NEWRIVER REIT PLC

Earnings Release • Nov 18, 2015

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RNS Number : 0724G

NewRiver Retail Limited

18 November 2015

NewRiver Retail Limited

("NewRiver" or the "Company")

Unaudited results for the six months ended 30 September 2015

Record financial results and portfolio growth through

successful deployment of equity placing proceeds

Financial Highlights

Record profits and strong NAV per share growth

§ EPRA adjusted profit increased by 190% to £19.7 million (Sept 2014: 120% to £6.8 million)

§ Profit before tax increased by 243% to £42.2 million (Sept 2014: 137% to £12.3 million)

§ EPRA adjusted earnings per share increased by 95% to 13.2p (Sept 2014: 6.8p)

§ Basic Earnings per share of 28.3p, a 128% increase on the prior period of 12.4 p

§ Dividend per share of 9p(1) (Sept 2014: 8.5p), fully covered

§ Third quarter dividend increased to 4.75 pence per share (11.7% growth on prior year)

§ EPRA NAV per share increased by 14% to 287p (Sept 2014: 252p)

§ LTV decreased to 37% (March 2015: 39%) with further approved debt facilities in place

Operational Highlights (2)

Highly active asset management continues to drive value

§ Successfully raised £150 million of fresh equity from a range of new and existing shareholders

§ Swiftly deployed into £230 million of acquisitions, net initial yield of 9.6%

§ Assets under management increased to £1 billion

§ Balance sheet assets increased to £882 million

§ Improved high retail occupancy rate of 96% (Sept 2014: 95%)

§ 22 planning consents for Convenience Store programme, construction started for first C-Store

§ Planning application lodged for major mixed-use town centre regeneration in Burgess Hill

§ Good progress on move to Main Market, obtaining a Premium Listing and EPRA Index qualification

(1) Includes two quarterly Dividends of 4.5 pence per share

(2) Unless otherwise stated, all figures are proportionately consolidated

Financial Statistics

Performance Highlights

Performance	Sep 2015	Sep 2014	Movement/ Growth
Total Shareholder Return (12 months)	25%	32%	7%
EPRA adjusted profit	£19.7m	£6.8m	+190%
Profit before tax	£42.2m	£12.3m	+243%
EPRA Adjusted  Profit (Pence Per Share) (3)	13.2	6.8	+95%
EPRA Basic (Pence Per Share)	12.6	5.6	+125%
Earnings Per Share	28.3	12.4	+128%
Dividends per share	9.0	8.5	+6%
Dividend cover	147%	80% (4)	-
Property valuation movement and disposals	£22.9m	£6.8m	+£16.1m
Interest Cover	4.0x	3.5x	+0.5x

(3) EPRA Adjusted Profit = Recurring Profit plus Profit on disposals

(4) Divided cover for the financial year to 31 March 2015 was 116%

Balance Sheet (proportionally consolidated)

Six months ended	30 Sep 2015	31 Mar 2015	Movement/ Growth
Net Asset Value	£521.0m	£339.7m	+£181.3m
EPRA NAV per share	287 pence	265 pence	+22 pence
Secured debt facilities (net of fees)	£359.4m	£272.5m	+£86.9m
Cash	£28.1m	£21.1m	+£7.0m
Net debt	£331.3m	£251.4m	+£79.9m
Cost of debt	3.8%	3.8%	-
Average debt maturity	3.9 years	4.6 years	-0.7 years
Loan to value	37%	39%	-2%
Balance sheet gearing	55%	49%	+6%
% of debt at fixed/capped rates	75%	83%	-8%

David Lockhart, Chief Executive of NewRiver Retail Limited, commented:

"I am delighted to report another strong set of financial results following one of the most active periods for NewRiver since its incorporation in 2009. We have achieved record profit growth and strong sustainable income returns, delivering increases in all our key financial metrics. These are excellent results and demonstrate that our business model is delivering. Following the over-subscribed £150 million equity fundraise, we efficiently deployed the proceeds into £230 million of strategic acquisitions at an average yield of 9.6% simultaneously growing our assets under management to the landmark £1 billion mark. Our move to the Main Market is targeted for July 2016 and will mark another important milestone in our impressive journey."

-Ends-

For further information

NewRiver Retail Limited  David Lockhart, Chief Executive Mark Davies, Finance Director	Tel: 020 3328 5800
Bell Pottinger David Rydell / James Newman / David Bass	Tel: 020 3772 2500
Liberum Richard Crawley / Jamie Richards	Tel: 020 3100 2000
Peel Hunt LLP Capel Irwin / Hugh Preston	Tel: 020 7418 8900

Chairman's Statement

The first half of the financial year has been marked as one of the most active periods for NewRiver Retail since its incorporation just six years ago. Combining major acquisitions, a significant equity fund raising, new debt facilities and significant asset management initiatives the period ended with record pre-tax profits of £42.2 million (Sept 2014: £12.3 million) and a 14 per cent. annual increase in EPRA NAV to 287p.  

EPRA adjusted profit increased by 190 per cent. to £19.7 million (Sept 2014: £6.8 million), whilst total gross assets under management broke through the watershed £1 billion level, an increase of 17 per cent. since 31 March 2015. EPRA NAV per share increased to 287 pence per share, impressive when considering this was in a period when the Company completed its largest equity fund raising to date.  

In line with its commitment to shareholder returns, the Board has approved two Quarterly Dividend payments of 4.5 pence per share resulting in an interim dividend of 9.0 pence (Sept 2014: 8.5 pence), our highest dividend pay-out to date. We are delighted to announce a further increase in the third quarter dividend to 4.75 pence per share (an 11.7 per cent. increase on the prior year).

In June, following previous successful capital raises, NewRiver again gained shareholder support for a major fund raising, securing £150 million of fresh equity from a range of new and existing shareholders. Management quickly and effectively deployed the majority of the equity proceeds having identified attractive opportunities to acquire quality assets and completing £230 million of new acquisitions at an average yield of 9.6 per cent. during the period.

The largest acquisition was the £69.1 million purchase of the Ramsay portfolio, a geographically diverse portfolio of 13 retail warehouse assets comprising nine investments properties and four development opportunities. Let to prime covenant retailers, the assets were acquired at a yield of eight per cent. and offer significant asset management and risk controlled development opportunities.  Three planning applications have already been approved with a further five to be submitted in the next quarter.

A further £52 million was utilised by acquiring the 50 per cent. stake not already owned by NewRiver in the Trent JPUT - notably the 202-strong Marston's public house portfolio at an implied net initial yield of 10.1 per cent. and the Camel III Shopping Centre Portfolio at a yield of 7.2 per cent.

Management view the public house market as a highly desirable sub sector of the retail property market. It generates secure long term income streams and offers significant asset-management and development opportunities. To date, nearly 50 planning applications have been submitted, 22 receiving approval principally for developments on surplus land adjacent to the trading public house. The Company has also identified further value-creating opportunities in its pub portfolio to develop up to 200 residential units on surplus land.

In September 2015, the Company expanded its pub portfolio through the £53.5 million acquisition of a further 158 public houses across England and Wales from Punch Taverns. The purchase price reflects a net initial yield of 13.5 per cent which management expect to generate an attractive cash on cash equity return in excess of 20 per cent.

In addition to an active acquisition programme, NewRiver made significant advances in its risk controlled development activities.  Notably a detailed planning application was submitted to the local authority for a major £65 million mixed use town centre redevelopment in Burgess Hill, West Sussex, totalling 465,000 sq ft. In Cowley, Oxfordshire, public consultation is underway for a £64 million redevelopment of Templars Square which is expected to deliver 225,000 sq ft of mixed use assets. In total the Company's growing development pipeline equates to more than 1 million sq ft.

Portfolio management has progressed well with total rent roll under management increasing by 19 per cent. in the last quarter alone to £85.3 million per annum. The retail occupancy rate improved to 96.3 per cent. and the team completed 109 new lettings and lease renewals during the period at 7.8 per cent. above ERV, delivering £2 million per annum of income.

The Company has announced its intention to move from AIM to the Premium segment of the Main market of the London Stock Exchange. The process is progressing well with an expected target date of July 2016. The Board is delighted with NewRiver's significant progress in the period which again demonstrates that it is achieving its objective of becoming one of the leading value-creating retail property investment businesses in the UK. The Board looks forward to the future with confidence.

Paul Roy

Chairman

18 November 2015

Proportionally consolidated Statement of Comprehensive Income

The Group financial statements are prepared under IFRS which includes profits from joint ventures on one line. The Board considers the performance of the Group on a proportionately consolidated basis and the report below therefore reflects this basis.

		Unaudited Six months ended 30 September 2015				Unaudited Six months ended 30 September 2014
INCOME STATEMENT		Group	Joint Ventures	Proportionally consolidated	Group		Joint Ventures	Proportionally consolidated
		£'000	£'000	£'000	£'000		£'000	£'000
Gross rental income and fees		26,640	9,134	35,774	9,199		7,731	16,930
Property outgoings		(2,827)	(798)	(3,625)	(1,750)		(662)	(2,412)
Net property income		23,813	8,336	32,149	7,449		7,069	14,518
Operating expenses		(4,919)	(411)	(5,330)	(3,781)		(387)	(4,168)
Net financing costs		(4,959)	(2,472)	(7,431)	(2,908)		(1,889)	(4,797)
Profit/ (loss) on disposal of investment properties		(73)	-	(73)	1,153		-	1,153
Joint ventures net income		5,453	(5,453)	-	4,793		(4,793)	-
Revaluation surplus		22,869	-	22,869	5,631		-	5,631
IFRS Profit for the period		42,184	-	42,184	12,337		-	12,337
EPRA adjustments		(22,469)	-	(22,469)	(5,556)		-	(5,556)
EPRA adjusted profit		19,715	-	19,715	6,781		-	6,781
EPRA adjusted EPS		13.2		13.2	6.8			6.8
Dividend per share		9.0		9.0	8.5			8.5
Dividend Cover		147%		147%	80% (1)			80% (1)

(1) Divided cover for the financial year to 31 March 2015 was 116%

Proportionally consolidated Balance Sheet

Management assesses the business on a proportionally consolidated basis. The IFRS net assets for the Group include investment in joint ventures on one line and this is split out on a line by line basis in the table below.

		Unaudited As at 30 September 2015				Unaudited As at 31 March 2015
BALANCE SHEET		Group	Joint Ventures	Proportionally consolidated	Group	Joint Ventures	Proportionally consolidated
		£'000	£'000	£'000	£'000	£'000	£'000
Properties at valuation		753,453	129,063	882,516	404,098	222,205	626,303
Investment in joint ventures		66,110	(66,110)	-	113,027	(113,027)	-
Other non-current assets		567	-	567	513	-	513
Cash		23,498	4,563	28,061	15,412	5,696	21,108
Other current assets		6,654	1,154	7,810	6,166	2,698	8,864
Total assets		850,282	68,672	918,954	539,216	117,572	656,788
Other current liabilities		(18,535)	(3,125)	(21,660)	(16,197)	(4,596)	(20,793)
Debt		(291,178)	(65,010)	(356,188)	(157,921)	(112,012)	(269,933)
Convertible loan stock		(16,978)	-	(16,978)	(23,420)	-	(23,420)
Other non-current liabilities		(2,555)	(535)	(3,090)	(1,983)	(964)	(2,947)
Total liabilities		(329,246)	(68,670)	(397,916)	(199,521)	(117,572)	(317,093)
IFRS net assets		521,036	-	521,036	339,695	-	339,695
EPRA adjustments		23,742		23,742	29,973		29,973
EPRA net assets		544,778		544,778	369,668		369,668
EPRA NAV per share				287p			265p

Consolidated Condensed Income Statement

For the period from 1 April 2014 to 30 September 2015

		Unaudited Period 1 Apr 2015 to 30 Sep 2015			Unaudited Period 1 Apr 2014 to 30 Sep 2014
	Notes	Operating and Financing £'000	Fair value adjustments £'000	Total £'000	Operating and Financing £'000	Fair value adjustments £'000	Total £'000
Gross income	3	26,640	-	26,640	9,199	-	9,199
Property operating expenses	4	(2,827)	-	(2,827)	(1,750)	-	(1,750)
Net property income		23,813	-	23,813	7,449	-	7,449
Administrative expenses	5	(4,919)	-	(4,919)	(3,781)	-	(3,781)
Share of income from joint ventures	11	5,453	2,296	7,749	4,793	5,631	10,424
Net valuation movement	9	-	20,573	20,573	-	-	-
(Loss)/Profit on disposal of investment properties		(73)	-	(73)	-	1,153	1,153
Operating profit		24,274	22,869	47,143	8,461	6,784	15,245
Net finance expense
Finance income		25	-	25	166	-	166
Finance costs		(4,984)	-	(4,984)	(3,074)	-	(3,074)
Profit for the year before taxation		19,315	22,869	42,184	5,553	6,784	12,337
Current taxation charge		-	-	-	-	-	-
Profit for the year after taxation		19,315	22,869	42,184	5,553	6,784	12,337
Earnings per share
EPRA Adjusted (pence)	6			13.2			6.8
EPRA basic (pence)	6			12.6			5.6
Basic EPS (pence)	6			28.3			12.4
EPS diluted (pence)	6			28.1			11.6

All activities derive from continuing operations of the Group.

Consolidated Condensed Statement of Comprehensive Income

For the period from 1 April 2014 to 30 September 2015

	Notes	Unaudited Period 1 Apr 2015 to 30 Sep 2015 £'000	Unaudited Period 1 Apr 2014 to 30 Sep 2014 £'000
Profit for the year after taxation		42,184	12,337
Other comprehensive income
Items that will be reclassified subsequently to profit or loss
Fair value gain on interest rate derivatives designated in cash flow hedges	12	6	129
Total comprehensive income for the year		42,190	12,466

Consolidated Condensed Balance Sheet

As at 30 September 2015

	Notes	30 September 2015 £'000	31 March 2015 £'000
Non-current assets
Investment properties	9	753,453	404,098
Investments in joint ventures	11	66,110	113,027
Property, plant and equipment		567	513
Total non-current assets		820,130	517,638
Current assets
Trade and other receivables		5,542	5,853
Derivative financial instruments	12	1,112	313
Cash and cash equivalents		23,498	15,412
Total current assets		30,152	21,578
Total assets		850,282	539,216
Equity and liabilities
Current liabilities
Trade and other payables		18,535	16,197
Current taxation liabilities		-	-
Total current liabilities		18,535	16,197
Non-current liabilities
Derivative financial instruments	12	2,555	1,983
Borrowings	12	291,178	157,921
Debt instruments	12	16,978	23,420
Total non-current liabilities		310,711	183,324
Net assets		521,036	339,695
Equity
Share capital	13	-	-
Retained earnings		79,235	58,254
Other reserves		412,333	273,582
Hedging reserve		(684)	(690)
Share Option reserve		1,463	1,063
Revaluation reserve		28,689	7,486
Total equity		521,036	339,695
Net Asset Value (NAV) per share
EPRA NAV (pence)	7	287	265
Basic (pence)	7	290	267
Basic diluted (pence)	7	286	264

The financial statements were approved by the Board of Directors on 18 November 2015 and were signed on its behalf by:

David Lockhart                    Mark Davies

Chief Executive                   Finance Director

Consolidated Condensed Cash Flow Statement

As at 30 September 2015

	Note	30 September 2015 £'000	30 September 2014 £'000
Cash flows from operating activities
Profit before tax on ordinary activities for the year attributable to Shareholders		42,184	12,337
Adjustments for:
Loss/(profit) on disposal of investment property		73	(1,153)
Net movement from fair value adjustments on Investment Properties	9	(20,573)	-
Net movement from fair value adjustments in joint ventures	11	(2,296)	(5,561)
Profits in joint ventures		(5,453)	(4,793)
Net finance costs		4,959	2,908
Rent free lease incentive adjustment		(112)	(216)
Provision for bad debts		(3)	22
Amortisation of legal and letting fees and facility fees		(342)	338
Depreciation on property plant and equipment		62	33
Share Options		400	268
Operating profit before changes in working capital		18,899	4,183
Changes in working capital:
(Increase)/decrease in receivables and other financial assets		(487)	(3,328)
Increase/(decrease) in payables and other financial liabilities		3,105	(3,458)
Cash generated from / (used in) operations before interest		21,424	(2,603)
Net finance costs		(4,984)	(175)
Corporation tax paid		-	(219)
Net cash generated from / (used in) operating activities		16,533	(2,997)
Cash flows from investing activities
Investment in joint ventures	11	-	(72,470)
Purchase of investment properties		(76,454)	(33,578)
Acquisition costs		(7,435)	-
Properties acquired on business combinations	10	(194,033)	-
Disposal of investment properties		6,150	24,450
Development and other capital expenditure		(4,729)	(1,693)
Purchase of plant and equipment		(117)	(66)
Dividends received	8	2,250	2,380
Net cash used in investing activities		(274,368)	(80,977)
Cash flows from financing activities			-
Proceeds from issuance of new shares		143,208	420
Repayment of bank loans and other costs		-	(11,960)
New borrowings		133,612	16,770
Dividends paid	8	(10,899)	-
Net cash generated from financing activities		265,921	5,230
Cash and cash equivalents at 1 October/1 April		15,412	89,555
Net increase / (decrease) in cash and cash equivalents		8,086	(78,744)
Cash and cash equivalents at 30 September/31 March		23,498	10,811

Consolidated Condensed Statement of Changes in Equity

As at 30 September 2015

	Notes	Retained earnings £'000	Share capital and Share premium £'000	Other reserves £'000	Hedging reserves £'000	Share Option reserves £'000	Revaluation reserves £'000	Total £'000
As at 30 September 2014		37,778	-	213,401	110	528	771	252,588
Net proceeds of issue from new shares	13		72,900					72,900
Transfer of share premium			(72,900)	72,900				-
Total comprehensive income for the period		27,191			(800)			26,391
Realisation of fair value movements		146					(146)	-
Share-based payments						535		535
Dividend payments	8			(12,719)				(12,719)
Revaluation movement		(6,861)					6,861
As at 31 March 2015		58,254	-	273,582	(690)	1,063	7,486	339,695
Net proceeds of issue from new shares			149,650					149,650
Transfer of share premium			(149,650)	149,650				-
Total comprehensive income for the period		42,184			6			42,190
Realisation of fair value movements		(630)					630	-
Share-based payments						400		400
Dividend payments	8			(10,899)				(10,899)
Revaluation movement		(20,573)					20,573	-
As at 30 September 2015		79,235	-	412,333	(684)	1,463	28,689	521,036

Notes to the financial statements

1 Accounting policies

General information

NewRiver Retail Limited (the 'Company') and its subsidiaries (together the 'Group') is a property investment group specialising in commercial real estate in the UK. NewRiver Retail Limited was incorporated on 4 June 2009 in Guernsey under the provisions of The Companies (Guernsey) Law, 2008. On 22 November 2010, the Company converted to a UK REIT( Real Estate Investment Trust) and is managed and controlled in the UK. The Company's registered office is Old Bank Chambers, La Grande Rue, St Martin's, Guernsey GY4 6RT and the business address is 37 Maddox Street, London W1S 2PP. The Company is publicly traded on the AIM market under the symbol NRR.

The Company has taken advantage of the exemption conferred by the Companies (Guernsey) Law, 2008, Section 244, not to prepare company only financial statements.

These consolidated financial statements have been approved for issue by the Board of Directors on 18 November 2015.

Going concern

The Directors of NewRiver Retail Limited have reviewed the current and projected financial position of the Group making reasonable assumptions about future trading and performance. The key areas reviewed were:

· Value of investment property

· Timing of property transactions

· Capital expenditure and tenant incentive commitments

· Forecast rental income

· Loan covenants

· Capital and debt funding

· Capital expenditure

The Group has cash and short-term deposits, as well as profitable rental income streams and as a consequence the Directors believe the Group is well placed to manage its business risks. Whilst the Group has borrowing facilities in place it is currently well within prescribed financial covenants. Together with its cash resources the Group will arrange bank facilities to fund any future risk-controlled developments.

The Group has £17 million of Convertible Unsecured Loan Stock ("CULS") in issue which mature on 31 December 2015 when they will be either converted or repaid. The Company expects the holders of the CULS to convert their interest to equity prior to the maturity date.

After making enquiries and examining major areas which could give rise to significant financial exposure, the Board has a reasonable expectation that the Company and the Group have adequate resources to continue its operations for the foreseeable future. Accordingly, the Group continues to adopt the going concern basis in preparation of these financial statements.

Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

Statement of compliance

The financial statements are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries. The consolidated financial statements account for interest in joint ventures using the equity method of accounting per IFRS11.

The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited financial statements, a copy of which can be found on our website www.nrr.co.uk.

Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience as adjusted for current market conditions and other factors.

In the process of applying the Group's accounting policies, management is of the opinion that any instances of application of judgements did not have a significant effect on the amounts recognised in the financial statements.

The preparation of financial statements requires management to make estimates affecting the reported amounts of assets and liabilities, of revenues and expenses, and of gains and losses. The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

i.  Investment properties

As described above, the Group's investment properties are stated at fair value, as accounted for by management based on an independent external appraisal. The estimated fair value may differ from the price at which the Group's assets could be sold at a particular time, since actual selling prices are negotiated between willing buyers and sellers. Also, certain estimates require an assessment of factors not within management's control, such as overall market conditions. As a result, actual results of operations and realisation of net assets could differ from the estimates set forth in these financial statements, and the difference could be significant.

The valuation of the Group's development property portfolio is inherently subjective due to, amongst other factors, the individual nature of each property, forecast trading EBITDA, the status of planning consent, obtaining vacant possession, development cost projections and the expected future rental income, incorporating tenant credit risk. As a result, the valuations the Group places on its development property portfolio are subject to a degree of uncertainty and are made on the basis of current relevant information available at the date of valuation.

ii. Valuation of share-based payments

Management has relied on the services of external experts to determine the fair value of share-based payments. This requires significant estimates of a number of inputs which are used to model that fair value.

iii. Impairment in investments and joint ventures

Determining whether investments are impaired requires an estimation of the fair values less cost to sell and value in use of those investments. The process requires the Group to estimate the future cash flows expected from the cash-generating units and an appropriate discount rate in order to calculate the present value of the future cash flows. Management has evaluated the recoverability of those investments based on such estimates.

iv. Property disposals

The Company has elected for REIT status. To continue to benefit from this regime, the Group is required to comply with certain conditions as defined in the REIT legislation. In particular, Management are required to determine whether each property acquisition should be included within the REIT rental property income business and whether on disposal of that property, any gain arising is capital or trading in nature, and therefore whether it has triggered a tax charge to be payable to HMRC. If HMRC were to challenge the tax treatment on the disposal of a property, particularly for properties for which redevelopment works have occurred and disposal is within a three year period since acquisition, and consider this to be trading in nature, this may give rise to a tax charge. The Group has determined that all property acquisitions during the year, including those within joint ventures should be included within the REIT ring-fence and therefore has not recognised any deferred tax on the revaluation movements since acquisition, and that all property disposals during the year generated a taxable loss. The Group has unrecognised tax losses carried forwards of £1.0 million at 30 September 2015 as detailed in Note 8.

v. Accounting for acquisitions

Management must assess whether the acquisition of property through the purchase of a corporate vehicle should be accounted for as an asset purchase or a business combination. Where the acquired corporate vehicle contains processes and inputs in addition to property, the transaction is accounted for as a business combination. Where there are no such items, the transaction is treated as an asset purchase.

Business combinations are accounted for using the acquisition method any excess of the purchase consideration over the fair value of the net assets acquired is recognised as goodwill and reviewed annually for impairment. Any discount received or acquisition related costs are recognised in the income statement.

Management acquired a trading pub portfolio in the period. The intention of the Group was to lease the properties to LT Management Plc for a period of 5 years. Under this arrangement the Group will only receive a fixed rental over the lease period and a minimal turnover rent should the performance of the pubs exceed a certain agreed level. As this adjustable element is expected to be minimal and hence income is expected to be mainly fixed over the period of the lease, the properties have been classified as investments properties under IAS40 and not as fixed assets under IAS16. The lease with LT Management was agreed post 30 September 2015.

2 Segmental reporting

During the year the Group operated in one business segment, being property investment in the UK and as such no further information is provided.

3 Gross income

	2015 £'000	2014 £'000
Rental and related income	21,723	8,307
Asset management fees	530	874
Realised gain received from Joint Venture partnership during the year	4,220	-
Surrender premiums and commissions	167	18
Gross income	26,640	9,199

4 Property operating expenses

	2015 £'000	2014 £'000
Amortisation of tenant incentives and letting costs	326	235
Ground rent payments	508	363
Rates on vacant units	510	330
Other property operating expenses	927	283
Property operating expenses	2,271	1,211
Service charge income	5,290	1,836
Service charge expense	(4,734)	(1,297)
Net service charge expense	556	539
Total property operating expenses	2,827	1,750

5 Administrative expenses

	2015 £'000	2014 £'000
Group staff costs	3,005	2,673
Depreciation	62	33
Share Option and LTIP expense	400	75
Administration and other operating expenditure	1,452	1,000
Administrative expenses	4,919	3,781
Asset management fees	(530)	(874)
Net administrative expenses	4,389	2,907
Net administrative expenses as a % of gross rental income (including share of joint ventures)	16%	19%

	2015 £'000	2014 £'000
Auditor's remuneration
Fees payable to the Company's auditor for the audit	75	25
Total audit fees
Fees payable to the Company's auditor for reporting accountant services and half year review	53	-
Total non-audit fees	-	-
Total	128	25

	2015 Number	2014 Number
Average staff numbers including Directors	44	36

6 Earnings per share

The European Public Real Estate Association (EPRA) issued Best Practices Policy Recommendations in 2014 and additional guidance in January 2015, which gives recommendations for performance measures. The EPRA earnings measure excludes investment property revaluations and gains on disposals, intangible asset movements and their related taxation. We have also disclosed an EPRA adjusted profit measure which includes realised gains on disposals and adds back Share Option expense as it is unrealised.

The National Association of Real Estate Investment Trusts (NAREIT) Funds From Operations (FFO) measure is similar to EPRA earnings and is a performance measure used by many property analysts. The main difference to EPRA earnings with respect to the Group is that it adds back the amortisation of leasing costs and tenant incentives and is based on US GAAP.

The calculation of basic and diluted earnings per share is based on the following data:

	2015 £'000	2014 £'000
Earnings
Earnings for the purposes of basic and diluted EPS being profit after taxation	42,184	12,337
Adjustments to arrive at EPRA profit
Unrealised (gains) on revaluation of investment properties	(20,573)	-
Unrealised (surplus) on revaluation of joint venture investment properties	(2,296)	(5,631)
Profit/(loss) on disposal of investment properties	73	(1,153)
Gain on bargain purchase	(674)	-
EPRA profit	18,714	5,553
Profit/(loss) on disposal of investment properties	(73)	1,153
Share Option expense	400	75
Gain on bargain purchase	674	-
EPRA adjusted profit	19,715	6,781
Adjustments to EPRA profit to arrive at NAREIT FFO
EPRA profit	18,714	5,553
Amortisation of tenant incentives and letting costs	115	235
Amortisation of rent-free periods	(112)	(216)
Amortisation of capitalised leasing costs	211	-
NAREIT FFO	18,928	5,572

Number of shares	2015 No. 000s	2014 No. 000s
Weighted average number of Ordinary Shares for the purposes of basic EPS and basic EPRA EPS	148,899	99,545
Effect of dilutive potential Ordinary Shares:
Options	1,143	707
Warrants	254	244
CULS	-	-
MSREI joint venture conversion (1)	-	2,803
Weighted average number of Ordinary Shares for the purposes of basic diluted EPS and basic diluted EPRA EPS	150,296	103,299
EPRA Adjusted EPS (pence)	13.2	6.8
EPRA EPS basic (pence)	12.6	5.6
EPRA diluted EPS (pence)	12.5	5.5
FFO EPS basic (pence)	12.7	5.6
EPS basic (pence)	28.3	12.4
Diluted EPS basic (pence)	28.1	11.6

(1) The MSREI conversion expired in May 2015

7 Net asset value per share

			30 September 2015				31 March 2015
	Total equity £'000s	Shares No'000s	Pence per share		Total equity £'000s	Shares No'000s	Pence per share
Basic	521,036	179,864	290		339,695	127,078	267
Warrants in issue	764	490	156		933	569	164
Unexercised employee awards	5,294	2,778	191		4,850	2,617	185
Convertible loan stock (A CULS)	17,000	6,996	243		17,000	6,855	248
Convertible loan stock (B CULS)	-	-	-		6,500	2,642	246
Diluted	544,094	190,128	286		368,978	139,761	264
Fair value derivatives	684	-	-		690	-	-
EPRA	544,778	190,128	287		369,668	139,761	265

* The number of shares in issue is adjusted under the EPRA calculation to assume conversion of the warrants, options, shares from the long-term incentive plan and the Convertible Unsecured Loan Stock converted to equity providing they have a dilutive effect.

8 Dividends

The following dividends are associated with the current and prior periods:

Payment date	Dividend	PID	Non-PID	Pence per share	30 September 2015 £'000
Current period dividends
18 May 2015	Fourth quarterly dividend	4.25	-	4.25	5,401
31 July 2015	First quarterly dividend	4.50	-	4.50	5,839
13 November 2015 (1)	Second quarterly dividend	4.50	-	4.50	8,094
		13.25	-	13.25	19,334
(1) Post balance sheet event
Prior year dividends					31 March 2015 £'000
31 October 2014	First interim dividend	1.00	3.25	4.25	4,235
30 January 2015	Second interim dividend	1.00	3.25	4.25	4,242
30 January 2015	Third quarterly dividend	4.25	-	4.25	4,242
		6.25	6.50	12.75	12,719
					30 September 2015 £'000	31 March 2015 £'000
Dividends in consolidated statement of changes in equity					10,899	12,719
Dividends settled in cash during the year					10,899	12,719
Timing difference related to payment of withholding tax on dividends					-	(503)
Dividends in cash flow statement					10,899	12,216

The Company announced that it was moving to a quarterly dividend policy last year and this policy has now been implemented.

During the period ended 30 September 2015 the Company declared total dividends of 8.50 pence per share of which 4.25 pence was paid after the period end. The total dividend is fully covered by profits in the year.

Of the total dividend in respect to the period ended 30 September 2015, 13.25 pence was paid as a PID.

A third quarterly dividend of 4.75 pence per share in respect of the year ended 31 March 2016 will be paid on 10 February 2016 to shareholders on the register at close of business on 29 December 2015. The ex-dividend date will be 24 December 2015. The quarterly dividend will be payable as a REIT Property Income Distribution (PID).

9 Investment properties

	Notes	30 September 2015 £'000	31 March 2015 £'000
Fair value brought forward		404,098	214,124
Acquisitions and improvements in the year		82,515	89,815
Properties acquired on business combinations	10	252,400	121,500
Disposals in the year		(6,133)	(28,202)
		732,880	397,237
Valuation movement gains in profit and loss		20,573	6,861
Fair value carried forward		753,453	404,098

It is the Group's policy to carry investment properties at fair value in accordance with IAS 40 'Investment Property'. The fair value of the Group's investment property at 31 March 2015 has been determined on the basis of open market valuations carried out by Colliers International and Strutt and Parker LLP who are the external independent valuers to the Group.

The fair value at 2015 represents the highest and best use.

The properties are categorised as Level 3 in the IFRS 13 fair value hierarchy. There were no transfers of property between Levels 1, 2 and 3.

The Group's policy is to recognise transfers into and out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer.

Valuation processes

The Group's investment properties have been valued at fair value on 31 March 2015 by independent valuers, Colliers International Valuation UK LLP and Strutt and Parker LLP, on the basis of fair value in accordance with the Current Practice Statements contained in The Royal Institution of Chartered Surveyors Valuation - Professional Standards, (the 'Red Book').

Information about fair value measurements for the investment property using significant unobservable inputs (Level 3)

		Property ERV per sq ft (£)			Property Rent per sq ft (£)			Property Equivalent Yield (%)	Net Initial Yield (%)
Segment	Fair value (£'000)	Min	Max	Average	Min	Max	Average	Average	Average
Shopping centres	526,762	8.12	36.67	13.28	4.91	28.31	12.41	7.4	6.40
High street	49,390	2.26	21.66	8.85	1.94	22.47	8.71	6.6	6.55
Retail Warehouse	118,548	7.05	20.00	11.13	6.04	21.36	10.42	7.4	7.26
Development site	11,760	0.00	10.00	10.00	0.00	0.00	0.00	0.0	0.00
	706,460	7.40	32.38	12.56	4.81	26.26	11.61	7.19	6.45

		Property Rent per sq ft (£)			Net Initial Yield (%)
Segment	Fair value (£'000)	Min	Max	Average	Min	Max	Average
Pub portfolio	126,620	2.30	87.56	20.47	6.2	32.1	11.9
Convenience store development portfolio	49,436	13.50	17.50	16.81	6.0	6.5	6.0
	176,056
Group Total
By Ownership
Wholly owned	753,453
Joint ventures	129,063
Group Total	882,516

Revenues are derived from a large number of tenants with no single tenant or group under common control contributing more than 5% of the Group's revenue.

There are interrelationships between all these unobservable inputs as they are determined by market conditions. The effect of an increase in more than one unobservable input would be to magnify the impact on the valuation. The impact on the valuation will be mitigated by the interrelationship of two unobservable inputs moving in opposite directions, e.g. an increase in rent may be offset by an increase in yield, resulting in no net impact on the valuation. Expected vacancy rates may impact the yield with higher vacancy rates resulting in higher yields.

Valuation techniques underlying the Group's estimation of fair value including joint ventures

The investments are several retail assets in the UK with a total carrying amount of £883 million. The valuation was determined using an income capitalisation method, which involves applying a yield to rental income streams. Inputs include yield, current rent and ERV.

Development properties are valued using a residual method, which involves valuing the completed investment property using an investment method and deducting estimated costs to complete, then applying an appropriate discount rate. The relationship of unobservable inputs to fair value are the higher the rental values and the lower the yield, the higher the fair value. In respect of the pub portfolio the Valuer makes judgements on whether to use residual value or a higher value to include development potential where appropriate. Where no conversion opportunity has been identified at present, the Valuer has not specifically considered an alternative use valuation.

These inputs include:

· Rental value - total rental value pa

· Equivalent yield - the discount rate of the perpetual cash flow to produce a net present value of zero assuming a purchase at the valuation

There were no changes in valuation techniques during the period.

The portfolio has been valued by external valuers biannually, on a fair value basis in accordance with the RICS Red Book. Valuation reports are based on both information provided by the Group, e.g. current rents and lease terms which is derived from the Company's financial and property management systems and is subject to the Group's overall control environment, and assumptions applied by the valuers, e.g. ERVs and yields. These assumptions are based on market observation and the valuer's professional judgement.

The fee payable to the valuers is on a fixed basis.

10 Acquisition of a subsidiary (Business combination)

On 18 June 2015, the Group acquired 50% of the units of NewRiver Retail Property Unit Trust 3 and 4, Unit Trusts registered in Jersey which is engaged in property investment, resulting in ownership of 100% and control of the underlying entity from its Joint Venture Partner Bravo II. Management determined that the acquisition of control should be accounted for as a business combination in accordance with IFRS 3 'Business Combinations'. The fair value of the Group's 50% equity interest in the NewRiver Retail Property Unit Trusts held before the business combination amounted to £54m. The acquired subsidiaries have contributed net revenues of £4.5m and profit of £2.9m to the Group for the period from the date of acquisition to 30 September 2015. If the acquisition had occurred on 1 April 2015, with all other variables held constant, Group net revenue for 2015 would have increased by £3m and underlying profit for 2015 would have increased by £2.6m.

Details of the assets and bargain purchase arising are as follows:

	Trent Attributed fair value £'000	Camel III Attributed fair value £'000
Investment property	121,000	77,900
Current assets	1,183	656
Other net current liabilities	(3,334)	(2,562)
Cash and cash equivalents	3,562	3,341
Debenture and loans	(62,453)	(32,358)
Fair value of acquired interest in net assets of subsidiary	59,958	46,977
Bargain purchase (negative goodwill)	(478)	(490)
Total purchase consideration	59,480	46,487
Less: fair value previously held interest	(30,480)	(23,537)
Cash consideration	29,000	22,950
Total acquisition of NewRiver Retail Property Unit Trust 3 and 4	29,000	22,950

The purchase consideration disclosed above comprises cash and cash equivalents paid to the acquiree's 50% owner of £51.95m. The bargain purchase is a result of the fair value exceeding the purchase price and includes a capital payment by Bravo II of £4.2m as part of the transaction which accrued to NewRiver Retail Limited as a result of strong performance of the Property Unit Trust. The gain on bargain purchase is recognised in the income statement. The fair value of cash and cash equivalents was considered equal to the carrying value representing the entity's bank deposits; fair value of borrowings and trade and other payables was calculated based on discounted cash flow models. The acquired bank loans and overdrafts have no recourse to other companies or assets in the Group.

On 13 July 2015 the Group acquired 158 pubs purchased under a Business Sale Agreement from Punch Tavern. The purchase consideration of this business combination was £53.5m equivalent to the fair value investment property acquired of £53.5m. No fair value was attributed to any other assets or liabilities.  The Group has not disclosed the revenue and profit or loss for this acquisition since acquisition date or the impact on revenue and profit or loss as though the acquisition date had been as of the beginning of the annual reporting period on the basis it was impractical to do so as this information was not readily available at the period end.

11 Investments in joint ventures

	Note	Sep 2015 £'000	Mar 2015 £'000
Opening balance		113,027	74,851
Additional joint venture interests acquired during the period/year(1)		-	72,470
Effective disposal of 50% investments	10	(54,017)	(7,942)
Income from joint ventures		5,453	11,411
Net valuation movement		2,296	11,843
Distributions and dividends(1)		(310)	(6,450)
Loan repayment		-	(45,567)
Capital call		-	2,275
Hedging movements		(339)	136
Closing balance		66,110	113,027
Name	Country of incorporation	% Holding 2015	% Holding 2015
NewRiver Retail Investments LP and NewRiver Retail Investments (GP) Ltd*	Guernsey	50	50
NewRiver Retail Property Unit Trust	Jersey	100	100
NewRiver Retail Property Unit Trust No.2	Jersey	50	50
NewRiver Retail Property Unit Trust No.3	Jersey	100	50
NewRiver Retail Property Unit Trust No.4	Jersey	100	50
NewRiver Retail Property Unit Trust No.5, No.6, No.7	Jersey	50	50

(1) The net cash outflow during the year was £0.3m (Mar 2015 inflow £66.02 million).

* NewRiver Retail Investments (GP) Limited and its Limited partner (NewRiver Retail Investments LP) has a number of 100% owned subsidiaries which are NewRiver Retail (Finco No 1) Limited and NewRiver Retail (GP1) Limited, acting in its capacity as General Partner for NewRiver Retail (Holding No 1) LP and NewRiver Retail (Portfolio No 1) LP. These entities have been set up to facilitate the investment in retail properties in the UK by the Barley JV.

There are currently four joint ventures which are equity accounted for as set out below:

NewRiver Retail Property Unit Trust, NewRiver Retail Property Unit Trusts No 2, 5,6 and 7.

NewRiver Retail Property Unit Trusts No 2, 3 and 4, 5,6,7 (the 'Middlesbrough, 'Camel III', 'Trent' and 'Swallowtail' JVs) are established jointly controlled Jersey Property Unit Trusts set up by NewRiver Retail Limited and PIMCO BRAVO II Fund LP ('BRAVO II') to invest in UK retail property.

On 18 June 2015, the Group acquired 50% of the units of Trent and Camel III, resulting in ownership of 100% and control of the underlying entity from its Joint Venture Partner Bravo II. See note 13. The Middlesbrough and Swallowtail JVs are owned 50% by NewRiver Retail Limited and 50% BRAVO II. NewRiver Retail (UK) Limited is the appointed asset manager on behalf of these JVs and receives asset management fees, development management fees and performance-related return promote payments.

Management have taken the decision to account for the equity interest in JVs as joint ventures as the Group has significant influence over decisions made by each joint venture but is not able to exert complete control over these joint ventures.

The JVs have an acquisition mandate to invest in UK retail property with an appropriate leverage with future respective equity commitments being decided on a transaction-by-transaction basis. In line with the existing NewRiver investment strategy, the JVs will target UK retail property assets with the objective of delivering added value and above average returns through NewRiver's proven skills in active and entrepreneurial asset management and risk-controlled development.

All JVs have a 31 December year end and the Group has applied equity accounting for its interest in each JV. The aggregate amounts recognised in the consolidated balance sheet and income statement eliminate intercompany transactions and are as follows:

	2015 NewRiver Retail Property Unit Trust, 2, 5, 6,7 Total £'000	30 September 2015 Group's share £'000	2015 NewRiver Retail Property Unit Trust, 2, 3, 4,5,6,7 £'000	31 March 2015 Group's Share £'000
Balance sheet
Non-current assets	231,050	115,525	417,560	208,780
Current assets	9,374	4,687	14,799	7,400
Current liabilities	(4,637)	(2,318)	(8,372)	(4,186)
Senior debt	(117,242)	(58,614)	(211,252)	(105,619)
Non-current liabilities	(1,069)	(542)	(1,865)	(939)
Net assets	117,476	58,738	210,870	105,436
Income statement*
Net income	11,769	7,988	34,702	15,705
Administration expenses	(571)	(359)	(1,800)	(804)
Finance costs	(3,192)	(2,311)	(8,867)	(4,021)
Recurring income	8,006	5,318	24,035	10,880
Fair value surplus on property revaluations	4,041	2,020	25,616	12,807
Income from joint ventures	12,047	7,338	49,651	23,687

*Includes NewRiver Retail Ltd's share of NewRiver Retail Property Unit Trust IV and III from the period 1 April 2014 to 30 June 2015 prior to acquisition of the remaining 50%.

The Group's share of any contingent liabilities to the JPUTs is £nil (2014: £nil).

NewRiver Retail Investments LP

NewRiver Retail Investments LP (the 'Barley JV') is an established jointly controlled limited partnership set up by NewRiver Retail Limited and Morgan Stanley Real Estate Investing ('MSREI') to invest in UK retail property.

The Barley JV is owned equally by NewRiver Retail Limited and MSREI. NewRiver Retail (UK) Limited is the appointed asset manager on behalf of the Barley JV and receives asset management fees as well as performance-related return promote payments.

In line with the existing NewRiver investment strategy, the Barley JV will target UK retail property assets with the objective of delivering added value and above average returns through NewRiver's proven skills in active and entrepreneurial asset management and risk-controlled development and refurbishment.

The Barley JV has a 31 December year end and the Group has applied equity accounting for its interest in the Barley JV. The aggregate amounts recognised in the consolidated balance sheet and income statement eliminate intercompany transactions and are as follows:

	2015 NewRiver Retail Investments (GP) Ltd Total £'000	September 2015 Group's Share 50% £'000	2015 NewRiver Retail Investments (GP) Ltd Total £'000	Mar 2015 Group's Share 50% £'000
Balance sheet
Non-current assets	27,075	13,538	26,850	13,425
Current assets	2,061	1,031	1,990	995
Current liabilities	(1,614)	(807)	(815)	(408)
Senior debt	(12,777)	(6,390)	(12,771)	(6,387)
Non-current liabilities	-	-	(70)	(34)
Net assets	14,745	7,372	15,184	7,591
Income statement
Net income	697	349	1,916	957
Administration expenses	(105)	(53)	(262)	(131)
Finance costs	(322)	(161)	(591)	(295)
Recurring income	270	135	1,063	531
Fair value surplus/(deficit) on property revaluations	550	276	(804)	(402)
Income/ (Deficit) from joint ventures	820	411	259	129

The Group's share of any contingent liabilities to the Barley JV is £nil (2015: £nil).

12 Borrowings

	30 September 2015 £'000	31 March 2015 £'000
Secured bank loans	291,178	157,921
Convertible Unsecured Loan Stock	16,978	23,420
	308,156	181,341
Maturity of borrowings:
Balance sheet borrowings
Less than one year - Convertible Unsecured Loan Stock	16,978	23,420
Between one and two years	5,000	-
Between two and five years	252,395	85,556
Over five years	33,783	72,365
	308,156	181,341
Maturity of borrowings:
Group's share of Joint Venture borrowings
Less than one year	-	-
Between one and two years	6,389	6,386
Between two and five years	58,621	105,626
Over five years	-	-
	65,010	112,012
Maturity of borrowings:
Total Group share of borrowings (Proportionally consolidated)
Less than one year	5,000	23,420
Between one and two years	6,389	6,386
Between two and five years	311,016	191,182
Over five years	33,784	72,365
Total	356,189	293,353

Debt maturity as at 30 September 2015

Secured bank loans

Bank loans are secured by way of legal charges on properties held by the Group and a hedging policy is adopted which is aligned with the property strategy on each of its assets.

	30 September 2015	31 March 2015
Weighted average debt maturity including extension options
Balance sheet secured borrowings	4.0yrs	5.0 yrs
Joint Venture secured borrowings	3.6yrs	3.9 yrs
Total Group share of borrowings	3.9yrs	4.6 yrs
	2015	2015
Effective interest rate during the period/year
Balance sheet secured borrowings (1)	4.0%	3.8%
Joint Venture secured borrowings	2.9%	3.9%
Total Group share of borrowings	3.8%	3.8%
LTV (proportionally consolidated)	37%	39%
Interest cover x (proportionally consolidated)	4.0x	3.9x

(1)  Increased during the period following the acquisition of the Bravo II share of the Marstons Portfolio which carries a slightly higher cost of debt.

Facility and arrangement fees

	30 September 2015
Current year	Maturity date	Facility drawn £'000	Unamortised facility fees £'000	Balance £'000
Secured balance sheet borrowings
Santander	Feb 2021	34,029	245	33,784
Barclays	Mar 2020	46,802	477	46,325
Santander/HSBC	Mar 2020	69,180	797	68,383
Lloyds	Sep 2019	19,165	132	19,033
HSBC	May 2019	24,736	334	24,402
Barclays	Dec 2018	31,996	238	31,758
Venn Capital	Dec 2018	63,000	507	62,493
Barclays (1)	Oct 2015	5,000	-	5,000
Subtotal		293,908	2,730	291,178
Group's share of secured Joint Venture borrowings
Santander	Feb 2017	6,400	11	6,389
Barclays	Aug 2018	13,585	98	13,487
HSBC	Nov 2019	45,500	366	45,134
Subtotal		65,485	475	65,010
Convertible Unsecured Loan Stock	Dec 2015	17,000	22	16,978
Total Group's share of borrowings		376,393	3,227	373,166

(1) The Group agreed the extension of the Barclays RCF from £5m to £20m on 4 November 2015

The Company expects the Holders of the Convertible Unsecured Loan Stock to convert their interest to equity prior to the maturity date.

		31 March 2015
Prior year	Maturity date	Facility drawn £'000	Unamortised facility fees £'000	Balance £'000
Secured balance sheet borrowings
Santander	Feb 2021	33,990	269	33,721
Barclays	Mar 2020	39,174	530	38,644
Santander/HSBC	Mar 2020	42,500	290	42,210
Lloyds	Sep 2019	19,165	149	19,016
HSBC	May 2019	24,736	406	24,330
Subtotal		159,565	1,644	157,921
Group's share of secured Joint Venture borrowings
Santander	Feb 2017	6,400	14	6,386
Barclays	Dec 2018	15,998	138	15,860
Barclays	Aug 2018	13,585	115	13,470
HSBC	Nov 2019	45,500	412	45,088
Venn Capital	Dec 2018	31,500	293	31,207
Subtotal		112,983	971	112,012
Convertible Unsecured Loan Stock	Dec 2015	23,500	80	23,420
Total Group's share of borrowings		296,048	2,695	293,353

Proportionately consolidated hedging statistics

	## Sep 2015 %	## Mar 2015 %
## Fixed	## 28.3	## 34.6
## Capped	## 46.2	## 48.0
## Floating	## 25.6	## 17.4

Fair value on interest rate swaps

The Group recognised a mark to market fair value profit of £1.1 million (2014: £0.3 million) on its interest rate swaps for the year ended 30 September 2015. The fair value of interest rate swap liabilities in the balance sheet as at 30 September 2015 was £2.5 million (2015: £1.9 million). The fair value of interest rate swap assets in the balance sheet as at 30 September 2015 was £1.1 million (2015: 0.3 million).All borrowings are due after more than one year and the derivative financial instruments are held as non-current liabilities.

Convertible Unsecured Loan Stock ('CULS')

On 22 November 2010 the Group issued £25 million of CULS, £17 million of A CULS and £8 million of B CULS. On issue, the stockholder was able to convert all or any of the stock into Ordinary Shares at the rate of one Ordinary Share for every £2.80.

The conversion rate has subsequently been adjusted on the A CULS to £2.43 (March 2015: £2.48) as at 30 September 2015 as a result of new shares being issued and dividends paid in accordance with the terms of the agreement. Under the terms of the convertible, interest will accrue at 5.85% on the outstanding loan stock until 31 December 2015 when it will be either converted or repaid. The interest payable on the CULS is due biannually on the 30 June and 31 December.

On 18 February 2014 £1.5 million B CULS were converted at a conversion price of £2.59 representing 579,151 Ordinary shares and the remaining £6.5 million B CULs were subsequently converted on 2 July 2015 at a conversion price of £2.45, representing 2,653,061 Ordinary shares.

Management was required to make estimates with the assistance of external experts to conclude on the valuation of the CULS at the date of issue. The issuance of the compound instrument was between two knowledgeable parties at arm's length and at a market rate of 5.85% per annum for five years. Management concluded that the value of the convertible option was negligible at that time and the value resided in the debt portion of the instrument at the date of issue.

13 Share capital and reserves

The authorised share capital is unlimited and there are 179,863,580 shares in issue which excludes treasury shares (March 2015: 127,077,895). The table below outlines the movement of shares in the period:

		Number of Ordinary Shares issued 000s	Price per  pence	Total number of shares 000s
Brought forward at 1 April 2015				127,078
May 2015	Option exercise (EBT)	17	-	127,095
July 2015	CULS conversion	2,653	245	129,748
July 2015	Equity issuance	50,000	300	179,748
September 2015	Warrant conversion	90	156	179,838
September 2015	Option exercise (EBT)	25	-	179,863
Carried forward at 30 September 2015				179,863

During the period, the Group approved a transfer from the share premium account of £152.8 million (2015: £73.3 million) to other reserves which may be distributed in the future. Other reserves being distributable reserves. The share premium arose from the successful equity raise. The gross proceeds of £150m were received from the issue of 50,000,000 shares at 300 pence. Costs of £3.8 million associated with the issue have been netted off against these proceeds.

Shareholders who subscribed for Placing Shares in the IPO received warrants, in aggregate, to subscribe for 3% of the Fully Diluted Share Capital exercisable at the subscription price per Ordinary Share of £2.50 and all such warrants shall be fully vested and exercisable upon issuance. The subscription price has subsequently been adjusted to £1.56 following subsequent dividend payments and share issues.

14 Related party transactions

Group

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

Total emoluments of Executive Directors during the period (excluding share-based payments) were £1.7 million (2014: £1.6 million).

Share-based payments of £0.4 million (2014: £0.1 million) accrued during the year.

During the year, no shares (2014: 76,018) were acquired on the open market by Directors.

15 Post balance sheet events

The Group completed the sale of Hull Ferensway for a consideration of £3m on 6 November 2015.

The Group agreed the extension of the RCF with Barclays from £5m to £20m on 4 November 2015.

A new Lloyd's debt facility was completed for £98m on £20 October 2015 to fund the Group's new retail warehouse facility.

INDEPENDENT REVIEW REPORT TO NEWRIVER RETAIL LIMITED

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2015 which comprises the Consolidated Income statement, the Consolidated Balance Sheet, the Consolidated Statement of Changes in Equity, the Consolidated Cash flow statement and related notes 1 to 15. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board.  Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules of the London Stock Exchange.

Deloitte LLP

Chartered Accountants and Statutory Auditor

Guernsey, Channel Islands, UK

18 November 2015

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR LLFEALRLDLIE

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