Primary Health Properties (PHP) Morgan Stanley - Big Five Investor Conference Presentation summary

Financial performance and dividend growth

• Like-for-like rental income rose £1.8m in six months, annualized at +2.4%, with open market value rental growth at +2.1%.

• Fully covered dividend increased 3% to 3.45p per share, marking the 28th consecutive year of dividend growth.

• Net rental income for H1 2024 was £76.2m, up 0.9% year-on-year; adjusted earnings per share rose 2.9% to 3.5p.

• Portfolio valued at £2.8bn with 99.2% occupancy and 89% of income government-backed.

• EPRA cost ratio remains low at 10.9%, reflecting strong cost control.

Market and political environment

• New Labour government in the UK is increasing investment in primary and community healthcare, supporting sector growth.

• Policy shifts include diverting funds from hospitals to GPs and community health, and expanding the role of community pharmacy.

• Housing policy and population growth (1.5m new homes) are expected to drive demand for up to 300 new primary health centres.

• Ireland's population is projected to grow to 6 million by 2050, with government support for modernising healthcare infrastructure.

Asset management, development, and investment

• £79m funding required over three years for asset management and development, with a pipeline including UK and Irish projects.

• First net zero carbon (NZC) asset management project completed in Norfolk, with further NZC projects underway.

• Short-cycle, de-risked development activity includes direct and forward-funded projects, with a focus on ESG and modern facilities.

• Strategic acquisition of PHP Axis in Ireland provides a permanent presence and access to a €50m development pipeline.