Impact Healthcare REIT PLC said on Monday inflation affected the company’s profit, but noted improved gross rental income.

The London-based healthcare-focused real estate investment trust said its 2022 pretax profit fell to £16.9 million from £32.0 million.

Net asset value per share at December 31 declined 2.0% to 110.17 pence from 112.43p a year prior. NAV total return was 3.8%, underperforming against its 9.0% target and down from 8.4% a year ago.

The change in the fair value of investment properties, driven up as a result of higher interest rates, caused profit to fall, Impact explained.

Meanwhile, the company’s gross rental income went up by 16% to £42.2 million from £36.4 million, attributed to rent reviews and the use of moderate leverage to further scale property investments, the company said.

The company declared a total dividend of 6.54 pence per share, up from 6.41p per share last year.

Looking ahead, Impact reported it expects uncertainty caused by ‘volatility’ in financial markets, but said care home operators have a ‘higher level of in-built resilience’ than tenants in other real estate sectors, and therefore expects to attract more investor interest.

Chair Rupert Barclay said: ‘We remain disciplined in investing capital, while managing the business efficiently and maintaining a conservative balance sheet, helping to ensure we continue to focus on growing the portfolio responsibly and accretively and creating further value through asset management and by funding development.’

Shares were down by 0.7% at 91.20 pence in London on Tuesday morning.

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