Annual report

For the year ended 31 March 2023

2023

Alpha Real Trust targets investment, development, financing and other opportunities in real estate, real estate operating companies and securities, real estate services, infrastructure, infrastructure services, other asset-backed businesses and related operations

and services businesses that offer attractive risk-adjusted total returns.

Contents

  1. Highlights
  2. Company's summary and objective
  1. Chairman's statement
  1. Investment review
  1. Directors
  2. Directors' and corporate governance report
  1. Directors' statement pursuant to the Disclosure and Transparency Rules
  2. Independent auditors' report
  1. Consolidated statement of comprehensive income
  2. Consolidated balance sheet
  3. Consolidated cash flow statement
  4. Consolidated statement of changes in equity
  5. Notes to the financial statements
  1. Directors and Company information
  2. Shareholder information
  3. Financial calendar

www.alpharealtrustlimited.com

Alpha Real Trust Limited : Annual report 2023 1

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•

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NAV per ordinary share 216.8p as at

31 March 2023 (31 March 2022: 216.0p).

Basic earnings for the year ended

31 March 2023 of 1.1p per ordinary share

(31 March 2022: earnings of 13.3p per ordinary share).

Adjusted earnings for the year ended

31 March 2023 of 7.7p per ordinary share

(31 March 2022: 4.0p per ordinary share)*.

Declaration of a quarterly dividend of 1.0p per ordinary share expected to be paid on 28 July 2023.

  • The basis of the adjusted earnings per share is provided in note 9

Highlights

  • Robust financial position: ART continues to adopt a cautious approach to new investment and has conserved cash as a result of the uncertainty that characterised the past year; this has placed the Company on a robust financial footing making it well positioned to take advantage of new investment opportunities.
  • Investment targets: the Company is currently focussed on selectively increasing its loan portfolio and opportunistically extending its wider investment strategy to target investments offering inflation protection via index linked income adjustments and investments that have potential for capital gains.
  • H2O Madrid: signing of a lease with anchor retailer Primark for a new 3,000 square metre store as part of a mall reconfiguration.
  • Diversified portfolio of secured senior and secured mezzanine loan investments: as at
    31 March 2023, the size of ART's drawn secured loan portfolio was £55.4 million, representing 44.5% of the investment portfolio.
  • The senior portfolio has an average Loan to Value ('LTV')** of 63.5% based on loan commitments (with mezzanine loans having an LTV range of between 48.8% and 78.6% whilst the highest approved senior loan LTV is 72.9%).
  • Loan commitments: including existing loans at the balance sheet date and loans committed post period end, ART's current total committed but undrawn loan commitments amount to £9.4 million.
  • Cash management: during the period the Company invested £14 million in short term UK Treasury Bonds (Gilts) and UK Treasury Bills to enhance returns on its liquid holdings.

** See page 4 for more details

2 Alpha Real Trust Limited : Annual report 2023

Company's summary and objective

216.8p

7.7p

4.0p

NAV per ordinary share 216.8p

Adjusted earnings per

Dividend per ordinary share

ordinary share of 7.7p

paid during the period

Strategy

ART targets investment, development, financing and other opportunities in real estate, real estate operating companies and securities, real estate services, infrastructure, infrastructure services, other asset-backed businesses and related operations and services businesses that offer attractive risk-adjusted total returns.

ART currently selectively focusses on asset-backed lending, debt investments and high return property investments in Western Europe that are capable of delivering strong risk adjusted cash flows.

The portfolio mix at 31 March 2023, excluding sundry assets/liabilities, was as follows:

31 March 2023

31 March 2022

High return debt:

44.5%

27.3%

High return equity in property

26.5%

18.8%

investments:

Other investments:

15.2%

13.1%

Cash:

13.8%

40.8%

The Company is currently focussed on selectively increasing its loan portfolio and opportunistically extending its wider investment strategy to target high return property investments offering inflation protection via index linked income adjustments and investments that have potential for capital gains.

In a market of higher interest rates and volatility of valuations, alternative credit remains an attractive investment opportunity. As geared asset owners seek to refinance at current valuations in an environment of more conservative lending criteria, higher margins and base rates, requirements will emerge for opportunistic capital to provide mezzanine finance at attractive risk adjusted returns.

Dividends

The current intention of the Directors is to pay a dividend and offer a scrip dividend alternative quarterly to all shareholders.

Listing

The Company's shares are traded on the Specialist Fund Segment ("SFS") of the London Stock Exchange ("LSE"), ticker ARTL: LSE.

Management

The Company's Investment Manager is Alpha Real Capital LLP ("ARC"), whose team of investment and asset management professionals focus on the potential to enhance earnings in addition to adding value to the underlying assets, and also focus on the risk profile of each investment within the capital structure to best deliver attractive risk adjusted returns.

Control of the Company rests with the non-executive Guernsey based Board of Directors.

Alpha Real Trust Limited : Annual report 2023 3

Company's summary and objective (continued)

Financial highlights

12 months ended

6 months ended

12 months ended

31 March 2023

30 September 2022

31 March 2022

Net asset value (£'000)

125,067

125,025

133,256

Net asset value per ordinary share

216.8p

219.6

216.0p

Earnings per ordinary share (basic and diluted)

1.1p

0.4p

13.3p

Earnings per ordinary share (basic and diluted) (adjusted)*

7.7p

3.3p

4.0p

Dividend per ordinary share (paid during the period)

4.0p

2.0p

4.0p

  • The adjusted earnings per share includes adjustments for the effect of the fair value revaluation of investment property and indirect property investments, capital element on Investment Manager's fees, the fair value movements on financial assets and deferred tax provisions: full analysis is provided in note 9 to the accounts.

Company's asset allocation by sector and investment (by percentage of Group's NAV, based on the balance sheet carrying values, excluding the Company's sundry assets/(liabilities)) as at 31 March 2023  (see page 8 for further details).

Hamburg 7.0%

Hotel, Wadebridge

3.1%

Secured mezzanine debt 13.3%

Hotel, Lowestoft 2.2%

n

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t

r

r

e

u

p

t

o

e

t

r

h

r

p

n

n

e

H2O 14.2%

i

g

y

i

t

m

H

g

H

t

s

i

i

e

26.5%

u

v

h

q

n

e

e

i

r

44.5%

t

n

u

r

d

Listed & authorised

e

15.2%

b

fund investments

O

t

Secured senior

3.5%

t

debt 31.2%

13.8%

r

h

e

Treasury bonds

Cash

and bills

11.2%

Affordable housing

0.5%

Cash 13.8%

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Disclaimer

Alpha Real Trust Limited published this content on 03 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 July 2023 14:35:04 UTC.