TIDMDRIP
RNS Number : 1002F
Drum Income Plus REIT PLC
25 October 2018
25 October 2018
LEI: 213800FG3PJGQ3KQH756
Drum Income Plus REIT plc
("Drum" or the "Company")
Unaudited Net Asset Value as at 30 September 2018
Drum Income Plus REIT plc (LSE: DRIP) announces its unaudited
net asset value ("NAV") as at 30 September 2018.
Highlights
Period from 1 July 2018 to 30 September 2018
-- Fair value independent valuation of property portfolio as at
30 September 2018 of GBP57.9m (30 June 2018: GBP58.7m).
-- NAV per share at 30 September 2018 of 94.1p (30 June 2018: 95.7p).
-- Earnings per share (excluding revaluation gains and losses on
fair value of investments) for three months ended 30 September 2018
were 2.0p.
-- Dividend paid during the quarter of 1.50p fully covered by earnings for the period.
-- NAV total return (NAV movement plus dividend paid) of -[0.1]%.
Introduction
The Company aims to provide shareholders with a regular dividend
income plus the prospect of income and capital growth over the
longer term. The Company invests in smaller UK commercial
properties, principally in the office, retail (including retail
warehouses) and industrial sectors, which have the potential to
offer a secure income stream, to create value through active asset
management and have strong prospects for future income and capital
growth.
Unaudited NAV (As at 30 September 2018)
GBPm Pence per Share
NAV as at 30 June 2018 36.5 95.7
Valuation change in property
portfolio (0.7) (2.1)
Income earned for the period 1.3 3.3
Expenses for the period (0.3) (0.8)
Interest paid (0.2) (0.5)
Dividend paid (0.6) (1.5)
Unaudited NAV as at 30 September
2018 36.0 94.1
--------------------------------- ----- ---------------
The NAV has been calculated in accordance with International
Financial Reporting Standards and incorporates the independent
portfolio valuation as at 30 September 2018 and income for the
period, but does not include a provision for the fourth interim
dividend, which will be paid in November 2018. The earnings per
share for the period from 1 July 2018 to 30 September 2018
(excluding revaluation gains and losses on fair value of
investments and expenses charged to capital) were 2.0p.
As at 30 September 2018, the Company had cash balances of GBP1.1
million and borrowings of GBP22.7 million (loan to value of
39.2%)
Current Portfolio
Jun-18 Sep-18
Location Value % Weighting Value % Weighting
North East GBP16,200,000.00 27.60% GBP16,100,000.00 27.78%
Scotland GBP18,400,000.00 31.35% GBP18,850,000.00 32.53%
North West GBP19,150,000.00 32.62% GBP19,000,000.00 32.79%
South West GBP4,950,000.00 8.43% GBP4,000,000.00 6.90%
------------------ -----------------
GBP58,700,000.00 100.00% GBP57,950,000.00 100.00%
------------------------------------ -----------------
Sector Value % Weighting Value % Weighting
Office GBP24,250,000.00 41.65% GBP24,800,000.00 42.80%
Shopping Centre GBP13,700,000.00 23.34% GBP13,700,000.00 23.64%
Retail GBP18,400,000.00 31.35% GBP17,300,000.00 29.85%
Industrial GBP2,350,000.00 3.66% GBP2,150,000.00 3.71%
------------------ -----------------
GBP58,700,000.00 100.00% GBP57,950,000.00 100.00%
------------------------------------ -----------------
Key KPIs
Jun-18 Sep-18
-------- --------
Total Number of Units 108 108
Total Number of Tenants 92 87
Total SQFT 336,303 336,303
Vacancy (% SQFT) 8.00% 10.10%
Vacancy (% ERV) 0.60% 1.90%
WAULT (Expiry) 6.35 6.14
WAULT (Breaks) 5.18 4.95
-------- --------
Differentiated Investment Strategy
-- Target lot sizes of GBP2m - GBP15m in regional locations.
-- Sector agnostic - opportunity driven.
-- Entrepreneurial asset management.
-- Risk-controlled development.
-- Dividend paid quarterly.
-- Fully covered dividend policy - growing incrementally.
Portfolio Attributes
In the context of the market uncertainty, the Board believes it
is helpful to shareholders to highlight some key attributes of the
Company's property portfolio:
-- The Company has no exposure to Central London markets, which may take the brunt of any Brexit-related market weakness.
-- The weighted average unexpired lease term (WAULT) to expiry is 6.14 years.
-- The portfolio yield is 7.0% (based on 30 September 2018 valuation).
-- The occupancy rate is high at greater than 95% by ERV
-- Gearing - the loan-to-value ratio of 39.2% is directly in
line with the stated intended target of 40%.
-- Further asset management angles to exploit.
Asset Management Overview and Update
3 Lochside Way, Edinburgh
We received notification from DNV in May that they wished to
vacate in December 18. We carried out a short marketing period and
have let the space with a date of entry 1 week after the existing
tenant vacates at a rent of GBP20 per square foot. The previous
tenant was paying GBP17.50 per square foot. The new Agreement for
Lease has now been signed. This has led to an increase in the value
by GBP400,000 to GBP5.6m.
Duloch Park, Dunfermline
Heads of Terms are agreed with Johnson Cleaners for a 10 year
lease with a break at year 5 at a rent of GBP32,000 per annum which
is ahead of the Business Plan. Legal documentation now
finalised.
Eastern Avenue, Gloucester
Office Outlet applied for a CVA which has been granted.
Discussions are ongoing with the tenant. This has led to a decrease
in the value by GBP850,000 to GBP4.0m. An Agreement for Lease has
been entered into with Home Bargains for the Office Outlet unit on
a subject to planning basis. Should planning be secured then this
would hopefully result in a valuation uplift.
Dividends
The Board is targeting a fully covered annual dividend of 6.0p
per share in respect of the year ending 30 September 2018*. At the
current share price of 94.5p this would represent an annualised
dividend yield of 6.3%.
*Target returns only and not a profit forecast. There can be no
assurance that these targets will be met and they should not be
taken as an indication of expected or actual current or future
results.
Enquiries:
Drum Real Estate Investment Management (Investment Manager)
Bryan Sherriff 0131 285 0050
Cantor Fitzgerald Europe (Financial Adviser and Corporate Broker)
Robert Peel (Corporate Finance) 0207 894 7719
Richard Sloss (Sales) 0131 240 3863
Dickson Minto W.S. (Sponsor)
Douglas Armstrong 020 7649 6823
Weber Shandwick (Financial PR)
Richard Bright 0131 556 6649
Nick Oborne 020 7067 0721
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END
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