TIDMIHR
RNS Number : 2961X
Impact Healthcare REIT PLC
25 April 2023
The information contained in this announcement is restricted and
is not for publication, release or distribution in the United
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Canada, Australia, Japan or the Republic of South Africa.
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.
25 April 2023
Impact Healthcare REIT plc
("Impact" or the "Company" or, together with its subsidiaries,
the "Group")
Dividend Declaration and First Quarter Update to 31 March
2023
Yields stabilising as acquisitions and rent reviews drive NAV
growth
HIGHLIGHTS
-- Investment in a portfolio of 6 new care homes for GBP56 million
-- 2.2% increase in NAV per share to 112.60 pence
-- 6.99% EPRA "topped up" Net Initial Yield, marginally up from 6.98% in December 2022
-- 1.8% increase in property portfolio(1) valuation to GBP542.1 million
-- 4% average increase in rent from 72 rent reviews
-- 11% increase in total contracted annual rent to GBP47.9 million
-- 87.6% bed occupancy, up one percentage point on December 2022
-- 1.8x rent cover(2) in line with last year
-- 98% rent due for first quarter received
-- 19.5 years weighted unexpired lease term
-- 28.3% gross loan to value (23.9% in December 2022)
-- 3.5% increase in quarterly dividend declared to 1.6925p per share
-- 3.69% unaudited NAV total return for the period.
NET ASSET VALUE
-- Unaudited net asset value ("NAV") as at 31 March 2023 was
GBP466.6 million, 112.60 pence per share. This represents an
increase of GBP20.6 million (2.43 pence per share), against the 31
December 2022 NAV of GBP445.9 million, 110.17 pence per share.
o The Investment portfolio (1) has been independently valued by
the Group's external valuer Cushman & Wakefield. The Group's
EPRA "topped up" Net Initial Yield at 31 March 2023 is 6.99%
broadly in line with the year-end (31 December 2022: 6.98%),
reflecting more stable investment markets during the last quarter
.
Pence per
share
Unaudited NAV per share as at 31 December
2022 110.17
Revaluation gains/(losses) on investment
properties(1) 2.22
Revaluation gain/(losses) on interest rate
caps (0.09)
Net remaining contribution to reserves 1.94
Quarterly dividend for the period to 31
December 2022 (1.64)
Unaudited NAV per share as at 31 March 2023 112.60
---------------------------------------------- ----------
Percentage change in quarter 2.2%
---------------------------------------------- ----------
-- The NAV attributable to the ordinary shares of the Company is
calculated under IFRS , incorporating the independent portfolio
valuation. EPRA NTA as at 31 March 2023 was 112.24 pence per share
(31 December 2022: 110.08 pence per share), which excludes the fair
value of derivatives.
-- Summary balance sheet (unaudited)
M ar Dec-22 Sep-22 Jun-22
-23
GBP'm GBP'm GBP'm GBP'm
-------------------------- -------- -------- -------- --------
Property portfolio* 542.1 532.5 543.0 530.2
Property Investments
via loans 93.3 36.3 38.1 38.0
Cash 18.8 22.5 23.2 22.0
Net assets/(liabilities) (0.3) (3.2) (1.7) (4.5)
Bank loans (187.3) (142.3) (130.6) (137.6)
-------------------------- -------- -------- -------- --------
Net assets 466.6 445.9 472.0 448.1
-------------------------- -------- -------- -------- --------
NAV per share (pence) 112.60 110.17 116.62 116.18
-------------------------- -------- -------- -------- --------
G ross LTV 28.3% 23.9% 21.4% 23.1%
* 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(1) was independently valued at
GBP542.1 million (31 March 2023; GBP532.5 million at 31 December
2022). This represents a 1.8%, or GBP9.6 million, increase in
value.
o The like-for-like movement in value was primarily driven by
the increased rent from the 72 rent reviews completed in the
quarter at an average uplift of 4.0% per annum in line with the
rental increase cap on these leases, contributing an extra GBP0.8
million to contracted rent. The EPRA 'topped up' net initial yield
remained broadly stable at 6.99% as at 31 March 2023 (31 December
2022: 6.98%) .
o The Group invested GBP0.5 million in the quarter on asset
management, primarily the refurbishment at the Fairview home,
operated by our tenant Welford.
-- We invested GBP56 million by way of a loan, in a portfolio of
six care homes operated by Welford during the quarter, funded by
the drawdown of GBP44.8 million under our existing revolving credit
facilities, with the balance via the issue of shares at the then
latest published NAV at the time of the transaction of 116.62 pence
per share, with 9,603,841 shares being issued taking our total
outstanding shares to 414,368,169. We have a further 12 care homes
operated by Holmes that were invested in December 2021 and continue
to be held through an investment by way of a loan of GBP37.5
million .
o The combined independent value of these portfolios is GBP93.3
million, GBP57.2 million for the new portfolio with Welford and
GBP36.1 million for the portfolio with Holmes.
o Once CQC regulatory approvals are received, the Group has the
option to acquire the entire issued share capital of the company
which owns the properties from the operator , which also has the
option to sell the entire issued share capital of the company to
Impact in order to repay the loan.
DIVID DECLARATION AND TOTAL ACCOUNTING RETURN
-- The Board has today declared the Company's first interim
dividend for the year ended 31 December 2023 of 1.6925 pence per
ordinary share, payable on 19 May 2023 to shareholders on the
register on 5 May 2023. The ex-dividend date will be 4 May 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(3) , 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 3.69%,
comprising the dividend paid in the period of 1.635 pence per share
and a 2.43 pence per share increase in NAV.
PORTFOLIO UPDATE
-- At 31 March 2023 , the Investment portfolio(1) comprised 140
healthcare properties(4) , of which 138 are care homes managed by
13 tenants(5) either by way of a loan with an option to purchase
and lease on our standard terms (18 homes), or 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 111 leases, and 1% p.a. and 5%
p.a. on nine). In addition, the Group owns two healthcare
facilities leased to the NHS with an annual CPI uplift. In total,
the Group had 14 tenants(5) across its Investment portfolio.
-- Rent cover across our Investment portfolio(1) remains strong
at 1.8x(2) in line with last year. Tenants' detailed operational
performance reporting for the quarter to March will be received in
May 2023.
-- Occupancy continued to improve to 87.6% at 31 March 2023, up
one percentage point on 31 December 2022 (86.6%).
-- Contracted rent grew 11% to GBP47.9 million(6) at 31 March
2023 (31 December 2022: GBP43.1 million) with the investment in six
care homes in the quarter and the increase of GBP0.8 million from
72 rent reviews.
-- Weighted average unexpired lease term across the Property
portfolio(1) of 19.5 years as at 31 March 2023 (31 December 2022:
19.7 years).
-- The Group charges rent quarterly or monthly in advance and
has received 98% (GBP9.6 million) of rent payments due for the
quarter to 31 March 2023. This includes GBP0.2 million utilised
from rent deposits and a further GBP0.2 million remains unpaid, as
disclosed in the Annual Results on 28 March 2023. The unpaid rent
is from a single tenant and the Investment Manager remains in
active discussions with this tenant.
FINANCING
-- The Group's gross loan to value ("LTV") ratio was 28.3% as at
31 March 2023 (31 December 2022: 23.9%) following the drawdown of
GBP45 million under its existing revolving credit facilities to
part fund investment in six care homes for GBP56 million. The
Group's EPRA LTV was 27.6% (31 December 2022: 22.6%).
-- The Group also purchased a further GBP50 million interest
rate cap at a cost of GBP1.5 million, which caps SONIA at 3.0% for
two years. The Group has now hedged the interest rates on 80%
(GBP150 million) of drawn debt. The current average cost of drawn
debt, including hedging and fixed rate borrowings, is 4.3%.
Notes:
(1) "Property portfolio" reflects the directly owned portfolio
owned by way of a freehold or long leasehold interest. "Investment
portfolio" is the Property portfolio and properties held by way of
loans.
(2) Rent cover is our tenants' EBITDARM for the 12 months to 31
December 2022 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 are undergoing major
capital improvement requiring partial closure. The rent cover
calculation excludes eight properties that are defined as
turnaround or immature.
(3) 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.
(4) Includes exchanged and under construction assets.
(5) Belmont, Careport, Carlton Hall, Electus Healthcare, Holmes
Care, Maria Mallaband Countrywide Group, Minster and Croftwood
(both subsidiaries of Minster Care Group), NHS Cumbria, Optima,
Prestige, Renaissance, Silverline and Welford.
(6) 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
----------------------------------------- ---------------
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 acquires, renovates, extends and
redevelops high quality healthcare real estate assets in the UK and
lets these assets on long-term full repairing and insuring leases
to high-quality established healthcare operators which offer good
quality care, under leases which provide the Company with
attractive levels of rent cover .
The Company aims to provide shareholders with an attractive
sustainable return, principally in the form of quarterly income
distributions and with the potential for capital and income growth,
through exposure to a diversified and resilient portfolio of UK
healthcare real estate assets, in particular care homes for the
elderly.
The Company has a progressive dividend policy with a target to
grow its annual aggregate dividend in line with the
inflation-linked rental uplifts received by the Group under the
terms of the rent review provisions contained in the Group's leases
in the prior financial year.
On this basis, the target total dividend for the year ending 31
December 2023 is 6.77 pence per share (3) , a 3.53% increase over
the 6.54 pence in dividends paid or declared 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
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