Wren Extra Care GroupWHG

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Description:

Description: The Company is a provider of retirement living, through a range of Extra Care and other services for the independent elderly.

Summary
Extra Care is positioned between traditional retirement homes and full care nursing homes and offers residents the best of both models, with independent living in your own home, but also the opportunity to receive Domiciliary Care and Personal Care which can be tailored to individual needs.

• Wren is working to build a portfolio of Extra Care schemes with intrinsic land, scheme and operating value in the South East
• Wren has planning permission for two schemes and has a pipeline of four further schemes which will drive a growing portfolio over time
• Wren's Extra Care schemes are in an attractive sector, with current shortages of Extra Care provision and rapidly growing long term demand
• Wren's target market is the M25 corridor and surrounding affluent areas.

UK market

• Currently circa 80,000 Extra Care units in UK
• About 1/3 of units are private sector funded, either for sale or rent, remainder are rented with public sector funding
• Extra Care market has generally targeted more affluent elderly due to potential profit from sale of units and lucrative follow-on care services
• Where apartments are sold to residents, they are standard long leases leaving tenant or relatives free to sell on
• Where apartments are rented to residents, rental agreements can be on a month by month basis
• New residents are typically in late 70s with approximately 30% buying in care, which typically involves an average of 1.5 hours per week of personal care

Market Demand

• National shortages
• McCarthy and Stone predict national shortage of 62,000 units by 2020
• Thousands of elderly people have been forced into full care due to lack of availability of needs-based Extra Care services
• Care Home closures, de-registration of beds in shared rooms and 80% benchmark of providing care beds in single rooms has reduced operational supply and contributed to undersupply - particularly in high value residential areas

• Local shortages
• No Extra Care developments within 10 miles of Warlingham 2, 8 miles of Crowborough, 5 miles of Kings Langley
• Surrey County Council has admitted to shortages of Extra Care units and is making provision of Extra Care a priority
  

Next results expected Prelimnary Jan 2010

• Wren's intention is to build a portfolio of Extra Care schemes with intrinsic land, scheme and operating value
• Wren already has planning permission for a portfolio of 110 Extra Care units and has a pipeline of schemes capable of driving a growing portfolio
• On completion, Wren has the option to either
• Rent the apartments and retain the freehold (e.g. Sunrise model)
• Sell the apartments and sell the freehold (e.g. McCarthy & Stone model); or
• Offer both a sale and rental option to potential residents, while retaining the freehold
• Wren's preference is to generate rental income from the apartments and retain the freehold, but is keeping all options open

Historic Performance
Reporting on the interims in April 2009 indicates Wren Homes future lies in the Extra Care Sector:
Brian Nathan, Chairman of Wren Homes Group Plc, commented:

"Whilst the global economy in general, and the UK's in particular, show few signs of recovery, Wren itself is holding its own with a slight, albeit to Wren significant, increase in sales of existing units. Further, it has already received interest for its new Extra Care Schemes and the first one planned for completion in Surrey in 2010 has received over 125 enquiries, without any advertising.

Wren's challenge for the foreseeable future is to continue to identify good sites and hold them under option at minimal cost, to obtain the necessary planning consents for its Extra Care Schemes and to source the necessary finance to acquire and develop such sites. Despite the challenges that 2009 may well present, I look forward with cautious optimism."

Technical data:

Web site:   www.wrenhomesplc.co.uk