Primary Health Properties (PHP) is a long-term investor in primary healthcare property in the UK and the Republic of Ireland. Assets are mainly long-let to GPs and the NHS or the HSE, organisations backed by the UK and Irish governments respectively.
The primary health property market is driven by supportive demographic trends and the need to modernise health provision rather than the economy. PHP’s leases are long and substantially upward-only, 89% backed directly or indirectly by government bodies.
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Harry Hyman
CEO
Richard Howell
CFO
Steven Owen
Chairman
Forecast net cash (£m)
1268.9
Forecast gearing ratio (%)
N/A
% | 1M | 3M | 12M |
---|---|---|---|
Actual | (2.2) | (2.1) | (13.9) |
Relative | (4.0) | (7.8) | (16.6) |
52 week high/low | 107.0p/85.5p |
FY23 adjusted earnings were slightly above consensus, with an EPS of 6.8p and a fully covered DPS of 6.7p (+3.1%). Earnings growth was mainly driven by strong organic rental growth from rent reviews and asset management projects, plus income arising from the acquisition of Axis. With building cost inflation yet to be reflected in rent levels, PHP is confident of further rental growth (to drive increased earnings and dividends) with 97% of debt costs fixed/hedged and one of the lowest cost ratios in the UK REIT sector (10.7%). A Q124 DPS of 1.725p (an annualised 6.9p or +3.0%) has already been paid, the 28th year of unbroken dividend growth. Property valuations were significantly more robust than the wider property sector, supported by rental growth and the defensive nature of the sector. As a result, adjusted NTA fell by just 4.1% to 108.0p/share and, adjusting for dividends, accounting total return was 1.9%.
Y/E Dec | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (p) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2022A | 141.5 | 131.9 | 56.9 | 6.6 | 13.9 | 10.4 |
2023A | 151.0 | 137.3 | 26.1 | 6.8 | 13.5 | 9.2 |
2024E | 154.3 | 141.6 | 77.5 | 6.9 | 13.3 | 8.6 |
2025E | 157.9 | 144.9 | 127.1 | 7.0 | 13.1 | 8.4 |