Civitas share price boosted as it sorts potential First Priority problem – Civitas Social Housing has announced that today, 9 May 2018, all Civitas leases previously with First Priority were assigned, on the same terms to Falcon Housing Association C.I.C, an existing Civitas housing association partner. Civitas’ share price is up 2% on the news.
In addition, Civitas has acquired an option to increase the length of the leases to 40 years from their respective start dates, exercisable at Civitas’ discretion. Post this assignment, the company has a total of 86 properties leased to Falcon, which represents 12.7% of 31 December 2017 Gross Asset Value.
By way of background, the company had leased 44 properties to First Priority. This housing association is the subject of a regulatory notice from the Regulator of Social Housing. Since February, when the notice was issued, Civitas has worked constructively with First Priority and other interested parties to seek an appropriate outcome that protects the interests both of the company’s shareholders and its tenants.
Civitas says that, in the event that it does not recover fully its rent arrears relating to the period prior to the assignment of the leases, such arrears would not be material, in any respect.
Falcon is a national, not for profit registered provider of social housing for vulnerable adults that operates nationwide from a head office in County Durham and has a presence in all major regions. It is a Community Interest Company, which uses its resources and assets for the public good, working in partnership with a wide range of local authorities and care providers. It obtained its Homes and Communities Agency (now the Regulator of Social Housing) registration in July 2013.
Separately Civitas and Falcon have noted the recent Request for Information made by the regulator in April 2018 to a wide range of registered providers as part of its work to gain a better understanding of smaller registered providers engaged in specialist supported housing services. Falcon has confirmed that it is in a position to comply fully with this request.
Michael Wrobel, chairman of Civitas, commented: “I am delighted that we can now provide clarity for all our stakeholders. Our team at Civitas Housing Advisors has achieved a successful outcome for our shareholders in preserving their interests and I am equally encouraged on behalf of our tenants that their homes have been secured for the long-term. We are also very much looking forward to continuing our positive relationship with Falcon over the coming months and years.”
Sharon Smith, General Manager of Falcon, commented: “Falcon is committed to the provision of quality housing for vulnerable adults nationwide. Within this mandate we are pleased to be extending our relationship with Civitas for the benefit of our tenants and their families“.
In addition to this update, Civitas confirms that it will shortly declare its quarterly dividend for the three months to 31 March 2018 in respect of both the ordinary shares and the C shares and on 30 May 2018 the company will announce its IFRS and Portfolio NAV for the quarter ended March 2018.
CSH : Civitas share price boosted as it sorts potential First Priority problem