Social housing provider hits back after short-seller attack
NEW YORK: A social and disabilities housing provider is under seige. From a short seller as the efficacy of its business model is called into question.
Civitas Social Housing PLC (LSE:CSH) has responded to criticisms of its business model by short-seller Shadowfall with a 37-page explanation of its strategy, business model, property transactions, relationships with directors and dividend plans.
Shares in the supported housing landlord have tumbled since Shadowfall, which said it has a short position, posed a number of questions in an open letter to the REIT last month.
In a statement, Civitas said that its board “has confidence in the strength of CSH and in its investment adviser, Civitas Investment Management Limited – the company’s assets and revenues continue to perform in line with expectations and the board reaffirms its dividend target for FY22”
“Given the recent fall in its share price, the company has been buying back its shares to be held in treasury as an enhancement to shareholder value, being available at a time when the share price is low compared to the company’s net asset value (NAV) albeit that this requires a diversion of funds that would otherwise have been used by the company to purchase further properties,” it added.
CSH currently owns 648 buildings spread across the UK with 4,391 residents in 178 local authority areas.
House broker Liberum said Civitas had mounted a strong defence of its portfolio, management process and the value provided by its assets.
“Recent bearish commentary has resulted in a 27% share price fall since the beginning of August. 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%.”
Shares rose 3% to 91p having been as high as 120.6p in August.