Regional REIT

LN: RGL

£402.7m market cap

108p last close

Regional REIT owns a highly diversified commercial property portfolio of predominantly offices and light industrial units located in the regional centres of the UK. It is actively managed and targets a total shareholder return of at least 10% with a strong focus on income.

Investment summary

RGL performed strongly in the year to 31 December 2018 (FY18), generating a 16.6% EPRA NAV total return, including 9% growth in EPRA NAV and a continuing strong contribution from dividends, up c 3% in the year to 8.05p. In its AGM statement the group says that FY19 trading in line with its expectations, which include a return to full dividend cover. A Q119 DPS of 1.90p has been declared, a further increase of 3%. The statement provides details on the progress of a number of asset management initiative, including several significant lettings at rents well above previous levels. Since IPO the company has successfully grown the portfolio through acquisitions, and says that its potential deal pipeline is very healthy and diverse. On 17 May, RGL said that that it is considering an equity fundraise to take advantage of its growing near-term pipeline of opportunities with any funds raised being deployed in line with its investment policy with a view to delivering further value to its shareholders.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2017A 45.8 36.4 25.8 8.6 12.6 N/A
2018A 54.4 36.8 28.5 7.5 14.4 N/A
2019E 55.2 44.9 31.7 8.5 12.7 N/A
2020E 55.7 44.9 32.1 8.6 12.6 N/A
Last updated on 17/06/2019
Industry outlook

The supply demand balance for regional office and industrial property remains generally firm, and a positive yield spread between the regions and London offers potential for further narrowing. Parts of the retail sector are displaying clear signs of stress.

Last updated on 17/06/2019
Share price graph
Balance sheet
Forecast net debt (£m) 303.3
Forecast gearing ratio (%) 70
Price performance
%
1m
3m
12m
Actual (0.4) 4.3 13.9
Relative* (0.2) 3.0 19.4
52-week high/low 109.8p/90.1p
*% relative to local index
Key management
Kevin McGrath Chairman
Adam Dickinson Head of IR
Daniel Taylor Non Executive Director
Stephen Inglis Non Executive Director
Tim Bee Non Executive Director
William D. Eason Non Executive Director

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