TIDMCSH
RNS Number : 5576R
Civitas Social Housing PLC
08 November 2021
8 November 2021
CIVITAS SOCIAL HOUSING PLC
("Civitas" or the "Company")
Net Asset Values, Dividend Declaration,
Trading and Market Update and continued Shareholder
Engagement
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 at 30 September 2021, a
dividend declaration, trading and market update and continued plans
for Shareholder engagement.
Highlights:
-- Robust financial performance in line with expectations
-- Rents received as normal with no COVID-19 impact during the quarter
-- IFRS NAV per share of 108.49p resilient as expected (30 June 2021: 108.42p)
-- Second 1.3875p quarterly dividend declared in line with full year target of 5.55p
-- M&G facility part-invested with balance available for pipeline opportunities
-- Ongoing engagement with existing and new shareholders
-- Share buy-backs undertaken with shares held in treasury for reissue
Trading and Market Update
The Company continues to perform well and in line with
expectations, rent collection continues as normal and remains
unaffected by COVID-19.
The Company is pleased to announce a slightly increased NAV and
a second quarterly dividend of 1.3875p as targeted, consistent with
the Board's stated objective of paying a total dividend of 5.55p
for the year ending 31 March 2022.
In common with other parts of the healthcare and social care
sectors, the Company is pleased to note that access to the
Company's properties has eased so that residents are better able to
engage with family and friends. At the same time, care providers
are still maintaining enhanced levels of health and safety delivery
reflecting the ongoing nature of the pandemic.
The pandemic has itself resulted in increased reported levels of
demand for many of the services that are delivered within the
Company's properties, that is in addition to the long-term secular
scarcity of adapted community-based accommodation. Recent
government commitments to additional funding of the NHS and social
care are consistent with the continued growth in community
provision, ensuring that primary care resources within the NHS can
be focused on patient waiting lists.
Civitas works within sectors that demonstrate supportive
long-term trends and it is of note that leading healthcare
consultant LaingBuisson has confirmed that over 90% of the delivery
of long-term learning disability and mental health care services
are now provided by independent sector care providers with funding
from the state. These services are extensively delivered in the
community in properties such as those owned by the Company.
The Company once again offers its sincere thanks and support to
all its partners and their staff and acknowledges their dedication
and excellent performance throughout the period.
Civitas Investment Management Limited ("CIM") - New
Shareholder
The Board notes the recent release made on CIM's website
confirming that CK Asset Holdings Limited ("CK Asset") has become a
shareholder in the CIM group.
CK Asset is a leading multinational corporation that has diverse
activities including property development and investment, hotels,
aircraft leasing, pub operations and investments in infrastructure
and utility assets.
The Board is pleased to note that CIM will continue to be
managed by the existing key individuals and the team and confirms
that there is no change to either the investment management
agreement or to the services provided under it as a result of the
investment by CK Asset.
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").
30 30
Sept Jun
IFRS NAV 2021 2021
Ordinary NAV (GBP'000) 672,884 674,883
------- -------
Ordinary NAV per share (pence) 108.49 108.42
------- -------
The portfolio, based on individual asset valuations, has been
valued overall at 30 September 2021, at an average Net Initial
Yield of 5.27% (30 June 2021: 5.25%), 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 growth in IFRS NAV reflects the contribution from the
indexation of leases in the period (based on the historic low level
of CPI inflation), less the cost of modest 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 period the Company purchased 2,250,000 shares into
treasury at an average price of 92.13p, being at a discount to the
Company's prevailing NAV. The impact of the share repurchases at 30
September 2021 has been to enhance IFRS NAV per share by 0.06p.
A dividend of 1.3875p per Ordinary Share was declared, as
targeted, on 6 August 2021 in respect of the quarter ended 30 June
2021 and paid on 10 September 2021 amounting to GBP8.6 million.
Portfolio NAV
The unaudited Portfolio NAV, disclosed below, reflects an
independent RICS "Red Book" valuation prepared on a portfolio basis
by JLL.
30 30
Sept Jun
PORTFOLIO NAV 2021 2021
Ordinary NAV (GBP'000) 742,636 743,876
------- -------
Ordinary NAV per share (pence) 119.74 119.51
------- -------
The portfolio, as a single entity, has been valued at 30
September 2021 at 5.1% Net Initial Yield (30 June 2021: 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 second quarterly dividend for the
period from 1 July 2021 to 30 September 2021 of 1.3875p per
Ordinary Share as part of the previously stated dividend target of
5.55p per Ordinary Share for the year ending 31 March 2022.
The dividend will be paid on or around 13 December 2021 to
holders on the register as at 19 November 2021 (the "record date")
with the corresponding ex-dividend date being 18 November 2021. 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 22 November 2021.
Shareholder Engagement
The Company and its investment adviser, Civitas Investment
Management Limited ("CIM") have continued to make themselves
available to speak and meet with both new and existing shareholders
following the release of the detailed Market Update on 11 October
2021.
In meetings the management team has discussed the additional
background to the Company's investment activities and talked
through the worked example of a property purchase that was set out
in Section 15 of the Market Update. Shareholders have found this
particularly helpful in understanding how the often significant
cost of post completion works and other related costs specified by
the Company (paid for from purchase consideration) significantly
reduces vendors' net margins from selling properties to the
Company. To provide further insight into the Company's strategy and
the Social Housing sector, the Company intends to hold a Capital
Markets Day in Q1 2022.
As a result of this engagement, the Board is pleased to welcome
a number of new and significant institutional shareholders to the
Company including several leading European institutions.
Investment and Pipeline Update
During the quarter to 30 September 2021, the Company completed
one transaction with respect to a property for the delivery of
learning disabilities and mental health care services.
The Company also has developed a range of pipeline opportunities
that are under consideration and will be balanced with the existing
share buy-back programme and the prudent objective of retaining
sufficient liquidity at all times.
Quarterly Factsheet
The Company has today published its Factsheet for the quarter to
30 September 2021 and this is available to view
on the Company's website .
S
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 Tel: +44 (0) 20 3100 2000
/ Owen Matthews
Buchanan
Helen Tarbet / Henry Wilson Tel: +44 (0) 20 7466 5000
Hannah Ratcliff / George Beale 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. So far, Civitas has completed more than 120 individual
transactions to build the largest portfolio of its kind that has
been independently valued at GBP915.6million (31 March 2021). CSH
now provides homes for 4,391 working age adults with long-term care
needs, in 648 bespoke properties that are supported by 119
specialist care providers, 17 approved providers and working with
over 178 individual local authorities.
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