Agenda Introduction and highlights Mike Watters (CEO) Financial - - PowerPoint PPT Presentation
Investing in opportunity rdireit.com Full year results presentation October 2018 1 Agenda Introduction and highlights Mike Watters (CEO) Financial results Donald Grant (CFO) Capital allocation Stephen Oakenfull (Deputy CEO)
Investing in opportunity
Full year results presentation
October 2018
rdireit.com
2018 full year results presentation
1
Mike Watters (CEO)
Donald Grant (CFO)
Stephen Oakenfull (Deputy CEO)
Adrian Horsburgh (Property Director)
Mike Watters (CEO)
2018 full year results presentation
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Strong results with 3.8% growth in the dividend to 2.70p, fully covered
(1) Refmecting post year end transactions.
Underlying earnings growth to £53.5m
Underlying EPS growth to 2.84p
EPRA NAV per share growth to 42.8p
Total accounting return
Disposal proceeds achieving 8.9% premium
Acquisitions yielding >9% on equity
Proforma LTV to 47.3%(1)
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Underpinned by a stronger balance sheet and signifjcantly improved portfolio
Superior income Sustainable income G r
i n g i n c
e
Superior income
Top quartile yield
average 4.2%)
EPRA cost ratio; effjciently converting rent to dividends Liquid and transparent investment in commercial real estate
Indexed rent
Serviced income with strong CPI correlation
Open rent reviews weighted to sectors with positive outlook Growing income Sustainable income
pay-out ratio
WAULT to fjrst break with 97.1% occupancy
debt maturity with 99.6% fjnance costs fjxed/capped
Hampton by Hilton, London Gatwick Airport
Strategic priority: Financial discipline
alignment to operational cash fmow
industry EPRA cost ratios
and operational cash fmow
senior management incentives to drive accountability
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(including share of joint ventures)
FY18 FY17 Change Change Summary income statement £m £m £m %
Net rental income 100.7 93.5 7.2 Other income 1.8 2.7 (0.9) Administrative costs (14.4) (15.6) 1.2 Net fjnance expense (29.0) (29.0) — Other items (2.8) 2.3 (5.1) Non-controlling interests (4.4) (3.0) (1.4) EPRA earnings 51.9 50.9 1.0 Company adjustments: – Reverse debt accretion charges (non-cash) 0.8 0.9 (0.1) – FX loss/(gain) 0.8 (2.0) 2.8 Underlying earnings 53.5 49.8 3.7 +7.4 Underlying earnings per share 2.84p 2.75p +3.3 Dividend per share (declared H2: 1.35p) 2.70p 2.60p +3.8
Diluted weighted average shares in issue 1,892.3m (31 August 2017: 1,811.9m).
EPRA cost ratio improved to 15.6% (17.2% in FY17)
2018 full year results presentation
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Disposals
Like-for-like +2.1% 1.1 Nil
UK Retail
0.5
UK Hotels
0.1
Europe Net rental income (FY17)
93.5
Acquisitions
15.1
Development UK Commercial
0.6
Net rental income (FY18)
100.7
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(including share of joint ventures)
Market Market EPRA value value Gain/ Gain/ topped up FY18 FY17 (loss)(1) (loss) NIY(2) £m £m £m % %
UK Commercial 332.0 307.4 23.1 7.5 5.2 UK Retail 481.0 501.8 (26.1) (5.2) 6.8 UK Hotels 245.9 239.6 5.1 2.1 5.9 UK total 1,058.9 1,048.8 2.1 0.2 6.0 Europe 226.1 226.5 (0.9) (0.4) 4.9 Total like‑for‑like 1,285.0 1,275.3 1.2 0.1 Acquisitions 303.3 — Development 32.1 23.4 Disposals — 240.0 Total property portfolio 1,620.4 1,538.7 5.8
(1) Gain/(loss) includes the efgect of capital expenditure, tenant incentives, head lease amortisation and FX. (2) Reported EPRA topped up NIY for total segment.
Disposals during the year were completed at a 8.9% premium to the last reported market value
CCY+0.6% €+2.2%
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Key statistics Medium term target FY18 HY18 FY17
LTV (%) 45% – 50% 46.2(1) 48.0 50.0(2) Weighted average debt maturity (years) 6.7 7.0 7.3 Weighted average cost of debt (%) 3.2% – 3.4% 3.4 3.3 3.1 Debt with interest rate protection (%) >75% 99.6 99.2 93.0 Interest cover(3) (times) >3x 3.5 3.5 3.2
(1) Increasing to 47.3% post period end. (2) Proforma adjusted from 51.3% to refmect transactions between 31 August 2017 and FY17 results announcement. (3) Group interest cover calculated as net rental income divided by net fjnance cost.
LTV continues to move towards the lower end of our target range
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Underlying earnings Valuation gains Profits on disposal and gains
Dividends FX loss Other EPRA NAV (FY17) EPRA NAV (FY18)
2.84 0.6 1.2 (2.65) (0.3) (0.29) 41.4 42.8
Up 3.4% to 42.8p
Total shares on issue 1,900.4m (31 August 2017: 1,828.1m).
Total accounting return of 9.8%
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Undrawn, committed facilities Cash and available facilities (FY17)
53.4 10.0 63.4
Operating cash flow
58.8
Disposals Acquisitions and capital expenditure
(106.4)
Net debt repaid
188.0
Dividends
(82.6)
Other
(41.1) (10.3)
Cash and available facilities (FY18)
134.8 75.0 59.8
(including share of joint ventures) Capital commitments of £9.5m, increasing to £27.5m post period end
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Key statistics Medium term target FY18 HY18 FY17 HY17
Rental income growth like-for-like (%) 2% – 5% 2.1 2.1 3.7 3.3 Rent collection (%) >95% within 7 days 98.0 89.3 94.3 94.0 EPRA cost ratio (%) <15% 15.6 15.7 19.8(1) 20.7(1) Cost of debt (%) 3.2% – 3.4% 3.4 3.3 3.1 3.3 LTV (%) 45% – 50% 46.2(2) 48.0 50.0(3) 49.9 Interest cover (times) >3x 3.5 3.5 3.2 3.1 Pay-out ratio (%) 90% – 95% 95.1 92.5 94.5 96.3 Underlying earnings per share growth (%) 3% – 5% 3.3 8.2 n/a n/a
(1) 17.2% and 18.0% respectively, when adjusted for non-recurring items. (2) Increasing to 47.3% post period end. (3) Proforma adjusted from 51.3% to refmect transactions between 31 August 2017 and FY17 results announcement.
Linked to management incentives to drive accountability Full year dividend of 2.70p representing growth of 3.8% on FY17
20 St Dunstans Hill, London
Strategic priority: Effjcient capital structure
with LTV at the lower end
allocating capital to sectors supported by
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Focus on both balance sheet and income statement leverage Continued reduction in LTV to 46.2%(1)
and reduced margins
Lower income statement leverage
Improvement in leverage KPIs
55 FY18 FY16 HY17 HY18 53.4% 2.7x 3.5x 46.2%(1) FY17
LTV (%)
45 50 2.5 3.0 3.5
Interest cover (x)
4.0 (1) 47.3% when adjusted for transactions between 31 August 2018 and FY18 results announcement.
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GBP Euro FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY28+ FY27 336.4 55.1 20.9 47.6 154.9 193.3 FY19 UK bank debt
Europe bank debt
UK non-bank debt
16% 65% 19%
Debt maturity profjle (£m) Group debt £808.2m (FY17: £842.2m)
until FY21
and cost of debt effjciencies
natural FX hedge
(1) 47.3% when adjusted for transactions between 31 August 2018 and FY18 results announcement.
Advanced negotiations to extend to FY24
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Income-led diversifjed business model provides ability to actively invest for growth Effjcient reinvestment demonstrates relentless focus on income and ability to efgectively recycle capital
High growth Low growth Low yield
Travelodge portfolio (IHL) £29.0m; 5.3% NIY German supermarket portfolio €205m; 10.8% premium; 5.8% NIY Acquisitions (acquisition value) Disposals (gross proceeds) EPRA topped up yield 5.8% Six regional offjces £59.8m; 8.9% premium; 6.4% NIY Kingston, Canbury Business Park £18.8m; 5.8% NIY Post year end distribution and industrial £52.3m; implied NIY >6% RBH managed hotels (IHL) £75.4m; implied NIY 7.5% London serviced offjces £161.7m; implied NIY >6% Hull, House of Fraser £11.0m; 12.8% discount; 9.7% NIY
High yield
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Total disposals of £255.7m at an average 8.9% premium to book value Strategic disposals
House of Fraser department store, Hull
a 22 year lease
to book value
Opportunistic disposals
German supermarket portfolio
income; implied NIY of 5.8%
Realising value following active asset management
Regional offjces
for £59.8m; an 8.9% premium
income; implied NIY of 6.4%
investment market
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RDI well placed to capitalise on structural changes and occupier demand Scalable operating platforms provide unique market position Increased exposure to limited service, branded hotels
saving costs following de-listing
and Edinburgh) with an implied NIY of 6.9%
Expanding into London serviced offjces
implied NIY >6%
and experienced operator with aligned interest
Earnings accretive acquisition complementing existing portfolio High yielding London exposure with structural support
2011 30 25 20 15 10 5 2012 2013 2016 2014 2015 2017 2018 Serviced office take-up Sub-5k deals % of market Flexible office vs sub-5,000 sqft take-up in central London (% of market) Source: CBRE/Savills.
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Outlook remains positive although new supply needs to be absorbed RBH managed hotels (incl. acquired IHL hotels)
89% by value in Greater London and Edinburgh
London serviced offjces
Exposure to Crossrail and Southbank markets
Both sub-sectors proven to be defensive in weaker markets
Average room rate
EBITDA per sqft on fmexible space
Average desk occupancy
Revenue per available room
Weighted average occupancy
Average desk rate (licence fee only)
Total revenue per available desk
Performance relative to prior year. Performance relative to acquisition in January 2018.
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Growth achieved by assets acquired over the last three years has signifjcantly
Acquisitions delivered signifjcant value over the last three years (£m)
structural change
signifjcant value over medium term
AUK portfolio (£489.9m) IHL portfolio (£104.4m) London serviced offjces portfolio (£161.7m)
At acquisition
774.8 (+10.1%) 853.1
31 Aug 2018 Market value Disposal gross proceeds Market value subsequently sold
+10.8%
like‑for‑like growth £143.6m disposals
+6.2%
premium on acquisition price
Major transactions:
20 Little Britain, London
Strategic priority: Income focused portfolio
enhanced through signifjcant capital recycling
sectors with positive outlook
give competitive edge
initiatives to deliver signifjcant value
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Clear visibility of medium term income and growth opportunities
Operational highlights
net income maintained
Strong income characteristics
weighted average lease length to fjrst break (8.4 years to expiry)
EPRA NIY reversionary yield 6.3%
market value
by market value invested in key cities and UK South East Open market rent reviews weighted to sectors with positive outlook
Limited development risk
Best in class aligned
and scalable
Active in‑house asset management expertise
Occupancy
Serviced income
Indexed rents
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FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28+ London serviced
RBH managed hotels 6.0 9.8 5.7 7.0 5.1 4.5 3.0 20.2 5.0 9.2 23.5 10.6 Serviced income
Clear income visibility with WAULT of 7.0 years to fjrst break (8.4 years to expiry)(1) Lease expiries to fjrst break by gross rental income (£m) Tenant profjle
tenant >3.2%
Top ten tenants
As at % of gross 31 August 2018 rental income Units
B&Q 3.2 5 Tesco 3.2 1 Primark 2.9 2 UK Government 2.6 11 Travelodge 2.2 5 Royal Mail 1.8 2 OBI 1.5 3 Wilko 1.4 3 Debenhams 1.4 2 Refresco Gerber 1.3 2
(1) Excluding RBH managed hotels and London serviced offjces. (2) Flexible space only.
Includes £1.9m recurring commercialisation income
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nt demand
1 8 . 2 2 3 . 3
d
1 . 7 2 4 . 2 7 .
4 9 . 9 % w e i g h t e d t
t r
g
c u p i e r d e m a n d
Food and discount anchored retail Strong occupier demand Fashion anchored retail
1
t r
g
c u p i e r d e
Open market rent reviews
by gross annualised income (%)
Strong occupier demand, including logistics, London offjces and well located retail parks Travelodge portfolio with long dated RPI linked leases
Indexation
by gross annualised income (%)
1 3 . 8 13.2 UK Germany
2 7 . % I n d e x e d
Medium term target of 2% – 5% rental growth per annum Serviced income
by gross annualised income (%)
Defensive serviced income supported by strong occupier demand
21.4 9.7
3 1 . 1 % s p a c e a s a s e r v i c e
Limited service hotels London serviced
(1) EBITDA net of management fee and FF&E.
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Maintaining net income, high occupancy and footfall above national average CVAs and administrations resulted in a £0.8m reduction in gross annualised rent following pro-active leasing activity (0.7% of total rent roll) UK retail parks
11% by market value
UK shopping centre – London
4% by market value
UK shopping centre – Fashion anchored(2)
6% by market value
UK shopping centres – Food & discount anchored(1)
8% by market value
(1) Includes Northampton, Seaham and Warrington. (2) Includes Wigan and Coventry.
Priory Park, Merton
South East
> £80 per sqft
units underway
Weston Favell, Northampton
less afgected by online
(FY18: £12.5 per sqft)
West Orchards, Coventry
maintain footfall (FY18: 97.3%)
+19% return on food court refurbishment cost
Debenhams
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Income-led criteria ensuring sustainability of income and growth opportunities Income‑led opportunities located next to Crossrail development Areas undergoing signifjcant regeneration Structural change
Last mile distribution
expected per day
the lettable area in 2021
since acquisition
and Castle regeneration area
(+£0.4m) on previous passing rent
and expected to deliver growth
(+£30.4m) in value since acquisition
Charing Cross Road, London Newington House, Southwark Camino Park, Crawley
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Post year end acquisitions in line with strategic priorities and investment criteria Distribution development, Bicester
distribution units
cost certainty
Southwood Business Park, Farnborough
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Income-led business plans form the foundation of our income commitment % of portfolio by gross annualised rental income
41.7%
Core secure income
17.8%
Income-led asset management
37.2%
Growth income
3.3%
Mature assets
Sustainable income Capital recycling Growing income
Asset management priorities for the next 12 months:
development plans and asset management initiatives
at a premium
and operational margins
rent reviews
20 St Dunstans Hill, London
Strategic priority: Scalable and sustainable business
remains relevant
the balance sheet and enhancing portfolio fundamentals
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Demand for companies to deliver predictable and growing income remains strong Portfolio rebalanced for income growth Scalable aligned operational platforms supported by structural change Dividend covered by underlying EPS and
Strategic priorities, medium term targets and dividend policy unchanged Disciplined acquisition strategy and reasonable levels of liquidity outweigh the risk
Strong and improving
Smart active asset management Continued effjcient reduction in leverage
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2018 full year results presentation
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Signifjcant progress against strategic priorities
IHL acquisition
Scheme of arrangement completed in November 2017 Transformational AUK acquisition
Completed in March 2016 London Serviced Offjce acquisition
January 2018
£1.0bn by market value
FY15
3% 4% 12% 13% 22% 46%
Other retail Shopping centres Hotels Automotive UK offices German offices U K ( 3 3 % ) G e r m a n ( 1 3 % )
£1.62bn by market value
Other retail Retail parks
30%
Shopping centres Hotels Serviced
Office Distribution U K ( 1 8 % ) G e r m a n y ( 1 2 % )
23% 11% 10% 11% 4% 11%
FY18 Effjcient capital structure
AUK fmexible banking facility
LTV
Interest cover
Interest cover
LTV Major transactions and activities:
February 2017 Capital Markets Day
targets
April 2017 Removed all JV cross ownerships with Redefjne Properties December 2017 Name change to RDI REIT P.L.C. January 2018 Established OSIT strategic partnership Disposal of Leopard portfolio
December 2017
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Relentless focus to deliver superior, sustainable and growing income
yield on NAV (UK REIT average 4.2%)
(8.4 years to expiry)
with longevity of income supported by experienced and aligned operational partners and strong occupier demand
current portfolio net initial yield
most liquid real estate markets:
for 21.5% of rent
dividend
target underlying EPS growth of 3% – 5% p.a. Index inclusion: Superior income Sustainable income Growing income
Strong income characteristics
Primary listing LSE: RDI Secondary listing JSE: RPL
£1.62bn income focused portfolio
By sector:
Other retail Retail parks
11% 23% 30% 11% 4% 11% 10%
Shopping centres Hotels Office Serviced
Distribution G e r m a n y ( 1 2 % ) U K ( 1 8 % )
>35% >35% Corporate holding <30%
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RDI culture
strategic partners
RDI business model and income‑led strategic priorities
Income focused portfolio
limited volatility through the cycle
across sectors
portfolio
Effjcient capital structure
Scalable business
Financial discipline
into profjt
to improve accountability and clear linkage to management incentives
Superior income Sustainable income G r
i n g i n c
e
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Global need for predictable and recurring income
Asset backed income is relatively predictable
non-property income
REITs were designed to give investors effjcient access to commercial property income
Long‑term property total returns are largely driven by income
medium term and infmuenced by market sentiment
management will drive sustainable capital growth
The composition of historic UK property total returns
Opportunity for a liquid and scalable REIT delivering a yield of >5.0% on NAV
30 years
73%
20 years
74%
10 years
140%
5 years
65%
Capital return Income return
Source: MSCI Lazarus
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NOTE: WAULT and occupancy excludes RBH managed hotels portfolio and serviced offjce portfolio. Relevant operational metrics disclosed separately. Weighted % of Annualised EPRA average EPRA portfolio by Market gross rental topped Reversionary lease length
% As at 31 August 2018 market value Properties Area (m2) value (£m) income (£m) ERV (£m) EPRA NIY up yield yield (years) (by ERV) Indexed UK Commercial Offjces – Serviced 10 4 15,473 163.4 11.0 10.9 6.0 6.0 6.0 n/a n/a — Offjces – greater London 7 4 14,938 113.3 5.1 5.9 4.0 4.0 4.8 3.6 96.7 13.3 Offjces – regional 4 9 28,091 60.7 4.4 4.5 5.8 6.6 7.0 5.1 95.5 22.0 UK Offjces 21 17 58,502 337.4 20.5 21.3 5.3 5.4 5.8 4.3 96.2 8.1 Distribution & industrial 8 3 94,754 134.7 6.4 7.9 4.4 4.4 5.5 4.2 100.0 3.1 Automotive 3 35 17,358 43.8 2.8 2.3 6.2 6.2 4.9 11.3 100.0 100.0 UK Commercial 32 55 170,614 515.9 29.7 31.5 5.1 5.2 5.6 5.3 98.1 16.0 UK Retail Shopping centres 18 6 158,295 290.9 26.1 25.8 6.9 7.3 8.1 7.7 96.4 25.8 Retail parks 11 6 60,742 184.8 12.0 11.9 5.7 5.9 6.0 8.2 94.7 10.2 Other retail — 1 4,790 5.3 0.6 0.4 5.9 9.0 7.6 3.9 100.0 — UK Retail 29 13 223,827 481.0 38.7 38.1 6.4 6.8 7.3 7.8 95.9 20.6 UK Hotels Greater London 12 7 29,426 186.5 12.5 12.5 5.7 5.7 6.3 n/a n/a — Regional 8 6 31,392 130.9 11.0 10.9 6.6 6.6 7.0 n/a n/a 0.9 RBH managed portfolio 20 13 60,818 317.4 23.5 23.4 6.1 6.1 6.6 n/a n/a 0.4 Travelodge 3 5 16,573 47.5 2.5 2.6 4.8 4.8 5.1 18.2 100.0 95.3 UK Hotels 23 18 77,391 364.9 26.0 26.0 5.9 5.9 6.4 18.2 100.0 9.3 Total UK 84 86 471,832 1,361.8 94.4 95.6 5.8 6.0 6.4 7.5 96.8 16.0 Europe German shopping centres 12 3 45,834 190.6 10.5 10.4 3.9 4.6 5.1 5.0 98.7 94.9 German retail parks and other 4 11 52,016 68.0 4.7 4.8 5.7 5.7 6.6 5.2 96.6 95.4 Total Europe 16 14 97,850 258.6 15.2 15.2 4.4 4.9 5.5 5.0 98.0 95.1 Total 100 100 569,682 1,620.4 109.6 110.8 5.6 5.8 6.3 7.0 97.1 27.0 Ownership breakdown: Wholly owned (at 100%) 64 68 430,953 1,035.1 68.3 69.5 5.3 5.7 6.2 7.0 96.9 34.8 Assets with minority holdings (accounted for at 100%) 34 28 125,311 559.9 39.4 39.5 6.0 6.0 6.3 7.5 98.2 12.3 Held in joint ventures (proportionate %) 2 4 13,418 25.4 1.8 1.8 6.4 6.4 6.7 5.5 100.0 52.9
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Earliest of lease break/expiry profjle
Annualised gross rental As at 31 August 2018 (£m) income FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27+
UK Commercial 19.1 1.7 2.3 2.5 1.7 3.9 1.4 0.6 1.0 0.3 3.7 UK Retail 38.7 3.9(1) 1.8 2.3 6.4 2.6 1.3 3.0 1.7 3.9 11.8 UK Hotels 2.5 — — — — — — — — — 2.5 Total UK 60.3 5.6 4.1 4.8 8.1 6.5 2.7 3.6 2.7 4.2 18.0 Germany 15.2 0.4 2.9 0.9 1.7 2.7 2.4 0.9 0.3 0.8 2.2 Total (excl. RBH managed hotels and London serviced offjces) 75.5 6.0 7.0 5.7 9.8 9.2 5.1 4.5 3.0 5.0 20.2 Defensive serviced income RBH managed hotels 23.5 London serviced offjces (fmexible space only) 10.6 Total 109.6 (1) Includes £1.9m recurring commercialisation income.
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Top 20 properties make up >60% of total portfolio
% of EPRA Weighted EPRA portfolio by Ownership topped Reversionary average
% As at 31 August 2018 market value % Area (m2) EPRA NIY up yield yield lease length (by ERV) Indexed
Berlin, Schloss-Strassen Center 5.2 100.0 18,581 4.2 4.2 4.9 5.1 97.1 91.0 Northampton, Weston Favell 4.8 100.0 30,757 6.8 7.4 8.0 7.4 94.4 53.9 Hamburg, Bahnhof Altona 4.6 100.0 15,042 4.8 4.8 5.2 3.5 99.8 97.8 Crawley, Camino Park Distribution Centre 4.5 100.0 33,171 3.5 3.5 5.2 4.7 100.0 7.1 London, Harrow, St Georges 4.3 100.0 20,133 5.7 5.8 6.3 3.4 98.6 4.0 Wigan, Grand Arcade 4.3 100.0 41,487 7.7 8.0 8.4 8.1 97.5 36.8 London, Monument, St Dunstans 4.1 80.0 5,428 6.1 6.1 6.0 n/a n/a — London, Charing Cross Road 3.6 100.0 3,716 3.2 3.2 3.9 4.4 100.0 33.7 Banbury, Banbury Cross Retail Park 3.1 100.0 16,610 5.0 5.5 6.6 6.8 82.5 13.4 London, Watford, The Arches Retail Park 3.1 100.0 11,599 6.0 6.0 5.3 9.0 100.0 — Top 10 properties 41.6 Bridgwater, Express Park Distribution Centre 3.0 100.0 47,207 5.4 5.4 6.0 3.3 100.0 — London, Southwark Holiday Inn Express 2.9 82.5 3,936 5.0 5.0 5.3 n/a n/a — Edinburgh, DoubleTree Hilton 2.7 82.5 7,250 6.1 6.1 6.2 n/a n/a 3.3 London, Merton, Priory Retail Park 2.2 100.0 6,255 5.0 5.0 5.1 8.7 100.0 — London, Liverpool Street, New Broad Street 2.1 80.0 3,291 5.4 5.4 5.3 n/a n/a — London, Earl's Court Holiday Inn Express 2.0 82.5 2,781 5.9 5.9 6.3 n/a n/a — London, St Paul's, Little Britain 2.0 80.0 3,429 5.3 5.3 5.6 n/a n/a — Ingolstadt, City Arcaden 2.0 100.0 12,211 1.1 5.0 5.1 8.2 100.0 97.5 London, Limehouse Holiday Inn Express 1.9 82.5 5,747 5.6 5.6 6.1 n/a n/a — London, Waterloo, Boundary Row 1.9 80.0 3,326 7.2 7.2 7.1 n/a n/a — Top 20 properties 64.3
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Annualised gross rental FY19 FY20 FY21 FY22 FY23 As at 31 August 2018 income (£m) (%) (%) (%) (%) (%)
UK Commercial Offjces – serviced(1) 11.0 96.7 96.7 98.7 98.0 96.7 Offjces – greater London 5.1 — — 10.2 9.2 25.9 Offjces – regional 4.4 29.8 29.4 6.3 16.2 30.0 UK Offjces 20.5 6.5 6.4 5.0 6.5 12.9 Distribution & industrial 6.4 35.0 16.1 24.0 16.4 — Automotive 2.8 47.0 25.5 18.3 — 7.8 UK Commercial 29.7 11.0 10.3 10.4 8.0 9.7 UK Retail UK Shopping centres 26.1 5.1 6.4 8.4 18.9 20.3 UK Retail parks 12.0 11.9 21.6 8.9 32.8 13.2 UK Other retail 0.6 — — — — 35.8 UK Retail 38.7 7.1 11.0 8.4 22.9 18.3 UK Hotels RBH managed portfolio 23.5 99.9 99.9 99.9 100.0 99.9 Travelodge 2.4 11.4 45.4 10.2 28.4 — UK Hotels 26.0 91.6 94.8 91.5 93.6 90.5 Total UK 94.4 6.6 8.8 6.0 12.7 10.6 Germany Shopping centres 10.5 13.4 17.2 9.2 15.1 6.5 Retail parks and other 4.7 6.4 5.4 5.0 5.0 3.7 Germany 15.2 11.2 13.6 7.9 12.0 5.7 Total 109.6 7.3 9.6 7.1 12.6 9.9
(1) Assuming all fmexible leases are on 12 month licence agreements.
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Principal debt Cost of Principal debt (proportionate) debt As at 31 August 2018 Lender Currency £m £m Maturity (%) AUK HSBC, RBS, Barclays, Santander GBP 228.0 228.0 Sep 2020 2.8 AUK facility 228.0 228.0 Serviced offjce portfolio Barclays, Deutsche Bank GBP 72.8 72.8 Dec 2019-Aug 2022 3.1 26 Esplanade Lloyds Bank GBP 17.0 8.5 Dec 2022 6.1 UK Offjces 89.8 81.3 Kwik Fit portfolio Aviva GBP 9.8 9.8 Jun 2029 6.4 UK Automotive 9.8 9.8 Aviva UK shopping centre Aviva GBP 145.1 145.1 Apr 2042 5.5 St George’s, Harrow Berlin Hyp GBP 37.2 37.2 Apr 2021 2.9 West Orchards, Coventry Santander GBP 11.2 11.2 Nov 2021 4.2 UK Retail 193.5 193.5 RBH Hotels portfolio Aareal Bank GBP 113.4 113.4 Nov 2021 3.0 IHL Portfolio Santander GBP 51.7 51.7 Jul 2020-Dec 2021 3.3 UK Hotels 165.1 165.1 Europe Bahnhof Altona, Hamburg HSH Nordbank Euro 40.4 40.4 Feb 2024 2.7 Schloss-Strassen Center, Berlin HSH Nordbank Euro 55.6 55.6 Mar 2021 1.9 German shopping centres 96.0 96.0 Premium Portfolio Munchener Euro 11.8 11.8 Feb 2020 1.3 OBI Portfolio BayernLB Euro 12.4 12.4 Dec 2022 1.6 Bremen/Lindenhofg BayernLB Euro 3.1 3.1 Sep 2019 2.0 Waldkraiburg BayernLB Euro 4.3 2.2 Jun 2024 1.7 Kaiserslautern BayernLB Euro 3.4 1.8 Jun 2024 1.7 Hückelhoven BayernLB Euro 6.1 3.2 Jun 2024 1.7 German supermarkets and retail parks 41.1 34.5 Total 823.3 808.2
2018 full year results presentation
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Underlying Company earnings IFRS proportionately consolidated EPRA adjustments specifjc adjustments proportionately For the year ended 31 August 2018 Group JVs Total Group JVs consolidated Group JVs consolidated
Rental income 110.2 1.8 112.0 — — 112.0 — — 112.0 Rental expense (11.1) (0.2) (11.3) — — (11.3) — — (11.2) Net rental income 99.1 1.6 100.7 — — 100.7 — — 100.7 Other income 1.8 — 1.8 — — 1.8 — — 1.8 Administrative costs and other fees (14.2) (0.2) (14.4) — — (14.4) — — (14.4) Net operating income 86.7 1.4 88.1 — — 88.1 — — 88.1 Gain on revaluation of investment property 10.8 (0.2) 10.6 (10.8) 0.2 — — — — Gain on revaluation of investment property held for sale 0.9 — 0.9 (0.9) — — — — — Gain on disposal of investment property 1.5 — 1.5 (1.5) — — — — — Gain on disposal of investment property held for sale 1.8 — 1.8 (1.8) — — — — — Net gain on disposal of subsidiary 15.4 — 15.4 (15.4) — — — — — Net gain on acquisition of subsidiaries 4.4 — 4.4 (4.4) — — — — — Other income and expense (0.4) — (0.4) 0.4 — — — — — Foreign exchange loss (0.8) — (0.8) — — (0.8) 0.8 — — Profjt from operations 120.3 1.2 121.5 (34.4) 0.2 87.3 0.8 — 88.1 Net fjnance costs (28.7) (1.1) (29.8) — — (29.8) 0.8 — (29.0) Other fjnance expense (0.6) — (0.6) 0.4 — (0.2) — — (0.2) Change in fair value of derivative fjnancial instruments 6.1 0.7 6.8 (6.1) (0.7) — — — — 97.1 0.8 97.9 (40.1) (0.5) (57.3) 1.6 — 58.9 Net loss on sale of joint venture interests (0.1) — (0.1) 0.1 — — — — — Net impairment reversal of joint ventures and associate interests 0.1 — 0.1 (0.1) — — — — — Share of post-tax profjt from associate 0.3 — 0.3 — — 0.3 — — 0.3 Movement in losses restricted in joint venture — (0.6) (0.6) — 0.3 (0.3) — — (0.3) Profjt before tax 97.4 0.2 97.6 (40.1) (0.2) 57.3 1.6 — 58.9 Taxation (1.1) (0.2) (1.3) 0.1 0.2 (1.0) — — (1.0) Profjt for the year 96.3 — 96.3 (40.0) — 56.3 1.6 — 57.9 Non-controlling interests (7.4) — (7.4) 3.0 — (4.4) — — (4.4) Profjt attributable to equity holders 88.9 — 88.9 (37.0) — 51.9 1.6 — 53.5 Weighted average number of shares (millions) 1,886.5 1,886.5 1,886.5 Diluted weighted average number of shares (millions) 1,892.3 1,892.3 1,892.3 Earnings per share (pence) 4.7 2.75 2.84
EPRA earnings proportionately
2018 full year results presentation
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Europe (several individually NCI share of earnings for the year ended 31 August 2018 Serviced offjces IHL RHHL immaterial NCI) Total NCI Principal place of business United Kingdom United Kingdom United Kingdom Germany Country of incorporation Isle of Man BVI BVI Various NCI % 20.0% 25.9% 17.52% Summarised statement of comprehensive income £m £m £m £m £m
Rental income 2.0 2.4 2.6 0.7 7.7 Rental expense (0.7) (0.4) — (0.1) (1.2) Net rental income 1.3 2.0 2.6 0.6 6.5 Other income 0.2 — — — 0.2 Administrative expenses (0.2) (0.3) — — (0.5) Net operating income 1.3 1.7 2.6 0.6 6.2 Net fjnance costs (0.3) (0.4) (0.6) (0.1) (1.4) Profjt before tax 1.0 1.3 2.0 0.5 4.8 Tax — — — — — Profjt before and after tax 1.0 1.3 2.0 0.5 4.8 Shareholder loan interest (eliminates at RDI Group level) — — — (0.4) (0.4) Underlying earnings 1.0 1.3 2.0 0.1 4.4 Change in fair value of derivatives — 0.3 — — 0.3 Gain/(loss) on revaluation of investment property 0.3 0.3 0.9 (0.1) 1.4 Gain on disposal of subsidiaries — — — 1.2 1.2 Deferred tax — — — (0.1) (0.1) Shareholder loan interest (eliminates at RDI Group level) — — — 0.2 0.2 Non‑underlying earnings 0.3 0.6 0.9 1.2 3.0 Total earnings 1.3 1.9 2.9 1.3 7.4
2018 full year results presentation
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for the year ended 31 August 2018
Serviced offjces Rest of portfolio Group total Year ended Year ended Year ended 31 August 31 August 31 August 2018 2018 2018 Continuing operations £m £m £m
Revenue 10.8 101.2 112.0 Rental income 9.8 100.4 110.2 Rental expense (3.3) (7.8) (11.1) Net rental income 6.5 92.6 99.1 Other income 1.0 0.8 1.8 Administrative costs and other fees (1.0) (13.2) (14.2) Net operating income(¹) 6.5 80.2 86.7 Gain on revaluation of investment property 1.6 9.2 10.8 Other gains and losses from operations — 22.8 22.8 Profjt from operations 8.1 112.2 120.3 Net fjnance expense (1.4) (27.9) (29.3) Change in fair value of derivative fjnancial instruments (0.1) 6.2 6.1 6.6 90.5 97.1 Equity accounted profjts — 0.3 0.3 Profjt before tax 6.6 90.8 97.4 Taxation — (1.1) (1.1) Profjt for the year 6.6 89.7 96.3 Profjt attributable to: Equity holders of the Parent 5.3 83.6 88.9 Non-controlling interests 1.3 6.1 7.4 6.6 89.7 96.3 (1) Net operating income of serviced offjce portfolio equates to EBITDA of the trading business (£10.3m annualised).
2018 full year results presentation
Mike Watters
Chief Executive Offjcer e: mwatters@rdireit.com
Stephen Oakenfull
Deputy Chief Executive Offjcer e: soakenfull@rdireit.com
Donald Grant
Chief Financial Offjcer e: dgrant@rdireit.com
Adrian Horsburgh
Property Director e: ahorsburgh@rdireit.com
Janine Ackermann
Head of Investor Relations e: jackermann@rdireit.com
RDI REIT P.L.C.
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