NewRiver REIT has suspended dividend payments as it tackles the coronavirus outbreak, telling investors its focus was on managing cash resources “very carefully” and maintaining liquidity.
The FTSE 250 regional retail and leisure group said it had £72m of unrestricted cash reserves and £45m of undrawn revolving credit facilities, giving available liquidity of £117m.
It said it benefitted from a wholly unsecured balance sheet, with no bank refinancing events due before August 2023, and the company’s £300m corporate bond not due for repayment until 2028.
The board explained that, consistent with its focus on cash preservation and liquidity, it had decided not to pay a fourth quarter dividend, preserving £17m of cash.
The firm added it was also taking a “prudent approach” to preserving cash flow and reducing operational costs.
Those measures included the suspension of all non-essential capital expenditure projects, which would improve cash flow over the next 12 months by £24m, and the suspension of business rates and marketing in its shopping centres and its pubs, which would improve cash flow by a further £4m.
In a statement to the London Stock Exchange this morning, the group said: “NewRiver remains a financially sound business with significant covenant headroom and a capital structure that is well placed to absorb a prolonged period of uncertainty,” the board said in its statement.
“NewRiver’s retail portfolio of shopping centres and retail parks represents more than 70% of our total portfolio valuation and net property income.
“These assets are typically anchored by major food and grocery brands and serve the everyday shopping needs of their local communities.”
“Our 723 wet led pubs are typically community based, local pubs providing an important social purpose with little or no dependency on food.”
NewRiver’s board said it would reinstate dividend payments as quickly as possible, but that could only be done on the return to normalised trading conditions.
“The board considers this to be the most prudent course of action until the impact of Covid-19 becomes clearer.”