TIDMIHR
RNS Number : 1410M
Impact Healthcare REIT PLC
10 January 2023
The information contained in this announcement is restricted and
is not for publication, release or distribution in the United
States of America, any member state of the European Economic Area
(other than the Republic of Ireland or the Netherlands and then
only to professional investors in such jurisdictions), Canada,
Australia, Japan or the Republic of South Africa.
10 January 2023
Impact Healthcare REIT plc
("Impact" or the "Company" or, together with its subsidiaries,
the "Group")
INVESTMENT IN A PORTFOLIO OF SIX CARE HOMES IN SHROPSHIRE AND
CHESHIRE FOR GBP56 MILLION
The Board of Directors of Impact Healthcare REIT plc (ticker:
IHR), the real estate investment trust which gives investors
exposure to a diversified portfolio of UK healthcare real estate
assets, in particular care homes, is pleased to announce that the
Group has invested in a portfolio of six care homes which were
owned and operated by Morris Care Limited. The purchase price is
GBP56 million, which will partly be paid in cash and partly with an
issue of new shares in the Company ("Shares"), as further detailed
below.
Morris Care enjoys a strong local reputation for delivering high
acuity care and has established good working relationships with the
local NHS Clinical Commissioning Groups. The vendors have granted a
licence for the homes to continue to trade under the Morris Care
brand for three years and the operational management team of Morris
Care will transfer to Welford Healthcare ("Welford"), which will
operate the homes. Welford is an existing Group tenant and the
investment will take the Group's relationship with Welford to 18
care homes across England with 1,087 beds.
The portfolio has 438 high quality beds, of which 400 have en
suite bathrooms, with five homes in Shropshire and one in Cheshire.
The homes each have an established track record of delivering
strong operational performance. Four of the homes have EPC ratings
of B, and two are rated C, with outline strategies in place for
achieving an EPC rating of B.
Home Number of
beds
Isle Court Nursing Home 80
----------
Radbrook Nursing Home 63
----------
Oldbury Grange Nursing Home 69
----------
Morris Care Centre 96
----------
Corbrook Park Nursing Home 80
----------
Stretton Hall 50
----------
80% of the GBP56 million consideration is payable in cash
(GBP44.8 million), with the balance paid in Shares. The Company has
issued to the vendors 9,603,841 Shares priced at 116.62 pence per
share, which is the Company's last reported NAV as at 30 September
2022. The Shares have been issued conditional on Admission which is
expected to occur on or around 13 January 2023. The vendors have
agreed to customary lock-up provisions for a period of six months.
100% of the debt drawn down to fund the cash element has been
hedged through a new GBP50 million interest rate cap at a cost of
GBP1.5 million, which caps SONIA at 3.0% for two years. The Group
has now hedged the interest rates on 80% (GBP150 million) of its
current drawn debt of GBP187 million with a gross LTV after this
transaction of 27.6% (1) . The Group has a further GBP54 million of
undrawn debt facilities.
The funding of the investment has been made initially by way of
a loan by the Group to Welford. The structure creates several
benefits for all stakeholders, including enabling Welford to take
immediate operational control of the six homes, thereby avoiding a
potentially lengthy transition period while regulatory approvals
are sought to register the operation of the homes in new legal
entities.
Once CQC regulatory approvals are received, Impact then has the
option to acquire the entire issued share capital of the company
which owns the properties from Welford, which also has the option
to sell the entire issued share capital of the company to Impact in
order to repay the loan. Impact will receive interest payments
equal to 8.4% per annum for the duration of the loan. When either
option is exercised, new 35-year leases on Impact's standard terms,
which have been pre-agreed with Welford, will come into effect.
Initial rent under the new leases is set at GBP3.9 million,
reflecting a gross initial yield of 7.0%.
The loan structure used to make this investment contains
additional protections for Impact's shareholders, including
security over the above property assets and a number of operational
covenants from Welford.
Immediately following Admission, the Company will have
414,368,169 Ordinary Shares in issue and therefore the total voting
rights in the Company will be 414,368,169. This figure may be used
by Shareholders as the denominator for the calculations by which
they may determine whether or not they are required to notify their
interest in, or a change to their interest in, the share capital of
the Company under the FCA's Disclosure Guidance and Transparency
Rules.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Impact Health Partners Via H/Advisors
LLP Maitland
Mahesh Patel
----------------------------------------- ---------------
Andrew Cowley
----------------------------------------- ---------------
D avid Yaldron
----------------------------------------- ---------------
Jefferies International +44 20 7029
Limited 8000
---------------
Tom Yeadon tyeadon@jefferies.com
----------------------------------------- ---------------
Ollie Nott onott@jefferies.com
----------------------------------------- ---------------
Winterflood Securities +44 20 3100
Limited 0000
---------------
Neil Langford neil.langford@winterflood.com
----------------------------------------- ---------------
Joe Winkley joe.winkley@winterflood.com
----------------------------------------- ---------------
H/Advisors Maitland +44 7747 113
(Communications advisor) 930
---------------
James Benjamin impacthealth-maitland@h-advisors.global
----------------------------------------- ---------------
Alistair de Kare-Silver
---------------
The Company's LEI is 213800AX3FHPMJL4IJ53.
Further information on Impact Healthcare REIT is available at
www.impactreit.uk .
NOTES:
Impact Healthcare REIT plc acquires, renovates, extends and
redevelops high quality healthcare real estate assets in the UK and
lets these assets on long-term full repairing and insuring leases
to high-quality established healthcare operators which offer good
quality care, under leases which provide the Company with
attractive levels of rent cover .
The Company aims to provide shareholders with an attractive
sustainable return, principally in the form of quarterly income
distributions and with the potential for capital and income growth,
through exposure to a diversified and resilient portfolio of UK
healthcare real estate assets, in particular care homes for the
elderly.
The Company has a progressive dividend policy with a target to
grow its annual aggregate dividend in line with the
inflation-linked rental uplifts received by the Group under the
terms of the rent review provisions contained in the Group's leases
in the prior financial year.
On this basis, t he Company is targeting a dividend for the year
to 31 December 2022 to increase by 2.0% to 6.54 pence per share (2)
.
The Group's Ordinary Shares were admitted to trading on the main
market of the London Stock Exchange, premium segment, on 8 February
2019. The Company is a constituent of the FTSE EPRA/NAREIT
index.
Neither the content of the Company's website, nor the content on
any website accessible from hyperlinks on its website for any other
website, is incorporated into, or forms part of, this announcement
nor, unless previously published by means of a recognised
information service, should any such content be relied upon in
reaching a decision as to whether or not to acquire, continue to
hold, or dispose of, securities in the Company.
(1) Current debt drawn divided by Gross Assets as at 30
September 2022 plus acquisitions at cost completed since 30
September 2022.
(2) This is a target only and not a profit forecast. There can
be no assurance that the target will be met and it should not be
taken as an indicator of the Company's expected or actual
results.
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