TIDMPHP
RNS Number : 7575B
Primary Health Properties PLC
24 February 2011
Primary Health Properties PLC ("PHP" or the "Group")
Annual Report for the year ended 31 December 2010
Primary Health Properties PLC, one of the UK's largest providers
of modern primary healthcare facilities, is pleased to announce its
audited results for the year ended 31 December 2010.
GROUP FINANCIAL HIGHLIGHTS
-- Operating profit before revaluation result and change in fair
value of derivatives rose from GBP7.9million to GBP9.1million;
Profit after tax for the year rose by GBP14.9million to
GBP25.7million
-- Payment of 17.5p of dividends during the year (2009: 17.0p);
9.00p second interim dividend for 2010 declared, payable on 31
March 2011
-- Basic net asset value increased to 262.3p per share (2009:
247.2p)
-- EPRA net asset value of 311.5p per share (2009: 279.9p)
-- Loan to Value ratio 57.6% at 31 December 2010 against
covenant of 70% (2009: 48.9%)
-- Interest cover was 2.1 times compared to a covenant
requirement of 1.3 times (2009: 2.2 times)
GROUP OPERATIONAL HIGHLIGHTS
-- Total rents received by the Group increased by GBP5.6million
to GBP26.6million
-- 33 high quality properties acquired during the year, at a
cost of GBP102.6million, adding GBP6.71million to the rent roll
-- Portfolio value increased from GBP341.9million to
GBP469.3million.
--Including commitments as at the date of this announcement, the
portfolio value is now GBP507.8million at an initial yield of
5.8%
-- Average annualised uplift of 3.2% on reviews completed in the
year, combined with acquisitions, increased contracted rent roll to
GBP28.0million
-- Portfolio 100% let
-- Review of Joint Manager Agreement reduces marginal cost of
management for gross assets over GBP500million to 0.525% from
0.75%, and over GBP750million to 0.4375%
-- Health and Social Care Bill proposals for England should
enhance role of GPs should lead to increased demand for modern
primary healthcare facilities in the medium term
Harry Hyman, Executive Managing Director of PHP, commented:
"I am pleased to report PHP's financial performance has again
been strong with rental growth continuing to be achieved against a
backdrop of full occupancy. The niche market in which PHP operates
has good fundamentals and there is continued demand for the
provision of modern primary health facilities from tenants,
investors and the NHS. Primary care activities are also set to
expand further as part of the changes outlined in the January 2011
Health and Social Care Bill.
"The position of primary care in the health economy, the stable
outlook for commercial property generally and the excellent income
characteristics of our portfolio bode well for the future. We look
forward to reporting further progress in due course."
Enquiries:
Pelham Bell Pottinger
David Rydell/ Victoria Geoghegan/ Elizabeth Snow
Tel: 020 7861 3925
Primary Health Properties PLC
Harry Hyman
Managing Director
Tel: 020 7451 7050
OPERATING AND FINANCIAL REVIEW
Overview
After a rise in capital values in the first half of the year,
the second half of 2010 has seen stability in the market place for
primary health property. The niche market in which we operate has
good fundamentals and there is continued demand for the provision
of modern primary health facilities from tenants, investors and the
NHS. The Group has an excellent portfolio of modern properties with
secure long leases and high quality tenants, backed by the
Government. At 31 December 2010, the 148 delivered properties were
occupied by 866 GPs serving nearly 1.5million patients.
Our buildings are all used in the provision of primary care,
which is the front line of delivery of NHS services. Spending on
healthcare through the NHS has been ring fenced in real terms in
recent budget announcements and primary care activities are set to
be expanded as part of the changes to be brought in by the Health
and Social Care Bill published in January 2011.
The Board remains committed to increasing the Group's portfolio
on a prudent basis, actively managing assets through refurbishment,
enhancement and redevelopment; increasing revenue from existing
leases and delivering returns for Shareholders. We believe that the
business is well positioned and we remain confident in the
prospects for the Group.
Trading performance
An analysis of the trading performance for the year ended 31
December 2010 is set out below:
2010 2009
GBPm GBPm
Annualised rent roll* 28.0 21.3
Rental and related income 26.9 21.3
Expenses (5.0) (3.3)
Operating profit before revaluation result
and financing 21.9 18.0
Net financing costs (12.8) (10.1)
Operating profit before revaluation result
and fair value (loss)/gain on interest
rate swaps 9.1 7.9
Fair value (loss)/gain on interest rate
swaps (4.7) 1.3
Revaluation gain on property portfolio 22.8 1.6
Profit before tax 27.2 10.8
Dividends paid 10.8 5.8
*On completed properties
Interim dividends were paid on 26 March 2010 and 29 October 2010
both at 8.75p, per ordinary share.
Rental growth
The Group achieved weighted average annual rental growth on
reviews completed in the year to 31 December 2010 of 3.2% (2009:
3.1%). For a typical three year review pattern this equates to a
rental uplift of 10.0% (2009: 9.4%).
Traditionally, the rate of rental growth has been correlated to
the underlying rate of inflation in the wider economy. In addition,
the ever increasing specification requirements of the NHS for new
buildings, requiring higher energy efficiency and reduced carbon
footprints, is expected to drive replacement costs higher, which
together with inflation should continue to justify higher
rents.
Portfolio activity and valuation
The table below sets out the Group's real estate portfolio.
2010 2009
GBPm GBPm
Investment properties 462.1 338.4
Properties in the course of development 7.2 3.5
Total properties 469.3 341.9
Finance leases 3.1 3.0
Total owned and leased 472.4 344.9
Committed as at 31 December 31.2 26.1
Total owned, leased and committed 503.6 371.0
Closing annualised rent roll (on completed
properties) 28.0 21.3
The freehold, leasehold and development properties of the Group
have been independently valued at open market value by Lambert
Smith Hampton, Chartered Surveyors and Valuers ("LSH"), as at 31
December 2010. Yields in the primary care property market have
tightened and stabilised during the year and the property portfolio
was valued at GBP469.3million at 31 December 2010. This represents
a true equivalent yield of 6.0% (2009: 6.2%) and an initial yield
of 5.8% (2009: 6.0%) and gave rise to a property revaluation gain
of GBP22.8million compared to GBP1.6million in 2009.
Acquisitions
The Group completed the purchase of the following properties
during the year that it had previously committed to acquire.
Development
Property cost GBPm Occupational tenants
Sheffield 3.0 GP practice and pharmacy
Treharris 4.6 GP practice, LHB accommodation and
a pharmacy
Connah's Quay 9.7 Three GP practices and LHB accommodation
The Group also purchased 33 completed investment properties
during the year including the Health Investments and Care Capital
portfolios, which each comprised 14 health centres. Fully let
investments were acquired in the period at the following
locations:
Aldridge, West Midlands
Basingstoke, Hampshire *
Bitterne, Southampton, Hampshire *
Burnley, Lancashire **
Chafford Hundred, Essex **
Chalford, Gloucestershire **
Castleford, Yorkshire *
Consett, County Durham **
Darlington, County Durham **
Eastbourne, Sussex *
Fareham, Hampshire *
Farnborough, Hampshire *
Farnham, Hampshire *
Flansham, Bognor, Sussex *
Hinckley, Leicestershire **
Hornchurch, Essex **
Hornsea, East Yorkshire
Horley, Surrey *
Kesgrave, Suffolk **
Lanark, Scotland
Leamington Spa, Warwickshire **
Leigh, Manchester
Lydney, Gloucestershire **
Maywood, Bognor, Sussex *
Mitcham, Surrey *
Portslade, Sussex *
Restalrig, Edinburgh **
Southwick, Brighton, Sussex *
St Marys, Southampton, Hampshire *
Stockton on Tees, County Durham
Stoneham, Southampton, Hampshire **
Watlington, Norfolk **
Wingate, County Durham **
* Purchased as part of the Health Investments Portfolio
("HI")
** Purchased as part of the Care Capital portfolio
Asset management
2010 has been a busy year in terms of asset management
activities. Enhancement projects were completed at eight sites.
Four of these included surgery leases (with a combined total rent
in excess of GBP500,000 pa) which have been extended by between ten
and 15 years, increasing the guaranteed longevity of Group income.
The addition of a pharmacy at Burton Latimer was started on-site,
with completion expected in April 2011, and is pre-let to Lloyds
Pharmacy. Terms have been agreed for projects at a further five
sites to be undertaken in 2011.
Disposals
There were no disposals during the year.
Commitments
As at 31 December 2010, the Group has committed to acquire the
following health centres at dates in the future.
Total
commitment Outstanding Details
Contracted in 2010 GBPm GBPm
1,442 sqm medical
centre (six GP practice
and NHS Trust)
South Queensferry 4.3 4.3 constructed in 2002
1,802 sqm medical
centre (eight GPs in
two practices and PCT)
Chesham 5.6 4.6 and 130 sqm pharmacy
3,750 sqm medical
centre (four GP
practice and PCT) with
804 sqm expansion space
Oswestry 8.8 5.1 and 75 sqm retail unit
1,493 sqm medical
centre (six GP practice
and PCT) and 120 sqm
Blackpool 4.1 4.1 pharmacy
795 sqm medical centre
(five GP practice) with
294 sqm expansion space
Allesley 2.8 2.2 and 154 sqm pharmacy
Total new commitments 25.6 20.3
Pre-existing commitments
1,792 sqm medical
centre (seven GP
practice and PCT) with
Shefford 5.5 5.3 96 sqm pharmacy
2,450 sqm medical
centre (ten GPs in two
practices and NHS
Trust) with 96 sqm
Cowbridge 6.6 5.6 pharmacy
Total commitments at 31
December 2010 37.7 31.2
All commitments are 100% pre-let. On 18 February 2011, the Group
entered into an agreement to purchase a newly developed health
centre at Newark with a committed cost of GBP4.2million. This asset
comprises a 1,275 sq m GP practice and a 159 sq m pharmacy.
Discounted cash flow property valuation
In addition to the market value exercise performed by LSH, the
Joint Managers monitor the value of the Group's investment
portfolio based on a discounted cash flow ("DCF") analysis. The DCF
valuation of delivered and committed assets as at 31 December 2010
was GBP554.3million compared to the market value of
GBP503.6million, including cash flows on commitments from their
anticipated completion date. The difference in value of
GBP50.7million represents an additional 80.7p of net asset value
per share. The DCF analysis covers the remaining term of each lease
and a terminal value on a property-by-property basis, with current
passing rent until expiry totalling GBP378.2million, contributing
68.2% of the DCF valuation.
The assumptions used in the DCF analysis are:
-- A discount rate of 7% (2009: 7%)
-- An average annual increase in the individual property rents
at review of 2.5% (2009: 2.5%)
-- Capital growth in residual values of 1% per annum (2009:
1%)
DCF values using alternative discount rates would be as
follows:
Impact on
Discount rate Value NAV per share
6.50% GBP573.3m 111.7p
7.50% GBP516.7m 21.5p
Portfolio performance
The PHP portfolio is a founder member of the IPD Healthcare
Property Index, whose constituents include approximately 50%
Primary Care assets. As a specialised index it is published on an
annual basis, with 2010 figures to be released in May 2011.
Accordingly, PHP is not able to benchmark its performance against
the sector index at this time, but will provide an update together
with its interim statement later in 2011.
The table below details the performance of the Group's portfolio
as compared to the All Property Index and recognised alternative
asset classes. Focusing on property returns, the income component
of the return on both the PHP portfolio and the IPD All Property
Index has been relatively constant at approximately 6% per annum.
In addition to the greater security of income from government
backed tenants, the benefits of the PHP portfolio are illustrated
by the relative stability of the capital element of returns, where
PHP's health sector valuations have been significantly less
volatile than those of other real estate sectors through the recent
turbulent period for property markets.
Performance for year ended 31 December
2010 1 year 3 years
PHP portfolio return 10.2% 4.9%
IPD All Property Index total return 15.2% (2.5%)
Equities 14.5% 1.4%
Bonds 9.1% 7.7%
Net assets and EPRANAV
The European Public Real Estate Association ("EPRA") net asset
value is calculated as balance sheet net assets including the
valuation result on trading properties, excluding fair value
adjustments for debt and related derivatives ("EPRA" is the
European Public Real Estate Association).
2010 2009
Net assets GBP164.7m GBP151.9m
Net asset value per share 262.3p 247.2p
EPRA net asset value per share 311.5p 279.9p
Revenue and administrative expenses
At a trading level, revenues for the year ended 31 December 2010
rose to GBP26.9million as a result of income from acquisitions, new
deliveries and favourable rent reviews. Operating profit before the
property revaluation gain and the change in the fair value of
interest rate swaps was GBP9.1million. An exceptional charge of
GBP1.6million was incurred in respect of converting acquired
companies to REIT status during the year. Administrative expenses
were slightly higher during 2010 mainly due to additional
management fees commensurate with the increase in the portfolio and
professional fees incurred as the Group explores refinancing
options.
Financing
The table below summarises the debt facilities available to the
Group as at 31 December 2010. The weighted average duration of
Group debt was 4.5 years, with a weighted average cost of debt
including the non-floating element of fixed rate swaps of 4.57%. As
part of the Board's continuing policy to have secured facilities to
cover the commitments of the Group, a new GBP25million facility was
completed with Aviva on 15 December 2010.
All loans are interest only unless stated.
Maximum Drawn
at
Facility Type Basis Term credit 31-Dec-10 Headroom
Expiring
within 12
months
National Term Floating 31 May GBP3,350,000 GBP3,000,000 GBP350,000
Westminster loan rate 2011
Bank plc
Royal Bank Overdraft Floating 30 Nov GBP10,000,000 - GBP10,000,000
of Scotland rate 2011*
plc
Expiring
after more
than 12
months
Royal Bank Term Floating 31 Jan GBP140,000,000 GBP134,300,000 GBP5,700,000
of Scotland loan rate 2013
plc
Allied Term Floating 31 Jan GBP50,000,000 GBP37,900,000 GBP12,100,000
Irish Bank loan rate 2013
Santander Term Floating 31 Jan GBP65,000,000 GBP65,000,000 -
loan rate 2013
Aviva** Term Fixed 31 Jan GBP28,140,297 GBP28,140,297 -
loan rate*** 2032****
Aviva Term Fixed 14 Dec GBP25,000,000 - GBP25,000,000
loan rate 2022
GBP321,490,297 GBP268,340,297 GBP53,150,000
* Renewable on a 12 month basis
** Acquired within the HI portfolio acquisition
*** Loan is amortised over period to maturity
**** Date of maturity of longest dated tranche
Existing term loans totalling GBP255million fall due for renewal
on 31 January 2013. In order to secure the longer term financial
stability of the Group and provide capacity for future
acquisitions, the Joint Managers have entered into discussions with
its lead bankers to re-finance the Term Loans and enlarge the
overall facilities made available to the Group. It is envisaged
that this will include introducing new banks to the Group's pool of
lenders. Separately, the Group has received heads of terms for a
GBP50million interest only facility with a new lender.
The loan to value ratio at 31 December 2010 was 57.6% (2009:
48.9%) compared to a maximum covenanted level of 70.0%. Interest
cover was 2.1 times compared to a minimum covenanted level of 1.3
times (2009: 2.2 times).
Interest rate hedging
The amount of fixed rate cover in place at 31 December 2010 was
GBP208million. This included GBP88million of swaps that are
callable at the option of the bank on a quarterly basis. These were
not called on 11 February 2011 and the next date on which they may
be called is 11 May 2011. Basis rate swaps totalling GBP200million
matured on 11 February 2010.
All swaps are taken out in order to mitigate exposure to
interest rate risk, but under accounting rules only certain swaps
qualify as "effective" hedges and the mark-to-model movement on
these is matched against the hedged liability in the Balance Sheet.
The mark-to-model liability of the Group's "effective" interest
rate swaps increased by GBP6.0million in the year to
GBP30.9million, (2009: decreased GBP7.7million) reflecting the
decrease in medium term interest rates year-on-year and continued
volatility. There is no cash flow impact from these mark-to-model
adjustments but the net asset value has been reduced by this year's
losses. This loss is charged directly to reserves but is included
in the Statement of Comprehensive Income. The revaluation of swaps
regarded as ineffective for IAS39 purposes resulted in a loss of
GBP4.7million (2009: gain GBP1.7million), which is included in the
profit for the period.
The mark-to-model value fluctuates with movements in term
interest rates and, in the case of the callable swaps, also with
market volatility. A further valuation undertaken as at 21 February
2011, valued the Group's total mark-to-model liability at
GBP21.9million, a decrease of GBP7.7million from the 31 December
2010 figure as forward rates have risen since that date.
Finance and interest rate hedging (assuming callable swaps are
not called)
This table shows the level of bank borrowings economically
hedged by interest rate swaps for each financial
year to 31 December 2027. Shown in GBPmillion.*
Weighted average
amount hedged
Year (GBPm) Rate (%)
2010 202 4.80
2011 208 4.80
2012 212 4.80
2013 190 4.79
2014 178 4.81
2015 180 4.79
2016 164 4.75
2017 158 4.69
2018 168 4.69
2019 168 4.69
2020 168 4.69
2021 131 4.66
2022 80 4.58
2023 80 4.58
2024 80 4.58
2025 80 4.58
2026 50 4.62
2027 20 4.76
Finance and interest rate hedging
This chart shows the level of bank borrowings covered by
effective hedges for each financial year to
31 December 2027. Shown in GBPmillion.*
Weighted average
amount hedged
Year (GBPm) Rate (%)
2010 114 4.80
2011 120 4.81
2012 124 4.81
2013 102 4.79
2014 90 4.81
2015 92 4.79
2016 76 4.69
2017 70 4.56
2018 80 4.58
2019 80 4.58
2020 80 4.58
2021 80 4.58
2022 80 4.58
2023 80 4.58
2024 80 4.58
2025 80 4.58
2026 50 4.62
2027 20 4.76
* The tables assume that term loans held by the Group which
expire in 2013 will be renewed.
Management arrangements
On 21 February 2011, the Management Engagement Committee
approved favourable changes to the terms of the Management
Agreement which will be of benefit to Shareholders as the assets
under management increase. The incremental fee payable to the Joint
Managers under the Management Agreement as gross assets increase
above GBP500million will be reduced. Full details were given in the
announcement released on 22 February 2011 and can also be found on
the Group website.
Key Performance Indicators ("KPIs")
1. Objective
To deliver sustainable long-term shareholder returns
Metric
-- Sustained real growth in EPS
-- Sustained dividend growth
-- Growth in NAV
Performance
-- Turnover rose to GBP26.9million from GBP21.3million
-- Adjusted EPS fell from 18.4p to 14.7p
-- Dividend grew for eleventh year to 17.5p per share, 2.9%
higher than in 2009
-- Basic NAV increased from 247.2p to 262.3p
-- EPRA NAVgrew from 279.9p to 311.5p
2. Objective
To maximise the returns from the investment portfolio
Metric
-- Out-performance versus IPD benchmark
Performance
-- Three year performance was better than the IPD benchmark
-- Rental growth of 3.2% p.a.
-- Portfolio valuation uplift of GBP22.8million for the year
3. Objective
To manage our balance sheet effectively
Metric
-- Maintain appropriate balance between debt and equity within
covenanted levels
Performance
-- Total debt increased in year due to acquisitions
-- Value of real estate portfolio increased
-- Equity issue as part of HI portfolio acquisition
-- Gearing increased to 57.6% but is well within covenant
limits
4. Objective
To identify new units to purchase
Metric
-- Future commitments
-- Deliveries
-- Acquisitions
Performance
-- 33 fully let investment properties were acquired
-- Acquisitions and deliveries in the year added GBP6.7million
to annual rent roll
-- New development commitments of GBP25.6million were entered
into during the year. New commitment of GBP4.2million entered into
since the year end
5. Objective
To maximise rent roll from the portfolio and maintain security
of income. To minimise vacancy in the portfolio. To complete
purchase of properties under development.
Metric
-- Growth in annualised rent roll
-- Composition of tenant covenant
-- Long average remaining lease term
-- Maintain a minimal percentage of voids
Performance
-- New deliveries added GBP6.7million to the rent roll
-- 90% of income effectively paid for by the NHS, with the
balance payable by pharmacies
-- Weighted average lease length (including commitments) of 16.9
years
-- The portfolio was 100% let at the year end
Principal risks and uncertainties
In common with most businesses, the Group is affected by a
number of risks and uncertainties, not all of which are wholly
within the Group's control. The Board has reviewed and agreed
policies for managing each of the risks and uncertainties which are
summarised below, but regards the first three items as its
principal risks at the present time:
1. Risk description: Capital adequacy
Impact/risk
-- Unable to counteract the impact of fluctuating property
values on the Group's balance sheet
-- Inability to invest in suitable property on favourable terms
to enable expansion
Mitigation and management
-- Capital raisings strengthened the Group's balance sheet
-- Liquidity and gearing are kept under constant review
2. Risk description: Liquidity risk
Impact/risk
-- Inability to fund operations and capital expenditure
programme
-- Restrictive covenant regime
-- Limited debt market capacity
-- Inability to raise sufficient new funding
-- Breach of covenants and LTVs
Mitigation and management
-- Board approves an annual plan setting out expected financial
requirements
-- Majority of borrowing matures in more than 12 months
-- Covenant and LTV ratio actively monitored
-- Commitments not wholly taken up
3. Risk description: Interest rate risk
Impact/risk
-- Increased borrowing costs
-- Market risk exposure through interest rates and availability
of credit
Mitigation and management
-- Borrowings on a variable basis but interest rate risk
mitigated through use of swaps
4. Risk description: Tax risk
Impact/risk
-- Increased taxes payable as a result of Government policy
changes
-- Compliance with the Real Estate Investment Trust ("REIT")
taxation regime
Mitigation and management
-- Ongoing monitoring and management of the criteria to meet
UK-REIT status
5. Risk description: Occupier market conditions
Impact/risk
-- Downturn in primary care market and demand for specialist
portfolios
-- Government changes primary care initiative and policies
-- Threat of voids in the portfolio
-- Prolonged downturn in tenant demand
Mitigation and management
-- 100% of the portfolio let
-- Demographics increasing demand for healthcare facilities
-- Effectively upwards only rent reviews and weighted average
lease length of some 16.9 years (including commitments)
6. Risk description: Market cycles
Impact/risk
-- Risk of falling property values
Mitigation and management
-- Target ranges for balance sheet gearing
-- Secure income under UK lease structure
7. Risk description: Property risks
Impact/risk
-- Asset value concentration
-- Poor performance of single asset having a material impact on
the portfolio
-- Loss of value
-- Property deterioration
Mitigation and management
-- No sign of policy changes regarding primary care
-- Multi-asset portfolio with long leases
-- Primarily let to the NHS
-- Properties predominantly leased on tenant repairing
leases
-- Properties regularly inspected and adequately insured
8. Risk description: Retention of Joint Managers
Impact/risk
-- As the Group has no employees, operations would be adversely
affected if the services of the Joint Managers were not
available
Mitigation and management
-- Contractual arrangements are in place which are regularly
reviewed by the Management Engagement Committee
Environmental matters
PHP specialises in the ownership of freehold or long leasehold
interests in modern purpose-built healthcare facilities, the
majority of which are leased to general practitioners and other
associated healthcare users. The Board considers environmental
matters as part of the assessment of the suitability of purchasing
new medical centres to expand the portfolio, either through forward
purchase development agreements or through open market purchases.
PHP undertakes an assessment of environmental risk as an important
element of its due diligence process obtaining an environmental
desktop study and energy efficiency certificates. PHP has engaged
an Environmental Consultant, Collier & Madge, to help in this
process. PHP's ability to influence the energy efficiency of
buildings is limited where completed properties are acquired and
let on FRI terms. Where possible and as a norm for newly built
premises, environmental issues are included in the leases entered
into by the medical practitioners. More generally, buildings
acquired are usually specified to meet the NHS's exacting standards
which provide some environmental consideration.
PHP is committed to the principles of continuous improvement in
managing environmental issues, including the proper management and
monitoring of waste, the reduction of pollution and emissions, and
compliance with environmental legislation and codes of
practice.
Relationships
Other than Shareholders, the Group's performance and value are
influenced by other stakeholders, principally its lessees (the GPs,
NHS organisations and healthcare users), the property developers,
the District Valuers, lenders and the Joint Managers. The Group's
approach to these relationships is based on the principle of mutual
understanding of aims and objectives and the highest standards of
ethics and business practice.
Social and community issues
The Group provides purpose built healthcare properties for use
by GPs, NHS organisations, pharmacies and healthcare users, thus
indirectly benefiting the communities in which they are based.
Outlook
Spending on healthcare is driven by demographics as well as the
growth of the economy. Primary care remains at the heart of the
changes going on in healthcare provision in the UK. There remains a
strong demand for larger purpose built primary care centres from
operators, and we also see evidence of more institutional and
corporate interest in investing in the sector.
The underlying property portfolio remains attractive,
particularly in today's market. It currently offers 100% occupancy
with some 90% of rent roll effectively being paid for by the
Government and has an unexpired lease term of almost 17 years. We
are recording pleasing rental increases and the new procedure for
rent appeals has started to yield positive results.
2010 was a very active year in terms of acquisitions. The
structural changes announced and to be implemented into the NHS are
likely to bring greater opportunities for the deployment of
capital, but inevitably have brought about a reduction in the
number of new projects being approved. We do, however, have a good
pipeline of potential deals that we are working on for 2011.
The position of primary care in the health economy, the stable
outlook for commercial property generally and the excellent income
characteristics of our portfolio bode well for the future. We look
forward to reporting further progress in due course.
Graeme Elliot
Chairman
23 February 2011
GROUP STATEMENT OF COMPREHENSIVE INCOME for the year ended 31
December 2010
2010 2009
Notes GBP000 GBP000
Rental income 26,574 20,994
Finance lease income 341 338
Rental and related income 26,915 21,332
Direct property expenses (398) (210)
Administrative expenses: recurring (4,646) (3,460)
Administrative expenses: non-recurring - 372
Operating profit before net valuation gain on property
portfolio 21,871 18,034
Net valuation gain on property portfolio 22,790 1,615
Operating profit before financing costs 44,661 19,649
Finance income 4 160 86
Finance costs 5 (12,882) (10,267)
Fair value (loss)/gain on interest rate swaps 5 (4,714) 1,318
Profit on ordinary activities before taxation 27,225 10,786
Current taxation credit 6 36 -
Conversion to UK-REIT charge 6 (1,586) -
Taxation expense (1,550) -
Profit for the year (1) 25,675 10,786
Fair value movement on interest rate swaps
treated as cash flow hedges (6,013) 7,657
Unrealised gain on current asset investment 79 -
Other comprehensive (loss)/income (5,934) 7,657
Total comprehensive income for the year net of tax
(1) 19,741 18,443
Earnings per share (2) 3 41.3p 26.6p
Adjusted earnings per share (2) (3) 3 14.7p 18.4p
The above relates wholly to continuing operations.
(1) Wholly attributable to equity Shareholders of Primary Health
Properties PLC.
(2) There is no difference between basic and fully diluted
EPS.
(3) Adjusted for large one-off items and movements in fair value
of properties and derivatives (see note 3).
GROUP BALANCE SHEET as at 31 December 2010
2010 2009
Notes GBP000 GBP000
Non current assets
Investment properties 8 469,290 341,890
Net investment in finance leases 3,036 3,014
Interest rate swaps 413 1,386
472,739 346,290
Current assets
Current asset investment 9 555 -
Interest rate swaps - 63
Trade and other receivables 2,582 1,939
Net investment in finance leases 48 49
Cash and cash equivalents 370 212
3,555 2,263
Total assets 476,294 348,553
Current liabilities
Interest rate swaps (16,859) (12,208)
Corporation tax payable (48) (29)
UK-REIT conversion charge payable (1,998) (1,455)
Deferred rental income (5,942) (4,638)
Trade and other payables (4,837) (1,991)
Term loans 10 (3,000) -
(32,684) (20,321)
Non current liabilities
Term loans 10 (264,445) (166,139)
Interest rate swaps (14,419) (9,322)
UK-REIT conversion charge payable - (856)
(278,864) (176,317)
Total liabilities (311,548) (196,638)
Net assets 164,746 151,915
Equity
Share capital 31,401 30,729
Share premium 53,934 50,664
Capital reserve 1,618 1,618
Special reserve 44,442 44,442
Cash flow hedging reserve (13,279) (7,266)
Retained earnings 46,630 31,728
Total equity (1) 164,746 151,915
Net asset value per share 11 262.3p 247.2p
EPRA net asset value per share 11 311.5p 279.9p
(1) Wholly attributable to equity Shareholders of Primary Health
Properties PLC.
These financial statements were approved by the Board of
Directors on 23 February 2011 and signed on its behalf by:
Graeme Elliot
Chairman
GROUP CASH FLOW STATEMENT for the year ended 31 December
2010
2010 2009
Notes GBP000 GBP000
Operating activities
Profit before tax 27,225 10,786
Less: Finance income (160) (86)
Plus: Finance costs 12,882 10,267
Plus: Fair value loss/(gain) on derivatives 4,714 (1,318)
Operating profit before financing 44,661 19,649
Adjustments to reconcile Group operating
profit to net cash flows from operating activities:
Revaluation gain on property (22,790) (1,615)
Increase in trade and other receivables (1) (946) (131)
Increase/(decrease) in trade and other payables
(1) 4,003 (377)
Cash generated from operations 24,928 17,526
UK-REIT conversion charge instalments (1,934) (1,575)
Taxation paid (2) (193) -
Net cash flow from operating activities 22,801 15,951
Investing activities
Payments to acquire investment properties (25,234) (23,413)
Payments to acquire shares in AH Medical
Properties PLC (476) -
Payments to acquire Anchor Meadow Limited (5,498) -
Payments to acquire Sinclair Montrose Properties
Limited (23,842) -
Payments to acquire Abstract Integrated Healthcare
Limited (3) (1,856) -
Payments to acquire Charter Medinvest Limited (6,787) -
Payments to acquire Health Investments Limited
(3) (7,214) -
Interest received on developments 134 46
Bank interest received 4 4
Other interest 8 36
Net cash flow used in investing activities (70,761) (23,327)
Financing activities
Proceeds from issue of shares (net of expenses) - 60,748
Term bank loan drawdowns 85,700 38,990
Term bank loan repayments (15,924) (77,290)
Swap interest payable (8,461) (6,541)
Loan arrangement fees (176) -
Interest paid (3,211) (3,432)
Dividends received 15 -
Equity dividends paid (9,825) (5,562)
Net cash flow from financing activities 48,118 6,913
Increase/(decrease) in cash and cash equivalents
for the year 158 (463)
Cash and cash equivalents at start of year 212 675
Cash and cash equivalents at end of year 370 212
(1) Asset movements include movements relating to
acquisitions
(2) Taxation was paid in the period in order to settle the
outstanding liabilities in the acquired companies. All amounts
payable were included in the consideration calculation.
(3) Payment net of acquired debt commitments.
GROUP STATEMENT OF CHANGES IN EQUITY for the year ended 31
December 2010
Cash
flow
Share Share Capital Special hedging Retained
capital premium reserve reserve* reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
1 January 2010 30,729 50,664 1,618 44,442 (7,266) 31,728 151,915
Profit for the
year - - - - - 25,675 25,675
Income and expense
recognised
directly in
equity:
Fair value
movement on
interest rate
swaps treated as
cash flow hedges - - - - (6,013) - (6,013)
Unrealised gains
at fair value
through equity - - - - - 79 79
Total
comprehensive
income - - - - (6,013) 25,754 19,741
Dividends paid:
Second dividend
for the year
ended 31 Dec 2009
(8.75p) - - - - - (5,061) (5,061)
First interim
dividend for the
year ended 31 Dec
2010 (8.75p) - - - - - (4,764) (4,764)
Scrip issue in
lieu of first
interim cash
dividends (net of
expenses) 54 262 - - - (316) -
Scrip issue in
lieu of second
interim dividend
(net of
expenses) 116 595 - - - (711) -
Share
consideration for
the HI
acquisition 502 2,413 - - - - 2,915
31 December 2010 31,401 53,934 1,618 44,442 (13,279) 46,630 164,746
1 January 2009 16,794 48,009 1,618 - (14,923) 26,788 78,286
Profit for the
year - - - - - 10,786 10,786
Income and expense
recognised
directly in
equity:
Fair value
movement on
interest rate
swaps treated as
cash flow hedges - - - - 7,657 - 7,657
Total
comprehensive
income - - - - 7,657 10,786 18,443
Proceeds from
capital raisings 13,883 2,855 - 46,956 - - 63,694
Expenses of
capital raisings - (433) - (2,514) - - (2,947)
Dividends paid:
Second dividend
for the year
ended 31 Dec 2008
(8.50p) - - - - - (2,855) (2,855)
First interim
dividend for the
year ended 31 Dec
2009 (8.50p) - - - - - (2,707) (2,707)
Scrip issue in
lieu of interim
cash dividends
(net of
expenses) 52 233 - - - (284) 1
31 December 2009 30,729 50,664 1,618 44,442 (7,266) 31,728 151,915
* The Special Reserve is a distributable reserve
NOTES TO THE FINANCIAL STATEMENTS
1. Corporate information
The Group's financial statements for the year ended 31 December
2010 were approved by the Board of Directors on 23 February 2011
and the Balance Sheets were signed on the Board's behalf by the
Chairman, G A Elliot. Primary Health Properties PLC is a public
limited company incorporated and domiciled in England & Wales.
The Company's Ordinary Shares are admitted to the Official List of
the UK Listing Authority, a division of the Financial Services
Authority and traded on the London Stock Exchange.
2. Accounting policies
2.1 Basis of preparation
The Group's financial statements have been prepared on the
historical cost basis, except for investment properties and
derivative financial instruments that have been measured at fair
value.
The Group's financial statements are presented in Sterling
rounded to the nearest thousand.
Statement of compliance
The Group prepares consolidated financial statements under
International Financial Reporting Standards ("IFRS") as adopted by
the European Union and applied in accordance with the Companies Act
2006 and Article 4 of the IAS Regulations.
2.2 Summary of significant accounting policies
Basis of consolidation
The Group's financial statements consolidate the financial
statements of Primary Health Properties PLC and its wholly owned
subsidiary undertakings. Subsidiaries are consolidated from the
date of their acquisition, being the date on which the Group
obtained control and continue to be consolidated until the date
that such control ceases. Control comprises the power to govern the
financial and operating policies of the investee so as to obtain
benefit from its activities and is achieved through direct or
indirect ownership of voting rights; currently exercisable or
convertible potential voting rights; or by way of contractual
agreement. The financial statements of the
subsidiary undertakings are prepared for the accounting
reference period ending 31 December each year using consistent
accounting policies. All intercompany balances and transactions,
including unrealised profits arising from them, are eliminated.
The Parent Company financial statements of Primary Health
Properties PLC and each of its subsidiary undertakings will
continue to be prepared under UK GAAP. The use of IFRS at Group
level does not affect the distributable reserves available to the
Group.
Segmental reporting
The Directors are of the opinion that the Group is engaged in a
single segment of business, being investment in property in the
United Kingdom leased principally to GPs, NHSOrganisations and
other associated health care users.
Investment properties and investment properties under
construction
The Group's investment properties are held for long-term
investment. Initially, investment properties are measured at cost
including transaction costs. Subsequent to initial recognition,
investment properties and investment properties under construction
are stated at fair value based on a professional valuation made as
of each reporting date. The fair value of investment property does
not reflect future capital expenditure that will improve or enhance
the property and does not reflect future benefits from this future
expenditure.
Gains or losses arising from changes in the fair value of
investment properties and investment properties under construction
are included in the Group Statement of Comprehensive Income in the
year in which they arise.
Investment properties cease to be recognised for accounting
purposes when they have been disposed of. Any gains and losses
arising are recognised in the Group Statement of Comprehensive
Income in the year of disposal.
Property acquisitions and business combinations
Where a property is acquired through the acquisition of
corporate interests, the Board considers the substance of the
assets and activities of the acquired entities in determining
whether the acquisition represents the acquisition of a
business.
Where such acquisitions are not judged to be an acquisition of a
business, they are not treated as business combinations. Rather,
the cost to acquire the corporate entity is allocated between the
identifiable assets and liabilities of the entity based on their
relative fair values on the acquisition date. Accordingly, no
goodwill or additional deferred taxation arises. Otherwise,
corporate acquisitions are accounted for as business
combinations.
Current asset investments
Current asset investments are held as Available For Sale ("AFS")
in accordance with IAS39. Any unrealised gain or loss is recognised
through the Group Statement of Comprehensive Income.
3. Earnings per share
The calculation of basic and diluted earnings per share is based
on the following:
Adjusted earnings per share:
2010 2009
Net profit Net profit
attributable attributable
to Ordinary Ordinary Per to Ordinary Ordinary Per
Shareholders Shares Share Shareholders Shares Share
GBP000 (number)* (pence) GBP000 (number)** (pence)
Basic earnings
per share 25,675 62,162,797 41.3p 10,786 40,623,413 26.6p
Adjustments to
remove:
Net property
valuation
gains (22,790) (1,615)
Fair value
loss/(gain)
on
derivatives* 4,714 (1,318)
Other
non-recurring
items - (372)
Charge on
conversion to
UK-REIT
status 1,586 -
UK corporation
tax credit (36) -
Adjusted basic
and diluted
earnings per
share 9,149 62,162,797 14.7p 7,481 40,623,413 18.4p
*Weighted average number of Ordinary Shares in issue during the
year.
**In view of the continuing volatility in the mark-to-model
adjustment in respect of the period end valuation of derivatives
that flows through the Group Statement of Comprehensive Income, the
Directors believe that it is appropriate to remove the gain or loss
in the calculation of adjusted earnings.
4. Finance income
2010 2009
GBP000 GBP000
Interest income on financial assets
Bank interest 3 4
Development loan interest 134 46
Other interest 8 36
Dividend income received 15 -
160 86
5. Finance costs
2010 2009
GBP000 GBP000
Interest expense on financial liabilities
Not at fair value through profit or loss
(i) Interest paid
Swap interest paid 8,518 6,473
Bank loan interest paid 3,812 3,228
Other interest paid 15 (12)
Notional UK-REIT interest 36 103
Bank facility non utilisation fees 105 148
Bank charges and loan commitment fees 396 327
12,882 10,267
At fair value through profit or loss
(ii) Derivatives
Net fair value loss/(gain) on interest
rate swaps 4,714 (1,318)
4,714 (1,318)
The fair value loss of GBP4.7million (2009: gain of
GBP1.3million) on derivatives recognised in the Group Statement of
Comprehensive Income for the year has arisen from the interest rate
swaps for which hedge accounting does not apply. The gain in 2009
is net of a loss of GBP391,000 on the basis rate swaps which
matured during the year.
Net finance costs may be summarised as follows:
2010 2009
GBP000 GBP000
Finance income (160) (86)
Finance costs 12,882 10,267
Net finance costs 12,722 10,181
6. Taxation
a) Tax expense in the Group Statement of Comprehensive
Income
The tax expense is made up as follows:
2010 2009
GBP000 GBP000
Current tax
UK corporation tax credit on non property (36) -
income
Charge on conversion to UK-REIT status 1,586 -
(1)
Total tax charge in Group Income Statement 1,550 -
The Emergency Budget on 22 June 2010 announced that the UK
corporation tax rate will reduce from 28% to 24% over a period of
four years from 2011. The reduction from 28% to 27% was
substantively enacted on 20 July 2010 and will be effective from
April 2011. This will reduce the Group's future current tax charge
on non property income.
b) Factors affecting the tax charge for the year
The tax assessed for the year is lower than (2009 - lower) the
standard rate of corporation tax in the UK. The differences are
explained below:
2010 2009
GBP000 GBP000
Profit on ordinary activities before taxation 27,225 10,786
Theoretical tax at UK corporation tax rate
of 28% (2009: 28%) 7,623 3,020
REIT exempt income (2,658) (3,052)
Non taxable items (5,059) -
Other differences - (2)
Finance lease adjustment 4 4
Losses carried forward 90 30
Movement in tax provision during the year (36) -
Current tax charge (36) -
(1) Conversion to a UK REIT means that the Group is no longer
subject to UK corporation tax. The UKREIT charge of GBP1.6million
has arisen on the conversion of the companies acquired during the
year ended 31 December 2010 to UK REIT status, based on the values
of the individual properties held within those companies.
7. Dividends
Amounts recognised as distributions to equity holders in the
year:
2010 2009
GBP000 GBP000
Second interim dividend for the year ended
31 December
2009 (8.75p) paid 26 March 2010 (2009:
8.50p) 5,061 2,855
Scrip dividend in lieu of second interim
cash dividend 316 284
First interim dividend for the year ended 31 December
2010 (8.75p) paid 29 October 2010 (2009:
8.50p) 4,764 2,707
Scrip dividend in lieu of first interim
cash dividend 711 -
10,852 5,846
Per share 17.5p 17.0p
8. Investment properties, investment properties under
construction
Investment Investment Investment
properties properties properties under
freehold long leasehold construction Total
GBP000 GBP000 GBP000 GBP000
As at 1 January
2010 (1) 280,739 57,655 3,496 341,890
Property
additions 517 262 20,442 21,221
Acquired
investment
property 3,641 - - 3,641
Anchor Meadow
Limited 5,498 - - 5,498
Sinclair
Montrose
Properties
Limited 22,073 1,792 - 23,865
Abstract
Integrated
Healthcare
Limited 1,770 3,086 - 4,856
Charter
Medinvest
Limited 6,787 - - 6,787
Health
Investment
Limited 22,924 15,818 - 38,742
Transfer from
properties in
the course of
development 14,313 2,989 (17,302) -
Revaluations for
the year 24,961 (2,742) 571 22,790
As at 31
December 2010 383,223 78,860 7,207 469,290
As at 1 January
2009 271,880 42,479 2,503 316,862
Additions 205 112 23,096 23,413
Transfer from
properties in
the course of
development 21,138 - (21,138) -
Revaluation for
the year 1,197 1,383 (965) 1,615
As at 31
December 2009 294,420 43,974 3,496 341,890
(1) The split between freehold and long leasehold properties has
been reclassified. This reclassification has no impact on the gross
asset value.
The historical cost of properties held by the Group, including
properties in the course of development, was GBP393.7million (2009:
GBP284.7million).
Head lease outgoings on long leasehold assets total less than
GBP32,000 in the current year.
Properties have been independently valued at fair value by
Lambert Smith Hampton ("LSH"), Chartered Surveyors and Valuers, as
at the balance sheet date in accordance with IAS 40: Investment
Property. LSH confirm that they have valued the properties in
accordance with the Practice Statements in the RICS Appraisal and
Valuation Standards ("Red Book"). The Valuers are appropriately
qualified and have sufficient market knowledge and relevant
experience of the location and category of investment property and
have had full regard to market evidence when determining the
values.
The properties are fully let. The valuations reflected a 5.8%
initial yield (2009: 6.0%) and a 6.0% (2009: 6.24%) true equivalent
yield. Where properties are within three months of their reviews,
an estimate is made of the likely rent on review in line with
market expectations and the knowledge of the valuer.
In addition to the market value exercise performed by LSH, the
Joint Managers monitor the value of the Group's investment
portfolio based on DCF analysis and with alternative discount
rates. Full details can be found in the Operating and Financial
Review.
In accordance with IAS 40, investment properties under
construction have also been valued at fair value by LSH. In
determining the fair value, the valuer is required to consider the
significant risks which are relevant to the development process
including, but not limited to, construction and letting risks. In
the case of the Group's portfolio under construction, where the
sites are pre-let and construction risk remains with the
builder/developer, the valuers have used the special assumptions
that, as at the valuation date, the developments have been
completed satisfactorily, the agreements of leases have been
completed and the rents and other tenants lease obligations have
commenced. A fair value increase of GBP571,000 (2009: decrease of
GBP965,000) in respect of investment property under construction
has been recognised in the Group Statement of Comprehensive
Income.
In line with Accounting Policies, the Group has treated the
corporate acquisitions during the year as asset purchases rather
than business combinations as they were judged to be acquisitions
of properties rather than businesses.
9. Current asset investment
2010 2009
GBP000 GBP000
As at beginning of period - -
Additions at cost 476 -
Unrealised gain recognised directly in 79 -
equity
555 -
The current asset investment acquired during the year at a cost
of GBP476,000 represents 1,970,500 ordinary shares in AH Medical
Properties PLC ("AHMP") and is held as an Available For Sale
("AFS") asset in accordance with IAS 39 and has been valued at the
quoted price on 31 December 2010 of 28p per share. The unrealised
gain on the investment is recognised directly in equity and through
the Group Statement of Comprehensive Income. On 19 January 2011, an
offer was made by Assura Group Limited for the entire share capital
of AHMP.
10. Term loans
At 31 December 2010, total facilities of GBP321.5million
including the GBP10million overdraft facility (2009:
GBP265.0million) were available. Of these facilities, as at 31
December 2010, GBP268.3million was drawn (2009: GBP167.3million)
and secured by an unlimited guarantee from each subsidiary and a
first fixed charge over the ownership of each property. Interest is
payable on the loans at a fixed percentage rate above LIBOR and
interest payable has fluctuated in the period between 1.4% and 1.5%
(2009: 3.2% and 1.2%), including lenders' margins and costs
(excluding margins and costs 0.6% and 0.8% (2009: 2.5% and 0.5%)).
However, the Group has entered into interest rate swaps to manage
its exposure to interest rate fluctuations.
Interest on floating rate loans is payable over three months
using underlying reference rates (e.g. LIBOR plus margin plus
costs). The fixed rate margin above LIBOR is 0.76% (including
lenders' costs of 0.06%).
The table below indicates amounts drawn and undrawn from each
individual facility:
Facility Amounts drawn Undrawn
2010 2009 2010 2009 2010 2009
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Current
364 day revolving
(1) 10,000 10,000 - - 10,000 10,000
Term to May 2011
(4) 3,350 - 3,000 - 350 -
Non-current
Term to January
2013 (1) 140,000 140,000 134,300 116,500 5,700 23,500
Term to January
2013 (2) 50,000 50,000 37,900 - 12,100 50,000
Term to January
2013 (3) 65,000 65,000 65,000 50,800 - 14,200
Fixed term loan (5) 28,140 - 28,140 - - -
Term to December
2020 (6) 25,000 - - - 25,000 -
321,490 265,000 268,340 167,300 53,150 97,700
Provider:
(1) The Royal Bank of Scotland plc
(2) Allied Irish Banks, p.l.c.
(3) Abbey National Treasury Services plc (branded Santander from
January 2010)
(4) Natwest Bank plc (acquired as part of Abstract
acquisition)
(5) Aviva facility (acquired as part of HI acquisition)
repayable in tranches to 31 January 2032
(6) Aviva facility (new facility)
Since the term loan facilities have been in existence, the Group
has suffered costs in association with the arrangement of the
facilities including legal advice and loan arrangement fees. These
costs are amortised over the remaining life of the related
facility.
Any amounts unamortised as at the period end are offset against
amounts drawn on the facilities as shown in the table below:
2010 2009
GBP000 GBP000
Term loans drawn: due within one year
Term loans drawn: due after more than one 3,000 -
year 265,340 167,300
Less: Unamortised borrowing costs (895) (1,161)
Term loans per Group Balance Sheet 267,445 166,139
11. Net asset value per share
Net asset values have been calculated as follows:
2010 2009
GBP000 GBP000
Net assets per Group Balance Sheet 164,746 151,915
Derivative interest rate swaps (net liability) 30,865 20,144
Basis rate swaps - (63)
EPRA NAV 195,611 171,996
Number of Number of
shares shares
Ordinary Shares:
Issued share capital 62,802,333 61,457,298
Net asset value per Share 262.3p 247.2p
EPRA NAV per Share 311.5p 279.9p
EPRA NAV is calculated as Balance Sheet net assets including the
valuation result on trading properties but excluding fair value
adjustments for debt and related derivatives.
12. Related party transactions
The Joint Managers of the Group, NPM and JOHCML, receive a
management fee, calculated at a combined 1% of the first
GBP50million of the property assets of the Group and 0.75%
thereafter, subject to a minimum of GBP120,000 per annum, the first
GBP100,000 of which is paid to NPM. NPM also receives a property
management fee and a fee for the preparation of the tax provisions,
both based on a reimbursement of the costs of services of NPM
employees engaged directly on the Group's activities, totalling
GBP158,000 (2009: GBP135,000).
The Joint Managers are entitled to a Performance Incentive Fee
of 15% of any performance in excess of an 8% per annum increase in
the Company's "Total Return" as derived from the audited financial
statements for the respective financial period. The Total Return is
determined by comparing the variation in the stated net asset value
per share (on a fully diluted basis, adjusting for deferred tax and
the REIT conversion charge and adding back gross dividends paid in
such period) against the fully diluted net asset value per share
from the previous period's audited accounts. No performance
incentive fee was payable in respect of 2010 (2009: Nil).
As announced on 22 February 2011, changes have been made to the
Management Agreement, further details of which can be found in that
announcement.
13. Subsequent events
The Group holds 1,970,500 ordinary shares in AHMP as a current
asset investment (note 9) at its year end quoted value of 28 pence
per share. On 19 January 2011, an offer was made by Assura Group
Limited for the entire share capital of AHMP. The Group has elected
to take the cash alternative of this offer of 40 pence per share
and the cash should be received by 4 March 2011.
On 21 February 2011, the Group announced it had entered into a
purchase and funding agreement for a new medical centre in Newark,
Nottinghamshire, for approximately GBP4.2million (excluding
associated costs).
14. Annual report
The financial information set out above does not constitute the
Group's statutory accounts fot the years ended 31 December 2010 or
2009 but is derived from those accounts. Statutory accounts for
2009 have been delivered to the Registrar of Companies and those
for 2010 will be delivered in due course. The Auditor has reported
on those accounts; their reports were (i) unqualified, (ii) did not
include a reference to any matters to which the Auditor drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498(2) or (3) of
the Companies Act 2006.
Full financial statements for the year ended 31 December 2010
will be published on the Group's website at www.phpgroup.co.uk and
will be posted to Shareholders on 4 March 2011.
Copies of this announcement are available from the Company
Secretary of Primary Health Properties PLC, Ground Floor, Ryder
Court, 14 Ryder Street, London SW1Y 6QB.
Directors' responsibility statement under the Disclosure and
Transparency Rules
The Directors confirm that, to the best of their knowledge and
belief:
1) the financial statements, prepared in accordance with IFRSs
as adopted by the European Union, give a true and fair view of the
assets, liabilities, financial position and profit of the Company
and the undertakings included in the consolidation as a whole;
2) the management reports (which are incorporated into the
Directors' Report) contained in the Annual Report include a fair
review of the development and performance of the business and the
position of the Company and the undertakings included in the
consolidation as a whole, together with a description of the
principal risks and uncertainties faced.
For and on behalf of the Board
Graeme Elliot
Chairman
23 February 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
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