TIDMNRR
RNS Number : 6873G
NewRiver REIT PLC
25 July 2019
NewRiver REIT plc First Quarter Company Update
25 July 2019
Good progress on our strategies to deliver Underlying FFO
growth
Allan Lockhart, Chief Executive commented: "We have made a good
start to the year despite continued retail sector headwinds,
delivering robust operational metrics, with occupancy and average
rents remaining stable, footfall outperforming the benchmark, and
long-term leasing deals ahead of previous passing rent and
estimated rental values.
We have progressed our strategies to deliver Underlying Funds
From Operations growth and to re-establish a fully covered dividend
with a net neutral investment approach, recycling GBP27.5 million
of lower-yielding assets and acquiring GBP30.3 million of
high-yielding retail parks, with robust cashflows, in a new joint
venture with BRAVO. We signed our third mandate within a year to
our third-party asset-management platform, for the Nicholsons
Shopping Centre in Maidenhead, which is a significant endorsement
of our in-house capabilities and demonstrates the attractiveness of
our scale, governance and asset management expertise to a wide
range of third-party asset owners. Our pub portfolio has also
continued to deliver high occupancy and robust cash returns, as it
benefited from its first full quarter of the scale-based synergies
secured through the integration of Hawthorn Leisure, completed in
January 2019.
Looking ahead, we remain confident that our diversified
portfolio, underpinned by affordable and therefore sustainable
rents, and a focus on convenience, value and services, alongside
our identified growth strategies, will position us well to weather
the current challenges and pursue value-creating
opportunities."
Good progress with strategies to deliver Underlying FFO growth
and re-establish dividend cover
-- Disposed of GBP27.5 million of assets at a blended net
initial yield ('NIY') of 6.7% and 1.6% below book value, comprising
an Asda foodstore and petrol filling station at St Elli Shopping
Centre, Llanelli for GBP17.9 million, one shopping centre, six
c-stores and three pubs; exchanged or under offer on a further
GBP10.7 million of assets; altogether representing a blended NIY of
6.0%; on track to recycle 5% of our portfolio in FY20
-- Deployed proceeds into acquisition in BRAVO JV of four retail
parks: Kittybrewster Retail Park in Aberdeen, units at Kingsway
East Retail Park in Dundee, Telford Retail Park in Inverness, and
Wakes Retail Park on the Isle of Wight, for GBP60.5 million (NRR
share: GBP30.3 million), reflecting a NIY of 9.8%
-- Asset Management Agreement signed with developer Areli Real
Estate for the management of Nicholsons Shopping Centre,
Maidenhead; third mandate for our third-party asset management
platform within a year of its launch; discussions ongoing with a
number of Local Authority owners of retail assets to expand
platform further
Affordable rents and focus on convenience, value and services
delivers robust operational metrics
-- Retail occupancy remained high at 95.4% (March 2019: 95.2%)
-- 172,200 sq ft of leasing activity in the quarter; includes
lease renewals on 29 Amazon Lockers across our community shopping
centre portfolio, securing GBP52,000 of rent and underscoring the
importance of our centres as click & collect destinations;
long-term retail deals completed on terms 1.4% ahead of previous
rent and 3.2% ahead of estimated rental values
-- Average retail rent remained affordable at GBP12.58 per sq ft
(March 2019: GBP12.52 per sq ft)
-- Well-positioned portfolio proved resilient to CVAs and
administrations during the quarter: 0.5% of gross income impacted
by CVAs and administrations during the quarter; includes Arcadia
Group exposure of 0.3% of gross income, with no reduction to rental
income as a result of its CVAs
-- Like-for-like footfall across our shopping centres declined
-2.5%, outperforming the UK benchmark by 70 bps
Community pub portfolio continues to deliver robust cash flows
and opportunities to extract further value
-- Community pub portfolio delivered like-for-like EBITDA per
pub of +5.5% in first quarter, driven by the scale-based synergies
secured in FY19
-- Occupancy remained high at 97.6% (March 2019: 97.9%) across our 661 community pubs
-- Extracting further value through risk-controlled development:
on site with the redevelopment of the Sea View Inn in Poole, Dorset
to deliver a scheme comprising 10 apartments and a Co-op
convenience store ('c-store')
Performance underpinned by a fully unsecured balance sheet and
disciplined capital allocation
-- Ordinary dividend for Q1 FY20 held at 5.4 pence (Q1 FY19: 5.4 pence)
-- Pro forma LTV remained stable at 37% based on March 2019
valuations, within our stated guidance of less than 40%, and
reflecting our net neutral investment approach
For further information
NewRiver REIT plc +44 (0)20 3328 5800
Allan Lockhart (Chief Executive)
Mark Davies (Chief Financial Officer)
Will Hobman (Head of Investor
Relations & Strategy)
+44 (0)20 7251
Finsbury 3801
Gordon Simpson
James Thompson
This announcement contains inside information as defined in
Article 7 of the EU Market Abuse Regulation No 596/2014 and has
been announced in accordance with the Company's obligations under
Article 17 of that Regulation. This announcement has been
authorised for release by the Board of Directors.
About NewRiver
NewRiver REIT plc ('NewRiver') is a leading Real Estate
Investment Trust specialising in buying, managing, developing and
recycling convenience-led, community-focused retail and leisure
assets throughout the UK.
Our GBP1.3 billion portfolio covers over 9 million sq ft and
comprises 33 community shopping centres, 23 conveniently located
retail parks and over 650 community pubs. Having hand-picked our
assets since NewRiver was founded in 2009, we have deliberately
focused on the fastest growing and most sustainable sub-sectors of
the UK retail market, with grocery, convenience stores, value
clothing, health & beauty and discounters forming the core of
our retail portfolio. This focus, combined with our affordable
rents and desirable locations, delivers sustainable and growing
returns for our shareholders, while our active approach to asset
management and inbuilt 1.9 million sq ft development pipeline
provide further opportunities to extract value from our
portfolio.
NewRiver has a Premium Listing on the Main Market of the London
Stock Exchange (ticker: NRR) and is a constituent of the FTSE 250
and EPRA indices. Visit www.nrr.co.uk for further information.
Forward-looking statements
The information in this announcement may include forward-looking
statements, which are based on current projections about future
events. These forward-looking statements reflect the directors'
beliefs and expectations and are subject to risks, uncertainties
and assumptions about NewRiver REIT plc (the 'Company'), including,
amongst other things, the development of its business, trends in
its operating industry, returns on investment and future capital
expenditure and acquisitions, that could cause actual results and
performance to differ materially from any expected future results
or performance expressed or implied by the forward-looking
statements.
None of the future projections, expectations, estimates or
prospects in this announcement should be taken as forecasts or
promises nor should they be taken as implying any indication,
assurance or guarantee that the assumptions on which such future
projections, expectations, estimates or prospects have been
prepared are correct or exhaustive or, in the case of the
assumptions, fully stated in the document. As a result, you are
cautioned not to place reliance on such forward-looking statements
as a prediction of actual results or otherwise. The information and
opinions contained in this announcement are provided as at the date
of this document and are subject to change without notice. No one
undertakes to update publicly or revise any such forward looking
statements. No statement in this document is or is intended to be a
profit forecast or profit estimate or to imply that the earnings of
the Company for the current or future financial years will
necessarily match or exceed the historical or published earnings of
the Company.
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END
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