NewRiver income from pub portfolio increases by £9.2m

23-May-2019 - Last updated on 23-May-2019 at 10:37 GMT

Buoyed by pubs’ performance: NewRiver has benefited from the acquisition of Star Pubs & Bars sites and the integration of Hawthorn Leisure

NewRiver’s pub net property income rose from £12.7m to £21.9m despite the FTSE 250 company’s overall loss of £36.9m after tax, according to its latest financial results.

Representing a 72% increase, the rise was primarily down to the company completing £126.6m worth of pub acquisitions last year – including the purchase of Hawthorn Leisure and its stable of 298 pubs as well as 76 sites from Star Pubs and Bars.

The company’s two highest profile pub acquisitions in 2018 added £12.1m in net property income over the 12 months to March 2019.

Additionally, while NewRiver recycled £31.3m worth of pubs, pub land and convenience stores over the past 12 months, it has more than doubled its number of sites from 331 in March 2018 to 665 in March 2019 with occupancy standing at 97.9% on 31 March – a 1.1% drop year on year.

The successful integration of Hawthorn Leisure in January 2019 – including all IT, finance and HR systems – means that all of NewRiver’s community pubs are now managed by the Hawthorn Leisure.

Across its pub portfolio, NewRiver completed 75 capital investment projects aimed to improve customer experience, trade and capital values at a cost of £2.8m.

Robust performance

In terms of NewRiver’s wider financial performance, the company reported a £36.9m loss after taxation for the 12 months to March 2019 compared to a £45.7m profit for the previous year while funds from operations dropped by 7% year on year from £60.3m to £56.4m.

NewRiver chief executive Allan Lockhart explained: “We have delivered a robust performance during the year despite the significant headwinds facing the UK retail sector.

“While we have not been immune to these challenges, our retail portfolio is focused on the most resilient sub-sectors of the market, providing consumers with convenience, value and services that cannot easily be replicated online.

“In addition, the specialist and hands-on retail asset management platform we have built since NewRiver’s inception almost 10 years ago means we have been able to mitigate the impact of any retailer distress in our portfolio.

“Our pubs business continues to deliver strong cash returns, a modest valuation uplift and opportunities to extract further value, with the integration of Hawthorn Leisure, which we acquired in May 2018, providing a solid platform for future growth.”

Continued acquisitions

Elsewhere NewRiver, whose £1.3bn portfolio covers more than 9million sq ft, including 34 community shopping centres and 19 retail parks in addition to its pub portfolio, revealed that it had established a joint venture with Bravo – a private equity-style fund run by US asset manager Pimco – to purchase retail parts in Aberdeen, Dundee, Inverness and on the Isle of Wight for £60.5m.

What’s more, NewRiver’s results statement revealed that it had signed three asset management agreements, including deals with Canterbury City Council, for management of Whitefriars Shopping Centre in Canterbury, Kent; and with Areli Real Estate for Nicholsons Shopping Centre, Maidenhead, Surrey.