Alternative Income REIT : Quarterly Investor Report

ALTERNATIVE INCOME REIT PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022







STRATEGIC REPORT

HIGHLIGHTS	3
CHAIRMAN'S STATEMENT	5
BUSINESS MODEL AND STRATEGY	7
KEY PERFORMANCE INDICATORS	9
EPRA PERFORMANCE MEASURES	10
INVESTMENT ADVISER'S REPORT	11
ENVIRONMENTAL, SOCIAL AND GOVERNANCE	19
SECTION 172(1) STATEMENT	22
PRINCIPAL RISKS AND UNCERTAINTIES	24
GOING CONCERN AND VIABILITY STATEMENT	30
BOARD APPROVAL OF THE STRATEGIC REPORT	31

GOVERNANCE

BOARD OF DIRECTORS	32
GOVERNANCE	33
REPORT OF THE AUDIT COMMITTEE	39
REPORT OF THE MANAGEMENT ENGAGEMENT COMMITTEE	42
ANNUAL STATEMENT OF DIRECTORS' REMUNERATION	43
DIRECTORS' REMUNERATION POLICY	44
DIRECTORS' REMUNERATION REPORT	45
DIRECTORS' REPORT	48
INFORMATION DISCLOSURES UNDER THE AIFM DIRECTIVE	51
STATEMENT OF DIRECTORS' RESPONSIBILITIES	52
INDEPENDENT AUDITOR'S REPORT	54

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	60
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	61
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	62
CONSOLIDATED STATEMENT OF CASH FLOWS	63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	64
COMPANY STATEMENT OF FINANCIAL POSITION	82
COMPANY STATEMENT OF CHANGES IN EQUITY	83
NOTES TO THE COMPANY ACCOUNTS	84
EPRA PERFORMANCE MEASURES (UNAUDITED)	87
ALTERNATIVE PERFORMANCE MEASURES	88

INFORMATION

GLOSSARY	90
COMPANY INFORMATION	92
SHAREHOLDER INFORMATION	93
NOTICE OF ANNUAL GENERAL MEETING	94

ANNUAL REPORT & ACCOUNTS 2022

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• ALTERNATIVE INCOME REIT PLC

Strategic report

Highlights



FINANCIAL HIGHLIGHTS

AS AT 30 JUNE

	2022	2021	Change
Net Asset Value ('NAV')	£77.6 million	£68.9 million	+12.6 %
NAV per share	96.4 p	85.6 p	+12.6 %
Share price	82.1 p	71.0 p	+15.6 %
Loan to gross asset value ('GAV') A	33.7 %	36.3 %	-
Loan Facility	£41 million	£41 million	-

FOR THE YEAR ENDED 30 JUNE

	2022	2021	Change
EPRA earnings per share A	6.27 p	5.55 p	+13.0 %
Adjusted earnings per share A	5.57 p	5.07 p	+9.9 %
Dividend cover A	101.27 %	98.6 %	+2.7 %
Total dividends per share	5.5 p	5.14 p	+7.0 %
Dividend yieldA	6.7 %	7.2 %	-0.5 %
Operating profit (including gain on	£6.6 million	£6.3 million	+4.8 %
sale of investment property)
Profit before tax	£13.2 million	£5.6 million	+135.7 %
Earnings per share ('EPS')	16.36 p	6.92 p	+136.4 %
Share price total return A	24.3 %	43.5 %	-
NAV total return A	22.5 %	8.3 %	-
Investment property fair value	£117.9 million	£109.2 million	+8.0 %
(based on external valuation)
Annualised passing rent	£7.2 million	£7.0 million	+2.9 %
Ongoing charges A (annualised)	1.42 %	1.27 %	+15 bps

• Alternative Performance Measure, please see pages 88 to 89 for further details.

HIGHLIGHT NOTES

• The majority of the NAV increase to 96.4 pence per share (pps) is due to the £8.7 million (8%) valuation uplift in investment properties, which primarily came from improved market conditions, following the last year's COVID-19 negative impact on valuations.
• A healthy dividend yield of 6.7%; the 0.5% decrease from the prior year being a result of the Company's rising share price.
• Dividends in respect of the year total 5.5pps a substantial 7.0% increase from the previous year and in line with the Board's target annual dividend.
• Profit before tax increased 135.7% to £13.2 million and earnings per share to 16.36pps for the year. The majority of this increase is due to the £8.7 million valuation uplift in investment properties.
• Loan to GAV ratio of 33.7% with significant headroom on the lender's loan to value covenant of 60% and interest cover covenant of 250%. The loan matures in 2025 and is fixed at a weighted average interest cost of 3.19%.

ANNUAL REPORT & ACCOUNTS 2022

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