Target Healthcare REIT PLC on Monday said net asset value per share dropped in the first half, as the company swung to a loss on falling property prices.
The London-based real estate investment trust investing in care homes reported NAV per share at December 31 was 103.9 pence, down 7.8% from 112.7p at June 30 last year.
NAV total return was negative 5.4% at December 31, swinging from a positive return of 3.4% a year ago.
The company said revenue for the first six months ended December 31 was £34.0 million, increasing 28% from £26.5 million a year ago. Pretax loss was £34.2 million, swinging from a profit of £18.7 million the year prior.
The company noted that the loss was a result of a fall in property values, with a 4.8% decrease in the portfolio value of the company to £867.7 million, from £911.6 million in June last year.
The company declared a first half dividend of 3.38p per share, unchanged from the year before. The firm has rebased its annual dividend to 5.60p per share, representing a 17% reduction, in order to provide a ‘sustainable dividend level which will be fully covered by earnings whilst allowing for annual growth,’ Target said.
Chair Alison Fyfe said: ‘We remain committed to our primary investment objective, producing long-term stable income and attractive total returns, with positive social impact by investing in fit-for-purpose care homes for older people in society.
‘The recent increases in interest rates have impacted on earnings but our tenants’ underlying trading performance is improving and maturing, with this property sector benefitting from significant tailwinds of demographic change and needs-based demand for care.’
In a separate announcement, Target Healthcare said it has sold four care homes in Northern Ireland, representing 2.5% of its portfolio.
‘The disposal is part of our commitment to pro-actively manage the portfolio and provide an attractive and sustainable level of income, together with the potential for growth, from a diversified portfolio of modern, purpose built care homes,’ Scott Stevens, head of asset management at Target Fund Managers, said.
Target healthcare shares fell 0.4% to 66.92 pence each in London on Monday morning.
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