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Primary Healthcare Properties delivers 10.5% NAV uplift

Primary Healthcare Properties delivers 10.5% NAV uplift – Primary Healthcare Properties (PHP) has published its results for the year ended 31 December 2017.

Highlights were:

  • EPRA earnings increased by 15.7% to GBP31.0m (2016: GBP26.8m)
  • EPRA earnings per share increased by 8.3% to 5.2p (2016: 4.8p)
  • Net rental income increased by 7.1% to GBP71.3m (2016: GBP66.6m)
  • IFRS profit before tax increased by 110.3% to GBP91.9m (2016: GBP43.7m)
  • EPRA net asset value per share increased by 10.5% to 100.7p (2016: 91.1p)
  • Increase in EPRA net assets and dividends paid in the year is equivalent to 14.9p per share, an increase of 16.4% (2016: 8.5p up 9.7%)
  • Total dividends of 5.25p per share distributed in the period (2016: 5.125p), an increase of 2.4% and the 21st successive year of dividend growth
  • First 2018 quarterly dividend of 1.35p per share, payable on 23 February 2018, equivalent to 5.4p on an annualised basis and a 2.9% increase over dividends distributed in 2017
  • Surplus on property valuation of GBP64.5m (2016: GBP20.7m), growth of 5.0% (2016: 1.7%); portfolio net initial valuation yield of 4.91% (2016: 5.17%)
  • Total portfolio  valued at GBP1.362bn as at 31 December 2017 (2016: GBP1.220bn)
  • Ten properties acquired in year for GBP71.9m, with a large average lot size of GBP7.2m and average patient size of c.14,000, adding GBP3.7m to the contracted rent roll
  • Strong pipeline of targeted acquisitions of approximately GBP150m
  • Average annualised uplift of 1.1% on rent reviews agreed in the period, resulting in an uplift in rent of GBP0.5m p.a. (2016: 0.9% with an uplift of GBP0.3m)
  • 99.7% of portfolio let with 13.2 years weighted average unexpired lease term (2016: 13.7 years) and only 0.6% of rent due to expire in the next three years
  • Group’s average cost of debt reduced by 56bps to 4.09% (2016: 4.65%)
  • Group’s weighted average maturity of debt facilities extended to 6.3 years (2016: 5.1 years)
  • Loan to value ratio reduced to 52.9% (2016: 53.7%)

Harry Hyman, Managing Director of PHP, commented: “I am delighted to report that PHP once again increased its total dividend, its 21st successive year of dividend growth. Increasing our income and dividends is key to our strategy as a modern healthcare REIT. Importantly, we have continued our progressive dividend policy into 2018 by increasing the first quarterly payment, which on an annualised basis reflects a return of 5.4p per share.  PHP is providing capital for the modernisation of the primary healthcare estate both in the UK and Ireland. Our well-financed and disciplined approach to investment and active asset management is delivering for shareholders.  This is reflected in the strong performance of all of key indicators across the Company. PHP is very active in its marketplace and has a strong targeted pipeline that meets our criteria. This bodes well for 2018 and beyond. We look forward to the future with confidence.”

Talking about PHP’s asset management initiatives – things like extending and refurbishing buildings – Alun Jones, the chairman, said “We continue to invest time and resource to initiate quality asset management projects and the Group has completed four during the year, with another five currently on site. Encouragingly, a further seven more projects have been approved and are due to commence in 2018. In addition, a strong pipeline of 16 potential asset management projects has been identified and these will be progressed during 2018. We devote considerable time to discussing our tenants’ requirements and identifying new opportunities.”

PHP : Primary Healthcare Properties delivers 10.5% NAV uplift

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