TIDMNRR
RNS Number : 3196N
NewRiver REIT PLC
17 January 2019
NewRiver REIT plc Third Quarter Company Update
17 January 2019
Active approach delivering resilient performance from
convenience-led community assets
Allan Lockhart, Chief Executive commented: "NewRiver has had a
solid third quarter as evidenced by the robust operating metrics
across our retail and pub portfolios. Pleasingly, we completed the
construction of our largest pre-let retail development to date at
Canvey Island Retail Park in Essex and continued our programme of
capital recycling on terms 2% ahead of March 2018 valuations. The
integration of Hawthorn Leisure is on track to complete later this
month, and we have made excellent progress towards realising the
GBP3 million of synergies identified at the time of acquisition, as
well as leveraging Hawthorn Leisure's pub operating expertise
across our wider retail portfolio. NewRiver's portfolio of wet-led
community pubs now accounts for over 20% of our total assets,
adding further diversification to our income streams.
Looking ahead, we expect the retail sector to continue to face
headwinds in the near-term, particularly in the department store
and mid-market fashion sub-sectors which we have consistently
avoided. We are confident that our focus on the resilient
sub-sectors of food and grocery, discounters, value fashion, health
and beauty, and community pubs is the right strategy as evidenced
by the solid Christmas trading performance recently reported by our
key occupiers."
Focus on Convenience & Community sub-sectors of the retail
market continues to deliver robust operating metrics
-- High level of retail occupancy sustained at 95.5% (Sep 2018:
96.2%); decrease due predominantly to a vacancy created by the
upsize of JD Sports at Priory Meadow, Hastings, to a larger unit
within the centre, and modest impact of retailer CVAs and
administrations, where the expected FY19 FFO impact has reduced to
GBP1.4 million, from GBP1.6 million announced in November 2018, due
to good progress in re-letting former Poundworld units
-- Average retail rents remained affordable at GBP12.37 per sq
ft (Sep 2018: GBP12.48); 99.6% of Q3 rents collected to date
-- Signed 119 leasing deals across 378,100 sq ft; long term
deals at an average rent per sq ft of GBP14.61 (increased from
previous rent of GBP13.14) and in-line with September 2018 ERV;
highlights included two lettings to B&M, including a unit
formerly occupied by Next at South Lakeland Retail Park, Kendal,
where we secured an 11% improvement on previous passing rent; and
the letting of three vacant units at The Ridings shopping centre,
Wakefield, to community cinema operator Reel Cinemas
-- Like-for-like footfall across the shopping centre portfolio
declined 1.8% outperforming the UK benchmark by 180 bps, reflecting
the essential nature of the day to day spend at our centres
Community pub operating metrics remain strong and Hawthorn
Leisure integration to complete on schedule
-- Pub occupancy remained high at 98.9% (Sep 2018: 98.6%); 671
pubs now account for 22% of total portfolio
-- Hawthorn Leisure integration to complete by the end of
January 2019; FFO will then benefit from GBP2 million of the GBP3
million synergies identified at the time of acquisition: includes
GBP1.7 million announced in H1 secured through supply contract
renegotiations and further GBP0.3 million unlocked in Q3; remaining
GBP1 million to follow in FY20
-- Hawthorn Leisure portfolio trading well; like-for-like EBITDA
per pub up 0.8% in Q3, and up 4.3% in the two weeks to 31 December
2018; beer volumes up 10.2% in two weeks to 31 December 2018
-- Opened first community pub in a NewRiver shopping centre,
with the launch of the Keg & Kitchen at The Ridings shopping
centre, Wakefield, operated by Hawthorn Leisure; early trading
performance has been encouraging and other opportunities across the
wider portfolio are under review
Continued programme of profitable capital recycling and
disciplined acquisitions
-- Completed asset disposals totalling GBP23.9 million (at
NewRiver share), representing a 2% premium to March 2018 valuation
and an average NIY of 5.2%, and completed GBP12.0 million of
acquisitions at a NIY of 17.1%
-- In October 2018, disposed of 22 community pubs let on 15-year
leases to Marston's for GBP14.8 million, representing a NIY of
5.6%; in December 2018 recycled part of the proceeds into the
acquisition of 76 community pubs from Star Pubs & Bars for
GBP12.0 million, representing a NIY of 17.1%
-- In November 2018 disposed of a supermarket in East Ham,
London, for GBP7.7 million (NewRiver share: GBP3.8 million),
representing a NIY of 4.9%
-- In December 2018 and January 2019 disposed of four Co-op
c-stores for total proceeds of GBP4.8 million, representing a NIY
of 5.0%
Risk-controlled development pipeline delivering additional cash
returns
-- Reached practical completion on the 62,000 sq ft Canvey
Island Retail Park in November 2018; M&S Foodhall due to open
at the site next week; fully-let annualised rent roll of GBP1
million and projected yield on cost of 9%
-- Convenience store ('c-store') development programme for The
Co-op saw completion of two further c-stores since the start of Q3
with a rent roll of GBP0.1 million; on track to deliver a total of
25 by the end of FY19 (currently 23)
Performance underpinned by a fully unsecured balance sheet with
all assets unencumbered
-- Third quarter ordinary dividend up 3% to 5.4 pence per share
(Q3 FY18: 5.25 pence); dividend for the financial year to date up
3% to 16.2 pence per share (FY18 YTD 15.75 pence)
-- LTV of 35% (based on Sep 2018 valuations), well within our
stated guidance of less than 40%, and with capacity to deploy with
discipline
For further information
NewRiver REIT plc +44 (0)20 3328 5800
Allan Lockhart (Chief Executive)
Mark Davies (Chief Financial Officer)
Will Hobman (Head of Investor
Relations & Strategy)
+44 (0)20 7251
Finsbury 3801
Gordon Simpson
James Thompson
This announcement contains inside information as defined in
Article 7 of the EU Market Abuse Regulation No 596/2014 and has
been announced in accordance with the Company's obligations under
Article 17 of that Regulation. 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, developing and
recycling convenience-led, community-focused retail and leisure
assets throughout the UK.
Our GBP1.4 billion portfolio covers over 9 million sq ft and
comprises 34 community shopping centres, 21 conveniently located
retail parks and over 650 community pubs. Having hand-picked our
assets since NewRiver was founded in 2009, we have deliberately
focused on the fastest growing and most sustainable sub-sectors of
the UK retail market, with grocery, convenience stores, value
clothing, health & beauty and discounters forming the core of
our retail portfolio. This focus, combined with our affordable
rents and desirable locations, delivers sustainable and growing
returns for our shareholders, while our active approach to asset
management and inbuilt 1.8 million sq ft development pipeline
provide further opportunities to extract value from our
portfolio.
NewRiver has a Premium Listing on the Main Market of the London
Stock Exchange (ticker: NRR) and is a constituent of the FTSE 250
and EPRA indices. Visit www.nrr.co.uk for further information.
LEI Number: 2138004GX1VAUMH66L31
Forward-looking statements
The information in this announcement may include forward-looking
statements, which are based on current projections about future
events. These forward-looking statements reflect the directors'
beliefs and expectations and are subject to risks, uncertainties
and assumptions about NewRiver REIT plc (the 'Company'), including,
amongst other things, the development of its business, trends in
its operating industry, returns on investment and future capital
expenditure and acquisitions, that could cause actual results and
performance to differ materially from any expected future results
or performance expressed or implied by the forward-looking
statements.
None of the future projections, expectations, estimates or
prospects in this announcement should be taken as forecasts or
promises nor should they be taken as implying any indication,
assurance or guarantee that the assumptions on which such future
projections, expectations, estimates or prospects have been
prepared are correct or exhaustive or, in the case of the
assumptions, fully stated in the document. As a result, you are
cautioned not to place reliance on such forward-looking statements
as a prediction of actual results or otherwise. The information and
opinions contained in this announcement are provided as at the date
of this document and are subject to change without notice. No one
undertakes to update publicly or revise any such forward looking
statements. No statement in this document is or is intended to be a
profit forecast or profit estimate or to imply that the earnings of
the Company for the current or future financial years will
necessarily match or exceed the historical or published earnings of
the Company.
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END
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