TIDMNRR
RNS Number : 7600G
NewRiver REIT PLC
19 March 2020
NewRiver REIT plc
("NewRiver" or the "Company")
Statement on Coronavirus (COVID-19)
NewRiver is today providing an update on the impact of the
Coronavirus (COVID-19) pandemic on its business and the measures it
is taking to manage the risks presented by the virus.
Key Points
-- The Company's focus is on managing cash resources very
carefully and maintaining liquidity in the business. The Company
has GBP72 million of unrestricted cash reserves and GBP45 million
of undrawn revolving credit facilities, giving available liquidity
of GBP117 million.
-- NewRiver benefits from a wholly unsecured balance sheet. No
bank refinancing events are due prior to August 2023, with the
Company's GBP300 million corporate bond not due for repayment until
2028.
-- Consistent with NewRiver's focus on cash preservation and
liquidity, the Board has decided not to pay a fourth quarter
dividend. This preserves GBP17 million of cash. The Company will
update shareholders on dividends at the time of its Full Year
Results announcement.
-- The Company is also taking a prudent approach to preserving
cashflow and reducing operational costs. These measures include the
suspension of all non-essential capital expenditure projects, which
will improve cashflow over the next 12 months by GBP24 million, and
the suspension of business rates and marketing in our shopping
centres and our pubs which will improve cashflow by a further GBP4
million.
-- NewRiver remains a financially sound business with
significant covenant headroom and a capital structure that is well
placed to absorb a prolonged period of uncertainty.
-- NewRiver's retail portfolio of shopping centres and retail
parks represents more than 70% of our total portfolio valuation and
net property income. These assets are typically anchored by major
food and grocery brands and serve the everyday shopping needs of
their local communities. We continue to have no department store
exposure and very limited fashion and casual dining exposure. Our
723 wet led pubs are typically community based, local pubs
providing an important social purpose with little or no dependency
on food.
Q4 Dividend
It is too early to quantify the impact of COVID-19 on the
Company's operations. A significant part of the Board's financial
focus for the foreseeable future must therefore be on liquidity and
trading through to more normalised conditions. To that end, the
Board has decided not to pay the fourth quarter dividend for the
financial year ending 31 March 2020. The total dividend paid for
the year ending 31 March 2020 will therefore be 16.2 pence per
share. The impact of this decision is to preserve an additional
GBP17 million of cash. The Company will update shareholders on
dividends at the time of the announcement of the Full Year Results.
The Board wishes to return to a consistent programme of dividend
payments as quickly as possible, but this can only be done on the
return to normalised trading conditions. The Board considers this
to be the most prudent course of action until the impact of
COVID-19 becomes clearer.
Operational update
Safety and Wellbeing
In this rapidly evolving situation, the safety and wellbeing of
NewRiver's staff, occupiers, tenants and pub partners, and the
customers who visit our assets, are a major priority. Currently,
all our retail assets and almost all our community pubs are
operational, and we stand ready to act on the latest advice from
the UK Government.
Retail portfolio
NewRiver's retail portfolio, mainly comprising community
shopping centres and retail parks, represented 77% of our total
portfolio by valuation and 70% of our net property income, as at 30
September 2019. This portfolio is focused on occupiers in the food
& grocery, health & beauty, discounter and essential
services sub-sectors, and almost two-thirds of our retail assets
are anchored by a major food and grocery brand. This underscores
the vital role that our assets play in meeting the everyday needs
of consumers. The resilience of our portfolio positioning is
reflected in a 660 bps outperformance of the UK footfall benchmark
over the week ended 15 March, with a year-on-year footfall decline
of -0.7% across our shopping centres. In addition, the Company has
in the last few days exchanged contracts on two new lettings, with
a major discounter at Sprucefield Retail Park and a food &
grocery retailer at Wakes Retail Park. NewRiver continues to
benefit from no exposure to department stores, and limited exposure
to mid-market fashion and casual dining operators, which are some
of the sub-sectors most impacted by COVID-19.
Community pub portfolio
Our community pub portfolio, which includes a number of Co-op
convenience stores, represented 23% of our portfolio by valuation
and 30% of our net property income, as at 30 September 2019. Most
of our community pubs operate under the 'Leased & Tenanted'
model, whereby individual occupiers have control over whether sites
remain open, although we are engaging closely with our occupiers to
provide support and ensure adherence to the latest UK Government
advice. The majority of our 'Operator Managed' pubs remain open and
trading, although we are currently assessing UK Government advice
and will take all necessary steps to ensure occupier and customer
safety.
In addition, the occupiers across our retail and community pub
portfolios also stand to benefit from the measures announced by the
UK Government on 17 March, giving all retail, hospitality and
leisure businesses in England a 100% business rates holiday for the
next 12 months, and providing GBP25,000 grants to businesses in the
same sectors with rateable values between GBP15,000 and GBP51,000.
For our retail portfolio alone, these measures are expected to save
our occupiers over GBP40 million. Almost all our community pubs
have a rateable value below GBP51,000, so this will provide further
indirect benefit to our portfolio, and NewRiver's own business
rates bill across its community pubs portfolio will be reduced by
GBP1 million.
NewRiver remains a financially sound business with a capital
structure that is well placed to absorb a prolonged period of
uncertainty, and we welcome the measures outlined by the UK
Government on 17 March to provide financial support for the retail
and hospitality sectors.
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)
+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 9 million sq ft and
comprises 33 community shopping centres, 25 conveniently located
retail parks and over 700 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 over the longer term, 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). Visit www.nrr.co.uk for further
information.
LEI Number: 2138004GX1VAUMH66L31
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END
STRSFDSMUESSESD
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