Target Healthcare REIT Reports Pretax Loss for Fiscal 2023
By Najat Kantouar
Target Healthcare REIT has announced a pretax loss for fiscal 2023, despite experiencing a rise in rental income. This U.K. medical properties investment trust reported a loss of £6.6 million ($8.1 million) for the year ended June 30, compared to a profit of £49.1 million in the previous year. The financial result was primarily driven by a swing to loss on the valuation of investment properties.
Increased Rental Income
Target Healthcare REIT experienced an overall increase in contractual rent, with the figure rising by 2.0% to £56.6 million from £55.5 million. This increase includes a like-for-like growth of 3.8% as a result of rent reviews.
Net Asset Value (NAV) Decline
Despite the rise in rental income, the trust witnessed a fall in total net asset value return, declining by 1.2%. However, there were still positive valuation uplifts of 1.5% in the second half of the financial year due to inflation-linked leases.
Improved Earnings per Share
Adjusted EPRA earnings per share, a key industry metric, saw a significant increase of 18.8% to 6.0 pence per share, compared to the previous year's figure of 5.0 pence.
Positive Performance and Future Outlook
Chairman Alison Fyfe emphasized the strong performance of Target Healthcare REIT's portfolio, attributing it to various factors such as disposing of non-core assets, investing in property enhancements, engaging with tenants actively, and the more favorable trading environment. Furthermore, the company's vacancy rate remains at zero, while rent collection, rent cover, and underlying resident occupancy all show improvement.
The board of Target Healthcare REIT maintains its confidence in the trust's growth and has decided to increase the dividend by 2.0% to 1.428 pence per share, aligning with rental growth.
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