Primary Health Properties PLC (PHP) has posted its audited preliminary results for the year ended 31st December 2024, continuing to deliver on its 28-year track record of continuous dividend growth by declaring a total of 6.9 pence per share, a 3% increase over 2023’s dividend of 6.7 pence per share.
The Company’s total value of dividends distributed during the year increased by 2.9% to £92.1 million (2023: £89.5 million), fully covered by adjusted earnings.
Mark Davies, who was appointed as PHP’s CEO in 2024 says he is pleased to report a solid set of results that are slightly ahead of market consensus. “I am very pleased to report such a positive financial performance, particularly in the second half of the year with good momentum in rental and earnings growth.”
The Group’s adjusted earnings increased by £2.2 million (+2.4%) to £92.9 million during the year (2023: £90.7 million), primarily driven by organic rental growth from rent reviews and asset management initiatives, plus an increased profit generated by Axis PHP, its Irish property management business.
PHP maintained strong operational property metrics with a high occupancy rate of 99.1% with 89% of its rent securely funded directly or indirectly by the UK and Irish governments and a long weighted average unexpired lease term (WAULT) of 9.4 years.
“We continue to focus on driving rental growth from both rent reviews and asset management activities which generated a £4 million of annualised rental income during the year,” comments PHP non-executive Chair, Harry Hyman.
The value of its property portfolio remains broadly unchanged and currently sits at just under £2.8 billion across 516 assets including 21 assets in Ireland, with a total rent roll of £153.9 million. The Group says that it saw values start to stabilise during the second half of the year with yield expansion starting to moderate and the impact of rental growth outweighing yield shift and it expects this trend to continue in 2025.
“Now that valuations have stabilised, and look set to improve as rental growth accelerates, we are seeing more opportunities to acquire earnings accretive acquisitions and this was demonstrated by our acquisition in Ireland of the Laya Healthcare urgent care and diagnostic facility at a yield of 7.1%,” notes Davies.
PHP are currently on site with two developments with costs to complete of £2.5 million and consequently, very limited exposure to high-cost pressures and supply chain delays. In its immediate pipeline, the Group has one development and 13 asset management projects with a total expected cost of £6.7 million which it says it will continue to evaluate, together with a wider medium-term pipeline at various stages of progress and to look to negotiating rents with the NHS at levels required to deliver an acceptable return.
The Group’s balance sheet remains robust with liquidity headroom, with cash and collateralised undrawn loan facilities, after capital commitments, totalling £270.9 million. Its loan-to-value (LTV) ratio currently sits at 48.1%.
