Impact Healthcare - INVESTMENT IN PORTFOLIO OF SIX CARE HOMES
10/01/2023 07:00
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RNS Number : 1410M Impact Healthcare REIT PLC 10 January 2023
The information contained in this announcement is restricted and is not for
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jurisdictions), Canada, Australia, Japan or the Republic of South Africa.
10 January 2023
Impact Healthcare REIT plc
("Impact" or the "Company" or, together with its subsidiaries, the "Group")
INVESTMENT IN A PORTFOLIO OF SIX CARE HOMES IN SHROPSHIRE AND CHESHIRE FOR
£56 MILLION
The Board of Directors of Impact Healthcare REIT plc (ticker: IHR), the real
estate investment trust which gives investors exposure to a diversified
portfolio of UK healthcare real estate assets, in particular care homes, is
pleased to announce that the Group has invested in a portfolio of six care
homes which were owned and operated by Morris Care Limited. The purchase price
is £56 million, which will partly be paid in cash and partly with an issue of
new shares in the Company ("Shares"), as further detailed below.
Morris Care enjoys a strong local reputation for delivering high acuity care
and has established good working relationships with the local NHS Clinical
Commissioning Groups. The vendors have granted a licence for the homes to
continue to trade under the Morris Care brand for three years and the
operational management team of Morris Care will transfer to Welford Healthcare
("Welford"), which will operate the homes. Welford is an existing Group
tenant and the investment will take the Group's relationship with Welford to
18 care homes across England with 1,087 beds.
The portfolio has 438 high quality beds, of which 400 have en suite bathrooms,
with five homes in Shropshire and one in Cheshire. The homes each have an
established track record of delivering strong operational performance. Four of
the homes have EPC ratings of B, and two are rated C, with outline strategies
in place for achieving an EPC rating of B.
Home Number of beds
Isle Court Nursing Home 80
Radbrook Nursing Home 63
Oldbury Grange Nursing Home 69
Morris Care Centre 96
Corbrook Park Nursing Home 80
Stretton Hall 50
80% of the £56 million consideration is payable in cash (£44.8 million),
with the balance paid in Shares. The Company has issued to the vendors
9,603,841 Shares priced at 116.62 pence per share, which is the Company's last
reported NAV as at 30 September 2022. The Shares have been issued conditional
on Admission which is expected to occur on or around 13 January 2023. The
vendors have agreed to customary lock-up provisions for a period of six
months. 100% of the debt drawn down to fund the cash element has been hedged
through a new £50 million interest rate cap at a cost of £1.5 million, which
caps SONIA at 3.0% for two years. The Group has now hedged the interest
rates on 80% (£150 million) of its current drawn debt of £187 million with a
gross LTV after this transaction of 27.6%(1). The Group has a further £54
million of undrawn debt facilities.
The funding of the investment has been made initially by way of a loan by the
Group to Welford. The structure creates several benefits for all stakeholders,
including enabling Welford to take immediate operational control of the six
homes, thereby avoiding a potentially lengthy transition period while
regulatory approvals are sought to register the operation of the homes in new
legal entities.
Once CQC regulatory approvals are received, Impact then has the option to
acquire the entire issued share capital of the company which owns the
properties from Welford, which also has the option to sell the entire issued
share capital of the company to Impact in order to repay the loan. Impact will
receive interest payments equal to 8.4% per annum for the duration of the
loan. When either option is exercised, new 35-year leases on Impact's standard
terms, which have been pre-agreed with Welford, will come into effect. Initial
rent under the new leases is set at £3.9 million, reflecting a gross initial
yield of 7.0%.
The loan structure used to make this investment contains additional
protections for Impact's shareholders, including security over the above
property assets and a number of operational covenants from Welford.
Immediately following Admission, the Company will have 414,368,169 Ordinary
Shares in issue and therefore the total voting rights in the Company will be
414,368,169. This figure may be used by Shareholders as the denominator for
the calculations by which they may determine whether or not they are required
to notify their interest in, or a change to their interest in, the share
capital of the Company under the FCA's Disclosure Guidance and Transparency
Rules.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Impact Health Partners LLP Via H/Advisors Maitland
Mahesh Patel
Andrew Cowley
David Yaldron
Jefferies International Limited +44 20 7029 8000
Tom Yeadon tyeadon@jefferies.com
Ollie Nott onott@jefferies.com
Winterflood Securities Limited +44 20 3100 0000
Neil Langford neil.langford@winterflood.com
Joe Winkley joe.winkley@winterflood.com
H/Advisors Maitland (Communications advisor) +44 7747 113 930
James Benjamin impacthealth-maitland@h-advisors.global
Alistair de Kare-Silver
The Company's LEI is 213800AX3FHPMJL4IJ53.
Further information on Impact Healthcare REIT is available at
www.impactreit.uk (http://www.impactreit.uk/) .
NOTES:
Impact Healthcare REIT plc acquires, renovates, extends and redevelops high
quality healthcare real estate assets in the UK and lets these assets on
long-term full repairing and insuring leases to high-quality established
healthcare operators which offer good quality care, under leases which provide
the Company with attractive levels of rent cover.
The Company aims to provide shareholders with an attractive sustainable
return, principally in the form of quarterly income distributions and with the
potential for capital and income growth, through exposure to a diversified and
resilient portfolio of UK healthcare real estate assets, in particular care
homes for the elderly.
The Company has a progressive dividend policy with a target to grow its annual
aggregate dividend in line with the inflation-linked rental uplifts received
by the Group under the terms of the rent review provisions contained in the
Group's leases in the prior financial year.
On this basis, the Company is targeting a dividend for the year to 31 December
2022 to increase by 2.0% to 6.54 pence per share(2).
The Group's Ordinary Shares were admitted to trading on the main market of the
London Stock Exchange, premium segment, on 8 February 2019. The Company is a
constituent of the FTSE EPRA/NAREIT index.
Neither the content of the Company's website, nor the content on any website
accessible from hyperlinks on its website for any other website, is
incorporated into, or forms part of, this announcement nor, unless previously
published by means of a recognised information service, should any such
content be relied upon in reaching a decision as to whether or not to acquire,
continue to hold, or dispose of, securities in the Company.
(1) Current debt drawn divided by Gross Assets as at 30 September 2022
plus acquisitions at cost completed since 30 September 2022.
(2) This is a target only and not a profit forecast. There can be no
assurance that the target will be met and it should not be taken as an
indicator of the Company's expected or actual results.
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