NAV, Dividend Declaration & Portfolio Valuation

RNS Number : 6879U

Alternative Income REIT PLC

03 August 2022

 

3 August 2022

Alternative Income REIT PLC

(the " Company " or " Group " or " AIRE ")

NET ASSET VALUE, DIVIDEND DECLARATION AND PORTFOLIO VALUATION UPDATE

Dividend target met and well-positioned to deliver attractive, secure, inflation-linked income and capital growth

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 with inflation-linked rent reviews, provides a trading and business update and declares an interim dividend for the quarter ended 30 June 2022.

Alan Sippetts, Non-Executive Chair of Alternative Income REIT plc, comments:

"The Board is pleased to announce that we have met our target dividend of 5.5 pence per share (pps) with full dividend cover for the year ended 30 June 2022, following the declaration of our fourth quarterly dividend of 1.6 pps.

At 30 June 2022, the Company's unaudited net asset value per share was 96.40 pence, representing a 3.3% increase over the quarter, due to increases in our portfolio valuation and rents as well as the careful control of costs.  When combined with the 1. 60 pps dividend paid for the quarter, this produces an unaudited NAV total return for the quarter of 5.19 %.

This quarterly update demonstrates that the Company's attractive, well managed and resilient portfolio continues to increase in value with growing contracted rents, 96% of which are linked to inflation. Together with our track record of collecting 100% of rents due, this helps ensure that AIRE is well-positioned to continue to provide our shareholders with attractive, secure, long dated income, including a potentially progressive dividend and capital growth."

Highlights (unaudited)

	At 30 June 2022	At 31 March 2022	Change
Net Asset Value ("NAV")	£77.60 million	£75.11 million	+3.3%
NAV per share	96.40 p	93.30 p	+3.3%
Share price	82.10p	77.60 p	+5.8%
Loan to gross asset value ("GAV") AB	33.69%	34.55%
	Quarter ended 30 June 2022	Quarter ended 31 March 2022	Change
EPRA earnings per share A	1.48 p	1.51 p	-2.0%
Adjusted earnings per share A	1.36 p	1.40 p	-2.9%
Dividend cover A	85.00%	107.69%	-21.1%
Total dividends	1.60 p	1.30 p	+23.1%
Earnings per share	4.39 p	4.22 p	+4.0%
Share price total return A	7.51%	9.27%
NAV total return A	5.19%	4.83%
Investment property fair value	£117.91 million	£115.38 million	+2.2%
Annualised contracted rent	£7.28 million	£7.22 million	+0.8%
Ongoing charges A (annualised)	1.42%	1.44%	+2 bps

^A Considered to be an Alternative Performance Measure.

^B The loan facility at 30 June 2022 of £41.0 million (31 March 2022: same) is with Canada Life Investments, matures on 20 October 2025 and has a weighted average interest cost of 3.19%.

Dividend Declaration, Earnings per share and Dividend Cover

The Board is pleased to declare an interim fourth quarterly dividend of 1.60 pps for the quarter ended 3 0 June 2022.  This follows the first, second and third quarterly dividends for the year ended 30 June 2022 of 1.3 pps each.  The Board is also pleased that the total dividend for the year is in accordance with the previously declared dividend target of 5.5 pps with full dividend cover, a 7% increase on the previous year's total dividend of 5.14 pps .

This fourth interim dividend will be distributed as Property Income Distribution ("PID") and will be paid on 26 August 2022 to shareholders on the register on 12 August 2022. The ex-dividend date will be 11 August 2022.

The Adjusted EPS was 1.36 p for the quarter giving a total of 5.55 pps for the year (2021: 5.07 pps). The dividend cover for the year was 100.9%, which compares favourably with the prior year's cover of 99%.

Property Valuation

At 30 June 2022, the Group's property portfolio, comprising 19 assets, had a fair value of £117.91 million, representing a 2.2% increase compared with the 31 March 2022 valuation of £115.38 million of the same 19 properties.

At 30 June 2022, the Net Initial Yield on the Group's portfolio was 5.70%, compared with 5.72% at 31 March 2022.

Valuations have increased across the majority of the Group's assets in the quarter, with the best performances from those properties that are experiencing both real and anticipated income increases from index linked rent reviews. The Group's hotels, student accommodation, leisure, nursery and some car showroom and production/warehouse assets have all seen growth.  

Net Asset Value

At 30 June 2022, the Company's unaudited NAV was £77.60 million, 96.40 pps (31 March 2022: £75.11 million, 93.30 pps) representing a 3.3% increase over the quarter, due to increases in the portfolio valuation and net income.  

When combined with the 1.60 pps dividend paid for the quarter, this produces an unaudited NAV total return for the quarter of 5.19% (31 March 2022: 4.83%).

The table below sets out the movement in NAV during the quarter.

	Pence per share	£ million
NAV at 1 April 2022	93.30	75.11
Valuation movement in property portfolio*	2.91	2.34
Income earned for the period	2.48	1.99
Expenses for the period	(0.55)	(0.44)
Net finance costs for the period	(0.44)	(0.36)
Interim dividend paid during the quarter ended 31 March 2022	(1.30)	(1.04)
NAV at 30 June 2022	96.40	77.60

* The quarter's increase in the independent fair valuation of £2.53 million has been reduced by £0.05 acquisition and £0.14 million to reflect the minimum contracted rental uplifts, resulting in a net valuation increase of £2.34 million.

The NAV attributable to the ordinary shares has been calculated under International Financial Reporting Standards as adopted by the United Kingdom and incorporates both the Group's property portfolio individually valued on a 'Red Book' basis at 30 June 2022 and net income for the quarter but does not include a provision for the interim dividend declared today (see above).

The income earned for the period includes an accrual for the minimum contractual uplifts contained in the index-linked leases. In the event that inflation is greater than these minimum contractual uplifts, the actual income will be greater than the income currently accrued.

Portfolio update

At 30 June 2022, t he Group's assets remain 100% let (31 March 2022: 100%). The weighted average unexpired lease term at 30 June 2022 was 17.5 years to the earlier of break and expiry (31 March 2022: 17.6 years) and 19.4 years to expiry (31 March 2022: 19.6 years).

9 6 % (3 1 March 2022 : 93 %) of the portfolio's income stream is reviewed periodically on an upward only basis, in line with inflation (44% annually); with 70 % and 26 % of the portfolio index -linked (subject to floors and caps) to RPI and CPI, respectively. The remaining 4 % of the portfolio's income stream is subject to Open Market Value Reviews or expiries .

Contracted annualised rent increased marginally this quarter , due t o three rent reviews, counterbalanced by a period of reduced rent as an incentive at the start of the new lease to BGEN in St Helens.   Over the next 12 - month period , 59 % of the Group's income will be reviewed ( eight annual index-linked rent reviews and six periodic index-linked rent reviews (3 or 5 years since the previous reviews)).

Rent Collection

The rents for the September 2022 quarter are split 8 4 % payable quarterly in advance and 1 6 % payable monthly in advance. Rent collection remains resilient with 100% expected for the September 2022 quarter.

ENQUIRIES

Alternative Income REIT PLC
Alan Sippetts - Chairman	via Maitland/amo below
M7 Real Estate Ltd Richard Croft	[phone]
Panmure Gordon (UK) Limited	[phone]
Alex Collins
Tom Scrivens
Chloe Ponsonby
Maitland/amo (Communications Adviser)	[phone]
James Benjamin	[e-mail]

The Company's LEI is 213800MPBIJS12Q88F71.

Further information on Alternative Income REIT plc is available at www.alternativeincomereit.com ¹ .

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.

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 index linked rent review provisions.

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. It has over 230 employees in 14 countries across Europe. The team manages over 600 properties with a value of circa €5.7 billion.

 

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