NewRiver REIT (LON:NRR) said its FY 2026 results showed the first full-year benefits from the Capital & Regional acquisition, with management pointing to higher earnings, dividend growth, portfolio repositioning and a strengthened balance sheet as evidence that its strategy is translating into financial performance.
On the company’s earnings call, Allan said the year was “an important step forward” in scaling NewRiver’s platform and improving the composition of its portfolio. He said underlying funds from operations rose to GBP 37.2 million, while the dividend increased to GBP 0.067 per share. The company also delivered a 9.4% total accounting return, which management described as sector-leading.
→ Costco’s Strong Quarter Still Leaves Investors With a Valuation Problem
“What we’re seeing is not simply short-term improvement, but the early evidence of a portfolio that is more focused and well-positioned for income-led growth,” Allan said.
Capital & Regional Integration Completed
Management said the Capital & Regional integration has been completed without disruption to the underlying business. The acquisition contributed to a broader shift in NewRiver’s portfolio, including an increase in London retail exposure to 43% of the balance sheet.
→ These 3 Software Stocks Are Buying Back Shares Hand Over Fist
Will Hobman, chief financial officer of NewRiver REIT, said all post-acquisition work streams had been completed. He said the company integrated the assets onto its platform and systems and delivered GBP 6.2 million of administrative cost synergies within the planned timeline.
Hobman also said NewRiver refinanced the Mall facility, which is due to be repaid when its 3.5% coupon expires in January 2027. He said the company had demonstrated disciplined capital allocation through GBP 110 million of asset sales at book value and a GBP 36 million share buyback, which helped facilitate Growthpoint’s exit from the share register.
Leasing Momentum Supports Income Growth
→ Gap Inc. Cuts Sales Outlook After Q1 Miss, Shares Drop 17%
NewRiver said operational performance was driven by strong leasing demand across its portfolio. Allan said rents agreed during the year were 37.3% ahead of previous passing rent and 8.5% ahead of estimated rental value, reflecting what he called “real pricing power” across the portfolio.
The company said it has completed more than 3.6 million square feet of leasing over the past four years ahead of both ERV and previous passing rent. Allan said the tenant mix is weighted toward essential and repeat-visit categories, including groceries and food-to-go, services, and health and wellbeing.
He said no single tenant represents more than 4% of total portfolio rent, limiting tenant concentration risk. Management also highlighted an all-in occupational cost ratio of 7.8%, down from 8.2% at the half year, which Allan said reflected lower business rates for tenants and growth in customer spending.
“At 7.8%, we would regard that as being highly affordable, which means it’s going to be highly sustainable,” Allan said during the question-and-answer session.
Portfolio Repositioned Toward Core Retail Segments
NewRiver said its portfolio has materially changed over the past three years. Allan said the portfolio has grown by more than GBP 200 million, while London retail exposure has increased from 12% to 43% of the balance sheet. The company said 75% of the portfolio is now concentrated in its three highest-conviction areas: London retail, U.K. major cities and retail parks.
Management said 96% of the portfolio now sits in what it defines as “core,” reflecting a deliberate concentration of capital in areas where leasing liquidity and rental growth prospects are strongest.
Allan said capital growth is positive across the company’s three focus areas, with leasing ahead of ERV and consumer spending growing. In response to a question from Bjorn Zietsman of Panmure Gordon about where NewRiver sees opportunities over the next 12 months, Allan said the company remains positive on London retail, U.K. major cities and retail parks, describing them as areas most likely to deliver consistent rental income growth.
Balance Sheet Strengthened Through Refinancing
Hobman said NewRiver ended the year with loan-to-value at 40%, down from 42% at the start of the year and back in line with guidance. He said the company had shown it could temporarily increase LTV to pursue capital allocation opportunities, including the Capital & Regional acquisition and the share buyback, before returning toward its target range through asset disposals.
The company agreed a new GBP 240 million unsecured facility split between a GBP 120 million term facility and a GBP 120 million revolving credit facility. Hobman said the term facility will be drawn to repay the Mall facility in January 2027, while the RCF replaces a GBP 100 million facility that was due to mature later this year.
Hobman said the refinancing extends liquidity and improves the maturity profile while allowing NewRiver to retain the benefit of the Mall facility’s 3.5% coupon until expiry. He said the company has hedged the term facility commitment with a forward-starting collar, fixing the all-in cost between 4.4% and 5.9% once drawn.
Fitch reaffirmed NewRiver’s investment-grade credit ratings during the year, at BBB with a stable outlook and BBB+ on the bond, according to Hobman.
Dividend Growth and Outlook
UFFO per share increased to GBP 0.083 from GBP 0.081 in the prior year, forming the basis of NewRiver’s dividend policy. Hobman said the FY 2026 dividend of GBP 0.067 per share was up 3% from GBP 0.065 in FY 2025. The company declared a final dividend of GBP 0.036 per share, following a GBP 0.031 first-half dividend already paid.
Hobman said NewRiver’s conservative payout policy gives it flexibility to support dividend growth while absorbing higher finance costs expected as the company refinances its debt pool. Allan said rental growth is expected to be the primary driver of dividend growth over the next three years.
NewRiver also pointed to growth in its capital partnerships business, which now manages more than GBP 2 billion of assets and approximately GBP 200 million of rent roll. Allan said the partnerships platform provides capital-light earnings growth and that management sees no reason it cannot continue growing net income at a similar pace to recent years.
Looking ahead, Allan said NewRiver is targeting a total accounting return of 9% to 11% per year through FY 2029, supported by leasing liquidity, capital discipline and a progressive dividend.
About NewRiver REIT (LON:NRR)
NewRiver is a leading Real Estate Investment Trust specialising in buying, managing and developing retail and leisure assets across the UK. Every day, our shopping centres, retail parks and pubs provide essential goods and services to their local communities.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
The article “NewRiver REIT H2 Earnings Call Highlights” was originally published by MarketBeat.
View MarketBeat’s top stocks for June 2026.
