Regional REIT

LN: RGL

£457.4m market cap

106p last close

Regional REIT owns a highly diversified commercial property portfolio of predominantly offices and light industrial units located in the regional centres of the UK. It is actively managed and targets a total shareholder return of at least 10% with a strong focus on income.

Investment summary

RGL is proposing to raise c £50m (gross) by issuing c 46.9m new ordinary shares at a price of 106.5p. Qualifying existing shareholders will be offered the opportunity to participate on the basis of one new share for every eight held. The issue price represents a discount of 1.8% to the closing price on 21 June 2019 and a 7.8% discount to the 31 December EPRA NAV per share of 115.5p. The company has an identified pipeline of acquisition opportunities with a value of more than £500m. Included within this is a geographically diverse portfolio of six offices (the Target assets) for which negotiations are ongoing. The capital issue is conditional on approval by shareholders at an EGM to be held on 18 July 2019 and a prospectus is available on the RGL website. The company has confirmed that it is targeting a dividend of 8.25p per share for the year ending 31 December 2019 (2018: 8.05p) which would represent a yield of 7.75% on the issue price for the new shares. Trading continues to be in line with the directors’ expectations and the directors remain confident of the group’s ability to return to a fully covered dividend once the net capital raising proceeds have been fully deployed.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2017A 45.8 36.4 25.8 8.6 12.3 N/A
2018A 54.4 36.8 28.5 7.5 14.1 N/A
2019E N/A N/A N/A N/A N/A N/A
2020E N/A N/A N/A N/A N/A N/A
Last updated on 25/07/2019
Share price graph
Balance sheet
Forecast net debt (£m) 303.3
Forecast gearing ratio (%) 70
Price performance
%
1m
3m
12m
Actual (0.9) 0.2 12.8
Relative* (2.1) (0.3) 15.9
52-week high/low 109.6p/89.9p
*% relative to local index
Key management
Kevin McGrath Chairman
Adam Dickinson Head of IR
Daniel Taylor Non Executive Director
Stephen Inglis Non Executive Director
Tim Bee Non Executive Director
William D. Eason Non Executive Director

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