REG - NewRiver REIT plc - Trading Update - Return to Capital Growth in H2

Newriver ReitAnnouncement

21/04/2022 07:00

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RNS Number : 8210I  NewRiver REIT PLC  21 April 2022

 

NewRiver REIT plc

("NewRiver" or the "Company")

Trading Update - Return to Capital Growth in H2

 

NewRiver is today providing a trading update ahead of the announcement of our
Full Year Results on 7 June 2022.

·      Portfolio returned to capital growth in H2

·      Continued progress on disposals in-line with last reported
valuation

·      Significant Loan to Value ('LTV') reduction creating surplus
capital position

·      Robust Q4 operational metrics

·      FY22 Underlying Funds From Operations ('UFFO') expected to be at
upper end of analysts' estimates(1)

 

Portfolio valuation

 

The independent valuers have concluded their work on NewRiver's property
portfolio as at 31 March 2022. Overall this shows c.2.5% capital growth in the
second half of FY22. This growth has been led by retail parks which have
continued the positive momentum seen over the last 18 months, but pleasingly
we have also seen our Core and Regeneration Shopping Centres return to capital
growth in the second half. We have seen further decline in our Work Out
Shopping Centre assets, but the rate of decline has slowed markedly when
compared to the first half of FY22 and we have made good progress with our
disposal and repositioning schedule.

 

Disposal progress

 

Since 1 April 2021, we have completed £305 million of disposals. Excluding
the sale of Hawthorn(2) we completed £77 million of retail disposals, £69
million of which were completed in the second half of the financial year on
terms in-line with last reported book value. The largest capital transaction
completed in the second half was the disposal of the Regeneration Shopping
Centre in Cowley, Oxford, for gross proceeds of £38.8 million.

 

Balance sheet position

 

The progress we have made on disposals and the capital growth our portfolio
has generated in the second half of FY22 mean that we expect LTV at 31 March
2022 to have reduced further to less than 35%, significantly below our LTV
guidance of 40%. As a result, we have surplus capital to deploy in-line with
our return focused approach to capital allocation on which we will provide a
further update in our Full Year Results. This LTV position compares to 50.6%
at 31 March 2021 and 39.4% at 30 September 2021.

 

Furthermore our disposal activity has reduced net debt to c.£222 million at
31 March 2022, from £493 million at 31 March 2021, the coupon on our drawn
debt is fixed and we have no maturity on drawn debt until March 2028.

 

Operational performance

 

Rent collection for Q1-Q4 FY22 currently stands at 95% of rent demanded and
rent collection in respect of Q1 FY23, due on 25 March 2022, is currently
tracking ahead of collection at the same point last year.

 

Leasing volumes have improved throughout FY22, with 367,300 sq ft of new
lettings and renewals secured in Q4 which compares to 383,800 sq ft for the
whole of H1. Long-term deals, which represented 95% of the £2.3 million of
annualised rent secured in Q4, were signed on average 4.5% ahead of September
2021 ERVs. For FY22 as a whole, long-term deals were signed on terms on
average 7.4% ahead of latest ERVs.

 

Occupancy remained high at 95.6% (March 2021: 95.8%), with average rent
remaining affordable at £11.74 per sq ft (March 2021 £11.51 per sq ft).

 

The strength of our underlying operations, together with the benefit of the
finance cost savings unlocked earlier in the year, mean that we expect that
FY22 UFFO will be at the upper end of analysts' estimates(1).

 

1.     Current analyst consensus for 31 March 2022 UFFO is £24.4 million
/ 8.0 pence per share, comprising six analyst forecasts ranging from £21.5
million to £27.1 million / 7.0 pence per share to 8.8 pence per share

2.     Hawthorn pub business, disposal completed on 20 August 2021

 

 

 

 

 

 

 

For further information

 

 NewRiver REIT plc                                            +44 (0)20 3328 5800
 Allan Lockhart (Chief Executive)

 Will Hobman (Chief Financial Officer)
 Lucy Mitchell (Communications & Investor Relations)

 

 Finsbury Glover Hering        +44 (0)20 7251 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 it forms part of the law of England and Wales by virtue
of the European Union (Withdrawal) Act 2018. 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 resilient retail assets
throughout the UK.

 

Our £0.7 billion portfolio covers 8 million sq ft and comprises 28 community
shopping centres and 15 conveniently located retail parks. We have hand-picked
our portfolio to focus on occupiers providing essential goods and services and
to support the development of thriving communities across the UK, while
deliberately avoiding structurally challenged sub-sectors such as department
stores and mid-market fashion. Our objective is to own and manage the most
resilient retail portfolio in the UK, focused on retail parks, core shopping
centres, and regeneration opportunities in order to deliver stable income and
capital growth to our investors.

 

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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