Real Estate Investors Plc · LSE:RLE
Real Estate Investors — FY2022 Earnings Presentation
25 slides from Real Estate Investors's earnings presentation, 2023
Slide 1: The UK's Only Midlands Focused REIT
THE UK’S ONLY MIDLANDS FOCUSED REIT Results for the year ended 31 Dec 2022 Investor and Analyst Presentation THE MIDLANDS INVESTOR REI PLC
Slide 2: Introduction
REAL ESTATE INVESTORS PLC INTRODUCTION REI Diversified Active Asset Multi- Attractive Today Portfolio Management banked Returns • UK’s only Midlands • Multi-sector • Break up opportunities • Multi-banked across 4 • Covered dividend focused REIT diversification, no within assets to satisfy lenders po
Slide 3: Highly Experienced Board & Proven Track Record
HIGHLY EXPERIENCED BOARD & PROVEN TRACK RECORD Non-Executive Executive William Wyatt Peter London Ian Stringer Paul Bassi CBE Marcus Daly FCA Non-Executive Chairman Non-Executive Director Non-Executive Director Chief Executive Officer Finance Director • Joined REI Board in 2010, • Joined REI Board i
Slide 4: Resilient Business Model
RESILIENT BUSINESS MODEL IN LINE WITH THE COMPANY’S COVERED DIVIDEND POLICY SINCE 2012 TOTAL DIVIDENDS DECLARED/PAID TO SHAREHOLDERS = £46.3 MILLION Financial Crisis / General Election / Scottish Referendum / European Referendum / BREXIT / COVID19 2004 2006 2010 2011 2012 2014 2015 2016 2019 2020 20
Slide 5: FY 2022 Operational Highlights
FY 2022 OPERATIONAL HIGHLIGHTS Contracted Rental Income £m • Strong overall rent collection for 2022 (adjusted for monthly and deferred agreements) of 99.54% 17.0 17.7 16.7 16.2 14.9 • The current quarter (Q1 2022) rent collection to date is 99.80% 11.9 14.3 12.6 7.7 • Contracted rental income: £12.
Slide 6: FY 2022 Financial Highlights
FY 2022 FINANCIAL HIGHLIGHTS • EPRA NTA per share increased to 62.2p (FY 2021: 58.8p) EPRA NTA • EPRA EPS of 2.7p (FY 2021: 3.7p) 64.5 66.2 68.9 69.3 67.4 59.1 61.3 58.8 62.2 55.2 • Total dividend per share for 2022 of 2.5p per share (FY 2021: 3.0625p) (which would be the basis for the dividend for
Slide 7: FY 2022 Financials Profit & Loss
FY 2022 FINANCIALS PROFIT & LOSS • Revenue* of £13.3 million (FY 2021: £14.7 million) FY 2022 FY 2021 Income Statement £m £m • Profit before tax of £10.9 million (FY 2021: £13.9 million profit) including: Revenue 13.3 16.0 − £3.2 million gain on property revaluations (FY 2021: £4.9 million gain) Cos
Slide 8: FY 2022 Financials Strong Balance Sheet
FY 2022 FINANCIALS STRONG BALANCE SHEET Gross property assets Net assets FY 2022 FY 2021 Balance Sheet £m £m Property 175.4 190.8 £175.4m £109m Cash 7.8 9.8 Debt (71.4) (89.4) Other (2.8) (6.2) Net assets 109.0 105.0 EPRA NTA per share Net LTV Adjustments - 2.1 62.2p 36.8% EPRA NTA 109.0 107.1 Net D
Slide 9: Movement in EPRA NTA per Share (p)
MOVEMENT IN EPRA NTA PER SHARE (P) REI PLC 8
Slide 10: Movement in EPRA Earnings per Share (p)
MOVEMENT IN EPRA EARNINGS PER SHARE (P) REI PLC 9
Slide 11: Quarterly Dividend Payments
QUARTERLY DIVIDEND PAYMENTS Uninterrupted dividend payments despite disposals Shareholder Distribution Year on Year £46.3 million total dividends declared/paid since 2012 COVID19 Total dividend for 2022 of 2.5p per share (2021: 3.0625p) +7% PERIOD Interim (which would be the basis for the divi
Slide 12: FY 2022 Financials Simplified Debt Position
FY 2022 FINANCIALS SIMPLIFIED DEBT POSITION Debt Structure % Debt Maturity £m • Cost of debt 3.7% (FY 2021: 3.5%) and 100% fixed debt (90% at 1 Jan 2022) 40.7 • Net LTV 36.8% (target LTV - 40% or below) (FY 2021: 42.2%) • Interest cover of 2.6x (FY 2021: 3.0x) Fixed Floating Multi-banked across 4 le
Slide 13: Attractive Spread Between NIY, Reversionary Yield & Cost of Debt
ATTRACTIVE SPREAD BETWEEN NIY, REVERSIONARY YIELD & COST OF DEBT 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 2015 2016 2017 2018 2019 2020 2021 2022 Cost of Debt NIY Reversionary Yield REI PLC 12
Slide 14: Private Investor Demand Continues for Smaller Lot Sizes
PRIVATE INVESTOR DEMAND CONTINUES FOR SMALLER LOT SIZES Strong appetite continued throughout 2022 from private investors seeking smaller lot sizes Summary of 2022: of £200,000 up to £1 million. • 25 assets/units successful disposed of We identified several assets that could be broken up into smaller
Slide 15: Delivering on Strategy
DELIVERING ON STRATEGY Capital Return Strategy & Buyback Programme EXECUTING STRATEGY The Board is committed to delivering value to its shareholders and believes that the share price discount to the net tangible assets (“NTA”) continues to be • Disposals totalling £20.9 million in 2022 at an unwarra
Slide 16: Ongoing Disposals at a Premium or Book Value
ONGOING DISPOSALS AT A PREMIUM OR BOOK VALUE Acquisitions & Disposals 70 Acquisitions 2022 - A YEAR OF DISPOSALS Disposals 60 • Completed 25 disposals totalling £20.9 million (aggregate uplift of 8.5% before costs above 50 book value) 40 COVID19 • Significant sales in pipeline legals PERIOD 30 • Fur
Slide 17: Recovering Income and Void Potential
RECOVERING INCOME AND VOID POTENTIAL INCOME LOSS DUE TO DISPOSALS UNLOCKING VOID POTENTIAL (as at results date) Contracted rental income as at 31 Dec 2022 - £12.6 million p.a. Of the 15.46% vacancy within the portfolio, over half of this (8.01%) can be attributed to spaces at 4 properties (Barracks
Slide 18: Diverse and Attractive Portfolio
DIVERSE AND ATTRACTIVE PORTFOLIO Fin FS 3.06% 3.25% RBC Office 82.01% of 4.72% 42.06% Sector £ % Income by Income by sector sector our offices are ‘non M&P 6.01% Office Office 5,310,138 42.06 Birmingham City centre’ TR Traditional Retail 2,189,615 17.34 Other - Hotels (Travelodge), Leisure (The Gym
Slide 19: Top Tenants by Income, No Material Exposure
TOP 10 TENANTS BY INCOME NO MATERIAL EXPOSURE Rank Tenant Rent £’000 % Sector Property 1 450 3.56 Discount Retail Jasper, Tunstall 2 420 3.33 Office Molineux House, Wolverhampton & Titan House, Telford 25.48% 3 396 3.14 Office Avon House, Bromsgrove Top 10 tenants represent only 25.48% of REI’s 4 30
Slide 20: ESG & the REI Portfolio
ESG & THE REI PORTFOLIO Portfolio Energy Performance Certification Carbon Emissions Reporting • In accordance with government guidelines, REI has undertaken a • REI has continued to work alongside Measurabl to collect, track and report carbon programme to ensure our assets meet the UK statutory time
Slide 21: Outlook & Summary
OUTLOOK & SUMMARY • Execute stated strategy – We anticipate continued sales to a strong private investor market, which will allow us to execute our stated strategy and reduce our debt further – if the share price discount to NTA persists, we will consider a further share buyback, special dividend or
Slide 22: Appendices
APPENDICES REI Real Estate Investors Pk REI PLC 21
Slide 23: The REI Business Model Active Asset Management
THE REI BUSINESS MODEL ACTIVE ASSET MANAGEMENT Generating value through asset management Buys REI market expertise Sells/holds Institutional sales VALUE ADD 12 - 24 months of Institutional quality assets Offices Asset Management Value & convenience retail Lease renewals HNW/private investors/ Leisur
Slide 24: Operational Team
OPERATIONAL TEAM Ian Clark Andrew Osborne Jack Sears Anna Durnford BSc (Hons) MRICS BSc (Hons) BSc (Hons) MRICS Donna Mooney Director, Investor Relations Director, Asset Manager Investment Manager Asset Management Receptionist/Administrator • Joined REI in 2007 • Joined REI in 2011 • Joined REI in 2
Slide 25: Real Estate Investors Plc
REAL ESTATE INVESTORS PLC 2nd Floor 75–77 Colmore Row Birmingham B3 2AP Telephone: 0121 212 3446 Fax: 0121 212 1415 www.reiplc.com