ICG-Longbow Senior Secured UK Property Debt Investments Ltd on Monday reported a significant drop in profit as it incurred a high expected credit loss provision on financial assets.
The London-based investor in UK real estate debt said pretax profit in the year that ended on January 31 fell to £2.0 million from £7.3 million a year prior. Total income decreased 24% to £7.3 million from £9.5 million.
The firm reported an expected credit loss provision on financial assets of £3.9 million for financial 2023, compared to none a year prior.
‘The recent rise in UK interest rates and worsening near term economic outlook have impacted the UK property market in most sectors, reducing value and liquidity. As a consequence, the company’s equity buffer has been eroded,’ ICG-Longbow said.
The company declared a total dividend of 3.6 pence per share, 36% lower than 5.6p a year ago.
Looking ahead, it said: ‘There is no doubt that we are now operating in a more difficult market than when we reported to you in our last annual and interim reports,’ adding that ‘we will continue to work with the investment manager to manage those risks and deliver the best outcome for shareholders in the most realistic timeframe.’
ICG-Longbow shares closed 4.2% lower at 35.50 pence each on Monday in London.
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