The operator of 660 community sites via its Hawthorn Leisure pub arm, NewRiver, revealed that net property income from pubs rose to £13.6m in the six months to 30 September – a 27% increase versus the same period in 2018 when the figure hit £10.7m.
This included net income growth from operator managed pubs of £2.6m – from £6.8m to £9.4m.
What’s more NewRiver recorded like-for-like earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 5.5% per pub – a result its latest statement claims was delivered by “scale-based synergies” from the integration of Hawthorn Leisure and NewRiver earlier this year.
NewRiver’s latest half-year results also revealed that its 26 pub capex projects over the “highly active” past six months – totalling £1.4m in expenditure – delivered a 24% return on investment. Such projects included a £210,000 makeover for the Church Inn in Swinton, Greater Manchester.
However, NewRiver has also disposed of eight pubs over the same period as part of sales totalling £35.3m, including an Asda store in Llanelli, one shopping centre, one retail park, eight parcels of land and nine convenience stores.
While pub occupancy across its 660-strong estate remains high at 96.7%, it has fallen by 1% since March 2019.
As reported by The Morning Advertiser (MA), NewRiver’s pub net property income rose from £12.7m to £21.9m for the year to March 2019, despite the FTSE 250 company’s overall loss of £36.9m after tax.
Meanwhile, Hawthorn Leisure saw executive chariman Mark Davies replace Gerry Carroll as its CEO on 1 October this year.
Continuing to extract value
“We are pleased to report another period of solid performance, as we entered our 10th year of operations,” NewRiver chief executive Allan Lockhart said of the company’s latest results. “Our diversified and differentiated portfolio continued to outperform the market, delivering sustainable cash flows, robust operational metrics and resilient valuations.
“We have made good progress with our key strategies to deliver underlying funds from operations growth and a fully covered dividend. In light of this progress, we have maintained our dividend for the first half at 10.8p per share, with cover improved from the comparative period.
“Since 1 April 2019 to the date of this announcement (21 November), we have completed, exchanged or are under offer on disposals at a blended yield of 5.4%, and have recycled most of this capital into five retail parks at a blended yield of 9%. Our market-leading asset management platform continues to expand, and now covers a growing number of third-party assets, including our most recent appointment by Knowsley Council.
“In pubs, supply chain benefits continue to drive like-for-like EBITDA growth, and we continue to extract further value from our portfolio. Our strong and unsecured balance sheet, and our ability to recycle capital, leaves us well-positioned to continue our progress to dividend cover.”