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Strategy

Portfolio value

£2.3bn

Strong performance delivering strategic objectives

We invest in flexible, modern properties for local primary healthcare. The overall objective of the Group is to create progressive returns to shareholders through a combination of earnings growth and capital appreciation.

To achieve this, PHP has invested in healthcare real estate let on long-term leases, backed by a secure underlying covenant where the majority of rental income is funded directly or indirectly by a government body.

Business model Investment case

Strategic objectives

General progressive shareholder returns through a combination of earnings and valuation growth.

Activity in 2018

Looking forward

  • EPRA earnings per share 5.2 pence unchanged (2017: 5.2 pence).
  • Dividend per share increased by 2.9% to 5.4 pence.
  • Total NAV return of 9.8p.
  • Average cost of debt reduced to 3.90%.
  • Strong investment pipeline both in the UK and Ireland.
  • Strategy of paying a progressive dividend that is covered by earnings in each financial year.

Content sourced from 2018 Annual Report.

Key performance indicators

Fund the development of and acquire modern, purpose-built healthcare premises that provide secure long term income streams with the potential for rental growth and capital enhancement.

Activity in 2018

Looking forward

  • Selectively acquired eight assets in the year investing £106.2 million.
  • Portfolio grown to 313 properties including eight assets in Ireland.
  • Total property return in the year of 8.0%.
  • Sector fundamentals of long leases and government-backed income continue to drive demand in the sector.
  • Strong pipeline of opportunities across the UK and Ireland.

Content sourced from 2018 Annual Report.

Key performance indicators

Work to improve the rental potential and longevity of underlying income streams and secure capital growth from assets within the portfolio, whilst controlling operating costs.

Activity in 2018

Looking forward

  • 16 asset management projects completed in the year, investing £4.4 million and generating £0.2 million of additional income.
  • EPRA cost ratio increased to 14.3% reflecting the impact of the performance incentive fee.
  • Five asset management projects approved and pipeline of 36 potential projects being progressed.
  • Continued discussions with occupiers to discuss requirements and identify new opportunities.
  • Cost ratio should fall in the future due to reducing fee rates as the portfolio grows.

Content sourced from 2018 Annual Report.

Key performance indicators

Fund activities through an appropriate mix of shareholder equity and debt, from a diverse range of sources with varied maturities

Activity in 2018

Looking forward

  • The Company completed an equity issue in April 2018 raising £111.2 million net of expenses.
  • The Group issued its first Euro-denominated senior secured loan notes for €51 million (£45.8 million) at a blended rate of 2.4973% with a weighted average maturity of 10.4 years.
  • £30.6 million of new loan facilities completed with Santander.
  • £40.0 million of 4.25% convertible bonds converted into equity and a further £6.2 million has converted post period end saving £2.0 million p.a.
  • New loan facilities and equity raise provide significant firepower to secure new investment opportunities.
  • Over 90% of the Group’s drawn debt is fixed or hedged protecting underlying earnings from potential interest rate rises that may result from recent and future economic and potential change.

Content sourced from 2018 Annual Report.

Key performance indicators

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