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Sovereign Reversions PLC 

("Sovereign" or "the Group")

AGM Statement

The Annual General Meeting of Sovereign Reversions plc, which specialises in providing finance to homeowners in retirement through equity release, will be held today at 12.00 noon at the offices of BDO Stoy Hayward LLP, 55 Baker Street, London W1U 7EU, where our Chairman, Paul Spencer, will make the following statement:

"We are pleased to report that the Group continues to make progress in a difficult business environment. In September 2009, we announced that our equity release services arm, Home & Capital had been awarded a contract to administer approximately 1,000 equity release plans for a substantial financial institution. This has increased the Group's plans under management by 50%, strengthened our long term, recurring revenue base from third parties and demonstrated that we can be beneficiaries of the consolidation which is taking place in our industry.

When we acquired Home & Capital in September 2006, our objective was to develop this as a profitable business in its own right within three years. Notwithstanding exceptional economic turbulence, we expect Home & Capital to make a small profit both in the six month period to 31 October 2009 and for the full financial year to April 2010. In providing a range of equity release services, Home & Capital earns revenue in three ways: from providing, advising on and administering equity release plans. This mix reduces the risk in the business and positions us well to capitalise on the expected eventual return of sustained growth in the equity release market in the future. In the shorter term, Home & Capital should have further opportunities to improve its profitability as a result of market consolidation.

Our investment portfolio is generating stronger cash flows for the Group than we had expected, enabling us to retire debt ahead of schedule as well as accumulate funds for re-investment, to which we have added the proceeds of the share issue in July/August of some £3.5m. We are evaluating various opportunities to re-invest in equity release assets close to the optimal point of the property cycle.

We are pursuing a number of avenues for replacing our current bank facilities with longer-term financing in a market-place that is now more receptive to such discussions. We have good relationships with our existing banks and will only make changes in our financing arrangements when we consider that the timing is right.

We have engaged Odgers Berndtson to recruit a new Non-executive Director. We have put forward proposals with regard to the remuneration of our Executive Directors, which provide for a reduction in fixed salary and the introduction of long-term incentives; these are currently being discussed with our major shareholders and we expect this process to have been concluded very shortly.

We will be reporting our results for the six months to October 2009 in early December 2009. We are intending to pay an interim dividend in January 2010."

Ends

For further information please contact:- 

 

Mark Baker, Wriglesworth Consultancy                                    Tel: 07980 635243 

 

Graeme Marshall, Chief Executive, Sovereign Reversions plc Tel: 01234 356300 

 

Philip Davies, Charles Stanley Securities, Nominated Adviser Tel: 020 7149 6000 

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