Primary Health Properties

LN: PHP

£1714.8m market cap

141.2p last close

Primary Health Properties 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.

Investment summary

H119 results showed strong underlying progress enhanced by a first-time contribution from MedicX and early achievement of the targeted merger operating synergies. Adjusted EPRA earnings increased 63% and EPS by 13% to 2.8p. Dividends increased by 3.7%, the 23rd year of growth, fully covered by adjusted EPRA earnings, and the company is well on target to meet its full year DPS target of 5.6p. Adjusted EPRA NAV per share was 115.2p. Accelerating rental growth, asset management initiatives, acquisition opportunities, the capital resources to fund these, and significant refinancing opportunities all bode well for future growth. During the current year, PHP has seen a rise in the number of opportunities for funding new developments both in Ireland and the UK, especially larger, modern, purpose-built medical centres that house bigger GP practices providing a more integrated healthcare. To provide additional long-term funding PHP recently raised c £100m (gross) in a placing at 128p/share (yet to be reflected in our forecasts).

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 71.3 62.6 91.9 5.1 27.7 14.1
2018A 76.4 66.5 74.3 5.2 27.2 14.6
2019E 117.0 104.8 (51.9) 5.7 24.8 14.5
2020E 133.5 120.6 115.6 6.2 22.8 13.5
Industry outlook

Healthcare planning, with broad political support, suggests strong underlying demand for modern healthcare properties in both the UK and the Republic of Ireland. In addition to providing investment opportunities, this seems likely to support rental growth.

Last updated on 14/11/2019
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 3.5 9.0 27.2
Relative* 2.3 5.8 22.2
52-week high/low 141.8p/108.0p
*% relative to local index
Key management
Alun Jones Chairman
Harry Hyman MD

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