TIDMSIR
RNS Number : 5605K
Secure Income REIT PLC
23 April 2020
23 April 2020
Secure Income REIT Plc
(the "Company")
Quarterly dividend declaration and update on rent collection
The Board of Secure Income REIT Plc (AIM: SIR), the specialist
long term income REIT, today declares an interim quarterly dividend
of 4.2 pence per share in respect of the year ending 31 December
2020.
Dividends will be payable on 29 May 2020 to shareholders on the
register on 1 May 2020 and the ex-dividend date will be 30 April
2020. The dividend will be paid as a Property Income Distribution
in respect of the Company's tax-exempt property rental
business.
Neither the Company nor Prestbury, the Investment Adviser, is
utilising any of the employee or fiscal assistance schemes provided
by the UK Government to ease the burden of the pandemic.
As announced in the Company's Covid-19 update on 6 April 2020,
the dividend for the current quarter is being maintained at the
same rate as the previous quarterly dividend. Since that
announcement, an additional GBP0.6 million of rents have been
collected and a further GBP1.6 million fell due, completing the
March quarter billing cycle. 74% of all rents due for the March
quarter have therefore been received. The only rents now
outstanding are those due from Travelodge, as noted in our
announcement of 20 April 2020, with the overdue rents representing
6.4% of the Company's annual rental income.
Following our announcement of 20 April, the Company finally
received a proposal from Travelodge, which was not in keeping with
either the nature or the spirit of the proposals made by any of our
other tenants who all engaged with us constructively and at an
early stage. We have not been able to accept the proposal from
Travelodge but have offered support which we believe to be
proportionate and consistent with the approach accepted by other
tenants in our portfolio.
Until the pandemic struck, Travelodge had substantial earnings
and significant operating cash flows, and we consider that this
business has considerable equity value as well as long-term
viability. It also has very substantial shareholders in Goldman
Sachs, Goldentree and Avenue Capital. We will therefore endeavour
to work with Travelodge and its owners to find a reasonable
solution to ease the current cash flow issues brought about by the
lockdown. We are keen to strike a fair and reasonable balance
between easing the cash flow burdens on our tenants brought about
by the pandemic, and protecting the interests of our own
shareholders, lenders and other stakeholders with a constructive
and sensible approach to rent deferrals. We are hopeful that such a
balance can be struck with Travelodge and their owners too.
The impact of the lockdown measures to manage the impact of the
Covid-19 pandemic continues to be felt by a great many businesses
in the UK and around the world. While the length of time over which
the lockdown conditions will continue remains uncertain, as does
the process for exiting the lockdown and returning businesses to
normal operations, we are working very constructively with those of
our leisure portfolio tenants who have requested our help to assist
their liquidity management whilst their businesses are closed. We
have had very strong relationships with our tenants going back in
most cases over thirteen years or more. In assessing any proposals
from them for cash flow deferrals, we consider the strengths of the
individual businesses and their track records. We believe that the
assistance we have provided reflects our partnership approach with
our tenants, whom we hold in high regard, and underpins both their
and the Company's long-term futures.
We are in advanced stages of discussions (including supportive
input from our lenders) to defer rental payments in order to assist
with the timing of tenant operational cash flows. As at the date of
this announcement:
-- 15.6% of the total Group passing rents of GBP110.7 million
(at 31 December 2019) is expected to be subject to deferral,
reducing cash rents receivable in June and September 2020, with
repayment of the deferred rents in full in September 2021 to
coincide with the tenant business' maximum liquidity position;
and
-- 1.0% of rents are subject to short term deferrals such that
cash flow is spread in order to assist our tenants, and where the
deferral and full recovery of rents is within the current financial
year ending 31 December 2020.
The next quarterly dividend is expected to be announced on 23
July 2020. The Board will continue to keep dividend payments under
review, recognising the importance of maintaining a balance between
retaining funds for opportunities should they arise, appropriate
cash reserves given the uncertain duration of the pandemic and the
desire of the Company's investors to preserve their dividend
income.
For further information on the Company, please contact:
Secure Income REIT Plc +44 20 7647 7647
Nick Leslau enquiries@SecureIncomeREIT.co.uk
Mike Brown
Sandy Gumm
Stifel Nicolaus Europe
Limited
(Nominated Adviser) +44 20 7710 7600
Stewart Wallace stifelsecureincomereit@stifel.com
FTI Consulting
(PR Adviser) +44 20 3727 1000
Dido Laurimore SecureIncomeREIT@fticonsulting.com
Claire Turvey
Eve Kirmatzis
About Secure Income REIT Plc :
Secure Income REIT specialises in generating long term,
inflation protected, secure income from real estate investments.
Its investment strategy is designed to satisfy investors' growing
requirements for high quality, safe, inflation protected income
flows.
At 31 December 2019, the Group's investment property portfolio
was valued at GBP2.1 billion, producing GBP110.7 million per annum
of rental income from long term leases with a weighted average
unexpired term to expiry of 21.0 years with no breaks. All rental
income is subject to fixed uplifts or RPI upwards only rent reviews
with 59% of rental income subject to RPI-linked reviews and 41%
having fixed uplifts.
The Group's portfolio comprises key operating assets let to
strong businesses in defensive sectors with high barriers to entry.
The upwards only RPI-linked rent reviews and fixed rental uplifts
combine with fixed cost debt to drive healthy dividend growth,
creating attractive and predictable returns.
The Company is advised by Prestbury Investment Partners Limited,
owned by the team which advised Max Property Group Plc until August
2014, when all of the assets of Max Property Group Plc were sold to
Blackstone Group. Prestbury is owned and run by a team of real
estate and finance professionals including Nick Leslau, Mike Brown,
Tim Evans, Ben Walford and Sandy Gumm.
The Company's Board is chaired by Martin Moore together with
three further independent Directors: Leslie Ferrar, Jonathan Lane
and Ian Marcus, as well as three members of the Prestbury Team:
Nick Leslau, Mike Brown and Sandy Gumm.
The Company is a UK REIT which floated on the AIM market of the
London Stock Exchange in June 2014.
The Company's LEI is 213800M1VI451RU17H40.
Further information on Secure Income REIT is available at
www.SecureIncomeREIT.co.uk .
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END
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