Target Healthcare REIT PLC · LSE:THRL
Target Healthcare REIT — H1 FY2025 Earnings Presentation
29 slides from Target Healthcare REIT's earnings presentation, Mar 14, 2025
Slide 1: Investing in care. Delivering returns.
Investing in care. Delivering returns. Results for the six months ended 31 December 2024 Webinar and Presentation | 14 March 2025 | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 Roden Hall, Telford
Slide 2: Presentation Team Agenda
Presentation Team Agenda Section Page 1 Introduction 1 2 Target Healthcare REIT 2 3 Financial Performance – Six months 6 to December 2024 4 Portfolio performance 14 5 Care property 19 James Kenneth Gordon MacKenzie 6 Care sector 22 MacKenzie Bland Head of Investor Chief Executive Finance Director 7
Slide 3: Target Healthcare REIT
Target Healthcare REIT Portfolio of scale with robust rental income stream 94 6,397 £925m 6.20% £61m Portfolio EPRA 34 Care Beds1 Contracted rent Tenants value Topped-Up Homes NIY | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 1 A further 60 beds and £0.6m rent
Slide 4: Target Healthcare REIT
Target Healthcare REIT Differentiated by quality, modernity & ESG-compliance 99% 100% 99% A & B EPC ratings 26.1 years En suite Inflation-linked WAULT wet-rooms rental uplifts1 | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 1 2.5% fixed annual uplift 3
Slide 5: Enhancing the portfolio
Enhancing the portfolio Last five years 2024 2019 Change Number of homes 94 62 +32 En suite wet-rooms 99% 96% +3ppts Building age - 2010 to present 84% 80% +4ppts EPCs A-B 100% 80% +20ppts Sqm per resident 48 47 +2% Mature homes 91% 75% +16ppts Rent cover 1.9x 1.5x +27% | Investor ResultsPresentatio
Slide 6: Long term outperformance
Long term outperformance MSCI UK Annual Healthcare Property Index A top performer in Healthcare Property Index 2024 #2/12 MSCI UK 10- year +5.4% #4/37 MSCI UK +5.5% Annual1 | 1 The index is published annually and covers the calendar years. Investor ResultsPresentation: August ended for the six month
Slide 7: Financial Performance
Financial Performance | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 6
Slide 8: Financial highlights: Six months to December 2024
Financial highlights: Six months to December 2024 6 mths to Dec 6 mths to Dec 2024 2023 Change Net rental income (£m) 29.8 28.6 +4% • NRI +4% from rent reviews and EPRA cost ratio (%) 16.1% 16.0% +10 bps developments, despite effect June 2024 Weighted average cost of debt (%) 3.9% 4.0% -10 bps dispo
Slide 9: Earnings summary
Earnings summary 6 mths to 6 mths to Change £ million Dec 2024 Dec 2023 (%) Rental income (excluding guaranteed uplifts) (£m) 29.8 28.6 4% - Management Fee (3.9) (3.7) 6% - Operating expenses (1.6) (1.5) 7% - Credit loss allowance / Bad debt (0.2) (0.3) -41% Total expenditure (5.7) (5.5) 4% Net fina
Slide 10: Growth in rent roll achieved
Growth in rent roll achieved Movement in Contracted Rent (£ millions) +3.0% | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 9
Slide 11: Balance sheet
Balance sheet Change Dec 2024 Jun 2024 (%) Portfolio market value (per independent valuers)* 924.7 908.5 2% Cash 37.9 38.9 - Working capital * (15.7) (17.9) - Debt (248.0) (243.0) 2% EPRA Net Tangible Assets (NTA) 698.9 686.5 2% EPRA NTA per share (pence) 112.7 110.7 2% 22.7% £72m 4.7 years Weighted
Slide 12: NTA bridge
NTA bridge EPRA NTA per share (pence) +1.8% | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 11
Slide 13: Debt summary
Debt summary Net debt: EBITDA Debt Provider Facility Size Drawn at Hedging Maturity Cost1 31 Dec 2024 £150m fixed Jan-32: £87m £150m £150m 3.32% rate Jan-37: £63m £30m hedged, £70m £48m Nov-25 4.41% £18m floating £100m £50m £50m hedged Nov-25 5.40% Total £320m £248m £230m 3.95% Interest costs well-h
Slide 14: Lower LTV levels deliver higher earnings
Lower LTV levels deliver higher earnings Earnings Yield v LTV. Source: Stifel research as at 28 February 2025 | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 13
Slide 15: Portfolio performance
Portfolio performance | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 14
Slide 16: Resident occupancy
Resident occupancy Mature* portfolio and full portfolio spot occupancies 85.9% Mature occupancy Dec 2024 | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 *Mature homes being those which have traded for greater than 3 years 15
Slide 17: Rent Cover
Rent Cover Mature portfolio quarterly rent cover – last twelve months rolling | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 16
Slide 18: Portfolio insights – Operator
Portfolio insights – Operator Six months Year to Year to Year to Year to Year to to Dec 2024 June 2024 June 2023 June 2022 June 2021 June 2020 Average weekly fee Increase (last 12 months) +5% +10% +11% +7% +4% +8% Inflation Rate (RPI) 3% 3% 11% 12% 4% 1% Private pay % 1 78% 74% 73% 67% 62% 66% Staff
Slide 19: Portfolio insights - Group
Portfolio insights - Group Six months Year to Year to Year to Year to Year to to Dec 2024 June 2024 June 2023 June 2022 June 2021 June 2020 Modernity (% of portfolio purpose 84% 84% 80% 79% 84% 83% build 2010 onwards) WAULT (years) 26.1 26.4 26.5 27.2 28.8 29.0 Group Mature homes % 91% 90% 90% 84% 7
Slide 20: Care property
Care property | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 19
Slide 21: Supply and quality
Supply and quality Age of home En suite wet-room Listed Peers Average is comprised of publicly available information available or disclosed by Care | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 REIT and Aedifica (in relation to their UK portfolio). 20
Slide 22: Quality vs. Listed Peers: Financial metrics
Quality vs. Listed Peers: Financial metrics EPRA topped-up NIY Av. Value per m2 Av. Rent per m2 Listed Peers Average is comprised of publicly available information available or disclosed by | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 Care REIT and Aedifica (
Slide 23: Care sector
Care sector | Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 22
Slide 24: Strong tailwinds – Demographics
Strong tailwinds – Demographics 12.9% Of over 85s require Fundamental demand dynamics long-term residential care1 2050 c.2x over 85s 85+ Today demographic expected to double to 3.4 million in the next 25 years1 £6tn 65 yrs+ net housing wealth The sector’s supply and demand fundamentals in homes in t
Slide 25: Strong tailwinds - Trend to quality
Strong tailwinds - Trend to quality Market shift towards en suite wet-rooms UK care home market en suite wet-room provision1 2014 2024 No en suite wet-room En suite wet-room Clear market shift to ESG-compliant care homes however today 66% of UK care home beds are not fit-for-purpose | Investor Resul
Slide 26: Private Pay
Private Pay Private pay Whole portfolio Private pay percentage • Residents of care homes can either pay their own fees (private pay) or, if they meet the means-testing, have them paid by Local Authorities • Target’s operators have a focus on private pay, which is supported by £6trn of assets held by
Slide 27: Manager's CEO Reflections
Manager’s CEO Reflections • Demographics Structurally-supported sector • Net wealth • Flight to quality and ESG Best-in-class assets • Future-proofed • No remedial capex concerns • Inflation-linked and contractual Income growth • Supported by revenue growth and service demand at our homes • Demonstr
Slide 28: Q&A
| Investor ResultsPresentation: August ended for the six months 2021 31 December 2024 27
Slide 29: Important Information
Important Information For the purpose of this disclaimer, the “Presentation” shall mean and include these slides, all comments made by the presenter(s) of the slides and any question and answer session or discussion related to it. The Presentation has been prepared solely for information purposes an
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