TIDMNRR
RNS Number : 3868M
NewRiver REIT PLC
21 January 2021
NewRiver REIT plc
("NewRiver" or the "Company")
Third Quarter Company Update
NewRiver is today providing an update in respect of its third
quarter, ended 31 December 2020. The Company continues to make
strong progress on rent collection, cash and liquidity, and
disposals during the quarter, despite the latest lockdown
restrictions.
Retail rent collection
Our rent collection for the first three quarters of the
financial year continues to improve following key agreements made
with retailers. Retail rent collection in respect of the fourth
quarter, due on 25 December 2020, is currently tracking ahead of
the levels seen at the same point in Q3. As in previous quarters,
we expect the Q4 figure will continue to improve in the coming
weeks.
Rent collection by quarter, at 15 January 2021
Q4 FY21 Q3 FY21 Q2 FY21 Q1 FY21
Collected 70% 82% 83% 78%
-------- -------- -------- --------
Deferred 5% 6% 5% 6%
-------- -------- -------- --------
Re-gear 5% 3% 6% 6%
-------- -------- -------- --------
Total collected or
alternative payments
agreed 80% 91% 94% 90%
-------- -------- -------- --------
Waived 4% 1% 3% 6%
-------- -------- -------- --------
Rent outstanding 16% 8% 3% 4%
-------- -------- -------- --------
Total 100% 100% 100% 100%
-------- -------- -------- --------
Disposal progress
We are on course to meet our target to dispose of GBP80 million
to GBP100 million of assets this financial year, despite the latest
lockdown restrictions, with GBP157.4 million of disposals either
completed, exchanged or currently under offer, across all asset
types. In aggregate these disposals represent a 6% discount to
March 2020 valuations. This figure comprises GBP53.3 million of
completed disposals, GBP8.9 million of exchanged, and GBP95.2
million under offer.
Cash and liquidity
At 31 December 2020, we had GBP138 million of cash reserves,
which is 68% higher than the position as at 31 March 2020, driven
by the progress with disposals and rent collection. Including our
GBP45 million of undrawn revolving credit facilities and our
eligibility for GBP50 million of financing under the Covid
Corporate Finance Facility ('CCFF'), which we currently have no
need or intention to draw, the Company has total available
liquidity of GBP233 million.
Retail leasing activity
In the third quarter, we continued the strong leasing momentum
seen in the first half, completing 291,900 sq ft of new lettings
and renewals across our retail portfolio, representing GBP1.2
million of annualised rent. This compares favourably to the 152,000
sq ft of new lettings and renewals signed in the same quarter last
year.
Long-term deals were signed at a 6.3% premium to ERV and a -5.2%
discount to previous passing rent, and included renewals signed
with Argos, Marks & Spencer and GO Outdoors. Also during the
quarter, Next opened one of its first collection & returns pods
in the car park of Cuckoo Bridge Retail Park, Dumfries, underlining
the increasing importance of retail parks to retailers' click &
collect strategies.
Retail portfolio operational performance
Reflecting our focus on essential retail, 52% of our occupiers
by gross income are currently open and trading, despite the current
lockdown restrictions across the UK. Eight of our top ten tenants
have remained open throughout the latest lockdown.
Our retail portfolio remained well-diversified, with our top
tenant, B&M, representing 2.5% of our gross income. Our average
rent remained broadly stable at GBP11.70 per sq ft (September 2020:
GBP11.85) and our occupancy remained high at 96.0% (September 2020:
96.2%).
We continue to have limited exposure to the structurally
challenged retail sub-sectors that have been particularly impacted
by COVID-19 and recent restrictions, with no department stores in
our portfolio, and minimal exposure to mid-market fashion and
casual dining operators.
Hawthorn
All of our community pubs in the UK are temporarily closed due
to lockdown restrictions.
Once again, our focus has been on protecting Hawthorn's
financial position and supporting our pub partners throughout the
closure period so we can bounce back quickly on reopening, as we
demonstrated in July 2020. Our team has been engaging closely with
pub partners to ensure they can access Government support schemes,
particularly local support grants and the Job Retention Scheme. The
goodwill generated from our engagement has been reflected in an 87%
retention rate for pub partners who were tenants of Hawthorn at 31
March 2020.
Over the past nine months, our pub partners have demonstrated
their resilience in challenging circumstances, and we are confident
that the vast majority of our pubs will emerge from the current
restrictions in a strong position. The completion of GBP2.7 million
of non-core pub disposals since 30 September 2020 further
demonstrates liquidity and confidence in the long-term prospects of
community pubs as an asset class.
We have also continued to improve the quality of the portfolio
with selected capex projects resumed and 86% of the portfolio
invested in during the last lockdown. Aligned to this we are seeing
a resurgence in demand for new convenience stores around the UK.
With lots of surplus land in our pub portfolio and good road
visibility locations in neighbourhoods around the country we are
well placed to benefit from this.
The community and suburban location of our portfolio is well
placed to benefit from consumers working from home and using their
local services and facilities. This was clearly evident in the
summer of 2020 when Hawthorn outperformed the UK pub sector and we
believe this can be achieved again when restrictions are relaxed
later this year. Our teams are currently preparing to bounce back
and reopen our pubs in April 2021 and, should Government guidance
align with this, or allow an earlier reopening, we are optimistic
about the trading prospects of Hawthorn in the new financial
year.
Fitch Ratings reaffirms NewRiver's Investment Grade Credit
Rating
NewRiver remains a financially sound business with a fully
unsecured balance sheet. In December 2020, Fitch Ratings reaffirmed
NewRiver's Long-Term Issuer Default Rating (IDR) at 'BBB' with
Stable Outlook, its senior unsecured rating at 'BBB+', and its
Short-Term IDR at 'F2'. The senior unsecured rating applies to
NewRiver's GBP300 million senior unsecured bond dated 2028.
Our capital structure is highly efficient and covenant-light,
providing the Company with significant operational flexibility, a
low cost of debt of 3.3%, and long-term debt maturity, with no
refinancing events until August 2023.
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
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as amended by The
Market Abuse (Amendment) (EU Exit) Regulations 2019. 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 and developing
essential retail and leisure assets throughout the UK.
Our GBP1.1 billion portfolio covers 9 million sq ft and
comprises 33 community shopping centres, 24 conveniently located
retail parks and around 700 community pubs. We hand-picked our
assets to deliberately focus on occupiers providing essential goods
and services, and avoid structurally challenged sub-sectors such as
department stores, mid-market fashion and casual dining. 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 2.6
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
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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