Civitas Social Hsng. - Trading and Market Update
10/08/2022 07:00
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RNS Number : 4610V Civitas Social Housing PLC 10 August 2022
10 August 2022
CIVITAS SOCIAL HOUSING PLC
("Civitas" or the "Company")
Net Asset Values, Dividend Declaration,
Trading and Market Update
Consistent and positive portfolio performance
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") update as at 30 June 2022, with performance continuing to be
robust and dividend declared in line with full year target.
Highlights:
· Consistently robust financial and operational performance, in line
with the Board's expectations
· Unaudited IFRS NAV per share increased to 111.89p (31 March 2022:
110.30p)
· First quarterly dividend of 1.425p declared in line with full year
target of at least 5.70p(1) (2022: 5.55p)
· Portfolio continues to benefit from contractual inflationary
increases to rent roll
· Work progressing on strengthening the sector including seeking to
achieve regulatory alignment through the previously announced lease clause
proposal
· Sustained high demand for the specially adapted community-based homes
that Civitas provides
Trading and Market Update
The Company is pleased to announce an increased unaudited NAV per share of
111.89 pence (being a 1.44% increase over the quarter) and a first quarterly
dividend of 1.425 pence per share as targeted, consistent with the Board's
previously announced target of paying a total dividend of at least 5.70
pence(1) per share for the year ended 31 March 2023.
The Civitas portfolio benefits from inflation adjusted long-term leases or
occupancy agreements with Approved Providers (housing associations and other
not-for-profit organisations) and the Company aims to deliver returns broadly
in line with inflation over the long-term.
As recently outlined, the Company has been working on a regulatory clause in
partnership with its Approved Providers with the objective of helping them to
achieve regulatory compliance. This work is progressing and the Company will
provide market updates as and when appropriate.
Demand for care-based community housing remains high and is projected to
increase further still by independent bodies. The Company is at the forefront
of ensuring the sector maintains focus on quality, value for money and robust
governance.
Investment and Pipeline Update
During the quarter to 30 June 2022, the Company completed the previously
announced acquisition in Wisbech, Cambridgeshire for a total consideration of
£0.6 million (excluding purchase costs).
The property is subject to indexed leases with Chrysalis (an existing
counterparty) and is immediately income generating with a net initial yield in
line with the Company's present expectations.
(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 30 31
June Mar
2022 2022
Ordinary NAV (£'000) 683,366 675,547
Ordinary NAV per share (pence) 111.89 110.30
The portfolio, based on individual asset valuations, has been valued overall
at 30 June 2022, at an average Net Initial Yield of 5.25% (31 March 2022:
5.28%), after taking into account the initial costs of property acquisitions
incurred by the Company and the assumed costs of a subsequent theoretical
sale. 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.
During the quarter to 30 June 2022, the Company also purchased 1,700,000
shares into Treasury at an average price of 87.72p, being at a discount to the
Company's prevailing NAV per share. Collectively, the share repurchases during
the quarter have enhanced IFRS NAV per share by 0.06p.
A dividend of 1.3875p per Ordinary Share (amounting to £8.5 million) was
declared, as targeted, on 11 May 2022 in respect of the fourth quarter ended
31 March 2022 and paid on 28 June 2022.
Portfolio NAV
The unaudited Portfolio NAV, disclosed below, reflects an independent RICS
"Red Book" valuation prepared on a portfolio basis by JLL.
PORTFOLIO NAV 30 31
June Mar
2022 2022
Ordinary NAV (£'000) 762,374 752,331
Ordinary NAV per share (pence) 124.83 122.84
The portfolio, as a single entity, has been valued at 30 June 2022 at 5.03%
Net Initial Yield (31 March 2022: 5.06%), reflecting the enhanced value from
the aggregation of individual properties into a single portfolio company and
the positive effects of the stamp duty adjustment noted below.
The JLL portfolio valuation incorporates two additional assumptions when
considering Red Book valuation. Firstly, that the assumed theoretical sale
costs (from Civitas to a subsequent buyer) are reduced as the portfolio is
assumed to be sold (with all properties within SPVs) with stamp duty being
charged at 0.5% on the sale of shares in SPVs, as opposed to 5.0% for the sale
of each underlying property. Secondly, that the portfolio is sold in its
entirety rather than as individual properties (making it better suited to a
wider group of institutional buyers) and so attracting more competitive
pricing. This assumption is supported by transactional evidence that JLL has
observed in the market.
Dividend Declaration
The Board has today declared a first quarterly dividend for the period from 1
April 2022 to 30 June 2022 of 1.425p per Ordinary Share as part of the
previously stated dividend target of at least 5.70p per Ordinary Share for the
year ended 31 March 2023.
The dividend will be paid on or around 9 September 2022, to holders on the
register as at 19 August 2022 (the "record date"), with the corresponding
ex-dividend date being 18 August 2022. 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 August 2022.
The increased target dividend for the year ending 31 March 2023 reflects both
the strong underlying cash generation that the Company's portfolio is
delivering and the Board's positive view of the Company's prospects for the
current financial year.
Quarterly Factsheet
The Company has today published its Factsheet for the quarter to 30 June 2022
and this is available to view on the Company's website
(https://www.civitassocialhousing.com/investors/results-reports-and-presentations/#currentPage=1)
.
ENDS
For further information, please contact:
Civitas Investment Management Limited
Andrew Dawber Tel: +44 (0)20 3058 4846
Paul Bridge Tel: +44 (0)20 3058 4844
Panmure Gordon
Sapna Shah Tel: +44 (0)20 7886 2783
Tom Scrivens Tel: +44 (0) 20 7886 2648
Liberum Capital Limited
Chris Clarke / Darren Vickers / Owen Matthews Tel: +44 (0) 20 3100 2000
Buchanan
Helen Tarbet / Henry Wilson Tel: +44 (0) 20 7466 5000
Hannah Ratcliff / Verity Parker civitas@buchanan.uk.com
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 £968.8million (31 March 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.
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