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 19.5 18.9
2016A 16.9 N/A 11.7 5.1 23.3 25.3
2017E 23.4 N/A 16.6 5.0 23.8 31.0
2018E 27.9 N/A 20.1 6.7 17.8 15.5

Last updated on 18/05/2017

Latest research

Portfolio growth

Update | Property | 28/04/2017

Care home specialist

Initiation | Property | 20/03/2017

Investment summary

THRL's corporate update on 26 April showed that portfolio value had increased 8.5% to £274.6m over the quarter to 31 March. 0.5% was due to revaluation of the existing assets and the rest through the acquisition of two care homes. Portfolio net initial yield was 6.75%, with a rent roll of £19.8m, up 8.7% in the quarter, of which 0.5% was through rent reviews. EPRA NAV per share fell very slightly from 101.8p to 101.5p, with the largest single factor being the payment of a 1.57p interim dividend (an annualised yield of 5.5%). Since the quarter end, THRL has continued to grow with the acquisition of a 45th home for £6.1m let to Athena Healthcare on a 35-year lease. THRL has debts of £30m for LTV of 10.9% and an all-in cost of debt of 2.36% to June 2019 (2.25% thereafter). The investment pipeline remains strong with several near-term opportunities and £20m of debt capital available for investment. A third 1.57p interim dividend will be paid on 26 May.

Last updated on 01/06/2017

Industry outlook

The UK population over the age of 85 is expected to increase by 140% from 2014 to 2039. 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 01/06/2017

Key management

Gordon Bland, FD

Company address

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