3 January 2023
If you are covering the suspension in dealing in shares of Home REIT, please find below a comment from Oli Creasey, equity research analyst at Quilter Cheviot:
“Shares in Home REIT, the social housing landlord with a focus on housing for homeless people, have been suspended due to the company’s year-end results not being published on time. The company’s year-end is August, and the London Stock Exchange requires FY results to be published within four months (ie: 31st December for Home REIT). The release of the full year report was delayed following the publication of a short-selling report by Viceroy research in late November.
“In principle, this is a technical breach of rules, and one that should be able to be remedied fairly quickly – we would expect that the results will be published in January 2023, and trading in the shares to resume promptly after that. As such, the suspension may only last a few days. We also note that this risk was flagged by the company late in 2022, and so has not come as a big surprise.
“The short-selling report makes a raft of allegations against the company, some of which don’t hold water, but others which could be very damaging. The full year release was delayed to enable a more thorough audit by the auditors, BDO, standard practice when such allegations have been made. The timing of the short report is unlikely to have been a coincidence – delaying the results and audit into December and the run up to Christmas was probably one of the goals of the short sellers to maximise the impact of their report.
“The reaction to the full year results, when it comes, is going to be highly dependent on the auditors’ statement, as well as the REIT management’s response to the allegations – for once analysts will not be focusing on the financial data. Home REIT has already offered a rebuttal to the short report, but will likely need to provide investors with further detail to shore up confidence in the company. Shares last traded at 38p, a substantial discount to the expected NAV, and well below the peak of 130p early last year.”
