed to the
Company’s affairs and the remuneration levels generally
within the sector. Detailed information on the remuneration
arrangements for the Directors can be found in the
Directors Remuneration Report on 70 to 72.
It is the responsibility of the Board as a whole to undertake
a formal review of the balance, effectiveness and diversity
of the Board and consider succession planning, identifying
the skills and expertise needed to meet the Companies
strategic objectives. The Board is also responsible for
reviewing the appointment of a Senior Independent
Director, membership of the Board’s Committees, and
the re-appointment of those Directors standing for
re
-election at AGMs.
In addition, the Board as a whole fulfils the functions of
a management engagement committee to review the
actions and judgements of management in relation to the
interim and annual financial statements and the Company’s
compliance with statutory and regulatory matters.
Furthermore, in this capacity, the Board reviews the terms
of the Fund Management Agreement and examines the
effectiveness of the Company’s internal control systems
and the performance of the Fund Manager, depositary,
administrator, company secretary and the registrar.
Board and Audit Committee
meeting attendance
Directors
Board
(8 meetings held)
Audit Committee
(3 meetings held)
Rob Whiteman 8 3
Robert Gray 8 3
Elaine Bailey 8 3
There were eight Board meetings and three Audit
Committees meetings held during the year to
30September 2024. Additional sub-committee meetings
of the Board were also held during the year in respect of
payment of dividends, approval of NAV, approval of financial
statements and results, and other administrative matters
and approval of documentation.
Board diversity
The Board Diversity Policy sets out the approach to
diversity on the Board and the process which the Board
will follow when making new appointments. All Board
appointments will be made on merit and against objective
criteria, having due regard to the benefits of diversity on
the Board including of gender, ethnicity, sexual orientation,
disability or educational, professional and socio-economic
backgrounds and cognitive and personal strengths and
taking care that appointees have enough time available to
devote to the position, in the context of the overall balance
of skills and backgrounds that the Board needs to maintain
in order to remain effective.
It is the Board’s ongoing intention that, to the extent that
there are any changes to the current composition of the
Board, it shall take into account the recommendations of
the FTSE Women Leaders Review, the Hampton-Alexander
Review, the Parker Review and the FCA UK Listing Rules and
Disclosure Guidance and Transparency Rules.
Whilst recognising the importance and benefits of diversity
in the boardroom, the Board does not consider it to be
in the interest of the Company and its shareholders
to set prescriptive diversity criteria or targets as all
appointments must be made on merit. However, diversity
generally, including gender and ethnicity, will be taken
into consideration with evaluating the skills, knowledge,
and experience desirable to fill each Board vacancy. The
objective of the Board Diversity Policy is to ensure that all
Board appointments will be made on merit, in the context
of the skills, knowledge and experience that are needed for
the Board to be effective.
The Board appraises its collective set of cognitive and
personal strengths, independence and diversity on
an annual basis, and especially during the recruitment
process, so as to ensure alignment with the Company’s
strategic priorities and aims. The Board is satisfied with
the composition of the Board, taking into consideration
the reduced size of the Board following John Carleton’s
resignation, as well as the balance of diversity of the Board,
with one Director of the Company being female.
The below tables set out the directors’ gender or sex and
ethnic background: In accordance with UK Listing Rule
14 Annex 1, the below tables show the gender and ethnic
background of the Directors as at 30September 2024.
Annual Report & Accounts 2024
62
02 Governance - Corporate Governance Statement
Board gender identity or sex
Number of board
members
Percentage of
the board
Number of
senior positions
on the board
Men 2 67%
Not applicable* Women 1 33%
fi – –
Board ethnic background
Number of board
members
Percentage of
the board
Number of
senior positions
on the board
White British or other White (including minority white groups) 3 100% Not applicable*
Mixed/Multiple Ethnic Groups 0 0 0
Asian/Asian British 0 0 0
Black/African/Caribbean/Black British 0 0 0
Other ethnic group, including Arab 0 0 0
fi 0 0 0
* This column is not applicable as the Company is an externally managed real estate investment trust and does not have executive management
functions, specifically it does not have a chief executive officer or chief financial officer. The chair of the Board and the Senior Independent
Director are both male. The chair of the Audit Committee is also male.
The information presented in the above tables was
collected on a self-reporting basis by the Directors, who
were asked to indicate which of the categories specified in
the prescribed tables were most applicable to them.
As at 30September 2024, the Company has not met the
following targets on Board diversity set out in UK Listing
Rule 22.2.30R(1):
a.
At least 40% of individuals on its Board are women
b.
At least one of the senior positions on its Board is
held by a woman
c.
At least one individual on its Board is from a minority
ethnic background
Although supportive of the targets, the Company has
not been able to meet the targets set by the UK Listing
Rules. For reasons set out above, the target of at least one
senior board positions held by a woman is not applicable
to the Company.
As a Board of three Directors, the size of the Board and
the Company provides a challenge to achieving the UK
Listing Rules gender and ethnicity diversity targets and it
is recognised that any change of the membership of the
Board will have a significant impact on the representation of
any particular group of people. At the time of the publication
of this Annual Report, there have been no changes to the
Board that have further impacted the Company’s ability to
meet these targets,
In light of the current economic environment and the impact
this has had on the growth of the Company, the Board does
not believe that at this time it would be in the best interests
of the Company and its members to incur the expense of
appointing an additional director.
In order to take steps towards embedding the Board
Diversity Policy and the Board Tenure Policy, encouraging
diversity, and achieving the UK Listing Rule diversity targets,
the Board will continue to review succession plans during
the year ending 30September 2025. The centrepiece
of which will be the gender and ethnic diversity of the
Board. In accordance with the Company’s Board Diversity
Policy, an objective of the Company when appointing new
directors to the Board shall be to have a long list of potential
non-executive directors including diverse candidates of
appropriate merit. The Board will ensure that active steps
are taken to search for, and attract, gender and ethnically
diverse candidates when recruiting new directors, where
further appointments are considered to be in the best
interests of the Company.
63
02 Governance - Corporate Governance Statement
Annual Report & Accounts 2024
Performance evaluation
On an annual basis, the Board evaluates its own
performance and the performance of the Audit
Committee, the Chairman and individual Directors. For
the period under review the evaluation was facilitated by
the Company Secretary and was carried out by way of a
detailed questionnaire.
The Chairman led the evaluation, which covered the
functioning and dynamics of the Board as a whole,
composition and diversity of the Board, the effectiveness
of the Audit Committee and the contribution made by
each Director. Each Director completed a self-evaluation
questionnaire in order to reflect on their personal
commitment and contributions during the period. The
results were reviewed by the Chairman and discussed
with the Board. The Board confirmed that the results of
the performance evaluation were positive, and it was
concluded that the Board continued to function effectively
and there are no significant concerns among the Directors
about the Board’s effectiveness. The resulting actions
agreed by the Directors will be monitored during the year
ending 30September 2025. The Board remains satisfied
that all current Directors continue to contribute effectively
and have the skills and experience relevant to the
leadership and direction of the Company.
A separate evaluation of the Chairman was led by the
Senior Independent Director, Robert Gray. Directors
completed a Chairman evaluation questionnaire,
the responses of which were reviewed by the Senior
Independent Director who then met with the Chairman to
discuss and address any points of action.
The Board monitors the performance of the Fund Manager
and believes the continuing appointment of the Fund
Manager to be in the best interests of shareholders as a
whole. For further information see 53.
During the period, the Board reviewed and re-evaluated the
need for an externally facilitated Board evaluation. Taking
into consideration the current activities of the Company, it
was agreed that undertaking an external Board evaluation
in the period was not, at this time, appropriate or in the best
interest of the Company. The Board recognise the benefits
of an external evaluation and will continue to consider
whether an external evaluation would be beneficial and in
the interests of the Company as a whole.
Internal control review and
assessment process
The AIC Code requires the Board to review the
effectiveness of the Company’s system of internal controls.
The Board recognises it has ultimate responsibility
for the Company’s risk management and system of
internal controls, and for reviewing and monitoring their
effectiveness. The risk management process and system
of internal controls are designed to manage, rather than
eliminate, the risk of failure to achieve the Company’s
objectives. It should be recognised that such systems
can only provide reasonable, rather than absolute, internal
assurance against material misstatement or loss.
The Board has undertaken a risk assessment and review
of the Company’s internal controls framework and the
Company’s risk appetite in the context of the Company’s
overall investment objective. The Board, through delegation
to the Audit Committee, has undertaken a robust
assessment and review of the emerging and principal risks
facing the Company. A statement of the principal risks
and uncertainties faced by the Company can be found on
41 to 45.
The Board believes that the existing arrangements
represent an appropriate framework to meet the control
requirements. By these procedures the Directors have
kept under review the effectiveness of the internal control
system throughout the year and up to the date of this
Annual Report. The monitoring and review includes all
material controls, covering financial, operational and
compliance. Given the nature of the Company’s activities
and the fact that most functions are sub-contracted, the
Directors have obtained information from key third-party
service providers regarding the controls operated by
them. The Board has concluded that the Company’s risk
management and internal control system, and those of the
key third-party service providers, are adequate to meet the
needs of the Company.
Annual Report & Accounts 2024
64
02 Governance - Corporate Governance Statement
Financial aspects of internal control
The Directors are responsible for the internal financial
control systems of the Company and for reviewing their
effectiveness. These aim to ensure the maintenance of
proper accounting records, the reliability of the financial
information upon which business decisions are made and
which is used for publication and that the assets of the
Company are safeguarded. As stated above, the Board
has contractually delegated to external agencies the
services the Company requires, but it is fully informed of
the internal control framework established by the AIFM, the
Fund Manager, Company Secretary, Corporate Broker, Tax
Adviser, Depositary, Public Relations Adviser and Registrar
to provide reasonable assurance on the effectiveness
of internal financial controls. The key procedures
include review of management accounts, monitoring of
performance at quarterly Board meetings, segregation of
the administrative function from investment management,
maintenance of appropriate insurance and adherence to
physical and computer security procedures.
The Statement of Directors’ Responsibilities in respect of
the accounts is on 73 and the Going Concern and
Viability Statement is on 46 to 47. The Independent
Auditor’s Report is on 75 to 81.
Other aspects of internal control
The Board holds quarterly meetings, plus additional
meetings as required. Between these meetings there
is regular contact with the Fund Manager and other key
service providers. The Board has agreed policies on key
operational issues. The Company’s key service providers
report to the Board on operational and compliance issues.
The Fund Manager, Corporate Broker, Company Secretary
and the Depositary provide reports, which are reviewed
by the Board. The Administrator prepares management
accounts, which enable the Board to assess the financial
position of the Company. Additional ad hoc reports are
received as required and Directors have access at all times
to the advice and services of the corporate Company
Secretary, which is responsible for ensuring that Board and
Committee procedures are followed and that applicable
regulations are complied with. The Company Secretary
is also responsible for ensuring the timely delivery of
information and reports and for ensuring that statutory
obligations of the Company are met.
This contact with the key service providers enables
the Board to monitor the Company’s progress towards
its objectives and encompasses an analysis of the
risks involved. The effectiveness of the Company’s risk
management and internal controls systems is monitored
and a formal review has been completed. There are no
significant findings to report from the review. A typical
agenda of a formal Board meeting includes a review of
the financial and portfolio performance in that period,
distributable income and dividend yield compared to
forecast, an update regarding the investment pipeline,
statutory and regulatory matters and governance
obligations. The Directors are independent of the Fund
Manager. The Board reviews investment activity and
performance and exercise appropriate control and
supervision to ensure acquisitions are made in accordance
with agreed investment parameters. The Fund Manager has
been given responsibility for the day-to-day management
of the Company’s assets in accordance with the investment
policy subject to the control and directions of the Board.
Matters reserved for the Board and
delegated authorities
There is a clear division of responsibilities between the
Chairman, the Directors, the Fund Manager and the
Company’s third-party service providers. To retain control
of key decisions and ensure there is a clear division of
responsibilities between the running of the Board and the
running of the business, the Board has identified ‘reserved
matters’ that only it can approve. The Board has delegated
a number of responsibilities and authorities to the Fund
Manager, in accordance with the Fund Management
Agreement, which has been reviewed during the period and
the Board has agreed that it remains appropriate. These
responsibilities include the level of borrowing, which is
based on the characteristics of the relevant property and
asset class and identifying new investment opportunities
for the Company, performing due diligence in relation
to potential investments, approving and executing such
investments and monitoring existing investments. The
Fund Manager presents potential transactions to the Board
at regular Board meetings. The Board and the Committee
receive sufficient, reliable and timely information in advance
of meetings and are provided with or given access to all
necessary resources and expertise to enable them to
fulfil their responsibilities and undertake their duties in an
effective manner.
65
02 Governance - Corporate Governance Statement
Annual Report & Accounts 2024
Principal risks
The Directors confirm that they have carried out a robust
assessment of the principal and emerging risks facing the
Company, including those that would threaten its position,
business model, future performance, solvency or liquidity.
The principal risks and how they are being managed is set
out in the Strategic Report on 41 to 45. As part of its
risk process, the Board seeks to identify emerging risks to
ensure that they are effectively managed as they develop
and recorded in the risk matrix.
Annual General Meeting
At least twenty-one days’ notice shall be given to all the
members and to the Auditors of an AGM. All other general
meetings shall also be convened by not less than twenty-
one days’ notice to all those members and to the Auditors
unless the Company offers members an electronic voting
facility and a special resolution reducing the period of
notice to not less than fourteen days prior to the general
meeting, in which case a general meeting may be convened
by not less than fourteen days’ notice in writing. A special
resolution will be proposed at the AGM to reduce the period
of notice for general meetings, other than the AGM, to not
less than fourteen days.
Shareholder relations
The Company encourages all shareholders to attend
and vote at the AGM and seeks to provide a minimum of
twenty-one working days’ notice of that meeting. The
Notice of Meeting sets out the business of the AGM and
any item not of an entirely routine nature is explained in the
Directors’ Report. Separate resolutions are proposed for
each substantive issue. The Board and the Fund Manager
are available to discuss issues affecting the Company, and
shareholders have the opportunity to address questions to
the Fund Manager, the Board including the Chairman and
the Chairman of the Audit Committee.
The Fund Manager has a structured programme of
meetings with key shareholders and reports back to the
Board on its findings. A detailed list of the Company’s
shareholders is reviewed at each Board meeting.
The Half-Yearly and Annual reports of the Company are
prepared by the Board and its advisers to present a full
and readily understandable review of the Company’s
performance. Copies of which are dispatched to
shareholders by post or electronically as requested and are
also on the Company’s website (https://greshamhouse.
com/real-assets/real-estate-investment/residential-
secure-income-plc/). Half year and annual investor
presentations, as well has factsheets, reports and policies
are also made available on the Company’s website.
The Chairman and the Board welcome direct feedback
from shareholders.
Further details of the Company’s engagement with
stakeholders and how the Board has regard to those
stakeholders in the Board’s decision-making processes are
set out in the Strategic Report on 37 to 40.
Exercise of voting powers and
stewardship code
The principles of best practice of the Stewardship Code are
not applicable to the Company’s operations, being a REIT
that does not hold the shares of other companies.
Social and environmental policy
Please see the Environmental and Social Impact report on
32 to 36 for details.
For and on behalf of
Computershare Company Secretarial
Services Limited
Company Secretary
21 January 2025
Annual Report & Accounts 2024
66
02 Governance - Corporate Governance Statement
Role of the Audit Committee
The AIC Code of Corporate Governance (the UK Code)
recommends that boards should establish an audit
committee consisting of at least three, or in the case
of smaller companies, two independent non-executive
directors. The Board is required to satisfy itself that the
Audit Committee has recent and relevant experience.
The main role and responsibilities of the Audit Committee
should be set out in written terms of reference covering
certain matters described in the UK Code. The terms of
reference of the Audit Committee can be found on the
Company’s website at https://greshamhouse.com/
real-assets/real-estate-investment/residential-
secure-income-plc/.
The Audit Committee meets formally at least twice a year
for the purpose, amongst other things, of:
considering the appointment, independence and
objectivity, and remuneration of the Company’s external
Auditor, BDO LLP (the Auditor);
to review the annual accounts and half-yearly
financial report;
to review the day-to-day management of the Company
by the Fund Manager and its adherence to agreed
investment parameters; and
assessment of the Company’s internal financial controls
and risk management systems.
Composition
All of the independent Directors of the Company are
members of the Audit Committee. The Audit Committee
as a whole has recent and relevant financial experience. As
endorsed by the AIC Code, the Chairman of the Company is
a member of the Audit Committee. The Board and the Audit
Committee believe that the Chairman of the Company
being a member of the Audit Committee is appropriate
as he was independent on appointment and remains
independent. His contributions are beneficial to the
Audit Committee due to his recent and relevant financial
experience. Details of the Committee members’ experience
can be found on 49 to 50.
Meetings
There have been three Audit Committee meetings during
the year ended 30September 2024. These meetings
were aligned with key dates for financial reporting and the
audit cycle of the Company. Attendance is included in the
Corporate Governance Statement on pages60 to 66.
During these meetings the Audit Committee has:
reviewed the Company’s financial statements
for the half year and year end and made formal
recommendations to the Board;
reviewed the Company’s going concern and
viability statements;
reviewed the internal controls and risk management
systems of the Company and its third-party service
providers including cyber-security;
reviewed the Company’s risk register reflecting the
current and emerging risks faced by the Company;
agreed the audit plan and fees with the Auditor, including
the principal areas of focus; and
reviewed its own performance; and reviewed its
Terms of Reference.
Financial statements and significant
accounting matters
The Audit Committee considered the following significant
accounting issues in relation to the Company’s Financial
Statements for the year ended 30September 2024:
A. Investment property valuation
The valuation of investment property is the most material
matter in the production of the financial statements. Savills
Advisory Services Limited has been appointed to value
the Company’s property investments, in accordance with
the Regulated Investment Company requirements, on a
quarterly basis. The Audit Committee reviewed a copy of
the annual valuation report once it had been completed and
has received a presentation from the valuer. Investment
properties are valued at their fair value in accordance with
IFRS 13 and IAS 40, which recognises a variety of fair value
inputs depending upon the nature of the investment. The
Audit Committee has reviewed the assumptions underlying
the property valuations and concluded that the valuation as
at 30September 2024 is appropriate.
B. Fair value of debt (debt held at fair value
fi
The Group’s debt held at fair value through profit or loss is
fair-valued as of the year-end and based on the relevant gilt
rate and discounted cash flows. The Audit Committee has
reviewed the assumptions underlying the debt valuations
and concluded that the valuation at the Company’s year-
end is appropriate.
Report of the Audit Committee
Annual Report & Accounts 2024
67
02 Governance
C. Revenue recognition
Ensuring that the Group’s rental income is accounted
for in accordance with accounting standards presents
an inherent risk. The Audit Committee has reviewed
the Company’s procedures in place for revenue
recognition and has concluded that revenue has been
appropriately recognised.
D. Internal Controls and Risk Management
Through the powers conferred upon the Audit Committee
by the Board, the Audit Committee is responsible for
ensuring that suitable internal controls systems are
implemented by the Fund Manager and other third-party
service providers, and further ensuring that those control
systems are continuously reviewed and remain effective.
The Audit Committee has reviewed the internal controls
of third-party service providers and the Fund Manager
during the period.
In addition, with the assistance of the Fund Manager
and third-party services providers, the Audit Committee
identifies the principal risks and uncertainties faced by
the Company and determines strategies to ensure that
they are mitigated. Further details on the principal risks
and uncertainties that face the Company can be found on
41 to 45.
E. Going Concern
At the General Meeting on 6 December 2024, the Directors
proposed an orderly wind-down of the Company as the
best course of action and shareholders voted in favour of
this proposal. Accordingly, the Group’s financial statements
have been prepared on a basis other than that of going
concern (see note 2 (b) of the financial statements).
External Audit
The Audit Committee monitors and reviews the
effectiveness of the external audit process for
the publication of the Annual Report and makes
recommendations to the Board on the re-appointment,
remuneration and terms of engagement of the Auditor.
Audit Fees
The audit fee incurred for the audit of the 2024 Annual
Report and Accounts was £272,000 (30September 2023:
£259,000). The Audit Committee continues to monitor the
level of audit fees carefully.
Provision of non-audit services
The Audit Committee has a Non-Audit Services Policy
to govern the supply of any non-audit services provided
by the Auditor. Such services are considered on a case-
by-case basis and may only be provided to the Company
if the provision of such services is at a reasonable and
competitive cost and does not constitute a conflict of
interest or potential conflict of interest which would prevent
the Auditor from remaining objective and independent. On
9September 2024, the Board reviewed and approved the
Non-Audit Services Policy following a review of its ongoing
effectiveness and adequacy.
BDO LLP were paid fees of £48,500 in respect of non-audit
services in the year to 30September 2024 (2022: £45,000).
These services were in respect of the interim review of
the Interim Report for the period ended 31March 2024.
When reviewing the suitability of BDO LLP to carry out this
service the Audit Committee assesses a number of factors,
including but not limited to: assessing whether there are
any threats to independence and objectivity resulting from
the provision of such services, the nature of the service
provided and whether the skills and experience of BDO LLP
make it the most suitable supplier. The Audit Committee
has considered the non-audit work of the Auditor during
the year ended 30September 2024 and does not consider
that this compromises its independence. In addition, the
Audit Committee has received assurances from the Auditor
that its independence is not compromised by the supply of
these services. The fees set out above are exclusive of VAT
and disbursements.
Audit tenure
BDO LLP has been appointed as the Company’s Auditor
since the Company’s incorporation in 2017, following
a competitive process and review of the Auditor’s
credentials. The appointment of the external Auditor is
reviewed annually by the Audit Committee and the Board
and is subject to approval by shareholders. Following a
review of the service provided by the Company’s Auditor
and consideration of conducting an audit tender, the Audit
Committee were satisfied with the Auditors performance
and have decided that no further action would be taken.
The current appointment of BDO LLP is compliant with all
existing regulations and the Board and the Audit Committee
agree that the Auditor remains independent. In accordance
with the requirements relating to the appointment of
audit firms, the Company will be required to conduct an
audit tender no later than for the financial year beginning
1October 2027. In addition, in line with the requirement
for the audit partner to be rotated at least every five years,
Richard Levy, was appointed as the audit partner from the
audit for the financial year beginning 1October 2021.
Annual Report & Accounts 2024
68
02 Governance - Report of the Audit Committee
Effectiveness of external
audit and continuing
appointment of the Auditor
The Audit Committee is responsible for reviewing the
effectiveness of the external audit process. The Audit
Committee received a presentation of the audit plan from
the Auditor and a presentation of the results of the audit
following completion of the main audit testing. Following
the presentation of the results of the audit, the Audit
Committee conducted a review of the Auditor which
included a discussion of the audit process and the ability
of the Auditor to fulfil its role. The feedback provided by
the Fund Manager regarding the audit team’s performance
on the audit was positive. The Auditor demonstrated a
good understanding of the Group and had identified and
focused on the areas of increased financial reporting risk.
Its reporting to the Audit Committee during the period
was clear and thorough. The Audit Committee is satisfied
that the Auditor has appropriately challenged the Fund
Manager’s judgements.
The Audit Committee acknowledged that the audit team
during the period, including the audit partner, comprised of
staff with appropriate levels of knowledge and experience
of the sector in which the Company operates. Following
the above review, the Audit Committee concluded that
the external audit process has been effective. Taking into
consideration the performance and effectiveness of the
Auditor and the confirmation of their independence, the
Audit Committee has agreed that the re-appointment of
BDO LLP should be recommended to the Board and the
shareholders of the Company at the forthcoming AGM.
BDO LLP has confirmed its willingness to continue in office.
Internal audit function
The Audit Committee has considered the need for an
internal audit function and considers that this is not
appropriate given the size, nature and circumstances of
the Company. The Audit Committee keeps the needs for an
internal audit function under periodic review.
CMA Order
Throughout the year ended 30September 2024, the
Company has complied with the provisions of the Statutory
Audit Services Order 2014, issued by the Competition and
Markets Authority (CMA Order).
Conclusion with respect to the
Annual Report and financial
statements – fair, balanced and
understandable financial statements
The Audit Committee has concluded that the Annual
Report for the year ended 30September 2024, taken
as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to
assess the Company’s position, performance, business
model and strategy. The Audit Committee has reported
its conclusions to the Board of Directors. The Audit
Committee reached this conclusion through a process of
review of the document and enquiries to the various parties
involved in the production of the Annual Report.
Robert Gray
Chairman of the Audit Committee
21 January 2025
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02 Governance - Report of the Audit Committee
Annual Report & Accounts 2024
The Board has prepared this report in
accordance with the requirements of the
Large and Medium Sized Companies and
Groups (Accounts and Reports) (Amendment)
Regulations 2013.
The law requires the Company’s Auditor to audit certain
disclosures provided. Where disclosures have been
audited, they are indicated as such. The Auditor’s opinion
is included in the Independent Auditor’s Report on
75 to 81.
The Board consists entirely of Non-Executive Directors and
the Company has no employees therefore the Company
has not reported on those aspects of remuneration that
relate to Executive Directors. As detailed on 70. it is
not considered appropriate for the Company to establish
a separate Remuneration Committee. Accordingly,
the Board as a whole considers and approves the
Directors’ remuneration.
Remuneration Policy
The Company is required to ask shareholders to formally
approve the Directors’ Remuneration Policy, on a three-
yearly basis. Any change to the Directors’ Remuneration
Policy requires shareholder approval. A binding ordinary
resolution to approve the Directors’ Remuneration Policy
was last proposed and approved by shareholders at
the AGM of the Company held on 14 January 2022. The
resolution was passed with proxies representing 99.16% of
the shares voted being in favour of the resolution.
There are no proposed changes to the policy, and therefore
it is intended that the provisions of this policy continue
for the year ended September 2025. A copy of the policy
is included in the Company’s Annual Report for the year
ended 30September 2021. The Directors’ Remuneration
Policy will next be put forward for approval at the AGM to
be held in 2025.
Directors’ Remuneration
Implementation Report
The Directors’ Remuneration Implementation Report is
presented for approval by shareholders on an annual
basis and will be put forward as an ordinary resolution
at the forthcoming AGM. The result of the shareholder
resolution on the Implementation Report is non-binding
on the Company, although it gives shareholders an
opportunity to express their views, which will be taken into
account by the Board.
A non-binding ordinary resolution to approve the Directors’
Remuneration Implementation Report contained in
the Annual Report for the year ended 30September
2023 was put forward and passed at the AGM held on
22February 2024.
The votes cast by proxy were as follows:
Directors’ Remuneration Report
Number of
votes
Percentage of
votes cast
For and discretionary 90,478,817 99.76%
Against 213,195 0.24%
Votes withheld 72,401 –
Remuneration
The Company currently has three Non-Executive Directors.
Directors are entitled to receive a fee linked to the Net
Asset Value of the Company in respect of their position as a
Director of the Company. Fees are currently payable at the
rates set out in the Remuneration Policy and below.
The Chairman, will be entitled to receive a fee linked to the
Net Asset Value of the Company as follows:
Net Asset Value Annual Fee
Up to £100,000,000 £40,000
£100,000,001 to £200,000,000 £50,000
£200,000,001 to £350,000,000 £60,000
thereafter £70,000
Each of the Directors, save for the Chairman, will be
entitled to receive a fee linked to the Net Asset Value of the
Company as follows:
Net Asset Value Annual Fee
Up to £100,000,000 £30,000
£100,000,001 to £200,000,000 £35,000
thereafter £40,000
The Board believes that these fees set out in the
Remuneration Policy appropriately reflect prevailing market
rates for the Company’s complexity and size and will also
enable the Company to attract appropriately experienced
additional Directors in the future.
Directors’ Remuneration Implementation Report
Annual Report & Accounts 2024
70
02 Governance
Directors’ service contracts
The Directors do not have service contracts with the Company.
The Directors are not entitled to compensation on loss of
office. The Directors have appointment letters which do not
provide for any specific term but are subject to re-election by
shareholders at a maximum interval of three years. However,
in line with best practice and the Company’s Tenure and Re-
appointment Policy all Directors are annually considered by the
Board for re-election. Rob Whiteman, Robert Gray and Elaine
Bailey will retire and stand for re-election on a voluntary basis at
the AGM on 27 February 2025.
There are no restrictions on transfers of the Company’s
shares held by the Directors, or any special rights attached
to such shares.
Director search and selection fees
No Director search and selection fees were incurred during
the year ended 30September 2024.
Directors’ emoluments for the year ended 30September 2024 (audited)
The Directors who served during the year received the following remuneration for qualifying services.
£’000
Fees from 1October 2022
to 30September 2023
£’000
Annual Percentage
Change in fees
%
Robert Whiteman 50 50 0
Robert Blackburn Gray 35 35 0
Elaine Bailey 35 35 0
John Carleton* 14 35 -60
134 155
* Resigned as a Director of the Company on 22February 2024
When reviewing any change in Directors’ fees from previous financial periods, it is important to note that the remuneration
of the Directors is linked to the Net Asset Value of the Company.
There are no other benefits payable by the Company which may be deemed to be taxable. None of the above fees were
paid to third parties.
The Directors do not receive pension benefits, long-term incentive schemes or share options.
Performance
The following chart shows the performance of the Company’s share price by comparison to the principal relevant indices.
The Board believes that these indices are the most representative comparator for the Company, given the Company’s
investment objective.
ReSI plc share price indexed performance vs. peers
l
ReSI plc
l
FTSE EPRA UK Residential Index
June 2017
June 2018
June 2019
June 2020
June 2021
June 2022
June 2023
June 2024
ReSI plc FTSE EPRA Nareit UK RESIDENTIA
60
80
100
120
140
160
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02 Governance - Directors’ Remuneration Implementation Report
Annual Report & Accounts 2024
Relative importance of spend on pay
The following table sets out the total level of Directors’
remuneration compared to Net Operating Income,
Directors’ fees, Operating expenses, and Dividends paid
and payable to shareholders.
2024
£’000
2023
£’000
Change
£’000
Net Property Income 18,922 18,514 408
Directors’ fees 134 155 (21)
Operating expenses 2,752 3,805 (1,053)
Dividends paid and payable
to shareholders 7,626 9,553 (1,927)
The management fee and expenses have been included to give
shareholders a greater understanding of the relative importance
of spend on pay. It also provides Directors Fees as percentage of
Dividends and Expenses.
Directors’ holdings (audited)
There are no requirements pursuant to the Company’s
Articles of Association for the Directors to own shares in
the Company. As at 30September 2024, the Directors’
beneficial shareholdings were as follows:
2024
30September
2023
Robert Whiteman 100,000 100,000
Robert Blackburn Gray 399,238 399,238
Elaine Bailey 5,000 5,000
John Carleton* – 4,850
* Resigned as a Director of the Company on 22February 2024
There have been no changes in the Director’s beneficial
shareholdings between 30September 2024 and the date
of this report.
The shareholdings of the Directors are not significant and
therefore do not compromise their independence as Non-
Executive Directors.
Statement
On behalf of the Board and in accordance with Part 2 of
Schedule 8 of the Large and Medium-sized Companies and
Groups (Accounts and Reports) (Amendment) Regulations
2013, I confirm that the above Report on Remuneration
Policy and Remuneration Implementation summarises, as
applicable, for the financial year ended 30September 2024:
a.
the major decisions on Directors’ remuneration;
b. any substantial changes relating to Directors’
remuneration made during the financial year ended
30September 2024; and
c.
the context in which the changes occurred and
decisions have been taken.
Rob Whiteman
Chairman of the Board of Directors
21 January 2025
Annual Report & Accounts 2024
72
02 Governance - Directors’ Remuneration Implementation Report
The Directors are responsible for preparing
the Annual Report and the financial
statements in accordance with applicable
lawand regulation.
Company law requires the Directors to prepare Group and
parent Company financial statements for each financial
year. The Group financial statements have been prepared
in accordance with UK adopted international accounting
standards and the Company financial statements have
been prepared in accordance with Financial Reporting
Standard 100 Application of Financial Reporting
Requirements (FRS 100) and Financial Reporting Standard
101 Reduced Disclosure Framework (FRS 101), subject
to any material departures disclosed and explained in
the Company financial statements; and United Kingdom
Generally Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law).
Under company law the Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
Company and of the Group’s and Company’s profit or loss
for that period.
In preparing the financial statements, the Directors
are required to:
select suitable accounting policies and then apply
them consistently;
make judgements and estimates that are reasonable,
relevant, reliable and prudent;
for the Group financial statements, state whether they
have been prepared in accordance with UK adopted
international accounting standards, subject to any
material departures disclosed and explained in the
financial statements;
for the parent Company financial statements, state
whether applicable UK accounting standards have
been followed, subject to any material departures
disclosed and explained in the parent company financial
statements; and
prepare the financial statements on a going concern
basis unless it is inappropriate to presume that the Group
and the Company will continue in business. As stated in
note 2(b) the Directors do not consider the going concern
and have prepared the financial statements on a basis
other than of going concern.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Group and Company and enable them to ensure that its
financial statements comply with the Companies Act 2006.
They are responsible for such internal control as they
determine necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities. Under
applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’
Report, Directors’ Remuneration Implementation Report
and Corporate Governance Statement that complies with
that law and those regulations. These can be found on
2 to 47, 52 to 58, 70 to 72 and 60 to 66 respectively.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The Directors are responsible for ensuring that the Annual
Report and accounts, taken as a whole, are fair, balanced
and understandable and provide the information necessary
for shareholders to assess the Group and Company’s
performance, business model and strategy.
Website publication: The Directors are responsible for
ensuring the Annual Report and the financial statements
are made available on a website (https://greshamhouse.
com/real-assets/real-estate-investment/residential-
secure-income-plc/). Financial statements are published
on the Company’s website in accordance with legislation
in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and
integrity of the Company’s website is the responsibility of
the Directors. The Directors’ responsibility also extends
to the ongoing integrity of the financial statements
contained therein.
Directors’ responsibility statement
Each of the Directors, whose names and titles are
listed on 49 to 50, confirms that to the best of
their knowledge:
the financial statements have been prepared in
accordance with UK adopted international accounting
standards and, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the
Company and the undertakings included in the
consolidation as a whole;
Directors’ Responsibilities
73
02 Governance
Annual Report & Accounts 2024
the Strategic Report includes a fair review of the
development and performance of the business and the
financial position of the Company and the undertakings
included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties
that they face; and
the Annual Report and accounts taken as a whole is
fair, balanced and understandable and provides the
information necessary for shareholders to assess
the Company’s position, performance, business
model and strategy.
For and on behalf of the Board
Rob Whiteman
Chairman
21 January 2025
Annual Report & Accounts 2024
74
02 Governance - Directors’ Responsibilities
Opinion on the financial statements
In our opinion:
the financial statements give a true and fair view of the
state of the Group’s and of the Parent Company’s affairs
as at 30September 2024 and of the Group’s loss for the
year then ended;
the Group financial statements have been p
prepared in accordance with UK adopted in
accounting standards;
the Parent Company financial statements have been
properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
the financial statements have been prepared
in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements of Residential
Secure Income plc (the Parent Company) and its
subsidiaries (the Group) for the year ended 30September
2024 which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated Statement
of Financial Position, the Consolidated Statement of
Cash Flows, the Consolidated Statement of Changes in
Equity, the Company Statement of Financial Position, the
Company Statement of Changes in Equity and notes to
the financial statements, including material accounting
policy information. The financial reporting framework
that has been applied in the preparation of the Group
financial statements is applicable law and UK adopted
international accounting standards. The financial reporting
framework that has been applied in the preparation of the
Parent Company financial statements is United Kingdom
Accounting Standards, including Financial Reporting
Standard 101 Reduced Disclosure Framework (United
Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of
the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion. Our audit
opinion is consistent with the additional report to the
audit committee.
Independence
Following the recommendation of the audit committee,
we were appointed by the Directors on 20September
2017 to audit the financial statements for the year ended
11July 2017 and subsequent financial periods. The period
of total uninterrupted engagement including retenders
and reappointments is 8 years, covering the years ended
nd the period ended 30September 2018 to
2024. We remain independent of the Group
and the Parent Company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard
as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. The non-audit services prohibited
by that standard were not provided to the Group or the
Parent Company.
Emphasis of matter – financial
statements prepared on a basis
otherthan going concern
We draw attention to note 2 (b) to the financial statements
which explains that at the General Meeting on 6December
2024, the Directors proposed an orderly wind-down of
the Company and shareholders have voted in favour of
this proposal; therefore, the Directors do not consider
it appropriate to adopt the going concern basis of
accounting. Accordingly, the financial statements have
been prepared on a basis other than going concern as
described in note 2 (b). Our opinion is not modified in
respect of this matter.
In relation to the Parent Company’s reporting on how it
has applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to
the Directors’ statement in the financial statements about
whether the Directors considered it appropriate to adopt
the going concern basis of accounting. As stated in the
note 2 (b) the Directors do not consider the Company
to be a going concern and have prepared the financial
statements on a basis other than going concern.
Independent Auditors’ Report
75
02 Governance
Annual Report & Accounts 2024
Overview
Coverage 100% (2023: 100%) of Group revenue
100% (2023: 100%) of Group profit before tax
100% (2023: 100%) of Group total assets
100% (2023: 100%) of Group investment property
Key audit matters
2024 2023
Kam 1 Valuation of investment properties Valuation of investment properties
Materiality Group financial statements as a whole
We determined materiality for the Group financial statements as a whole to be £3,693,000
(2023:£3,888,000) based on 1% (2023: 1%) of Group total assets.
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding
of the Group and its environment, including the Group’s
system of internal control, and assessing the risks of
material misstatement in the financial statements. We also
addressed the risk of management override of internal
controls, including assessing whether there was evidence
of bias by the Directors that may have represented a risk of
material misstatement.
The Group operates solely in the United Kingdom and
through one segment, investment property. The Group
audit team carried out full scope audits of each of the six
significant components of the Group using the materiality
level set out below and specific audit procedures on the
insignificant components. The Group audit team performed
all the work necessary to issue the Group and Parent
Company audit opinion, including undertaking all of the
audit work on the risks of material misstatement identified
in the key audit matters section below.
Climate change
Our work on the assessment of potential impacts on
climate-related risks on the Group’s operations and
financial statements included:
enquiries and challenge of Management to understand
the actions they have taken to identify climate-related
risks and their potential impacts on the financial
statements and adequately disclose climate-related risks
within the annual report;
our own qualitative risk assessment taking into
consideration the sector in which the Group operates and
how climate change affects this particular sector;
involvement of climate-related experts in evaluating
managements risk assessment; and
review of the minutes of Board meetings and other
papers related to climate change.
Based on our risk assessment procedures, we did not
identify there to be any Key Audit Matters materially
impacted by climate-related risks and related commitments.
Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most significance in our
audit of the financial statements of the current period and
include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we
identified, including those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the
audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters.
Annual Report & Accounts 2024
76
02 Governance - Independent Auditors’ Report
Key audit matter How the scope of our audit addressed the key audit matter
Valuation of
investment properties
Refer to note4 (significant
accounting Judgements
and estimates) and
note 14 (investment
property) to the Group
financial statements.
Investment properties
are held at fair value in the
Group’s financial statements.
The valuation of the Group’s
investment property is the
key component of net asset
value and underpins the
Group’s result for the year.
The valuation of investment
property requires significant
judgement and estimates
by management with
the involvement of their
independent external Valuer,
including discount rates
used, inflation assumptions
and staircasing rates for the
shared ownership properties.
There is also a risk that:
inaccurate inputs to the
valuation model could
result in misstatements
management may influence
the significant judgements
and estimates in respect
of property valuations
in order to achieve
performance targets to
meet market expectations
property valuations
have not been disclosed
appropriately in the
financial statements
in accordance with UK
adopted international
accounting standards
Therefore, we considered
the valuation of investment
properties to be a
key audit matter.
Our audit procedures included the following:
Experience of Valuer and relevance of their work
With the assistance of our real estate valuation experts, we
read the independent external Valuer’s report and assessed
whether the approaches used were consistent with the
requirements of accounting standards. We assessed the
Valuer’s competence and capabilities and read their terms
of engagement with the Group, and considered if there
were any matters that affected their independence and
objectivity, or imposed scope limitations upon them.
Data provided to the Valuer
We checked the data provided to the Valuer by
management including inputs such as current rent and
lease term (which we have agreed on a sample basis to
executed lease agreements as part of our audit work), future
costs, void rates, staircasing rates and bad debts (which we
have assessed based on past experience of the portfolio).
Assumptions and estimates used by the Valuer
We met with the Valuer and gained an understanding
of the valuation methods and assumptions used. We
benchmarked the valuation to our expectations developed
using independently obtained data in relation to discount
rates and capitalisation yields. With the assistance of
our own real estate valuation experts, we considered the
methodology applied and challenged the assumptions
utilised by the Valuer, corroborating their explanations
where relevant. This included considering if there was any
evidence of management bias in relation to the valuations.
We checked the accuracy of the valuation models by
reperforming the discounted cash flow calculations
using the same inputs and assumptions as those used
by the Valuer.
Financial statement disclosures
We assessed whether the disclosures in the financial
statements relating to investment properties
are appropriate and in accordance with relevant
accounting standards.
Key observations:
Based on the procedures performed, we found the
estimates and assumptions used appropriate in the context
of the valuation of the Group’s investment properties.
Our application of materiality
We apply the concept of materiality both in planning
and performing our audit, and in evaluating the effect
of misstatements. We consider materiality to be
the magnitude by which misstatements, including
omissions, could influence the economic decisions
of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the
probability that any misstatements exceed materiality,
we use a lower materiality level, performance materiality,
to determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
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02 Governance - Independent Auditors’ Report
Annual Report & Accounts 2024
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
fi fi
2024 2023 2024 2023
Materiality £3,693,000 £3,888,000 £1,562,000 £1,898,000
Basis for determining
materiality
1% of Total Assets 1% of Total Assets 1% of Total Assets 1% of Total Assets
Rationale for the
benchmark applied
We determined that total assets would be
the most appropriate basis for determining
overall materiality as we consider it to be
one of the principal considerations for users
of the financial statements in assessing the
financial performance of the Group.
We determined that total assets would be
the most appropriate basis for determining
overall materiality as we consider it to be
one of the principal considerations for users
of the financial statements in assessing
the financial performance of the Parent
Company.
Performance materiality £2,769,000 £2,916,000 £1,171,000 £1,273,500
Basis for determining
performance materiality
75% of materiality. This was on the basis
of our risk assessment, together with our
assessment of the Group’s overall control
environment and our past experience of the
audit which has indicated a low number of
corrected and uncorrected misstatements
in the prior period and Management’s
willingness to investigate and correct these.
75% of materiality. This was on the basis
of our risk assessment, together with our
assessment of the Parent Company’s
overall control environment and our past
experience of the audit which has indicated
a low number of corrected and uncorrected
misstatements in the prior period and
Management’s willingness to investigate
and correct these.
Rationale for the
percentage applied for
performance materiality
The level of performance materiality applied was set after having considered a number
of factors including our assessment of the Group’s and Parent Company’s overall control
environment and the expected total value of known and likely misstatements and the level
of transactions in the year.
fiateriality
We determined that for other account balances, classes of
transactions and disclosures that impact the calculation
of adjusted earnings (as defined in note 13 of the Group
financial statements) a misstatement of less than
materiality for the financial statements as a whole, specific
materiality, could influence the economic decisions of
users. We concluded that specific materiality for these
areas should be £463,000 (2023: £402,000), which was set
at 5% of adjusted earnings. Adjusted earnings excludes
the impact of fair value movements and one-off debt
arrangement costs.
The specific materiality applied to the Parent Company
was £79,000 (2023: £100,000) respectively, calculated as a
proportion of Group specific materiality.
Component materiality
We set materiality for each significant component of
the Group based on a percentage of between 0.5% and
63% of Group materiality dependent on the size and
our assessment of the risk of material misstatement of
that component. Component materiality ranged from
£17,000 to £2,343,000 (2023: £56,000 to £2,379,000) and
component specific materiality from £33,000 to £394,000
(2023: £24,000 to £390,000). In the audit of each significant
component, we further applied performance materiality
levels of 75% (2023: 75%) of the component materiality
to our testing to ensure that the risk of errors exceeding
component materiality was appropriately mitigated.
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Reporting threshold
We agreed with the Audit Committee that we would
report to them all individual audit differences in excess of
£184,000 (2023: £194,000) for items audited to financial
statement materiality, and £23,000 (2023: £20,000) for
items audited to specific materiality.
The Parent Company reporting threshold was £78,000
(2023: £94,000) and specific reporting threshold applied
was £3,000 (2023: £20,000).
We also agreed to report differences below these
thresholds that, in our view, warranted reporting on
qualitative grounds.
Other information
The directors are responsible for the other information.
The other information comprises the information included
in the annual report, other than the financial statements
and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements, or our knowledge obtained in the course of
the audit, or otherwise appears to be materially misstated.
uch material inconsistencies or apparent
atements, we are required to determine
whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Corporate governance statement
The UK Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and
that part of the Corporate Governance Statement relating to the Parent Company’s compliance with the provisions of the
UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained
during the audit.
Going concern
and longer-term
viability
The Directors’ statement with regards to the appropriateness of adopting the going concern
basis of accounting and any material uncertainties identified set out on pages 46 and 47;
The Directors’ explanation as to their assessment of the Parent Company’s prospects, the period
this assessment covers and why the period is appropriate set out on page 46.
Other Code
provisions
Directors’ statement on fair, balanced and understandable set out on page74;
Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on page 66;
The section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on pages 64 to 65; and
The section describing the work of the audit committee set out on pages67 to 69.
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Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by
the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report
and Directors’
report
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Strategic report and the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Directors’ report have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements in
the Strategic report or the Directors’ report.
Directors’
remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Matters on which
we are required
to report by
exception
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the Parent Company, or returns adequate
for our audit have not been received from branches not visited by us; or
the Parent Company financial statements and the part of the Directors’ remuneration report to be
audited are not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities
statement, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either
intend to liquidate the Group or the Parent Company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the
audit of the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
Extent to which the audit was capable of
detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is
detailed below:
Non-compliance with laws and regulations
Based on:
our understanding of the Group and the industry in
which it operates;
discussion with management and those charged with
governance; and
obtaining and understanding of the Group’s policies
and procedures regarding compliance with laws
and regulations;
we considered the significant laws and regulations to
be the company act 2006, UK Listing Rules, the REIT tax
regime requirements and legislation relevant to the rental
of properties.
Our procedures in response to the above included:
review of minutes of meeting of those charged with
governance for any instances of non-compliance with
laws and regulations;
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review of correspondence with regulatory and tax
authorities for any instances of non-compliance with laws
and regulations;
review of financial statement disclosures and agreeing to
supporting documentation;
involvement of REIT tax experts in the audit; and
review of legal expenditure accounts to understand the
nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements
to material misstatement, including fraud. Our risk
assessment procedures included:
enquiry with management and those charged with
governance regarding any known or suspected
instances of fraud;
obtaining an understanding of the Group’s policies and
procedures relating to:
– Detecting and responding to the risks of fraud; and
– Internal controls established to mitigate risks
related to fraud.
review of minutes of meeting of those charged
with governance for any known or suspected
instances of fraud;
discussion amongst the engagement team as to how and
where fraud might occur in the financial statements;
involvement of forensics specialists within the audit team
to assess the susceptibility of the financial statements to
material fraud;
performing analytical procedures to identify any unusual
or unexpected relationships that may indicate risks of
material misstatement due to fraud; and
considering remuneration incentive schemes and
performance targets and the related financial statement
areas impacted by these.
Based on our risk assessment, we considered the areas
most susceptible to fraud to be management override of
controls, revenue recognition relating to the treatment
of staircasing of shared ownership properties, the
valuation of investment properties and the valuation of
index linked debt.
Our procedures in respect of the above included:
assessing significant estimates made by management
for bias, which included the valuation of the Group’s
investment property valuations as detailed under the key
audit matters, and the valuation of the index linked debt;
testing a sample of journal entries throughout the
year, which met a defined risk criteria, by agreeing to
supporting documentation;
assessing the index linked debt valuations with the
assistance of our valuation experts; and
assessing the accounting treatment for a sample
of staircasing transactions in accordance with the
requirements of the applicable accounting standards.
We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement
team members, who were deemed to have the appropriate
competence and capabilities, and remained alert to any
indications of fraud or non-compliance with laws and
regulations throughout the audit.
Our audit procedures were designed to respond to risks
of material misstatement in the financial statements,
recognising that the risk of not detecting a material
misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations
is from the events and transactions reflected in the financial
statements, the less likely we are to become aware of it.
A further description of our responsibilities is available
onthe Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s
members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Parent Company’s
members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Parent Company
and the Parent Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Richard Levy
(Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom
21 January 2025
BDO LLP is a limited liability partnership registered in
England and Wales (with registered number OC305127).
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03
Financials
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Consolidated Statement of Comprehensive Income
For the year ended 30 September 2024
Note
| 2024 | 2023 | ||
| £’000 | £’000 | ||
Income | 6 | ||
Cost of sales | 6 | ( | ( |
Net income | |||
Fund management fee | 7 | ( | ( |
General and administrative expenses | 7 | ( | ( |
One-off operating income/(costs) | 7 | ( | |
Aborted fundraising and acquisition costs | 7 | ( | ( |
Administrative expenses | ( | ( | |
fi | |||
Profit/(loss) on disposal of investment properties | ( | ||
Change in fair value of investment properties | 11 | ( | ( |
Change in fair value of borrowings | 11 | ( | |
Debt one-off fees | 10 | ( | ( |
fi | ( | ( | |
Finance income | 10 | ||
Finance costs | 10 | ( | ( |
Loss for the year before taxation | ( | ( | |
Taxation | 12 | ||
Loss for the year after taxation | ( | ( | |
Other comprehensive income: | |||
Total comprehensive loss for the year attributable to the shareholders of the Company | ( | ( | |
Loss per share – basic and diluted – pence | 13 | ( | ( |
All of the activities of the Group are classified as continuing.
The notes on 87 to 119 form part of these financial statements.
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03 Financials
Consolidated Statement of Financial Position
Company number 10683026
As at 30 September 2024
| 2024 | 2023 | ||
| Note | £’000 | £’000 | |
| Non-current assets | |||
Investment properties | 14 | ||
Total non-current assets | |||
| Current assets | |||
Inventories – shared ownership properties | 16 | ||
Trade and other receivables | 17 | ||
Cash and cash equivalents | 18 | ||
Total current assets | |||
Asset held for sale | 15 | ||
Tot al assets | |||
| Current liabilities | |||
Trade and other payables | 19 | ||
Borrowings | 20 | ||
Lease liabilities | 28 | ||
Total current liabilities | |||
| Non-current Liabilities | |||
Borrowings | 20 | ||
Recycled capital grant fund | 22 | ||
Lease liabilities | 28 | ||
Total non-current liabilities | |||
Total liabilities | |||
Net assets | |||
| Equity | |||
Share capital | 23 | ||
Share premium | 24 | ||
Treasury shares reserve | 24 | ( | ( |
Retained earnings | 25 | ||
Total interests | |||
Total equity | |||
Net asset value per share – basic and diluted (pence) | 29 |
The financial statements were approved and authorised for issue by the Board of Directors on 21 January 2025 and signed
on its behalf by:
Rob Whiteman
Chairman
21 January 2025
The notes on 87 to
119 form part of these financial statements.
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Consolidated Statement of Cash Flows
For the year ended 30 September 2024
Note
| 2024 | 2023 | ||||
| £’000 | £’000 | ||||
| fl | |||||
Loss for the year | ( | ( | |||
| Adjustments for items that are not operating in nature: | |||||
Loss in fair value of investment properties | 11 | ||||
Movement in rent smoothing adjustments | 11 | ( | ( | ||
Change in fair value of borrowings | 11 | ( | |||
(Profit)/Loss on disposal of investment properties | ( | ||||
Shares issued in lieu of management fees | 31 | ||||
Finance income | 10 | ( | ( | ||
Finance costs | 10 | ||||
Debt one-off fees | 10 | ||||
Operating result before working capital changes | |||||
| Changes in working capital | |||||
Increase in trade and other receivables | ( | ( | |||
Decrease in inventories | |||||
Increase in trade and other payables | |||||
fl | |||||
| fl | |||||
Purchase of investment properties | 14 | ( | ( | ||
Grant received | 14 | ||||
Disposal of investment properties | |||||
Interest received | 10 | ||||
fl | ( | ||||
fl | fi | ||||
Purchase of own shares | ( | ( | |||
New borrowings raised | 20 | ||||
New borrowing costs | 20 | – | ( | ||
B ank loans repaid | 20 | ( | ( | ||
Finance costs | 21 | ( | ( | ||
Dividend paid | 27 | ( | ( | ||
fl | fi | ( | ( | ||
Net increase/(decrease) in cash and cash equivalents | ( | ||||
Cash and cash equivalents at the beginning of the period | 18 | ||||
Cash and cash equivalents at the end of the period | 18 |
The notes on 87 to 119 form part of these financial statements.
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Consolidated Statement of Changes in Equity
For the year ended 30 September 2024
| Treasury | |||||
| Share | Share | shares | Retained | Tot al | |
| capital | premium | reserve | earnings | equity | |
| £’000 | £’000 | £’000 | £’000 | £’000 | |
| ( | ||||
Loss for the year | ( | ( | |||
Other comprehensive income | |||||
Total comprehensive loss | ( | ( | |||
| Contributions by and distributions | |||||
Issue of management shares | ( | ||||
Share based payment charge | |||||
Purchase of own shares | ( | ( | |||
Dividends paid | ( | ( | |||
| ( | ||||
Loss for the year | ( | ( | |||
Other comprehensive income | |||||
Total comprehensive loss | ( | ( | |||
Contributions by and distributions to shareholders | |||||
Issue of management shares | ( | ||||
Share based payment charge | |||||
Purchase of own shares | ( | ( | |||
Dividends paid | ( | ( | |||
| ( |
The notes on 87 to 119 form part of these financial statements.
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For the year ended 30 September 2024
Notes to the Consolidated Financial Statements
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| 2024 | 2023 | |
| £’000 | £’000 | |
Fund management fee (note 31) | 1,411 | 1,885 |
Administration expenses (note 8 and note 9) | 1,344 | 1,456 |
Aborted fundraising and acquisition costs | 11 | 273 |
One-off (income)/expenses | (14) | 191 |
2,752 | 3,805 |
| 2024 | 2023 | |
| £’000 | £’000 | |
Fees | 134 | 155 |
Taxes | 15 | 17 |
149 | 172 | |
Fees paid to directors of subsidiaries | 25 | 53 |
174 | 225 |
Net asset value | Annual fee | |
Up to £100,000,000 | £40,000 | |
£100,000,000 to £2 | 00,000,000 | £50,000 |
£200,000,000 to £35 | 0,000,000 | £60,000 |
Thereafter | £70,000 |
Net asset value | Annual fee | |
Up to £100,000,000 | £30,000 | |
£100,000,000 to £2 | 00,000,000 | £35,000 |
Thereafter | £40,000 |
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| 2024 | 2023 | |
| £’000 | £’000 | |
| Audit fees | ||
Parent and consolidated financial statements | 145 | 125 |
Audit of subsidiary undertakings | 198 | 201 |
Additional fees payable to the auditors in relation to prior year audit | – | 62 |
Total audit fees | 343 | 388 |
| Audit related services | ||
Review of interim report | 61 | 57 |
| Non-audit fees | ||
Corporate Finance Fees | – | – |
Tot al fees | 404 | 445 |
| 2024 | 2023 | |
| £’000 | £’000 | |
| Finance income | ||
Interest income | 284 | 220 |
284 | 220 | |
| Finance expense | ||
Interest payable on borrowings | (5,694) | (5,365) |
Amortisation of loan costs | (218) | (288) |
Debt programme costs | (92) | (89) |
Lease interest | (1,020) | (978) |
(7,024) | (6,720) | |
| Net finance costs | (6,740) | (6,500) |
Debt one-off fees | (167) | (155) |
| Debt one-off costs | (167) | (155) |
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| 2024 | 2023 | |
| £’000 | £’000 | |
Loss on fair value adjustment of investment properties | (11,469) | (37,752) |
| Adjustments for lease incentive assets and rent straight line assets recognised | ||
Start of the year | 3,262 | 2,070 |
End of the year | (4,589) | (3,262) |
(12,796) | (38,944) | |
(Loss)/gain on fair value adjustment of borrowings (note 20) | (6,814) | 7,747 |
(19,610) | (31,197) |
| 2024 | 2023 | |
| £’000 | £’000 | |
Current tax | – | – |
Deferred tax | – | – |
– | – |
| 2024 | 2023 | |
| £’000 | £’000 | |
Loss before tax | (10,048) | (23,154) |
Tax at the UK corporation tax rate of 25% (2023: 25%) | (2,512) | (5,789) |
| Tax effect of: | ||
UK tax not payable due to REIT exemption | (1,134) | (3,329) |
Investment property revaluation not deductible | 3,199 | 9,736 |
Expenses that are not deductible/income not in taxable profit | 335 | (691) |
Unutilised residual current year tax losses | 112 | 72 |
Tax charge for the year | – | – |
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| 2024 | 2023 | |
| £’000 | £’000 | |
Loss per IFRS income statement | (10,048) | (23,154) |
Changes in value of investment properties | 12,796 | 38,944 |
(Profit)/Losses on disposal of investment properties | (258) | 11 |
Profits on sales of trading properties | (41) | (417) |
Changes in fair value of financial instruments | 6,814 | (7,747) |
EPRA earnings | 9,263 | 7,637 |
(Additions)/Deduction of non-recurring costs | (14) | 191 |
Deduction of debt set up costs | 167 | 155 |
Deduction of aborted fundraising and acquisition costs | 11 | 273 |
Profits on sales of trading properties | 41 | 417 |
Adjusted EPRA earnings | 9,468 | 8,673 |
Weighted average number of ordinary shares (thousands) | 185,163 | 185,163 |
| IFRS earnings per share (pence) | ||
– 2024 (pence) | (5.4) | |
– 2023 (pence) | (12.5) | |
| EPRA earnings per share (pence) | ||
– 2024 (pence) | 5.0 | |
– 2023 (pence) | 4.1 | |
| Adjusted EPRA earnings per share (pence) | ||
– 2024 (pence) | 5.1 | |
– 2023 (pence) | 4.7 |
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| 2024 | 2023 | ||
| £’000 | £’000 | ||
At beginning of period | 376,727 | 406,127 | |
Property acquisitions at cost | 61 | 11,16 | 3 |
Grant receivable | – | (1,148) | |
Capital expenditure | 906 | 1,497 | |
Property disposals | (8,862) | (3,407) | |
Movement in head lease gross up | (2,842) | 247 | |
Transfer to property inventory | (90) | – | |
Change in fair value during the period | (11,469) | (37,752) | |
354,431 | 376,727 | ||
Valuation provided by Savills | 325,684 | 345,138 | |
Adjustment to fair value – finance lease asset | 28,747 | 31,589 | |
Total investment properties | 354,431 | 376,727 | |
Transfer to property held for sale (note 15) | (15,085) | – | |
At end of period | 339,346 | 376,727 |
| 2024 | 2023 | |
| £’000 | £’000 | |
Leasehold properties | 271,636 | 282,073 |
Freehold properties* | 38,963 | 63,065 |
Head lease gross up | 28,747 | 31,589 |
Total investment properties | 339,346 | 376,727 |
| 2024 | 2023 | |
| £’000 | £’000 | |
Total investment properties | 339,346 | 376,727 |
Adjustment to fair value – finance lease asset | (28,747) | (31,589) |
Committed properties with purchase contracts exchanged | – | – |
| Total investment properties including committed properties | ||
with purchased contracts exchanged | 310,599 | 345,138 |
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| Valuation at | |||||
| 30 September | +Updated | – Updated | |||
| Sensitivity | 2024 | Valuation | Valuation | ||
Key inputs | Key inputs | modelled | £ mn | £mn | £mn |
Retirement | Regional Discount Rate | +/- 25bps | 198,390 | 191,582 | 205,675 |
Consumer Price Index (CPI) 1 | +/- 25bps | 198,390 | 190,000 | 207,336 | |
Retail Price Index (RPI) 2 | +/- 25bps | 198,390 | 206,831 | 190,339 | |
Shared ownership | Rental Discount Rate | +/- 25bps | 112,206 | 108,317 | 116,381 |
Retail Price Index (RPI) | +/- 25bps | 112,206 | 114,535 | 109,992 | |
House Price Index (HPI) | +/- 25bps | 112,206 | 113,434 | 111,035 | |
Staircasing Sensitivity Analysis | +/- 100bps | 112,206 | 117, 86 4 | 104,322 |
| 2024 | 2023 | |
| £’000 | £’000 | |
Shared ownership properties | – | 431 |
– | 431 | |
| The costs of inventories recognised in cost of sales as an expense in the year is £521,000 (2023: £5,207,000). The amount |
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| 2024 | 2023 | |
| £’000 | £’000 | |
Trade debtors | 954 | 469 |
Prepayments | 2,755 | 2,836 |
Other debtors | 92 | 165 |
3,801 | 3,470 |
| 2024 | 2023 | |
| £’000 | £’000 | |
Cash at bank | 5,411 | 3,221 |
Cash held as investment deposit | 2 | 2 |
5,413 | 3,223 | |
Restricted cash | 5,678 | 5,582 |
11,091 | 8,805 |
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| 2024 | 2023 | |
| £’000 | £’000 | |
Trade payables | 4,562 | 2,328 |
Accruals | 2,559 | 2,615 |
VAT payable | 4 | 3 |
Deferred income | 19 | 117 |
Other creditors | 1,836 | 1,770 |
8,980 | 6,833 |
| 2024 | 2023 | |
| £’000 | £’000 | |
Loans | 181,674 | 183,899 |
Unamortised borrowing costs | (1,934) | (2,152) |
179,740 | 181,747 | |
Current liability | 17,892 | 23,327 |
Non-current liability | 161,848 | 158,420 |
179,740 | 181,747 | |
| The loans are repayable as follows: | ||
Within one year | 17,892 | 23,327 |
Between one and two years | 2,915 | 3,043 |
Between three and five years | 8,658 | 8,699 |
Between six and ten years | 14,212 | 14,261 |
Between eleven and twenty years* | 104,383 | 105,381 |
Over twenty years | 31,680 | 27, 036 |
179,740 | 181,747 |
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| Fair value | Held at | ||||
| through profit | amortised | ||||
| or loss | cost 2024 | 2023 | |||
| £’000 | £’000 | £’000 | £’000 | ||
At 30 September 2023 | 69,280 | 112,467 | 181,747 | 189,705 | |
Drawdown of facility | – | – | – | 16,800 | |
New borrowing costs | – | – | – | (18) | |
Amortisation of loan costs | – | 218 | 218 | 288 | |
Fair value movement | 6,814 | – | 6,814 | (7,747) | |
Repayment of borrowings | (2,739) | (6,300) | (9,039) | (17,281) | |
At 30 September 2024 | 73,355 | 106 | ,385 | 179,740 | 181,747 |
| Outstanding debt | |||||||
| Drawn on | net of unamortised | ||||||
| original facility | issue costs | Annual | |||||
| 2024 | 2023 | 2024 | 2023 | Maturity | interest rate | ||
Lender Held at amortised cost | £’000 | £’000 | £’000 | £’000 | date | % | |
Scottish Widows Ltd | 97,000 | 97,000 | 91,423 | 91,972 | Jun-43 | 3.5 Fixed (average) | |
Santander | 15,000 | 20,650 | 14,962 | 20,495 | Mar-25 | 2.25% over SONIA | |
112,000 | 117,65 | 0 | 106,385 | 112,467 | |||
| Held at fair value | |||||||
Universities Superannuation Scheme | 77,500 | 77, | 50 0 | 73,355 | 69,280 | May-65 | 1.1% (average)* |
77,500 | 77,50 | 0 | 73,355 | 69,280 | |||
Tot al borrowings | 189,500 | 195,150 | 179,740 | 181,747 | |||
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03 Financials - Notes to the Consolidated Financial Statements
| 2024 | 2023 | ||
| £’000 | £’000 | ||
| Financial assets | |||
| Loans and receivables at amortised cost | |||
Trade and other receivables | 1,04 | 6 | 634 |
Cash and cash equivalents | 11,091 | 8,805 | |
12,137 | 9,439 | ||
| Financial liabilities | |||
| At amortised cost | |||
Borrowings | 106,385 | 112,467 | |
Trade and other payables | 8,957 | 6,713 | |
115,342 | 119,180 | ||
| At fair value through profit or loss | |||
Borrowings | 73,355 | 69,280 | |
73,355 | 69,280 | ||
188,697 | 188,460 |
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03 Financials - Notes to the Consolidated Financial Statements
109
03 Financials - Notes to the Consolidated Financial Statements
| Nil rate | Fixed rate | |||||||
| assets | Floating | Fixed | inflation- | Floating | ||||
| and | rate | rate | linked | rate | ||||
| liabilities | assets | liability | liability | liability | Tot al | |||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |||
| 2024 | ||||||||
Trade and other receivables | 1,0 | 46 | – | – | – | – | 1,0 | 46 |
Cash and cash equivalents | – | 11,091 | – | – | – | 11,091 | ||
Trade and other payables | (8,958) | – | – | – | – | (8,958) | ||
Bank borrowings | – | – | (91,443) | (73,335) | (14,962) | (179,740) | ||
Obligations under finance leases | – | – | (28,747) | – | – | (28,747) | ||
(7,912) | 11,091 | (120,190) | (73,335) | (14,962) | (205,308) | |||
| 2023 | ||||||||
Trade and other receivables | 634 | – | – | – | – | 634 | ||
Cash and cash equivalents | – | 8,805 | – | – | – | 8,805 | ||
Trade and other payables | (6,713) | – | – | – | – | (6,713) | ||
Bank borrowings | – | – | (91,972) | (69,280) | (20,495) | (181,747) | ||
Obligations under finance leases | – | – | (31,589) | – | – | (31,589) | ||
(6,079) | 8,805 | (123,561) | (69,280) | (20,495) | (210,610) |
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nual Report & Accounts 2024
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03 Financials - Notes to the Consolidated Financial Statements
| 2024 | 2023 | ||
| £’000 | £’000 | ||
Trade and other receivables | 1,04 | 6 | 634 |
Cash and cash equivalents | 11,091 | 8,805 | |
12,137 | 9,439 |
| Less than | Two to five | More than | |||
| one year | years | five years | Tot al | ||
| £’000 | £’000 | £’000 | £’000 | ||
| 2024 | |||||
Borrowings | 17,892 | 11,573 | 150,275 | 179,740 | |
Interest on borrowings | 5,227 | 15,601 | 49,980 | 70,808 | |
Obligations under finance leases | 921 | 3,649 | 121,023 | 125,593 | |
Payables and accruals | 8,957 | – | – | 8,957 | |
32,997 | 30,823 | 321,278 | 385,098 | ||
| 2023 | |||||
Borrowings | 23,327 | 11,742 | 146,678 | 181,747 | |
Interest on borrowings | 5,227 | 15,601 | 49,980 | 70,808 | |
Obligations under finance leases | 1,005 | 4,000 | 130,946 | 135,951 | |
Payables and accruals | 6,713 | – | – | 6,713 | |
36,272 | 31,343 | 4 | 327,60 | 395,219 | |
111
03 Financials - Notes to the Consolidated Financial Statements
| 2024 | 2023 | ||
| £’000 | £’000 | ||
Obligations under finance leases | 28,747 | 31,589 | |
Borrowings (book value) | 179,740 | 181,747 | |
Cash and cash equivalents | (11,091) | (8,805) | |
Net debt | 197, | 396 | 204,531 |
Equity attributable equity holders | 151,001 | 168,679 | |
Net debt to equity ratio | 1.31 | 1.21 | |
Borrowings excluding finance lease liability | 179,740 | 181,747 | |
Available cash* | (9,250) | (6,998) | |
Net debt excluding lease liability and cash | 170,490 | 174,749 | |
Total assets less finance lease gross up and cash | 340,574 | 349,040 | |
Loan to Value (LTV) leverage ratio | 0.50 | 0.50 |
| Borrowings | |||||
| due in more | Lease | ||||
| than one year | liabilities | Interest | |||
| (note 20) | (note 28) | payable | Tot al | ||
| £’000 | £’000 | £’000 | £’000 | £’000 | |
At 1 October 2023 | 23,327 | 158,420 | 31,589 | 756 | 214,092 |
| Cash flows | |||||
Borrowings repaid | – | (9,039) | – | – | (9,039) |
Interest paid | – | – | – | (7,042) | (7,042) |
| Non-cash flows | |||||
Reclassification of borrowings | (5,435) | 5,435 | – | – | – |
Amortisation of debt set up fees | – | 218 | – | – | 218 |
Change in fair value of borrowings | – | 6,814 | – | – | 6,814 |
| Recognition of headlease | |||||
liabilities acquired | – | – | (2,842) | – | (2,842) |
Interest and commitment charge | – | – | – | 6,973 | 6,973 |
At 30 September 2024 | 17,892 | 161,848 | 28,747 | 687 | 209,174 |
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nual Report & Accounts 2024
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03 Financials - Notes to the Consolidated Financial Statements
| Borrowings | Borrowings | ||||
| due within | due in more | Lease | |||
| one year | than one year | liabilities | Interest | ||
| (note 20) | (note 20) | (note 28) | payable | Tot al | |
| £’000 | £’000 | £’000 | £’000 | £’000 | |
At 1 October 2022 | 14,285 | 175,420 | 31,342 | 564 | 221,611 |
| Cash flows | |||||
Borrowings advanced | – | 16,800 | – | – | 16,800 |
Borrowings repaid | (17,281) | – | – | – | (17, 281) |
Debt arrangement fees paid | – | (18) | – | – | (18) |
Interest and commitment fees paid | – | – | – | (6,394) | (6,394) |
| Non-cash flows | |||||
Reclassification of borrowings | 26,323 | (26,323) | – | – | – |
Amortisation of debt set up fees | – | 288 | – | – | 288 |
Change in fair value of borrowings | – | ( 7,747) | – | – | ( 7,747) |
| Recognition of headlease | |||||
liabilities acquired | – | – | 247 | – | 247 |
Interest and commitment charge | 6,586 | 6,586 | |||
23,327 | 158,420 | 31,589 | 756 | 214,092 |
| 2024 | 2023 | |
| £’000 | £’000 | |
Grant brought forward | 585 | 205 |
Transfer on staircasing | 270 | 380 |
Grant carried forward | 855 | 585 |
| Number of | ||
| Ordinary | ||
1p shares | £’000 | |
| At 30 September 2023 and 2024 | 194,149,261 | 1,941 |
113
03 Financials - Notes to the Consolidated Financial Statements
| £’000 | |
| Share premium | |
At 30 September 2023 and 30 September 2024 | 14,605 |
| £’000 | |
| Treasury share reserve | |
| At 30 September 2023 | (8,295) |
| Purchase of treasury shares | (269) |
| Transferred as part of Fund Management fee | 265 |
| At 30 September 2024 | (8,299) |
| £’000 | |
| At 30 September 2023 | 160,428 |
| Loss for the year | (10,048) |
| Share based payment charge | 342 |
| Issue of management shares | (342) |
| Dividends | (7,626) |
| At 30 September 2024 | 142,754 |
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114
03 Financials - Notes to the Consolidated Financial Statements
| Principal | ||||
| Percentage of | Country of | place of | ||
| Name of entity | ownership | incorporation | business | Principal activity |
RHP Holdings Limited | 100% | UK | UK | Holding company |
ReSI Portfolio Holdings Limited | 100% | UK | UK | Holding company |
The Retirement Housing Partnership | 100% | UK | UK | Property investment |
ReSI Housing Limited | 100% | UK | UK | Registered Provider |
| of Social Housing | ||||
Wesley House (Freehold) Limited | 100% | UK | UK | Property investment |
Eaton Green (Freehold) Limited | 100% | UK | UK | Property investment |
Name of entity | Registered address |
ReSI Portfolio Holdings Limited | 5 New Street Square, London. EC4A 3TW |
RHP Holdings Limited | 5 New Street Square, London, England. EC4A 3TW |
The Retirement Housing Limited Partnership | First Floor 2 Tangier Central, Castle Street, Taunton, Somerset, TA1 4AS |
ReSI Housing Limited | 5 New Street Square, London. EC4A 3TW |
Wesley House (Freehold) Limited | 5 New Street Square, London. EC4A 3TW |
Eaton Green (Freehold) Limited | 5 New Street Square, London. EC4A 3TW |
| 2024 | 2023 | |
| £’000 | £’000 | |
| Amounts recognised as distributions to shareholders in the period: | ||
4th interim dividend for the year ended 30 September 2022 of 1.29p per share | – | 2,389 |
1st interim dividend for the year ended 30 September 2023 of 1.29p per share | – | 2,388 |
2nd interim dividend for the year ended 30 September 2023 of 1.29p per share | – | 2,388 |
3rd interim dividend for the year ended 30 September 2023 of 1.29p per share | – | 2,388 |
4th interim dividend for the year ended 30 September 2023 of 1.03p per share | 1,907 | – |
1st interim dividend for the year ended 30 September 2024 of 1.03p per share | 1,906 | – |
2nd interim dividend for the year ended 30 September 2024 of 1.03p per share | 1,907 | – |
3rd interim dividend for the year ended 30 September 2024 of 1.03p per share | 1,906 | – |
7,626 | 9,553 | |
| Amounts not recognised as distributions to shareholders in the period: | ||
4th interim dividend for the year ended 30 September 2023 of | – | |
4th interim dividend for the year ended 30 September 2024 of | – | |
| Categorisation of dividends for UK tax purposes: | ||
| Amounts recognised as distributions to shareholders in the period: | ||
Property Income Distribution (PID) | 7,626 | 9,553 |
Non-PID | – | – |
7,626 | 9,553 |
115
03 Financials - Notes to the Consolidated Financial Statements
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nual Report & Accounts 2024
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03 Financials - Notes to the Consolidated Financial Statements
| Ten to | More than | |||||
| Less than | Two to | Six to | twenty | twenty | ||
| one year | five years | ten years | years | years | Tot al | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Minimum lease payments | 921 | 3,649 | 4,550 | 9,089 | 107,385 | 125,594 |
Interest | – | (266) | (394) | (1,375) | (94,812) | (96,847) |
| Present value at 30 September 2024 | 921 | 3,383 | 4,156 | 7,714 | 12,573 | 28,747 |
| Ten to | More than | |||||
| Less than | Two to | Six to | twenty | twenty | ||
| one year | five years | ten years | years | years | Tot al | |
| As at 30 September 2023 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
Minimum lease payments | 1,005 | 4,000 | 5,000 | 10,001 | 115, 945 | 135,951 |
Interest | – | (292) | (433) | (1,512) | (102,125) | (104,362) |
| Present value at 30 September 2023 | 1,005 | 3,708 | 4,567 | 8,489 | 13,820 | 31,589 |
117
03 Financials - Notes to the Consolidated Financial Statements
| 2024 | 2023 | |
| £’000 | £’000 | |
Receivable within 1 year | 8,346 | 8,689 |
Receivable between 1-2 years | 4,894 | 6,353 |
Receivable between 2-3 years | 4,758 | 5,359 |
Receivable between 3-4 years | 4,758 | 5,160 |
Receivable between 4-5 years | 4,758 | 4,441 |
Receivable between 5-10 years | 23,713 | 22,166 |
Receivable between 10-20 years | 47,388 | 44,283 |
Receivable after 20 years | 462,127 | 435,467 |
560,742 | 531,918 |
| 2024 | 2023 | |
| £’000 | £’000 | |
Receivable within 1 year | 29,849 | 29,138 |
Receivable between 1-2 years | 24,627 | 25,118 |
Receivable between 2-3 years | 21,143 | 20,940 |
Receivable between 3-4 years | 18,422 | 18 ,154 |
Receivable between 4-5 years | 16,207 | 15,328 |
Receivable between 5-10 years | 59,513 | 56,214 |
Receivable between 10-20 years | 74,106 | 69,698 |
Receivable after 20 years | 479,113 | 451,628 |
722,980 | 686,218 |
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nual Report & Accounts 2024
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03 Financials - Notes to the Consolidated Financial Statements
| 2024 | 2023 | |
| £’000 | £’000 | |
Net assets | 151,001 | 168,679 |
151,001 | 168,679 | |
Ordinary shares in issue at period end (excluding shares held in treasury) | 185,163,281 | 185,163,281 |
Basic NAV per share (pence) | 81.6 | 91.1 |
| 2024 | 2023 | |
| £’000 | £’000 | |
IFRS NAV per the financial statements | 151,001 | 168,679 |
Revaluation of trading properties | – | 66 |
Fair value of financial instruments | (12,845) | (17,292) |
Real estate transfer tax | – | – |
EPRA NTA | 138,156 | 151,453 |
Fully diluted number of shares | 185,163 | 185,163 |
EPRA NAV per share (pence) | 74.6 | 81.8 |
119
03 Financials - Notes to the Consolidated Financial Statements
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nual Report & Accounts 2024
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120
03 Financials
Company Statement of Financial Position
Company number 10683026
As at 30 September 2024
Note
2024
£’000
2023
£’000
Non-current assets
Investment in subsidiary undertakings 5 155,694 169,913
Total non-current assets 155,694 169,913
Current assets
Trade and other receivables 6 9 86
Cash and cash equivalents 679 80
Total current assets 688 166
Tot al assets 156,382 170,079
Current liabilities
Trade and other payables 7 5,239 1,400
Total current liabilities 5,239 1,400
Net assets 151,143 168,679
Equity
Share capital 8 1,941 1,941
Share premium 14,605 14,605
Own shares reserve (8,299) (8,295)
Retained earnings 142,896 160,428
Total interests 151,143 168,679
Total equity 151,143 168,679
The notes on 122 to 124 form part of these financial statements.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not
presented its own profit and loss account in these financial statements. The loss attributable to the Parent Company for
the year ended 30September 2024amounted to £9.9mn (2023: £11.2mn).
These financial statements were approved and authorised for issue by the Board of Directors on 21 January 2025 and
signed on its behalf by:
Rob Whiteman
Chairman
21 January 2025
121
03 Financials
Company Statement of Changes in Equity
For the year to 30 September 2024
Share
capital
£’000
Share
premium
£’000
Own
shares
reserve
£’000
Retained
earnings
£’000
Tot al
equity
£’000
1,941 14,605 (8,293) 181,155 189,408
Loss for the year – – – (11,174) (11,174)
Other comprehensive income – – – – –
Total comprehensive loss – – – (11,174) (11,174)
Contributions by and distributions to shareholders
Issue of management shares – – 482 (482) –
Share based payment charge 482 482
Purchase of own shares – – (484) – (484)
Dividend paid – – – (9,553) (9,553)
1,941 14,605 (8,295) 160,428 168,679
Loss for the year – – – (9,906) (9,906)
Other comprehensive income – – – – –
Total comprehensive loss – – – (9,906) (9,906)
Contributions by and distributions to shareholders
Issue of management shares – – 342 (342) –
Share based payment charge – – – 342 342
Purchase of own shares – – (346) – (346)
Dividends paid – – – ( 7,626) (7,626)
1,941 14,605 (8,299) 142,896 151,143
The notes on 122 to 12
4 form part of these financial statements.
An
nual Report & Accounts 2024
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122
03 Financials
Notes to Company Financial Statements
For the year to 30 September 2024
1. Basis of preparation
The financial statements have been prepared in accordance with Financial Reporting Standard 100 Application of Financial
Reporting Requirements (FRS 100) and Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101).
In preparing these financial statements the Company has taken advantage of all disclosure exemptions conferred by
FRS101. Therefore, these financial statements do not include:
certain comparative information as otherwise required by adopted IFRS;
certain disclosures regarding the Company’s capital;
a statement of cash flows;
the effect of future accounting standards not yet adopted;
the disclosure of the remuneration of key management personnel; and
disclosure of related party transactions with other wholly owned members of Residential Secure Income plc.
In addition, and in accordance with FRS 101, further disclosure exemptions have been adopted because equivalent
disclosures are included in the Company’s consolidated financial statements. These financial statements do not include
certain disclosures in respect of:
Financial instruments;
Fair value measurement other than certain disclosures required as a result of recording financial instruments at fair value.
2. Significant accounting judgements and estimates
In preparing the financial statements of the Company, the Directors have made the following judgements:
Determine whether there are any indicators of impairment of the investments in subsidiaries. Factors taken into
consideration in reaching such a decision include the financial position and expected future performance of the
subsidiary entities.
3. Summary of material accounting policies information
The principal accounting policies applied in the preparation of these financial statements are in line with group with the
company specific policies set out below:
Investment in subsidiaries
The investments in subsidiary companies are included in the Company’s statement of financial position at cost less
provision for impairment.
4. Fees paid to the Company’s Auditor
The remuneration of the auditor in respect of the Company’s consolidated and individual financial statements for the year
was £139,000 (2023: £180,000). Fees payable for audit and non-audit services provided to the company and the rest of the
Group are disclosed in the note 9 to the Group financial statements.
123
03 Financials - Notes to Company Financial Statements
5. Investments
2024
£’000
2023
£’000
At beginning of year 169,913 189,018
Impairment loss (14,219) (19,105)
At end of year 155,694 169,913
Investments represent investment in subsidiary undertakings are subject to review for impairment indicators.
The impairment of the Company’s investments in subsidiary undertakings has been determined by the comparing
the Company’s cost of investment in each subsidiary with the fair value of each subsidiaries’ assets and liabilities.
Theinvestments are categorised as Level 3 in the fair value hierarchy.
The Company had the following subsidiary undertakings at 30September 2024:
Name of entity
Percentage
of ownership
Country of
incorporation
Principal
place
of business Principal activity
ReSI Portfolio Holdings Limited 100% UK UK Holding company
RHP Holdings Limited 100% UK UK Holding company
The Retirement Housing Limited Partnership 100% UK UK Property investment
ReSI Housing Limited 100% UK UK Registered Provider of
Social Housing
Wesley House (Freehold) Limited 100% UK UK Property investment
Eaton Green (Freehold) Limited 100% UK UK Property investment
Name of entity Registered address
ReSI Portfolio Holdings Limited 5 New Street Square, London, EC4A 3TW
RHP Holdings Limited 5 New Street Square, London, EC4A 3TW
The Retirement Housing Limited Partnership First Floor 2 Tangier Central, Castle Street, Taunton, Somerset, TA1 4AS
ReSI Housing Limited 5 New Street Square, London, EC4A 3TW
Wesley House (Freehold) Limited 5 New Street Square, London, EC4A 3TW
Eaton Green (Freehold) Limited 5 New Street Square, London, EC4A 3TW
All group entities are UK tax resident.
6. Trade and other receivables
2024
£’000
2023
£’000
Prepayments 9 45
Other debtors – 41
9 86
All amounts fall due for repayment within one year.
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nual Report & Accounts 2024
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03 Financials - Notes to Company Financial Statements
7. Trade and other payables
2024
£’000
2023
£’000
Amounts owed to group undertakings 3,141 215
Trade payables 1,452 443
Accruals 646 742
5,239 1,400
Amounts due to group undertakings are unsecured, interest free and repayable on demand.
8. Share capital
Details of the share capital of the Company are disclosed in note 23 to the Group financial statements.
9. Related party transactions
Details of related party transactions are disclosed in note 31 to the Group financial statements.
The Group is a member of the European Public Real Estate Association (EPRA). EPRA has developed and defined
performance measures to give transparency, comparability and relevance of financial reporting across entities which may
use different reporting standards.
The Group presents adjusted earnings per share (EPS), dividend per share, total accounting return, total cost ratio,
LTV ratio and EPRA Best Practice Recommendations, calculated in accordance with EPRA guidelines, as Alternative
Performance Measures (APMs) to assist stakeholders in assessing performance alongside the Group’s statutory
results reported under IFRS. APMs are among the key performance indicators used by the Board to assess the
Group’s performance.
EPRA Best Practice Recommendations have been used to facilitate comparison with the Group’s peers through consistent
reporting of key real estate specific performance measures. Certain other APMs may not be directly comparable with
other companies adjusted measures and are not intended to be a substitute for, or superior to, any IFRS measures
of performance.
1. EPRA Earnings: Recurring earnings from core operational activities
2024
£’000
2023
£’000
Loss per IFRS income statement (10,048) (23,154)
Changes in value of investment properties 12,796 38,944
(Profit)/Losses on disposal of investment properties (258) 11
Profits on sales of trading properties (41) (417)
Changes in fair value of financial instruments and associated close-out costs 6,814 (7,747)
EPRA Earnings 9,263 7,637
Basic number of shares 185,163 185,163
EPRA Earnings per Share (EPS) (Pence) 5.00 4.12
Adjusted EPRA Earnings per share
2024
£’000
2023
£’000
EPRA Earnings 9,263 7,637
Company specific adjustments:
Exclude debt one-off fees 167 155
Exclude one-off administration costs (14) 191
Exclude one-off aborted acquisition costs 11 10
Exclude one-off aborted fundraise costs – 263
Include shared ownership first tranche sales 41 417
fi 9,468 8,673
fi 5.1 4.7
125
03 Financials
Supplementary information
An
nual Report & Accounts 2024
2. EPRA Net Tangible Assets (NTA)
2024
£’000
2023
£’000
IFRS NAV per the financial statements 151,001 168,679
Revaluation of trading properties – 66
Fair value of financial instruments (12,845) (17,292)
Real estate transfer tax – –
EPRA NTA 138,156 151,453
Fully diluted number of shares 185,163 185,163
EPRA NTA per share (pence) 74.6 81.8
The Group has debt which it elected to carry at fair value through profit and loss. In accordance with the EPRA Best
Practice Recommendations, EPRA NTA should reflect the amortised cost of the debt rather than its fair value. In the current
period, an adjustment has been made for £12.8mn which represents the difference between fair value and what amortised
cost would have been had the Group carried the debt at amortised cost.
The fair value of financial instruments removes the effect of mark-to-market adjustments, arising from the movement in gilt
yields and credit spreads, to include the value of debt at amortised cost which will be crystallised through holding debt in
normal circumstances.
3. EPRA Net Reinstatement Value (NRV)
2024
£’000
2023
£’000
IFRS NAV per the financial statements 151,001 168,679
Revaluation of trading properties – 66
Fair value of financial instruments (12,845) (17,292)
Real estate transfer tax – –
EPRA NRV 138,156 151,453
Fully diluted number of shares 185,163 185,163
EPRA NRV per share (pence) 74.6 81.8
4. EPRA Net Disposable Value (NDV)
2024
£’000
2023
£’000
IFRS NAV per the financial statements 151,001 168,679
Revaluation of trading properties – 66
Fair value of financial instruments 21,242 26,558
Real estate transfer tax – –
EPRA NDV 172,243 195,303
Fully diluted number of shares 185,163 185,163
EPRA NDV per share (pence) 93.0 105.5
Annual Report & Accounts 2024
126
03 Financials - Supplementary information
5. EPRA Net Initial Yield (NIY) AND EPRA “Topped Up” NIY
2024
£’000
2023
£’000
Investment property – wholly owned 310,599 345,138
Trading property (including share of JVs) – 431
Assets held for sale 15,085 –
Completed property portfolio 325,684 345,569
Allowance for estimated purchasers’ costs estimated as 6% of property portfolio 19,541 20,734
Gross up completed property portfolio valuation 345,225 366,303
Annualised cash passing rental income 28,505 28,836
Property outgoings (10,942) (9,833)
Annualised net rents 17,563 19,003
Add: notional rent expiration of rent-free periods or other lease incentives – –
Topped-up net annualised rent 17,563 19,003
EPRA NIY 5.1% 5.2%
EPRA Topped up NIY 5.1% 5.2%
In accordance with the EPRA Best Practice Recommendations, EPRA NIY should be based on net passing cash rental.
Theprior period annualised rental income has been updated to reflect this.
6. EPRA Vacancy Rate
2024
£’000
2023
£’000
Estimated Rental Value of vacant space 784 1,060
Estimated rental value of the whole portfolio 29,883 30,114
EPRA Vacancy Rate 2.6% 3.5%
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7. EPRA Cost Ratios
2024
£’000
2023
£’000
Administrative/operating expense line per IFRS income statement 2,752 3,805
Net service charge costs/fees 6,250 5,522
Management fees less actual/estimated profit element 2,426 2,099
Other property operating expenses 2,266 2,212
Service charge costs recovered through rents but not separately invoiced (6,023) (5,138)
EPRA Costs (including direct vacancy costs) 7,671 8,500
Direct vacancy costs (248) (659)
EPRA Costs (excluding direct vacancy costs) 7,423 7, 841
Gross Rental Income less ground rents – per IFRS 28,845 26,952
Less: service fee and service charge costs components of Gross Rental Income (6,023) (5,138)
Gross Rental Income 22,822 21,814
EPRA Cost Ratio (including direct vacancy costs) 34% 39%
EPRA Cost Ratio (excluding direct vacancy costs) 33% 36%
In accordance with the EPRA Best Practice Recommendations, EPRA Costs should exclude service charges recovered
through rents but not separately invoiced and include all property operating expenses. The prior period costs have been
updated to reflect this.
Gross rental income includes service charges collected from tenants, included in rent collected but not separately
invoiced, of £6,067,000 during the period (2023: £5,518,000) service charge expenses, as reflected in the cost of sales,
also includes amounts paid in respect of properties which were vacant during the period of £6,000 (2023: £4,000).
Management fees less actual/estimated profit element is made up of property management fees paid during the period.
8. EPRA LTV
2024
£’000
2023
£’000
Borrowings 179,739 181,747
Net payables 6,035 3,516
Less cash (11,091) (8,805)
Net debt 174,683 176,458
Investment properties at fair value 310,599 345,138
Assets held for sale 15,085 –
Total property value 325,684 345,138
EPRA LTV 54% 51%
Annual Report & Accounts 2024
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03 Financials - Supplementary information
9. AIC Ongoing Ratio
2024
£’000
2023
£’000
Total expenses ratio
Management fee 1,411 1,885
Fund operating expenses 806 846
2,217 2,731
Average Net Asset Valuation* 159,840 185,034
Annualised total expenses ratio 1.4% 1.5%
* The average Net Asset Valuation is calculated as the average of the opening and closing NAV for the financial year.
10. Net rental yield
The net yield on the Group’s fair value of investment property represents the unlevered rental income return on the Group’s
capital deployed into acquisition of investment properties. In previous periods net yield was calculated on the Group’s
historic cost of investment property.
2024
£’mn
2023
£’mn
Annualised net rental income at balance sheet date 16.2 18.0
Fair value of investment properties 310.6 345.1
Net yield 5.2% 5.2%
11. Total Return on NTA
A performance measure which represents the total return for the year, excluding movements in valuation of debt
andderivatives, expressed as a percentage of opening NTA.
2024
£’mn
2023
£’mn
Operating profit before property disposals and change in fair value 16.2 14.7
Valuation movement of investment properties (12.5) (39.0)
Finance costs (6.9) (6.7)
Debt Indexation (2.4) (4.5)
Revaluation of trading properties (0.1) –
Property return (5.7) (35.5)
IFRS NAV at beginning of the prior year 168.7 201.4
Revaluation of trading properties 0.1 0.1
Fair value of financial instruments (17. 3) (5.0)
Real estate transfer tax –
Opening EPRA NTA 151.5 196.5
Movement in share capital – –
Decrease in the year (13.3) (45.0)
Closing EPRA NTA 138.2 151.5
Total return on opening NTA (%) (3.7%) (18 .1%)
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12. Total Return on IFRS NAV
A performance measure which represents the total IFRS return for the year as a percentage of opening IFRS NAV.
2024
£’mn
2023
£’mn
Net income (10.0) (23.2)
Share issuance costs – –
Total Return (10.0) (23.2)
Net Asset Value at the beginning of the year 168.7 201.4
Total IFRS return on opening NAV (%) (6.0%) (11.5%)
13. Loan to Value Ratio
The LTV leverage ratio has been presented to enable a comparison of the group’s borrowings as a proportion of
GrossAssets as at 30September 2024 to its medium target LTV leverage ratio of 0.50.
2024
£’000
2023
£’000
Borrowings excluding lease liability 179,739 181,747
Available cash (7,031) (6,998)
Net debt excluding lease liability and cash increase/(decrease) in year 172,708 174,749
Total assets less finance lease gross up and cash 329,485 349,040
Loan to Value (LTV) leverage ratio 0.52 0.50
Annual Report & Accounts 2024
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04
Other
Information
133
04 Other Information
Glossary
Administrator The Company’s administrator from time to time, the current such administrator being
MGR Weston Kay LLP.
AIC Association of Investment Companies.
Alternative Investment Fund
or “AIF”
An investment vehicle under the UK AIFM Regime. the Company is classified as an AIF.
Annual General Meeting or
“AGM”
A meeting held once a year which shareholders can attend and where they can vote
on resolutions to be put forward at the meeting and ask directors questions about the
company in which they are invested.
Articles or Articles of
Association
The articles of association of the Company.
Company Secretary The Company’s company secretary from time to time, the current such company
secretary being Computershare Company Secretarial Services Limited.
Discount The amount, expressed as a percentage, by which the share price is less than the net
asset value per share.
Depositary Certain AIFs must appoint depositaries under the requirements of the AIFM Regime.
A depositary’s duties include, inter alia, safekeeping of assets, oversight and cash
monitoring. The Company’s current depositary is Indos Financial Limited.
Dividend Income receivable from an investment in shares.
DSCR Debt service cover ratio
Ex-dividend date The date from which you are not entitled to receive a dividend which has been declared
and is due to be paid to shareholders.
Financial Conduct Authority
The independent body that regulates the financial services industry in the UK.
Fund Manager Gresham House Asset Management Limited, a company incorporated in England and
Wales with company number 09447087 in its capacity as Fund Manager to the Company.
Gearing A way to magnify income and capital returns, but which can also magnify losses. A bank
loan is a common method of gearing.
Housing Association A regulated independent society, body of trustees or company established for the
purpose of providing social housing.
HMRC HM Revenue & Customs
ICR Interest cover ratio
Investment company A company formed to invest in a diversified portfolio of assets.
Liquidity The extent to which investments can be sold at short notice.
Loan to Value (LTV) Ratio Ratio of total debt outstanding, excluding the finance lease liability, against the total
assets excluding the adjustment for finance lease gross up.
Net assets The net asset value of the Company as a whole on the relevant date calculated in
accordance with the Company’s normal accounting policies.
An
nual Report & Accounts 2024
Annual Report & Accounts 2024
134
04 Other Information - Glossary
Net asset value (NAV) per
Ordinary Share
The net asset value of the Company on the relevant date calculated in accordance with
the Company’s normal accounting policies divided by the total number of Ordinary
Shares then in issue.
Non PID dividend A dividend paid by the Company that is not a PID.
Ongoing charges A measure, expressed as a percentage of average net assets, of the regular, recurring
annual costs of running an investment company.
Ordinary Shares The Company’s Ordinary Shares of 1p each.
PID A distribution referred to in section 548(1) or 548(3) of the CTA 2010, being a dividend
or distribution paid by the Company in respect of profits or gains of the Property Rental
Business of the Group (other than gains arising to non-UK resident Group companies)
arising at a time when the Group is a REIT insofar as they derive from the Group’s
Property Rental Business.
Portfolio A collection of different investments held in order to deliver returns to shareholders
and to spread risk.
Premium The amount, expressed as a percentage, by which the share price is more than the net
asset value per share.
Property Rental Business A Property Rental Business fulfilling the conditions in section 529 of the CTA 2010.
REIT Real estate investment trust.
Rental growth The change in gross rental income in a period as a result of rent increases, tenant
renewals or a change in tenants. Applies to changes in gross rents on a comparable
basis and excludes the impact of acquisitions, disposals and changes resulting from
refurbishments.
Reversionary Surplus The increase in valuation if the portfolio is valued on a vacant possession basis
compared to the IFRS fair value.
RPI The Retail Price Index (RPI) is a measure of inflation, which in turn is the rate at which
prices for goods and services are rising.
Share buyback A purchase of a company’s own shares. Shares can either be bought back for
cancellation or held in treasury.
Share price The price of a share as determined by a relevant stock market.
Shared Owner The part owner of a shared ownership home that occupies such shared ownership
home in return for the payment of rent to the co-owner.
Total return A measure of performance that takes into account both income and capital returns.
Treasury shares A company’s own shares which are available to be sold by a company to raise funds.
UK AIFM Regime Together, The Alternative Investment Fund Managers Regulations 2013 (as amended
by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations
2019) and the Investment Funds Sourcebook forming part of the FCA Handbook, in
each case as amended from time to time.
Annual Report & Accounts 2024
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04 Other Information
Company Information
Directors
Robert Whiteman
(Non-executive Chairman)
Robert Gray
(Senior Independent Director)
Elaine Bailey
(Non-executive Director)
Registered Office
The Pavilions
Bridgwater Road
Bristol
BS13 8FD
Company Information
Company Registration Number: 10683026
Incorporated in the United Kingdom
Fund Manager
Gresham House Asset Management Limited
5 New Street Square
London
EC4A 3TW
Corporate Broker
Peel Hunt LLP
7th Floor, 100 Liverpool Street
London
EC2M 2AT
Legal and Tax Adviser
Cadwalader, Wickersham & Taft LLP
100 Bishopsgate
London
EC2N 4AG
Tax Adviser
Evelyn Partners Group Limited
45 Gresham Street
London
EC2V 7BG
Depositary
Indos Financial Limited
The Scalpel
18th Floor 52 Lime Street
London
EC3M 7AF
Administrator
MGR Weston Kay LLP
55 Loudoun Road
St John’s Wood
London
NW8 0DL
Company Secretary
Computershare Company Secretarial Services Limited
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
Public Relations Adviser
Kaso Legg Communications Ltd
40 Queen Street
London
EC4R 1DD
Valuers
Savills (UK) Limited
33 Margaret Street
London
W1G 0JD
Annual General Meeting 2025
In line with the requirements of the Companies Act 2006
(the Act), the Company will hold an Annual General Meeting
(AGM) of its shareholders to consider the resolutions laid
out in the Notice of Meeting be-low.
Shareholders are invited to attend the AGM on
Thursday 27February 2025 in person and any
shareholders wishing to do so are requested to register
attendance by emailing the Company Secretary at
ReSI-CoSec@Computershare.co.uk by no later than
Tuesday 24February 2025.
Should a shareholder have a question that they would
like to raise at the AGM, either of the Board or the
Fund Manager, the Board requests that questions are
submitted in advance of the AGM via email to ReSI-
CoSec@Computershare.co.uk by no later than Tuesday
24February 2025 or alternatively, a shareholder may
attend the AGM and ask the question at the meeting at the
appropriate time. If appropriate, the Company will publish
the responses on its website https://greshamhouse.com/
real-assets/uk-housing/residential-secure-income-
plc as soon as reasonably practicable after the
conclusion of the AGM.
Resolutions
Resolutions 1 to 9 will be proposed as ordinary resolutions.
An ordinary resolution requires a simple majority of votes
cast, whether in person or by proxy, to be cast in favour of
the resolution for it to be passed. Resolutions 10 to 13 will
be proposed as special resolutions. A special resolution
requires a majority of not less than 75% of the votes cast,
whether in person or by proxy, to be cast in favour of the
resolution for it to be passed.
AGM voting
Each of the resolutions to be considered at the AGM will be
voted on by way of a show of hands unless a poll is validly
demanded. A member present in person or by proxy shall
have one vote on a show of hands.
If you would like to vote on the resolutions but will not be
attending the AGM, you may appoint a proxy:
(1) by completing and returning the enclosed
proxy form; or
(2) electronically (details of how to appoint a proxy this
way are set out within the administrative notes on
of the Notice of Meeting). Alternatively, if you
hold your shares in CREST, you can appoint a proxy via
the CREST system.
(3) If you hold your shares through a nominee service,
please contact the nominee service provider re-
garding the process for appointing a proxy.
Voting results
The results of the voting will be published on the London
Stock Exchange through a regulato-ry information
service and will be published on our website https://
greshamhouse.com/real-assets/uk-housing/residential-
secure-income-plc as soon as reasonably practicable
after the conclusion of the AGM.
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting
of Residential Secure Income plc (the Company) will
be held at the offices of the Company Secretary,
Computershare, Floor 3, Moor House, 120 London Wall,
London, EC2Y 5ET on 27February 2025 at 1.00 p.m. for the
following purpos-es:
To consider and if thought fit pass the following resolutions
of which resolutions 1 to 9 will be proposed as ordinary
resolutions and resolutions 10 to 13 will be proposed as
special resolutions.
Annual Report & Accounts 2024
136
04 Other Information
Notice of Annual General Meeting
Ordinary Resolutions
1. To receive the Company’s Annual Report and
Accounts for the year ended 30September 2024, with
the reports of the Directors and Auditor thereon.
2. To approve the Directors’ Remuneration
Implementation Report included in the Annual Report
for the year ended 30September 2024.
3. To re-elect Robert Whiteman as a Director
of the Company.
4. To re-elect Robert Gray as a Director of the Company.
5. To re-elect Elaine Bailey as a Director of the Company.
6. To re-appoint BDO LLP as Auditor to the Company
to hold office until the conclusion of the next general
meeting at which the Company’s annual accounts are
laid before the meeting.
7. To authorise the Directors to fix the remuneration of
the Auditor until the conclusion of the next Annual
General Meeting of the Company.
8. To authorise the Directors to declare and pay all
dividends of the Company as interim dividends and for
the last dividend referable to a financial year not to be
categorised as a final dividend that would ordinarily be
subject to shareholder approval.
9. That the Directors be and are hereby generally
and unconditionally authorised in accordance with
section 551 of the Act (in substitution for all subsisting
authorities to the extent unused) to exer-cise all the
powers of the Company to allot Ordinary Shares of
one penny each in the capital of the Company up to
an aggregate nominal amount equal to £370,326.52
(equivalent to approximately 20% of the Ordinary
Shares in issue (excluding shares held in Treasury)
at the date of the notice of this meeting) during the
period commencing on the date of the passing of
this resolution and expiring (unless previously varied,
revoked or renewed by the Company in a general
meeting) at the conclusion of the Annual General
Meeting of the Company to be held in 2026 or, if earlier,
on the expiry of 15 months from the passing of this
resolution, save that the Company may, at any time
prior to the expiry of such authority, make an offer or
enter into an agreement which would or might require
the allotment of shares in pursuance of such an offer
or agreement as if such authority had not expired.
Special Resolutions
10. That, subject to the passing of resolution 9, in
substitution for all subsisting authorities to the extent
unused but without prejudice to the exercise of any
such power prior to the date hereof, the Directors be
and are generally and unconditionally authorised for
the purposes of sections 570 and 573 of the Act to
allot equity securities (within the meaning of section
560 of the Act) for cash either pursuant to the authority
conferred by resolution 9 or by way of sale of treasury
shares, as if section 561(1) of the Act did not apply
to any such allotment or sale, provided this authority
shall be limited to (a) the allotment or sale of equity
securities up to an aggregate nominal amount equal
to £185,163.28 (equivalent to approximately 10% of
the issued Ordinary Shares of the Company (excluding
shares held in Treasury) at the date of this notice);
and (b) the allotment or sale of equity securities at a
price not less than the prevailing Net Asset Value per
share, and shall (unless previously varied, revoked or
renewed by the Company in general meeting) expire at
the conclusion of the Annual General Meeting of the
Company to be held in 2026 or, if earlier, on the expiry
of 15 months from the passing of this resolution, save
that the Company may, at any time prior to the expiry of
such power, make an offer or enter into an agreement
which would or might require equity securities to be
allotted or sold from treasury after the expiry of such
power, and the Directors may allot or sell from treasury
equity securities in pursuance of such an offer or an
agreement as if such power had not expired.
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11. That, subject to the passing of resolution 9 and in
addition to the authority granted in resolution 10, in
substitution for all subsisting authorities to the extent
unused but without prejudice to the exercise of any
such power prior to the date hereof, the Directors be
and are generally and unconditionally authorised for
the purposes of sections 570 and 573 of the Act to
allot equity secu-rities (within the meaning of section
560 of the Act) for cash either pursuant to the authority
conferred by resolution 9 or by way of sale of treasury
shares, as if section 561(1) of the Act did not apply
to any such allotment or sale, provided this authority
shall be limited to (a) the allotment or sale of equity
securities up to an aggregate nominal amount equal
to £185,163.28 (equivalent to approximately 10% of
the issued Ordinary Shares of the Company (excluding
shares held in Treasury) at the date of this notice);
and (b) the allotment or sale of equity securities at a
price not less than the prevailing Net Asset Value per
share, and shall (unless previously varied, revoked or
renewed by the Company in general meeting) expire at
the conclusion of the Annual General Meeting of the
Company to be held in 2026 or, if earlier, on the expiry
of 15 months from the passing of this resolution, save
that the Company may, at any time prior to the expiry of
such power, make an offer or enter into an agreement
which would or might require equity securities to be
allotted or sold from treasury after the expiry of such
power, and the Directors may allot or sell from treasury
equity securities in pursuance of such an offer or an
agreement as if such power had not expired.
12. That the Company be and is hereby generally and
unconditionally authorised in accordance with section
701 of the Act to make market purchases (within the
meaning of section 693(4) of the Act) of its Ordinary
Shares of 1p each, provided that:
a.
the maximum number of Ordinary Shares hereby
authorised to be purchased shall be 27,755,975
(representing 14.99% of the Company’s issued
Ordinary Share capital (excluding shares held in
Treasury) at the date of the notice of this meeting);
b.
the minimum price (exclusive of any expenses)
which may be paid for an Ordinary Share is 1p;
c.
the maximum price (excluding expenses) which
may be paid for an Ordinary Share is not more
than the higher of:
i. 5% above the average of the middle market
quotations for the Ordinary Shares for the five
business days immediately before the day on
which it purchases that share; and
ii. the higher of the price of the last independent
trade and the highest current independent bid
for the Ordinary Shares.
d.
the authority hereby conferred shall expire at
the conclusion of the Annual General Meeting
of the Company in 2026 or, if earlier, on the
expiry of 15months from the passing of this
resolution, unless such authority is renewed prior
to such time; and
e.
the Company may make a contract to purchase
Ordinary Shares under the authority hereby
conferred prior to the expiry of such authority,
which will or may be executed wholly or partly
after the expiration of such authority and may
make a purchase of Ordinary Shares pursuant to
any such contract.
13. That a general meeting of the Company other than
an Annual General Meeting may be called on not less
than 14 clear days’ notice, provided that this authority
shall expire at the conclusion of the Company’s next
Annual General Meeting after the date of the passing
of this resolution.
Notes to each of the resolutions contained within this
Notice of Meeting can be found on pages 142 to 144.
Regffi
The Pavilions,
Bridgwater Road,
Bristol,
England,
BS13 8FD
By order of the Board
For and on behalf of
Computershare Company Secretarial
Services Limited
Company Secretary
21January 2025
Annual Report & Accounts 2024
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04 Other Information - Notice of Annual General Meeting
Notes to the Resolutions
Resolution 1
Ordinary resolution: Annual report and accounts
for the year ended September 2024
The Directors are required to present the annual report
and accounts, which incorporate the Strategic report,
Directors’ Report, the Auditor’s Report and the financial
statements for the year ended 30September 2024. These
are contained in the Company’s Annual Report and Audited
Financial Statements for the year ended 30September
2024 (the Annual Report).
Resolution 2
Ordinary resolution: Directors’ Remuneration
Implementation Report
In accordance with the requirements of the remuneration
reporting regime which came into force on 1October 2013,
the Board is required to give notice to shareholders of the
intention to propose an ordinary resolution to approve the
Directors’ Remuneration Implementation Report for the
financial year ended 30September 2024. The Directors’
Remuneration Implementation Report, which can be found
on 70 to 72 of the Annual Report, gives details of the
Directors’ remuneration and remuneration policy for the
year ended 30September 2024.
The Company’s auditor, BDO LLP, has audited those parts
of the Directors’ Remuneration Implementation Report
which are required to be audited, and their report may be
found in the Annual Report. The Directors’ Remuneration
Implementation Report has been approved by the Board
and signed on its behalf by the Company Secretary. The
vote on the Directors’ Remuneration Implementation
Report is advisory in nature and therefore not binding
on the Company.
Resolutions 3-5
Ordinary resolution: Re-election of directors
In line with best practice and the Board Tenure Policy, the
Board has resolved that all Directors will be submitted for
re-election on an annual basis. Robert Whiteman, Robert
Gray and Elaine Bailey will retire, and being eligible, offer
themselves for re-election.
The Board has carefully considered whether each of the
Non-Executive Directors is free from any relationship
that could materially interfere with the exercise of his or
her independent judgement. It has concluded that each
Non-Executive Director is independent. The Board has also
reviewed and concluded that each Non-Executive Director
standing for re-election possesses the necessary mix of
skills and experience to continue to contribute effectively
to the Company’s long-term sustainable success. Further,
notwithstanding their other appointments, the Board is
satisfied that each Non-Executive Director standing for re-
election is able to commit sufficient and appropriate time to
their board responsibilities.
Full biographies for Robert Whiteman, Robert Gray and
Elaine Bailey are set out in the Company’s Annual Report on
49 to 50.
Resolution 6
Ordinary resolution: Re-appointment of auditor
The appointment of BDO LLP as auditor of the Company
ends at the conclusion of the AGM. BDO LLP have indicated
their willingness to stand for reappointment as auditor of
the Company until the conclusion of the AGM to be held
in 2026, if required. The Audit Committee considers the
reappointment of the external auditor each year before
making a recommendation to the Board. The Board
recommends the reappointment of the auditors.
The effectiveness of the external auditor is evaluated by
the Audit Committee. The Committee assessed BDO
LLP’s approach to providing audit services as it undertook
this year’s audit. On the basis of such assessment, the
Committee concluded that the audit team was providing
the required quality in relation to the provision of the
services. The audit team had shown the necessary
commitment and ability to provide the services, together
with a depth of knowledge, robustness, independence and
objectivity as well as an appreciation of complex issues.
The Audit Committee assesses the independence of the
external auditor on an ongoing basis and the external
auditor is required to rotate the lead audit partner every
five years and other senior audit staff every seven years.
In accordance with the requirements relating to the
appointment of audit firms, the Company will be required to
conduct an audit tender no later than for the financial year
beginning 1October 2027. The current lead partner was
appointed from the audit for the financial year beginning
1October 2021. No partners or senior staff associated with
the audit may transfer to the Group.
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nual Report & Accounts 2024
Resolution 7
Ordinary resolution: Remuneration of auditor
The Audit Committee reviews the fee structure, resourcing
and terms of engagement for the external auditor annually.
The Board is seeking authority for the Audit Committee
to fix the auditor’s remuneration. Fees paid to the external
auditor for the year were £272,000 (2023: £259,000).
The Audit Committee is satisfied that this level of fee
is appropriate in respect of the audit services provided
and that an effective audit can be conducted for this fee.
BDOLLP were paid fees of £48,500 in respect of non-audit
services in the year to 30September 2022 (2023: £45,000).
These services were in respect of the interim review of
the Interim Report for the period ended 31March 2023
(£45,000). The consolidated financial statements provides
details of the remuneration of the Company’s external
auditor. This can be found on 68 of the Annual Report.
Resolution 8
Ordinary resolution: Policy of paying quarterly
interim dividends.
The purpose of the renewal is to provide flexibility to the
Company to continue implementing its quarterly interim
dividend policy.
Resolution 9
Ordinary resolution: Authority to allot
The purpose of this resolution is to grant the Board the
authority to allot ordinary shares in accordance with
Section 551 of the Act up to up to 37,032,656 Ordinary
Shares (excluding shares held in Treasury) in the capital
of the Company (equivalent to approximately 20% of the
Ordinary Shares in issue at the date of the notice of this
meeting). While the Directors have no present intention of
exercising this authority, they consider it important to have
the maximum flexibility commensurate with good corporate
governance guidelines, to enable the Company to respond
to investment opportunities, market developments and
conditions. No ordinary shares will be issued for cash at a
price less than the prevailing net asset value per ordinary
share at the time of issue pursuant to this authority. This
authority shall expire at the conclusion of the Company’s
AGM to be held in 2026, or, ifearlier, onthe expiry of 15
months from the passing of this resolution, save that
the Company may, at any time prior to the expiry of such
authority, make an offer or enter into an agreement which
would or might require the allotment of shares in pursuance
of such an offer or agreement as if such authority
had not expired.
Resolutions 10 and 11
Special resolution: Disapplication of
pre-emption rights
If the Directors wish to exercise the authority under
resolution 9 and offer shares (or sell treasury shares
which the Company may purchase and elect to hold as
treasury shares) for cash, company law requires that unless
shareholders have given specific authority for the waiver of
their statutory pre-emption rights, the new shares must be
first offered to existing shareholders in proportion to their
existing holdings. There may be occasions, however, when
the Directors will need the flexibility to allot new shares
(or to grant rights over shares) for cash or to sell treasury
shares for cash without first offering them to existing
shareholders in proportion of their holdings in order to
make investments in line with the Company’s investment
policies. This cannot be done unless the shareholders have
first waived their pre-emption rights.
These Resolutions will, if passed, authorise the Directors
to do this by allowing the Directors to allot shares for cash
or sell treasury shares for cash up to an aggregate nominal
value of £370,326.56, which is equivalent to approximately
20% of the Company’s issued Ordinary Share capital as the
date of this Notice (being the latest practicable date prior to
the publication of this notice).
In the event that resolution 10 is passed, but resolution
11 is not passed, the Directors will only be authorised to
issue Ordinary Shares up to an aggregate nominal value of
£185,163.28, which represents approximately 10% of the
Company’s issued Ordinary Share capital (excluding shares
held in Treasury) as the date of this Notice (being the latest
practicable date prior to the publication of this notice).
Resolutions 10 and 11 will allow the Company to carry out
one or more tap issues, in aggregate, up to 20% of the
number of Ordinary Shares in issue at the AGM and thus
to pursue specific investment opportunities in a timely
manner in the future and without the requirement to publish
a prospectus and incur the associated costs.
The Directors are aware that the combined authority to
dis-apply pre-emption rights in respect of up to 20% of the
Company’s issued Ordinary Share capital sought under
resolutions 10 and 11 is higher than the 10% typically
sought by investment companies. However, the Directors
believe that a higher authority is justified to enable the
Company to fund future acquisitions in line with the
Company’s anticipated acquisition pipeline. In addition, the
higher authority is expected to broaden the Company’s
asset base which will increase the diversity of the portfolio.
It will also allow the Company to broaden its investor
base and enhance the size and liquidity of the Company’s
share capital and spread the fixed operating costs over
a larger capital base, thereby reducing the Company’s
ongoing charges ratio.
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In accordance with UK Listing Rules, the Company will only
issue Ordinary Shares pursuant to this authority at a price
that is not less than the prevailing net asset value per share
of the Company calculated in accordance with its IFRS
accounting policies at the time of issue. In addition, the
Directors will not sell treasury shares at less than such net
asset value per share.
Resolutions 10 and 11 will be proposed as special
resolutions to provide the Company with the necessary
authority. If given, the authority will expire at the conclusion
of the next AGM of the Company to be held in 2026 or, if
earlier on the expiry of 15 months from the passing of this
resolution. The Directors intend to renew such authority in
respect of 10% of the Company’s issued Ordinary Share
capital (excluding shares held in Treasury) at successive
AGMs in accordance with current best practice.
Resolution 12
Special resolution: Purchase of own shares
The current authority of the Company to make market
purchases of up to approximately 14.99 per centum of its
issued share capital expires shortly. This resolution seeks
renewal of such authority until the next AGM, or the expiry
of 15 months after the passing of the resolution is earlier.
The price paid for shares will not be less than the nominal
value nor more than the maximum amount permitted
to be paid in accordance with the rules of the Financial
Conduct Authority in force as at the date of purchase.
This power will be exercised only if, in the opinion of the
Directors, a repurchase would be in the best interests of
shareholders as a whole. Any shares repurchased under
this authority will either be cancelled or held in Treasury at
the discretion of the Board for future re-sale in appropriate
market conditions.
The authority sought would replace the authority previously
given to the Directors. The maximum number of ordinary
shares authorised to be purchased pursuant to the
authority represents approximately 14.99 per centum of the
total number of ordinary shares in issue (excluding shares
held in Treasury) as at the date of this Notice.
This authority shall expire at the conclusion of the
Company’s next AGM to be held in 2026.
Resolution 13
Special resolution: Notice of General Meetings
Under the provisions in the Act, listed companies must call
general meetings (other than an annual general meeting) on
at least 21 clear days’ notice unless the company:
a.
has obtained shareholder approval for the holding of
general meetings on 14 clear days’ notice by passing
an appropriate resolution at its most recent annual
general meeting; and
b.
offers the facility for shareholders to vote by electronic
means accessible to all shareholders.
To enable the Company to utilise the shorter notice period
of 14 days for calling such general meetings, shareholders
are asked to approve this resolution. The shorter notice
period would not be used as a matter of routine for such
meetings, but only where the flexibility is merited by
the business of the meeting and is thought to be to the
advantage of shareholders as a whole. If granted, this
authority will be effective until the Company’s next AGM.
Recommendation
The Directors consider that all the resolutions to be
proposed at the AGM are in the best interests of the
Company and its shareholders as a whole. The Directors
unanimously recommend that shareholders vote in favour
of all the resolutions, as they intend to do in respect of their
own beneficial holdings of shares.
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Administrative notes to the Notice of Annual
General Meeting
Website address
1. Information regarding the meeting, including the
information required by section 311A of the Act, is
available via https://greshamhouse.com/real-assets/
uk-housing/residential-secure-income-plc/
Entitlement to attend and vote
2. Only those holders of Ordinary Shares registered
on the Company’s register of members at 6.00p.m.
on Tuesday, 25February 2025 or, if this meeting is
adjourned, at close of business on the day two days
prior to the adjourned meeting, shall be entitled to vote
at the meeting.
Appointment of Proxies
3. Members entitled to vote at the meeting (in
accordance with note 2 above) are entitled to
appoint a proxy to vote in their place. If you wish to
appoint a proxy please use the Form of Proxy or
follow the instructions at note 7 below if you wish to
appoint a proxy through the CREST electronic proxy
appointment service. In the case of joint members,
only one need sign the Form of Proxy. The vote of the
senior joint member will be accepted to the exclusion
of the votes of the other joint members. For this
purpose, seniority will be determined by the order in
which the names of the members appear in the register
of members in respect of the joint shareholding. The
completion and return of the Form of Proxy will not
stop you attending and voting in person at the meeting
should you wish to do so. A proxy need not be a
member of the Company.
You may appoint more than one proxy provided each
proxy is appointed to exercise the rights attached to
a different share or shares held by you. If you choose
to appoint multiple proxies use a separate copy of
this form (which you may photocopy) for each proxy,
and indicate after the proxy’s name the number of
shares in relation to which they are authorised to act
(which, in aggregate, should not exceed the number
of Ordinary Shares held by you). Please also indicate
if theproxyinstruction is one of multiple instructions
being given. All forms must be signed and returned
in the same envelope. Additional forms may be
obtained by contacting the Company’s registrars,
Computershare Investor Services PLC helpline
on 0370 889 3181. Shareholders can access their
information at www.investorcentre.co.uk.
4. You can appoint the Chairman of the Meeting, or any
other person. If you wish to appoint someone other
than the Chairman, cross out the words “the Chairman
of the Meeting” on the Form of Proxy and insert the full
name of your appointee.
5. You can instruct your proxy how to vote on each
resolution by marking the resolutions For and Against
using the voting methods stated in notes 6 and
7 below. If you wish to abstain from voting on any
resolution please mark these resolutions withheld.
Itshould be noted that a vote withheld is not a vote in
law and will not be counted in the calculation of the
proportion of votes “For” and “Against” a resolution.
If you do not indicate how your proxy should vote,
he/she can exercise his/her discretion as to whether,
and if how so how, he/she votes on each resolution,
as he/she will do in respect of any other business
(including amendments to resolutions) which may
properly be conducted at the meeting.
A company incorporated in England and Wales or Northern
Ireland should execute the Form of Proxy under its common
seal or otherwise in accordance with Section 44 of the Act
or by signature on its behalf by a duly authorised officer or
attorney whose power of attorney or other authority should
be enclosed with the Form of Proxy.
Appointment of proxy using
6. You can vote either:
by logging on to www.eproxyappointment.com and
following the instructions. Shareholders will need
their shareholder reference number, PIN and control
number to submit a proxy vote this way (which will be
provided via email or on their paper form of proxy);
You may request a hard copy form of proxy directly
from the registrars, Computershare Investor
Services on Tel: 0370 889 3181; or
in the case of CREST members, by utilising the
CREST electronic proxy appointment service in
accordance with the procedures set out below.
To be valid, a form of proxy should be lodged with
the Company’s registrars, Computershare Investor
Services PLC, The Pavilions, Bridgewater Road,
Bristol, BS99 6ZY so as to be receive not later than
48hours before the time appointed for the meeting or
any adjourned meeting or, in the case of a poll taken
subsequent to the date of the meeting or adjourned
meeting, so as to be received no later than 24 hours
before the time appointed for taking the poll.
Appointment of a proxy through CREST
7. CREST members who wish to appoint a proxy
or proxies through the CREST electronic proxy
appointment service may do so for the meeting to be
held on the above date and any adjournment(s) thereof
by using the procedures described in the CREST
Manual. CREST Personal Members or other CREST
sponsored members, and those CREST members
who have appointed a voting service provider(s),
should refer to their CREST sponsor or voting service
provider(s), who will be able to take the appropriate
action on their behalf.
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04 Other Information - Notice of Annual General Meeting
Termination of proxy appointments
8. In order to revoke a proxy instruction you will need
to inform the Company. Please send a signed hard
copy notice clearly stating your intention to revoke
your proxy appointment to Computershare Investor
Services PLC, The Pavilions, Bridgwater Road,
Bristol BS99 6ZY.
In the case of a member which is a company, the
revocation notice must be executed under its common
seal or otherwise in accordance with section 44 of
the Act or by signature on its behalf by an officer or
attorney whose power of attorney or other authority
should be included with the revocation notice.
If you attempt to revoke your proxy appointment but
the revocation is received after the time specified in
note 2 above then, subject to the paragraph directly
below, your proxy will remain valid.
If you submit more than one valid proxy appointment in
respect of the same Ordinary Shares, the appointment
received last before the latest time for receipt of
proxies will take precedence.
Nominated Persons
9. If you are a person who has been nominated under
section 146 of the Act to enjoy information rights:
You may have a right under an agreement between
you and the member of the Company who has
nominated you to have information rights (Relevant
Member) to be appointed or to have someone else
appointed as a proxy for the meeting.
If you either do not have such a right or if you have
such a right but do not wish to exercise it, you may
have a right under an agreement between you and
the Relevant Member to give instructions to the
Relevant Member as to the exercise of voting rights.
Your main point of contact in terms of your
investment in the Company remains the Relevant
Member (or, perhaps, your custodian or broker)
and you should continue to contact them (and not
the Company) regarding any changes or queries
relating to your personal details and your interest in
the Company (including any administrative matters).
The only exception to this is where the Company
expressly requests a response from you.
If you are not a member of the Company but you have
been nominated by a member of the Company to enjoy
information rights, you do not have a right to appoint
any proxies under the procedures set out in the notes
to the form of proxy.
In order for a proxy appointment or instruction made
using the CREST service to be valid, the appropriate
CREST message (a CREST Proxy Instruction) must be
properly authenticated in accordance with Euroclear
UK & Ireland Limited’s specifications and must contain
the information required for such instructions, as
described in the CREST Manual. The message,
regardless of whether it constitutes the appointment
of a proxy or an amendment to the instruction given
to a previously appointed proxy, must, in order to
be valid, be transmitted so as to be received by the
Company’s agent (ID: 3RA50) by the latest time(s)
for receipt of proxy appointments specified in the
notice of meeting. For this purpose, the time of receipt
will be taken to be the time (as determined by the
timestamp applied to the message by the CREST
Applications Host) from which the Company’s agent
is able to retrieve the message by enquiry to CREST in
the manner prescribed by CREST. After this time any
change of instructions to a proxy’s appointee through
CREST should be communicated to the appointee
through other means.
CREST members and, where applicable, their CREST
sponsors or voting service providers should note that
Euroclear UK & Ireland Limited does not make available
special procedures in CREST for any particular
messages. Normal system timings and limitations
will therefore apply in relation to the input of CREST
Proxy Instructions.
It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a
CREST personal member or sponsored member
or has appointed a voting service provider(s), to
procure that his CREST sponsor or voting service
provider(s) take(s)) such action as shall be necessary
to ensure that a message is transmitted by means
of the CREST system by any particular time. In this
connection, CREST members and, where applicable,
their CREST sponsors or voting service providers are
referred, in particular, to those sections of the CREST
Manual concerning practical limitations of the CREST
system and timings.
The Company may treat as invalid a CREST Proxy
Instruction in the circumstances set out in Regulation
35(5) (a) of the Uncertificated Securities Regulations
2001. All messages relating to the appointment of
a proxy or an instruction to a previously appointed
proxy, which are to be transmitted through CREST,
must be lodged at 1:00p.m. on Tuesday, 25February
2025 in respect of the meeting. Any such messages
received before such time will be deemed to have been
received at such time. In the case of an adjournment,
all messages must be lodged with Computershare
Investor Services PLC no later than 48 hours before
the rescheduled meeting.
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Questions at the Meeting
10. Under section 319A of the Act, the Company must
answer any question you ask relating to the business
being dealt with at the meeting unless:
answering the question would interfere unduly
with the preparation for the meeting or involve the
disclosure of confidential information;
the answer has already been given on a website in
the form of an answer to a question; or
it is undesirable in the interests of the Company
or the good order of the meeting that the
question be answered.
Issued Shares and total voting rights
11. As at the date of this Notice, the total number of shares
in issue is 194,149,261 Ordinary Shares of 1p each.
The total number of Ordinary Shares with voting rights
is 185,163,281. On a vote by a show of hands, every
holder of Ordinary Shares who (being an individual) is
present by a person, by proxy or (being a corporation)
is present by a duly authorised representative, not
being himself a member, shall have one vote. On a
poll every holder of Ordinary Shares who is present
in person or by proxy shall have one vote for every
Ordinary Share held by him.
Communication
12. Except as provided above, members who have general
queries about the meeting should use the following
means of communication (no other methods of
communication will be accepted):
calling Computershare Investor Services PLC
shareholder helpline: 0370 889 3181; or
in writing to Computershare Investor Services PLC,
The Pavilions, Bridgwater Road, Bristol BS99 6ZZ.
You may not use any electronic address provided
either in this Notice of Meeting or in any related
documents (including the Form of Proxy for this
meeting) to communicate with the Company for any
purposes other than those expressly stated.
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