RMII Rm Infrastructure Income Plc

TIDMRMDL TIDMTTM

RNS Number : 4303F

RM Secured Direct Lending PLC

16 July 2021

 
                             RM Secured Direct Lending Plc 
 
                               ("RMDL" or the "Company") 
 
                               LEI: 213800RBRIYICC2QC958 
 
                                    Net Asset Value 
 
      NAV 
       The Company's NAV % Total Return for the month of June was +0.83%, 
       which brings the NAV % Total Return for the quarter to +3.63%. 
       The Ordinary Share NAV as at 30(th) June 2021 was 95.25 pence 
       per share. This monthly NAV return of -0.828 pence per share 
       arose primarily from the ex-dividend effect of the 1.625 pence 
       per share total ordinary dividend for the period Q1 2021, declared 
       in May and paid in June 2021. Otherwise, there was positive interest 
       income, net of expenses, of 0.517 pence per share and an increase 
       in portfolio valuations of 0.262 pence per share.  Summary for June 2021 (pence 
                   per share) 
        Net interest income     +0.517p 
        Change in portfolio 
         valuations             +0.280p 
        Payment of Dividend     -1.625p 
        Net NAV Movement        -0.828p 
       ----------------------  -------- 
 
       Company Activity 
       During the period the Company declared and paid a 1.625 pence 
       per share dividend in respect of Q1 2021. This marks the 17(th) 
       distribution for the Company all being at or above the Company's 
       stated target. The Company's Zero Dividend Preference shares 
       ("ZDPs") matured in April 2021 and were repaid with a final capital 
       entitlement payable of 110.91p per ZDP share. The ZDPs were repaid 
       from a new credit facility with OakNorth Bank which at the time 
       of closing was neutral in terms of the Company's existing gross 
       borrowings (9.90% on a net basis after taking account of cash 
       balances). 
       Buyback Programme 
       No shares were repurchased by the Company during the period as 
       the share price discount was within the target range of not greater 
       than 6% discount. It is pleasing to see the discount below the 
       6% target and the Board and the Investment Manager remain focused 
       on the share price returning to trading at a premium to NAV, 
       as was the case for the first 36 months following IPO. Post quarter 
       end the Board of the Company have announced and implemented a 
       closed period buyback programme. 
       Portfolio Update 
 
       Investment Performance 
       Overall, it was a very strong quarter for the portfolio with 
       a NAV % total return of 3.63% which is significantly ahead of 
       the observable liquid high yield and leverage loan indices referred 
       to within the Market Update section above. This above target 
       return was largely due to a partial revaluation of investments 
       which had been conservatively marked lower during the pandemic. 
       The continued trajectory of the remaining investments which were 
       marked lower during the pandemic is positive and valuations will 
       be further reviewed by the independent valuation agent as 1) 
       the economy continues to re-open post the lockdowns and 2) the 
       underlying credit and financial metrics improve. 
 
 
       New Investments - Execution and rotation towards Social & Environmental 
       Investments 
       During the period, several investments were made which align 
       with the updated investment focus communicated by the Company 
       and Investment Manager. These include investments across the 
       social infrastructure segment, with each Investment secured over 
       all assets of the borrower including property. 
 
        *    Social Infrastructure> Education: (CBILS) GBP2m loan 
             (loan ref 91) to a UK Education provider, secured 
             over the school campus. 
 
 
        *    Social Infrastructure> Aged Care: GBP13m commitment 
             (loan ref 88). Loans to a modern care home 
             development, with approximately 200 beds. 
 
 
        *    Social Infrastructure> Student Accommodation: (CBILS) 
             GBP5.0m loan (ref 92) secured over a portfolio of 
             student accommodation assets across the UK. 
 
 
 
       In each instance the Investment Manager has underwritten the 
       Loans against a variety of financial, business and credit metrics, 
       and, where possible, eligible borrowers accessed the CBILS scheme, 
       providing a further credit enhancement for the Investment Trust. 
       CBILS Loans 
       The CBILS scheme closed to new applications on the 31(st) March 
       2021, but pre-qualified prospective investments were permitted 
       a grace period to reach financial close under the scheme rules. 
       The portfolio CBILS exposure increased over the quarter from 
       GBP19.5m to GBP32m with CBILS partially government guaranteed 
       loans now representing 25% (from 15.8% at end of Q1) of the gross 
       assets of the portfolio. All CBILS loans benefit from a UK Government 
       Guarantee, protecting a minimum of 80% of the principal and 100% 
       of the first year's interest. 
 
       Existing portfolio 
       Accommodation > Student Accommodation 
       During the quarter, the recovery against Loan ref 68 Student 
       Accommodation in Coventry was completed. The asset is now fully 
       owned by the Company. An Operations and Maintenance ("O&M") Contract 
       was signed with a reputable student accommodation provider (the 
       "Operator") to manage the lettings process. The asset is currently 
       valued on a "day 1 basis", i.e. open but with no trading history. 
       The Investment Manager expects NAV growth from this asset in 
       time, as occupancy becomes established and stabilised. The Investment 
       Manager is encouraged by the valuations attached to both private 
       and public transactions within the UK student accommodation sector. 
       Within the short space of time since appointment the Operator 
       reports pre-lettings for 2021/22 is currently at 20%, with the 
       expectation of increased pre-lets during the summer period. 
       Non-Core > Manufacturing 
       Bienbauer's (Loan ref: 39) performance continues to benefit from 
       the economic reopening in Germany. The borrower's management 
       team notified the lending group of its intention to revert to 
       paying the original loan payment terms of 50% cash / 50% PIK 
       from Q3. This this will significantly reduce the overall percentage 
       of the portfolio which is paid in PIK as they were the largest 
       contributor to this during 2020. 
       Health & Well Being > Gym Royalty's/Franchise 
       Energie Fitness (Loan ref:76) has seen significant growth in 
       membership numbers which are now back above the 100,000-member 
       level and are expected to be back at pre-lockdown levels by Q4 
       2021. Overall, the business is performing well with the recently 
       announced Iberia Master Franchise entering pre-sales period for 
       membership sales, multiple new UK site franchise agreements signed 
       and the launch of the Empowered Brands concept, which seeks to 
       partner with established health and wellness businesses to rollout 
       UK and International franchises. 
 
 The Company also announces that the Monthly Report for the period 
  to 31 May 2021 is now available to be viewed on the Company website: 
 https://rmdl.co.uk/investor-centre/monthly-factsheets/ 
 
                                          END 
 
  For further information, please contact: 
 RM Capital Markets Limited - Investment Manager 
 James Robson 
 Pietro Nicholls 
  Thomas Le Grix De La Salle 
 Tel: 0131 603 7060 
 
 International Fund Management - AIFM 
 Chris Hickling 
 Shaun Robert 
 Tel: 01481 737600 
 
 Tulchan Group - Financial PR 
 James Macey White 
 Elizabeth Snow 
 Tel: 0207 353 4200 
 
 PraxisIFM Fund Services (UK) Limited - Administrator and Company 
  Secretary 
 Brian Smith 
 Ciara McKillop 
 Tel: 020 4513 9260 
 
 Singer Capital Markers Advisory LLP - Financial Adviser and 
  Broker 
 James Maxwell 
 Asha Chotai 
 Tel: 020 7496 3000 
 
 Peel Hunt LLP - Financial Adviser and Broker 
 Luke Simpson 
 Liz Yong 
 Tel: 020 7418 8900 
 
 About RM Secured Direct Lending 
 
 RM Secured Direct Lending Plc ("RMDL" or the "Company") is a 
  closed-ended investment trust established to invest in a portfolio 
  of secured debt instruments. 
 
 The Company aims to generate attractive and regular dividends 
  through loans sourced or originated by the Investment Manager 
  with a degree of inflation protection through index-linked returns 
  where appropriate. Loans in which the Company invests are predominantly 
  secured against assets such as real estate or plant and machinery 
  and/or income streams such as account receivables. 
 
 For more information, please see 
 https://rmdl.co.uk/investor-centre/monthly-factsheets/ 
 

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July 16, 2021 02:00 ET (06:00 GMT)

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