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Currency in GBP
Last close As at 23/03/2023
GBP0.68
▲ −2.10 (−3.00%)
Market capitalisation
GBP434m
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. A growing elderly population and the need to improve the existing estate point to continuing demand 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 that 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.
Director, Financials
Gordon Bland
FD
Kenneth MacKenzie
CEO
Forecast net debt (£m)
233.9
Forecast gearing ratio (%)
37
| % | 1M | 3M | 12M |
|---|---|---|---|
| Actual | (13.7) | (13.6) | (38.4) |
| Relative | (9.6) | (14.5) | (37.7) |
| 52 week high/low | 119.2p/67.8p |
For Q223, Target declared a second quarterly DPS of 1.69p, supported by inflation-linked rental growth and improving rent collection. Income is protected by fixed costs on 96% of borrowings. Yield widening across the broad property sector affected the portfolio’s property valuations (-5% like for like vs c 13% for the broad market), while the impact on NAV was softened by moderate gearing (25.1% at the period end). Q223 NAV per share decreased to 103.0p (Q123:112.1p) and the accounting total return was a negative 6.6%, resulting in a negative total return of 5.3% in H123.
| Y/E Jun | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (p) | P/E (x) | P/CF (x) |
|---|---|---|---|---|---|---|
| 2021A | 50.0 | N/A | 26.0 | 5.46 | 12.4 | 12.9 |
| 2022A | 63.9 | N/A | 30.2 | 5.05 | 13.4 | 13.4 |
| 2023E | 68.1 | N/A | 36.3 | 5.85 | 11.6 | 14.7 |
| 2024E | 73.1 | N/A | 37.7 | 6.08 | 11.2 | 11.0 |
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