Impact Healthcare REIT PLC on Friday said it has increased its protection against interest rate changes, with 92% of drawn debt now hedged.

The London-based owner of care homes and other healthcare properties in the UK said it bought a new £50 million interest rate cap at a cost of £1.8 million. This caps the sterling overnight index average at 4.0% for two years, expiring on August 15, 2025.

Impact Healthcare has now hedged or fixed the interest rates on £175 million, or 92%, of its current drawn debt of £191 million.

The company said the weighted average cost of drawn debt is 4.66% based on SONIA of 5.4%. At current hedging and drawn debt levels, an increase of 50 basis points in SONIA will result in a 4 basis point increase in the weighted average cost of drawn debt, it said.

Impact Healthcare’s gross loan to value ratio at June 30 was 28.5%. No further debt has been drawn as of Friday, the company said.

Shares in Impact Healthcare were down 1.4% to 85.20 pence each in London on Friday morning.

On Wednesday last week, Impact Healthcare said first half revenue rose, as it hiked its interim dividend.

It reported net rental income of £22.7 million in the first half of 2023, up from £19.6 million a year ago. The increase in revenue was supported by rent increases and stable rent yields, the company said. The firm posted pretax profit of £27.6 million, increasing from £27.3 million a year ago.

Impact said net asset value per share at June 30 was 113.64 pence, down from 116.18p a year ago, but increasing 3.2% from 110.17p six months ago. The firm said this reflects shares issued to part fund its acquisition of six care homes.

The firm declared a second-quarter dividend of 1.69 per share, bringing its total interim dividend to 3.39p per share, which it said is in line with its target to increase its total dividend by 3.5% to 6.77p per share for the full-year.

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