NewRiver REIT will not pay a fourth quarter dividend, it has announced, due to the coronavirus pandemic.
The company, which owns a portfolio of community shopping centres, convenience stores and pubs, said it is focused on cash preservation and reducing operational costs during this uncertain time.
The decision not to pay a fourth quarter dividend, will save the company £17m.
To manage the risks presented by the virus, the group said it would also suspend all non-essential capital expenditure projects, which will improve cashflow over the next 12 months by £24m, and suspend all business rates and marketing in its shopping centres and pubs, which will improve cashflow by a further £4m.
NewRiver said it has £72m of unrestricted cash reserves and £45m of undrawn revolving credit facilities, giving it available liquidity of £117m. It also said it benefits from a wholly unsecured balance sheet, with no bank refinancing events due prior to August 2023. The company’s £300m corporate bond is not due for repayment until 2028.
The company said it was “well placed to absorb a prolonged period of uncertainty”.
[NewRiver’s retail portfolio of shopping centres and retail parks, which represent more than 70% of its total portfolio valuation and net property income, are typically anchored by major food and grocery brands, almost two-thirds, and serve the everyday shopping needs of their local communities. The majority of stores in its assets are focused on the ‘non-discretionary spend’ side of the market and are likely to be less impacted during the outbreak. It has limited exposure to mid-market fashion and casual dining operators, which are some of the sub-sectors most impacted by Covid-19]
On its fourth quarter dividend, the company said:
“It is too early to quantify the impact of Covid-19 on the company’s operations. A significant part of the board’s financial focus for the foreseeable future must therefore be on liquidity and trading through to more normalised conditions. To that end, the board has decided not to pay the fourth quarter dividend for the financial year ending 31 March 2020. The total dividend paid for the year ending 31 March 2020 will therefore be 16.2 pence per share. The impact of this decision is to preserve an additional £17m of cash. The company will update shareholders on dividends at the time of the announcement of the full year results. The board wishes to return to a consistent programme of dividend payments as quickly as possible, but this can only be done on the return to normalised trading conditions. The board considers this to be the most prudent course of action until the impact of Covid-19 becomes clearer.”
[We consider it a prudent step to take as the rapidly evolving coronavirus pandemic plays out. These are unprecedented times, but NewRiver’s strong balance sheet puts it in a good position to ride it out.]
NRR : NewRiver REIT withholds dividend payment as coronavirus pandemic escalates
Anyone – as a private investor who has recently bought shares in New River Reit (may 2020) do I have to register with New River for the dividends? Or do they automatically get paid into my share dealing account once the company starts paying them again, without having to register? Thanks in advance!
As long as your name (or that of the platform that holds the shares on your behalf) is on the register, you’ll get the dividend. The register is updated quite quickly after you deal in the shares. No re-registration will be required. Legally, as long as you hold the shares on the ex-dividend date, you are entitled to the dividend, even if your name isn’t on there. I wouldn’t worry about it.