(Alliance News) - Grit Real Estate Income Group Ltd on Friday reported a jump in interim property income but saw a fall in profit.

It also announced a deemed disposal and potential exit of its BHI interests.

For the six months ended December 31, the Pan-African property investment and management company reported net property income of USD22.1 million from USD19.2 million a year earlier.

Contractual rental collected during the period amounted to 108%, up from 95% a year earlier.

The company said net operating income grew 9.1% versus the comparable period, positively impacted by "leasing activity and rent escalations achieved".

Pretax profit, however, fell to USD6.2 million from USD8.5 million, as finance costs widened to USD18.2 million from USD8.5 million.

Net reinstatement value per share of USD78.8 cents per share at period end, down 0.8% from USD79.4 cents per share at June 30.

Chief Executive Officer Bronwyn Knight said: "Grit produced a robust operating performance, including strong cash collections of 108.4% of contracted revenue, and is increasingly well placed to deliver further positive sustainable value for our shareholders and positive impact for the people of Africa."

The company declared a gross dividend of US 2 cents per share for the period, down 20% from 2.50 cents a year prior.

Looking ahead, Grit Real Estate said it aims to transition to a more resilient, higher-growth asset base.

Additionally, it announced a deemed disposal of 17% and the potential further exit by Grit of its remaining interests in Beachcomber Hospitality Investments Ltd, an associate owning three hotels in Mauritius.

BHI was set up as a business venture between New Mauritius Hotels Ltd and Grit.

"Following a successful 2022 trading performance, BHI recently declared a dividend whereby Grit received EUR14.5 million in cash and NMH elected to receive a scrip dividend. This deemed disposal has resulted in Grit's interests in BHI being diluted from 44.4% to 27.1% as at December 31," Grit said.

As a result, Grit today signed a merger deal to merge Grit's wholly owned subsidiary Leisure Property Northern Ltd("LPNL"), through which it owns its interest in BHI, with and into BHI.

Shares were down 4.5% at 31.53 pence each on Friday afternoon in London.

By Xindi Wei, Alliance News reporter

Comments and questions to newsroom@alliancenews.com

Copyright 2023 Alliance News Ltd. All Rights Reserved.