NAV,Dividend Declaration, Results Notice & Update
The information contained in this announcement is restricted and is not for publication, release or distribution in the United States of America, any member state of the European Economic Area (other than the United Kingdom, the Republic of Ireland or the Netherlands), Canada, Australia, Japan or the Republic of South Africa.
6 February 2020
AEW UK Long Lease REIT plc
("AEWL", the "Company" or the "Group")
NAV, DIVIDEND DECLARATION AND UPDATE FOR THE QUARTER ENDED 31 DECEMBER 2019
NOTICE OF HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
The Board of Directors of AEW UK Long Lease REIT plc (ticker: AEWL), the owner of a diversified portfolio of 19 regional UK commercial property assets let on long leases, announces the following update for the quarter ended 31 December 2019.
The Board today declared an interim dividend of 1.375 pence per share for the quarter ended 31 December 2019. The dividend will be paid on 28 February 2020 to shareholders on the register on 14 February 2020. The ex-dividend will be 13 February 2020. This dividend will be a Property Income Distribution ("PID"). In line with the Group's Dividend Payment Policy, the Board is targeting an aggregate dividend of 5.50 pence per share for the year ending 30 June 2020 1.
Later this month, the Board will announce the actions it is taking to reduce the Group's costs with the objective of delivering a fully cash covered dividend with effect from the financial year commencing 1 July 2020, and the Board confirms that AEW UK's tenure as investment manager will cease on 9 April 2020.
Highlights for the quarter ended 31 December 2019
· Unaudited EPRA earnings per share ("EPRA EPS") for the quarter increased by 12.9% to 1.523 pence per share, which represents dividend cover for the quarter of 110.8% (quarter to 30 September 2019: 1.348 pence per share, 98.0% cover).
o The EPRA EPS includes an accrual to reflect the minimum contracted uplifts under the Group's leases and a non-cash adjustment for the amortisation of loan arrangement fees. Excluding these adjustments from EPRA EPS, the unaudited cash earnings were 1.201 pence per share, reflecting 87.3% cash dividend cover for the quarter (quarter ended 30 September 2019: 1.022 per share, 74.3% cash dividend cover).
· At 31 December 2019, the independent fair valuation of the property portfolio was £112.99 million (30 September 2019: £113.06 million), a decrease over the quarter of £0.07 million (0.06%) (quarter to 30 September 2019: increase of £0.07 million or 0.06% over prior quarter).
· Unaudited Net Asset Value ("NAV") increased 0.15% over the period to £76.17 million, 94.627 pence per share (30 September 2019: £76.06 million, 94.482 pence per share). Please see table below for NAV movement during the quarter.
· The weighted average unexpired lease term to first break or expiry was 20.0 years and 22.1 years to expiry.
Notice of results
The Company will announce its unaudited half year results for the six months ended 31 December 2019 on 26 February 2020.
Net Asset Value
As at 31 December 2019, the Group owned 19 investment properties with a fair value of £112.99 million.
|
Movement during the quarter |
Pence per share |
£ million |
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NAV at 1 October 2019 |
94.482 |
76.06 |
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Valuation change in property portfolio * |
(0.003) |
(0.00) |
|
Income earned for the period |
2.338 |
1.88 |
|
Expenses for the period |
(0.371) |
(0.30) |
|
Net finance costs for the period |
(0.444) |
(0.36) |
|
Interim dividend paid in respect of the quarter ended 30 September 2019 |
(1.375) |
(1.11) |
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NAV at 31 December 2019 |
94.627 |
76.17 |
* The quarter's reduction in the independent fair valuation of £0.07 million was offset by a reversal of a capital expenditure provision of £0.36 million and the quarter's recurring rent smoothing charge of £0.29 million.
The NAV attributable to the ordinary shares has been calculated under International Financial Reporting Standards as adopted by the European Union and incorporates both the Group's property portfolio individually valued on a 'Red Book' valuation basis as at 31 December 2019 and net income for the quarter, but does not include a provision for the interim dividend for the quarter ended 31 December 2019.
The income earned for the period includes an accrual for the minimum contractual uplifts defined within the index linked leases. In the event that inflation is greater than these minimum contractual uplifts, the actual income will be greater than that currently accrued.
Debt
The Group has drawn all of its £41 million fixed interest loan facility with Canada Life Investments and at 31 December 2019 was geared at a loan to Gross Asset Value ("GAV") of 34.5%. The weighted average interest cost of the Group's facility is 3.19% and the facility is repayable on 20 October 2025. The Company's medium-term target for its loan to GAV is 30%.
Inflation linked rent reviews
92% of the portfolio's income stream is reviewed periodically, on an upward only basis, in line with inflation; with 71% and 21% of the portfolio indexed (subject to floors and caps) to RPI and CPI, respectively.
Rent reviews reflecting inflation linked uplifts during the period include assets let to Prime Life in Solihull and Brough where rent is set to increase by 2.4% as compared to the previous year.
Sector weightings
The sector weightings, by value, of the property portfolio as at 31 December 2019: Hotels 21.1%; Industrial 20.0%; Residential care homes 16.0%; Car showrooms 13.1%; Student accommodation 10.8%; Leisure 8.6%; Power station 4.7%; Petrol station 3.9%; and Nursery 1.8%.
Notes
1 Investors should note that any dividend targets are for illustrative purposes only, based on current market conditions and is not intended to be, and should not be taken as, a profit forecast or estimate. Actual returns cannot be predicted and may differ materially from this illustrative figure. There can be no assurance that the target will be met or that any dividend or total return will be achieved.
2 Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised 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.
ENQUIRIES
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AEWL |
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Steve Smith - Chairman |
via Maitland/AMO below |
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Maitland/AMO (Communications Adviser) |
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James Benjamin |
james.benjamin@maitland.co.uk +44(0) 20 7379 5151 |
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Cenkos |
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Will Rogers |
+44(0) 20 7397 1920 |
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Rob Naylor |
+44(0) 20 7397 1922 |
The Company's LEI is 213800MPBIJS12Q88F71.
Further information on AEW UK Long Lease REIT is available at: www.aewukllreit.com 2
About AEW UK Long Lease REIT
AEW UK Long Lease REIT plc aims to generate a sustainable, secure and attractive income return for shareholders, whilst maintaining capital values in real terms, from a diversified portfolio of UK property investments, predominately in alternative and specialist sectors. The majority of the assets in the Company's portfolio are let on long leases which contain inflation linked rent review provisions, which help to underpin income distributions to shareholders with the potential for income and capital growth.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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