NewRiver Retail (NRR) has been taking advantage of the fast-recovering regional retail property market. It made £174m-worth of acquisitions in the first half: part-funded by more borrowing, January's £85m share placing, and four disposals that raised £34m. The group has also extended its development pipeline to around 1m sq ft and 20 planning applications were submitted during the first half.
The major event of the period was the £140m purchase of three large shopping centres from the Swallowtail portfolio. That was funded through a joint venture with Bravo, with both parties having taken a 50 per cent stake. The centres were formerly part of a distressed property portfolio held by Royal Bank of Scotland and were acquired at an attractive initial yield of 8 per cent. Chief executive David Lockhart says these assets hold considerable potential for refurbishment, having been poorly maintained with no capital expenditure.
In the existing portfolio, NewRiver delivered 110 new lettings and lease renewals, at 11.1 per cent above estimated rental value. Meanwhile, progress with the conversion of the Marston's pub estate - purchased a year ago - included 63 pre-let agreements with the Co-operative Group to build a convenience store portfolio.
Broker Peel Hunt expects full-year adjusted book value of 270p at share (from 240p in 2014).
| NEWRIVER RETAIL (NRR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 312p | MARKET VALUE: | £311m | |
| TOUCH: | 310-314p | 12-MONTH HIGH: | 320p | LOW: 250p |
| DIVIDEND YIELD: | 5.9% | DEVELOPMENT PROPERTIES: | nil | |
| PREMIUM TO NAV: | 23% | |||
| INVESTMENT PROPERTIES: | £381m** | NET DEBT: | 67% | |
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 220 | 5.2 | 10.9 | 6 |
| 2014 | 253 | 12.3 | 12.4 | 8.5* |
| % change | +15 | +136 | +14 | +42 |
Ex-div: 29 Dec Payment: 30 Jan *Dividends paid quarterly (first quarterly dividend of 4.25p paid on 31 Oct) **Includes £155m in joint ventures | ||||
