Solid results from Civitas Social Housing – Civitas Social Housing has published its full year results for the year ended 31 March 2021. Over that period, the IFRS NAV rose 0.4% to 108.3p. EPRA earnings per share were 6.5% higher at 4.93p and the company says that, at levels of investment at the year end, the dividend is now fully covered by EPRA earnings. The dividend was 5.4p – in line with target – and the board has set a new target for this year of 5.55p. The incidence of COVID amongst residents remains very low and the board has thanked the staff at all of the company’s partners that made that possible. All remaining shares held in treasury have been sold [we hope to see the company growing soon – the manager confirms that there is still a real need for additional accommodation of the type provided by the company.].
The pace of anticipated rent increases was held back by the low inflation rate during the year. However, the CPI rate has picked up since and this is feeding through into rent reviews. A further boost to income could come from lower interest rates on debt now that the company has secured a credit rating.
Highlights
- Continued strong financial and operational resilience to the COVID-19 pandemic
- Growth in portfolio of high-quality properties for mid-to-high acuity care needs
- Expansion and diversification of counterparties to include a number of charities and discussions progressing with the NHS; now expanding into Advanced Homelessness Provision (AHP)
- Post year end, announced a strategic framework agreement with E.ON to implement a programme of carbon reducing energy enhancements and cost savings across the portfolio
- Independent study confirms Civitas created a social value of £127 million in the year at 31 March 2021, including £79.5 million of savings to the public purse
Investment Property Portfolio Enhanced
- Portfolio value increased to £915.6 million (IFRS)
- IFRS valuation average net initial yield (NIY) of 5.24%
- IFRS NAV increased to 108.30 pence per share
Rent Roll Up and Expected to Increase Further
- Annualised rent roll increased to £50.8 million
- Rents received as expected, unaffected by COVID-19
- EPRA earnings per share (diluted) increased to 4.93 pence per share
- EPRA earnings (diluted) increased to £30.6 million
Diversified Portfolio of 619 Properties Providing Homes to over 4,295 Residents
- Providing accommodation to working age adults with learning disabilities, autism and mental health disorders with an average tenant age of 32 years
- Research confirms tenants each receiving on average 43 hours of care per week
- Properties located across 164 Local Authority areas in England and Wales and leased to 16 approved providers, with support provided by 118 Care Providers
- Over one third of the portfolio on back-to-back 25-year leases, with leading Care Providers
Dividend
- Target dividend of 5.40 pence per share to 31 March 2021 now fully paid
- Target raised to 5.55 pence per share for YE 31 March 2022
- EPRA run-rate dividend cover of 100% as at 31 March 2021
- EPRA dividend cover of 91.6% on an actual basis over the year to 31 March 2021 up from 87.4% the prior year and expected to increase further following the subsequent deployment of additional debt facilities
Debt Facilities & Credit Rating
- New £84.5m debt facility drawn down from M&G
- The debt facility will support further acquisitions of high quality, immediately income generating properties throughout 2021
- Secured a high quality investment credit rating from Fitch Ratings of “A” secured and “A-” unsecured, enabling access to broader long-term funding markets
Post Year End Highlights and Opportunities
- Acquisition of 15 supported living and care facilities in the South of Wales for a total consideration of £10.9 million
- Acquisition of 10 supported living properties across Hertfordshire, Essex, Suffolk and Wales for a total consideration of £8.6 million
- A substantial pipeline of over £200 million has been developed with long standing and trusted counterparties for high quality mid-to-higher acuity healthcare facilities
CSH : Solid results from Civitas Social Housing