Interim Management Statement

RNS Number : 6475W

Primary Health Properties PLC

11 November 2014

 



PRIMARY HEALTH PROPERTIES PLC

A specialist REIT providing Primary Care accommodation to the NHS

Interim Management Statement

Primary Health Properties PLC ("PHP", the "Group" or the "Company") the UK's leading investor in modern primary healthcare facilities, issues its Interim Management Statement for the period from 1 July 2014 to 10 November 2014.

Highlights

Property portfolio

·    Acquired three modern medical centres for a total of £15 million; two standing investments and one under construction, average unexpired lease term of 25 years

·    Contracted to fund development of and acquire a new medical centre in Clipstone, Nottinghamshire for a total of £3.66 million, to be let on completion to a GP practice and pharmacy operator for a 25 year term

·    Portfolio now comprises 267 assets, 262 complete and five on site under construction with a total value of £1.02 billion

·    Total rent roll (including development assets) - £60.5 million, average unexpired lease term of 16 years

·    Occupancy 99.7%

·    Rental growth continues - average annualised increase on reviews completed in the nine months to 30 September 2014 of 1.9% (2013 full year - 2%)

·    Strong pipeline of further medical centre properties in solicitors' hands or with terms agreed with vendors

Funding

·    Completed refinance of debt assumed with acquisition of PPP in December 2013.  £113 million of individual loans consolidated into two tranches of 10 to 15 years, with fixed interest rate of 4.91%

·    Refinance of major lending facilities with high street banks:

o  extended term of £235 million of existing facilities and securing additional £30 million headroom with an average additional 2 years added to maturity, and

o  lending margins reduced by an average of 55 basis points, effective 21 August 2014

·    Facilities available to the group total £786.4 million, headroom of £127.7 million after development commitments, LTV 64% (based on 30 June 2014 valuation)

Dividend

·    Payment of an interim dividend of 9.75 pence per share on 7 November 2014, making a total of 19.5 pence for 2014

Harry Hyman, Managing Director, commented:

"We have continued to shape our pipeline and add high quality assets to the portfolio.  We have successfully negotiated a number of asset management projects, committing capital to re-invest in our assets, adding to valuation growth by generating rental increases and extending underlying lease terms.

The first six months of the year saw substantial progress toward achieving our strategic priority of a return to full dividend cover, with cover rising to 76% for that period. The continued portfolio expansion, rental growth and cost savings on both debt and management costs that will be evident in the second half of the year, will ensure that dividend cover improves further in the remainder of 2014 and into 2015.

The outlook for the sector remains strong.  NHS England recently released its "Five Year Forward Review", which further underlined the importance of primary care.  Increasingly care provision will become more integrated as preventative action and social care services move closer to primary care.  These services are already being delivered from a number of properties within PHP's portfolio and PHP is well placed to provide additional modern premises to allow further integration to occur."

11 November 2014

For further information contact

Harry Hyman/Phil Holland
Primary Health Properties PLC
T:  [phone]
[e-mail]/[e-mail]

David Rydell/Victoria Geoghegan/Elizabeth Snow
Pelham Bell Pottinger
T: [phone]

This interim management statement may contain forward-looking statements. By their nature forward-looking statements involve risk and uncertainty because they relate to future events and circumstances.

These statements reflect the knowledge and information at the time of the release of this interim management statement. Nothing in this Interim Management Statement should be construed as a profit forecast or estimate.

Apart from the information contained in this Interim Management statement there have been no material events or transactions affecting the Group during the period.

 

END

 

 

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