- Sirius Real Estate achieves impressive FY 2023 results: 36.9% FFO increase to €102.1M (ZAR 2.13B), 7.7% rise in rent roll to €175.9M (ZAR 3.67B).
- Surpasses €100M FFO target in four years.
- Strong financial position with €124.3M cash (ZAR 2.59B) and 95% fixed-rate debt.
Guernsey-based real estate company Sirius Real Estate Limited has reported impressive financial results for the fiscal year ending March 31, 2023. The company achieved substantial growth across key financial metrics, surpassing its targets and delivering value to shareholders. Sirius Real Estate’s success is attributed to its high-quality and affordable real estate offerings in Germany and the UK.
The standout achievement of the fiscal year was the remarkable 36.9% increase in Funds From Operations (FFO), reaching €102.1 million compared to €74.6 million in the previous year. This achievement surpassed the company’s ambitious €100 million FFO target for the next five years within a shorter timeframe of just four years. The company’s annualized like-for-like rent roll also demonstrated healthy growth, rising by 7.7% to €175.9 million from the previous year’s €163.3 million.
FFO per share experienced a significant boost, rising by 28.9% to 8.74c, showcasing the company’s strong financial performance. Sirius Real Estate’s investment property book value increased by 1.1% (€22.9 million) to €2,123.0 million, primarily due to substantial income growth. Furthermore, the company’s commitment to providing returns to shareholders is evident in the 25.7% increase in the second-half dividend to 2.98c per share. This increase resulted in a total dividend for the financial year of 5.68c per share, marking a notable 28.8% uplift compared to the previous year’s total dividend of 4.41c per share. The dividend payout ratio remained consistent at 65% of FFO.
Sirius Real Estate also successfully executed asset recycling activities worth €90 million during the year. The disposals achieved a remarkable 25% combined premium to book value, demonstrating the company’s ability to generate value from its portfolio. With a total cash balance of €124.3 million, including €99.2 million in the bank, Sirius Real Estate has the financial capacity for future acquisitions and investments.
The company’s debt structure remains robust, with 95% of its total debt (€975.1 million) secured at fixed interest rates for the next 3.25 years. This stability safeguards Sirius Real Estate against potential interest rate fluctuations and provides a strong foundation for future growth.
Despite a 46.0% decrease in operating profit to €101.6 million and a 49.4% decline in basic earnings per share to 6.82c, headline earnings per share saw a positive surge, increasing by 43.2% to 7.62c.
Andrew Coombs, Chief Executive Officer of Sirius Real Estate, expressed his satisfaction with the company’s performance. Coombs highlighted the sustained rental growth and the ability to exceed the FFO target, stating, “Sirius has delivered another positive set of annual results, with sizeable rental growth underpinned by continued occupier demand for our high-quality and affordable products in both Germany and the UK.”
Coombs also emphasized the company’s commitment to value creation through asset recycling, stating, “We will continue to pursue an opportunistic asset recycling program where we see opportunities to crystallize returns and drive value.”
Looking ahead, Sirius Real Estate remains optimistic about its future prospects. With a strong balance sheet and significant cash reserves of €124 million, the company is well-positioned to continue delivering attractive returns for shareholders. Coombs acknowledged the potential impact of ongoing global macro-economic uncertainty but expressed confidence in Sirius’ ability to navigate such challenges.
The Board of Directors has authorized a 25.7% increase in dividends for the second six months of the fiscal year ended March 31, 2023. Shareholders can expect a dividend payout of 2.98c per share, based on 65% of FFO, representing a significant increase compared to the previous year. The total dividend for the year amounts to 5.68c per share, reflecting a substantial 28.8% increase from the previous year’s total dividend of 4.41c per share.
Investors and shareholders are encouraged to refer to the detailed announcement available at the company’s website or request a copy from the registered office or JSE sponsor. The audited annual financial statements, along with the audit opinion from Ernst & Young LLP, are also available on the company’s website.
To provide further insights and address inquiries, Sirius Real Estate will host an in-person presentation for analysts and investors at Peel Hunt’s offices in London. Additionally, a live webcast will be available for those unable to attend in person.