Impact Healthcare REIT

LSE: IHR

Market Cap£417m

Last Close 103p

Impact Healthcare REIT invests in a diversified portfolio of UK healthcare assets, particularly residential and nursing care homes, let on long leases to high-quality operators. It aims to provide shareholders with attractive and sustainable returns, primarily in the form of dividends, underpinned by structural growth in demand for care.

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Investment summary

Impact Healthcare REIT’s (IHR’s) Q322 NAV total return was 1.8%, taking the nine-month return to 8.0%, comprising a fully covered dividend return of 4.3% and capital return of 3.7%. A DPS of 1.635p is in line with the full year target of 6.54p (+2%). Index-linked rent increases drove a 0.8% like-for-like portfolio uplift and the underlying valuation yield was stable despite increased government bond yields (EPRA topped-up yield of 6.68%). Tenants are managing inflationary pressures through occupancy growth and strong fee uplifts. IHR continues to collect rents in full and expects Q322 rent cover will have increased versus Q222 (1.73x) when tenant data have been fully received. Gearing remains modest with an end-Q322 LTV of 21.4%. Liquidity remained strong, with £131m of the £206m of debt capacity drawn, and significant covenant headroom. Drawn debt was 77% hedged.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2020A 30.8 25.7 23.1 7.3 14.1 15.6
2021A 36.4 30.9 27.4 8.1 12.7 14.8
2022E 41.6 34.9 31.5 8.2 12.6 16.0
2023E 49.2 42.3 32.9 8.1 12.7 11.4
Industry outlook

Care home demand is driven by demographics and care needs and benefits from supportive demand fundamentals including increasing requirements from a rapidly ageing population for high quality care and a need to reduce pressure on high-cost, medical care providers in the NHS.

Last updated on 30/11/2022
Content on Impact Healthcare REIT
Impact Healthcare REIT – Performing well in a challenging environment
Real Estate | research Update | 25 October 2022
Diamond House
Impact Healthcare REIT – Successfully growing with tenants
Real Estate | research Outlook | 9 May 2022
Diamond House
Impact Healthcare REIT – Positive Q421 returns
Real Estate | research Update | 9 February 2022
Diamond House
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Share price graph
Balance sheet
Forecast net cash (£m) 138.5
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (1.7) (10.1) (13.2)
Relative* (8.0) (13.0) (15.5)
52-week high/low 127.0p/92.2p
*% relative to local index
Key management
David Yaldron FD
Andrew Cowley Managing partner, Impact Health Partners
Rupert Barclay Non-executive chairman