Target Healthcare REIT PLC on Wednesday reported a positive net asset value return for its financial first quarter, and said underlying trading ‘continues to improve’.

The real estate investment trust, which specialises in UK care homes, said its EPRA net tangible assets increased by 1.1% to 105.6 pence per share on September 30 from 104.5p on June 30. It said this mainly reflected a like-for-like valuation uplift due to inflation-linked rate reviews.

Shares in Target Healthcare were up 2.2% at 73.67p in London on Wednesday morning.

Target Healthcare also declared a first interim dividend of 1.428p per share, up 2.0% from 1.400p for the fourth quarter of financial 2023 and reflecting an annualised payout for financial 2024 of 5.712p per share.

The FTSE-250 listing said it delivered a positive 2.5% NAV total return for the first quarter of the year ending on June 30 2024, improved from positive 2.1% a year prior.

The value of Target Healthcare’s portfolio increased 2.5% to £890.3 million at September 30 from £868.7 million at June 30. Rent collection exceeded 99% ‘as overall tenant profitability continues to benefit from improved trading performance,’ and contractual rental income increased by 1.0% over the three months.

‘Underlying trading across the portfolio continues to improve, with home profitability as measured by rent cover ahead of pre-pandemic levels,’ said Chief Executive Officer Kenneth MacKenzie, adding: ‘We are also seeing our investment thesis being validated in the wider care home market, where transactions continue to be focused on portfolios of modern, high-quality homes.

‘It is encouraging to see our tenants enjoy better trading following the challenging pandemic.’

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