Last close As at 18/08/2026
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▲ −0.10 (−0.11%)
Market capitalisation
GBP2,459m
Research: Real Estate
Primary Health Properties (PHP) has issued a Q324 trading update alongside its capital markets presentation. The presentation focused on the significant opportunities for growth that PHP has identified in both the UK and Irish markets. Most importantly, the trading statement shows organic rental growth continuing, underpinning PHP’s commitment to its progressive dividend policy. Our forecasts are, for now, unchanged.
Primary Health Properties |
Highlighting organic and investment-led growth |
Q3 update and capital markets day |
Real estate |
17 October 2024 |
Share price performance
Business description
Analyst
Primary Health Properties is a research client of Edison Investment Research Limited |
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Primary Health Properties (PHP) has issued a Q324 trading update alongside its capital markets presentation. The presentation focused on the significant opportunities for growth that PHP has identified in both the UK and Irish markets. Most importantly, the trading statement shows organic rental growth continuing, underpinning PHP’s commitment to its progressive dividend policy. Our forecasts are, for now, unchanged.
Year end |
Net rental income (£m) |
Adjusted earnings* (£m) |
Adjusted EPS** (p) |
EPRA*** NTA/share (p) |
DPS |
P/NTA |
Yield |
12/22 |
141.5 |
88.7 |
6.6 |
112.6 |
6.50 |
0.89 |
6.5 |
12/23 |
151.0 |
90.7 |
6.8 |
108.0 |
6.70 |
0.93 |
6.7 |
12/24e |
154.5 |
91.9 |
6.9 |
105.2 |
6.90 |
0.95 |
6.9 |
12/25e |
157.3 |
94.2 |
7.0 |
107.3 |
7.00 |
0.93 |
7.0 |
Note: *Excludes valuation movements, amortisation of fair value adjustment to acquired debt and other exceptional items. **Non-diluted. ***Defined as adjusted EPRA net tangible assets (NTA) excluding fair value of derivative interest rate contracts and convertible bond, deferred tax and fair value adjustment on acquired debt.
The presentation showcased PHP’s capabilities to benefit from strong structural and demographic sector growth drivers, and political support for healthcare reform in both the UK and Ireland. It expects this to be reflected in organic rental growth and a growing momentum in accretive investment opportunities as market rents adjust to the new interest rate environment.
Ireland remains PHP’s preferred area of future investment activity, with similar market dynamics to the UK, while benefiting from a lower cost of capital and higher property yields. Over the medium term, the company targets an increase in the Irish share of the portfolio from the current 9% to c 15%.
In the UK, the new government appears strongly committed to NHS reform and investment, recognising the central role of primary healthcare in providing enhanced patient access to services, earlier diagnosis of progressive health conditions and a continuation of the shift of services out of hospitals and into the community. This will be challenging to achieve and will require significant investment. It is estimated that around half the existing primary healthcare estate is unfit for purpose. PHP is well placed to help meet this need for investment where it is economically viable. In this respect, the increasing signs of market rent adjustment are highly encouraging. This also provides a benchmark for open market rent reviews on existing assets, for which the outlook continues to improve. PHP’s open market rent reviews (two-thirds of the total and indexed/fixed uplifts the balance) added £2.4m pa to income in the first nine months of FY24 and PHP expects a more than £3.0m pa increase for the year. Asset management projects added an additional £0.3m pa.
PHP has already declared dividends of 6.9p per share (+3%) for FY24 and we expect further growth in FY25, which would mark 30 years of unbroken dividend growth. The ability to generate visible, growing, mostly government backed income-driven returns is the core of the PHP investment case. PHP was recently announced as the winner of MSCI’s Highest 10-Year Risk Adjusted Total Return Award for the UK in 2023 for the third year in a row. The prospective yield of more than c 7% contrasts with the UK 10-year government bond yield of a little over 4% growth.
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Research: TMT
Esker made further good progress in Q324, with constant currency (cc) revenue growth of 17% y-o-y in Q324 and 14% for 9M24. Guidance was maintained for FY24; we have revised up our forecasts with revenue at the top end of the guidance range and profitability in the middle of the range. Order intake was stable in Q324 and up 34% cc for 9M24, providing support for our FY25 forecasts. The process to acquire Esker is ongoing, with the offer expected to open within the next couple of weeks.