Primary Health Properties (PHP)

[MDW1954]

We simply do not know, then, is the answer. But Dod is right: with sharply rising interest rates, we can expect the NAV and share price to pull back. We see the same thing right across the REIT space, with my spreadsheet showing most of them on a discount where not so long ago they were on a premium.

Re the pull back, I would suggest that most of that has taken place already. The question for me now is how much more interest rates are expected to increase and if that has all been priced in. I can't envisage that there is much more to go and that whatever that is, it will already be mostly priced in.

Don't forget that we haven't yet seen a NAV from PHP which reflects this new interest rate regime -- and won't, until late January.

We might surmise that it has fallen, and guess at the size of the fall, but we won't actually know until then.

MDW1954

[idpickering]

Dividend Declaration.

The Company announces that the first quarterly interim dividend in 2023 of 1.675 pence per ordinary share of 12.5 pence each will be paid as to 1.34 pence by way of a Property Income Distribution ("PID") and the remainder as an ordinary dividend on 23 February 2023 to shareholders on the register on 13 January 2023.

Certain qualifying shareholders may receive PIDs without deduction of withholding tax and further details are available on the Company's website http://www.phpgroup.co.uk .

The Company also announces that it is inviting shareholders to participate in a dividend reinvestment plan ("DRIP") in respect of the current interim dividend and any future dividends. The DRIP will be provided by Equiniti Financial Services Limited ("Equiniti FS") and administered by PHP's registrars, Equiniti Limited ("Equiniti"), and provides shareholders with the opportunity to reinvest dividend payments to purchase additional ordinary shares in PHP in the market. A circular setting out full details of the DRIP ("Circular"), an application form to participate in the DRIP ("DRIP Application Form") and the terms and conditions under which Equiniti FS will be offering the DRIP will be posted to shareholders and published on PHP's website later today.

Shareholders who hold their ordinary shares in certificated form and who wish to participate in the DRIP will need to ensure that a completed DRIP Application Form is received by Equiniti no later than 5:00pm on 3 February 2023 (the "Election Date"). Shareholders who hold their ordinary shares in CREST and who wish to participate in the DRIP must do so by submitting an election by CREST input message by the Election Date.

PHP is suspending the scrip dividend and will not be offering a scrip alternative with this dividend.

Ex Dividend 12/01/23 paid 23/02/23.

https://www.investegate.co.uk/primary-h ... 00067235L/

I hold, and topped up recently.

Ian.

[idpickering]

Notice of Preliminary Results.

Primary Health Properties PLC (LSE: PHP), one of the UK's leading investors in modern primary healthcare facilities, will announce its preliminary results for the year ended 31 December 2022 on Wednesday, 22 February 2023.

A presentation for analysts will be held at Buchanan Communications on the day of results at 9.30am and will also be accessible via live video webcast and a live conference call facility. Following the presentation there will be a moderated Q&A session.

To access the briefing, please log on or dial in shortly before 09.30am via the details below:

Webcast: https://stream.brrmedia.co.uk/broadcast ... 77238eaa71

https://www.investegate.co.uk/primary-h ... 00067289M/

Ian.

[idpickering]

Acquisition of Axis Technical Services Limited and signing of long-term Development Pipeline Agreement in Ireland.

Primary Health Properties, one of the leading investors in modern primary healthcare facilities in the UK and Ireland, announces that it has acquired Axis Technical Services Limited, an Irish property management business, and signed a long-term Development Pipeline Agreement providing access to a strong pipeline of future primary care projects in Ireland.

Axis Technical Services Limited, currently manages a portfolio of over 30 properties, including the majority of PHP's Irish portfolio, and the acquisition gives the Group a permanent presence on the ground, further strengthening its position in the country and relationship with the Health Service Executive ("HSE"), Ireland's national health service provider. The acquired company also provides fit-out, property and facilities management services to the HSE and other businesses located across Ireland.

As part of the acquisition, PHP has signed a Development Pipeline Agreement with Axis Heath Care Assets Limited ("Axis"), a related company owned by the selling shareholders, which gives the Group the option to acquire Axis's development pipeline over the next five years. Axis is one of Ireland's leading developers of primary care properties having developed five properties over the last five years which have been acquired by PHP. It also has a strong pipeline of projects with an estimated gross development value of €50m.

PHP currently owns a portfolio of 20 assets in Ireland valued at €261m.

https://www.investegate.co.uk/primary-h ... 00044733N/

Ian (I hold).

[idpickering]

Preliminary results for the year ended 31 December 2022

Harry Hyman , Chief Executive, commented:

" The Group's continued operational and financial resilience throughout the year reflects the security and longevity of our income which are important drivers of our predictable cash-flows and underpin our progressive dividend policy as we enter the 27th year of continued dividend growth.

"We are encouraged by the rental growth experienced in the year from rent reviews and asset management projects and believe PHP will be a beneficiary of the significant rise in construction costs seen in recent years. Furthermore, with the majority of PHP's debt either fixed or hedged for a weighted average period of just over seven years, a strong control on costs and just one development on site we have limited exposure to further cost increases and development risk.

"In the longer term, the ageing and growing demographic of the UK and Irish populations means that the health services in both countries will be called upon to address more long-term, complex and chronic co-morbidities. Consequently, the Government needs to respond and invest in new structures to deliver more healthcare in primary care and community settings and away from over-burdened hospitals. PHP stands ready to play its part in delivering and modernising the real estate infrastructure required to meet this need."

And later;

Dividends

The Company distributed a total of 6.5 pence per share in 2022, an increase of 4.8% over 2021 of 6.2 pence per share. The total value of dividends distributed in the year increased by 5.2% to £86.7 million (2021: £82.4 million), which were fully covered by adjusted earnings. Dividends totalling £5.1 million were satisfied through the issuance of shares via the scrip dividend scheme. We have suspended the scrip dividend scheme in light of the fall in the share price during the year and are offering a dividend re-investment plan in its place.

A dividend of 1.675 pence per share was declared on 5 January 2023, equivalent to 6.7 pence on an annualised basis, which represents an increase of 3.1% over the dividend distributed per share in 2022. The dividend will be paid to shareholders on 23 February 2023 who were on the register at the close of business on 13 January 2023. The dividend will be paid by way of a property income distribution of 1.34 pence and normal dividend of 0.335 pence.

The Company intends to maintain its strategy of paying a progressive dividend, which the Company pays in equal quarterly instalments, that is covered by adjusted earnings in each financial year. Further dividend payments are planned to be made on a quarterly basis in May, August and November 2023 which are expected to comprise a mixture of both property income distribution and normal dividend.

https://www.investegate.co.uk/primary-h ... 00076305Q/

Ian (I hold).

[idpickering]

Notice of Interim Dividend.

The Company announces that the second quarterly interim dividend in 2023 of 1.675 pence per ordinary share of 12.5 pence each will be paid as to 1.34 pence by way of a Property Income Distribution ("PID") and the remainder as an ordinary dividend on 19 May 2023 to shareholders on the register on 31 March 2023.

Certain qualifying shareholders may receive PIDs without deduction of withholding tax and further details are available on the Company's website http://www.phpgroup.co.uk .

The Company also confirms, further to its announcement on 5 January 2023, that shareholders may participate in a dividend reinvestment plan ("DRIP") in respect of the current interim dividend and any future dividends. The DRIP is provided by Equiniti Financial Services Limited ("Equiniti FS") and administered by PHP's registrars, Equiniti Limited ("Equiniti"), and provides shareholders with the opportunity to reinvest dividend payments to purchase additional ordinary shares in PHP in the market.

Shareholders who hold their ordinary shares in certificated form and who wish to participate in the DRIP will need to ensure that a completed DRIP Application Form is received by Equiniti no later than 5:00pm on 26 April 2023 (the "Election Date"). Shareholders who hold their ordinary shares in CREST and who wish to participate in the DRIP must do so by submitting an election by CREST input message by the Election Date.

The key dates for the dividend are detailed in the timetable below.

https://www.investegate.co.uk/primary-h ... 00039306T/

Ex dividend 30 Mar 23, paid 19 May 23.

Ian (I hold).

[idpickering]

Q1 2023 Trading Update.

Primary Health Properties PLC, one of the UK's leading investors in modern primary healthcare facilities, today publishes a trading update for the period 1 January 2023 to 31 March 2023 ahead of its AGM later today.

Like-for-like rental growth

In the first quarter of 2023 the Company generated an additional £1.3 million or 0.9% (Q1 2022: £0.9 million or 0.6%) of extra rental income on a like-for-like basis from its rent review and asset management activities.

The Company continues to see an improving rental growth outlook, especially from rent reviews, with an extra £1.2 million (Q1 2022: £0.6 million) of income generated in the quarter from 101 reviews that have been settled, equivalent to 3.7% (2022: 3.4%) on an annualised basis.

Over the course of 2023, the Group anticipates rent reviews will generate around £4.0 million (2022: £3.0 million) of extra income driven by the impact of inflation on both indexed-linked and open market value ("OMV") reviews. In the quarter PHP settled 49 OMV reviews, including 20 nil increases, resulting in an additional £0.4 million (Q1 2022: £0.4 million on 67 OMV reviews) of income equivalent to 2.0% (2022: 1.5%) per annum with most of the OMV reviews still relating to periods when inflation was relatively muted.

A further £0.1 million (Q1 2022: £0.3 million) has been generated in the quarter from asset management activities where the Company exchanged three new projects which are due to start on site shortly. Currently there are ten projects on site which, in addition to extending lease lengths and increasing rents, will improve the environmental performance of the buildings.

Axis Technical Services Limited ("Axis")

As previously reported, in January 2023, the Group successfully completed the acquisition of Axis, an Irish property management business, and signed a long-term development pipeline agreement providing access to a pipeline of future primary care projects in Ireland.

Since the acquisition, Axis has performed in line with management's expectations and PHP has successfully migrated all asset and property management activities in Ireland to the Axis team, who have already identified several new potential asset management initiatives across the portfolio which are being actively progressed.

Investment and development

The Group continues to adopt a very disciplined approach to further investment and development activity, which will only take place if accretive to earnings. Future pipeline of opportunities continues to be focused predominantly on Ireland and PHP's existing portfolio through asset management projects.

Currently there is limited exposure to development risk with just one scheme on-site presently. The Group is in the process of renegotiating rental values with several Integrated Care Boards across the UK to restore the financial viability of schemes in our pipeline, given the current economic and interest rate environment.

Financing

As at 31 March 2023 the Group's net debt stood at £1,273.3 million (31 December 2022: £1,261.3 million) and on a pro-forma basis the Loan to Value ("LTV") ratio was 45.5% (31 December 2022: 45.1%). The Group has £321 million (31 December 2022: £326 million) of undrawn loan facilities available, net of capital commitments.

On 18 April 2023, the Group converted €60.0 million (£52.9 million) of sterling equivalent denominated debt into euros across its various revolving credit facilities to cover a small unhedged euro denominated balance sheet exposure which had arisen primarily because of historic valuation gains and retained earnings arising on our portfolio in Ireland. As part of the transaction the Group took advantage of cheaper euro denominated interest rates and purchased 2.0% caps on €60m nominal value for a period of 2.5 years for an all-in premium of €2.2 million (£1.9 million). The above transaction is expected to reduce the Group's average cost of debt by around 9bps over the next 2.5 years and increase the proportion of net debt that is fixed or hedged to 97% (31 December 2022: 94%).
Dividend

On 23 March 2023, the Company declared its second quarterly interim dividend of 1.675p per Ordinary Share which will be paid on 19 May 2023 to shareholders who were on the share register at the close of business on 30 March 2023. The dividend will be paid by way of a property income distribution of 1.34 pence and normal dividend of 0.335 pence. The dividend is equivalent to 6.7p on an annualised basis and represents a 3.1% increase over 6.5p paid in 2022.

The Company intends to maintain its strategy of paying a progressive dividend, in equal quarterly instalments, covered by underlying earnings in each financial year. Further dividend payments are planned to be made in August and November 2023.

https://www.investegate.co.uk/primary-h ... 00036594W/

Ian (I hold).

[idpickering]

Results of AGM voting.

Primary Health Properties PLC (the "Company" or "PHP")) announces that at the Annual General Meeting of the Company held today 19 April 2023, all of the resolutions, as set out in full in the Notice of Meeting, were duly passed on a poll by the requisite majority.

Any proxy votes which were at the discretion of the Chairman have been included in the "For" total.

For information the votes cast were as follows:

https://www.investegate.co.uk/primary-h ... 23418023W/

Ian.

[idpickering]

Notice of Interim Results.

Primary Health Properties PLC (LSE: PHP), one of the UK's leading investors in modern primary healthcare facilities, will announce its interim results for the six months ended 30 June 2023 on Wednesday, 26 July 2023.

A presentation for analysts will be held at the offices of Numis Securities on the day of the interim results' announcement at 9.30 a.m. For those who cannot attend in person, the presentation will also be accessible via live video webcast and a live conference call facility. Following the presentation, there will be a moderated Q&A session.

To access the briefing, please log on or dial in shortly before 9.30 a.m. via the details below:

Webcast: https://stream.brrmedia.co.uk/broadcast ... 44e084c4b0

https://www.investegate.co.uk/announcem ... ts/7582400

Ian.

[idpickering]

Notice of Interim Dividend.

The Company announces that the third quarterly interim dividend in 2023 of 1.675 pence per ordinary share of 12.5 pence each will be paid as to 1.34 pence by way of a Property Income Distribution ("PID") and the remainder as an ordinary dividend on 18 August 2023 to shareholders on the register on 7 July 2023.

Certain qualifying shareholders may receive PIDs without deduction of withholding tax and further details are available on the Company's website http://www.phpgroup.co.uk.

Ex dividend 06/07/23.

Dividend paid 18/08/23.

https://www.investegate.co.uk/announcem ... nd/7601756

Ian.

[idpickering]

Interim results for the six months ended 30 June 2023.

EARNINGS AND DIVID GROWTH

· Adjusted earnings per share unchanged at 3.4p (30 June 2022: 3.4p)

· IFRS earnings per share decreased by 62.5% to 3.0p (30 June 2022: 8.0p)

· Contracted annualised rent roll increased by 1.4% to £147.4 million (31 December 2022: £145.3 million)

· Additional annualised rental income on a like-for-like basis of £2.2 million or 1.5% from rent reviews and asset management projects (H1 2022: £1.8 million or 1.3%; FY 2022: £3.3 million or 2.4%)

· EPRA cost ratio 10.1% (FY 2022: 9.9%), representing one of the lowest in the UK REIT sector

· First three quarterly dividends totalling 5.025 pence per share distributed or declared in the year-to-date, equivalent to 6.7 pence per share on an annualised basis, a 3.1% increase over 2022 (6.5 pence per share) and marking the Company's 27th consecutive year of dividend growth

· The Company intends to maintain its strategy of paying a progressive dividend fully covered by Adjusted earnings

NET ASSET VALUE AND PORTFOLIO MANAGEMENT

· Adjusted Net Tangible Assets ("NTA") per share decreased by 1.3% to 111.1 pence (31 December 2022: 112.6 pence)

· Property portfolio valued at £2.783 billion at 30 June 2023 (31 December 2022: £2.796 billion) reflecting a net initial yield of 4.90% (31 December 2022: 4.82%)

· Revaluation deficit in the period of £11.9 million (30 June 2022: surplus £51.2 million), representing a decline of -0.4% (30 June 2022: +1.8%), comprising a £45 million decline driven by NIY widening of 8bps partially offset by gains of £33 million arising from rental growth and asset management projects

· The portfolio's metrics continue to reflect the Group's secure, long-term and predictable income stream with occupancy at 99.6% (31 December 2022: 99.7%), WAULT of 10.6 years (31 December 2022: 11.0 years) and 89% (31 December 2022: 89%) of income funded by government bodies

· Portfolio in Ireland comprises 20 assets, valued at £219 million (€255 million) (31 December 2022: £231 million / €261 million) and continues to be the Group's preferred area of future investment activity with a target to grow to around 15% of the total portfolio

· The acquisition of Axis Technical Services Limited, an Irish property management business, in January 2023, gives the Group a permanent presence in Ireland and is an important strategic move as we seek out new investment, development and asset management opportunities

· Pipeline of 32 asset management projects and lease regears planned over next two years, investing £23.7 million, creating additional rental income of £1.2 million per annum and extending the weighted average unexpired lease term (WAULT) back to over 20 years

· Disciplined approach to future investment focused on Ireland, direct developments and asset management projects are our preferred areas of future investment

FINANCIAL MANAGEMENT

· LTV ratio 45.6% (31 December 2022: 45.1%) in the middle of the Group's targeted range of between 40% to 50%

· 97% (31 December 2022: 94%) of net debt fixed or hedged for a weighted average period of just under seven years

· Weighted average debt maturity 6.9 years (31 December 2022: 7.3 years)

· Significant liquidity headroom with cash and collateralised undrawn loan facilities totaling £314.4 million (31 December 2022: £325.9 million) after capital commitments

And later;

First three quarterly dividends totalling 5.025 pence per share distributed or declared in the year-to-date, equivalent to 6.7 pence per share on an annualised basis, a 3.1% increase over 2022 (6.5 pence per share) and marking the Company's 27th consecutive year of dividend growth

· The Company intends to maintain its strategy of paying a progressive dividend fully covered by Adjusted earnings

The Company will pay a third interim dividend of 1.675 pence per Ordinary Share for the year ending 31 December 2023, payable on 18 August 2023. The dividend will comprise a Property Income Distribution ("PID") of 1.340 pence per share and an ordinary dividend of 0.335 pence per share. The scrip dividend scheme was suspended in light of the falls in the share price in 2022 and first half of 2023 and the company continues to offer a dividend reinvestment plan in its place.

https://www.investegate.co.uk/announcem ... ts/7654901

Ian (I hold).

[MrFoolish]

· Adjusted earnings per share unchanged at 3.4p (30 June 2022: 3.4p)

· IFRS earnings per share decreased by 62.5% to 3.0p (30 June 2022: 8.0p)

DAK what is the difference between these two measures and which is the important one? Asking for a friend with a HYP.

[Dod101]

· Adjusted earnings per share unchanged at 3.4p (30 June 2022: 3.4p)

· IFRS earnings per share decreased by 62.5% to 3.0p (30 June 2022: 8.0p)

DAK what is the difference between these two measures and which is the important one? Asking for a friend with a HYP.

It all depends. The 'true' one is the IFRS one. It is the statutory one and includes the write down of the value of their properties in the period. Directors usually like to use their adjusted one which conveniently usually excludes all these revaluations and other 'one off' charges. Actually they have a point it seems to me anyway as it gives a better idea of the trend of the underlying trading and in fact until recent years revaluation charges/credits never used to appear in the accounts except as a change to the capital items (which arguably valuation changes are) Valuation reductions do not affect cash flow and so the ability to pay dividends for instance.

The trouble is that a reduction in the value of their properties does affect the Loan to Value ratio which can in extremis be important. In this case it is currently almost negligible in my book. Their financial ratios as disclosed look fine to me. They are also a charge against Revenue Reserves which in the end do affect the ability to pay dividends because of course they are only allowed to pay dividends if they have the revenue reserves from which to pay them.

Dod

[idpickering]

Edison issues update on Primary Health Properties.

Interim results showed Primary Health Properties (PHP) to be well on track to meet its fully covered 6.7p DPS target, the 27th consecutive year of growth. Organic rent growth continues to increase, borrowing costs are nearly all fixed/hedged and the cost ratio is among the lowest in the sector. Despite this, the prospective dividend yield is now c 7%.

Visible, secure and growing income is the core of the PHP investment case. Leases are long and substantially upward-only, 89% backed directly or indirectly by government bodies, with little exposure to the economic cycle or fluctuations in occupancy. The rise in interest rates has driven up the prospective dividend yield to c 7% despite accelerating rent growth underpinning the prospects for further growth in income and dividends.

Click here to view the full report.

https://www.investegate.co.uk/announcem ... es/7690256

A good read. PHP are in fine health it seems ( pun intended) imho.

Ian (I hold).

[Dod101]

Edison issues update on Primary Health Properties.

Interim results showed Primary Health Properties (PHP) to be well on track to meet its fully covered 6.7p DPS target, the 27th consecutive year of growth. Organic rent growth continues to increase, borrowing costs are nearly all fixed/hedged and the cost ratio is among the lowest in the sector. Despite this, the prospective dividend yield is now c 7%.

Visible, secure and growing income is the core of the PHP investment case. Leases are long and substantially upward-only, 89% backed directly or indirectly by government bodies, with little exposure to the economic cycle or fluctuations in occupancy. The rise in interest rates has driven up the prospective dividend yield to c 7% despite accelerating rent growth underpinning the prospects for further growth in income and dividends.

Click here to view the full report.

https://www.investegate.co.uk/announcem ... es/7690256

A good read. PHP are in fine health it seems ( pun intended) imho.

Ian (I hold).

The rise in interest rates has I think only indirectly driven up the prospective dividend yield. Higher interest rates pushed down the valuation of their assets and thus the share price. That then increased the dividend yield. I tend to ignore third party reports like this.

Dod

[idpickering]

The rise in interest rates has I think only indirectly driven up the prospective dividend yield. Higher interest rates pushed down the valuation of their assets and thus the share price. That then increased the dividend yield. I tend to ignore third party reports like this.

Dod

Thanks for your input Dod. I do get where you're coming from, but it was still an interesting read nonetheless imho.

Ian.

[richfool]

The rise in interest rates has I think only indirectly driven up the prospective dividend yield. Higher interest rates pushed down the valuation of their assets and thus the share price. That then increased the dividend yield. I tend to ignore third party reports like this.

Dod

Thanks for your input Dod. I do get where you're coming from, but it was still an interesting read nonetheless imho.

Ian.

(My bolding above). Surely the "higher interest rates" have also pushed up the costs of borrowing (for the company), which will also have adversely impacted sentiment and the share price.

[Dod101]

Thanks for your input Dod. I do get where you're coming from, but it was still an interesting read nonetheless imho.

Ian.

(My bolding above). Surely the "higher interest rates" have also pushed up the costs of borrowing (for the company), which will also have adversely impacted sentiment and the share price.

As interest rates were rising I took a look at the debt profile (all on the website). Most/much of the debt is fixed until around 2025 I think it is, so that I think is not really an issue at the moment. It has probably though impacted sentiment but not the numbers so far I think.

Dod

[kempiejon]

(My bolding above). Surely the "higher interest rates" have also pushed up the costs of borrowing (for the company), which will also have adversely impacted sentiment and the share price.

And if we are to believe that interest rates might have peaked? As per https://www.forbes.com/uk/advisor/mortg ... e-updates/ Mortgage News: Halifax, HSBC, NatWest, First Direct Cut Fixed Rates As Stability Takes Root.
If rates are expected to revert that must make now or soon the time for such headwinds to ease a little and then share price rises and hence yield falls. I know PHP at a high yield interested me enough to look at the prospect of adding it to my portfolio. A quick look at some numbers and something to check as 2022 operating profit was 70M yet 200M the year before. Assets, liabilities, revenue all broadly similar. Not a thorough look and data from 3rd party.
https://www.hl.co.uk/shares/shares-sear ... nd-reports

[Dod101]

(My bolding above). Surely the "higher interest rates" have also pushed up the costs of borrowing (for the company), which will also have adversely impacted sentiment and the share price.

And if we are to believe that interest rates might have peaked? As per https://www.forbes.com/uk/advisor/mortg ... e-updates/ Mortgage News: Halifax, HSBC, NatWest, First Direct Cut Fixed Rates As Stability Takes Root.
If rates are expected to revert that must make now or soon the time for such headwinds to ease a little and then share price rises and hence yield falls. I know PHP at a high yield interested me enough to look at the prospect of adding it to my portfolio. A quick look at some numbers and something to check as 2022 operating profit was 70M yet 200M the year before. Assets, liabilities, revenue all broadly similar. Not a thorough look and data from 3rd party.
https://www.hl.co.uk/shares/shares-sear ... nd-reports

The trouble with profit disclosures for property companies these days is that so much depends on the revaluation metrics of the property portfolio.. The half year numbers were down to around £40 million against £107 million at the previous half year. That change is largely accounted for by the deficit for the current half year of £11 million or so against a surplus of over £50 million in the comparative period. That has nothing to do with the trading results which is what I think matters. That is a result of the current fetish for mark to market valuations feeding into the trading results rather being dealt with by a note as used to be the case.

Dod