Residential Secure Income has appointed agents and is preparing to formally launch the sales process for its portfolio of retirement and shared ownership homes, as the wind-down of the company moves forward.

Shareholders voted in favour of the realisation strategy in December after the board decided to call it a day due to its modest market cap and its persistent discount to NAV, which had undermined its ability to raise capital and reach a sufficient scale to efficiently manage the portfolio in the medium-term and provide sufficient liquidity to investors.

The company has already sold its local authority portfolio, generating £15m of net proceeds, which was used to pay down floating rate debt.

The company gave the update in annual results for the year to 30 September 2024.

The portfolio of 2,975 homes was valued at £310m, a fall of 10.0% in the 12 months. This contributed to an 8.8% drop in EPRA net tangible assets (NTA) to 74.6p per share.

EPRA adjusted earnings were up 9%, primarily due to 5.8% like-for-like rental growth (through inflation linkage of rental income) and the rebasing of management fee. This coupled with a 20% cut to the dividend, delivered 124% dividend coverage.

Commenting on the results, Robert Whiteman CBE, chairman, said: “ReSI continues to deliver strong operational performance, with high levels of rent collection, occupancy, rent growth and stabilisation of operating costs. Coupled with Gresham House agreeing to reduce fund management fees and reducing the composition of the board from four non-executive directors to three, this has led to adjusted earnings growing by 9%, to comfortably cover our dividend.

“The underlying operational performance of the Company has been robust throughout the year. We have successfully reduced costs, executed the sale of the local authority portfolio (as a post balance sheet event) and reduced exposure to floating rate debt. Despite these positive moves, the Company faces the same challenges faced by other smaller investment trusts. The modest market capitalisation of the Company and persistent discount to NAV undermines the Company’s ability to raise more capital and reach a sufficient scale to efficiently manage the portfolio in the medium-term and provide sufficient liquidity to our investors.

“As such, the Board concluded that it is in the best interests of shareholders to move towards an orderly realisation of assets, a decision ratified by shareholders at the general meeting held on 6 December 2024.

“On behalf of the Board, I would like to thank our shareholders for their continued support of the Company and its portfolio, and Gresham House Asset Management our Fund Manager for its active management of the portfolio and paramount focus on delivering in the best interests of our shareholders.”