TIDMAIRE
RNS Number : 4271V
Alternative Income REIT PLC
06 August 2020
6 August 2020
Alternative Income REIT PLC
(the " Company " or " Group ")
UPDATE ON NAV, TRADING AND THE BUSINESS
DIVIDEND DECLARATION
The Board of Directors of Alternative Income REIT PLC (ticker:
AIRE), the owner of a diversified portfolio of UK commercial
property assets predominantly let on long leases, today provides a
trading and business update and declares an interim dividend for
the quarter ended 30 June 2020 .
Steve Smith, Chairman of Alternative Income REIT plc,
commented:
"The Board remains confident that the Company is well positioned
given its resilient balance sheet, diversified portfolio of
predominantly long let, index-linked assets that remain fully let
with strong recent rent collection. Additionally, the Company has a
lower overhead following the changes to service providers announced
on 25 February 2020, the effect of which started to be realised in
the final quarter of its financial year ended 30 June 2020, with
significantly enhanced service levels, helping the Company to
navigate the effects of the COVID-19 pandemic.
On 18 May 2020, the Board announced the appointment of M7 as
Investment Adviser and is delighted with its contribution to date.
The Board continues to work closely with M7 to identify a clear
path both to grow the Company and enhance its performance and a
further announcement will be made in due course. Until 1 October
2020, there is no fee payable to M7 by the Company.
This interim dividend of 1.425 pence per share declared today is
a significant increase on the 0.825 pence per share paid for the
March 2020 quarter, underlining the Company's strong rent
collection and cash flows. "
Dividend declaration and strong rent collection
The Board declares today an interim dividend of 1.425 pence per
share for the quarter ended 30 June 2020 . The dividend will be
paid on 28 August 2020 to shareholders on the register on 14 August
2020. The ex-dividend date will be 13 August 2020. The dividend
will be a Property Income Distribution.
This interim dividend is an increase on the 0.825 pence per
share paid for the prior quarter, underlining the Company's strong
rent collection and cash flows. This brings the combined total
dividends declared for the financial year ended 30 June 2020 to 5.0
pence per share, ensuring the Company continues to adhere to its
distribution obligations as a UK REIT.
As announced on 13 July 2020, t he Board continues to expect
that at least 84% of Q3 rents due will be collected by September
2020 and, to date, 82% of all Group's Q2 2020 rents have been
collected. Of the remaining 18%, the Board expects to recover 2%
through monthly payments during August 2020, whilst deferral
arrangements have been agreed or are being discussed on the
remaining 16%.
Resilient EPRA Earnings Per Share, Valuation and Net Asset
Value
Unaudited EPRA earnings per share (" EPRA EPS ") for the quarter
ended 30 June 2020 increased by 9.12% to 1.384 pence per share,
representing dividend cover for the quarter of 97.1% (quarter to 31
March 2020: 1.268 pence per share, 153.7 % cover).
The EPRA EPS includes accruals to reflect the minimum contracted
uplifts under the Group's leases, the spreading of rent free
periods and an adjustment for the (non-cash) amortisation of loan
arrangement fees. Excluding these accruals from the Group's EPRA
EPS, the unaudited cash earnings were 0.828 pence per share,
reflecting 58.1% cash dividend cover for the quarter (quarter ended
31 March 2020: 0.946 pence per share, 114.7 % cash dividend
cover).
As at 30 June 2020, the independent fair valuation undertaken by
Knight Frank of the Company's property portfolio was GBP104.76
million (31 March 2019: GBP108.78 million), reflecting a 3.70%
reduction, and the yield on the portfolio was 5.77 % (31 March
2020: 5.27%).
The Company's unaudited net asset value ("NAV") was GBP67.30
million, 83.601 pence per share as at 30 June 2020, which takes
account of the above valuation (31 March 2020: GBP70.86 million,
88.024 pence per share). See the table below for NAV movement
during the quarter.
Analysis of Movement in NAV
Movement during the quarter Pence per share GBP million
NAV at 31 March 2020 88.024 70.86
---------------- ------------
Valuation change in property portfolio* (4.982) (4.01)
---------------- ------------
Income earned for the period 2.459 1.98
---------------- ------------
Expenses for the period (0.609) (0.491)
---------------- ------------
Net finance costs for the period (0.466) (0.375)
---------------- ------------
Interim dividend paid in respect
of the quarter ended 31 March 2020 (0.825) (0.664)
---------------- ------------
NAV at 30 June 2020 83.601 67.300
---------------- ------------
* The quarter's reduction in the independent fair valuation of
GBP4.02 million was further reduced by GBP0.49 million to reflect
the minimum contracted rental uplifts and the rent frees in the
quarter and two adjustments aggregating to GBP0.11 million to
adjust previous accounting errors relating to the acquisitions of
two properties. This reduction was almost entirely offset by a
reversal of a provision for capital expenditure of GBP0.61 million,
resulting in a net valuation change in the quarter of GBP4.01
million.
Diversified portfolio, fully let predominantly on long,
index-linked, leases
Following the sale of the Wet 'n' Wild Water Park announced on 3
August 2020, the Group owns a diversified portfolio of UK
commercial property assets that are fully let, with a w eighted
average unexpired lease term ("WAULT") of 19.4 years (31 March
2020: 19.75 years) to the earlier of break and expiry and 21.6
years to expiry.
88 % of the portfolio's income stream is reviewed periodically,
on an upward only basis, in line with inflation; with 64 % and 24 %
of the portfolio indexed (subject to floors and caps) to RPI and
CPI respectively and, except for the rent for 2021 from Travelodge
(as a result of the terms of Travelodge's Company V oluntary A
rrangement (" CVA ") as announced by the Company on 13 July 2020 )
, none of the rents are pegged to the tenant's turnover or trading
volumes .
The NAV attributable to the ordinary shares has been calculated
under International Financial Reporting Standards as adopted by the
European Union and incorporates both the Group's property portfolio
individually valued on a 'Red Book' valuation basis as at 30 June
2020 and net income for the quarter, but does not include a
provision for the interim dividend (see above) for the quarter
ended 30 June 2020.
The income earned for the period includes an accrual for the
minimum contractual uplifts defined within the index linked leases.
In the event that inflation is greater than these minimum
contractual uplifts, the actual income will be greater than that
currently accrued.
ENQUIRIES
Alternative Income REIT PLC
Steve Smith - Chairman via Maitland/AMO below
------------------------------
Maitland/AMO (Communications
Adviser)
------------------------------
James Benjamin james.benjamin@maitland.co.uk
+44(0) 20 7379 5151
------------------------------
Cenkos
------------------------------
Will Rogers wrogers@cenkos.com
+44(0) 20 7397 1920
------------------------------
Rob Naylor rnaylor@cenkos.com
+44(0) 20 7397 1922
------------------------------
The Company's LEI is 213800MPBIJS12Q88F71.
Further information on Alternative Income REIT plc is available
at www.alternativeincomereit.com (1)
NOTES
Alternative Income REIT PLC aims to generate a sustainable,
secure and attractive income return for shareholders from a
diversified portfolio of UK property investments, predominately in
alternative and specialist sectors. The majority of the assets in
the Group's portfolio are let on long leases which contain
inflation linked rent review provisions, which help to underpin
income distributions to shareholders with the potential for income
and capital growth.
The Company's Investment Adviser is M7 Real Estate Limited
("M7"). M7 is a leading specialist in the pan-European, regional,
multi-tenanted real estate market. Majority owned by its senior
managers, it has over 200 employees in 14 countries across Europe.
The team manages over 835 properties with a value of circa EUR5.1
billion.
1 Neither the content of the Company's website, nor the content
on any website accessible from hyperlinks on its website or any
other website, is incorporated into, or forms part of, this
announcement nor, unless previously published on a Regulatory
Information Service, should any such content be relied upon in
reaching a decision as to whether or not to acquire, continue to
hold, or dispose of, securities in the Company.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
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END
DIVFLFIDTEIRIII
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