Target Healthcare REIT (THRL) investor relations material

Executive summary

• Delivered a 9.3% total accounting return for the year, with a 3.7% increase in EPRA NTA and a 3% dividend increase, despite sector challenges.

• Achieved 7.5% annualized total accounting returns since launch, consistently outperforming the MSCI Annual Healthcare Property Index over 11 years.

• Maintained a robust, defensive portfolio of 93 modern, ESG-compliant care homes with nearly 6,500 beds and strong sector tailwinds.

• Active asset management and capital recycling, including the largest disposal since IPO at an 11.6% premium to book value, reducing exposure to the largest tenant.

• Portfolio quality and private pay mix remain strong, with 79% of income from private sources.

Financial highlights

• Rental income rose 3% year-over-year to £60.6m, driven by inflation-linked growth and new developments.

• EPRA earnings per share decreased by 0.8% to 6.08p due to exceptional costs from tenant administration and re-tenanting.

• Dividend increased 3% to 5.884p, covered at 103%.

• Portfolio valuation increased 2.4% year-over-year to £929.9m, with like-for-like growth of 2.6%.

• Ongoing charges figure stable at 1.51%.

Outlook and guidance

• Strong pipeline of over £150 million in accretive investment opportunities at yields above 6%.

• Attractive acquisition pipeline focused on high-quality, en suite wet-room care homes, with first acquisitions expected in November.

• Commitment to progressive dividend policy, with a further 2.5% increase announced.

• Dividend cover expected to be maintained through conservative modeling.