Okay. Right, well, good morning, everyone, and welcome to our full year results presentation. Before we go through our presentation, let me start by saying that over the years, we have carefully positioned our portfolio for the evolving consumer and retail trends, where a physical store is vital. As a result, we have delivered another excellent operational performance and a significant total return, our performance 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. Let's move on to our presentation.
We ended our financial year in a strong position, having delivered a resilient set of operating and financial results in what was a challenging macroeconomic environment, while simultaneously continuing to execute our strategy. 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. This is underpinned by a UK consumer who has proved to be more resilient than financial markets were expecting. We saw active demand for space in our portfolio with a strong leasing performance, high tenant retention, our highest occupancy for five years, and another period of leasing terms ahead of ERV.
These operational metrics delivered a 26% increase in retail underlying funds from operations to GBP 25.8 million, delivering a full year dividend of 6.7 pence per share, 125% covered. Whilst the MSCI all property and all retail indices delivered -16% and -13% capital returns, our portfolio outperformed its retail benchmark by 660 basis points and 1,020 basis points on a total return, due to the inherent high income component that we have. The like-for-like valuation movement of -5.9% was predominantly contained in our regeneration portfolio, 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 GBP 111 million of cash, up from GBP 88 million last year. This means our balance sheet is in great shape as we have no drawn debt maturity to 2028, and all of our interest costs are fixed. Finally, we are committed to delivering our ESG strategy and are making good progress, and that was one of the key reasons why M&G Real Estate chose NewRiver to manage a large retail portfolio on their behalf. Despite inflation peaking in October 2022 and the rapid increase in interest rates, the UK consumer has proved to be more resilient than many people had feared.
Very low rates of unemployment, excess consumer savings, rising wages, and broadly stable house prices have led to an increase in consumer confidence. The value of retail sales has increased and is significantly above pre-pandemic levels. This is largely to be expected due to inflation. Encouragingly, the volume of retail sales has also recovered. Clearly, consumers are not immune to the cost-of-living squeeze. Therefore, it is not surprising that consumers have been adapting some of their behavior. We've seen a growing trend of consumers purchasing more affordable versions of expensive equivalent products, downtrading to lower price grocery, and seeking value options when eating out. Our portfolio is ideally positioned in that regard.
Looking ahead, with an expectation of further easing in inflation to 5% by the end of 2023, real income is set to become positive in the second half of the year, underpinned by a strong labor market. We expect living standards to rise by the end of 2024. As we said last year, the retail occupational market is, in our view, fitter, leaner, and more agile than it has been for many years. This is clearly shown in a significant reduction in tenant failures. That said, online pure-play operators have been more challenged by high inflation, squeezing already tight margins and consumers returning to the physical store. This has led to an increase in pure-play distress.
Consumers want to purchase goods when, where, and how they choose, and omni-channel operators successfully cater for this, with the physical store remaining very much at the core of the consumer journey, and our portfolio provides for this. Positive retailer sentiment is reflected in reduced vacancy rates over the last 12 months and an improving rental performance. Today, retail parks have a vacancy rate lower than industrial, at circa 5%, which should drive future rental growth. As we highlighted in our half-year results, the reduction in business rates from April 2023 will lower occupational costs and support rental levels. While 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 significant risk premium were the most impacted. NewRiver's yield portfolio premium is 200 basis points higher than the MSCI or retail, and 510 basis points higher than the 10-year gilt. This is one of the reasons why we have outperformed in a volatile capital market. We have 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 to March 2023, long-term leasing transactions secured GBP 15.4 million of annual rent, equating to a 10-year compound annual growth rate of just -0.4%. Given the extent of disruption within the retail sector over the last 10 years, from the growth of online and COVID, our leasing performance over the last 3 years demonstrates the underlying resilience we have in our rental cash flows. 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 valuation movement of -5.9%. Our core shopping centers and retail parks delivered capital returns of -0.7% and -3.2%.
We've now had four financial reporting periods of broadly stable valuations in our core shopping centers and retail parks. Our regeneration portfolio experienced -14.1% valuation movement as a result of high inflation and rising interest rates on estimated development costs. Our workout portfolio, which only accounts for 11% of our total portfolio, recorded -7.8% of capital return, which was in line with MSCI. We've always held the view that income returns over the long term are the key driver of total returns. Given our high portfolio yield, you can see the importance of that income return in our total return outperformance relative to the MSCI.
Last year, our retail parks delivered a total return outperformance of 1,170 basis points, and our shopping centers, including workout and our regeneration assets, outperformed by 680 basis points. Over a one, three, and five-year period, our portfolio has consistently outperformed on income, capital, and total returns. We expect that to continue. We take our role as the custodians of assets within the community very seriously. I'm delighted to report progress in the delivery of our ESG strategy, as recognized by both GRESB and EPRA. In addition, we are fully MEES compliant. Achieving net zero within the retail sector very much relies upon mutual action between 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. We're pleased to report that 57% of our lettable floor space is occupied by retailers that have already set emissions reduction targets, and we expect that to increase over the coming years. With that, I'm now gonna hand over to Will, who will take you through the financials.
Thanks, Allan, good morning, 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 GBP 25.8 million compared to GBP 20.5 million last year, which is the retail comp, stripping out the contribution from Hawthorn prior to its disposal. 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 6.7 pence per share, from 5.3 pence last year, excluding the pubs. Importantly, it's comfortably covered by UFFO per share of 8.3 pence.
Turning to the balance sheet, where 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 GBP 1.21, from GBP 1.32 at the half year and GBP 1.34 a year ago. Albeit, we did still outperform the market by a significant margin, 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 6 and 12 months ago before the valuation disruption, and driven by a reduction in net debt and an increase in cash reserves from GBP 88 million a year ago to GBP 111 million 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. I'll have more on the balance sheet later on, but first, I'd like to look at UFFO. Alongside the UFFO statement, this 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 GBP 20.5 million to GBP 25.8 million. 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 UFFO improvement. Starting with other income, which you can see added GBP 1.4 million. This relates entirely to the settlement of an income disruption claim relating to COVID on our car park income, and it occurred during the first national lockdown between March and June 2020. Our work on cost reduction, both admin and finance costs, added over GBP 5 million, with admin costs reflecting the impact of our cost-saving initiatives, not least the relocation of our head office, which we completed during the first half of the year. 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.
NPI, which, after factoring in the impact of GBP 100 million of retail disposals completed this and last year, has increased from GBP 48.1 million last year to GBP 50.5 million this year. You can see that like-for-like income was up by GBP 1.2 million, or 2.9%, significant in representing a return to growth for the first time since 2018. 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. Rent and service charge provisions, where we've seen a modest benefit this year due to further improvement in rent collection rates year on year, now normalized at 98% in FY23.
We've also continued to collect historical COVID arrears, meaning the blended rate for FY21 and FY22 has now increased to 95%. Lastly, car park and commercialization income, which has been steadily improving over the last 18 months and is now back up to 80% of pre-pandemic levels, recovering a further GBP 1.3 million of income during the year. Before moving on to the dividend, I'd like to break UFFO per share down into its constituent elements, to 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. Admin costs, which have already reduced, and although it'll be challenging in this environment, where we've targeted further savings. Finally, finance costs, which have also reduced, and very importantly, are fixed for the next 5 years.
All of which means our retail UFFO is rebuilding, which flows directly into our dividend. Under our dividend policy, we pay dividends twice per annum, announced within our half and full year results, and based on 80% of the UFFO reported for the most recently completed 6-month period. In the prior year, we declared a total dividend per share of 7.4 pence, which included a 2.1 pence contribution from Hawthorn prior to its disposal, and a dividend from the retail business of 5.3 pence. Today, we've declared a second half dividend of 3.2 pence per share, payable in early August. Along with the dividend we declared in our half year results, that takes the total fully covered dividend for this financial year to 6.7 pence.
which based on our average share price over the last month, represents a fully covered dividend yield of 8%. Moving on to the balance sheet, 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, as reflected in the reduction in NTA per share, shown in the top left of this 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%. Given we have no maturity on drawn debt until 2028, that will remain the case for the next five years.
On top of that, we also have a market-leading yield gap position, being the difference between the net initial yield of our portfolio, i.e., our income, and our cost of debt, as you can see on this slide. We have the highest yield spread when compared to our listed real estate peers, thanks mainly to our high and sustainable income yield. 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.
You can see clearly that we've maintained significant headroom across all of our policies during the year, so that 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. These aspects were recognized by Fitch, along with our sustainable dividend policy and resilient portfolio characteristics, when they reaffirmed NewRiver's investment-grade credit rating in December, at BBB with a stable outlook and BBB+ 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. 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 effects of the 5.9% valuation decline. 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%. Leads me on to LTV guidance and capital allocation. To remind you, 1 year ago, with LTV at 34%, we said that we would not rush to redeploy to our 40% guidance level, and that 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 6 months ago when we presented the half-year results, with LTV also at 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 6 and 12 months, we believe that this was the right call and has been a key contributor to the position of strength we're now able to report. Revisiting this now, while we remain confident in the strength of NewRiver's position, and we've demonstrated the resilience of our underlying cash flows in the current environment, we see no reason to change our near-term guidance at the moment. We intend to keep headroom to the 40% level in the near term.
The big difference today is that the base rate is now 4.5%, compared to 1% a year ago and 3% at the half year. 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. In the meantime, by holding cash, we retain maximum flexibility. Any capital allocations we make have to offer particularly compelling returns over and above what we're achieving on our cash at the moment.
We'll, of course, continue to monitor the market very carefully. There could well be opportunities for us as increasing finance costs feed into upcoming market refinancings. Today, 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 the slide that we take the GBP 0.083 per share of UFFO we've reported today, which we then adjust to remove the impact of items that benefited FY23, but will not benefit FY24. Being completed disposals and one-offs dating back to COVID, such as the GBP 1.4 million of disruption insurance proceeds received during the year.
To add in items that will benefit FY24 more than FY23, namely, a full year of income from the M&G Real Estate mandate, and a full year of income earned on our surplus cash, which gives us 7.7 pence per share as a start point. We 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 0.9 million 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. Income recovery, which is a measure of our success in recovering the income disruption we experienced back in FY21.
We've made good progress during FY22 and FY23, which means that the remaining impact to recover now stands at 1.2 pence per share, down from just over 2 pence 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. Alongside that, we're actively expanding other revenue streams, such as our capital partnerships, where we've had success during the year in signing a new and exciting mandate with M&G Real Estate, which has already been expanded post-year-end. Finally, number 3, capital deployment.
As I've just communicated, we will not rush to redeploy to the 40% level in the near term, but we've included an illustrative 0.7 pence 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 Allan.
Thanks, Will. We're gonna now move to a review of our portfolio. Our core shopping centers are long-term holds for us due to their reliable cash flows. We've seen active demand for space reflected in an occupancy of 98%, retention rate of 90%, and 3 years of leasing transactions exceeding value ERVs. Our core shopping centers are valued off a net initial yield of 9.6%, and given the security of the underlying cash flows, it is no surprise that they have significantly outperformed MSCI on a 1, 3, and 5-year period. On a total return, last year's outperformance was 1,540 basis points. These centers, located in Northern Ireland, Scotland, and England, are the largest of our core shopping centers, with a combined value of GBP 117 million.
Located in the center of their communities, with short travel times ranging from 9 minutes to 13 minutes, the key to the success of these assets is the high-quality anchor stores, including Marks & Spencer, Primark, Next, Dunnes Stores, and Asda, but also the right balance between supply and demand. As a result, these assets have high occupancy and retention rates and very efficient gross to net ratios. Our retail park portfolio has had another good year of delivering strong operating metrics, with occupancy at 98% and a retention rate of 100%. We continue to see strong occupational demand for our retail parks, which are highly compatible with omni-channel retailing. Given the tight supply in our portfolio, they should deliver future consistent rental growth.
Our retail park portfolio significantly outperformed MSCI on a total return by 1,170 basis points, reflecting our consistently higher income return and more stable valuation performance. All of our retail parks are anchored by or adjacent to food retailers. The three retail parks featured on this slide benefit from a range of high-quality food retailers, including Aldi, Tesco, Sainsbury's, and The Food Warehouse. The high frequency of customer visits, the free surface car parking, and the range of omni-channel operators means that these assets are delivering resilient operating metrics with occupancy ranging from 91%-100%, high retention rates, and highly efficient gross to net ratios.
With affordable rents ranging from GBP 10.60 to GBP 12.90 per sq ft, supported by low service charges, the long-term compound annual growth rate has ranged from -0.9% to +1.4%, demonstrating the reliable rental cash flows that these assets provide. 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 rent, build to sell, 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 year in Cowley and in Penge.
Our three projects are at different stages in the development cycle, with planning consent secured at Burgess Hill, and where we are finalizing key anchor lettings prior to selling the residential site. At Grays, we have completed the pre-planning process, which will facilitate a major planning application later this year. Finally, in Bexleyheath, London, we are making good progress with our master plan, working closely with the council, who are supportive, to deliver up to 700 residential units. Moving now to our workout, which represents 11% of our portfolio, a reduction from the previous year of 14%, and which outperformed MSCI on a total return by 590 basis points. Our strategy is to exit from workout, which we are seeking to achieve through a combination of disposals and the implementation of turnaround strategies to deliver long-term rental and capital sustainability.
This year, we are targeting 4 disposals with an average value of GBP 5 million, and the completion of 5 turnaround strategies, for which we are making excellent progress. In the meantime, we benefit from an attractive income return. The turnaround strategies that we're deploying include intensive asset management, as we are doing in Paisley, where we are taking advantage of the significant displacement of tenants from the proposed demolition of another center in that town, to a complete repositioning, as 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 social leisure operator to lease approximately 100,000 sq ft, which will be both transformational and accretive. Our capital partnership activities, which are expanding, are focused on 3 areas.
In the institutional sector, where we were appointed by M&G Real Estate to asset manage a retail portfolio comprising 16 retail parks and one shopping center, and which was then extended in April to include an additional one 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. Finally, in the public sector with Canterbury City Council, where we asset manage two shopping centers, and we're recently appointed as development manager to relocate the council's offices to their center. We now manage in excess of GBP 500 million of assets and over GBP 50 million of annual rent on behalf of our partners, 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 outperformance.
We are therefore on track to deliver recurring fee income of between GBP 3 million and GBP 5 million by the end of 2024. 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. Given the high current occupancy in our retail parks and our 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. We're in an excellent position with a 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.
It is for those reasons that we remain confident of our ability to deliver our medium-term objective of a consistent 10% total accounting return. Thank you. I think we're now going to move to Q&A. We're going to start with questions from the floor, followed by webcast questions. I think we've got some roving microphones, and for the benefit of those that have dialed in, could you please introduce yourself before asking your question? I think we're going to start with Yusuf.
Thank you. Thank you for that. My question is on the capital allocation of GBP 111 million of cash, and you've highlighted three areas you could invest in. Could you give more color on what you'd be looking at in terms of investing in the direct market opportunities that you might see immediately? How likely is a share buyback, and how much do you think, or proportions that might go of the GBP 111 million into those things?
Well, we will be investing in our portfolio this year, but that is normal business activities for us, and the investment that we'll be putting into our portfolio will be accretive. We're constantly monitoring opportunities in the direct real estate market. Our sort of view is that given that cash and liquidity has real value in sort of times like we have today, and the fact that we're earning 4% interest, which is likely to increase with forthcoming increases by the Bank of England and the base rate, that if we're to deploy capital into the direct real estate market, we need to find opportunities that are gonna deliver very compelling returns. We think there'll be opportunities during the course of the year to be able to do that.
you know, particularly as we've seen, interest rates rise rapidly and with the likelihood of refinancing that needs to be done in the marketplace, that we believe will create some opportunities for a company like NewRiver, that has a lot of liquidity available. You know, a buyback is also a very credible option. it doesn't have to necessarily be one or the other option. We could certainly look at a combination of options of a buyback, as well as an investment in the direct real estate market and investing into our own portfolio. Will, do you want to add anything to that?
I would just add, Allan, that we've been clear that we want to keep headroom to our 40% LTV guidance today, and therefore, when we're talking about future allocation, really, I think future allocation at this point would be funded, from disposals that we make from this point forward, so that we can keep headroom to our LTV guidance after having made that deployment.
Thank you. Morning, gentlemen. Just touching on your ESG criteria, can you tell us what proportion of the portfolio at the moment is EPC-C or above? Of the assets that you expect to own long term, what sort of CapEx do you think needs to be invested there to get them up to the 2027 legislation?
I think that the, in this morning's RNS, Andrew, we got full disclosure, around, you know, our EPC data. I think the big difference for retail versus, say, offices, where the owners of office buildings are 100% responsible for the costs of being able to decarbonize their buildings, because they're responsible for the lighting and the heating system and the fit out that they provide their tenants. In retail, it's very different, because each of our tenants has a different fit out, they use different materials, many of them have different heating and lighting systems. Food retailers run refrigeration, the responsibility for those costs very much lie with the tenants.
That's why, as I said, you know, we have limited control on that, but what we're very encouraged about is seeing that increasing number of our tenants committing to reducing their carbon emissions.
Hi. Morning. It's Eleanor Free from Barclays here. Thank you very much for the presentation. Two questions from me. On your planned workout disposals, can you give us a bit of color on what you're seeing in the market? How are interest levels, what kind of buyers, et cetera? With your last update, you gave quite a comprehensive tenant affordability review. Can you give us a bit of an update on that, what you're seeing from retailers? Any signs of distress?
Yeah. In terms of the shopping centers, we've seen a steady increase in liquidity into the market, which is really encouraging. Most of the buy-side activity, importantly, is financing their acquisitions with cash, the retail sector's not been particularly reliant on the debt markets over the last sort of 2-3 years. We've seen a range of buyers, from private property companies, high net worth family offices that have been investing, councils still invest, we've seen some private equity activity. We're seeing much stronger levels of liquidity in the retail park sector, both in terms of institutional capital, as some of you may know, there's a very large US REIT that has been highly active in the market over the last 2 years, acquiring retail parks.
It's encouraging that liquidity is coming through, I think that is reflective of the fact that the fundamentals within the retail real estate sector are improving from an occupational perspective. Of course, retail offers a very attractive spread to other areas of the real estate market and indeed to gilt rates. I think that we expect that liquidity, you know, to improve. In terms of our tenant profile, yes, there is some data in our presentation that shows the probability of tenant failure. It's incredibly low. I think it's something like 0.9% for the next sort of two years. We do track that on a quarterly basis.
What we're very encouraged about, our occupational market is that, as I said in the presentation, the sector is definitely a lot more fitter and leaner. There's a lot of restructuring has already taken place, where you're seeing distress in the market is not with retailers that run a physical store network, it's in the online. It's pure play online retail, where you've seen more failures over the last 12 months. Interestingly, some of those failures have been acquired by omni-channel retailers. I, you know, for us, the clear winner over the last 12 months in a high inflation, high interest rate environment, has been omni-channel retailers and retailers that run physical store networks. John?
John Mozley, Liberum. Just one question, I think probably for Will, actually. Will, at the Capital Markets Day, 18 months ago, 2 years ago now, you set out a very clear, cost savings program. You obviously had a lot of that come through this year and the previous year. Is there much left to go from that now? Is that a kind of a finished step that you've now reached a level for, or could there be another range of cost savings after that?
Yeah. Thanks, John. Back in September 2021, at the Capital Markets Day, we set out cost savings in two areas: admin costs and finance costs. We said we wanted to save finance costs by reducing our amount of debt, which we did. We repaid GBP 335 million of debt in the prior year. That reduced our finance costs by GBP 7 million. We saw half of that benefit in the second half of the previous year, and the remainder come through this half, in the first half of this year. On admin costs, you know, we've reduced admin costs from GBP 12 million. That was our baseline position back in FY21. Last year, they were GBP 11.7 million. This year, GBP 11.1 million.
We've made really good progress, not least by moving just around the corner from where we're presenting today. We've sort of slightly downsized and made a really good saving there. Looking forward, obviously, in the market that we're in now, it is more challenging to save costs. You know, inflation is running in the double digits, as we all know. We have a target still in mind, and we have areas where we will be focusing in terms of cost savings, and there are some cost savings that we've made in the second half of the year we're reporting, that will start to come through in FY24 too.
Great. Well, if there's no more questions from the floor, I think we'll take some webcast questions. Lucy?
Great. We've got the first question in from Clive Black at Shore Capital. With respect to your capital partnerships, do you foresee opportunities across your three strands, or is it to be focused on any one of the three? Second question: you're starting to see evidence of debt-distressed retail assets that pose investment opportunities coming onto the radar.
Morning, Clive, thank you for your question. We do see a significant opportunity in those three areas: public sector, private equity, and the institutional market, this is gonna be a key focus for us moving forward over the next sort of couple of years. As I said in the presentation, you know, we are on track to be delivering recurring fee income of between GBP 3 million-GBP 5 million by the end of 2024. We'll be achieving that in a very capital-light way, which is a, you know, key point to make. In terms of the debt distress, you know, as of yet, we're not seeing that coming through.
The rapid rise of interest rates that we've seen over the 12, sort of 18 months, you know, does take time to feed through into the market. We think the probability of opportunities where through refinancing may create some distress in the market, and particularly with our position, having significant amounts of liquidity, you know, that could be a really good opportunity for us to deploy capital to deliver very compelling returns over and above what we're currently receiving by maintaining our cash position on deposit.
Great. Linked to capital partnerships again, a question from Mark Bentley at ShareSoc. Have you needed to increase the size of the team to support the capital partnerships expansion?
We have modestly. Taking on the new mandate that we did at the end of last year, you know, we have taken on 2 more people. In terms of the additional cost, it's well within the fee income that we can generate. It's a highly profitable way for us to deliver, you know, revenue growth. As we expand out that portfolio, our capital partnership activities, you know, that may require some selective recruitment. We'd be very confident of being able to attract the very best talent in the marketplace. I don't know if you saw, but we were included within the Sunday Times Best Companies to Work For. That's partly reflective of the culture we have.
It's a great place to work, so we're very confident being able to attract top-quality talent to support our strategy going forward.
Second question from Mark Bentley again: How much CapEx will be required for our turnaround activities in 2024?
It's gonna be about over GBP 10 million. Our current projections is that it's going to deliver a double-digit unlevered return, so it's gonna be very accretive, going forward to the business. As I said, the five turnaround strategies is all about positioning those assets to be able to deliver long-term rental and capital sustainability.
Okay. There's a few other questions, but they've broadly been covered by questions from the floor. That concludes the questions.
Has that concluded? Okay. Well, thank you everyone for joining us. Will and I are gonna be around for a short while, so if you'd like to have any further conversations, do approach us. Thank you very much for taking the time to come in and listen to our results presentation.