Newriver REIT (LSE:NRR) — Investor Presentation

0:00 Good afternoon, and welcome to the NEWRIVER REIT PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives in the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll.

0:26 I'd now like to hand you up to Alan Lockhart, CEO. Good afternoon, sir. Good afternoon, everybody, and many thanks for taking the time to meet with us this afternoon. I'm Alan Lockhart. I'm CEO of NEWRIVER. I'm joined here by our brilliant CFO, Will Hoffman and our equally brilliant Head of Investor Relations, Lucy Mitchell. Retail investors form an important part of our shareholder register, so we're absolutely delighted that there are a number of retail investors on the call this afternoon and we're pleased to be able to personally take you through our recent full year results presentation. But before we go through our presentation, let me start by saying that over the years, we carefully positioned our portfolio for the evolving consumer and retail trends where a physical store is vital.

1:19 As a result, we've delivered another excellent operational performance and a significant total return outperformance versus our relative MSCI benchmarks. Arguably, we now have one of the strongest balance sheets in our sector with a low LTV, one of the lowest net debt to EBITDA ratios and one of the highest portfolio yield spreads. Finally, we have genuine growth options including deployment of capital and the expansion of our very successful capital partnership strategy. But let's move on to the presentation. We ended our financial year in a strong position having delivered a resilient set of operational and financial results in what was a challenging macroeconomic environment.

2:09 We've seen an improving market backdrop despite rapidly increasing interest rates in response to elevated inflation. The occupational markets have held up well with rental tension returning and this is underpinned by a UK consumer who has proved to be more resilient than financial markets we're expecting. We saw active demand for space in our portfolio with a strong leasing performance, high tenant retention, our highest occupancy for five years, another period of leasing terms ahead of ERB with our portfolio delivering positive like for like growth the first time since 2018. These operational metrics delivered a 26% increase in retail underlying funds from operations to GBP 25,800,000 delivering a full year dividend of 6.7p per share, 125% covered.

3:12 Whilst the MSCI all property and all retail indices delivered minus 16% and minus 13% capital returns, our portfolio outperformed its retail benchmark by six sixty basis points and ten twenty basis points on a total return. And this is partly due to the inherent high income component that we have. The like for like valuation movement of minus 5.9% was predominantly contained in our regeneration portfolio, which was impacted by inflation on estimated development costs. Our LTV improved further to 33.9% supported by strong operational performance resulting in excellent cash generation as we ended the year with £111,000,000 of cash, up from £88,000,000 last year.

4:12 And this means our balance sheet is in great shape as we have no drawn debt to 2028 and all of our interest costs are fixed. And finally, you know, we are committed to delivering our ESG strategy and we're making good progress. Despite inflation peaking in October 2022 and the rapid increase in interest rates, The UK consumer has proved to be more resilient than many had feared. Very low levels of unemployment, excess consumer savings, rising wages, and broadly stable house prices have led to an increase in consumer confidence.

4:55 The value of retail sales has increased and is significantly above pre pandemic levels, And this is largely to be expected due to inflation, but encouragingly, the volume of retail sales has also recovered. Looking ahead, with the expectation of further easing in inflation to around 5% by the end of twenty twenty three, real income is set to become positive in the second half of the year underpinned by a strong labor market and we expect living standards to rise by the end of twenty twenty four. The occupational market is in our view fitter, leaner and more agile than it has been for many years. And this is clearly shown in a significant reduction in tenant failure.

5:46 That said, pure play operators have been more challenged by high inflation squeezing already tight margins and of course consumers returning to the physical storm. And this has led to an increase in pure play distress. Positive retail retailer sentiment is reflected in reduced vacancy rates over the last twelve months and an improving rental performance. Today, parks have a vacancy rate lower than industrial at circa 5%, which should be supportive of future rental growth. The reduction in business rates from April 2023 will lower occupational costs and support rental levels.

6:33 And whilst retailers still face cost challenges with higher wages and elevated energy costs, overall cost pressures should ease this year supported by a reduction in supply chain costs. Within the wider capital markets, we've seen a decline in capital values driven predominantly by the recalibration of property yields to the increase in gilt rates. For retail, the impact of yield expansion has been less pronounced as current retail yields provide a significant premium to gilt rates. You can see on the chart, those sectors which did not provide a sufficient risk premium were the most impacted.

7:18 Now NEWRIVER's portfolio yield premium is 200 basis points higher than the MSCI all retail and currently four ten basis points higher than the ten year gilt. And this is one of the reasons why we have outperformed in a volatile market. We've consistently expressed our confidence in our portfolio and last year was no exception with an increase in occupancy, tenant retention and a strong leasing performance. As an example, from April 2020 through to March 2023, long term leasing transactions secured £15,400,000 of annual rent, equating to a ten year compound annual growth rate of just minus 0.4%.

8:12 Now given the extent of disruption within the retail real estate sector over the last ten years from the growth of online and COVID, our leasing performance over the last three years really demonstrates the underlying resilience in our rental cash flows. Of course, it also helps that we have a market leading asset management platform, which you need in the highly operational sector that retail real estate has become. Moving now to our valuation performance, which significantly outperformed MSCI experienced a like for like movement of minus 5.9%. Our core shopping centers and retail parks delivered capital returns of minus 0.7% and minus 3.2%.

9:04 We've now had four financial reporting periods of broadly stable valuations in our core shopping centers and retail parks. The majority of our valuation movement was in our regeneration portfolio as a result of high inflation and rising interest rates on estimated development costs. We've always held the view that income returns over the long term are the main driver of total returns. And given our high portfolio yield, you can see the importance of that income return in our total return outperformance relative to the MSCI. Over a one, three and five year period, our portfolio has consistently outperformed on income, capital and total returns and we expect that to continue.

10:01 We take our role as the custodians of assets within the community very seriously and we are delighted to report progress in the delivery of our ESG strategy as recognized by both GRES and EPRA. In addition, we are fully MES compliant. Achieving net zero within the retail sector very much relies upon mutual action by real estate owners and occupiers. The energy our occupiers consume accounts for almost 90% of our total carbon emissions. These are emissions over which we have limited control, but we continue to develop our engagement to support alignment between our climate ambitions and those of our occupiers.

10:51 And so we're pleased to report that 57% of our lettable floor space is occupied by retailers that have already set emission reduction targets and we expect that to increase over the coming years. So with that, I'm now going to hand over to Will who will take you through the financials. Thanks, Alan, and good afternoon, everyone. It's my pleasure to be taking you through our full year results today, starting with the financial highlights. We've delivered a strong recovery in underlying earnings this year with UFFO increasing to £25,800,000 compared to £20,500,000 last year, which is the retail comp stripping out the contribution from Hawthorne prior to its disposal.

11:39 Because our dividend policy is linked to UFFO, this has led to an improvement in the fully covered dividend delivered by the retail portfolio, which has increased to 6.7p per share from 5.3p last year excluding the pubs. And importantly, it's comfortably covered by UFFO per share of 8.3p. Turning to the balance sheet. Our asset valuations were not immune from the disruption seen in the investment and credit markets in the second half of the year, which means NTA per share reduced to a 121p from a 132p at the half year and a 134p a year ago, albeit we did still outperform the market by a significant margin.

12:28 And despite the backdrop, we still achieved our workout disposal target during the second half, ensuring that we ended the year with LTV at just under 34%, in line with the positions reported six and twelve months ago before the valuation disruption and driven by a reduction in net debt and an increase in cash reserves from £88,000,000 a year ago to £111,000,000 at the year end. Our other key debt metrics such as interest cover and net debt to EBITDA have also improved during the year. Alongside the fact that our cost of drawn debt is fixed and we have no refinancing requirement until 2028 means that we ended the year in an even stronger position than we started, which we believe is a considerable achievement in this environment.

13:21 I'll have more on the balance sheet later on, but first, I'd like to look at UFFO. Alongside the UFFO statement, the slide shows a bridge from the prior year, which illustrates clearly that once adjusting for the contribution from the pubs last year, retail UFFO has improved significantly year on year from £20,500,000 to £25,800,000 and factoring in retail disposals that all component parts of UFFO have contributed to the increase. I'll have more on net property income in a moment, but before that, I'd like to walk you through the other drivers of the FFO improvement. Starting with other income, which you can see added 1,400,000.

14:09 This relates entirely to the settlement of an income disruption insurance claim relating to our car park income during the first COVID lockdown between March and June 2020. Our work on cost reduction, both admin and finance costs added over GBP 5,000,000. With admin costs reflecting the impact of our cost savings initiatives, not least the relocation of our head office, which we completed during the first half of the year, and with finance costs benefiting from the debt reduction exercise completed last year as well as the income we're currently generating on our cash balances. Next, NPI, which after factoring in the impact of the 100,000,000 of retail disposals completed this and last year has increased from £48,100,000 to £50,500,000 You can see that like for like income was up by £1,200,000 or 2.9%, significant in representing a return to growth for the first time since 2018.

15:12 And importantly, growth was strongest in our core shopping center and retail park assets, which we see as forming the backbone of our portfolio over the long term. Next, rent and service charge provisions, where we've seen a modest benefit year on year due to further improvement in rent collection rates year on year, now normalized at 98% in FY 2023. We've also continued to collect historical COVID arrears, meaning the blended collection rate for FY 2021 and FY 2022 has now increased to ninety five percent. Lastly, car park and commercialization income, which has been steadily improving over the last eighteen months and is now back up to 80% of pre pandemic levels, recovering a further GBP 1,300,000 of income during the year.

16:09 Before moving on to the dividend, I'd like to break UFFO per share down into its constituent elements. Look at the status and direction of travel of each. Starting with income, which as I've just shown, the underlying trend is continued recovery post COVID.

16:28 Then admin costs, which have already reduced. And although it will be challenging in this environment where we've targeted further savings. And finally, finance costs, which have already reduced and very importantly, are fixed for the next five years, all of which means our retail UFFO is rebuilding, which flows directly into our dividend.

16:55 Because under our dividend policy, we pay dividends twice per annum, announced within our half and full year results and based on 80% of UFFO reported for the most recently completed six month period. In the prior year, we declared a total dividend per share of 7.4p, which included 2.1p of contribution from Hawthorne prior to its disposal and a dividend from the retail business of 5.3p. And when we announced our results two weeks ago, we declared a second half dividend of 3.2p per share, payable in early August. Along with the dividend we declared in our half year results, this takes the total fully covered dividend for this financial year to 6.7p, which based on our average share price over the last month represents a fully covered dividend yield of 8%.

17:54 Moving on to the balance sheet and starting with a snapshot of our key balance sheet and debt metrics. This slide shows clearly the continued and indeed improved strength of our position today despite the impact we saw on our valuations from the market disruption in the second half of the year, as reflected in the reduction in NTA per share in the top left of the slide. With LTV, interest cover and cash holdings all improved year on year, and net debt to EBITDA improving half on half. This position is supported by our low and attractive cost of debt, which is fixed at 3.5%. And given we have no maturity on drawn debt until 2028, that will remain the case for the next five years.

18:43 On top of that, we also have a market leading yield gap position, being the difference between our net initial yield on our portfolio, I. Our income and our cost of debt, as you can see on this slide, which shows that we have the highest yield spread when compared to our listed real estate peers, thanks mainly to our high and sustainable income yield. And importantly, given the elevated interest rate environment we're now in, which is putting pressure on near term refinancings, the fact that our debt is fixed for five years means that we expect this to remain a strength going forward. Next, our financial policies, which form a key part of NEWRIVER's approach to financial risk management.

19:30 You can see clearly that we've maintained significant headroom across all of our policies during the year. So our position has improved since the last time we reported, with interest cover continuing to trend up and net debt to EBITDA now particularly strong and the lowest amongst our listed peers, thanks to our high and sustainable income yield and our conservative net debt position. And these aspects were recognized by Fitch along with our sustainable dividend policy and resilient portfolio characteristics when they reaffirmed New River's investment grade credit rating in December at triple b with a stable outlook and triple b plus on the bond itself. These ratings have now been maintained since the corporate bond was issued five years ago, which we see as a real endorsement of the continued strength of our business.

20:23 Next, LTV. You can see that our LTV position has reduced slightly during the year despite valuations because the achievement of our workout disposal target has offset the adverse effect of the 5.9% valuation decline. And UFFO retained after paying dividends and covering investment into our portfolio has driven the overall reduction during the year from 34.1 to 33.9%,

20:54 which leads me on to LTV guidance and capital allocation. To remind you, a year ago with LTV at 34%, we said that we would not rush to redeploy to our 40% guidance level. And in the near term, we intended to keep some headroom to that level and to operate with higher cash holdings given the uncertain macro outlook. We repeated this guidance six months ago when we presented the half year results when LTV was also 34%. Noting that we wanted to understand more about the potential impact of market disruption on valuations before making any allocation decisions. Looking back at the events of the last six and twelve months, we believe that this was the right call and has been a key contributor to the position of strength we are now able to report.

21:46 Revisiting this now, while we remain confident in the strength of New River's position, we've demonstrated the resilience of our underlying cash flows in current environment. We see no reason to change our near term guidance at the moment.

22:00 So we intend to keep headroom to the 40% level in the near term. The big difference now is that the base rate is 4.5% compared to 1% a year ago and 3% at the half year. So we're now earning just over a 4% return on the majority of our cash. Therefore, it's still making a meaningful contribution to UFFO and the dividend. The rate we're achieving is likely to go up in the near term as current deposits roll off and we renew at higher rates and also in the event that the base rate increases further from here. And in the meantime, by holding cash, we retain maximum flexibility. So any capital allocation decision we make has to offer particularly compelling returns over and above what we're achieving on our cash at the moment.

22:55 We'll, of course, continue to monitor the market very carefully because there could well be opportunities for us as increasing finance costs feed into upcoming market refinancings. But right now, our message is clear. We're in a strong and flexible position, and we will be highly disciplined when it comes to capital allocation. Lastly from me, I'd like to expand on the key areas we expect to contribute to UFFO growth looking ahead. You can see on the left hand side of this slide that we take the 8.3p per share of UFFO we reported recently, which we then adjust to remove the impact of items that benefited FY 2023 but will not benefit FY 2024, being completed disposals and one off stating back to COVID, such as the £1,400,000 of disruption insurance proceeds received during the year.

23:52 And to item in items that will benefit FY 2024 more than FY 2023, namely a full year of income from the M and G asset management mandate and a full year of income earned on our surplus cash, which gives us 7.7p per share as a start point. We then add in further cost savings, which we've not yet unlocked, highlighted as number one on the slide. That's principally the further admin cost savings we've targeted on top of the GBP 900,000 we've unlocked over the last year and a half, which will be more challenging given the inflationary environment we're now in, but which will remain an area of focus for us. Next, income recovery, which is a measure of our success in recovering the income disruption we experienced back in FY 2021.

24:44 We've made good progress during FY 2022 and FY 2023, which means that the remaining impact to recover now stands at 1.2p per share, down from just over 2p per share at the start of the year. We're confident we can make further inroads as we look ahead and encouraged by the like for like growth we've seen this year. But alongside that, we're actively expanding other revenue streams such as our capital partnerships, where we had success during the year in signing a new and exciting mandate with M and G Real Estate, which has already been expanded post year end. Finally, number three, capital deployment. As I've just communicated, we will not rush to redeploy to the 40% LTV level in the near term.

25:32 But we've included an illustrative 0.7p per share as an indication of the incremental benefit over and above the returns we're currently generating on our cash as and when we decide to deploy. Thank you all for listening. I'll now hand you back to Alan. Thanks, Will. And moving now to a review of our portfolio. Our core shopping centers are long term holds for us due to their reliable and secure cash flows. We've seen active demand for space reflected in an occupancy of 98%, a retention rate of 90%, and now three years of leasing transactions exceeding value ERBs.

26:18 Our core shopping centers are valued off a net initial yield of 9.6%. And given the security of the underlying rental cash flows, it is no surprise that they have significantly outperformed MSCI on a one, three, and five year period. On a total return, last year's outperformance was fifteen forty basis points. These centers located in Northern Ireland, Scotland, and England are the largest of our core shopping centers with a combined value of £117,000,000. Located in the center of their communities with short travel times ranging from nine minutes to thirty minutes, the key to the success of these assets is the high quality anchor stores, including Marks and Spencer's, Primark, Dunne's, and Asda, but also the right balance between supply of space and demand for that space.

27:20 As a result, these assets have high occupancy and retention rates and very efficient gross to net ratios. Our retail part portfolio has had another good year of delivering strong operating metrics with occupancy at 98% and a retention rate last year of 100%. We continue to see strong occupational demand for our retail parks, which are highly compatible with omnichannel retailing. And given the tight supply in our portfolio, they should deliver consistent rental growth. Our retail power portfolio significantly outperformed MSCI on a total return by eleven seventy basis points reflecting our consistently higher income return and more stable valuation performance.

28:18 All of our retail parks are anchored by or adjacent to food retailers and the three retail parks featured here benefit from a range of high quality food retailers, Aldi, Tesco, Sainsbury's, and Food Warehouse. The high frequency of customer visits, the free surface car parking, and the range of omnichannel retailers means that these assets are delivering resilient operating metrics with occupancy ranging from 91% to 100%, high retention rates, and highly efficient gross to net ratios. With affordable rents ranging from 10.60 to £12.90 per square foot supported by low service charges, the long term compound annual growth rate has ranged from minus 0.9% to plus 1.4% demonstrating the reliable rental cash flows that these assets provide.

29:22 We're seeking to deliver capital growth in our regeneration portfolio by redeveloping surplus retail space principally for residential. Across our three projects, we're working on the delivery of over 1,700 residential units providing a mix of build to sell, build to rent, and affordable units. These are not projects that we would ever develop out ourselves, but we can create value by securing planning consents and then selling to residential developers as we did in the previous financial year in Cowley and in Penge. Our three projects are at different stages in the development cycle with Burgess Hill, planning consent already secured, and where we're finalizing key anchor lettings prior to selling the residential site.

30:18 At Grays, we've completed the preplanning process, which will facilitate a major planning application later this year. And finally, in Bexley Heath, we are making good progress with the master plan working closely with the council who are supportive to deliver up to 700 residential units on a phased basis. Moving now to our workout portfolio, which represents about 11% of our total portfolio, a reduction from the previous year of 14% and which also outperformed the MSCI on a total return by five ninety basis points. Our strategy is to exit from workout, which we're seeking to achieve through a combination of disposals and implementation of turnaround strategies to deliver long term rental and capital sustainability.

31:18 This year, we are targeting four disposals with an average value of around £5,000,000 and the completion of five turnaround strategies for which we are making excellent progress. And then of course, in the meantime, we do benefit from an attractive income return. The turnaround strategies that we are deploying include intensive asset management such as in Paisley where we're taking advantage of significant displacement of tenants from the proposed demolition of another center in that town to a complete repositioning that we are doing in Cardiff. In Cardiff, our plans are to repurpose this once retail dominated center to leisure and we are in advanced negotiations with a leading competitive and social leisure operator to lease approximately 100,000 square feet, which will both be transformational and accretive.

32:22 Our capital partnership activities which are expanding are focused on three areas. In the institutional sector where we were appointed by M and G real estate to asset manage a retail portfolio comprising 16 retail parks and one shopping center, which was then extended in April to include an additional shopping center. In the private equity sector with Bravo in which we co invest. Currently, this joint venture, comprises three retail parks and one shopping center. And finally, in the private in the public sector with Canterbury City Council where we asset managed two shopping centers and were recently appointed as development manager to relocate the council's offices to their center.

33:16 Today, we now manage in excess of £500,000,000 of assets and over £50,000,000 of annual rent on behalf of our partners and the potential for us to increase our capital partnership activities is significant given our unique position in the marketplace and our strong track record of our performance. We're therefore on track to deliver recurring fee income of between GBP 3,000,000 to GBP 5,000,000 by the end of twenty twenty four. Our operating and financial results over the last two years demonstrate the underlying resilience in our portfolio and platform and we expect that to continue into our new financial year.

34:08 Given the high occupancy in our retail parks and core shopping centers at 98%, we believe that the prospects for future rental growth are now encouraging, which should be supportive of future capital returns and another year of MSCI outperformance. The business is in an excellent position with a very strong balance sheet that is not exposed in the medium term to rising interest rates. We have significant capital available to deploy and opportunities to expand our capital partnerships, all of which should deliver future earnings and NAV growth. And it's for those reasons that we remain confident of delivering our medium term objective of a consistent 10% total accounting return.

35:03 Thanks for listening. That concludes our presentation and Will and I would be happy to take your questions. Alan, Will, thank you very much for your presentation. I'll just submit a poll and if you could give that your attention, the company would be most grateful. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab, which is situated on the top right hand corner of your screen. But just while the company take a few minutes to read those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. As you can see, we received a number of questions throughout today's presentation. And Lucy, at this point, if I could just hand over to you to chair the q and a, that'd be great, and I'll pick up from you at the end. Great. Thank you. We've had a few questions come in, so thank you for submitting those. So we'll just track through those.

35:48 So, the first one is from Greg H. It's regarding regeneration. Would you consider buying another regeneration asset, or do you think that time has passed? Our focus really is going to be in the future is to be investing into assets that deliver consistent, reliable, rental cash flows that have the potential, to grow, because that way we'll deliver, capital growth. And that's really where our focus is gonna be moving moving into the years ahead. Okay. Second question is from David D. Have we considered fitting solar panels to our shopping centers? We we do have, solar panels already, on our shopping centers, and they make a valuable contribution to our ESG strategy.

36:40 Indeed, of the energy that we supply to our common areas, whether that's our mall areas or our car parks is already from renewable energy. Okay. Great. Thank you. Third question is regarding the dividend. And there are two questions around dividend growth. So the first was simply, do we see dividend growth over the short term from David D? And the second from Vivian W was that we were paying dividends of over 5 p a quarter, and had done so since 2016. Do we think we'll be able to return to dividends at this level? Is that unachievable? Or if not, what's our long term plan for dividends? I think regarding dividend growth, we had a chart in the pack that I presented. It's it's on slide 20.

37:33 And what that effectively tries to do is take where we are at the moment in terms of numbers we've just reported, you know, reflecting disposals that happened at the end of the year and other things, and then kind of show growth from that annualized position effectively. So the answer is, you know, yes, we we are hopeful of growing our UFFO in the sort of short term. And and therefore, because of our dividend policy, if we can grow UFFO, that will feed directly into our dividend. So that's the that's the sort of dividend growth question. Yes. Okay. Great. The next question regards Wilco. So it's from Youssef as effectively as over the weekend, there were reports of CVA being filed by Wilco. Wilco accounts for 2.1% of our rent roll. What percentage of this represents retail parks versus shopping centers?

38:24 And can I can we comment on what impact we think Wilco's CVA will have to revenue and cash? Well, we're expecting Wilco to launch a CVA on the June quarter. The impact to NEWRIVER is going to be de minimis. We have five Wilkinson stores in our portfolio. They're all in our shopping centers. Four out of those five stores, We are not expecting any change to the rental terms. We have one store where the rent will come down, but the amount is really frankly de minimis and just not material. Two of those Wilkinson stores are in assets that we will be selling this year. Two of the other stores are in our regeneration portfolio, which we actually would like to get taken possession in due course. So I think the message is Wilkinson's are not gonna be impacting our our earnings during the course of this year.

39:26 Okay. Superb. And the final question is regarding leasing. What length of lease do you look for, and does it include rising income? So rental growth, presume. And then secondly, do we include footfall measurements to be safe in footfall? Well, if you look at all of our leasing transactions last year, think the blended weighted average lease expiry profile of all those new deals that we did in the last financial year was around eight point two years. We don't have a huge amount of indexation within our portfolio, but actually our portfolio is already starting to deliver like for like rental growth. And then you'll have seen it on one of Will's slides that last year, the portfolio delivered 2.9% like for like rental growth, which is the first positive print on rental growth that we've had since 2018.

40:25 And I think that's just reflective of portfolio positioning, owning the right assets in the right locations, and of course, the quality of our asset management team and the fantastic work that they do to drive the best deals when it comes to leasing. Great. Thank you. And one more question has come in regarding the role of physical retail. So it's from Vivian W again. There's clearly been a recovery in physical retail since the pandemic. Do you believe the trend is in favor of the physical retail, or will online continue to gain long term share? Online will continue to grow, but the pace of growth is rapidly receding compared to the last ten years. But what we've been seeing over the last sort of twelve months is the value of physical stores.

41:16 They physical store operators and omnichannel retailers, I. Those retailers that run a physical store network and an online online channel have emerged as a clear winners over the last twelve months and they've coped much, much better in a high inflation environment. And we think click and collect is really the fastest growth areas and omnichannel retailers are much, much better positioned to facilitate click and collect for their their shoppers. And that's one of the reasons why we've been investing more in retail parks because we believe that retail parks are highly compatible with that click and collect format.

42:01 Okay. Thank you. And there's still a few more questions coming in. So again from Vivian, there was a trend during the pandemic for sharing the risk with your retail tenants. Is that still something that we're seeing continue? Well, the the pandemic period, obviously, we have the the enforced lockdowns. The government also put in place a moratorium on real estate owners' ability to take the normal legal enforcement action for non payment of rent. So it was a very challenging time. Around about 65% of our portfolio by rent actually traded all the way through the pandemic period, which reflects our portfolio positioning being more focused on essential goods and services.

42:50 But for those retailers and those tenants that were forced to shut their stores during the lockdown periods, we reached mutual agreements with them in terms of providing them with support and our typical agreement was they got a rent free period, but in return we got an extension to the lease or we removed a break clause. So the upshot of it was that overall from that pandemic period, we've as it stands at the moment, we've collected 95% of the rents that were due in that period, which I think is frankly an outstanding performance and one of the sort of market leading performances as well.

43:36 Okay. Great. And just a further question kind of linked to a previous one. Do we have many turnover related leases? We don't. Most of our retailers don't want to share their turnover with us. Where you tend to see turnover leases within the retail sector is within fashion, but we don't have a high exposure to fashion. You know, I would say our key fashion operator within our portfolio is Primark and there's no way Primark want to share their turnover with landlords. So we're not exposed to that sort of variable turnover element. Okay. So you've got a couple of other questions, but they've been addressed in questions that we've already asked and you've answered. Okay. So I think Alan, Will, Lucy, thank you very much for that. I think you've addressed those questions you can from investors, and of course, the company will review your questions submitted today, and we'll publish those responses on the investor me company platform.

44:35 But just before redirecting investors to provide you with their feedback, which you know is particularly important to the company, Alan, could I just ask you for a few closing comments? Well, thank you everybody for your time. I hope that going through the presentation that you will agree with us that, you know, we are operating in a marketplace that has improving. It's been more resilient than many people had expected. Hopefully, we were able to convey how strong our operating performance has been and that's reflective of the quality of our portfolio with which we have carefully curated over many years. And hopefully, you also recognize the strength of our balance sheet. We believe that we have one of the strongest balance sheets in the listed real estate sector. And then finally, we genuinely believe we have real growth opportunities.

45:27 We've got a line of sight as to how we can deliver earnings per share growth whilst many others will be impacted by rising interest rates on their earnings. We're in a really great position where we're not exposed to that. So we've got a real line of sight as to how we can deliver earnings growth and that's why we believe that we offer one of the most compelling total shareholder return opportunities within the listed real estate sector over the next couple of years. Thank you. Alan, Will, Lucy, thanks once again for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations.

46:13 This will only take a few moments to complete, but I'm sure you'll be greatly valued by the company. On behalf of the management team of NEWRIVER REIT PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.