Newriver Reit Share Discussion Threads

[ramellous] 26/11/2018 11:00

Nearly at 216p where they will be paying a 10% divi. I’ll be in for more if it gets there.

[cc2014] 26/11/2018 10:46

Thanks for all your posts above guys. I found them very helpful. I have a pile of INTU which I hope the takeover will go through on this week and I'm looking for a home for the money. Looking for yield really although I have some appetite for capital risk at least on part of the proceeds.

I note Woodford owns either 24% or 29% of NRR depending on what sources I look at.

Which puts this in the wait and watch category for me. I'm worried he may become a forced seller if he gets continuing fund withdrawals. Wtf does he have so many large positions in percentages terms in so many companies? Doesn't he understand liquidity?

Anyways I shall continue to watch, wait and monitor. I guess I'm looking for a stupidly low price if Woodford starts selling. If he doesn't I guess I'll miss out.

[speedsgh] 23/11/2018 12:01

NewRiver tarred with the wrong brush -

The business model at NewRiver REIT (NRR) sets it apart from other retail landlords, but that doesn’t stop valuers taking a red pen to its portfolio. So, in the six months to September, its net asset value shrank, while headline profits virtually disappeared as the previous £2.2m valuation uplift was replaced with a downward valuation of £24.7m.

All this comes at a time when net rental income grew by nearly six per cent to £42.9m, with occupancy levels steady at 96.2 per cent. A total of 127 retail leases were secured covering 653,000 square feet on long-term deals at 10.7 per cent above previous passing rents.

This resilience largely reflects the fact that NewRiver remains focused on the convenience end of the retail market, where the non-discretionary spread of shops is less affected by the rise in online shopping. Tenants are also relatively sticky, too, because at £12.48 per sq ft, average rents are roughly half those prevailing in the retail sector. The May acquisition of Hawthorn Leisure for an enterprise value of £107m, representing an initial yield of 13.6 per cent, brings with it 298 pubs and potential synergies of £3m.

Analysts at Peel Hunt are forecasting adjusted net asset value at the March 2019 year end of 281.4p from 291.8p a year earlier.

IC VIEW
The dividend is uncovered because the disciplined approach to new investments meant that there is capital still to be deployed. Around 5 per cent of the portfolio will be recycled this year, and the residential portfolio is sitting on a potential £140m of development profits. At a discount to NAV and yielding over 9 per cent, the shares are worth having. Buy.

[skyship] 22/11/2018 08:13

CEO impressive on the SKY evening business programme with Ian King last night.

If I weren't so committed to HCFT & RGL I finally might consider buying now @ c232p!

An 18% discount and 9% yield suggests they may have found the bottom at this level.

[chucko1] 21/11/2018 10:40

A0002577, it’s not a problem (buying too soon) as no one can tell the path this will take a priori, whatever they may say! If you hold long enough (I intend doing so, for sure, unless a clear and permanent change of prospect is evident) you should do fine on NRR. I also bought “too soon”, but kept back a bunch of dry powder as I expected other investors to balk at the overall outlook for retail (and sell out), as well as the most unhelpful Woodford mega-holding - something which may well prevent a rerating of this for a long time.

[a0002577] 21/11/2018 10:28

I thought they were very presentable results apart from one little porky - namely that they haven't increased the dividend. It is still 5.4 pence - as it was during the first two quarters.

I like the story here and am hopeful of others seeing it soon - in the meanwhile I shall enjoy the near 9 and a half per cent yield. My problem is that I bought too soon!

[fenners66] 21/11/2018 09:29

Either I am missing something (quite likely as I only read so far down) or that is a BS red herring excuse to cover up something else.

I may be being simplistic but when ostensibly ( I know cash was spent on dividends but it was last year as well)
when they have "used" £141m more of capital - less cash and more borrowings - how can they say the comparison between the 2 periods is non-deployed capital?


As I write this , I am wondering if expenses have risen or if they are giving away rent free periods.
Occupancy may be good , but if its for free then maybe that is why the dividend cover is lower -18% lower.

I have not looked.....

[spectoacc] 21/11/2018 09:09

Numbers declining except for the divi @hpcg ;)

@fenners66 - I see what you're saying, cash drag % doesn't equate to divi cover % drop. You'll have to ask the co.

[hpcg] 21/11/2018 09:05

Falling on the footfall numbers, and the move of cover from 77% to 96%. I didn't think it was too bad either, but numbers were declining not increasing. So as a potential buyer I'll wait some more.

[fenners66] 21/11/2018 08:44

Sorry Specto - I don't follow your reply .

Clearly cash fell £85m
Gross Debt rose £56m

And yet we are told by comparison the dividend cover has fallen 18% because of non-deployed capital ?

[spectoacc] 21/11/2018 08:34

@fenners66 - why isn't it the £30.8m? They do of course have 35% LTV too, so "undeployed" is debateable.

Note also the disposals, inc after the period end.

Surprised it's ticked down, read positively to me. Not sure why they're increasing an uncovered divi tho.

[fenners66] 21/11/2018 08:28

"In the first half our dividend was 77% covered, reflecting the fact that we have deliberately held back on deploying capital because we expect better buying opportunities in the future, which we are well placed to take advantage of."

But then

Cash Sep 18 GBP30.8m Mar18 GBP116.2m

So where is this non-deployed capital ?

[spectoacc] 21/11/2018 07:30

Definitely some positives - disposals post-period end, divi increase.

NAV fall perhaps unsurprising, as is occupancy (tho fallen by decimal point across both retail & pubs).

Still reading it.

[trustman] 20/11/2018 16:09

Thanks Mr 10-looking forward ( I hope ) to figures and Outlook tomorrow-and a word on the dividend. T

[mrtenpercent] 13/11/2018 09:17

@hpcg - Your post of 8 November was one of the best I've read for a long time. The market clearly expects distributable income to fall and the dividend to fall with it. Only time will tell if the market is right.
NRR is on my watch list. I will buy one day because the wave of shop closures and lack of new openings will reverse one day. The internet isn't everything. I am watching Amazon's share price with interest.

[trustman] 09/11/2018 15:00

Good points hpcg.
my thought was that if voids were starting to occur it would be legitimate to spend money on tenant improvements and that would have prevented dividend increase.
That said I have heard of huge value reductions in good names, particularly in isolated situations in small towns.T

[fenners66] 09/11/2018 10:44

From the DM

"The accountancy giant's study of 500 high streets with the Local Data Company found 2,692 stores had vanished in the first six month of the year - roughly 14 a day. The rate is similar to the same period in 2017 - but crucially there has been a dramatic fall in the number of openings year-on-year.

Compared with 2,342 shops opening their doors in the first six months of last year, there were 1,569 openings between January 1 and June 30."

[hpcg] 08/11/2018 16:20

Trustman - as a REIT NRR must distribute 90% or more of its tax exempt income profits. In that sense the dividend is out of its control; it can neither prop it up from reserves, as there aren't any, nor squirrel some away for a rainy day. It can do what it wants with trading profits. Given that capital values and rent are inextricably linked, and that a DCF to termination is a consequence of both, or at least just the land can be counted in the terminal value, the share price is discounting future impairments to both capital and revenue not yet apparent in current trading.

[trustman] 08/11/2018 15:11

Interesting the price now below the Barclay target of 260p.
They must take a different view than the company of the sustainable nature of the income and dividend stream.
The dividend was raised to 21p through 4 quarterly payments of 5.25p.
In June NRR raised the next quarterly dividend to 5.4p. Even at 21p that makes a yield of 8.5%- a level usually associated with a pending cut.
Seems to me as a shareholder that there is at least a modest technical bounce coming.

[tim1478] 07/11/2018 16:51

Also a broker downgrade today -Barclays

[ramellous] 07/11/2018 15:30

Probably dropped today due to m&s reporting reduced sales.

[asmodeus] 07/11/2018 11:28

A diabolically/ghastly pint for £2.60 ? I'm not surprised at that price. :)

[eeza] 07/11/2018 11:20

That's a 12mth downtrend, from a double top.

[hpcg] 07/11/2018 11:15

Hitting new lows. At some point this is a screaming buy as it will no doubt overshoot long term fair value on a discounted free cash flow basis, but goodness knows when that will be. Well, there some guidelines on the historical chart but that's about it.