Primary Health Properties Plc · LSE:PHP
Primary Health Properties — H1 2021 Earnings Presentation
31 slides from Primary Health Properties's earnings presentation, 2021
Slide 1: The Foundations of Future Growth
THE FOUNDATIONS OF FUTURE GROWTH Primary Health Properties PLC Half Year Results Presentation 2021
Slide 2: Agenda
Primary Health Properties PLC Half Year Results Presentation 2021 AGENDA • PHP at a glance • Continued progress in H1 2021 • Nexus internalisation • Pipeline and developments 25 years of dividend growth • Key financial highlights and results • Debt summary • Property portfolio overview and ESG • Div
Slide 3: PHP at a Glance
Primary Health Properties PLC Half Year Results Presentation 2021 PHP AT A GLANCE • Leading investor in flexible, modern primary healthcare accommodation across UK and Ireland • Leading portfolio of 514 properties valued at just under £2.7 billion • FTSE 250 UK Real Estate Investment Trust (“REIT”)
Slide 4: Continued Progress in H1 2021
Primary Health Properties PLC Half Year Results Presentation 2021 CONTINUED PROGRESS IN H1 2021 • Successful completion of the internalisation of the Group’s management structure delivering annual cost savings of approximately £4m • The foundations of future growth strong pipeline of immediate trans
Slide 5: Nexus Internalisation - Strategic and Financial Benefits
Primary Health Properties PLC Half Year Results Presentation 2021 NEXUS INTERNALISATION - STRATEGIC AND FINANCIAL BENEFITS ✓ Acquisition by the Group of a fully operational management platform with the transfer of the systems, know-how and proprietary market knowledge that Nexus has developed since
Slide 6: Foundations for Future Growth - Strong Pipeline of Acquisitions, Developments and Asset Management Projects
Primary Health Properties PLC Half Year Results Presentation 2021 FOUNDATIONS FOR FUTURE GROWTH - STRONG PIPELINE OF ACQUISITIONS, DEVELOPMENTS AND ASSET MANAGEMENT PROJECTS Total funding requirement of c. £262m over the next 2-3 years to fund a mix of future acquisition pipeline, direct development
Slide 7: Forward Funded Development Pipeline
Primary Health Properties PLC Half Year Results Presentation 2021 FORWARD FUNDED DEVELOPMENT PIPELINE ✓ Two schemes currently on site in Ireland with a net development cost of £26m ✓ Four developments completed in the period at Mountain Ash, Wales, Llanbradach, Wales, Epsom, Surrey and Eastbourne Ea
Slide 8: Direct Developments
Primary Health Properties PLC Half Year Results Presentation 2021 DIRECT DEVELOPMENTS ✓ 4 projects with a combined gross development value £21m which are progressing towards a start on site ✓ A significant medium-term pipeline with a gross development value £125m across 17 projects are progressing.
Slide 9: Key Financial Highlights
Primary Health Properties PLC Half Year Results Presentation 2021 KEY FINANCIAL HIGHLIGHTS Performance 30 June 2021 30 June 2020 Change Net rental income (£m) 67.7 64.8 +4.5% Adjusted earnings (£m) 40.7 36.0 +13.1% Adjusted earnings per share (pence) 3.1p 3.0p +3.3% Dividends paid (£m) 41.1 35.9 +14
Slide 10: Income Statement
Primary Health Properties PLC Half Year Results Presentation 2021 INCOME STATEMENT 30 June 2021 30 June 2020 Change £m £m Net rental income 67.7 64.8 +4.5% Administrative expenses (4.3) (5.7) Performance incentive fee (0.7) (0.8) Operating profit before financing costs 62.7 58.3 Net financing costs
Slide 11: Balance Sheet Strengthened
Primary Health Properties PLC Half Year Results Presentation 2021 BALANCE SHEET STRENGTHENED Adjusted NAV per share (pence) 120.0 (2.4) 3.1 (3.1) 5.0 (0.1) 115.4 115.0 112.9 110.0 105.0 100.0 95.0 90.0 85.0 Opening Adjusted Dividends Portfolio Nexus Other Closing NAV per earnings paid revaluation in
Slide 12: Debt Summary
Primary Health Properties PLC Half Year Results Presentation 2021 DEBT SUMMARY • Broad and diverse range of lending partners Euro private placements £104m/€121m (7%) • Long weighted average debt maturity of 7.0 years Convertible bond £150m (10%) • 100% of debt fixed or hedged Aviva £512m (35%) • Tot
Slide 13: Property Portfolio Overview
Primary Health Properties PLC Half Year Results Presentation 2021 PROPERTY PORTFOLIO OVERVIEW Key Figures1 30 June 2021 Total number of properties 514 Including properties in Ireland 19 Investment portfolio value (£bn) 2.65 Floor area (000’s sqm) 684 Capital value (£ per sqm) 3,876 Contracted rent r
Slide 14: High Quality Recurring Income
Primary Health Properties PLC Half Year Results Presentation 2021 HIGH QUALITY RECURRING INCOME Key characteristics of the portfolio Strong tenant UK leases have 31% of portfolio Weighted average covenant – 90% of effectively upward on fixed or Occupancy unexpired lease rent roll paid only rent revi
Slide 15: Long Leases with Rental Growth Potential
Primary Health Properties PLC Half Year Results Presentation 2021 LONG LEASES WITH RENTAL GROWTH POTENTIAL • Effectively upward only rent roll in UK Drivers of rental growth • Total weighted average rental growth 1.5% p.a. • Completion of historic rent reviews – increased momentum ✓ 69% reviewed to
Slide 16: Asset Management – Enhancing Existing Portfolio
Primary Health Properties PLC Half Year Results Presentation 2021 ASSET MANAGEMENT – ENHANCING EXISTING PORTFOLIO ✓ 17 projects either completed or on-site in year investing £10.8m, £0.3m additional rent and WAULT extended back to 21 years ✓ Strong pipeline of over 100 projects either Board approved
Slide 17: ESG: Premises, Health and People
Primary Health Properties PLC Half Year Results Presentation 2021 ESG: PREMISES, HEALTH AND PEOPLE Built Environment • Supporting the NHS target to be Carbon Net Zero by 2045 and interim reduction of 80% by 2036-2039 • All acquisitions to have an EPC rating of C or better • In the UK, all new develo
Slide 18: 25 Year Track Record of Dividend Growth
Primary Health Properties PLC Half Year Results Presentation 2021 25 YEAR TRACK RECORD OF DIVIDEND GROWTH 7.0 6.20p 6.0 Implied PHP 2021 dividend yield2 Historic dividend progression CAGR 8.9% 1 5.60p 5.90p Q4 5.40p Share Price3 Yield 5.00p 5.125p 5.25p 4.75p 4.88p 5.0 4.63p 160p 3.9% 4.25p 4.38p 4.
Slide 19: Conclusion - Investment Highlights
Primary Health Properties PLC Half Year Results Presentation 2021 CONCLUSION - INVESTMENT HIGHLIGHTS • One of the UK’s largest listed primary health property investors with 514 properties valued at £2.7 billion One of the UK’s largest primary health • FTSE 250 UK REIT with market capitalisation of £
Slide 20: Further Background on PHP
Primary Health Properties PLC Further background on PHP
Slide 21: Positive Yield Gap
Primary Health Properties PLC Half Year Results Presentation 2021 POSITIVE YIELD GAP Illustrative yield gap on property investment UK acquisitions Ireland acquisitions 5.0% 4.7% 0.7% 6.0% +0.1% 4.5% 1.6% 5.1% 1.6% 5.0% 4.0% 3.5% 4.0% 3.6% 3.0% 2.4% 2.5% 3.0% 2.0% 2.0% 1.5% 1.0% 1.0% 0.5% 0.0% 0.0% V
Slide 22: Primary Health Care Opportunity in the UK
Primary Health Properties PLC Half Year Results Presentation 2021 PRIMARY HEALTH CARE OPPORTUNITY IN THE UK • The UK population has been steadily getting older and this trend is projected to continue in the future. • By 2066, it is estimated there will be a further 8.6 million UK residents aged 65 y
Slide 23: Primary Health Care Opportunity in the UK
Primary Health Properties PLC Half Year Results Presentation 2021 PRIMARY HEALTH CARE OPPORTUNITY IN THE UK • Common challenges include lack of space in waiting rooms and consultation rooms, growing list sizes and lack of disabled access. • The COVID-19 crisis undoubtedly accelerated the intended tr
Slide 24: Strong Track Record of Relative Performance
Primary Health Properties PLC Half Year Results Presentation 2021 STRONG TRACK RECORD OF RELATIVE PERFORMANCE • IRR over period since inception of 13.3%1 (Average annual inflation (RPI) over period: 2.7%) CAGR total shareholder returns PHP TSR (absolute change) PHP TSR (absolute – 6 months change) –
Slide 25: Balance Sheet
Primary Health Properties PLC Half Year Results Presentation 2021 BALANCE SHEET £m 30 June 21 31 Dec.20 Investment properties 2,655.2 2,576.1 Cash 72.5 103.6 Debt (1,157.7) (1,159.3) Net debt (1,085.2) (1,055.7) Other net current liabilities (35.3) (35.1) Adjusted net tangible assets (NAV) 1,534.7 1
Slide 26: Spread of Funding Sources
Primary Health Properties PLC Half Year Results Presentation 2021 SPREAD OF FUNDING SOURCES Secured facilities 3 Secured Aviva Secured Provider Santander RBS1 HSBC Lloyds Barclays Aviva bond One Medical bond Tenor Bullet Bullet Bullet Bullet Bullet Bullet Bullet Amortising Bullet Expiry Jul-2021 Mar
Slide 27: Spread of Funding Sources (Continued)
Primary Health Properties PLC Half Year Results Presentation 2021 SPREAD OF FUNDING SOURCES (CONTINUED) Secured facilities 3 Unsecured Cash/ Total Unfettered facilities 1 assets Standard Convertible Provider Aviva Ignis Aviva Euro PP (€) Euro PP (€) Aviva Aviva Life bond Tenor Bullet Bullet Bullet B
Slide 28: EPRA Cost Ratio
Primary Health Properties PLC Half Year Results Presentation 2021 EPRA COST RATIO Half-year ended Half-year ended Year ended 30 June 2021 30 June 2020 31 December 2020 £m £m £m Gross rent less ground rent and service charge income 69.1 66.2 134.6 Direct property expense 4.0 3.2 7.8 Administrative ex
Slide 29: Rent Review Results
Primary Health Properties PLC Half Year Results Presentation 2021 RENT REVIEW RESULTS • £1.0m (1.5% p.a.) increase from 213 rent reviews completed OMV Number of outstanding 6 months to 30 June 2021 Rent reviews reviews (current rent) • 1.0% p.a. achieved on 132 open market value reviews completed •
Slide 30: Contact Details
Primary Health Properties PLC Half Year Results Presentation 2021 CONTACT DETAILS Harry Hyman Richard Howell Chris Santer David Bateman Chief Executive Chief Financial Officer Chief Investment Officer Investment Director harry.hyman@ richard.howell@ chris.santer@ david.bateman@ phpgroup.co.uk phpgro
Slide 31: Disclaimer
Primary Health Properties PLC Half Year Results Presentation 2021 DISCLAIMER This document comprises the slides for a presentation in respect of Primary Health Properties PLC (the “Company”) and its 2021 half-year results presentation (the “Presentation”). No reliance may be placed for any purposes
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