AEW UK Long Lease targets covered dividend in FY2021 – AEW UK Long Lease REIT has published results covering the year ended 30 June 2019. Generally, things seem to be on track – as the highlight below show – but problems with one tenant (now replaced) led to a dip in the share price. This has not recovered. The board fired the manager but this has not yet taken effect (9 April 2020 is the end of the contract). Takeover and merger bids were called for and rejected. The way forward is not clear. One commitment the board has made is that the dividend will be covered by earning in the fund’s accounting year ended June 2021. As the numbers show though, it very nearly achieved that this year.
Results highlights (NB the end June 2018 numbers ate for 14 months and for a period when the trust was still investing its IPO proceeds):
- Net Asset Value of GBP76.32 million, and of 94.81 pence per share as at 30 June 2019 (30 June 2018: GBP76.42 million and 94.93p).
- Operating profit before fair value changes of GBP5.58 million for the year (period ended 30 June 2018: GBP2.45 million).
- Unadjusted profit before tax of GBP4.23 million and earnings of 5.26p for the year (period ended 30 June 2018: loss of GBP0.89 million 1.25p, of which GBP6.48 million and 8.05p related to property acquisition costs written off).
- EPRA Earnings per share for the year were 5.47p (period ended 30 June 2018: 2.74p). But the board prefers to remove all non cash items from earnings – this brings the adjusted EPS to 4.86p.
- Total dividends of 5.50p declared for the year in line with the dividend target as set out in the prospectus (period ended 30 June 2018: 3.25p).
- Share price 78.75p as at 30 June 2019 (30 June 2018: 90.24p) – today 70p!.
- As at 30 June 2019, the Group had a GBP41 million loan facility with Canada Life Investments and was geared to 34.3% of the Gross Asset Value (30 June 2018: 27.7%).
- EPRA Cost Ratio of 19.2% as at 30 June 2019 (30 June 2018: 35.8%).
- The Group acquired three properties in the year for a total of GBP12.65 million, excluding acquisition costs (period ended 30 June 2018: 16 properties for GBP95.46 million).
- As at 30 June 2019, the Group’s property portfolio had a fair value of GBP112.99 million across 19 properties (30 June 2018: GBP99.09 million across 16 properties).
- Weighted average unexpired lease term of 20.5 years to the earlier of break and expiry (30 June 2018: 21.8 years) and 22.6 years to expiry (30 June 2018: 24.0 years).
- The portfolio was fully let as at 30 June 2019 (30 June 2018: 99.7% occupancy)
- Rental and other income generated in the period was GBP6.91 million (30 June 2018: GBP3.60 million). The number of tenants as at 30 June 2019 was 24 (30 June 2018: 21).
- The portfolio had annualised contracted rental income of GBP6.67 million as at 30 June 2019 (30 June 2018: GBP5.64 million).
- EPRA Net Initial Yield of 4.98% as at 30 June 2019 (30 June 2018: 5.28%) equivalent to 5.54% following the expiry of Meridian Steel rent free period.
- EPRA Cost Ratio of 19.2% as at 30 June 2019 (30 June 2018: 35.8%).
AEWL : AEW UK Long Lease targets covered dividend in FY2021