Target Healthcare Reit Share Discussion Threads

[spectoacc] 27/3/2023 06:37

Had to read down a bit to find that, and of course it's not cut, it's "rebased". Hmm.

Key line for me is this:

"Contractual rent increased by 2.9% to GBP57.1 million (June 2022: GBP55.5 million), including like--for-like rental growth of 1.8%"

RPI inflation hit 17% in the year, and is currently over 13%. Do holders really regard their income as "inflation-linked"? Why? LFL rental growth was 1.8%.

1.8%!

NAV gone up over 25% but today's disposals should help.

Rent collection isn't 100%.

Occupancy surprisingly low, even if Covid still given as an excuse.

But a fair bit in the price here too.

[ammons] 27/3/2023 06:35

Indeed. "Rebased" to an annual 5.6p which is still a decent yield at the current price.

[spoole5] 27/3/2023 06:31

17% divi cut

[spoole5] 22/3/2023 08:36

Daily ATLs. Results usually out by now.......

[spoole5] 21/3/2023 12:21

Discount over 30% here now

[bdog51] 10/3/2023 16:31

A lot of investment trusts carrying a discount to NAV given the dire market conditions. But Target's discount is around 27% which seems way overdone to me. Must be good value at these levels given the dividends available.

[cheshirecat2] 10/3/2023 13:29

Yield trap or just part of wider sell off?

[cheshirecat2] 10/3/2023 13:28

Bought here around 85p for the yield- do we think this is just part of a wider sell off vs some concerns around the debt/divi?

[spoole5] 10/3/2023 11:12

Pushing 10% yield on these now. 25% ltv

[bodgeman] 02/3/2023 16:54

Thank you very much for this and taking the time. Yes I read it on the following article that you already found.



I haven't seen the correction. 25% sounds much better.

[al101uk] 01/3/2023 17:56

From Target Healthcares own investor diclosure document:

Gearing policy

"Gearing calculated as borrowings as a percentage of the Group's assets, may not exceed 35 per cent at the time of drawdown. The Board currently intends that, over the medium term, borrowings of the Group will represent approximately 25 per cent. of the Group's gross assets at the time of drawdown. However, it is expected that Group borrowings will exceed this level from time to time as borrowings are incurred to finance the growth of the property portfolio."

And from the most recent NAV RNS:

"As at 31 December 2022, the Group's total borrowings were £240 million, representing a net LTV of 25.1% (total gross debt less cash, as a proportion of gross property value). The Group's weighted average cost on its drawn debt, inclusive of amortisation of loan arrangement costs, was 3.79% (30 September 2022: 3.49%). This excludes the amortisation of the cost of the interest rate cap, the upfront cost of which has already been deducted in full from the EPRA NTA as shown in the table in the appendix. The increase over the quarter was due to the increase in market interest rates impacting the variable rate applied to the Group's revolving credit facilities."

I can only find positive recent write ups, which are listed at the bottom of the page here:



Have you a link to go with your quote? Googling your quote gets no results.

edit - Found it:



The article was just plain wrong, he corrected it on Motley Fool:



Now reads:

"With the old world of cheap credit firmly in the rear-view mirror, I am wary of highly leveraged companies. Fortunately, Target Healthcare has its debt burden under control. The Company’s Net Loan-to-Value is 25% — calculated as total debt less cash held divided by the value of the property portfolio."

[bodgeman] 01/3/2023 17:48

This is what I read in a MF article....

"Unfortunately, Target Healthcare has a lot more debt than equity on its books. To be precise, it has 33 times more debt than equity. That is like you or me buying a £250,000 house by putting down a measly deposit of £7,500 (just 3%, when the UK average is 15%) and funding the rest with a bank loan."

[spoole5] 24/2/2023 20:42

Net LTV 25%. Highly geared?

[bodgeman] 24/2/2023 18:01

Was probably comments from BoE about interest rates, the inflation pivot may be later in the year and the reports that economy is doing better than expected - hence less pressure on BoE to go softly on the next raise. Target are highly geared but luckily hedged - but markets dont like that.

[schlumberger74] 22/2/2023 21:38

Any idea for the price drop today ?

[cwa1] 09/2/2023 08:19

XD for 1.69p this morning, pay day 24/2

[archy147] 02/2/2023 11:49

Good to see the overdue price correction getting underway today. Expecting a return to the previous 105-120p trading range.

[uapatel] 02/2/2023 07:38

RNS. Update & Dividend

NAV down, but to be expected. Good to see Dividend kept, did think they might cut it.

[sentinelnc] 18/1/2023 09:31

I think shares outstanding have doubled since 2017, something to keep in mind but this does look an interesting investment.

[igoe104] 16/1/2023 14:05

I haven't sold my original amount. Might add more, if when I get funds...

These are a victim of desperate funds selling up, for client redemptions

[a0002577] 16/1/2023 12:49

Very heap indeed, igoe104. So have bought back in. There should be an update shortly - with the dividend announcement perhaps.

[igoe104] 12/1/2023 14:53

These are looking extremely cheap, over 27% discount to the Nav.

[igoe104] 10/1/2023 09:07

This should be good for the sector.

[spoole5] 19/12/2022 09:28

Topped up at 75.70, excellent value here on a low ltv

[uapatel] 08/12/2022 11:47

Was re reading the Edisongroup document on Target Healthcare. It suggests they might review the dividend and cut it by around 20%. But nothing official from the company might be more a case of we’ve looked into it with new members of the board and decided to stick with our dividends. But that might explain the recent pull. Back from High 80s. But beyond this I’m no wiser.


Page 4…. Target is primarily focused on income returns, and we would expect that maintaining a high distribution to shareholders is important to the board. It is nonetheless the case that there are some investors with a preference for fully covered dividends and we can also see some advantages that would arise from a rebasing of the dividend. An uncovered dividend requires capital resources to be diverted away from long-term growth and in the near term requires additional borrowing, which is unattractive at high borrowing rates. Moreover, whatever the level of dividends paid, there is no impact on total accounting returns. A 20% rebasing of the dividend would be sufficient to restore underlying (excluding the hedging premium) cover for FY23, create a base for future growth, and at the current share price would represent a yield of more than 6%….