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PRIMARY HEALTH PROPERTIES - Pre-Listing Announcement and Secondary Listing by way of Introduction of Primary Health Properties PLC on the JSE

Release Date: 17/10/2023 09:00
Code(s): PHP     PDF:  
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Pre-Listing Announcement and Secondary Listing by way of Introduction of Primary Health Properties PLC  on the JSE

Primary Health Properties PLC
(Incorporated in the United Kingdom)
Company Number: 3033634
LSE Share Code: PHP
JSE Share Code PHP
("PHP" or the "Company")



1.1     PHP is a United Kingdom based Real Estate Investment Trust ("REIT") and a leading investor
        in modern primary healthcare premises across the United Kingdom and Ireland.

1.2     The Company has a primary listing on the Premium Segment of the Official List on the London
        Stock Exchange Main Market ("LSE") and is included on the FTSE 250 Index. As at the date
        of this announcement, the current market capitalisation of the Company is approximately
        £1.22 billion. PHP's ordinary shares were admitted to trading on the LSE on 5 November
        1998. The LSE is considered to be an "accredited exchange" as defined in the Listings
        Requirements of the JSE. PHP is not listed on any other exchange.

1.3     The JSE has granted approval to PHP for a secondary listing, by way of the fast-track listing
        process, of all its issued ordinary shares being 1,336,493,786 ordinary shares with a nominal
        value of 12.5 pence each on the Main Board of the JSE in the "Health Care REIT" sector,
        under the abbreviated name "PHP", share code "PHP" and ISIN code GB00BYRJ5J14 with
        effect from the commencement of trading on Tuesday, 24 October 2023 ("Listing Date").


2.1     PHP invests in healthcare real estate let on long-term leases, backed by secure underlying
        covenants funded mostly by government bodies in the United Kingdom ("UK") and Ireland, in
        terms of which approximately 89% of the rental income is attributable, directly or indirectly, to
        such government bodies.

2.2     PHP aims to operate in a relatively low risk environment to generate progressive returns for
        shareholders through a combination of earnings growth and capital appreciation by
        investment in the primary healthcare real estate sector in the UK and Ireland, which is
        traditionally less cyclical than other real estate sectors.                                                                                                    

2.3     PHP's property portfolio comprises 514 properties let to National Health Service ("NHS")
        organisations in the UK, the Health Service Executive ("HSE") in Ireland, General Practitioner
        surgeries, pharmacies, dentists and other healthcare service providers.

2.4     PHP actively manages its portfolio with a focus on the organic income growth that can be
        generated from its existing portfolio. This growth arises mainly from rent reviews and asset
        management projects (extensions, refurbishments and lease regears) which provide an
        important opportunity to increase both income and capital value, extend lease terms and avoid
        obsolescence whilst ensuring that they continue to meet the communities' healthcare needs
        and improve the properties environmental credentials.

2.5     PHP also looks to selectively grow its property portfolio by funding and acquiring high quality
        developments, newly developed facilities and investing in already completed, let healthcare

2.6     PHP funds its activities with a mix of equity and debt, diversified across a number of lenders
        on both a secured and unsecured basis, in order to optimise risk-adjusted returns to

2.7     PHP's portfolio is managed by an experienced team within an efficient management structure,
        where operating costs are tightly controlled.

2.8     The Company has grown its dividend for 27 consecutive years.


3.1     The Company's property portfolio was valued at £2.783 billion at 30 June 2023 (31 December
        2022: £2.796 billion) across 514 assets (31 December 2022: 513 assets), including 20 in
        Ireland, with a contracted rent roll (annualised) of £147.4 million as at 30 June 2023 (31
        December 2022: £145.3 million).

3.2     The PHP portfolio currently comprises 514 facilities providing a wide range of integrated care
        services helping to realise the NHS target of 24/7 access to General Practitioner services and
        the HSE's expansion of primary care infrastructure. For a complete list of the Company's
        current property portfolio including geographical locations and further information, please visit


4.1     Growth in the immediate future will be focused on increasing income from PHP's existing real
        estate portfolio and PHP is encouraged by the increasingly firmer tone of rental growth seen
        in recent years. PHP believe the favourable dynamics of higher inflation 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.

4.2     As previously reported with PHP's interim results in July 2022, the deteriorating interest rate
        and economic outlook caused the Company to reconsider the acquisition pipeline and pause
        investment activity in the second half of the year of 2022 until the economic outlook became
        clearer. At this time, PHP expects further investment activity will be focused on Ireland,
        however, the Company will continue to monitor market conditions on an ongoing basis and
        re-evaluate the UK acquisition pipeline subject to prevailing market conditions but will only
        undertake such acquisitions, if accretive to earnings.

4.3     In the current environment, Ireland continues to be the Company's preferred area of future
        investment activity and PHP have ambitions to continue to grow the portfolio there to around
        15% of the total (31 December 2022: 8%). The acquisition of Axis Technical Services Limited,
        in January 2023, now gives the Company a permanent presence in Ireland, an important
        strategic move as PHP seeks out new investment, development and asset management
        opportunities and seeks to strengthen its relationship with the HSE as the leading provider of
        modern primary care infrastructure in the country.

4.4     PHP's balance sheet and financing position remain strong with cash and committed undrawn
        loan facilities totalling £314.4 million (31 December 2022: £325.9 million) after contracted
        capital commitments. 97% of PHP's net debt is fixed or hedged for a weighted average period
        of just under seven years.

4.5     With an improving rental growth outlook, a strong control on costs resulting in one of the
        lowest EPRA cost ratios (a proportionally consolidated measure (including direct vacancy
        costs) of the ratio of net overheads and operating expenses against gross rental income (with
        both amounts excluding ground rents payable) in the sector of 10.1% (31 December 2022:
        9.9%) and with the majority of PHP's debt either fixed or hedged, PHP looks forward to the
        remainder of 2023 with confidence.

4.6     PHP believes that its activities benefit not only shareholders but also wider stakeholders,
        including occupiers, patients, the NHS and HSE, suppliers, lenders, and the wider
        communities in both the UK and Ireland which are served by the services delivered at its


5.1     The Company's rationale for the secondary listing on the Main Board of the JSE includes the

        5.1.1   establish a positive relationship and reliable track record with the South African market;

        5.1.2   increase the liquidity and tradability in the Company's shares through a robust exchange;                                                                                                       

        5.1.3   introduce a first-of-its-kind primary healthcare focused REIT to the JSE investor community;              

        5.1.4   provide investors on the JSE with an opportunity to participate in the Company's income
                and capital growth potential;

        5.1.5   subject to market conditions, raise capital in a new market to fund further acquisitions in
                due course albeit no new capital raise is anticipated at present;

        5.1.6   provide investors on the JSE with an additional local platform to invest and trade in the
                Company's shares; and

        5.1.7   further diversify the Company's shareholder base.

5.2     The financial surveillance department of the South African Reserve Bank has approved the
        inward listing of PHP on the Main Board of the JSE which will be classified as "domestic".
        Accordingly, South African exchange control resident shareholders are entitled to hold their
        PHP ordinary shares on the JSE register subsequent to the secondary listing and may trade
        the PHP ordinary shares on the JSE without affecting their foreign investment allowances.

5.3     The JSE has granted PHP a secondary listing, by way of the fast-track listing process, of all
        its issued ordinary shares on the Main Board of the JSE in the "Health Care REIT" sector,
        under the abbreviated name "PHP", share code "PHP" and ISIN code GB00BYRJ5J14 with
        effect from the commencement of trade on the Listing Date.

5.4     The Company is a public limited company incorporated in England under the Companies Act
        2006 with registration number 3033634 on 16 March 1995, with its registered address situated
        at Fifth Floor, Burdett House, 15-16 Buckingham Street, London, WC2N 6DU. The Company
        is not registered as an external company in South Africa.

5.5     The Company was admitted to trading on the LSE on 5 November 1998 and was granted
        status as a UK REIT in 2007.

5.6     The Company has its financial year-end at 31 December.

5.7     The Company has appointed JSE Investor Services (Pty) Ltd as its transfer secretaries in
        South Africa with its main place of business at One Exchange Square, 2 Gwen Lane,
        Sandown, Sandton, 2196.

5.8     The Company's registrar in the UK is Equiniti Limited with its registered office address and
        primary place of business at Aspect House, Spencer Road, Lancing, West Sussex, BN99


6.1     The issued share capital of PHP is as set out in the table below:

                                                            Number of shares
             Ordinary shares                                 1,336,493,786

6.2     There are no ordinary shares held in treasury and no person has any special rights of control
        over the Company's share capital.

6.3     The Companies Act 2006 removed the requirement for a company to have an authorised
        share capital, and the articles of association of the Company reflect this. Directors are still
        limited as to the number of shares they can allot and issue at any one time because allotment
        authority continues to be required under the Companies Act 2006.

6.4     PHP will have an anticipated market capitalisation of approximately £1.22 billion on the Listing

6.5     There is no restriction on the transferability of PHP's shares (other than as imposed by laws
        and regulations).

6.6     On the Listing Date, all shares in issue will rank pari passu in all respects, including in respect
        of voting rights, dividends and other distributions.


7.1     All relevant historical financial information of the Company is available on the Company's
        website (

7.2     Set out below are the basic, diluted, adjusted and headline earnings (as defined in terms of
        The South African Institute of Chartered Accountants Circular 1/2023) per share of PHP for
        the six months ended 30 June 2023 and 30 June 2022 and year ended 31 December 2022:

                                                      (Reviewed)            (Reviewed)             (Audited)
                                                      Six months           Six months           Year ended
                                                           ended                ended         31 December
Earnings                                            30 June 2023         30 June 2022                 2022
Basic earnings                                             £39.5m             £107.1m               £56.3m

Add back revaluation deficit / (surplus)                   £11.9m             (£51.2m)              £64.4m

Add back profit on sale of properties                             -                    -            (£2.9m)

Total tax effects of above adjustments                     (£0.7m)               £0.7m               £0.8m

Headline earnings                                          £50.7m               £56.6m             £118.6m

Add back gain on fair value of derivative
financial instruments and convertible bond                 (£3.9m)            (£10.4m)             (£26.8m)

Add back non-recurring items                               (£0.9m)             (£1.4m)              (£2.9m)

Adjusted earnings (after tax)                              £45.9m               £44.8m              £88.9m

Diluted basic earnings                                     £36.0m               £97.5m              £32.0m                                                                                                  

Diluted Headline earnings                                  £47.2m               £47.0m              £94.3m

Basic earnings per share (CAD)                           3.0 pence            8.0 pence           4.2 pence

Headline earnings per share (CAD)                        3.8 pence            4.2 pence           8.9 pence

Adjusted earnings per share (CAD)                        3.4 pence            3.4 pence           6.6 pence

Diluted basic earnings per share (CAD)                   2.5 pence            6.8 pence           2.2 pence

Diluted headline earnings per share (CAD)                3.3 pence            3.3 pence           6.5 pence

Number of shares                                          1,336.5m             1,334.1m            1,336.5m
Weighted average number of ordinary
shares for the purpose of headline, basic
and adjusted earnings per share                           1,336.5m             1,333.5m            1,334.8m

Weighted average number of ordinary
shares for the purpose of diluted basic and
headline earnings per share                               1,445.4m             1,438.9m            1,443.7m


8.1     The full names, ages, business addresses and functions of the directors of PHP are provided

         Name               Age     Function                     Business address

         Steven Owen        65      Non-executive Chairman       5th Floor, Burdett House
                                                                 15-16 Buckingham Street
                                                                 London, England
                                                                 WC2N 6DU
                                                                 United Kingdom

         Harry Hyman        67      Chief Executive Officer      5th Floor, Burdett House
                                                                 15-16 Buckingham Street
                                                                 London, England
                                                                 WC2N 6DU
                                                                 United Kingdom

         Richard Howell     57      Chief Financial Officer      5th Floor, Burdett House
                                                                 15-16 Buckingham Street
                                                                 London, England
                                                                 WC2N 6DU
                                                                 United Kingdom

         Ivonne Cantú       54      Independent Non-executive    5th Floor, Burdett House
                                    Director                     15-16 Buckingham Street
                                                                 London, England
                                                                 WC2N 6DU
                                                                 United Kingdom

         Ian Krieger        71      Senior Independent Non-      5th Floor, Burdett House
                                    Executive Director           15-16 Buckingham Street
                                                                 London, England
                                                                 WC2N 6DU

                                                                 United Kingdom
         Laure Duhot        60      Independent Non-executive    5th Floor, Burdett House
                                    Director                     15-16 Buckingham Street
                                                                 London, England
                                                                 WC2N 6DU
                                                                 United Kingdom                                        


9.1     The REIT Regulations require the Company, as a REIT, to distribute at least 90% of its exempt
        rental income (as calculated for tax purposes) as a property income distribution.

9.2     The Company's policy is to make all of its dividend payments (currently four per annum) as
        interim dividends. This enables the fourth dividend payment to be made approximately two
        months earlier than would be the case if that dividend were categorised as a "final dividend" and
        therefore have to await shareholder approval at the annual general meeting. This arrangement
        is made in the interests of shareholders, enabling them to benefit from the earlier receipt of the
        fourth dividend.

9.3     PHP operates a Dividend Re-Investment Plan enabling shareholders to use their cash dividend
        to buy further shares in the Company through an arranged dealing service.


10.1    The following shareholders are, directly or indirectly, beneficially interested in 5% or more of
        a class of securities issued by the Company as at the date of this announcement:

           SHAREHOLDER                 NUMBER OF SHARES                  % OF THE ISSUED SHARE

           BlackRock                   114,315,177                       8.55%

           Hargreaves Lansdown         73,154,299                        5.47%

           SSGA                        68,619,568                        5.13%

           Vanguard Group Inc.         68,605,208                        5.13%

           Total                       324,694,252                       24.28%


11.1    The directors of PHP hereby confirm that PHP has:

        11.1.1   a total of 1,336,493,786 shares are in issue;

        11.1.2   audited financial statements for the preceding three years, being, the financial years ended
                 31 December 2022, 31 December 2021 and 31 December 2020;                                                                                                       

        11.1.3   there has been no significant change in the financial or trading position of the Company
                 which has occurred since the end of the last financial period ended 31 December 2022 for
                 which audited financial statements have been published;

        11.1.4   carried on its activities through its various subsidiaries that it controls through both majority
                 ownership as well as by exerting influence over decisions relating to the assets;

        11.1.5   a reasonable spread of direct interest in assets and has rights to actively participate in the
                 management of those assets, both by voting and through other rights which give it
                 influence in decisions relating to the assets;

        11.1.6   a board and senior management team that collectively have appropriate expertise and
                 experience for the governance and management of the Company's businesses; and

        11.1.7   20% of its share capital is held by the public to ensure reasonable liquidity. Currently,
                 approximately 97.36% of PHP's shares are held by the public.

11.2    In addition, the directors of PHP further confirm that as a company listed on the Premium
        Segment of the Official List on the LSE, PHP is required to comply with the Listing Rules
        maintained by the Financial Conduct Authority.

11.3    Further information in relation to the Company's listing on the Premium Segment of the Official
        List on the LSE can be obtained directly from the Company or from the Company's website


12.1    The directors of PHP have no reason to believe that the working capital available to the
        Company or its group will be insufficient for at least 12 months from the Listing Date.

12.2    The directors of PHP hereby confirm that PHP has, to the best of their knowledge and belief,
        adhered to all legal and regulatory requirements of the LSE.

13.   SALIENT DATES AND TIMES                                                                                                  
      Publish pre-listing announcement on the Stock Exchange News Service of                      Tuesday,
      the JSE ("JSE")                                                                           17 October 

      Listing and commencement of trading of PHP shares on the Main Board of                      Tuesday,
      the JSE from the commencement of trade 09:00 on                                           24 October 

      Documents, such as financial statements, public announcements, and investor presentations
      which PHP has made public over the last two years and the constitutional documents of PHP are
      available on the Company's website at A comparative
      table including the differences between certain provisions of the Listings Requirements of the
      JSE and the regulatory and legislative framework in the UK will be available on the Company's
      website on Friday, 20 October 2023.

      This announcement is not an invitation to the public to subscribe for or purchase shares but is
      issued in compliance with the JSE Listing Requirements relating to the secondary listing of the
      Company on the JSE's Main Board.

     For further information, please contact:

     PSG Capital

     Terence Kretzmann                          Calvin Craig
     +27 (21) 887 9602                          +27 (21) 887 9602          

United Kingdom
17 October 2023

Sponsor: PSG Capital

Date: 17-10-2023 09:00:00
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