Regional REIT

LN: RGL

£284.8m market cap

66p 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

Ahead of the release of interim results for the six months to 30 June 2020 (H120) on 17 September, a Q220 DPS of 1.5p has been declared, a level that the board aims to at least maintain for the rest of the year and which it expects to be fully covered by EPRA earnings. The Q220 DPS is lower than Q120 (1.9p) despite continuing robust collection of rents from the group’s predominantly regional office portfolio, with the board deciding to hold more cash than normal due to the challenging market environment. RGL benefits from a highly diversified portfolio and secure borrowings with no near-term maturities and good liquidity. LTV at 30 June was 39.7%, slightly below the stated target of 40%.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 54.4 36.8 67.9 7.5 8.8 N/A
2019A 55.0 44.1 26.3 7.8 8.5 N/A
2020E N/A N/A N/A N/A N/A N/A
2021E N/A N/A N/A N/A N/A N/A
Industry outlook

The commercial property market is cyclical, historically exhibiting substantial swings in valuation through cycles while income returns have been more stable, but still fluctuating according to tenant demand and rent terms. The extent and duration of impact of the global pandemic on the economic outlook remains uncertain. While the supply demand balance for regional office and industrial property has hitherto remained generally firm the weakness that was previously confined to the retail sector is likely to continue to broaden.

Last updated on 24/09/2020
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Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (14.0) (8.6) (36.1)
Relative* (9.8) (4.4) (21.0)
52-week high/low 122.4p/55.8p
*% 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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