TIDMIHR
RNS Number : 7305Q
Impact Healthcare REIT PLC
20 October 2023
The information contained in this announcement is restricted and
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This Announcement contains inside information for the purposes
of Article 7 of the UK version of EU Regulation 596/2014 (as
incorporated into UK law by virtue of the European Union
(Withdrawal) Act 2018, and as subsequently amended. Upon the
publication of this Announcement, this inside information is now
considered to be in the public domain.
20 October 2023
Impact Healthcare REIT plc
("Impact" or the "Company" or, together with its subsidiaries,
the "Group")
Dividend Declaration and Third Quarter Update to 30 September
2023
NAV growth from rent reviews and recent acquisitions with stable
rental yields and rent cover
HIGHLIGHTS
-- 1.3% increase in NAV per share to 115.08 pence and 1.2%
increase in EPRA NTA per share to 114.38 pence
-- 6.91% EPRA "topped up" Net Initial Yield, broadly flat from 6.95% in June 2023
-- 1.3% like-for-like increase in Property portfolio valuation to GBP646.2 million
-- 4.69% average increase in rent from 12 rent reviews
-- Contracted annual rent of GBP48.4 million
-- 88.2% bed occupancy was stable for the period, and up over a
percentage point on December 2022
-- 1.8x annual adjusted rent cover(1) to 30 June 2023 that grew
during the third quarter of 2023 underlining the resilience of
tenants
-- Collection of 99% of rent due for the 9 months to September 2023 with zero voids
-- 21.0 years weighted unexpired lease term
-- 27.0% gross loan to value (28.5% in June 2023), EPRA net LTV of 27.7% (27.6% in June 2023)
-- Group has currently hedged the interest rates on 98% (GBP175
million) of drawn debt, with current average cost of drawn debt,
including hedging and fixed rate borrowings, of 4.47%
-- Dividend declared of 1.6925 pence per share, in line with our
target dividend of 6.77 pence for the year to 31 December
2023(2)
-- 2.75% unaudited NAV total return for the period
NET ASSET VALUE / EPRA NTA
-- Unaudited net asset value ("NAV") as at 30 September 2023 was
GBP476.8 million, 115.08 pence per share. This represents an
increase of GBP5.9 million (1.44 pence per share), against the 30
June 2023 NAV of GBP470.9 million, 113.64 pence per share.
o The Investment portfolio has been independently valued by the
Group's external valuer Cushman & Wakefield. The Group's EPRA
"topped up" Net Initial Yield at 30 September 2023 is 6.91% (30
June 2023: 6.95%) a marginal improvement in the period reflecting
strong rent cover.
Pence per share EPRA NTA NAV
Unaudited value per share as at 30 June
2023 113.08 113.64
Revaluation gains/(losses) on investment
properties 1.30 1.30
Purchase of interest rate cap (0.42) -
Revaluation gain/(losses) on interest
rate caps - (0.28)
Net remaining contribution to reserves 2.11 2.11
Quarterly dividend for the period to 30
June 2023 (1.69) (1.69)
Unaudited value per share as at 30 September
2023 114.38 115.08
Percentage change in quarter 1.1% 1.3%
-- The NAV attributable to the ordinary shares of the Company is
calculated under IFRS , incorporating the independent portfolio
valuation.
Summary balance sheet (unaudited)
Sep-23 Jun-23 Mar-23 Dec-22
GBP'm GBP'm GBP'm GBP'm
Property portfolio* 646.2 638.2 542.1 532.5
Property Investments
via loans - - 93.3 36.3
Cash 7.4 22.1 18.8 22.5
Net assets/(liabilities) 1 .9 1 .4 (0.3) (3.2)
Bank loans (178.8) (190.8) (187.3) (142.3)
Net assets 476.8 470.9 466.6 445.9
NAV per share (pence) 115.08 113.64 112.60 110.17
EPRA NTA per share (pence) 1 14.38 1 13.08 1 12.24 1 10.08
Gross LTV 2 7.0% 2 8.5% 28.3% 23.9%
EPRA Net LTV 2 7.7% 2 7.6% 2 2.6% 2 1.9%
* Properties within the portfolio are directly owned by way of
freehold interest or long leasehold and are stated at the market
value provided by the external valuer and excludes the IFRS effects
of guaranteed rent reviews and initial lease rental payments.
PROPERTY VALUATION
-- The Group's Property portfolio was independently valued at
GBP646.2 million (30 June 2023: GBP638.2 million). This represents
a 1.3% or GBP8.1 million increase in value.
o This like-for-like movement in value was in part driven by the
increased rent from the 12 rent reviews completed in the quarter at
an average uplift of 4.69% per annum in line with the rental
increase cap on these leases, contributing an extra GBP0.3 million
to contracted rent.
o The EPRA 'topped up' net initial yield improved by 4 basis
points to 6.91% as at 30 September 2023 (30 June 2023: 6.95%),
reflecting improvements in the valuation on a sub set of the
portfolio with consistently strong rent cover .
o The Group invested GBP0.6 million in the quarter on asset
management, primarily the refurbishments at the Fairview and Mavern
homes, operated by our tenant Welford.
DIVID DECLARATION AND TOTAL ACCOUNTING RETURN
-- The Board has today declared the Company's third interim
dividend for the year ended 31 December 2023 of 1.6925 pence per
ordinary share, payable on 24 November 2023 to shareholders on the
register on 3 November 2023. The ex-dividend date will be 2
November 2023. This dividend will be paid as a Property Income
Distribution ("PID").
-- This is in line with the previously announced annual dividend
target of 6.77 pence per share for the year ending 31 December
2023(2) , a 3.5% increase over the 6.54 pence paid per ordinary
share in dividends for the year ended 31 December 2022.
-- The unaudited NAV total return for the period was 2.75 %,
comprising the dividend paid in the period of 1.6925 pence per
share and a 1.44 pence per share increase in NAV.
PORTFOLIO UPDATE
-- At 30 September 2023 , the Investment portfolio comprised 140
healthcare properties(3) , of which 138 are care homes managed by
14 tenants(4) on fixed-term leases of 20 to 35 years (no break
clauses), subject to annual upward-only Retail Price Index-linked
rent reviews (with a floor and cap at 2% p.a. and 4% p.a.,
respectively on 117 leases, and 1% p.a. and 5% p.a. respectively on
21 leases). In addition, the Group owns two healthcare facilities
leased to the NHS with an annual CPI uplift. In total, the Group
had 14 tenants(4) across its Investment portfolio.
-- Rent cover across our Investment portfolio remains strong at
1.8x(1) for the 12 months to 30 June 2023 . Tenants' detailed
operational performance reporting for the full quarter to September
will be received at the end of October 2023. Based on reporting
from the tenants who report monthly (as opposed to quarterly),
which covers over 80% of the Group's portfolio, we expect rent
cover for the third quarter to improve on the first half of the
year.
-- Occupancy was stable at 88.2% at 30 September 2023, in line
with occupancy at 30 June 2023 (88.2%).
-- Contracted rent grew marginally to GBP48.4 million(5) at 30
September 2023 (30 June 2023: GBP48.1 million) reflecting the
increase from 12 rent reviews in the period.
-- Weighted average unexpired lease term across the Property
portfolio of 21.0 years as at 30 September 2023 (30 June 2023: 21.2
years).
-- The Group has varied the leases on seven homes previously
leased to Silverline and now being turned around by Melrose(4) .
During the turnaround period no rent is due on those homes. On the
remainder of its portfolio the Group charges rent quarterly or
monthly in advance and has received 100% (GBP11.5 million) of rent
payments due for the quarter to 30 September 2023. We have zero
voids.
FINANCING
-- The Group's gross loan to value ("LTV") ratio was 27.0% as at
30 September 2023 (30 June 2023: 28.5%). The Group's EPRA LTV was
27.7 % (30 June 2023: 27.6%).
-- The Group purchased a further GBP50 million interest rate cap
in the quarter at a cost of GBP1.76 million, which caps SONIA at
4.0% for two years. The Group has now hedged the interest rates on
98 % (GBP175 million) of drawn debt. The current average cost of
drawn debt, including hedging and fixed rate borrowings, is 4.47
%.
Notes:
(1) Rent cover is our tenants' EBITDARM for the 12 months to 30
June 2023 divided by 12 months' rent for the same period. It
excludes "turnaround" and "immature" homes. Immature homes being
defined as homes that are newly opened, or undergoing major capital
improvement requiring partial closure. The rent cover calculation
excludes eight properties that are defined as turnaround or
immature.
(2) This is a target only and not a profit forecast. There can
be no assurance that the target will be met and it should not be
taken as an indicator of the Company's expected or actual
results.
(3) Includes exchanged and under construction assets.
(4) Belmont, Careport, Carlton Hall, Electus Healthcare, Holmes
Care, Maria Mallaband Countrywide Group, Minster, Croftwood and
Melrose (Minster and Croftwood are subsidiaries of Minster Care
Group and Melrose is an affiliate), NHS Cumbria, Optima, Prestige,
Renaissance and Welford.
(5) Contracted rent includes rent due, or passing rent,
alongside; future committed rent from contracted capital projects
and forward funded developments, rent associated with deferred
payments, contractually exchanged property acquisitions and post
tax interest income from investment in properties by way of a loan
.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Impact Health Partners Via H/Advisors
LLP Maitland
Andrew Cowley
Mahesh Patel
David Yaldron
Jefferies International +44 20 7029
Limited 8000
Tom Yeadon tyeadon@jefferies.com
Neil Winward nwinward@jefferies.com
Ollie Nott onott@jefferies.com
Winterflood Securities +44 20 3100
Limited 0000
Neil Langford neil.langford@winterflood.com
Joe Winkley joe.winkley@winterflood.com
H/Advisors Maitland +44 7747 113
(Communications advisor) 930
James Benjamin impacthealth-maitland@h-advisors.global
Rachel Cohen
The Company's LEI is 213800AX3FHPMJL4IJ53.
Further information on Impact Healthcare REIT is available at
www.impactreit.uk .
NOTES:
Impact Healthcare REIT plc is a specialist and responsible owner
of care homes and other healthcare properties across the UK.
Elderly care is an essential service and demand for it is high and
continues to grow as the UK's population gets older. We work with
our tenants so we can grow together and help them care for more
people, while continuing to improve our homes for their
residents.
We take a long-term view and look to generate secure and growing
income. This has allowed us to provide our shareholders with
attractive and rising dividends and the potential for capital
growth.
The target total dividend for the year ending 31 December 2023
is 6.77 pence per share (2) , a 3.53% increase over the 6.54 pence
in dividends per ordinary share for the year ended 31 December
2022.
The Group's Ordinary Shares were admitted to trading on the main
market of the London Stock Exchange, premium segment, on 8 February
2019. The Company is a constituent of the FTSE EPRA/NAREIT
index.
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END
NAVNKCBPABDDNKD
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October 20, 2023 02:04 ET (06:04 GMT)
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