Company Announcements

15 September 2022

CIVITAS SOCIAL HOUSING PLC

("Civitas" or the "Company")

AGM Trading Update

Consistent Portfolio Performance

Civitas Social Housing PLC ("Civitas" or the "Company"), one of the UK's leading care-based and healthcare REITs, provides the following trading and market update ahead of its Annual General Meeting to be held today.

The Company's financial and operational performance continues to be robust, and in line with management expectations with rents indexed in accordance with their terms and reflecting current levels of indexation.

Civitas continues to see strong and growing demand for its specially adapted community-based properties, which provide homes for life for working age adults with a range of complex needs who require the high levels of specialist care for which the portfolio is designed. There has long been national consensus among health and social care experts that bespoke care in the community offers the highest quality of life for people with complex disabilities. The Government consultation, launched by the Department for Levelling Up, Housing and Communities, on a new social housing rent cap in 2023 currently excludes Specialist Supported Housing and other specialist sub-sectors.

The Company's current leverage stands at 34%, comfortably within the self-imposed maximum level of 40% set at the time of IPO. Progress is being made in increasing the average tenor of facilities and reducing exposure to interest rate movements for that part of the loan book that is not already fixed. A further announcement in this regard will be made in due course.  

The first phase of the partnership with E.ON has delivered a significant reduction in CO₂ emissions and improved EPC ratings at several properties. Civitas is targeting a minimum EPC "A-C" rating by 2030 across the whole portfolio. The Company also remains confident that its new lease clause proposal, which it aims to roll out over the medium term, will help its housing association counterparties become better able to achieve regulatory compliance. Civitas announced earlier this week that the clause has received approval from the Boards of the two initial housing associations with whom it has been discussed, and is now being introduced to several specimen leases.

In the last 12 months the Company has bought back £10.9 million worth of shares, all at a discount to the prevailing Net Asset Value ("NAV"), thus cumulatively enhancing NAV per share by 0.4p. A share buy-back programme was instituted in late 2021. The Board has now given further instruction in this regard and purchases have recommenced.

Beyond the various initiatives noted above, the Board is also actively considering and exploring other ways to address the discount to NAV and to restore shareholder value.

ENDS

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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 £968.8million (31 March 2022). CSH now provides homes for 4,594 working age adults with long-term care needs, in 697 bespoke properties that are supported by 130 specialist care providers, 18 approved providers and working with over 178 individual local authority partners.