Primary Health Properties Plc · LSE:PHP
Primary Health Properties — Hardman Investor Forum (November 2019)
22 slides from Primary Health Properties's conference presentation, November 2019
Slide 1: Hardman Investor Forum
Hardman Investor Forum Primary Health Properties PLC Leading the way in modern primary health properties November 2019
Slide 2: Agenda
Agenda PHP at a glance MedicX merger – compelling rationale Strong track record of dividend growth Strong track record of relative performance Equity raise – use of proceeds Property Portfolio Funding
Slide 3: Primary Health Properties PLC at a glance
Primary Health Properties PLC at a glance ✓ Leading investor in flexible, modern primary healthcare accommodation across UK and Ireland ✓ Leading portfolio of 485 properties valued at £2.4 billion ✓ FTSE 250 UK Real Estate Investment Trust (“REIT”) with £1.7 billion market capitalisation ✓ 90% of in
Slide 4: MedicX merger: compelling strategic, operational and financial rationale
MedicX merger Compelling strategic, operational and financial rationale
Slide 5: MedicX merger - investment highlights
MedicX merger - investment highlights ✓ Created one of the UK’s largest listed primary health property investors with over 485 properties valued at £2.4 billion ✓ FTSE 250 REIT with market capitalisation of £1.7 billion and improved share liquidity Successful all-share ✓ Highly complementary portfol
Slide 6: Strong track record of dividend growth
Strong track record of dividend growth Historic dividend progression CAGR: 9.25%1 Implied PHP 2019 dividend yield 6.0 Share Price Yield 5.40p 5.60p 5.25p 142.6p 3.9% 4.88p 5.00p 5.125p 5.0 4.63p 4.75p 4.38p 4.50p 4.13p 4.25p 4.0 3.75p 3.38p 3.00p 3.0 2.75p 2.50p 2.25p 2.00p 2.0 1.75p 1.40p 1.50p 1.0
Slide 7: Strong track record of relative performance
Strong track record of relative performance ✓ IRR over period since inception of 13.3%1 (Average annual inflation (RPI) over period: 2.8%) PHP 5 year relative TSR performance PHP TSR (absolute change) – 1yr / 3yr/ 5yr CAGR total shareholder returns PHP TPR vs MSCI UK Monthly Property Index PHP Assur
Slide 8: Equity raise - use of proceeds
Equity raise - use of proceeds Total funding requirement of c.£150m over the next 18 months to fund a mix of recent acquisitions, committed development funding, future acquisition pipeline and asset management 1 Funding requirement Property Cost Investment Recent acquisitions/ acquisitions Oakwood L
Slide 9: Property Portfolio
Property Portfolio
Slide 10: Property portfolio overview
Property portfolio overview Key Figures PHP MedicX Combined Total number of properties 318 167 485 Including properties in Ireland 10 5 15 Investment portfolio value (£bn) 1.59 0.81 2.4 Floor area (000’s sqm) 419 225 644 Capital value (£ per sqm) 3,665 3,615 3,650 Contracted rent roll (£m) 81.1 44.5
Slide 11: Property portfolio overview
Property portfolio overview Geographical spread by valuation Ireland South West 7% 5% Midlands and East Anglia London 23% 7% Wales 8% Scotland North East 8% 16% North West South East 13% 13% Covenant exposure by rent roll Other Pharmacy 1% 9% Government backed income (UK GPs/NHS/HSE) 90% Numbers in
Slide 12: High quality recurring income
High quality recurring income Key characteristics of the portfolio Strong tenant 32% of portfolio Weighted average covenant – 90% of The majority of on fixed or Occupancy unexpired lease rent roll paid leases have indexed uplifts. rate of length of directly/indirectly effectively upward 68% OMV revi
Slide 13: Long leases with growth potential
Long leases with growth potential Effectively upward only rent roll Income expiry profile – WAULT of 13.0 years Rent review profile • 6.6% on fixed uplift <3 years 3-5 years 20+ years 1.6% 6.0% • 25.3% index linked 13.0% • 68.1% reviewed to open market 5-10 years 25.5% Drivers of rental growth 15-20
Slide 14: Positive yield gap
Positive yield gap Illustrative yield gap on property investment UK Acquisitions Ireland Acquisitions 6.0% 6.0% 5.6% 5.0% 4.8% 0.275% 5.0% 0.0% 0.275% 4.0% 4.0% 3.7% 1.6% 0.8% 3.0% 3.0% 2.0% 2.0% 2.0% 1.7% 1.0% 1.0% 0.0% 0.0% Valuation Incremental 10 yr Libor Average debt Income return Valuation Inc
Slide 15: Growing Development Pipeline
Growing Development Pipeline • Eight schemes on site with a net development cost of £59.5m Emerald Gardens, Kew Medical Centre, UK Bray Primary Care Centre, Ireland Tenants Tenants • GP practice • Health Service Executive (HSE) • Social prescribing charity • GP Practices • Pharmacy Purchase date: Ma
Slide 16: Investment
Investment • Five assets acquired for £31.3m (average lot size £6.3m) • Strong active pipeline in UK and Ireland totalling £150m including £70m in legal due diligence Oakwood Lane Medical Centre, Leeds The Meath Primary Care Centre, Dublin, Ireland Tenants Tenants • GP practice • Health Service Exec
Slide 17: Asset Management – enhancing existing portfolio
Asset Management – enhancing existing portfolio • Eight projects completed, three on-site and eleven approved and due to commence shortly • £4.9m invested, £0.3m additional rent and WAULT extended back to 17 years • Strong pipeline of over 60 potential projects Robin Lane Medical Centre, Pudsey West
Slide 18: Funding
Funding
Slide 19: Debt summary
Debt summary ✓ Broad range of lending partners with 93% of debt fixed or hedged ✓ Total debt facilities of £1.4bn(1) ✓ Drawn net debt £1.1bn ✓ Group LTV 47.9% (proposed fundraise of between £75m to £100m reduces the LTV ratio by between 3% to 4%) ✓ Average cost of debt 3.68%(1), 32bp reduction since
Slide 20: Contact Details
Contact Details Harry Hyman Richard Howell Chris Santer Managing Director Finance Director Chief Investment Officer harry.hyman@ richard.howell@ chris.santer@ nexusgroup.co.uk nexusgroup.co.uk nexusgroup.co.uk Primary Health Properties PLC Interim Results 2019 20
Slide 21: Disclaimer
Disclaimer The information contained in this presentation in respect of Primary Health Properties PLC (the “Company”) and communicated during any delivery of the presentation, including the talks given by the presenters, any question and answer session and any document or material distributed at or
Slide 22: Disclaimer
Disclaimer to place undue reliance on these forward-looking statements. The Company is not under any obligation (except as required by the Listing Rules of the FCA, the Disclosure Guidance and Transparency Rules of the FCA, the Market Abuse Regulation and the rules of the London Stock Exchange) and
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