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1. Company Snapshot

1.a. Company Description

NewRiver REIT plc (‘NewRiver') is a leading Real Estate Investment Trust specialising in buying, managing and developing essential retail and leisure assets throughout the UK.Our £1.1 billion portfolio covers 9 million sq ft and comprises 33 community shopping centres, 24 conveniently located retail parks and 700 community pubs.We hand-picked our assets to deliberately focus on occupiers providing essential goods and services, and avoid structurally challenged sub-sectors such as department stores, mid-market fashion and casual dining.


This focus, combined with our affordable rents and desirable locations, delivers sustainable and growing returns for our shareholders, while our active approach to asset management and inbuilt 2.6 million sq ft development pipeline provide further opportunities to extract value from our portfolio.NewRiver has a Premium Listing on the Main Market of the London Stock Exchange (ticker: NRR).

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1.b. Last Insights on NRR

NewRiver REIT plc's recent performance was driven by a strong earnings release, with the company reporting a 12.1% increase in net rental income. The REIT's diversified portfolio, comprising retail, leisure, and residential assets, has shown resilience in the face of economic challenges. Additionally, the company's focus on asset management and refurbishment initiatives has contributed to its growth. Furthermore, NewRiver's commitment to delivering value to shareholders is evident in its recent share buyback program, which aims to reduce the number of outstanding shares and enhance earnings per share.

1.c. Company Highlights

2. NewRiver's Disciplined Growth Strategy Yields Strong Half-Year Results

NewRiver's financial performance for the half-year was robust, driven by disciplined growth and a focus on sustainable expansion. The company's underlying funds from operations (UFFO) increased to GBP 15.1 million, with UFFO per share at 3.3p, or 3.9p when adjusted for Snozone's seasonality. The half-year dividend was 3.1p per share, fully covered by UFFO. The earnings per share (EPS) figure was not disclosed, but the dividend increase suggests a positive EPS performance. The company's strong balance sheet is reflected in its low loan-to-value (LTV) ratio of 38%, which increased to 42% after a share buyback. Net debt-to-EBITDA and interest cover ratios remain among the best in the listed peer group.

Publication Date: Dec -04

📋 Highlights
  • Portfolio Integration Synergies: GBP 6.2 million net annual synergies unlocked post-Capital & Regional acquisition, boosting cash profits by 31%.
  • Dividend Growth: Half-year dividend rose to 3.1p/share, fully covered by earnings and UFFO, reflecting financial discipline.
  • Balance Sheet Strength: Comfortable LTV (38% post-disposals) and BBB credit rating, with GBP 90 million cash reserves and healthy liquidity.
  • UFFO Performance: UFFO increased to GBP 15.1 million, with adjusted UFFO/share at 3.9p, despite CVA disruptions.
  • Leasing and Tenant Growth: New rents 11.3% above ERV and 24.2% above prior rents, driven by high occupancy and active demand for space.

Capital Discipline and Balance Sheet Strength

The company's capital discipline is evident in its strong balance sheet, with comfortable gearing, healthy cash reserves, and ample liquidity. Fitch reaffirmed NewRiver's investment-grade credit ratings at BBB with a stable outlook, reflecting the company's solid financial position. The company's net debt-to-EBITDA ratio stands at 11.52, indicating a manageable debt burden. With GBP 90 million in cash and a lower gross debt requirement, the company is well-positioned to navigate potential future challenges.

Portfolio Performance and Growth Opportunities

NewRiver's portfolio performance was strong, with high occupancy and tenant retention rates. Leasing activity was robust, with new rents 11.3% above estimated rental value (ERV) and 24.2% ahead of previous rents. The company's value creation strategy focuses on active asset management, targeting improved tenant profiles, enhanced asset quality, and rental growth. The acquisition of Snozone presents an opportunity for growth, and the company is exploring ways to leverage its expertise and the management team's experience to drive earnings growth. Analysts estimate next year's revenue growth at 25.4%, indicating a positive outlook for the company's future performance.

Valuation and Dividend Yield

NewRiver's valuation metrics indicate a relatively attractive position. The company's Price-to-Book Ratio stands at 0.65, suggesting a potentially undervalued position. The Dividend Yield is 8.95%, making it an attractive option for income-seeking investors. With a strong balance sheet and a focus on sustainable growth, NewRiver appears to be well-positioned for future success.

3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.65%)

6. Segments

Retail

Expected Growth: 4.65%

NewRiver REIT plc's 4.65% retail growth is driven by increasing footfall in community shopping centers, rising demand for convenience retail, and strategic acquisitions of high-yielding properties. Additionally, the company's focus on active asset management, rent collection, and cost control measures have contributed to the growth.

7. Detailed Products

Community Shopping Centres

NewRiver REIT plc owns and manages a portfolio of community shopping centres across the UK, providing essential retail services to local communities.

High Street Retail

The company has a significant portfolio of high street retail assets, including shops, restaurants, and cafes in prominent locations.

Leisure and Entertainment

NewRiver REIT plc owns and operates a portfolio of leisure and entertainment assets, including cinemas, bingo halls, and family entertainment centres.

Pub and Restaurant Investments

The company has a portfolio of pubs and restaurants, offering a range of dining and socialising experiences.

Residential and Mixed-Use Developments

NewRiver REIT plc develops and invests in residential and mixed-use schemes, combining retail, leisure, and residential uses.

8. NewRiver REIT plc's Porter Forces

Forces Ranking

Threat Of Substitutes

NewRiver REIT plc operates in a niche market, and substitutes are limited. However, there is a growing trend towards online shopping, which could pose a threat to the company's physical retail assets.

Bargaining Power Of Customers

NewRiver REIT plc's customers are primarily retailers, who have limited bargaining power due to the company's diversified portfolio and strong relationships with tenants.

Bargaining Power Of Suppliers

NewRiver REIT plc's suppliers are primarily contractors and service providers, who have some bargaining power due to the company's reliance on them for maintenance and development projects.

Threat Of New Entrants

The UK REIT market is highly competitive, and new entrants would face significant barriers to entry, including high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The UK REIT market is highly competitive, with several established players competing for market share and assets. NewRiver REIT plc faces intense rivalry from peers such as British Land and Landsec.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 43.97%
Debt Cost 4.93%
Equity Weight 56.03%
Equity Cost 9.39%
WACC 7.43%
Leverage 78.47%

11. Quality Control: NewRiver REIT plc passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Ascencio

A-Score: 7.2/10

Value: 6.1

Growth: 4.0

Quality: 7.1

Yield: 10.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Wereldhave Belgium

A-Score: 6.8/10

Value: 4.0

Growth: 4.2

Quality: 6.4

Yield: 10.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Supermarket Income REIT

A-Score: 6.3/10

Value: 3.4

Growth: 2.8

Quality: 6.4

Yield: 9.4

Momentum: 6.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Frey

A-Score: 5.9/10

Value: 3.3

Growth: 5.4

Quality: 4.5

Yield: 9.4

Momentum: 3.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Selectirente

A-Score: 5.8/10

Value: 4.3

Growth: 3.9

Quality: 7.3

Yield: 5.6

Momentum: 3.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
NewRiver

A-Score: 5.6/10

Value: 5.2

Growth: 2.8

Quality: 5.5

Yield: 10.0

Momentum: 2.5

Volatility: 7.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.74$

Current Price

0.74$

Potential

-0.00%

Expected Cash-Flows