NewRiver Retail (NRR) floated on the Alternative Investment Market (Aim) less than four years ago, yet it already manages 23 town centre shopping centres worth nearly £400m. The company's managers are so excited about prospects in this embattled sector - often dismissed as outdated and oversupplied in the digital age - that they even want to expand the portfolio to £1bn.
Highly active management has helped NewRiver outperform the falling market, but not buck it entirely. Its portfolio dipped 0.8 per cent over the year to 31 March, compared with an average capital decline of 3.7 per cent for all UK shopping centres. That fall was magnified at the equity level by fairly high gearing - the company's loan-to-value ratio is 51 per cent - hitting reported profits and the book value. Adjusted net asset value (NAV) per share fell 7 per cent to 240p; the decline exacerbated by discounted equity issuance to global bond fund manager Pimco, which is now NewRiver's second-largest shareholder and a major joint-venture partner.
Stripping out property revaluations and disposals, profits fell 3 per cent to £4.2m, as increased operating and debt costs offset higher rental income. The void rate also crept up from 4 per cent to 6 per cent, despite 103 new lettings or lease renewals.
Broker Investec Securities expects adjusted NAV for 2014 of 250p.
NEWRIVER RETAIL (NRR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 213p | MARKET VALUE: | £72m | |
| TOUCH: | 212-214p | 12-MONTH HIGH: | 215p | LOW: 177p |
| DIVIDEND YIELD: | 7.5% | TRADING PROPERTIES: | nil | |
| DISCOUNT TO NAV: | 9% | |||
| INVESTMENT PROPERTIES: | £221m | NET DEBT: | 132% | |
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 261 | 2.20 | 21.0 | na |
| 2011 | 273 | 4.90 | 23.1 | 5.5 |
| 2012 | 254 | 3.97 | 15.3 | 15.0 |
| 2013 | 235 | 1.41 | 4.7 | 16.0 |
| % change | -7 | -64 | -69 | +7 |
Ex-div: 26 Jun Payment: 25 Jul | ||||
