TIDMNRR
RNS Number : 4597N
NewRiver REIT PLC
30 September 2021
This announcement contains inside information as defined in
Article 7 of the EU Market Abuse Regulation No 596/2014 (as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018) 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.
NewRiver REIT plc
("NewRiver" or the "Company")
Capital Markets Event
NewRiver will today host a virtual Capital Markets Event, during
which the Company will provide more details regarding its resilient
retail strategy and what this means for investors.
NewRiver has clear objectives, namely to:
-- Own and manage the most resilient retail portfolio focused on
Retail Parks, Core Shopping Centres and Regeneration
-- Maintain a strong and flexible balance sheet
-- Deliver stable income and capital growth
-- Target 10% total accounting return
We have developed a proprietary scorecard based on four key
outputs: Resilience, Stability, Repositioning and At Risk.
We have assessed our current portfolio and will actively exit
our at risk "Work Out" assets by the end of FY23.
We aim for resilient Retail Parks and Core Shopping Centres to
represent approximately 90% of our portfolio in the medium
term.
Allan Lockhart, Chief Executive, commented : "Today we are
outlining where the business is positioned today and how we are
transitioning it for the future.
Our Board is acutely aware that our shares are trading at
material discount to NAV.
We expect that with valuations stabilising, an improving market
backdrop, a significantly strengthened balance sheet, a reinstated
dividend and our clear strategy to deliver attractive returns, the
discount should narrow.
Our approach to capital allocation is clear. We remain committed
to an LTV below 40% and surplus capital can be reinvested in
accretive asset management, regeneration, acquiring resilient
retail assets or buying back our own shares - maximising returns
for shareholders.
It is the first time for a while that we can look forward with
such confidence."
To accompany the Capital Markets Event NewRiver is providing the
below trading update.
Operational progress
Rent collection figures have further improved since our Q1
update in July. Occupiers continue to make payments due under COVID
deferral agreements, increasing our rent collection rate in respect
of FY21, and our most recent quarter rent collection rate now
exceeds 90%. This represents a material improvement compared with
the same point last year.
Rent cash collection rate by quarter
Q1 Q2
As at 24 September
2021 86% 91%
---- ----
As at 24 September
2020 67% 67%
---- ----
Recent leasing transactions continue to be completed at pricing
ahead of March 2021 valuation ERVs and occupancy remains high at
97%. We have now received GBP2 million under our business
interruption insurance policy, relating to the impact of COVID
restrictions on Hawthorn's trading, and we expect to receive up to
another GBP2 million later this year.
In addition, we have made further progress with our disposal of
non-core retail assets following the successful disposal of
Hawthorn which completed in August 2021. In FY22 to date, NewRiver
has either completed, exchanged or is under offer on GBP93 million
of disposals, increased from GBP73 million at our Q1 update in
July. These disposals will provide the capital which we can
redeploy in line with our capital allocation policy . We anticipate
that our disposal programme over the next five years will amount to
over GBP290 million.
Indicative valuations
The retail investment market continues to improve as we emerge
from the pandemic period; transaction volumes of both shopping
centres and retail parks are increasing. Furthermore, retail parks
are experiencing yield compression and shopping centre yields are
showing signs of stabilisation. Indicative external valuations
suggest that our own portfolio is close to stabilisation and we
expect a valuation decline of approximately -3% in respect of the
first half of FY22. This will be a material improvement compared
with the retail valuation movement in FY21H1 (-9.4%) and FY21H2
(-6.1%). We expect our Core and Regeneration shopping centre
valuations to show only marginal declines, retail parks to maintain
their capital growth trajectory and Work Out shopping centres to
show continued decline. Our repositioning or disposal of these Work
Out assets is well underway and we plan to have exited this segment
by the end of FY23.
Debt reduction and liquidity
Following the successful completion of the Hawthorn disposal in
August, realising net aggregate proceeds of GBP216.1 million, we
repaid GBP100 million of revolving credit facilities, with GBP70
million having already been repaid during the first quarter. As a
result, our GBP215 million revolving credit facility is currently
undrawn. In addition we have repaid our GBP165 million term loan,
taking total debt repayment in the first half of the financial year
to GBP335 million. The balance sheet remains fully unsecured and
the reduction in drawn debt improves balance sheet efficiency,
significantly reducing our annual finance costs by GBP7 million,
and also means that the only drawn debt instrument is our GBP300
million bond which does not mature until 2028.
Capital Markets Event 2021
NewRiver will be hosting a virtual Capital Markets presentation
at 10:00 BST today , focusing on its revised retail strategy and
what this means for investors. Our objectives include delivering
stable income and capital growth which, supported by a best in
class operating platform and unsecured balance sheet, will deliver
an income-backed 10% total accounting return.
No new material disclosures will be made during the event. A
live webcast will be available via the following link:
https://secure.emincote.com/client/newriver/capitalmarketsday2021
There will be an opportunity to submit written questions during
the presentation and a video replay will be available at
www.nrr.co.uk after the event.
For further information
NewRiver REIT plc +44 (0)20 3328 5800
Allan Lockhart (Chief Executive)
Will Hobman (Chief Financial Officer)
Emily Meara (Head of Investor
Relations)
+44 (0)20 7251
Finsbury 3801
Gordon Simpson
James Thompson
About NewRiver
NewRiver REIT plc ('NewRiver') is a leading Real Estate
Investment Trust specialising in buying, managing and developing
essential retail and leisure assets throughout the UK.
Our GBP0.7 billion portfolio covers 8 million so ft and
comprises 31 community shopping centres and 18 conveniently located
retail parks. We hand-picked our assets to deliberately focus on
occupiers providing essential goods and services, and avoid
structurally challenged sub-sectors such as department stores,
mid-market fashion and casual dining. 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 2.5 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). Visit www.nrr.co.uk for further
information.
LEI Number: 2138004GX1VAUMH66L31
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END
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