Target Healthcare (THRL) boss Kenneth MacKenzie says he is looking forward to Andy Burnham’s social care reforms after the new prime minister’s speech on the subject last week.

MacKenzie, chief executive of Target Fund Managers, which runs the £1bn care home portfolio, said: “We note the prime minister’s recent social care plan speech and the commencement of public consultation by Baroness Casey of Blackstock on the need for social care reform. We would welcome new solutions to the issues in social care and it is sensible to bring forward the Casey report to 2027.”

Burnham has asked Casey to consider how the government could set up a National Care Service that could cost £18bn a year, requiring “difficult decisions” and possible tax rises.

MacKenzie added: “We believe that responsible private operators and long-term investors will continue to play a key role in ensuring that everybody can access high‑quality care providing dignity and security in later life, benefitting residents and society.”

The property investor also revealed he was looking for a new chief financial officer after Alastair Murray decided to leave the business due to a change in his personal circumstances. “Alastair remains a strong advocate for the investment manager and the company and he leaves with our support and best wishes,” he said.

In a trading update, the real estate investment trust said the value of its care homes rose by 1.2% in the second quarter with net tangible assets (NTA) adding 1.5p to 122.1p per share in the three months to 30 June.

The group returned to 100% rent collection after selling one property that had not been paying rent in full, depressing rent collection to 99% in the first quarter. The £28m acquisitions of two homes meant 85% of the £85.9m proceeds from the sale of nine properties last September have been reinvested.

Earnings per share dipped slightly to 1.55p from 1.6p in the previous quarter after one-off costs of 0.08p per share to reorganise the group’s debts which rose to 16.1% of the portfolio from 15.2% well below a 25% target. This was enough to fully cover the 1.508p quarterly dividend.

At 114p the shares have rallied 20.7% in the past year to stand on a 6.7% discount to NTA.

Our view

James Carthew, head of investment company research at QuotedData, said: “It is pleasing to see another positive update from Target Healthcare REIT. This comes on the back of a gradual narrowing of the discount, which is now back in single figures. It traded on a premium for much of its life and I see no reason why it shouldn’t get back there again, provided there is no adverse interest rate news over coming quarters.”

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