Trading Update

RNS Number : 4695J

Triple Point Social Housing REIT

14 April 2020

 

14 April 2020

Triple Point Social Housing REIT plc

(the "Company" or, together with its subsidiaries, the "Group")

TRADING UPDATE

· The Group provides homes for vulnerable individuals of working age with care needs who have their rent funded through housing benefit

· The UK government has, rightly, put supporting vulnerable people at the top of the political and financial agenda as they tackle COVID-19

· 98% of Q1 FY20 rent had been received as at 31 March 2020 (with the remainder expected over the next few days) - in line with Q1 FY19 receipts, and the Company's general expectations

·     100% of the Group's leases are linked to annual inflation, and all of the Group's 171 leases that were due to increase in April, have increased the rents in line with CPI (using February 2020 CPI Growth - being 1.7 per cent)

· The Group's financing position remains conservative and stable, with c.31% LTV of low cost debt

Overview

The Group's investment strategy seeks to offer shareholders regular dividend income and generate an attractive risk adjusted total return. The properties owned by the Group provide vulnerable individuals of working age with care needs, with homes (typically for the long term) in their community allowing them to live independently whilst receiving the care and support they need. These individuals benefit from central government's support through the recepit of housing benefit.

The Board and the Company's Investment Manager, Triple Point Investment Manager LLP (the " Manager "), believe that such investments are well positioned to withstand the current disruption created by Covid-19 because of their essential and long-term nature.  The Board is reassured that the government has put supporting vulnerable people at the top of the political and financial agenda as they tackle the current disruption and impact on the nation's health.

This central response has been reflected at a community level and we have seen unprecedented collaboration between registered providers, care providers and local authorities as they ensure that the individuals living in the properties owned by the Group continue to receive care and support with the minimum of disruption. This has required huge levels of personal commitment from care workers and housing managers for which the Board is extremely grateful.

Rental Collection

The Group's rental collection has been normal and continues to remain robust. As at 31 March 2020 98% of the Q1 FY20 rent had been received, in-line with the Q1 FY19 collection, with the balance expected over the next few days, in line with expectations and previous years.

Inflation-linked Rental Income Increases

100% of the Group's leases have rents that are linked to annual increases in inflation (98% linked to CPI) and 54% of the Group's leases have their annual increases applied in April to mirror increases in housing benefit.  As is usual, all of the  Group's 171 leases that were due to have rent increases in April have had their rents increased in line with CPI (using February 2020 CPI growth - being 1.7 per cent).

Financing

As at 31 March 2020 the Group had undrawn loan facilities and cash on deposit totalling £43.8m after deducting capital commitments.  The Group's net debt was £130.7m and on a pro-forma basis the Loan to Value ("LTV") ratio was 31.1%.

		31-Mar-20	31-Dec-19
	Average cost of debt (%)	2.80%	2.77%
	Loan to value (%)*	31.1%	31.1%
	Interest cover (times)**	4.88	5.16
	Weighted average debt to maturity (years)	5.32	5.57
	Total debt drawn down (£m)	169.09	169.09
	Total undrawn facilities and uncommitted cash (£m)	43.84	64.81
	Unfettered assets (£m)***	42.57	17.68

*31 March 2020 LTV % is calculated using NAV as at 31 December 2019.

**31 March 2020 interest cover is based on current Manager estimates.

***Assets acquired prior to 31 December 2019 are valued as at 31 December 2019. Assets acquired after 31 December 2019 but before 31 March 2020 have been valued at their purchase price. This figure excludes forward funding deals still under construction, which are detailed below.

Developments

Three developments with a combined gross development value ("GDV") of £7.2m have reached practical completion since the start of 2020 and we expect a fourth development with a GDV of £3.4m to achieve practical completion imminently, which will bring the total number of successfully completed forward funding projects undertaken since the Group's IPO to 15.  All of these schemes were completed within budget.

The Group is currently engaged on a further seven schemes which have all been developed in response to direct local authority demand and which all benefit from agreements for lease with registered providers including Inclusion, Chrysalis and Care Housing Association.  Currently the cost of completed and audited works on these projects is £13.3m and the capital committed to the completion of these schemes is £10.7m.

Through both the Manager's internal surveying team and its use of external surveyors progress is monitored on all ongoing schemes and the Manager remains confident that all ongoing schemes will complete successfully, albeit in some instances over an extended timeframe reflective of the fact that it is difficult to have full construction teams on site in the current cirumstances.  Contractually the Group is protected from any cost overruns and so will not bear the cost of any delays.

FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:
 

Triple Point Investment Management LLP (Delegated Investment Manager)	Tel: [phone]
James Cranmer
Ben Beaton
Max Shenkman
Hanway Advisory Limited (Company Secretary)	Tel: [phone]
Luke Cheshire
Akur Capital (Financial Adviser)	Tel: [phone]
Tom Frost
Anthony Richardson
Siobhan Sergeant

The Company's LEI is 213800BERVBS2HFTBC58.

Further information on the Company can be found on its website at www.triplepointreit.com .

NOTES:

The Company invests in primarily newly developed social housing assets in the UK, with a particular focus on supported housing. The assets within the portfolio are subject to inflation-linked, long-term (typically from 20 years to 30 years), Fully Repairing and Insuring ("FRI") leases with Approved Providers (being Housing Associations, Local Authorities or other regulated organisations in receipt of direct payment from local government). The portfolio comprises investments into properties which are already subject to an FRI lease with an Approved Provider, as well as forward funding of pre-let developments but does not include any direct development or speculative development.

There is increasing political pressure and social need to increase housing supply across the UK which is creating opportunities for private sector investors to help deliver this housing. The Group's ability to provide forward funding for new developments not only enables the Company to secure fit for purpose, modern assets for its portfolio but also addresses the chronic undersupply of suitable supported housing properties in the UK at sustainable rents as well as delivering returns to investors.

Triple Point Investment Management LLP (part of the Triple Point Group) is responsible for management of the Group's portfolio (with such functions having been delegated to it by Langham Hall Fund Management LLP, the Company's alternative investment fund manager.

The Company was admitted to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange on 8 August 2017 and was admitted to the premium segment of the Official List of the Financial Conduct Authority and migrated to trading on the premium segment of the Main Market on 27 March 2018.  The Company operates as a UK Real Estate Investment Trust ("REIT") and is a constituent of the FTSE EPRA/NAREIT index.

 

END

 

 

TSTFFFLISLIVLII