PSPI plunges after strategic review

European care home group PSPI plunged on Monday after the firm admitted it would be unlikely to receive an acceptable cash consideration for an outright disposal of its assets.

The company also said it is considering a joint refinancing as part of a potential combination of the majority of the group's UK property assets and the owned and operated properties of its UK tenant.

"Such a refinancing would establish a solid financial platform for the combined businesses, but is unlikely to generate short term cash proceeds for the group," the firm said.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

In recent months PSPI has experienced an increase in capitalisation rates on its investment properties which has meant a significant reduction in the valuation of these properties, a trend which is expected to continue.

PSPI added that it is reviewing its dividend and distribution policy as part of the strategic review. "The result of the review may lead to a material change in the nature of the group's business and resultant recurring cash generation, but also in potential ad hoc cash generation as a result of transactional activity."

The firm also announced the termination of its asset management agreement with RP&C International.

The share price had fallen 42.52% to 36.50p by 12:05.

NR