Secured finance
Information as per 30 September 2024 half-year report
| Investment | Investment type | Carrying value | Income return | Property type / underlying security |
|---|---|---|---|---|
| Secured senior finance | First charge secured loans | £24.0m * | 9.6%** | Diversified loan portfolio focussed on real estate investments and developments |
| Secured mezzanine finance | Second charge secured loans |
£21.3m* |
18.0%** |
Diversified loan portfolio focussed on real estate investments and developments |
* Including accrued interest/coupon at the balance sheet date
** The income returns for high return debt are the annualised actual finance income return over the period shown as a percentage of the average committed capital over the period
These loans are typically secured on real estate investment and development assets with attractive risk-adjusted income returns from either current or capitalised interest or coupons.
As at 30 September 2024, ART had invested a total amount of £45.3 million across twelve loans. Over the past twelve months the loan portfolio has decreased by 21.8%.
During the six months to 30 September 2024, additional drawdowns of £1.9 million were made on existing loans, one loan for £4.1 million (including accrued interest and exit fees) was fully repaid and a further £5.9 million (including accrued interest) was received as part repayments.
Post period end, one new loan was granted for £3.1 million, £0.3 million of drawdowns were made on existing loans, two loans for £20.5 million (including accrued interest and applicable fees) were fully repaid and part payments were received amounting to £0.6 million (including accrued interest).
Each loan will typically have a term of up to two years, a maximum 75% loan to gross development value ratio and be targeted to generate attractive risk-adjusted income returns. As at 30 September 2024, the senior portfolio has an average LTV of 62.0% based on loan commitments (with mezzanine loans having an LTV range of between 49.5% and 72.0% whilst the highest approved senior loan LTV is 63.6%).
Four loans in the portfolio have entered receivership and ART is working closely with stakeholders to maximise capital recovery. The Company has considered the security on these loans (which are a combination of a first charge and a second charge over the respective assets and personal guarantees) and has impaired one loan, which is accounted for at fair value, by £0.4 million; the Group also calculated an ECL on the other three loans of approximately £4.3 million; the Group have also provided for an ECL on the remainder of the loans’ portfolio for an additional £1.7 million. In total, the Group have provided for an ECL of £6.0 million (31 March 2024: £5.7 million) in its consolidated accounts.
