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RDI REIT reports fall in first-half earnings
11th May 2020 09:41
(Sharecast News) - RDI REIT reported a fall in underlying earnings in its interim results on Monday, to ?20.8m, compared to ?22.7m a year earlier, excluding the Aviva portfolio.
The London-listed firm said underlying earnings per share for the six months ended 29 February totalled 5.5p, down from 6p in the six months ended 28 February 2019 excluding the Aviva portfolio, or 6.9p including it.
Net rental income for the first half was ?35.7m, down from ?36.3m excluding the Aviva portfolio, while the board said it would not pay a dividend for the interim, having distributed 4p per share after the first half of the 2019 financial year.
Looking at its balance sheet, RDI's EPRA net asset value per share was 172p as at 29 February, compared to 185.5p on 31 August, while its IFRS net asset value fell to ?639.7m from ?685.6m.
Its portfolio valuation, including its joint venture shares, was ?1.34bn, down from ?1.42bn, while its loan-to-value ratio slipped to 41.8% from 42%.
RDI said its EPRA occupancy remained high for the first half at 96.5%, compared to 95.9% on 31 August, adding that it completed 69 leasing events during the period, with 6.1% or ?0.7m above its estimated rental value.
Like-for-like net rental income declined 1.3%, which the board said reflected a reduction in income from operational assets and continued company voluntary arrangement activity in the retail sector.
It said it saw "resilient" income returns from the London serviced office portfolio, with average desk rates maintained despite lower occupancy of 89.6%, compared to 93.6% at the end of August.
The revenue per available room (revPAR) in its managed hotel portfolio declined 10% to ?71.4, following lower occupancy and rates.
RDI also updated the market on its current trading in light of the Covid-19 coronavirus pandemic, saying that it had approximately ?85m of cash, providing "good levels" of liquidity.
Rent collection for the March quarter stood at 59%, or 83.1% excluding RBH managed hotels and London serviced offices.
The board said it was taking "disciplined measures" to reduce asset-related operating costs, and had limited its committed capital expenditure to ?1.8m.
It said it had also taken "strong progress" on its strategic disposal programme, with ?156m of disposals completed or exchanged during the period, at an average premium of 1.7% to market value, including transactions post period end.
Group retail exposure had reduced to 33.6% from 35.3% at the end of August, with a further reduction to 28.1% following the sale of the German DIY portfolio, and subject to the completion of the Bahnhof Altona shopping centre disposal in Hamburg.
UK retail exposure was limited to 17.7%, the board added.
"We are releasing interim results in unprecedented times, but are pleased to report that the strategic actions taken over the last 12 months, including our disposal programme and proactive balance sheet management, have put the company in a position to weather the extraordinary conditions we face," said chairman Gavin Tipper.
"Our focus during this time has been on the welfare, safety and security of our stakeholders, and on ensuring that asset values are protected, revenues are carefully managed and costs are minimised.
"In order to preserve liquidity, we have not declared an interim dividend, and will revisit distributions based on the results for the full financial year."
Chief executive officer Mike Watters added that in recent weeks, the company had been focussed on "actively engaging" with tenants and taking "necessary pragmatic actions" across the business to ensure it was "best equipped" to withstand the current, challenging period.
"The ongoing implementation of our consistent strategy means that the underlying portfolio is well positioned to resume activity as government restrictions begin to be lifted and, we hope, the onset of strengthening economic conditions.
"Our assets are focussed on sectors and locations with long term positive structural demand characteristics, further reinforced by high portfolio occupancy, a diversified tenant base and a balance sheet that provides access to significant cash reserves."
At 0929 BST, shares in RDI REIT were down 0.5% at 51.64p.
The London-listed firm said underlying earnings per share for the six months ended 29 February totalled 5.5p, down from 6p in the six months ended 28 February 2019 excluding the Aviva portfolio, or 6.9p including it.
Net rental income for the first half was ?35.7m, down from ?36.3m excluding the Aviva portfolio, while the board said it would not pay a dividend for the interim, having distributed 4p per share after the first half of the 2019 financial year.
Looking at its balance sheet, RDI's EPRA net asset value per share was 172p as at 29 February, compared to 185.5p on 31 August, while its IFRS net asset value fell to ?639.7m from ?685.6m.
Its portfolio valuation, including its joint venture shares, was ?1.34bn, down from ?1.42bn, while its loan-to-value ratio slipped to 41.8% from 42%.
RDI said its EPRA occupancy remained high for the first half at 96.5%, compared to 95.9% on 31 August, adding that it completed 69 leasing events during the period, with 6.1% or ?0.7m above its estimated rental value.
Like-for-like net rental income declined 1.3%, which the board said reflected a reduction in income from operational assets and continued company voluntary arrangement activity in the retail sector.
It said it saw "resilient" income returns from the London serviced office portfolio, with average desk rates maintained despite lower occupancy of 89.6%, compared to 93.6% at the end of August.
The revenue per available room (revPAR) in its managed hotel portfolio declined 10% to ?71.4, following lower occupancy and rates.
RDI also updated the market on its current trading in light of the Covid-19 coronavirus pandemic, saying that it had approximately ?85m of cash, providing "good levels" of liquidity.
Rent collection for the March quarter stood at 59%, or 83.1% excluding RBH managed hotels and London serviced offices.
The board said it was taking "disciplined measures" to reduce asset-related operating costs, and had limited its committed capital expenditure to ?1.8m.
It said it had also taken "strong progress" on its strategic disposal programme, with ?156m of disposals completed or exchanged during the period, at an average premium of 1.7% to market value, including transactions post period end.
Group retail exposure had reduced to 33.6% from 35.3% at the end of August, with a further reduction to 28.1% following the sale of the German DIY portfolio, and subject to the completion of the Bahnhof Altona shopping centre disposal in Hamburg.
UK retail exposure was limited to 17.7%, the board added.
"We are releasing interim results in unprecedented times, but are pleased to report that the strategic actions taken over the last 12 months, including our disposal programme and proactive balance sheet management, have put the company in a position to weather the extraordinary conditions we face," said chairman Gavin Tipper.
"Our focus during this time has been on the welfare, safety and security of our stakeholders, and on ensuring that asset values are protected, revenues are carefully managed and costs are minimised.
"In order to preserve liquidity, we have not declared an interim dividend, and will revisit distributions based on the results for the full financial year."
Chief executive officer Mike Watters added that in recent weeks, the company had been focussed on "actively engaging" with tenants and taking "necessary pragmatic actions" across the business to ensure it was "best equipped" to withstand the current, challenging period.
"The ongoing implementation of our consistent strategy means that the underlying portfolio is well positioned to resume activity as government restrictions begin to be lifted and, we hope, the onset of strengthening economic conditions.
"Our assets are focussed on sectors and locations with long term positive structural demand characteristics, further reinforced by high portfolio occupancy, a diversified tenant base and a balance sheet that provides access to significant cash reserves."
At 0929 BST, shares in RDI REIT were down 0.5% at 51.64p.