Custodian REIT plc (CREI) 
Custodian REIT plc : Final Results 
16-Jun-2021 / 07:13 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 
(MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
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16 June 2021 
 
 
Custodian REIT plc 
 
("Custodian REIT" or "the Company") 
 
Final Results 
 
 
Custodian REIT (LSE: CREI), the UK commercial real estate investment company, today reports its final results for the 
year ended 31 March 2021. 
 
Financial highlights and performance summary 
 
  ? 91% of rent collected for the year, adjusted for contractual rent deferrals 
  ? EPRA[1] earnings per share[2] decreased to 5.6p (2020: 7.0p) due to providing for deferred and overdue rent and a 
    5.0% decrease in the annual rent roll 
  ? Basic and diluted earnings per share[3] of 0.9p (2020: 0.5p), impacted by property valuation decreases of GBP19.6m 
    (2020: GBP25.9m) 
  ? Profit before tax up 76.6% to GBP3.7m (2020: GBP2.1m) 
  ? Aggregate dividends per share for the year of 5.0p (2020: 6.65p), reflecting the decreases in rent collection rate 
    and rent roll since the onset of the COVID-19 pandemic 
  ? Target dividend per share for the year ending 31 March 2022 of not less than 5.0p, based on rent collection levels 
    remaining in line with expectations 
  ? NAV total return per share[4] of 0.9% (2020: 1.1%) comprising 4.8% dividends (2020: 6.2%) and a 3.9% capital 
    decrease (2020: 5.1% capital decrease) 
  ? Property value of GBP551.9m (2020: GBP559.8m): 
  ? GBP19.6m aggregate valuation decrease (3.5% of property portfolio value) comprising a GBP9.4m property valuation uplift 
    from successful asset management initiatives and GBP29.0m of general valuation decreases, primarily due to decreases 
    in the estimated rental value ("ERV") of high street retail properties, negative market sentiment for retail assets 
    and the impact of the COVID-19 pandemic 
  ? GBP11.4m[5] invested in three property acquisitions 
  ? Disposal of five properties for aggregate consideration of GBP4.4m[6] 
  ? GBP2.3m capital expenditure incurred including GBP0.7m on construction of a drive-through restaurant on an existing 
    site 
 
                                                                   2021   2020   Change 
Return 
Share price total return[7]                                        (2.3%) (5.0%) 2.7% 
Dividend cover[8]                                                  112.7% 104.4% 8.3% 
Dividends per share[9] (p)                                         5.0    6.65   (24.8%) 
 
Capital values 
NAV and EPRA NTA[10] (GBPm)                                          409.9  426.7  (3.9%) 
NAV per share and NTA per share (p)                                97.6   101.6  (3.9%) 
Share price (p)                                                    91.8   99.0   (7.3%) 
Market capitalisation (GBPm)                                         385.6  415.9  (7.3%) 
Discount of share price to NAV per share                           (5.9%) (2.6%) (3.3%) 
Net gearing[11]                                                    24.9%  22.4%  (2.5%) 
 
Costs 
Ongoing charges ratio[12] ("OCR")                                  2.48%  1.55%  0.93% 
OCR excluding direct property expenses[13]                         1.12%  1.12%  0.0% 
 
Environmental 
 
 
Weighted average energy performance certificate ("EPC") rating[14] C (63) C (70) (10%)

Alternative performance measures

The Company reports alternative performance measures ("APMs") to assist stakeholders in assessing performance alongside the Company's results on a statutory basis, set out above. APMs are among the key performance indicators used by the Board to assess the Company's performance and are used by research analysts covering the Company. Certain other APMs may not be directly comparable with other companies' adjusted measures, and APMs are not intended to be a substitute for, or superior to, any IFRS measures of performance. Supporting calculations for APMs and reconciliations between APMs and their IFRS equivalents are set out in Note 21.

Commenting on the final results, David Hunter, Chairman of Custodian REIT, said:

"Custodian REIT's investment strategy has been tested, with the Company operating for a full year under the shadow of COVID-19. From a low point in May 2020, Custodian REIT's share price has been gently recovering, matching the greater clarity that the Company has provided around dividends through the course of the year.

"The impact of the pandemic has been to accelerate the decline in high street retail, pushing an increasing number of occupiers into insolvency and many occupiers into seeking to defer rental payments. Despite the strongly positive performance of the Company's industrial and logistics portfolio, the net result has been a 3.5% property valuation decrease during the year.

"However, 91% of rent was collected, net of contractual deferrals, meaning I was delighted to be able to announce dividends per share totalling 5.0p for the year and that the Company is targeting a dividend per share of at least 5.0p for the year ending 31 March 2022, based on rent collection levels remaining in line with expectations. This dividend outcome is significantly ahead of the minimum level announced in April 2020 of 0.75p per quarter before the full impact of the first national lockdown could be ascertained.

"The combination of resilient capital values and a return to stabilised dividends should lend support to Custodian REIT's objective to be the REIT of choice for private and institutional investors seeking high and well supported dividends from diversified UK commercial property."

Further information

Further information regarding the Company can be found at the Company's website www.custodianreit.com or please contact: 


Custodian Capital Limited 
Richard Shepherd-Cross / Ed Moore / Ian Mattioli MBE Tel: +44 (0)116 240 8740 
                                                     www.custodiancapital.com 
Numis Securities Limited 
Hugh Jonathan / Nathan Brown  Tel: +44 (0)20 7260 1000 
                              www.numiscorp.com 
Camarco 
Hazel Stevenson/ Emily Hall  Tel: +44 (0)20 3757 4989 
                             www.camarco.co.uk Analyst presentation

There will be an analyst presentation to discuss the results at 2:00pm today. Those analysts wishing to take part are asked to register at:

numiscorp.zoom.us/webinar/register/WN_cZmwSfrpTAqdmcWrYM4pmQ

After registering, you will receive a confirmation email containing information about joining the webinar. If you have any questions please contact Amy Rush on +44 (0) 20 7260 1365 or at a.rush@numis.com.

Investor presentation

The Board has been monitoring whether COVID-19 guidance limiting public gatherings and travel will be in place when the Company holds its AGM on 25 August 2021. To provide certainty and encourage interaction and engagement with our shareholders, the Company has arranged an online investor presentation at 2:00pm on 6 July 2021 at which shareholders will receive updates from the Chairman and Investment Manager with the opportunity for an interactive question and answer session.

Those investors wishing to take part are asked to register at:

bigmarker.com/mattioli-woods-plc/Custodian-REIT-plc-annual-results Business model and strategy

Purpose

Custodian REIT offers investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund. The Company seeks to provide investors with an attractive level of income and the potential for capital growth, becoming the REIT of choice for private and institutional investors seeking high and stable dividends from well-diversified UK real estate.

Investment Policy

The Company's investment policy[15] is summarised below: ? To invest in a diverse portfolio of UK commercial real estate, principally characterised by individual property

values of less than GBP10m at acquisition. ? The property portfolio should be diversified by sector, location, tenant and lease term, with a maximum weighting

to any one property sector or geographic region of 50%. ? To focus on areas with high residual values, strong local economies and an imbalance between supply and demand,

acquiring modern buildings or those considered fit for purpose by occupiers. ? No one tenant or property should account for more than 10% of the rent roll at the time of purchase, except for:

(i) governmental bodies or departments; or

(ii) single tenants rated by Dun & Bradstreet as having a credit risk score higher than two[16], where exposure may not exceed 5% of the rent roll. ? The Company will not undertake speculative development except for the refurbishment of existing holdings, but may

invest in forward funding agreements where the Company may acquire pre-let development land and construct

investment property with the intention of owning the completed development. ? The Company may use gearing provided that the maximum LTV shall not exceed 35%, with a medium-term net gearing

target of 25% LTV.

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