NewRiver REIT (LSE:NRR) - Share price, News & Analysis

Q: What is the Fair Price of NRR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

NRR (£0.89) is trading above our estimate of [[fair value]] (£0.24)

NRR fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	4/6
Past Performance	2/6
Financial Health	1/6
Dividends	4/6

NRR Stock Overview

NewRiver REIT plc (‘NewRiver’) is a leading Real Estate Investment Trust specialising in buying, managing and developing essential retail and leisure assets throughout the UK.

Rewards

Earnings are forecast to grow 24.92% per year

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record

Large one-off items impacting financial results

NewRiver REIT Competitors

Capital & Regional

LSE:CAL

UK£103.2m

Capital & Counties Properties

LSE:CAPC

UK£1.2b

Shaftesbury

LSE:SHB

UK£1.9b

Supermarket Income REIT

LSE:SUPR

UK£1.5b

Price History & Performance

Summary of all time highs, changes and price drops for NewRiver REIT
Historical stock prices
Current Share Price	UK£0.89
52 Week High	UK£1.02
52 Week Low	UK£0.70
Beta	1.08
1 Month Change	-1.33%
3 Month Change	-0.78%
1 Year Change	5.96%
3 Year Change	-39.77%
5 Year Change	-74.42%
Change since IPO	-65.14%

Recent News & Updates

Jun 19

Need To Know: Analysts Are Much More Bullish On NewRiver REIT plc (LON:NRR) Revenues

NewRiver REIT plc ( LON:NRR ) shareholders will have a reason to smile today, with the analysts making substantial...

Shareholder Returns

	NRR	GB REITs	GB Market
7D	3.5%	2.4%	0.4%
1Y	6.0%	-10.4%	-9.0%

Return vs Industry: NRR exceeded the UK REITs industry which returned -10.4% over the past year.

Return vs Market: NRR exceeded the UK Market which returned -7.8% over the past year.

Price Volatility

Is NRR's price volatile compared to industry and market?
NRR volatility
NRR Average Weekly Movement	4.9%
REITs Industry Average Movement	3.6%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.8%
10% least volatile stocks in GB Market	2.7%

Stable Share Price: NRR is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: NRR's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2009	51	Allan Lockhart	https://www.nrr.co.uk

NewRiver REIT plc (‘NewRiver’) is a leading Real Estate Investment Trust specialising in buying, managing and developing essential retail and leisure assets throughout the UK. Our £1.1 billion portfolio covers 9 million sq ft and comprises 33 community shopping centres, 24 conveniently located retail parks and 700 community pubs. We hand-picked our assets to deliberately focus on occupiers providing essential goods and services, and avoid structurally challenged sub-sectors such as department stores, mid-market fashion and casual dining.

NewRiver REIT Fundamentals Summary

How do NewRiver REIT's earnings and revenue compare to its market cap?
NRR fundamental statistics
Market Cap	UK£274.46m
Earnings (TTM)	UK£7.00m
Revenue (TTM)	UK£75.00m

39.2x

P/E Ratio

3.7x

P/S Ratio

Is NRR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NRR income statement (TTM)
Revenue	UK£75.00m
Cost of Revenue	UK£25.50m
Gross Profit	UK£49.50m
Other Expenses	UK£42.50m
Earnings	UK£7.00m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Nov 24, 2022

Earnings per share (EPS)	0.023
Gross Margin	66.00%
Net Profit Margin	9.33%
Debt/Equity Ratio	71.4%

How did NRR perform over the long term?

See historical performance and comparison

Dividends

7.4%

Current Dividend Yield

24%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is NRR undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NRR?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NRR. This is calculated by dividing NRR's market cap by their current preferred multiple.
What is NRR's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£274.46m

NRR key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	7.5x
Enterprise Value/EBITDA	14.7x
PEG Ratio	1.6x

Price to Earnings Ratio vs Peers

How does NRR's PE Ratio compare to its peers?

NRR PE Ratio vs Peers

The above table shows the PE ratio for NRR vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	7.7x
CAL Capital & Regional	3.9x	14.9%	UK£103.2m
CAPC Capital & Counties Properties	10x	-21.4%	UK£1.2b
SHB Shaftesbury	4.7x	-59.1%	UK£1.9b
SUPR Supermarket Income REIT	13.1x	6.2%	UK£1.5b
NRR NewRiver REIT	39.2x	24.9%	UK£274.5m

Price-To-Earnings vs Peers: NRR is expensive based on its Price-To-Earnings Ratio (39.2x) compared to the peer average (7.7x).

Price to Earnings Ratio vs Industry

How does NRR's PE Ratio compare vs other companies in the GB REITs Industry?

Price-To-Earnings vs Industry: NRR is expensive based on its Price-To-Earnings Ratio (39.2x) compared to the UK REITs industry average (6.3x)

Price to Earnings Ratio vs Fair Ratio

What is NRR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NRR PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	39.2x
Fair PE Ratio	17.4x

Price-To-Earnings vs Fair Ratio: NRR is expensive based on its Price-To-Earnings Ratio (39.2x) compared to the estimated Fair Price-To-Earnings Ratio (17.4x).

Share Price vs Fair Value

What is the Fair Price of NRR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NRR (£0.89) is trading above our estimate of fair value (£0.24)

Significantly Below Fair Value: NRR is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is NewRiver REIT forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

24.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NRR's forecast earnings growth (24.9% per year) is above the savings rate (0.9%).

Earnings vs Market: NRR's earnings (24.9% per year) are forecast to grow faster than the UK market (9.8% per year).

High Growth Earnings: NRR's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NRR's revenue (4.4% per year) is forecast to grow faster than the UK market (4.4% per year).

High Growth Revenue: NRR's revenue (4.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: NRR's Return on Equity is forecast to be low in 3 years time (5%).

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Past Performance

How has NewRiver REIT performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-48.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NRR has a large one-off loss of £11.6M impacting its March 31 2022 financial results.

Growing Profit Margin: NRR became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: NRR has become profitable over the past 5 years, growing earnings by -48.5% per year.

Accelerating Growth: NRR has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: NRR has become profitable in the last year, making it difficult to compare its past year earnings growth to the REITs industry (107%).

Return on Equity

High ROE: NRR's Return on Equity (1.7%) is considered low.

Discover strong past performing companies

Financial Health

How is NewRiver REIT's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: NRR's short term assets (£101.7M) exceed its short term liabilities (£34.2M).

Long Term Liabilities: NRR's short term assets (£101.7M) do not cover its long term liabilities (£370.8M).

Debt to Equity History and Analysis

Debt Level: NRR's net debt to equity ratio (51.4%) is considered high.

Reducing Debt: NRR's debt to equity ratio has increased from 59% to 71.4% over the past 5 years.

Debt Coverage: NRR's debt is not well covered by operating cash flow (15.9%).

Interest Coverage: NRR's interest payments on its debt are not well covered by EBIT (1.9x coverage).

Balance Sheet

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Dividend

What is NewRiver REIT current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

7.42%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: NRR's dividend (7.42%) is higher than the bottom 25% of dividend payers in the UK market (1.8%).

High Dividend: NRR's dividend (7.42%) is in the top 25% of dividend payers in the UK market (5.11%)

Stability and Growth of Payments

Stable Dividend: NRR's dividend payments have been volatile in the past 10 years.

Growing Dividend: NRR's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (24.5%), NRR's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (46.2%), NRR's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure

CEO

Allan Lockhart (57 yo)

13.58yrs

Tenure

UK£984,462

Compensation

Mr. Allan Lockhart serves as the Chief Executive Officer of NewRiver REIT plc since May 1, 2018 and serves as its Director since November 19, 2010. Mr. Lockhart Founded NewRiver REIT plc in 2009. He served...

CEO Compensation Analysis

Compensation vs Market: Allan's total compensation ($USD1.19M) is about average for companies of similar size in the UK market ($USD1.05M).

Compensation vs Earnings: Allan's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: NRR's management team is considered experienced (3.3 years average tenure).

Board Members

Experienced Board: NRR's board of directors are considered experienced (3.5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: NRR insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/13 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31