LXI REIT has confirmed payment of its final dividend despite taking a hit on income due to the covid-19 pandemic.
The company, which owns a portfolio of inflation-protected long-let property, said it expects to approve the payment of the company’s final quarterly dividend for the year ended 31 March 2020, at the rate of 1.4375 pence per share. The final dividend is scheduled to be announced in May 2020, along with the company’s annual results, and paid in June 2020. This will meet the company’s dividend per share target of 5.75 pence for the year.
As of today, the company had already collected 67% of rent due in respect of the quarter ending 30 June 2020.
The group said it was assisting tenants that had been materially impacted by the pandemic and experienced disruption to their business models.
It said it was in advanced discussions with tenants which represent a 30% of the rent roll to agree payment plans, which include conversions to monthly or in arrears payments or deferral and stage repayments over a defined period. LXI said where any liability is deferred, it still remains due and the company expects it to be repaid.
Financials
The company has a relatively low loan-to-value (LTV) ratio of 20%, against a loan covenant of 50%. Its interest cover is around 600% versus a debt covenant of 300%.
The company’s debt has an average maturity of 12 years and is fully fixed at an average all-in rate of 2.94%.
Forward funding developments
LXI has a number of forward-funded developments at various stages of completion where construction has paused. The developments are all pre-let, with full planning permission in place and the company said it does not anticipate a financial impact from the delays.
It said the forward funding price was fully fixed, payments are made in arrears and the developer’s profit is retained by the company until completion.
It added that LXI receives a developer licence fee for the full duration of the construction works, which is fully cash-backed by means of a significantly over-collateralised retention in the company’s bank account.
Its forward funding commitments are fully covered by the group’s undrawn revolving credit facility.
Annual results
The company is expected to report its annual results for the year ended 31 March 2020, in late May 2020, subject to any further guidance from the FCA and FRC being published before then.
LXI : LXI REIT to pay final dividend