Civitas Social Housing PLC (LON:CSH), a leading supported living and social housing REIT, today presented its full year results for the year ended 31 March 2019.
The full Annual Report and Financial Statements can be accessed via the Company’s website at www.civitassocialhousing.com or by contacting the Company Secretary by telephone on 01392 477500.
Performance Highlights
| Property Valuation and Performance | March 2019 | March 2018 | Change |
| Investment property (£m) | 826.9 | 516.6 | Up 60% |
| IFRS NAV per share (diluted) (p) | 107.08 | 105.54 | Up 1.5% |
| Financial Performance | March 2019 | March 2018 | Change |
| Rent roll annualised (£m) | 45.7 | 28.4 | Up 61% |
| Net rental income (£m) | 35.7 | 18.6 | Up 92% |
| EPRA earning per share (p) | 3.81 | 1.8 | Up 112% |
| EPRA earning per share (diluted) (p) | 3.63 | 1.44 | Up 152% |
| Dividend per share (p) | 5.0 | 3.0 | Up 67% |
| Financing | March 2019 | March 2018 | Change |
| Loan to value ratio | 22% | 12% | – |
| Weighted average cost of debt | 2.57% | 2.60% | – |
· Increased investment property portfolio
· Portfolio value up 60% to £826.9 million (IFRS)
· Valuation net initial yield of 5.27% compared to an average net initial yield on purchase of 5.67% (5.90% before costs)
· IFRS NAV per share (diluted) up 1.5% to 107.08 pence
· WAULT of 24.4 years
· All equity proceeds and £208m of borrowings successfully deployed
· Diversified portfolio of 591 properties providing homes to over 4,000 people
· 177 properties acquired during the year
· Providing accommodation to tenants with learning disabilities, autism, mental health disorders and also for women’s refuge with an average age of 32 years
· Properties located across half the Local Authorities in England and Wales and leased to 15 Housing Associations, with support provided by 133 Care Providers
· Rent roll and earnings up significantly
· Annualised rent roll up 61% to £45.7 million
· EPRA earnings (diluted) up 157% to £22.6 million
· EPRA earnings per share (diluted) up 152% to 3.63 pence
· Growth combined with attractive shareholder returns
· Final dividend proposed of 1.325p per Ordinary Share – an increase of 6% over the equivalent quarter and ahead of the inflationary increase originally envisaged
· Total declared dividends of 5.075 pence per Ordinary Share
· Target dividend of 5.3 pence for the financial year ended 31 March 2020
· The total NAV return from IPO to 31 March 2019 is 7.23% p.a. (on an IFRS basis)
· Conservative funding structure and significant interest cover
· LTV of 22% of gross assets
· In discussions regarding new debt funding
· Making a positive social contribution
· Civitas’ portfolio has produced £114 million of social value – including £59 million each year of direct savings to the taxpayer
· Cost advantage enjoyed by Local Authorities and the improved well-being of tenants and their families, compared to institutional care
· Working with third party consultants to provide independent verification
· Investment Adviser team strengthened with senior industry experts
· Including two former specialist care industry CEOs
Evolving the Business Model and Sector
· Growing demand from tenants, backed by local and central government
· In August 2018 the Government affirmed clear long-term support to retain the existing system of funding for supported housing from Housing Benefit, part of the Welfare Budget
· Over 20 years of unbroken commitment across various political administrations
· Decisive move away from institutionalisation and towards community living, which is vastly preferred by tenants and their families
· Support from local authority commissioners for each Civitas property acquired
· Leading various initiatives designed to help the sector mature and professionalise
· Supporting Housing Association Boards in appointing experienced, skilled individuals
· Private seminars for Housing Association partners to help enhance best practice and professional standards
· Greater interaction with care providers
· Regular, positive and productive discussions with the Regulator of Social Housing (RSH)
· RSH recognises that this is an evolving sector
· RSH is supportive of our initiatives to help the sector grow and mature
· Lease adaptations proposed for Housing Associations
· That both preserve value and introduce mitigation via “force majeure” clauses and cap and collar arrangements
· Lease length and other general lease terms remain constant
Michael Wrobel, Chairman, said:
“The Company has made considerable progress through the year. We have deployed all the equity proceeds and £204.8 million of borrowings. At the end of the year, the Company’s property portfolio was valued at £820.1 million. This is generating annualised rental income of £45.7 million together with measurable positive social impact.
“The UK has a chronic shortage of supported housing, with demand expected to increase further due to a range of factors including medical advances at birth and a growing and ageing population. The Government sponsored Personal Social Services Research Unit projects a 55% growth in supported housing needs for working age adults with learning disabilities between 2015 and 2030.”
“This demand-supply imbalance along with continued government commitment to fund supported accommodation provides strong fundamentals for continued investment into the supported housing sector.”
“The Company will continue to build on the successful and disciplined deployment to date and to seek opportunities to further enhance the portfolio within our capital resources. The Investment Adviser has a pipeline of properties under negotiation and in various stages of due diligence. Our confidence is reflected in our intention to target a dividend of 5.3p for the current financial year to March 2020.”
