Primary Health Properties (PHP) investor relations material

Market backdrop and growth opportunities

• Recent government ten year health plan positions the sector for significant growth, emphasizing a shift from hospitals to primary care settings.

• Demographic trends, such as an aging population, are driving increased demand for healthcare infrastructure.

• Many existing primary care premises are outdated, creating opportunities for modern, fit-for-purpose facilities.

• Rental income is largely government-backed, providing secure, long-term revenue streams.

• The sector is experiencing high demand for space, with patient lists and service requirements expanding rapidly.

Financial performance and outlook

• Net rental income for the first half of 2025 rose 3% to just under £79m, with adjusted earnings up 2.2% to £47.3m.

• Portfolio value increased to £2.8bn, with a positive revaluation surplus of nearly £20m after years of declines.

• Dividend cover maintained at 100%, marking 29 consecutive years of dividend growth.

• Like-for-like rental growth reached 1.4% in H1, with open market value rental growth accelerating to 12.3% for recent reviews.

• Cost control remains strong, with sector-leading cost ratios and a competitive average debt cost of 3.4%.

Strategic combination with Assura

• The recommended merger with Assura is expected to be earnings accretive, delivering £9m in annualized synergies.

• Combined entity will be the ninth largest UK REIT, with a £6bn portfolio and enhanced index weighting.

• Merger will temporarily increase LTV to ~55%, with plans to reduce it to 40–50% via asset disposals and joint ventures.

• Strong support from capital markets, including a new £1.2bn bridging facility and confirmed investment grade ratings.

• Dividend growth policy will continue, with 80–90% of income targeted as government-backed.