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Target Healthcare REIT (LSE: THRL)

Last close As at 15/04/2024

GBP0.79

▲ −0.50 (−0.63%)

Market capitalisation

GBP490m

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.

The care home sector is driven by demographics rather than the economy, generating a positive demand outlook for new, ESG-compliant, purpose-built homes with flexible layouts and high-quality residential facilities. With its unwavering focus on asset and tenant quality, these are the homes in which Target invests. It believes best-in-class assets, in areas with strong demand/supply characteristics, and sustainable rent levels will always be attractive to existing or alternative tenants and are key to providing sustainable, long-duration income with capital growth.

Latest Insights

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Real Estate | Update

Target Healthcare REIT — Rent cover at a high and fully covered DPS

Real Estate | Outlook

Target Healthcare REIT — DPS growth from a sustainable base

Real Estate | Update

Target Healthcare REIT — Fully covered DPS and positive total return

Real Estate | Update

Target Healthcare REIT — Growth from a firm base
Elderly care image
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Sector

Real Estate

Equity Analyst

Martyn King

Martyn King

Director, Financials

Key Management

  • Alison Fyfe

    Chairman

  • Gordon Bland

    FD

  • Kenneth MacKenzie

    CEO

Balance Sheet

Forecast net debt (£m)

250

Forecast gearing ratio (%)

37

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 0.3 (7.9) 2.1
Relative (2.4) (11.9) 0.7
52 week high/low 88.0p/66.5p

Financials

Indexed rent reviews are driving increased earnings and property values. H2 income will also benefit from development completions. Tenant profitability continues to strengthen, reflected in a new high level of rent cover (1.9x) and 99% rent collection. H124 DPS of 2.856p, covered 1.07x by adjusted EPRA earnings. EPRA net tangible assets per share increased 2.0% to 106.7p and including dividends paid the accounting total return was 4.9%. Reflecting strong investor demand for high quality assets, the tight yield spread over funding costs is frustrating THRL’s ambitions to grow its portfolio, but a strong, liquid balance sheet positions it well for a change in market conditions.

Y/E Jun Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2022A 63.9 N/A 30.2 5.0 15.8 15.8
2023A 67.7 N/A 37.2 6.0 13.2 16.3
2024E 69.0 N/A 37.2 6.0 13.2 11.7
2025E 73.8 N/A 39.3 6.3 12.5 11.9

Research

Target Healthcare REIT_resized

Outlook

Real Estate

Target Healthcare REIT — DPS growth from a sustainable base
Elderly care image

Update

Real Estate

Target Healthcare REIT — Fully covered DPS and positive total return
Elderly care image

Real Estate

Update

Target Healthcare REIT — Rent cover at a high and fully covered DPS

Elderly care image
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Thematics

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