TIDMCSH
RNS Number : 3083E
Civitas Social Housing PLC
29 June 2023
29 June 2023
CIVITAS SOCIAL HOUSING PLC
ANNUAL FINANCIAL REPORT
YEAR TO 31 MARCH 2023
Civitas Social Housing PLC ("Civitas" or the "Company"), the
UK's leading care-based and healthcare REIT, presents its full year
results for the year ended 31 March 2023.
Performance Highlights
Property Valuation and Performance Mar 23 Mar 22 Change
Investment property (GBPm) 978.1 968.8 1.0%
NAV per share (diluted) (p) 109.16 110.30 (1.03)%
Financial Performance
Annualised contracted rent
roll (GBPm) 56.3 53.2 5.83%
Net rental income (GBPm) 52.7 50.7 3.94%
EPRA earnings (GBPm) 26.9 29.8
Operating Cash Flow (GBPm) 39.5 39.1 1.02%
IFRS earnings per share (diluted)
(p) 4.19 7.23
EPRA earnings per share (diluted)
(p) 4.43 4.82
Dividends per share (p) 5.70 5.55 2.70%
NAV Total return since IPO
(%) 41.8 37.2 +4.6 pts
Financing
Loan to value ratio (%) 35.6 34.4
Weighted average interest
cost of debt (%) 3.4 2.5 +0.9 pts
Full Year Highlights
-- Annualised contracted rent roll increased by c.6% to GBP56.3million
-- Portfolio value increased to GBP978.1million from GBP968.8million (IFRS)
-- NAV decreased slightly to 109.16 pence per share as at 31
March 2023 (2022: 110.30 pence per share)
-- IFRS valuation average net initial yield (NIY) of 5.55%
-- EPRA earnings per share (basic and diluted) 4.43 pence per
share (2022: 4.82 pence per share)
-- Dividends of 5.70 pence per share to 31 March 2023 (2022:
5.55p) fully paid in four dividend distributions
-- In December 2022 the Company signed a new five-year GBP70.8
million facility with a European bank lender
-- Maintained a high quality investment credit rating from Fitch
Ratings of "A-" (stable) and "A" Secured
-- Continuation of share buybacks, with the Company acquiring
6,050,000 shares at an average of 76.89 pence per share for a total
investment of GBP4.65 million, enhancing the NAV by 0.30%
Operational Highlights
-- Diversified portfolio of 697 properties providing homes to 4,594 residents
-- Providing lifelong homes to mostly working age adults with
disabilities and complex care needs
-- High acuity focused portfolio with 40% of residents living in
Civitas properties receiving over 50 hours of care per week
-- Phase two of the Company's work with E.ON continues across
identified properties, targeting a 25% reduction in carbon
emissions
-- CIM continues to engage actively with the Company's Approved
Provider partners and care providers, offering advice and shared
learning
-- CIM continues to closely and proactively asset manage the
largest portfolio of specialist care based housing in the UK
Post Year End Highlights
-- On 9 May 2023 the Board announced a recommended offer for the
Company at 80p in cash, from Wellness Unity Limited, a subsidiary
of CK Asset Holdings Limited (CKA)
-- On 22 May 2023 the Offer Document was made available. It is
intended that Civitas Investment Management ("CIM") is maintained
as the Investment Adviser to Civitas so that the day-to-day
management of the Civitas portfolio will continue uninterrupted,
and Civitas be re -- registered as a private limited company as
soon as practicable following the cancellation of the listing and
trading of Civitas shares
-- On 23 June 2023 the Offer became unconditional
Please find the full 2023 Annual Report on the Civitas Social
Housing plc website .
For further information, please contact:
Civitas Investment Management
Limited
Andrew Dawber Tel: +44 (0) 20 3058 4846
Paul Bridge Tel: +44 (0) 20 3058 4844
Panmure Gordon
Sapna Shah Tel: +44 (0) 20 7886 2783
Tom Scrivens Tel: +44 (0) 20 7886 2648
Liberum Capital Limited
Chris Clarke / Darren Vickers Tel: +44 (0) 20 3100 2000
/ Owen Matthews
Buchanan
Helen Tarbet / Henry Wilson Tel: +44 (0) 20 7466 5000
Hannah Ratcliff / Verity Parker civitas@buchanan.uk.com
Notes:
Civitas Social Housing PLC (CSH) was created in 2016 by Civitas
Investment Management Limited as the first dedicated London listed
REIT to raise long-term, sustainable, institutional capital to
invest in care-based social homes and healthcare facilities across
the UK. CSH's portfolio has been independently valued at GBP978.1
million (31 March 2023). CSH now provides homes for 4,594 working
age adults with long-term care needs, in 697 bespoke properties
that are supported by 131 specialist care providers, 19 approved
providers and working with over 178 individual local authority
partners.
Chairman's Statement
From the Chairman:
"Since November 2016, Civitas Social Housing PLC has provided
vital homes and healthcare facilities across the UK, for those
working age adults with significant and typically life-long care
needs.
I am pleased to report that, despite a difficult economic
backdrop in the UK, our portfolio has continued to
perform strongly."
This is our sixth Annual Report, covering the year to 31 March
2023. I am pleased to report that, despite a difficult economic
backdrop in the UK, our portfolio has continued to perform
strongly, delivering on average a 5% increase in rental income
derived from our inflation adjusted leases.
Our Investment Adviser, Civitas Investment Management Limited
("CIM"), has continued to work closely with our Approved Providers
to enhance further the quality of the portfolio and to assist where
needed in the process of ensuring our rental income is received on
a timely basis. The net asset value of the Company at 31 March 2023
was 109.16 pence, a small decrease of 1.03% from 110.30 pence per
share as at 31 March 2022.
The Board declared a final dividend of 1.425p, bringing the full
year dividend to 5.70p, in line with the minimum stated
intention.
A difficult challenge during the year was the sharp increase in
interest rates. I am pleased that in February 2023 the Company
entered into a new debt facility for GBP70.9m, which was partly
used to repay the loan facility with Lloyds. In addition, we also
fixed our interest rate exposure to provide greater certainty.
However, the overall re-financing was achieved at a material
increase in ongoing interest costs. Full details are included in
the Investment Adviser's Report.
Our share price has been disappointing over the year under
review, reflecting in part the broad derating of real estate
investments, higher interest rates and investor concern about our
sector. The Board has been reviewing a number of possible actions
to address this position. The Company has continued to buy back
shares - over the past 12 months it has acquired 6,050,000 shares
at an average of 76.89 pence per share for a total investment of
GBP4.65 million. This has enhanced the NAV by 0.30% and benefited
the EPRA earnings.
Continuation Vote
At the annual general meeting on 15 September 2022, 98.85% of
those shareholders who voted have voted in favour of the
continuation of the Company.
Offer for the Company
Following the year end, on 9 May 2023 the Board announced a
recommended offer for the Company at 80p per share in cash, from a
subsidiary of CK Asset Holdings Limited (CKA).
Whilst the Board believes that the Offer undervalues the
long-term prospects of Civitas as expressed by net asset value, we
also recognise that Civitas, and its sector as a whole, faces a
number of challenges in sentiment which the public markets are
unlikely to overcome in the short to medium term.
The Offer provides liquidity to shareholders with the
opportunity to exit in full and in cash at a significant premium to
the current share price, in a time of macroeconomic
uncertainty.
Moreover, CKA, as a current investor in the social housing
sector, has a detailed understanding of the attractive fundamentals
of the real estate and the expertise of the management team. CKA
does not expect there to be any disruption to tenants as a result
of the Offer and will be focused on the continuation of
relationships with Approved Providers, care providers and the
Regulator of Social Housing following the completion of the Offer.
The Board therefore considers the terms of the Offer to be fair and
reasonable and we have recommended it to our shareholders.
Outlook
Demand for the type of properties within the Company's portfolio
remains strong with independent forecasts predicting that there
will be continued growth for many years to come in the need for
additional units of adapted accommodation. The Board remains
confident in the strength of the portfolio and its potential
revenue generation.
Michael Wrobel
Chairman
28 June 2023
Growth
Growing Base of Global Investors
Civitas invests on behalf of a wide range of global, national
and local investors seeking exposure to sustainable long-term
income together with measurable social impact and high levels of
ESG delivery.
Four Continents... ...over 60 Locations
1. Amsterdam 13. Chichester 25. Heerlen 37. New Jersey 49. Smithfield
2. Bath 14. Columbus 26. Hong Kong 38. New York 50. Surrey
3. Beijing 15. Denver 27. Jersey 39. New Zealand 51. Sydney
4. Birmingham 16. Dublin 28. Leeds 40. Oslo 52. Tallinn
5. Blackpool 17. Edinburgh 29. Liverpool 41. Paris 53. Tauranga
6. Bolton 18. Espoo 30. London 42. Philadelphia 54. The Hague
7. Boston 19. Exeter 31. Los Angeles 43. Radnor 55. Tokyo
8. Bournemouth 20. Fort Lauderdale 32. Luxembourg 44. Rotterdam 56. Toronto
9. Bradford 21. Frankfurt 33. Manchester 45. Sacramento 57. Tunbridge
Wells
10. Bristol 22. Geneva 34. Melbourne 46. San Francisco 58. Vancouver
11. Brussels 23. Guernsey 35. Montreal 47. Seattle 59. Windsor
12. Chicago 24. Halifax 36. Munich 48. Singapore 60. Zurich
Our Strategy for Growth
Demand for the accommodation provided by Civitas is strong and
expected to remain so over the long-term. The pandemic has further
evidenced the need for safe and secure homes for the most
vulnerable people in society.
Civitas is a go-to partner for an increasing range of major
vendors and counterparties.
Civitas is the market leader with the largest portfolio and
deeply ingrained relationships with care providers, local
authorities, Approved Providers and charities across the UK.
The Company continues to work closely with The Social Housing
Family CIC to enable it to expand and play a broader role in the
sector, and becoming part of critical local authority pathways,
leading to many opportunities in specialist supported living and
advanced homelessness.
Civitas now works with a broader range of counterparties
including charities and other not-for-profit organisations, to
expand into significant markets across the UK, now including
Scotland and Northern Ireland.
Our Portfolio
By UK Region as at 31 March 2023
Region Funds invested Annualised rent
Properties (percentage) roll (percentage)
------------------- ----------- --------------- -------------------
South West 120 15.5 14.3
London 26 12.8 13.8
West Midlands 101 11.3 11.6
Yorkshire and the
Humber 96 10.8 10.7
Wales 34 11.0 10.6
North West 101 10.1 10.1
South East 65 10.1 9.8
East Midlands 58 8.6 8.8
North East 64 5.8 6.4
East of England 32 4.0 3.9
Total 697
Market Value (%)
Region Market Value
-------------------------- -------------
South West 14.3%
London 13.3%
West Midlands 11.7%
Wales 11.3%
Yorkshire and the Humber 10.7%
North West 9.9%
South East 9.8%
East Midlands 8.8%
North East 6.3%
East of England 3.9%
Total GBP978.1m
Tenancies
Region Tenancies
-------------------------- ----------
South West 759
Yorkshire and the Humber 610
North West 607
West Midlands 502
North East 462
South East 417
East Midlands 374
Wales 364
London 338
East of England 161
Total 4,594
Our Portfolio
By Approved Provider as at 31 March 2023
Annualised Contracted Rent Roll (%)
Approved Provider Annualised Contracted Rent Roll
(%)
--------------------- --------------------------------
Falcon 19.1%
Auckland(1) 16.5%
BeST 12.6%
Inclusion 9.4%
Qualitas Housing(1) 8.4%
Westmoreland 5.6%
Trinity 5.2%
Encircle 5.2%
Pivotal 4.0%
Chrysalis 3.7%
New Walk 2.6%
Harbour Light 2.3%
My Space 1.3%
Other 1.1%
IKE 1.0%
Hilldale 1.0%
Windrush 0.7%
Lily Rose 0.2%
Blue Square 0.1%
Total GBP56.3m
Properties
Approved Provider Properties
--------------------- -----------
Falcon 116
Auckland(1) 101
Inclusion 81
BeST 74
Qualitas Housing(1) 54
Trinity 42
Westmoreland 41
New Walk 41
Chrysalis 28
Pivotal 27
Harbour Light 26
Encircle 16
Hilldale 15
Windrush 13
IKE 10
My Space 9
Blue Square 1
Lily Rose 1
Other 1
Total 697
Tenancies
Approved Provider Tenancies
--------------------- ----------
Falcon 850
BeST 591
Auckland(1) 547
Inclusion 507
Qualitas Housing(1) 370
Trinity 242
Westmoreland 239
Pivotal 238
Encircle 205
New Walk 194
Harbour 182
Chrysalis 151
My Space 71
IKE 68
Windrush 51
Hilldale 39
Other 32
Lily Rose 13
Blue Square 4
Total 4,594
Market Value (%)
Approved Provider Market Value (%)
--------------------- -----------------
Falcon 19.1%
Auckland(1) 16.4%
BeST 13.2%
Inclusion 9.1%
Qualitas Housing(1) 8.6%
Westmoreland 5.7%
Trinity 5.1%
Encircle 4.9%
Pivotal 3.9%
Chrysalis 3.8%
New Walk 2.6%
Harbour Light 2.3%
My Space 1.1%
Other 1.1%
IKE 1.1%
Hilldale 1.0%
Windrush 0.8%
Blue Square 0.1%
Lily Rose 0.1%
Total GBP978.1m
(1) Auckland and Qualitas Housing are both members of the Social
Housing Family C.I.C and subject to common control.
Investment Adviser's Report
Consistent Performance
In the year to March 2023, CIM continued to work closely with
the Board to manage a high-performing portfolio.
Portfolio
-- 40% of residents living in Civitas properties receive over 50 hours of care per week.
-- High acuity portfolio
-- Provide homes to those who need long-term quality accommodation
-- Largest portfolio of SSH in England & Wales
-- Premium Fitch rating retained at "A" secured and "A-" unsecured
-- Average rental growth of c.5%
Social Impact
-- 4,594 high quality bed spaces
-- GBP127.0 million savings to the public purse(1)
-- 5 charitable relationships
Phase two work with E.ON
-- Continued work across identified properties
-- Targeting 25% reduction in carbon emissions
-- Continued access to government grant funding sources
-- Targeting minimum EPC "A-C" by 2030
Highly Experienced Team
The asset management team set up to work with and assist our
Approved Providers have
specialisms from:
-- Local authority commissioning of specialist supported housing
-- Senior level rents and housing benefit advisers
-- Housing management and compliance
-- Property asset management
-- Commissioning of care
1. Source: The Good Economy, Civitas Social Housing PLC, Annual
Impact Report 2021, June 2021.
"For over six years CIM has been working with the CSH Board to
invest in high-quality assets to deliver long-term affordable homes
for life for the most vulnerable in society.
We have developed in-depth knowledge of the sector along with
extensive relationships with Approved Providers, care providers and
local authorities, which has directly led to improvements in the
sector."
Paul Bridge - CEO, Social Housing - Civitas Investment
Management Limited
Introduction
Civitas Investment Management Limited ("CIM") is the Investment
Adviser to Civitas Social Housing PLC ("CSH") and is the leading
provider of care-based housing in the UK. CIM comprises a team of
39 individuals with a range of expertise in specialist supported
housing, real estate management and complex care needs CIM has the
capacity and specialist knowledge to manage the CSH portfolio at a
granular level and has cultivated strong professional relationships
across the sector over the last decade.
Overview of Results
In the UK prior to the launch of the Company, equity and private
capital played a very small part in the social housing sector. Over
time, UK demographics changed and the number of adults with
long-term, complex care needs has been steadily increasing.
This is reflected in a number of institutional investors
including aspects of social housing within their
investment strategies.
Results Highlights
-- Six years of consistent rental growth and progressive
dividend payments that have increased from an initial 3.00p per
share to 5.70p per share for the year ended 31 March 2023.
-- A retained high-quality investment credit rating from Fitch
Ratings of A secured and A- unsecured since March 2021, which CSH
was the first to secure in this sector.
-- An actively managed portfolio of operational real estate with
a sector-leading team of professionals assisting and enabling high
quality and longevity of homes and income.
-- Professional support to enable Approved Providers to enhance
the quality of their delivery and demonstrate long-term financial
and operational independence.
-- Targeting investments and homes which enable the delivery of
higher end care as this is where the greatest need exists and where
the applicability of exempt rents is clearly demonstrated.
-- An active and continuing programme working with E.ON to
permanently reduce carbon emissions across the portfolio, leading
to lower energy costs for residents and a more carbon neutral
portfolio.
-- Sector leading partnerships with national and local charities
delivering real change and continuing to enhance CSH's reputation
as the most experienced investor in social infrastructure in the
UK.
-- CIM has a highly experienced asset management team which has
overseen some GBP25 million of physical improvements to the
portfolio since inception largely paid for by the vendors of the
properties.
Sector Leading Social Outcomes
ESG
Our ESG Policy is located at www.civitassocialhousing .com. It
provides an overview of the Company's
investment procedures and sets out the Board's commitment to a
continuous improvement process in its
approach to ESG integration.
ESG Rating Providers
CIM engages with the leading ESG rating providers to set out the
activities that are undertaken by CSH and to ensure these are
profiled and evaluated correctly. Notably, active participation in
the 2022 GRESB Public Disclosure Assessment has resulted in CSH
retaining an A score previously attained in 2021, whilst the peer
group average score has moved up to B. CSH is up to second position
within its Comparison Group (UK Residential). Meanwhile, the Risk
Rating Score for CSH by Sustainalytics remains at 14.9 (Low Risk)
as was reported in February 2023.
The latest independent report by The Good Economy on CSH was
published in November 2022 and notes
CSH's continued progress in delivering measurable social impact.
Social value analysis by The Good Economy, carried out in March
2021, found that, overall, the portfolio generated GBP127 million
of social value per year, including fiscal savings to public
budgets of GBP75.9 million per year.
Of particular note with respect to the portfolio:
-- 41% of CSH's 697 properties have been brought into the
specialist housing sector for the first time
-- CSH continues regular engagement with its Approved Providers
to monitor the quality of its stock
-- Improvement works have enhanced the energy efficiency of homes
-- 87% of respondents to the survey of residents carried out by
CIM in March 2021 reported that they were satisfied with the
quality of their home
-- CSH Approved Provider partners have reported 99% statutory
compliance - considerably better than the wider affordable housing
sector
Environmental: Carbon Reduction/ Energy Cost Savings
CIM continues to work with E.ON (a leading UK energy and
solutions company) under a national framework agreement in
partnership with CSH tenants, to improve the environmental
performance of the portfolio. The "fabric first" approach to
reducing the portfolio's carbon footprint includes the installation
of cavity wall insulation, loft insulation, external wall
insulation, air source heat pumps and solar PV and battery storage
to identified properties within the portfolio. The installation of
these energy efficient measures, utilising available government
grants and other funding sources, will optimise value for the
Company, our counterparties and our shareholders. The collaboration
with E.ON is delivering significant environmental enhancements
without any cost to our Approved Providers.
The Phase 2 retrofit surveys will help to refine the
implementation programme and identify the best method for reducing
the total carbon dioxide emissions (and fuel costs) associated with
individual properties over the medium or long term. The overall
energy performance of the portfolio, as identified on Environmental
Performance Certificates ("EPC") reports data has improved over the
last 12 months. The proportion of properties with EPC Rating A-C is
currently c.55% and the carbon footprint (estimated from property
characteristics) has reduced by 2% per Civitas tenancy (from 2.65
tonnes of CO(2) /tenancy in March 2022 to 2.61 tonnes of CO(2)
/tenancy). The whole social housing sector, and indeed the whole
housing sector, continues to require significant public investment
if it is to meet the current government guidelines on achieving net
zero carbon emissions by 2050.
Government Policy and Regulation
Reforming the Mental Health Act
Current mental health legislation results in many people with
mental health issues or learning disability needs being detained in
large institutions that are often inappropriate for the
individuals. It is estimated by NHS Digital that there was a rise
in annual mental health detentions from 45,864 in 2016/2017 to over
53,239 in 2020/2021.
Once people are sectioned into an institution it becomes very
difficult and costly to move them into a supported living community
setting.
As a result of these concerns, the Government commissioned an
independent body chaired by Professor Sir Simon Wessley in 2017.
Currently in draft form in the Houses of Parliament, the Mental
Health Reform Act seeks to raise the threshold for detaining people
with a learning disability and/or autism unless they have a
coexisting psychiatric disorder.
We believe that this Act will drive even more demand for
community housing and care settings which are already in short
supply, further securing the value and importance of the CSH
portfolio.
The CSH portfolio will further benefit from the following
broader market dynamics:
Social Housing Regulation Bill 2023
The overall regulation of social housing is under review with
the main objective of delivering transformational change for social
housing residents and fulfilling the Government's 2019 manifesto
pledge to "empower residents, provide greater redress, better
regulation and improve the quality of social housing".
The implication of this review for CSH's portfolio is expected
to be positive as it aims to bring landlords closer to their
tenants and more focused on addressing their needs quickly. Our
Approved Providers are very close to their residents' needs and
work in partnership with care providers to ensure good quality
service outcomes, all supported by the granular asset management
provided by CIM every day.
Supported Housing (Regulatory Oversight) Bill
This bill, which is under review, seeks to improve the
regulation and outcomes of supported exempt accommodation. This
follows reported cases, particularly of temporary housing, that
should not qualify as
exempt accommodation.
Financial Review
As at 31 March 2023 the Net Asset Value of the Company was
GBP661.9 million, being 109.16 pence per share, a 1.03% decrease on
the 110.30 pence per share at 31 March 2022. A net fair value gain
on investment properties of GBP2.6 million (2022: GBP12.3 million)
was recorded in the year.
Operational cash flows increased moderately to GBP39.5 million
(2022: GBP39.1 million). Ongoing rental collections throughout the
year supported the Company's healthy operating cash flows despite
further increases to the cost of debt as all facilities were put
onto a fixed basis.
Rental Growth and Dividend
The portfolio generated rental income (excluding any insurance
and service charge rechargeables) of GBP53.1
million, representing c.5% increase over the corresponding
period last year.
The contracted rent roll now increases through indexation only
as no new equity has been raised and therefore no new investments
have been made in the period.
During the year, the Company declared and paid four dividend
distributions including one dividend of 1.3875p and three
instalments of 1.4250p.
Debt Fixing and Reducing Risk
CIM arranged the following debt facilities which fixes debt on
the portfolio at an average rate of 3.92% until August 2024 as is
prudent in the current interest rate environment.
Remaining
Term at Loan
31 Mar 23 Principal
Lenders Facility (years) GBP'000 All in rate
----------------- ------------ ----------- ------------ -------------
Scottish Widows Fixed 4.59 52,500 2.99%
----------------- ------------ ----------- ------------ -------------
Deutsche Bank
AG, London
Branch Fixed 4.85 70,875 5.69%
----------------- ------------ ----------- ------------ -------------
Fixed by
Interest
HSBC rate cap 2.67 100,000 4.60%
----------------- ------------ ----------- ------------ -------------
Fixed by
Interest
NatWest rate swap 1.38 60,000 2.60%
----------------- ------------ ----------- ------------ -------------
M&G Fixed 4.91 84,550 3.14%
----------------- ------------ ----------- ------------ -------------
3.67 367,925 3.92%
------------------------------ ----------- ------------ -------------
We have received terms from lenders to refinance the NatWest
facility which is due to expire in August 2024.
Governance
CIM continues to engage actively with the Company's Approved
Provider partners and care providers, offering advice and shared
learning.
The Board, comprised of five independent non-executive
Directors, carries out an annual Board performance evaluation
exercise and hosts periodic strategy sessions in addition to
regular planned Board meetings.
Summary
CIM continues to closely and proactively asset manage the
largest portfolio of specialist care-based housing in the UK.
There is demonstrable demand in excess of supply and significant
further legislation that is likely to
continue to increase demand for the properties in the Company's
portfolio.
We continue to undertake our work with a view to both enhancing
the value of the portfolio and protecting the interest of our
underlying tenants.
Civitas Investment Management Limited
Investment Adviser
28 June 2023
Asset Management Initiatives
As part of the ongoing active management of the CSH portfolio,
CIM has developed an extensive asset management resource that
covers all the key disciplines that are apparent within specialist
supported housing and the residential care sectors.
Capital works are undertaken on a rolling basis with much of the
work being undertaken around the time of initial acquisition and
paid for by the original vendors as part of the purchase agreement.
This ensures that appropriate adaptations are made to deliver a
bespoke property that is suitable for the user's needs over the
long term. Capital works are also undertaken, from time to time,
during the life of the property where it is deemed appropriate to
undertake improvement works or repositioning of the asset. In some
cases this also leads to an immediate uplift in contracted rent
roll and a commensurate increase in capital values.
Set out below are some examples of projects that have been
undertaken.
The Asset Management Team understand the value of a good home.
With nearly 100 years' experience between them working in the
housing field, there is a lot of knowledge we can share.
As part of our active asset management of the CSH portfolio, we
work with and support our partners tackling issues and finding
solutions to help sustain the tenancies of the most vulnerable
people living in our homes.
A recent example of this was with Cole Street and Hampden Road.
These properties are managed by Trinity Housing Association and are
popular properties with long standing residents. However, Trinity
had struggled to meet its housing benefit potential. Officers from
the team worked closely with Trinity and supported them to put the
information and evidence together for tribunal. Trinity won the
tribunal and the matter was resolved with a full backdate and rent
agreed. This was a great result for the team and for the tenants at
the schemes.
Case Study
York Mews, Clacton-on-Sea
A detached two storey block of seven self-contained flats
constructed around the 1950's. Some external works were identified
as being required and a review was undertaken at the asset.
Assessment reports obtained suggested that replacing the heaters
within the flats and other minor works would improve the energy
efficiency and, in most cases, improve the EPC ratings at the same
time. We therefore tendered a programme of works over two phases -
the first phase just before the previous Winter period to replace
the existing heaters with high heat retention storage heaters - the
second phase during the following Spring/Summer period was to
undertake the external works to remove the existing render, replace
and
decorate to improve the exterior of the building.
Before After
------- ------- ------
Flat 1 D D
Flat 2 D C
Flat 3 D C
Flat 4 D D
Flat 5 D C
Flat 6 D C
Flat 7 E D
Corporate Social Responsibility Report
Sustainability
The business model of the Company is to provide long--term
suitable homes for individuals with care needs; acting in a
sustainable manner is key to achieving this aim. Properties that
are owned by the Company are tailored to meet the future needs of
the tenants and, where required, are actively asset managed to
provide long-term functionality and value to the wider
community.
Environment
During the investment due diligence phase, the Company looks
closely at the environmental impact of each potential acquisition,
and encourages a sustainable approach for maintenance and upgrading
properties. Through collaborating with specialist developers and
vendors, the high standards the Company expects from each
investment in the care-based housing sector is adopted by other
companies in the sector.
Once within the portfolio, the properties of the Company are
actively managed, and the Investment Adviser assesses whether there
are opportunities to improve the environmental efficiency of the
properties, in addition to other asset management initiatives. The
Company has an Environment, Social and Governance Policy which can
be found on the Company's website. This goes into further detail
about the Company's ESG approach and how it integrates with
investment strategy. Further details on the Company's ESG approach
can also be found in the full Annual Report.
The Board has considered the requirements to disclose the annual
quantity of emissions; further detail on this is included in the
Report of the Directors as set out in the full Annual Report.
Diversity
The Company does not have any employees or office space and, as
such, the Company does not operate a diversity policy with regards
to any administrative and management functions.
Whilst recognising the importance of diversity in the boardroom,
the Company does not consider it to be
in the interest of the Group and its shareholders to set
prescriptive diversity criteria or targets. The Board has adopted a
diversity policy in respect of appointments to be made to the Board
and will continue to monitor diversity, taking such steps as it
considers appropriate to maintain its position as a meritocratic
and diverse business. The Board's objective is to maintain
effective decision-making, including the impact of succession
planning. All Board appointments will be made on merit and have
regard to diversity regarding factors such as gender, ethnicity,
skills, background and experience. This includes Director
appointments to the Audit and Management Engagement Committee and
Nomination and Remuneration Committee. See Corporate Governance
Statement in the full Annual Report.
The Board comprises three male and two female non-executive
Directors. Throughout the year, the Company complied with the
Hampton-Alexander Review's target of a minimum 33% representation
of women on FTSE 350 boards.
The Board is aware of the recommendations of the Parker Review,
which will be taken into consideration as part of the Board's
succession planning. See Corporate Governance Statement as set out
in the full Annual Report
The Board of Directors of the Company's subsidiaries, which are
non-operational, each comprise one female and up to four male
directors.
Human Rights
Given the Company's turnover for the year under review, it now
falls within the scope of the Modern Slavery Act 2015. The Company
published its modern slavery statement on 22 September 2021.
The Board is satisfied that, to the best of its knowledge, the
Company's principal advisers, which are listed in the Company
Information section, comply with the provisions of the UK Modern
Slavery Act 2015.
The Company's business is solely in the UK and therefore is
considered to be low risk with regards to human rights abuses.
Community and Employee
The Company's properties enable the provision of care to some of
the most vulnerable people in the community, ensuring safe and
secure accommodation, tailored to meet individual care needs. The
Company has increased the provision of care-based housing, bringing
new supply to the sector and providing homes to over 4,500 people.
All of the Company's properties enable the provision of high levels
of care, generating local jobs and helping to support local
economies.
The Company has no employees and accordingly no requirement to
separately report on this area.
The Investment Adviser is an equal opportunities employer who
respects and seeks to empower each individual and the diverse
cultures, perspectives, skills and experiences within its
workforce.
Section 172(1) Statement and stakeholder engagement
Overview
The Directors' overarching duty is to act in good faith and in a
way that is most likely to promote the success of the Company as
set out in section 172 of the Companies Act 2006. In doing so,
Directors must take into consideration the interests of the various
stakeholders of the Company, the impact the Company has on the
community and the environment, take a long-term view on
consequences of the decisions they make, as well as aim to maintain
a reputation for high standards of business conduct and fair
treatment between the members of the Company.
Fulfilling this duty naturally supports the Company in achieving
its investment objective and helps to ensure that all decisions are
made in a responsible and sustainable way. In accordance with the
requirements of the Companies (Miscellaneous Reporting) Regulations
2018, the Company explains how the Directors have discharged their
duties under section 172 below.
To ensure that the Directors are aware of, and understand, their
duties, they are provided with the pertinent information when they
first join the Board as well as receiving regular and ongoing
updates and training on the relevant matters. Induction and access
to training is provided for new Directors. They also have continued
access to the advice and services of the Company Secretary and,
when deemed necessary, the Directors can seek independent
professional advice at the Company's expense. The Schedule of
Matters Reserved for the Board, as well as the Terms of Reference
of its committees, are reviewed regularly and further describe
Directors' responsibilities and obligations and include any
statutory and regulatory duties. The Audit and Management
Engagement Committee has the responsibility for the ongoing review
of the Company's risk management systems and internal controls and,
to the extent that they are applicable, risks related to the
matters set out in section 172 are included in the Company's risk
register and are subject to periodic and regular reviews and
monitoring.
Long-term Success
The strategy of the Company can be found below. Any deviation
from, or amendment to, that strategy is subject to Board and, if
necessary, shareholder approval. The Company's business model,
which can be found below, provides that the Board considers the
long-term consequences of its investment decisions.
The Company grants long-term leases, generally 20 years in
length, to its tenants. The Company seeks to maintain lasting
relationships with its tenants and supports its tenants in adapting
properties to meet their needs, particularly improving and
enhancing properties. Further details can be found in the full
Annual Report.
Stakeholders
A company's stakeholders are normally considered to comprise its
shareholders, its employees, its customers and its suppliers as
well as the wider community in which the company operates and
impacts. The Company is different in that as an investment trust it
has no employees and, in terms of suppliers, the Company receives
professional services from a number of different providers,
principal among them being the Investment Adviser.
Through regular engagement with its stakeholders, the Board aims
to gain a rounded and balanced understanding of the impact of its
decisions. Feedback from stakeholders is gathered by the Investment
Adviser in the first instance and communicated to the Board in its
regular quarterly meetings and otherwise as required.
The importance of stakeholders is taken into account at every
Board meeting, with discussions involving careful consideration of
the longer-term consequences of any decisions and their
implications for stakeholders. The following section explains why
these stakeholders are considered of importance to the Company and
the actions taken to ensure that their interests are taken into
account by the Board as part of its decision making.
Our Key areas How we engage
stakeholders of interest
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Shareholders The Board welcomes shareholders' views
Continued * Current and future financial performance on both a and places great importance on communication
shareholder NAV and share price basis with the shareholders of the Company.
support and The Board is responsible for the content
engagement of communication regarding corporate
are critical * Strategy and business model issues and for communicating its views
to the to shareholders. The Board aims to
existence ensure that shareholders are provided
of the * Corporate governance with sufficient information to understand
business the risk/reward balance to which they
and the are exposed by the holding of shares
delivery * ESG performance and sustainability in the Company. Active engagement with
of the shareholders is carried out throughout
long-term the year and regular communication
strategy of * Climate Change is undertaken to ensure that they understand
the business. the performance of the business. The
Board is committed to maintaining open
* Dividend channels of communication and to engaging
with shareholders in a manner which
they find most meaningful, in order
to gain an understanding of the views
of shareholders. These channels include:
Annual General Meeting - The Company
welcomes and encourages attendance,
voting and participation from shareholders
at the AGM, at which shareholders have
the opportunity to meet the Directors
and Investment Adviser and to address
questions to them directly. The Investment
Adviser attends the AGM and provides
a presentation on the Group's performance
and its future outlook. The Company
values any feedback and questions it
may receive from shareholders ahead
of and during the AGM and takes action,
as appropriate. The Board was pleased
to note that all resolutions proposed
at the Company's AGM on 15 September
2022 were approved by shareholders.
Publications - The Annual Report and
Half-Year Results are made available
on the Company's website. These reports
provide shareholders with a clear understanding
of the Group's portfolio and financial
position. In addition to the Annual
and Half-Year Reports, regularly updated
information is available on the Company
website, including quarterly factsheets,
key policies, the investor relations
policy and details of the investment
property portfolio. Feedback and/ or
questions the Company receives from
the shareholders help the Company evolve
its reporting aiming to render the
reports and updates transparent and
understandable.
Shareholder meetings - Shareholders
are able to meet with the Investment
Adviser and the Company's Joint Brokers
throughout the year and the Investment
Adviser provides information on the
Company on the Company's website. Feedback
from all shareholder meetings with
the Investment Adviser and/or the Joint
Brokers, and shareholders' views, are
shared with the Board on a regular
basis. The Chairman and other members
of the Board, including the Senior
Independent Director and Chair of the
Audit and Management Committee, are
available to meet with shareholders
to understand their views on governance
and the Company's performance where
they wish to do so.
Shareholder concerns - The Board gives
due consideration to any matters raised
by shareholders. In the event shareholders
wish to raise issues or concerns with
the Board or the Investment Adviser,
they are welcome to write to the Company
at the registered office address set
out in the full Annual Report.
In line with increasing shareholder
focus on Environmental, Social and
Governance ("ESG") matters, the Board
requests regular updates from the Investment
Adviser. The Board retains overall
responsibility for ESG issues and the
Company's operational performance.
Implementation of ESG matters are undertaken
by the Investment Adviser on behalf
of the Board.
Furthermore, ESG reporting has been
disclosed in the full Annual Report
and the Board is open to discussion
with shareholders on this topic if
requested.
Investor relations updates - The Board
regularly monitors the shareholder
profile of the Company. With the majority
of shareholders being a combination
of institutional investors and private
client brokers, the Board receives
regular updates on investors' views
and attitudes from the Company's Brokers
and the Investment Adviser. The results
of these meetings were reported to
the Board as part of the formal reporting
undertaken by both the Investment Adviser
and the Brokers.
Included in the Report of the Directors
in the full report are details of substantial
shareholdings in the Company.
On a regular basis (sometimes weekly)
and at Board meetings, the Directors
receive updates from the Company's
Brokers on the share trading activity,
share price performance and any shareholders'
feedback, as well as an update from
the Company's Investor Relations adviser,
Buchanan, and the Investment Adviser
on any publications or comments by
the press. To gain a deeper understanding
of the views of its shareholders and
potential investors, the Investment
Adviser maintains regular contact with
them and also undertakes investor roadshows.
Any relevant feedback is taken into
account when Directors discuss any
possible fundraising or the future
dividend policy.
Following the year end, the Board recommended
an offer to shareholders of 80 pence
for each share held in the Company
from Wellness Unity Limited (a wholly
owned subsidiary of CK Asset Holdings
Limited). During the Takeover process,
the Board engaged with shareholders
and received their views on the Takeover.
which it took into account during its
discussions. Further information on
the Board's decision in relation to
the Takeover Offer can be found in
the full Annual Report.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Investment The asset management of the Company's
Adviser * Current and future financial performance portfolio is delegated to the Investment
Holding the Adviser, which manages the assets in
Company's accordance with the Company's objectives
shares * Shared commercial objectives with the Company and policies. At each Board meeting,
offers representatives from the Investment
investors Adviser are in attendance to present
an investment * Operational excellence reports to the Directors covering the
vehicle Company's current and future
through activities, portfolio of assets and
which they * Long-term development of its business and resources its investment performance over the
can obtain preceding period.
exposure to
the Company's * ESG performance and sustainability Maintaining a close and constructive
portfolio of working relationship with the Investment
properties. Adviser is crucial as the Board and
The the Investment Adviser both aim to
Investment continue to achieve consistent long-term
Adviser's returns in line with the Company's
performance investment objective. Important components
is critical in the collaboration with the Investment
for the Adviser, representative of the Company's
Company culture are:
to
successfully * operating in a fully supportive, co-operative and
deliver its open environment and maintaining ongoing
investment communication with the Board between formal meetings;
strategy and
meet its
objective
to provide * encouraging open discussion with the Investment
shareholders Adviser, allowing time and space for original and
with an innovative thinking;
attractive
level of
income,
together with * recognising that the interests of stakeholders and
the potential the Investment Adviser are for the most part well
for capital aligned, adopting a tone of constructive challenge;
growth.
* drawing on Board members' individual experience and
knowledge to support the Investment Adviser in its
monitoring of and engagement with other stakeholders;
and
* willingness to make the Board members' experience
available to support the Investment Adviser in the
sound long-term development of its business and
resources, recognising that the long-term health of
the Investment Adviser is in the interests of
shareholders in the Company.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Other service The Company's main functions are delegated
providers * Current and future financial performance to a number of service providers, including
In order to the Administrator, the Company Secretary,
function as the AIFM, the Registrar, the Corporate
a REIT with * Shared commercial objectives with the Company Brokers and the Depositary, each engaged
a premium under separate contracts. The Board
listing maintains regular contact with its
on the London * Operational excellence key external providers and receives
Stock regular reporting from them, both through
Exchange, the Board and Committee meetings, as
the Company * Long-term development of the service providers' well as outside of the regular meeting
relies on a businesses cycle. Their advice, as well as their
diverse range needs and views, are routinely taken
of reputable into account. Through its Audit and
advisers for * Sustainability Management Engagement Committee, the
support in Board formally assesses their performance,
meeting all fees and continuing appointment at
relevant least annually to ensure that the key
obligations. service providers continue to function
at an acceptable level and are appropriately
remunerated to deliver the expected
level of service. The Audit and Management
Engagement Committee also reviews and
evaluates the control environment in
place at each key service provider.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Care At the outset, it is important to note
providers * Current and future performance that the Company does not have any
legal or operational responsibility
for the delivery of care in the properties
* Welfare of tenants within the portfolio. However, the
Board and the Investment Adviser have
taken the view that they wish to have
* Lease obligations a detailed understanding of the delivery
of care and the interaction with the
major care providers who deliver this
* Void management care. Accordingly, the Investment Adviser
maintains an active dialogue with many
of the care providers to build constructive
and informed relationships.
At the same time, as part of transaction
due diligence at the time of acquisition
of properties, the Investment Adviser
undertakes due diligence with respect
to the operational and financial performance
of all care providers who are proposed
to deliver care into the particular
properties. This includes the financial
standing of the care provider, its
CQC rating and the nature of the SLA
agreement covering voids between the
care provider and the Approved Provider.
The Investment Adviser is noted as
having demonstrated considerable expertise
and understanding of the care taking
place within its properties.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Tenants The Company's properties are adapted
* Greater independence for the use of individuals with long-term
care needs within a community setting
with the specific aim of achieving
* Maintaining high level of care better personal outcomes and independence
for the individuals.
* Improved personal outcome The sector in which the Company operates
is regarded as having achieved significant
success in delivering these positive
outcomes compared to long-term older
style remote institutional care.
On a regular basis, members of the
Investment Adviser visit properties
accompanied by Approved Provider and
care provider partners to see first
hand the nature of the housing and
care provision that is being delivered.
Whilst this process has slowed as a
result of the pandemic, the Investment
Advisor has continued to engage with
its tenants. This is supported by the
regular Approved Provider seminars
at which the wellbeing of tenants is
discussed in detail.
In addition, the Company undertakes
resident case studies and surveys through
careful and considered interaction
via the care provider to assess the
positive impact our properties and
associated specialised care have had
on the individual and their wellbeing.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Approved The Company's Approved Provider partners
Providers * Current and future performance are an important part of the investment
model as the responsibility for collection
of housing benefit and subsequent payment
* Sustainability of rent, the maintenance of the properties
under the full repairing and insuring
leases and, most importantly, the safeguarding
* Compliance and property management of the underlying tenants through the
above means, lies with the Approved
Providers.
* Welfare of tenants
The Investment Adviser works closely
with the Company's Approved Provider
* Lease obligations partners to improve standards and governance
and to introduce practices and procedures
that make the Company's investment
processes ever more robust.
The Investment Adviser has a constant
open dialogue with the Approved Provider
partners, liaising monthly on compliance,
health and safety, maintenance and
future-proofing schemes, as well as
hosting quarterly seminars to discuss
current themes/trends affecting the
sector, to troubleshoot. This serves
as an opportunity to build relationships
and share best practice.
The Investment Adviser is supported
by the establishment of The Social
Housing Family CIC, a not-for-profit
community interest company operated
independently of the Company whose
stated aim is to enable Approved Providers
holding the Company's leases to increase
skills and experience and to provide
funding to promote enhanced performance.
Membership is open to any Approved
Provider that holds Civitas leases
and the effect of membership is to
transfer ownership of the Approved
Provider to the social housing family.
Auckland Homes Solutions was the first
Approved Provider to join and has now
recruited a very experienced and senior
executive team and board of management.
Qualitas community benefit society
has also joined the CIC.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Regulator The Company is not itself regulated
of Social * Financial and operational viability by the RSH, but it is important to
Housing (RSH) maintain open and regular dialogue
to ensure that the Company and the
* Governance RSH are working together to improve
the sector.
* Compliance with health and safety, and regulatory The Investment Adviser has a regular
standards and ongoing dialogue with the RSH and
with the Housing Association partners
regulated by the RSH.
* Safety and wellbeing of underlying tenants
The Company also publishes responses
to the regulatory judgements of the
RSH regarding the Approved Providers
with the Company as part of the RSH's
general review of Approved Providers
engaged in the provision of property
services for vulnerable people as announced
in May 2018. This demonstrates the
Company's desire to maintain aa dialogue
with the RSH and its desire to see
that the positions improve where needed.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Other The Company regularly considers how
regulatory * Compliance with statutory and regulatory requirements it meets various regulatory and statutory
authorities obligations and follows voluntary and
The Company best practice guidance, and how any
can only * Governance based on best practice guidance governance decisions it makes can have
operate an impact on its shareholders and wider
with the stakeholders, both in the shorter and
approval * Better reporting to shareholders and other in the longer term.
of its stakeholders
regulators The Board receives quarterly regulatory
who have a compliance monitoring updates from
legitimate the Investment Adviser.
interest in The Board receives quarterly compliance
how the updates from the AIFM regarding the
Company Company's compliance with its investment
operates in policy and the Investment Adviser's
the market compliance with the Investment Management
and treats Agreement.
its The Board also has access to the advice
shareholders. of the Company Secretary who provides
updates and advice on regulatory, statutory
and governance matters for consideration
by the Board at its quarterly meetings
and as and when required.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Local It is important for the Company to
authorities * Provision of safe and secure properties of a high build and maintain relationships with
quality local authorities as they have an important
role in identifying areas of high demand,
agreeing rents and referrals to the
* Sustainability for long-term placements Company's asset management initiatives.
The Company will engage with the local
authority commissioner either directly,
or through specialist consultants,
Approved Provider and care provider
partners as part of the Company's due
diligence to ensure that each property
being acquired has been commissioned
by the relevant local authority and
that rent levels have been discussed
and agreed.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Lenders The Company has arranged debt facilities
Availability * Current and future financial performance of the from a wide range of lenders and engages
of funding business with these on a regular basis through
and liquidity regular meetings and presentations
are crucial to ensure they are informed on all
to the * Openness and transparency relevant areas of the business. The
Company's continual dialogue helps to support
ability to the credit relationships.
take * Proactive approach to communication
advantage The Company has reaffirmed its Investment
of investment Grade High Credit Quality Rating from
opportunities * Operational excellence Fitch Ratings Limited of "A" (senior
as they secured) and a Long-Term IDR (Issuer
arise. Default Rating) of "A-" with a Stable
Outlook.
This will enable the Company to pursue
its strategy in relation to debt funding,
in addition to continuing to work with
the Company's existing lenders, with
whom the Company has built strong relationships.
During the year, the Board considered
and closed a five year term debt facility
with Deutsche Bank AG. Further information
can be found in the full Annual Report.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Communities A key component of the Company's portfolio
The Company's * Acceptance of care in the community is that the properties within it are
assets rely set within community environments so
on a strong, that individuals are able as part of
positive * Availability of local facilities for tenants their care plan to interact with the
connection local community rather than being isolated.
with the
local This is achieved in consultation with
communities local authorities in determining that
in which its the initial settings are appropriately
business diversified within the respective community
operates. and are not clustered in a way that
would lead to isolation.
This assists the individuals and also
ensures appropriate integration within
the community. On a day-to-day basis,
care providers and Approved Providers
operate policies to ensure positive
relationships with neighbours and surrounding
dwellings. The activities within the
Company's properties create employment
within the local community for both
housing and care workers.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Charity The Company supports a number of organisations
Partners * Delivering needed support to vulnerable adults whose objectives are to provide improved
outcomes for vulnerable adults affected
by homelessness and other care needs.
* Improved wellbeing of vulnerable adults
The Company commits targeted financial
* ESG performance and sustainability support to fund specific programmes
which help those affected by homelessness
by teaching them skills and offering
support to prevent them from being
in that position again.
The Company ensures regular calls and
meetings with our charity partners
to update on progress and projects
being undertaken, as well as attending
events in support of their work.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Principal Decisions
Principal decisions have been defined as those that have a
material impact to the Group and its key stakeholders.
In taking these decisions, the Directors considered their duties
under section 172 of the Act. Principal decisions made during the
year were as follows:
New Regulatory Clause Initiative
In 2022, the Board considered and agreed a new approach to the
Company's lease model with the goal of supporting additional
regulatory compliance and addressing perceptions of risk. The new
regulatory clause enables Approved Providers to achieve greater
alignment between income receipts and lease liabilities, set
achievable capital solvency requirements against lease obligations
and demonstrate a further degree of risk sharing.
The new lease clause has, following detailed negotiation
including legal input, received approval from the board's of two
initial housing associations with whom it had been discussed. The
Company had previously sought and obtained formal written
confirmation from its valuers that the inclusion of a clause of
this type within the Company's new and existing leases will not of
itself cause a diminution in the value of those leases or in the
underlying assets.
Takeover Offer
As announced on 9 May 2023, the Board made the decision to
recommend to shareholders an all-cash offer of 80 pence for each
share of the Company by Wellness Unity Limited (a wholly owned
subsidiary of CK Asset Holdings Limited).
Although the Board believes the offer undervalues the long-term
prospects of the Company, the Board
recognises that the Company and the sector in which it operates
faces a number of challenges in light of the current macro
environment and outlook. This includes the considerable negative
sentiment in the public markets towards the Company and the social
housing sector which the Board believes are unlikely to be overcome
in the short to medium term and will continue to have a material
impact on the Company's share price prospects. In addition, despite
delivering on revenue, NAV and dividend growth since IPO, the
Company's shares have traded for some time at an entrenched
discount to NAV.
On 23 June 2023, the Offer became unconditional.
Updates to Debt Arrangements
During the year, the Board considered and closed a new five year
term debt facility of c.GBP71 million with a major European bank
lender.
The facility was deployed in full to redeem the Company's
existing facility with Lloyds Bank of
GBP60 million as well as providing additional liquidity. As a
result, all of the Company's debt facilities are at 100% fixed or
capped rates.
Buyback Programme
During the year, the Board monitored the decline in the
Company's share price and in response, the Board agreed the
implementation of a share buyback programme under certain
parameters, which is being operated by the Company's Joint
Brokers.
Further information on the Company's buyback programme can be
found in the full Annual Report.
Strategic Overview
Purpose of the Company
The Company was established in 2016 with the purpose of
delivering long-term responsible, stable returns to investors and
achieving positive measurable social impact and ESG benefits on a
large scale. It should achieve this as a result of introducing
long-term equity capital into the social housing sector with a
particular focus on care-based community housing. By doing so, this
would form a bridge between equity investors and the social housing
sector and bring together aspects of healthcare with social
housing.
The Company has since developed the largest portfolio of
care-based community housing in the UK that provides long-term
homes for more than 4,500 individuals across half the local
authorities in England and Wales.
As a result of this success, the Company has recently extended
its mandate to be able to enter into transactions directly with the
NHS and with leading charities with an interest in the provision of
specialist housing that has a strong care or support element, is
consistent with public policy and whose costs are met by the public
purse for which it offers value for money.
Investment Objective
The Company's investment objective is to provide shareholders
with an attractive level of income, together with the potential for
capital growth from investing in a portfolio of Social Homes, which
benefits from inflation adjusted long-term leases or occupancy
agreements with Approved Providers and to deliver, on a fully
invested and geared basis, a targeted dividend yield of 5% per
annum(1) , which the Company expects to increase broadly in line
with inflation.
(1) The dividend yield is based on the original IPO price of 100
pence per Ordinary share. The target dividends are targets only and
do not represent a profit forecast. There can be no assurance that
the targets can or will be met and should not be taken as an
indication of the Company's expected or actual future results.
Accordingly, potential investors should not place any reliance on
these targets in deciding whether or not to invest in the Company
or assume that the Company will make any distributions at all, and
should decide for themselves whether or not the target dividend
yields are reasonable or achievable.
Investment Policy
The Company's investment policy is to invest in a diversified
portfolio of Social Homes throughout the United Kingdom. The
Company intends to meet the Company's investment objective by
acquiring, typically indirectly via Special Purpose Vehicles,
portfolios of Social Homes and entering into long-term inflation
adjusted leases or occupancy agreements for terms primarily ranging
from 10 years to 40 years with Approved Providers, where all
management and maintenance obligations will be serviced by the
Approved Providers. The Company will not undertake any development
activity or assume any development or construction risk. However,
the Company may engage in renovating or customising existing homes,
as necessary.
The Company may make prudent use of leverage to finance the
acquisition of Social Homes and to preserve capital on a real
basis.
The Company is focused on delivering capital growth and expects
to hold its Portfolio over the long-term and therefore it is
unlikely that the Company will dispose of any part of the
Portfolio. In the unlikely event that a part of the Portfolio is
disposed of, the Directors intend to reinvest proceeds from such
disposals in assets in accordance with the Company's investment
policy .
Investment Restrictions
The Company invests and manages the Portfolio with the objective
of delivering a high quality, diversified Portfolio through the
following investment restrictions:
-- the Company only invests in Social Homes located in the United Kingdom;
-- the Company only invests in Social Homes where the
counterparty to the lease or occupancy agreement is an Approved
Provider;
-- no lease or occupancy agreement shall be for an unexpired
period of less than 10 years, unless the shorter leases or
occupancy agreements represent part of an acquisition of a
portfolio which the Investment Adviser intends to reorganise such
that the average term of lease or occupancy agreement is increased
to 15 years or above;
-- the aggregate maximum exposure to any single Approved
Provider is 25% of the Gross Asset Value, once the capital of the
Company is fully invested;
-- no investment by the Company in any single geographical area,
in relation to which the houses and/or apartment blocks owned by
the Company are located on a contiguous or largely contiguous
basis, exceeds 20% of the Gross Asset Value of the Company;
-- the Company only acquires completed Social Homes and will not
forward finance any development of new Social Homes;
-- the Company does not invest in other alternative investment
funds or closed-end investment companies; and
-- the Company is not engaged in short selling.
The investment limits detailed above apply at the time of the
acquisition of the relevant investment in the Portfolio once fully
invested. The Company would not be required to dispose of any
investment or to rebalance the Portfolio as a result of a change in
the respective valuations of its assets.
Gearing Limit
The Directors seek to use gearing to enhance equity returns. The
level of borrowing is set on a prudent basis for the asset class
and seeks to achieve a low cost of funds, whilst maintaining the
flexibility in the underlying security requirements and the
structure of both the Portfolio and the Company.
The Company may, following a decision of the Board, raise debt
from banks and/or the capital markets and the aggregate borrowings
of the Company is always subject to an absolute maximum of 40% of
Gross Asset Value calculated at the time of drawdown. Current
gearing is 35.61% (2002: 34.43%).
Debt is secured at asset level, whether over a particular
property or a holding entity for a particular series of properties,
without recourse to the Company and also potentially at Company
level with or without a charge over the Portfolio (but not against
particular assets), depending on the optimal structure for the
Company and having consideration to key metrics including lender
diversity, cost of debt, debt type and maturity profiles. Otherwise
there will be no cross-financing between investments in the
Portfolio and the Company will not operate as a common treasury
function between the Company and its investments.
Use of Derivatives
The Company may choose to utilise derivatives for efficient
portfolio management. In particular, the Directors may engage in
full or partial interest rate hedging or otherwise seek to mitigate
the risk of interest rate increases on borrowings incurred in
accordance with the gearing limits as part of the management of the
Portfolio.
Cash Management
The Company invests in cash, cash equivalents, near cash
instruments and money market instruments.
REIT Status
The Directors conduct the affairs of the Company so as to enable
it to remain qualified as a REIT for the purposes of Part 12 of the
Corporation Tax Act 2010 (and the regulations made thereunder).
Culture
The Directors agree that establishing and maintaining a healthy
corporate culture among the Board and in its interaction with the
Investment Adviser, shareholders and other stakeholders will
support the delivery of its purpose, values and strategy. The Board
seeks to promote a culture of openness, debate and integrity
through ongoing dialogue and engagement with its service providers,
principally the Investment Adviser.
As detailed in the Corporate Governance Statement, the Company
has a number of policies and procedures in place to assist with
maintaining a culture of good governance, including those relating
to diversity and Directors' conflicts of interest. The Board
assesses and monitors compliance with these policies as well as the
general culture of the Board through Board meetings and, in
particular, during the annual evaluation process which is
undertaken by each Director (for more information, see the
performance evaluation section in the full Annual Report).
The Board's culture itself is one of openness, collaboration and
constructive debate to ensure the
effective contribution of all Directors, particularly in respect
of the Board's decision making. Consideration
of our Stakeholders is embedded in the Board's decision making
process. Please see our section 172 Statement above.
Key Performance Indicators ("KPIs")
Measure Explanation Result
----------------------------- --------------------------------- ----------------------------------------------------
Increase in NAV per Target to achieve capital IFRS NAV increase of 11.2p per share 11.4%
share appreciation whilst maintaining from IPO (2022:12.3p per share 12.6% from IPO).
a low risk strategy from
enhancing the quality of
cash flows from investments,
by physical improvement of
properties and by creating
a significantly diversified,
high-quality portfolio.
----------------------------- --------------------------------- ----------------------------------------------------
Dividends per share For the year ended 31 March Total dividend of 5.70p per share declared
2023, the Company targeted for the year to 31 March 2023 (2022:5.55p).
a dividend of 5.70p per share.
----------------------------- --------------------------------- ----------------------------------------------------
Number of local authorities, Target risk mitigation through As at 31 March 2023:
Approved Providers and a diversified
care providers portfolio (once fully invested) -- 178 Local Authority partners (2022:178 local
with no more authority partners)
than 25% exposure to any -- 19 Approved Providers (2022: 18 Approved
one Local Authority or single Providers)
Approved Provider and no -- 131 Care Providers (2022:130 Care Providers)
more than 20% exposure to
any single geographical area, The Company's largest single exposure is to
once the capital of the Company Falcon Housing Association CIC and currently
is fully invested. stands at 19% (2022: 19%). The largest geographical
concentration is in the South West, being 14%
(2022: 16%).
----------------------------- --------------------------------- ----------------------------------------------------
Loan to Gross Assets Targeted total debt drawn Leverage as at 31 March 2023 of 35.61% of gross
(Leverage) no more than 40% of gross assets (2022: 34.43%).
assets.
----------------------------- --------------------------------- ----------------------------------------------------
EPRA
The Company is a member of the European Public Real Estate
Association ("EPRA"). EPRA has developed and defined the following
performance measures to give transparency, comparability and
relevance of financial reporting across entities which may use
different accounting standards. The Company is pleased to disclose
the following measures which are calculated in accordance with EPRA
guidance. These are all Alternative Performance measures of the
Company.
Definition EPRA Earnings EPRA Net Reinstatement EPRA Net Tangible EPRA Net Disposal
Value ("NRV") Assets ("NTA") Value ("NDV")
Earnings from EPRA NAV metric EPRA NAV metric EPRA NAV metric
operational which which which represents
activities. assumes that assumes that the shareholders'
entities never entities buy value under
sell assets and sell assets, a disposal scenario,
and aims to thereby crystallising where deferred
represent the certain levels tax, financial
value required of unavoidable instruments
to rebuild deferred tax. and certain
the entity. other adjustments
are calculated
to the full
extent of their
liability, net
of any resulting
tax.
------------------- ----------------------- ----------------------- ----------------------
Purpose A key measure The EPRA NAV set of metrics make adjustments
of a company's to the NAV per the financial statements
underlying to provide stakeholders with the most
operating results relevant information on the fair value
and an indication of the assets and liabilities of a real
of the extent estate investment company, under different
to which current scenarios.
dividend payments
are supported
by earnings.
------------------- ------------------------------------------------------------------------
Performance EPRA Earnings EPRA NRV EPRA NTA EPRA NDV
GBP GBP GBP GBP
2023:26,929,000 2023:653,780,000 2023:653,780,000 2023:673,645,000
2022:29,810,000 2022:673,416,000 2022:673,416,000 2022:678,191,000
2021:30,630,000 2021:674,042,000 2021:674,042,000 2021:671,476,000
------------------- ----------------------- ----------------------- ----------------------
EPRA Earnings EPRA NRV per EPRA NTA per EPRA NDV per
per share share (diluted) share (diluted) share (diluted)
(Basic and pence pence pence
diluted) pence
2023:4.43 2023:107.82 2023:107.82 2023:111.09
2022:4.82 2022:109.96 2022:109.96 2022:110.74
2021:4.93 2021:108.38 2021:108.38 2021:107.97
------------------- ----------------------- ----------------------- ----------------------
Definition EPRA Net EPRA Topped-up EPRA Costs EPRA LTV EPRA
Initial Net Ratio Vacancy
Yield ("NIY") Initial Rate
Yield ("NIY")
Annualised This measure Administrative Debt (including Estimated
rental income incorporates and operating net payables Market
based on an adjustment costs (including but net of cash Rental
the cash to the and excluding balances) divided Value
rents passing EPRA NIY costs of by the market ("ERV")
at the balance in respect direct vacancy) value of property of vacant
sheet date, of the divided (including net space
less nonrecoverable expiration by gross receivables). divided
property of rent-free rental income. by ERV
operating periods of the
expenses, (or other whole
divided by unexpired portfolio.
the market lease incentives
value of such as
the property discounted
with (estimated) rent periods
purchasers' and stepped
costs. rents).
----------------------- ------------------ ------------------ ------------------- ---------------
Purpose A comparable measure A key measure A key (shareholder A 'pure'
for portfolio valuations. to enable gearing) metric (%) measure
These measures should meaningful to determine of investment
make it easier for measurement the percentage property
investors to judge of the changes of debt comparing space
themselves, how the in a company's to the appraised that is
valuation of portfolio operating value of the vacant,
X compares with portfolio costs. properties. based
Y. on ERV.
------------------------------------------- ------------------ ------------------- ---------------
Performance EPRA
EPRA Topped-up EPRA Costs Vacancy
EPRA NIY NIY Ratio(1) EPRA LTV Rate
% % % % %
--------------------- -------------------- ------------------ ------------------- ---------------
2023:5.55 2023:5.55 2022:23.07 2023:33.91 2023:0.02
2022:5.28 2022:5.28 2021:20.20 2022:31.24 2022:0
2021:5.24 2021:5.24 2020:20.33 2021:27.20 2021:0
--------------------- -------------------- ------------------ ------------------- ---------------
Past performance is not a reliable indicator of future
performance. For detailed workings reconciling the above
measures to the IFRS results, please see Appendix 1 to these
financial statements below.
(1) The ratios inclusive of vacancy costs are the same as the
ratio exclusive of vacancy costs for 2022, 2021 and 2020.
Principal Risks and Risk Management
The Board considers that the risks detailed below are the
principal risks facing the Group currently, along with the risks
detailed in note 31.0 to the financial statements. These are the
risks that could affect the ability of the Company to deliver its
strategy. The Board confirms that the principal risks of the
Company, including those which would threaten its future
performance, solvency or liquidity, have been robustly assessed
throughout the year ended 31 March 2023, taking into account the
emerging risks such as the evolving Ukraine-Russia conflict risk,
climate change risk, cyber security risk and recruitment of staff
at counterparties risk, and that processes are in place to continue
this assessment.
The Audit and Management Engagement Committee has divided the
Company's risks into the following risk type categories:
-- Strategy and Competitiveness;
-- Operational, including Cyber Crime;
-- Investment Management; and
-- Accounting, Legal and Regulatory.
Each risk contained in each category is reviewed for its impact
and probability by the Audit and Management Engagement Committee at
least twice during the year.
The Audit and Management Engagement Committee takes
responsibility for overseeing the effectiveness of risk management
and internal control systems on behalf of the Board and advises the
Board on the principal risks facing the business.
Further details of risk management processes that are in place
can be found in the Corporate Governance Statement as set out in
the full report. The principal and emerging risks and uncertainties
relating to the Group are regularly reviewed by the Board along
with the internal controls and risk management processes that are
used to mitigate these risks. The Board acknowledges that the
Takeover by Wellness Unity Limited may result in increased risk
both during the transition and subsequently. Specifically, the
Directors have not had detailed visibility of the offeror's post
completion funding for the group or the detailed plans behind the
intentions statements included within the announcement. Oversight
and monitoring during this period will take on critical importance.
The Board has identified one new principal risk during the year (as
set out in the list of principal risks and uncertainties). The risk
associated with a disruption to share price due to negative
sentiment in the social housing sector was identified as having the
highest impact and likelihood. The risk associated with promoting
the Company to generate investor demand was removed as a principal
risk by the Board during the year as the Takeover Offer by Wellness
Unity Limited has reduced the need for the Company to generate
additional investor demand. Further details on this and the other
principal risks and the management of those risks are described
below:
Principal Risks and Uncertainties
1. Strategy and Impact How managed/mitigated
Competitiveness
risk
-------------------------- ------------------------------------ ------------------------------------ --------------
The Company's share The Company is targeted by The Board is committed to Impact: High
price is disrupted a short seller or activist maintaining
due to negative shareholder leading to a fall open channels of communication with Probability:
sentiment towards in the Company's share price shareholders and engaging in ways Likely
the social housing and a widening of the shareholders find most meaningful,
sector following discount to NAV. in order to gain understanding of
a targeted attack shareholder views. Further
by a short seller Significant numbers of shares information
and pollution from may need to be repurchased on the Board's engagement with
other events in leading to a fall in the size shareholders
the sector. of the Company and liquidity can be found above.
implications.
This risk remained The Board seeks to provide full
at the same level disclosure on the counterparties
as the year ended and the structure of transactions
31 March 2022 so that all stakeholders are kept
reliably informed on the Company's
business dealings.
The Board regularly reviews the
Company's buyback policy to ensure
this is in alignment with the
interests
of the Company and shareholders.
The Board is also mindful of the
possibility to issue shares and
regularly reviews its policy in
this area to ensure that it is
consistent
with the Company's strategy. It
receives regular updates from the
Company's brokers to help inform
its decisions in this regard.
-------------------------- ------------------------------------ ------------------------------------ --------------
2. Strategy and Impact How managed/mitigated
competitiveness
risks
-------------------------- ------------------------------------ ------------------------------------ --------------
The Company and Any change in the laws, regulations The Company focuses on niche real Impact: Very
its operations and/or government policy affecting estate sectors where it believes High
are subject to the Company and its operations the regulatory framework and
laws and regulations may have a material adverse underlying Probability:
enacted by national effect on the ability of the demand dynamics to be robust. Unlikely
and local governments Company to successfully pursue
and government its investment policy and The Investment Adviser has strong
policy. meet its investment objective industry contacts and has good
and on the value of the Company knowledge
This risk remained and the shares. on policy opinion and direction.
at the same level
as the year ended The Board obtains regular updates
31 March 2022. from professional advisers to
monitor
developments in regulation and
legislation.
-------------------------- ------------------------------------ ------------------------------------ --------------
3. Strategy and Impact How managed/mitigated
competitiveness
risks
-------------------------- ------------------------------------ ------------------------------------ --------------
As a result of The rate of capital deployment The Company has strong links with Impact: High
competition from would drop, decreasing returns vendors and a robust pipeline of
other purchasers to shareholders. future acquisitions. Probability:
of social housing Unlikely
properties, the The Board regularly reviews the
Company's ability pipeline of potential acquisitions
to deploy capital and monitors the market landscape.
effectively within
a reasonable timeframe The Board is aware of the current
may be restricted competitive social housing market
or the net initial and recognises the impact this may
yields at which have on the Company's ability to
the Company can deploy capital effectively.
acquire properties
may decline such
that target returns
cannot be met.
This risk remained
at the same level
as the year ended
31 March 2022.
-------------------------- ------------------------------------ ------------------------------------ --------------
4. Investment Impact How managed/mitigated
management risk
-------------------------- ------------------------------------ ------------------------------------ --------------
Tenant defaulting Loss of rental income in the The portfolio is highly diversified Impact:
under the terms short term. to reduce the impact of default. Medium
of a lease. Extensive diligence is undertaken
on all assets, which is reviewed Probability:
This risk remained and challenged by the Board. Likely
at the same level
as the year ended The Investment Adviser works
31 March 2022. proactively
with Approved Providers to address
any potential concerns.
The Board is provided with regular
updates on the tenants with any
concerns raised for discussion.
The Board has noted that the
Company's
historic level of defaults has been
immaterial.
-------------------------- ------------------------------------ ------------------------------------ --------------
5. Investment Impact How managed/mitigated
management risk
-------------------------- ------------------------------------ ------------------------------------ --------------
The value of the The valuation of the Company's The Company invests in projects Impact:
investments made assets would fall, decreasing with stable, predetermined, High
by the Company the NAV and yields of the long-term
may change from Company. leases in place with CPI or CPI Probability:
time to time according plus 1% indexation and its strategy Possible
to a variety is not focused on sale of
of factors, including properties.
movements in interest
rates, inflation The Board receives regular updates
and general market on factors that might impact
pricing of similar investment
investments. valuations.
This risk remained
at the same level
as the year ended
31 March 2022
-------------------------- ------------------------------------ ------------------------------------ --------------
6. Investment Impact How managed/mitigated
management risk
-------------------------- ------------------------------------ ------------------------------------ --------------
The current macroeconomic Less favourable borrowing The Investment Adviser, AIFM and Impact:
environment has terms increase the financing Depositary monitor covenants in Medium
increased the level costs reducing returns to place with debt providers and
of risk around shareholders. present Probability:
the Company's financing to the Board on a quarterly basis. Possible
arrangements regarding
borrowing terms The Investment Adviser leverages
and covenants. the relationships it already has
in the market to form long term
This was identified partnerships with debt providers
as a new risk during at rates it already has achieved
the year. on similar projects within the same
macro market.
The Investment Advisers reports
to the Board on discussions with
banks which will highlight at the
earliest opportunity if this risk
has increased.
-------------------------- ------------------------------------ ------------------------------------ --------------
7. Investment Impact How managed/mitigated
management risk
-------------------------- ------------------------------------ ------------------------------------ --------------
Due diligence may The Company would overpay The Company undertakes detailed Impact:
not reveal all for assets due diligence on the properties, High
facts and circumstances impairing shareholder value, their condition, the proposed
that may be relevant reducing rental income and rental Probability:
in connection with therefore returns. levels - benchmarking against Unlikely
an investment and comparable
may not prevent schemes using both external
an acquisition consultants
being materially where required and its own
overvalued or rental proprietary
streams being at database - and on the Approved
risk. Providers
and care providers involved in each
property to ensure that the
This risk remained purchase
at the same level price is robust.
as the year ended
31 March 2022.
The Board considers the due
diligence
undertaken when approving
acquisitions.
-------------------------- ------------------------------------ ------------------------------------ --------------
8. Investment Impact How managed/mitigated
management risk
-------------------------- ------------------------------------ ------------------------------------ --------------
Loss of key staff Negative investor sentiment The Board considers the risk of Impact:
at the Investment leading to a reduction in the Investment Adviser losing key High
Adviser. share price. Reduction in staff and the succession plans the
ability to source off market Investment Adviser has in place. Probability:
This risk remained and favourable deals. Unlikely
at the same level
as the year ended The Board has noted the ongoing
31 March 2022. expansion of the Investment
Adviser's
support team.
-------------------------- ------------------------------------ ------------------------------------ --------------
9. Strategy and Impact How managed/mitigated
Competitiveness
-------------------------- ------------------------------------ ------------------------------------ --------------
The Company fails Decrease in the value of the Regular review and consideration Impact: High
to respond to issues Company's asset and a negative by the Board including the input
related to climate impact on the Company's share of climate change specialists at Probability:
change, either price. the Investment Adviser. Unlikely
directly as enhancements
to properties or Advice received from external
indirectly via professional
its climate change advisers.
reporting.
This risk remained
at the same level
as the year ended
31 March 2022.
-------------------------- ------------------------------------ ------------------------------------ --------------
10. Operational, Impact How managed/mitigated
including cyber
crime
-------------------------- ------------------------------------ ------------------------------------ --------------
Serious accident Reputational damage for the Reporting from Approved Providers Impact: High
or poor Company. and monitoring of Approved
management amongst Providers Probability:
Approved Providers by the investment Adviser. Unlikely
due to staff shortages
and loss of competence.
This risk remained
at the same level
as the year ended
31 March 2022
-------------------------- ------------------------------------ ------------------------------------ --------------
Emerging risks
Emerging risks are considered during the regular risk review,
and would be specifically discussed and evaluated as they arise
during the year. Input from the Investment Adviser on emerging
risks is considered by the Audit and Management Engagement
Committee.
Key emerging risks identified and considered during the year
include:
-- Long-term Climate Change - the impact of climate change, over
the longer-term on the business. The Company is committed to
understanding ESG risk, including the particular impact of climate
change on the business. Climate change poses an indirect risk to
the Company's operations, the environment and society, and the
Board is aware that appropriate action is required to reduce its
impact. The Board uses the updates from the Investment Adviser as
they relate to the performance of the company and the impact of
long-term climate change to help manage/mitigate this risk.
-- Cyber Security - the impact of a cyber security breach within
the Company or its service providers. The Audit and Management
Engagement Committee reviews and monitors the cyber security
controls of the Company's service providers on a regular basis to
manage/mitigate this risk.
Please see the Company's ESG Report in the full Annual Report
for further details.
The Listing Rules require premium-listed commercial companies to
disclose in their annual report whether they have reported on how
climate change affects their business in a manner consistent with
the recommendations of the Task Force on Climate-related Financial
Disclosures ('TCFD'), and to provide an explanation and other
information if they are unable to do so. In addition, the UK
Government intends to introduce mandatory climate-related
disclosures to supplement the requirements under the Listing Rules.
The Board has chosen not to adopt the requirements early and
expects these to be applicable to the Company in the financial year
2024.
Going Concern and Viability Statement
Going Concern
The Board regularly reviews the position of the Company and its
ability to continue as a going concern at its meetings. The
financial statements set out the current financial position of the
Company.
As at 31 March 2023, the Company held cash balances of GBP35.6
million (net of operating and financing amounts due). The Board has
evaluated the financial position of the Company which has
maintained its premium investment grade rating from Fitch Ratings
Ltd - a well established rating agency with a strong familiarity
with the alternative healthcare real estate space, which gives the
Company confidence in the ability to raise future debt and/or
equity capital in order to fund the Company's investments for the
long term and to facilitate the payment of dividends to
shareholders. Based on these, the Board believes that the Company
is in a position to manage its financial risks.
Various forms of sensitivity analysis have been performed, in
particular the financial performance of tenants and a reduction in
passing rent. As at 31 March 2023, the passing rent would have to
drop by approximately 11% before any of the Company's interest
cover covenants are breached. The property values would need to
fall by around 13% before breaching the loan to value covenant.
The Company's performance in the event of severe but plausible
downside scenarios used for viability are equally applicable for
going concern. At the date of approval of this report, the Company
has sufficient headroom within its financial loan covenants. The
Company also benefits from a secure income stream from leases with
long average unexpired term leases.
Leverage is prudently maintained at a level of less than 40% of
Gross Asset Value.
The Company's articles of association include a requirement for
the Board to propose an ordinary resolution at the annual general
meeting following the fifth anniversary from the initial public
offering of the Company for the Company to continue in its current
form (the Continuation Resolution). On 15 September 2022, at the
Annual General Meeting, shareholders representing 298,478,435 voted
in favour of the continuation of the Company being 98.85% of those
who voted.
On 9 May 2023 an announcement was made to the market for an
all-cash offer of the Company from Wellness Unity Limited, a wholly
owned indirect subsidiary of CK Asset Holdings Limited (CKA). On 23
June 2023, when the offer became unconditional, CKA subsequently
became the ultimate controlling party of the Company, and a related
party under IAS 24. The Group's existing committed debt facilities
contain a standard change of control clause which has now been
triggered due to the offer becoming unconditional. This could
result in the existing committed debt facilities being withdrawn.
The Group does not have visibility of the post completion funding
for the Group at this time. Therefore, this could create some
uncertainty as to the Group's going concern position. The Directors
note the detailed intentions statement included within the
announcement on 9 May 2023 which states that CKA does not envisage
making any changes to the management team nor any disruption to any
counterparties or to the underlying tenants. The conditions
outlined above indicate a material uncertainty which may cast
significant doubt upon the Group and the Company's ability to
continue as a going concern. The financial statements do not
include the adjustments that would result if the Group and the
Company were unable to continue as a going concern.
Having considered all of the above, the Board is of the opinion
that the going concern basis adopted in the preparation of the
consolidated financial statements is appropriate.
Viability Statement
The Directors present the Company's viability statement which
summarises the results of their assessment of the Company's current
position, its principal risks and prospects over a period to 31
March 2028.
The Company acquires high-quality property with a particular
focus on property providing care for the long
term. The properties acquired are on long-term full repairing
and insuring leases in a sector of the market with very high levels
of need. The cost base of the Company is proportionately low
compared to revenue
and there is a high level of certainty over cost to be incurred.
On this basis, the Company is expected to be viable well beyond the
five-year term considered in the Company's testing below.
The assumptions underpinning the forecast cashflows and covenant
compliance forecasts were sensitised to explore the resilience of
the Company to the potential impact of the Company's principal
risks and uncertainties.
The prospects were assessed over a five-year period for the
following reasons:
i) the Company's long-term forecast covers a five-year
period;
ii) the length of service level agreements between Approved
Providers and care providers is typically five years; and
iii) the Company's leases are typically 25 years on fully
repairing and insuring leases, enabling reasonable certainty of
income over the next five years.
The Company's five-year forecast incorporates assumptions
related to the Company's investment strategy and principal risks
from which performance results, cash flows and key performance
indicators are forecast. The principal risks are set out above. Of
these risks, those which are expected to have a higher impact on
the Company's longer-term prospects are those related to the
current macroeconomic environment, which has increased the level of
risk around the Company's financing arrangements regarding
borrowing terms and covenants. The risk associated with a
disruption to share price due to negative sentiment in the social
housing sector being identified as having the highest impact and
likelihood. The Company has considered its strategy over a longer
term and, in light of the inherent demand for the Company's
properties and the vulnerable nature of the ultimate tenant, the
risk of change in future housing policy is considered to be
limited. The principal risks are mitigated by the Company's risk
management and internal control processes, which function on an
ongoing basis.
The Board, via delegation to the Audit and Management Engagement
Committee, monitors the effectiveness of the Company's risk
management and internal control processes on an ongoing basis. The
monitoring activities are described in the Report of the Audit and
Management Engagement Committee as set out in the full Annual
Report and include direct review and challenge of the Company's
documented risks, risk ratings and controls, and review of
performance and compliance reports prepared by the Company's key
suppliers and the independent external auditors.
The Board of Directors has carried out a robust assessment of
the principal and emerging risks facing the Company, including
those that would threaten its business model, future performance,
solvency and liquidity. Where appropriate, the Company's forecasts
are subject to sensitivity analysis, which involves applying severe
(but plausible) conditions and flexing a number of assumptions
simultaneously.
The sensitivities performed were designed to provide the
Directors with an understanding of the Company's performance in the
event of severe but plausible downside scenarios, taking full
account of mitigating actions that could be taken to avoid or
reduce the impact or occurrence of the underlying risks outlined
below:
-- 10% of tenants defaulting under a lease. The outcome of this
scenario reduces profits on average over the five year forecast by
18% per annum and reduces cash by GBP20 million. However, the Board
remains comfortable that dividends could be paid and any
liabilities could be settled as there is still a sufficient level
of cash in the business. Therefore the business remains viable over
the five year period; and
-- deterioration in economic outlook, or a change in government
housing policy which could impact the fundamentals of the social
housing sector, including a negative impact on valuations and a 5%
reduction in annual rents. The outcome of the 'severe downside
scenario' was that the Company's covenant headroom on existing debt
(the level at which the investment property values would have to
fall before a financial breach occurs) reduces by 13%, prior to any
mitigating actions such as asset sales, which indicates that
covenants on existing facilities would not be breached.
The remaining principal risks and uncertainties, whilst having
an impact on the Company's business, are not considered by the
Directors to have a reasonable likelihood of impacting the
Company's viability over the five-year period, therefore the
scenarios outlined above are the only ones that have been
specifically tested.
Based on the results of their assessment, notwithstanding the
material uncertainty arising from the offer from CKA, the Directors
have a reasonable expectation that the Company will be able to
continue in operation and meet its liabilities as they fall due
over the five-year period of their assessment.
Michael Wrobel
Chairman
28 June 2023
Further details on the Environmental, Social & Governance
framework of the Company and the Social Impact report are set out
in the full Report.
Board of Directors
Michael Wrobel (Chairman)
Peter Baxter (Senior Independent Director and Chair of
Nomination and Remuneration Committee)
Caroline Gulliver (Chair of the Audit and Management Engagement
Committee)
Alison Hadden (Director)
Alastair Moss (Director)
Extracts from the Report of the Directors
Results and Dividends
The following dividends were paid on the Ordinary shares during
the year:
Fourth Quarterly dividend 1.3875p per share paid on 28 June 2022
-------------------------- ------------------------------------------
First Quarterly dividend 1.425p per share paid on 9 September 2022
-------------------------- ------------------------------------------
Second Quarterly dividend 1.425p per share paid on 9 December 2022
-------------------------- ------------------------------------------
Third Quarterly dividend 1.425p per share paid on 10 March 2023
-------------------------- ------------------------------------------
Since the year end, the Company has declared the following
dividend:
Fourth Quarterly dividend 1.425p per share paid on 9 June 2023
-------------------------- -------------------------------------
No final dividend is being recommended on the Ordinary
shares.
Capital Structure
Issue of shares
At the AGM held on 15 September 2022, the Directors were
authorised to issue equity securities up to an aggregate nominal
amount of GBP610,736 (being approximately 10% of the issued
Ordinary share capital).
The Company was also authorised to disapply pre-emption rights
in respect of equity securities and
to issue equity securities for cash up to an aggregate nominal
amount equal to GBP610,736 (being approximately 10% of the issued
Ordinary share capital).
Purchase of Own Shares
At the AGM held on 15 September 2022, the Directors were granted
the authority to buy back up to 91,549,383 Ordinary shares, being
14.99% of the Ordinary shares in issue at the time of the passing
of the resolution.
During the year, the Board maintained the Company's share
buyback programme, under which a total of
6,050,000 shares have been purchased into treasury for aggregate
amount of GBP4,624,947.50 (nominal value GBP60,500, representing
0.97%) as at 31 March 2023.
The authority to buy back up to 91,549,383 shares will expire at
the conclusion of the next AGM of the Company or on 30 September
2023, whichever is earlier when a resolution for its renewal will
be proposed. Further information will be contained in the Notice of
AGM, which will be circulated to shareholders in due course.
Current Share Capital
As at 31 March 2023, there were 622,461,380 Ordinary shares in
issue, of which 16,075,000 shares were held in treasury,
representing 2.6% of the Company's total issued share capital. The
total voting rights of the Company as at 31 March 2023 was
606,386,380.
Statement of Directors' Responsibilities
The directors are responsible for preparing the Annual Report
and financial statements in accordance with applicable law and
regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the Group financial statements in accordance with
UK-adopted international accounting standards and the Company
financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 "Reduced Disclosure Framework", and applicable
law).
Under Company law, Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
profit or loss of the Group for that period. In preparing the
financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- state whether applicable UK-adopted international accounting
standards have been followed for the Group financial statements and
United Kingdom Accounting Standards, comprising FRS 101 have been
followed for the Company financial statements, subject to any
material departures disclosed and explained in the financial
statements;
-- make judgements and accounting estimates that are reasonable and prudent; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain the
Group's and Company's transactions and disclose with reasonable
accuracy at any time the financial position of the Group and
Company and enable them to ensure that the financial statements and
the Directors' Remuneration Report comply with the Companies Act
2006.
The Directors are responsible for the maintenance and integrity
of the Company's financial statements published on the ultimate
parent Company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Directors' confirmations
The directors consider that the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group's
and Company's position and performance, business model and
strategy.
Each of the Directors, whose names and functions are listed in
the Board of Directors confirm that, to the best of their
knowledge:
-- the Group financial statements, which have been prepared in
accordance with UK-adopted international accounting standards, give
a true and fair view of the assets, liabilities, financial position
and profit of the Group;
-- the Company financial statements, which have been prepared in
accordance with United Kingdom Accounting Standards, comprising FRS
101, give a true and fair view of the assets, liabilities,
financial position and profit of the Company; and
-- the Group Strategic Report includes a fair review of the
development and performance of the business and the position of the
Group and Company, together with a description of the principal
risks and uncertainties that it faces.
Approval
This Statement of Directors' Responsibilities was approved by
the Board and signed on its behalf by:
Michael Wrobel
Chairman
28 June 2023
Non-statutory accounts
The financial information set out below does not constitute the
Company's statutory accounts for the year ended 31 March 2023 or
the year ended 31 March 2022 but is derived from those accounts.
Statutory accounts for the period ended 31 March 2022 have been
delivered to the Registrar of Companies and those for the year
ended 31 March 2023 will be delivered in due course. The Auditor
has reported on those accounts; their report was (i) unqualified,
(ii) included one reference to a matter to which the Auditor drew
attention without qualifying their report and (iii) did not contain
a statement under Section 498 (2) or (3) of the Companies Act
2006.The text of the Auditor's report can be found in the Company's
full Annual Report and financial statements at
www.civitassocialhousing.com .
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2023
For the For the
year ended year ended
31 March 2023 31 March 2022
Note GBP'000 GBP'000
------------------------------------- ------- --------------- ---------------
Revenue
Rental income 5.0 54,607 51,636
Less direct property expenses 5.0 (1,941) (978)
------------------------------------- ------- --------------- ---------------
Net rental income 52,666 50,658
Directors' remuneration 6.0 (211) (206)
Investment advisory fees 8.0 (6,217) (6,132)
General and administrative expenses 9.0 (5,393) (3,909)
------------------------------------- ------- --------------- ---------------
Total expenses (11,821) (10,247)
Change in fair value of investment
properties 15.0 2,640 12,269
------------------------------------- ------- --------------- ---------------
Operating profit 43,485 52,680
Finance income 10.0 148 7
Finance expense 11.0 (15,335) (10,608)
Change in fair value of interest
rate derivatives 21.0 (2,826) 2,675
------------------------------------- ------- --------------- ---------------
Profit before tax 25,472 44,754
Taxation 12.0 - -
------------------------------------- ------- --------------- ---------------
Profit being total comprehensive
income for the year 25,472 44,754
---------------------------------------------- --------------- ---------------
Earnings per share - basic and
diluted 13.0 4.19p 7.23p
-------------------------------- ----- ------ ------
All amounts reported in the Consolidated Statement of
Comprehensive Income above arise from continuing operations.
Consolidated Statement of Financial Position
As at 31 March 2023
31 March 2023 31 March 2022
Note GBP'000 GBP'000
----------------------------- ------- -------------------- --------------
Assets
Non-current assets
Investment property 15.0 953,364 945,237
Other receivables 17.0 24,783 23,519
Interest rate derivatives 21.0 8,129 2,131
----------------------------- ------- -------------------- --------------
986,276 970,887
Current assets
Trade and other receivables 17.0 11,260 12,865
Cash and cash equivalents 18.0 35,588 53,337
----------------------------- ------- -------------------- --------------
46,848 66,202
----------------------------- ------- -------------------- --------------
Total assets 1,033,124 1,037,089
----------------------------- ------- -------------------- --------------
Liabilities
Current liabilities
Trade and other payables 19.0 (9,300) (9,492)
Non-current liabilities
Bank and loan borrowings 20.0 (361,915) (352,050)
Total liabilities (371,215) (361,542)
----------------------------- ------- -------------------- --------------
Total net assets 661,909 675,547
----------------------------- ------- -------------------- --------------
Equity
Share capital 22.0 6,225 6,225
Share premium reserve 23.0 292,626 292,626
Capital reduction reserve 24.0 317,714 322,365
Retained earnings 25.0 45,344 54,331
----------------------------- ------- -------------------- --------------
Total equity 661,909 675,547
----------------------------- ------- -------------------- --------------
Net assets per share -
basic and diluted 26.0 109.16p 110.30p
------------------------ ----- -------- --------
These consolidated financial statements were approved by the
Board of Directors of Civitas Social Housing PLC and authorised for
issue and signed on its behalf by:
Michael Wrobel
Chairman and Independent Non-Executive Director
28 June 2023
Company No: 10402528
Consolidated Statement of Changes in Equity
For the year ended 31 March 2023
Share Capital
Share premium reduction Retained Total
capital reserve reserve earnings equity
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ----- -------- -------- ---------- ---------- ---------
Balance at 1 April 2021 6,225 292,463 331,140 43,670 673,498
Profit and total comprehensive income
for the year - - - 44,754 44,754
Shares reissued from treasury 23.0 - 163 484 - 647
Shares bought back into treasury 24.0 - - (9,259) - (9,259)
Dividends paid 14.0 - - - ( 34,093) (34,093)
Balance at 31 March 2022 6,225 292,626 322,365 54,331 675,547
--------------------------------------- ----- -------- -------- ---------- ---------- ---------
Profit and total comprehensive income
for the year - - - 25,472 25,472
--------------------------------------- ----- -------- -------- ---------- ---------- ---------
Shares reissued from treasury 23.0 - - - - -
--------------------------------------- ----- -------- -------- ---------- ---------- ---------
Shares bought back into treasury 24.0 - - (4,651) - (4,651)
--------------------------------------- ----- -------- -------- ---------- ---------- ---------
Dividends paid 14.0 - - - (34,459) (34,459)
--------------------------------------- ----- -------- -------- ---------- ---------- ---------
Balance at 31 March 2023 6,225 292,626 317,714 45,344 661,909
--------------------------------------- ----- -------- -------- ---------- ---------- ---------
Consolidated Statement of Cash Flows
For the year ended 31 March 2023
For the
For the year ended
year ended 31 March
31 March 2022
2023 *Restated
Note GBP'000 GBP'000
--------------------------------------- ------- ------------ ------------
Cash flows from operating
activities
Profit for the year before
taxation 25,472 44,754
- Change in fair value of
investment properties (2,640) (12,269)
- Change in fair value of
interest rate derivatives 2,826 (2,675)
- Rent and incentive straight
line adjustments 436 397
- Bad debt expense/(credit) 5.0 429 (17)
Finance income (148) (7)
Finance expense 15,335 10,608
Increase in lease incentive
receivable (1,700) (2,011)
Decrease/(increase) in trade
and other receivables 1,044 (236)
(Decrease)/increase in trade
and other payables (1,725) 551
--------------------------------------- ------- ------------ ------------
Cash generated from operations 39,329 39,095
Interest received 148 7
--------------------------------------- ------- ------------ ------------
Net cash flow generated from
operating activities 39,477 39,102
--------------------------------------- ------- ------------ ------------
Investing activities
Improvements and purchases
of investment properties (4,679) (27,695)
Acquisition costs (211) (1,640)
Purchase of subsidiary - including
property - (13,559)
Sale proceeds on sale of subsidiary
- excluding property - 2,695
--------------------------------------- ------- ------------ ------------
Net cash flow used in investing
activities (4,890) (40,199)
--------------------------------------- ------- ------------ ------------
Financing activities
Cost of shares bought into
treasury 24.0 (4,651) (9,259)
Proceeds from shares reissued
from treasury 24.0 - 919
Dividends paid to equity shareholders (34,576) (33,928)
Interest rate derivative premium
paid 21.0 (8,841) -
Proceeds from the disposal
of interest rate derivatives 21.0 17 -
Bank borrowings advanced 20.0 70,875 -
Bank borrowings repaid 20.0 (60,000) -
Bank borrowing issue costs
paid (3,148) (1,805)
Interest and security fees
paid on bank borrowings and
derivatives (12,012) (8,590)
--------------------------------------- ------- ------------ ------------
Net cash flow used in financing
activities (52,336) (52,663)
--------------------------------------- ------- ------------ ------------
Net decrease in cash and
cash equivalents (17,749) (53,760)
Cash and cash equivalents
at the start of the year 18.0 53,337 107,097
--------------------------------------- ------- ------------ ------------
Cash and cash equivalents
at the end of the year 18.0 35,588 53,337
--------------------------------------- ------- ------------ ------------
* Cash and cash equivalents and monies held in restricted
accounts and deposits have been restated as at 31 March 2022
following clarification by IFRIC on classification of funds with
externally imposed restrictions. Please refer to details in note
2.4.
The notes set out below are an integral part of these
consolidated financial statements.
Notes to the Consolidated Financial Statements for the year
ended 31 March 2023
1.0 Corporate information
Civitas Social Housing PLC (the "Company") was incorporated in
England and Wales under the Companies Act 2006 as a public company
limited by shares on 29 September 2016 with company number 10402528
under the name Civitas REIT PLC, which was subsequently changed to
the existing name on 3 October 2016.
The address of the registered office is 6(th) Floor, 65 Gresham
Street, London EC2V 7NQ. The Company is registered as an investment
company under section 833 of the Companies Act 2006 and is
domiciled in the United Kingdom.
The Company did not begin trading until 18 November 2016 when
the shares were admitted to trading on the London Stock Exchange
("LSE").
The Company's Ordinary shares are admitted to the Official List
of the Financial Conduct Authority ("FCA") and traded on the
LSE.
The principal activity of the Company and its subsidiaries (the
"Group") is to provide shareholders with an attractive level of
income, together with the potential for capital growth from
investing in a portfolio of social homes.
2.0 Basis of preparation
The financial statements have been prepared in accordance with
UK-adopted international accounting standards and with the
requirements of the Companies Act 2006 as applicable to companies
reporting under those standards.
The Group's consolidated financial statements have been prepared
on a historical cost basis, as modified for the Group's investment
properties and derivative financial instruments at fair value
through profit or loss.
2.1 Functional and presentation currency
The financial information is presented in Pounds Sterling which
is also the functional currency of the Group, and all values are
rounded to the nearest thousand pounds (GBP'000s), except where
otherwise indicated.
2.2 Going concern
The Group benefits from a secure income stream from long leases
with the Approved Providers. The Group's cash balances as at 31
March 2023 were GBP35,588,000, of which GBP2,949,000 was held as
restricted cash. Details of this can be found in note 18.0.
The Company and its Investment Adviser, Civitas Investment
Management Limited ("CIM") continue to work closely with the
Company's major counterparties to monitor the position on the
ground and should it be needed, to offer assistance and guidance
where possible. The Board of Directors believes that the Company
operates a robust and defensive business model and that social
housing and specialist healthcare are proving to be some of the
more resilient sectors within the market, given that they are based
on non-discretionary public sector expenditure and that demand
exceeds supply.
On 17 November 2022, an extension was granted for the facility
with HSBC Bank plc, which now expires on 28 November 2025.
On 13 February 2023, the Company closed a new five year term
debt facility of GBP70,875,000 with Deutsche Bank AG. The facility
has been deployed to redeem the Company's revolving credit facility
with Lloyds Bank plc of GBP60,000,000 as well as providing
additional liquidity. As a result, now all debt facilities have
fixed or capped rates.
On 1 December 2022, the Company signed a facility with an
institutional lender. Subsequent to this, on 21 June 2023, the
Company received credit approved terms for an additional GBP61.0
million fixed facility based on a 3-year SONIA rate at the date of
draw down +195bps margin with a maturity date of 3 August 2026. The
eventual drawdown on the facility is subject to certain standard
closing conditions.
Cash flow forecasts based on severe but plausible downside
scenarios have been run, in particular the financial performance of
tenants and a reduction in contracted rent. As at 31 March 2023,
the rent would have to drop by approximately 10% before any of its
loan covenants are breached. At the date of approval of this
report, the Company has sufficient headroom within its financial
loan covenants. The Company also benefits from a secure income
stream from leases with long weighted average unexpired term
leases. As a result, the Directors believe that the Group is well
placed to manage its financing and other business risks and that
the Group will remain viable, continuing to operate and meet its
liabilities as they fall due.
The Company's articles of association include a requirement for
the Board to propose an ordinary resolution at the annual general
meeting following the fifth anniversary from the initial public
offering of the Company for the Company to continue in its current
form (the Continuation Resolution). This vote was passed in
September 2022 so the Company will continue its business as
presently constituted and will propose the same resolution at the
AGM in September 2027 and every fifth annual general meeting
thereafter.
On 9 May 2023, an announcement was made to the market for an
all-cash offer of Civitas Social Housing PLC (CSH) from Wellness
Unity Limited, a wholly owned indirect subsidiary of CK Assets
Holdings Limited (CKA). The offer became unconditional on 23 June
2023. The Group's existing committed debt facilities contain a
standard change of control clause which has now been triggered due
to the offer becoming unconditional. This could result in the
existing committed debt facilities being withdrawn. Furthermore,
the Directors do not have visibility of the post completion funding
for the Group and Company at this time. The Directors note the
detailed intentions statement included within the announcement on 9
May 2023 which states that CKA does not envisage making any changes
to the management team nor any disruption to any counterparties or
to the underlying tenants. However, the conditions outlined above
indicate a material uncertainty which may cast significant doubt
upon the Group's and Company's ability to continue as a going
concern. The Independent Auditors' Report included within the
Annual Report and Accounts for the year ended 31 March 2023 also
highlights this material uncertainty. Therefore, notwithstanding
the material uncertainty arising from the offer from CKA, the
Directors are satisfied that the going concern basis remains
appropriate for the preparation of the financial statements. The
financial statements do not include the adjustments that would
result if the Group and the Company were unable to continue as a
going concern.
2.3 New standards, amendments and interpretations
The following new standards are now effective and have been
adopted for the year ended 31 March
2023.
-- IFRIC Agenda Item: Following clarification by IFRIC on the
classification of monies held in restricted accounts, monies that
are restricted by use only are classified at 31 March 2023 as "Cash
and cash equivalents". As detailed in note 2.4, the comparative
balances have been restated where applicable to reflect this change
in classification.
-- IFRIC Agenda Item: In October 2022, the IFRIC issued an
agenda decision in respect of 'Lessor forgiveness of lease payments
(IFRS 9 and IFRS 16)' ('the IFRIC Decision on Concessions'). This
concluded that losses incurred on granting retrospective rent
concessions should be charged to the income statement on the date
that the legal rights to income are conceded (i.e. immediate
recognition in full rather than smoothed over the life of the
lease). The clarification has not had a material impact on the
financial statements.
-- Amendments to IFRS 3 'Business Combinations' (effective for
periods beginning on or after 1 January 2022) - gives clarification
on the recognition of contingent liabilities at acquisition and
clarifies that contingent assets should not be recognised at the
acquisition date. The amendments have not had a significant impact
on the preparation of the financial statements.
-- Amendments to IAS 37 'Provisions, Contingent Liabilities and
Contingent Assets' (effective for periods beginning on or after 1
January 2022) - gives clarification on costs to include in
estimating the cost of fulfilling a contract for the purpose of
assessing whether that contract is onerous. The amendments have not
had a significant impact on the preparation of the financial
statements.
-- Amendments to IFRS 9 'Financial Instruments' (effective for
periods beginning on or after 1 January 2022) - gives clarification
on the fees an entity includes when assessing whether the terms of
a new or modified financial liability are substantially different
from the terms of the original liability. The amendments have not
had a significant impact on the preparation of the financial
statements.
2.4 Restatement
IFRIC Agenda Decision - Recognition of restricted cash as "Cash
and cash equivalents"
In March 2022, the IFRS Interpretations Committee ("IFRIC")
finalised a decision on the classification of monies held in
restricted accounts, such that monies that are restricted by use
only, are classified at 31 March 2023 as "Cash and cash
equivalents".
The Group holds restricted cash for tenant deposits and
retention monies in relation to deferred payments subject to
achievement of certain conditions, other retentions and cash
segregated to fund repair, maintenance and improvement works to
bring the properties up to satisfactory standards for the Group and
the tenants.
As a result of the IFRIC decision, the Group has revisited its
policy and includes these monies within the classification "cash
and cash equivalents". The adjustment has no impact on the
classification of the net assets of the Group on the Statement of
Financial Position, however the movements on these balances are now
reported in the Statement of Cashflows and comparative figures have
been restated.
Comparative figures for 'cash and cash equivalents' have
increased by GBP4,362,000 (31 March 2021: GBP3,278,000). This has
resulted in an increase to the comparative figure for cash
generated from operations by GBP1,613,000 concerning movements on
deposit balances and an increase to the net cash flow used in
investing activities of GBP529,000 concerning movements on
retention monies.
The Group has not presented revised balance sheets as at 1 April
2021 within the financial statements, in accordance with IAS 1
Presentation of Financial Statements and IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors.
The following table shows the impact of these adjustments in the
prior year:
31 March
31 March 2022
2022 Restatement Restated
GBP'000 GBP'000 GBP'000
------------------------------------------- --------- ------------ ----------
Group cash flow statement (extract)
Net cash flow generated from operating
activities 37,489 1,613 39,102
Net cash flow used in investing
activities (39,670) (529) (40,199)
------------------------------------------- --------- ------------ ----------
Cash and cash equivalents at the
start of the year 103,819 3,278 107,097
Cash and cash equivalents at the
end of the year 48,975 4,362 53,337
Net decrease in cash and cash equivalents (54,844) 1,084 (53,760)
------------------------------------------- --------- ------------ ----------
2.5 New standards, amendments and interpretations effective for
future accounting periods
The following are new standards, interpretations and amendments,
which are not yet effective and have not been early adopted in this
financial information, that will or may have an effect on the
Group's future financial statements:
-- Amendments to IAS 12 'Income Taxes' (effective for periods
beginning on or after 1 January 2023) - clarify how companies
account for deferred tax on transactions such as leases and
decommissioning obligations. The amendments are not expected to
have a significant impact on the preparation of the financial
statements.
-- Amendments to IAS 1 'Presentation of Financial Statements'
(effective for periods beginning on or after 1 January 2023) - are
intended to help entities in deciding which accounting policies to
disclose in their financial statements. The amendments are not
expected to have a significant impact on the preparation of the
financial statements.
-- Amendments to IAS 8 'Accounting Policies, Changes in
Accounting Estimates and Errors' (effective for periods beginning
on or after 1 January 2023) - introduce the definition of an
accounting estimate and include other amendments to help entities
distinguish changes in accounting estimates from changes in
accounting policies. The amendments are not expected to have a
significant impact on the preparation of the financial
statements.
-- Amendments to IAS 1 'Presentation of Financial Statements'
(effective for periods beginning on or after 1 January 2024) -
clarify that liabilities are classified as either current or
non-current, depending on the rights that exist at the end of the
reporting period and not expectations of or actual events after the
reporting date. The amendments also give clarification to the
definition of settlement of a liability. The amendments are not
expected to have a significant impact on the preparation of the
financial statements.
2.6 Segmental information
IFRS 8 Operating Segments requires operating segments to be
identified on the basis of internal financial reports about
components of the Group that are regularly reviewed by the Chief
Operating Decision Maker, which in the Group's case is delegated to
the Investment Adviser who has formed an Executive Team, in order
to allocate resources to the segments and to assess their
performance.
The internal financial reports received by the Investment
Adviser's Executive Team contain financial information at a Group
level as a whole and there are no reconciling items between the
results contained in these reports and the amounts reported in the
consolidated financial statements.
The Directors consider the Group's property portfolio represents
a coherent and diversified portfolio with similar economic
characteristics and as a result, the whole portfolio of properties
represents a single operating segment. In the view of the Directors
there is accordingly one reportable segment under the provisions of
IFRS 8.
All of the Group's properties are based in the UK. Geographical
information is provided to ensure compliance with the
diversification requirements of the Company, other than this no
geographical grouping is contained in any of the internal financial
reports provided to the Investment Adviser's Executive Team and,
therefore no geographical segmental analysis is required by IFRS
8.
The Directors note the requirements in IFRS 8 Paragraph 34
pertaining to entities under common control and confirm that both
Auckland Home Solutions and Qualitas Housing (as lessees of the
Company's investment real estate) are under common control of The
Social Housing Family CIC ("TSHF"). The percentage and sum total of
the Company's annual contracted rent roll pertaining to these
counterparties as if they were considered to be a "single customer"
can be found in note 28.0 and in the full Annual Report.
3.0 Significant accounting judgements, estimates and
assumptions
In the application of the Group's accounting policies, which are
described in note 4.0, the Directors are required to make
judgements, estimates and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent from other
sources. The judgements, estimates and associated assumptions that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the financial
year are outlined below:
3.1 Significant estimate - valuation of investment property
The Group uses the valuation carried out by its independent
valuer as the fair value of its property portfolio. The valuation
is based upon assumptions including future rental income and the
appropriate discount rate. The valuers also make reference to
market evidence of transaction prices for similar properties.
Further information is provided in note 15.0.
The Group's properties have been independently valued by Jones
Lang LaSalle Limited ("JLL" or the "Valuer") in accordance with the
current Royal Institution of Chartered Surveyors' Valuation -
Global Standards, incorporating the IVS, and the RICS Valuation -
Global Standards 2017 UK national supplement (the RICS "Red Book").
JLL is a well recognised professional firm within social housing
valuation and has sufficient current local and national knowledge
of both social housing generally and Specialist Supported Housing
("SSH") and has the skills and understanding to undertake the
valuations competently.
With respect to the Group's consolidated financial statements,
investment properties are valued at their fair value at each
balance sheet date in accordance with IFRS 13. Fair value
measurements should be presented and classified using a fair value
hierarchy that reflects the significance of the inputs used in the
measurements, according to the following levels:
Level 1 Unadjusted, quoted prices for identical assets and
liabilities in active (typically quoted) markets.
Level 2 Inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from
prices).
Level 3 Inputs for the asset or liability that are not based on
observable market data (unobservable inputs). Value is the
Directors' best estimate, based on advice from relevant
knowledgeable experts, use of recognised valuation techniques and a
determination of which assumptions should be applied in valuing
such assets and with particular focus on the specific attributes of
the investments themselves.
Given the bespoke nature of each of the Group's investments, the
particular requirements of due diligence and financial contribution
obtained from the vendors together with the recent emergence of
SSH, all of the Group's investment properties are included in Level
3.
3.2 Significant estimate - valuation of interest rate
derivatives
The fair value of Group's interest rate derivatives is recorded
in the Group Statement of Financial Position and is determined by
the respective counterparties. The counterparties use a number of
assumptions in determining the fair values, including estimations
over future interest rates and future cash flows using observable
yield curves.
3.3 Significant judgement - business combinations
The Group acquires subsidiaries that own investment properties.
At the time of acquisition, the Group considers whether each
acquisition represents the acquisition of a business or the
acquisition of an asset. Management considers the substance of the
assets and activities of the acquired entity in determining whether
the acquisition represents the acquisition of a business.
The Group accounts for an acquisition as a business combination
where an integrated set of activities is acquired in addition to
the property. Where such acquisitions are not judged to be the
acquisition of a business, they are not treated as business
combinations. Rather, the cost to acquire the corporate entity is
allocated between the identifiable assets and liabilities of the
entity based upon their relative fair values at the acquisition
date. Accordingly, no goodwill or additional deferred tax
arises.
There were no corporate acquisitions made in the year.
During the year, the Group entered into a transaction to acquire
the freehold properties operated by CPI Care Limited. Upon the
acquisition of the company; the properties were transferred into
other group companies and the company acquired, along with its
associated operations, was sold to Envivo Corundum Bidco Limited.
Further details are shown in note 16.0 to the financial
statements.
The acquired companies met the definition of a business under
IFRS 3, and the transaction was therefore recorded as a business
combination.
Because the Group acquired the company with the intent to sell
the business, management applied the short-cut method under IFRS 5
- Subsidiaries acquired with a view to resale. Under this method,
the subsidiary is recorded at fair value less costs to sell, and
there is no requirement to fair value the subsidiary's individual
assets and liabilities.
3.4. Significant judgement - operating lease contracts - the
Group as lessor
The Group has acquired investment properties that are subject to
commercial property leases with Approved Providers. The Group has
determined, based on an evaluation of the terms and conditions of
the arrangements, particularly the duration of the lease terms and
minimum lease payments, that it retains all the significant risks
and rewards of ownership of these properties and so accounts for
the leases as operating leases.
3.5. Significant judgement - REIT Status
Civitas Social Housing PLC is a Real Estate Investment Trust
(REIT). The UK REIT regime applies when entities meet certain
conditions with the effect that the income profits and capital
gains of the qualifying property rental business are exempt from
tax. Within these conditions at least 90% of the Group's property
income must be distributed as dividends to shareholders and the
Group must ensure that the property rental business represents more
than 75% of total profits and assets.
Following the completion of the offer, there is a level of
uncertainty that the Group will remain in the REIT regime.
4.0 Summary of significant accounting policies
The principal accounting policies applied in the preparation of
the consolidated financial statements are set below. The policies
have been consistently applied to all periods presented, unless
otherwise stated.
4.1. Basis of consolidation
The consolidated financial statements comprise the financial
information of the Group as at the year end date.
Subsidiaries are all entities over which the Group has control.
The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power to
direct the activities of the entity. All intra-group transactions,
balances, income and expenses are eliminated on consolidation. The
financial information of the subsidiaries is included in the
consolidated financial statements from the date that control
commences until the date that control ceases.
If an equity interest in a subsidiary is transferred but a
controlling interest continues to be held after the transfer then
the change in ownership interest is accounted for as an equity
transaction.
Accounting policies of the subsidiaries are consistent with the
policies adopted by the Company.
4.2. Investment property
Investment property, which is property held to earn rentals
and/or for capital appreciation, is initially measured at cost,
being the fair value of the consideration given, including
expenditure that is directly attributable to the acquisition of the
investment property. After initial recognition, investment property
is stated at its fair value at the balance sheet date. Gains and
losses arising from changes in the fair value of investment
property are included in profit or loss for the period in which
they arise in the Consolidated Statement of Comprehensive
Income.
Subsequent expenditure is capitalised only when it is probable
that future economic benefits are associated with the expenditure.
Ongoing repairs and maintenance are expensed as incurred. Overheads
and operating expenses are not capitalised.
An investment property is derecognised upon disposal or when the
investment property is permanently withdrawn from use and no future
economic benefits are expected from the disposal. Any gain or loss
arising on derecognition of the property (calculated as the
difference between the net disposal proceeds and the carrying
amount of the asset) is incurred in profit or loss in the period in
which the property is derecognised.
Significant accounting judgements, estimates and assumptions
made for the valuation of investment properties are discussed in
note 3.1.
4.3. Leases
Leases are classified as finance leases whenever the terms of
the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as
operating leases.
The Company has determined that it retains all the significant
risks and rewards of ownership of the properties and accounts for
the contracts as operating leases as discussed in note 3.4.
Properties leased out under operating leases are included in
investment property in the Consolidated Statement of Financial
Position. Rental income from operating leases is recognised on a
straight line basis over the term of the relevant leases.
Lease incentive costs are recognised as an asset and amortised
over the life of the lease.
4.4. Financial Assets
Classification
The Group classifies its financial assets in the following
measurement categories:
-- those to be measured subsequently at fair value (either
through other comprehensive income or through profit or loss);
and
-- those to be measured at amortised cost.
The classification depends on the entity's business model for
managing the financial assets and the contractual terms of the cash
flows. For assets measured at fair value, gains and losses will
either be recorded in profit or loss or other comprehensive
income.
Trade and other receivables
Trade and other receivables are amounts due in the ordinary
course of business. If collection is expected in one year or less,
they are classified as current assets. If not, they are presented
as non-current assets.
Trade receivables are recognised initially at fair value and
subsequently are measured at amortised cost using the effective
interest method, less impairment provision. The Group holds the
trade receivables with the objective to collect the contractual
cash flows.
Impairment
The Group's financial assets are subject to the expected credit
loss model.
For trade receivables, the Group applies the simplified approach
permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
The expected loss rates are based on the payment profiles of
lease income over a period of up to 12 months before 31 March 2022
or 1 April 2022, respectively, and the corresponding historical
credit losses experienced within this period. The historical loss
rates are adjusted to reflect current and forward-looking
information on macroeconomic factors affecting the liability of the
tenants to settle the receivable. Such forward-looking information
would include: changes in economic, regulatory, technological and
environmental factors (such as industry outlook, GDP, employment
and politics); external market indicators; and tenant base.
Based on the assessment and the specific work that is underway
around collection of aged arrears, a provision of GBP459,000 (2022:
GBP239,000) has been reflected in the annual results.
Trade receivables are written off when there is no reasonable
expectation of recovery.
Indicators that there is no reasonable expectation of recovery
include, among others, the probability of insolvency or significant
financial difficulties of the debtor. Impaired debts are
derecognised when they are assessed as uncollectible.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, cash held by
lawyers and liquidity funds with a term of no more than three
months that are readily convertible to a known amount of cash and
which are subject to an insignificant risk of changes in value.
Restricted cash represents amounts held for specific
commitments, tenant deposits and retention money held by lawyers in
relation to deferred payments subject to achievement of certain
conditions, other retentions and cash segregated to fund repair,
maintenance and improvement works to bring the properties up to
satisfactory standards for the Group and the tenants.
Derivative financial instruments
Derivative financial instruments, which comprise interest rate
swaps for hedging purposes, are initially recognised at fair value
at acquisition and are subsequently measured at fair value, being
the estimated amount that the Group would receive or pay to sell or
transfer the agreement at the period end date, taking into account
current interest rate expectations and the current credit rating of
the lender and its counterparties. The instrument may be an asset
or a liability. The gain or loss at each fair value remeasurement
date is recognised in the Group's Consolidated Statement of
Comprehensive Income.
Derivative financial instruments are derecognised when the
rights to receive cash flows from the agreement have expired or
have been transferred, and the Group has transferred substantially
all the risks and rewards of ownership. The difference between the
carrying amount and consideration received is recognised as a gain
or loss in the Group's Consolidated Statement of Comprehensive
Income.
The Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data is available to measure
fair value, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs significant to the fair
value measurement as a whole.
Other than derivative financial instruments which are not
designated as hedging instruments, the Group does not have any
assets held for trading nor does it voluntarily classify any
financial assets as being at fair value through profit or loss.
4.5. Financial liabilities
The Group recognises a financial liability when it first becomes
a party to the contractual rights and obligations in the
contract.
All financial liabilities are initially recognised at fair
value, minus (in the case of a financial liability that is not at
fair value through profit or loss) transaction costs that are
directly attributable to issuing the financial liability. Financial
liabilities are subsequently measured at amortised cost, unless the
Group opted to measure a liability at fair value through profit or
loss.
A financial liability is derecognised when the obligation under
the liability is discharged, cancelled or expires.
Trade and other payables
Trade and other payables are classified as current liabilities
if payment is due within one year or less. If not, they are
presented as non-current liabilities. Trade and other payables are
recognised initially at their fair value and subsequently measured
at amortised cost until settled. The fair value of a non-interest
bearing liability is its discounted repayment amount. If the due
date of the liability is less than one year, discounting is
omitted.
Bank and other borrowings
All bank and other borrowings are initially recognised at fair
value less directly attributable transaction costs. After initial
recognition, all bank and other borrowings are measured at
amortised cost, using the effective interest method. Any
attributable transaction costs relating to the issue of the bank
borrowings are amortised through the Group's Statement of
Comprehensive Income over the life of the debt instrument on a
straight-line basis.
Borrowings are removed from the consolidated statement of
financial position when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the
carrying amount of a financial liability that has been extinguished
and the consideration paid is recognised in profit or loss as a
finance cost.
4.6. Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that the Group will be required to settle that
obligation and a reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the
balance sheet date, taking into account the risks and uncertainties
surrounding the obligation.
4.7. Taxation
Taxation on the profit or loss for the period not exempt under
UK REIT regulations is comprised of current and deferred tax. Tax
is recognised in the Consolidated Statement of Comprehensive Income
except to the extent that it relates to items recognised as a
direct movement in equity, in which case it is recognised as a
direct movement in equity. Current tax is expected tax payable on
any non-REIT taxable income for the period, using tax rates enacted
or substantively enacted at the balance sheet date, and any
adjustment to tax payable in respect of previous periods.
The current tax charge is calculated on profits arising in the
period and in accordance with legislation which has been enacted or
substantially enacted at the balance sheet date.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The amount of
deferred tax that is provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at
the balance sheet date.
4.8. Capital management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and to maintain an optimal capital
structure to reduce the cost of capital.
Capital assets comprise the following:
31 March 31 March
2023 2022
GBP'000 GBP'000
-------------------------------------------- ---------- ----------
Proceeds from the issue of Ordinary shares
and retained earnings 661,909 675,547
Bank and loan borrowings 361,915 352,050
-------------------------------------------- ---------- ----------
Total 1,023,824 1,027,597
-------------------------------------------- ---------- ----------
The Directors may use gearing to enhance equity returns. The
level of borrowing will be on a prudent basis for the asset class
and will seek to achieve a low cost of funds, whilst maintaining
the flexibility in the underlying security requirements and the
structure of the Group.
The Group may, following a decision of the Board, raise debt
from banks and/or the capital markets and the aggregate borrowings
of the Group will always be subject to an absolute maximum,
calculated at the time of drawdown, of below 40% of the Gross Asset
Value on a fully invested basis.
4.9. Dividends payable to shareholders
Dividends are included in the financial statements in the year
in which they are paid.
4.10. Rental income
Rental income from investment property is recognised on a
straight-line basis over the term of ongoing leases and is shown
gross of any UK income tax. Lease incentives are spread evenly over
the lease term. Losses incurred on granting retrospective rent
concessions are charged to the income statement on the date that
the legal rights to income are conceded (i.e. immediate recognition
in full rather than smoothed over the life of the lease).
Insurance recharges and other similar receipts are recognised
under IFRS 15 'Revenue from contracts with customers', and are
included in net rental and property income gross of the related
costs as the Directors consider the Group acts as principal in this
respect.
4.11. Finance income
Finance income is recognised as interest, and is accrued on cash
and cash equivalent balances held by the Group.
4.12. Finance costs
Finance costs consist of interest and other costs that the Group
incurs in connection with bank and other borrowings. Bank interest
and bank charges are recognised on an accruals basis. Borrowing
transaction costs are amortised using the effective interest
rate.
4.13. Expenses
All expenses, including Investment Advisory fees, are recognised
in the Consolidated Statement of Comprehensive Income on an
accruals basis.
4.14. Share issue costs
The costs of issuing or reacquiring equity instruments (other
than in a business combination) are accounted for as a deduction
from equity.
4.15 Exceptional items
Exceptional items relate to amounts which do not normally occur
in the normal course of business.
Exceptional professional costs for two major projects have been
disclosed separately. These relate to costs associated with the
offer for the purchase of the entire share capital of the Company
by a subsidiary of CK Asset Holdings Limited (CKA) and costs
associated with a planned bond issue which was postponed.
4.16 Share held in treasury
The costs, including directly attributable transactions costs,
of purchasing the Company's own shares to be held in treasury are
deducted from equity and the costs are shown in the Consolidated
Statement of Changes in Equity. Consideration received, net of
transaction costs, for the resale of these shares is also included
in equity. Whilst the Company holds shares in treasury, the
calculations for net asset value and earnings per share are
adjusted to exclude these shares.
5.0 Rental income
For the
year ended For the
31 March year ended
2023 31 March 2022
GBP'000 GBP'000
---------------------------------------- ------------ ------------------------
Rental income from investment property 53,531 51,038
Rent straight line adjustments 586 529
Lease incentive amortisation (1,022) (926)
Rechargeable costs received 1,512 995
---------------------------------------- ------------ ------------------------
Rental income 54,607 51,636
---------------------------------------- ------------ ------------------------
Less direct property expenses
----------------------------------------
Insurance and service charge costs (1,512) (995)
----------------------------------------
Bad debt (429) 17
---------------------------------------- ------------ ------------------------
Direct property expenses (1,941) (978)
---------------------------------------- ------------ ------------------------
Net rental income 52,666 50,658
---------------------------------------- ------------ ------------------------
Rechargeable costs received represent insurance and service
charge costs paid by the Group and recharged to the Approved
Providers and are accounted for under IFRS 15 'Revenue from
contracts with customers'.
As per the lease agreements with the Group and Approved
Providers, the Approved Providers are responsible for the
settlement of all present and future rates, taxes and other
impositions payable in respect of the property. As a result, no
further direct property expenses were incurred.
6.0 Directors' remuneration
For the
year ended For the
31 March year ended
2023 31 March 2022
GBP'000 GBP'000
--------------------------------------------- ------------ ---------------
Directors' fees 194 190
Employer's National Insurance Contributions 17 16
--------------------------------------------- ------------
Total 211 206
--------------------------------------------- ------------ ---------------
The Directors are remunerated for their services in accordance
with the Remuneration Policy which sets parameters within which
Directors' remuneration may be set. The Remuneration Policy is
approved by shareholders.
Disclosures required by the Companies Act 2006 on Directors'
remuneration, including salaries, share options, pension
contributions and pension entitlement and those specified by the
Listing Rules of the Financial Conduct Authority are included in
the Remuneration Report set out in the full Annual Report and form
part of these Financial Statements.
7.0 Particulars of employees
The Group had no employees during the period (2022: nil) other
than the Directors.
8.0 Investment advisory fees
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
--------------- --------------- ---------------
Advisory fee 6,206 6,132
--------------- --------------- ---------------
Disbursements 11 -
--------------- ---------------
Total 6,217 6,132
--------------- --------------- ---------------
Civitas Investment Management Limited ("CIM") is the appointed
Investment Adviser of the Company. Under the current Investment
Management Agreement, the Advisory Fee shall be an amount
calculated in respect of each quarter, in each case based upon the
Net Asset Value most recently announced to the market at the
relevant time (as adjusted for issues or repurchases of shares in
the period between the date of such announcement and the date of
the relevant calculation), on the following basis:
a) on that part of the Net Asset Value up to and including
GBP250,000,000, an amount equal to 1% of such part of the Net Asset
Value;
b) on that part of the Net Asset Value over GBP250,000,000 and
up to and including GBP500,000,000, an amount equal to 0.9% of such
part of the Net Asset Value;
c) on that part of the Net Asset Value over GBP500,000,000 and
up to and including GBP1,000,000, an amount equal to 0.8% of such
part of the Net Asset Value;
d) on that part of the Net Asset Value over GBP1,000,0000, an
amount equal to 0.7% of such part of the Net Asset Value.
The appointment of the Investment Adviser shall continue in
force unless and until terminated by either party giving to the
other not less than 12 months' written notice, such notice not to
expire earlier than 30 May 2025.
9.0 General and administrative expenses
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
-------------------------------- --------------- ---------------
Legal and professional fees 1,250 1,459
-------------------------------- --------------- ---------------
Exceptional professional costs 1,816 -
Administration fees 1,044 1,037
Consultancy fees 143 136
Audit fees 441 340
Abortive costs 48 196
Valuation fees 96 100
Depositary fees 71 71
Grants and donations 65 26
Insurance 97 84
Marketing 225 343
Regulatory fees 21 25
Sundry expenses 76 92
-------------------------------- ---------------
Total 5,393 3,909
-------------------------------- --------------- ---------------
Abortive costs represent legal and professional fees incurred in
relation to the acquisition of investment properties and proposed
share issues that were considered but subsequently aborted.
General and administrative expenses for the current year contain
exceptional professional costs of GBP1,816,000 (2022: GBPNil).
These costs pertain to two strategic projects the Company has been
evaluating and comprise of GBP1,294,000 (2022: GBPnil) associated
with the offer for the purchase of the entire share capital of the
Company by a subsidiary of CK Asset Holdings Limited (CKA) and
GBP522,000 (2022: GBPNil) associated planned bond issue which was
postponed.
Services provided by the Company's auditors and their
associates
The Group has obtained the following services from the Group's
auditors and their associates:
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
----------------------------------------- --------------- ---------------
Fees payable to the Group's auditor
and its associates for auditing
financial statements:
Audit of the Group's financial
statements(1) 358 296
Total fees payable for audit services: 358 296
Fees payable to the Group's auditor
and its associates for other services:
Audit related services - review
of the half year financial statements 83 44
Other services(2) - 62
----------------------------------------- --------------- ---------------
Total fees payable to the Group's
auditors and their associates 441 402
----------------------------------------- --------------- ---------------
(1) Includes GBP64,000 (2022: GBP18,000) cost in relation to the
previous year audit.
(2) This amount was recognised within exceptional legal and
professional costs in the year ended 31 March 2022.
10.0 Finance income
For the
year ended For the
31 March year ended
2023 31 March 2022
GBP'000 GBP'000
------------------------------------ ------------ ---------------
Interest and dividends received on
liquidity funds 148 4
Bank interest received - 3
------------------------------------ ------------ ---------------
Total 148 7
------------------------------------ ------------ ---------------
11.0 Finance expense
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
---------------------------------- --------------- ---------------
Bank charges 8 6
Interest paid and payable on
bank borrowings and derivatives 12,151 8,907
Amortisation of loan arrangement
fees 1,869 1,653
Costs of early repayment of debt 1,271 -
Loan security fees 36 42
Total 15,335 10,608
---------------------------------- --------------- ---------------
During the year the Lloyds Bank plc GBP60,000,000 revolving
credit facility was repaid. Costs of early repayment of debt
include break costs and the write off of the remaining unamortised
loan issue costs.
12.0 Taxation
As a UK REIT, the Group is exempt from corporation tax on the
profits and gains from its property investment business, provided
it meets certain conditions as set out in the UK REIT regulations.
For the current year ended 31 March 2023, the Group did not have
any non-qualifying profits and accordingly there is no tax charge
in the year. If there were any non-qualifying profits and gains,
these would be subject to corporation tax.
Deferred tax has not been recognised on temporary differences
relating to the property rental business. No deferred tax asset has
been recognised in respect of the unutilised residual current year
losses as it is not anticipated that sufficient residual profits
will be generated in the future. In the event that Civitas'
property portfolio was to be sold at valuation, any gains realised
on such disposals may be subject to taxation in the UK. Generally,
disposals by a REIT of assets held for the purpose of a property
rental business should be exempt from UK corporation tax. The
Directors do not believe that any properties within the Civitas
property portfolio meet the conditions for assets held as part of
the property rental business being subject to corporation tax on
disposal. Accordingly, if the Civitas property portfolio was to be
sold at valuation, the Directors estimate that no corporation tax
liability would arise on that sale.
Following the completion of the offer, there is a level of
uncertainty that the Group will remain in the REIT regime.
For the
For the year ended
year ended 31 March
31 March 2023 2022
GBP'000 GBP'000
------------------------------- --------------- ------------
Corporation tax charge for the
year - -
------------------------------- --------------- ------------
Total - -
------------------------------- --------------- ------------
The tax charge for the period is less than the standard rate of
corporation tax in the UK of 19%. The differences are explained
below.
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
-------------------------------------- --------------- ---------------
Group
Profit before taxation 25,472 44,754
-------------------------------------- --------------- ---------------
UK corporation tax rate 19% 19%
Theoretical tax at UK corporation
tax rate 4,840 8,503
Effects of:
Change in value of exempt investment
properties (502) (2,331)
Exempt REIT income (6,019) (6,598)
Amounts not deductible for
tax purposes 1,081 (230)
Unutilised residual current
period tax losses 600 656
-------------------------------------- --------------- ---------------
Total - -
-------------------------------------- --------------- ---------------
A deferred tax asset of GBP2,877,000 (2022: GBP1,268,000),
calculated using the forthcoming tax rate of 25%, has not been
recognised in respect of the unutilised residual current year
losses as it is not anticipated that sufficient residual profits
will be generated in the future.
The standard rate of corporation tax is currently 19%. The
standard rate of corporation tax increased to 25% with effect from
1 April 2023.
REIT exempt income includes property rental income that is
exempt from UK Corporation Tax in accordance with Part 12 of
Corporation Tax Act 2010.
13.0 Earnings per share
Earnings per share ("EPS") amounts are calculated by dividing
profit for the year attributable to Ordinary equity holders of the
Company by the weighted average number of Ordinary shares in issue
during the year.
The calculation of basic and diluted earnings per share is based
on the following:
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
---------------------------------------- -------------------------- ---------------
Calculation of earnings per share
Net profit attributable to Ordinary
shareholders (GBP'000) 25,472 44,754
Weighted average number of Ordinary
shares (excluding shares held in
treasury) 608,552,681 618,797,942
Earnings per share - basic and diluted 4.19p 7.23p
---------------------------------------- -------------------------- ---------------
14.0 Dividends
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
----------------------------------------- --------------- ---------------
Dividend of 1.3875p for the 3 months
to 31 March 2022
(1.3500p 3 months to 31 March 2021) 8,474 8,403
Dividend of 1.4250p for the 3 months
to 30 June 2022
(1.3875p 3 months to 30 June 2021) 8,703 8,637
Dividend of 1.4250p for the 3 months
to 30 September 2022 (1.3875p 3 months
to 30 September 2021) 8,641 8,555
Dividend of 1.4250p for the 3 months
to 31 December 2022 (1.3875p 3 months
to 31 December 2021) 8,641 8,498
----------------------------------------- --------------- ---------------
Total 34,459 34,093
----------------------------------------- --------------- ---------------
On 9 May 2023, the Company announced a dividend of 1.425 pence
per share in respect of the period 1 January 2023 to 31 March 2023
totalling GBP8,641,000. The dividend payment was made on 9 June
2023 to shareholders on the register as at 19 May 2023. The
financial statements do not reflect this dividend. The dividend was
paid as a REIT property income distribution ("PID").
15.0 Investment property
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
--------------------------------------- --------------- ---------------
Balance at beginning of year 968,756 915,589
Property acquisitions 543 33,466
Improvements to investment properties 4,944 5,818
Lease incentives and rent straight
line adjustments recognised 1,264 1,614
Change in fair value 2,640 12,269
--------------------------------------- --------------- ---------------
Value advised by the property valuers 978,147 968,756
Less lease incentive assets and rent
straight line assets (24,783) (23,519)
--------------------------------------- --------------- ---------------
Total 953,364 945,237
--------------------------------------- --------------- ---------------
Improvements to investment properties includes capital
expenditure incurred of GBP128,000 (2022: GBP12,000) in respect of
climate change initiatives.
During the previous year, the Group acquired a property holding
company from Herleva Properties Limited which held assets totalling
GBP8,611,000. These are included within Property Acquisitions in
the note above. Herleva Properties Limited is a subsidiary of
Specialist Healthcare Operations Limited ("SHO"). Andrew Dawber and
Tom Pridmore (both directors of the Investment Adviser), are 14.99%
shareholders in SHO. They are not directors of SHO, and have no
operational role in that business. SHO does not meet the definition
of a related party under IAS 24.
Valuation
In accordance with "IAS 40: Investment Property", the investment
property has been independently valued at fair value by JLL, an
accredited external valuer with recognised and relevant
professional qualifications and recent experience of the location
and category of the investment property being valued, however, the
valuations are the ultimate responsibility of the Directors.
JLL valued the Civitas Social Housing PLC property portfolio on
the basis of each individual property and the theoretical sale of
the properties without the benefit of any corporate wrapper at
GBP978,147,000 as at 31 March 2023 (2022: GBP968,756,000).
JLL has provided valuation services to the Company with regards
to the properties during the year. JLL has provided additional
valuation services on the acquisition of investment property by the
Company during the year. The Directors have ensured that JLL has
appropriate procedures in place to ensure there are no independence
conflicts with the services provided to the Company. In relation to
the year ended 31 March 2023, the proportion of the total fees
payable by the Company to JLL's total fee income was less than 5%
and is therefore minimal. Additionally, JLL has a rotation policy
in place whereby the signatories on the valuations rotate after
seven years.
With the exception of the acquisition detailed in note 16.0, all
corporate acquisitions during the year and the comparative year
have been treated as asset purchases rather than business
combinations because following review of the IFRS 3 concentration
test, they are considered to be acquisitions of properties rather
than businesses (note 3.3).
The following table provides the fair value measurement
hierarchy for investment property:
Quoted prices Significant Significant
in active observable unobservable
markets inputs inputs
Investment properties Total (Level 1) (Level 2) (Level 3)
measured at fair value GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ---------- ---------------- ------------ --------------
31 March 2023 953,364 - - 953,364
-------------------------- ---------- ---------------- ------------ --------------
31 March 2022 945,237 - - 945,237
-------------------------- ---------- ---------------- ------------ --------------
There have been no transfers between Level 1 and Level 2 during
any of the years, nor have there been any transfers between Level 2
and Level 3 during any of the years.
The valuations have been prepared in accordance with the RICS
Valuation - Professional Standards (incorporating the International
Valuation Standards) by JLL, one of the leading professional firms
engaged in the social housing sector.
As noted previously all of the Group's investments are reported
as Level 3 in accordance with IFRS 13 where inputs are not based on
observable market data and the value is based upon advice from
relevant knowledgeable experts.
In this instance, the determination of the fair value of
investment property requires an examination of the specific merits
of each property that are in turn considered pertinent to the
valuation.
These include:
i. the regulated social housing sector and demand for the
facilities offered by each SSH property owned by the Group;
ii. the particular structure of the Group's transactions where
vendors, at their own expense, meet the majority of the
refurbishment costs of each property and certain purchase
costs;
iii. detailed financial analysis with discount rates supporting
the carrying value of each property;
iv. a full repairing and insuring lease with annual indexation
based on CPI or CPI+1%.
The following descriptions and definitions relating to valuation
techniques and key unobservable inputs made in determining fair
values are as follows:
Valuation techniques: income approach
Fair value is defined as the price that would be received to
sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date
(i.e. an exit price).
The valuation methodology used by the valuers follows the income
approach. This approach considers the rental income currently
payable; the next uplift due on that income on review; the
likelihood of a continuation of that rental income - with growth in
accordance with the leases - over the remaining terms; and then a
long-term reversion which considers the likely ability of the
properties to continue to generate rent through supported housing
occupation, as distinct from a reversion to vacant possession
value.
Risks are involved in both assessing the value of the indexed
rental income over the remaining terms of the leases and in also
predicting that income will continue beyond the end of the existing
leases. This is a balanced judgment, which can properly be
reflected in the exit yield applied to the final year's income and
in the overall return to a purchaser.
Appropriate taxation calculations are adopted for every property
based on its value and on the assumption of the sale of the
property assets directly as opposed to shares of a subsidiary
company holding the property and have considered the individual
characteristics of the properties.
There are two main unobservable inputs that determine the fair
value of the Group's investment property:
i) The rate of 2% per annum has been used for CPI over the term
of the subject properties' leases in line with the Bank of
England's long-term inflation targets for CPI. It should be noted
that all leases benefit from either CPI or CPI+1 indexation.
ii) The discount rate applied to the rental flows.
Key factors in determining the discount rates applied include
the regulated social housing sector and demand for each SSH
property owned by the Group, costs of acquisition and refurbishment
of each property, the anticipated future underlying cash flows for
each property, benchmarking of each underlying rent for each
property (passing rent), impact of climate change, and the fact
that all of the properties within the Group's portfolio have the
benefit of full repairing and insuring leases entered into by an
Approved Provider.
As at the balance sheet date, the lease lengths within the
Group's portfolio ranged from an effective 14 years to 35 years
(2022:a 15 years to 36 years) with a weighted average unexpired
lease term of 21.5 years (2022: 22.1). The greater the length of
the lease, then, all other metrics being equal, the greater the
value of the property.
Sensitivities of measurement of significant unobservable
inputs
As set out within significant accounting estimates at 3.1 above,
the Group's property investment valuation is open to inherent
uncertainties in the inputs that determine fair value. Management
has re-considered the sensitivity ranges and widened them for the
current year as a result of macroeconomic uncertainty. As a result,
the following sensitivity analysis has been prepared:
Average discount rate and range
The average discount rate used by the valuer in the Group's
property Portfolio Valuation is 6.38% (2022: 5.5%). In setting the
discount rates adopted in the valuation, the valuers have
considered market standard and anticipated returns to set a
benchmark for the portfolio as a whole. They have then considered
the various characteristics of the individual properties in order
to adjust those rates for each property. JLL will keep yields, and
therefore discount rates, under regular review.
The range of discount rates used by the valuer in the Group's
property Portfolio Valuation is from 4.6% to 11.7% (2022: 4.6% to
11.5%). In assessing the range of discounts, the valuer considers
the likely net initial yield which would be sought by the
investment market and builds additional discounts to reflect added
risk into the discount rate of the term and, in some cases, the
discount rate for the reversion. For example where larger rental
growth is allowed during the lease, an additional discount is built
into the reversion because of the greater risk of a fall in the
rent at the end of the lease.
Similarly additional discounts are considered where properties
are in the process of being re-purposed and premiums are considered
where residential care assets are funded by back-to-back leases
with care providers.
The table below illustrates the change to the value of
investment properties if the discount rate and CPI used for the
portfolio valuation calculations are changed:
-1.0% in +1.0% in -0.5%
discount discount +0.5% in
rate rate in CPI CPI
GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ---------- ---------- --------- ---------
Increase/(decrease) in
the IFRS fair value of
investment properties
at:
31 March 2023 71,929 (62,507) 56,676 (52,583)
31 March 2022 73,955 (64,020) 58,150 (53,815)
------------------------- ---------- ---------- --------- ---------
16.0 Subsidiary resale
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
------------------------------------ ---------------- ---------------
Acquisition of subsidiary
companies (including intercompany
loan) - 13,559
Acquisition costs - 765
Transfer to investment
property - (11,629)
Sale proceeds - (2,695)
------------------------------------ ---------------- ---------------
Total - -
------------------------------------ ---------------- ---------------
During the previous year, the Group entered into a transaction
to acquire the freehold properties operated by CPI Care Limited.
Upon the acquisition of the companies for GBP13,559,000 plus
transaction costs, the properties were transferred into other group
companies and the company acquired, along with its associated
operations, was sold to Envivo Corundum Bidco Limited for
GBP2,695,000. Envivo Corundum Bidco Limited is a subsidiary of
Specialist Healthcare Operations Limited ("SHO"). Andrew Dawber
and Tom Pridmore (both directors of the Investment Adviser), are
14.99% shareholders in SHO. They are not directors of SHO, and have
no operational role. SHO does not meet the definition of a related
party under IAS 24.
17.0 Trade and other receivables
31 March
Amounts falling due in less than one 2023 31 March 2022
year GBP'000 GBP'000
---------------------------------------- --------- --------------
Trade receivables 6,676 4,960
Less provision for impairment of trade
receivables (459) (239)
Accrued income 3,313 4,982
Prepayments and other receivables 1,730 3,162
---------------------------------------- --------- --------------
Total 11,260 12,865
---------------------------------------- --------- --------------
Prepayments and other receivable amounts include prepaid legal
and professional fees of GBPNil (2022: GBP34,000) that have been
incurred in connection with acquisitions yet to be completed and
GBP286,000 (2022: GBP1,046,000) in respect of ongoing works on the
property portfolio.
Accrued income relates mainly to rent accrued for the year but
not yet demanded.
31 March
2023 31 March 2022
GBP'000 GBP'000
------------------------------------- --------- --------------
Amounts falling due after more than
one year
Straight line adjustments 2,639 2,053
Lease incentives 22,144 21,466
------------------------------------- --------- --------------
Total 24,783 23,519
------------------------------------- --------- --------------
The aged analysis of trade receivables was as follows:
31 March
2023 31 March 2022
GBP'000 GBP'000
------------------------------- ---------
Debtors past due
------------------------------- --------- --------------
Current 2,518 1,777
< 30 days 862 355
30-60 days 275 105
> 60 days 3,021 2,723
------------------------------- --------- --------------
6,676 4,960
------------------------------- --------- --------------
Debtors past due
Less provision for impairment (459) (239)
------------------------------- --------- --------------
Total 6,217 4,721
------------------------------- --------- --------------
The Directors consider the fair value of receivables equals
their carrying amount.
Other categories within trade and other receivables do not
include impaired assets
The provision for impairment movement was as follows:
31 March 2023 31 March 2022
GBP'000 GBP'000
------------------------ -------------- --------------
Balance at beginning
of year 239 256
Impairment provision
made 306 109
Amounts recovered (67) (126)
Amounts written off (19) -
------------------------ -------------- --------------
Balance at end of year 459 239
------------------------ -------------- --------------
18.0 Cash and cash equivalents
31 March 2023 31 March 2022
GBP'000 GBP'000
---------------------------------------- -------------- --------------
Cash held by solicitors 64 376
Liquidity funds 15,636 10,489
Cash held at bank 16,939 38,110
---------------------------------------- -------------- --------------
Unrestricted cash and cash equivalents 32,639 48,975
Restricted cash 2,949 4,362
---------------------------------------- -------------- --------------
Total 35,588 53,337
---------------------------------------- -------------- --------------
Liquidity funds refer to money placed in money market funds.
These are highly liquid funds with accessibility within 24 hours
and subject to insignificant risk of changes in value.
Cash held by solicitors is money held in escrow for expenses
expected to be incurred in relation to investment properties
pending completion. These funds are available immediately on
demand.
Restricted cash represents amounts held for specific
commitments, tenant deposits and retention money held in relation
to deferred payments subject to achievement of certain conditions,
other retentions and cash segregated to fund repair, maintenance
and improvement works to bring the properties up to satisfactory
standards for the Group and the tenants.
19.0 Trade and other payables
31 March 2022
31 March 2023 (Restated*)
GBP'000 GBP'000
----------------------------------- -------------- --------------
Deferred income 761 860
Acquisition costs accrued 600 960
Finance costs 3,688 1,840
Dividends withholding tax payable 940 1,057
Accruals and other creditors 773 2,202
Tenant deposits 2,538 2,573
----------------------------------- --------------
Total 9,300 9,492
----------------------------------- -------------- --------------
Acquisition costs accrued also include monies retained at the
point of acquisition to be paid at a later date totalling
GBP383,000 (2022: GBP262,000).
* Comparatives have been restated to correct the analysis of
GBP1,896,000 of tenant deposits which had previously been included
in acquisition costs accrued.
20.0 Bank and loan borrowings
Bank borrowings are secured by charges over individual
investment properties held by certain asset-holding subsidiaries.
The banks also hold charges over the shares of certain subsidiaries
and any intermediary holding companies of those subsidiaries. Any
associated fees in arranging the bank borrowings unamortised as at
the year end are offset against amounts drawn on the facilities as
shown in the table below:
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
-------------------------------------- ---------------- ---------------
Bank borrowings drawn at start of
year 357,050 357,050
Bank borrowings advanced 70,875 -
-------------------------------------- ---------------- ---------------
Bank borrowings repaid (60,000) -
-------------------------------------- ---------------- ---------------
Bank borrowings drawn at end of year 367,925 357,050
-------------------------------------- ---------------- ---------------
Unamortised costs at start of year (5,000) (4,930)
Less: loan issue costs incurred (3,544) (1,723)
Add: loan issue costs amortised upon
repayment of bank loan 665 -
-------------------------------------- ---------------- ---------------
Add: loan issue costs amortisation 1,869 1,653
-------------------------------------- ---------------- ---------------
Unamortised costs at end of year (6,010) (5,000)
-------------------------------------- ----------------
At end of year 361,915 352,050
-------------------------------------- ---------------- ---------------
Loan Balance(1) Loan Balance Loan Principle(1) Loan Principle
31 March 31 March 31 March 31 March
2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000
------------------- ----------------- ------------- ------------------- ---------------
Maturity of bank
borrowings:
Repayable within
1 year - - - -
Repayable between
1 to 2 years 59,600 158,746 60,000 160,000
Repayable between
2 to 5 years 302,315 59,365 307,925 60,000
Repayable after
5 years - 133,939 - 137,050
------------------- -----------------
Total 361,915 352,050 367,925 357,050
------------------- ----------------- ------------- ------------------- ---------------
1 Loan balance net of unamortised costs.
The Group has been party to the following loan facility
agreements in the year:
Loan Principal
Facility GBP'000 Interest
Expiry Date rate
--------------------------- ------------------ ----------------- ------------ -----------------
Summary of Borrowings
Scottish Widows Term loan 52,500 02/11/2027 2.9936% fixed
Limited 10-year
facility
Lloyds Bank plc Revolving - - SONIA + 1.67%(1)
credit facility
Deutsche Bank AG Loan Notes 70,875 03/02/2028 5.69% fixed
HSBC Bank plc Revolving 100,000 28/11/2025 SONIA + 2.15%(1)
credit facility
National Westminster Revolving 60,000 14/08/2024 SONIA + 2.00%(2)
Bank Plc 5-year credit facility
facility
M&G Investment Management Term loan 84,550 24/02/2028 3.137% fixed
Limited 7-year facility
--------------------------- ------------------ ----------------- ------------ -----------------
367,925
---------------------------------------------- ----------------- ------------ -----------------
Borrowings are secured on investment properties to the
value:
31 March 2023 31 March 2022
GBP'000 GBP'000
------------------------------------------------- -------------- --------------
Scottish Widows Limited 10-year facility
principal GBP52,500,000 173,510 173,777
Deutsche Bank AG Loan Notes principal
GBP70,875,000 168,610 -
HSBC Bank plc facility principal GBP100,000,000 231,116 222,745
National Westminster Bank Plc 5-year
facility principal GBP60,000,000 137,827 135,330
M&G Investment Management Limited
7-year facility principal GBP84,550,000 230,279 230,487
------------------------------------------------- -------------- --------------
At 31 March 2023, the Group is in compliance with all
covenants.
The covenants in place under the five agreements are summarised
in the table below:
Historical
and projected Loan to Value
Loan: interest cover Ratio
-------------------------------------
Scottish Widows Limited 10-year Must not exceed
facility At least 325% 40%
------------------------------------- ---------------- ----------------
Must not exceed
Deutsche Bank AG Loan Notes At least 175% 50%
Must not exceed
HSBC Bank PLC facility At least 250% 50%
National Westminster Bank Plc 5-year Must not exceed
facility At least 250% 50%
M&G Investment Management Limited Must not exceed
7-year facility At least 250% 55%
------------------------------------- ---------------- ----------------
1 Interest rate caps have been purchased to cap interest costs
on this facility as per details in notes 21.0 and 31.3.
2 Fixed by way of an interest rate swap as detailed in note
21.0.
21.0 Interest rate derivatives
The Group has entered into an interest rate swap with NatWest
Markets in order to mitigate the risk of changes in interest rates
on its loan with National Westminster Bank Plc under which GBP60
million is currently drawn. The swap has a notional value of
GBP60,000,000 and fixes interest at 2.60% (including the 2% margin
on the bank loan).
During the year, the Group has entered into three new interest
rate cap arrangements for a total cost of GBP8,841,000:
An interest rate cap that capped the GBP60,000,000 Lloyds Bank
plc facility at 3.92% (including the 1.67% margin on the loan
facility) for the period from 16 September 2022 to 20 February
2023. This arrangement was sold upon the repayment of the loan with
proceeds of GBP17,000.
An interest rate cap that capped the SONIA interest rate on the
GBP100,000,000 HSBC Bank plc facility at 2.60% for the period from
21 September 2022 to 17 April 2023.
An interest rate cap transaction to mitigate the risk of the
SONIA interest rate exceeding 2.45% p.a. on the principal of
GBP100,000,000 HSBC Bank plc facility for the period 17 April 2023
to 28 November 2025. This instrument covers the remaining term of
the revolving credit facility with HSBC Bank plc and its extension
to November 2025.
For the
year ended For the
31 March year ended
2023 31 March 2022
GBP'000 GBP'000
----------------------------------------------- ------------- ---------------
Interest rate derivative assets/(liabilities)
----------------------------------------------- ------------- ---------------
At start of year 2,131 (544)
Interest rate cap premiums paid 8,841 -
Disposal proceeds (17) -
Realised loss on disposal (187) -
Change in fair value during the year (2,639) 2,675
----------------------------------------------- ------------- ---------------
At end of the year 8,129 2,131
----------------------------------------------- ------------- ---------------
The table below shows the fair value measurement hierarchy for
interest derivatives:
Quote prices Significant Significant
in Active Observable Unobservable
Markets Inputs Inputs
(Level 1) (Level 2) (Level 3)
GBP'000 GBP'000 GBP'000
-------------- ------------- ------------ --------------
31 March 2023 - 8,129 -
31 March 2022 - 2,131 -
-------------- ------------- ------------ --------------
The fair value of Group's interest rate derivatives is recorded
in the Group Statement of Financial Position and is determined by
the respective counterparties. The counterparties use a number of
assumptions in determining the fair values, including estimations
over future interest rates and future cash flows using observable
yield curves. The fair value represents the net present value of
the difference between the cash flows produced by the contracted
rate and the valuation rate. This valuation technique falls within
Level 2 of the fair value hierarchy as defined by IFRS 13.
There have been no transfers between Level 1 and Level 2 during
any of the periods, nor have there been any transfers between Level
2 and Level 3 during any of the periods.
22.0 Share capital
Share capital represents the nominal value of consideration
received by the Company for the issue of Ordinary shares.
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
------------------------------ ---------------- ---------------
Share capital
At beginning and end of year 6,225 6,225
------------------------------ ---------------- ---------------
Number of shares issued and
fully paid
Ordinary shares of GBP0.01
each
At beginning and end of year 622,461,380 622,461,380
------------------------------ ----------------
During the year, the Company purchased 6,050,000 Ordinary shares
to be held in treasury at a cost of GBP4,651,000 (31 March 2022:
10,025,000 Ordinary shares for GBP9,259,000).
During the previous year, the Company reissued 565,000 Ordinary
shares held in treasury for GBP647,000. The cost of purchasing
these shares into treasury of GBP484,000 has been credited to the
capital reduction reserve with the gain credited to the Share
premium reserve.
At 31 March 2023, the Company held 16,075,000 (31 March 2022:
10,025,000) Ordinary shares in treasury. The shares will continue
to be held in treasury until either reissued or cancelled.
At 31 March 2023, the number of Ordinary shares used to
calculate the net asset value per share i s 606,386,380 (31 March
2022: 612,436,380) which excludes the shares held in treasury.
23.0 Share premium reserve
The share premium reserve represents the amounts subscribed for
Ordinary share capital in excess of nominal value less associated
issue costs of the subscriptions.
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
------------------------------------ ---------------- ---------------
At beginning of year 292,626 292,463
Premium arising on shares reissued
from treasury - 163
------------------------------------ ----------------
At end of year 292,626 292,626
------------------------------------ ---------------- ---------------
For movements in the year, please see details in note 22.0.
24.0 Capital reduction reserve
The capital reduction reserve is a distributable reserve to
which the value of the cancelled share premium was transferred.
Pursuant to Article 3 of The Companies (Reduction of Share Capital)
Order 2008, the balance held in the capital reduction reserve is to
be treated for the purposes of Part 23 of the Companies Act 2006 as
a realised profit and therefore available for distribution in
accordance with section 830 of the Companies Act. The Company has
used this reserve for the costs of buying back shares to be held in
treasury and payment of dividends.
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
------------------------------- ---------------- ---------------
At beginning of year 322,365 331,140
Shares reissued from treasury - 484
Shares bought back into
treasury (4,651) (9,259)
------------------------------- ---------------- ---------------
At end of year 317,714 322,365
------------------------------- ---------------- ---------------
For movements in the year, please see details in note 22.0.
25.0 Retained earnings
This reserve represents the profits and losses of the Group.
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
---------------------- ---------------- ---------------
At beginning of year 54,331 43,670
Profit for the year 25,472 44,754
Dividends paid (34,459) (34,093)
---------------------- ---------------- ---------------
At end of year 45,344 54,331
---------------------- ---------------- ---------------
26.0 Net asset value
Basic NAV per share is calculated by dividing net assets in the
Consolidated Statement of Financial Position attributable to
Ordinary equity holders of the parent by the number of Ordinary
shares outstanding at the end of the year.
Net asset values have been calculated as follows:
31 March 2023 31 March 2022
-------------------------------------- -------------- --------------
Net assets (GBP'000) 661,909 675,547
Number of Ordinary shares in
issue at end of year 622,461,380 622,461,380
Number of Ordinary shares held
in treasury (16,075,000) (10,025,000)
-------------------------------------- -------------- --------------
Number of Ordinary shares excluding
treasury shares held by the Company 606,386,380 612,436,380
-------------------------------------- -------------- --------------
NAV per share - basic and diluted 109.16p 110.30p
-------------------------------------- -------------- --------------
27.0 Analysis of financial liabilities and assets arising from
financing activities
For the
Interest rate Bank year ended
31 March
derivatives borrowings 2023
GBP'000 GBP'000 GBP'000
---------------------------------- -------------- ----------- -----------
At beginning of year (2,131) 352,050 349,919
Cash flows from financing
activities
Loan issue costs paid - (3,148) (3,148)
Interest rate derivative
premiums paid (8,841) - (8,841)
Proceeds from the sale
of Interest rate derivatives 17 - 17
Bank borrowings advanced - 70,875 70,875
Bank borrowings repaid - (60,000) (60,000)
Non cash movements
Loan issue fees accrued - (396) (396)
Amortisation of loan arrangement
costs - 1,869 1,869
Unamortised loan arrangement
fees written off - 665 665
Change in fair value of
interest rate derivatives 2,826 - 2,826
---------------------------------- -------------- ----------- -----------
At end of year (8,129) 361,915 353,786
---------------------------------- -------------- ----------- -----------
For the
Interest rate Bank year ended
derivatives borrowings 31 March 2022
GBP'000 GBP'000 GBP'000
---------------------------- -------------- ----------- --------------
At beginning of year 544 352,120 352,664
Cash flows from financing
activities
Loan draw down - (1,805) (1,805)
Non cash movements
Loan issue fees payable - 82 82
Amortisation of loan issue
costs - 1,653 1,653
Change in fair value of
interest rate derivatives (2,675) - (2,675)
---------------------------- -------------- ----------- --------------
At end of year (2,131) 352,050 349,919
---------------------------- -------------- ----------- --------------
28.0 Operating leases
The Group is party to a number of operating leases on its
investment properties with Approved Providers. The future minimum
lease payments under non-cancellable operating leases receivable by
the Group are as follows:
31 March
2023 31 March 2022
GBP'000 GBP'000
-------------------- ---------- --------------
Amounts receivable
< 1 year 57,262 53,821
1-2 years 57,352 53,879
2-5 years 172,536 161,940
> 5 years 958,286 928,210
-------------------- ----------
At end of year 1,245,436 1,197,850
-------------------- ---------- --------------
Leases are direct-let agreements with Approved Providers for a
term between 20-40 years with indexed linked annual rent reviews.
All current leases are full repairing and insuring leases; the
tenants are therefore obliged to repair, maintain and renew the
properties back to the original conditions.
The following table gives details of percentage of annual rental
income per Approved Provider:
31 March 2023 31 March 2022
% %
----------------------------------------- -------------- --------------
Auckland Home Solutions and Qualitas
Housing 24.9 24.4
Falcon Housing Association CIC 19.1 18.7
Bespoke Supportive Tenancies 12.5 12.6
Inclusion Housing CIC 9.4 9.3
Westmoreland Supported Housing Limited 5.6 5.9
Encircle Housing Limited 5.2 5.9
Trinity Housing Association Limited 5.2 5.1
Pivotal Housing Association 4.0 3.8
Chrysalis Supported Association Limited 3.7 3.6
New Walk Property Management CIC 2.7 2.8
Harbour Light Assisted Living CIC 2.3 3.6
My Space Housing Solutions 1.3 1.3
Elysium Healthcare Limited 1.1 -
IKE Supported Housing Limited 1.0 1.1
Hilldale Housing Association Limited 1.0 1.0
Windrush Alliance UK CIC 0.7 0.7
Lilly Rose Supported Housing 0.2 0.1
----------------------------------------- -------------- --------------
Blue Square Residential Ltd 0.1 0.1
----------------------------------------- --------------
Total 100.0 100.0
----------------------------------------- -------------- --------------
Auckland Home Solutions and Qualitas Housing are both members of
the Social Housing Family CIC and subject to common control. Their
annual rent figures have therefore been aggregated in the table
above. The percentage relating to Auckland Home Solutions and
Qualitas Housing was 16.5% and 8.4% (2022: 16.3% and 8.1%)
respectively. The annual rent at 31 March 2023 for Auckland Home
Solutions and Qualitas Housing was GBP9,266,000 and GBP4,730,000
(2022: GBP8,679,000 and GBP4,334,000) respectively.
The Group is also party to a number of operating leases on its
long leasehold properties. The ground rent payment commitments
under these operating leases are negligible so the future minimum
lease payments under these leases have not been disclosed in these
financial statements.
29.0 Controlling parties
As at 31 March 2023, there is no ultimate controlling party.
30.0 Related party disclosures
A list of all subsidiary undertakings including the address of
the registered office is detailed in note 8.0 to the Company
accounts below.
30.1 Transactions with Directors
The Directors are remunerated for their services at such rate as
the Directors shall from time to time determine. The aggregate
remuneration and benefits in kind of the Directors of the Company
(in each case, solely in their capacity as such) in respect of the
year ended 31 March 2023 payable out of the assets of the Company
is not expected to exceed GBP250,000.
Fees of GBP194,000 (2022: GBP190,000) were incurred and paid to
the Directors.
As at 31 March 2023 and 2022, the Directors held the following
number of shares:
31 March 31 March 2022
2023
Director Ordinary Ordinary
shares shares
---------------- --------------------------------- --------- --------------
Michael Wrobel Chairman 200,000 120,598
Alastair
Moss Director 11,766 11,766
Alison Hadden Director 31,937 -
Caroline Audit and Management Engagement
Gulliver Committee Chair 58,832 58,832
Peter Baxter Director 82,065 82,065
---------------- --------------------------------- --------- --------------
Remuneration
The Investment Adviser has reviewed its remuneration policies
and procedures to ensure incentives are aligned with the
requirements of AIFMD. It includes measures to avoid conflicts of
interest such as providing staff with a fixed monthly salary and
determining discretionary payments by the performance of the
Investment Adviser as a whole and not linked to any one AIF in
particular. The Investment Adviser and its staff receive no
remuneration through profit share, carried interest, co-investment
or other schemes related to the Company's performance.
30.2 Transactions with the Investment Adviser
On 1 November 2016, Civitas Investment Management Limited
("CIM") was appointed as the Investment Adviser of the Company. Its
address is shown below.
Fees of GBP6,206,000 (2022: GBP6,132,000) were incurred and paid
to CIM. In addition GBP11,000 (2022: GBPnil) disbursements were
paid in the year.
The Investment Adviser agreed to contribute GBPnil (2022:
GBP100,000) towards legal and professional fees incurred. This
amount was offset against legal and professional fees in note
9.0.
As at 31 March 2023, a net amount of GBP48,000 (2022:
GBP151,000) was due from CIM, which has since been received.
As at 31 March 2023, CIM held 167,664 (2022: 50,000) Ordinary
shares in the Company.
31.0 Financial risk management
31.1 Financial instruments
The Group's principal financial assets and liabilities are those
that arise directly from its operations: trade and other
receivables, trade and other payables and cash and cash
equivalents. The Group's other principal financial liabilities are
bank borrowings, the main purpose of which is to finance the
acquisition and development of the Group's investment property
portfolio, and interest rate derivatives as detailed in notes 20.0
and 21.0.
All financial liabilities are measured at amortised cost, except
interest rate derivatives, which are measured at fair value. All
financial instruments were designated in their current categories
upon initial recognition.
Set out below is a comparison by class of the carrying amounts
and fair value of the Group's financial instruments that are
carried in the financial statements:
Book value Fair value Book value Fair value
31 March 31 March 31 March 31 March
2023 2023 2022 2022 GBP'000
GBP'000 GBP'000 GBP'000
-------------------------------- ----------- ----------- ----------- --------------
Financial assets
Interest rate derivatives 8,129 8,129 2,131 2,131
Trade and other receivables(1) 34,949 34,949 34,580 34,580
Cash and cash equivalents 35,588 35,588 53,337 53,337
-------------------------------- ----------- ----------- ----------- --------------
Financial liabilities
Trade and other payables(2) 7,599 7,599 8,632 8,632
Bank borrowings 361,915 350,179 352,050 349,406
-------------------------------- ----------- ----------- ----------- --------------
(1) Excludes prepayments
(2) Excludes deferred income and dividend withholding tax
payable
The Group has five bank loans as detailed in note 20.0. The fair
value of the fixed rate loan is determined by comparing the
discounted future cash flows.
Financial risk management
The Group is exposed to market risk, interest rate risk, credit
risk and liquidity risk in the current and future years. The Board
of Directors oversees the management of these risks. The Board of
Directors reviews and agrees policies for managing each of these
risks that are summarised below.
31.2 Market risk
The Group's activities will expose it primarily to the market
risks associated with changes in property values and changes in
interest rates.
Risk relating to investment in property
Investment in property is subject to varying degrees of risk.
Some factors that affect the value of the investment in property
include:
-- changes in the general economic climate;
-- competition for available properties;
-- obsolescence; and
-- government regulations, including planning, environmental and tax laws.
Variations in the above factors can affect the valuation of
assets held by the Group and as a result can influence the
financial performance of the Group.
Risk relating to liquidity funds classified as cash and cash
equivalents
The Group holds positions in two AAA rated liquidity funds that
invest in a diversified range of government and non-government
money market securities, which are subject to varying degrees of
risk. Some factors that affect the value of the liquidity funds
include:
-- the performance of the underlying government and
non-government money market securities; and
-- interest rates.
Variations in the above factors can affect the valuation of
assets held by the Group and as a result can influence the
financial performance of the Group.
31.3 Interest rate risk
Interest rate risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in market interest rates.
At 31 March 2023 all long-term borrowings are either at fixed
rate or have an interest rate cap or interest rate swap in place
which has mitigated the risk of rising interest rate. Interest rate
derivative instruments are in place to the loan maturity date on
the variable rate loans.
The table below shows the bank loans, derivative instruments and
interest rates:
Derivative Maximum
Summary of Borrowings instrument interest
Loan Principal Expiry Interest in place rate
GBP'000 Date rate payable
------------------------- --------------- ----------- ------------ ------------- ----------
Scottish Widows
Limited 10-year 2.9936%
facility 52,500 02/11/2027 fixed 2.99%
Deutsche Bank
AG 70,875 03/02/2028 5.69% fixed 5.69%
SONIA + Interest
HSBC Bank plc 100,000 28/11/2025 2.15% rate cap(1) 4.75%
National Westminster
Bank Plc 5-year SONIA + Interest
facility 60,000 14/08/2024 2.00% rate swap 2.60%
M&G Investment
Management Limited 3.137%
7-year facility 84,550 24/02/2028 fixed 3.14%
------------------------- --------------- ----------- ------------ ------------- ----------
367,925
------------------------- --------------- ----------- ------------ ------------- ----------
(1) Maximum interest rate reduces to 4.6% from 18 April
2023.
The exposure of the Group to variable rates of interest is
considered upon drawing of any new loan facilities, to ensure that
the Group's exposure to interest rate fluctuations is within
acceptable levels.
The Investment Adviser monitors the Group's exposure to any
changes in interest rate on an ongoing basis, with the Board
updated on a quarterly basis of the current exposure of the Group's
loan facilities.
As at 31 March 2023, if interest rates had been 100 basis points
higher/(lower) with all other variables held constant the impact on
profits after taxation for the year would be as below. The
Investment Adviser anticipates these levels are reasonably possible
based on the observation of current market conditions that interest
rates would not fluctuate more than 1%.
31 March 2023 31 March 2022
GBP'000 GBP'000
-------------------------------- -------------- --------------
Increase/(decrease) in profits
due to interest rates
100 basis points higher 256 (1,066)
100 basis points lower (210) 1,572
-------------------------------- -------------- --------------
The average effective interest rates of financial instruments at
31 March 2023 and 2022 were as follows:
31 March 2023 31 March 2022
% %
------------------------------------ --------------- --------------
Bank borrowings - fixed rate 2.65 2.94
Bank borrowings - variable rate(1) 6.07 2.23
Cash and cash equivalents 0.82 0.05
------------------------------------ --------------- --------------
(1) Variable rate borrowings are subject to a maximum interest
rate of 4.75% due to an interest rate cap. The maximum interest
rate reduces to 4.6% from 18 April 2023.
31.4. Credit risk
Credit risk is the risk that a counterparty will not meet its
obligations under a financial instrument or customer contract,
leading to a financial loss. The Group is exposed to credit risks
from both its leasing activities and financing activities,
including deposits with banks and financial institutions.
Debtors and accrued income represent rent due or accrued. These
amounts due are diversified between a number of different Approved
Providers of differing financial strength, see note 28.0 for
details of the different counterparties. None of the Approved
Providers have a credit rating, however, the diversified nature of
this asset supports the credit quality.
The Group has policies in place to ensure that rental contracts
are entered into only with lessees with an appropriate credit and
operational history, and limits exposure to any one tenant. The
credit risk is considered to be further reduced as the source of
the rents received by the Group is ultimately provided by the
Government, by way of housing benefit and care provision, via a
diverse range of local authorities.
For details of provisions for impairment please refer to note
17.0.
Credit risk related to financial instruments and cash
deposits
One of the principal credit risks of the Group will arise with
the banks and financial institutions. The Board of Directors
believes that the credit risk on short-term deposits and current
account cash balances is limited because the counterparties are
banks considered to be of good credit quality. In the case of cash
deposits held with lawyers, the credit risk is limited because the
cash is held by the lawyers within client accounts at banks with
high credit quality.
The credit ratings for banks where balances are held by the
Group are as follows:
Lloyds Bank plc A+/F1
HSBC Bank plc AA-/F1+
RBS International Limited A/FI
National Westminster Bank plc A/F1
Ratings advised by Fitch.
No balances are held with Deutsche Bank AG.
31.5. Liquidity risk
The Group manages its liquidity and funding risks by considering
cash flow forecasts and ensuring sufficient cash balances are held
within the Group to meet future needs. Prudent liquidity risk
management implies maintaining sufficient cash and marketable
securities, the availability of financing through appropriate and
adequate credit lines, and the ability of customers to settle
obligations within normal terms of credit. The Group ensures,
through forecasting of capital requirements, that adequate cash is
available.
The following table details the Group's maturity profile in
respect of its financial instrument liabilities based on
contractual undiscounted payments:
On demand <1 year 1-5 years > 5 years Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ---------- --------- ---------- ---------- ---------
31 March 2023
Trade and other
payables 7,599 - - - 7,599
Bank borrowings - 14,482 407,770 - 422,252
----------------- ----------
7,599 14,482 407,770 - 429,851
----------------- ---------- --------- ---------- ---------- ---------
31 March 2022
Trade and other
payables 8,632 - - - 8,632
Bank borrowings - 9,336 245,974 144,602 399,912
----------------- ----------
8,632 9,336 245,974 144,602 408,544
----------------- ---------- --------- ---------- ---------- ---------
The profile above shows the maturity profile at 31 March 2023
and included within the contracted payments is GBP54,327,000 (2022:
GBP42,862,000) of loan interest payable up to the point of
maturity.
32.0 Capital Commitments
At 31 March 2023, the Company had funds committed totalling
GBPNil (2022: GBP92,000 concerning capital expenditure for a
property in Surrey).
33.0 Post balance sheet events
Dividends
On 9 May 2023, the Company announced a dividend of 1.425 pence
per share in respect of the period 1 January 2023 to 31 March 2023
totalling GBP8,641,000. The dividend payment was made on 9 June
2023 to shareholders on the register as at 19 May 2023. The
financial statements do not reflect this dividend. The dividend was
paid as a REIT property income distribution ("PID").
Financing
On 1 December 2022, the Company signed a facility with an
institutional lender. Subsequent to this, on 21 June 2023, the
Company received credit approved terms for an additional GBP61.0
million fixed facility based on a 3-year SONIA rate at the date of
draw down +195bps margin with a maturity date of 3 August 2026. The
eventual drawdown on the facility is subject to certain standard
closing conditions.
Recommended cash offer for the Group
On 9 May 2023 an announcement was made to the market for an
all-cash offer of Civitas Social Housing PLC (Civitas) from
Wellness Unity Limited, a wholly owned indirect subsidiary of CK
Asset Holdings Limited (CKA). The offer of 80 pence per share
received values the entire issued share capital (excluding treasury
shares) of CSH at approximately GBP485 million. This represents a
44.4% premium to the share price of 55.4 pence per share on 5 May
2023 (the last trading day prior to announcement of the offer), and
26.7% discount to 31 March 2023 NAV of 109.16p. This provides
shareholders the opportunity to exit in full and in cash at a
significant premium to the current share price. The offer will be
implemented by way of a takeover offer within the meaning of Part
28 of the Companies Act.
On 22 May 2023, the Offer Document was made available. The offer
became unconditional on 23 June 2023. Payment of consideration due
to shareholders who have submitted valid acceptances will be made
no later than 14 calendar days after the date the Offer becomes or
is declared unconditional, or, in relation to valid acceptances
received after such date, within 14 calendar days of receipt of
that acceptance. According to the Offer Document, it is intended
that Civitas Investment Management Limited ("CIM") is maintained as
the Investment Adviser to Civitas so that the day-to-day management
of the Civitas portfolio will continue uninterrupted, and Civitas
be re-registered as a private limited company as soon as
practicable following the cancellation of the listing and trading
of Civitas shares. At the balance sheet date, CKA, as an indirect
investor in CIM, was not a related party to the Group as per IAS
24. On 23 June 2023, when the offer became unconditional, CKA
subsequently became the ultimate controlling party of the Company,
and a related party under IAS 24.
Company Statement of Financial Position
As at 31 March 2023
31 March 2023 31 March 2022
Note GBP'000 GBP'000
----------------------------- ------- -------------- --------------
Assets
Fixed assets
Investment in subsidiaries 7.0 794,733 793,284
----------------------------- ------- -------------- --------------
Current assets
Trade and other receivables 9.0 2,599 4,310
Cash and cash equivalents 10.0 26,193 23,438
----------------------------- ------- -------------- --------------
28,792 27,748
----------------------------- ------- -------------- --------------
Total assets 823,525 821,032
----------------------------- ------- -------------- --------------
Liabilities
Creditors - amounts falling
due within one year
Trade and other payables 11.0 (318,414) (274,020)
----------------------------- ------- -------------- --------------
(318,414) (274,020)
----------------------------- ------- -------------- --------------
Total liabilities (318,414) (274,020)
----------------------------- ------- -------------- --------------
Total net assets 505,111 547,012
----------------------------- ------- -------------- --------------
Equity
Share capital 12.0 6,225 6,225
Share premium reserve 13.0 292,626 292,626
Capital reduction reserve 14.0 317,714 322,365
Accumulated losses 15.0 (111,454) (74,204)
----------------------------- ------- -------------- --------------
Total equity 505,111 547,012
----------------------------- ------- -------------- --------------
The Company has taken advantage of the provisions of Companies
Act 2006 s408 and does not disclose the Company's individual profit
and loss account. Loss for the year was GBP2,791,000 (2022: profit
GBP21,362,000).
The Company financial statements were approved by the Board of
Directors of Civitas Social Housing PLC and authorised for issue
and signed on its behalf by:
Michael Wrobel
Chairman and Independent Non-Executive Director
28 June 2023
Company No: 10402528
Company Statement of Changes in Equity
For the year ended 31 March 2023
Share Capital
Share premium reduction Accumulated Total
Capital reserve reserve losses equity
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ------- -------- -------- ---------- ------------ ---------
Balance at 1 April 2021 6,225 292,462 331,140 (61,473) 568,354
Profit and total comprehensive income
for the year - - - 21,362 21,362
Shares reissued from treasury 13.0 - 164 484 - 648
Shares bought back into treasury 14.0 - - (9,259) - (9,259)
Dividends paid 15.0 - - - (34,093) (34,093)
Balance at 31 March 2022 6,225 292,626 322,365 (74,204) 547,012
--------------------------------------- ------- -------- -------- ---------- ------------ ---------
Loss and total comprehensive loss
for the year - - - (2,791) (2,791)
Shares reissued from treasury 13.0 - - - -
Shares bought back into treasury 14.0 - - (4,651) - (4,651)
Dividends paid 15.0 - - - (34,459) (34,459)
Balance at 31 March 2023 6,225 292,626 317,714 (111,454) 505,111
--------------------------------------- ------- -------- -------- ---------- ------------ ---------
The Company's distributable reserves comprise retained
earnings/(accumulated losses) and the capital reduction reserve.
These in aggregate had sufficient realised distributable reserves
to support dividends paid to date.
The notes below are an integral part of these financial
statements.
Notes to the Company Financial Statements
As at 31 March 2023
1.0 Corporate information
Civitas Social Housing PLC ("the Company") was incorporated in
England and Wales under the Companies Act 2006 as a public company
limited by shares on 29 September 2016 with company number 10402528
under the name Civitas REIT PLC, which was subsequently changed to
the existing name on 3 October 2016.
The address of the registered office is 6th Floor, 65 Gresham
Street, London EC2V 7NQ. The Company is registered as an investment
company under section 833 of the Companies Act 2006 in England and
Wales and is domiciled in the United Kingdom.
The Company did not begin trading until 18 November 2016 when
the shares were admitted to trading on the London Stock Exchange
("LSE").
The Company's Ordinary shares have been admitted to the Official
List of the Financial Conduct Authority ("FCA"), and are traded on
the LSE.
The principal activity of the Company is to act as the ultimate
parent company of its subsidiaries (the "Group") and to provide
shareholders with an attractive level of income, together with the
potential for capital growth from investing in a portfolio of
social homes.
2.0 Basis of preparation
The financial statements have been prepared on a historical cost
basis and in accordance with Financial Reporting Standard 101
Reduced Disclosure Framework ("FRS 101") and the Companies Act 2006
as applicable to companies using FRS 101.
In preparing these financial statements, the Company applies the
recognition, measurement and disclosure requirements of
International Financial Reporting Standards ("Adopted IFRSs"), but
makes amendments where necessary in order to comply with the
Companies Act 2006 and has set out below where advantage of the FRS
101 disclosure exemptions has been taken.
In preparing these financial statements the Company has taken
advantage of all disclosure exemptions conferred by FRS 101.
Therefore, these financial statements do not include:
-- certain comparative information as otherwise required by IFRS;
-- certain disclosures regarding the Company's capital management;
-- certain disclosures in relation to IFRS 15 Revenue Contracts with Customers;
-- a statement of cash flows;
-- the effect of future accounting standards not yet adopted;
-- the disclosure of the remuneration of key management personnel; and
-- disclosure of related party transactions with other wholly
owned members of Civitas Social Housing PLC.
In addition, and in accordance with FRS 101, further disclosure
exemptions have been adopted because equivalent disclosures are
included in the Company's consolidated financial statements. These
financial statements do not include certain disclosures in respect
of:
-- financial instruments; and
-- fair value measurement other than certain disclosures
required as a result of recording financial instruments at fair
value.
The Company has taken advantage of the exemption in section 408
of the Companies Act 2006 not to present its own income statement
or statement of comprehensive income.
New standards, amendments and interpretations
After a review of new accounting standards which are now
effective, none are relevant to be adopted in the preparation of
the Company's financial statements for the year ended 31 March
2023.
Going concern
The financial statements have been prepared on a going concern
basis.
As discussed in the Group financial statements above, the
underlying assets of the Company benefit from a secure income
stream.
The Company financial statements show an accumulated loss,
however this is due to a time-lag on profits from subsidiary
companies being moved up the structure in the form of
dividends.
The Company has net current liabilities of GBP289,622,000 (2022:
GBP246,272,000). This balance arises due to the intercompany
balances totalling GBP316,128,000 (2022: GBP271,632,000) with the
Company's subsidiary companies. The amounts principally relate to
bank loans drawn in the Company's subsidiary companies in order to
finance the purchase of new acquisitions in accordance with the
Group's business model. The directors of the subsidiary companies
have provided a letter of comfort that they will not seek repayment
of these balances within 12 months from the date of approval of the
Company's financial statements.
The Company's articles of association include a requirement for
the Board to propose an ordinary resolution at the annual general
meeting following the fifth anniversary from the initial public
offering of the Company for the Company to continue in its current
form (the Continuation Resolution). This vote was passed in
September 2022 so the Company will continue its business as
presently constituted and will propose the same resolution at the
AGM in September 2027 and every fifth annual general meeting
thereafter.
On 9 May 2023, an announcement was made to the market for an
all-cash offer of Civitas Social Housing PLC (CSH) from Wellness
Unity Limited, a wholly owned indirect subsidiary of CK Assets
Holdings Limited (CKA). The offer became unconditional on 23 June
2023. The Group's existing committed debt facilities contain a
standard change of control clause has now been triggered due to the
offer becoming unconditional. This could result in the existing
committed debt facilities being withdrawn. Furthermore, the
Directors do not have visibility of the post completion funding for
the Group and Company at this time. The Directors note the detailed
intentions statement included within the announcement on 9 May
2023, which states that CKA does not envisage making any changes to
the management team nor any disruption to any counterparties or to
the underlying tenants. However, the conditions outlined above
indicate a material uncertainty which may cast significant doubt
upon the Group's and Company's ability to continue as a going
concern. The Independent Auditors' Report included within the
Annual Report and Accounts for the year ended 31 March 2023 also
highlights this material uncertainty. Therefore, notwithstanding
the material uncertainty arising from the offer from CKA, the
Directors are satisfied that the going concern basis remains
appropriate for the preparation of the financial statements. The
financial statements do not include the adjustments that would
result if the Group and the Company were unable to continue as a
going concern.
Significant judgements and sources of estimation uncertainty
The key source of estimation uncertainty relates to the
Company's investment in Group companies, and is stated in the
Company's separate financial statements at cost less impairment
losses, if any. Impairment losses are determined with reference to
the investment's fair value less estimated costs of disposal.
Investment properties held by the subsidiary companies are
supported by independent valuation. Judgements and assumptions
associated with the property values of the investments held by the
subsidiary companies are detailed in the Group financial
statements.
3.0 Accounting Policies
The financial statements of the Company follow the accounting
policies laid out in the Group's consolidated financial statements
along with the following accounting policies which have been
consistently applied:
Investments in subsidiaries
The investments in subsidiary companies are included in the
Company's Statement of Financial Position at cost less provision
for impairment. Impairment losses are determined with reference to
the investment's fair value less estimated selling costs. On
disposal, the difference between the net disposal proceeds and its
carrying amount is included in the income statement.
The investment in a subsidiary company may include both the
purchase of shares and an intercompany loan which is subsequently
capitalised in return for shares in the subsidiary company. The
intercompany loan capitalised is disclosed in note 7.0 as a
transfer between the shares and loan columns.
Loans to subsidiaries
Loans made to subsidiary companies which arise as part of the
transactions for the acquisition of investments and are
subsequently capitalised by the issue of shares are recognised as
investment in subsidiaries at cost. At the point the loan is
capitalised, this transaction is recognised as a transfer within
the table in note 7.0.
Amounts due to subsidiary companies
Balances arising with subsidiary companies of a temporary nature
are initially recognised at fair value and subsequently measured at
amortised cost.
4.0 Dividends
Dividends are included in the financial statements in the year
in which they are paid. Details of dividends paid and proposed are
included in note 14.0 of the Group's consolidated financial
statements.
5.0 Employee information
Details of Directors' remuneration are included in note 6.0 of
the consolidated financial statements. The Company had no employees
during the year (2022: nil).
6.0 Audit fees
Audit fees in relation to the Company's financial statements
total GBP358,000 (2022: GBP296,000). For further details, please
refer to note 9.0 of the Group financial statements.
7.0 Investments in subsidiaries
For the
Shares in Loans to year ended
subsidiaries subsidiaries 31 March 2023
Year ended 31 March 2023 GBP'000 GBP'000 GBP'000
----------------------------- -------------- --------------- ----------------
Balance at the beginning of
the year 768,075 25,209 793,284
Increase in investments 1,090 600 1,690
Loans transferred 7,727 (7,727) -
Impairment (241) - (241)
----------------------------- --------------
At the end of the year 776,651 18,082 794,733
----------------------------- -------------- --------------- ----------------
For the
Shares in Loans to year ended
subsidiaries subsidiaries 31 March 2022
Year ended 31 March 2022 GBP'000 GBP'000 GBP'000
--------------------------------- --------------- --------------- ----------------
Balance at the beginning of the
year 703,435 17,483 720,918
Increase in investments 41,712 31,013 72,725
Loans transferred 23,287 (23,287) -
Impairment (359) - (359)
--------------------------------- ---------------
At the end of the year 768,075 25,209 793,284
--------------------------------- ---------------
Following a review comparing cost of investments to the
underlying net assets of subsidiary companies, an impairment
provision has been made of GBP241,000 (2022: GBP359,000).
8.0 Subsidiary entities
The Company has provided a guarantee under s479C of the
Companies Act 2006 in respect of the financial year ended 31 March
2023 for a number of its subsidiary companies (as indicated in the
table below). The guarantee is over all outstanding liabilities to
which the subsidiary companies are subject at 31 March 2023 until
they are satisfied in full.
The Group consists of a parent company, Civitas Social Housing
PLC, incorporated in England and Wales (company number 10402528)
and a number of subsidiaries held directly by Civitas Social
Housing PLC, which operate and are incorporated in England and
Wales or Jersey.
The Group owns 100% equity shares of all subsidiaries listed
below and has the power to appoint and remove the majority of the
board of directors of those subsidiaries. The relevant activities
of the below subsidiaries are determined by the Board of Directors
based on the purpose of each company.
Therefore, the Directors concluded that the Group has control
over all these entities and all these entities have been
consolidated within the consolidated financial statements.
A list of all related undertakings included within these
consolidated financial statements are noted below. Indirectly held
subsidiary companies are marked by an indentation in the table
below:
Name Registered number Principal activity Country of incorporation
Civitas Social Housing Finance Company 1 Limited * 10997707 Finance company England & Wales
Civitas Social Housing Jersey 1 Limited 124129 Holding company Jersey
Civitas SPV1 Limited* 10518729 Property investment England & Wales
Civitas SPV2 Limited* 10114251 Property investment England & Wales
Civitas SPV11 Limited* 10546749 Property investment England & Wales
Civitas SPV15 Limited* 09777380 Property investment England & Wales
Civitas SPV25 Limited* 10791473 Property investment England & Wales
Civitas SPV27 Limited* 10883112 Property investment England & Wales
Civitas SPV33 Limited* 10546407 Property investment England & Wales
Civitas SPV35 Limited* 10588530 Property investment England & Wales
Civitas SPV38 Limited* 10738318 Property investment England & Wales
Civitas SPV39 Limited* 10547333 Property investment England & Wales
Civitas SPV40 Limited* 10738510 Property investment England & Wales
Civitas SPV41 Limited* 10738542 Property investment England & Wales
Civitas SPV50 Limited* 10775419 Property investment England & Wales
Civitas Social Housing Finance Company 2 Limited* 10997698 Finance company England & Wales
Civitas Social Housing Jersey 2 Limited 124876 Holding company Jersey
Civitas SPV3 Limited* 10156529 Property investment England & Wales
Civitas SPV4 Limited* 10433744 Property investment England & Wales
Civitas SPV5 Limited* 10479104 Property investment England & Wales
Civitas SPV6 Limited* 10674493 Property investment England & Wales
Civitas SPV9 Limited* 10536388 Property investment England & Wales
Civitas SPV10 Limited* 10535243 Property investment England & Wales
Civitas SPV12 Limited* 10546753 Property investment England & Wales
Civitas SPV17 Limited* 10479036 Property investment England & Wales
Civitas SPV18 Limited* 10546651 Property investment England & Wales
Civitas SPV19 Limited* 10548932 Property investment England & Wales
Civitas SPV20 Limited* 10588735 Property investment England & Wales
Civitas SPV22 Limited* 10743958 Property investment England & Wales
Civitas SPV24 Limited* 10751512 Property investment England & Wales
Civitas SPV26 Limited* 10864336 Property investment England & Wales
Civitas SPV29 Limited* 10911565 Property investment England & Wales
Civitas SPV30 Limited* 10956025 Property investment England & Wales
Civitas SPV31 Limited* 10974889 Property investment England & Wales
Civitas SPV32 Limited* 11007173 Property investment England & Wales
Civitas SPV34 Limited* 10738381 Property investment England & Wales
Civitas SPV36 Limited* 10588792 Property investment England & Wales
Civitas SPV42 Limited* 10738556 Property investment England & Wales
Civitas SPV43 Limited* 10534877 Property investment England & Wales
Civitas SPV45 Limited* 10871854 Property investment England & Wales
Civitas SPV46 Limited* 10871910 Property investment England & Wales
Civitas SPV47 Limited* 10873270 Property investment England & Wales
Civitas SPV48 Limited* 10873295 Property investment England & Wales
Civitas SPV51 Limited* 10826693 Property investment England & Wales
Civitas SPV52 Limited* 10827006 Property investment England & Wales
Civitas SPV63 Limited* 10937805 Property investment England & Wales
Civitas SPV64 Limited* 10938411 Property investment England & Wales
Civitas SPV70 Limited* 10770201 Property investment England & Wales
Civitas SPV71 Limited * 10888639 Property investment England & Wales
Civitas SPV72 Limited* 10938022 Property investment England & Wales
Civitas SPV74 Limited* 11001855 Property investment England & Wales
Civitas SPV75 Limited* 11001834 Property investment England & Wales
Civitas SPV80 Limited* 11001998 Property investment England & Wales
Civitas SPV163 Limited* 14527873 Property investment England & Wales
Civitas Social Housing Finance Company 3 Limited* 10997714 Finance Company England & Wales
Civitas SPV8 Limited* 10536157 Property investment England & Wales
Civitas SPV28 Limited* 10895228 Property investment England & Wales
Civitas SPV53 Limited* 11021625 Property investment England & Wales
Civitas SPV55 Limited* 11056455 Property investment England & Wales
Civitas SPV57 Limited* 11091444 Property investment England & Wales
Civitas SPV60 Limited* 11111908 Property investment England & Wales
Civitas SPV61 Limited* 10937662 Property investment England & Wales
Civitas SPV66 Limited* 10937898 Property investment England & Wales
Civitas SPV77 Limited* 11166491 Property investment England & Wales
Civitas SPV78 Limited* 11170099 Property investment England & Wales
Civitas SPV79 Limited* 11236544 Property investment England & Wales
Civitas SPV81 Limited* 11192811 Property investment England & Wales
Civitas SPV82 Limited* 11380796 Property investment England & Wales
Civitas SPV83 Limited* 11371128 Property investment England & Wales
Civitas SPV85 Limited* 11300749 Property investment England & Wales
Civitas SPV95 Limited* 11208184 Property investment England & Wales
Civitas SPV97 Limited* 11463890 Property investment England & Wales
Civitas SPV103 Limited* 11500596 Property investment England & Wales
Civitas SPV105 Limited* 11532177 Property investment England & Wales
Civitas SPV106 Limited* 11532179 Property investment England & Wales
Civitas SPV107 Limited* 11532182 Property investment England & Wales
Civitas SPV116 Limited* 11504399 Property investment England & Wales
Civitas SPV117 Limited* 11504445 Property investment England & Wales
Civitas Social Housing Finance Company 4 Limited* 11906660 Finance Company England & Wales
Civitas SPV23 Limited* 10746881 Property investment England & Wales
Civitas SPV54 Limited* 11039750 Property investment England & Wales
Civitas SPV59 Limited* 11111912 Property investment England & Wales
Civitas SPV69 Limited* 11142372 Property investment England & Wales
Civitas SPV73 Limited* 10939075 Property investment England & Wales
Civitas SPV84 Limited* 11381455 Property investment England & Wales
Civitas SPV86 Limited* 11418432 Property investment England & Wales
Civitas SPV87 Limited* 10888903 Property investment England & Wales
Civitas SPV88 Limited* 10939044 Property investment England & Wales
Civitas SPV90 Limited* 10939131 Property investment England & Wales
Civitas SPV91 Limited * 10941377 Property investment England & Wales
Civitas SPV92 Limited* 11449913 Property investment England & Wales
Civitas SPV93 Limited* 11043111 Property investment England & Wales
Civitas SPV94 Limited* 11208105 Property investment England & Wales
Civitas SPV96 Limited* 11270786 Property investment England & Wales
Civitas SPV100 Limited* 11069703 Property investment England & Wales
Civitas SPV101 Limited* 09978282 Property investment England & Wales
Civitas SPV102 Limited* 11521555 Property investment England & Wales
Civitas SPV109 Limited* 11532120 Property investment England & Wales
Civitas SPV112 Limited* 11579750 Property investment England & Wales
Civitas SPV114 Limited* 11579733 Property investment England & Wales
Civitas SPV115 Limited* 11522178 Property investment England & Wales
Civitas SPV118 Limited* 11411498 Property investment England & Wales
Civitas SPV121 Limited* 11099917 Property investment England & Wales
Civitas SPV122 Limited* 11482646 Property investment England & Wales
Civitas SPV126 Limited* 11459821 Property investment England & Wales
Civitas SPV127 Limited* 10941401 Property investment England & Wales
Civitas SPV129 Limited* 11664994 Property investment England & Wales
Civitas SPV130 Limited* 11705074 Property investment England & Wales
Civitas SPV131 Limited* 11675132 Property investment England & Wales
Civitas SPV132 Limited* 11473735 Property investment England & Wales
Civitas SPV145 Limited* 11842306 Holding company England & Wales
SPV153 Limited (previously 5219012 Property investment England & Wales
Fieldbay Limited) *
Civitas SPV148 Limited* 11632633 Property investment England & Wales
Civitas SPV149 Limited* 11462691 Property investment England & Wales
Civitas SPV150 Limited* 11462555 Property investment England & Wales
FPI CO 324 Ltd* 11633019 Property investment England & Wales
Civitas Social Housing Finance Company 5 Limited* 13083077 Finance Company England & Wales
Civitas SPV7 Limited* 10536368 Property investment England & Wales
Civitas SPV13 Limited* 09517692 Property investment England & Wales
Civitas SPV37 Limited* 10738450 Property investment England & Wales
Civitas SPV44 Limited* 10588783 Property investment England & Wales
Civitas SPV49 Limited* 11031349 Property investment England & Wales
Civitas SPV56 Limited* 11056465 Property investment England & Wales
Civitas SPV62 Limited* 10937528 Property investment England & Wales
Civitas SPV65 Limited* 10938467 Property investment England & Wales
Civitas SPV67 Limited* 10937929 Property investment England & Wales
Civitas SPV68 Limited* 10938269 Property investment England & Wales
Civitas SPV98 Limited* 11478695 Property investment England & Wales
Civitas SPV99 Limited* 11478707 Property investment England & Wales
Civitas SPV104 Limited* 11532174 Property investment England & Wales
Civitas SPV108 Limited* 11532135 Property investment England & Wales
Civitas SPV113 Limited* 11580068 Property investment England & Wales
Civitas SPV123 Limited* 08253452 Property investment England & Wales
Civitas SPV133 Limited* 11698972 Property investment England & Wales
Civitas SPV134 Limited* 11689461 Property investment England & Wales
Civitas SPV135 Limited* 11579880 Property investment England & Wales
Civitas SPV136 Limited* 11579760 Property investment England & Wales
Civitas SPV143 Limited* 11546808 Property investment England & Wales
Civitas SPV144 Limited* 11546696 Property investment England & Wales
Civitas SPV146 Limited* 11861500 Holding Company England & Wales
Bryn Eithin (2019) Limited * 11844898 Property investment England & Wales
Civitas SPV147 Limited* 11861974 Holding Company England & Wales
Mynydd Mawr (2019) Limited * 11844917 Property investment England & Wales
Civitas SPV152 Limited* 11955719 Property investment England & Wales
Civitas SPV155 Limited* 12044281 Property investment England & Wales
Civitas SPV156 Limited* 12081093 Property investment England & Wales
Civitas SPV157 Limited* 12188610 Property investment England & Wales
Civitas SPV158 Limited* 12202674 Property investment England & Wales
Civitas SPV160 Limited* 12272906 Property investment England & Wales
Bedford SPV1 Limited* 12315518 Property investment England & Wales
Bridge Property Herts Limited* 12435985 Property investment England & Wales
Bridge Propco Limited* 12445439 Property investment England & Wales
FPI Co 294 Ltd* 11519226 Property investment England & Wales
Civitas SPV14 Limited* 10479041 Property investment England & Wales
Civitas SPV HP Ltd* 12784895 Property investment England & Wales
Civitas SPV16 Limited* 09917557 Property investment England & Wales
Civitas SPV21 Limited* 10631541 Property investment England & Wales
Civitas SPV159 Limited* 12258313 Property investment England & Wales
Civitas Financing PLC* 13546154 Holding Company England & Wales
* These entities are exempt from the requirements of the
Companies Act 2006 relating to the audit of individual financial
statements by virtue of Section 479A of that Act. These are all
entities that have a year end of 31 March 2023.
The registered addresses for the subsidiaries are consistent
based on their country of incorporation and are as follows:
-- England & Wales entities: Link Company Matters Limited,
6th Floor, 65 Gresham Street, London EC2V 7NQ
-- Jersey entities: 12 Castle Street, St Helier, Jersey, JE2
3RT
9.0 Trade and other receivables
31 March
31 March 2023 2022
GBP'000 GBP'000
---------
Trade receivables 1,544 1,150
Prepayments and other receivables 420 1,902
Accrued income 635 1,258
---------
Total 2,599 4,310
---------
Prepayments and other receivable amounts include prepaid legal
and professional fees of GBPNil (2022: GBP34,000) that have been
incurred in connection with acquisitions yet to be completed and
GBP286,000 (2022: GBP1,046,000) in respect of uncompleted works on
the property portfolio.
10.0 Cash and cash equivalents
31 March
31 March 2023 2022
GBP'000 GBP'000
Cash held by solicitors 64 376
Liquidity funds 15,636 10,489
Cash held at bank 10,239 12,258
Cash and cash equivalents 25,939 23,123
Restricted cash 254 315
Total cash held at bank 26,193 23,438
Liquidity funds refer to money placed in money market funds.
These are highly liquid funds with accessibility within 24 hours
and subject to insignificant risk of changes in value.
Cash held by solicitors is money held in escrow for expenses
expected to be incurred in relation to investment properties
pending completion. These funds are available immediately on
demand.
Restricted cash represents amounts held for specific
commitments, tenant deposits and retention money held by lawyers in
relation to deferred payments subject to achievement of certain
conditions, other retentions and cash segregated to fund repair,
maintenance and improvement works to bring the properties up to
satisfactory standards for the Group and the tenants.
11.0 Trade and other payables
31 March 2022
31 March 2023 Restated
GBP'000 GBP'000
Retentions* 20 60
Accruals 745 685
Dividends withholding tax payable 940 1,057
Deferred income 374 358
Amounts due to subsidiary companies 316,128 271,632
Tenant deposits held* 207 228
Total 318,414 274,020
* Comparatives have been re-analysed to correct the analysis of
GBP228,000 of tenant deposits which had previously been included in
retentions.
12.0 Share capital
Share capital represents the nominal value of consideration
received by the Company for the issue of Ordinary shares.
For the
For the year ended
year ended 31 March
31 March 2023 2022
GBP'000 GBP'000
Share capital
At beginning and end of year 6,225 6,225
Number of shares authorised, issued and fully paid
For the For the
year ended year ended
31 March 2023 31 March 2022
Ordinary shares of GBP0.01 each
At beginning and end of year 622,461,380 622,461,380
During the year, the Company purchased 6,050,000 Ordinary shares
to be held in treasury at a cost of GBP4,651,000 (31 March 2022:
10,025,000 Ordinary shares for GBP9,259,000).
During the previous year, the Company reissued 565,000 Ordinary
shares held in treasury for GBP647,000. The cost of purchasing
these shares into treasury of GBP484,000 has been credited to the
capital reduction reserve with the gain credited to the share
premium reserve.
At 31 March 2023, the Company held 16,075,000 (31 March 2022:
10,025,000) Ordinary shares in treasury. The shares will continue
to be held in treasury until either reissued or cancelled.
At 31 March 2023, the number of Ordinary shares used to
calculate the net asset value per share is 606,386,380 (31 March
2022: 612,436,380) which excludes the shares held in treasury.
13.0 Share premium reserve
The share premium reserve represents the amounts subscribed for
Ordinary share capital in excess of nominal value less associated
issue costs of the subscriptions.
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
At the beginning of the year 292,626 292,462
Premium arising on shares reissued
from treasury - 164
At end of year 292,626 292,626
For movements in the year, please see details in note 12.0.
14.0 Capital reduction reserve
The capital reduction reserve is a distributable reserve to
which the value of the cancelled share premium was transferred.
Pursuant to Article 3 of The Companies (Reduction of Share Capital)
Order 2008, the balance held in the capital reduction reserve is to
be treated for the purposes of Part 23 of the Companies Act 2006 as
a realised profit and therefore available for distribution in
accordance with section 830 of the Companies Act. The Company has
used this reserve for the costs of buying back shares to be held in
treasury.
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
At the beginning of year 322,365 331,140
Shares reissued from treasury - 484
Shares bought back into treasury (4,651) (9,259)
At end of year 317,714 322,365
For movements in the year, please see details in note 12.0.
15.0 Accumulated losses
This reserve represents the profits and losses of the
Company.
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
At the beginning of year (74,204) (61,473)
(Loss)/profit for the year (2,791) 21,362
Dividends paid (34,459) (34,093)
At end of year (111,454) (74,204)
16.0 Controlling parties
As at 31 March 2023, there is no ultimate controlling party.
17.0 Related party transactions
For all related party transactions and transactions with the
Investment Adviser please make reference to notes 30.1 and 30.2 of
the Group's consolidated financial statements and amounts due to
subsidiary companies in note 11.0 above.
18.0 Post balance sheet events
Please refer to note 33.0 of the Group Consolidated financial
statements above in relation to the cash offer for the Group.
Since the year end, Civitas Social Housing Jersey 1 Limited and
Civitas Social Housing Jersey 2 Limited have issued dividends to
the Company totalling GBP10,246,000.
Appendix 1 (unaudited): Notes to the calculation of EPRA and
other alternative performance measures
The Group has chosen to adopt EPRA best practice guidelines for
calculating key alternative performance measures. Notes 1.0 to 7.0
support the EPRA metrics disclosed where the definition and purpose
of each metric are outlined.
For the For the
1.0 EPRA Earnings year ended year ended
31 March 2023 31 March 2022
Earnings from operational activities
Profit after taxation (GBP'000) 25,472 44,754
Change in fair value of derivative financial instruments (GBP'000) 2,826 (2,675)
Changes in value of investment properties (GBP'000) (2,640) (12,269)
Costs of early repayment of debt (GBP'000) 1,271 -
EPRA Earnings (GBP'000) 26,929 29,810
Weighted average number of shares in issue
(adjusted for shares held in treasury) 608,552,681 618,797,942
EPRA Earnings per share (EPS) - basic & diluted 4.43p 4.82p
2.0 EPRA NAV Metrics
EPRA Net Reinstatement Value EPRA Net Tangible Assets EPRA Net Disposal Value
31 March 2023
Net assets (GBP'000) 661,909 661,909 661,909
Fair value of derivative
financial instruments (GBP'000) (8,129) (8,129) -
Adjustment to fair value for
bank borrowings (GBP'000) - - 11,736
NAV (GBP'000) 653,780 653,780 673,645
Number of shares in issue
(adjusted for shared held in
treasury) 606,386,380 606,386,380 606,386,380
NAV per share 107.82p 107.82p 111.09p
EPRA Net Reinstatement Value EPRA Net Tangible Assets EPRA Net Disposal Value
31 March 2022
Net assets (GBP'000) 675,547 675,547 675,547
Fair value of derivative financial
instruments (GBP'000) (2,131) (2,131) -
Adjustment to fair value for bank
borrowings (GBP'000) - - 2,644
NAV (GBP'000) 673,416 673,416 678,191
Number of shares in issue (adjusted
for shares held in treasury) 612,436,380 612,436,380 612,436,380
NAV per share 109.96p 109.96p 110.74p
3.0 EPRA Net Initial Yield
For the year ended For the year ended
31 March 31 March
2023 2022
Investment property (GBP'000) 978,147 968,756
Allowance for estimated purchasers' costs (GBP'000) 59,973 56,412
Gross up completed property portfolio (GBP'000) 1,038,120 1,025,168
Annualised net rents (GBP'000) 57,654 54,091
Add: notional rent expiration of rent free periods or other lease incentives
(GBP'000) - -
Topped-up net annualised rent (GBP'000) 57,654 54,091
EPRA NIY 5.55% 5.28%
EPRA Topped-up NIY 5.55% 5.28%
4.0 EPRA Vacancy Rate
For the year ended 31 March 2023 For the year ended 31 March 2022
Estimated Market Rental Value (ERV) of vacant
spaces (GBP'000) 10 -
Estimated Market Rental Value (ERV) of whole
portfolio (GBP'000) 57,654 54,091
EPRA Vacancy Rate 0.02% 0.00%
5.0 EPRA Costs Ratio
For the year
ended 31 For the year
March 2023 ended 31 March 2022
Total administrative and operating expenses 11,821 10,247
Direct property expenses 1,941 978
Less property expenses recovered through rents (1,512) (995)
EPRA Costs (including direct vacancy costs) 12,250 10,230
Direct vacancy costs - -
EPRA Costs (excluding direct vacancy costs) 12,250 10,230
Rental income 54,607 51,636
Less rechargeable costs received (1,512) (995)
Gross rental income 53,095 50,641
EPRA Cost Ratio (including direct vacancy costs) 23.07% 20.20%
EPRA Cost Ratio (excluding direct vacancy costs) 23.07% 20.20%
The Group has not incurred any direct vacancy costs.
6.0 EPRA LTV
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
Net Debt
Borrowings from financial institutions (GBP'000) 367,925 357,050
Cash and cash equivalents (GBP'000) (35,588) (53,337)
332,337 303,713
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
Total Property Value
Investment properties at fair value (GBP'000) 953,364 945,237
Net receivables (GBP'000) 26,743 26,892
980,107 972,129
EPRA LTV 33.91% 31.24%
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
Net receivables comprises
Other receivables 24,783 23,519
Trade and other receivables 11,260 12,865
Less trade and other payables (9,300) (9,492)
Total 26,743 26,892
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
Components of Net Assets used in EPRA LTV calculation
Investment properties at fair value 953,364 945,237
Net receivables 26,743 26,892
Cash and cash equivalents 35,588 53,337
Less borrowings from financial institutions (367,925) (357,050)
Net assets used in the EPRA LTV calculation 647,770 668,416
Less amounts excluded from the calculation
Interest rate derivatives 8,129 2,131
Unamortised loan issue costs 6,010 5,000
Net assets 661,909 675,547
7.0 EPRA Table of Capital Expenditure
For the For the
year ended year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
Acquisitions including incidental costs of purchase 543 33,466
Development - -
Investment properties
Incremental lettable space - -
Enhancing lettable space 4,944 5,818
Tenant incentives 1,700 1,614
Other material non-allocated types of expenditure - -
Capitalised interest - -
Total Capital Expenditure 7,187 40,898
Conversion from accruals to cash basis (597) 1,312
Total Capital Expenditure on a cash basis 6,590 42,210
The Group has not capitalised any overhead or operating
expenses.
The Group has no Joint Ventures so there is no joint venture
property to disclose in the above table.
8.0 Leveraged Internal Rate of Return (IRR)
This is the annual growth rate, based on growth in net asset
value per share since launch and dividends paid to Ordinary
shareholders.
31 March 31 March
2023 2022
NAV per share 109.1600p 110.3000p
31 May 2017 Interim dividend 0.7500p 0.7500p
31 August 2017 Interim dividend 0.7500p 0.7500p
30 November 2017 Interim dividend 0.7500p 0.7500p
9 March 2018 Interim dividend 0.7500p 0.7500p
8 June 2018 Interim dividend 1.2500p 1.2500p
7 September 2018 Interim dividend 1.2500p 1.2500p
30 November 2018 Interim dividend 1.2500p 1.2500p
11 January 2019 Interim dividend 1.1100p 1.1100p
28 February 2019 Interim dividend 0.1400p 0.1400p
7 June 2019 Interim dividend 1.3250p 1.3250p
6 September 2019 Interim dividend 1.3250p 1.3250p
29 November 2019 Interim dividend 1.3250p 1.3250p
28 February 2020 Interim dividend 1.3250p 1.3250p
12 June 2020 Interim dividend 1.3250p 1.3250p
7 September 2020 Interim dividend 1.3500p 1.3500p
4 December 2020 Interim dividend 1.3500p 1.3500p
1 March 2021 Interim dividend 1.3500p 1.3500p
11 June 2021 Interim dividend 1.3500p 1.3500p
10 September 2021 Interim dividend 1.3875p 1.3875p
13 December 2021 Interim dividend 1.3875p 1.3875p
11 March 2022 Interim dividend 1.3875p 1.3875p
28 June 2022 Interim dividend 1.3875p -
9 September 2022 Interim dividend 1.4250p -
9 December 2022 Interim dividend 1.4250p -
11 March 2023 Interim dividend 1.4250p -
139.0100p 134.4875p
NAV per share at launch 98.0000p 98.0000p
Levered IRR 6.29% 6.63%
Five Year Financial Results
Group Statement of Comprehensive Income
For the For the For the For the For the
year ended year ended year ended year ended year ended
31 March 2023 31 March 2022 31 March 2021 31 March 2020 31 March 2019
Revenue GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Rental income 54,607 51,636 49,020 46,165 35,738
Less direct property expenses (1,941) (978) (1,175) (259) -
Net rental income 52,666 50,658 47,845 45,906 35,738
Directors' remuneration (211) (206) (198) (176) (163)
Investment advisory fees (6,217) (6,132) (6,117) (6,183) (6,457)
General and administrative expenses (5,393) (3,909) (3,183) (3,501) (3,022)
Total expenses (11,821) (10,247) (9,498) (9,860) (9,642)
Change in fair value of investment
properties 2,640 12,269 5,511 9,389 3,652
Operating Profit 43,485 52,680 43,858 45,435 29,748
Finance income 148 7 20 110 491
Finance expenses - relating to bank
borrowings (15,335) (10,608) (7,737) (7,342) (3,975)
Finance expenses - relating to C
share amortisation - - - - (6,400)
Change in fair value of interest
rate derivatives (2,826) 2,675 (66) (478) -
Profit before tax 25,472 44,754 36,075 37,725 19,864
Taxation - - - - -
Profit being total comprehensive
income 25,472 44,754 36,075 37,725 19,864
Earnings per share - basic 4.19p 7.23p 5.80p 6.06p 4.67p
Earnings per share - diluted 4.19p 7.23p 5.80p 6.06p 4.22p
Dividend declared (per share) 5.70p 5.55p 5.40p 5.30p 5.00p
Group Statement of Financial Position
31 March 2023 31 March 2022 31 March 2021 31 March 2020 31 March 2019
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Investment property 953,364 945,237 893,684 867,988 820,094
Other receivables 24,783 23,519 21,905 10,755 6,824
Interest rate derivatives 8,129 2,131 - - -
986,276 970,887 915,589 878,743 826,918
Non-current assets
Trade and other receivables 11,260 12,865 12,821 10,838 5,723
Cash and cash equivalents 35,588 53,337 107,097 58,374 54,347
46,848 66,202 119,918 69,212 60,070
Total assets 1,033,124 1,037,089 1,035,507 947,955 886,988
Liabilities
Current liabilities
Trade and other payables (9,300) (9,492) (9,345) (7,743) (15,324)
Bank and loan borrowings - - (59,937) (59,730) -
(9,300) (9,492) (69,282) (67,473) (15,324)
Non-current liabilities
Bank and loan borrowings (361,915) (352,050) (292,183) (209,440) (205,156)
Interest rate derivatives - - (544) (478) -
(361,915) (352,050) (292,727) (209,918) (205,156)
Total liabilities (371,215) (361,542) (362,009) (277,391) (220,480)
Total net assets 661,909 675,547 673,498 670,564 666,508
Assets
Share capital 6,225 6,225 6,225 6,225 6,225
Share premium reserve 292,626 292,626 292,463 292,405 292,405
Capital reduction reserve 317,714 322,365 331,140 330,926 331,625
Retained earnings 45,344 54,331 43,670 41,008 36,253
Total equity 661,909 675,547 673,498 670,564 666,508
Net assets per share - basic 109.16p 110.30p 108.30p 107.87p 107.08p
Net assets per share - diluted 109.16p 110.30p 108.30p 107.87p 107.08p
Share price 53.70p 87.40p 107.80p 96.40p 96.00p
Total shareholder return (on a NAV basis 41.84% 37.23% 29.56% 23.64% 17.45%
Leverage 35.61% 34.43% 34.48% 26.90% 22.00%
Shareholder Information
The Company's Ordinary shares of 1p each are quoted on the
Official List of the FCA and traded on the premium segment of the
Main Market of the London Stock Exchange (LSE).
SEDOL number BD8HBD3
ISIN GB00BD8HBD32
Ticker/TIDM CSH
LEI 213800PGBG84J8GM6F95
Frequency of NAV Publication
The Company's NAV is released to the LSE on a quarterly basis
and published on the Company's website:
www.civitassocialhousing.com.
Sources of Further Information
Copies of the Company's Annual and Half-Yearly Reports, Stock
Exchange announcements and further information on the Company can
be obtained from its website: www.civitassocialhousing.com.
Share Register Enquiries
The register for the Company's Ordinary shares is maintained by
Link Group. In the event of queries regarding your holding, please
contact the Registrar on 0371 664 0300 (calls are charged at the
standard geographic rate and will vary by provider; calls outside
the UK will be charged at the applicable international rate). Lines
are open between 9.00am and 5.30pm, Monday to Friday, excluding
public holidays in England and Wales. You can also email
enquiries@linkgroup.co.uk.
Changes of name and/or address must be notified in writing to
the Registrar: Link Group, Central Square, 29 Wellington Street,
Leeds LS1 4DL
Key Dates
June
Annual results announced
Payment of fourth interim dividend
September
Company's half-year end
Annual General Meeting
Payment of first interim dividend
December
Half-yearly results announced
Payment of second interim dividend
February
Payment of third interim dividend
March
Company's year end
Association of Investment Companies
The Company is a member of the AIC, which publishes statistical
information in respect of member companies. The AIC can be
contacted on 020 7282 5555, enquiries@ theaic.co.uk or visit the
website: www.theaic.co.uk.
Electronic Communications from the Company
Shareholders now have the opportunity to be notified by email
when the Company's Annual Report, Half Yearly Report and other
formal communications are available on the Company's website,
instead of receiving printed copies by post. This has environmental
benefits in the reduction of paper, printing, energy and water
usage, as well as reducing costs to the Company.
If you have not already elected to receive electronic
communications from the Company and wish to do so, please contact
the Registrar.
Glossary
AIFM means the Alternative Investment Fund Manager.
AIFMD means the Alternative Investment Fund Managers Regulations
2013 (as amended by The Alternative Investment Fund Managers
(Amendment etc.) (EU Exit) Regulations 2019) and the Investment
Funds Sourcebook forming part of the FCA Handbook.
ALMO means an arm's length management organisation, a
not-for-profit company that provides housing services on behalf of
a local authority.
Alternative Performance Measures (APMs) means a financial
measure of historical financial performance, financial position, or
cash flows, other than a financial measure defined or specified in
the applicable financial reporting framework.
Annual contracted rent roll means the annual contractual rental
income currently receivable on a
property as at the Balance Sheet date.
Approved Provider means Approved Providers, local authorities,
ALMOs, Community Interest Companies, Registered Charities and other
regulated organisations directly or indirectly in receipt of
payment from local or central government including the NHS.
Care Provider means a provider of care services to the occupants
of Specialist Supported Housing, registered with the Care Quality
Commission.
CIM means Civitas Investment Management Limited or CIM (formerly
known as Civitas Housing Advisors Limited until its change of name
on 7 May 2020).
Community Interest Company or CIC means a company approved by
the Office of the Regulator of Community Interest Companies as a
community interest company and registered as such with Companies
House.
Company means Civitas Social Housing PLC, a company incorporated
in England and Wales with company number 10402528.
CMA Order means the Statutory Audit Services Order 2014, issued
by the Competition and Markets Authority.
Current Leverage means the percentage taken as total bank
borrowings drawn over total assets.
Dividend Yield means the ratio of the total annual dividend
declared for the financial year over market price per share.
EPRA means the European Public Real Estate Association.
EPRA EPS is the EPRA earnings divided by the weighted average
number of shares in issue in the period.
EPRA LTV is the EPRA loan to value ratio calculated as debt net
of cash balances divided by the market value of property (including
net receivables) as defined in the EPRA Best Practice
Guidelines.
EPRA Net Initial Yield ("EPRA NIY") is calculated as the
annualised rental income based on the cash rents passing at the
balance sheet date less non-recoverable property operating
expenses, divided by the gross market value of the property.
EPRA Net Reinstatement Value ("EPRA NRV") is an EPRA NAV metric
which assumes that entities never sell assets and aims to represent
the value required to rebuild the entity.
EPRA Net Tangible Assets ("EPRA NTA") is an EPRA NAV metric
which assumes that entities buy and sell assets, thereby
crystallising certain levels of unavoidable deferred tax.
EPRA Net Disposal Value ("EPRA NDV") is an EPRA NAV metric which
represents the shareholders' value under a disposal scenario, where
deferred tax, financial instruments and certain other adjustments
are calculated to the full extent of their liability, net of any
resulting tax.
Gross Asset Value means total assets.
Group means the Company and its subsidiaries.
Housing Association or HA means an independent society, body of
trustees or company established for the purpose of providing
low-cost social housing for people in housing need generally on a
non-profit making basis. Any trading surplus is typically used to
maintain existing homes and to help finance new ones. Housing
Associations are regulated by the Regulator of Social Housing.
Investment Adviser means Civitas Investment Management Limited
("CIM"), a company incorporated in England and Wales with company
number 10278444, in its capacity as investment adviser to the
Company.
IPO means Initial Public Offering.
IRR means internal rate of return.
Levered IRR means the internal rate of return including the
impact of debt.
Local Authority or LA means the administrative bodies for the
local government in England comprising 326 authorities (including
32 London boroughs).
Net Asset Value or NAV means the net asset value of the Group on
the relevant date, prepared in accordance with IFRS accounting
principles.
Net Initial Yield means the ratio of net rental income and gross
purchase price of a property.
NHS means the publicly funded healthcare system of the United
Kingdom comprising The National Health Service in England, NHS
Scotland, NHS Wales and Health and Social Care in Northern Ireland,
including, for the avoidance of doubt, NHS Trusts.
NHS Trust means a legal entity, set up by order of the Secretary
of State under section 25 of, and Schedule 4 to, the National
Health Service Act 2006, to provide goods and services for the
purposes of the health service.
Ongoing Charges means the figure published annually by the
Company which shows the drag on performance caused by operational
expenses. More specifically, it is the annual percentage reduction
in shareholder returns as a result of recurring operational
expenses assuming markets remain static and the portfolio is not
traded. Although the Ongoing Charges figure is based on historical
information, it provides shareholders with an indication of the
likely level of costs that will be incurred in managing the Company
in the future.
Portfolio means the Group's portfolio of assets.
Portfolio Net Asset Value or Portfolio NAV means the net asset
value of the Company, with assets aggregated rather than valued on
an asset by asset basis, as at the relevant date, calculated on the
basis of an independent Portfolio Valuation. See note 7.0 to
Appendix 1 for a reconciliation to IFRS NAV.
Portfolio Basis means the Portfolio NAV (as defined above)
Portfolio Valuation means an independent valuation of the
Portfolio by Jones Lang LaSalle Limited or such other property
adviser as the Directors may select from time to time, based upon
the Portfolio being held, directly or indirectly, within a
corporate vehicle or equivalent entity which is a wholly owned
subsidiary of the Company and otherwise prepared in accordance with
RICS "Red Book" guidelines.
REIT means a qualifying real estate investment trust in
accordance with the UK REIT Regime introduced by the UK Finance Act
2006 and subsequently re-written into Part 12 of the Corporation
Tax Act 2010.
RICS means Royal Institution of Chartered Surveyors.
RSH means the Regulator of Social Housing, the executive
non-departmental public body, sponsored by the Ministry of Housing,
Communities and Local Government, which is the regulator for Social
Homes providers in England and Wales.
Social homes or social housing means social rented homes and
other accommodation that are offered at rents subsidised below
market level or are constituents of other appropriate rent regimes
such as exempt rents or are subject to bespoke agreement with
entities such as NHS Trusts and are provided by Approved
Providers.
Specialist Supported Housing or SSH means social housing which
incorporates some form of care or other ancillary service on the
premises.
SPV means special purpose vehicle, a corporate vehicle in which
the Group's properties are held.
Target Return means the target return on investment.
Total Return means Net Total Return, being the change in NAV
over the relevant period plus dividend paid.
Total Shareholder Return means a measure of the return based
upon share price movement over the period plus dividend paid.
Valuation means an independent valuation of the Portfolio by
Jones Lang LaSalle Limited or such other property adviser as the
Directors may select from time to time, prepared in accordance with
RICS "Red Book" guidelines and based upon a valuation of each
underlying investment property rather than the value ascribed to
the portfolio and on the assumption of a theoretical sale of each
property rather than the corporate entities in which all of the
Company's investment properties are held.
WAULT or "Weighted Average Unexpired Lease Term" is the product
of annual contracted rent roll at period end and the time in years
to when the lease expires for each given lease, summed across
leases, and then divided by the total annual contracted rent roll
of the portfolio. The result is expressed in years. WAULT is a key
measure of the quality of the Company's portfolio. Long lease terms
underpin the security of the Company's income stream.
Company Information
Non-executive Directors
Michael Wrobel, Chairman
Peter Baxter, Senior Independent Director and Chairman of the
Nomination and Remuneration Committee
Caroline Gulliver, Chair of the Audit and Management Engagement
Committee
Alison Hadden
Alastair Moss
Registered Office
Link Company Matters Limited
6th Floor
65 Gresham Street
London EC2V 7NQ
Registered no: 10402528
www.civitassocialhousing.com
Alternative Investment Fund Manager
G10 Capital Limited
3 More London Riverside
London SE1 2AQ
Investment Adviser
Civitas Investment Management Limited
25 Maddox Street
London W1S 2QN
Joint Corporate Brokers
Liberum Capital Limited
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
Panmure Gordon (UK) Limited
One New Change
London EC4M 9AF
Company Secretary
Link Company Matters Limited
6th Floor
65 Gresham Street
London EC2V 7NQ
Administrator
Link Alternative Fund Administrators Limited
Broadwalk House
Southernhay West
Exeter EX1 1TS
Depositary
INDOS Financial Limited
5th Floor
54 Fenchurch Street
London EC3M 3JY
Registrar
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
Independent Auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT
Legal and Tax Adviser
Cadwalader, Wickersham & Taft LLP
Dashwood House
69 Old Broad Street
London EC2M 1QS
Public Relations Adviser
Buchanan
107 Cheapside
London EC2V 6DN
Tax Adviser
BDO LLP
55 Baker Street
London W1U 7EU
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END
FR XVLLLXQLBBBK
(END) Dow Jones Newswires
June 29, 2023 02:00 ET (06:00 GMT)
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