Real Estate Investors Plc · LSE:RLE
Real Estate Investors — H1 2024 Earnings Presentation
22 slides from Real Estate Investors's earnings presentation, September 2024
Slide 1: Real Estate Investors Plc Results for the period ended 30 June 2024
Real Estate Investors Plc Results for the period ended 30 June 2024 Investor and Analyst Presentation
Slide 2: Maximising Shareholder Returns
REAL ESTATE INVESTORS PLC MAXIMISING SHAREHOLDER RETURNS REI Portfolio Diversified Active Asset Multi- Attractive Orderly Sale Today Portfolio Management banked Returns of Assets • Gross property assets • Multi-sector • Break up opportunities • Banked across 3 • Uninterrupted and • Persistent/substa
Slide 3: Highly Experienced Board Aligned with Shareholders
HIGHLY EXPERIENCED BOARD ALIGNED WITH SHAREHOLDERS 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 Boa
Slide 4: A Resilient Record Throughout Challenging Times
A RESILIENT RECORD THROUGHOUT CHALLENGING TIMES IN LINE WITH THE COMPANY’S COVERED DIVIDEND POLICY SINCE 2012 TOTAL DIVIDENDS DECLARED/PAID TO SHAREHOLDERS = £52.4 MILLION 3-YEAR DISPOSAL STRATEGY ANNOUNCED IN JANUARY 2024 Financial Crisis General Election Scottish Referendum EU Referendum BREXIT CO
Slide 5: H1 2024 Operational Highlights
H1 2024 OPERATIONAL HIGHLIGHTS • Strong overall rent collection for H1 2024 of 99.6% Contracted Rental Income £m • Contracted rental income: £10.3 million p.a. (FY 2023: £10.9 million p.a.) due to disposals and lease events 17.0 17.7 16.7 16.2 14.9 14.3 • Gross property assets: £136.2 million (FY 20
Slide 6: H1 2024 Financial Highlights
H1 2024 FINANCIAL HIGHLIGHTS • EPRA NTA per share of 52.0p (FY 2023: 54.9p) EPRA NTA • EPRA EPS of 1.04p (FY 2023: 1.26p) 66.2 68.9 69.3 67.4 61.3 64.5 62.2 59.1 55.2 58.8 54.9 52 • Q2 2024 dividend per share of 0.5p (Q2 2023: 0.625p) paid as an Ordinary Dividend FY 2013 FY 2014 FY 2015 FY 2016 FY 2
Slide 7: H1 2024 Financials Reducing Costs
H1 2024 FINANCIALS REDUCING COSTS • Revenue of £5.6 million (H1 2023: £6.1 million) reduction due to sales H1 2024 H1 2023 Income Statement £m £m • Underlying profit before tax* of £1.8 million (H1 2023: £2.2 million) Revenue 5.6 6.1 • Loss before tax of £3.2 million (H1 2023: £800,000 loss) includi
Slide 8: H1 2024 Financials Strong Balance Sheet
H1 2024 FINANCIALS STRONG BALANCE SHEET Gross property assets Net assets H1 2024 H1 2023 Balance Sheet £m £m Property 136.2 169.2 £136.2m £90.7m Cash 5.4 8.0 Debt (48.0) (67.9) Other (2.9) (2.9) Net assets 90.7 106.4 EPRA NTA per share Net LTV Adjustments 0.1 (0.4) 52.0p 31.8% EPRA NTA 90.8 106.0 EP
Slide 9: H1 2024 Financials Simplified Debt Position
H1 2024 FINANCIALS SIMPLIFIED DEBT POSITION • Cost of debt 6.5% (H1 2023: 3.7%) & 18.4% of debt was fixed Debt Profile Year-to-Date • Net LTV 31.8% (H1 2023: 35.9%) & Interest cover of 2.0x (H1 2023: 2.6x) Lender Debt Facility (£m) Debt Maturity • Total drawn debt of £48.0 million (H1 2023: £67.9 mi
Slide 10: Movement in EPRA NTA per Share (p)
MOVEMENT IN EPRA NTA PER SHARE (P) 60 54.9 1.0 52.0 -2.8 -1.1 50 40 30 20 10 0 01-Jan-24 Underlying Profits Revaluation of properties Dividend 30-Jun-24 REI PLC 9
Slide 11: Movement in EPRA Earnings per Share (p)
MOVEMENT IN EPRA EARNINGS PER SHARE (P) 1.4 1.3 1.2 0.3 1.0 1 -0.1 0.2 0.8 0.6 -0.7 0.4 0.2 0 01-Jul-23 Rental Income Direct Costs Admin Expenses Finance Costs 30-Jun-24 REI PLC 10
Slide 12: Uninterrupted Dividend Delivering Consistent Returns
UNINTERRUPTED DIVIDEND DELIVERING CONSISTENT RETURNS Uninterrupted dividend payments despite disposals Shareholder Distribution Year on Year £52.4 million total dividends declared/paid since 2012 Q2 2024 dividend of 0.5p per share (Q2 2023: 0.625p) +7% COVID19 Interim PERIOD Dividend paid qu
Slide 13: Continued Sales at a Premium to Book Value
CONTINUED SALES AT A PREMIUM TO BOOK VALUE Acquisitions & Disposals 70 • Completed disposals of £6.7 million and contracted Acquisitions Disposals 60 disposals of £1.6 million at H1 2024, with a further £5.1 50 million, totalling £13.4 million year to date 2024 40 COVID19 (aggregate uplift of 3.5% b
Slide 14: H1 2024 Market Sentiment & Activity Levels
H1 2024 MARKET SENTIMENT & ACTIVITY LEVELS Despite negative market sentiment with activity 40% below the 5-year average, year to date, we have made targeted sales of £13.4 million at 3.5% above 2023 year-end book values and prepared assets for future sales. Political uncertainty in election year I
Slide 15: Private Investor & Owner Occupier Demand Continues
PRIVATE INVESTOR & OWNER OCCUPIER DEMAND CONTINUES Summary of 2024 to date: • Sales of £13.4 million • An average lot size of £956,000 • 3.5% (pre-costs) above 2023 year-end book values • £10.0 million debt repaid using proceeds • Strong pipeline of assets for sale in legals Further sales 2024/2025
Slide 16: Larger Lot Sizes Oven Ready – Examples for Sale
LARGER LOT SIZES OVEN READY – EXAMPLES FOR SALE We have a number of properties in the portfolio which are ready for sale, all of which have undergone successful business plans and improvements. Due to the current subdued marketplace our normal buyer pool of property companies, REITs, UK funds, pensi
Slide 17: Diverse and Attractive Portfolio Balanced Risk
DIVERSE AND ATTRACTIVE PORTFOLIO BALANCED RISK Other 14.21% Office Income by Income by 85.15% of FS Sector Sector Sector our office 49.44% 3.97% (£) (%) investments are FIN Office 5,068,890 49.44% ‘non- Birmingham 2.11% City centre core’ Traditional Retail 1,365,681 13.32% RBC 2.67% Discount Retail
Slide 18: Top Tenants by Income Diversity Is Key
TOP 10 TENANTS BY INCOME DIVERSITY IS KEY Rank Tenant Rent £’000 % Sector Property 1 899 8.77* Office Birchfield House, Oldbury Top 10 tenants represent 2 450 4.39 Discount Retail Jasper, Tunstall only 36.15% of REI’s contracted income 3 396 3.86 Office Avon House, Bromsgrove 4 324 3.16 Office Molin
Slide 19: ESG & the REI Portfolio
ESG & THE REI PORTFOLIO Energy Performance Certification Carbon Emissions Reporting In accordance with government guidelines, REI has undertaken a As with previous years, the reduction of the portfolio’s carbon footprint is an ongoing programme to ensure our assets meet the UK statutory regulations
Slide 20: Outlook Disposal Strategy to Maximise Returns
OUTLOOK DISPOSAL STRATEGY TO MAXIMISE RETURNS Dispose Repay Return of Assets Debt Capital Disposals Programme – Complete disposals programme to the strong private investor/owner-occupier markets. Position larger assets for sale in anticipation of institutional/corporate buyers returning to the marke
Slide 21: Appendices
APPENDICES REI Real Estate Investors Pk REI PLC 20
Slide 22: 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
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