PSPI stuns the market with grim update

Sometimes the market is right. We thought we'd spotted a valuation anomaly in Public Service Properties Investments (PSPI), an Aim-listed care-home landlord with index-linked rental income, whose shares traded at a cavernous discount to net asset value even a year ago. But, after testing market appetite for its assets, the company has established that its portfolio is overvalued on its books – and property values are still falling.

Not only that, but the company is struggling to find a bank willing to refinance the debt held against some of its UK care homes, which expires in September. Finance must be found before any further dividends are paid. The fund manager has been sacked, but will serve a notice period of 24 months. The shares are down 31 per cent on this news, which came out of the blue in a very grim update.

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