Retail Estates 1H25/26 Results, no big acquisition, but managing the bankruptcies

RET reported its 1H25/26 results (September end) slightly below our estimates. EPRA EPS amounted to €3.06 vs. our expectation of €3.10. NRI grew 2.95% to €72.7m vs. 74.0m expected. Despite many bankruptcies, occupancy remained relatively stable at 97.4% vs. 97.6% over 1H24/25. Out of 19 outlets in restructuring, RET has relet 2 and is in exclusive talks on 10. The difference with our expectations results largely from lower net investments of €5.1m vs. €40.0m expected. The debt ratio increased 0.28% from 42.52% to 42.80%. The outlook for FY25/26 is confirmed at a 2.0% dividend growth, pointing to a €6.50 EPRA EPS vs. our expectation of 6.54. The FY25/26 NRI is lowered from 146m to 145m due to Carpetright failure. The cost of debt declined to 2.05% from 2.08%. The FV of the existing portfolio grew by 0.85% to €2.09bn from FV uplift and net investments. The NTA decreased to €78.99 from €80.87 (+2.2% shares). We maintain our Buy rating and €76.0 target, cheap on EPRA PE basis. Analyst meeting at 10h30.