Maiden interim results from Regional Reit (RGL) confirmed that the property investor is well on its way to delivering a sector-busting 7-8 per cent dividend yield for the full year, based on the flotation price of 100p a share. Three quarterly dividends of 1.75p have already been paid or pencilled in, while the fourth-quarter payout will be balanced to manage compliance to the 90 per cent minimum distribution requirement of a real-estate investment trust.
Operating exclusively outside the M25, acquisitions amounting to £128m were completed in the first half, pushing gross borrowing up to £218m from £129m at the end of December 2015, and taking the loan-to-value ratio up to 38.1 per cent, broadly in line with a long-term target of 35 per cent. Adjusted net asset value grew marginally from 107.8p in December to 108p, although without acquisition costs and higher stamp duty this would have been 2.5p a share higher.
Core to the investment policy is the acquisition of assets from distressed sellers or organisations with less asset management expertise, with a view to sweating these assets for greater income revenue. And rental income jumped from £5.36m in the previous six months to £19.7m, helped by a seven percentage point rise in occupancy levels at its Wing portfolio of assets acquired in March.
Analysts at Peel Hunt are forecasting adjusted net asset value at the November 2016 year-end of 109p a share.
| REGIONAL REIT (RGL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 108.5p | MARKET VALUE: | £298m | |
| TOUCH: | 106-109p | 12-MONTH HIGH: | 111p | LOW: 88p |
| DIVIDEND YIELD: | 4.1% | DEVELOPMENT PROP: | nil | |
| PREMIUM TO NAV: | 1% | |||
| INVESTMENT PROP: | £501m | NET DEBT: | 65% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p*) |
|---|---|---|---|---|
| 2015 | - | - | - | - |
| 2016 | 107 | 5.9 | 2.2 | 3.50 |
| % change | - | - | - | - |
Ex-div: 8 Sep Payment: 7 Oct *Dividends paid quarterly XD and payment dates refer to second quarter dividend of 1.75p | ||||
