Primary Healthcare Properties says, over the six months ended 30 June 2016, total shareholder NAV return for the period was 5.2625 pence per share or 6.0%, including dividends paid in the period. Its EPRA Net Asset Value per share increased by 3.1% to 90.4 pence (31 December 2015: 87.7 pence). EPRA Earnings increased by 27.3% to GBP12.6 million (30 June 2015: GBP9.9 million) and EPRA Earnings per share increased by 9.1% to 2.4 pence (30 June 2015: 2.2 pence). Total dividends of 2.5625 pence per share were paid in the period (30 June 2015: 2.5 pence), representing the 20th successive year of dividend growth. The Company is to pay its third quarterly dividend, also of 1.28125 pence per share, on 26 August 2016 to shareholders on the register as at 15 July 2016. A further dividend payment is planned to be made in November 2016. The Company intends to maintain its strategy of paying a progressive dividend that is fully covered by earnings in each financial year.
The Group’s property portfolio was valued at GBP1.2 billion as at 30 June 2016 (31 December 2015: GBP1.1 billion), generating a surplus, after the costs associated with acquisitions in the period, of GBP15.5 million (30 June 2015: GBP23.9 million). They say that yields in the primary care sector have tightened a little further thanks to the attractive fundamentals and the continued low levels of new development approval by the NHS. Transactions in the primary care real estate sector continued through the period of market uncertainty in the lead up to the EU referendum. Post-vote activity in the primary care market has not suggested any immediate change to trading conditions or valuations. They will closely monitor the market and assess any impact on the Group of the UK’s pending exit from the EU.
The Group owned a total of 292 properties as at 30 June 2016. All assets were located in the UK, with 289 completed and rent producing and three on site, under development. The development at Ipswich was subsequently completed on 4 July 2016, with the project at Colwyn Bay due to complete in the coming weeks and the development at Swindon targeted for delivery in March 2017.
Including development commitments as complete, the annualised contracted rent roll of the portfolio at 30 June 2016 was GBP66.9 million, an increase of 5.0% in the period (31 December 2015: GBP63.7 million). Portfolio WAULT at 30 June 2016 was 14.1 years (31 December 2015: 14.7 years).
The Group’s entire property portfolio was independently valued by Lambert Smith Hampton, Chartered Surveyors and Valuers, as at 30 June 2016. Including development commitments, the aggregate of the individual property values totalled GBP1.2 billion (31 December 2015: GBP1.1 billion). Allowing for the costs associated with properties acquired in the six month period and to complete asset management projects, an overall surplus resulted on revaluation of GBP15.5 million (six months to 30 June 2015: GBP23.9 million). This surplus equates to 2.6 pence per share.
The Group’s EPRA Cost Ratio has stayed constant at 11.5%, although administrative costs have risen by 2.9% to GBP3.5 million (30 June 2015: GBP3.4 million). The tiered structure of the property advisory fee provides benefits as the portfolio grows and attracts a lower management charge rate. This has led to no overall change in the EPRA Cost Ratio, which continues to be the lowest in the quoted property sector.
In absolute terms, net financing costs have fallen by 6.9% to GBP16.1 million, as overall sums drawn were reduced following the equity raise in April 2016, even after the deployment of capital into new properties acquired in the period. The average cost of the Group’s debt in the first six months of the year was 4.49%, down from 4.67% for the 2015 financial year.
PHP : Primary Healthcare Properties’ dividend rises again