Primary Health Properties (PHP) has reaffirmed its dividend policy with its business less impacted by covid-19.
The company, which owns primary healthcare facilities in the UK and Ireland, said 90% of its contracted rent is either paid directly or indirectly by the UK and Irish governments, with the balance mainly coming from pharmacies attached to its properties.
As at 31 March 2020, PHP had collected 79% of the Q1 FY20 rent, in-line with the Q1 FY19 collection rate, with the balance expected to be received over the next two weeks.
The group said it was actively working with the NHS, HSE and its GP tenants to help them better utilise its properties for deployment during the covid-19 pandemic.
Financing
As at 31 March 2020 the group’s net debt stood at £1,086.0m and on a pro-forma basis the loan to value (LTV) ratio was 44.8%.
After capital commitments the group has undrawn loan facilities and cash on deposit totalling £341.1m.
PHP said its portfolio would need to fall in value by around £1.0bn or 42% for the LTV covenants in the group’s borrowing arrangements to come under risk of being breached.
Dividend
The company said it intends to maintain its strategy of paying a progressive dividend, in equal quarterly instalments, covered by underlying earnings in each financial year.
The company declared its second quarterly interim dividend of 1.475p per share in March which will be paid on 22 May 2020. It said further dividend payments are planned to be made in August and November 2020.
Outlook
PHP said: “The covid-19 pandemic has highlighted the demands on health systems around the world, not least the NHS in the UK and HSE in Ireland, where the underlying demand for healthcare is increasingly driven by growing and ageing populations. The need for modern, integrated, local primary healthcare facilities is becoming more acute in order to relieve the pressures being placed on hospitals and A&E departments. We anticipate that the crisis will highlight the important role primary healthcare will play in the future provision of health services and the continuing movement of services away from over-burdened hospital settings.”
PHP : PHP reaffirms dividend policy