Regional REIT | Winterflood Research

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H1 2023 Results: 48% discount; 14% dividend yield

On 12 September, Regional REIT (RGL) published its interim results for the six months to 30 June 2023. Highlights include:

- EPRA NTA per share -9.0% to 66.9p; share price TR -18.5%. Since IPO in November 2015, EPRA NTA TR +2.5% p.a. and share price TR -2.1% p.a., underperforming target return of 10% p.a.

- Property portfolio valued at £752m at 30 June, -3.8% on LFL basis over H1 vs -7.2% for MSCI UK Regional Office benchmark. 92% of portfolio invested in Offices. EPRA occupancy rate of 82.5%.

- 99% of rent due for HY collected. EPRA EPS 2.5p, -13.8% vs H1 2022; net income negatively impacted by lower income from lease surrenders and dilapidations payments compared to previous period. Dividends totalling 2.85p per share declared in respect of HY, -13.6% vs H1 2022, as quarterly dividend rate reduced by -27% from 1.65p to 1.20p with effect from Q2.

- Net LTV ratio at 30 June was 52%. Programme of asset management initiatives and disposals planned to reduce LTV to long-term target of 40%.

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