Impact Healthcare REIT delivers small NAV uplift – Impact Healthcare REIT has published results for the period ended 31 December 2017. It made a 7.19% EPRA NAV total return for the period from the IPO to 31 December 2017, compared to 10.79% for the EPRA/ NAREIT UK REITs Index. The NAV was 100.65p per share as at 31 December 2017. Dividends per share of 4.50p were paid or declared for the period to 31 December 2017, delivering against the target set at the time of the IPO. These dividends were 97.6% covered by adjusted earnings per share for the full period. Profit before tax was £9.46 million for the period.
Impact’s portfolio of 57 care homes with 2,527 beds was valued at £156.17 million as at 31 December 2017, representing an uplift on the aggregate purchase price and costs of 1.5%. The portfolio had contracted annual rents of GBP11.34 million on admission, which increased to GBP11.60 million following the acquisition of Saffron Court in June 2017 and GBP11.86 million following the commitment to fund capital improvements at two homes, delivering an investor contracted yield of 7.59% (compared to an EPRA NIY of 7.02%). They had no debt as at 31 December 2017.
Impact has planning permission to add 249 beds to the portfolio with discussions underway with planners for a further 215 beds. During the period, the board approved projects for the first 92 beds, at a cost of GBP7.94 million.
Post balance sheet highlights
The Group’s initial asset management project at Turnpike is due to complete in April 2018, adding 25 of the initial 92 beds approved. Conditional contracts were exchanged on 11 January 2018 to acquire 234 beds across three assets in the North East of England. The first of these three assets completed on 16 March 2018. The seed portfolio is subject to annual RPI uplifts with a floor of 2% and cap of 4%. The uplift was due in March 2018 and increased the rent roll from GBP11.9 million to GBP12.3 million.
Rupert Barclay, non-executive Chairman of Impact Healthcare REIT plc, commented: “Impact Healthcare is a well-managed investment company, combining a good yield with attractive upside potential. We know that many of our shareholders prioritise a safe dividend and we believe that the quality of our initial tenant group, our secure and well-covered rental stream and our prudent approach to gearing limits downside risk. We have a pipeline of opportunities to add value, through asset management and acquisitions, and have made good progress since the period end.
The fundamentals of our market are strong, with growing demand for beds and limited supply. Care is an essential service and the government needs to continue to relieve the pressure on adult social care and hospitals. Residential care homes will be an important part of the solution and we therefore see good prospects for the Group. The Company remains well placed to continue delivering attractive and sustainable returns to our shareholders for 2018 and beyond.”
IHR : Impact Healthcare REIT delivers small NAV uplift