RECI maintains dividend despite fall in net asset value and earnings
Real Estate Credit Investments Ltd on Thursday maintained its dividend despite ‘challenging times for the listed investment company sector’ as its net asset value fell.
The investor in European real estate credit markets said its net asset value per share fell 3.5% to 138.4 pence at the end of March from 143.4p a year prior.
The total annualised NAV return, including dividends, was 4.9%, down from 7.7% in the previous year.
Earnings per share were down 32% to 10.2p from 6.9p, but RECI maintained its quarterly dividend of 3.0p per share, giving an unchanged total payout of 12.0p for the year.
Net profit dropped 33% to £15.2 million from £22.8 million, but interest income increased 13% to £33.3 million from £29.5 million.
RECI recorded a £7.2 million net loss on financial assets and liabilities at fair value, swung from a £3.6 million gain a year ago.
Chair Andreas Tautscher said the fall in NAV reflects ‘markets view of broader valuations in the property markets and potential impact to the company’s assets notwithstanding the payment to shareholders of four unchanged dividends.’
‘The negative market sentiment during our last financial year inevitably impacted RECI’s share price and saw material discount widening across the investment funds sector generally and the credit and real estate sectors, in particular.’
In September last year, a share buyback programme for up to £10.0 million was approved, which has not been utilised. RECI in March said it intends to undertake a further buyback programme which will run to the end of September.
Looking ahead, Chair Tautscher said: ‘In considering all options when deciding on the appropriate allocation of the company’s available cash resources, the board is mindful of when opportunities present themselves to achieve attractive repeatable returns from new investments and thereby enhance the ’investment case’ for RECI.
‘The directors believe that RECI remains soundly positioned to continue to deliver an attractive and stable dividend to investors seeking a reliable long-term income stream from a listed and liquid investment company, with a highly regarded specialist investment manager.’
Shares in RECI were flat at 114.00p on Thursday morning in London.
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