Residential Secure Income plc (LSE:RESI) has launched the first stage of its B Share Scheme to return proceeds to shareholders following the disposal of its Retirement Group to Living REIT plc.
The Retirement Group was sold for £108.3 million, including £45 million in cash. After accounting for transaction costs and settling historic expenses, Residential Secure Income plans to distribute approximately £35.2 million through redeemable B shares, equivalent to 19 pence for each ordinary share.
Alongside the capital return, the company will make a property income distribution of approximately £2.8 million, representing 1.53 pence per share. Together, the two payments amount to an initial capital and income return of around £38 million.
Shared Ownership disposal could lead to further distributions
Residential Secure Income is also advancing the proposed sale of its Shared Ownership portfolio, which is expected to generate net proceeds of approximately £13.5 million.
Once that transaction has completed, the company intends to make additional capital or income distributions to shareholders as it continues implementing its orderly wind-down strategy.
The B Share Scheme uses unlisted redeemable shares to facilitate the return of substantial disposal proceeds. The structure forms a central part of RESI’s plan to distribute available cash to investors as its remaining assets are sold.
Balance sheet strengthens as wind-down progresses
Residential Secure Income’s financial position presents a mixed picture. Consistent cash generation and a significantly strengthened, debt-free balance sheet provide support, while declining revenue and continuing net losses remain areas of weakness.
Technical indicators are moderately positive, with the share price trading above important moving averages. The company’s valuation also benefits from a high dividend yield, although negative earnings limit support from conventional earnings-based valuation measures.
More about Residential Secure Income
Residential Secure Income plc is a UK-listed real estate investment trust focused on residential property assets, historically including retirement housing and shared ownership homes.
The company operates a tax-exempt property rental business and is currently pursuing an orderly wind-down. As assets are disposed of, RESI intends to return available proceeds to shareholders through mechanisms including its structured B Share Scheme.
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