Interim results for the six months ended 28 February 2019 strong, operational metrics despite headwinds

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Interim results for the six months ended 28 February 2019 strong, operational metrics despite headwinds.

 GAVIN-TIPPER-

Strong operational performance and asset management

 Net rental income increased 0.2 per cent on a like-for-like basis or 1.9 per cent when excluding £0.7 million of hotel refurbishment charges

 EPRA occupancy remains high at 96.9 per cent (31 August 2018: 97.1 per cent)

 Long WAULT of 6.5 years to first break and 8.1 years to lease expiry (excluding hotels managed by RBH and the London serviced office portfolio)

 100 lease events completed in the period, 3.4 per cent ahead of ERV

 UK retail occupancy and net income remained broadly stable with strong leasing activity across the retail parks portfolio

 Footfall across UK Shopping Centre portfolio increased 1.1 per cent, outperforming national average (down 3.3 per cent)

Financial highlights

 Underlying earnings per share of 6.94 pence (5.2 per cent down on H1 2018: 7.32 pence; 1.2 per cent up on H2 2018: 6.86 pence)

 EPRA diluted NAV per share (“EPRA NAV”) declined by 4.4 per cent to 204.4 pence per share (31 August 2018: 213.8 pence per share)

 Like-for-like portfolio value declined by 2.5 per cent (1.8 per cent on a constant currency basis) impacted by lower values for UK Shopping Centres and strengthening of Sterling against the Euro

 Excluding UK Retail, valuations broadly stable

 First half dividend of 4.0 pence per share. Full year dividends to be weighted towards second half with expectation to revert to regular pay-out ratio alongside full year results

Gavin Tipper, Chairman, commented:

“While this has been a challenging period on a number of fronts, operational performance has remained robust. Excluding the impact of the Aviva financed UK Shopping Centre portfolio, the core business delivered strong results and is well positioned for the future. I am confident that the current initiatives to further reduce retail exposure and facilitate a stronger capital structure will deliver sustained long-term shareholder value.’’

Mike Watters2

Mike Watters, Chief Executive, commented:

“We have faced some challenging market conditions during the period which have emphasised the defensive nature of our income, following the progress made against our strategic objectives over the last three years. Strong operational results continue to be achieved across the majority of our portfolio which highlights the strength of the underlying business and the success of our asset management efforts. “Following unprecedented weak sentiment towards the UK retail sector and the resulting negative impact on asset valuations, RDI has reached an inflexion point that will see us taking decisive action to accelerate delivery against our strategic priorities. These include a lower leverage capital structure, more focused capital allocation and continued reduction to retail exposure. These priorities will support a simplified, single geography investment proposition with an enhanced portfolio weighted towards our preferred sectors of beds, sheds and desks. “Notwithstanding the near-term impact on earnings, we remain confident that delivery against our strategic objectives will best position RDI for the future whilst enabling us to maximise shareholder returns from a more robust business that offers attractive income growth opportunities.”

Last modified on Thursday, 02 May 2019 01:22
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