Civitas Social Housing PLC Net Asset Values, Investment and Market Update (7045W)

TIDMCSH

RNS Number : 7045W

Civitas Social Housing PLC

03 August 2018

3 August 2018

Net Asset Values, Investment and Market Update

3 August 2018

CIVITAS SOCIAL HOUSING PLC

("Civitas" or the "Company")

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 England and Wales, is pleased to announce its quarterly net asset value ("Net Asset Value" or "NAV") as at 30 June 2018.

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.

 
                                         31 Mar 2018  Increase 
 IFRS NAV                  30 June 2018                   % 
 Ordinary NAV (GBP'000)         370,388      369,395     +0.3% 
                          -------------  -----------  -------- 
 Ordinary NAV per share           105.8        105.5     +0.3% 
                          -------------  -----------  -------- 
 C Share NAV (GBP'000)          297,218      298,752    -0.5%* 
                          -------------  -----------  -------- 
 C Share NAV per share             98.4         98.9    -0.5%* 
                          -------------  -----------  -------- 
 

*The first C share dividend was paid in the quarter, for the extended period from inception to 31 March 2018; the total dividend paid was GBP3.4 million, representing 1.13p per C share. An Ordinary share dividend for the quarter ended 31 March 2018 of GBP4.4 million, representing 1.25p per Ordinary share was also paid.

Portfolio NAV

The unaudited Portfolio NAV, disclosed below, reflects an independent RICS "Red Book" valuation prepared on a portfolio basis by Jones Lang LaSalle Ltd.

 
                  30 June  31 Mar 2018  Increase 
 Portfolio NAV       2018                   % 
 Ordinary NAV 
  (GBP'000)       402,600      398,505     +1.0% 
                 --------  -----------  -------- 
 Ordinary NAV 
  per share         115.0        113.9     +1.0% 
                 --------  -----------  -------- 
 C Share NAV 
  (GBP'000)       304,223      302,766     +0.5% 
                 --------  -----------  -------- 
 C Share NAV 
  per share         100.7        100.3     +0.5% 
                 --------  -----------  -------- 
 

Individual properties acquired by the Company are often relatively small in size and as such, benefit from being incorporated within a larger diversified portfolio. As at 30 June 2018, the Company had acquired 440 properties in 51 transactions, which includes 89 properties for the benefit of C shareholders.

The Portfolio NAV is intended to provide shareholders with an indication of the inherent value likely to be obtained by the sale of the portfolio as a single entity within its existing corporate structure. It is considered that comparable market transactions offer both support for the carrying value of the Company's properties on a portfolio basis and demonstrate the willingness of acquirers to pay enhanced values for larger portfolios.

Investment Update

During the period, 26 additional properties were acquired and a number of the existing leases entered into by the Company have seen their rental income increase as a result of annual indexation, which taken together has resulted in a run-rate of rental income at 30 June 2018 of GBP31.1 million. This is expected to grow significantly as the Company moves to full investment over the coming months which will support the Company's target dividends.

In the period since IPO, the Company has made the following investments and created a quality, nationally-based, diversified portfolio of regulated social housing in England and Wales as well as partnering with new Housing Associations and care providers in new local authorities:

 
 Period                                          31-Mar-17   30-Jun-17   30-Sept-17   31-Dec-17   31-Mar-18  30-Jun-18 
 Investment (excluding purchase costs) (GBPm)       106         206         284          431         472        508 
                                                ----------  ----------  -----------  ----------  ----------  --------- 
 Properties                                         82          167         282          384         414        440 
                                                ----------  ----------  -----------  ----------  ----------  --------- 
 Tenancies                                          487        1,130       1,820        2,405       2,621      2,845 
                                                ----------  ----------  -----------  ----------  ----------  --------- 
 Local Authorities                                  32          68           82          99          109        123 
                                                ----------  ----------  -----------  ----------  ----------  --------- 
 Housing Associations                                5           7           10          10          11         12 
                                                ----------  ----------  -----------  ----------  ----------  --------- 
 Care Providers                                     25          42           50          59          64         71 
                                                ----------  ----------  -----------  ----------  ----------  --------- 
 

C Share Deployment Update

As at the 30 June 2018 the Company had deployed GBP108.5 million before costs of the C share equity, of which GBP36 million was invested in the quarter to 30 June 2018.

The Company is confident, based upon the current level of pipeline and due diligence of its ability to substantially deploy the net proceeds of the C share in a timely manner consistent with the terms of the conversion of the C shares into Ordinary shares as set out in the C share prospectus. This is expected to be supported by several significant transactions that are targeted to be announced shortly and which have been subject to ongoing due diligence. In particular, the Company expects to complete a number of material acquisitions in the near term with an expected value of circa GBP100m.

The Company has also continued to expand the network of Housing Associations and care providers that it interacts with, to further diversify the portfolio. The Company is well progressed with its due diligence in respect of several potential new Housing Association partners that it is seeking to work with during 2018.

Market Update

The need for increased levels of housing of all types and tenures continues to be a prominent political issue. The government is continually investigating various initiatives to try and meet the target of 300,000 new homes per annum that was set earlier in the year.

The restriction in housing provision and growing demand for specialist supported housing has resulted in significant and growing demand for good quality properties tailored to provide healthcare in the community. A recent report commissioned jointly by Mencap and Housing LIN expects the need for Specialist Supported Housing, in particular, to increase by up to 23% by 2027/28.

Against this background Specialist Supported Housing remains very much in demand with a range of both private and public buyers seeking to purchase properties and with an element of upward pressure on pricing as a result. Despite this, the Company utilises its relationships, existing agreements and buying power to acquire good quality properties at competitive prices that remain firmly within the yield range set out at the time of IPO in 2016.

Dividend

The Board has declared a second quarterly dividend in respect of the Ordinary and C shares for the three months to 30 June 2018 of 1.25 pence per Ordinary share and 0.75 pence per C share. The dividends will be paid on or around 7 September 2018 to holders on the respective registers as at 17 August 2018 (the record date) and the corresponding ex-dividend date being 16 August 2018. The Ordinary share dividend will be paid as a REIT property income distribution ("PID"); the C share dividend will be paid as an ordinary dividend.

Quarterly Fact Sheet

The Company has today published its Fact Sheet for the quarter to 30 June 2018 and this is available to view on the Company's website, http://civitassocialhousing.com/investor-relations/reports-and-publications/.

http://civitassocialhousing.com/investor-relations/reports-and-publications/

For further information, please contact:

Civitas Housing Advisors Limited

   Paul Bridge                           Tel: [phone] 
   Andrew Dawber                    Tel: [phone] 

Cenkos Securities PLC

   Sapna Shah                           Tel: [phone] 
   Tom Scrivens                        Tel: [phone] 

Pagefield

   Philip Dennis                        Tel: [phone] 
   David Leslie                         Tel: [phone] 

Notes:

Civitas Social Housing PLC is the first Real Estate Investment Trust offering pure play exposure to social housing in England and Wales. The Company is managed by Civitas Housing Advisors Limited. The Company's Ordinary shares are listed on the premium listing segment of the Official List of the Financial Conduct Authority and were admitted to trading on the main market for listed securities of the London Stock Exchange in November 2016.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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August 03, 2018 02:00 ET (06:00 GMT)