Primary Health Properties PLC Portfolio Update (3038B)

TIDMPHP

RNS Number : 3038B

Primary Health Properties PLC

06 June 2019

6 June 2019

Primary Health Properties PLC

Portfolio Update

Primary Health Properties PLC ("PHP"), one of the UK's leading investors in modern primary healthcare facilities, publishes an update on the property portfolio and net debt as at 31 March 2019 following the completion of the successful all share merger with MedicX Fund Limited ("MedicX") on 14 March 2019.

Property portfolio

The portfolio now comprises 484 properties with a gross book value of over GBP2.3 billion (31 December 2018: GBP1.5 billion) and a contracted annualised rent roll in excess of GBP125 million (31 December 2018: GBP79.6 million). The portfolio includes 15 properties in Ireland including developments at Bray, Athy, Rialto and Mullingar representing 6% of the total portfolio (31 December 2018: 6%).

The portfolio's average lot size has remained constant at GBP4.8 million (31 December 2018: GBP4.8 million).

 
                                Number        Book value             Average lot 
                             of properties    GBP million      %      size (GBP 
                                                                       million) 
-------------------------  ---------------  -------------  -------  ------------ 
 >GBP10m                          42             585        25.3%       13.9 
 GBP5m - GBP10m                  107             746        32.2%        7.0 
 GBP3m - GBP5m                   159             609        26.3%        3.8 
 GBP1m - GBP3m                   169             370        16.0%        2.2 
 < GBP1m (including land 
  GBP2.7million)                  7               6          0.2%        0.5 
-------------------------  ---------------  -------------  -------  ------------ 
 Total                           484            2,316       100.0%       4.8 
-------------------------  ---------------  -------------  -------  ------------

The geographical analysis of the portfolio by book value is as follows:

 
 Midlands and East Anglia    23% 
 North East                  16% 
 South East                  14% 
 North West                  13% 
 Scotland                     8% 
 Wales                        8% 
 London                       7% 
 Ireland                      6% 
 South West                   5% 
--------------------------  ----- 
 Total                       100% 
--------------------------  -----

The security and longevity of our income are important drivers of our secure, long-term, predictable income stream and enable our progressive dividend policy. 90% (31 December 2018: 91%) of the rent roll is funded directly or indirectly by the NHS in the UK and HSE or government funded bodies in Ireland. The portfolio also benefits from an occupancy rate of 99.5% (31 December 2018: 99.8%).

68.1% of the rents are reviewed on an open market basis, typically every three years and are impacted by land and construction inflation. The balance of the portfolio has either RPI (25.2%) or fixed uplifts (6.7%) which provide an element of certainty to future rental growth within the portfolio.

The portfolio's weighted average lease length at 31 March 2019 was 13.4 years (31 December 2018: 13.1 years) and only 1.6% of our income expires over the next three years and 68.8% expires in over 10 years. The table below sets out the lease expiry profile of our income.

 
 < 3 years       1.6% 
 4-5 years       5.3% 
 5-10 years     24.3% 
 10-15 years    35.2% 
 15-20 years    19.7% 
 > 20 years     13.9% 
-------------  ------- 
 Total          100.0% 
-------------  -------

Net debt

As at 31 March 2019 the enlarged group's net debt stood at GBP1,115 million (31 December 2018: GBP673 million) with a loan to value ratio of 48.1% (31 December 2018: 44.8%) and an average cost of debt of 4.0% (31 December 2018: 3.9%). The weighted average debt maturity was 7.2 years (31 December 2018: 5.4 years).

Harry Hyman, Managing Director of PHP, commented:

"We are delighted to have successfully completed the merger with MedicX bringing together two highly complementary portfolios and teams in the UK and Ireland and the combined business represents a stronger platform for the future. This transformational deal has created significant value for shareholders of the enlarged group and we continue to work assiduously to deliver the significant operating and financial savings outlined when the merger was announced earlier this year."

More information on Primary Health Properties PLC can be found on www.phpgroup.co.uk

Further details:

 
 Harry Hyman 
  Managing Director 
  Tel: +44 (0) 20 7451 7050 
 Richard Howell 
  Finance Director 
  Tel: +44 (0) 20 7104 5599 
 David Rydell / Steph Watson (Buchanan 
  Communications) 
  Tel: +44 (0) 20 7466 5066

Legal Entity Identifier: 213800Y5CJHXOATK7X11

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June 06, 2019 02:01 ET (06:01 GMT)

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