Primary Health Properties PLC Revised Advisory Services Terms (6279Y)
28 1월 2014 - 4:00PM
UK Regulatory
TIDMPHP
RNS Number : 6279Y
Primary Health Properties PLC
28 January 2014
Primary Health Properties PLC ("PHP" or the "Company")
Revised advisory services terms
The Board of PHP is pleased to announce a revision to the
structure for advisory fees paid for the management of its property
portfolio with effect from 30 April 2014.
These changes are in addition to those announced on 25 September
2013 whereby Nexus Tradeco Limited ("Nexus") will become the sole
advisor to the Company from 30 April 2014, taking on responsibility
for those non-property services previously provided by J O Hambro
Capital Management Limited. As advised on 25 September 2013, for
these additional services, Nexus will receive a fixed annual fee
which may be increased or decreased by up to 5% subject to
movements in the Retail Price Index (or such other appropriate
independent index agreed by Nexus and the Company) (the
"Administrative Services fee"). This is unchanged by the following
amendments.
Nexus has delivered advisory services to the Company for over 17
years under the terms of an advisory agreement and during this time
has generated significant annual returns for shareholders.
Following significant transactional activity in 2013, PHP's
property portfolio comprises over 260 primary healthcare facilities
in the UK, both completed and committed, which are primarily let to
GP surgeries, NHS bodies and pharmacy operators.
The gross assets of the Company have grown substantially,
totalling approximately GBP933m on 3 December 2013 following
completion of the acquisition of Prime Public Partnerships
(Holdings) Limited. Accordingly, the Company and Nexus have deemed
it appropriate to vary the terms of the advisory agreement in order
to further reduce the incremental cost of advisory services and
provide long term visibility regarding the fee structure as the
assets under management continue to grow.
Summary of the changes to the advisory agreement
The current fee arrangement for property advisory services (the
"Property Services Fee"), based on gross asset values is as
follows:
Gross Assets Total Fee
---------------------------- ----------
First GBP50 million 0.5500%
Between GBP50 million and
GBP350 million 0.4125%
Between GBP350 million and
GBP450 million 0.4875%
Between GBP450 million and
GBP500 million 0.5625%
Between GBP500 million and
GBP750 million 0.4500%
Above GBP750 million 0.3750%
---------------------------- ----------
The revised terms of the advisory agreement will establish
reduced incremental Property Services Fees payable to Nexus as
gross assets increase firstly above GBP1 billion and then further
when above GBP1.25 billion. The amended property advisory fee
structure will continue to be calculated with reference to the
gross asset value of the Company and is detailed below:
Gross Assets Total Fee
---------------------------- ----------
First GBP250 million 0.5000%
Between GBP250 million and
GBP500 million 0.4750%
Between GBP500 million and
GBP750 million 0.4000%
Between GBP750 million and
GBP1 billion 0.3750%
Between GBP1 billion and
GBP1.25 billion 0.3250%
Above GBP1.25 billion 0.3000%
---------------------------- ----------
The illustrative impact of the change to the Property Services
Fee structure and associated savings are detailed below:
Assets under Management Old Fee* New Fee* Saving /
(Cost)
(GBP Million) (GBP Million) (GBP Million) (GBP Million)
------------------------ ---------------- ---------------- ----------------
GBP1,000 GBP4.344 GBP4.375 GBP(0.031)
------------------------ ---------------- ---------------- ----------------
GBP1,062 GBP4.578 GBP4.578 GBPnil
------------------------ ---------------- ---------------- ----------------
GBP1,125 GBP4.813 GBP4.781 GBP0.031
------------------------ ---------------- ---------------- ----------------
GBP1,250 GBP5.281 GBP5.188 GBP0.094
------------------------ ---------------- ---------------- ----------------
GBP1,375 GBP5.750 GBP5.563 GBP0.188
------------------------ ---------------- ---------------- ----------------
GBP1,500 GBP6.219 GBP5.938 GBP0.281
------------------------ ---------------- ---------------- ----------------
*Both Old and New illustrative fees shown reflect Property
Services Fees only, i.e. the Administrative Services fee (the terms
of which are unchanged under the revised agreement) is
excluded.
As PHP continues to deliver its strategy of growing the property
portfolio, all the financial benefits arising from the changes to
the charging structure based on gross assets will accrue only to
the Company and therefore its shareholders. The changes detailed
above will come into effect on 30 April 2014.
The agreement remains terminable by the Company by not less than
two years' written notice with the ability to terminate and make
payment to Nexus in lieu of notice.
Graeme Elliot, Chairman said: "These amended fee arrangements
reflect the strong portfolio growth achieved in recent years. The
Board firmly believes shareholders should continue to benefit from
the scale-ability of the PHP platform and we are pleased to
announce the outcome of negotiations with Nexus, who have
recognised the importance of maximising value for shareholders.
Lowering the cost associated with managing further assets that the
Company will acquire contributes to the Board achieving its
priority of returning the Company to a fully covered dividend."
Further details:
Primary Health Properties PLC
Harry Hyman - Managing Director
Tel: 020 7451 7050
Pelham Bell Pottinger
David Rydell/ Victoria Geoghegan
Tel: 020 7861 3925
This information is provided by RNS
The company news service from the London Stock Exchange
END
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