DJ Custodian REIT plc: Interim Results
Custodian REIT plc (CREI) Custodian REIT plc: Interim Results 30-Nov-2021 / 07:00 GMT/BST Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
-----------------------------------------------------------------------------------------------------------------------
6
30 November 2021
Custodian REIT plc
("Custodian REIT" or "the Company")
Interim Results
Custodian REIT (LSE: CREI), the UK commercial real estate investment company focused on smaller lot-sizes, today reports its interim results for the six months ended 30 September 2021 ("the Period").
Property highlights
-- Property portfolio value of GBP565.3m (31 March 2021: GBP551.9m, 2020[1]: GBP532.3m)
-- GBP32.3m aggregate valuation increase comprising a GBP2.3m property valuation uplift from asset managementinitiatives and GBP30.0m of general valuation increases, primarily due to hardening yields in the industrial andlogistics sector
-- GBP12.5m[2] invested in three property acquisitions
-- GBP4.2m profit on disposal[3] from the disposal of 10 properties for aggregate consideration of GBP38.5mcomprising:? A portfolio of seven industrial assets for GBP32.6m, GBP5.1m (19%) above the properties' 31 March 2021valuation, when terms of the sale were agreed, and GBP2.9m (10%) above the 30 June 2021 valuation, representing anet initial yield ("NIY") on sale price of 5.9%; - A retail warehouse in Galashiels to a special purchaser for GBP4.5m, GBP1.8m (67%) ahead of the 30 June2021 valuation, representing a NIY on sale price of 5.73%; and - Two smaller assets in the retail and other sectors GBP0.1m above valuation for aggregate considerationof GBP1.4m
-- Since the Period end:? An aggregate GBP46.5m invested in a portfolio of 10 office, retail and industrial assets through thecorporate acquisition of DRUM Income Plus REIT plc ("DRUM REIT"), and separately, an industrial unit in York;and - Three properties sold for consideration of GBP14.1m
Financial highlights and performance summary
-- 95% of rent collected relating to the six-month period, adjusted for contractual rent deferrals (year to31 March 2021: 91%, 2020: 88%)
-- EPRA[4] earnings per share[5] for the six-month period increased to 3.0p (2020: 2.6p) due to the movementin the doubtful debt provision during the six-month period changing from a GBP2.9m increase in 2020 to a GBP0.1mdecrease during the Period
-- Basic and diluted earnings per share[6] increased to 11.4p (2020: -3.8p) primarily due to propertyportfolio valuation increases of GBP32.3m (2020: GBP27.4m decrease)
-- Profit before tax of GBP48.1m (2020: loss of GBP16.1m)
-- Aggregate dividends per share of 2.5p declared for the Period (2020: 2.0p)
-- Target quarterly dividend per share increased by 10% to 1.375p commencing from the quarter ending 31December 2021, resulting in target dividends per share of no less than 5.25p for the year ending 31 March 2022 and5.5p for the year ending 31 March 2023, based on rent collection levels remaining in line with expectations
-- NAV per share 106.0p (31 March 2021: 97.6p, 2020: 95.2p)
-- NAV per share total return[7] of 11.7% (2020: -3.7%) comprising 3.1% income (2020: 2.6%) and a 8.6%capital change (2020: -6.3% capital change)
-- GBP0.6m of new equity[8] raised at a premium of 5.9% to dividend adjusted NAV
Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 Mar 2021 30 Sept 2021 30 Sept 2020 Total return Share price total return[9] 4.7% (7.7%) 2.3% Capital values NAV and EPRA NTA[10] (GBPm) 445.9 399.7 409.9 NAV per share and EPRA NTA per share (p) 106.0 95.2 97.6 Share price (p) 93.1 88.8 91.8 Net gearing[11] 19.6% 23.4% 24.9% EPRA vacancy rate[12] 8.4% 7.1% 8.4% Weighted average energy performance certificate ("EPC") rating[13] C (62) C (66) C (63)
The Company presents alternative performance measures ("APMs") to assist stakeholders in assessing performance alongside the Company's results on a statutory basis.
APMs are among the key performance indicators used by the Board to assess the Company's performance and are used by research analysts covering the Company. Certain other APMs may not be directly comparable with other companies' adjusted measures, and APMs are not intended to be a substitute for, or superior to, any IFRS measures of performance. Supporting calculations for APMs and reconciliations between APMs and their IFRS equivalents are set out in Note 18.
David Hunter, Chairman of Custodian REIT, said:
"The UK property market has shown significant resilience since the outbreak of the COVID-19 pandemic. The subsequent recovery, in certain sectors, since the successful vaccination roll-out has been marked with the Company's rent collections improving to 95%, net of contractual deferrals, and EPRA earnings per share increasing to 3.0p (2020: 2.6p) reflecting this improvement and the stabilisation of the Company's rent roll.
"As a result of this recovery I was very pleased to be able to declare dividends per share of 2.5p (2020: 2.0p) for the Period and, from the quarter ending 31 December 2021, the Board intends to increase quarterly dividends per share to 1.375p to achieve an annualised target dividend per share of no less than 5.5p, based on rent collection levels remaining at least in line with expectations.
"The COVID-19 pandemic has reinforced Custodian REIT's strategy which, over and above decisions in relation to investment approach, has always placed income and financial resilience at the heart of the Company's objectives. When allied to the appropriate property strategy this focus underpins sustainable dividends, which in turn support long-term total return."
Further information
Further information regarding the Company can be found at the Company's website www.custodianreit.com or please contact:
Custodian Capital Limited Richard Shepherd-Cross / Ed Moore / Ian Mattioli MBE Tel: +44 (0)116 240 8740 www.custodiancapital.com Numis Securities Limited Hugh Jonathan/Nathan Brown Tel: +44 (0)20 7260 1000 www.numiscorp.com Camarco Ed Gascoigne-Pees Tel: +44 (0)20 3757 4984 www.camarco.co.uk Custodian REIT plc interim results for the six months ended 30 September 2021
Chairman's statement
The UK property market has shown significant resilience since the outbreak of the COVID-19 pandemic. The subsequent recovery, in certain sectors, since the successful vaccination roll-out has been marked with the Company enjoying a GBP32.3m valuation increase during the six months ended 30 September 2021. EPRA earnings per share increased to 3.0p (2020: 2.6p) reflecting the stabilisation of the Company's rent roll and the Company's rent collections improving to 95%, net of contractual deferrals, which provided 120% cover for dividends relating to the Period.
The recent volatility in markets has emphasised the importance of having a well-diversified, income focused property portfolio. I was very pleased to be able to announce that despite the inevitable disruption to cash collection caused by the COVID-19 pandemic, dividends per share of 2.5p (2020: 2.0p) have been declared relating to the Period. From the quarter ending 31 December 2021 the Board intends to increase quarterly dividends per share to 1.375p to achieve a target dividend per share for the year ending 31 March 2022 of no less than 5.25p and for the year ending 31 March 2023 of no less than 5.5p, based on rent collection levels remaining at least in line with expectations.
While it is clear that a renewed spread of the pandemic, possibly through further variants, will lead to a reintroduction of some restrictions, the UK Government has made it clear that they are committed to avoiding a return to lockdown, if at all possible. We will approach any such event in the same manner as previous restrictions, optimising rent collection through close liaison with our tenants. The Company's strategy of direct rent collection ensures a close understanding of tenant needs and an ability to react appropriately to these, to mutual benefit.
The Board acknowledges the importance of income for shareholders and its objective is to grow the dividend on a sustainable basis at a rate which is fully covered by projected net rental income and does not inhibit the flexibility of the Company's investment strategy.
These have been testing times which have necessitated an exceptional effort from the Investment Manager, both in the collection of rents and in operating remotely as a team. I would like to acknowledge the results of their efforts. I also thank my fellow Board members who have been flexible and supportive during a period which has required numerous formal and informal additional Board meetings. Net asset value
(MORE TO FOLLOW) Dow Jones Newswires
November 30, 2021 02:00 ET (07:00 GMT)