Net Asset Value and Trading Update

RNS Number : 2221P

Civitas Social Housing PLC

08 February 2023

 

8 February 2023

CIVITAS SOCIAL HOUSING PLC

("Civitas" or the "Company")

Net Asset Value and Trading Update

Civitas Social Housing PLC ("Civitas" or the "Company"), the UK's leading care-based and healthcare REIT is pleased to announce its quarterly net asset value ("NAV") as of 31 December 2022, together with a dividend declared in line with the full year target of at least 5.70p¹ per share.

Highlights:

· Consistently robust financial and operational performance, in line with the Board's expectations

· Rent roll increased with inflation and lease billings continue to reflect CPI inflation increases

·   Unaudited IFRS NAV per share declined by 3.40% to 110.93p (30 September 2022: 114.84p) reflecting slight widening of valuation yields and mark-to-market movements of financial swaps/caps on debt facilities

·   Third 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 now 100% fixed with drawdown of new five-year £70.8m facility to replace certain existing facilities on track for completion as planned later this month

·   Focused model that provides highly adapted properties where high levels of bespoke care are delivered to residents by 130 separate specialist care providers

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

·   Civitas' business model and portfolio has always been directed to supporting the delivery of high levels of care for vulnerable individuals in bespoke, adapted care-based housing.   The average number of care hours provided in a typical Civitas property is 50 hours per week, qualifying the Company's portfolio as Specialist Supported Housing which is exempt from caps on housing benefit

·   The Board continues to work proactively with its advisers to explore options for reducing the discount and enhancing shareholder value.

Trading and Market Update

In the period to 31 December 2022 the unaudited NAV per share declined by a total of 3.40% to 110.93 pence. This reflected both a slight widening of the average net initial yield from 5.27% at 30 September 2022 to 5.45% at 31 December 2022, 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.

From the Company's constant activity within the specialist social housing sector, it is evident that demand for quality accommodation in a community environment remains strong whilst levels of supply have further reduced. This decline in part reflects the effects of inflation on the cost of building and adaptation works and the ability for developers to deliver highly adapted properties within a tight rental framework.

Independent research confirms the long-term demand trends that exist in the sector, in which the Company is a market leader, and which provide confidence over the Company's future rent roll. The delivery of long-term care for vulnerable individuals remains a key service that receives priority funding from local authorities who have a primary responsibility for the well-being of such individuals.

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

Net Asset Values ("NAV"):

IFRS NAV

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

IFRS NAV	31 Dec 2022	30 Sept 2022
Ordinary NAV (£'000)	672,656	696,357
Ordinary NAV per share (pence)	110.93	114.84

The portfolio, based on individual asset valuations, has been valued overall as at 31 December 2022, at an average Net Initial Yield of 5.45% (30 September 2022: 5.27%), 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 IFRS 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 third quarterly dividend for the period from 1 October 2022 to 31 December 2022 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 10 March 2023, to holders on the register as of 17 February 2023 (the "record date"), with the corresponding ex-dividend date being 16 February 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 17 February 2023.

Quarterly Factsheet

The Company has today published its Factsheet for the quarter to 31 December 2022 and this is available to view on the   Company's website .

ENDS

For further information, please contact:

Civitas Investment Management Limited
Andrew Dawber	Tel: [phone]
Paul Bridge	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 130 specialist care providers, 18 approved providers and working with over 178 individual local authority partners.

 

END

 

 

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