Primary Health Properties

LN: PHP

£1511.8m market cap

133.2p 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

The now completed all-share merger with MedicX brings together two high quality portfolios, creating the leading primary healthcare investor in the UK and Ireland. Our earnings and DPS forecasts immediately benefit from cost efficiencies, while the combination of two high-quality portfolios creates a scale platform, well placed to profitably address the substantial investment needs of the primary healthcare sectors in both countries. The targeted near-term cost savings are highly deliverable and the increased scale of the group offers further strong potential in the medium term. This includes enhanced access to funding, both debt and equity, leaving PHP well positioned for further profitable growth. Not included in our forecasts, a significant medium-term refinancing opportunity exists as the larger group benefits from improved borrowing terms. Our FY19e EPRA EPS and DPS are increased with further strong growth forecast for FY20–21. After merger-related costs, our FY19e EPRA NAV per share growth reduces slightly.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 71.3 62.6 31.0 5.2 25.6 13.3
2018A 76.4 66.5 36.8 5.2 25.6 13.8
2019E 115.6 103.8 59.3 5.6 23.8 18.2
2020E 131.9 119.6 68.1 6.0 22.2 12.9
Last updated on 22/05/2019
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 22/05/2019
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 1.8 10.5 18.7
Relative* 3.7 8.4 27.9
52-week high/low 134.4p/106.4p
*% relative to local index
Key management
Alun Jones Chairman
Harry Hyman MD

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