Primary Health Props (PHP) - Interim Management Statement
RNS Number : 1682R
Primary Health Properties PLC
15 November 2012
PRIMARY HEALTH PROPERTIES PLC
A specialist REIT providing Primary Care Accommodation for the NHS
Interim Management Statement
Primary Health Properties PLC ("PHP", the "Group" or the "Company") one of the
largest providers of modern primary healthcare facilities, today issues its
Interim Management Statement for the period from 1st July to 15 November 2012.
·Successful completion of retail bond issue raising £75million unsecured
finance at 5.375% for 7 year term
·Acquisitions and commitments totalling £29.5million announced
·Portfolio continues to be 100% let
·Annualised passing rent roll, including commitments, was £34.9million at
15November (£33.2million at 30 June 2012)
·There is a continued pipeline of attractive property acquisition
·Deals in solicitors hands have a gross asset value of over £106million
·Interim dividend of 9.25p per share was paid to shareholders on 28
October2012; total of 18.5p per share paid in 2012 (2011: 18.0p)
Borrowings and Banking facilities
As announced on 24 July 2012, the Group completed the issue of a new seven
year, £75 million unsecured retail bond. The Board welcomes the new
stakeholders this brings to the Group.
Following the retail bond issue, total facilities available to the Group
amount to £459million with drawn borrowings currently totalling £329million.
Contracted commitments to forward fund and acquire future assets are
£16million, giving the Group head room of £114million to fund further
The £27million debt facility provided by Allied Irish Banks ("AIB") as part of
the Group's historic core facilities will be allowed to run its course to its
maturity date of 31 January 2013. The structure of the continuing provision of
existing interest rate swaps procured from AIB to mitigate interest rate risk
across the Group's wider bank debt portfolio is being finalised.
Upon maturity, the AIB loan will initially be refinanced from existing debt
resources, however, discussions continue with new debt providers to secure new
facilities to replace AIB and facilitate the future expansion of the Group's
Interest Rate hedging
The total mark to model liability of the derivative portfolio was estimated at
£52.4million as at 30September 2012, an increase from its value of
£49.3million at 30 June 2012. This movement has been caused by further
reduction in longer term interest rates as global economic markets remain
The Group has secured a number of new investment properties in the period:
Asset Acquisition basis Acquisition cost Size sqm
Luton, Bedfordshire Standing Let Investment £3.9 million 1,281
Stourbridge, West Midlands Forward Funding £8.5 million 2,600
Newton Abbot, Devon Forward Funding £3.0 million 1,373
Rotherham Standing Let Investment £14.1 million 4,636
Transactions with a gross asset value of some £106million are in solicitors'
hands, to acquire further investment properties located across mainland United
Kingdom. Some of these will be acquired as portfolios with associated debt of
various durations totalling some £50million, which reduces the cash required
of PHP to complete these acquisitions.
The Group continues to appraise a strong pipeline of attractive acquisition
opportunities, a mix of further forward funding commitments to acquire newly
developed assets and standing let investments, all of which would be accretive
to overall rent roll and Group profitability.
The Directors believe that initial property yields in the Group's portfolio
have remained stable at approximately 5.74% in the period under review, as
demand continues from property investors in all sectors for quality assets let
to strong covenants. The next valuation of the freehold, leasehold and
development properties of the Group will be carried out as at 31 December
The forward funding commitments at Allesley Park and Pelton have both recently
achieved practical completion and become rent producing. The Group's other
existing commitments are proceeding in line with their planned timetables.
Rent roll and rental growth
Annualised passing rent roll of the Group's completed portfolio as at 15
November 2012 was £33.5million (30 June 2012- £31.4million), the increase
being due to deliveries and rent reviews completed in the period.
Average rental growth achieved on rent reviews completed to 31 October 2012
showed an annualised rate of 2.5%. This is lower than that achieved for 2011
of 3.0% but is satisfactory when analysed in the context of the current
Having completed the refinance of the Group's core debt facilities and
obtained new funds from the unsecured retail bond, the Group is now well
positioned to add to its portfolio at yields which exceed its marginal cost of
funding. This will enable the Group to re-establish 100% dividend cover which
remains management's top priority.
The amount of transactions in lawyers' hands is higher than it has been for
some time and when these deals are completed further announcements will be
For further information contact
Harry Hyman/Phil Holland
Primary Health Properties PLC
T: +44(0)20 7451 7050
David Rydell/Victoria Geoghegan/Elizabeth Snow
Pelham Bell Pottinger
T: +44(0) 20 7861 3232
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
This information is provided by RNS
The company news service from the London Stock Exchange
IMSGGGMPGUPPGRC -0- Nov/15/2012 07:00 GMT
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