Newriver Reit Share Discussion Threads

[nickrl] 26/7/2021 10:12

Not sure what costs they have here but if they nett 200m my estimate is LTV dropped to c37-38%. Mind you it depends on what terms the debt is on as to whether that will cost them to pay it off early. Hopefully the shareholder circular on 28th will give us more detail.

[chucko1] 26/7/2021 10:07

The bigger mistake was not forecasting the pandemic. The fact that you have not mentioned that is an absurdity as any analysis has to consider that, and managing the risk in the new scenarios they are facing.

[fenners66] 26/7/2021 09:53

Classic manoeuvre spend 3 years writing off the value and then dispose at far less, and above all don't draw attention to how much it all cost.

[fenners66] 26/7/2021 09:51

What a BS presentation of years of Failure.

They are going to great lengths not to draw attention to how much money they have lost on the pub estate .

After telling everyone for years that it was a master stroke buying pubs now they have to disclose the details (see the very bottom of the RNS) even those are slightly opaque and seek to play down both the loss and the contribution the estate was making(Not).

Check the detail at the bottom - I knew they would have to add it somewhere so I carried on reading - despite them only mentioning "strategic review" and "Gross proceeds"

Detail:-

Disposal Group Net Assets £249.3m

Net Proceeds exp £216.1m

Therefore what they do not say outright - LOSS on disposal £33.2m

But that is after

Net de-valuation movement 2019,20,21 of £51.6m (Loss)

So as Property investors they have managed around £85m of losses on something sold for £216m !!

But its because they did not see sufficient scale (674 pubs sold to someone with 1000) and it was only to meet the "strategic review"


BS the board should just come clean and admit the whole experiment was just a very expensive mistake!

[dhoult12] 26/7/2021 08:35

Quite, they should have at X discount to last published NAV etc etc.

We shouldnt have to scramble around accounts to try and work it out.

[brwo349] 26/7/2021 08:32

What a terribly worded announcement on a deal that is transformational. So little detail.

[dhoult12] 26/7/2021 08:28

Im getting slightly different numbers as i do not think this sale includes the C-Stores.. although clear as mud.

Announcement says "The Disposal of Hawthorn, which as at 30 June 2021 comprised 674 leased & tenanted and operator managed community pubs"

Number of pubs sold ties to accounts, page 12 (without C stores).

Accounts have pubs AND c stores at £248m. Handily value of c stores not split, but seems to be from the development blurb 24 of them sat in that £248m figure.

A couple went in year, one for £2.8m including flats and another for £1.2m.

Doesnt seem totally mad to value each one at £500k conservative which would mean what's being disposed is actually £248m - (24*£500k) = £236m.

If each C store was worth £1m then its down £248m - £24m = £224m, which strangely just about ties to disposals proceeds.


Would also suggest Admiral Taverns are more likely to be bidding for just the pubs rather than pubs plus what is effectively retail.

[chucko1] 26/7/2021 08:02

They sold the pubs at around an 11% discount to NAV, according to their statement which broke out the pub portfolio.

The whole estate was trading at what appears to be a 40% or so discount, so the effect of this sale is to increase the discount by around 8% to near 50% for the remaining portfolios.

Given the more stable trading performance of the retail portfolio and the reduction in uncertainty presented by potential future social distancing in pubs, this discount seems excessive to me.

[riverman77] 26/7/2021 08:00

By my rough calculations this will reduce NAV by 7-8p, perhaps a price worth paying to get the LTV down.

[rogerrail] 26/7/2021 07:55

NAV of Hawthorne last disclosed at £248m including C Stores. Cant see anywhere if the sale includes C Stores.

[gary1966] 26/7/2021 07:38

Hawthorn Leisure gone for just over £220m.

EPIC are predominantly retail warehouses and they performed very well during the pandemic. A large seller has just been cleared. Trading at around a 17% discount to NAV and yielding around 7% paid monthly. Dividend should increase by around 10% shortly after the year end in September. Hope that helps gbjbaanb

[gbjbaanb] 26/7/2021 03:01

Shopping centres make up 57%, retail parks 16% and pubs 25%.

I wonder if there are better reits for retail parks.

[riverman77] 25/7/2021 19:23

If pubs are sold at book value there will be no impact on NAV - pubs go out, cash comes in = NAV neutral. If cash is used to pay down debt then this will reduce LTV, but again no NAV impact. For NAV to fall 35-40p they would have to more or less give the pubs away!

[nickrl] 25/7/2021 18:39

Retail Parks are small part of portfolio especially since they offloaded a load into the BRAVO JV so shopping centres will still dominate and it depends on whether we've reached the bottom on these or not.

Anyhow pub sale is imminent and that could realise 250m so a step change down in LTV will give it some headroom but NAV will drop 35-40p so current share price reflecting that i guess.

Nearly got to my 80p interest level but has bounced back so probably missed that opportunity as momentum is carrying the sector higher currently.

[brwo349] 25/7/2021 16:44

brief mention in todays Mail on Sunday -

"AJ Bell's Hewson likes investment trust New River Real Estate, which she says has exposure to retail parks.

These have proved popular, as many people have preferred to shop out of town and take advantage of easy parking. "

[fenners66] 01/7/2021 00:17

Gap to close ALL 81 UK and Ireland stores to go online by the end of the year....

Retail closures continue, of course if every other shop is empty it will not affect NRR.... apparently.

[gbjbaanb] 16/6/2021 12:41

Either that, or they've looked at the inflation figures and have come to the conclusion that interest rates are going to have to be raised, possibly by quite a lot.

[dhoult12] 16/6/2021 12:10

Ft reporting eviction ban to be extended to march 22...

[nickrl] 16/6/2021 12:03

Bondholder they aren't the only ones selling off income producing family silver and im surmising some of them need cash to cover off debts that they might not be able to rollover so easily or protect themselves from covenant breaches.

[lord gnome] 16/6/2021 12:01

The disposal of the pubs business has a whiff of concerned lenders wanting gearing reduced.

[calton1] 16/6/2021 11:18

Isn't the point that NR will have filleted Hawthorn's estate of all the property type assets for redevelopment before floating off the core pub business?

[bondholder] 16/6/2021 10:28

You don't dispose of a highly cash generative business in turn slashing your net income if you have other options

[bondholder] 16/6/2021 09:41

NRR are not alone in carrying properties at unattainable valuations in their accounts but the lack of transparency in latest presentation doesn't help. They mention new deals without any information on lease lengths,rent free periods or break clauses. The disposal of the pub business has a definite air of fire fighting rather than a strategic repositioning.

[janekane] 16/6/2021 09:38

Cwa1
Thanks interesting reading