TIDMCSH
RNS Number : 2229B
Civitas Social Housing PLC
29 January 2020
CIVITAS SOCIAL HOUSING PLC
("Civitas" or the "Company")
Net Asset Values, Dividend Declaration, Company and Market
Update
29(th) January 2020
The Board of Civitas Social Housing PLC ("Board"), the first
London listed Real Estate Investment Trust ("REIT") dedicated to
investing into regulated social housing in the UK, is pleased to
announce its quarterly net asset value ("Net Asset Value" or "NAV")
as at 31 December 2019.
Highlights:
-- Annualised rent roll GBP47.2 million (30 September 2019: GBP46.5m)
-- IFRS NAV per share 107.55p (30 September 2019: 107.23p)
-- 1.325p quarterly dividend declared
-- EPRA dividend cover 87% (EPRA run rate 97%)
-- Lease indexation targets achieved
-- GBP60m NatWest debt facility now part drawn
-- Progress on delivering new facilities and investment pipeline
Net Asset Values:
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 Ltd ("JLL").
31 30
Dec Sept
IFRS NAV 2019 2019
Ordinary NAV (GBP'000) 668,592 667,441
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Ordinary NAV per share (pence) 107.55 107.23
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The portfolio, based on individual asset valuations, has been
valued overall at 31 December 2019 at an average of 5.29% Net
Initial Yield compared to 5.28% at 30 September 2019. This small
movement is the result of a slight reduction, at the present time,
in the expectation of growth of the Consumer Price Index based on
current predictions for short-term UK inflation rates.
In the period to 31 December 2019, an Ordinary Share dividend of
1.325p per share was declared and paid, amounting to GBP8.2
million.
Portfolio NAV
The unaudited Portfolio NAV, disclosed below, reflects an
independent RICS "Red Book" valuation prepared on a portfolio basis
by JLL.
31 30
Dec Sept
PORTFOLIO NAV 2019 2019
Ordinary NAV (GBP'000) 737,561 736,401
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Ordinary NAV per share (pence) 118.65 118.30
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The portfolio as a whole has been valued at 31 December 2019 at
5.06% Net Initial Yield compared to 5.05% Net Initial Yield at 30
September 2019. The slight adjustment reflects the inflation point
noted above.
The JLL Portfolio NAV valuation incorporates two additional
assumptions when considering the Red Book valuation. First, that
the assumed 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. Second, 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
prices (5.06% Net Initial Yield as opposed to 5.29% under IFRS).
This assumption is supported by transactional evidence that JLL has
observed in the market.
Company Update
Civitas has now partially drawn the proceeds of the GBP60
million 5-Year Term Facility with National Westminster Bank Plc,
and this is being applied to investments expected to be completed
shortly and in the recent purchase of own shares at a discount to
NAV. The remaining balance of the facility is expected to be drawn
shortly.
During the quarter to 31 December 2019 the Company acquired a
total of 815,000 Ordinary Shares at an average price of 85.20p per
share which are held in treasury for subsequent cancellation or
reissue. This compares to 97.30p per share at which the Company's
shares traded at the close of business on 28 January 2020.
At the time of publication of the interim results on 2 December
2019, Civitas highlighted the delivery of new state-of-the-art
properties in Wales that will support higher acuity care for a
range of conditions. These properties are being acquired on
completion and following the entering into of all arrangements
including leases. Commissioning works have continued to progress,
and an update will be provided in due course, once these
completions have taken place.
The Company's pipeline of investment opportunities remains
robust and comprises new and existing schemes and properties that
have typically been brought together by Civitas directly. This
reflects the Company's active engagement with a range of
property-owning specialist care providers and other sector
counterparties. Civitas expects this focus on the generation of
bespoke opportunities to remain a core element of the Company's
investment process. At the same time the Company is pleased to note
that Civitas continues to be an early point of contact for many
vendors and their advisers often in advance of general marketing
for the properties.
As part of the Company's asset management activities we have
successfully assigned certain leases (on their existing terms) to
optimise the portfolio and maximise the efficiency of the
respective housing associations. In this regard the proportion of
the Company's portfolio with Westmoreland Supported Housing, as
measured by rental income, is now reduced to 6.4% from the 11.2%
previously reported, with leases having been assigned to several
housing associations (already within Civitas' portfolio). A full
update of the distribution of housing associations will be provided
at the time of publication of the Company's results for the year to
31 March 2020.
Since IPO, the Company has successfully attained the following
investment milestones and created a high quality, nationally based,
diversified portfolio of regulated social housing partnering with a
range of counterparties:
31-Mar 31-Mar 31-Mar 30-Jun 30-Sept 31-Dec
Period 2017 2018 2019 2019 2019 2019
Investment*
(GBPm) 106 472 758 761 764 771
------- ------- ------ ------ ------- ------
Properties 82 414 591 594 599 608
------- ------- ------ ------ ------- ------
Tenancies 487 2,621 4,075 4,094 4,114 4,153
------- ------- ------ ------ ------- ------
Local Authorities 32 109 157 158 160 161
------- ------- ------ ------ ------- ------
Housing Associations 5 11 15 15 15 15
------- ------- ------ ------ ------- ------
Care Providers 25 64 113 113 114 115
------- ------- ------ ------ ------- ------
In the three-month period to 31 December 2019, the Company
acquired nine properties for a consideration of GBP7.1 million.
Market Update
The sector continues to experience significant underlying demand
from local authority commissioners, individuals and families
seeking a community-based solution for their care and associated
long-term housing needs. This is particularly so for young adults
who are seeking to secure a long-term placement for the first time,
often on moving from children's services or a family home.
Recently the Company was pleased to host the Channel 4
documentary "Home Free" at St Thomas House, a Civitas property in
Chester. This featured a group of young adults moving into their
first independent long-term home that is managed by our housing
association partner Hilldale.
The recent definitive General Election result has brought
greater clarity to the political landscape. Whilst specialist
supported housing has always received cross-party support it is
helpful that the macro environment has gained greater clarity and
the new Government has made various commitments supporting the
delivery of state funded healthcare and social care.
Demand continues to be very strong for the provision of
properties in which higher acuity care is delivered, as this
generates the highest cost saving for the state and local
authorities and the best personal outcomes for individuals. It is
also where the rental cost is at its lowest when compared with the
total cost of care and accommodation combined.
More generally we have noted that the importance of providing
safe, community based accommodation for vulnerable adults, and the
insufficiency and dangers of institutional care, are rising up the
public debate agenda, with these issues having been highlighted
recently by Parliamentary groups, investigative journalists and
activists. We consider that this public focus is likely to generate
additional demand for the properties that Civitas and others seek
to deliver and to highlight the tangible benefits that result from
a well-constructed community placement.
Dividend
The Board has declared a quarterly dividend for the period from
1 October 2019 to 31 December 2019 of 1.325p per Ordinary Share.
The dividend will be paid on or around 28 February 2020 to holders
on the register as at 7 February 2020 (the record date) and the
corresponding ex-dividend date being 6 February 2020. The dividend
will be paid as a REIT property income distribution ("PID").
In respect of EPRA dividend cover this has increased to 97% on a
run rate basis as at 31 December 2019 and 87% over the period to 31
December 2019. The Company remains committed to achieving 100% run
rate EPRA dividend cover as soon as practicable.
Quarterly Fact Sheet
The Company has today published its Fact Sheet for the quarter
to 31 December 2019 and this is available to view on the Company's
website.
For further information, please contact:
Civitas Housing Advisors Limited
Paul Bridge Tel: +44 (0)20 3058 4844
Andrew Dawber Tel: +44 (0)20 3058 4846
Liberum Capital Limited
Gillian Martin Tel: +44 (0) 20 3100 2222
Panmure Gordon
Sapna Shah Tel: +44 (0)20 7886 2783
Tom Scrivens Tel: +44 (0) 20 7886 2648
Buchanan
Helen Tarbet / Henry Wilson Tel: +44 (0) 20 7466 5000
Hannah Ratcliff / George Beale civitas@buchanan.uk.com
Notes:
Civitas Social Housing PLC is the first Real Estate Investment
Trust offering pure play exposure to social housing across the UK.
The Company is advised by Civitas Housing Advisors Limited, who are
authorised and regulated by the Financial Conduct Authority under
Firms Reference Number 815699. The Company is listed on the premium
listing segment of the Official List of the Financial Conduct
Authority and was admitted to trading on the main market for listed
securities of the London Stock Exchange in November 2016.
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END
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