TIDMDRIP
RNS Number : 2940Q
Drum Income Plus REIT PLC
18 October 2019
Drum Income Plus REIT plc
("Drum" or the "Company")
Unaudited Net Asset Value as at 30 September 2019
Drum Income Plus REIT plc (LSE: DRIP) announces its unaudited
net asset value ("NAV") as at 30 September 2019.
Highlights
Period from 1 July 2019 to 30 September 2019
-- The independent valuation of the property portfolio as at 30 September 2019 was GBP55.35m (30 June 2019:
GBP57.15m).
-- NAV per share at 30 September 2019 of 85.60p (30 June 2019 of 90.86p).
-- The quarterly valuations reflect the negative market sentiment and current lack of transactional sales in the
retail sector along with the impact of not securing a positive planning result at 108 Eastern Avenue, Gloucester.
The income from the portfolio remains strong and tenant retention is high.
-- Earnings per share (excluding revaluation gains and losses on fair value of investments) for three months ended
30 September were 1.3p.
-- Dividend paid during the quarter of 1.50p.
-- NAV total return (NAV movement plus dividend paid) of -4%.
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 2019)
GBPm Pence per Share
NAV as at 30 June 2019
Property portfolio valuation
movement 34.71 90.86
Capitalised costs and rent free
debtor movement -1.93 -5.06
Income earned for the period 0.99 2.61
Expenses for the period -0.36 -0.93
Interest paid -0.14 -0.38
Dividend paid -0.57 -1.50
Unaudited NAV as at 30 September
2019 32.70 85.60
--------------------------------- ----- ---------------
The NAV has been calculated in accordance with International
Financial Reporting Standards and incorporates the independent
portfolio valuation as at 30 September 2019 and income for the
period, but does not include a provision for the fourth interim
dividend, which will be paid in November 2019. The earnings per
share for the period from 1 July 2019 to 30 September 2019
(excluding revaluation gains and losses on fair value of
investments and expenses charged to capital) were 1.3p.
As at 30 September 2019, the Company had cash balances of
GBP0.51 million and borrowings of GBP22.56 million (loan-to-value
of 40.76%).
Current Portfolio
Jun-19 Sep-19
Location Value % Weighting Value % Weighting
North East GBP15,900,000.00 27.82% GBP15,400,000.00 27.82%
Scotland GBP18,350,000.00 32.11% GBP18,250,000.00 32.97%
North West GBP18,900,000.00 33.07% GBP18,200,000.00 32.88%
South West GBP4,000,000.00 7.00% GBP3,500,000.00 6.32%
------------------ -----------------
GBP57,150,000.00 100.00% GBP55,350,000.00 100.00%
------------------------------- -----------------
Sector Value % Weighting Value % Weighting
Office GBP25,800,000.00 45.14% GBP25,800,000.00 46.61%
Shopping
Centre GBP13,500,000.00 23.62% GBP13,000,000.00 23.49%
Retail GBP16,450,000.00 28.78% GBP15,150,000.00 27.37%
Industrial GBP1,400,000.00 2.45% GBP1,400,000.00 2.53%
------------------ -----------------
GBP57,150,000.00 100.00% GBP55,350,000.00 100.00%
------------------------------- -----------------
The properties were valued at GBP55,350,000 as at 30 September
2019 (30 June 2019: GBP57,150,000) by Savills (UK) Limited
('Savills'), in their capacity as external valuers and were
adjusted for lease incentives of GBP440,428. (30 June 2019:
GBP495,895). Capitalised costs for the quarter were GBP187,607 (30
June 2019: GBP215,474).
Key KPIs
Jun-19 Sep-19
-------- --------
Total Number of
Units 105 105
Total Number of
Tenants 90 87
Total SQFT 336,303 336,303
Vacancy (% SQFT) 9.60% 10.90%
Vacancy (% ERV) 7.10% 10.20%
WAULT (Expiry) 5.94 5.85
WAULT (Breaks) 4.69 4.56
-------- --------
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.
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.
-- The weighted average unexpired lease term (WAULT) to expiry is 5.85 years.
-- The portfolio yield is 7.1% (based on 30 September 2019 valuation).
-- The occupancy rate is high at 89.8% by ERV.
-- Gearing - the loan-to-value ratio of 40.76% 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
An extension has been agreed with Leidos and upon vacation the
unit is currently under offer pending exchange of legal
contracts.
Burnside Industrial Estate, Aberdeen.
A new lease of Unit 2 has been entered into with Grampian Auto
Services for a term of 5 years and a Lease Extension for a period
of 5 years is currently with solicitors to document for an existing
occupier.
108 Eastern Avenue Retail Park, Gloucester
The planning application for change of use on the former Office
Outlet unit has been refused. Options are currently being
reviewed.
Kew Retail Park, Southport
A reversionary lease is currently being documented with Wickes
to extend occupation beyond the lease expiry for a further 5 years
with a tenant break option in year 3.
Duloch Park, Dunfermline
Unit 2 is under offer to British Red Cross for a 10 year term
with a tenant break option in year 5 at a rental in line with
recent evidence on the park.
Dividends
The Board is targeting a fully covered annual dividend of 6.0p
per share in respect of the year ending 30 September 2019*. At the
current share price of 80.50p this would represent an annualised
dividend yield of 7.5%.
*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)
Nick Oborne 020 7067 0721
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END
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