**Summary of KCR Residential REIT PLC Interim Results for H1 2026**
**Overview**
KCR Residential REIT PLC, a UK-based residential REIT, reported unaudited consolidated results for the six months ending 31 December 2025. The period saw continued growth in core rental income, driven by improved performance at Deanery Court and incremental rental increases across the portfolio. Despite challenging operating conditions, including higher interest rates and inflationary pressures, the company made progress in optimizing asset performance and controlling costs.
**Key Highlights**
1. **Revenue Growth**
Revenue increased by 15% to £1,092k (H1 2024: £950k), primarily due to improved performance at Deanery Court and rental increases across the portfolio.
Deanery Court achieved an average occupancy of 86% (H1 2024: 66%), while the rest of the portfolio maintained strong occupancy (>97%).
2. **Operational Performance**
Positive operating cash flow rose to £218k (H1 2024: £32k), the strongest outcome to date, reflecting the success of the business plan over the past five years.
Net cash used in operating activities reduced by 31% to £180k (H1 2024: £261k), despite higher finance costs.
3. **Cost Management**
Inflationary pressures made cost reductions challenging, but costs were tightly controlled.
Cost-saving measures implemented during the period are expected to reduce administrative expenses and cost of sales in H2 2026.
4. **Strategic Focus**
The company remains focused on optimizing existing assets, upgrading portfolio quality, exploring development opportunities, and controlling costs.
Lease expiries and tenant churn are actively managed to maximize rental income.
5. **Financial Performance**
Gross profit increased by 16% to £841k (H1 2024: £723k), with a gross margin of 77% (H1 2024: 76.10%).
Operating profit before separately disclosed items was £76k (H1 2024: £798k), with the prior year benefiting from non-cash revaluation gains.
Loss for the period was £377k (H1 2024£433k profit), primarily due to higher finance costs.
6. **Portfolio Updates**
Refurbishment works at Heathside were completed, with two flats now being let.
The transition of Coleherne Road to a minimum six-month tenancy period was successfully completed, expected to stabilize income and reduce operating costs.
Planning submissions for Ladbroke Grove properties are pending, with a strategy to be formalized upon outcome.
7. **Cash Position**
Cash balances at period-end were £0.43m (H1 2024: £0.47m), with ongoing efforts to achieve a cash-neutral position.
**Challenges and Outlook**
Higher finance costs and inflationary pressures continue to challenge the company’s cash neutrality goal.
Tightness in debt markets and higher debt costs limit acquisition opportunities.
The company expects further improvements in operational performance and cost control over the next 12 months.
**Conclusion**
KCR Residential REIT PLC demonstrated resilience in H1 2026, achieving revenue growth and operational improvements despite a challenging environment. The company remains committed to its strategic objectives, focusing on asset optimization and cost management to drive long-term value for shareholders.
| Metric | Six Months Ended 31 December 2025 | Six Months Ended 31 December 2024 | Year Ended 30 June 2025 (Audited) |
|---|---|---|---|
| Revenue | £1,092,414 | £950,103 | £1,885,144 |
| Gross Profit | £841,184 | £722,850 | £1,466,098 |
| Operating Profit Before Separately Disclosed Items | £75,618 | £797,519 | £1,266,836 |
| Operating Profit | £12,024 | £713,529 | £990,013 |
| (Loss)/Profit Before Taxation | (£377,278) | £432,596 | £327,641 |
| (Loss)/Profit for the Period | (£377,278) | £432,596 | £327,641 |
| Basic (Loss)/Profit per Share (pence) | (0.91) | 1.04 | 0.79 |
| Total Assets | £27,500,041 | £27,136,724 | £27,310,839 |
| Secured Bank Borrowings | £14,561,215 | £13,904,324 | £14,135,965 |
| Cash and Cash Equivalents | £427,498 | £472,652 | £174,312 |
| Net Asset Value per Share (pence) | 29.45 | 30.61 | 30.36 |
| Net Cash Used in Operating Activities | (£179,751) | (£261,192) | (£800,119) |