Newriver Reit Share Discussion Threads

[essentialinvestor] 21/11/2019 15:29

Perhaps a little more complex. The borrowings effectively give a
geared play on NAV.

[finkie] 21/11/2019 15:14

What i mean is that whilst all these shares trade at a discount to NAV the 10-20% additional asset write down that is surely coming will affect the share price as the nav gap will have to be maintained as basically no one believes the board or the valuers!!!

[hpcg] 21/11/2019 14:54

I really don't understand their approach to the dividend. The market isn't going to punish a cut. So debt was up and cash down, despite their trading activity. The elephant in the room remains Barnett whose overweight position surely needs trimming.

I note sales below book though only 2% shy, and rent psf also down a tad. What the former signals is that NAV revisions are a genuine loss of value and can't be ignored as non-cash.

Their redevelopment portfolio looks interesting, but does anyone know if they have actually done one yet? I don't remember mention of one in the back of annual reports? They are taking the right tack with development partners, but there is more potential for something to go wrong than there is in the day to day landlording business.

The question remains when and where will valuations stop declining.

[scrwal] 21/11/2019 13:15

I am disappointed at the lack of inroads into improving the dividend cover - I would want to see it at 85% now given that the board keep banging on about their intentions to re-establish a 100% cover which does now seem a long way off.

I don't think the profits from buying/selling property have anything to do with the divs being covered cash wise as I consider such funds are used to repurchase more property and cannot be used to pay any dividends.

On a side note as this is a REIT can anyone show how to calculate the 90% minimum PID distribution level from the interim figures if possible as I have no idea. Just want to know what that is compared to what they are paying.

[spectoacc] 21/11/2019 12:19

Fair point @fenners666 but you're also guilty of picking a headline!

A lot in NRR's price - enough? Who knows.

[eeza] 21/11/2019 11:32

Company is not immune to the sector's difficulties but management have continued to do their job, successfully, regardless, not least by diversifying their income streams.
Happy to continue to hold.

[a0002577] 21/11/2019 10:51

Very good post, SpecToAcc - thank-you

I suspect that if you count in the profits from the buying and selling of property the dividend is covered or nearly covered.

I my view a very well run company doing its job in difficult times - am a happy holder.

[fenners66] 21/11/2019 10:41

Spec I only got as far as I have alluded to in my read of the figures this morning before other stuff I had to do.

If you are saying there are more Easter eggs to find in the words.....

However that's part of my beef with company results these days.

They know most punters do NOT read the results so therefore put some

*adjusted * underlying * exclude non-underlying (our definition even if repeated every year ) figures together

as headlines and hey presto everything in the garden is rosy.

If I was seriously thinking of investing I would ignore the headlines and read all the rest.....

[diggybee] 21/11/2019 10:13

Which still leaves it at a nice discount to NAV?

[finkie] 21/11/2019 10:06

The 10% £50m write down in asset value is already historic and nowhere near enough to reflect the downward pressure on the sector, they must face a similar chop next time around or worse, i fully expect the NAV to be hit by a further 10-20% before the rout is over.

[spectoacc] 21/11/2019 09:32

And what of the loss of NAV due to the uncovered dividend? Shareholders have had that return. You choose to cherry-pick - NRR are making sales at decent profit, what can they do about valuers marking down the NAV?

The NAV matters where LTV is concerned - returns (in cash) are what matter to shareholders.

Show me a property company that hasn't seen its NAV fall (excluding last-mile perhaps).

Again - I'm not disputing the valuation fall, but I am disputing cherry-picking a non-cash number. NRR aren't forced sellers.

Perhaps balance it with the occupancy?

(Ironically, there are a few iffy numbers - just that no one, particularly not you, has pointed them out!).

And remind me what discount to the marked-down NAV NRR is on?

[fenners66] 21/11/2019 09:25

mark its not the where - its the how much.

Its the admin cost /income ratio that has gone up
So if you think its down to the new business stream - it costs more than their existing business.
Alternatively you could instead think its just an excuse to cover rising admin costs whilst the shareholders have to take a massive loss.

Spec - the business is about investing in property.
So the "non-cash" massive loss is perfectly acceptable ?
If the BOD believe that they will not be scrutinised for non-cash losses then .......roll on and increase admin costs whilst they are at it.

Let me put it this way. The business is Investing in property.

Say it was a shares investment business instead

Maybe it buys £100m of shares in Imperial Brands....money put to good use the underlying income expected to be up by £8m a year as we found a great investment and put your cash to work...

Unfortunately we had to mark to market and had a "Non-cash" un-crystallised loss of £33m but don't worry celebrate our admin cost ratio which went up !!

(Those figures are a close approximation to what has happened at IMB)

Would you invest in a company that lost 33% of your capital chasing yield ?

Once again its too easy for "Losses" to be explained away.
There is a culture in quoted companies that there is no bad news only good.

There is a reason for regular portfolio valuation and disclosure of losses, far greater minds than ours have decided its necessary.


I know for my own investing for yield - the total return matters - I only started looking here because of the high yield and avoided buying because of the potential capital cost involved.

But you are advocating its ok for the business to ignore their capital losses ?

[diggybee] 21/11/2019 07:54

Not bad I reckon. Plus asset management business could become quite a nice income stream.

[marksp2011] 21/11/2019 07:50

Fenners

So where do you think the costs of the property administration activity should be reported? I would have thought administration would be the right place but
maybe you have a better idea?

The results aren't good but I don't see the point in fabricating negatives there are enough on their own.

[hugepants] 21/11/2019 07:49

Dividend is hopelessly uncovered but they seem to be terrified of cutting it even though its the obvious and prudent thing to do and no-one would blame them for it. Another significant reduction in NAV over only 6 months. LTV is creeping up to nearly 40%. Footfall continues its downward trajectory - down by 2.3%. Yes beating the national average of 3% but not by much.

[spectoacc] 21/11/2019 07:32

"(6) IFRS (Loss)/Profit after taxation due to non-cash valuation decline of GBP42.5 million (7) Total Accounting Return equals EPRA NAV per share movement during the period plus dividends paid in the period divided by the EPRA NAV per share at the start of the period"

Come on @fenners666, you can do better than a non-cash loss.

[fenners66] 21/11/2019 07:25

"We are pleased to report another period of solid performance, as we entered our 10(th) year of operations"

IFRS (Loss)/Profit after taxation (6) -GBP21.3m GBP2.7m

[spectoacc] 21/11/2019 07:23

Or:

"Allan Lockhart, Chief Executive commented: "We are pleased to report another period of solid performance, as we entered our 10(th) year of operations. Our diversified and differentiated portfolio continued to outperform the market, delivering sustainable cash flows, robust operational metrics and resilient valuations. We have made good progress with our key strategies to deliver Underlying Funds From Operations growth and a fully covered dividend. In light of this progress, we have maintained our dividend for the first half at 10.8 pence per share, with cover improved from the comparative period.

Since 1 April 2019 to the date of this announcement we have completed, exchanged or are under offer on disposals at a blended yield of 5.4%, and have recycled most of this capital into five retail parks at a blended yield of 9.0%. Our market-leading asset management platform continues to expand, and now covers a growing number of third-party assets, including our most recent appointment by Knowsley Council. In pubs, supply chain benefits continue to drive like-for-like EBITDA growth, and we continue to extract further value from our portfolio. Our strong and unsecured balance sheet, and our ability to recycle capital, leaves us well-positioned to continue our progress to dividend cover."

[fenners66] 21/11/2019 07:22

So :

Net Assets down£50.5m
Shares up
Gross Debt up £5m
Cash Down £1.6m
Admin cost ratio up 1.7%
Post Tax loss £21.3m
EPS - 7p


Of course if you prefer :

Ignoring all the losses the divi is 80% covered.... ie uncovered


Curious the admin cost ratio went up when they tout a new business opportunity of managing property for others.

[marksp2011] 21/11/2019 07:13

Results could have been worse

[speedsgh] 20/11/2019 11:42

Some food for the bears :o)

"Major UK retail chains (which have 10 or more outlets) have shuttered 5834 branches in the first 9 months of this calendar year, up 77 per cent from 2018. Some 333 shops used a company voluntary arrangement, 708 folded into administration, and 4793 were part of a cost-cutting exercise. Based on data from the Centre for Retail Research, it also means that thousands of jobs have gone, maybe forever."

[spectoacc] 19/11/2019 20:25

Indeed. lightened a few in advance, but was strong today & clear once again of FTSE250 relegation worries. Thurs might decide that!

[eeza] 19/11/2019 17:09

Int results on Thursday.