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(Alliance News) -Â NewRiver REIT PLC on Wednesday unveiled plans for a possible spin-off and listing of community pub chain Hawthorn.
Shares in the retail and leisure property investor were up 3.4% at 106.93 pence in London in early trade.
The firm said it ended the financial year with GBP198 million in cash and undrawn revolving credit facilities, increased from GBP127 million at the end of March 2020.
"Our independent valuers are now concluding their work on valuing our property portfolio as at 31 March 2021. The indicative outcome of this exercise is that our valuation decline in the second half of FY21 will be less than that reported in the first half. Retail parks have returned to positive capital growth, our pub and regeneration portfolios have experienced only modest capital declines and our core shopping centre and work out portfolios have seen an improvement in H2 compared to H1," NewRiver said.
After a review, NewRiver said it has decided to divest the community pub business in order to reset its loan-to-value ratio and provide "firepower" to reshape its portfolio. This includes a potential initial public offering of Hawthorn.
The board has agreed that Mark Davies will lead the potential IPO, having been chief executive of Hawthorn since 2019 and NewRiver's chief financial officer since IPO in 2009. Subject to the transaction completing, it is planned that Will Hobman, who has been NewRiver's finance director for 18 months and with the company for five years, will be appointed the group's CFO.
NewRiver acquired Hawthorn from an affiliate of Avenue Capital Group for an enterprise value of GBP106.8 million back in 2018.
It added on Wednesday that it has decided to sell non-core retail assets and recycle the resultant capital into "resilient retail", and transform its regeneration assets.
"By 2025 our clear strategic aim is that assets in our portfolio will display only the characteristics of resilient retail and we believe that the collective measures outlined above will transform NewRiver into a more agile business committed to delivering attractive returns to shareholders," the company said.
NewRiver is confident that the business will emerge from the pandemic in a stronger position to tackle challenges and capitalise on opportunities.
By Lucy Heming;Â lucyheming@alliancenews.com
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