Retail Estates 1H24/25 Results, managing the reletting well
RET reported its 1H24/25 results (September end) slightly below our estimates. EPRA Net profit grew 1.9%. EPRA EPS amounted to EUR 3.12 vs. our expectation of 3.16. NRI grew 4.6% to 70.6m vs. 72.2.9m expected. Occupancy declined slightly to 97.6% from 97.9%. Retail Estates was confronted with some bankruptcies in the toy (Fun) and fashion (Euro Shoe) segment, but has so far managed the re-letting extremely well. These bankruptcies have soured the sentiment on the stock. However, RET confirmed its FY24/25 dividend of EUR 5.1, in line with our expectation of 5.07. The LTV% increased 6bps to 44.52%. The cost of debt declined to 2.13% from 2.30%. The FV of the existing portfolio was revised up by 11.6m. The NTA declined to 76.70 from 78.15, mainly on the dilution from 332k new shares (stock div). We maintain our Buy and EUR 76.0 target. The shares are cheap on EPRA PE basis. Analyst meeting at 10h00 in Ternat.Retail Estates is a niche fixed-capital real estate investment fund that invests in retail properties located on the periphery of residential areas or along access roads to urban centers. Co. buys properties from third parties or builds and markets shop premises for its own account. The outlets have a built on surface areas of between 500m2 and 3,000m2. A typical retail property has an average surface area of 1,000m2. As of Mar 2010 Co. had 399 premises in its portfolio. The retail lettable area amounted to 398,754m2.
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