To: RNS Company Announcements
Date: 1 August 2014
Company: Target Healthcare REIT Limited
Subject: Net Asset Value and Dividend Increase
Net Asset Value
The Company announces that its unaudited net asset value ('NAV') per share as at 30 June 2014 was 94.7 pence. This is a decrease of 1.5% from the NAV per share as at 31 March 2014, primarily driven by transaction costs on acquired properties as analysed in the table below. As at 30 June 2014 the Company owned eighteen care homes with a market value of £83.2 million and had cash balances of approximately £17.1 million.
The NAV has been calculated under International Financial Reporting Standards ('IFRS'). It is based on the external valuation of the Company's property portfolio prepared by Colliers International.
The 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 September 2014 and the NAV per share as at 30 September 2014 will be announced in October 2014.
Analysis of movement in NAV
The following table provides an analysis of the movement in the unaudited NAV per share for the period from 31 March 2014 to 30 June 2014:
|
Pence per share |
% of opening NAV |
NAV per share as at 31 March 2014 |
96.0 |
|
Transaction costs relating to asset acquisitions during period Property revaluation |
(1.7) 0.9 |
(1.8) 0.9 |
Movement in revenue reserve |
1.0 |
1.0 |
Movement due to fifth interim dividend payment to 31 March 2014 |
(1.5) |
(1.6) |
NAV per share as at 30 June 2014 |
94.7 |
|
Highlights
The Company paid its fifth interim dividend, in respect of the period from 1 January 2014 to 31 March 2014, of 1.5 pence per share on 30 May 2014.
The Company announced its final dividend for the period to 30 June 2014 of 1.5 pence per ordinary share on 29 July 2014 for payment in August 2014.
During the period the Company has acquired the following:
· In April, a modern, purpose-built care home located in Flixton, Greater Manchester for approximately £3.8 million including acquisition costs
· Exchanged contracts to acquire another care home in York which is due to be completed and opened in summer 2014 for approximately £5.1 million including acquisition costs
· In May a portfolio of three modern, purpose-built residential care homes located in Wigan, Stockport and Coventry for approximately £13.9 million including acquisition costs
· Two purpose-built care homes - Bromford Lane and Beechdale Manor - in the Midlands, for approximately £14.3 million including acquisition costs in June
After the period end, in July 2014, the Company acquired three purpose-built care homes and four specialist care bungalows in Norfolk and Northern Ireland for approximately £20.4 million including acquisition costs, and has acquired another care home in Leicestershire for approximately £6.0 million including acquisition costs. The completion of these transactions will see the Company's investment portfolio increase to twenty-three care homes.
Following the addition of these properties the Company has now invested all of its existing equity and has drawn down substantially all of a £30 million term loan and revolving credit facility.
Dividend Increase
The recent declaration of the Company's final dividend for the period to 30 June 2014 brings the total dividend for the period to 8 pence per share. Given the aggregate net initial rental yield on acquisition across the portfolio remains ahead of the 7% blended initial yield modelled pre-launch, and the impact of the inflation-linked annual rental uplifts which are upwards only, we are pleased to announce that we intend to increase the quarterly dividends in respect of the year to 30 June 2015 by 2% to 1.53 pence per share, in the absence of unforeseen circumstances.
Offer Update
As noted in the circular dated 28 June 2014, the board has been discussing with its advisers a proposal to raise additional capital. The board expects to publish a prospectus by the beginning of September and that the initial placing and offer for new ordinary shares will close by mid-September. The issue price for the initial placing and offer is expected to be approximately 101 pence per new ordinary share. New investors will not be entitled to receive the dividend for the period ending 30 June 2014 which will be paid in August but will be entitled to the next dividend to be paid in November 2014.
The Company currently has 95,221,629 ordinary shares in issue.
Kenneth MacKenzie, Managing Partner of Target Advisers LLP, commented on the Company's activity during the period:
"We are very pleased with the Company's significant acquisition activity during the period which has added further quality assets to the Company's portfolio allied with the expansion of the Company's tenant base and geographic reach. The strong performance of the existing portfolio confirms our conviction in the Company's investment strategy and we look forward to the contribution of the growing portfolio."
Enquiries:
Kenneth MacKenzie
Target Advisers
01786 406 581
Graeme Caton
Winterflood Securities
020 3100 0268
Fiona Harris/Sam Emery
Quill PR
020 7466 5058 / 020 7466 5056
