Comparatives are difficult because the previous year only covered 10 months since flotation, but it is clear that Impact Healthcare REIT (IHR) hit the ground running, delivering an 8.5 per cent return, almost up to its 9 per cent target.
A total of 15 care homes were acquired in 2018, taking the total to 72, with the number of beds increasing by 40 per cent to 3,500. These acquisitions and a valuation uplift meant that the portfolio's value increased by 43 per cent. And while it drew down £26m of £50m debt facilities, the loan-to-value ratio was low at 11.6 per cent.
Rental income and capital values have been pushed higher, in part reflecting a capital improvement programme. This is always tenant-led and involves adding capacity by better utilisation of space. In the case of building a new wing, typically to cater for specialist needs such as dementia, the marginal cost of new beds is relatively low because the land is already owned.
Since the year-end, the group completed the acquisition of the Yew Tree Centre and announced a 12-month placing programme that will allow it to take advantage of a strong pipeline of acquisition opportunities through the issue of up to 200m new shares. Potential acquisitions identified have a total value of over £400m, with 12 already under review and four already in the hands of solicitors.
| IMPACT HEALTHCARE REIT (IHR) | ||||
| ORD PRICE: | 106p | MARKET VALUE: | £203.7m | |
| TOUCH: | 104-106p | 12-MONTH HIGH: | 106p | LOW: 99p |
| DIVIDEND YIELD: | 5.7% | TRADING PROPERTIES: | nil | |
| PREMIUM TO NAV: | 3% | NET DEBT: | 12% | |
| INVESTMENT PROPERTIES: | £220m | |||
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)** |
| 2017* | 101 | 9.46 | 5.8 | 4.5 |
| 2018 | 103 | 16.5 | 8.6 | 6 |
| % change | +3 | +74 | +47 | +33 |
| Ex-div: | - | |||
| Payment: | - | |||
| *10-months to 29 December **Dividends paid quarterly, fourth-quarter dividend of 1.5p a share paid on 22 February | ||||
