Care home owner Target Healthcare REIT reported a 8.1% NAV total return for the year ended 30 June 2022. Result highlights include:
- EPRA NTA per share increased 1.7% to 112.3 pence (2021: 110.4 pence)
- Group specific adjusted EPRA earnings per share fell 7.5% to 5.05p (2021: 5.46p), mainly due to the time lag between a £125m equity issuance in September 2021 and the investment of the proceeds in December 2021
- Dividend increased by 0.6% to 6.76p (2021: 6.72p)
- Dividends cover of 72%, 95% covered based on EPRA earnings
- Net loan-to-value (LTV) of 22.0% as at 30 June 2022, with an average cost of drawn debt (interest-only) of 3.1% and average term to maturity of 6.9 years. £180m (77%) of drawn debt is fixed
Portfolio highlights
- Portfolio value increased by £226.8m or 33% (including acquisitions) to £911.6m. Like-for-like valuation growth of 4.2% (2021: 3.8%)
- Contractual rent increased by 35% to £55.5m per annum (2021: £41.2m). Like-for-like increase of 4.6% from rent reviews and asset management initiatives
- Acquisition commitments during the year totalled £223m, taking the portfolio to 101 properties, consisting of 97 operational care homes and four pre-let sites
- 95% of rent collected
- Resident occupancy levels across the mature portfolio at 83%, continuing to recover from Q1 2021 low point
- Weighted average unexpired lease term of 27.2 years (2021: 28.8 years)
Malcolm Naish, chairman, said:
“Amidst the current market uncertainty and economic headwinds, we continue to focus on the favourable long-term prospects for our portfolio. We have been delighted to grow through the addition of a significant value of assets during the year, with inclusion in the FTSE 250 testament to valued shareholder support and the stable total returns from our well-diversified portfolio.
“Our portfolio remains well-placed, resident occupancies are improving, and home environments are returning to “normal” trading and activity conditions. Our rent collection for the year was 95%, inclusive of successful arrears recovery post year-end, and our immediate focus is on moving as quickly as possible towards full rent collection, for which initiatives are in progress and remain under our control. We expect our ESG-compliant modern assets to provide sustainable long-term returns, and in volatile times such as these we are thankful to have remained prudent in the rents we have set, capital prices paid and in our borrowing levels and terms.
“The Board remains confident in the Group’s prospects and I would personally like to thank shareholders for their support. We collectively are making a positive social impact through our committed backing of the care sector.”
THRL : Target Healthcare REIT reports 8.1% NAV total return