Regional REIT (RGL) owns a highly diversified commercial property portfolio located in the regional centres of the UK.
The commercial property market is cyclical, historically exhibiting substantial swings in capital values through cycles. Income returns have been significantly more stable, supporting rental growth across much of the market. Capital values are significantly down from the 2022 peak and should benefit from the expected decline in interest rates.
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Outlook
Adam Dickinson
Head of IR
Daniel Taylor
Senior independent non-executive director
Frances Daley
Independent non-executive director
Kevin McGrath
Chairman
Massy Larizadeh
Independent non-executive director
Stephen Inglis
Non Executive Director
Forecast net cash (£m)
386.3
Forecast gearing ratio (%)
N/A
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 30.5 | (10.4) | (55.6) |
Relative | 27.0 | (16.2) | (57.7) |
52 week high/low | 54.7p/14.1p |
FY23 EPRA EPS of 5.23p covered DPS of 5.25p as expected. FY24 DPS (Q124 DPS will be declared in May) will partly depend on RGL’s chosen route for refinancing of the £50m 4.5% unsecured bond that matures in August. While good progress is being made with asset disposals these are unlikely to be sufficient to fund repayment of the bond and RGL will soon provide an update on additional debt and equity options. The lettings market has remained uncertain, reflected in end-FY23 occupancy of 80%, although a significant letting of vacant Grade A office space near Glasgow is a positive development. The c 9% like-for-like decline in portfolio value in FY23 was significantly less than that seen across the sector, in part reflecting a significant advance in average portfolio EPC ratings and other asset management initiatives. However, despite a reduction in borrowings, LTV increased to 55.1% while EPRA NTA per share was 23% lower at 56.4p.
Y/E Dec | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (fd) (p) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2021A | 55.8 | 45.2 | 28.8 | 6.6 | 3.7 | N/A |
2022A | 62.6 | 51.2 | (65.2) | 6.6 | 3.7 | N/A |
2023E | 53.7 | 43.1 | (67.3) | 5.2 | 4.6 | N/A |
2024E | 53.8 | 42.7 | 24.8 | 4.8 | 5.0 | N/A |