NewRiver REIT has reported intensified losses over the past year due to ongoing valuation declines.
The retail and leisure-focused investor revealed a pretax loss of £153.2m for the year to the end of March, compared with a £121.6m loss the previous year.
NewRiver’s EPRA NTA per share fell by 24.9% to 151p over the period. It reported net assets of £460.4m, down from £610.6m a year earlier.
The REIT reported a like-for-like valuation decline of 13.6%. It fell by 8.2% in the first half, with a less severe drop of 5.6% in the second half.
The portfolio value fell from £1.2bn to £974m. NewRiver reported a total property return of -6.9%, however said this outperformed the MSCI IPD benchmark by 120bps.
NewRiver’s portfolio value is split 25% community pubs, 22% core shopping centres, 22% regeneration shopping centres, 16% retail parks and 13% work-out shopping centres.
During the year, the community pubs valuation fell by 8.5% and core shopping centres dropped by 18%. Every sector declined during the Covid-19 pandemic.
Chief executive Allan Lockhart said the business had outperformed the market in terms of rent collection and highlighted the REIT’s success in improving liquidity over the period. Unrestricted cash climbed by 88% to £154m, with a total of £199m in liquidity.
Lockhart said: “Our performance was underpinned by our unsecured balance sheet, our diversified portfolio focused on local convenience and community, and the dedication and expertise of our staff who successfully completed a range of transactions in a very challenging market.”
The REIT was able to shave £70m of net debt from its balance sheet, putting the total at £493.3m. However, the valuation drops saw a worsening LTV at 50.6%.
NewRiver said that while this is higher than its guidance, the sale of the Hawthorn pubs business and further non-core retail disposals will significantly improve this. It completed £81m in disposals for the full year, achieving its target, and has a further £79m exchanged or under offer, including The Moor in Sheffield.
As it sets about divesting from pubs and non-core retail, NewRiver is boosting residential development. It has 2.6m sq ft development pipeline, of which 75% is residential.
Lockhart said: “Having successfully navigated the challenges of Covid-19, we look to the future with genuine confidence based upon an improving consumer market, the underlying strength of our business and a clear strategic plan to deliver long-term shareholder value.”
NewRiver’s board has opted to reinstate the dividend at 3p per share, representing 80% of its underlying funds from operations per share of 3.8p.
To send feedback, e-mail emma.rosser@eg.co.uk or tweet @EmmaARosser or @EGPropertyNews
