Civitas Social Housing : 2nd December 2019 Half Year Results for the six months to 30 September 2019

Civitas Social Housing PLC

('Civitas,' the 'Company' or the 'Group')

Half Year Results for the six months to 30 September 2019

Civitas Social Housing PLC, a leading supported living and social housing REIT, presents its interim results for the six-month period ended 30 September 2019.

The full Interim Report and Financial Statements can be accessed via the Company's website at www.civitassocialhousing.com or by contacting the Company Secretary by telephone on 01392 477500.

Performance Highlights

Property Valuation and Performance	Sept 19	Sept 18	Change	Mar 19
Investment property (£m)	841.5	678.7	Up 24%	826.9
IFRS NAV per share (diluted) (p)	107.23	106.06	Up 1.1%	107.08
Financial Performance	-	-	-	-
Rent roll annualised (£m)	46.5	37.2	Up 25%	45.7
Rental income (£m)	22.7	15.7	Up 45%	35.7
EPRA earnings1 (£m)	14.3	10.1	Up 42%	22.6
Operating Cash Flow (£m)	16.9	9.1	Up 86%	23.3
EPRA earning per share (p)	2.29	1.05	Up 118%	3.81
EPRA earning per share (diluted)2 (p)	2.29	1.63	Up 40%	3.63
Dividend per share (p)	2.65	2.50	Up 6%	5.0
Financing	-	-	-	-
Loan to value ratio	24	12	Up 12%	22%
Weighted average cost of debt	2.63%	-	-	2.57%

¹ Sept 18: £10.1m and Mar 19: £22.6m - represents the diluted EPRA earnings after adding back finance costs associated with the C share

²Difference due to C Share amortisation cost

• Increased investment property portfolio
• Portfolio value up to £841.5 million (IFRS)
• IFRS valuation net initial yield of 5.28% compared to average purchase net initial yield of 5.6% (5.90% before initial costs)
• IFRS NAV per share (diluted) up 1.1% to 107.23 pence
• Weighted Average Unexpired Lease Term (WAULT) of 23.9 years

• Diversified portfolio of 599 properties providing homes to over 4,000 people
  • £10.2 million of acquisitions made in the period
  • Providing accommodation to tenants with learning disabilities, autism, mental health disorders and also for women's refuge with an average tenant age of 33 years
  • Properties located across half the Local Authorities in England and Wales and leased to 15 Housing Associations, with support provided by 114 Care Providers

• Rent roll, operating cash flow and earnings significantly up
• Annualised rent roll increased to £46.5 million
• Operating cashflow increased to £16.9 million
• EPRA earnings (diluted) increased to £14.3 million
• EPRA earnings per share (diluted) up to 2.29 pence

• Dividend payments and dividend cover
• Target dividend of 5.3 pence for the financial year ended 31 March 2020
• Run-rate dividend cover of 96% at 30 September 2019
• Market forecasts suggest full run-rate cover around end March 2020

• Total NAV Return
• Total NAV return from IPO to 31 March 2019 of 6.9% p.a. (IFRS basis)

Additional Debt Facilities

• New £60 million 5-year term facility with National Westminster Bank
• Total drawn debt of £228.5 million reflecting gearing of 24% (available loan facilities of £272.5 million)
• Intention to secure additional £80 million facility to be in place Q1 2020

Working with Housing Associations and the Regulator

• Regulator has identified specific risks that require improvement
• Civitas is working proactively to enhance the sector
• Practical steps being taken to improve housing associations

Post Balance Sheet Highlights

• 4 properties acquired post period end, totalling £3.2 million
• Since 30 September 2019, the Company has bought back a total of 715,000 shares at a price ranging from 84.20p to 85.14p. These shares are held in treasury
• On 7 November 2019, the Board declared a quarterly dividend for the three months to 30 September 2019 of 1.325p per share
• Alison Hadden was appointed as an independent non-executive Director of the Company on 21 November 2019

Michael Wrobel, Non-Executive Chairman of the Company, commented:

'The Company is pleased to report a strong set of results with our key performance objectives met.

We continue to operate and grow the largest portfolio of specialist supported living accommodation which has been further increased to 599 properties, 4,114 tenancies and with a total of £764 million capital deployed since IPO.

The supply-demand imbalance in specialist supported accommodation continues to be severe and driven by strong demographic trends resulting in specialist supported living being one of fastest growing sub-sectors in healthcare real estate.

This is a critical need that the expertise of the Company's Investment Adviser is ideally placed to serve.

We also continue to play a key role in helping and supporting the increasing professionalisation of the sector and assisting our housing association partners as they seek to meet their regulatory obligations.'

For further information, please contact:

Civitas Housing Advisors Limited

Paul Bridge Tel: [phone]

Andrew Dawber Tel: [phone]

Liberum Capital Limited

Gillian Martin Tel: [phone]

Panmure Gordon

Sapna Shah Tel: [phone]

Tom Scrivens Tel: [phone]

Buchanan

Helen Tarbet/Henry Harrison-Topham Tel: [phone]

Henry Wilson/Hannah Ratcliff [e-mail]

About Civitas

Civitas Social Housing PLC is the first Real Estate Investment Trust offering pure play exposure to social care housing across the UK. The Company is advised by Civitas Housing Advisors Limited, who are authorised and regulated by the Financial Conduct Authority under Firms Reference Number 815699. The Company is listed on the premium listing segment of the Official List of the Financial Conduct Authority and was admitted to trading on the main market for listed securities of the London Stock Exchange in November 2016.

Chairman's Statement

Dear Shareholder

Introduction

Civitas has delivered another strong set of results for the six months to 30 September 2019.

We have continued to grow our rental income, achieve enhanced operational cash flow, met our dividend obligations and moved closer to the near-term target of 100% dividend cover.

We have strengthened our position as the leading owner of care-based supported housing in the UK. We have developed closer relationships with a range of major national care providers and an ever-greater number of local authority commissioners.

Today we are regarded as instrumental in the development of many new high-quality schemes that meet care needs and we are in the process of taking delivery of some of the very best facilities in the UK.

In the six months to 30 September 2019, Civitas generated a profit of £17.4 million, including £17.0 million of operating cashflow and IFRS earnings of 2.80 pence per share.

We paid out target dividends of 2.65 pence per share and we achieved EPRA dividend cover over the period of 87% (EPRA earnings per share 2.29 pence) and a Run Rate (based on EPRA Earnings) of 96% (see Appendix 1).

IFRS net asset value increased in the period to 107.23 pence per share (31 March 2019: 107.08 pence per share) reflecting gains on the portfolio as a result of the indexation of leases.

Specialist Supported Housing, whilst accounting for only 0.6% of the UK Government's Welfare Budget, continues to play a vital role in enabling community living for people who would otherwise be forced to reside in long stay institutional facilities or hospitals. Demand for quality facilities is high and continues to outstrip supply.

In October 2019, the Parliamentary Joint Committee on Human Rights published a report ('The detention of young people with learning disabilities and/or autism') that highlighted the plight of young people unable to move from hospitals into an appropriate community setting and called for urgent action. This reflects our experience on the ground where we continue to see a shortage of appropriate accommodation.

During the period, we worked closely with the Regulator of Social Housing (the 'RSH') and with our Housing Association and other partners. Our hands-on approach and our strong desire to achieve continually higher standards of delivery has, we believe, contributed to a number of measurable operational and governance improvements.

We are aware that the RSH remains concerned about a number of aspects of the lease based model and we, with others are working to address those concerns.

Our Investment Adviser has pioneered a new initiative for the sector with the establishment of a not-for-profit community interest company ('The Social Housing Family CIC') whose objective is to bring greater resources, skills and support to Housing Associations holding Group leases. This is being funded by the sector without any cost to the Group and enables direct input to be delivered and standards to be monitored.

Much effort has been applied to ensuring that key messages about the strengths and benefits of our model are being heard by opinion formers and leaders in the sector.

We are pleased that the extensive work that has been undertaken to deliver and measure social impact and social value is being noted and Civitas is now one of The Daily Telegraph newspaper's '10 Best Ethical Funds' and a constituent of the Bestinvest top 15 'Clean Fifteen Funds'.

Financial Performance

Rental income of £22.7 million was generated in the period, a 45% increase over the corresponding period (30 September 2018: £15.7 million) as a result of new investments made in the period, on track indexation of rents and the effect of rental income on properties purchased prior to the period, being included for the full six months.

Net cash generated from operating activities was £17.0 million (30 September 2018: £9.1 million), an 86% increase.

As at 30 September 2019, the IFRS net asset value of the Group was 107.23 pence which together with the dividends paid gives a total return since IPO of 6.9% on an annualised IFRS basis.

Loan Financing

On 10 September 2019, the Group announced a new £60 million 5 Year Term Facility with National Westminster Bank Plc ('NatWest') that has the potential to be extended by a further £40 million.

The availability of these funds enabled the Group to take the opportunity to buy back shares at a discount to net asset value.

The facility achieved a competitive investment grade pricing, which taken with the Group's existing debt facilities results in an average cost of debt of 264 bps.

The Group intends to put in place additional debt facilities of up to £80 million to achieve an average gearing level of 35% of portfolio gross assets (30 September 2019: 24%) (see Appendix 1). Discussions are progressing with a view to this being in place during Q1 2020.

Dividends

On 7 June 2019, a dividend of 1.325p per share was paid in respect of the three months to 31 March 2019. A further dividend of 1.325 pence per share was declared on 6 August 2019 in respect of the three months to 30 June 2019 and paid on 6 September 2019.

The dividends declared and paid match the Company's target of a quarterly dividend of 1.325 pence per share for each of the quarter periods from March 2019 to 31 March 2020. The Company's ambition is that future dividends will increase in line with inflation as measured by the consumer price index.

The Company has worked consistently to deliver a fully covered dividend as soon as possible. The strategy of purchasing fully built properties and new properties at completion without development funding assists this objective.

As at 30 September 2019, the Company achieved dividend cover over the six-month period of 87% as measured by EPRA earnings and a Run Rate (based on EPRA Earnings) cover at 30 September 2019 of 96% (see Appendix 1).

Investment

Total investment in the period was £10.2 million across eight specialist supported housing properties. This is lower than the previous period as we awaited the next tranche of debt becoming available.

This is now in place and will enable the Company to honour the commitments made to investment counterparties and to balance the ability to buy-back shares with these commitments. This is both to vendors of new properties and existing properties that are within the portfolio that are presently being extended significantly to meet the demand for places.

We continue to make use of our leading in-depth relationships at a local level across England, Wales and now Scotland and Northern Ireland, to create bespoke schemes where we are instrumental in selecting properties, determining adaptations and then on-boarding care providers and/or Housing Associations.

Share Price

The Company's share price has traded at or above IFRS net asset value for much of the time since IPO in November 2016.

On 4 April 2019, the RSH published an addendum to their annual sector risk report that was interpreted by some commentators as calling into question its support for the lease-based model of housing provision. Sentiment around this report exerted significant downwards pressure on the share price of Civitas and its sector in the market, widening the discount to net asset value.

Since that time, the RSH has issued an updated sector risk report and Civitas and others are working with the RSH and with Housing Association partners to assist them in making improvements to address the risks identified by the RSH.

At the same time, the Company continues to deliver on its financial and social targets.

I am confident that as we continue to deliver our strategy and as our Housing Association partners continue to demonstrate improvements to satisfy the RSH, this will be reflected in more positive sentiment.

Share Buybacks

Following the NatWest facility becoming available, the Company has undertaken several purchases of shares which are now held in treasury.

These purchases were made post 30 September and have to date amounted to 715,000 shares that have been acquired at prices between 84.20 pence and 85.14 pence per share. These purchases are accretive to the NAV and demonstrate the Board's confidence in the portfolio valuation.

The Company will consider additional share purchases whilst having regard to its financial capacity, existing property commitments and to the importance of the Company maintaining an active presence in the sector, together with the impact on the size of the Company and associated liquidity.

Appointment of Joint Broker

The Company is pleased to announce it has today appointed Panmure Gordon (UK) Limited as joint broker to work alongside Liberum Capital Limited ('Liberum'), whose appointment was announced by the Company on 17 September 2019.

We are pleased to note that recently Liberum published a significant research note on the Company and our Investment Adviser is working with them and meeting investors. This forms part of our active programme of investor relations.

Board

I am delighted that Alison Hadden has joined the Board effective from 21 November 2019, bringing our total to five non-executive Directors. Ms Hadden brings a depth of experience of Social Housing, most recently as a Chief Executive of several Housing Associations and having started her career at Local Authorities. She has worked with all stakeholders in the industry, including the RSH, to improve delivery, financial performance and governance. Ms Hadden is currently Chair of Housing Group Plus, an 18,000 home group in Staffordshire and Shropshire, and a non-executive director and member of the Audit and Risk Committee of Yorkshire Housing, a 20,000 home association operating in the Yorkshire area.

Outlook

All major political parties have previously supported legislation to promote care being delivered in community settings such as those provided by the Group.

The major political parties in their manifestos for the forthcoming General Election have committed to seeking the delivery of additional social housing for general needs.

They have also indicated additional funding for social care which is regarded as encouraging a positive funding environment.

Brexit is not expected to have any particular effect on the Group's activities which are entirely UK based. The care providers who provide primary care into the Group's properties typically draw the majority of staff from local areas with limited EU and overseas staff given the local nature of the provision.

The role of supported housing in enabling high quality healthcare solutions for vulnerable adults with life-long conditions is firmly established within the care and social housing sectors.

It has been supported for several decades by governments of all colours as delivering better outcomes for individuals, whilst being more cost-effective than institutionalisation. It is also preferred by local authorities.

We are recognised in the sector for our expertise and knowledge, both within social housing and in care, and this is being applied directly to assist our Housing Association partners to become stronger, better resourced and able to address fully the issues raised by the RSH. We take this very seriously and are taking active steps to bring this about with continued hands-on input, from the Investment Adviser.

We have increased our commitment to communicating with all our stakeholders and to making available as much information on our portfolio and our partners as reasonably possible whilst respecting the privacy of our residents. We believe this will enable a growing understanding and confidence in the Company's model.

I would like to take the opportunity to thank our shareholders for their continuing support, my fellow board members for their contribution and all our advisers, particularly our Investment Adviser for its work and efforts for the Company and the wider sector.

Michael Wrobel

Chairman

29 November 2019

Analysis of Property Portfolio¹
as at 30 September 2019

Geographically Diversified

Region	Properties	Tenancies	% of funds invested
North West	99	592	10.8
West Midlands	96	484	12.0
Wales	15	242	8.9
South West	112	687	14.3
North East	63	460	6.3
Yorkshire	49	422	10.8
East Midlands	58	374	9.4
East of England	18	106	2.7
London	26	338	13.9
South East	63	409	10.9

Market Value by Region¹

South West	14.5%
London	14.1%
West Midlands	11.9%
Yorkshire/Humber	10.7%
South East	10.7%
North West	10.5%
East Midlands	9.6%
Wales	8.3%
North East	7.0%
East of England	2.7%

Assets by Region¹

South West	112
North West	99
West Midlands	96
North East	63
South East	63
East Midlands	58
Yorkshire/Humber	49
London	26
East of England	18
Wales	15

Diversified by Registered Provider

Rental Income by Registered Provider¹

Registered Provider	Rental Income
Falcon	20.8%
Auckland	20.0%
BeST	11.3%
Westmoreland	10.8%
Inclusion	8.8%
Encircle	6.2%
Trinity	5.7%
Pivotal	4.1%
Chrysalis	3.4%
New Walk	3.0%
Harbour Light	2.4%
My Space	1.2%
IKE	1.2%
Hilldale	1.0%
Blue Square	0.1%

Assets by Registered Provider¹

Registered Provider	Number of Properties
Falcon	116
Westmoreland	76
BeST	72
Inclusion	65
Auckland	63
Trinity	43
New Walk	41
Pivotal	27
Harbour Light	26
Chrysalis	20
Encircle	16
Hilldale	15
IKE	10
My Space	8
Blue Square	1

Market Value by Registered Provider¹

Registered Provider	Market Value
Falcon	21.3%
Auckland	20.2%
BeST	11.5%
Westmoreland	10.8%
Inclusion	8.6%
Encircle	5.8%
Trinity	5.6%
Pivotal	4.1%
Chrysalis	3.3%
New Walk	3.0%
Harbour Light	2.3%
IKE	1.2%
My Space	1.2%
Hilldale	1.0%
Blue Square	0.1%

Tenancies by Registered Provider¹

Registered Provider	Tenancies
Falcon	850
BeST	526
Auckland	512
Inclusion	441
Westmoreland	406
Trinity	242
Pivotal	238
Encirle	205
New Walk	194
Harbour Light	182
Chrysalis	136
My Space	71
IKE	68
Hilldale	39
Blue Square	4

¹ As at 30 September 2019, including completed properties only.

Investment Adviser's Report

We are working hard to deliver innovation and drive improvements in the sector and to address the concerns expressed by RSH. By taking a leading role, we are able to enhance the quality of the Company's portfolio and the level of confidence in the sector overall.

Introduction

During the six-month period, we have worked actively to achieve a number of strategic objectives that we believe taken together have enhanced the Company and its portfolio as well as bringing about sustainable improvement to our sector. These are:

• Achieve the Company's financial objectives: grow rental income, deliver strong operational cash flow, meet dividend targets, drive dividend cover and enhance asset values;

• Take action on the ground: improve the business operations of a number of the Company's counterparties, give strength to the sector by new innovations and engage with the RSH; and

• Promote social impact and social value: the Investment Adviser's evidence-based approach with independent analysis to support the positive impact and cost savings generated by the Company's portfolio and our broader activities in the sector.

We set out below in some detail the steps that we have undertaken to deliver on the above objectives.

We are very conscious that Civitas is the leading provider of Specialist Supported Housing in the UK; we have the opportunity to influence the sector directly and we are intent on doing so for the benefit of all stakeholders, including the Company's shareholders and the individuals who are able to call a Civitas property their home.

Financial Review

Rental income in the period grew to £22.7 million, a 45% increase over the corresponding period (30 September 2018: £15.7 million) with annualised rental income of £46.5 million at 30 September 2019.

This increase has been generated as a result of new investments made in the period, on track indexation of rents and the effect of rental income on properties purchased prior to the period, being included for the full six months.

A net fair value gain on investment properties of £3.2 million was recorded in the period, lower than the £6.9 million recorded in the corresponding period reflecting less yield compression for the same period. Operational cash flow increased strongly to £17.0 million (30 September 2018: £9.1 million) adjusted for non-cash items.

Earnings per share increased to 2.80 pence over the six-month period compared to 4.22 pence for the full year to 31 March 2019. EPRA earnings per share increased to 2.29 pence over the six-month period compared to 3.63 pence (diluted) for the full year to 31 March 2019 and 1.63 pence (diluted) for the six months to 30 September 2018.

The Company paid two dividends of 1.325 pence each during the period fully in line with the distribution target announced for the year to 31 March 2020. The priority is to reach a fully covered dividend as soon as possible and we are pleased to note that the Run Rate (based on EPRA Earnings) dividend cover at 30 September 2019 was 96%. This should allow the Company to reach the target of 100% cover shortly.

As at 30 September 2019, the IFRS net asset value of the Company was 107.23 pence per share, a slight increase on the 107.08 pence per share at 31 March 2019. Together with the dividends of 2.65 pence paid in the period, this gives a total return since IPO of 6.9% on an annualised IFRS basis and 10.4% on a Portfolio basis (see Appendix 1).

The Ongoing Charges reflecting total annualised recurring costs expressed as a percentage of the average net asset value was 1.37% in the period compared to 1.36% in the year to 31 March 2019 (see Appendix 1).

The portfolio was independently valued on an individual IFRS asset basis by JLL at £841.5 million as at 30 September 2019 reflecting a net initial yield since IPO of 5.90%. This compares to an average purchase yield since IPO of 5.59% (prior to purchase costs) and reflects the ability of the Company to use its scale and market position to buy well. More recent acquisitions have however been in the range of 5.5%-5.75% (prior to purchase costs) reflecting modest compression.

Action on the Ground

The career experience of our team in social housing and specialist care combined with the leading position of Civitas in the sector is both an opportunity and a responsibility.

It enables us to play a significant hands-on role in bringing about direct improvements to Civitas' counterparties, particularly its Housing Association partners, to work closely with the RSH to help address the risks they have identified and to take action to increase confidence in the sector overall.

Since the publication by the RSH of the addendum to the Sector Risk Report in April 2019 and the issue of various grading notices, some questions have been raised over the lease-based model. At the same time, Civitas and other leading funds have continued to deliver on financial, operational and social targets.

Against this backdrop, we decided to take an active role working in close consultation with our partners in the sector and with the RSH to promote the delivery of as many improvements as possible.

A summary of the key actions that we have taken are set out below.

A New Community Interest Company to Own and Support Housing Associations

The Investment Adviser has supported the establishment of a new not-for-profit community interest company - The Social Housing Family Community Interest Company ('CIC') that was incorporated in November 2018 and which has recently become an active participant within the social housing sector.

The CIC is governed by a board of experienced, non-executive directors and is chaired (without remuneration) by Paul Bridge (a director of the Investment Adviser). It is structured to be entirely independent of the Investment Adviser and of Civitas and is funded by the sector without any cost or recourse to Civitas.

The CIC intends to bring together a group of regulated Housing Associations that hold Civitas and other leases (the 'CIC Group') and to use the skills and resources that will be built up within the CIC to enhance, where needed, the performance and delivery of those Housing Associations who become part of the CIC Group. Specifically, the CIC is designed to address the improvements being sought by the RSH.

To achieve this, the CIC has the authority to appoint board members to Housing Associations within the CIC Group and to provide advice and, governance assistance and should it be required, financial support.

All operational matters rest with the boards of each Housing Association including their responsibilities owed to the RSH.

Discussions have been held with the RSH, attended by all the non-executive directors of the CIC. It has been emphasised that the role of the CIC is not to change the nature and level of responsibilities that board members of Housing Associations owe to the RSH and to their underlying residents. Rather it is intended to provide greater advice, support and resources so that they are able to become better and stronger organisations.

The board of Auckland Home Solutions CIC ('Auckland'), a leading Civitas partner Housing Association (20.0% of rent roll as at 30 September 2019) voted recently to become the first member of the CIC and accordingly it joined the CIC Group on 7 August 2019.

Since this time, the CIC has supported a programme of additional recruitment within Auckland to enhance the skill set within the business as part of creating a stronger and more resourced organisation.

The presence of the CIC is being seen as attractive by potential staff recruitment candidates with backgrounds in major Housing Associations and has already led to additional senior appointments being made at Auckland.

The CIC enables additional resources and benefits to be delivered to Housing Associations whilst maintaining their separate regulated status and their direct reporting obligations to the RSH.

Assisting in the Recruitment of New Housing Association Board Members and Executives

It has been reported that over recent months more than 30 senior individuals, typically with large Housing Association experience have become board members of specialist Housing Associations that deliver the lease-based model. Many of these organisations hold Civitas leases. This has made a considerable positive impact on the skills and experience that is available.

At the same time, senior appointments have also been made at an executive level, including CEO and CFO appointments and at an operational level in areas such as rent collection from local authorities and operational co-ordination of repairs and maintenance.

Given the level of our contacts and relationships in the social housing and care sectors, we have been asked to help with a number of these individuals and have been pleased to do so.

For a number of others who have not been identified by us, we have been asked to meet individuals and to provide the confidence that as a significant partner to the relevant Housing Association, we are both supportive and intending to be here for the long term.

Our motivation in providing this assistance is not to seek favour or influence but to play our part in helping to encourage the very best individuals to become directors or executives of small growing Housing Associations that hold Civitas leases.

The availability of highly experienced individuals, particularly those who have previously benefited from significant engagement with the RSH will, we believe, advance the ability of smaller Housing Associations to achieve the operational improvements being sought by the RSH.

Rolling Programme of Housing Association Governance and Performance Seminars

We have taken the lead in directly hosting quarterly seminars for our Housing Association partners, each of which is designed around a particular topic such as governance, compliance and engagement with the RSH.

The purpose is both to encourage dialogue and the sharing of experiences and to promote the role of the Company as a supportive partner and an entity seeking to encourage best practice.

The seminars have been attended by a number of senior individuals from within the sector.

Review of Housing Association Business Planning and Stock Condition Advice

We have assisted several Housing Associations holding Civitas leases in their business planning and particularly the development of their stress testing analysis of 30-year cash flows that all Housing Associations are required to prepare. This has been supported by the force majeure clause that we developed for new leases.

We have also been asked to use our asset management resources and knowledge of care to assist other landlords who have several leases with our Housing Association partners. This work has been undertaken without any charge by us and without any cost to Civitas and is an example of the way in which we are making a contribution to the sector and to Housing Associations holding Civitas leases.

Sector Dialogue with RSH

Civitas is regarded as a significant entity in both the social housing and care sectors and as a result the Investment Adviser is invited frequently to host panel discussions, make key-note presentations and sponsor talks at a number of significant sector events.

As well as enabling us to promote the Company it provides a very useful forum to meet with existing and new potential partners including care providers and local authorities as well as engaging with the RSH.

A summary of some of the leading sector conferences that we have presented at recently in 2019 are:

• EPRA European Public Real Estate Conference
• HOUSING 2019 - Chartered Institute of Housing (Europe's largest housing conference)
• SOCIAL HOUSING Finance Conference - London
• MIPIM UK SUMMIT - London
• Women in Housing and 24 Housing

Social Impact and Social Value

At the time of the publication of the full year results in June this year, the social impact consultants, The Good Economy published their independent review of Civitas and concluded that the Company was an 'Authentic Impact Investor' under the IFC Principles.

They also highlighted the significant financial cost savings and the broader social value that had been created over the year to 31 March 2019. We intend to update this financial data on an annual basis whilst The Good Economy will continue to publish their broader independent assessment of Civitas twice a year with the interim and full year results.

The latest independent report from The Good Economy accompanies these half year results and provides details of the Company's portfolio and the continued success in delivering measurable social impact.

Highlights include:

• £3.50 is created in social value for every £1 of annualised investment¹
• 38% of properties within the portfolio are new to the social housing sector¹
• 67% of properties are in the 40% most deprived local authorities in the UK
• Average age of a Civitas resident is 33 years

¹ As at 31 March 2019.

The Portfolio - Asset Management

We are an active manager of the Civitas portfolio and undertake property assessments on a regular basis with our Housing Association partners and surveyors to determine whether properties are achieving an optimal outcome.

Where appropriate the Company will, from time to time, invest further in order to both expand properties, such as those in South Wales that are referred to earlier and also to ensure that properties are as future proofed as possible. This might include small adaptations to enable a building to function better for a Housing Association or a care provider and this modest investment is typically above and beyond the repair and maintenance obligations in the lease.

We also undertake reviews to ensure that each property is working in an optimal manner within the overall sector ecosystem in terms of the interaction with the local authority as well as the Housing Association and the care provider.

Now that we have established a substantial portfolio there are clear opportunities to move certain properties between Housing Associations, based on lease assignments on the same lease terms.

This is where a particular Housing Association has, for example, a strong relationship with a particular local authority that facilitates engagement or where we can achieve concentrations that assist Housing Associations in undertaking maintenance and repairs.

We will also respond to requests from Housing Associations who might themselves want to reduce down or reshape their geographic coverage so that they can become more efficient and have a business that is more easily managed and can better meet the requirements set by the RSH.

The Portfolio - Rental Income

The annualised rental income as at 30 September 2019 increased to £46.5 million (31 March 2019: £45.7 million) and this is expected to increase further as additional indexation is applied, the balance of the existing debt is invested and further debt is secured to achieve the leverage target of 35% of gross assets over the next few months.

Rental income is generated from leases with 15 Housing Associations, with the top three representing 52.1% (Falcon 20.8%, Auckland 20.0%, BeST 11.3%) based on the current leverage of 24% of gross assets and the distribution of leases as at 30 September 2019.

As part of our ongoing asset management, we continue to work closely with Westmoreland in helping to improve its governance and operational efficiency through refocussing its geographic spread by selective lease reassignments to other Housing Associations.

Falcon is a well-established, profitable and cash generative Housing Association that was formed in 2008 and has developed a strong track record of delivery. Today it provides long-term homes for more than 863 residents. As at 30 March 2019 it had net assets of £1.96 million including owned properties that Falcon has started to purchase to complement the leased properties.

Auckland is also a well-established, profitable and cash generate Housing Association that was formed in 2010 and which recently became the first member of the CIC Group. Today it provides long-term homes for more than 660 residents and has net assets of £0.9 million.

Investment Pipeline

As the profile and reputation of Civitas has grown in the sector so too have the number and range of direct approaches and opportunities to construct bespoke transactions. We are in active discussion with local authorities in respect of the plans they wish to implement where the provision of care based housing and affordable housing is a key component.

We are working directly with leading care providers and other major sector participants who are seeking strategic discussions regarding the manner in which they evolve their businesses and the part that Civitas can play in that.

These discussions relate both to standing stock with residents in place and also new developments that Civitas can acquire on completion without taking development or funding risk.

As a result of these and other initiatives we have allocated projects for all the available remaining debt facilities recently arranged having taken account the need to preserve the Company's cash buffer (including the ability to buy-back shares).

This allocation is based on the Company seeking to honour the commitments already made to investment counterparties and local authorities. This includes to vendors of new properties, focussed in areas of the UK where the Company has a number of existing properties and where the Investment Adviser has built strong relationships with local authorities that we wish to maintain.

It is also in respect to existing properties that are within the portfolio that have now been extended significantly to meet local authority demand with the delivery of new state of the art adjacent facilities that are now being acquired on completion.

We have also allocated projects for the additional up to £80 million of debt finance that the Company intends to secure over the next months following a similar approach described above.

Outlook

The past six months have been both challenging and rewarding. The comments from the RSH in April 2019, and subsequently in October 2019, clearly unsettled some in the investment community and Civitas is still recovering from that in terms of share price performance and discount to net asset value. We are at the same time working actively to address the risks identified by the RSH.

The Company's portfolio has over the past three years delivered both in terms of economic and social returns and we work on a daily basis to ensure this can continue to be the case in the future.

We have taken a very hands-on approach to bringing about improvements in the sector and we know that this has been noted by the RSH and other important sector participants.

Working closely with local authorities and care providers on a daily basis we see the levels of unsatisfied demand within the system and we appreciate the quality of the enhanced housing service that is being delivered by the staff of our Housing Association partners and the quality of primary care that is being delivered by the staff of the care providers.

Both are highly dedicated to helping all the residents achieve better outcome for lives that face daily challenges. For our part we intend to continue to bring forward the very best accommodation possible to assist in meeting these challenges and enabling people to achieve the very best outcomes possible.

We would like to thank the support of the Company's shareholders, many of whom we meet on a regular basis, the assistance and advice from our professional advisers and the input and guidance from the Civitas Board who are equally dedicated to delivering the very best outcomes for shareholders, residents and all our other stakeholders.

Civitas Housing Advisors Limited

Investment Adviser

29 November 2019

Key Performance Indicators ('KPIs')

	Explanation	Result
Capital deployed	Target of deploying the C share proceeds by 31 December 2018 or earlier.	The C share proceeds were materially deployed by 31 December 2018. Total of £764 million invested to 30 September 2019, representing Ordinary and C share equity and debt.
Increase in IFRS and Portfolio NAV per share	Target to achieve capital appreciation whilst maintaining a low risk strategy from enhancing the quality of cash flows from investments, by physical improvement of properties and by creating a significantly diversified, high-quality portfolio.	IFRS NAV increase of 9.2p per share or 9.4% from IPO. Portfolio NAV increase of 20.2p per share or 20.6% from IPO.
Dividend per share	Targeting 5.3p per share per annum.	Dividends on target with 2.65p per share declared for the six month period.
Number of Local Authorities, Housing Associations and care providers	Target risk mitigation through a diversified portfolio (once fully invested) with no more than 25% exposure to any one Local Authority or single Housing Association and no more than 20% exposure to any single geographical area, once the capital of the Company is fully invested.	As at 30 September 2019: · 160 Local Authorities · 15 Housing Associations · 114 care providers The Company's largest single exposure is to Falcon Housing Association and currently stands at 20.8% of total rent roll. The largest geographical concentration is in the South West, being 14.5% of total rent roll.
Loan to Gross Assets	Target debt drawn of 35% of gross assets.	Leverage as at 30 September 2019 of 24% of gross assets with facilities in negotiation to achieve the target in due course.

KPIs remain the same as the prior reporting period, except for capital deployed which is no longer relevant following the full deployment of C share proceeds in the prior period.

Alternative Performance Measures

Alternative Performance Measure	Definition	Performance Measure	30 September 2019	30 September 2018
Portfolio NAV	IFRS NAV adjusted to reflect investment property valued on a portfolio basis rather than on an individual asset basis.	Portfolio NAV Portfolio NAV per share	£736,392,000 118.30p	£403,427,000 115.21p
Company Adjusted Earnings	Company Specific Earnings Measure which adds back the finance costs associated with the C share financial liability.	Adjusted Earnings Adjusted Earnings per share	£14,279,000 2.29p	£10,116,000 2.89p
Annualised Total Shareholder Return	Internal rate of return calculation from IPO based on issuance of shares, dividends paid and NAV.	IFRS NAV Portfolio NAV	6.91% 10.41%	7.32% 11.01%
Run Rate (based on EPRA Earnings)	Annualised EPRA earnings (based on annualised rent roll) divided by total dividends (at 5.3p per share based on the adjusted weighted average number of shares in issue).	Run Rate (based on EPRA Earnings)	96%	-
Portfolio Gearing	Total borrowings divided by portfolio gross assets.	Portfolio Gearing	24%	12%
Ongoing Charges	Annualised recurring costs divided by average net assets.	Ongoing Charges	1.37%	1.36%

For detailed workings reconciling the above measures to the IFRS results, please see Appendix 1 to these financial statements below.

EPRA

The Company is a member of the European Public Real Estate Association ('EPRA'). EPRA has developed and defined the following performance measures to give transparency, comparability and relevant financial reporting across entities which may use different accounting standards. The Company is pleased to disclose the following measures which are calculated in accordance with EPRA guidance:

EPRA Performance Measure	Definition	EPRA Performance Measure	30 September 2019	30 September 2018
Earnings	Earnings from operational activities.	EPRA Earnings EPRA Earnings per share (basic) EPRA Earnings per share (diluted)	£14,279,000 2.29p 2.29p	£3,658,000 1.05p 1.63p
EPRA NAV	Net Asset Value adjusted to include properties and other investment interest at fair value and to exclude certain items not expected to crystallise in a long-term investment property business model.	EPRA Net Asset Value EPRA NAV per share (diluted)	£667,621,000 107.26p	£670,743,000 107.81p
EPRA NNNAV	EPRA NAV adjusted to include the fair values of (i) financial instruments, (ii) debt and (iii) deferred taxes.	EPRA NNNAV EPRA NNNAV per share (diluted)	£664,537,000 106.76p	£672,050,000 108.02p
EPRA Net Initial Yield	Annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property with (estimated) purchasers' costs.	EPRA Net Initial Yield	5.28%	5.28%
EPRA 'Topped-up' NIY	This measure incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free-periods (or other unexpired lease incentives such as discounted rent periods and stepped rents).	EPRA 'Topped-up' Net Initial Yield	5.28%	5.28%
EPRA Vacancy Rate	Estimated Market Rental Value ('ERV') of vacancy space divided by ERV of the whole portfolio.	EPRA Vacancy Rate	0%	0%
EPRA Costs Ratio	Administrative & operating costs (including & excluding costs of direct vacancy) divided by gross rental income.	EPRA Costs Ratio EPRA Costs Ratio (excluding direct vacancy costs)	21.58% 21.58%	28.23% 28.23%

For detailed workings reconciling the above measures to the IFRS results, please see Appendix 1 to these financial statements below.

Principal Risks and Uncertainties

The principal risks facing the Company are substantially unchanged since the date of the Annual Report for the financial year ended 31 March 2019 and continue to be as set out on pages 52 to 54 of that report.

Risks faced by the Company include, but are not limited to, strategy and competitiveness risks, investment management risks, accounting, legal and regulatory risks and operational risks, including cyber crime. Financial risks include market risks in relation to investment in property and liquidity funds, interest rate risk, credit risk and liquidity risk.

Details of the Company's management of these risks are set out in the 2019 Annual Report.

Statement of Directors' Responsibilities

The Directors confirm that these condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the Half Year Report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

• an indication of important events that have occurred during the first six months and their impact on the condensed consolidated financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
• material related party transactions in the first six months and any material changes in the related party transactions described in the last annual report.

The Directors of the Company are listed below.

The principal risks and uncertainties facing the Group are consistent with those outlined in the Group's most recent annual financial statements for the year ended 31 March 2019, reflecting the information required by DTR 4.2.7R.

This Half Year Report was approved by the Board of Directors and the above responsibility statement was signed on its behalf by:

Michael Wrobel
Chairman
29 November 2019

Independent Review Report to Civitas Social Housing PLC

Report on the condensed consolidated financial statements

Our conclusion

We have reviewed Civitas Social Housing PLC's condensed consolidated financial statements (the 'interim financial statements') in the Half Year Report of Civitas Social Housing PLC for the 6 month period ended 30 September 2019. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The interim financial statements comprise:

• the Condensed Consolidated Statement of Financial Position as at 30 September 2019;

• the Condensed Consolidated Statement of Comprehensive Income for the period then ended;

• the Condensed Consolidated Statement of Cash Flows for the period then ended;

• the Condensed Consolidated Statement of Changes in Equity for the period then ended; and

• the explanatory notes to the interim financial statements.

The interim financial statements included in the Half Year Report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The Half Year Report, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Half Year Report in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express a conclusion on the interim financial statements in the Half Year Report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What a review of interim financial statements involves

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 enquiries, 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, 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.

We have read the other information contained in the Half Year Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

PricewaterhouseCoopers LLP

Chartered Accountants

London

29 November 2019

Condensed Consolidated Statement of Comprehensive Income
For the period from 1 April 2019 to 30 September 2019

		From 1 April	From 1 April
		2019 to	2018 to	Year ended
		30 September	30 September	31 March
		2019	2018	2019
		Unaudited	Unaudited	Audited
	Note	£'000	£'000	£'000
Revenue
Rental income	4	22,729	15,675	35,738
Net rental income		22,729	15,675	35,738
Directors' remuneration		(84)	(78)	(163)
Investment advisory fees	18	(3,111)	(3,223)	(6,457)
General and administrative expenses		(1,710)	(1,124)	(3,022)
Total expenses		(4,905)	(4,425)	(9,642)
Change in fair value of investment properties	5	3,150	6,908	3,652
Operating profit		20,974	18,158	29,748
Finance income		56	399	491
Finance expense - relating to bank borrowings	6	(3,421)	(1,533)	(3975)
Finance expense - C shares amortisation	6	-	(6,458)	(6,400)
Change in fair value of interest rate derivatives	14	(180)	-	-
Profit before tax		17,429	10,566	19,864
Taxation	7	-	-	-
Profit being total comprehensive income for the period		17,429	10,566	19,864

All amounts reported in the Condensed Consolidated Statement of Comprehensive Income above arise from continuing operations.

Earnings per Ordinary share - basic	8	2.80p	3.02p	4.67p
Earnings per Ordinary share - diluted	8	2.80p	2.74p	4.22p

The notes below are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statement of Financial Position
As at 30 September 2019

		30 September	31 March	30 September
		2019	2019	2018
		Unaudited	Audited	Unaudited
	Note	£'000	£'000	£'000
Assets
Non-current assets
Investment property	10	833,477	820,094	673,872
Other receivables		8,022	6,824	4,783
		841,499	826,918	678,655
Current assets
Trade and other receivables		6,627	5,723	4,898
Cash and cash equivalents	11	53,043	54,347	104,349
		59,670	60,070	109,247
Total assets		901,169	886,988	787,902
Liabilities
Current liabilities
Trade and other payables		(8,903)	(15,324)	(15,602)
C shares	12	─	─	(299,532)
		(8,903)	(15,324)	(315,134)
Non-current liabilities
Bank and loan borrowings	13	(224,645)	(205,156)	(101,557)
Interest rate derivatives	14	(180)	─	─
		(224,825)	(205,156)	(101,557)
Total liabilities		(233,728)	(220,480)	(416,691)
Total net assets		667,441	666,508	371,211
Equity
Share capital	15	6,225	6,225	3,500
Share premium reserve		292,405	292,405	-
Capital reduction reserve		331,625	331,625	331,625
Retained earnings		37,186	36,253	36,086
Total equity		667,441	666,508	371,211
Net assets per Ordinary share - basic and diluted	16	107.23p	107.08p	106.06p

The notes below are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statement of Changes in Equity
For the period from 1 April 2019 to 30 September 2019

			Share	Capital
		Share	premium	reduction	Retained	Total
		capital	reserve	reserve	earnings	equity
	Note	£'000	£'000	£'000	£'000	£'000
Six month movements in equity (unaudited)
Balance at 1 April 2019		6,225	292,405	331,625	36,253	666,508
Profit and total comprehensive income for the period		-	-	-	17,429	17,429
Dividends paid
Total interim dividends for the period (2.65p)	9	-	-	-	(16,496)	(16,496)
Balance at 30 September 2019		6,225	292,405	331,625	37,186	667,441
Balance at 1 April 2018		3,500	-	331,625	34,270	369,395
Profit and total comprehensive income for the period		-	-	-	10,566	10,566
Dividends paid
Total interim dividends for the period (2.50p)	9	-	-	-	(8,750)	(8,750)
Balance at 30 September 2018		3,500	-	331,625	36,086	371,211
Prior year movements in equity (audited)
Balance at 1 April 2018 (audited)		3,500	-	331,625	34,270	369,395
Profit and total comprehensive income for the period		-	-	-	19,864	19,864
Issue of Ordinary shares
Issue of share capital	15	2,725	292,461	-	-	295,186
Share issue costs		-	(56)	-	-	(56)
Dividends paid
Total interim dividends for the period (5.00p)	9	-	-	-	(17,881)	(17,881)
Balance at 31 March 2019		6,225	292,405	331,625	36,253	666,508

The notes below are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statement of Cash Flows
For the period from 1 April 2019 to 30 September 2019

		From 1 April	From 1 April
		2019 to	2018 to	Year ended
		30 September	30 September	31 March
		2019	2018	2019
		Unaudited	Unaudited	Audited
	Note	£'000	£'000	£'000
Cash flows from operating activities
Profit for the period before taxation		17,429	10,566	19,864
- Change in fair value of investment properties		(3,150)	(6,908)	(3,652)
- Change in fair value of interest rate derivatives		180	─	─
- Rent and incentive straight line adjustments		(57)	(284)	(314)
Finance income		(56)	(399)	(491)
Finance expense		3,421	7,991	10,375
Increase in trade and other receivables		(918)	(1,996)	(2,789)
Increase/(decrease) in trade and other payables		63	(288)	(149)
Cash generated from operations		16,912	8,682	22,844
Interest received		56	399	491
Net cash flow generated from operating activities		16,968	9,081	23,335
Investing activities
Purchase of investment properties		(9,186)	(144,398)	(267,908)
Acquisition costs		(4,888)	(2,953)	(9,241)
Purchase of subsidiary company		─	─	(25,470)
Sale proceeds on sale of subsidiary company		─	─	4,336
Restricted cash held as retention money		1,630	(1,945)	(936)
Lease incentives paid		(3,939)	(2,053)	(3,178)
Net cash flow used in investing activities		(16,383)	(151,349)	(302,577)
Financing activities
Share issue costs paid		─	-	(56)
Dividends paid to equity shareholders		(16,409)	(8,602)	(17,591)
Dividends paid to C shareholders		─	(5,678)	(9,966)
Bank borrowings advanced	13	20,000	10,990	115,990
Bank borrowing issue costs paid		(1,111)	(432)	(2,374)
Loan interest paid		(2,739)	(1,214)	(2,958)
Net cash flow (used in)/generated from financing activities		(259)	(4,936)	83,045
Net increase/(decrease) in cash and cash equivalents		326	(147,204)	(196,197)
Unrestricted cash and cash equivalents at the start of the period		47,128	243,325	243,325
Unrestricted cash and cash equivalents at the end of the period	11	47,454	96,121	47,128

The notes below are an integral part of these condensed consolidated financial statements.

Notes to the Condensed Consolidated Financial Statements
For the period from 1 April 2019 to 30 September 2019

1. Corporate information

These condensed consolidated financial statements for the period from 1 April 2019 to 30 September 2019 comprise the results of the Company and its subsidiaries (together the 'Group') and were approved by the Board and authorised for issue on 29 November 2019.

Civitas Social Housing PLC is incorporated in England and Wales under the Companies Act 2006 as a public company limited by shares with company number 10402528.

The address of the registered office is Beaufort House, 51 New North Road, Exeter, EX4 4EP. The Company is registered as an investment company under section 833 of the Companies Act 2006 and is domiciled in the United Kingdom.

The principal activity of the Company is to act as the ultimate parent company of the Group, whose principal activity is to provide shareholders with an attractive level of income, together with the potential for capital growth from investing in a portfolio of social homes.

1. Basis of preparation

The financial information for the period ended 30 September 2019 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for the year ended 31 March 2019 has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report, and did not contain statements under section 498(2) or (3) of the Companies Act 2006.

The Group's condensed consolidated financial statements have been prepared on a going concern basis in accordance with the Disclosure Guidance and Transparency Rules of the UKLA and with International Financial Reporting Standards ('IFRS') and IFRS Interpretation Committee ('IFRIC') as issued by the IASB and as adopted by the European Union ('EU') and in accordance with IAS 34 Interim Financial Reporting. The current period financial information presented has been reviewed, not audited.

The comparative period represents the period from 1 April 2018 to 30 September 2018 as reported in the Group's 2018 Interim Report, and comparatives for the year ended 31 March 2019 as reported in the Company's 2019 Annual Report are also disclosed.

The Group's condensed consolidated financial statements should be read in conjunction with the annual financial statements for the period ended 31 March 2019, which have been prepared in accordance with IFRS as adopted by the European Union.

The same accounting policies, estimates, presentation and methods of computation are followed in the Half Year Report as applied in the Group's latest annual audited financial statements, with the exception of the following items:

• Derivative financial instruments. The Group has now entered into an interest rate swap for hedging purposes. These derivative financial instruments, are initially recognised at fair value at acquisition and are subsequently measured at fair value being the estimated amount that the Group would receive or pay to sell or transfer the agreement at the period end date, taking into account current interest rate expectations and the current credit rating of the lender and its counterparties. The gain or loss at each fair value remeasurement date is recognised in the Group's Consolidated Statement of Comprehensive Income.

• Adoption of IFRS 16 Leases. This standard introduces a single, on-balance sheet accounting model for lessee accounting (effective for annual periods beginning on or after 1 January 2019).

As the Group has no material operating lease arrangements where the Group acts as lessee, there is no material impact on the Group's financial statements.

The following are new accounting standards, interpretations and amendments, which are not yet effective and have not been early adopted in this financial information, that will or may have an effect on the Company's future financial statements:

• Amendments to IFRS 3 Business Combinations: These amendments clarify the definition of a business. A significant change in the amendment is the option for an entity to assess whether substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. If such a concentration exists, the transaction is not viewed as an acquisition of a business and no further assessment of the business guidance is required. This will be relevant where the value of the acquired entity is concentrated in one property, or a group of similar properties (effective for periods beginning on or after 1 January 2020 with earlier application permitted).

There will be no impact on the Group's financial statements since the amendments are effective for new business combinations.

The Group's condensed consolidated financial statements have been prepared on a historical cost basis, as modified for the Group's investment properties at fair value through profit or loss.

• Functional and presentation currency

The financial information is presented in Pounds Sterling which is also the functional currency of the Company, and all values are rounded to the nearest thousand (£'000s) pound, except where otherwise indicated.

The Group benefits from a secure income stream from long leases with Housing Associations, which are not overly reliant on any one tenant and present a well-diversified risk. The Group's cash balances as at 30 September 2019 were £53 million, of which £47 million was readily available. The Group is geared at 24%, see note 13, with £187 million of investment property remaining as unsecured.

As a result, the Directors believe that the Group is well placed to manage its financing and other business risks and that the Group will remain viable, continuing to operate and meets its liabilities as they fall due.

The Directors believe that there are currently no material uncertainties in relation to the Group's ability to continue for the period of at least 12 months from the date of the Group's condensed consolidated financial statements. The Board is, therefore, of the opinion that the going concern basis adopted in the preparation of the condensed consolidated financial statements is appropriate.

IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal financial reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker, which in the Group's case is delegated to the Investment Adviser, who has formed an Executive Team, in order to allocate resources to the segments and to assess their performance.

The internal financial reports received by the Investment Adviser's Executive Team contain financial information at a Group level as a whole and there are no reconciling items between the results contained in these reports and the amounts reported in the condensed consolidated financial statements.

The Directors consider the Group's property portfolio represents a coherent and diversified portfolio with similar economic characteristics and as a result these individual properties have been aggregated into a single operating segment. In the view of the Directors there is accordingly one reportable segment under the provisions of IFRS 8.

All of the Group's properties are based in the UK. No geographical grouping is contained in any of the internal financial reports provided to the Investment Adviser's Executive Team and, therefore no geographical segmental analysis is required by IFRS 8.

1. Significant accounting judgements, estimates and assumptions

In the application of the Group's accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are unchanged from those outlined in the Annual Report.

1. Rental income

	From	From
	1 April 2019 to	1 April 2018 to	Year ended
	30 September	30 September	31 March
	2019	2018	2019
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Rental income from investment properties	22,672	15,391	35,424
Rent straight line adjustments	155	327	459
Lease incentives	(98)	(43)	(145)
Total	22,729	15,675	35,738

1. Change in fair value of investment properties

	From	From
	1 April 2019	1 April 2018 to	Year ended
	30 September	30 September	31 March
	2019	2018	2019
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Change in valuation during the period	4,348	11,359	10,144
Adjustment for lease incentives and rent straight line adjustments recognised in assets at: - start of the period	6,824	332	332
- end of the period	(8,022)	(4,783)	(6,824)
Total	3,150	6,908	3,652

1. Finance expense

	From	From
	1 April 2019	1 April 2018	Year ended
	30 September	30 September	31 March
	2019	2018	2019
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Bank charges	2	2	2
Interest paid and payable on bank borrowings	2,759	1,278	3,048
Bank borrowing commitment fees	60	25	207
Amortisation of loan arrangement fees	600	228	718
Finance expenses associated with bank borrowings	3,421	1,533	3,975
Amortisation of C share liability	-	6,458	6,400
Total	3,421	7,991	10,375

1. Taxation

As a UK REIT, the Group is exempt from corporation tax on the profits and gains from its property investment business, provided it meets certain conditions as set out in the UK REIT regulations. For the period ended 30 September 2019, the Group did not have any non-qualifying profits and accordingly there is no tax charge in the period. If there were any non-qualifying profits and gains, these would be subject to corporation tax.

It is assumed that the Group will continue to be a group UK REIT for the foreseeable future, such that deferred tax has not been recognised on temporary differences relating to the property rental business. No deferred tax asset has been recognised in respect of the unutilised residual current period losses as it is not anticipated that sufficient residual profits will be generated in the future.

	From 1 April 2019 to 30 September 2019 Unaudited £'000	From 1 April 2018 to 30 September 2018 Unaudited £'000	Year ended 31 March 2019 Audited £'000
Corporation tax charge/(credit) for the period	-	-	-
Total	-	-	-

The tax charge for the period is less than the standard rate of corporation tax in the UK of 19%. The differences are explained below.

	From 1 April 2019 to 30 September 2019 Unaudited £'000	From 1 April 2018 to 30 September 2018 Unaudited £'000	Year ended 31 March 2019 Audited £'000
Group
Profit before taxation	17,429	10,566	19,864
UK corporation tax rate	19.00%	19.00%	19.00%
Theoretical tax at UK corporation tax rate	3,312	2,008	3,774
Effects of:
Change in value of exempt investment properties	(599)	(1,313)	(694)
Exempt REIT income	(3,020)	(2,128)	(4.702)
Amounts not deductible for tax purposes	67	1,259	1,296
Unutilised residual current period tax losses	240	174	326
Total	-	-	-

The Government has announced that the corporation tax standard rate is to be reduced to 17% with effect from 1 April 2020.

REIT exempt income includes property rental income that is exempt from UK corporation tax in accordance with Part 12 of the Corporation Tax Act 2010.

1. IFRS Earnings per share

Earnings per share ('EPS') amounts are calculated by dividing profit for the period attributable to ordinary equity holders of the Company by the weighted average number of Ordinary shares in issue during the period.

Diluted EPS is calculated by adjusting earnings and the number of shares for the effects of dilutive options and other dilutive potential Ordinary shares (i.e. the C shares).

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

	From	From
	1 April 2019 to	30 April 2018 to	Year ended
	30 September	30 September	31 March
	2019	2018	2019
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Calculation of Basic Earnings per share
Net profit attributable to Ordinary shareholders	17,429	10,566	19,864
Weighted average number of Ordinary shares	622,461,380	350,000,000	425,393,423
Earnings per Ordinary share - basic	2.80p	3.02p	4.67p
Calculation of Diluted Earnings per share
Net profit attributable to Ordinary shareholders	17,429	10,566	19,864
Add back finance costs associated with the C share liability	-	6,458	6,400
	17,429	17,024	26,264
Weighted average number of Ordinary shares	622,461,380	350,000,000	425,393,423
Effects of dilution from C shares	-	272,140,052	197,067,957
	622,461,380	622,140,052	622,461,380
Earnings per Ordinary share - diluted	2.80p	2.74p	4.22p

1. Dividends

	From	From
	1 April 2019 to	1 April 2018 to	Year ended
	30 September	30 September	31 March
	2019	2018	2019
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Dividend of 1.25p for the three months to 31 March 2018	-	4,375	4,375
Dividend of 1.25p for the three months to 30 June 2018	-	4,375	4,375
Dividend of 1.25p for the three months to 30 September 2018	-	-	4,375
Dividend of 1.25p for the three months to 31 December 2018	-	-	4,756
Dividend of 1.325p for the three months to 31 March 2019	8,248	-	-
Dividend of 1.325p for the three months to 30 June 2019	8,248	-	-
	16,496	8,750	17,881

On 7 November 2019 the Company announced a dividend of 1.325p per Ordinary share in respect of the period 1 July 2019 to 30 September 2019. The dividend will be paid on or around 30 November 2019 to shareholders on the register as at 15 November 2019. The financial statements do not reflect this dividend.

1. Investment property

	From		From
	1 April 2019 to	Year ended	1 April 2018 to
	30 September	31 March	30 September
	2019	2019	2018
	Unaudited	Audited	Unaudited
	£'000	£'000	£'000
Balance at beginning of period	826,918	516,554	516,554
Property acquisitions	7,555	289,304	148,165
Acquisition costs	2,678	10,916	2,577
Change in fair value during the period (Note 5)	4,348	10,144	11,359
Value advised by the property valuers	841,499	826,918	678,655
Adjustments for lease incentive assets and rent straight line assets recognised	(8,022)	(6,824)	(4,783)
Balance at the end of period	833,477	820,094	673,872

In accordance with 'IAS 40: Investment Property', the investment property has been independently valued at fair value by Jones Lang LaSalle Ltd ('JLL'), an accredited external valuer with recognised and relevant professional qualifications and recent experience of the location and category of the investment property being valued. However the valuations are the ultimate responsibility of the Directors.

JLL valued the Group's properties if they were each sold in independent transactions in accordance with IFRS, at £841,499,000 as at 30 September 2019 (31 March 2019: £826,918,000 and 30 September 2018: £678,655,000).

JLL has provided additional valuation services to the Company during the period.

In relation to the period ended 30 September 2019, the proportion of the total fees payable by the Company to JLL's total fee income was less than 5% and is therefore minimal. Additionally, JLL has a rotation policy in place whereby the signatories on the valuations rotate after seven years.

All corporate acquisitions during the period have been treated as asset purchases rather than business combinations because they are considered to be acquisitions of properties rather than businesses.

The following table provides the fair value measurement hierarchy for investment property:

	Total £'000	Quoted prices in active markets (Level 1) £'000	Significant observable inputs (Level 2) £'000	Significant unobservable inputs (Level 3) £'000
Investment properties measured at fair value
30 September 2019	833,477	-	-	833,477
31 March 2019	820,094	-	-	820,094
30 September 2018	673,872	-	-	673,872

There have been no transfers between Level 1 and Level 2 during any of the periods, nor have there been any transfers between Level 2 and Level 3 during any of the periods.

The valuations have been prepared in accordance with the RICS Valuation - Professional Standards (incorporating the International Valuation Standards) by JLL, one of the leading professional firms engaged in the Social Housing sector.

As noted previously, all of the Group's investments are reported as Level 3 in accordance with IFRS 13 where external inputs are 'unobservable' and value is the Directors' best estimate, based upon advice from relevant knowledgeable experts.

1. Cash and cash equivalents

	30 September 2019 Unaudited £'000	31 March 2019 Audited £'000	30 September 2018 Unaudited £'000
Cash held by solicitors	17,564	17,031	31,437
Liquidity funds	10,440	13,394	53,309
Cash held by banks	19,450	16,703	11,375
Unrestricted cash and cash equivalents	47,454	47,128	96,121
Restricted cash	5,589	7,219	8,228
Total	53,043	54,347	104,349

Liquidity funds refer to money placed in money market funds. These are highly liquid funds with accessibility within 24 hours and subject to insignificant risk of changes in value.

Cash held by lawyers is money held in escrow for expenses expected to be incurred in relation to investment properties pending completion. These funds are available immediately on demand.

Restricted cash represents retention money held by lawyers in relation to deferred payments subject to achievement of certain conditions, other retentions and cash segregated to fund repair, maintenance and improvement works to bring the properties up to satisfactory standards for the Group and the tenants. Currently that amount of cash is held in escrow.

1. C shares

	From 1 April 2019 to 30 September 2019 Unaudited £'000	Year ended 31 March 2019 Audited £'000	From 1 April 2018 to 30 September 2018 Unaudited £'000
At start of period	-	298,752	298,752
Dividends paid to C share holders	-	(9,966)	(5,678)
Amortisation of C share liability	-	6,400	6,458
Conversion to Ordinary shares	-	(295,186)	-
At end of period	-	-	299,532

On 10 November 2017 the Company announced the issue of 302,000,000 C shares, issued at £1 per share. The C shares are convertible preference shares. The shares are listed on the London Stock Exchange and dealing commenced on 14 November 2017.

Holders of C shares are not entitled to receive notice of, attend, speak or vote at general meetings of the Company.

Under IAS 32 Financial Instruments Presentation, the C shares meet the definition of a financial liability rather than equity and are presented in the financial statements as a liability of the Company carried at amortised cost.

The funds were raised in order to finance a number of property acquisitions and C shares were issued rather than Ordinary shares so that the issue costs associated with the fund raise and the costs associated with the property acquisitions did not dilute the Ordinary share NAV.

In order to calculate the net assets attributable to each share class, the results, assets and liabilities attributable to the C shares are identified in a separate pool to the results, assets and liabilities of the Ordinary shares. A share of fund level expenses for the period is allocated to the C shares based on the net assets of each share class pool.

It should be noted that these financial statements include all results, assets and liabilities of both share class pools however as the C shares are classified as a liability, net assets are reduced by the value of the C shares liability which is also equivalent to the net assets of the C share pool.

On 21 December 2018 the C shares were converted to Ordinary shares in the ratio 0.902190 new Ordinary shares for every 1 C share held. The conversion ratio was calculated with reference to the respective portfolio net asset values of the C shares and Ordinary shares at close of business on the calculation date.

Accordingly 272,461,380 Ordinary shares were issued.

1. Bank and loan borrowings

Bank borrowings are secured by charges over individual investment properties held by certain asset-holding subsidiaries. The banks also hold charges over the shares of certain subsidiaries and any intermediary holding companies of those subsidiaries. Any associated fees in arranging the bank borrowings unamortised as at the period end are offset against amounts drawn on the facilities as shown in the table below:

	From	Year ended	From
	1 April 2019 to	31 March	1 April 2018 to
	30 September 2019	2019	30 September 2018
	Unaudited	Audited	Unaudited
	£'000	£'000	£'000
At start of period	208,447	92,457	92,457
Bank borrowings drawn	20,000	115,990	10,990
Bank borrowings drawn at end of period	228,447	208,447	103,447
Unamortised loan issue costs at start of period	(3,291)	(1,635)	(1,635)
Less: loan issue costs incurred	(1,111)	(2,374)	(483)
Add: loan issue costs amortised	600	718	228
Unamortised costs at end of period	(3,802)	(3,291)	(1,890)
At end of period	224,645	205,156	101,557
Maturity of bank borrowings:
Repayable within 1 year	-	-	-
Repayable between 1 to 2 years	55,947	55,947	-
Repayable between 2 to 5 years	120,000	100,000	50,947
Repayable after 5 years	52,500	52,500	52,500
	228,447	208,447	103,447

The Group has entered into the following loan facility agreements:

A 10 year Sterling Term Facility Agreement dated 2 November 2017 for up to £52,500,000 with Scottish Widows Limited. Interest is fixed at a total of 2.9936%. These borrowings include amounts secured on investment property to the value of £171,443,000 (30 September 2018: £168,998,000; 31 March 2019: 169,999,000).

A 3 year Sterling Revolving Facility Agreement dated 15 November 2017 for up to £60,000,000 with Lloyds Bank plc. Interest is charged at LIBOR + 1.50% margin. These borrowings include amounts secured on investment property to the value of £145,503,000 (30 September 2018: £143,265,000; 31 March 2019: £144,166,000).

A 3-year Revolving Credit Facility Agreement dated 28 November 2018 for up to £100,000,000 with HSBC Bank PLC. Interest charged at LIBOR + 1.70% margin.

The borrowings include amounts secured on investment property to the value of £210,304,000 (30 September 2019: £nil; 31 March 2019: £208,953,000).

A 5-year loan facility with National Westminster Bank Plc for up to £60,000,000. Interest is charged at LIBOR + 2.00% margin and has been fixed by way of a five-year swap. The loan can be extended for an additional 2 years and there is the option of a further £40 million accordion.

The borrowings include amounts secured on investment property to the value of £126,772,000 (30 September 2018: £nil; 31 March 2019: £nil)

A number of covenants are in place under the four agreements. Under the Scottish Widows Limited 10 year facility, historical and projected interest cover must be at least 325% and the loan to value ratio must not exceed 40%. Under the Lloyds Bank plc 3 year revolving credit facility, historical and projected interest cover must be at least 250% and the loan to value ratio must not exceed 55%. Under the HSBC Bank PLC 3-year facility, historical and projected interest cover must be at least 250% and the loan to value ratio must not exceed 60%. Under the National Westminster Bank Plc 5-year facility, historical and projected interest cover must be at least 250% and the loan to value must not exceed 50%. At 30 September 2019, the Group is in compliance with all covenants.

1. Interest rate derivatives

The Group has entered into an interest rate swap with NatWest Markets in order to mitigate the risk of changes in interest rates on its loan with National Westminster Bank plc under which £20,000,000 is currently drawn.

The swap has a notional value of £20,000,000 and fixes interest at 0.7105%.

	30 September	31 March	30 September
	2019	2019	2018
	Unaudited	Audited	Unaudited
	£'000	£'000	£'000
At start of the period	-	-	-
Change in fair value during the period	(180)	-	-
At the end of the period	(180)	-	-

The table below shows the fair value measurement hierarchy for interest rate derivatives:

	Quoted prices	Significant	Significant
	in active	observable	unobservable
	markets	inputs	inputs
	(Level 1)	(Level 2)	(Level 3)
	£'000	£'000	£'000
30 September 2019	-	(180)	-
31 March 2019	-	-	-
30 September 2018	-	-	-

There have been no transfers between Level 1 and Level 2 during any of the periods nor have there been anytransfers between Level 2 and Level 3 during any of the periods.

1. Share capital

Share capital represents the nominal value of consideration received by the Company for the issue of Ordinary shares.

	From	Year ended	From
	1 April 2019 to	31 March	1 April 2018 to
	30 September 2019	2019	30 September 2018
	Unaudited	Audited	Unaudited
	£'000	£'000	£'000
Share capital
At start of period	6,225	3,500	3,500
Shares issued	-	2,725	-
At end of period	6,225	6,225	3,500
Number of shares authorised issued and fully paid
Ordinary shares of £0.01 each
At beginning of period	622,461,380	350,000,000	350,000,000
Shares issued	-	272,461,380	-
At end of period	622,461,380	622,461,380	350,000,000

On 21 December 2018, the Company issued 272,461,380 Ordinary share in respect of the conversion of 302,000,000 C shares. The fair value of assets representing the C shares pool at that date was £295,186,000.

1. Net asset value

Basic NAV per share is calculated by dividing net assets in the Condensed Consolidated Statement of Financial Position attributable to ordinary equity holders of the parent by the number of Ordinary shares outstanding at the end of the period.

It has been determined that the conversion of the C shares will not produce a dilutive effect on the Ordinary share NAV.

Net asset values have been calculated as follows:

	30 September 2019 Unaudited £'000	31 March 2019 Audited £'000	30 September 2018 Unaudited £'000
Net assets	667,441	666,508	371,211
Number of Ordinary shares in issue at end of period	622,461,380	622,461,380	350,000,000
NAV - basic and diluted	107.23p	107.08p	106.06p

1. Related party disclosures

The Directors are remunerated for their services at such rate as the Directors shall from time to time determine. The Chairman receives a Director's fee of £50,000 per annum, and the other Directors of the Board receive a fee of £32,000 per annum (with the exception of the chairman of the Audit and Management Engagement Committee who receives a fee of £36,000 per annum).

As at 30 September 2019, the Directors (including their connected persons) had beneficial interests in the following number of shares in the Company:

Director	Ordinary shares
Michael Wrobel	100,598
Peter Baxter	47,065
Caroline Gulliver	58,832
Alastair Moss	11,766

For the period from 1 April 2019 to 30 September 2019, fees of £75,000 (1 April 2018 to 30 September 2018: £75,000) were incurred and paid to the Directors.

1. Transactions with the Investment Adviser

On 1 November 2016 Civitas Housing Advisors Limited was appointed as the Investment Adviser of the Company.

For the period from 1 April 2019 to 30 September 2019, fees of £3,111,000 (1 April 2018 to 30 September 2018: £3,223,000) were incurred and paid to Civitas Housing Advisors Limited.

As at 30 September 2019, no amounts (31 March 2019: £nil) were due to/from Civitas Housing Advisors Limited.

As from 26 April 2019, the Investment Advisory fee paid is calculated based on the IFRS NAV instead of the Portfolio NAV. Further details of the fee calculation can be seen in the Company's Annual Report.

The Board also agreed with the Investment Adviser to extend the initial notice period term within the Investment Management Agreement from 30 November 2021 to 30 May 2024.

At 30 September 2019, CHA held 50,000 Ordinary shares in the Company.

1. Capital commitments

At 30 September 2019, the Group had funds committed (forward purchase) totalling £12,000,000 concerning two properties, currently under development for which the Group has interest into a conditional sale and purchase agreement, conditional on the completion of development.

1. Post balance sheet events

Acquisitions

On 4 October 2019, a property in Surrey was acquired for £1.05 million and a property in Worcestershire was acquired for £0.35 million.

On 14 November 2019, a property in Warwickshire was acquired for £0.50 million.

On 19 November 2019, a property in Essex was acquired for £1.30 million

Dividends

On 7 November 2019 the Board declared a quarterly dividend in respect of the Ordinary shares for the three months to 30 September 2019 of 1.325 pence per Ordinary share. The dividend will be paid on or around 29 November 2019 to holders of Ordinary shares on the register as at 15 November 2019. The dividend will be paid as a REIT property income distribution ('PID').

Share Buy-Backs

On 3 October 2019, the Company bought into treasury 150,000 Ordinary shares at a price of 85.1400p per Ordinary share.

On 4 October 2019, the Company bought into treasury 40,000 Ordinary shares at a price of 85.0250p per Ordinary share.

On 9 October 2019, the Company bought into treasury 150,000 Ordinary shares at a price of 84.5267p per Ordinary share.

On 10 October 2019, the Company bought into treasury 100,000 Ordinary shares at a price of 84.2000p per Ordinary share.

On 1 November 2019, the Company bought into treasury 250,000 Ordinary shares at a price of 84.8196p per Ordinary share.

On 6 November 2019, the Company bought into treasury 25,000 Ordinary shares at a price of 84.9000p per Ordinary share.

Following these transactions the Company's issued share capital is 622,461,380 and the Company holds a total of 715,000 Ordinary shares in treasury which do not carry any voting rights.

Other Announcements

On 22 November 2019, the Board announced the appointment of Alison Hadden as an independent non-executive Director of the Company on 21 November 2019.

Appendix I - Notes to the Calculation of EPRA and Other Alternative Performance Measures (unaudited)

1. EPRA Earnings

Earnings from operational activities

	30 September 2019 £'000	3 September 2018 £'000
Profit after taxation	17,429	10,566
Changes in value of investment properties	(3,150)	(6,908)
EPRA Earnings	14,279	3,658
Finance costs associated with the C share financial liability	-	6,458
Diluted EPRA Earnings	14,279	10,116
Weighted average number of shares in issue	622,461,380	350,000,000
Dilutive elements	-	272,140,052
Adjusted weighted average number of shares in issue	622,461,380	622,140,052
EPRA Earnings per share (EPS) - basic	2.29p	1.05p
EPRA Earnings per share (EPS) - diluted	2.29p	1.63p

1. EPRA NAV

Net asset value adjusted to include properties and other investment interest at fair value and to exclude certain items not expected to crystallise in a long-term investment property business model.

	30 September 2019 £'000	3 September 2018 £'000
Net assets	667,441	371,211
Effect of the exercise of C shares	-	299,532
Diluted net assets	667,441	670,743
Adjustments to exclude fair value of interest rate derivatives	180	-
EPRA Net Assets	667,621	670,743
Number of Ordinary shares in issue	662,461,380	350,000,000
Number of Ordinary shares that would be issued on the conversion of C shares	-	272,140,052
Adjusted number of shares to calculated diluted NAV	622,461,380	622,140,052
EPRA Net Assets per share	107.26p	107.81p

1. EPRA NNNAV

EPRA NAV adjusted to include the fair values of (i) financial instruments, (ii) debt and (iii) deferred taxes.

	30 September 2019 £'000	30 September 2018 £'000
EPRA Net assets (per above)	667,621	670,743
Adjustment to value bank borrowings and derivatives at fair value	(3,084)	1,307
EPRA NNNAV	664,537	672,050
Number of Ordinary shares in issue	622,461,380	350,000,000
Number of Ordinary shares that would be issued on the conversion of C shares	-	272,140,052
Adjusted number of shares to calculated diluted NAV	622,461,380	622,140,052
EPRA NNNAV per share	106.76p	108.02p

1. EPRA Vacancy Rate

Estimated Market Rental Value (ERV) of vacancy space divided by ERV of the whole portfolio.

	30 September 2019 £'000	3 September 2018 £'000
Estimated Market Rental Value (ERV) of vacant spaces	-	-
Estimated Market Rental Value of whole portfolio	46,451	37,286
EPRA Vacancy Rate	0%	0%

1. EPRA Costs Ratio

Administrative and operating costs divided by gross rental income.

	30 September 2019 £'000	3 September 2018 £'000
Total administrative and operating costs	4,905	4,425
Gross rental income	22,729	15,675
EPRA cost ratio	21.58%	28.23%

1. Portfolio NAV

IFRS NAV adjusted to reflect investment property valued on a portfolio basis rather than individual asset basis.

	30 September 2019 £'000	3 September 2018 £'000
Net assets	667,441	371,211
Adjustment for change to property valuation	68,951	32,036
Portfolio net assets	736,392	403,247
Number of Ordinary shares in issue	622,461,380	350,000,000
EPRA Net Assets per share	118.30p	115.21p

1. Company Adjusted Earnings

Company Specific Earnings Measure which adds back finance costs associated with the C share financial liability.

	30 September 2019 £'000	3 September 2018 £'000
Profit after taxation	17,429	10,566
Changes in value of investment properties	(3,150)	(6,908)
EPRA Earnings	14,279	3,658
Finance costs associated with the C share financial liability	-	6,458
Company Adjusted Earnings	14,279	10,116
Weighted average number of shares in issue	622,461,380	350,000,000
EPRA Earnings per share (EPS) - basic	2.29p	2.89p

1. Annualised Total Shareholder Return

The annualised total shareholder return for the period from launch to 30 September 2019 based on IFRS NAV and Portfolio NAV is calculated using dividend cash flows data as follows:

		IFRS NAV	Portfolio NAV
		basis	basis
		pence per share	£'000
18 November 2016	Investment (net of issue costs)	98.00	98.00
31 May 2017	Interim dividend	0.75	0.75
31 August 2017	Interim dividend	0.75	0.75
30 November 2017	Interim dividend	0.75	0.75
9 March 2018	Interim dividend	0.75	0.75
8 June 2018	Interim dividend	1.25	1.25
7 September 2018	Interim dividend	1.25	1.25
30 November 2018	Interim dividend	1.25	1.25
11 January 2019	Interim dividend	1.11	1.11
28 February 2019	Interim dividend	0.14	0.14
7 June 2019	Interim dividend	1.33	1.33
6 September 2019	Interim dividend	1.33	1.33
30 September 2019	NAV	107.23	118.30
IRR		6.91%	10.41%

1. Run Rate (based on EPRA Earnings)

Annualised EPRA earnings divided by total dividends (at 5.3p per share based on the adjusted weighted average number of shares in issue).

	30 September 2019 £'000
Annualised rent roll1	46,547
Annualised EPRA Earnings	31,553
Target dividends per share for 12 months	5.3p
Adjusted weighted average number of shares in issue	622,461,380
Target dividends for 12 months	32,990
Run Rate (based on EPRA Earnings)	96%

¹ Annualised rent roll based upon £841.5 million of real estate at 30 September 2019.

1. EPRA Dividend Cover

Diluted EPRA earnings divided by total dividends (at 2.65p per share based on the adjusted weighted average number of shares in issue).

	3 September 2019 £'000	3 September 2018 £'000
Target dividends per share for 6 months	2.65p	2.65p
Adjusted weighted average number of shares in issue	622,461,380	622,140,052
Target dividends for 6 months	16,495	16,487
EPRA Earnings (diluted)	14,279	10,116
EPRA Cover	87%	61%

1. Portfolio Gearing

Total borrowings divided by portfolio gross assets.

	3 September 2019 £'000	3 September 2018 £'000
Portfolio valuation	910,450	724,700
Other assets	59,670	109,257
Total Portfolio Gross Assets	970,120	833,947
Borrowings	228,447	103,447
Portfolio Gearing	24%	12%

1. Ongoing Charges

Annualised recurring costs divided by the average net assets.

	3 September 2019 £'000	31 March 2019 £'000
Total costs	4,905	9,642
Less non recurring costs	(332)	(559)
Recurring costs for the period	4,573	9,083
Annualised recurring costs	9,146	9,083
Average net assets	667,089,135	667,217,437
Ongoing Charges	1.37%	1.36%

Glossary

Acuity means higher degree of care.

Annualised Rent Roll means annual rent roll based on investment properties held at a reporting date.

Average Net Yield means the average yield on an investment or a portfolio that results from adding all interest, dividends or other income generated from the investment, divided by the average of the valuation of investments for the period.

CHA means Civitas Housing Advisors Limited, the Investment Adviser to the Company.

Care Provider means a provider of care services to the occupants of Specialist Supported Housing, registered with the Care Quality Commission.

Company means Civitas Social Housing PLC, a company incorporated in England and Wales with company number 10402528.

EPRA means European Public Real Estate Association.

ESG means Environmental, Social and Governance.

Group means the Company and its subsidiaries.

Housing Association means an independent society, body of trustees or company established for the purpose of providing low-cost social housing for people in housing need generally on a non-profit-making basis. Any trading surplus is typically used to maintain existing homes and to help finance new ones. Housing Associations are regulated by the Homes and Communities Agency.

IFRS Net Asset Value or IFRS NAV means the net asset value of the Group on the relevant date, prepared in accordance with IFRS accounting principles.

IFRS Valuation means an independent valuation of the Portfolio by Jones Lang LaSalle or such other property adviser as the Directors may select from time to time, prepared in accordance with RICS 'Red Book' guidelines and based upon a valuation of each underlying investment property rather than the value ascribed to the portfolio and on the assumption of a theoretical sale of each property rather than the corporate entities in which all of the Company's investment properties are held.

Investment Adviser means Civitas Housing Advisors Limited, a company incorporated in England and Wales with company number 10278444, in its capacity as investment adviser to the Company.

Local Authority means the administrative bodies for the local government in England comprising of 326 authorities (including 32 London boroughs).

Portfolio Net Asset Value or Portfolio NAV means the net asset value of the Company, as at the relevant date, calculated on the basis of an independent Portfolio Valuation. See note 16 for a reconciliation to IFRS NAV. See note 6 in Appendix 1.

Portfolio Valuation means an independent valuation of the Portfolio by Jones Lang LaSalle or such other property adviser as the Directors may select from time to time, based upon the portfolio being held, directly or indirectly, within a corporate vehicle or equivalent entity which is a wholly owned subsidiary of the Company and otherwise prepared in accordance with RICS 'Red Book' guidelines.

REIT means a qualifying real estate investment trust in accordance with the UK REIT Regime introduced by the UK Finance Act 2006 and subsequently re-written into Part 12 of the Corporation Tax Act 2010.

Registered Providers means Housing Associations, Local Authorities and arm's length management organisations, a not-for-profit company that provides housing services on behalf of a Local Authority.

RICS means Royal Institution of Chartered Surveyors.

RSH means Regulator of Social Housing.

Social Family Community Interest Company - 'CIC' means a not-for-profit community interest company incorporated in England and Wales with company number 11667993.

Social homes or social housing means homes which are social rented, affordable rented, other homes managed by Registered Providers or Low Cost Home Ownership homes.

SLA means a service level agreement between Care Provider and Registered Provider.

Specialist Supported Housing or SSH means social housing which incorporates some form of care or other ancillary service on the premises.

SPV means special purpose vehicle, a corporate vehicle in which the Group's properties are held.

WAULT means weighted average unexpired lease term.

Company Information

Non-executive Directors

Michael Wrobel Chairman

Alastair Moss

Caroline Gulliver Chair of the Audit and Management Engagement Committee

Peter Baxter

Alison Hadden (date of appointment: 21 November 2019)

Registered Office

Beaufort House

51 New North Road

Exeter

Devon EX4 4EP

Registered no: 10402528

www.civitassocialhousing.com

Alternative Investment Fund Manager

G10 Capital Limited

136 Buckingham Palace Road

London SW1W 9SA

Investment Adviser

Civitas Housing Advisors Limited

13 Berkeley Street

London W1J 8DU

Financial Advisers

Panmure Gordon (UK) Limited

One New Change

London EC4M 9AF

Liberum Capital Limited

Ropemaker Place

25 Ropemaker Street

London EC2Y 9LY

Company Secretary

Link Company Matters Limited

Administrator

Link Alternative Fund Administrators Limited

Beaufort House

51 New North Road

Exeter

Devon EX4 4EP

Depositary

INDOS Financial Limited

5th Floor

54 Fenchurch Street

London EC3M 3JY

Registrar

Link Market Services Limited

The Registry

34 Beckenham Road

Beckenham

Kent BR3 4TU

Independent Auditors

PricewaterhouseCoopers LLP

7 More London Riverside

London SE1 2RT

Legal and Tax Adviser

Norton Rose Fulbright LLP

3 More London Riverside

London SE1 2AQ

Public Relations Adviser

Buchanan

107 Cheapside

London EC2V 6DN

Tax Adviser

BDO LLP

55 Baker Street

London W1U 7EU

NATIONAL STORAGE MECHANISM

A copy of the Half Year Report will be submitted shortly to the National Storage Mechanism ('NSM') and will be available for inspection at the NSM, which is situated at www.morningstar.co.uk/uk/NSM.

LEI: 213800PGBG84J8GM6F95

ENDS

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the website (or any website) is incorporated into, or forms part of, this announcement.

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