Quarterly Investor Report: | August 2023 |
Quarter ended 30 June 2023
Target Healthcare REIT plc and its subsidiaries ('the Group') is a leading investor in modern purpose-built UK care homes with en suite wet rooms. The Group's objective is to provide investors with an attractive quarterly dividend, generated from a portfolio diversified by tenant, geography and end-user payment profile, through responsible investment.
Group at a glance
Properties
97
Beds
6,705*
Tenants
32
Contracted rent
£56.6m
Property Value
£868.7m
Overview | Key ratios & financials | |||||||||
Launch date | March 2013** | Investment properties | £868.7 million | |||||||
ISIN | GB00BJGTLF51 | Drawn debt | £230.0 million | |||||||
SEDOL | BJGTLF5 | EPRA NTA | £647.9 million | |||||||
Company name | Target Healthcare REIT plc | EPRA NTA per share | 104.5 pence | |||||||
Registered number | 11990238 | Quarterly NAV total return | 2.4% | |||||||
(including dividend) | ||||||||||
Expected quarterly dividend | Feb/May/Aug/Nov | Quarterly Group specific | 1.46 pence | |||||||
adjusted EPRA earnings per | ||||||||||
Financial year end | 30 June | |||||||||
share | ||||||||||
Currency | Sterling | Quarterly dividend per share | 1.40 pence | |||||||
Ordinary hare class as at | ||||||||||
Website | www.targethealthcarereit.co.uk | Dividend yield (01/08/2023) | 7.6% | |||||||
01/08/2023 | Loan-to-Value ('LTV')*** | 26.5% (gross); 24.7% (net) | ||||||||
Shares in issue | ||||||||||
620,237,346 | Management fee rate | 1 05% up to £500m NAV | ||||||||
0.95% of £500m - £750m NAV | ||||||||||
Share price | 73.4 pence | |||||||||
0.85% of £750m - £1,000m NAV | ||||||||||
Market capitalisation | £455.3 million | 0.75% of £1,000m - £1,500m NAV | ||||||||
0.65% of £1,500m + NAV | ||||||||||
Share price discount to EPRA | 29.8% | WAULT | 26.5 years | |||||||
NTA |
* Including planned beds in development sites
** Originally launched as Target Healthcare REIT Limited (Jersey registered: 112287)
*** Gross LTV calculated as total gross debt as a proportion of gross property value. Net LTV calculated as total gross debt less cash, as a proportion of gross property value
Recent news | |||||
Asset Management and I vestment Activity | |||||
reported by our tenants, and is demonstrated by growing | This quarter the conversion to 51 full ensuite wet-rooms from | ||||
Demand for places in our care homes remains encouraging, as | |||||
weekly fee rates and improving rent covers/profitability. | poorer quality ensuites at two care homes was completed, | ||||
Resident occupancy across the portfolio continues to recover | progressing plans to move the portfolio to 100% wet-rooms | ||||
towards pre-pandemic levels. | (currently 98% following these works). The Group signed | ||||
The Group's focus remains on managing the portfolio, | legal agreements relating to the addition of 18 bedrooms at a | ||||
supporting its tenants in their business aspirations and | property with works expected to complete by September | ||||
continuing to invest to improve the real estate when we see | 2023. | ||||
the opportunity to unlock further value. | Post quarter-end, the Group acquired a site subject to a | ||||
The return to near-full rent collection for the quarter and the | forward funding agreement to construct a 66-bed care home | ||||
in Weston-super-Mare, which is pre-let to a new tenant to the | |||||
stability of the Group's portfolio valuation is consistent with | Group. The care home is to be built to exceptional ESG | ||||
its investment thesis - that modern, purpose-built care homes | standards, with the highest certifications anticipated, and will | ||||
will provide compelling long-term returns. | offer carbon net zero operational ability. | ||||
The portfolio value increased by 1.5% over the quarter, | |||||
comprising a like-for-like uplift in the operational portfolio | In addition to the above acquisition, we have four further sites | ||||
Performance | Outlook | ||||
(+0.9%), primarily reflecting inflation-linked rent reviews, | where pre-let care homes are being built which will deliver a | ||||
and further investment into the portfolio, mainly associated | pipeline of much-neededfit-for-purpose modern real estate | ||||
with the four development properties (+0.6%). | to the sector. The portfolio has 94% A or B EPC (100% A to C | ||||
ratings), currently compliant with the minimum energy | |||||
Contractual rent increased by 1.1%, largely as a | result of | efficiency standards anticipated to apply from 2030. | |||
inflation-linked rent reviews in the quarter (+1.0%). |
Summary balance sheet | |||||||
£m | June-23 | March-23 | |||||
868.7 | |||||||
Property portfolio* | 855.7 | ||||||
Cash | 15.4 | 26.4 | |||||
Net current assets/(liabilities) | (6.2) | (10.5) | |||||
Bank loans | (230.0) | (230.0) | |||||
Net assets | 647.9 | 641.6 | |||||
EPRA NTA per share (pence) | 104.5 | 103.4 | |||||
* Ignores the effect of fixed/guaranteed rent reviews. See note 9 to the Annual Report 2022 for full de | tails. |
Performance - NAV and share price total return
205 | |||||||||||||||||||||||||||||||||||||
195 | NAV total return | ||||||||||||||||||||||||||||||||||||
185 | |||||||||||||||||||||||||||||||||||||
175 | Share price total return | ||||||||||||||||||||||||||||||||||||
165 | |||||||||||||||||||||||||||||||||||||
155 | |||||||||||||||||||||||||||||||||||||
145 | |||||||||||||||||||||||||||||||||||||
135 | |||||||||||||||||||||||||||||||||||||
125 | |||||||||||||||||||||||||||||||||||||
115 | |||||||||||||||||||||||||||||||||||||
105 | |||||||||||||||||||||||||||||||||||||
95 | Jun-13 | Sep-13 | Dec-13Mar-14Jun-14Sep-14Dec-14 | Jun-15 | Sep-15 | Jun-16 | Sep-16 | Jun-17 | Sep-17 | Jun-18 | Sep-18 | Jun-19 | Sep-19 | Jun-20 | Sep-20 | Jun-21 | Sep-21 | Jun-22 | Sep-22 | Jun-23 | |||||||||||||||||
Mar-13 | Mar-15 | Dec-15 | Mar-16 | Dec-16 | Mar-17 | Dec-17 | Mar-18 | Dec-18 | Mar-19 | Dec-19 | Mar-20 | Dec-20 | Mar-21 | Dec-21 | Mar-22 | Dec-22 | Mar-23 |
Portfolio summary at 30 June 2023 | |||||
Scotland | North East | Number of properties by geographic region | |||
North West | Yorkshire & The Humber | ||||
Wales | East Midlands | ||||
West Midlands | East of England | ||||
South West | South East | ||||
Contracted rent by geographic region
2%1% | 8 | ||
7% | 5% | ||
24% | |||
7% | 2 | ||
8% | 17% | 18 | |
12% | 17% | 26 | |
Valuation by geographic region (including | 7 | 13 | |||||||||||||||||
developments) | 5 | ||||||||||||||||||
Wales | |||||||||||||||||||
1 | |||||||||||||||||||
North East | 13 | ||||||||||||||||||
East of England | 4 | ||||||||||||||||||
South West | |||||||||||||||||||
West Midlands | |||||||||||||||||||
Scotland | |||||||||||||||||||
East Midlands | |||||||||||||||||||
North West | |||||||||||||||||||
South East | |||||||||||||||||||
Yorkshire & The Humber | |||||||||||||||||||
0% | 5% | 10% | 15% | 20% | 25% |
AlisonDirectorsFyfe (Chair)
Michael Brodtman
Richard Cotton
Vince Niblett
Dr Amanda Thompsell
TargetInves meFundt Managers Ltd. Kenneth MacKenzie, Gordon Bland
+44 (0) 1786 845 912 targetfundmanagers.com
Administrator | Target Fund Managers Ltd. |
visers | IQ EQ Depositary Company (UK) Ltd. |
Depositary | |
Broker | Stifel Nicolaus Europe Ltd. |
Legal | Dickson Minto W.S. |
Auditors | Ernst & Young LLP |
This Report is intended solely for the information of the person to whom it is provided by the Group, the Investment Manager or the Administrator. This Report is not intended as an offer or solicitation for the purchase of shares in the Group and should not be relied on by any person for the purpose of accounting, legal or tax advice or for making an investment decision. The payment of dividends and the repayment of capital are not guaranteed by the Group. Any forecast, projection or target is indicative only and is not guaranteed in any way, and any opinions expressed in this Report are not statements of fact and are subject to change, and neither the Group nor the Investment Manager is under any obligation to update such opinions. Past performance is not a reliable indicator of future performance, and investors may not get back the original amount invested. Unless otherwise stated, the sources for all information contained in this report are the Investment Manager and the Administrator. Information contained in this Report is believed to be accurate at the date of publication, but none of the Group, the Investment Manager and the Administrator gives any representation or warranty as to the Report's accuracy or completeness. This Report does not contain and is not to be taken as containing any financial product advice or financial product recommendation. None of the Group, the Investment Manager and the Administrator accepts any liability whatsoever for any loss (whether direct or indirect) arising from any use of this Report or its contents. Target Healthcare REIT plc, registered in the UK (Registered Number: 11990238). Registered Office: Level 4, Dashwood House, 69 Old Broad Street, London EC2M 1QS.
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Target Healthcare REIT plc published this content on 07 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 August 2023 15:46:08 UTC.