Net Asset Value and Trading Update

Civitas Social Housing PLC

09 May 2023

 

9 May 2023

CIVITAS SOCIAL HOUSING PLC

("Civitas" or the "Company")

Trading & NAV Update

Another Robust Performance; Dividend Declared in Line with Full Year Target

Civitas Social Housing PLC, the UK's leading care-based and healthcare REIT, is pleased to announce its quarterly net asset value ("NAV") as of 31 March 2023, together with a dividend declared in line with the full year target of at least 5.70p¹ per share.

Highlights:

·  Continued robust financial and operational performance, in line with the Board's and the investment adviser's expectations

·    Rent roll continues to benefit broadly from inflation indexed leases

·    Unaudited NAV per share declined by 1.60% to 109.16p (31 December 2022: 110.93p) reflecting slight widening of valuation yields and mark-to-market movements of financial swaps/caps on debt facilities

·   Fourth quarterly dividend of 1.425p per share declared in line with full year target of at least 5.70p¹ per share (2022: 5.55p per share)

·    All debt facilities currently 100% fixed following completion and drawdown of a new 5 year debt facility, announced in February 

·    Focused model that provides highly adapted properties where high levels of bespoke care are delivered to residents by 131 separate specialist care providers

·    Sustained high levels of demand for the specially adapted community-based homes that Civitas provides for vulnerable adults

Trading and Market Update

In the period to 31 March 2023 the unaudited NAV per share declined by 1.60% to 109.16 pence. This reflected both a slight widening of the average net initial yield from 5.45% at 31 December 2022 to 5.55% at 31 March 2023 as a result of the broader macro-economic environment, and the effects of the mark-to-market valuations of the Company's financial swaps and caps.

The asset class into which the Company invests has continued to demonstrate robust underlying cashflows. Whilst noting that c. 31% of the Company's leases are capped at 4% CPI, with the balance subject to rental increases at CPI or CPI+1, the Company has continued to enjoy good growth in rental income combined with cash collections. At the same time, the Company has now ensured that its entire debt book benefits from fixed rates.

The ability of developers to deliver new stock into the sector has been limited by margin pressures as a result of increases in building and development costs. This, combined with continued demand from local authorities for additional properties that are adapted to support higher levels of care, continues to underpin high levels of demand in the sector. The gap between supply and demand is expected to continue to grow as demand is predicted to increase further in coming years.

The Company's investment adviser, Civitas Investment Management Limited ("CIM"), continues to work closely with all of its approved providers, care providers and stakeholders through CIM's specialised team of individuals drawn from the sector. The ability to deliver specialist input into the Company's portfolio and to manage the portfolio at a granular level are regarded as essential components of the asset management activities for Civitas' nearly 700 properties.

Net Asset Values ("NAV"):

NAV

The unaudited NAV, disclosed below, reflects an independent RICS "Red Book" valuation prepared on an individual asset basis by Jones Lang LaSalle ("JLL").

NAV	31 Mar 2023	31 Dec 2022
Ordinary NAV (£'000)	661,909	672,656
Ordinary NAV per share (pence)	109.16	110.93

The Company's portfolio, based on individual asset valuations, has been valued overall as at 31 March 2023, at an average Net Initial Yield of 5.55% (31 December 2022: 5.45%), after taking into account the initial costs of property acquisitions incurred by the Company and the assumed costs of a subsequent theoretical sale. A slight yield softening in the portfolio was experienced in the period as a result of the broader macro-economic environment. The individual valuations are determined by JLL and are based on a range of underlying metrics including applicable discount rates and expected long-term inflation.

The NAV reflects the contribution from the indexation of leases in the period, less the cost of discretionary capital expenditure that has been incurred to enhance further the quality of the Company's properties to reflect the individual needs of tenants for the long-term. 

Dividend Declaration

The Board has today declared a fourth quarterly dividend for the period from 1 January 2023 to 31 March 2023 of 1.425p per Ordinary Share as part of the previously stated dividend target of at least 5.70p¹ per Ordinary Share for the year ended 31 March 2023.

The dividend will be paid on or around 9 June 2023, to holders on the register as of 19 May 2023 (the "record date"), with the corresponding ex-dividend date being 18 May 2023. The dividend will be paid as a REIT property income distribution. The Company operates a Dividend Reinvestment Plan ("DRIP"), which is managed by its registrar, Link Group. For shareholders who wish to receive their dividend in the form of shares, the deadline to elect for the DRIP is 19 May 2023.

Quarterly Factsheet

The Company has today published its Factsheet for the quarter to 31 March 2023 and this is available to view on the Company's website.

¹ This is a target and not a formal dividend forecast or a profit forecast

ENDS

For further information, please contact:

Civitas Investment Management Limited
Andrew Dawber	Tel: [phone]
Panmure Gordon
Sapna Shah	Tel: [phone]
Tom Scrivens	Tel: [phone]
Liberum Capital Limited
Chris Clarke / Darren Vickers / Owen Matthews	Tel: [phone]
Buchanan
Helen Tarbet / Henry Wilson	Tel: [phone]
Hannah Ratcliff / Verity Parker	[e-mail]

Notes:

Civitas Social Housing PLC (CSH) was created in 2016 by Civitas Investment Management Limited as the first dedicated London listed REIT to raise long-term, sustainable, institutional capital to invest in care-based social homes and healthcare facilities across the UK. CSH's portfolio has been independently valued at £999.5million (30 September 2022). CSH now provides homes for 4,594 working age adults with long-term care needs, in 697 bespoke properties that are supported by 131 specialist care providers, 18 approved providers and working with over 178 individual local authority partners.

 

END