Civitas Social Housing Share Discussion Threads

[davebowler] 06/4/2018 10:07

Has anyone looked at RESI as an alternative?

[badtime] 26/3/2018 11:45

HI SG...ltns :)Your guess is as good as mine..prospect of higher rates? Out of fashion?....this stock did have its own issues recently but I don't think you can put that entirely down to the current slideI'm tempted to add but waiting for this 5/6% targeted yield and some bottoming outYou in?

[simon gordon] 22/3/2018 15:32

Hi BT,

Hope you are well.

What are the sector woes caused by?

Cheers!

[badtime] 16/3/2018 10:31

Confirmed div paid as PID

[badtime] 10/3/2018 19:39

Does anyone know if the latest dividend was treated as a PID...I don't seem to have the full .075p per share

[taudelta1] 22/2/2018 09:10

IMO the First Priority difficulty will blow over without significant long term impairment to CSH, but in the interests of full disclosure to readers see below recent regulatory appraisal of First Priority (which represents about 11% of CSH's portfolio)... GLA ...

Regulatory Notice February 2018
Registered Provider
First Priority Housing Association Limited (4702) is a small Registered Provider of homes for a vulnerable client group, primarily adults with learning disabilities and mental health problems. It was incorporated in 2011 but has grown substantially in the last 18 months and now has leased properties with 26 landlord counterparties in total. The provider has 227 individual properties in 50 local authority areas that number 1,0751 bed spaces with 759 tenancies currently in place.
In autumn 2017 First Priority Housing Association Limited (FPHA) advised the regulator that it had terminated its contract with its managing agents and had appointed a new Chief Executive. Production of the Annual Accounts had been delayed and they have still not been submitted.
Regulatory Finding
The regulator has concluded that
a) based on the evidence submitted directly by FPHA, including communications from the board of directors and the Chief Executive Officer in January 2018, FPHA is not compliant with the Governance and Financial Viability Standard.
b) the board has failed to ensure that it operates an appropriate strategic planning and control framework that identifies and manages risks to the delivery of its objectives and their planning has not sufficiently considered the financial implications of risks to the delivery of plans.
1 The provider has exceeded 1,000 homes or bedspaces in the period since the last statistical return to the regulator
Page 1 of 2
Regulatory Notice First Priority Housing Association Limited [4702]
Subsequent enquiries and investigations undertaken by the regulator suggest that FPHA does not have sufficient working capital or the financial capacity to meet its debts as they fall due. The regulator has concluded that FPHA has failed to secure access to sufficient liquidity because it continues to trade on the goodwill of its creditors. FPHA is working with its creditors and lender to find a solution to its current financial difficulties.
The regulator also has concerns about the governance arrangements within the organisation, particularly the adequacy of resources and the skill and capability of the board to maintain effective control of the organisation. The fact the board is dependent on the goodwill of its lease counterparties in relation to rent payments indicates a fundamental failure of governance.
The board of directors and the Chief Executive recognise the seriousness of FPHA’s situation and are working positively with the regulator. The regulator has taken steps to strengthen FPHA’s board by appointing new board members with a range of relevant skills and expertise. These additions to the board will support FPHA as it works through the complex matrix of difficulties it faces.
Based on the most recent SDR return FPHA had fewer than 1,000 units and is classed as a small provider. The regulator does not publish regulatory judgements for providers who fall into this category. Instead, in the interests of transparency, the regulator publishes a Regulatory Notice where it has evidence that a small registered provider is not meeting the regulatory standards. This notice is published under those arrangements.

[taudelta1] 14/2/2018 08:48

you won't go wrong long term IMO ... the recent RNS was conservative, and stuck with the 5p divvy for now. However the earlier interim report made it clear they have been investing at a 6% yield .. so I think the final quarterly div in the year just beginning is going to have to bring the total above 5p ... otherwise they would not be compliant with REIT status which demands nearly all income (in an accounting year overall) is paid out ... btw the share price is edging up a bit now, while Triple Point Social Housing (ticker SOHO) is edging down ... I am waiting for SOHO to say what yield they have been investing at .... GL

[badtime] 12/2/2018 13:07

I topped up last week after all

[taudelta1] 05/2/2018 11:04

Badtime .. if you did so before the 2017 calendar result RNI, you would be in ahead of any divvy news that surprised to the upside, IMHO .. and GL ...

PS there doesn't seem to be a published investors calendar so I have no idea when that would be .. March maybe allowing for formal audit??

[badtime] 02/2/2018 13:38

Much lower and maybe top up time

[taudelta1] 29/11/2017 15:20

sp motoring nicely now .. i see the co announced its sizeable investments to date have been at an average yield of 6% .. therefore I believe we will soon enough see a divvy somewhat above the promised 5p per year (NB to preserve REIT status requires a very high payout ratio) ... also a good number (very roughly half) of the properties purchased are on lease escalators of CPI + 1% rather than CPI ... so on average lets say CPI + 0.5% ... this seems quite a handsome total return for very little risk. With share price now about 111.5, a 6p divvy gives a running yield 6/1.115 = 5.38% and if CPI is 2.5%, div growth will be 3.0% so total return = 8.38%.

(I am assuming that the negative effect of admin expense is roughly balanced by the positive effect of gearing. Also the assumption of CPI=2.5% long term derives from the yield differential between conventional and index linked gilts ... the huge consensus we call the gilt market looks for RPI of just over 3%.)

[henryatkin] 30/10/2017 09:42

tiltonboy...thanks for clarifying that point.

[riverman77] 29/10/2017 18:42

That's correct, thanks for clarifying. However I note that the company quickly saw a c.10% uplift to its nav once it was fully invested, which suggests they are able to source properties at a discount to their market value.

[tiltonboy] 29/10/2017 17:24

Incorrect. They do not convert on 1:1, but on a ratio to their respective NAV's.

[henryatkin] 29/10/2017 14:24

Little different to a placing at 10% discount with a fixed 3% yield until converted to ordinary shares where the company aim for 5% yield. Conversion will be no longer than 12 months. So at constant NAV there is between 13% & 15% gain to be had over the next twelve months. Interesting.

[davebowler] 19/10/2017 09:25

No I don't see it, taudelta1.

Net Asset Value

As at the close of business on 30 September 2017 the unaudited NAV of the Company was 109.8p per ordinary share.

[taudelta1] 28/9/2017 10:09

The c shares will convert at their nav to co nav, i.e. par to co nav. Unless there's a significant upward revaluation of the properties already acquired (unlikely), the co nav will be close to 100p, so conversion will be at 100p approx ... therefore there's a big incentive to take up the issue as you are getting in at 100p rather than paying the market price of 111p ... so given the size of the issue, won't be surprised to see some downside drift ... IMHO .. please say, somebody, if I've got this wrong ... GLA

[badtime] 28/9/2017 09:16

So another 350mill possible through 'c' shares

[badtime] 14/8/2017 22:36

Have you gone for Triple Point as well?

[davebowler] 08/8/2017 16:20

Similar Triple Point trades today

[davebowler] 04/8/2017 09:44

Liberum;
Triple Point Social Housing REIT
£200m IPO

Event
Triple Point Social Housing has raised gross proceeds of £200m through an initial public offering; the company will list on Specialist Fund Segment on Tuesday 8 August.

The portfolio will focus on supported housing assets (c.80%), which are subject to inflation linked, 20-25 year fully repairing and insuring leases. The portfolio will comprise both operating assets and forward funding of developments with a net initial yield between 5.5% and 6.5%. Forward funding investments will provide enhanced returns but will only be considered in circumstances where a lease agreement is already in place. The company has agreed to acquire a seed portfolio of five supported housing properties with a purchase price of £17.9m net initial yield of 6%.

Following full deployment of the proceeds and the application of gearing the company targets a dividend yield of 5% (on issue price) for the year ending December 2018; the dividend will increase annually with inflation.

Liberum view
Triple Point has an immediate peer in Civitas Social Housing, which also focuses on supported housing for vulnerable adults. However, Civitas does not take any forward funding risk. Civitas has traded at a premium to NAV since launch (currently 4%) demonstrating the perceived attractiveness of the social housing strategy. Given that provision of supported living and adult social care has been hit particularly hard by local government funding cuts, which show no sign of meaningfully abating, it was inevitable that private investment in the sector would increase to meet demand. Non-specialist funds, such as GCP Infrastructure and GCP Asset Backed Income Fund, have also started moving into the social housing/supported living sector (on the debt side) in the past c. two years.

[davebowler] 24/7/2017 13:58

Similar one to this is imminently floating called Triple Point REIT.

[badtime] 03/4/2017 17:32

Took a nibble today