Irish Residential Properties REIT Plc

Hello everyone and thank you for joining the Irish Residential Pptys Reit PLC 2025 Preliminary Results Conference Call. My name is Harry and I will be coordinating your call today. Joining us on today's call are Eddie Byrne, Chief Executive Officer, Brian Fagan, Chief Financial Officer and Stephen Mulcair, Investor Relations. All lines will be in listen-only mode for now answering prepared remarks and there will be an opportunity for questions and answers at the end. You can enter the queue for questions by pressing star followed by 1 on your telephone keypad. If you change your mind, please press star followed by 2 to exit the queue. I will now hand the call over to Stephen Mulcair with investor relations to begin. Please go ahead.

Good morning and welcome to the IRS 2025 preliminary results call. We're excited to share our strategic progress and financial results with you today. Joining me is CEO Eddie Byrne and CFO Brian Fagan. Before I hand over to Eddie, please note that some statements made today may be forward-looking and subject to risks and uncertainties that could cause actual results to differ material from those expressed or implied by these forward-looking statements. For detailed information, please refer to the risk section of our results issued today. I'll now hand over to Eddie to provide an overview of the results for the year.

Thank you, Stephen. Good morning, everyone, and welcome to our 2025 preliminary results presentation. The past 12 months have marked a step change in both our operational and financial performance, driving meaningful improvements in margins and earnings. Our strategic initiatives have delivered tangible results, underpinned by our relentless focus on operational excellence and cost control, all powered by our internalised operating platform. Our asset recycling programme continues to deliver, generating sales premiums over 25% above book value. Our disciplined approach to capital allocation is totally focused on creating sustainable long-term shareholder value, and the momentum is set to accelerate as we look to capitalise on favourable regulatory and market trends. The coming year will present exciting opportunities to expand on the strong foundation we built in 2025. Turning to the numbers, our unwavering commitment to cost management has driven a 120 basis points margin uplift. In 2025, we have sustained and strengthened on the earnings growth trajectory we established in 2024, with adjusted EPRA earnings per share up 2.3% year-on-year. Operationally, our platform continues to deliver. Occupancy remains at an impressive 99.5%, with rent collections exceeding 99%. Asset disposals into the owner-occupied market have further enhanced our results, with adjusted earnings excluding fair value movements growing by a strong 7.4% across the full year. And in line with Irish REIT legislation, we are proposing a final year-end dividend of 2.53 cents per share, bringing our full-year dividend to 4.89 cents, an increase of 20% on 2024. as at the 31st of December 2025 our EPRA net initial yield stood at 5.2% with asset values improving slightly compared to the prior year due to improved operating performance rather than any yield tightening. PRS prime yields have now been stable for two full years and looking ahead we are confident in the outlook for valuations as major headwinds including elevated inflation interest rates and restrictive rent controls have largely subsided. Greater liquidity and embedded reversion in the market in general is expected to have a positive impact on yields over time. On the balance sheet, we successfully refinanced our debt and returned surplus capital to shareholders through an accretive share buyback during the year. We continue to see an increasing number of opportunities for growth in the market. There has been a significant shift in market sentiment in PRS since the government announced a suite of changes to the regulatory landscape. We are very positive on the outlook for growth for the business over the coming year. Importantly, overall, we have continued to deliver across all measures within our control. The regulatory landscape is shifting positively, with the government's announcement of the revised rental regulation representing a very positive development. These changes will substantially enhance our business outlook and I'll go into further details on the reforms later in the presentation. Turning now to slide six. As we look at this slide, I want to highlight the core strategic pillars that underpin our business and drive our success. These pillars provide a clear blueprint for our management team to maximize value creation for our shareholders. We are constantly refining our operating strategy to ensure we stay ahead of market trends and seize every opportunity to deliver outstanding results. We also maintain a sharp focus on reviewing all capital allocation options available to the company, ensuring we remain agile and responsive in a dynamic environment. Our unique and fully internalised operating platform, further strengthened by advanced digitalisation, sets us apart in the market. This enables us to consistently drive operational excellence and cost efficiency, maximising value for shareholders. We are relentless in our pursuit of value creation. Our strategy is anchored by commitment to maintain a robust balance sheet, moderate gearing and flexible financing by managing our loan to value ratio, financing costs and maturities with discipline and foresight. Optimising our portfolio is at the heart of our approach. We are actively recycling capital from assets, channelling proceeds into either our existing portfolio or looking to selectively acquire high-quality, better-yielding assets whilst continuing to manage the LTV. Where it makes sense, we are ready and able to return capital to shareholders efficiently, demonstrating prudent capital management, evidenced by our share buyback during the period. Sustainability is also a core element of our strategy. We consistently work to ensure our portfolio is fit for purpose over the long term and continues to generate the returns we expect. As a PLC, we operate as a responsible business with strong governance frameworks in place. As we look across our performance for the full year, we've executed strongly on each of these strategic priorities. Our operational metrics are exemplary. Our acid recycling programme continues to deliver significant value. Our capital allocation remains highly efficient and aligned with our strategic framework. And our balance sheet and financial position has strengthened. Having executed on our strategic priorities, the business enters 2026 well positioned to capitalise on the growth opportunity and deliver strongly for shareholders. Moving on now, I'll discuss some of the positive changes that we've seen across the regulatory spectrum. As you are all likely aware, rent regulation has long presented significant challenges for the Irish residential sector. However, the landscape has now shifted decisively for the better. Following the government's substantial changes to rental and other regulations, we are entering a new environment that is set to stimulate investment and accelerate the development of much needed homes across Ireland. This progressive suite of rent, building design standards and VAT reforms marks a pivotal moment for the sector. The headline changes include Rental property owners will be able to reset rents to market levels for all new tenancies commencing from 1 March 2026, bringing greater flexibility and transparency to the rental market. Importantly, this will allow us to gradually bring rents across our portfolio back to the prevailing market over time as units turn over. While annual rent increases remain capped at 2% or the rate of inflation, whichever is lower, the index for inflation will move from HICP to CPI, which has historically tracked higher, ensuring a more realistic effect in market conditions. Crucially, new-build properties will be exempt from the 2% cap and instead will only be limited to CPI. providing a genuine incentive for development and investment in new builds. Under these rules, every unit in our portfolio with the lease commencing after the 1st of March, 2026 can be re-let at prevailing market rents once vacant. Currently, our independently assessed rents are approximately 20% below market. And while in 2024 and 2025, around 14% of our portfolio turned over. We do see this moderating slightly into 2026 to around 10%, but we do not see it going below that level based on historical data from our resident surveys. The opportunity to realise this embedded reversion is substantial and we expect it to translate into enhanced returns for the company and our shareholders. But importantly, Whilst this change is set to be a substantial driver for our business and will enable us to contribute to increasing the supply of rental accommodation in Ireland, the mechanics of the legislation ensures that renters will continue to be protected at the same time. Looking at the wider market, these changes are set to make a real difference. By addressing long-standing viability challenges, the reforms will encourage greater investment into the Irish residential sector, Improving liquidity, which will potentially lead to a tightening of yields over time. As shown by the graph on the bottom right-hand side of the slide, restrictive regulations have led to a substantial drop in investment in PRS assets over the subsequent years. The new changes will take time to translate to the level of investment that is needed, but we are already seeing a shift of sentiment and the potential for new Fresh Capital to enter the market since the government has announced these changes. We are optimistic about the future. The new registry framework puts Ireland on a more competitive footing and will unlock fresh investment, drive growth and support the creation of new homes nationwide. It's an exciting time for our sector and a positive turning point for the Irish housing market. I'll now hand over to Brian to run through the financial results for the year.