Primary Health Properties PLC

(“PHP”, the “Company” or the “Group”)

Q3 2024 Trading Update and Capital Markets Day

Primary Health Properties PLC, one of the UK’s leading investors in modern primary healthcare facilities, publishes a trading update for the third quarter of the year to 30 September 2024 (“Q3 2024”) ahead of the Group’s Capital Markets Day today at 1.00 pm (2.00 pm SAST) for institutional investors and sell-side analysts.

Mark Davies, CEO of Primary Health Properties, commented:

“At today’s Capital Markets Day we will focus on the significant opportunity ahead in primary care and PHP’s continued dedication to dividend growth. We will be demonstrating PHP’s capabilities in this regard across both the UK and Ireland and how extremely well placed the Company is to benefit from the growth drivers and political momentum we see in our sector and how this will deliver future earnings and rental growth.

“We welcome the new Government’s commitment to reforming the NHS and specifically the need for increased investment in primary care which will add further resilience to the business model. As highlighted in the Lord Darzi report, the current primary care estate in the UK is not fit for purpose and there is an urgent need to provide more high-quality, multidisciplinary care in the community in modern facilities with digital infrastructure and diagnostics. In the future this will result in a shift in resources from hospitals towards primary care and community led health services that PHP has been successfully delivering for nearly 30 years.

“PHP is very well placed to capture the significant opportunity ahead and this will be the focus of our capital markets day.”

Q3 2024 Trading Update

Rental growth

In the nine months to 30 September 2024 the Company generated an additional £2.7 million (Q3 2023: £3.3 million) of extra rental income from its rent review and asset management activities, both in the UK and in Ireland.

An extra £2.4 million (Q3 2023: £3.1 million) of income was generated in the nine months from 241 reviews that have been settled, representing a 7.9% increase over the previous passing rent, equivalent to 3.0% (2023: 4.4%) on an annualised like for like basis.

Importantly, the Company continues to see an improving open market value (“OMV”) rent review outlook continuing the positive trend seen in recent years. The growth from rent reviews completed in the nine months to 30 September 2024, is summarised below:

PHP remains on course to generate in excess of £3.0 million (2023: £4.0 million) of extra income from rent reviews in 2024 driven by the improving OMV review outlook, partially offset by the impact of declining inflation on indexed-linked reviews.

A further £0.3 million (Q3 2023: £0.2 million) has been generated from asset management activities where the Company has exchanged on four new projects, completed seven lease regears and six new lettings in the UK together with a further six asset management initiatives in Ireland. There is a growing momentum driven by demand for space and a strong pipeline of a further 39 asset management projects which, in addition to extending lease lengths and increasing rents, will improve the environmental performance of the buildings we own.

Investment and development

The Group continues to adopt a very disciplined approach to further investment and risk-controlled development activity, which will only take place if accretive to earnings.

Investment activity during this period has been deliberately held back but we are now seeing a range of interesting and accretive opportunities as the market adjusts to the new interest rate environment.

On the development side we legally completed and have now commenced construction of the new South Kilburn Medical Centre which is part of a large housing redevelopment in the London Borough of Brent. To ensure the viability of the project the Integrated Care Partnership and Brent Council contributed £1.0m towards the infrastructure and fit out costs for the medical centre. The project will be accretive with a yield on cost of 6.2% and a profit on cost in excess of 10%.

The management team will be commenting further at the Capital Markets Day on the growing opportunities it can see in its risk-controlled development pipeline in the UK and Ireland.

Financing

In the period, the Group positively addressed the refinancing of debt maturities falling due in 2025 and has completed a new £170 million facility with Barclays with £70 million of the proceeds from the new facility being used to repay the variable rate bond ahead of maturity in December 2025. The Group has also agreed terms with Lloyds to extend its £100 million facility for a further three years with an option to increase the size to £125 million. The new facilities have options to extend by a further year on each of the first and second anniversaries.

As at 30 September 2023 the Group’s net debt stood at £1,322.7 million (30 June 2024: £1,318.5 million) and on a pro-forma basis the Loan to Value (“LTV”) ratio was 48.1% (30 June 2024: 48.0%), within its target range. The Group has £301 million (30 June 2024: £308 million) of undrawn loan facilities available, net of capital commitments. 95% of the Group’s debt is fixed or hedged at a weighted average cost of 3.3%.

Dividend

As previously announced, on 3 October 2024 the Company declared its fourth quarterly interim dividend of 1.725p per Ordinary Share which will be paid on 22 November 2024 to shareholders who were on the share register at the close of business on 11 October 2024. The dividend will be paid by way of a property income distribution of 1.45 pence and a normal dividend of 0.275 pence. The dividend is equivalent to 6.9p on an annualised basis and represents a 3.0% increase over the 6.7p paid in 2023.  

MSCI’s Highest 10-Year Risk Adjusted Total Return Award

During the period, PHP was announced as the winner of MSCI’s Highest 10-Year Risk Adjusted Total Return Award for the UK in 2023 for the third year in succession. The award reflects the Group’s continued operational resilience and security of its income stream which underpins its progressive dividend policy as PHP completes its 28^th year of continued dividend growth.

The company also qualified for the FTSE/JSE All Share Index and the All-Property Index reflecting improved liquidity and global investor interest in PHP and good progress following the completion of the listing on the Johannesburg Stock Exchange (“JSE”) just 12 months ago.

Separately, we have also achieved EPRA Gold awards for both the 2023 Annual Report and Responsible Business Report.

Kepler

Top 5 most bought investment trusts in September
Turning to the world of investment trusts, these were the most bought trusts last month:

most bought trusts

1. Scottish Mortgage (SMT)
2. BlackRock WorldMining (BRWM)
3. Greencoat UK Wind (UKW)
4. Alliance Trust (ATST)
5. JPMorgan GlobalGrowth & Income (JGGI)
   Source: Hargreaves Lansdown, AJ Bell, Bestinvest and interactive investor

Scottish Mortgage (SMT) held onto top honours as the most bought trust in September. The FTSE-100 listed trust remains a popular choice for investors seeking Magnificent Seven exposure, delivering a stellar 12% increase in NAV in the last month.

Josef Licsauer, analyst at Kepler Trust Intelligence, comments: “Investors had raised questions over the valuation of SMT’s unlisted portfolio but the trust’s exposure has fallen from close to its ceiling in 2023 to around 24% this year, on the back of the successful IPO of Tempus AI and strong performance in its public holdings.

“Added to this, its share buyback programme continues apace, with SMT having bought back one billion shares since March and executing the largest single-day buyback by a UK investment company of 311m in May 2024. While its discount has widened slightly in recent months, it remains significantly narrower than its 20%-plus discount in mid-2023.”

BlackRock World Mining (BRWM) soared into the charts but was narrowly pipped to the post for first place. After a challenging few months, BRWM has chalked up a 13% increase in NAV in the last month, helped in part by gold prices rising due to conflict in the Middle East, alongside a juicy dividend yield of more than 6%. The trust holds significant positions in large-cap miners Rio Tinto, Glencore and BHP which should benefit from the large increase in demand for commodities to meet net zero commitments.

The other three trusts, Greencoat UK Wind (UKW), JPMorgan Global Growth & Income (JGGI) and Alliance Trust (ATST) continued to curry favour with UK investors. Both JGGI and ATST have ticked up nicely in the last month, while investors took the opportunity to lock in the chunky 7% dividend yield on the slight dip in UKW.

And that brings the curtain down on trading in September. Uncertainty remains firmly on the menu, with investors hoping for a more positive UK GDP print for August and nervousness is starting to build over possible changes to tax relief in the Autumn Budget. On the other side of the Atlantic, all eyes will be on the next round of corporate earnings with companies facing mounting pressure to justify the lofty valuations of the S&P 500. It’s shaping up to be an interesting (if slightly stressful) month.

jaewook.net
Sumbry36337@gmail.com
77.36.120.72

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By the Nile Crocodile.

The current portfolio was started on the 9/09/2022.

The minimum buying yield was 5% but as Investment Trust prices have fallen the yields have risen, so the new target is 7%.

After ten years the plan was to receive income of £13,790 pa.

IF next year’s target of 10k is met it will equal the plan’s figure for 2028.

The actual income for the plan could be around 15k pa, this is not a fcast or a target, yet.

HENDERSON FAR EAST INCOME LIMITED

4^th Interim dividend for the year ending 31 August 2024

The directors have declared the fourth interim dividend of 6.20p per ordinary share in respect of the year ending 31 August 2024. The dividend will be paid on 29 November 2024 to shareholders on the register at 25 October 2024 (the record date). The shares will be quoted ex-dividend on 24 October 2024. 

Thursday 17 October

BBGI Global Infrastructure SA dividend payment date
Custodian Property Income REIT PLC ex-dividend date
Invesco Bond Income Plus Ltd ex-dividend date
JPMorgan China Growth & Income PLC ex-dividend date
Livermore Investments Group Ltd ex-dividend date
TwentyFour Income Fund Ltd ex-dividend date

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No coding, exactly the same as penning an email.

Assura plc

Trading update for the first half ended 30 September 2024

Assura plc (“Assura”), the diversified healthcare REIT, today announces its Trading Update for the six months to 30 September 2024.  

Jonathan Murphy, CEO, said:

“We have made strong strategic progress in the first half of the year. The £500 million acquisition in August of a private hospital portfolio accelerates the delivery of our broader healthcare strategy while our £250 million joint venture with USS diversifies our funding. We are also very pleased to have been certified as the first FTSE 250 B Corp recognising our high standards of social and environmental performance. 

“The purchase of 14 UK private hospitals materially increases our exposure to the structurally supported private healthcare market as we continue to diversify our offering to meet changing UK healthcare demands. The joint venture with USS, the UK’s leading private pension scheme, provides a new source of funding and opportunities to recycle capital into our growth pipeline.

“The need for investment in healthcare infrastructure was starkly outlined by the recent Lord Darzi report – which found the primary care estate to be plainly not fit for purpose and more than 1 million people to be waiting for community services. We are at an inflexion point in the UK, with structural changes to the delivery of healthcare services, the Government targeting preventative services in a community setting, and rising demand for private providers. Assura has firmly positioned itself to facilitate this change, being well-placed to work with all healthcare providers to deliver high-quality, sustainable facilities for the long-term..”

Delivery against our strategic objectives

•      Portfolio of 14 private hospitals acquired for £500 million: day 1 rental income of £29.4 million, WAULT of 26 years, 100% subject to annual index-linked rent reviews, let to tier 1 private healthcare providers with strong rent cover of 2.3 times

•      Portfolio now stands at 625 properties with an annualised rent roll of £179.1 million (March 2024: £150.6 million)

•      Three developments completed with a total combined spend of £46 million; GP surgery in Shirley, ambulance hub at Bury St Edmunds and our largest in-house development project to date of the Northumbria Health & Care Academy at Cramlington

•      Positive progress on rent reviews, 129 settled in the first half, covering £20.4 million of existing rent and generating an uplift of £1.7 million (8.2% uplift on previous passing rent, 3.0% on an annualised basis)

•      Initial tranche of seven assets agreed for transfer to joint venture with USS

•      Completed seven asset enhancement capital projects (total spend £3.0 million) and seven lease regears (existing rent £0.6 million); on site with a further four capital projects (total spend £5.6 million)

•      Quarterly dividend increased by 2.4% to 0.84 pence per share, as announced at the full year results, with effect from the July 2024 payment

Pipeline of opportunities for strategic expansion and further growth 

•      Advanced discussions taking place for the disposal of 12 assets

•      Currently on site with five developments; total cost of £44 million with £27 million remaining to be spent. On site schemes include two net zero carbon buildings in the UK (one GP medical centre, one NHS children’s therapy centre) and three developments for the HSE in Ireland.

•      Pipeline of 14 capital asset enhancement projects (projected spend £8.8 million) over the next two years

•      32 lease re-gears covering £3.9 million of existing rent roll in the current pipeline

Strong and sustainable financial position

•      Weighted average interest rate 3.0% (March 2024: 2.3%); all drawn debt on fixed rate basis

•      Weighted average debt maturity of 5.1 years, limited refinancing on drawn debt over the next 3 years. Over 40% of drawn debt matures beyond 2030, with our longest maturity debt at our lowest rates

•      A- rating reaffirmed by Fitch in August following private hospital portfolio acquisition

•      Net debt of £1,575 million (March 2024: £1,217 million) on a fully unsecured basis with cash and undrawn facilities of £143 million

Full results for the six months ended 30 September 2024 will be announced on 14 November 2024.