Ltc Properties ((LTC)) has held its Q1 earnings call. Read on for the main highlights of the call.
Confident Investing Starts Here:
- Quickly and easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter
The recent earnings call for LTC Properties highlighted a strong focus on growth and solid financial performance, driven by the expansion of their RIDEA platform. Despite these positive developments, the company acknowledged existing challenges, particularly in skilled-nursing centers and occupancy rates within the Anthem portfolio. Overall, LTC Properties appears poised for future growth, albeit with a cautious approach to these hurdles.
RIDEA Platform Expansion
LTC Properties has significantly expanded its RIDEA platform, incorporating a SHOP portfolio with a gross book value of $176 million through the conversion of 13 properties from triple net leases. This strategic move has bolstered their investment pipeline to $300 million, with RIDEA opportunities now representing approximately half of this total.
Financial Performance and Liquidity
The company reported a growth in core FFO to $0.65 from $0.64, and an increase in core FAD to $0.70 from $0.67. LTC Properties maintains robust liquidity of approximately $681 million, with a debt to annualized adjusted EBITDA ratio of 4.3x and an improved fixed charge coverage ratio of 5.0x.
Prestige Contractual Cash Interest
LTC Properties received full contractual cash interest of $5 million, comprising $3.8 million in cash interest paid and $1.2 million from security. Prestige also benefited from $2.3 million in retroactive Medicaid payments, with their security deposit now standing at $6 million.
Operator Pipeline and Growth Strategy
The company is actively pursuing underwriting opportunities to add stabilized assets, focusing on a blend of RIDEA strategy with traditional and structured finance transactions to create long-term value.
Challenges with Skilled-Nursing Centers
A significant challenge arose as an operator decided not to renew their lease on seven skilled-nursing centers for strategic reasons. The sale process is ongoing, with plans to replace $8.3 million of 2025 GAAP rent.
Anthem Portfolio Occupancy
The Anthem portfolio, now part of the SHOP strategy, currently has an 81% occupancy rate. However, higher-than-normal discharges in Q4 have impacted its performance.
Forward-Looking Guidance
Looking ahead, LTC Properties outlined strategic moves including the conversion of 13 properties to a SHOP portfolio valued at $176 million, as part of their RIDEA strategy. The investment pipeline has expanded to $300 million, with 50% representing RIDEA opportunities. The company appointed Dave Boitano as the new Chief Investment Officer, and provided full-year guidance for core FFO per share between $2.65 and $2.69, and core FAD per share between $2.78 and $2.82. The SHOP portfolio is expected to generate NOI between $9.4 million and $10.3 million in 2025.
In summary, LTC Properties’ earnings call conveyed a positive sentiment with a focus on growth through strategic expansions and solid financial metrics. While challenges remain, particularly in skilled-nursing centers and occupancy rates, the company’s forward-looking guidance suggests a well-positioned future for growth and value creation.