Share Name Share Symbol Market Type Share ISIN Share Description
Newriver Reit Plc LSE:NRR London Ordinary Share GB00BD7XPJ64 ORD 1P
  Price Change % Change Share Price Shares Traded Last Trade
  -3.00 -3.4% 85.20 1,593,651 16:35:13
Bid Price Offer Price High Price Low Price Open Price
85.30 85.50 85.80 83.50 85.50
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Real Estate Investment & Services 91.10 -153.20 -49.10 261
Last Trade Time Trade Type Trade Size Trade Price Currency
17:45:49 O 286 85.799 GBX

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Newriver Reit Daily Update: Newriver Reit Plc is listed in the Real Estate Investment & Services sector of the London Stock Exchange with ticker NRR. The last closing price for Newriver Reit was 88.20p.
Newriver Reit Plc has a 4 week average price of 79.70p and a 12 week average price of 79.70p.
The 1 year high share price is 109p while the 1 year low share price is currently 42.70p.
There are currently 306,148,433 shares in issue and the average daily traded volume is 1,544,626 shares. The market capitalisation of Newriver Reit Plc is £260,838,464.92.
kenmitch: Strongly agree chucko1. I ticked your post but as often happens these days, it didn’t record. The easy gains have been had now but it’s been great fun for the few of us who spotted the great sector buy opportunity. e.g AEWU dividend (they even managed not to cut it) is 13% at my buy price. I would be happy with that and no capital gain but the share price has recovered strongly too.
chucko1: Short and sharp: I only look at the future and the prospects for the business relative to the value of its underlying claims on cash flows. Every REIT, including NRR, has had a period of suffering from investors and loudmouths who had no stomach for the fight. The valuers, frankly, wet their pants over the difficulty in making the sorts of assessments they are trained to do. This is why we have seen huge rallies in every single REIT bar none the past year. Yes, some more than others, although 46p for NRR was a gift that I think has a fair amount more giving to do, never mind Barclays's indifference and stated inability to factor in the future Hawthorne sale. Many of these REITs have also had the "oh - look at them - they only talk about the positive things". It was ever thus and I pity those who talked themselves out of the obvious and enriching investments that, to my eyes, were in rarified risk/reward territory. Or the "I am going to wait it out" brigade. Have they made 100% on NRR, or 75% on EPIC, or 70% on AEWU, or 40% on RGL? Before dividends. On asset-backed, LOWLY LEVERAGED (I repeat) assets. Some of these were priced as though it was 2007 again. It's not. You should have seen the comments on the management statements from AEWU and RGL. And, to a lesser extent, RLE (although I kind of see the problems there, but still a 50% rally). All that said, the easy tens of percent are in the past and it's now a game of more intense risk management.
chucko1: Fenners66, nice of you to assume the position of town crier. But the extent to which all the noise is in the share price is really the issue of substance. Do you have anything to offer on that? PE interest in Marstons with a return of its share price to 85% of pre-covid levels (up 4x since March, in fact) bodes reasonably for NRR (or at least 25% of its estate) whose share price is firm today. NRR as much, if not more, a play on absolute property values and development partnership than covid impact from here. Nevertheless, recent vaccine news pretty reasonable.
chucko1: The current management are very good, but as you say, likely not with the flair that DL had. But I am not sure that it is relevant at this stage - they have what they have and the share price gets knocked from here to next week by events that are not within their control. i.e. eviction moratorium or rules regarding pubs. The long term value, however, will be determined by managing/developing the current portfolio/finances which require the more mundane skills (which I believe NRR does possess). At the current share price, capital recovery is all you should care about for now, as I see that as a route to doubling the share price from this level. Perhaps more with a tail wind.
candid investor: Dhoult..thanks for your reply which raises lots of different points which I will try and get through ..First of all I totally agree with you that NRR is a high risk,high reward share...recovery shares (as NRR is) always are, more so with Covid.. I don't subscribe to the 'world going to end theory' I think the world will just 'muddle through' as it always does(remember 2008/9?) Likewise I think NRR will manage to muddle through all this due to its ample liquidity , 50% margins and no tax.. It's important to note that selling assets which are not recycled reduces a company's footprint which reduces UFFO and therefore dividends ..asset devaluations also reduce NAV per share. Under such circumstances, share prices in my view aren't likely to rise substantially.. Can you explain why you think a substantial fundraise would be necessary given current liquidity ? Such an act at current share prices would surely destroy shareholder value and unnecessarily so ...doubling the number of shares to 600 million to raise less than £150 million (given required discounts) will dilute shareholder value by 50% and more so given the discount you will have to offer..Current asseta sold are £62 million with a further £38 million being progressed..this alone will raise £100 million...buying back shares on the other hand would increase shareholder value as my earlier calculations demonstrated due to their being fewer shares in circulation to match the reduced footprint.. ..if as you say , share prices fell , then all the better because it would then cost less money for the company to buy them back fear would be that share prices would rise too much during this exercise because there would always be a buyer for shareholders wanting to sell so sellers could ask for more .. The sticking point is being able to sell the London portfolio or similar.. I was hopeful this could be achieved but you think not..
candid investor: Catsick...I think you and others mis-comprehend the purpose of and benefits to shareholders of conducting share buybacks in circumstances such as these. Take the position as at present assets £610 million .(£2.03 per share) with current share price at 50 pence per share. net debt £563millon, LTV 47% and UFFO is £52 million or 17 pence per share.Given the discount on value of assets sold I think it's safe to reduce asset value of approx £1200 million by 5% or by £60 million...this reduces net assets by £60 million to £550 million which now reduces NAV per share to £1.83... The current plan is to sell £100 million of these assets ...this will reduce debt to £463 million = 45% LTV...selling the assets will also reduce UFFO though to approx £48million or 16 pence per share.i.e.both worse than at present .. I want to buy back 20% of the shares at today's extremely low how do I finance it ? NRR have sold £62 million to date...stop there but.sell the London shopping centres and head office relocating staff to Birmingham ...selling London assets will raise £150 million and only lose £9 million in net revenue .ignore opposition, NRR is a regionally based organisation need for a head office opposite Mayfair..relocate to other office in Birmingham, it's cheaper.. total proceeds for both London and elsewhere amount to £215 million...I would pay off the £175million revolving credit facility (knowing it's still there in reserve)..this reduces net debt to £388 million and fixed assets to £925 million and LTV to 42%. With the remaining £40 million I would buy back 20% of the shares and put them in treasury leaving 240 million shares still in circulation Net Asset value reduces from £610 million (by £60 million due to asset devaluation and by a further £45 million due to funding of share back) to £505 million but divided by only 240 million shares which gives revised NAV of £2.10 per share (rather than £1.83). I have also calculated that UFFO now reduces to approx £45 million or 18.5p per share thus actually increasing dividends...icing on the cake is to reissue the 60 million shares when share price reaches say £1.50 to get £90 million which in turn enables further capital investments of £150million...that is why companies buy back shares..
candid investor: have also made several assertions such as "residential has not shifted nor has warehousing". Are these both verifiable facts or your opinion ...if they are your opinion can you say so or if they are facts could you quote the external source. Re the share buy back .. we just have opposing views...I want NRR to conduct a share buy back as a stated aim along with a statement declaring that they believe the current share price to be far below its true market value . , I don't know how they will achieve this in practice though with current LTV. Your assertion about not doing share buy backs when no dividends are being paid is misguided...companies conduct share buy backs in lieu of dividends that are not being paid, in order to maintain shareholder value... Just an announcement to embark on one, helps to prop up the share price and give existing shareholders the reassurance to know that they have a buyer for their shares if they want out..HMSO did try it but they had to abandon it because their situation was much worse than ours. In NRR's case, a market value of below £140 million, wouldn't take much to buy back the lot , not that they would ). The obvious danger of course would be that they would be more exposed to a predator hedge fund , but as existing shareholders we would probably be well rewarded for that if it happened There is always a bigger picture.. ignore the media hype and background noise and stay put...NRR has the liquidity to get through this in my view ...but as always dyor...
candid investor: Ok lots of misconceptions going on here so let me correct them...first and most importantly, lots of cash and loan facilities so let me explain why ..NRR has an incredibly high margin so even in worst case scenario and net income of £90 million was reduced by 50% due to the pandemic there is no requirement for cash, since interest and admin only require £45 million (even ignoring furlough scheme benefits for admin costs)....secondly NRR selling £100 million of assets so they should end the year with more not less cash. Asset revaluations don't need any extra cash BUT any further Negative revaluations (i.e. devaluations) will have an adverse impact on NRR ..if these contravene covenants then I think that the lenders will temporarily waive benefit is that all or any profits are TAX FREE. plus we have to get at least 90% of those benefits as dividends which remains a huge benefit to us as shareholders...if there are no profits on a UFFO basis then we don't get dividends BUT likewise NRR don't part with cash..very important this next point.if NRR make and cash profits we get them not NRR, likewise if they don't make any cash profits then they don't need to pay out any cash to us so in either scenario NRR are not better off not worse off...think about that . With asset sales they will end up with more cash, likewise with asset purchases they would end up with less cash...speaking personally and with the share price so low they should BUY back shares with sales proceeds, absolutely no need, (or would it make any sense to issue more shares at these prices..might of course issue more at a later date at a higher price once this pandemic is over and resume their asset growth programme. Too much to take in, I realise. I will explain the share buy back strategy another time..other options availabl with new asset purchases is via JV sharing capital costs which they are already on to..finally it is time to repurpose assets although not right now.
candid investor: Spectoacc...there is also a bear case as well, I agree...factors include. .if share price is 46p now what price will it fall to when inevitable second full lockdown occurs.. ..NRR's sector of the economy is less able to cope with second lockdown apart from 40% essential retail shops...pubs already reeling after first lockdown...a second lockdown could kill many of them off ..occupancy starting to fall quarter by quarter..risk over sustained reduction in renewals ... ...disposals all have low yield so they suggest safe assets although then again not much marginal loss of income resulting from their disposal ..asset valuations falls on the way..anyone's guesss...the higher they are the higher the ratio of debt to equity which is not good.. ..time lag between loss of rent and converting to alternative purpose assets if that becomes required. ..Millenium International are slowly building up an increasing short position (never a good sign) ..they obviously think share price could fall to the 20p region If I thought hard I could probably think of more. Two major tax and as REIT any profit which is made will generate dividends which will prop up share price.. Secondly lots of cash should withhold the worst of storms.. It's worth noting that even a 50% fall in net revenue is about the break-even point in UFFO terms. Such is the benefit of running a high margin tax free business with at least 90% profits distributed to shareholders.. I will stay here for now but will be fastening my seatbelt for a bumpy ride..dyor..
manouk2: a friend sent me this well written analysis: Thought I’d let you know I’m buying into NRR again. The discount is too big to ignore. I believe the market is mis-pricing the risk/return due to: • Headlines of physical retail decline and demise of other retail-focused REITs (see Hammerson, Intu) • Covid 2nd lockdown of non-essential retail (unlikely – but watching hospitalisations and deaths carefully – not just cases) • Lack of clarity on true occupier ability to pay due to the moratorium on eviction proceedings • Suspending of the dividend • Brexit uncertainty Portfolio valuation 1. NAV / share 201p. Current share price 51p (75% discount to NAV from 31 Mar-20 – which reported in June and already accounted for Covid to some extent) 2. LTV 47% and the issue of debt-level now an issue that needs to be resolved by management which they are addressing with disposals of £100m this year (already achieved £52m by Aug-20 at Mar-20 valuations) 3. I expect future valuation decline to be relatively modest through the rest of the financial year given: a) Disposals already achieved in line with Mar-20 valuations (see above) b) Tenant mix is focused on convenience and value/discounters who have fared well during lockdown and vs general online migration. E.g. One of their biggest tenants - B&M - has now been admitted to the FTSE 100 c) Retail park valuations (19% of the portfolio) are holding up in a post-Covid world (e.g. RDI disposal of 6 retail parks at 3% below Feb-20 pre-lockdown book valuations) d) Pubs (23% of the portfolio) are open and were on an upwards like-for-like EBITDA trajectory before Covid e) Shopping centres (51% of the portfolio) are the most vulnerable to valuation decline but are underpinned by alternative use valuations as residential (8% below existing use) should provide some further support. The business is already underway gaining planning permissions on many of these sites f) NEY across the portfolio is already much higher than other property asset classes at 8.9% and rents are low compared to piers meaning there is less vulnerability to further yield drift which has affected other retail (e.g. LandSec retail down 20.5% vs. NewRiver down 12.3% over same valuation period to Mar-20). g) Lettings conducted so far in FY21 are in line with Mar-20 valuation (Aug-20 operational update) h) Savills monthly yield tracker for retail is showing just a c25bps blended yield drift for their mix of portfolio (shopping centres, retail parks and pubs) since April 2020 i) Average lot size of retail parks (£13m) and shopping centres (£20m) low compared to piers providing great access to liquidity. Pubs more liquid again (average value c£350k) 4. NewRiver has better metrics than piers (e.g. Capital & Regional LTV 57% and has breached covenants on a number of asset-specific debt, much less liquid assets but trading at same 75% discount to NAV) 5. Debt covenants are at 60% and 65% on a group-wide basis which would require a further 22% decline in valuations across the entire portfolio and no disposals to breach 6. As yields are high they collect a lot of cash for the portfolio value so interest coverage ratios will hold up easily 7. UK is already amongst the highest levels of online shopping penetration in the western world so the pressure of future shift is less acute from here than other countries 1. Online only really works for high-margin / high-value goods given the cost of operating a delivery network. NRR isn’t particularly exposed to online migration Rental income 1. Already collected or agreed re-gears with 84% of Q1 rents and 80% of Q2 rents 2. Lots of the remainder are big names taking advantage of the current government protection to conserve cash when they don’t actually need to a) E.g. Boots, Superdrug, Sports Direct, etc. in the press b) Just 1.2% of tenant rental income is currently subject to administrations or active CVA (agree likely to go up as furlough ends) 3. Portfolio is currently under-rented vs Mar-20 ERVs so there is some headroom to grow into 4. Net acquisitions in Mar-20 year are yet to see a full year of rent collection – meaning some further room to grow in FY21 vs. FY20 figures. I expect the government to extend the commercial tenant eviction legislation to the end of 2020 or beyond. Some tenants will continue to take advantage in an unscrupulous way but NRR can simply match that by delaying the reinstatement of the (full) dividend. Ultimately the rents are simply deferred - tenants will have to pay later or do a CVA / go out of business. I spoke with a couple of commercial agents selling retail property to gather their thoughts. Lots of tenants have taken advantage of the legislation to part-pay or refuse payment but are working out deals to bring themselves up to date over the next 6-9 months. This also allows them time to apply for business interruption insurance claims – the High Court has just ruled generally in tenants’ favour on this today in a landmark test case of business interruption insurance. I’m also comforted by the other ways the business adds value beyond simply collecting rent on balance sheet assets, specifically through fees and profit shares of JV equity with BRAVO (PIMCO), active asset management and capital recycling capability (buy at 9-15% yields, sell at 5-7%), re-development capability, and asset management mandates. I expect underlying cash flows from operations to be c8p in FY21 (starting at , rising to 16p in FY22 and NAV/share to fall to 150-170p over the course of the next two half year reporting dates. But I think that will be the bottom of the market. The catalyst for a resurgence in the share price are: - Re-instatement of the dividend and dividend guidance - 1H21 results (Nov-20) - Sales of assets and clear route to return to 40% LTV. [Given likely portfolio valuation declines against Mar-20 this will require a fair amount of selling and is probably the biggest risk to regaining a stabilised business] - Covid-19 improvements: o Realisation that ‘Covid 2nd wave’ is case-led and isn’t resulting in anything like the same level of hospitalisations and deaths even on a proportional basis o Vaccine roll-out news / implementation Although I do also expect further share price weakness on: - The opposite or poor results on the above - Extension of the commercial tenant eviction moratorium - Retail business redundancies, CVA’s and administrations in the headlines - Hammerson or other retail REIT administration / further equity raise / public distress / fire sales of assets But I see those as opportunities to buy.
Newriver Reit share price data is direct from the London Stock Exchange
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