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Results For The Year Ended 31 December 2023
Primary Health Properties PLC
(Incorporated in the United Kingdom)
Company Number: 3033634
LSE Share Code: PHP
JSE Share Code PHP
ISIN Code: GB00BYRJ5J14
LEI: 213800Y5CJHXOATK7X11
("PHP" or the "Company")
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2023
1. SALIENT FEATURES
• Net rental income increased by 5.5% to £149.3 million (December 2022: £141.5 million)
• Adjusted earnings per share (see note 1) increased by 3.0% to 6.8 pence
(December 2022: 6.6 pence)
• Headline earnings per share ("HEPS") (see note 2) decreased by 32.6% to 6.0 pence
(December 2022: 8.9 pence)
• Earnings per share ("EPS") decreased by 52.4% to 2.0 pence
(December 2022: 4.2 pence)
• Dividend per share increased by 3.1% to 6.7 pence (December 2022: 6.5 pence) and remains
fully covered by adjusted earnings at 101%
• Net tangible assets per share decreased by 4.0% to 106.5 pence
(December 2022: 110.9 pence)
• Investment property portfolio valuation of £2.78 billion (December 2022: £2.80 billion)
• Net initial yield of 5.05% (December 2022: 4.82%)
• Weighted average unexpired lease term of 10.2 years (December 2022: 11.0 years)
• Occupancy of 99.3% (December 2022: 99.7%)
• Rent-roll funded by government bodies of 89% (December 2022: 89%)
• Average cost of debt of 3.3% (December 2022: 3.2%)
• Loan to value ratio of 47.0% (December 2022: 45.1%)
• Weighted average debt maturity (drawn facilities) of 6.6 years
(December 2022: 7.3 years)
• Total undrawn loan facilities and cash of £321.2 million (December 2022: £325.9 million)
Notes:
1. "Adjusted earnings, which is a tax adjusted measure of revenue profit, is the basis for the
calculation of adjusted earnings per share. PHP believes adjusted earnings and adjusted
earnings per share provide further insight into the results of the Company's operational
performance to stakeholders as they focus on the net rental income performance of the
business and exclude capital and other items which can vary significantly from year-to-year";
and
2. The main difference between HEPS and EPS are due to non-cashflow losses arising on the
valuation of the Company's property portfolio. EPS were further impacted by non-cashflow
losses arising from convertible bond and interest rate derivates.
2. OUTLOOK
"Growth in the immediate future will continue to be focused on increasing income from our existing
portfolio and we are encouraged by the firmer tone of rental growth experienced in 2022 and 2023. We
believe the favourable dynamics of inflation over the last two years and increased build costs combined
with a demand for new primary care facilities and the need to modernise the estate will continue to
increase future rental settlements.
We are currently on site with just one development which is due to complete towards the end of Q3
2024 and consequently have very limited exposure to higher construction cost pressures and supply
chain delays. In our immediate pipeline we have just one development and 23 asset management
projects with a total expected cost of £22.6 million and will continue to evaluate these, together with a
wider medium-term pipeline at various stages of progress and seek to negotiate rents with the National
Health Service at the level required to deliver an acceptable return.
In the current environment, Ireland continues to be the Group's preferred area of future investment
activity and we have ambitions to continue to grow the portfolio there to around 15% of the total (31
December 2023: 9%). The acquisition of Axis, in January 2023, gives the Group a permanent presence
in Ireland, an important strategic move as we seek out new investment, development and asset
management opportunities and try to strengthen our relationship with the Health and Safety Executive
as the leading provider of modern primary care infrastructure in the country.
With an improving rental growth outlook, a strong control on costs resulting in one of the lowest EPRA
cost ratios in the sector and the vast majority of PHP's debt either fixed or hedged for a weighted
average period of just under seven years, we look forward to 2024 with confidence."
Harry Hyman, Chief Executive, commented:
"We are encouraged by the organic rental growth achieved in 2023, resulting in another record year
with an additional £4.3 million generated from our rent review and asset management activities. The
strong rental growth in the year has been reflected in the positive overall property return, significantly
ahead of the wider property market.
"Furthermore, with over 97% of PHP's debt either fixed or hedged, a strong control on costs, significant
liquidity headroom and just one development on site we have limited exposure to further cost increases
and development risk.
"The high quality of PHP's portfolio reflects the security and longevity of our income with 89%
government funded, near full occupancy and continued rental growth which are key drivers of our
predictable cash-flows and underpin our progressive dividend policy with 28 years of continued
growth. With a market leading portfolio across the UK, and increasingly in Ireland, we are well
positioned for long-term success."
3. SHORT FORM ANNOUNCEMENT
The short form announcement is the responsibility of the directors of the Company. It contains only a
summary of the information in the full announcement ("Full Announcement") and does not contain full
or complete details. The Full Announcement can be found at:
https://senspdf.jse.co.za/documents/2024/JSE/ISSE/PHPE/Final23.pdf
A copy of the Full Announcement is also available for viewing on the Company's website at
https://www.phpgroup.co.uk/investors/results-reports-and-presentations/.
Any investment decisions by investors and/or shareholders should be based on consideration of the
Full Announcement, as a whole.
These annual results have been audited by the Company's auditors, Deloitte LLP, who expressed an
unmodified audit opinion thereon.
4. WEBCAST DETAILS
The presentation will be accessible via live video webcast and a live conference call facility:
Webcast: https://stream.brrmedia.co.uk/broadcast/659e72fc277c2248ee137e83
Time: 10.30am (GMT) / 12.30pm (SAST)
Telephone: UK-wide: +44 (0) 33 0551 0200
Telephone: South Africa toll free: 0 800 980 512
Password: Quote "PHP full year results" when prompted
If you would like to register your interest in attending the meeting, please contact Buchanan
at php@buchanan.uk.com.
A recording of the webcast will be made available from c.12.00pm (GMT) / 14.00pm (SAST) on
28 February 2024 on the PHP website, https://www.phpgroup.co.uk/.
The Company has a primary listing on the London Stock Exchange and a secondary listing on the
JSE Limited.
United Kingdom
28 February 2024
Sponsor: PSG Capital
Date: 28-02-2024 09:00:00
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