Alternative Income REIT Reports First Half Losses

Alternative Income REIT has experienced a significant swing to a pretax loss in the first half of this year. This is primarily due to increased inflation and interest rates, as well as a decrease in the value of its properties.

The UK-based real estate investment trust announced on Monday that it incurred a pretax loss of £5.2 million ($6.3 million) for the six months ending June 30. This is in stark contrast to the £13.2 million profit it made during the same period last year. The decline in the fair value of its investment properties is the primary cause of this downturn.

Moreover, the company's property portfolio value dwindled from £117.9 million to £107.0 million. On the bright side, its net initial yield increased from 5.7% to 6.6%. Additionally, rental revenue saw a boost, reaching £8.1 million compared to £7.5 million previously.

Furthermore, Alternative Income REIT received £825,000 as part of a litigation settlement related to the replacement of defective cladding on the Travelodge Hotel in Swindon. The firm allocated this amount to revenue as property income and capital as a reduction.

Despite these setbacks, the company managed to exceed expectations with its full-year dividend. The dividend rose to 6.045 pence per share, surpassing last year's dividend of 5.5 pence. This achievement also outperformed the company's target of at least 5.7 pence.

As of 08:23 GMT, shares were up by 0.2 pence or 0.3%, reaching 59.8 pence.