REG - M7 Regional E-Whse. - Q3 Business Update

FTI ConsultingAnnouncement

27/10/2022 08:15

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RNS Number : 2395E  M7 Regional E-Warehouse REIT PLC  27 October 2022

 

M7 Regional E-Warehouse REIT plc

("M7 Regional E-Warehouse REIT" or the "Company")

 

27 October 2022

 

Q3 BUSINESS UPDATE

STRONG RENT COLLECTION SUPPORTS 8% DIVIDEND IN LINE WITH EXPECTATIONS

The Board of Directors of M7 Regional E-Warehouse REIT, which owns a
diversified portfolio of e- warehouses across the UK (ticker: REW), provides a
trading and business update and declares an interim dividend for the quarter
ended 30 September 2022.

 

James Max, Non-Executive Chairman of M7 Regional E-Warehouse REIT plc,
commented:

"Our third quarter performance remained strong and in line with expectations.
We have continued to benefit from the performance of this broad asset class
and the individual assets in which we are invested. At this time, the cash
generation of this portfolio continues to support the dividend which offers an
attractive c. 8% yield. The Board recognises the significant headwinds facing
the economy and the resultant impact on the commercial real estate sector. We
are reassured by the geographic spread of the Company's portfolio and the
trading prospects for our diverse range of tenants despite the economic
challenges. We continue to work closely with our tenants during this time with
a sharp focus on tenant covenant, occupancy and any opportunity to reduce
costs and enhance income".

 

Financial and operational highlights (unaudited)

 

                                                               Quarter ended     Quarter ended

                                                               30 Sept 2022      30 June 2022       Change
 Net Asset Value (unaudited)                                   £41.33 million    £42.19 million     -£0.86 million
 Net Asset Value per share (unaudited)                         108.31p           110.56p            -2.25p
 Share price                                                   111p              100p               +11p
 Investment property fair value (based on external valuation)  £112.78 million   £114.17 million    -£1.39 million
 Operating profit( )                                           £1.80 million     £1.76 million      + £0.04 million
 Profit / (Loss) before tax( )                                 -£0.1 million     £1.11 million      -£1.21 million
 Adjusted EPS (1)                                              1.80p             1.73p              +7p
 Dividend cover based on Adjusted EPS (1)                      86.96%            86.50%             +46 bps
 Dividend (per share)                                          2.07p             2.00p              +7p
 Dividend yield                                                1.87%             2.00%              -13bps

(1) Considered to be an Alternative Performance Measure.

 

•     3.5% increase in dividend to 2.07 pence per share ("pps") for the
quarter to 30 September 2022 compared to the previous quarter, in line with
the annual 8 pence, or 8%, target dividend stated in the Company's Admission
document.

•     Portfolio value of £112.78 million at 30 September 2022,
reflecting a net initial yield of 7.36%(2) (30 June 2022: 7.32%), with the
small change driven by outward yield movement across the sector

•     Senior loan facility of £54.3 million and an unsecured loan note
balance of £19.7 million, totalling £74.0 million, reflecting a loan to
value ratio of 65.65% as at 30 September 2022 (30 June 2022: 64.86%). The
Senior loan facility will mature in August 2023 and refinancing discussions
are underway.

·      £2.1 million of rent recognised during the quarter in line with
passing rent (quarter ended 30 June 2022: £2.08 million). Rent collection was
96.39% to 30 September 2022 (97.38% total collection rate from admission).

·      As at 30 September 2022, there were 54 tenants with a weighted
average unexpired lease term of 4.94 years to break and 5.81 years to expiry
(30 June 2022: 5.12 years to break and 5.98 years to expiry).

·   Occupancy across the portfolio was 98.17% at 30 September (30 June
2022: 98.30%) with one lease terminating during the period and no leases due
to expire for the remainder of 2022.

( 2) (Including purchaser's costs of 6.65%.)

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

 

                                           Pence per share    £ million
 NAV at 1 July 2022                        110.56             42.19
 Valuation movement in property portfolio  (3.60)             (1.38)
 Income earned for the period              5.51               2.10
 Expenses for the period                   0.30               0.11
 Net finance costs for the period          (2.46)             (0.93)
 Interim dividend paid                     (2.00)             (0.76)
 NAV at 30 September 2022                  108.31             41.33

 

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 30 September 2022 and net income for the quarter, but does
not include a provision for the interim dividend declared today (see below)
for the quarter ended 30 September 2022.

 

Dividend

The Board declares today a 3.5% increase in quarterly dividend to 2.07pps for
the three months to 30 September 2022 (period ended 30 June 2022: 2.00pps).
On a pro-rata basis, the dividend is in line with the annual 8 pence target,
or 8% target dividend yield, as stated in the Company's Admission document.
The dividend, which will be a Property Income Distribution, will be paid on or
around 24 November 2022. The ex-dividend date will be 3 November 2022 and the
record date will be 4 November 2022.

 

Debt Covenant

There continues to be significant headroom in the debt covenants. The senior
debt loan to value is 48.19% (default level is greater than 70%) and the
interest cover ratio is 360.77% (default level is less than 225%). The Group
has therefore complied with the above covenants in the latest interest payment
date. The current senior debt facility matures in August 2023 and refinancing
discussions are underway.

 

 

ENQUIRIES

 M7 Regional E-Warehouse REIT plc
 James Max - Chairman                     via FTI Consulting below

 M7 Real Estate Ltd                       +44 (0) 20 3657 5500

 Richard Croft

 Dickson Minto (Lead Adviser)             +44 (0) 131 2254455

 FTI Consulting (Communications Adviser)  +44 (0) 20 3727 1000
 Richard Sunderland                       M7regionale-warehousereit@FTIConsulting.com

 Eve Kirmatzis

 Alter Domus (UK) Limited                 +44 (0) 207 645 4800

 (Company Secretary)

 

 

The Company's ISIN is GB00BLN7H037.

Further information on M7 Regional E-Warehouse REIT plc is available at
www.rewreit.co.uk(1).

 

NOTES

M7 Regional E-Warehouse REIT plc is a property investment company, listed on
the International Property Securities Exchange offering shareholders  a
sustainable level of income together with the potential for income and capital
growth by investing in diversified portfolio of enhanced warehouse
(e-warehouse) properties across the United Kingdom.

 

The Company's asset manager is M7 Real Estate Limited ("M7"), a leading
specialist in the pan-European, regional, multi-tenanted real estate market.
M7 has over 225 employees in 15 countries across Europe. The team manages over
580 properties with a value of circa €5.8 billion.

(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.

 

 

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