Secure Income REIT PLC Quarterly dividend declaration and update on rent (5605K)

TIDMSIR

RNS Number : 5605K

Secure Income REIT PLC

23 April 2020

23 April 2020

Secure Income REIT Plc

(the "Company")

Quarterly dividend declaration and update on rent collection

The Board of Secure Income REIT Plc (AIM: SIR), the specialist long term income REIT, today declares an interim quarterly dividend of 4.2 pence per share in respect of the year ending 31 December 2020.

Dividends will be payable on 29 May 2020 to shareholders on the register on 1 May 2020 and the ex-dividend date will be 30 April 2020. The dividend will be paid as a Property Income Distribution in respect of the Company's tax-exempt property rental business.

Neither the Company nor Prestbury, the Investment Adviser, is utilising any of the employee or fiscal assistance schemes provided by the UK Government to ease the burden of the pandemic.

As announced in the Company's Covid-19 update on 6 April 2020, the dividend for the current quarter is being maintained at the same rate as the previous quarterly dividend. Since that announcement, an additional GBP0.6 million of rents have been collected and a further GBP1.6 million fell due, completing the March quarter billing cycle. 74% of all rents due for the March quarter have therefore been received. The only rents now outstanding are those due from Travelodge, as noted in our announcement of 20 April 2020, with the overdue rents representing 6.4% of the Company's annual rental income.

Following our announcement of 20 April, the Company finally received a proposal from Travelodge, which was not in keeping with either the nature or the spirit of the proposals made by any of our other tenants who all engaged with us constructively and at an early stage. We have not been able to accept the proposal from Travelodge but have offered support which we believe to be proportionate and consistent with the approach accepted by other tenants in our portfolio.

Until the pandemic struck, Travelodge had substantial earnings and significant operating cash flows, and we consider that this business has considerable equity value as well as long-term viability. It also has very substantial shareholders in Goldman Sachs, Goldentree and Avenue Capital. We will therefore endeavour to work with Travelodge and its owners to find a reasonable solution to ease the current cash flow issues brought about by the lockdown. We are keen to strike a fair and reasonable balance between easing the cash flow burdens on our tenants brought about by the pandemic, and protecting the interests of our own shareholders, lenders and other stakeholders with a constructive and sensible approach to rent deferrals. We are hopeful that such a balance can be struck with Travelodge and their owners too.

The impact of the lockdown measures to manage the impact of the Covid-19 pandemic continues to be felt by a great many businesses in the UK and around the world. While the length of time over which the lockdown conditions will continue remains uncertain, as does the process for exiting the lockdown and returning businesses to normal operations, we are working very constructively with those of our leisure portfolio tenants who have requested our help to assist their liquidity management whilst their businesses are closed. We have had very strong relationships with our tenants going back in most cases over thirteen years or more. In assessing any proposals from them for cash flow deferrals, we consider the strengths of the individual businesses and their track records. We believe that the assistance we have provided reflects our partnership approach with our tenants, whom we hold in high regard, and underpins both their and the Company's long-term futures.

We are in advanced stages of discussions (including supportive input from our lenders) to defer rental payments in order to assist with the timing of tenant operational cash flows. As at the date of this announcement:

-- 15.6% of the total Group passing rents of GBP110.7 million (at 31 December 2019) is expected to be subject to deferral, reducing cash rents receivable in June and September 2020, with repayment of the deferred rents in full in September 2021 to coincide with the tenant business' maximum liquidity position; and

-- 1.0% of rents are subject to short term deferrals such that cash flow is spread in order to assist our tenants, and where the deferral and full recovery of rents is within the current financial year ending 31 December 2020.

The next quarterly dividend is expected to be announced on 23 July 2020. The Board will continue to keep dividend payments under review, recognising the importance of maintaining a balance between retaining funds for opportunities should they arise, appropriate cash reserves given the uncertain duration of the pandemic and the desire of the Company's investors to preserve their dividend income.

For further information on the Company, please contact:

 
 Secure Income REIT Plc                        [phone] 
 Nick Leslau                   [e-mail] 
 Mike Brown 
 Sandy Gumm 
 
 
 
 Stifel Nicolaus Europe 
  Limited 
  (Nominated Adviser)                          [phone] 
 Stewart Wallace              [e-mail] 
 
 
 
 
 FTI Consulting 
  (PR Adviser)                                 [phone] 
  Dido Laurimore             [e-mail] 
  Claire Turvey 
  Eve Kirmatzis 
 
 

About Secure Income REIT Plc :

Secure Income REIT specialises in generating long term, inflation protected, secure income from real estate investments. Its investment strategy is designed to satisfy investors' growing requirements for high quality, safe, inflation protected income flows.

At 31 December 2019, the Group's investment property portfolio was valued at GBP2.1 billion, producing GBP110.7 million per annum of rental income from long term leases with a weighted average unexpired term to expiry of 21.0 years with no breaks. All rental income is subject to fixed uplifts or RPI upwards only rent reviews with 59% of rental income subject to RPI-linked reviews and 41% having fixed uplifts.

The Group's portfolio comprises key operating assets let to strong businesses in defensive sectors with high barriers to entry. The upwards only RPI-linked rent reviews and fixed rental uplifts combine with fixed cost debt to drive healthy dividend growth, creating attractive and predictable returns.

The Company is advised by Prestbury Investment Partners Limited, owned by the team which advised Max Property Group Plc until August 2014, when all of the assets of Max Property Group Plc were sold to Blackstone Group. Prestbury is owned and run by a team of real estate and finance professionals including Nick Leslau, Mike Brown, Tim Evans, Ben Walford and Sandy Gumm.

The Company's Board is chaired by Martin Moore together with three further independent Directors: Leslie Ferrar, Jonathan Lane and Ian Marcus, as well as three members of the Prestbury Team: Nick Leslau, Mike Brown and Sandy Gumm.

The Company is a UK REIT which floated on the AIM market of the London Stock Exchange in June 2014.

The Company's LEI is 213800M1VI451RU17H40.

Further information on Secure Income REIT is available at www.SecureIncomeREIT.co.uk .

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April 23, 2020 02:00 ET (06:00 GMT)