Last checked at 
LONDON (Alliance News) - NewRiver REIT PLC said Thursday profits jumped on increased net assets as it announced the purchase of a pub managers Hawthorn Leisure Holdings Ltd, a deal for which it had previously confirmed it was in discussions.
For the year ending March, the property investor said the value of its net assets increased 30% to GBP892.4 million from GBP684.5 million the year before. Profit after tax increased 26% to GBP45.7 million from GBP36.2 million.
The company's funds from operations increased 4% to GBP60.3 million from GBP58.2 million.
The rise in net assets was predominantly due to the company's GBP225 million equity raise in July of 2017. And the profit hike was due to the "disposal of investment properties and the revaluation of derivatives".
Its net asset value per share was flat on the last year at 292 pence. NewRiver blamed the "negative sentiment" towards the UK retail sector for the lack of growth.
NewRiver said it has acquired Hawthorn Leisure from an affiliate of Avenue Capital Group for an enterprise value of GBP106.8 million. NewRiver had on Monday confirmed a report in The Times on Saturday that it was in talks to buy Hawthorn.
The purchase represents a net initial yield based on the value of the pub portfolio of 13.6%.
According to the retail property investor, Hawthorn's 298 pub portfolio is "geographically complementary" to NewRiver's existing portfolio.
NewRiver said the purchase is "absolutely aligned" with its strategy. For the year ending 2017, Hawthorn generated adjusted earnings before interest, tax, depreciation and amortisation of GBP9.9 million. Hawthorn's total assets stood at GBP153.0 million at the end of the year.
Looking ahead, NewRiver expects the recent headwinds experienced in the retail market will continue. In particular, the department store, mid-market fashion and casual dining sub-sectors will come under "significant structural pressure".
Despite this the FTSE 250-listed company says it remains well-positioned due to its occupiers providing "consumers with value for money on essential goods and services" which are "underpinned by affordable rents and robust footfall".
Chief Executive Allan Lockhart said: "This has been another year of growth for NewRiver, in which the foundations we have put in place through our actions in the equity and debt capital markets, our balance sheet capacity and continued focus on the most sustainable segments of the UK retail market, characterised by frequent spend on everyday essentials, have positioned us well for growth.
"Our proven business model has continued to perform despite the challenging headwinds affecting the wider UK retail sector. With our convenience and community focus, we continue to generate growing and sustainable cash returns for shareholders, and as a result we have increased our fully covered full year ordinary dividend by 5% to 21.0 pence per share. Looking ahead, the strength of our underlying cash flows, and our well-advanced acquisition pipeline, including the acquisition of Hawthorn Leisure announced this morning, give us the confidence to increase our dividend for the first quarter of the new financial year by 3%."
Shares in NewRiver were trading down 0.9% Thursday morning at 286.00 pence each.
