CSH.L Regulatory News (CSH)

9 November 2022

CIVITAS SOCIAL HOUSING PLC

("Civitas" or the "Company")

Trading & NAV Update

Increased NAV & Strong Portfolio Performance

Civitas Social Housing PLC ("Civitas" or the "Company"), the UK's leading care-based and healthcare REIT, is pleased to announce its quarterly net asset value ("NAV") update as at 30 September 2022, with a 2.63% increase in unaudited IFRS NAV per share and a dividend declared in line with the previously upgraded full year target.

Highlights:

· Consistently robust financial and operational performance, in line with the Board's expectations

· Unaudited IFRS NAV per share increased by 2.63% to 114.84p (30 June 2022: 111.89p)

· Second quarterly dividend of 1.425p declared in line with full year target of at least 5.70p1 (2022: 5.55p)

· Rent roll increases with inflation and leases continue to be billed in line with relevant CPI indexation

· Positive progress made to hedge balance of loan book

· Sustained high demand for the specially adapted community-based homes that Civitas provides for vulnerable adults.

Trading and Market Update

The Company is pleased to announce an increased unaudited NAV per share of 114.84 pence, an uplift of 2.63% over the quarter, and a second quarterly dividend of 1.425 pence per share as targeted, consistent with the Board's previously announced increased target of a total dividend of at least 5.70 pence1 per share for the year ended 31 March 2023. The NAV increase reflects the growth in rental income as a result of inflation indexation.

Rental income continues to benefit from positive inflation linkage. Leases that have indexed in the quarter have been billed fully in accordance with their contractual terms including all CPI related uplifts. Further details will be set out at the time of publication of the Company's half year results to 30 September 2022.

Positive progress has been made to hedge the Company's loan book against interest rate increases and a further announcement will be made at the time of the Company's interim results scheduled for early December.

The Company has also been making further progress on a regulatory clause in partnership with its Approved Providers with the objective of helping them to achieve regulatory compliance. The clause has now been incorporated into specimen leases and the Company is working to promote its engagement. 

Demand for care-based community housing remains high and is projected to increase further still by independent bodies. The Company is at the forefront of ensuring the sector maintains focus on quality, value for money and robust governance. 

1 This is a target and not a formal dividend forecast or a profit forecast

Net Asset Values ("NAV"):

IFRS NAV

The unaudited IFRS NAV, disclosed below, reflects an independent RICS "Red Book" valuation prepared on an individual asset basis by Jones Lang LaSalle ("JLL").

The portfolio, based on individual asset valuations, has been valued overall as at 30 September 2022, at an average Net Initial Yield of 5.27% (30 June 2022: 5.25%), after taking into account the initial costs of property acquisitions incurred by the Company and the assumed costs of a subsequent theoretical sale. The individual valuations are determined by JLL and are based on a range of underlying metrics including applicable discount rates and expected long-term inflation.

The IFRS NAV reflects the contribution from the indexation of leases in the period, less the cost of discretionary capital expenditure that has been incurred to enhance further the quality of the Company's properties to reflect the individual needs of tenants for the long-term. 

Addressing the Discount to NAV

The Board is very mindful of shareholder concerns about the share price discount to NAV; with significant discounts now prevalent across the broader REIT and real estate sector. During the quarter to 30 September 2022, the Company continued its share repurchase programme by purchasing an additional 4,350,000 shares into Treasury at an average price of 72.65p. Collectively, the share repurchases during the quarter have enhanced IFRS NAV per share by 0.28p.

The Board continues to work proactively with its advisers to explore options for reducing the discount and enhancing shareholder value.

Dividend Declaration

The Board has today declared a second quarterly dividend for the period from 1 July 2022 to 30 September 2022 of 1.425p per Ordinary Share as part of the previously stated dividend target of at least 5.70p per Ordinary Share for the year ended 31 March 2023.

The dividend will be paid on or around 9 December 2022, to holders on the register as at 18 November 2022 (the "record date"), with the corresponding ex-dividend date being 17 November 2022. The dividend will be paid as a REIT property income distribution. The Company operates a Dividend Reinvestment Plan ("DRIP"), which is managed by its registrar, Link Group. For shareholders who wish to receive their dividend in the form of shares, the deadline to elect for the DRIP is 18 November 2022.

Quarterly Factsheet

The Company has today published its Factsheet for the quarter to 30 September 2022 and this is available to view on the Company's website.

ENDS

For further information, please contact:

Notes:

Civitas Social Housing PLC (CSH) was created in 2016 by Civitas Investment Management Limited as the first dedicated London listed REIT to raise long-term, sustainable, institutional capital to invest in care-based social homes and healthcare facilities across the UK. CSH's portfolio has been independently valued at £968.8million (31 March 2022). CSH now provides homes for 4,594 working age adults with long-term care needs, in 697 bespoke properties that are supported by 130 specialist care providers, 18 approved providers and working with over 178 individual local authority partners.