Primary Health Properties (PHP) Status Update summary

Market and strategic outlook

• Positive market backdrop with significant growth opportunities driven by the government's 10-year NHS plan, emphasizing a shift from hospitals to primary care.

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

• High-quality, government-backed property portfolio supports long-term, secure income and consistent dividend growth.

• Double-digit rental growth emerging in London, with new schemes and long lease terms reflecting asset quality.

• Strict cost control and efficient capital structure maintained, with plans to address temporary leverage increase post-merger.

Financial performance and rental growth

• Annualized rent roll reached £158 million, with net rental income up 3% to nearly £79 million for H1 2025.

• Adjusted earnings rose 2.2% to £47.3 million; loan-to-value ratio at 48.6%, within target range.

• Portfolio valued at £2.8 billion, with a positive revaluation surplus and total accounting return of 4.5%.

• Dividend per share increased 2.9% year-on-year, marking 29 years of consecutive growth; dividend cover at 100%.

• Like-for-like rental growth of 1.4% in H1, with open market value rental growth accelerating to 3.6% annualized.

Assura combination and capital structure

• Recommended merger with Assura expected to deliver significant strategic and financial benefits, including £9 million in annualized synergies.

• Combined group to be one of the largest UK-listed REITs, with enhanced scale, liquidity, and index weighting.

• Targeting 80-90% government-backed income and maintaining a progressive dividend policy.

• Initial combined LTV may reach 55%, with plans to reduce via asset disposals and joint ventures.

• Strong support from capital markets, new £1.2 billion bridging facility secured, and investment grade ratings reaffirmed.