Newriver Reit Plc · LSE:NRR
Newriver Reit — H1 FY2025 Earnings Presentation
38 slides from Newriver Reit's earnings presentation, Dec 12, 2024
Slide 1: Half Year Results 2025
HALF YEAR RESULTS 2025 6 months to 30 September 2024 12 December 2024 HALF YEAR PRESENTATION 6 MONTHS TO 30 SEPTEMBER 2024 1
Slide 2: Transformational M&A, coupled with strong operational performance
TRANSFORMATIONAL M&A, COUPLED WITH STRONG OPERATIONAL PERFORMANCE FY24 FY25 Year to Date FY26 Consistent strong operational performance Completed acquisition of Ellandi Positioned Delivering for growth growth Successful equity raise Completed acquisition of Capital & Regional HALF YEAR PRESENTATION
Slide 3: Capital & Regional: compelling strategic and financial benefits
CAPITAL & REGIONAL: COMPELLING STRATEGIC AND FINANCIAL BENEFITS Increase in balance £0.9bn / +65% high-yielding, complementary assets, at an attractive entry point sheet portfolio value Combined Portfolio Valuation1 Increase in £90m / +70% with a well-diversified tenant base and strong income growth
Slide 4: C&R assets highly complementary with NewRiver portfolio
C&R ASSETS HIGHLY COMPLEMENTARY WITH NEWRIVER PORTFOLIO Local community centres supported by Low-risk tenant profile focused on Affordable Occupational Cost Ratios higher disposable incomes value-oriented and service retailers supported by strong sales growth 88% value 56% shoppers 87% rent 2.1% fai
Slide 5: Attractive entry point at material discount
ATTRACTIVE ENTRY POINT AT MATERIAL DISCOUNT Shopping Centre rents and Value-add opportunities Attractive entry point values have rebased Shopping Centre MSCI market movements1 Affordable OCRs provide foundation to Acquired at 14% discount to NAV2 Capital Value and ERV since Sep-19. Index Sep-19=10
Slide 6: Diversified £0.9bn convenience focused portfolio
DIVERSIFIED £0.9BN CONVENIENCE FOCUSED PORTFOLIO +65% increase in balance sheet portfolio London and South-East composition increased to 56% South East 14% Core Shopping Centres Retail Parks 74% Core London Shopping Centres 33% GAV London & South-East GAV 42% 56% 56% £540m £890m Retail Parks Total P
Slide 7: HY25 operational & financial strength
HY25 OPERATIONAL & FINANCIAL STRENGTH Operational Metrics Financial Metrics Supported by valuation stability Underlying Funds From Leasing vs ERV Portfolio Valuation LFL Movement Operations EY Weighting Movement % % +5.3% £11.5m As at 30 September 2024 £m % H1 % EY ERV (FY24 +3.6%) (HY24 £12.3m) Sho
Slide 8: Finance Review
FINANCE REVIEW Will Hobman: Chief Financial Officer HALF YEAR PRESENTATION 6 MONTHS TO 30 SEPTEMBER 2024
Slide 9: Increased scale post C&R transaction: with balance sheet strength maintained
INCREASED SCALE POST C&R TRANSACTION: WITH BALANCE SHEET STRENGTH MAINTAINED Proforma for C&R Acquisition1 30 September 2024 31 March 2024 Portfolio at Valuation £890m £540m £544m Cash & cash equivalents c.£70m £185m £133m Gross debt £444m £304m £304m EPRA NTA Per Share c.102p 106p 115p Net debt: EB
Slide 10: Financial position in context: peer group and NRR policy
FINANCIAL POSITION IN CONTEXT: PEER GROUP AND NRR POLICY Net debt: EBITDA ICR LTV • Considerable headroom to Policy • Considerable headroom to Policy • Considerable headroom to Policy • Amongst the strongest in the sector • Amongst the strongest in the sector • Marginally above Guidance • To reduce
Slide 11: Loan to value: to reduce to <40% with modest disposals
LOAN TO VALUE (%): TO REDUCE TO <40% WITH MODEST DISPOSALS H1 MOVEMENT: PROFORMA1 GUIDANCE Reduced from 30.8% to 21.6% Increased to c.42% To reduce to <40% • LTV reduced to 21.6% in H1, primarily due to equity placing in September 2024 c.20% c.42%1 <40% To reduce LTV to guidance would • Proforma LTV
Slide 12: Increased scale, low debt cost maintained and maturity profile diversified
INCREASED SCALE, LOW DEBT COST MAINTAINED AND MATURITY PROFILE DIVERSIFIED • No impact on existing NewRiver debt: £300m, 3.5% bond, Proforma for C&R maturing in Mar-28; undrawn £100m RCF NewRiver Capital & Regional Acquisition1 • Three smaller and secured C&R facilities totalling £59m at a Gross deb
Slide 13: Underlying funds from operations: continued core performance
UNDERLYING FUNDS FROM OPERATIONS (£m): CONTINUED CORE PERFORMANCE Proportionally consolidated HY25 HY24 Net property income £(1.2)m (1.6) 12.3 £m £m 1.0 11.5 (0.1) (0.2) 0.5 (0.4) Revenue 31.1 34.4 Property operating expenses (9.3) (11.4) Net property income 21.8 23.0 Administrative expenses (5.5) (
Slide 14: Fully covered dividend per share: to grow in H2 and beyond
FULLY COVERED DIVIDEND PER SHARE: TO GROW IN H2 AND BEYOND DIVIDEND TOPPED-UP IN FY24 PENDING DEPLOYMENT COMPLETED DEPLOYMENT TO DRIVE FUTURE DIVIDEND GROWTH 4.0p 3.8p 3.7p 85% 3.4p Pay out Top-up 3.2p 85% 3.0p Pay out Top-up 80% Pay out • Completed acquisitions to generate future UFFO and dividend
Slide 15: Looking ahead: UFFO per share building blocks
LOOKING AHEAD: UFFO PER SHARE BUILDING BLOCKS EXISTING GROUP C&R ACQUISITION: MID-TO-HIGH TEENS ACCRETION ENLARGED GROUP2 DEPLOYMENT DAY 1 NEXT 12 TO 24 MONTHS 5 1.3p (0.7p) 8.7p Capital Partnerships growth 3.3p 7.4p 4 (2.6p) 3 Like-for-like NRI growth • Modest disposals of Synergies of c.£30m to £6
Slide 16: Portfolio Review & Outlook
PORTFOLIO REVIEW & OUTLOOK Allan Lockhart: Chief Executive HALF YEAR PRESENTATION 6 MONTHS TO 30 SEPTEMBER 2024
Slide 17: NewRiver portfolio: strong operating performance
NEWRIVER PORTFOLIO: STRONG OPERATING PERFORMANCE High Consistent Positive In-Store Spend Underpinned by portfolio focused High Occupancy Retention Rate1 Growth (YoY%)2 on essential goods & services 95.6% 96.7% 98.0% 96.5% 94% 98% +6.7% Top Retailers % Total Rent Including C&R assets 90% 92% +4.6% 1
Slide 18: Accelerating capital partnerships
ACCELERATING CAPITAL PARTNERSHIPS Leading owner and manager of retail Diverse range of partners Scalable Operating Platform 13 Active in every region in the UK Institutions Community focused shopping centres Partners Private Equity 49 29 Destination shopping centres Shopping Centres Retail Parks Deb
Slide 19: ESG: delivering on our commitment
ESG: DELIVERING ON OUR COMMITMENT Progress on our net-zero carbon target Adding social value to our communities Emissions from landlord energy consumption vs 2030 SBTi Short Term Target Absolute Scope 1&2 Emissions +£41m social value generation Forecasted social value generation across the portfolio
Slide 20: The outlook is positive
THE OUTLOOK IS POSITIVE Consistent strong Completed acquisition Successful Completed acquisition financial and operational of Ellandi equity raise of Capital & Regional performance Delivering growth Continue capital Unlock synergies identified Rental and valuation growth Capital recycling pa
Slide 21: Appendices
APPENDICES Appendix title Slide # Appendix title Slide # Background information Valuation Presentation team 22 Valuation analysis for Core Shopping Centres and Retail Parks – Initial Yield 33 Performance track record 23 Valuation analysis for Core Shopping Centres and Retail Parks – Equivalent Yield
Slide 22: Presentation team
PRESENTATION TEAM Allan Lockhart Will Hobman Chief Executive Chief Financial Officer • Co-founded NewRiver in 2009 as Property Director. Appointed • Will is a Chartered Accountant with over 14 years of post qualified CEO effective 1 May 2018. experience, having qualified at BDO LLP working in its Au
Slide 23: Performance track record
PERFORMANCE TRACK RECORD HY25 FY24 HY24 FY23 HY23 Underlying FFO (‘UFFO’) £11.5m £24.4m £12.3m £25.8m £13.6m Underlying FFO (‘UFFO’) per share 3.7p 7.8p 4.0p 8.3p 4.4p Ordinary dividend per share 3.0p 6.6p 3.4p 6.7p 3.5p Ordinary dividend cover (based on UFFO) 125% 118% 118% 125% 125% EPRA Net tangi
Slide 24: Portfolio segmentation: key characteristics
PORTFOLIO SEGMENTATION: KEY CHARACTERISTICS AS AT 30 SEPTEMBER 2024 Retail Parks Shopping Centres Shopping Shopping - Core Centres Centres - Regen - Work Out Valuation £179.3m £304.7m £24.7m £28.7m Portfolio Weighting 33.2% 56.4% 4.6% 5.3% Number of Assets 13 17 2 4 Average Lot Size (100% Share) £17
Slide 25: Top 10 assets by value
TOP 10 ASSETS BY VALUE: AS AT 30 SEPTEMBER 2024 Floor area Gross rent Name (sq ft) (NR Share) Occupancy Key occupiers Broadway Shopping Centre, Bexleyheath 398,000 £6.3m 96.3% M&S, Boots, H&M, WH Smith, Greggs Abbey Centre, Newtownabbey 320,000 £5.4m 95.5% Primark, Next, Dunnes, River Island Broadwa
Slide 26: Retail lease profile
RETAIL LEASE PROFILE Passing rent subject to expiry Passing rent ERV of leases of leases expiring expiring £m £m FY25 4.0 4.6 FY26 5.6 6.3 FY27-FY28 9.3 10.6 Total 18.9 21.5 Passing rent subject to review1 Passing rent ERV of leases WALE of subject to subject to leases subject review review to revie
Slide 27: Reconciliation of IFRS profit/(loss) after taxation to UFFO
RECONCILIATION OF IFRS PROFIT / (LOSS) AFTER TAXATION TO UFFO HY25 HY24 Total Total £m £m Profit / (loss) after taxation 8.2 (2.6) Adjustments: Revaluation of investment properties 2.2 11.6 Revaluation of joint ventures’ investment properties - - Profit / (loss) on disposal of investment properties
Slide 28: Adjusted funds from operations (AFFO)
ADJUSTED FUNDS FROM OPERATIONS (AFFO) HY25 HY24 Analysis of HY25 HY24 Criteria Capitalised Recoverable £m £m capital £m £m from tenants expenditure Gross rental income (GRI) 25.8 27.9 Essential 0.2 0.5 Works required to FFO before void costs for repairs 11.9 12.9 maintain physical environment in
Slide 29: Balance sheet
BALANCE SHEET • Investment property decreased to £540m at Proportionally Proforma for 30 Sept 31 March 30 Sept 31 March 30 Sept 30 September 2024 (versus £544m at 31 Consolidated C&R 2024 2024 2023 2023 2022 March 2024) due to one work out disposal Acquisition1 and a marginal decline in valuations o
Slide 30: Financial policies and additional guidelines
FINANCIAL POLICIES AND ADDITIONAL GUIDELINES Proportionally consolidated Financial Policies Proforma5 30 September 2024 31 March 2024 Net debt c.£371m £116.6m £167.3m Principal value of gross debt £444m £304.3m £304.0m Weighted average cost of debt – drawn only1 3.5% 3.5% 3.5% Weighted average debt
Slide 31: Loan to value
LOAN TO VALUE 30 September 31 March 30 September 31 March 30 September 2024 2024 2023 2023 2022 £m £m £m £m £m Borrowings 297.1 296.6 297.2 296.7 296.3 Cash and cash equivalents (184.4) (132.8) (137.3) (108.6) (92.5) Net debt 112.7 163.8 159.9 188.1 203.8 Equity attributable to equity holders of the
Slide 32: Number of shares
NUMBER OF SHARES 30 September 31 March 30 September 31 March 30 September Number of shares (m) 2024 2024 2023 2023 2022 Weighted average – basic1,5 314.2 311.4 311.3 309.7 309.0 Weighted average – diluted2,5 316.6 313.9 313.3 311.7 310.4 Year end – basic3,5 377.7 310.8 313.7 310.7 309.0 Year end – d
Slide 33: Valuation analysis: initial yield
VALUATION ANALYSIS FOR CORE SHOPPING CENTRES AND RETAIL PARKS: INITIAL YIELD NewRiver Core Shopping Centres NewRiver Retail Parks Average Lot Size: £20.7m Average Lot Size: £17.3m NIY: 8.4% NIY: 6.4% 14.0% 18.0% 16.0% 12.0% 14.0% 10.0% 12.0% 8.0% 10.0% NIY % NIY % 6.0% 8.0% MSCI1 Shopping Centre NIY
Slide 34: Valuation analysis: equivalent yield
VALUATION ANALYSIS FOR CORE SHOPPING CENTRES AND RETAIL PARKS: EQUIVALENT YIELD NewRiver Core Shopping Centres NewRiver Retail Parks Average Lot Size: £20.7m Average Lot Size: £17.3m NEY: 9.2% NEY: 6.6% 16.0% 25.0% 14.0% 20.0% 12.0% MSCI1 Shopping 10.0% Centre EY 9.2% 15.0% NEY % NEY % 8.0% 6.0% 10.
Slide 35: Capital & Regional: proforma details
CAPITAL & REGIONAL: PROFORMA DETAILS • Where possible, key metrics have been provided proforma for the acquisition of Capital & Regional (‘C&R’), which completed on 10 December 2024, including the impact of the cash component of the consideration, estimated remaining transaction costs and the planne
Slide 36: Acquisition of Capital & Regional: material, recurring anticipated cost savings
ACQUISITION OF CAPITAL & REGIONAL: MATERIAL, RECURRING ANTICIPATED COST SAVINGS £m 1 2 3 8 1 C&R admin costs of £8.0m in year to 30 December 2023 IT Property Mgmt Income Head Office 7 C&R Admin costs were £6.9m net of Property Management 6 Professional 2 income Advisory Fees 5 Admin net of Property
Slide 37: Disclaimer
DISCLAIMER The information in this presentation may include forward-looking statements, which are based on current expectations and projections about future events. These forward-looking statements reflect the directors' beliefs and expectations and are subject to risks, uncertainties and assumption
Slide 38: NewRiver REIT plc
NewRiver REIT plc 89 Whitfield Street London W1T 4DE www.nrr.co.uk HALF YEAR PRESENTATION 6 MONTHS TO 30 SEPTEMBER 2024 38