The Group continues to develop its close relationships with
existing lenders HSBC and Santander and was pleased to establish
new relationships with Barclays and Venn Capital who combined,
provided debt finance of GBP154 million during the year on
competitive terms maintaining a low cost of debt across the
portfolio of less than 4%.
Our LTV at the balance sheet date net of cash is 25%, currently
below our targeted range of 45-60% as a result of the recent equity
raise and this is expected to return to the normal range on the
back of acquisitions in the next financial year.
The EPRA net asset value has increased since the last reported
balance sheet from 222 pence to 240 pence. During the year we have
absorbed GBP4.5 million of fundraising costs, GBP6.5 million of
purchase costs and a special interim dividend paid in March 2014 of
10p per share of GBP6.7 million. These costs have been offset by
our active asset management, risk controlled development and
improving market sentiment for regional shopping centres adding
GBP13.7 million of value to net assets during the year.
The dividend for the year was 16 pence, in-line with 2013 and
98% covered by EPRA adjusted profit. As a mark of confidence, the
Board has agreed to a quarterly dividend policy starting in October
2014.
Highlights from the Statement of Comprehensive Income
Income
The Group financial statements are prepared under IFRS which
includes profits from Joint Ventures on one line. The Board
considers the performance of the Group on a proportionally
consolidated basis and the report below therefore reflects this
basis.
As at 31 March
2014 As at 31 March 2013
------------------------------ -------- ------------------------- -------- -------------------------
Joint Proportionally Joint Proportionally
Group Ventures consolidated Group Ventures consolidated
Income Statement GBP,000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- --------- -------------- -------- --------- --------------
Gross rental income and
fees 18,197 6,956 25,153 17,978 1,931 19,909
Property outgoings (3,383) (721) (4,104) (3,591) (403) (3,994)
------------------------------ -------- --------- -------------- -------- --------- --------------
Net property income 14,814 6,235 21,049 14,387 1,528 15,915
Operating expenses (6,420) (406) (6,825) (4,797) (169) (4,966)
Net financing costs (5,403) (1,533) (6,937) (6,210) (500) (6,710)
Profit on disposal of
investment properties 2,032 - 2,032 811 - 811
Joint Ventures net income 4,296 (4,296) - 859 (859) -
Tax & EPRA adjustments 182 - 182 161 - 161
------------------------------ -------- --------- -------------- -------- --------- --------------
EPRA adjusted profit 9,501 - 9,501 5,211 - 5,211
Revaluation surplus/(deficit) (763) 14,503 13,740 (2,157) (1,483) (3,640)
Tax & EPRA adjustments (182) - (182) (161) - (161)
Profit for the year before
tax 8,556 14,503 23,059 2,893 (1,483) 1,410
------------------------------ -------- --------- -------------- -------- --------- --------------
EPRA adjusted EPS 15.7 15.7 16.3 16.3
Dividend per share 16.0 16.0 16.0 16.0
------------------------------ -------- --------- -------------- -------- --------- --------------
Property net income for the year including our share of Joint
Ventures was GBP21.1 million - a 33% increase compared to GBP15.9
million in the prior year generated by the stable portfolio of
assets on balance sheet and three new portfolios acquired as joint
ventures with the BRAVO Joint Venture during the year. On a
like-for-like basis, net rental income was stable with no increase
on the prior year.
Operating expenses totalled GBP6.8 million in 2014 compared to
GBP5.0 million in 2013. This reflects the 66% increased headcount
following the growth of the business platform which has seen an
increase in assets under management of 50% from GBP400m to GBP600m.
Management assesses operating efficiency by calculating operating
costs net of asset management fees as a proportion of gross rental
income. In 2014 this ratio fell to 22% from 24% in 2013.
Net finance costs totalled GBP6.9 million (2013: GBP6.7 million)
for the year, GBP1.5 million of which was payable on convertible
loan stock and GBP5.4 million for debt secured over property. Our
hedging strategy remains prudent with 74% of Group debt hedged
either on a fixed or capped basis. Interest cover is very positive
at over 3 times at property level compared to banking covenants
which range from 1.5 to 2.0 times.
In March 2014 we completed the sale of Wallsend Library, which
added GBP2.0 million to the EPRA adjusted profit for 2014 and
ensures we continue to grow our bottom line year-on-year through
both rental profit growth and actual realised profit on sale of
assets. In the year NewRiver achieved a respectable EPRA adjusted
EPS of 15.7 pence per share, which means that dividends for the
year are 98% covered.
The other success story of the year is the uplift in capital
values, due to a combination of a number of factors, including our
active asset management, risk-controlled development and movement
in shopping centre yields the economic environment reflecting a
growing economy and rising demand for retail assets such as
NewRiver's which are regionally based. A fair value gain of GBP13.7
million was reflected in the 2014 results which included a capital
return of 5.4% over the year, including the revaluation surplus on
all new acquisitions.
Profit before tax was GBP23.1 million (2013: GBP1.4 million) a
combination of recurring rental profit and fair value capital
gains; including GBP9.5 million EPRA adjusted profit and GBP13.7
million capital profit.
Balance Sheet
Management assesses the business on a proportionally
consolidated basis, particularly in light of the rapid development
of the joint venture with Pacific Investment Management Company in
the past year. The IFRS net assets for the group include investment
in joint ventures on one line and this is split out on a line by
line basis in the table below.
Proportionally consolidated balance sheet
As at 31 March
2014 As at 31 March 2013
------------------------------ ---------- ------------------------- ---------- -------------------------
Joint Proportionally Joint Proportionally
Group Ventures consolidated Group Ventures consolidated
Balance Sheet GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ---------- --------- -------------- ---------- --------- --------------
Properties at valuation 214,124 149,222 363,346 206,278 29,890 236,168
Investment in joint ventures 74,851 (74,851) - 14,688 (14,688) -
Other non-current assets 384 - 384 404 - 404
Cash 89,555 3,010 92,564 7,545 897 8,442
Other current assets 3,595 2,567 6,162 1,981 704 2,685
382,509 79,948 462,456 230,896 16,803 247,699
Other current liabilities (10,421) (3,817) (14,237) (11,418) (928) (12,346)
Debt (108,256) (76,566) (184,822) (112,698) (15,682) (128,380)
Convertible loan stock (23,306) - (23,306) (24,693) - (24,693)
Other non-current liabilities (899) 435 (464) (2,299) (193) (2,492)
IFRS net assets 239,627 - 239,627 79,788 - 79,788
EPRA adjustments 4,879 - 4,879 3,945 - 3,945
------------------------------ ---------- --------- -------------- ---------- --------- --------------
EPRA net assets 244,506 - 244,506 83,733 - 83,733
------------------------------ ---------- --------- -------------- ---------- --------- --------------
EPRA NAV pence per share 240 240
------------------------------ ---------- --------- -------------- ---------- --------- --------------
Investment Properties
Grafico Azioni Newriver Reit (LSE:NRR)
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Da Ago 2024 a Set 2024
Grafico Azioni Newriver Reit (LSE:NRR)
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