Impact Healthcare REIT reported net asset value (NAV) uplift of 4.7% to 115.38p per share in annual results to 31 December 2023. The care home landlord’s portfolio grew in value by 4.1% over the year helped by strong rental growth.
With a net increase of five homes taking the total portfolio to 140 properties and over 7,700 beds, contracted rent was up 13.2% to £48.8m per annum.
Adjusted earnings per share was up 2.4% to 7.28p, covering its dividend for the year of 6.77p (which in turn was up 3.5% over 2022). The company is targeting a 2.7% uplift in dividend for 2024 to 6.95p.
Rent cover among the group’s tenants improved to 2.0x in the year, the highest annual cover since the company listed in 2017. The weighted average unexpired lease term lengthened to 20.8 years (19.7 years in 2022).
The group’s balance sheet remained healthy, with an LTV of 27.8%. The company has £250m of committed debt facilities and a weighted average term of 6.3 years. Drawn debt was £184.8m at a 4.56% average cost, with 95% fixed or hedged against interest rate rises.
Simon Laffin, chairman, commented: “Our aim is to work with our tenants to provide quality, affordable and sustainable care homes. The country needs a thriving and growing care home sector. The private sector can play an even more significant role in providing care for elderly people and helping the NHS, deploying capital and resources to enhance and grow affordable care home provision. By offering more step-down, nursing and residential care for elderly people, the sector has the medium-term potential to take tens of thousands of patients out of hospital beds: freeing up NHS resources and reducing costs.
“As the economy recovers from 2023’s high inflation and interest rate rises, and as government begins to recognise the larger role that this sector can play in the health infrastructure we believe that there will be opportunities for Impact. We are well positioned to play a larger role in helping both residents and the NHS, whilst delivering long-term sustainable returns to shareholders.”