Primary Health Properties Plc · LSE:PHP
Primary Health Properties — H1 2014 Earnings Presentation
33 slides from Primary Health Properties's earnings presentation, Aug 21, 2014
Slide 1: Investor Presentation – Interim results 30 June 2014
Investor Presentation – Interim results 30 June 2014 Primary Health Properties PLC Landlord to the NHS A dedicated healthcare REIT
Slide 2: Highlights
21 August 2014 2014 Interim Results – 30 June 2014 | 2 Highlights Property portfolio reaches £1 billion in value1 (31 Dec 2013: £958.7 million) Rental income increased by 50% to £29.4 million (30 June 2013: £19.7 million) Adjusted profit increased by 91% to £8.2 million (30 June 2013: £4.3 mil
Slide 3: Performance
21 August 2014 2014 Interim Results – 30 June 2014 | 3 Performance Operating profit increased by 52% to £25.4 million (30 June 2013: £16.7 million) Rent reviews achieve average 1.9% per annum (12 months to 31 Dec 2013: 2.2%) Total Expense Ratio reduced to 77bps (12 months to 31 Dec 2013: 88 bp
Slide 4: Funding
21 August 2014 2014 Interim Results – 30 June 2014 | 4 Funding Debt assumed with PPP acquisition refinanced to lock in lower fixed rates New £50m, ten year and £63 million, fifteen year facilities with Aviva Interest rate reduced by an overall 100 bps New five year £50 million revolving debt
Slide 5: Portfolio
21 August 2014 2014 Interim Results – 30 June 2014 | 5 Portfolio 262 healthcare centres – 257 completed and owned, 5 forward purchase commitments Portfolio valued at £1 billion – net initial yield of 5.58% (31 Dec 2013: 5.64%) Average lot size increased to £3.8 million (31 Dec 2013: £3.7 milli
Slide 6: Delivering on strategic objectives
21 August 2014 2014 Interim Results – 30 June 2014 | 6 Delivering on strategic objectives Continued portfolio growth Acquisitions concluded in period - £23.0 million Asset management projects completed or on site - £6.6 million capex, £0.6 million additional income, additional WAULT – 18 years
Slide 7: Financials
| FINANCIALS
Slide 8: Results in Brief
21 August 2014 2014 Interim Results – 30 June 2014 | 8 Results in Brief Six months ended Six months ended 30 June 2014 30 June 2013 Revenue 29.4 19.7 Expenses (4.0) (3.0) Operating profit 25.4 16.7 Net financing costs (17.2) (12.4) Profit before revaluations and other non-recurring items 8.2 4.1 Pro
Slide 9: Balance Sheet
21 August 2014 2014 Interim Results – 30 June 2014 | 9 Balance Sheet 30 June 2014 31 December 2013 EPRA Net Assets £341.9m £330.9m EPRA net asset value per share 308.0p 300.0p Property portfolio1 £983.3m £941.6m Net Debt £625.4m £579.7m LTV 63.6% 61.6% Future minimum lease payments receivable £927m
Slide 10: Dividend cover
21 August 2014 2014 Interim Results – 30 June 2014 | 10 Dividend cover Number one priority to rebuild dividend cover, whilst maintaining progressive dividend Positive spread from PPP acquisition in late 2013 reflected in H1 2014 bottom line Full period impact of rental income from PPP acquisit
Slide 11: Dividend growth
21 August 2014 2014 Interim Results – 30 June 2014 | 11 Dividend growth 18th successive year of dividend growth 9.75p per share paid in April 2014 9.75p per share to be paid on 7 November 20141 Total of 19.5p represents a 2.6% increase over total paid in 2013 Total dividend paid per year 20
Slide 12: Relative performance
21 August 2014 2014 Interim Results – 30 June 2014 | 12 Relative performance PHP annualised real estate portfolio out performs healthcare benchmark index over 1,3 and 5 years 1 year 3 years 5 years Primary Health Properties 8.2% 8.3% 14.0% IPD Healthcare Property Index 7.2% 7.9% 8.7% IPD All Prope
Slide 13: Operational Review
Investor Presentation - August 2014 | 13 OPERATIONAL REVIEW
Slide 14: Portfolio Strength
21 August 2014 2014 Interim Results – 30 June 2014 | 14 Portfolio Strength Key characteristics 257 completed rent producing assets 5 forward purchase commitments (all to be delivered in 2014) Weighted average unexpired lease term of 16 years (31 December 2013: 16 years) Strong tenant coven
Slide 15: Portfolio analysis by rent
21 August 2014 2014 Interim Results – 30 June 2014 | 15 Portfolio analysis by rent 262 primary care facilities, 257 completed and 5 committed 91% of rental income directly or indirectly from UK Government Wide Geographical Spread Strong rental covenant London Wales 5% South West Pharmacy 8% 10%
Slide 16: Long Leases with growth potential
21 August 2014 2014 Interim Results – 30 June 2014 | 16 Long Leases with growth potential 54% of rent with more than 15 years remaining Analysis of leases unexpired by rent roll Asset management and lease renewal Less than 5 years maintain lease length 1% More than 20 years 16% 10% of leases s
Slide 17: Forthcoming Rent Reviews by Annual Rent
21 August 2014 2014 Interim Results – 30 June 2014 | 17 Forthcoming Rent Reviews by Annual Rent1 Forthcoming Rent Reviews1 £25.0 Millions £20.0 £20.4m £14.9m £17.4m £15.0 £10.0 £5.0 £3.6m £0.0 2014/15 2015/16 2016/17 Longer Pattern Annual contracted rent on completed assets - £57.6 million 1 – inclu
Slide 18: Cumulative Cash Flow from Rent Reviews
21 August 2014 2014 Interim Results – 30 June 2014 | 18 Cumulative Cash Flow from Rent Reviews1 £4.5m £4.1m £4.0m £3.5m £3.2m £3.0m £2.7m £2.5m £2.2m £2.0m £1.4m £1.5m £1.1m £1.0m £0.5m £0.0m 2014/15 2015/16 2016/17 6.0% over three years (2.0%p.a.) 7.5% over three years (2.5%p.a.) 1 – includes rent
Slide 19: Asset Management Projects
21 August 2014 2014 Interim Results – 30 June 2014 | 19 Asset Management Projects Poplar Grove, Aylesbury – On site October 2013, completion October 2014 Extension to double the size of the existing medical centre to accommodate local practice merger. Whole of enlarged centre to be fully let for new
Slide 20: Asset Management Project - completed
21 August 2014 2014 Interim Results – 30 June 2014 | 20 Asset Management Project - completed Toddington, Bedfordshire – On site October 2013, completion October 2014 Construction of a new 100 m² pharmacy adjacent to and addition of 2 consulting rooms within a purpose built health centre constructed
Slide 21: Development Delivery - 2014
21 August 2014 2014 Interim Results – 30 June 2014 | 21 Development Delivery - 2014 St Johns Surgery, Worcester Tenants: GP Practice and Pharmacy Constructed: March 2014 NIA: 1,205 m² Value: £4.9 million Patient numbers: 15,110
Slide 22: Development Delivery - 2014
21 August 2014 2014 Interim Results – 30 June 2014 | 22 Development Delivery - 2014 Lion Medical Centre, Stourbridge Tenants: GP Practice and Pharmacy Constructed: March 2014 NIA: 2,600 m² Value: £9.4 million Patient numbers: 29,500
Slide 23: Development commitment - 2014
21 August 2014 2014 Interim Results – 30 June 2014 | 23 Development commitment - 2014 Gorse Stacks, Chester Tenants: 4 GP Practices and pharmacy Date committed: February 2014 Expected completion: December 2014 NIA: 5,754 m² Expected Cost: £18.5 million Patient numbers: 24,235
Slide 24: Acquisition - 2014
21 August 2014 2014 Interim Results – 30 June 2014 | 24 Acquisition - 2014 New Cumnock Surgery, Ayrshire Tenants: GP practice Date acquired: February 2014 NIA: 540 m² Value: £1.8 million Patient numbers: 4,100
Slide 25: Yield on Cost and Value
21 August 2014 2014 Interim Results – 30 June 2014 | 25 Yield on Cost and Value 10.00% 8.00% Rental yield on cost – 6.9% 6.00% Assumed market yield – 5.6% Surplus to bottom line – 1.6% 4.00% Management fee – 0.325% All in cost of debt – 3.7% Margin on debt – 185 bps 2.00% 0.00% -2.00% -4.00% 5 Year
Slide 26: Funding
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Slide 27: Secure Borrowing Facilities
21 August 2014 2014 Interim Results – 30 June 2014 | 27 Secure Borrowing Facilities Average maturity of bank debt – 7.1 years Provider Maturity Facility Headroom* £50m, 5 year, interest only facility with RBS (overdraft) Mar 2015 5.0 5.0 HSBC April 2019 RBS/Santander August 2018 165.0 50.0 Maxim
Slide 28: Convertible Bond
21 August 2014 2014 Interim Results – 30 June 2014 | 28 Convertible Bond £82.5 million convertible bond issued on 20 May 2014 Bond issued on an unsecured basis with no asset related covenants Bond matures in May 2019 i.e. 5 year term Issued at par with a 4.25% p.a. coupon Issued through a w
Slide 29: Joint Advisers and Fee Base
21 August 2014 2014 Interim Results – 30 June 2014 | 29 Joint Advisers and Fee Base Consolidation of the provision of accounting and company secretarial services to Nexus from 30 April 2014 Fixed fee basis with upwards/downwards RPI adjustment (capped at +/- 5%) Breaks link to gross assets for
Slide 30: Conclusion
| CONCLUSION
Slide 31: Conclusion
21 August 2014 2014 Interim Results – 30 June 2014 | 31 Conclusion Low risk, proven business model – more than 90% of rents underpinned by Government funding, 100% occupancy Demographic and political drivers – ageing population, all party commitment to NHS Long term non-cyclical market Maint
Slide 32: Contact details
21 August 2014 2014 Interim Results – 30 June 2014 | 32 Contact details Harry Hyman Phil Holland Managing Director Deputy Managing Director harry.hyman@nexusgroup.co.uk phil.holland@nexusgroup.co.uk Telephone: 020 7451 7050 Telephone: 020 7104 5599
Slide 33: Disclaimer
21 August 2014 2014 Interim Results – 30 June 2014 | 33 Disclaimer IMPORTANT NOTICE This document has been prepared by Primary Health Properties PLC (the “Company”) and is the sole responsibility of the Company. The information in this document is accurate as at the date of this document and its con
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