29th Sep 2016 07:51
LONDON (Alliance News) - Specialist care home investor Target Healthcare REIT Ltd on Thursday noted "various headwinds" to the UK healthcare sector, but said its EPRA net asset value per share rose over the course of its financial year.
Target Healthcare reported a EPRA net asset value per share of 100.60 pence at the end of its financial year, June 30, up from 97.90p a year prior, and the company delivered a net asset value total return of 9.3%. This was slightly below the 10.3% reported for the year earlier.
Target Healthcare reported good growth over the recent year, with passing rent up by 40% to GBP15.5 million and pointed to the new shareholder capital of GBP115.1 million which has been issued.
The company said significant capital awaiting investment does "temporarily detract" from revenue returns, though said longer-term benefits to shareholders would come from growing the group to outweigh this short-term drag.
"When the group is fully invested, net rental income is expected to fully cover intended dividend levels as a result of careful asset selection process and control of the group's costs," Chairman Malcolm Naish said.
Target Healthcare said it was recommending a full year dividend of 6.18 pence per share, up from 6.12p per share, in line with its progressive dividend policy.
The company said it was operating in an environment of political and economic uncertainty, citing the UK's vote to leave the European Union, though said the fundamentals of population demographics ad supply/demand imbalance makes UK care home stock "compelling".
Target Healthcare noted headwinds facing the UK healthcare sector including the introduction of the living wage, nursing shortages, "mediocre" fee increases from government, and the ongoing challenges of a more engaged regulatory regime.
However, the company said its focus on specialist investment management provided it with some protection against such headwinds.
"The performance of an informed 'bottom-up' investment appraisal process enables long-term investment, providing a stable yield for our shareholders and a platform for our tenants to provide a quality care service to their residents," Target Healthcare said.
Shares in Target Healthcare were untraded on Thursday, having last traded at 111.00 pence.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Target Healthc.