NewRiver Regulatory News (NRR)

NewRiver REIT plc Half Year Results

17 November 2016

Focused strategy delivering secure and sustainable cash returns

David Lockhart, Chief Executive commented: "I am pleased to report that NewRiver has again produced growing cash profits from its high quality and defensively positioned portfolio. We have a proven track record of generating secure income returns and delivering a growing dividend to our shareholders, and this half has been no exception with the dividend per share up by over 11%. We completed our move to the Main Market in August, only seven years after the Company was founded, with FTSE All Share and EPRA index qualification in December our next target. Following the EU Referendum, our operational metrics remain strong and we have continued to see good levels of demand across the portfolio. The Brexit vote has impacted the investment market but created some good buying opportunities for us in the short term as demonstrated by our recent retail warehouse acquisition in Sheffield from an open-ended property fund.

Looking ahead, while uncertainty remains, with the convenience-led profile of our portfolio, affordable rents, conservative balance sheet and risk controlled development pipeline, our proven business model is well equipped to continue to deliver secure and sustainable cash returns to our shareholders."

Focused strategy of delivering secure and sustainable cash returns paying dividends

· Funds From Operations1 ('FFO') up 24% to £24.5 million (Sep 2015: £19.7 million)

· FFO per share of 10.5 pence (Sep 2015: 13.2 pence); prior period included promote receipts from Bravo JV of 2.8 pence per share

· Fully covered first half dividend per share increased by 11% to 10.0 pence2 (Sep 2015: 9.0 pence)

· Third quarter dividend announced today of 5.0 pence per share (FY16: 4.75 pence)

· EPRA NAV per share down 1.7% to 290 pence (Mar 2016: 295 pence); after absorbing acquisition costs, 1.0% valuation deficit and one off Main Market move costs

· IFRS PBT of £11.6 million (Sep 15: £42.2 million) including an £11.4 million non-cash reduction in portfolio valuation

· Total shareholder return +2.7% vs EPRA/NAREIT UK Index down 2.2%; total accounting return +1.6%

Successfully deployed equity into £158 million of strategic acquisitions

· Assets under management increased by 14% to £1.3 billion (Mar 2016: £1.1 billion); NRR share £1.1 billion

· Acquisitions totalling £158.4 million, average equivalent yield of 7.2%

· £120.3 million acquisition of Broadway Shopping Centre and Retail Park in Bexleyheath, South East London, blended equivalent yield of 7.0%

· £20.2 million acquisition of Cuckoo Bridge Retail Park, Dumfries, equivalent yield 7.9%

· £17.9 million acquisition of a retail warehouse in Sheffield from open-ended property fund, equivalent yield 7.6%; exchanged contracts with the current occupier for NRR to accept up to a £12 million surrender premium

Creating sustainable income through active asset management and affordable rents

· 178 leasing events; long term deals on average up 0.9% vs ERV with an average lease length of 10.1 years

· High occupancy of 96% (Mar 2016: 96%); maintained above 94% since IPO seven years ago

· Affordable average retail rent of £12.69 per sq ft (Mar 2016: £12.14 per sq ft)

· Footfall across the shopping centre portfolio of 74 million in H1; on a like-for-like basis -0.2% vs Sep 2015 but outperforming the UK benchmark by 180bps; post EU Referendum +1.1% on a like-for-like basis

· Ahead of 2017 rates revaluation, draft rateable values across the portfolio in England & Wales will fall by more than 20% benefitting retailers greatly and reducing cost ratios further

Generating secure long-term income through risk-controlled developments

· Progressing 1.6 million sq ft development pipeline; 67,300 sq ft completed in period; 24,800 sq ft on-site

· Further six convenience stores handed over to Co-operative taking total number to nine, securing annual rent of £0.6 million; under construction and consented schemes will add a further £1.5 million of annual rent

· Planning granted on 159,600 sq ft; includes 62,000 sq ft at Canvey Island Retail Park, already over 50% pre-let

· 367,400 sq ft of planning applications submitted; includes 236,000 sq ft mixed-use regeneration in Cowley, Oxford

Conservative gearing and low cost of debt3

· Loan to value of 38% (Mar 2016: 27%) increased due to acquisitions in the period but well within stated policy

· Cost of debt reduced to 3.65% (Mar 2016: 3.70%); seeing scale benefits in recent lower cost facilities

· Interest cover remains a strong metric for the Company at 4.3x (Mar 2016: 4.3x)

Achieved key milestone with move to Main Market

· Completed move from AIM to a Premium Listing on the Main Market of the London Stock Exchange

· Currently meet the requirements for inclusion in FTSE ALL Share, and EPRA/NAREIT UK indices in December 2016

Notes:

1. The Company has previously referred to FFO as EPRA adjusted earnings.

2. Includes two quarterly payments of 5.0 pence each

3. All debt metrics presented on a proportionally consolidated basis

Financial Statistics

Notes:

* Unless otherwise stated all figures are proportionally consolidated.

(1) Funds From Operations ('FFO') is a Company measure determined by cash profits which includes realised recurring cash profits plus realised cash profits on the sale of properties above valuation and excludes other one off or non-cash adjustments as set out in Note 6. This is a true cash profit earned by the Company during the year and the basis for dividend payments and cover. Prior period included promote receipts from Bravo JV of £4.2 million or 2.8 pence per share

(2) Interest cover is tested at property level and is the basis for banking covenants. It is calculated by comparing actual net rental income received versus cash interest payable.

(3) Total Accounting Return equals NAV per share growth plus dividends paid in the period.

(4) Facilities are secured directly against properties and are shown in the table on a look-through basis to include the Company's share of joint venture debt.

(5) Loan to value measures the value of properties compared to the secured debt facilities, net of cash balances.

For further information

NewRiver REIT plc +44 (0)20 3328 5800

David Lockhart (Chief Executive)

Mark Davies (Chief Financial Officer)

Allan Lockhart (Property Director)

Will Hobman (Head of Investor Relations)

Bell Pottinger +44 (0)20 3772 2500

David Rydell

David Bass

James Newman

Eve Kirmatzis

This announcement contains inside information as defined in Article 7 of the EU Market Abuse Regulation No 596/2014 and has been announced in accordance with the Company's obligations under Article 17 of that Regulation.

Results presentation

The results presentation will be held at 10.45am today at the offices of Eversheds LLP, 1 Wood St, London EC2V 7WS.

A live audio webcast will be available at: http://view-w.tv/965-1325-17489/en

A recording of this webcast will be available on the same link after the presentation, and on the Company's website (http://www.nrr.co.uk/investor-center) later in the day.

Results video

A short video overview of the financial results from Mark Davies, CFO, can be found at: http://www.nrr.co.uk/investor-center

About NewRiver

NewRiver REIT plc (ticker: NRR) is a premium listed REIT on the London Stock Exchange. The Company is a specialist real estate investor, asset manager and developer focused solely on the UK retail and leisure sector.

Founded in 2009, NewRiver is one of the UK's largest owner/managers of convenience-led shopping centres with assets under management of £1.3 billion principally comprising 33 UK wide shopping centres together with further nationwide retail and leisure assets. The portfolio totals over 8 million sq. ft. with over 2,000 occupiers, an annual footfall of 150 million and a retail occupancy rate of 96 per cent.

Visit nrr.co.uk for further information.

Forward-looking statements

The information in this announcement may include forward-looking statements, which are based on current projections about future events. These forward-looking statements reflect the directors' beliefs and expectations and are subject to risks, uncertainties and assumptions about NewRiver REIT plc (the "Company"), including, amongst other things, the development of its business, trends in its operating industry, returns on investment and future capital expenditure and acquisitions, that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statements.

None of the future projections, expectations, estimates or prospects in this announcement should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the document. As a result, you are cautioned not to place reliance on such forward looking statements as a prediction of actual results or otherwise. The information and opinions contained in this announcement are provided as at the date of this document and are subject to change without notice. No one undertakes to update publicly or revise any such forward looking statements. No statement in this document is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company.

Chief Executive's review

The first half of the financial year has been another busy period for NewRiver. In an environment of increased uncertainty in the UK, we remained focused on creating sustainable income across our convenience-led portfolio through disciplined stock selection, active asset management and risk-controlled development. We completed our largest single acquisition to date, applied our asset management skills to create sustainable income across the portfolio, progressed our risk-controlled development pipeline, completed our move to the Main Market and delivered a fully covered, growing dividend to our shareholders.

Our Funds From Operations ('FFO') of £24.5 million were up 24% compared to the same period last year due to acquisitions made in the last 12 months and our active asset management. FFO per share was down 20% to 10.5 pence, due to promote income received in the prior period. The Board approved two quarterly dividend payments of 5.0 pence per share resulting in a fully covered interim dividend of 10.0 pence per share, up 11% compared to the same period last year. We have also announced a third quarter dividend of 5.0 pence per share, further demonstrating our proven ability to deliver secure and sustainable cash returns. Our assets under management now stand at £1.3 billion, £1.1 billion at NewRiver's share, with our EPRA net asset value per share down 5 pence to 290 pence reflecting the absorption of acquisition and Main Market move costs as well as a small 1% reduction in portfolio valuation. Our total accounting return for the period was 1.6%.

We continued to sign leases ahead of valuers' estimates, with 178 new lettings and renewals completed on terms 0.9% ahead of ERV. Our operational metrics remain robust, with occupancy unchanged from March 2016 at 96%. In fact, since NewRiver was founded in September 2009, occupancy has always been above 94%. Occupier retention remains high at 86%, and our rents are affordable at £12.69 psf on average. The combination of our high occupancy, high retention and low average rents shows us that retailers are trading profitably at our centres, underpinning the sustainability of our income.

We completed acquisitions totalling £158 million at an equivalent yield of 7.2%. We started the period by completing our largest acquisition to date, buying the Broadway Shopping Centre and Broadway Square Retail Park in Bexleyheath, South East London, for £120 million at a blended equivalent yield of 7%. We have been active in the six months since acquisition, improving rental tone in the shopping centre and working in partnership with the London Borough of Bexley to design a masterplan for the shopping centre, retail park and surrounding council owned land.

We remained active in the investment market throughout the period, completing the acquisition of Cuckoo Bridge Retail Park in Dumfries in June off-market for £20 million, and a retail warehouse in Sheffield in September for £18 million. We moved quickly to acquire the Sheffield asset from an open-ended property fund and it is a great example of a NewRiver deal. As we completed the Sheffield acquisition we exchanged contracts with the current occupier, a bulky goods retailer, to accept a surrender premium of up to £12.25 million which must be exercised by May 2017. In essence, this means that we have acquired a 110,000 sq ft prominently located retail warehouse for less than £6 million, well below replacement cost. We plan to sub-divide and re-position the asset and we are in discussions with a number of retailers interested in taking the space.

We made good progress in the period implementing active asset management initiatives at those assets acquired in the last 12 months. We purchased the Neptune Portfolio, consisting of 3 shopping centres in Darlington, Wakefield and Cardiff, in January 2016 for £92 million. Pre-acquisition we identified that at the Ridings Centre, Wakefield, there was an opportunity to significantly increase net rental income. We have made good progress since acquisition, commencing phase one of works costing £1.2 million which we aim to complete in the second half of the current financial year and which we believe will increase net rent. We are also in pre-planning for a major 147,000 sq ft retail and leisure re-development at the Capitol Shopping Centre in Cardiff, which will include almost 180 apartments in the air space above the centre.

Our 1.6 million sq ft risk-controlled development pipeline has also moved forward since the year end. At our 465,000 sq ft regeneration scheme in Burgess Hill, we have exchanged contracts with Cineworld for a 10 screen multiplex cinema, meaning that the retail & leisure element of the scheme is now 41% pre-let with a further 22% in solicitors' hands. Post period end, we received planning consent at Canvey Island for a 62,000 sq ft retail park which is already 52% pre-let, with a further 23% in solicitors' hands. In November, we submitted the planning application for our exciting 236,000 sq ft mixed-use regeneration in Cowley, Oxford. Our current development commitment is modest, with 24,800 sq ft under construction, and our risk-controlled approach to development means we will not commit to further developments without substantial pre-letting.

The convenience store programme within the pub portfolio continued to progress, and we handed over a further six C-stores to the Co-operative in the period taking the total number completed to date to nine and adding £0.6 million to our rent roll. We are on site for the construction of a further two totalling 6,500 sq ft and we have consent to construct a further 25 totalling 85,400 sq ft.

Our LTV was 38% at 30 September, up from 27% at March 2016 predominantly due to the acquisition of our assets in Bexleyheath which completed in April. Our interest cover remained robust at 4.3x and our weighted average cost of debt was 3.65%, down from 3.70% in March 2016.

We completed our move from AIM to a Premium Listing on the Main Market in August marking a significant milestone for NewRiver, only seven years following our £25 million IPO. We are excited to have entered the next ambitious phase in the Company's development, and we currently meet the requirements for inclusion in the FTSE All Share and EPRA indices in December 2016.

Post the EU Referendum, operationally it has been business as usual for NewRiver. Our key metrics remain robust and the business has performed well, with retailers continuing to take space and footfall up 1.1% on a like-for-like basis across our centres. The investment market has been impacted, but we remained selectively active and moved quickly to take advantage of the short window of opportunity created by open-ended fund redemptions in August.

Outlook

Looking ahead, the UK economy looks set for a prolonged period of uncertainty, with the exact timing and structure of Brexit not yet clear. In this environment, retailer profit margins will continue to face pressure, with increasing import costs due to weakening sterling and the introduction of the National Living Wage both negatives for the sector. However, our portfolio is well positioned towards convenience and non-discretionary spend and will be further supported by the 2017 business rates revaluation, with our draft rateable values showing that across our portfolio in England and Wales rateable values will fall by over 20%, with almost 75% of our occupiers benefitting from this.

We founded the Company in 2009 during a severe recession, and since then we have consistently created value for our shareholders through our proven business model, focusing on the non-discretionary convenience-led retail & leisure sector where the UK household budget is spent day in, day out. We believe that with our convenience-led specialism, strong operational metrics, affordable rents and conservative balance sheet we are well-positioned to continue to deliver secure and sustainable cash returns to our shareholders.

David Lockhart

Chief Executive

17 November 2016

Operating review

Highlights

· Assets under management increased by 14% to £1.3 billion (NRR share £1.1 billion)

· Capital return -1.0%

· Ungeared total property return +2.6%, outperforming the IPD All Retail benchmark by 310 bps

· £158.4 million of acquisitions at an average equivalent yield of 7.2%

· £5.6m of disposals 5% ahead of valuation

· 178 total leasing events; average new long term leasing events 0.9% ahead of ERV

· Strong occupancy sustained at 96%; maintained above 94% since NRR was founded in 2009

· Like-for-like footfall -0.2% vs H1 2016 outperforming benchmark by 180bps; post EU Referendum +1.1% as consumers continue to buy non-discretionary items

· Six further convenience stores handed over to Co-operative taking total to nine, securing £0.6 million of rent

· Planning granted on 159,600 sq ft including Canvey Island Retail Park

· 367,400 sq ft of planning applications submitted, including 236,000 sq ft mixed-use regeneration in Cowley, Oxford

Portfolio overview

During the period, assets under management increased from £0.97 billion in March 2016 to £1.13 billion in September. Acquisitions account for the majority of the movement, with like-for-like valuations remaining broadly flat. Including acquisition costs and capital expenditure incurred, capital return across the portfolio was down marginally by 1.0%. Our capital return compares favourably to the market, outperforming the IPD All Retail benchmark of -3.0% by 200 bps. Moreover, we delivered a Total Property Return of 2.6%, significantly outperforming the benchmark of -0.5% by 310 bps.

The equivalent yield across the portfolio now stands at 8.3%. On a like-for-like basis, equivalent yields have remained stable, with no more than 10 bps movement since March 2016 across all sectors of the portfolio. Taking account of acquisition and disposals, the equivalent yield on the Shopping Centre portfolio (which accounts for 61% of NewRiver's share of assets) has come in from 7.9% to 7.7% following the recent acquisition of Bexleyheath.

Acquisitions

We completed £158.4 million of strategic acquisitions in the period in three separate transactions, at an average equivalent yield of 7.2%.

Bexleyheath

Our most significant acquisition was in Bexleyheath, South East London, where in April we purchased both the Broadway Shopping Centre and the Broadway Square Retail Park for a total cost of £120.3 million at a blended equivalent yield of 7.0%. The acquisition was a rare opportunity to acquire high-quality retail assets in Greater London at an attractive price, approximately 95 basis points above the 15-year average IPD non-central London retail net initial yield of 5.75%. The assets were acquired from an institutional vendor, and the acquisition represented NewRiver's largest single asset acquisition to date and the Company's first significant asset in Greater London.

The Bexleyheath assets are 100% occupied, reflecting high demand from retailers and excellent growth credentials, and provide a balanced range of convenience, food and fashion retailers in-line with NewRiver's wider portfolio. In total, the assets comprise 525,000 sq ft of retail & leisure space across an eleven-acre site with an average lease length at acquisition of 12.7 years. Representing over 60% of the town's retail space, the assets provide the principal retail destination for a South East London borough earmarked for significant growth with attractive and sustained footfall of over 9 million. Bexleyheath has an affluent and growing population which will benefit from major regeneration and infrastructure projects including Thames Gateway, Europe's largest regeneration project, which will provide 160,000 new homes in the area, and direct access to Abbey Wood Crossrail station scheduled to open in 2018.

Dumfries

In June, we completed the acquisition of Cuckoo Bridge Retail Park, Dumfries, off-market for a total consideration of £20.2 million. The acquisition equated to a net initial yield of 7.05%, an equivalent yield of 7.87% and a reversionary yield of 7.93%, with net rental income of £1.5 million per annum and a weighted average lease expiry at acquisition of 8.3 years at purchase. Cuckoo Bridge is the dominant retail park in Dumfries, prominently located in close proximity to the A75. The asset has a strong catchment, is 100% occupied and comprises 130,000 sq ft of income generating space across seven retail units with 550 car park spaces. The asset benefits from prime positioning, adjacent to a 24 hour Tesco supermarket which provides the main food offer for the town. Anchored by Homebase, the retail park offers a mix of quality retailers including Dunelm, Poundstretcher, Laura Ashley, B&M, KFC and Costa Coffee.

Sheffield

In September, we moved swiftly to complete the acquisition of a retail warehouse in Sheffield from an open-ended property fund for £17.9 million, representing an equivalent yield of 7.6%. The property comprises a 110,000 sq ft retail warehouse unit and 580 car parking spaces, and is well located 2.5 miles east of Sheffield city centre and in close proximity to Meadowhall shopping centre. The asset is prominently located and highly visible being adjacent to the A6102 which forms part of the Sheffield inner ring road.

The asset presented an attractive value-creating opportunity for NewRiver with the unit currently let to a home improvement retailer no longer in occupation due to over representation in the area. As we completed the acquisition, we simultaneously exchanged contracts with the home improvement retailer to accept a surrender premium of up to £12.25 million to release them from their lease obligations. The timing of this premium is flexible, and excluding some restrictions in January 2017 we can exercise the premium at any time until the 4th May 2017, receiving rent from the retailer in the interim. Capitalising on seasonality a temporary let was secured with Royal Mail for the festive period, saving £0.3 million of holding costs, after which it is our intention to sub-divide, re-position and re-let the warehouse unit.

Disposals

We sold £5.6 million of property in the period, 5.4% ahead of March 2016 valuation.

Two retail warehouse disposals were completed in the period, both of which were acquired in July 2015 as part of the Ramsay portfolio purchase. At acquisition, the Ramsay portfolio included nine value-led retail parks and four development sites located adjacent to upper-quartile performing Morrison's foodstores. In August we sold a development site in Newquay for £700,000, and in September we sold Leafield Retail Park in Dumfries for £2.7 million. These disposals were completed marginally ahead of book value, and 33% ahead of the price paid in July 2015.

We made a number of disposals across our pub portfolio, comprising either pub sales to tenants or non-core sales of ancillary properties and land which we do not consider to be essential to the ongoing operational and strategic management of the assets. In total we sold four pubs for £2.1 million, a 7.6% premium to March 2016 valuation, and over a 40% premium to purchase price. We sold two plots of land adjacent to pubs, at the Royal Oak, Kings Bromley and the Ostrich Inn, Longford for £86,000. These plots were held at zero value, and so although small in size they demonstrate the incremental value we are able to extract from the pub portfolio.

We will continue to recycle mature assets, assets where we feel the forward looking returns are below acceptable levels and assets where we feel the risk profile has changed.

Asset management

Our active asset management is a key driver of long-term capital value and the generation of income returns to shareholders.

We continued to sign leases on terms ahead of valuers' estimates in the period, completing 178 new lettings and renewals with long term deals on terms 0.9% ahead of March 2016 ERV. Half of these leasing events were completed following the EU Referendum demonstrating the robust and attractive profile of the NewRiver portfolio. At 96%, our occupancy remained strong and in line with March 2016 and since the company was established in September 2009 during a severe recession, occupancy has never been below 94%.

Retailer retention remains high at 86%, demonstrating that the vast majority of our retailers want to remain in occupation at lease expiry. Our average rents remain affordable at £12.69 per sq ft, with the increase from £12.14 at March 2016 due predominantly to the assets purchased in Bexleyheath. The combination of high occupancy, high retention and affordable rents is important because it shows that retailers are trading profitably at our centres and therefore that our income is sustainable.

Footfall across the shopping centre portfolio totalled 74 million during the period, down 0.2% compared to the same period last year on a like-for-like basis but outperforming the national benchmark by 180 bps. Testimony to the robust positioning of the NewRiver portfolio, following the EU Referendum footfall was up 1.1% on a like-for-like basis, showing that consumers have continued to visit our conveniently located centres to buy non-discretionary items.

Although footfall was down marginally over the half on a like-for-like basis, at an asset level downward movements were often linked to ongoing development activity. For example, at the Abbey Centre, Newtownabbey, footfall was down 5% mainly due to the volume of ongoing development and enhancement works at the centre which we believe will drive future footfall. The works are well progressed, and we handed over a 44,000 sq ft flagship store to Next in August on schedule and within budget. Reflecting the impact of our actions, we saw ERV growth of over 4% in the period at the Abbey Centre.

At March 2016 we had exposure of 1% of total rent to BHS, spread across three centres. Ahead of the BHS administration, we advanced plans to secure alternative strategic occupiers and in the short time since the final BHS closure we have made good progress in re-letting these units. At the Abbey Centre, Newtownabbey, we have agreed a temporary letting of the former BHS unit to Dunnes Stores, the leading Irish department store operator, to allow them to continue to trade whilst we extend their current unit by 15,000 sq ft. We are in legal negotiations with a major flagship operator to secure a long term letting commencing at the end of the temporary Dunnes lease. At Priory Meadow, Hastings we have terms agreed with a major flagship retailer that we believe will be a major attraction to the centre. At the Burns Mall Shopping Centre, Kilmarnock, we are actively pursuing a subdivision and are in discussions with a range of retail and leisure operators.

At Bexleyheath, we have had an active six months since our acquisition of the Broadway Shopping Centre and the Broadway Square Retail Park. Both schemes are fully let, and we have seen significant interest from existing and new retailers which will create rental tension and allow us to improve rental tone. Following our recent lease renewal with Vodafone at £91,500 per annum we have increased the rental tone of the shopping centre by almost 5% within the first 6 months of ownership. A handful of lease renewals are currently in solicitors' hands at or above this level with national retailers cementing a sustainable upward trend of rental growth. Metro Bank successfully opened in July opening almost 500 new accounts in the first week of trading and we are working in partnership with the London Borough of Bexley to design a masterplan for the shopping centre, retail park and surrounding council owned land.

We made good progress in the period on asset management initiatives at those assets acquired in the last 12 months. We purchased the Neptune Portfolio, comprising three shopping centres in Darlington, Wakefield and Cardiff, in January 2016 for £92 million. Pre-acquisition we identified that at the Ridings Centre, Wakefield there was an opportunity to significantly increase net rental income. Across our entire portfolio, the average gross to net rent conversion rate is 90%, and at Wakefield the figure was closer to 50% at acquisition. Our strategy is to reduce voids, reconfigure unit sizes, increase food & beverage provision and rebrand the centre. In the period we commenced phase one of works costing £1.2 million which we aim to complete in the second half of the current financial year. We are also in pre-planning for a major 147,000 sq ft retail and leisure re-development at the Capitol Shopping Centre in Cardiff which will include almost 180 apartments in the air space above the centre.

We recently completed a comprehensive programme of asset management enhancements at Clough Road Retail Park in Hull having acquired the asset in June 2014 as part of the Linear Portfolio. We paid £7.5 million for the 95,500 sq ft park which was only 85% let, was in need of investment and had adjacent PC World and Currys units. Within a year of acquisition, we had let the vacant unit to Go Outdoors and the park was fully occupied. In the period under review, we signed a new 10 year lease with Currys and negotiated the surrender of the PC World unit, which we then sub-divided and re-let to Staples and Halfords improving the retail offer on the park as well as the rental tone. Post period end, we completed the construction of a Costa coffee pod in the car park, signed on a 15 year lease, taking total investment in the asset to £1.0 million, and driving valuation uplift since acquisition of over 20%.

We have worked hard to secure rateable value reductions for our occupiers ahead of the 2017 business rates revaluation and we recently received our draft rateable values. These show that across our portfolio in England and Wales rateable values will fall by more than 20%, with almost 75% of our occupiers seeing cash benefit from 1 April 2017.

Development

We have made significant progress on our risk-controlled development pipeline which now totals 1.6 million sq ft development which we believe will be a key driver of long term returns for shareholders.

Development pipeline

*Excluding residential

Completed in period/Under construction

During the period, we completed 67,300 sq ft of development across seven assets, with 24,800 sq ft of development currently under construction, predominantly in our pub portfolio.

Public Houses: Having signed a conditional agreement with the Co-operative in September 2014, we handed over a further six C-stores in the period totalling 23,300 sq ft, taking the total number completed to date to nine. Of the stores delivered to date, six utilised surplus land adjacent to the existing pubs, two were pub conversions and one was a new build on a site previously occupied as a pub.

The C-stores handed over to date have annualised rents of £0.6 million on 15-year leases across 34,900 sq ft, at a total construction cost of £5.4 million. We are on site for the construction of a further two totalling 6,500 sq ft and we have consent to construct a further 25 totalling 85,400 sq ft.

Abbey Centre, Newtownabbey: A new 44,000 sq ft Next anchor store was handed over to Next for fit-out in August and is scheduled to open in time for Christmas. The store was delivered on schedule and within budget and Next were delighted with the finished product. We are now on-site with the next phase of development works at the centre, constructing a 15,000 sq ft extension to create a 31,600 sq ft flagship unit for Dunnes Stores, the leading Irish department store operator.

Planning granted

Since the start of the period, we secured planning permission for 159,600 sq ft of development across 27 schemes.

Canvey Island: We acquired the site in July 2015 as part of the Ramsay portfolio. We submitted a planning application in June 2016 to create a 62,000 sq ft retail park, 87,000 sq ft including mezzanine, and we received planning consent in early November. The consent was given with no s.106 requirement and no restriction on opening hours. Even at this early stage the park is already 52% pre-let, with B&M signing an agreement for lease on 25,000 sq ft in the period and Sports Direct signing post period end. Including deals in solicitors' hands, the park is 75% pre-let.

Burgess Hill: In our full year announcement, we reported that we had recently secured full detailed planning consent for our £65 million mixed-use redevelopment of Burgess Hill town centre. The 465,000 sq ft project will provide a 10-screen multiplex cinema, a 63 bed Travelodge, a higher quality retail offer and new restaurant and leisure provisions, 174 additional car park spaces and an improved public realm, together with 142 new residential units and a new purpose built library. During the period, we exchanged contracts with Cineworld meaning the retail, leisure & hotel elements of the scheme are now 41% pre-let. Including deals in solicitors' hands, this number increases to over 60% pre-let.

Montague Centre, Worthing: A3 consent was granted to re-position 18,000 sq ft of existing space at the shopping centre into a restaurant quarter with leading national operators. We have agreed terms with Patisserie Valerie and Nando's and have deals with a handful of high quality national operators in final negotiations. Works are due commence in the first half of 2017 with completion of phase 1 open for trade by Christmas 2017.

In planning

Cowley, Oxford: In November we submitted a planning application for our 236,000 sq ft mixed-use regeneration in Cowley, Oxford having previously announced that we had exchanged contracts with Travelodge for a 71-bed hotel. As well as the hotel and two new restaurant units, we plan to create 225 new residential apartments, modernised car parks and major improvement of the public realm. Templars Square has been at the heart of Cowley for over fifty years and its future success is of great importance to the local community. There is a clear need to rejuvenate the shopping centre, meet strong demand for new homes in Oxford and add much needed choice of restaurants and hotels. A combination of rationalisation of the existing car provision, air space opportunity and site assembly have enabled a proposal with significant massing. The existing shopping centre will continue to trade throughout and we are confident that rental tone will benefit from the development works.

Pre-planning

Capitol Shopping Centre, Cardiff: We are in pre-application consultation with Cardiff Council to bring forward a major re-development of the Capital Shopping Centre, acquired in January 2016 as part of the Neptune Portfolio. The centre is well located in the city centre, benefitting from a high volume of commuter traffic from Cardiff Queen Street Station as well as a significant student population. We plan to reposition the centre as a mixed retail and leisure destination, and construct 178 apartments in the air space above the centre.

Financial review

Highlights

· Funds from operations ('FFO') increased by 24% to £24.5 million (Sep 2015: £19.7 million) delivering an FFO per share of 10.5 pence

· Fully covered first half dividend per share increased by 11% to 10.0 pence

· EPRA NAV per share decreased by 1.7% to 290p (Mar 2016: 295p) after absorbing acquisition costs, 1.0% valuation deficit and one off Main Market move costs

· IFRS PBT of £11.6 million (Sep 15: £42.2 million) including an £11.4 million non-cash reduction in portfolio valuation

· Total shareholder return +2.7% vs EPRA/NAREIT UK Index down 2.2%; total accounting return +1.6%

· Loan to value increased to 38% (Mar 2016: 27%) due to £158.4 million of acquisitions completed in the period; safely within the Company's stated policy

· Cost of debt 3.65% (Mar 2016: 3.70%); robust interest cover of 4.3x (Mar 2016: 4.3x)

Overview

The business performed well in the first half of the year, increasing Funds From Operations ("FFO") to £24.5 million (Sep 2015: £19.7 million) with FFO per share of 10.5 pence. The dividend per share of 10.0 pence for the first half is therefore 105% covered by FFO per share.

Reflecting the Company's focus on driving cash income returns and growing the dividend we will place more emphasis on Funds From Operations ('FFO') going forward. We feel that this measure is most appropriate when considering our dividend policy as it is a cash measure and it is familiar to non-property and international investors. We will continue to disclose the EPRA ratios in accordance with EPRA guidelines.

The 24% increase in FFO in the period was primarily driven by acquisition activity completed in the last twelve months. FFO per share of 10.5 pence provides 105% cover to first half dividend of 10.0 pence per share (Sep 2015: 9.0 pence) and we are on track to deliver growing FFO for the full year. It is worth noting that FFO per share of 13.2 pence in the prior period included 2.8 pence of promote receipts.

Our loan to value increased from 27% in March to 38% due to acquisitions completed in the period. EPRA net asset value per share reduced by 1.7% to 290 pence due to a 1.0% reduction in portfolio valuation, which included purchase costs on £158 million of acquisitions, and one off Main Market costs.

We continued to build on our strong banking relationships with external debt providers, refinancing £134 million of debt in the half, our overall cost of debt was reduced to 3.65% (Mar 2016: 3.70%) and interest cover remained strong at 4.3x.

The business is capable of delivering further scale benefits as demonstrated by its administrative cost ratio of 14% and is focused on achieving a lower cost of debt.

Presentation of financial information

The Group financial statements are prepared under IFRS where the Group's interests in joint ventures are shown as a single line item on the income statement and balance sheet and all subsidiaries are consolidated at 100%. Management reviews the performance of the business principally on a proportionally consolidated basis which includes the Group's share of joint ventures on a line-by-line basis. The Group's financial key performance indicators are also presented on this basis.

Funds From Operations

Funds From Operations is a Company measure determined by cash profits which includes realised recurring cash profits plus realised cash profits on the sale of properties above valuation and excludes other one off or non-cash adjustments. Funds From Operations is represented on a proportionally consolidated basis in the table below, including a line by line presentation of the Group and its JVs.

Net income

Net income has increased by 19% to £38.3 million in the half reflecting the full benefit of £294 million of net acquisitions completed in the last financial year and further acquisitions completed in the current period. We invested £158 million in the half buying a shopping centre and retail park in Bexleyheath, a retail park in Dumfries and a retail warehouse in Sheffield. We saw like-for-like net income growth of 0.2% across the portfolio reflecting the impact of our ongoing active asset management initiatives.

Administrative expenses

Administrative expenses increased by 6% to £5.6 million in the period, excluding £1.2 million of exceptional costs linked to our move to the Main Market which we completed successfully in the period. As the Company has grown we have invested in additional headcount but importantly our admin cost ratio has reduced further to 14% (Sep 2015: 16%) which is below our previously reported target of 15% and is a good example of the scale benefits we are starting to see.

Net financing costs

Overall financing costs increased by 17% to £8.7 million in the period due to the increasing scale of the underlying business, with properties at valuation increasing by 28% from £882 million in September 2015, to £1,130 million in September 2016. Our cost of debt remains low at 3.65% (March 2016: 3.70%) and interest costs continue to be 4.3x covered (March 2016: 4.3x).

FFO per share

FFO per share decreased by 20% to 10.5 pence from 13.2 pence in the period. This is primarily due to a promote payment received by the Company from our JV partner in the prior period following the acquisition of 50% of their share of the joint venture.

Dividends

It is our fundamental belief that dividend per share is our key performance ratio and our dividend policy is driven by two key objectives:

· Growing cash Funds From Operations and FFO per share

· The REIT requirement to pay out at least 90% of recurring cash profits

We have seen significant growth in FFO in recent years and the Board has increased the dividend from 5.5 pence per share in the year to March 2011 to 10.0 pence for the first half of the current financial year. A key driver of the Company's growth has been the ability to raise and deploy equity quickly and wisely but never at the expense of dividend per share.

The Board approved a second quarterly dividend of 5.0 pence in the period, bringing the dividend declared in the half of the financial year to 10.0 pence per share, an 11% increase on the prior year (Sep 2015: 9.0 pence).

The Company today announces its third quarterly dividend of 5.0 pence per share (FY16: 4.75 pence). This will be paid on 27 January 2017 to shareholders on the register at close of business on 30 December 2016. The ex-dividend date will be 29 December 2016. The quarterly dividend will be payable as a REIT Property Income Distribution (PID).

Balance sheet

EPRA net assets include a number of adjustments to the IFRS reported net assets and both measures are presented below on a proportionally consolidated basis.

EPRA NAV per share

At 30 September 2016, the EPRA NAV per share was 290 pence, down 5 pence from March 2016. The 1.7% reduction in the period reflects a reduction in portfolio valuation of 1.0%, the absorption of purchase costs and one off costs associated with our Main Market move. Of the valuation reduction, two thirds relates to a fall in capital values, and one third relates to purchase costs incurred on acquisitions completed in the period. Including the dividend paid in the period, we delivered a total accounting return of 1.6%.

IFRS net assets

At 30 September 2016, IFRS net assets were £674.6 million, down 2.2% from March 2016. This movement was due to the £11.4 million reduction in portfolio valuation in the period, as well as an adverse movements on interest rate hedges largely due to a decrease in LIBOR linked to the movement in base rates and the overall growth in the portfolio.

Net debt & financing

Net debt increased by £167 million in the period predominantly due to £158 million of acquisitions and subsequent drawdowns of new debt. This included our largest acquisition to date in Bexleyheath where we purchased a retail park and shopping centre for £120.3 million, part funded by a new £49 million facility with DekaBank, at an all in cost of 2.2%.

Including the £49 million DekaBank facility, the principal value of gross debt increased by £92.2 million to £474.8 million in the period, with the majority of the remaining increase due to the Company drawing £30 million of revolving credit facilities in the period. At 30 September 2016 we had £67 million of undrawn facilities (Mar 2016: £102 million).

We also signed an improved £85.3 million debt facility with a major US insurance company on our pub and convenience store portfolio. Under the terms of the new facility, the bank margin was reduced by 30% and the loan maturity was extended from 2018 to 2021. Following this refinancing activity, our weighted average interest rate was 3.65%, reduced from 3.70% at March 2016.

On a proportionally consolidated basis LTV was 38% at 30 September 2016, increased from 27% at March 2016 due to acquisition activity and safely below our Company policy maximum of 50%. Our interest cover remains unchanged at 4.3x.

Mark Davies

Chief Financial Officer

Principal risks and uncertainties

The principal risks of the business are set out on pages 52-53 of the Group's 2016 Annual Report & Accounts alongside their potential impact and related mitigations.

The Board has considered the principal risks and uncertainties that the Group is exposed to, and which may impact performance, in light of the outcome of the UK's referendum on continued membership of the EU. Whilst we consider the principal risks are unchanged from those set out in the Annual Report and Accounts published in June 2016, the Board is aware that market uncertainty could lead to some risks being elevated.

The Board has reviewed the principal risks in the context of the second half of the current financial year and believes there has been no material change to the risks outlined in the Group's Annual Report, and that the existing mitigation measures within the business remain relevant for the risks highlighted.

Directors' Responsibility Statement

We confirm to the best of our knowledge:

(a) The condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

(b) The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

(c) The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

On behalf of the Board

David Lockhart Mark Davies

Chief Executive Chief Financial Officer

17 November 2016

Copies of this announcement are available on the Company's website at www.nrr.co.uk and can be requested from the Company's registered office at 37 Maddox Street, London, W1S 2PP.

Auditors Review Report

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2016 which comprises the consolidated income statement, consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, consolidated statement of changes in equity and related notes 1 to 14. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Deloitte LLP

Chartered Accountants and Statutory Auditor

Guernsey, Channel Islands

17 November 2016

Condensed consolidated Income Statement

For the six months ended 30 September 2016

All activities derive from continuing operations of the Group.

During the period, the Group completed its move from AIM to the Premium listing segment of the official list, trading on the Main Market of the London Stock Exchange. NewRiver REIT plc became the ultimate parent company, with the former parent company, NewRiver Retail Limited, becoming a direct subsidiary of NewRiver REIT plc, in a scheme of arrangement. The results and comparatives presented in these condensed consolidated financial statements include the consolidated results and financial positon of NewRiver Retail Ltd for the period prior to 18 August 2016. See note 12 for further details.

Condensed consolidated Statement of Comprehensive Income

For the six months ended 30 September 2016

During the period, the Group completed its move from AIM to the Premium listing segment of the official list, trading on the Main Market of the London Stock Exchange. NewRiver REIT plc became the ultimate parent company, with the former parent company, NewRiver Retail Limited, becoming a direct subsidiary of NewRiver REIT plc, in a scheme of arrangement. The results and comparatives presented in these condensed consolidated financial statements include the consolidated results and financial positon of NewRiver Retail Ltd for the period prior to 18 August 2016. See note 12 for further details.

Condensed consolidated Statement of Financial Position

As at 30 September 2016

During the period, the Group completed its move from AIM to the Premium listing segment of the official list, trading on the Main Market of the London Stock Exchange. NewRiver REIT plc became the ultimate parent company, with the former parent company, NewRiver Retail Limited, becoming a direct subsidiary of NewRiver REIT plc, in a scheme of arrangement. The results and comparatives presented in these condensed consolidated financial statements include the consolidated results and financial positon of NewRiver Retail Ltd for the period prior to 18 August 2016. See note 12 for further details.

The financial statements were approved by the Board of Directors on 17 November 2016 and were signed on its behalf by:

David Lockhart Mark Davies

Chief Executive Chief Financial Officer

During the period, the Group completed its move from AIM to the Premium listing segment of the official list, trading on the Main Market of the London Stock Exchange. NewRiver REIT plc became the ultimate parent company, with the former parent company, NewRiver Retail Limited, becoming a direct subsidiary of NewRiver REIT plc, in a scheme of arrangement. The results and comparatives presented in these condensed consolidated financial statements include the consolidated results and financial positon of NewRiver Retail Ltd for the period prior to 18 August 2016. See note 12 for further details.

Condensed consolidated Statement of Changes in Equity

As at 30 September 2016

(2) During the period, the Group completed its move from AIM to the Premium listing segment of the official list, trading on the Main Market of the London Stock Exchange. NewRiver REIT plc became the ultimate parent company, with the former parent company, NewRiver Retail Limited, becoming a direct subsidiary of NewRiver REIT plc, in a scheme of arrangement. The results and comparatives presented in these condensed consolidated financial statements include the consolidated results and financial positon of NewRiver Retail Ltd for the period prior to 18 August 2016. See note 12 for further details.

Notes to the financial statements

1 Accounting policies

General information

NewRiver REIT plc (the 'Company') and its subsidiaries (together the 'Group') is a property investment group specialising in commercial real estate in the UK.

These consolidated financial statements have been approved for issue by the Board of Directors on 17 November 2016.

Scheme of arrangement

During the period the Group completed its move from AIM to the Premium listing segment of the official list, trading on the Main Market of the London Stock Exchange. NewRiver REIT plc became the ultimate parent company, with the former parent company, NewRiver Retail Limited, becoming a direct subsidiary of NewRiver REIT plc, in a scheme of arrangement on 18 August 2016. The principal steps of the group reorganisation were as follows:

NewRiver REIT plc was incorporated in the United Kingdom on 8 June 2016 under the Companies Act 2006 as a public company. On incorporation, the share capital of NewRiver REIT plc was £50,000.02 divided into 2 ordinary shares of 1 pence and 50,000 redeemable preference shares of £1. The preference shares were redeemed on 12 October 2016.

As part of a scheme of arrangement under Guernsey law, all issued ordinary shares in the capital of NewRiver Retail Limited, the former holding company of the Group, were cancelled on by way of a reduction of capital on 18 August 2016. Following the cancellation of the shares, NewRiver Retail Limited issued a corresponding number of ordinary shares to the Company, such that the Company held all of the issued shares in the capital of NewRiver Retail Limited. The Company has, in turn, issued ordinary shares to the former shareholders of NewRiver Retail Limited on a one-for-one basis. The result of the share cancellation and share issue is that the Company is now the ultimate parent company of the Group.

Throughout the period from incorporation to 18 August 2016, NewRiver REIT plc was a dormant company with no revenues and no assets and did not constitute a 'business' as defined by IFRS 3 Business Combinations. The transaction therefore falls outside the scope of that standard. Following the guidance regarding the selection of an appropriate accounting policy provided by IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, the transaction has been accounted for using the principles of merger accounting, allowed for group reconstructions, as set out in FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland.

This policy, which does not conflict with IFRS, reflects the economic substance of the transaction as a continuation of the previous Group. The comparatives presented in these condensed consolidated financial statements are therefore the consolidated results and financial positon of NewRiver Retail Ltd for the period or year then ended.

Going concern

The Directors of the Company have reviewed the current and projected financial position of the Group making reasonable assumptions about future trading and performance. The key areas reviewed were:

The Group has cash and short-term deposits, as well as profitable rental income streams and as a consequence the Directors believe the Group is well placed to manage its business risks. The Group is currently well within the prescribed financial covenants on its borrowing facilities. Together with its cash resources the Group plans to arrange bank facilities to fund any future risk-controlled developments.

After making enquiries and examining major areas which could give rise to significant financial exposure, the Board has a reasonable expectation that the Company and the Group have adequate resources to continue its operations for the foreseeable future. Accordingly, the Group continues to adopt the going concern basis in preparation of these financial statements.

Critical accounting estimates and judgements

At 31 March 2016, the Group disclosed within its post balance sheet event note that the acquisition of the legal entities that owned the Broadway Shopping Centre and Broadway Square Retail Park in Bexleyheath was expected to be accounted for as a Business Combination per IFRS 3. After further analysis in the process of applying the Group's accounting policies, management have deemed that the legal entities acquired did not constitute a 'business' as defined by IFRS 3 Business Combinations. The transaction is therefore accounted for as an acquisition of a group of assets, applying the recognition principles of IAS 40 Investment Properties. The applicable accounting standards for the recognition of other assets acquired and liabilities assumed have been adopted in accordance with the Group's policies. There have been no other changes to other critical accounting estimates and judgements as reported in the 31 March 2016 annual report.

Statement of compliance

The financial statements are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.

The financial information for the period ended 30 September 2016 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts of NewRiver Retail Ltd for the year ended 31 March 2016 can be requested from the Group's registered address. The auditors' report on those accounts was not qualified and did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries. The consolidated financial statements account for interest in joint ventures using the equity method of accounting per IFRS11.

The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited financial statements, a copy of which can be found on our website www.nrr.co.uk.

2 Segmental reporting

For the purpose of IFRS 8, the chief operating decision maker takes the form of the Board of Directors. The Board of Directors are of the opinion that the principal activity of the Group is to invest in commercial real estate in the UK.

IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal financial reports about components of the Group that are regularly reviewed by the chief operating decision maker i.e. the Board of Directors. The internal financial reports received by the Board contain financial information at a Group level as a whole and there are no reconciling items between the results contained in these reports and the amounts reported in the financial statements.

The property portfolio includes investment properties located throughout the UK, predominantly regional investments outside London and comprises a diverse portfolio of commercial buildings including shopping centres, retail warehouses, high street assets and pubs. The Directors consider that these properties all contribute to delivering on a strategy of targeting high yielding property that offers attractive returns through rental income. Therefore, these individual properties have been aggregated into a single operating segment. As such, the Directors consider there to be one reportable segment under the provisions of IFRS 8.

All of the Group's properties are based in the UK. No geographical grouping is contained in any of the internal financial reports provided to the Board and, therefore, no geographical segmental analysis is required by IFRS 8. Furthermore, no single tenant accounts for more than 2.7% of the Groups total rents received from investment properties.

3 Gross income

4 Property operating expenses

5 Administrative expenses

6 Performance measures

The European Public Real Estate Association (EPRA) issues recommendations for performance measures. The EPRA earnings measure excludes investment property revaluations and gains on disposals, intangible asset movements and their related taxation.

Given the group's focussed strategy on delivering growing cash income returns the Group measure of Funds From Operations (FFO) is disclosed. The Group has previously referred to this measure as EPRA Adjusted earnings. The Group no longer discloses NAREIT FFO as a performance measure.

During the period, the Group completed its move from AIM to the Premium listing segment of the official list, trading on the Main Market of the London Stock Exchange. NewRiver REIT plc became the ultimate parent company, with the former parent company, NewRiver Retail Limited, becoming a direct subsidiary of NewRiver REIT plc, in a scheme of arrangement. The results and comparatives presented in these condensed consolidated financial statements include the consolidated results and financial positon of NewRiver Retail Ltd for the period prior to 18 August 2016. See note 12 for further details. The number of shares used in the performance measures for earnings includes the weighted average of NewRiver Retail Limited's shares up to 18 August 2016 and NewRiver REIT's shares from that date. NewRiver REIT issued the same number of shares as NewRiver Retail Limited had in issue in 18 August 2016. See note 12 for further details.

7 Dividends

The following dividends are associated with the current and prior periods:

A third quarterly dividend of 5.00 pence per share in respect of the year ended 31 March 2017 will be paid on 27 January 2017 to shareholders on the register at close of business on 30 December 2016. The ex-dividend date will be 29 December 2016. The quarterly dividend will be payable as a REIT Property Income Distribution (PID).

8 Net asset value per share

(1) Basic net asset value number of shares includes vested share awards with nil exercise price of 211,901

9 Investment properties

The Group's total property portfolio was valued by independent external valuers on the basis of fair value, in accordance with the RICS Valuation - Professional Standards 2014, ninth edition, published by The Royal Institution of Chartered Surveyors. The information provided to the valuers, and the assumptions and valuations model used by the valuers are reviewed by the property portfolio team, the Property Director and the Chief Financial Officer. The valuers meet with the external auditors and also present directly to the Audit Committee on a half yearly basis. Real estate valuations are complex and derived from data that is not widely publicly available and involves a degree of judgement. For these reasons, the valuations are classified as Level 3 in the fair value hierarchy as defined by IFRS 13. The valuations are sensitive to change in rental and yield data as well as EBITDA data and multiples adopted for the pubs. The fair value at 30 September 2016 represent the highest and best use. In respect of the pub portfolio the valuer makes judgements on whether to use residual value or a higher value to include development potential where appropriate. Where no conversion opportunity has been identified at present, the valuer has not specifically considered an alternative use valuation.

10 Investments in joint ventures

(1) The net cash outflow during the period was £1.9 million (March 2016 £4.3 million).

There are currently five joint ventures. NewRiver Retail Property Unit Trusts No 2, 5,6,7 (the 'Middlesbrough', and 'Swallowtail' JVs) are established jointly controlled Jersey Property Unit Trusts set up by NewRiver Retail Limited and PIMCO BRAVO II Fund LP ('BRAVO II') to invest in UK retail property. NewRiver Retail Investments LP (the 'Barley JV') is an established jointly controlled limited partnership set up by NewRiver Retail Limited and Morgan Stanley Real Estate Investing ('MSREI') to invest in UK retail property.

Summarised financial information of all joint ventures is as follows:

*Includes NewRiver Retail Property Unit Trust III and IV for the period 1 April 2015 to 30 June 2015 prior to the Group's acquisition of the remaining 50%.

11 Borrowings

Fair value on interest rate swaps

The Group recognised a mark to market fair value loss of £4.6 million (2015: profit £0.01 million) on its interest rate swaps for the year ended 30 September 2016. The fair value of interest rate swap liabilities in the balance sheet as at 30 September 2016 was £3.8 million (March 2016: £3.0 million). The fair value of interest rate swap assets in the balance sheet as at 30 September 2016 was £0.1 million (March 2016: £0.3 million). All borrowings are due after more than one year and the derivative financial instruments are held as non-current liabilities.

12 Share capital and reserves

During the period the Group completed its move from AIM to the Premium listing segment of the official list, trading on the Main Market of the London Stock Exchange. NewRiver REIT plc became the ultimate parent company, with the former parent company, NewRiver Retail Limited, becoming a direct subsidiary of NewRiver REIT plc, in a scheme of arrangement on 18 August 2016. The principal steps of the group reorganisation were as follows:

NewRiver REIT plc was incorporated in the United Kingdom on 8 June 2016 under the Companies Act 2006 as a public company. On incorporation, the share capital of NewRiver REIT plc was £50,000.02 divided into 2 ordinary shares of 1 pence and 50,000 redeemable preference shares of £1. The preference shares were redeemed on 12 October 2016. All ordinary shares have 1 vote per share. There are no voting rights attached to the preference shares. The deferred shares were redeemed following the period end. All shares are fully paid.

As part of a scheme of arrangement under Guernsey law, all issued ordinary shares in the capital of NewRiver Retail Limited, the former holding company of the Group, were cancelled by way of a reduction of capital on 18 August 2016. Following the cancellation of the shares, NewRiver Retail Limited issued a corresponding number of ordinary shares to the Company, such that the Company held all the issued shares in the capital of NewRiver Retail Limited. The Company has, in turn, issued ordinary shares to the former shareholders of NewRiver Retail Limited on a one-for-one basis. The result of the share cancellation and share issue is that the Company is now the ultimate parent company of the Group.

On 18 August 2016, the Company issued 238,588,536 ordinary shares with a nominal value of one pence each to the former shareholders of NewRiver Retail Limited.

As at 30 September 2016 5,039,000 shares are held in an Employee Benefit Trust for the benefit of employees under the Group's employee share schemes (31 March 2016: 5,152,055).

Shareholders who subscribed for placing shares in the original share listing of NewRiver Retail Limited's shares received warrants, in aggregate, to subscribe for 3% of the fully diluted share capital. The subscription price is adjusted following the payment of dividends or share issuance and was 146p as at 30 September 2016. 377,000 remain outstanding (31 March 2016: 420,000) and are now warrants over the Company's shares.