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Regional REIT (RGL)

Business description

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

In recent weeks, RGL has announced a number of refinancing measures, including new/revised facilities and the anticipated repayment of expensive debt facilities. The average cost of debt including hedging costs has reduced to 3.5% and the average maturity has extended to more than 7 years. It has also given an update on letting activity, and despite Brexit uncertainty reports a strong finish to 2018 with momentum continuing into 2019. In 2018, RGL was able to take advantage of the strength in the investment market to reposition its portfolio for new opportunities, realise gains from its asset management strategy, and progress its targeted reduction in gearing. Net property sales will have dampened income and reduced dividend cover, but in FY19 we expect a rebound, driven by reinvestment, occupancy and rental growth, and interest savings.

Last updated on 01/02/2019

Y/E Dec Revenue (£m) EBITDA (£m) PBT (£m) EPS (fd) (p) P/E (x) P/CF (x)
2016A 38.1 29.9 13.4 7.8 13.1 N/A
2017A 45.8 36.4 28.7 8.6 11.8 N/A
2018E 53.5 38.0 64.7 7.3 13.9 N/A
2019E 56.0 44.1 42.5 8.6 11.8 N/A

Last updated on 29/01/2019

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Executive interview – Regional REIT

Industry outlook

The supply demand balance for regional office and industrial property remains generally firm, and a positive yield spread between the regions and London offers potential for further narrowing. Parts of the retail sector are displaying clear signs of stress.

Last updated on 01/02/2019

Key management

Kevin McGrath, Chairman
Adam Dickinson, Head of IR
Tim Bee, Non Executive Director
William D. Eason, Non Executive Director
Stephen Inglis, Non Executive Director
Daniel Taylor, Non Executive Director

Company address

Toscafund Asset Management LLP 7th Floor
90 Long Acre
London
WC2E9RA
United Kingdom
+44 (0) 207 845 6100
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