Final Results

Primary Health Properties PLC 19 September 2001 Primary Health Properties PLC 18 September 2001 PRIMARY HEALTH PROPERTIES PLC Modern accommodation for the Provision of Primary Health Care Services Preliminary Results for the year ended 30 June 2001 Group Financial Highlights *Dividend increased 14.3% to 8.0p (2000: 7.0p) *NAV increased 17.6% to 152.5p (2000: 129.7p) *Portfolio increased to £63.5m (2000: £51.8m) *Total return per share increased to 30.8p (2000: 19.3p) Harry Hyman, Managing Director Enquiries: Primary Health Properties PLC Harry Hyman Managing Director Tel: 01483 306912 Mobile: 0973 344768 Kate Power - Bell Pottinger Financial 020 7427 7200 Chairman's Statement I am pleased to report another year of significant progress for your Group. The total return per ordinary share rose from 19.3p to 30.8p. Group profit before taxation for the year ended 30 June 2001 totalled £1,582,000 (2000: £ 1,240,000), an increase of 27.6%. The Board has recommended a final dividend of 4.25p per share which, with the interim dividend, makes a total of 8.0p per share for the year, an increase of 14.3 % over the total dividend of 7.0p per share paid in respect of the previous year. The year end valuation carried out on behalf of the Board by Lambert Smith Hampton has resulted in a revaluation surplus for the year of £3,415,000. The net asset value per share has risen from 129.7p to 152.5p, an increase of 17.6%. During the year the Group has successfully concluded the restructuring of its lease investment at Baldock and completed a review of rent at one of the properties purchased in London last year. These contributed significantly to the revaluation surplus. Other rent reviews completed during the period were satisfactory in terms of the Group's expectation of achieving annual increases in rent of between 2.5% and 3.0%. During the year the Group saw its portfolio of investment properties, finance leases and properties in the course of development increase to £63.5 million including revaluation surpluses. In addition the Group had further outstanding contractual commitments to purchase £9.2 million of property at the balance sheet date. At the year end the Group's rent roll had increased from £4,261,000 to £ 5,014,000, an increase of 17.7% In order to finance the continuing expansion of our portfolio the Group continued to draw down on its existing long term bank lines. At the year end total debt including the convertible loan stock stood at £37.4 million. We continued to monitor our interest rate exposure carefully and during the year hedged out a further £10.0 million of liabilities at an average rate of 5.6325%. Of the £37.4 million of borrowings, £27.0 million (72 %) is at fixed rates. Although no shares were repurchased during the period the Board wishes to retain the option to effect repurchases and accordingly a resolution enabling the Group to do this is included in the Notice for this year's Annual General Meeting. As the Group's portfolio matures we are seeing the benefit of a diversified portfolio. With our established track record and large database of potential deals we are on track to increase the Group's portfolio to £100 million at which point a form of relatively cheaper non-recourse financing should become available. 99% of our current rent roll is derived directly or indirectly from the NHS and Pharmacy operators. Notwithstanding the events of the recent week, given our existing portfolio and our pipeline of future transactions, we remain confident in our ability to continue to deliver attractive shareholder returns. G A Elliot Chairman 18 September 2001 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 30 June 2001 30 June 30 June 2001 2000 £'000 £'000 Turnover 4,626 3,691 Administrative expenses (972) (903) Operating profit 3,654 2,788 Interest receivable 115 85 Interest payable (2,187) (1,633) Profit on ordinary activities before taxation 1,582 1,240 Corporation tax (158) (124) Profit on ordinary activities after taxation 1,424 1,116 Interim dividend of 3.75p per share (2000: 3.4p) (589) (534) Final dividend proposed of 4.25p (2000: 3.6p) (667) (565) Profit retained for the year 168 17 Net profit after tax and dividends for the year retained by: The Company 140 9 Subsidiary undertakings (after declaring dividends 28 8 of £4,405,000) 168 17 Earnings per share - basic 9.1p 7.1p diluted 8.7p 7.0p Dividends per share (net) 8.0p 7.0p Increase in net asset value 22.8p 12.3p Total return per share 30.8p 19.3p All activities are continuing. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the year ended 30 June 2001 30 June 2001 30 June 2000 £'000 £'000 Profit for the financial year 1,424 1,116 Unrealised surplus on revaluation of properties 3,415 1,912 Total gains relating to the year 4,839 3,028 CONSOLIDATED BALANCE SHEET as at 30 June 2001 At 30 At 30 June June 2000 2001 £'000 £'000 Fixed Assets Tangible assets 61,028 49,318 Investments: development loans 31 10 61,059 49,328 Current assets Debtors 539 568 Net investment in finance leases: amounts falling due in 2,490 2,498 more than one year (due within one year: 2001:£265,000; 2000:£259,000) Cash at bank 338 389 3,367 3,455 Creditors: amounts falling due within one year (3,105) (2,920) Net current assets 262 535 Total assets less current liabilities 61,321 49,863 Creditors: amounts falling due after more than one year Term loan (33,375) (25,500) Convertible loan stock 2016 (4,000) (4,000) (37,375) (29,500) 23,946 20,363 Capital and reserves Called up share capital 7,850 7,850 Share premium account 5,810 5,810 Capital reserve 1,618 1,618 Revaluation reserve 8,287 4,872 Revenue reserve 381 213 Equity shareholders' funds 23,946 20,363 Net asset value per share 152.52p 129.70p CONSOLIDATED CASH FLOW STATEMENT for the year ended 30 June 2001 30 June 2001 30 June 2000 £'000 £'000 Net cash inflow from operating activities 3,828 3,037 Returns on investments and servicing of finance Interest received 43 27 Interest paid (1,845) (1,545) (1,802) (1,518) Taxation UK corporation tax paid (9) (9) Capital expenditure and financial investment Payments to acquire tangible fixed assets (8,789) (10,254) Equity dividends paid (1,154) (1,068) Net cash outflow before financing (7,926) (9,812) Financing Term bank loan 2008 7,875 10,000 (Decrease)/increase in cash (51) 188 Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash in the period (51) 188 Cash inflow from loans (7,875) (10,000) Movement in net debt in period (7,926) (9,812) Net debt at 1 July (29,111) (19,299) Net debt at 30 June (37,037) (29,111) NOTES: The above results for the year to 30 June 2001 are audited. 1. Earnings per share The calculation of earnings per share is based on the following: As at 30 June 2001 As at 30 June 2000 Net profit Net profit attributable attributable to ordinary shareholders Ordinary to ordinary Ordinary shares shareholders shares £'000 number £'000 number Basic 1,424 15,700,000 * 1,116 15,700,000 * earnings per share Option - 395,951 - 182,140 conversion** Convertible 279 3,478,261 - - Loan stock conversion*** Diluted 1,703 19,574,212 1,116 15,882,140 earnings per share * Weighted average number of Ordinary shares in issue during the year. **Excess of the total number of potential shares on option exercise over the number that could be issued at fair value as calculated in accordance with Financial Reporting Standard No. 14: Earnings per share. *** Excess of the total number of potential shares on conversion of the loan stock over the number that could be issued at fair value as calculated in accordance with Financial Reporting Standard No. 14: Earnings per share. 2. Notes to the statement of cash flow Reconciliation of operating profit to net cash inflow from operating activities 2001 2000 £'000 £'000 Operating profit 3,654 2,788 Increase/(decrease) in operating debtors and prepayments 28 (101) Increase in operating creditors and accruals 146 350 Net cash inflow from operating activities 3,828 3,037 3. At the Annual General Meeting, a resolution to declare a final dividend of 4.25p per share will be put to the members and will be paid on 30 November 2001 to holders registered at close of business on 2 November 2001. 4. The statutory accounts for the year ended 30 June 2001 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to Registrar of Companies following the Company's Annual General Meeting. Copies will be sent to shareholders shortly and will also be available on request from the Company Secretary, J O Hambro Capital Management Limited, Ground Floor, Ryder Court, 14 Ryder Street, London, SW1Y 6QB. The Annual General Meeting is to be held on 22 November 2001 at 2.30pm at Ground Floor, Ryder Court, 14 Ryder Street, London, SW1Y 6QB. 5. The financial information set out above does not constitute the Company's statutory financial statements for the years ended 30 June 2001 or 2000 (but is derived from and has been prepared on the same basis, as those financial statements). Statutory financial statements for 2000 have been delivered to the Registrar of Companies, and those for 2001 will be delivered following the Company's Annual General Meeting. The auditors have reported on those financial statements; their reports were unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985.

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