TIDMDRIP
RNS Number : 5552O
Drum Income Plus REIT PLC
30 January 2019
30 January 2019
LEI: 213800FG3PJGQ3KQH756
Drum Income Plus REIT plc
("Drum" or the "Company")
Unaudited Net Asset Value as at 31 December 2018
Drum Income Plus REIT plc (LSE: DRIP) announces its unaudited
net asset value ("NAV") as at 31 December 2018.
Highlights
Period from 30 September to 31 December 2018
-- Fair value independent valuation of property portfolio as at
31 December 2018 of GBP56.7m (30 September 2018: GBP57.4m).
-- NAV per share at 31 December 2018 of 91.6p (30 September 2018: 93.8p).
-- Earnings per share (excluding revaluation gains and losses on
fair value of investments) for three months ended 31 December 2018
were 1.0p.
-- Dividend paid during the quarter of 1.50p.
-- NAV total return (NAV movement plus dividend paid) of -0.7%.
Introduction
The Company aims to provide shareholders with a regular dividend
income plus the prospect of income and capital growth over the
longer term. The Company invests in smaller UK commercial
properties, principally in the office, retail (including retail
warehouses) and industrial sectors, which have the potential to
offer a secure income stream, to create value through active asset
management and have strong prospects for future income and capital
growth.
Unaudited NAV (As at 31 December 2018)
GBPm Pence per Share
NAV as at 30 September 2018 35.8 93.8
Valuation change in property
portfolio (0.6) (1.7)
Income earned for the period 1.1 2.9
Expenses for the period* (0.5) (1.4)
Interest paid (0.2) (0.5)
Dividend paid (0.6) (1.5)
Unaudited NAV as at 31 December
2018 35.0 91.6
-------------------------------- ----- ---------------
The NAV has been calculated in accordance with International
Financial Reporting Standards and incorporates the independent
portfolio valuation as at 31 December 2018 and income for the
period, but does not include a provision for the fourth interim
dividend, which will be paid in February 2019. The earnings per
share for the period from 1 October 2018 to 31 December 2018
(excluding revaluation gains and losses on fair value of
investments and expenses charged to capital) were 1.0p.
* Prior to 30 September 2018 an unsolicited approach was made by
a potential purchaser with a view to acquiring the entire share
capital of the Trust. The initial terms discussed were deemed by
both parties to be acceptable and diligence was instructed by both
parties in October 2018. Following a period of extensive due
diligence, satisfactory final terms could not be agreed between the
parties and the transaction was aborted in November 2018. Costs of
GBP252K were incurred by the Trust in the period October to
November 2018 in relation to the aborted transaction.
As at 31 December 2018, the Company had cash balances of GBP1.4
million and borrowings of GBP22.7 million (loan to value of
40.0%).
Current Portfolio
Sep-18 Dec-18
Location Value % Weighting Value % Weighting
North East GBP16,100,000 27.78% GBP16,150,000 28.18%
Scotland GBP18,850,000 32.53% GBP18,250,000 31.85%
North West GBP19,000,000 32.79% GBP18,900,000 32.99%
South West GBP4,000,000 6.90% GBP4,000,000 6.98%
--------------- --------------
GBP57,950,000 100.00% GBP57,300,000 100.00%
--------------------------------- --------------
Sector Value % Weighting Value % Weighting
Office GBP24,800,000 42.80% GBP25,300,000 44.15%
Shopping Centre GBP13,700,000 23.64% GBP13,750,000 24.00%
Retail GBP17,300,000 29.85% GBP16,750,000 29.23%
Industrial GBP2,150,000 3.71% GBP1,500,000 2.62%
--------------- --------------
GBP57,950,000 100.00% GBP57,300,000 100.00%
--------------------------------- --------------
The properties were valued at GBP57,300,000 as at 31 December
2018 (30 September 2018: GBP57,950,000) by Savills (UK) Limited
('Savills'), in their capacity as external valuers adjusted for
lease incentives of GBP574,000. (30 September 2018:
GBP599,000).
Key KPIs
Sep-18 Dec-18
-------- --------
Total Number of
Units 108 105
Total Number of
Tenants 87 87
Total SQFT 336,303 336,303
Vacancy (% SQFT) 10.10% 10.80%
Vacancy (% ERV) 1.90% 4.50%
WAULT (Expiry) 6.14 6.25
WAULT (Breaks) 4.95 5.07
-------- --------
Differentiated Investment Strategy
-- Target lot sizes of GBP2m - GBP15m in regional locations.
-- Sector agnostic - opportunity driven.
-- Entrepreneurial asset management.
-- Risk-controlled development.
-- Dividend paid quarterly.
-- Fully covered dividend policy.
Portfolio Attributes
In the context of the market uncertainty, the Board believes it
is helpful to shareholders to highlight some key attributes of the
Company's property portfolio:
-- The Company has no exposure to Central London markets, which may take the brunt of any Brexit-related market weakness.
-- The weighted average unexpired lease term (WAULT) to expiry is 6.25 years.
-- The portfolio yield is 7.1% (based on 31 December 2018 valuation).
-- The occupancy rate is high at greater than 95% by ERV
-- Gearing - the loan-to-value ratio of 40.0% is directly in
line with the stated intended target of 40%.
-- Further asset management angles to exploit.
Asset Management Overview and Update
3 Lochside Way, Edinburgh
New tenant now in occupation which maintains the buildings
occupancy at 100%. Rental on the new letting is GBP20psf which is a
new level for the building.
Arthur House, Manchester
A letting of c 3,500sqft to IJ Tours Limited on the fifth floor
has been concluded at a level of GBP18.50 per sqft for a period of
9 years with a break at the end of the 3(rd) and 6(th) years of the
term.
The proposed refurbishment works of the 6(th) floor has been
approved by the Board and these works will be instructed in the
first quarter of 2019.
Eastern Avenue, Gloucester
An Agreement for Lease has been entered into with Home Bargains
for the former Office Outlet unit on a subject to planning basis.
The planning application is due to be determined in the first
quarter of 2019.
There is interest in the former Maplin unit from two potential
tenants.
Dividends
The Board is targeting a fully covered annual dividend of 6.0p
per share in respect of the year ending 30 September 2019*. At the
current share price of 94.5p this would represent an annualised
dividend yield of 6.3%.
*Target returns only and not a profit forecast. There can be no
assurance that these targets will be met and they should not be
taken as an indication of expected or actual current or future
results.
Enquiries:
Drum Real Estate Investment Management (Investment Manager)
Bryan Sherriff 0131 285 0050
Cantor Fitzgerald Europe (Financial Adviser and Corporate Broker)
Robert Peel (Corporate Finance) 0207 894 7719
Richard Sloss (Sales) 0131 240 3863
Dickson Minto W.S. (Sponsor)
Douglas Armstrong 020 7649 6823
Weber Shandwick (Financial PR)
Richard Bright 0131 556 6649
Nick Oborne 020 7067 0721
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END
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