Target Healthcare REIT (THRL)

Business description

Target Healthcare REIT invests in modern, purpose-built residential care homes in the UK let on long leases to high-quality care providers. It selects assets according to local demographics and intends to pay increasing dividends underpinned by structural growth in demand for care.

Y/E Jun Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2015A 13.7 N/A 9.6 6.1 19.0 18.3
2016A 16.9 N/A 11.7 5.1 22.7 24.7
2017E 23.4 N/A 16.6 5.0 23.2 30.1
2018E 27.9 N/A 20.1 6.7 17.3 15.0

Last updated on 23/03/2017

Latest research

Portfolio growth

Update | Property | 28/04/2017

Care home specialist

Initiation | Property | 20/03/2017

Investment summary

Target Healthcare REIT (Target) continues to approach full investment, having completed the acquisitions of four care homes in the quarter to 31 March and one more in April. Portfolio value stood at £274.6m at the quarter-end (31 December: £253.1m). The Q217 dividend was the main cause of a slight decrease in EPRA NAV per share to 101.5p (31 December: 101.8p); we expect full dividend cover to be achieved in FY18 as the company becomes fully invested. The secular trends of an ageing population and a persistent lack of modern care homes create a significant opportunity for further investment to underpin the attractive dividend yield.

Last updated on 28/04/2017

Industry outlook

The UK population over the age of 85 is expected to increase by 140% from 2014 to 2039 and the number of residential care beds has fallen in recent years. There is a lack of high-quality care homes of the sort Target invests in, providing ample opportunity to grow the portfolio.

Last updated on 04/04/2017

Key management

Gordon Bland, FD

Company address

Ordnance House
31 Pier Road
St Helier
Jersey
JE4 8PW
United Kingdom
+44 (0)1786 845 912
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