Track Record - Returns to community shareholders
The table below shows how much member share capital MSP manages and the return made to shareholders.
Whilst an investment in Mustard Seed Property should not primarily be seen as a finance first investment, the board has been diligent in recognising its commitment to MSP shareholders that their investment deserves a regular return. As such, investors have been paid a return every year without fail for over a decade.
The target interest rate was set at 3.50% in the three historic years shown, and is expected to be maintained at this rate for the current financial year (ending 30 September 2020) and next financial year (ending 30 September 2021), before rising to 4.50% for the financial year ending 30 September 2022, once the new properties are generating income.
MSP’s current policy is to re-invest all share interest as a new share issue for all members that have less than the maximum of £100,000 of share capital. Each year investors will receive an additional share certificate to the value of the re-invested amount and they will earn share interest on those new shares in subsequent years. Members have the option to opt out of this every year so they can receive cash returns.
MSP generated a loss of c. £19k in the last full financial year to 30 September 2019, expects a loss of c. £19k this year (to 30 September 2020) and to generate a larger loss of c. £52k in the next financial year (to 30 September 2021). This is planned for and expected - as property is purchased and funds are spent on raising new capital.
The Board are committed to continuing to pay a return to community shareholders and consider this sensible given the stable existing revenues and the projected financial performance – see ‘Investment Plan’ – with healthy profits generated from October 2021 as new properties are fully let to operational partners.
The target interest rate will therefore be maintained at 3.50% and only increased to 4.50% once profits are again generated.