A headline loss at the half-year stage reflected a downward valuation in the property portfolio for RDI REIT (RDI), but crucially, like-for-like rental income edged ahead to £43m, underpinned by a strong performance in the London serviced office portfolio.
Given the current climate, the group has decided to reduce its retail exposure by selling its assets in Germany and its Aviva financed shopping facility. The latter comprises four shopping centres in the UK financed by a long-term debt facility arranged with Aviva. The sale was initiated after a valuation instructed by Aviva showed that the 85 per cent loan-to-value covenant had been exceeded. Disposal would reduce the group’s retail exposure from 28.2 per cent to 19.3 per cent.
However, to bring this below 85 per cent, the group paid £9.7m, and cash flows were retained within the facility. A further £3m was paid after debt secured on three hotels broke a covenant, which resulted in the reduced dividend pay out.
Peel Hunt is forecasting adjusted net asset value of 209.5p at the August 2019 year-end, down from 213.8p a year earlier.
| RDI REIT (RDI) | ||||
| ORD PRICE: | 129.2p | MARKET VALUE: | £ 491m | |
| TOUCH: | 128.2-129.2p | 12-MONTH HIGH: | 191p | LOW: 125p |
| DIVIDEND YIELD: | NIL | DEVELOPMENT PROP: | nil | |
| DISCOUNT TO NAV: | 36% | |||
| INVESTMENT PROP: | £1.59bn** | NET DEBT: | 80% | |
| Half-year to 28 Feb | Net asset value (p)* | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 209 | 60.8 | 14.8 | 6.75 |
| 2019 | 202 | -4.7 | -1.3 | 4.00 |
| % change | -3 | - | - | -41 |
| Ex-div: | 06 Jun | |||
| Payment: | 25 Jun | |||
| *Adjusted for 1-for-5 share consolidation **Including joint ventures † Paid as a property income distribution and subject to a deduction of 20 per cent UK withholding tax unless exemptions apply. | ||||
