Schroder European Real Estate swings to profit but discount persists

Schroder European Real Estate Investment Trust PLC reported on Thursday a return to interim profit and said it is evaluating options to address its discount to net asset value.

The London and Johannesburg-listed property investor said pretax profit was €544,000 for the six months that ended March 31, swung from a loss of €2.4 million a year earlier.

Income for the first half was flat at €10.3 million, after what it called ‘strategic disposals’.

Net loss from fair value adjustment on investment shrank to €2.8 million from €6.6 million.

Schroder European Real Estate declared a second interim dividend of 1.48 euro cents per share, the same as the first interim dividend, and both unchanged from a year before.

The company said asset management initiatives and exposure to winning sectors continued to support earnings.

Basic loss per share narrowed to 0.1 euro cents from 1.6 cents, reflecting once-off adjustments. But headline earnings per share fell 16% to 2.7 cents from 3.2 cents.

As at March 31, net asset value per share was 120.1 euro cents, down 2.8% from 123.6 cents at March 31, 2024 and was down 2.1% from 122.7 cents at September 30, 2024.

Shares in Schroder European were unchanged at R 16.13, about 78 euro cents, on Thursday morning in Johannesburg. In London, they were down 0.1% to 67.54 pence.

Chair Julian Berney said the company continued to review all potential options to address the share discount and maximise shareholder returns.

Its shares trade at a persistent discount to NAV, as equity markets continue to ‘disadvantage smaller listed vehicles’, Berney said.

Looking ahead, Schroder European said its main priority remains progressing key tenant discussions and expects to make formal announcements on re-gearing initiatives in due course.

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