REG - Impact Healthcare - Transfer of Operations & Related Party Transaction

Impact Healthcare REITAnnouncement

15/05/2024 07:00

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RNS Number : 4441O  Impact Healthcare REIT PLC  15 May 2024

The information contained in this announcement is restricted and is not for
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member state of the European Economic Area (other than the Republic of Ireland
or the Netherlands and then only to professional investors in such
jurisdictions), Canada, Australia, Japan or the Republic of South Africa.

 

15 May 2024

Impact Healthcare REIT plc

("Impact" or the "Company" or, together with its subsidiaries, the "Group")

TRANSFER OF OPERATIONS OF THREE CARE HOMES TO A NEW TENANT OPERATOR OF THE
GROUP AND SMALLER RELATED PARTY TRANSACTION

The Board of Directors of Impact Healthcare REIT plc (ticker: IHR), the real
estate investment trust which gives investors exposure to a diversified
portfolio of UK healthcare real estate assets, in particular care homes,
announces that the Group has completed the transfer of three homes located in
Bradford (the "Bradford Portfolio") to a new tenant, We Care Group ("We
Care"), on long-term leases.  These homes have been operated by Melrose
Holdings Limited ("MHL") following their transfer from the Silverline Group
("Silverline") as part of a recovery plan first announced by the Group in June
2023.

 

Since acquiring Silverline's tenant companies, MHL has stabilised the
operation of the homes, including the Bradford Portfolio. As a result,
discussions have taken place with potential long-term, third-party operators
and the Board has concluded that it is in the best interests of all the
Company's stakeholders to facilitate the transfer of the Bradford Portfolio to
We Care, providing a long-term future for the homes.

 

We Care is an experienced operator with over 30 homes located throughout the
North of England. As an operator, it has significant experience with
turnaround homes, including in the Bradford submarket.  We Care has committed
to make further investment in the homes and has agreed to the inclusion of a
Landlord option to extend the leases to 35 years.

 

The Company has granted a rent-free period to We Care and lease incentives of
£1.46 million of which £0.25 million is additional cash to invest directly
in the homes. These incentives will enable We Care to complete the
refurbishment of the homes and are expected to be fully recovered over the
life of the leases. It is anticipated that the Bradford Portfolio will resume
paying rent in the first quarter of 2025.

 

The four remaining homes, located in Scotland, that were transferred from
Silverline continue to be operated by MHL. The Investment Manager is making
progress with its negotiations to transfer these four homes to a new operator
on long-term leases.

 

MHL is wholly-owned by connected parties of Mahesh Patel and as such the
transfer of its Bradford leases to We Care is a smaller related party
transaction for the purposes of Listing Rule 11.1.10R and this announcement is
therefore made in accordance with Listing Rule 11.1.10R(2)(c). As per the
requirements of Listing Rule 11.1.10 the Company has obtained written
confirmation from an FCA-approved sponsor firm that it believes the
transaction is fair and reasonable as far as the shareholders of the Company
are concerned.

 

Andrew Cowley, Managing Partner of Impact Health Partners commented "I am
delighted that we have secured a new tenant for the three homes in Bradford.
This will provide a long-term partner and secure these high quality and much
needed homes to the benefit of both residents and staff. We would like to
thank Melrose for stepping in and enhancing the operations in the homes over
the last year, which will secure value over the long term for our
shareholders"

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

 Impact Health Partners LLP                                                             Via H/Advisors Maitland
 Andrew Cowley
 David Yaldron

 Jefferies International Limited                                                        +44 20 7029 8000
 Tom Yeadon                                    tyeadon@jefferies.com
 Ollie Nott                                    onott@jefferies.com

 Winterflood Securities Limited                                                         +44 20 3100 0000
 Neil Langford                                 neil.langford@winterflood.com
 Joe Winkley                                   joe.winkley@winterflood.com

 H/Advisors Maitland (Communications advisor)  impacthealth-maitland@h-advisors.global
 James Benjamin                                                                         +44 7747 113 930
 Rachel Cohen                                                                           +44 20 7379 5151
 Billy Moran                                                                            +44 20 7379 5151

 

The Company's LEI is 213800AX3FHPMJL4IJ53.

 

Further information on Impact Healthcare REIT is available at
www.impactreit.uk (http://www.impactreit.uk/) .

 

NOTES:

Impact Healthcare REIT plc acquires, renovates, extends and redevelops high
quality healthcare real estate assets in the UK and lets these assets on
long-term full repairing and insuring leases to high-quality established
healthcare operators which offer good quality care, under leases which provide
the Company with attractive levels of rent cover.

 

The Company aims to provide shareholders with an attractive sustainable
return, principally in the form of quarterly income distributions and with the
potential for capital and income growth, through exposure to a diversified and
resilient portfolio of UK healthcare real estate assets, in particular care
homes for the elderly.

 

The Company's dividend policy is to maintain a progressive dividend that is
covered by adjusted earnings.

 

The target total dividend for the year ending 31 December 2024 is 6.95 pence
per share(*), a 0.18 pence increase over the 6.77 pence in dividends paid or
declared per ordinary share for the year ended 31 December 2023.

 

The Group's Ordinary Shares trade on the main market of the London Stock
Exchange, premium segment. The Company is a constituent of the FTSE
EPRA/NAREIT index.

*     This is a target only and not a profit forecast. There can be no
assurance that the target will be met and it should not be taken as an
indicator of the Company's expected or actual results.

 

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