Social Housing Reit Plc · LSE:SOHO
Social Housing Reit — Triple Point Social Housing REIT — H1 2023 Earnings Presentation
33 slides from Social Housing Reit's earnings presentation, September 2023
Slide 1: 2023 Interim Results Presentation
2023 Interim Results Presentation September 2023
Slide 2: Agenda
AGENDA Triple Point Social Housing REIT plc - Board Highlights Max Shenkman Financial Overview Isobel Gunn-Brown Operational Overview Chris Phillips Chairman Ian Reeves CBE Senior Independent Director Cecily Davis Non-Executive Director Peter Coward Non-Executive Director Tracey Fletcher-Ray Non-Exe
Slide 3: Key Points
KEY POINTS Valuation resilience All debt long-term and Majority of lessees performing underpinned by rental growth fixed-priced in line with expectations Portfolio sale principally in Long-term partnership Share buy-back to optimise line with book value approach shareholder value 3
Slide 4: Key Performance Indicators
KEY PERFORMANCE INDICATORS 111.31p £675.1m 5.46p 37.5% EPRA NTA Portfolio Value FY23 Dividend Target LTV per Share (Dec-22: £669.1m) (FY22: 5.46p) (Dec-22: 37.4%) (Dec-22: 109.06p) 24.8 years 0.81x 88.1% 5.65% WAULT Dividend Cover - Rent Collection EPRA Net (Dec-22: 25.3 years) adjusted to 0.90x1 (D
Slide 5: Valuation Resilience Underpinned by Growing Demand and Limited Supply
VALUATION RESILIENCE Valuation Resilience Underpinned by Growing Demand and Limited Supply IFRS Value Blended IFRS Valuation NIY 5.69% £800m 5.49% 6.00% 5.25% 5.28% 5.00% Blended IFRS Valuation NIY £600m 4.00% Portfolio Value £400m 3.00% £642.0m £669.6m £669.1m £675.1m 2.00% £200m 1.00% £0m 0.00% 31
Slide 6: Inflation Correlated Income and Advantageous Capital Structure
INFLATION CORRELATED INCOME AND ADVANTAGEOUS CAPITAL STRUCTURE 10.1 years 100% 100% 6.7% Weighted average debt maturity; Fixed price debt; Leases linked to inflation1 Weighted average rent increase in investment grade credit rating 2.74% weighted average 2022; 4.8% in H1 2023 reaffirmed by Fitch fix
Slide 7: Portfolio Sale Demonstrating Value of Properties
PORTFOLIO SALE DEMONSTRATING VALUE OF PROPERTIES Portfolio of 4 properties sold for £7.6 million: Pricing principally in-line £0.7m gain relative to the with latest book value aggregate purchase price Sale Portfolio SOHO Portfolio 4 497 Properties (38 units) (3,455 units) Average Residents per Prope
Slide 8: Financial Overview
FINANCIAL OVERVIEW
Slide 9: Statement of Comprehensive Income
STATEMENT OF COMPREHENSIVE INCOME Six months to Six months to Year ended % change £’000 30 June 2023 30 June 2022 31 December 2022 Jun 23 v Jun 22 7.5% Rental Income 19,576 18,208 37,300 7.5% (3,157) Increase in Rental Income Expected Credit Loss (“ECL”) (474) (2,073) 566.0% Other Income - 110 110 -
Slide 10: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Six months to Six months to Year ended % change £’000 30 June 2023 30 June 2022 31 December 2022 Jun 23 v Dec 22 2.1% Investment property (IFRS valuation) Asset held for sale 665,422 7,871 668,348 640 667,713 - 0.8% EPR NTA Growth per Share Trade and other receivables
Slide 11: EPRA NTA Reflecting Valuation Resilience
EPRA NTA REFLECTING VALUATION RESILIENCE EPRA NTA per Share Bridge 1 Notes: (1) Adjusted earnings is EPRA earnings adjusted for non-cash items such as ongoing amortisation of loan arrangement fees. 11
Slide 12: Total Accounting Return
TOTAL ACCOUNTING RETURN 4.6% 5.46p 42.5% Total Return for H1 2023 FY23 Target Dividend1 Cumulative Total Accounting Return Since IPO Total Accounting Return since IPO 45% 42.5% 145 EPRA NTA plus Cumulative Dividend 40% 140 35% 135 Cumulative Total Return 30% 130 Paid per Share 25% 28.30p 125 22.84p
Slide 13: Strong Credit Position with Investment Grade Credit Rating
STRONG CREDIT POSITION WITH INVESTMENT GRADE CREDIT RATING Interest Cover Significant covenant Headroom headroom maintained in Actual Covenant (rental income movement) both facilities Loan Notes I 4.42x 1.75x 60% Additional liquidity from Loan Notes II 4.07x 1.75x 51% £23.8 million cash and £77.2 mi
Slide 14: Share Buyback Programme Completed
SHARE BUYBACK PROGRAMME COMPLETED £5m initial share buyback programme successfully completed Programme Start Date: 19/04/2023 Programme End Date: 12/06/2023 Low Price (p): 45.84 Positive impact on EPRA High Price (p): 57.75 NTA per share Avg. Purchase Price: 52.61 Total Shares Bought Back To Date: 9
Slide 15: Operational Overview
OPERATIONAL OVERVIEW
Slide 16: Requirement for Private Capital to Meet Social Need
REQUIREMENT FOR PRIVATE CAPITAL TO MEET SOCIAL NEED Demand / supply imbalance is increasing: Long-term view Proactive partnership of ownership with deep sector expertise 35% growth in demand for SSH for learning disabilities by 2030 SOHO’s Differentiated Development headwinds – development Approach
Slide 17: New Partnership with Leading Registered Provider
NEW PARTNERSHIP WITH LEADING REGISTERED PROVIDER SOHO has agreed a partnership with Golden Lane Housing, a PROJECT BROOKE STREET leading RP with G1 V2 rating Location: Chorley Units: 12 Apartments Lessee: Golden Lane Housing Transaction Type: Forward Funding GDV: c.£3.0 million Lease Term: 10 years
Slide 18: Simon's Story
CASE STUDY “ Simon’s Story Oxford Road, Abingdon ‘’My dad and brother are happy. Dad took pictures of the house and garden and Mum saw the pictures, and she’s happy. It’s a really nice house and I really like it." Simon has his own pets “I’ve never had Continental rabbits before. Julia supported me
Slide 19: Diversified Portfolio Geographically and by Lessee
DIVERSIFIED PORTFOLIO GEOGRAPHICALLY AND BY LESSEE Diversified Lessee Base (by rent roll) Inclusion Parasol Homes Falcon Hilldale My Space Chrysalis BeST AHS Blue Square 30.6% Care Housing Association Highstone Sunnyvale IHL Sandwell Wings Care 5.0% Bespoke Care and Support IKE 5.6% Pivotal 9.2% YMC
Slide 20: Active Partnership Approach to Working with RP Lessees
ACTIVE PARTNERSHIP APPROACH TO WORKING WITH RP LESSEES Strengths Challenges CHALLENGES Highly regulated portfolio Inflation Diversified portfolio of RPs throughout the UK Increasing costs of repairs and maintenance Need to respond positively to increased 25 out of 27 with no material rent arrears co
Slide 21: Active Asset Management - Rent Collection
ACTIVE ASSET MANAGEMENT - RENT COLLECTION Historical Portfolio Annual Rent Collection 88.1% of rent due collected during the period 100% 80% 25 out of 27 lessees with 60% no material arrears 100% 100% 100% 100% 100% 91.8% 88.1% 40% 20% Rent collection set to increase in second half of the year 0% 20
Slide 22: Active Asset Management - Rent Collection
ACTIVE ASSET MANAGEMENT - RENT COLLECTION • We hope to agree a creditor agreement shortly – required to address My Space's solvency • Agreement should address future rent payments and arrears • Management team bolstered by two senior hires • Assessing merger options • Alternative Registered Provider
Slide 23: Active Regulation Driving Transparency and Accountability
ACTIVE REGULATION DRIVING TRANSPARENCY AND ACCOUNTABILITY 94.7% of lessees regulated by Regulator of Social Housing Direct engagement Lessees and New Lease Regulator remains highly with the Regulator the Regulator Clause active in the sector Dialogue maintained RP Boards are keen to Designed to addr
Slide 24: Implementation of New Risk Sharing Clause
IMPLEMENTATION OF NEW RISK SHARING CLAUSE Sector Leading Initiative Supported by Key Stakeholders Subject to a pre- determined materiality First institutional landlord to share Clause supported by RP Boards, threshold risk sharing clause with all RPs valuers and lenders; it has been shared with the
Slide 25: Impact Overview
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Slide 26: The Good Economy Impact Report
THE GOOD ECONOMY IMPACT REPORT 26
Slide 27: Launched Eco Retrofit Programme
LAUNCHED ECO RETROFIT PROGRAMME Pilot Scheme All properties need to be EPC of C or above by 2030 Work on first 11 properties to be completed over the next 12 months Findings from the pilot scheme will inform how best to roll-out the project SOHO’s portfolio performs Works will include: well relative
Slide 28: Outlook
OUTLOOK First forward funding project since 2021, through new partnership with Golden Lane Housing Majority of lessees to continue to perform in line with expectations; valuations remaining resilient Active asset management with focus on operational performance and rent collection Incorporating risk
Slide 29: Appendix
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Slide 30: Long-Term and Fixed-Price Debt Portfolio
LONG-TERM AND FIXED-PRICE DEBT PORTFOLIO 11.6 years Loan Lender Facility Cost Weighted average Maturity Commitment Amount Drawn Fitch Rating MetLife Loan Notes I Fixed debt 2028 maturity £41.5m £41.5m A Tranche A 2.924% Loan Notes II Fixed MetLife & Barings 2031 £77.5m £77.5m A Tranche A 2.403% Loan
Slide 31: Key Terms
KEY TERMS UK listed REIT The Company London Stock Exchange Main Market, Premium Segment Management Triple Point Investment Management LLP as Investment Manager • the Group will only invest in social housing assets located in the United Kingdom • the Group will only invest in social housing assets wh
Slide 32: Glossary
GLOSSARY Approved Provider a housing association, local authority or other regulated organisation in receipt of direct payment from local government including a care provider; Board the Directors of the Company from time to time; Company Triple Point Social Housing REIT plc (company number 10814022)
Slide 33: Disclaimer
DISCLAIMER This presentation, including any oral presentation, any question or answer session and any written or persons to whom it may be lawful to communicate it (each such person in (A) to (E) above being a made in relation to, and no responsibility or liability is or will be accepted by Triple P
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