TIDMNRR
RNS Number : 5136A
NewRiver REIT PLC
22 January 2020
NewRiver REIT plc Third Quarter Company Update
22 January 2020
Well-positioned portfolio delivering a resilient operational
performance
Allan Lockhart, Chief Executive commented: "In the third
quarter, we saw continued stability in our operational metrics with
an increase in retail occupancy to 96.1%, footfall outperforming
the UK benchmark by 60 bps and a healthy demand for our retail
space having signed deals across 152,000 sq ft, with long-term
deals on terms ahead of previous passing rent and ERVs. Our
Hawthorn Leisure pubs business also delivered growth through the
acquisition of Bravo Inns and from strong like-for-like EBITDA per
pub growth.
Our disposal programme continues apace, with GBP70.3 million of
disposals now completed, exchanged or under offer in FY20 to date,
at a blended yield of 4.9%. In line with our strategy, we have
recycled sales proceeds into GBP92.6 million of retail park and
community pub acquisitions in FY20 to date, at a blended net
initial yield of 10.1%.
We were pleased with the robust Christmas trading performance of
a number of our top 15 tenants, including Sainsbury's, B&M,
Primark, Next and Iceland. With a clear strategy and a portfolio
focused around occupiers providing convenience, value and services,
we feel well-positioned to navigate our way through these
challenging market conditions."
Continued progress in disposing of a minimum of 5% of our
portfolio in FY20
-- So far in FY20, disposals completed, exchanged or under offer
total GBP70.3 million, at a blended NIY of 4.9%; completed
disposals on terms in-line with March 2019 valuation
-- Completed disposals in FY20 to date total GBP39.3 million
across all asset types, at a blended NIY of 5.6%, with a further
GBP31.0 million of disposals exchanged or under offer, at a blended
NIY of 3.8%
Disposal proceeds recycled into high yielding acquisitions
across retail parks and community pubs
-- So far in FY20, acquisitions total GBP163.1 million (NewRiver
share: GBP92.6 million), at a blended NIY of 10.1%
-- Poole Retail Park acquired in October 2019 in a 10%
investment with BRAVO for GBP44.7 million (NewRiver share: GBP4.5
million), representing a NIY of 8.0%
-- Sprucefield Retail Park, Lisburn acquired in December 2019
for GBP40.0 million, representing a NIY of 8.7%; acquisition to
generate GBP3.7 million of annualised Net Property Income for
NewRiver and provides opportunity to extract further value through
active asset management and the disposal of parcels of land for
development
-- Bravo Inns acquired in December 2019 for GBP17.9 million,
representing an EBITDA multiple of 6.8x; transaction expected to
generate annualised outlet EBITDA of GBP2.6 million across the 44
pubs and grows our exposure to the highly profitable operator
manager pub model
Retail portfolio delivered robust operational metrics, as
platform signs fourth asset management mandate
-- Retail occupancy remained high at 96.1% (September 2019: 95.6%)
-- 152,000 sq ft of leasing activity completed; long term deals
on terms 3.0% ahead of previous passing rent and 2.5% ahead of ERV;
includes a letting to The Gym Group in Victoria Retail Park,
Beverley, one of the brand's first "small-box" sites, which further
increases our exposure to the growing low-cost gym sub-sector
-- Affordable average retail rent of GBP12.59 psf (September 2019: GBP12.49 psf)
-- Tenant mix remains well-diversified with our largest tenant,
Sainsbury's, representing just 2.3% of gross income
-- Like-for-like footfall across shopping centres outperformed
UK benchmark by 60 bps, with a decline of -1.9%
-- In November 2019, signed fourth third-party asset management
mandate with Knowsley Council to become strategic asset manager for
Kirkby Town Centre; agreement includes fees for acquisition
due-diligence, asset management and a potential development
monitoring fee
Hawthorn Leisure: continued like-for-like EBITDA growth per pub,
supported by solid Christmas trading
-- Like-for-like EBITDA growth per pub of +4.9% in FY20 to date,
as the portfolio continued to benefit from the scale-based
synergies secured in FY19 and a solid Christmas; rate of growth
expected to moderate following annualisation of Hawthorn Leisure
integration in January 2020
-- Pub occupancy remained high at 97.9% (September 2019: 96.7%) across our 698 community pubs
-- 26(th) convenience store ("c-store") to be handed over to the
Co-op this week at site of the Sea View Inn in Poole, triggering
GBP275,000 performance receipt from the Co-op; nine c-stores sold
in FY20 to date
Solid performance underpinned by conservative financial policies
and a fully unsecured balance sheet
-- Third quarter ordinary dividend held at 5.4 pence per share
(Q3 FY19: 5.4 pence); dividend for FY20 to date held at 16.2 pence
per share (FY19 to Q3: 16.2 pence)
-- Following acquisitions, pro forma LTV of 41% (based on
September 2019 valuations); net borrowings expected to reduce as
disposal programme progresses; guidance remains for LTV to be below
40%
-- In November 2019, Fitch Ratings affirmed NewRiver's IDR at
'BBB' with Stable Outlook and corporate bond rating at 'BBB+'; an
endorsement of our conservative balance sheet and financial
policies, and resilient business model
For further information
NewRiver REIT plc +44 (0)20 3328 5800
Allan Lockhart (Chief Executive)
Mark Davies (Chief Financial Officer)
Tom Loughran (Head of Investor
Relations)
Finsbury +44 (0)20 7251 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 9 million sq ft and
comprises 33 community shopping centres, 25 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 in-built 2.3 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.
LEI Number: 2138004GX1VAUMH66L31
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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