Primary Health Properties Plc · LSE:PHP
Primary Health Properties — H1 2018 Earnings Presentation
30 slides from Primary Health Properties's earnings presentation, Jul 25, 2018
Slide 1: Interim Results: Six months ended 30 June 2018
Slide 2: Agenda
Primary Health | Properties ntroduction Financial results Property Portfolio Asset Management Funding Positive outlook Appendices
Slide 3: Primary Health Properties PLC at a glance
Interim Results Presentation Primary Health Properties PLC at a glance FTSE 250, UK Real Estate Investment Trust (“REIT”) * Leading investor in flexible, modern primary healthcare accommodation across UK and Ireland Portfolio of over 310 properties valued at over £1.4 billion 90% of income funded by
Slide 4: Key Financial Highlights
Interim Results Presentation Key Financial Highlights Performance 30 June 2018 30 June 2017 Change Net rental income (£m) 37.4 34.8 +7.5% EPRA earnings (£m) 17.1 15.4 +11.0% Dividends paid (£m) 16.8 15.7 +7.0% Dividend cover 102% 98% +4.0% Dividend per share (pence) 27 2.62 +3.1% Position 30 June 20
Slide 5: Strong performance delivering earnings, net asset value and dividend
Primary Health Properties Strong performance delivering earnings, net asset value and dividend
Slide 6: Income Statement June 2018 June 2017 Change
Interim Results Presentation Income Statement 30 June 2018 30 June 2017 Change £m £m % Net rental income 37.4 34.8 +7.5% Administrative expenses (4.2) (3.9) Performance incentive fee (0.6) - Operating profit before revaluation gain and financing 32.6 30.9 +5.5% Net financing costs (15.5) (15.5) EPRA
Slide 7: Dividend cover restored
6.0 CAGR: 9.5%1 5.4p 5.25p 5.125p 5.00p 4.88p 5.0 4.75p 4.63p 4.50p 4.38p 4.25p 4.13p 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 0.80p 0.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Dividend cover res
Slide 8: EPRA NAV per share (pence)
EPRA NAV per share (pence) 110.0 0.6 104.2 105.0 2.5 (2.5) 2.9 100.7 100.0 95.0 90.0 85.0 Opening NAV EPRA Dividends Portfolio Shares Closing NAV per share Earnings paid Revaluation issued per share
Slide 9: Growing property portfolio
Growing property —= = po rtfolio
Slide 10: Investing the proceeds from the equity raise
Interim Results Presentation Investing the proceeds from the equity raise Strong pipeline of opportunities with £37m in legals and over £175m in negotiation UK * £2minlegals ° — Pipeline in negotiation £155m * — Strong asset management project pipeline avoiding obsolescence and arresting WAULT decli
Slide 11: Property Portfolio
Interim Results Presentation Property Portfolio Portfolio of 308 healthcare centres -valued at £1.4bn Post period end two assets in Ireland acquired for £24.8m (€28m) Average net initial yield 4.85% (2017: 4.91%) Average lot size increased to £4.6m (2017: £4.5m) 80% of portfolio valued at more than
Slide 12: Investment Acquisition: Mallow Primary Health Centre
Interim Results Presentation Investment Acquisition Mallow Primary Health Centre, Ireland Health Service Executive (HSE), ST 4 4 GP practices (21 doctors), me 4 dentist, optician, pharmacy and café. 6,500 sqm February 2018 £17.7m (€20.0m) 21.9 years
Slide 13: Investment Acquisition: Moredon Medical Centre
Interim Results Presentation Investment Acquisition Moredon Medical Centre, Swindon Tenants GP practice (5 doctors) and a pharmacy Size 1,450 sqm Date purchased June 2018 Acquisition cost £6.1m WAULT 27.5 years Patient list size c.11,500 Rent review OMV and RPI Primary Health Properties
Slide 14: Development: Bray Primary Care Centre
Interim Results Presentation Development Bray Primary Care Centre, Ireland Tenants Health Service Executive (HSE), GP practice (5 doctors), pharmacy and coffee shop Size 4,800 sqm Completion Autumn 2019 Development cost £19.7m (€22.3m) WAULT 25 years Patient list size c.30,000 Rent review Irish CPI
Slide 15: Management activities adding value
Management activities adding value CARRIGAI
Slide 16: High quality recurring income
Interim Results Presentation High quality recurring income... Strong tenant covenant - 21% of portfolio on fixed or 90% of rent roll paid ihe ie of leases nove indexed uplifts. 73% OMV directly/indirectly by the enective’ emer only ren} review, typically every three Government years ov o v v v Avera
Slide 17: Asset management projects arresting WAULT decline
Interim Results Presentation Asset management projects arresting WAULT decline Analysis of leases unexpired Asset management projects committed in 2018 <3years 4S years <1% 3% + Investment £4.8m, re-gearing leases back to 20 years >20 years 12% | / 5-10 years . + 28% Nine projects completed : Three
Slide 18: Asset Management Project: St Georges Medical Centre, Sheerness
Interim Results Presentation Asset Management Project St Georges Medical Centre, Sheerness Asmall extension (2 Consulting Rooms) and minor refurbishment package. Total Capex £0.4m. New 20 year lease on the whole property. The works are scheduled for completion end of July 2018. Dermerroat cueriinsrs
Slide 19: Asset Management Project: Fell Tower Medical Centre
Interim Results Presentation Asset Management Project Fell Tower Medical Centre, Gateshead Refurbishment of the large multi-purpose room on the lower ground floor to create 5 consulting rooms and new patient waiting area. Total capex. £0.2m. New 25 year lease on the whole property. 5 week programme
Slide 20: Funding diversity and longevity
diversity and longevity
Slide 21: Delivering Financial Management
Interim Results Presentation Delivering Financial Management Cost of debt (%) Loan to value ratio (%) Interest cover ratio (X) Debt maturity (years) 6 70 641 3 1 5.15 ° 62.7 oa 6.2 59 6.3 59 5 467 465 109 60 53.7 52.9 25 2.05 2.25 6 5.1 3.86 5 4 4 50 4.6 > 173 190 5 40 4 3 15 30 3 2 20 : 2 1 10 0.5
Slide 22: Debt maturity profile
• Debt maturity profile £'m 140.0 132.8 125.4 120.0 115.0 104.3 100.0 80.0 80.0 76.9 70.0 63.0 60.0 51.2 40.0 20.0 7.0 1.5 3.1 1.7 2.0 0.0 0.0 0.0 0.0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Slide 23: Outlook
Slide 24: Positive Outlook
Interim Results Presentation Positive Outlook 2-term, NO Disciplined approach to acquisitions avoiding asset obsolescence Increased opportunities in Ireland, still priced attractively but yields compressing Majority of rents in both jurisdictions funded by government for long lease terms Positive yi
Slide 25: Appendices
Primary Health Properties
Slide 26: Positive Yield Gap
Interim Results Presentation Positive Yield Gap 1. Net margin over funding cost - UK Acquisitions 2. Net margin over funding cost - Ireland 6.0% Fo% ' 49% 6.0% 50% 6.0% Es 4.09 5.0% 0% = 3.0% 40% 3.2% 3.0% 50 Los 17% 2.0% 1.0% 1.0% 0.0% ; 0.0% Valuation Incremental lyr Libor Average debt__Income ret
Slide 27: Spread of Funding Sources
Interim Results Presentation Spread of Funding Sources - Passing Ren’ LTV actual ICRM AX Primar Health Properties Lloyds Bullet Dec-20 £30m Enil £58m £3m 65% n/a 1.75x n/a 1 2. Barclays/ AIB Bullet Jan-21 £115m £55m £218m £1lm 60% 25% 15x 8.0x Excludes unsecured £5m overdraft facility Bullet Mar-22
Slide 28: Population age profile 2014 and 2039
• • Age 105 98 91 2039 2039 84 77 70 63 56 Females Males 49 2014 42 2014 35 28 21 14 7 0 600,000 400,000 200,000 0 200,000 400,000 600,000 Population
Slide 29: Contact Details
Interim Results Presentation Contact Details Harry Hyman Richard Howell Managing Director Finance Director harry. hyman@nexusgroup.co.uk richard.howell@nexusgroup.co.uk Primary Health’ www.phpgroup.co.uk (29 } Properties
Slide 30: Disclaimer
Interim Results Presentation Disclaimer IMPORTANT NOTICE This presentation and the information contained within it is strictly private and confidential and may not be distributed in any way to any other person without the consent of Primary Health Properties Plc (“PHP”). The information contained in
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