HealthCo Healthcare & Wellness REIT released its results for the full-year ended 30 June 2022 delivering in excess of its IPO PDS forecasts but flagging a buy intention to avoid the REIT trading at a discount to NTA.
HCW Senior Portfolio Manager, Sam Morris said, “We are pleased to deliver a strong inaugural full-year result which exceeded our IPO PDS financial forecasts notwithstanding the volatile economic and market landscape over recent months.
Since listing last September, HCW has collected 100% of cash rent. This is a testament to our model portfolio strategy which provides strong downside protection via subsector, tenant and geographic diversification.
Despite the more challenging economic backdrop, we have continued to make good progress unlocking the significant growth opportunity embedded in our development pipeline. This will transform the scale and quality of the portfolio on completion.
The George paediatric hospital in Camden, South West Sydney is on-track to open in 1Q 2023. We are also in advanced discussions with two leading hospital operators to develop a significant private hospital at stage 2 of our Camden Precinct,” Mr Morris said.
HCW CFO, Christian Soberg said, “HCW remains well capitalised with net cash and strong liquidity. The recent sale of St Mary’s at a 71% premium to book value has further enhanced our balance sheet strength and flexibility.
The REIT has confirmed an intention to buy back up to 9.99% of the securities on issue at market prices over the next 12 months.
“Our focus is on protecting our capital so that HCW remains well positioned to capitalise on our development pipeline and other investment opportunities which meet our risk adjusted returns including the on-market share buy-back we have announced today” Mr Soberg said.
Financial highlights
- FY22 statutory net profit of $49.6 million
- FY22 FFO of $16.4m (5.1 cpu) ahead of upgraded guidance
- FY22 DPU of 7.5 cpu in-line with PDS forecast
- Pro forma FY22 net cash position of $13m following the sale of St Mary’s at a 71% premium to book value
- Jun-22 NTA/unit of $2.01 versus $1.86 at IPO (+8%) driven by $36m of net revaluation gains
Operational highlights
- 99% occupancy
- 100% cash rent collection since IPO
- 10.2 year WALE secured by high quality and growing income streams5
Investment highlights
- ~$200m high quality healthcare assets acquired at 5.0% WACR
- ~$125m committed development projects remain on budget and schedule
- Strong progress made on $500m+ development pipeline including stages 2 & 3 of the Camden Precinct where we are in advanced discussions with leading national healthcare operators
FY23 guidance
- FY23 FFO guidance of 6.8 cpu which represents 9.5% growth on FY22 (annualised)
- FY23 DPU guidance of 7.5 cents
- Announcing intention to conduct an on-market unit buy-back
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