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Civitas Social Housing reports half-year results as portfolio grows to nearly 600 properties

Civitas Social Housing reports half-year results as portfolio grows to nearly 600 properties – Civitas Social Housing, the supported living and social housing REIT, has released half-year results to 30 September 2019.

CSH’s chairman, Michael Wrobel, commented: “The company is pleased to report a strong set of results with our key performance objectives met.

We continue to operate and grow the largest portfolio of specialist supported living accommodation which has been further increased to 599 properties, 4,114 tenancies and with a total of £764m capital deployed since IPO.

The supply-demand imbalance in specialist supported accommodation continues to be severe and driven by strong demographic trends resulting in specialist supported living being one of fastest growing sub-sectors in healthcare real estate.”

  • IFRS NAV per share (diluted) up 1.1% to 107.23 pence;
  • Weighted Average Unexpired Lease Term (WAULT) of 23.9 years;
  • Providing accommodation to tenants with learning disabilities, autism, mental health disorders and also for women’s refuge with an average tenant age of 33 years;
  • Properties located across half the Local Authorities in England and Wales and leased to 15 Housing Associations, with support provided by 114 Care Providers;
  • Annualised rent roll increased to £46.5m;
  • Target dividend of 5.3 pence for the financial year ended 31 March 2020;
  • EPRA earnings (diluted) increased to £14.3m;
  • Run-rate dividend cover of 96% at 30 September 2019;
  • Total NAV return from IPO to 31 March 2019 of 6.9% p.a. (IFRS basis);
  • New £60m 5-year term facility with National Westminster Bank;
  • Total drawn debt of £228.5m reflecting gearing of 24% (available loan facilities of £272.5m).

Property Valuation and Performance

Sept 19

Sept 18

Change

Mar 19

Investment property (£m)

841.5

678.7

Up 24%

826.9

IFRS NAV per share (diluted) (p)

107.23

106.06

Up 1.1%

107.08

Financial Performance

Rent roll annualised (£m)

46.5

37.2

Up 25%

45.7

Rental income (£m)

22.7

15.7

Up 45%

35.7

EPRA earnings (£m)

14.3

10.1

Up 42%

22.6

Operating Cash Flow (£m)

16.9

9.1

Up 86%

23.3

EPRA earning per share (p)

2.29

1.05

Up 118%

3.81

EPRA earning per share (diluted) (p)

2.29

1.63

Up 40%

3.63

Dividend per share (p)

2.65

2.50

Up 6%

5.0

Financing

Loan to value ratio

24

12

Up 12%

22%

Weighted average cost of debt

2.63%

2.57%

Portfolio by region;

Region

Properties

Tenancies

% of funds invested

North West

99

592

10.8

West Midlands

96

484

12.0

Wales

15

242

8.9

South West

112

687

14.3

North East

63

460

6.3

Yorkshire

49

422

10.8

East Midlands

58

374

9.4

East of England

18

106

2.7

London

26

338

13.9

South East

63

409

10.9

Outlook and update on regulation

Michael Wrobel, CSH’s chairman, added:

“During the period, we worked closely with the Regulator of Social Housing (the “RSH”) and with our Housing Association and other partners. Our hands-on approach and our strong desire to achieve continually higher standards of delivery has, we believe, contributed to a number of measurable operational and governance improvements. We are aware that the RSH remains concerned about a number of aspects of the lease based model and we, with others are working to address those concerns.”

Michael went on to say: “All major political parties have previously supported legislation to promote care being delivered in community settings such as those provided by the group.The major political parties in their manifestos for the forthcoming general election have committed to seeking the delivery of additional social housing for general needs.

They have also indicated additional funding for social care which is regarded as encouraging a positive funding environment. Brexit is not expected to have any particular effect on the Group’s activities which are entirely UK based. The care providers who provide primary care into the Group’s properties typically draw the majority of staff from local areas with limited EU and overseas staff given the local nature of the provision.The role of supported housing in enabling high quality healthcare solutions for vulnerable adults with life-long conditions is firmly established within the care and social housing sectors.

It has been supported for several decades by governments of all colours as delivering better outcomes for individuals, whilst being more cost-effective than institutionalisation. It is also preferred by local authorities.

We are recognised in the sector for our expertise and knowledge, both within social housing and in care, and this is being applied directly to assist our Housing Association partners to become stronger, better resourced and able to address fully the issues raised by the RSH. We take this very seriously and are taking active steps to bring this about with continued hands-on input, from the Investment Adviser.

We have increased our commitment to communicating with all our stakeholders and to making available as much information on our portfolio and our partners as reasonably possible whilst respecting the privacy of our residents. We believe this will enable a growing understanding and confidence in the Company’s model.

I would like to take the opportunity to thank our shareholders for their continuing support, my fellow board members for their contribution and all our advisers, particularly our Investment Adviser for its work and efforts for the company and the wider sector.”

CSH: Civitas Social Housing reports half-year results as portfolio grows to nearly 600 properties

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