REG - Alternative Inc REIT - NAV, Dividend Declaration and Portfolio Valuation

Alternative Income REITAnnouncement

05/02/2025 07:00

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RNS Number : 9156V  Alternative Income REIT PLC  05 February 2025

5 February 2025

Alternative Income REIT PLC

(the "Company" or "Group" or "AIRE")

NET ASSET VALUE, DIVIDEND DECLARATION AND PORTFOLIO VALUATION UPDATE

TO 31 DECEMBER 2024

Declares an interim dividend of 1.55 pence per share ("pps") for the quarter
ended 31 December 2024

The target annual dividend remains at 6.2pps for the year ending 30 June
2025(†), an increase of 5.1% on the prior year's target of 5.9pps

Dividend cover of 110.3% for the quarter

Unaudited NAV total return for the quarter of 2.7%

Resilient portfolio well-placed to continue to provide secure, index-linked
income with the potential for capital growth

 

The Board of Directors of Alternative Income REIT PLC (ticker: AIRE), the
owner of a diversified portfolio of UK commercial property assets,
predominantly let on long leases with index-linked rent reviews, provides a
trading and business update and declares an interim dividend for the quarter
ended 31 December 2024.

 

Simon Bennett, Non-Executive Chair of Alternative Income REIT plc, comments:

 

"The Company continues to pay a fully covered dividend in line with the 2025
annual dividend target of 6.2pps†. The dividend cover for the quarter was
110.3%. The annual dividend target of 6.2pps is an increase of 5.1% over the
previous year's dividend of 5.9pps. The target is subject to the continued
collection of rent from the Group's portfolio as it falls due.

 

At 31 December 2024, the Group's unaudited NAV was £66.0 million, 81.9pps,
representing a 0.8% increase over the previous quarter. When combined with the
1.55pps dividend paid in the quarter, this produces an unaudited NAV total
return for the quarter of 2.7%.

 

The Group's portfolio remains relatively insulated from market fluctuations,
benefiting from being 100% let, achieving 100% collection of rent due, and a
91.5% index-linked rent review profile.

 

The Group's track record demonstrates a secure and increasing income stream.
The valuation of the portfolio has risen this quarter by £0.6 million or 1%
on a like-for-like basis. The Group continues to benefit from low borrowing
costs until October 2025, when the current Canada Life senior loan matures.
The Board has appointed a debt adviser to assist with the refinancing and is
confident that the requisite financing will be achieved prior to October
2025,albeit at an increased interest rate as compared to the current rate. I
look forward to reporting on AIRE's continued progress in the coming months."

 

Overview of Key Financials

                                            At 31 December   At 30 September  Change

                                            2024             2024

                                            (unaudited)      (unaudited)
 Net Asset Value ("NAV")                    £66.0 million    £65.4 million    +0.8%
 NAV per share                              81.9p            81.3p            +0.8%
 Share price per share                      70.6p            72.5p            -2.6%
 Share price discount to NAV                13.8%            10.8%            +3.0%
 Investment property fair value             £106.2 million   £103.1 million   +3.0%

 (based on external valuation)
 Loan to gross asset value ("GAV") (A) (B)  37.4%            37.6%

 

                                   Quarter ended        Quarter ended         Change

                                   31 December 2024     30 September 2024

                                   (unaudited)          (unaudited)
 EPRA earnings per share (A)       1.7p                 1.6p                  +6.2%
 Adjusted earnings per share (A)   1.7p                 1.6p                  +6.2%
 Dividend cover (A)                110.3%               100.7%                +9.6%
 Total dividends per share         1.55p                1.55p                 -
 Dividend yield (annualised)(A)    8.8%                 8.6%                  +0.2%
 Earnings per share                2.2p                 2.0p                  +10.0%
 Share price total return (A)      -0.5%                12.3%
 NAV total return (A)              2.7%                 2.5%                  +0.2%
 Annualised passing rent           £7.8 million         £7.8 million          -
 Ongoing charges (A) (annualised)  1.5%                 1.5%                  -

(A) Considered to be an Alternative Performance Measure.

(B) The loan facility at 31 December 2024 of £41.0 million (30 September
2024: £41.0 million) with Canada Life Investments, matures on 20 October 2025
and has a weighted average interest cost of 3.19%.

 

Dividend Declaration, Earnings Per Share and Dividend Cover

 

The Board is pleased to declare a second interim dividend of 1.55pps for the
quarter ended 31 December 2024, in line with the Company's dividend target of
6.2pps for the year ending 30 June 2025(†), which represents an increase of
5.1% over the previous year. This interim dividend will be distributed as
Property Income Distribution ("PID") and will be paid on 28 February 2025 to
shareholders on the register on 14 February 2025. The ex-dividend date will be
13 February 2025.

 

The Adjusted EPS was 1.7pps for the quarter (30 September 2024: 1.6pps), an
increase of 6.2% over the quarter. The dividend cover for the quarter
increased significantly from 100.7% at 30 September 2024 to 110.3% this
quarter.

 

Property Portfolio

 

The Group's portfolio is relatively insulated from market fluctuations,
benefiting from being 100% let, with 100% collection of rent due and 91.5%
index-linked rent review profile, which continues to provide a secure and
growing rental income stream.

 

At 31 December 2024, the Group held 20 properties (30 September 2024: 19
properties) valued at £106.2 million (30 September 2024: £103.1 million).
This valuation includes the acquisition of Tring for £2.5 million, with the
like-for-like increase therefore being £0.6 million. The total increase for
the quarter ended 31 December 2024 amounted to 3.0%.

 

At 31 December 2024, the Net Initial Yield on the Group's portfolio was 7.1%
(30 September 2024: 7.1%) and the Group's assets remained 100% let (30
September 2024: 100%). The weighted average unexpired lease term at 31
December 2024 was 16.1 years to the earlier of break and expiry (30 September
2024: 16.2 years) and 17.7 years to expiry (30 September 2024: 18.1 years).

 

The Group's contracted annualised rent increased by 2.6% during the quarter to
31 December 2024 (30 September 2024: 1.3%). This was due to annual indexation
of two leases and the inclusion of Tring. 91.5% of leases within our portfolio
are index-linked, with 35.2% of the contracted rental income reviewed
annually. Active management of the portfolio continues this quarter; Pure
Gym's tenant break in 2027, in London, has been removed with their lease now
extended to 2032. BGEN, one of the tenants at our St Helens industrial asset,
is staying in occupation for a further two years. Discussions continue with
three other tenants considering re-gearing leases, removing tenant breaks and
extending lease lengths. The Estimated Rental Value of the Group's property
assets has risen marginally by 0.2% this quarter.

 

For the upcoming quarter to 31 March 2025, 5.9% of the Group's income will be
reviewed with an annual index-linked rent review.

 

Net Asset Value, Share Price and Share Price Discount to NAV

 

At 31 December 2024, the Group's unaudited NAV was £66.0 million, 81.9pps (30
September 2024: £65.4 million, 81.3pps), representing a 0.8% increase over
the previous quarter.

 

When combined with the 1.55pps dividend paid in the quarter, this produces an
unaudited NAV total return for the quarter of 2.7% (30 September 2024: 2.5%).
Over the quarter, the Company's share price decreased by 2.6% to 70.6pps,
reflecting an increase in the discount from 10.8% to 13.8%.

 

The table below sets out the movement in NAV during the quarter.

 

                                                                   Pence per share  £ million
 NAV at 30 September 2024                                          81.3             65.4
 Valuation movement in property portfolio                          +0.5             +0.4
 Income earned for the period                                      +2.7             +2.3
 Expenses for the period                                           -0.6             -0.5
 Net finance costs for the period                                  -0.4             -0.4
 Interim dividend paid during the quarter ended 30 September 2024  -1.6             -1.2
 NAV at 31 December 2024                                           81.9             66.0

 

The NAV attributable to the ordinary shares has been calculated under
International Financial Reporting Standards as adopted by the United Kingdom
and incorporates both the Group's property portfolio individually valued on a
'Red Book' basis at 31 December 2024 and net income for the quarter but does
not include a provision for the interim dividend declared today (see above).

 

The income earned for the period includes an accrual for the minimum
contractual uplifts contained in the index-linked leases. In the event that
inflation is greater than these minimum contractual uplifts, the actual income
will be greater than the income currently accrued.

 

Rent Collection

 

Rent collection remains resilient with 100% collection of rent due for the
quarter ended 31 December 2024. 90.50% of the portfolio's contracted rent is
payable quarterly in advance, rising from 83.6% at 30 September 2024. The
remainder is payable monthly in advance.

 

† This is a target and not a formal dividend forecast or a profit forecast

 

ENQUIRIES

 Alternative Income REIT PLC
 Simon Bennett - Chair                                  via H/Advisors Maitland below

 Martley Capital Real Estate Investment Management Ltd  020 4551 1240

 Richard Croft

 Jane Blore

 Panmure Liberum Limited                                020 3100 2000
 Alex Collins
 Tom Scrivens

 H/Advisors Maitland (Communications Advisor)           07747 113 930 / 020 7379 5151
 James Benjamin                                         aire-maitland@h-advisors.global

 Rachel Cohen

 Billy Moran

 

The Company's LEI is 213800MPBIJS12Q88F71.

 

Further information on Alternative Income REIT PLC is available at
www.alternativeincomereit.com (http://www.alternativeincomereit.com) (1).

 

(1) Neither the content of the Company's website, nor the content on any
website accessible from hyperlinks on its website or any other website, is
incorporated into, or forms part of, this announcement nor, unless previously
published on a Regulatory Information Service, should any such content be
relied upon in reaching a decision as to whether or not to acquire, continue
to hold, or dispose of, securities in the Company.

 

NOTES

Alternative Income REIT PLC aims to generate a sustainable, secure and
attractive income return for shareholders from a diversified portfolio of UK
property investments, with a particular focus on alternative and specialist
real estate sectors. The majority of the assets in the Group's portfolio are
let on long leases which contain index linked rent review provisions.

 

The Company's asset manager is Martley Capital Real Estate Investment
Management Limited ("Martley Capital"). Martley Capital is a full-service real
estate investment management platform whose activities cover real estate
investing, lending, asset management and fund management. It has over 35
employees across five offices in the UK and Europe. The team manages assets
with a value of circa £900 million across 20 mandates (at 31 December 2024).

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