‘Important year’ pays off for embattled IRES

Fresh supply and organic rental growth has helped Irish Residential Properties REIT push revenue for the year ended 31 December to €87.9m (£75m). The group said revenue performance had been supported by a 99.4% occupancy level. Net rental income totalled €67.9m, up 3.3% on the previous year. EBITDA was also up by 3.3% to €56m. The REIT’s portfolio fell in value from €1.5bn to €1.3bn as a result of around €96.5m of asset sales and market-driven yield expansion arising from increased interest rates and low transactional activity. The company also confirmed plans this morning to undertake a strategic review of the business that will comprise a “comprehensive consideration” of all strategic options to maximise value for shareholders. This includes combinations, mergers or other corporate action, a review of the company’s status as a listed REIT, the sale of the entire issued share capital of the company and selling its portfolio. The review is being will be led by former chief executive and chairman of Capital & Regional Hugh Scott-Barrett, with advice from Savills. The REIT recently fought off an attempt by activist shareholder Vision Capital, which sought to replace five board directors of IRES and undertake a strategic review focused solely on a sale of the company or its assets. IRES chief executive Margaret Sweeney said: “This was an important period for our business, the first full year following the internalisation of operations and the deployment of an operational management platform. This required a sharp focus on operational efficiencies, cash collections and cost management. Against that backdrop, the core and enduring strengths of the business continued to deliver revenue growth, strong operating and financial performance and stable cash flows despite the continuing challenging environment in 2023.” She added: “As outlined at the end of 2022, capital management and allocation was a top priority. Disposals were completed at relevant book value, representing an attractive return on original cost, were broadly neutral to our earnings profile. “We are confident in our continuing focus and progress on optimising our portfolio through asset recycling, including demand for individual units at accretive values, as well as maintaining operational excellence and cost management, and improving the sustainability credentials of our assets.”