Primary Health Properties (PHP) H2 2024 earnings summary

Executive summary

• Delivered strong FY24 results, slightly ahead of market consensus, with profit and dividend growth and stabilisation of property valuations in H2.

• Achieved nearly 30 years of consecutive dividend increases, with a current yield of approximately 7.7%.

• Announced a significant, accretive acquisition in Ireland (Leya Health & Wellbeing Clinic, Cork) for €22 million at a 7.1% yield.

• Benefiting from demographic tailwinds, high occupancy, and government-backed income streams in both the UK and Ireland.

• Continued disciplined investment, efficiency, and hands-on management, focusing on strategy execution.

Financial highlights

• Net rental income rose by £4.3m (2.9%) to £153.6m, driven by rent reviews, asset management, and acquisitions.

• Adjusted earnings up 2.4% to £92.9m; adjusted EPS 7.0p; fully covered dividend of 6.9p, up 3% year-over-year.

• Like-for-like rental growth of 3.2%, up 70bps on 2023 and over 100bps on 2022.

• Investment property portfolio stable at £2.75bn; NAV/NTA per share at 105p.

• LTV increased to 48.1% due to valuation declines and net debt increase.

Outlook and guidance

• Expect continued rental and dividend growth, supported by high occupancy and government policy shifts.

• Confident in future rental growth, with asset management projects showing 15–20% rent increases.

• 10-year government plan and NHS policy shift expected to accelerate growth and provide further opportunities.

• Growth opportunities in Ireland, supported by a strong pipeline and government healthcare modernisation.

• Dividend remains a priority, with earnings growth guiding future capital allocation.