NewRiver dividend leaps 24% as regional spending remains strong

NewRiver REIT, the UK’s third largest shopping centre owner, has revealed a 24% leap in operational profits to £58.2m for the full year to 31 March.

The company said the improvement reflected continued income growth and the strength of consumer spending outside London.

The group also posted a dividend up 24% to 23.0p, including a special dividend of 3p a share linked to NewRiver’s retail warehouse acquisition in Sheffield.

However, the FTSE 250 group’s net asset value (NAV) per share fell 1% to 292p, against 295p in the previous year, and profit after tax plunged to £36.2m from £69.4m last year, with the company stating the decrease was due mainly to a non-cash reduction in the portfolio valuation.

Assets under management rose by 14% to £1.3bn. Acquisitions totalled £158.4m during the year, at an average equivalent yield of 7.2%, and total shareholder return stood at 8.3%.

The group also reported an occupancy level of of 97%, a record 355 leasing events, and like-for-like footfall across the portfolio was up 0.5%.

David Lockhart, chief executive of NewRiver, said: “Our convenience-led, community-focused retail and leisure portfolio has proved well-positioned, despite the prevailing macro-economic uncertainty in the UK, and we have continued to deliver growing and sustainable cash returns to our shareholders.

“We have increased our full year ordinary dividend by over 8% to 20 pence per share, and today we have announced an additional 3 pence special dividend linked to our retail warehouse acquisition in Sheffield, meaning our fully covered dividend has increased by 24% in total.

“Looking ahead, we believe that with our convenience and community focus, affordable rents, active approach to asset management and in-built risk-controlled development pipeline we are well-placed to continue to deliver growing and sustainable cash returns to our shareholders. Reflecting the confidence we have in the strength of our underlying business, we have today announced that the ordinary dividend for the first quarter of the new financial year will increase by 5% to 5.25 pence per share.”

The results were welcomed by analysts at Liberum, which issued a BUY note this morning.

Liberum noted: “A 3p special dividend tops another year of resilient performance at NewRiver. Adjusted earnings per share and the dividend per share both beat our forecasts due to the recognition of a surrender premium agreed alongside the purchase of a retail warehouse in Sheffield. NAV was also 1% ahead of our forecast, -1% to 292p, with the portfolio valuation registering a +0.5% like-for-like gain in the second half. NewRiver’s convenience focused portfolio with active asset management continues to outperform the retail sector.”​

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