REG - Target Healthcare - Net Asset Value(s) <Origin Href="QuoteRef">THRLT.L</Origin>

Target Healthcare ReitAnnouncement

03/11/2015 07:02

RNS Number : 2981E
Target Healthcare REIT Limited
03 November 2015
To: RNS Company Announcements
Date: 3 November 2015
Company: Target Healthcare REIT Limited 
Subject: Net Asset Value 
Net Asset Value and Portfolio Update
Target Healthcare REIT Limited (the "Company" and together with its subsidiaries, the "Group") announces that its unaudited EPRA NAV per share as at 30 September 2015 was 99.2 pence. The Group's care home assets held for the three month period increased in value by 1.4%. This valuation growth contributed towards a net increase of 1.3% in the EPRA NAV per share as at 30 September 2015 as analysed in the table below. The NAV total return for the quarter was 2.9%.
As at 30 September 2015 the Group owned twenty-eight care homes with a market value of 145.8 million. The valuation of the homes is based on the independent external valuation of the Group's property portfolio prepared by Colliers International.
The EPRA NAV includes income and no provision for an accrued dividend has been made. 
The next quarterly valuation of the property portfolio will be conducted by Colliers International during December 2015 and the unaudited NAV per share as at 31 December 2015 will be announced in January 2016.
Analysis of movement in EPRA NAV
The following table provides an analysis of the movement in the unaudited EPRA NAV per share for the period from 30 June 2015 to 30 September 2015:

Pence per share

EPRA NAV per share as at 30 June 2015
97.9




Property revaluation
1.5

Property acquisition & treasury share issue costs
(0.1)

Movement in revenue reserve
1.4

Fourth interim dividend payment for the period to 30 June 2015
(1.5)

EPRA NAV per share as at 30 September 2015
99.2

Percentage change in the 3 month period
1.3%

The EPRA NAV provides a measure of the fair value of a company on a long-term basis. As at 30 September 2015 there were no differences between the EPRA NAV stated above and that calculated under International Financial Reporting Standards.
Highlights
- Dividends
The Company paid its fourth interim dividend for the year to 30 June 2015, in respect of the period from 1 April 2015 to 30 June 2015, of 1.53 pence per share on 28 August 2015. This reflects an annualised payment of 6.12 pence per share and a dividend yield of 5.51% based on the 2 November 2015 closing share price of 111.0 pence.
- Gearing
The Group's borrowings remained unchanged at 31.5 million at 30 September 2015, giving a loan-to-value ratio of 21.6 per cent (excluding the effect of cash held).
- Portfolio
As at 30 September 2015 the Group owned twenty-eight care homes with a market value of 145.8 million. On a like-for-like basis the portfolio has increased in value by 1.4% over the quarter reflecting an element of yield compression across individual assets as the underlying trading performance of the homes mature and uplifts from rent reviews on 9 properties. These rent reviews provided an average increase per property of 2.4%, and a like-for-like increase to portfolio passing rent of 0.7%.
As at 30 September 2015, the portfolio had an EPRA net initial yield of 7.2% (based on contractual net income) and an annualised rent roll of 11.1 million with a weighted average unexpired lease term of 29.2 years.
Subsequent to the period end, in October 2015 the Group completed the acquisition of a purpose-built care home in Kingston-Upon-Hull for approximately 6.2 million including acquisition costs. Contracts had been exchanged for this transaction during June 2015 and completion had been dependent on the incoming tenant obtaining registered status with the Care Quality Commission. 
- Share issuance
On 27 August 2015, the Company issued 14,229,822 ordinary shares, under the placing programme described in the Company's prospectus dated 5 September 2014, as supplemented on 7 January 2015 and 24 February 2015, at a price of 99.5 pence per share. Following admission on 2 September 2015, the Company immediately repurchased these same shares, at the same price, to be held in treasury. The net cash position of the Company following this transaction was unchanged.
The shares held in treasury will be available to be sold, at a price above the amount paid of 99.5 pence per share, to meet ongoing market demand. The net proceeds of any subsequent sales of shares out of treasury will provide the Group with additional capital to enable it to take advantage of investment opportunities in the market and make further investments in accordance with its investment policy and within its appraisal criteria. 
- Pipeline
The Group continues to be acquisitive, focusing on its strategy of acquiring high quality assets with favourable local dynamics and sustainable rental levels. In addition to the recently completed 6.2 million acquisition noted above, the Group expects by the end of 2015 to complete on 19 million of care home assets where terms have already been agreed. In addition the Group has identified and agreed terms on a further 14 million of assets and it hopes to finish its due diligence and complete on the majority of these assets in early 2016. A further pipeline in excess of 40 million of opportunities has been identified and is being actively evaluated although currently no terms have been agreed on these assets. 
The Group has a clear view on its investment pipeline and although there is no certainty that it will be able to complete on all the investment opportunities mentioned, it also continues to see a large number of other attractive opportunities in the market. The Group has cash reserves available for investment of approximately 19 million and with near term investment opportunities and commitments totalling 46 million, the Group remains cognisant of the need to ensure it has the operational flexibility to complete on its attractive investment opportunities, whilst also minimising the impact of cash drag on its returns. As such it will continue to engage and consult with existing and prospective shareholders in connection with achieving accretive and disciplined growth. 
The Company currently has 156,528,048 ordinary shares in issue, of which 14,229,822 ordinary shares are held in treasury. The total number of voting rights of the Company is 142,298,226.
Kenneth MacKenzie, Managing Partner of Target Advisers LLP, commented on the Group's activity during the period:
'Portfolio performance continues to be pleasing, with strong growth in NAV driven by a strengthening investment market and rental uplifts ahead of inflation. The Group is well-placed to continue to successfully manage its portfolio whilst also adding further attractive assets as some of our long standing deals near completion.'
Enquiries:
Kenneth MacKenzie 
Target Advisers
01786 845 912
Stifel Nicolaus Europe Limited
Mark Young, Roger Clarke, Neil Winward
020 7710 7600
Martin Cassels
R&H Fund Services Limited
0131 524 6140
Fiona Harris/Sam Emery
Quill PR
020 7466 5058 / 020 7466 5056

This information is provided by RNS
The company news service from the London Stock Exchange
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