REG - M7 Regional E-Ware. - 2nd Quarter Results

Warehouse ReitAnnouncement

28/07/2022 08:15

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RNS Number : 9901T  M7 Regional E-Warehouse REIT PLC  28 July 2022

 

M7 Regional E-Warehouse REIT plc

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

 

27 July 2022

 

Q2 BUSINESS UPDATE SHOWS NAV GROWTH AND STRONG RENT COLLECTION WITH DIVIDEND
IN LINE WITH 8% ANNUAL TARGET

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 second
quarter ended 30 June 2022.

 

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

"Our performance in the second quarter of the year underlines the benefits of
the stabilised and geographically diversified nature of the Company's
portfolio. The continued strong cash generation and increase in valuation
supports the attractive 8% pa dividend yield.  Although the comparative
figures were distorted by an extended first period, which commenced on the
date of admission to IPSX in December 2021 and included a number of one-off
cash items related to the listing, we expect that the dividend will be fully
covered going forward. While we are aware of the current economic headwinds,
we believe the prospects for the enhanced warehouse asset class and our
portfolio in particular remain good. The portfolio is underpinned by strong
fundamentals of continued occupier demand driven by structural changes to
consumer behaviour and an increased focus from businesses on their supply
chain."

 

Financial and operational highlights (unaudited)

 

                                             Period ended         Quarter ended

                                             31 March 2022        30 June 2022       Change
 Net Asset Value (unaudited)                 £41.71 million       £42.19 million     +1.2%
 Net Asset Value per share (unaudited)       109.31 p             110.56 p           +1.2%
 Share price                                 100 p                100 p              -
 Operating profit( )                         £2.03 million(1)     £1.76 million      -13.3%
 Profit before tax( )                        £3.99 million(1)     £1.11 million      -72.2%
 EPRA EPS (2)                                2.80 p               1.55 p             -44.6%
 Dividend cover based on EPRA EPS            130.32%              77.42%             -40.6%
 Adjusted EPS (2)                            2.17 p               1.71 p             -21.2%
 Dividend cover based on Adjusted EPS (2)    101.09%              85.54%             -15.4%
 Dividend (per share)                        2.15 p               2.00 p             -7.0%

1 Presented for the period from the date of Admission and ended on 31 March
2022.

2 Considered to be an Alternative Performance Measure.

 

•      Interim dividend of 2.00 pence per share declared for the
quarter ended 30 June 2022 in line with the annual 8 pence, or 8%, target
dividend stated in the Company's Admission document.

•      Net Asset Value ("NAV") increased 1.15% to £42.19 million
during the quarter or 110.56 pence per share (31 March 2022: £41.71 million,
109.31 pence per share).

•      Increase in portfolio valuation of 0.28% to £114.17 million in
the quarter to 30 June 2022, reflecting a net initial yield of 7.32% (3).

•      £1.76 million operating profit for the second quarter compared
to £2.03 million for the previous extended period since admission to IPSX of
three months and 10 days.

•      EPRA Earnings per share ("EPS") of 1.55 pence per share,
reflecting 77.42% dividend cover for the quarter (extended period ended 31
March 2022: 2.80 pence per share, 130.32% dividend cover).

•      Adjusted EPS was 1.71p, reflecting 85.54% cash dividend cover
for the quarter (extended period ended 31 March 2022: 2.17 pence per share,
101.09% dividend cover).

•      Senior loan facility of £54.34 million and an unsecured loan
note balance of £19.70 million, totalling £74.04 million, reflecting a loan
to value ratio of 64.86% as at 30 June 2022 (31 March 2022: 65.05%).

•      £2.08 million of rent recognised during the quarter in line
with passing rent (extended quarter ended 31 March 2022: £2.41 million).

•      As at 30 June 2022, there were 54 tenants with a weighted
average unexpired lease term of 5.12 years to break and 5.98 years to expiry
(31 March 2022: 5.25 years to break and 6.10 years to expiry).

•      Occupancy across the portfolio was 98.8% at 30 June2022 (31
March 2022: 98.8%) with no lease events falling due during the period and 2.7%
of the portfolio by rent up for renewal the second half of the year.

( 3) (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 April 2022                       109.31                                           41.71
 Adjustment of issuance cost                                     0.50                                             0.19
 Valuation movement in property portfolio  0.81                                             0.31
 Income earned for the period              5.46                                             2.08
 Expenses for the period                   (1.04)                                           (0.39)
 Net finance costs for the period          (2.33)                                           (0.89)
 Interim dividend paid                     (2.15)                                           (0.82)
 NAV at 30 June 2022                       110.56                                           42.19

 

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 June 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 June 2022.

 

Dividend

The Board declared on 26 July 2022 an interim dividend of 2.00 pence per share
for the quarter ended 30 June 2022 (extended period ended 31 March 2022:
2.15 pence per share). 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 26 August 2022. The ex-dividend date
will be 4 August 2022 and the record date will be 5 August 2022.

 

Debt Covenant

There continues to be significant headroom in the debt covenants. The senior
debt loan to value is 49.09% (default level is greater than 70%) and the
interest cover ratio is 435.73% (default level is less than 225%). The Group
has therefore complied with the above covenants in the latest interest payment
date.

 

 

 

 

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 with 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 230 employees in 14 countries across Europe. The team manages over
600 properties with a value of circa €5.7 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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