Highcroft Investments PLC ("Highcroft" or the "Company")

Final results for the year ended 31 December 2021

KEY HIGHLIGHTS

·      6.7% increase in investment property valuation to £87,565,000 (2020 £82,060,000)

·      11.1% increase in property valuation on a like-for-like basis (2020 5.4% decrease)

·      3.8% decrease in net property income to £5,258,000 (2020 £5,464,000)

·      2021 rent collection 97% (2020 94%)

·      One property disposal in the year at a 9% uplift to opening valuation

·      15.5% increase in net asset value per share to 1275p (2020 1104p)

·      Earnings per share of 230.5p (2020 loss 22.2p)

·      Revenue profit before tax decreased by 7.4% to £3,243,000 (2020 £3,503,000)

·      Total debt remained at £27,200,000; LTV 31% (2020 33%)

·      Cash £5,715,000 (2020 £3,295,000)

·      10% increase in final dividend to 33p per share (2020 30p per share with an additional special dividend of 6p per share)

·      3.5% decrease in total dividend payable for 2021 to 55p per share (2020 57p per share including the special dividend of 6p per share)

Dear Shareholder,

Introduction

At the time of writing to you last year, I don't think we would have believed that 2021 would be primarily dominated by continuing to deal with the effects of the pandemic. Whilst the effects of Covid-19 continued to be felt across the world, we took a cautious approach in how we managed the portfolio, keeping a relatively low LTV, a healthy level of cash and taking no unnecessary risks. Our portfolio proved to be very resilient throughout 2021, and I am pleased to report a very solid set of results for the year.

Property portfolio

The focus of our asset management has been on warehouses and retail warehouses for several years (making up 73% of our portfolio by asset value). This has proven to be a successful strategy with a strong sector performance in 2021. Notwithstanding the volatile macro environment, we expect this to see this positive momentum continue into 2022.

We did not acquire any properties during the year and we sold one property at an increase of 9% over its 31 December 2020 valuation. Notwithstanding the ongoing pandemic, we continued to achieve a high level of rent collection for the year of 97% (2020 94%).  Our gross rental revenue decreased by 2.6% (2020 4% increase), due primarily to the negative effects of CVAs and voids offset by the progress that we have made with our asset management initiatives and one-off income.

When taken together with a very positive like-for-like property revaluation of 11.1%, this led to an overall increase in net assets of 15.5%.

Dividend

The company's interim dividend was 22p, a 4.8% increase on 2020, and we are proposing a final dividend for 2021 of 33p per share taking the total dividend for 2021 to 55p per share. This represents an increase of 8% from the 2020 dividend of 51p per share (excluding the 2020 special dividend of 6p per share).

Sustainability

Highcroft has a clear purpose of providing our tenants with excellent properties in optimal locations, enabling them to succeed and our stakeholders to benefit on a long-term sustainable basis. As a board we consider climate-related risks and opportunities and over the year have evaluated how any future developments will be approached, and the most appropriate strategy for reducing our impact within the existing portfolio. We are in a process of identifying the levers that we can operate and influence to ensure the sustainability of our business.   

People

As for many companies, the ongoing impacts of the Covid-19 pandemic have presented challenges to the Board, the tenants we serve, and the communities we operate in. During the year the business has continued to perform commendably, and I would like to thank my fellow directors and the employees for the continued commitment and considerable efforts over the last year.

During the year, we welcomed Anne-Marie Palmer as Company Secretary. Anne-Marie has 20 years' experience as a chartered secretary advising listed companies and as reported last year, recognising both the increase in governance and reporting requirements, we welcome her addition to the team.

Outlook

2021 was a strong year for Highcroft despite the world still being seriously affected by Covid-19. We now face new macro challenges with the tragic events in Ukraine. While there is no doubt the effects of this will be severe and long lasting, we are confident that with the cautious approach we take to managing the portfolio along with relatively low levels of gearing we can continue to deliver robust shareholder returns against a continuing volatile global backdrop.

We are planning that our AGM this year will be back to normal as an open meeting, and I look forward to meeting those of you who can make it.

Charles Butler

Chairman                                                                                            

28 March 2022

Enquiries:

Highcroft Investments PLC

Charles Butler / Roberta Miles

01869 352766

020 7496 3000

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under retained EU law version of the Market Abuse Regulations (EU No. 596/2014) (the "UK MAR"), which is part of UK law by virtue of the European Union (withdrawal) Act 2018 .

Consolidated statement of comprehensive income

Consolidated statement of financial position

at 31 December 2021