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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Regional Reit Limited | RGL | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.50 | 2.28% | 22.40 | 08:21:04 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 21.90 | 21.55 | 22.40 | 21.90 |
| Industry Sector |
|---|
| REAL ESTATE INVESTMENT TRUSTS |
| Top Posts |
|---|
Posted at 12/3/2024 17:16 by grahamg8 I would be interested to know if Edison still stick to their assertion that if there was an equity raise the share price would rise. Fat chance. This does smack of deliberately trashing the share price in order to allow a known investor to takeover on the cheap. A new 5 year bond at 15% coupon would be a lot simpler, but doesn't solve the debt/equity limit. So convertible shares/bond hybrid deal? The coupon should be lower and the equity base would be higher. Combine this with a decent level of asset sales and we might stay in business. |
Posted at 12/3/2024 14:13 by cc2014 I have been to look at the bios of the directors of RGL. They seem reasonably heavyweight by comparison with some I look at for companies this size. Certainly some of them ought to understand the balance sheet so I'm wondering why what is happening is happening. I think maybe based on the RI info coming from Edison they are not being consulted on everything in a timely way. Maybe.My gut says investors are going to get stitched up here. I see no other explanation for the very strange actions of the Board. |
Posted at 11/3/2024 19:31 by williamcooper104 From React News Won't be a surprise given the paid for research trailer it so heavily 10p offer price Surprised the share price hasn't moved much - but it will Regional REIT is laying the ground for a distressed rights issue to help recapitalise the business, React News can reveal.The company is understood to be planning to raise around £75m from the market to pay down debt that is due to mature in the coming months, reduce its loan-to-value (LTV) position, and fund necessary capex projects across its portfolio.In order to secure the funds from the market it will have to offer shares at a major discount, with the company currently trading at around 75% below its net asset value. It is expected that new shares could be issued at around a 50% discount to the current trading price, which is in the region of 20p after collapsing by around two-thirds over the past year.300 Bath Street in Glasgow is among Regional REIT's most valuable assetsPeel Hunt, the company's financial adviser and joint broker, alongside joint broker Panmure Gordon are working on the process. The offering is expected to be put to prospective investors around the same time as the company's full year preliminary results on 26 March.The most pressing issue for management that is driving the equity raise is the maturity of a £50m unsecured retail bond, which comes due in August. That instrument, which is currently trading at a discount of around 15%, carries a coupon of 4.5% but given the considerable increase in the cost of debt since it was issued in 2018, taking out similar subordinated debt would likely cost between 13% and 16%.Management is understood to have determined that taking pain now, and undertaking a discounted rights issue to put the company on a more stable footing, is a more prudent and lower risk option to refinancing with expensive debt which may not become materially cheaper in the medium-term and may still result in a rights issue further down the line. The remainder of company's debt does not hit maturity for several years.LTV in the spotlightLast year ARA Asset Management bought Regional REIT's asset manager London & Scottish Property Investment Management. The Singaporean giant has been supporting the business and its access to capital.Raising equity would also mean the company will need to sell fewer assets towards the bottom of the market cycle, albeit asset sales will be part of a broader recapitalisation process to reduce the company's LTV.Currently standing in the region of 55.1%, a £75m rights issue would bring Regional REIT's LTV down to 45%, having already begun selling lower-yielding and more mature assets.It is expected to sell £60m this year, with the view of reducing its LTV to 40% and close to current market expectations for a listed property firm. The company said last month that £22.2m of sales were in solicitors' hands, with £5m completed in line with valuations since the start of the year.Accessories, Accessory, TieRegional REIT's management is overseen by London & Scottish chief executive Stephen InglisFurther sales of £60m in 2025 and £30m in 2026 could be undertaken, subject to market conditions, the broader valuation of its portfolio and opportunities to recycle capital.Last September Regional REIT cut its dividend due to the economic backdrop and a fall in net rental income. Around £25m has been set aside for dividend payments, although this is expected to be reduced on a proportional basis as it will be spread across a vastly greater number of shares in issuance. In a trading update last month, the company revealed that its portfolio had experienced a 5.9% like-for-like fall during the second half of the year, with its then 144-asset collection valued at £700.7m a 9.9% yield. With 92.1% made up by regional offices, the asset class has come under pressure due to shifts towards working from home and corporate occupier trends.At the time Stephen Inglis, chief executive of London and Scottish Property Investment Management, said: "2023 was one of the most challenging years for REITs in recent memory and Regional REIT was not immune from the macro-economic difficulties faced by the sector. While valuations have been impacted, the asset manager's active asset management initiatives continued to mitigate some of the impact on the portfolio."The leasing market was slower than anticipated, largely due to the uncertainty around working patterns and the geopolitical situation impacting inflation and interest rates, but with some stability we are witnessing increasing numbers of enquiries for our assets." |
Posted at 04/3/2024 13:40 by hpcg Good points WC. The risk with RGL1 is then not capital but return. What is on offer is worthless (you know what I mean) if it takes a 18 months to get back rather than 6. The other genuine question is how much an administrator takes out, or the board / management in a wind-up, how long it takes, and what it can get versus current NAV when everything is shopped at once.What I, and I imagine others are saying, is not that the company is bankrupt, but that its capacity to pay any meaningful income to investors is severely curtailed. |
Posted at 23/2/2024 10:07 by hpcg Why are some investors blind to the concept that a company can go out of business? This isn't fear, it is literally what happens every day of the week. There are plenty of bad outcomes for equity that don't involve going out of business, even from this share price. |
Posted at 14/2/2024 21:22 by nickrl RGL aren't very transparent with covenants but in a capital raising document issued in 2019 they reported thatthe Santander (65m) facility was historic interest cover > 300 per cent. at all times; projected interest cover > 300 per cent. at all times; LTV <60% until fifth anniversary then <50% Its secured against Toscafund Glasgow Limited whatever properties are in that portfolio as that has multiple subsidiaries and its Jersey domiciled. The anniversary is 19 June 24 so doomsday clock looks earlier than the bond potentially. Scottish Widows Ltd. & Aviva Investors Real Estate Finance (165m) historic interest cover > 300 per cent. projected interest cover > 300 per cent. LTV <60% secured against RR Range Limited (28 properties) Scottish Widows (36m) historic interest cover > 275 per cent. projected interest cover > 225 per cent. LTV <60% secured against RR Star Limited (19 properties) Royal Bank of Scotland, Bank of Scotland & Barclays (126m) must be post 2019 as not mentioned. |
Posted at 06/2/2024 11:00 by cc2014 A copy of my post from the weekendWith regard to RGL as I and others have written before, the balance sheet is in a bad place but worse the actions of the directors and Board are not helping it. At 55% LTV the dividend should have been binned last time, yet it's not even clear they will bin it this time. This creates a feeling of lack of credibility over balance sheet management and inevitably will lend to all debt being renewed at a higher coupon that would have been necessary had appropriate action taken place. To be blunt the lack of credibility around the directors has been apparent for years as evidenced over the persistently wide discount to NAV when compared with peers. In the end what price to roll the retail bond? The ENQ and IPF bonds are trading around 10-11% yield and they are far safer bets that RGL. That puts this in the range of around 15%, but I'm not even sure that's enough for an unsecured bond at the bottom of the stack in both time and subordination. There's another problem too in that at 15% retail investors walk away as the risk becomes crystallised in the coupon. If the retail bond is reset at 15% and the dividend is reset to zero what price the equity? Something beginning with a 1 rather than a 2? (and finally as I know someone is going to assert that they don't need to roll all of the £50m retail bond, if they were going to do that they'd be buying them back in the market now at well below par rather than waiting to redeem them later in the year) The situation is becoming binary now. Either sell some assets quick and get the LTV down and the share price may rally or it's continual pain for shareholders as the balance sheet becomes more and more stretched as every day goes by. Good luck to all holders. I don't think it's going bust but there could be very many years with no dividend. |
Posted at 04/2/2024 09:32 by cc2014 @grahamg8Regrettably if you post anything negative on advfn 95% you will get shot down. It's human nature that those long with money invested will want to defend their positions whether they believe what they write or not. With regard to RGL as I and others have written before, the balance sheet is in a bad place but worse the actions of the directors and Board are not helping it. At 55% LTV the dividend should have been binned last time, yet it's not even clear they will bin it this time. This creates a feeling of lack of credibility over balance sheet management and inevitably will lend to all debt being renewed at a higher coupon that would have been necessary had appropriate action taken place. To be blunt the lack of credibility around the directors has been apparent for years as evidenced over the persistently wide discount to NAV when compared with peers. In the end what price to roll the retail bond? The ENQ and IPF bonds are trading around 10-11% yield and they are far safer bets that RGL. That puts this in the range of around 15%, but I'm not even sure that's enough for an unsecured bond at the bottom of the stack in both time and subordination. There's another problem too in that at 15% retail investors walk away as the risk becomes crystallised in the coupon. If the retail bond is reset at 15% and the dividend is reset to zero what price the equity? Something beginning with a 1 rather than a 2? (and finally as I know someone is going to assert that they don't need to roll all of the £50m retail bond, if they were going to do that they'd be buying them back in the market now at well below par rather than waiting to redeem them later in the year) The only hope for RGL shareholders is that somehow an asset is sold close to NAV and preferably one with not much debt on it. Good luck to all holders. I don't think it's going bust but there could be very many years with no dividend. |
Posted at 02/2/2024 18:45 by grahamg8 RGL seems to be trying to defy gravity.From the Q3 update "In the near term, the Board remains focused upon a controlled disposal programme, to reduce the LTV back to the Company's long-term target of 40%, whilst maintaining the quarterly dividend.". The 40% target is repeated for the YE RNS today. Take the figures as gospel:Portfolio £700.7m, LTV 55.1% , so borrowing is £386.09m. To achieve a 40% target by asset sales would mean (700.7-X)x0.40=386.0 The latest dividend of 1.20p would cost £24.76mpa with 515.74m shares in issue. So to maintain the dividend over 2024 would mean 'finding' £6.18m. This assumes operating and admin costs fall in direct proportion to the value of each disposal, highly unlikely. The only way to at least partly square the circle is for only the vacant properties to be sold, so no income would be lost. But there just aren't enough of these, and the chances of vacant properties being sold at book seems pretty remote to me. There is one more sleight of hand that can be thrust on shareholders, and that is if 'maintaining the quarterly dividend' actually means maintaining a quarterly dividend no matter how miserly. Technically correct a dividend of 4 x 0.001pps is maintaining a quarterly dividend. This would save the requisite amount from the lower rental income surplus available to distribute. I'm also pretty edgy about the debt itself remaining duration of 3.5y interest rate of 3.5%. Have the board actually noticed that interest rates have gone up and they are only dropping very slowly? Our ultra low interest environment is over; refinancing is going to cost a lot more and 3.5 years is scarily close, starting in August 2024 in just 6 months time. The coupon on RGL1 is 4.5% and that is nowhere high enough to tempt new investors, or encourage a roll-over by existing bond holders. 8% sounds more realistic, and if all coming in the form of a bond would cost an extra £1.75mpa in interest, all to be taken out of the pool of funds available for RGL shareholder dividends. The fall in the share price today says the market doesn't believe the narrative, and neither do I. |
Posted at 01/11/2023 15:32 by mondex From Citywire:Regional Reit’s new let provides fresh hope for suffering dividend Under pressure Regional Reit (RGL) has secured a full letting at Birmingham office block Norfolk House, one of the largest assets in the portfolio. The £140m real estate investment trust (Reit), which invests in offices outside of the M25 orbital road, has struggled since the Covid pandemic as the emerging trend for working from home saw companies downsize their offices. The fund is the worst performer in the Association of Investment Companies (AIC) UK Commercial Property sector over the past year, with the shares falling 52.4% in the 12-month period to the end of October, while its peers fell an average of 20%. In a bid to boost the value of the portfolio, the fund has undertaken extensive asset management projects and refurbished existing properties to make them more attractive to renters. The now fully-let Norfolk House, a 118,000 square foot office in the centre of Birmingham, was refurbished pre-pandemic to provide ‘quality accommodation’ alongside ‘excellent transport links and amenities’. The investment has paid off as the Reit confirmed existing tenant, private higher education provider Global Banking School, has increased its occupancy, taking the previously vacant fourth and fifth floors of the building. The new lease will provide an additional rental income of £558,277 a year, with the lease signed until December 2037 with a break option in 2032. When combined, Global Banking School is now paying an annual rent of £1.4m. Stephen Inglis, chief executive of London & Scottish Property Investment Management, said the tenant was ‘attracted to the high standard of the recently completed refurbishment and its excellent location in the heart of Birmingham city centre’. Investors will no doubt be hoping that the increased rent from the fully leased offices will help shore up the dividend, which suffered a 27% cut in September. The fund announced a second-quarter dividend of just 1.2p, down from 1.65p in the previous three months, as higher costs brought on by inflation started to bite. Regional has warned that further cuts may be necessary to counter declines in rental income. Another glimmer of hope for investors was the appointment of ARA Europe Private Markets as investment adviser in October. ARA Europe, which is part of the ESR Group, is the largest manager of Reits in Asia Pacific – in April it purchased a majority share in the trust’s asset manager London & Scottish, replacing Toscafund Asset Management. |
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