Home REIT shares tumble after last-minute account delays
Shares in social housing investor Home REIT plunged today after the firm delayed the publication of its accounts following an attack by a short seller last week.
Viceroy Research, which was among the first investors to take aim at the now-collapsed payments firm Wirecard, said last week that Home REIT’s charity tenants in many cases could not afford rent, were simply not paying or were run by bad actors.
The scathing report led Home REIT to announce after market close on Friday it would delay the publication of its accounts due today, which sent shares spiralling beyond seven per cent..
Shares in the FTSE 250 firm are now trading down over 26 per cent since the publication of the critical report last Wednesday, trading at around at 55.8p per share, down from around 75.8p per share last Wednesday.
Home REIT claimed it was “standard practice” that a company that has had “material allegations” made against it is “subject to an enhanced set of audit procedures.”
“The results, having been audited by BDO, were on track for release on Monday 28th November as previously announced, until the Viceroy report was published on Wednesday morning,” Home REIT said on Friday. “Only due to the additional procedures now required, they have been delayed.”
Viceroy partner Fraser Perring claims to have reported the quality of Home REIT’s leases to the Met Police and the City watchdog the Financial Conduct Authority.
Perring claims that Home REIT has used cash kickbacks to incentivise charities to sign contracts and now had poor quality tenants that could not keep up with payments.
“If the management were running an ethical and decent business, why was there a need to give incentives to charities – that are newly formed – in [the form of] £3m or properties,” he told City PMlast week.
“I would call it an inducement and query the legality of it. Why is there a need to give these inducements to charities?”
Viceroy claimed in the report that “not only are most of these tenants relatively newly formed, but many have financials that cast serious doubt on their ability to service these leases.”