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Primary Health Properties reports 7.1% jump in earnings

Primary Health Properties buys medical centres portfolio for £47.1m

Primary Health Properties has reported a 7.1% increase in earnings in a trading update for the six months to the end of June.

The company, which owns a portfolio of primary healthcare facilities, said adjusted EPRA earnings per share grew to 3.0p (June 2019: 2.8p).

This was off the back of an average uplift of 2.2% per annum on rent reviews completed in the period and the acquisition of new assets.

Its contracted annualised rent roll increased 4.4% to £133.3m (December 2019: £127.7m). It bought 22 purpose-built medical centres for £54m in the period and forward funded four developments with a net development cost of £27m.

This helped it pay two quarterly dividends in the period totalling 2.95p per share. A third quarterly dividend of 1.475p per share has been declared, payable on 21 August 2020, and equates to 5.9p on an annualised basis (a 5.4% increase over the 2019 dividend per share and the company’s 24th consecutive year of dividend growth).

Adjusted EPRA net asset value increased by 1.1% to 109.1 pence (31 December 2019: 107.9 pence) following a 0.4% increase in portfolio value to £2.514bn (December 2019: £2.347bn).

Rent collection

As at 8 July 2020, 91% and 88% had been collected in the UK and Ireland respectively for the third quarter of 2020. This is ahead of the collection rates experienced for the second quarter of the year, which now stand at over 99% for both countries. The balance of rent due for the third quarter is expected to be received within the next two weeks the group said.

Financing

At 30 June 2020 the group’s net debt stood at £1.150bn (December 2019: £1.067bn) and the loan to value (LTV) ratio was 45.8% (December 2019: 44.2%).

After capital commitments the group has undrawn loan facilities and cash on deposit totalling £266m.

It has significant headroom in LTV covenants with the group’s portfolio needing to fall in value by around £1bn or 40% to come under risk of being breached. The group’s income would need to fall by around £76m or 57% for the interest cover covenants to come under risk of being breached.

PHP : Primary Health Properties reports 7.1% jump in earnings

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