With a market capitalisation just north of £750m, NewRiver Retail (NRR) is not the largest sector play trading on the London market, but its operational progress suggests there is plenty of room to grow. The real estate investment trust completed £342m in acquisitions last year, with an average yield of 9.2 per cent. Assets under management were driven up 30 per cent to £1.1bn, while total net asset value (NAV) doubled to £690m. NewRiver bumped up its annual payout by 1.5p to 18.5p, fully covered by earnings. That provided firmer footing for analysts' payout forecasts.
The group has expanded its portfolio substantially, with rental growth increasingly underpinned by scale benefits: administration costs reduced from 23 per cent to 18 per cent of turnover. The rapid growth of the business, driven by NewRiver's ability to efficiently allocate new equity and debt capital to acquire income-producing assets, has helped to sustain its high yield despite a steady rise in the share price. Last month it finalised its largest acquisition to date, The Broadway Shopping Centre and Broadway Square Retail Park in Bexleyheath, London, which was snapped up for £120m.
Prior to these results, Liberum anticipated adjusted NAV of 310p for the March 2017 year-end, rising to 323p the following year.
NEWRIVER RETAIL (NRR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 323p | MARKET VALUE: | £754m | |
| TOUCH: | 320-325p | 12-MONTH HIGH: | 362p | LOW: 304p |
| DIVIDEND YIELD: | 5.7% | TRADING PROPERTIES: | nil | |
| PREMIUM TO NAV: | 9% | NET DEBT: | 38% | |
| INVESTMENT PROPERTIES: | £909m* | |||
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 254 | 4.0 | 15.3 | 15 |
| 2013 | 235 | 1.4 | 4.7 | 16 |
| 2014 | 241 | 23.1 | 38.0 | 16 |
| 2015 | 267 | 39.5 | 37.5 | 17 |
| 2016 | 295 | 69.5 | 39.2 | 18.5* |
| % change | +10 | +76 | +5 | +9 |
Ex-div: - Payment: - *Includes joint ventures **Fourth-quarterly dividend of 4.75p paid on 13 May | ||||
