Social housing landlord Civitas Social Housing (CSH) has published a defence of its strategy, business model, property transactions, relationships with directors and dividend plans as it fights off criticisms of its business by short-seller Shadowfall.

The 37-page document is designed to reassure shareholders after its share price collapsed since August when Shadowfall took a short position in the stock and put forward a number of questions in an open letter to the REIT last month.


In a statement on Monday, Civitas said that its board ‘has confidence in the strength of the company’ and in its investment adviser, Civitas Investment Management. The company also stated that its assets and revenues continue to perform in line with expectations and that it remains committed to dividend targets for the full year to March 2022.

The property company is predicted to pay a 5.55p per share dividend this year from £53.6 million revenue and £35.7 million pre-tax profit, based on Refinitiv consensus forecasts.

Civitas has been buying back shares to be held in treasury as it attempts to prop-up the share price, which had lost around a quarter of their value since early August. The stock rose around 1.6% on Monday to 89.7p, having traded at a peak 120.6p two months ago.

The downside to buying back its own discounted stock is that it is diverting funding away from investment in additional properties, the company admitted.

Civitas currently owns 648 buildings spread across the UK with 4,391 residents in 178 local authorities.


House broker Liberum called today’s Civitas paper a ‘strong defence’ of its portfolio, management process and the value provided by its assets.

‘The company has provided considerable disclosure around operating cash flows, occupancy and the affiliated party transactions that should help to restore investor confidence and result in a narrowing of the discount from the current level of 19%,’ said Liberum in a note to clients this morning.

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Issue Date: 11 Oct 2021