Newriver Reit Plc · LSE:NRR
Newriver Reit — NewRiver Retail — FY2016 Earnings Presentation
30 slides from Newriver Reit's earnings presentation, Mar 31, 2016
Slide 1: Results Presentation: Year Ended 31 March 2016
Results Presentation: Year Ended 31 March 2016 www.nrr.co.uk @newriverretail
Slide 2: 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 3: Transformational Year
Transformational Year • Sixth consecutive year of revenue, profit and dividend growth • Significant growth across all operations • Total assets exceed £1 billion • Swift deployment of £300m equity raised • Fully covered dividend grew 9% to 18.5p – Q1 FY17 dividend increased to 5 pence per share (+11
Slide 4: Record Financial Results
Record Financial Results Performance FY16 FY15 Movement Gross Income £74.9m £46.7m +60% EPRA Adjusted Profit* £47.1m £20.9m +125% Profit Before Tax £69.5m £39.5m +76% EPRA Adjusted EPS 26.6p 19.8p +34% Dividend Per Share 18.5p 17.0p +9% EPRA NAV Per Share 295p 265p +11% Total Shareholder Return 16%
Slide 5: Business Model Delivering
Business Model Delivering • Dynamic retail sector • Strategic stock selection • Higher yields, low risk, low interest rates • Sustainable income, affordable rents • Asset management driving income growth • Development unlocking capital value • Economies of scale 5
Slide 6: Highly Active Year
Highly Active Year • £342m acquisitions, average yield 9.2% • £48.2m disposals, average exit yield 5.7% • 235 total leasing events • 24 planning approvals • 3 new convenience stores handed over to Co-Operative • Planning permission approved for major mixed use town centre redevelopment • Post year e
Slide 7: High Quality Diversified Portfolio £1.1 Billion AUM
High Quality Diversified Portfolio £1.1 Billion AUM NO. RETAILER % TOTAL STORES (NRR Share: £970m) 1 2.9% 5 Shopping centres, 2 2.6% 19 convenience stores & Regent Court, Leamington Spa in-town retail 3 2.3% 20 Retail warehouses 75% High street 4 2.2% 15 Development 2.1% 7 (2) (2) 5 Pubs Ridings Sho
Slide 8: Driving Income Returns
Driving Income Returns Proportionally Consolidated FY16 FY15 Growth • 125% growth in EPRA adjusted profits to Income Statement £m £m (%) £47.1m (FY15: £20.9m) Gross Income 74.9 46.7 +60% • EPRA adjusted* earnings per share Property costs (7.7) (5.7) increased by 34% to 26.6p (FY15: 19.8p Net Income
Slide 9: Strong Balance Sheet
Strong Balance Sheet Proportionally Consolidated FY16 FY15 • Investment properties increased to Balance Sheet (£m) 2013 (£m) 31.03.16 31.03.15 £973m following £342m of acquisitions £m and an upward valuation of £24m Investment Property 973.2 626.3 • Total assets under management Other Assets 9.8 9.4
Slide 10: Debt - Low Gearing and Low Cost
Debt - Low Gearing and Low Cost 31 March 2016 Balance sheet debt facilities • Debt maturity of 3.5 years Undrawn Interest cost Bank Loan expiry Drawn debt LTV covenant ICR covenant debt FY16 • Low cost of borrowing 3.7% AIG / Venn Dec 2018 £62.7M £22M 6.2% 70.0% 1.75x • Undrawn debt facilities; £102
Slide 11: EPRA NAV Bridge: +11.3% NAV per share return
EPRA NAV Bridge: +11.3% NAV per share return EPRA NAV: Movement for the 12 months ended 31 March 2016 (pence per share) 320.0 9.0p 18.5p 300.0 21.4p 7.8p 280.0 26.6p 260.0 +11.3% NAV per share growth 295p 295p 312p 240.0 303p 265p 265p 291p 220.0 200.0 EPRA NAV EPRA Earnings Revaluation gains Equity
Slide 12: Delivering Dividend Growth
Delivering Dividend Growth Financial FY15 FY16 FY17 Quarter Q1 4.25p 4.50p +11.1% 5.0p (1) Q2 4.25p 4.50p - Q3 4.25p 4.75p - Q4 4.25p 4.75p - TOTAL 17p 18.5p +8.8% (1) Ex-dividend date: 21 July 2016 Payment date: 19th August 2016 12
Slide 13: Acquisitions Totalling £342 million 9% NIY
Acquisitions Totalling £342 million 9% NIY Swift and strategic deployment of equity raises into acquisitions The Beacon, North Shields Co-op & Old Sal Pub, Longton South Lakeland, Kendal The Market, Bolton JV - Camel III JV - Marston’s Ramsay Punch Price £39m Price £61m Price £69m Price £53.5m NIY 7
Slide 14: Acquisitions: Neptune
Acquisitions: Neptune Acquired January 2016 • Distressed acquisition from German bank • Purchase price - £92.3m • Net initial Yield 8.0% • Equivalent Yield of 9.6% • Assembled 2005–06, for £312m Darlington Wakefield Cardiff • Value, Fashion, Food & Leisure Profile • Strong anchor retailers Price £50
Slide 15: Post Year End Acquisition: Bexleyheath, £120m, 7% NEY
Post Year End Acquisition: Bexleyheath, £120m, 7% NEY Acquired April 2016 • Single largest acquisition to date • Acquired from an international institution • First significant London asset • Economic growth area, driven by infrastructure improvements • Fully occupied with excellent retailer demand &
Slide 16: Disposals: £48.2 million, 5.7% average exit yield
Disposals: £48.2 million, 5.7% average exit yield Leamington Spa Glasgow Hull Acquisition Disposal Acquisition Disposal Acquisition Disposal Nov Jan Nov Date Dec 2012 Date July 2015 Date July 2014 2015 2016 2015 Price £10.5m £28.4m Price £6.0m £9.0m* Price £1.92m £3.0m NIY 8.88% 5.04% NIY 10.23% n/a
Slide 17: Asset Management Driving Income Growth
Asset Management Driving Income Growth Highly Active Asset Management Delivering on Key Strategies No. of Leasing Events 235 • Maximising rental income • Reducing property costs Total Headline Rent £4.16m Like-For-Like Growth • Broadening catering and leisure Comparison to ERV • Enhancing retail mix
Slide 18: Asset Management Case Study
Asset Management Case Study Priory Meadow, Hastings £65 million investment £75 million end-value 18
Slide 19: Development Unlocking Value
Development Unlocking Value • Risk controlled development – Pre-lets – Within existing ownership • Close relationships with Councils Capitol Shopping Centre, Cardiff • Town centre and mixed-use opportunities Development unlocking value Pipeline 1.5 million sq ft Planning approvals granted 24 Forum S
Slide 20: Development Case Study
Development Case Study Burgess Hill Proposed development planning granted major retail & leisure regeneration £65 million investment £75 million end-value 20
Slide 21: Development Case Study
Development Case Study Pub portfolio performing well £65 million investment 7 Pub Sales (completed/ under offer) Combined Acquisition £2.9m Price Combined 2015 £3.4m Valuation Combined Sale Price £3.9m £75 million end-value Old Sal, Stoke on Trent 21
Slide 22: Looking ahead
Looking ahead • Leading position in the convenience-led retail and leisure sectors • Strong retail sales growth forecast • Strong platform for future growth • Scalability of business model • Focus on driving earnings and dividend growth • Move to Main Market - NewRiver REIT Plc 22
Slide 23: Appendix
NEWRIVER RETAIL Appendix
Slide 24: Management team
Management team £65 million investment David Lockhart Mark Davies Allan Lockhart Chief Executive Finance Director Property Director £75 million end-value 24
Slide 25: Key Financial Statistics
Key Financial Statistics Performance FY16 FY15 FY14 Total shareholder return 16% 16% 55% EPRA adjusted profit £47.1M £20.9M £9.5M Profit before tax £69.5M £39.5M £23.1M EPRA adjusted profit pence per share 26.6p 19.8p 15.7p EPRA basic (pence per share) 20.4p 17.6p 12.0p Basic EPS 39.2p 37.5p 38.0p D
Slide 26: FY16 Valuations: Like For Like Performance
FY16 Valuations: Like For Like Performance As at 31st March 2016 Valuation NEY LFL Valuation LFL NOI LFL ERV £M % % % % Shopping Centres 726 7.9 3.9 1.6 3.9 Retail Warehouses 132 7.4 10.2 0.2 0.8 High Street 48 6.4 (1.0) (0.1) (0.9) Development 35 n/a 13.7 0.0 0.0 Pubs 161 11.7 1.7 0.7 0.7 TOTAL 1,1
Slide 27: Track Record – Five Years of Sustained Growth
Track Record – Five Years of Sustained Growth Property Company of the Year Property Week Awards 2016 Gross rental income £m Assets Under Management £m (proportionally consolidated) 1,100 74.9 848 46.7 600 390 25.2 19.9 274 16.8 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 27
Slide 28: Changing Dynamics of the Retail Sector
Changing Dynamics of the Retail Sector Retail sales forecast to grow 47% from 2015-2025 (Value) • Improving consumer confidence • 66% of NewRiver’s Top 30 retailers are expanding • Rising disposal income • “Top-up” drives 45p in every £1 • Diminishing vacancy rates • 85% of UK adults do a weekly “to
Slide 29: Asset Management Income Returns
Asset Management Income Returns Kingston-Upon-Hull, City of Culture 2017 • £65 million investment • • • • • • £75 million end-value 29
Slide 30: Cowley, Oxford: case study
Cowley, Oxford: case study Significant Mixed-Use Regeneration in Oxford £65 million investment £75 million end-value 30