Share Name Share Symbol Market Type Share ISIN Share Description
Civitas Social Housing Plc LSE:CSH London Ordinary Share GB00BD8HBD32 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  2.00 2.15% 95.00 94.80 94.90 94.90 93.00 93.50 3,533,272 16:35:22
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Real Estate Investment Trusts 49.0 36.1 5.8 16.4 591

Civitas Social Housing Share Discussion Threads

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SA Thanks for info. and concur with your conclusions.
Thanks mp Also castigating myself for not having read the actual report at earliest opportunity. I did reduce my holding a bit on the last rise, as concerned the earnings weren't growing much and related ratios/margins look set to remain low. That combined with quite rapid expansion of Civitas portfolio ongoing and rise in debt-ratio - [though still well within CSH own stated tolerance]if only temporary. The rental growth looks ok, at this time; ditto the NAV growth. However, yes, these may be considerably more vulnerable than I've thought; the RPs do look shaky, especially the smaller ones. Excerpt from that regulatory report: These regulatory judgements and notices have revealed some recurring themes, which include:  the concentration risk that comes from having long-term, low-margin inflation-linked leases as a single source of finance  the thin capitalisation of some of the RPs undertaking this model  poor risk management and contingency planning undertaken by some of the RPs  some inappropriate governance practises that have led to poor decision making  a lack of assurance about whether appropriate rents are being charged. Perhaps potential political/regulatory risk will weigh heaviest upon that last noted concern?
Thanks @mushy, must admit I've only read the summaries & co responses, not the report, which I'll wade through later. @2sporrans - good points, tho this caught my eye from a glance at the report: "...Weak governance at many of these organisations has led them to develop business models that are unsustainable in the longer term and cannot withstand foreseeable downside risk." So whilst a recession/downturn may not be a problem, the business models of the RPs may be! SOHO is the other big one - and yes, has taken a similar tumble to CSH. SOHO has less exposure to the smaller stuff mind. Impact claims to have none at all (sub-1k beds). I guess that does imply it's the report - not yet Labour - to have done the recent damage.
All holders should read the report that triggered the most recent S.P. collapse. Lease-based providers of specialised supported housing - GOV.UK https://www.gov.uk/government/publications/lease-based-providers-of-specialist-supported-housing Presumably some institutions are no longer able to justify the risk of holding here. Private investors on the other hand, as their own taskmasters, are free to sit it out. Still, personally annoying not to have been paying proper attention in class from back in last summer,
Yes SA, could be some of the share price drop is Corbyn/Mcdonnell regime discount being priced in. But, if so, a similar drop in Civitas's peers - or near peers - ought to be evident. Are you aware of any? I'm not as not invested in any other specifically Social Housing REIT. However, I hold a bigger stake in Impact Health Reit [IHR] which is largely dependent upon state financing of its tenants in its care homes; tenant income: 59% LA / 8% NHS / 33% private. In contrast to CSH, IHR has performed well recently: share price up ~7% past 3 months, RPI dividend raise for 2019-20....currently ~5.75%. Guess that while the risk from a Labour Gov't is potentially pretty crippling, in reality the rhetoric would prove far more deleterious than the reality. On t'other hand, these REITs won't suffer [directly] from the woes of business/financial downturns to the extent that most REITS will [very variable, as portfolios and length/terms of rental agreements vary widely]; at least their incomes will keep on coming in full to extent the downturn[s] prove to be merely cyclical and not 'structural'.
Should also mention the political angle/Corbyn: "Discussions are well advanced for the introduction of a force majeure clause into new Civitas leases that will bring all parties together in the unlikely event of a change in law or government policy that permanently reduces the income received by registered providers (registered housing associations and local authorities) ("RPs"). The clause that we have evolved in conjunction with the sector is based on similar provisions found in many other long-income/infrastructure sectors and we are advised it will not alter the value of leases as it does not change any underlying risk or expectation of cashflows. However, it will address the specific concerns expressed around RPs and their exposure under leases to any future changes in law or government policy that affects their income and their ability to service leases."
Agree on both those points - reminds me a bit of ESP. Was amused how totally quiet this (and another I'm watching)'s ADVFN BB's were - I get the impression it's the insts who are selling out, and some big (7-figure) trades implies that may be the case. Raising more money would seem to be out for all of them in current climate. Edit - this was interesting this morning, from RESI: "12 April 2019 Residential Secure Income plc Clarification following publication of regulator's report Residential Secure Income plc ("ReSI") (LSE: RESI), which invests in affordable shared ownership, retirement and local authority housing, notes the report "Lease-based providers of specialist supported housing" ("the Report") published on 4 April 2019 by the Regulator of Social Housing. For clarification, ReSI has never had any exposure to the specialised supported housing sector, the subject of the Report. ReSI's strict investment strategy means its acquisitions are limited to those assets with sufficient cashflows, counterparty credit quality and property security to be capable of supporting long-term investment grade equivalent debt. Accordingly, ReSI's Housing Association partners are typically large, credit-worthy institutions who own significant portfolios of property, currently including Places for People, owning or managing 198,000 homes and rated G1/V1, and Metropolitan Thames Valley, owning or managing 57,000 homes and rated G1/V2. " The way I understand it, only those with 1,000+ beds get a formal rating. The likes of CSH also deal with sub-1k bed, who don't receive a formal rating, but are now getting investigated (and in many cases, being found wanting). Sort of the sub-prime of the supported living world! :)
Thx for your thoughts. I have read the rns’s and as 2sporrans implies the impact on the share price seems a bit ott. Not sure we have found a base yet though.
alter ego
There was an issue with First Priority - one of Civitas's RP's [Registered Provider - Housing Association]earlier this year That caused a dive in the sp, recovered later after Civitas took action to assist FP to meet obligations/standards. Excerpt from the RNS [above] 10Apr19 - "Advisor's Update": "Focus on the Tenant. Since each of the underlying tenants has a recognised high level of acute needs to qualify for life long care in the community, Civitas has the ability to reassign the lease if the RP is not performing its obligations, thereby ensuring continuity of care and accommodation for individuals and longevity of income for Civitas. This was achieved in the case of First Priority and would be available to be undertaken in the future if needed." Why the woes of this dissociated RP should cause an even deeper dive in the sp, ongoing is a moot point. Guess it's a kind of compounded concern; there's maybe a fair bit of rot amongst theSe RPs? Interestingly, Civitas have expressed their intention to raise the dividend this year; so maybe best just to hold and see if the RP concerns abate, share price revives and hopefully a fillip from divi raise news. Then reconsider how much one wants to [continue to] hold... IHR looks like could be a better model/bet to me and paying over 6p divi, ~5.75% currently.
Read last few RNS's! From what I can gather (and I've only come to it recently), the issue is the tenants. ie the co that signs the lease and runs the care home (or whatever) may be of dubious financial and operational quality. May all turn out fine, but the regulator has picked on several smaller operators recently. CSH isn't alone in being affected by this. Some people apparently think the entire business model is flawed. Not sure I'd go that far, but there's an element of uncertainty now which there wasn't previously (that uncertainty presumably being "what happens to the rent if the tenant goes pop"). I'd be interested to hear the views of anyone who's followed these happenings throughout. CSH say "Today's regulatory announcements are expected to have no impact on Civitas' portfolio or financial position", but it certainly had an effect on the share price.
CSH has lost 20% of its value in the last 6 months but there's been little comment here. There still appears to be a lot of selling going on. Anyone able to explain why?
alter ego
a useful document hxxp://hardmanandco.com/docs/default-source/company-docs/civitas-social-housing-plc-documents/24.08.18-housing-security.pdf
Not RESI but hold IHR - Health rather than social REIT. Divi. solid at 6%pa [PID]; 6*1.5p paid out last 18 months; decent NAV growth + discount. Get the gross PID in ISA Dunno why Civitas shot up today; no RNS. But sold off the taxed 1/2 not in ISA for 109.3p as close to 2 year highs and the downside risk is not insignificant, as the First Priority fandango demonstrated and trough of ~95p.
Has anyone looked at RESI as an alternative?
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?
Hi BT, Hope you are well. What are the sector woes caused by? Cheers!
simon gordon
Confirmed div paid as PID
Does anyone know if the latest dividend was treated as a PID...I don't seem to have the full .075p per share
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.
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
I topped up last week after all
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??
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