Civitas Social Housing PLC OPENING OF NEW FACILITY IN WALES, JUNE - PowerPoint PPT Presentation

Civitas Social Housing PLC OPENING OF NEW FACILITY IN WALES, JUNE 2020 CREATING VALUE BY ENHANCING LIVES Civitas Investment Management Ltd 0

Presentation Team and Contents Paul Bridge CEO, SOCIAL HOUSING Paul is a founder of CIM and has over 20 years’ experience working at a senior level in the social housing sector. During his career, Paul has held a variety of non-executive roles in and out of the sector, including Chairman of Thames Valley Charitable Housing Association, Chief Executive of Homes for Haringey, a Registered Provider, where he was responsible for 800 staff and 21,000 homes, and Director at Hyde Group, a major G15 Housing Association. Contents Page Number Overview 2 Highlights 6 Financial Results 9 Operational Review 12 Civitas Portfolio 19 Social Impact, ESG and Sector Awards 22 Pipeline 24 Outlook 25 Appendix 28 Civitas Investment Management Ltd 1

OVERVIEW Rental Recovery, Counterparties and Portfolio Performance Rental Recovery Counterparties Portfolio Performance Rents continue to be received as normal Housing associations and major care Civitas portfolio continues to perform as providers holding Civitas leases or under- expected with no COVID-19 impact and are unaffected by COVID-19 leases continue to perform well Evidence of good operational performance More than Quarter to 31 March 2020 Incidences of COVID-19 continue to be few during COVID-19 99% in number amongst staff and residents Continued receipt of payment from local authorities / NHS as normal Two months to May 2020 96% Housing associations and care providers have adapted and follow guidance from Authorities supportive of appropriate rental RSH and CQC increases - PPE and extra COVID-19 running costs Rental income June 2020 received as Regular dialogue, rolling monitoring and Civitas continues to operate full asset expected operational support from Civitas when management activities within the portfolio needed Civitas Investment Management Ltd 2

OVERVIEW Portfolio Bartley Green, Warwickshire Bournemouth, Dorset Tamworth, West Midlands St Albans, Hertfordshire Higher Acuity Facility, Wales Folkestone, Kent Civitas Investment Management Ltd 3

OVERVIEW Portfolio Bournemouth, Dorset Borehamwood, Hertfordshire Worcester, Worcestershire St Albans, Hertfordshire New facility, Wales St Albans, Hertfordshire Civitas Investment Management Ltd 4

OVERVIEW Portfolio Halstead, Essex Halstead, Essex Horley, Surrey Newark, Nottinghamshire New Facility, Wales Bartley Green, Warwickshire Civitas Investment Management Ltd 5

HIGHLIGHTS Financial Highlights Strong income, earnings and asset growth Income Statement – Year Ended Mar 20 Mar 19 Change Annualised Rent Roll (£m) 48.4 45.7 Up 5.8% Rental Income (£m) 45.9 35.7 Up 28.4% EPRA Earnings 1 (£m) 28.8 22.6 Up 27.5% Operating Cash Flow (£m) 32.9 23.3 Up 41.0% IFRS EPS (diluted) 1 (p) 6.06 4.22 Up 43.7% EPRA EPS (diluted) 1 (p) 4.63 3.63 Up 27.5% Dividends Declared per share (p) 5.30 5.00 Up 6.0% Balance Sheet Mar 20 Mar 19 Change Investment property IFRS (£m) 878.7 826.9 Up 6.3% IFRS NAV per share (diluted) (p) 107.87 107.08 Up 0.7% LTV / Gross Assets (%) 27 22 Up 24.1% 1 Mar 19: EPRA Earnings, IFRS EPS, EPRA EPS figures are after adding back finance costs associated with the C share Civitas Investment Management Ltd 6

HIGHLIGHTS Market and Portfolio Highlights Operational and investment objectives achieved in the period Portfolio Market Focus on alignment of care Created a portfolio of care-based housing for adults of working age Continued drive towards mid to provider and housing association with long-term care needs in England and Wales higher acuity care properties lease terms Civitas is a leading strategic counterparty for many major sector Average acquisition net initial participants and is frequently the party of first or sole choice for IFRS asset by asset independent yield at 31 March 2020 of vendors valuation of 5.9% 5.26% (before initial purchase costs) and Strong demand continues from local authorities, enhanced by (after initial purchase costs) 5.6% (after initial purchase costs) pandemic Low void levels WAULT of Total Expense Supports the demographic growth in those needing care 23.7 years Ratio of paid directly by housing accommodation and closure of older long stay hospitals 1.36% associations across the at 31 March 2020, portfolio as at 31 March compared to 24.4 as at 31 March Clear commitment from government to provide additional funding 2020 with no exposure to years at 31 March 2020 (1.36% 31 and continued support for social care sector Civitas 2019 March 2019) £789 Investment Tenancies 4,216 Properties 613 Local Authorities 164 117 Care Providers Housing Associations 15 31-Mar-19 31-Mar-20 Civitas Investment Management Ltd 7

FINANCIAL RESULTS Rent Roll and Operating Cash Flow 6% Growth in Annualised Net Rent Roll 41% Increase in Operating Cash Flow Acquisitions and rent indexation drive rental growth Driven by strong growth in rental income 60 40.00 35.00 (0.60) (0.23) 50 1.8 0.9 10.39 48.4 32.90 30.00 45.7 40 25.00 £ million 23.34 £ million 30 20.00 15.00 20 10.00 10 5.00 0 0.00 Mar-19 Annual Rent Reviews Acquisitions Mar-20 Mar-19 Net Rental Income Expenses Debtors/Creditors Mar-20 Civitas Investment Management Ltd 8

FINANCIAL RESULTS Growth in EPRA Earnings and EPRA Earnings Per Share 28% Growth in EPRA Earnings 28% Growth in EPRA Earnings Per Share Driven by strong growth in net rental income The diluted EPRA earning per share applied the weighted average number of shares in issue, 622,461,380 shares for March 2019 and 622,103,798 shares for March 2020 5 35 4.5 1.63 4.63 30 4 10.2 28.8 (0.03) 25 3.5 3.63 (0.6) (0.2) 22.6 3 (3.8) 20 £ million Pence 2.5 15 2 1.5 10 1 5 0.5 0 0 0 0 0 Mar-19 Admin Expenses Net Finance Costs Net Rental Income Mar-20 Mar-19 Admin Expenses Net Finance Costs Net Rental Income Mar-20 Mar-19: £22.6m represents the diluted EPRA earnings after adding back finance costs associated with the C-shares Civitas Investment Management Ltd 9

FINANCIAL RESULTS Investment Property Portfolio and IFRS NAV per Share 6% Growth in IFRS Valuation 1% Growth in IFRS NAV Per Share Acquisitions and revaluation gains drive IFRS valuation IFRS NAV per share after deduction of dividend payments 120 6.06 1000 0.03 (5.30) 107.87 107.08 13.3 900 100 878.7 38.5 800 826.9 80 700 £ million 600 60 £ millions 500 40 400 300 20 200 100 0 Mar-19 Total Profit Dividends Paid Consolidation to Ordinary Shares Mar-20 0 Mar-19 Acquisitions Revaluation Gain Mar-20 Civitas Investment Management Ltd 10

FINANCIAL RESULTS Dividends As at 31 March 2020 - 100% 1 run rate dividend cover (87% actual cover) reflecting growth in rental income, profitability and cash flow Target dividend to 31 March 2021 reflects progressive dividend policy to seek to grow dividends each year broadly in line with CPI inflation Dividend Cover Target Dividend for Dividend for financial year to 31 quarter to 31 March 2020 March 2021 of (£’000) March 2020 of 5.4 pence 1.325 pence Profit after taxation 37,725 per Ordinary Share per Ordinary Share Less revaluation gains (8,912) EPRA Earnings 28,813 Dividend Cover Dividend Cover on Run Rate Ordinary Shares Total dividends paid 32,970 100% 1 87.4% Year to 31 March as at 31 March Dividend cover on Ordinary Shares 87.4% 2020 2020 1 Includes all properties that had exchanged / legally committed prior to 31 March 2020 This is a target and not a formal dividend forecast or a profit forecast Civitas Investment Management Ltd 11

OPERATIONAL REVIEW Operational Highlights New initiatives delivered in the period Care Provider Relationships Delivering new state of the 2 1 Extended art healthcare facilities Increasing number of national care • Completion of first stage of delivery • provider relationships of new Wales facilities Delivering back-to-back lease • No development or financing risk • protection 3 4 The Social Housing Family A Multi-channel Approach CIC • Recent shareholder consent to Auckland commences major • undertake transactions with NHS and recruitment after joining the CIC charities • Active discussions for new parties to Now able to partner with wider range • join CIC shortly of counterparties Civitas Investment Management Ltd 12

OPERATIONAL REVIEW Broader Care Provider Relationships Civitas continues to drive the care acuity that can be delivered within its properties with a focus on mid-to-higher acuity care Civitas has also established strategic relationships with many leading national, regional and local care providers across the acuity range More than one-third of the Civitas portfolio 33%+ of Civitas Portfolio benefits from back-to-back care provider leases is supported by c.25-year back-to-back care provider leases These leases guarantee all principle rental obligations that housing associations owe to Civitas Most recent acquisitions are based on the back-to-back lease structure Civitas has developed an in-depth understanding of the care being delivered in the portfolio Civitas Investment Management Ltd 13