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Target Healthcare REIT (LSE: THRL)

Last close As at 02/07/2024

GBP0.78

▲ −0.10 (−0.13%)

Market capitalisation

GBP487m

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, generating a positive demand outlook 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 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.

Latest Insights

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Real Estate | Flash note

Target Healthcare REIT — Enhanced portfolio metrics and interest savings

Real Estate | Update

Target Healthcare REIT — Positive momentum continued in Q3

Real Estate | Update

Target Healthcare REIT — Rent cover at a high and fully covered DPS

Real Estate | Outlook

Target Healthcare REIT — DPS growth from a sustainable base
Elderly care image
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Sector

Real Estate

Equity Analyst

Martyn King

Martyn King

Director, Financials

Key Management

  • Alison Fyfe

    Chairman

  • Gordon Bland

    FD

  • Kenneth MacKenzie

    CEO

Balance Sheet

Forecast net debt (£m)

254

Forecast gearing ratio (%)

37

Share Price Performance

Price Performance
% 1M 3M 12M
Actual (2.9) (6.9) 8.0
Relative (1.4) (9.3) (0.6)
52 week high/low 88.0p/66.5p

Financials

Target Healthcare’s (THRL’s) Q324 update shows a fifth successive quarter of positive NAV total return, with indexed rent reviews driving increased earnings and property values. Tenant profitability remains strong, with rent cover stable at 1.9x, the highest level since IPO in 2013. Rent collection is robust at more than 98%. Dividend cover was 1.1x in Q3 and is 1.08x year to date. Q324 NAV per share increased 2.2% to 109.0p and NAV total return was 3.6% (8.3% ytd). Reflecting strong investor demand for high-quality assets, the tight yield spread over funding costs is frustrating THRL’s ambitions to grow its portfolio, but a strong, liquid balance sheet positions it well for a change in market conditions.

Y/E Jun Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2022A 63.9 N/A 30.2 5.0 15.7 15.7
2023A 67.7 N/A 37.2 6.0 13.1 16.2
2024E 69.1 N/A 37.8 6.1 12.9 12.8
2025E 73.3 N/A 38.7 6.2 12.6 12.2
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Update

Real Estate

Target Healthcare REIT — Capital deployment and positive returns

Update

Real Estate

Target Healthcare REIT — Consistent returns and continuing growth

Outlook

Real Estate

Target Healthcare REIT — Consistent positive returns with social impact

Update

Real Estate

Target Healthcare REIT — Vaccine roll-out adds further confidence

Update

Real Estate

Target Healthcare REIT — Continuing DPS and positive total returns
Elderly care image

Outlook

Real Estate

Target Healthcare REIT — Driven by demographics

Update

Real Estate

Target Healthcare REIT — Continuing positive returns in Q4

Update

Real Estate

Target Healthcare REIT — Rental growth and development progress

Update

Real Estate

Target Healthcare REIT — Interims confirm portfolio growth and performance

Update

Real Estate

Target Healthcare REIT — Growing portfolio performing well
Elderly care image

Update

Real Estate

Target Healthcare REIT — Portfolio performing well and growing

Update

Real Estate

Target Healthcare REIT — Income growth and growing NAV

Update

Real Estate

Target Healthcare REIT — Careful investment paying dividends

Update

Real Estate

Target Healthcare REIT — Nearing full investment

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Real Estate

Executive interview – Target Healthcare REIT

Update

Real Estate

Target Healthcare REIT — Portfolio growth
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Initiation

Real Estate

Target Healthcare REIT — Care home specialist