Interim Results, Capital Markets Update, Webcast

About this update from Primary Health Properties Plc

[{"type":"text","content":"\n \n THIS ANNOUNCEMENT AND THE INFORMATION HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. \n THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT AND NO INVESTMENT DECISION IN RELATION TO THE OFFER OR THE NEW PHP SHARES SHOULD BE MADE EXCEPT ON THE BASIS OF INFORMATION IN THE OFFER DOCUMENT, THE REVISED OFFER DOCUMENT, THE COMBINED CIRCULAR AND PROSPECTUS AND THE SUPPLEMENTARY PROSPECTUS. \n   \n Primary Health Properties PLC \n Interim results for the six months ended 30 June 2025 \n PHP positioned for secure income and valuation growth supporting its progressive dividend policy \n Primary Health Properties PLC (\"PHP\", the \"Group\" or the \"Company\"), a leading investor in modern primary health facilities, announces its interim results for the six months ended 30 June 2025 (the \"period\"). \n Mark Davies , Chief Executive Officer (\"CEO\") of PHP, commented: \n \"At a pivotal time for our sector, PHP has delivered a strong operational and financial performance driven by rental growth across our portfolio, a value-accretive acquisition in Ireland, valuation gains and another period of dividend growth. The improving rental growth outlook and a stabilisation of our property yields at 5.25% signal that we've moved through a key inflexion point in the property cycle with a very encouraging outlook ahead. \n \"The 10-year Health Plan which was published on 3 July 2025 is clearly positive for PHP. We welcome the Government's commitment to strengthening the NHS, particularly its emphasis on shifting more services to modern primary care facilities embedded in local communities. This plays directly to our strengths and our long-standing partnerships across the NHS give us a strong foundation to support this transition and deliver value to our shareholders. \n \"We continue to believe in the compelling strategic and financial rationale for the recommended combination with Assura plc. The transaction is expected to be earnings accretive for both sets of shareholders and we were pleased to have secured strong support for the transaction from PHP shareholders at our general meeting on 1 July 2025 with over 99% of voting shareholders approving the proposed combination. This is a clear endorsement of the Company's ability to deliver a financially beneficial transaction that is strategically valuable, supported by an expected strong investment grade credit rating that will deliver future value to shareholders and underpin the Group's progressive dividend policy. \n \"Since the announcement of the Assura plc recommendation, we've continued discussions with third party investors on forming a joint venture, which is expected to include the private hospital portfolio, as part of our deleveraging strategy. Conversations are ongoing with a range of highly- credible investors and we remain confident in our ability to conclude a transaction in a timely manner post completion. \n \"From day one the combined group will offer a powerful platform with greater scale, enhanced income and valuation growth potential and a lower cost of capital, all underpinned by a clear and important social purpose. The proposed combination also positions us strongly to invest in the future of healthcare infrastructure and we will have the financial capacity and Government support to help deliver it.\" \n \n \n   \n CAPITAL MARKETS UPDATE AND WEBCAST: \n An in-person Capital Markets Update presentation will be held today, 24 July 2025 at 2.30pm BST (3.30pm SAST) at the offices of Deutsche Numis, 45 Gresham Street, London, EC2V 7BF and for those who cannot attend in person, the meeting will be accessible via live video webcast and conference call facility. Following the presentation there will be a managed questions and answers session. If you would like to register your interest in attending the meeting in person or virtually, please contact Burson Buchanan via [email protected] . \n The event will provide valuable insight into the future of healthcare real estate, highlighting the radical shift from hospital to community care and how PHP is strategically well placed to benefit from this positive outlook. PHP management will also present an operational and financial update including the recommended combination with Assura although no new information will be provided in respect of the transaction. \n A fireside chat will be held with former Health Secretary and Chancellor, Sir Jeremy Hunt, a long-term advocate for increased investment in primary care, followed by an opportunity for a live Q&A. \n FINANCIAL AND OPERATIONAL HIGHLIGHTS \n \n \n \n \n Income statement and financial metrics \n \n \n Six months to 30 June 2025 \n \n \n Six months to 30 June 2024 \n \n \n   \n Change \n \n \n \n \n Net rental income 1 \n \n \n £78.6m \n \n \n £76.2m \n \n \n +3.1% \n \n \n \n \n Adjusted earnings 1,2 \n \n \n £47.3m \n \n \n £46.3m \n \n \n +2.2% \n \n \n \n \n Adjusted earnings per share 1,2 \n \n \n 3.54p \n \n \n 3.46p \n \n \n +2.3% \n \n \n \n \n IFRS profit for the period \n \n \n £59.4m \n \n \n £3.6m \n \n \n   \n \n \n \n \n IFRS earnings per share 2 \n \n \n 4.4p \n \n \n 0.3p \n \n \n   \n \n \n \n \n Dividends \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Dividend per share 5 \n \n \n 3.55p \n \n \n 3.45p \n \n \n +2.9% \n \n \n \n \n Dividends paid 5 \n \n \n £47.4m \n \n \n £46.1m \n \n \n +2.8% \n \n \n \n \n Dividend cover 1 \n \n \n 100% \n \n \n 100% \n \n \n   \n \n \n \n \n Balance sheet and operational metrics \n \n \n 30 June \n 2025 \n \n \n 31 December \n 2024 \n \n \n   \n Change \n \n \n \n \n Adjusted NTA per share 1,3 \n \n \n 106.2p \n \n \n 105.0p \n \n \n +1.1% \n \n \n \n \n IFRS NTA per share 1,3 \n \n \n 104.0p \n \n \n 103.0p \n \n \n +1.0% \n \n \n \n \n EPRA NDV per share 1,3 \n \n \n 113.9p \n \n \n 114.1p \n \n \n -0.2% \n \n \n \n \n Property portfolio \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Investment portfolio valuation 4 \n \n \n £2.81bn \n \n \n £2.75bn \n \n \n +0.7% \n \n \n \n \n Net initial yield (\"NIY\") 1 \n \n \n 5.25% \n \n \n 5.22% \n \n \n +3bps \n \n \n \n \n Contracted rent roll (annualised) 1,6 \n \n \n £157.7m \n \n \n £153.9m \n \n \n +2.5% \n \n \n \n \n Weighted average unexpired lease term (\"WAULT\") 1 \n \n \n 9.1 years \n \n \n 9.4 years \n \n \n   \n \n \n \n \n Occupancy \n \n \n 99.1% \n \n \n 99.1% \n \n \n   \n \n \n \n \n Rent-roll funded by government bodies 1 \n \n \n 88% \n \n \n 89% \n \n \n   \n \n \n \n \n Debt \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Average cost of debt \n \n \n 3.4% \n \n \n 3.4% \n \n \n   \n \n \n \n \n Loan to value ratio (\"LTV\") 1 \n \n \n 48.6% \n \n \n 48.1% \n \n \n   \n \n \n \n \n   \n 1   Items marked with this footnote are alternative performance measures. Refer to the Glossary of Terms for a description of these measures and a reconciliation to the nearest statutory metric where appropriate. \n 2   See note 7 , earnings per share, to the financial statements. \n 3   See note 7 , net asset value per share, to the financial statements. Adjusted net tangible assets, EPRA net tangible assets (\"NTA\"), EPRA net disposal value (\"NDV\") and EPRA net reinstatement value (\"NRV\") are considered to be alternative performance measures. The Group has determined that adjusted net tangible assets is the most relevant measure. \n 4 Percentage valuation movement during the period based on the difference between opening and closing valuations of properties after allowing for acquisition costs and capital expenditure. \n 5 See note 8, dividends, to the financial statements. \n 6 Percentage contracted rent roll increase during the period is based on the annualised uplift achieved from all completed rent reviews and asset management projects. \n EARNINGS AND DIVIDEND GROWTH \n ·   Adjusted earnings per share up 2.3% at 3.54 pence (H1 2024: 3.46 pence) \n ·   IFRS earnings per share increased to 4.4 pence (H1 2024: 0.3 pence) reflecting non-cashflow gains and losses arising on the valuation of the Group's property portfolio, convertible bond and interest rate derivatives \n ·   Contracted annualised rent roll increased by 2.5 % to £157.7 million (31 December 2024: £153.9 million) \n ·   Additional annualised rental income on a like-for-like basis of £2.2 million or 1.4 % from rent reviews and asset management projects (H1 2024: £1.8 million or 1.2%; FY 2024: £4.0 million or 2.7%) continuing the trend experienced in recent years. \n ·   EPRA cost ratio 9.8 % (FY 2024: 10.1 %) excluding Axis overheads and direct vacancy costs, representing one of the lowest in the UK REIT sector, \n ·   First three quarterly dividends totalling 5.325 pence per share distributed or declared in the year-to-date, equivalent to 7.1 pence per share on an annualised basis, a 2.9 % increase over 2024 (6.9 pence per share) and marking the Company's 29 th consecutive year of dividend growth \n ·   The Company intends to maintain its strategy of paying a progressive, covered dividend \n NET ASSET VALUE AND PORTFOLIO MANAGEMENT \n ·   Adjusted Net Tangible Assets (\"NTA\") per share increased by 1.1% to 106.2 pence (31 December 2024: 105.0 pence) \n ·   IFRS NTA increased by 1.0% to 104.0 pence (31 December 2024: 103.0 pence) \n ·   Property portfolio valued at £2.81 billion (31 December 2024: £2.75 billion) reflecting a net initial yield (\"NIY\") of 5.25% (31 December 2024: 5.22%) \n ·   Revaluation surplus in the period of £19.8 million (H1 2024: deficit £40.0 million), or an increase of +0.7% (H1 2024: -1.4%), comprising £28.8 million arising from rental growth and asset management projects offset by a £9.0 million decline arising from NIY widening of 3bps \n ·   The portfolio's metrics continue to reflect the Group's secure, long-term and predictable income stream with occupancy at 99.1% (31 December 2024: 99.1%), 88% (31 December 2024: 89%) of income funded by government bodies and a WAULT of 9.1 years (31 December 2024: 9.4 years) \n ·   Pipeline of 43 asset management projects and lease regears planned over next two to three years , highlighting the improving rental growth outlook with the current weighted average rent of £195psm due to increase by around 15% to £223psm post completion providing important evidence for future rent review settlements across the wider portfolio \n ·   Acquisition of Laya Healthcare facility, Cork, Ireland for €22.0 million / £18.2 million delivering an accretive earnings yield of 7.1% \n ·   Portfolio in Ireland now comprises 22 assets, valued at £293 million or €341 million (31 December 2024: £255 million / €309 million). The portfolio in Ireland represents 10% (31 December 2024: 9%)  of the total portfolio and Ireland continues to represent a core part of the Group's strategy and preferred area of future growth \n FINANCIAL MANAGEMENT \n ·      Significant liquidity headroom with cash and collateralised undrawn loan facilities totaling £107.3 million (31 December 2024: £270.9 million) after capital commitments and repayment of the £150m convertible bond post period end on 15 July 2025 \n ·      100% (31 December 2024: 100%) of net debt fixed or hedged for a weighted average period of six years \n ·      LTV ratio 48.6% (31 December 2024: 48.1%) within the Group's targeted range of between 40% to 50% \n ·      Weighted average debt maturity 5.1 years (31 December 2024: 5.7 years) \n RELATIVE TOTAL RETURNS \n \n \n \n \n Six months ended \n 30 June 2025 \n \n \n Six months ended \n 30 June 2024 \n \n \n Year ended \n 31 December 2024 \n \n \n \n \n Adjusted NTA return \n \n \n 4.5% \n \n \n 0.4% \n \n \n 3.6% \n \n \n \n \n Income return \n \n \n 2.9% \n \n \n 2.8% \n \n \n 5.5% \n \n \n \n \n Capital return \n \n \n 0.7% \n \n \n (1.4%) \n \n \n (1.3%) \n \n \n \n \n Total property return 1 \n \n \n 3.6% \n \n \n 1.4% \n \n \n 4.2% \n \n \n \n \n 1   The de finition for total property return is set out in the Glossary of Terms. \n   \n   \n   \n For further information contact: \n \n \n \n \n Mark Davies \n Chief Executive Officer \n Primary Health Properties PLC \n T: +44 (0) 7968 122448 \n E: [email protected] \n \n \n Richard Howell \n Chief Financial Officer \n Primary Health Properties PLC \n T: +44 (0) 7766 072272 \n E: [email protected] \n \n \n \n \n \n \n \n \n \n \n \n \n Burson Buchanan (Financial PR) \n Mark Court/Stephanie Whitmore/ \n Jesse McNab \n T: +44 (0) 20 7466 5066 \n E: [email protected] \n \n \n Sodali & Co (media re proposed combination with Assura) \n Rory Godson \n Elly Williamson \n T: +44 (0) 7970 246725  \n E: [email protected] \n \n \n \n \n   \n   \n \n \n   \n EXECUTIVE REVIEW \n PHP has continued to deliver on its 29-year track record of continuous dividend growth underpinned by another period of robust operational and financial performance in the first half of 2025. The performance in the period is a testament to the quality of PHP's business model, portfolio, management team and people against the backdrop of an uncertain interest rate and economic environment which continues to weigh heavily on the real estate sector. \n The Group's operational resilience throughout the period reflects the security and longevity of our income which are important drivers of our predictable income stream and underpin our progressive dividend policy. We have maintained our strong operational property metrics, with high occupancy at 99.1% (31 December 2024: 99.1%), 88% (31 December 2024: 89%) of our rent being securely funded directly or indirectly by the UK and Irish Governments and a long weighted average unexpired lease term (\"WAULT\") of 9.1 years (31 December 2024: 9.4 years). \n The improving rental growth outlook and stabilisation of yields in the period have underpinned valuation growth across the portfolio now valued at £2.81 billion (31 December 2024: £2.75 billion) across 517 assets (31 December 2024: 516 assets), including 22 assets in Ireland, with a rent roll of £157.7 million (31 December 2024: £153.9 million). The increase in values created a surplus of £19.8 million after acquisition and asset management capital expenditure and resulted in an increase in the portfolio's average lot size to £5.4 million (31 December 2024: £5.3 million). \n We continue to drive rental growth from both rent reviews and asset management activities which is a critical factor in the Group's business model and underpins both the earnings and dividend outlook. Importantly, we have continued to see open market value (\"OMV\") growth improving with reviews completed in the six months ended 30 June 2025 generating an extra £0.8 million (H1 2024: £0.6 million) an uplift of 7.6% (2024: 6.5%) over the previous passing rent equivalent to 2.3% (2024: 2.1%) on an annualised basis. This continues the positive trend in growth seen over the last couple of years . \n We welcome the Government's 10-year Health Plan and its commitment to strengthening the NHS which is clearly positive for PHP, with further information on this provided below. Many of our primary care facilities and occupiers will need to deal with future reforms along with addressing the large backlog of procedures that has built up over recent years. We continue to maintain close relationships with our key stakeholders and GP partners to ensure we are best placed to help the NHS and Health Service Executive (\"HSE\"), Ireland's national health service provider, evolve and deal with the ever-increasing pressures being placed on them. \n Recommended combination with Assura \n On 16 May 2025, PHP announced a firm intention to make a share and cash offer for the entire issued share capital of Assura pursuant to Rule 2.7 of the Takeover Code and on 13 June 2025 posted an offer document to Assura shareholders along with a combined circular and prospectus to PHP shareholders. \n Subsequent to the above, on 23 June 2025, the Boards of both PHP and Assura announced the terms of a recommended combination which will be implemented by way of an increased shares and cash offer. Under the increased terms of PHP's offer, Assura shareholders will receive for each share held 0.3865 new PHP shares and 12.5 pence in cash. Assura shareholders will be entitled to receive a special dividend of 0.84 pence per Assura share in addition to the dividends of 0.84p already declared and paid in April 2025 and July 2025. The offer is not conditional on any antitrust, competition or merger control approvals. \n On 1 July 2025, PHP's general meeting was held to approve the transaction with 99.3% of shareholders who voted approving the proposed combination which is a strong endorsement of the transaction. \n The transaction will create a UK REIT of significant scale and liquidity with a combined portfolio of approximately £6 billion of long leased, sustainable infrastructure assets principally let to government tenants and leading UK healthcare providers benefiting from increased income security, longevity, diversity of assets, geography and mix of rent review types. \n The transaction will be funded through both the issue of new share equity and by way of a new £1.125 billion unsecured loan provided by Citibank, N.A., London Branch, Lloyds Bank plc and The Royal Bank of Scotland Plc. The facility will be used to finance the cash consideration payable by PHP to Assura shareholders, provide headroom to refinance debt facilities maturing in the next 18 to 24 months and provide additional undrawn working capital headroom for the combined Group. \n To support the combined Group's progressive dividend policy, paid on a quarterly basis, we have set out an attractive strategy and financial framework which will focus on: \n ·    80% to 90% government backed income target with new or regeared leases typically in excess of 20 years \n ·    Focus on organic rental growth greater than 3% to deliver sector leading, risk adjusted total property returns \n ·    Risk controlled and capital light asset management and development projects \n ·    Targeting a strong investment grade credit rating of BBB+ or better \n ·    LTV target of 40% to 50% \n ·    Interest cover target of greater than 2.5x net rental income with more than 90% of debt fixed or hedged \n ·    Strong control on costs and overheads with one of the lowest EPRA cost ratios in the sector \n Notwithstanding the expected future growth from earnings and valuation accretion a return to PHP and Assura's long term trading valuations could potentially deliver significant upside for shareholders. \n PHP encourages all Assura shareholders to accept the offer and to make a mix and match election. Assura shareholders who have not yet accepted the offer should note that the mix and match facility will remain open until the date on which the offer becomes or is declared unconditional after which time it may be closed by PHP without further notice. PHP intends to close the mix and match Facility after the offer becomes unconditional (in order to allow allocations to be calculated).  Assura shareholders who have not yet accepted the offer and wish to make elections under the mix and match facility are therefore recommended to accept the offer and make their elections under the mix and match facility as soon as possible. \n Further information in respect of the offer are contained at the end of this announcement in the section headed \"Important Information in relation to PHP's offer for Assura plc\" and on the Group's website: https://www.phpgroup.co.uk/investors/offer-for-assura-plc . \n Overview of results \n PHP's Adjusted earnings increased by £1.0 million or 2.2% to £47.3 million (H1 2024: £46.3 million) in the six months to 30 June 2025, driven by organic rental growth from rent reviews and asset management projects, plus the acquisition of Laya Healthcare facility in February 2025, partially offset by higher interest costs on the Group's increased debt arising from acquisition and asset management activities. Using the weighted average number of shares in issue in the period the Adjusted earnings per share increased by 2.3% at 3.54 pence (H1 2024: 3.46 pence). \n A revaluation surplus of £19.8 million (H1 2024: deficit £40.0 million) was generated in the period from the portfolio, equivalent to +1.5 pence per share. The valuation surplus was driven by rental growth and asset management projects equivalent to £28.8 million partially offset by net initial yield (\"NIY\") widening of 3 bps in the period, equivalent to a valuation reduction of around £9 million. \n A combined loss of £5.2 million (H1 2024: loss of £1.8 million) from the fair value movements of interest rate derivatives and convertible bonds, the amortisation of the fair value adjustment on the MedicX fixed rate debt at acquisition and the amortisation of the intangible asset arising on the acquisition of Axis PHP in 2023 resulted in a profit before tax as reported under IFRS of £61.9 million (H1 2024: £4.5 million). \n The Group's balance sheet remains robust with significant liquidity headroom with cash and collateralised undrawn loan facilities, after capital commitments and post period end repayment of the £150 million convertible bond, totalling £107.3 million (31 December 2024: £270.9 million). The loan to value ratio of 48.6% (31 December 2024: 48.1%) is in line with the targeted range of between 40% and 50% with significant valuation headroom across the various loan facilities with values needing to fall by around £1.0 billion or 35% before the loan to value covenants are impacted. \n Dividends \n The Company distributed a total of 3.55 pence per share in the six months ended 30 June 2025, equivalent to 7.1 pence on an annualised basis, which represents an increase of 2.9 % over the dividend per share distributed in 2024 of 6.9 pence. 2025 will mark the 29 th year of consecutive dividend growth for PHP. \n A third quarterly interim dividend of 1.775 pence per share was declared on 16 June 2025. The dividend will be paid on 15 August 2025 to shareholders who were on the register at the close of business on 3 July 2025. The Company intends to maintain its strategy of paying a progressive dividend, which is paid in equal quarterly instalments, and covered by underlying earnings in each financial year. A further interim dividend payment is planned to be made in November 2025, which is expected to comprise a mixture of both Property Income Distribution and normal dividend. \n The total value of dividends distributed in the period increased by 2.8 % to £47.4 million (30 June 2024: £46.1 million), which were covered by Adjusted earnings. As previously reported, we suspended the scrip dividend scheme in light of the ongoing weakness in the share price and a dividend re-investment plan is being offered in its place. \n Johannesburg Stock Exchange (\"JSE\") secondary listing \n In the period, the Company has continued build on the growing interest in the Company and its profile in the South African market where investors have shown strong interest in the unique healthcare property investment opportunity. Since listing in October 2023, the secondary listing has helped contribute to liquidity in the Group's shares and as at 30 June 2025 approximately 45 million shares or 3.4% (31 December 2024: 14 million or 1.0%) of the register is now listed on the JSE. We continue to help potential South African investors acquire PHP shares and provide further liquidity on the JSE with the objective of increasing the number of shares listed there to between 5% to 10% of the Group's total issued share capital. \n   \n Environmental, Social and Governance (\"ESG\") \n PHP has a strong commitment to responsible business. ESG matters are at the forefront of the Board's and our various stakeholders' considerations and the Group has committed to transitioning to net zero carbon (\"NZC\"). PHP published, at the start of 2022, a NZC Framework setting out the five key steps we are taking to achieve an ambitious target of being NZC by 2030 for all of PHP's operational, development and asset management activities. \n We continue to make good progress on the delivery of our NZC framework commitments and achieved our first milestone of net zero operations for the last three years, one year ahead of target. Additionally, the Group's completed the NZC fit-out development at South Kilburn, London in Q2 2025 and is due to complete imminently the NZC development at Croft, West Sussex. \n We continue to modernise existing buildings and improve the environmental credentials of our portfolio through the asset management programme and have completed a further two projects in the period, all of which saw an improvement in the EPC ratings to a B. As at 30 June 2025, 52% of assets have an EPC rating of A or B (31 December 2024: 47%) and 90% at A to C (31 December 2024: 88%). \n As part of establishing the wider carbon impact of the buildings and improving our access to energy performance data we have partnered with arbnco, the award-winning Protech company addressing climate change, to increase and move towards 100% energy data coverage across the portfolio, allowing us to proactively engage with and support tenants on improving their energy performance. \n As a leading provider of modern primary care premises, we aim to create a lasting positive social impact, particularly on the health outcomes and wellbeing in the communities where we are invested. We believe that our activities benefit not only our shareholders but also our wider stakeholders, including occupiers, patients, the NHS and HSE, suppliers, lenders, and the wider communities in both the UK and Ireland. \n Further details on our progress, objectives for the future and approach to responsible business can be found in the 2024 Annual Report and on our website. \n The NHS 'fit for the future' 10-year health plan for England \n The UK Government's 10-year plan for the NHS in England was launched on 3 July 2025, to create a new model of care fit for the future, setting out three radical shifts - from hospital to community, analogue to digital, and sickness to prevention. \n ·    The move from hospital to community will be delivered through a 'neighbourhood health service' that will join up multiple services through local teams to make them patient focused, accessible and, in time, to offer predictive and preventative care, anticipating need rather than reacting to it.  \n ·    The move to digital will be through the NHS app to improve patient access to services and control their data in a single patient record. \n ·    The move from sickness to prevention will include an ambition to end obesity, incentivisation of healthier choices, better support for people to find and stay in work, an expansion of mental health support and increased use of genomics to enable intervention for people at high risk of developing disease. \n There is a clear theme of reducing the reliance on hospitals and an accompanying commitment to shift expenditure away from expensive hospital care.  Consequently, the plan should be a catalyst for unlocking significant future opportunities in primary care and community diagnostics. \n In support of the shift from hospital to community, the plan outlines the development of neighbourhood health centres (\"NHC\") in every community acting as a 'one stop shop' for patient care and the place from which multidisciplinary teams operate.  The objective of NHC's is to create an offer that meets population needs holistically by co-locating NHS, local authority and voluntary sector services, bringing historically hospital based activities such as diagnostics, post-operative care and rehabilitation into the community but also offer a variety of services such as smoking cessation, weight management, employment support and debt advice providing convenient access to services, particularly for those with complex needs, but will also support more integrated working by healthcare and allied professionals. Importantly, much of the existing UK primary care infrastructure is incapable of facilitating these broad, multi-disciplinary services in the community. \n The creation of NHCs will therefore mandate the improved utilisation of existing assets and the delivery of new premises. The plan recognises that private capital, including third party development, will be essential to the delivery of the new estate and proposals for a new plan to support the establishment of an NHC in every community is expected with the Autumn 2025 Budget. \n PHP is strategically well placed to assist and support the Government and NHS with the NHC programme by enhancing its existing estate through both the Group's pro-active asset management and development activities. \n Primary health and investment market update \n Primary care asset values have continued to perform well relative to mainstream commercial property due to recognition of the security of their government backed income, crucial role in providing sustainable healthcare infrastructure and more importantly a stronger rental growth outlook enabling attractive reversion over the course of long leases. In particular, the recent KKR / Stonepeak approach for Assura has demonstrated the continued desirability of the primary care sector. \n Yields adopted by the Group's valuers have shown moderation moving out by only 3bps to 5.25% as at 30 June 2025 (31 December 2024: 5.22%) to reflect perceived market sentiment for the sector. We believe the sector has reached an inflexion point with future rental growth offsetting the impact of any further yield expansion. \n PHP Outlook \n PHP continues to believe the compelling strategic and financial rationale for the recommended combination with Assura plc (\"Assura\"). We are also pleased to have secured strong support for the transaction from PHP shareholders at our general meeting with over 99% of voting shareholders approving the proposed combination which is a strong endorsement of the Company's ability to deliver an earnings accretive transaction. \n At an important time for our sector, a combined group creates a strong platform that offers scale, income and valuation growth with both resilience and an important social purpose. UK PLC ownership of primary care facilities also provides appropriate stewardship of these social infrastructure assets. \n PHP welcomes the Governments 'fit for the future' 10-year Health Plan for the NHS in England with its emphasis on shifting services to modern primary care facilities in a community setting. Our track record in primary care and relationships with NHS stakeholders place PHP at the centre of the solution to deliver on the Government's plan. This backdrop, together with the improving rental growth outlook, and the potential for valuations to be at an inflexion point in the current economic cycle represents a very encouraging outlook for the combined group over the long term.  \n PHP has delivered another period of strong operational and financial performance with a focus on driving rental growth from our existing assets and are encouraged by the firmer tone of rental growth experienced over the last couple of years. We believe the dynamics of inflation in recent years, including significantly increased build costs combined with demand for new primary care facilities and the need to modernise the estate will continue to drive future rental settlements. \n These factors, along with the encouraging Government commitments to a neighbourhood health service and the resulting increased investment in primary and community care, enable us to look forward to the rest of 2025 and beyond with confidence. \n   \n   \n   \n   \n Harry Hyman                                                  Mark Davies \n Chair                                                                Chief Executive Officer \n 23 July 2025 \n \n \n \n BUSINESS REVIEW \n Rental growth \n PHP's sector-leading metrics remain robust and we continue to focus on delivering the organic rental growth that can be derived from our existing assets. This growth arises mainly from rent reviews and asset management projects (extensions, refurbishments and lease re-gears) which provide an important opportunity to increase income, extend lease terms and avoid obsolescence whilst ensuring that our properties continue to meet their communities' healthcare needs, improve their ESG credentials and ensure they also play a crucial role in helping the Government fulfil its 10-year Health Plan. \n In the first half of 2025 we have continued to see strong organic rental growth from our existing portfolio with income increasing by £2.2 million or 1.4% (six months ended 30 June 2024: £1.8 million or 1.2%; years ended 31 December 2024 and 2023: £4.0 million or 2.7% and £4.3 million or 3.0% respectively) on a like-for-like basis. The progress continues the improving rental growth outlook seen over the last couple of years. \n Rent review performance \n In the six months to 30 June 2025, the Company generated an additional £2.1 million (H1 2024: £1.6 million; H2 2024: £1.6 million) of extra rental income from its rent review activities, both in the UK and in Ireland. \n Importantly, the Company continues to see an improving open market rent review performance with an additional £0.8 million (H1 2024: £0.6 million; H2 2024: £0.8 million) an increase of 7.6% over the previous passing rent completed across 86 reviews. This includes 37 open market value rent reviews arising in 2022, 2023 and 2024 which delivered an increase of 12.3% over the previous passing rent or 3.6% on an annualised basis. \n The growth from rent reviews completed in the period is summarised below: \n \n \n \n \n \n \n \n \n Review type \n \n \n Number \n \n \n Previous rent \n (per annum) \n £ million \n \n \n Rent increase \n (per annum) \n £ million \n \n \n % increase      total \n % \n \n \n % increase annualised \n % \n \n \n \n \n UK - open market 1 \n \n \n 86 \n \n \n 10.8 \n \n \n 0.8 \n \n \n 7.6% \n \n \n 2.3% \n \n \n \n \n UK - indexed \n \n \n 63 \n \n \n 7.6 \n \n \n 0.7 \n \n \n 8.5% \n \n \n 4.0% \n \n \n \n \n UK - fixed \n \n \n 13 \n \n \n 3.6 \n \n \n 0.2 \n \n \n 6.1% \n \n \n 2.6% \n \n \n \n \n UK - total \n \n \n 162 \n \n \n 22.0 \n \n \n 1.7 \n \n \n 7.7% \n \n \n 3.0% \n \n \n \n \n Ireland - indexed \n \n \n 14 \n \n \n 2.7 \n \n \n 0.4 \n \n \n 16.0% \n \n \n 3.4% \n \n \n \n \n Total - all reviews \n \n \n 176 \n \n \n 24.7 \n \n \n 2.1 \n \n \n 8.6% \n \n \n 3.0% \n \n \n \n \n 1 - includes 20 (H1 2024: 24) reviews where no uplift was achieved. \n \n \n \n \n At 30 June 2025 589 (31 December 2024: 600) open market rent reviews representing £88.1 million (31 December 2024: £88.8 million) of passing rent were outstanding out of which 290 (31 December 2024: 326) have been triggered to date and are expected to add another £2.7 million (31 December 2024: £2.7 million) to the contracted rent roll when concluded and represent an uplift of 6.1% (31 December 2024: 5.5%) against the previous passing rent. The balance of the outstanding reviews will be actioned when there is further comparative evidence to support the estimated rental values. \n The large number of outstanding reviews reflects the requirement for all awards to be agreed with the District Valuer. A great deal of evidence to support open market reviews comes from the completion of historical rent reviews and the rents set on delivery of new properties and asset management projects into the sector. NHS initiatives to modernise the primary care estate will result in previously agreed rental values having to be renegotiated to make a number of these projects viable in the current economic environment. \n Asset Management \n The Group continues to progress an advanced pipeline of 43 projects (31 December 2024: 37 projects) which highlight the improving rental growth outlook with the current weighted average rent of £195psm due to increase by around 15% to £223psm post completion. These projects provide important evidence for future rent review settlements across the wider portfolio. \n In the UK, we exchanged on two (H1 2024: three) new asset management projects, three (H1 2024: seven) lease re-gears and two (H1 2024: three) new lettings during the period. These initiatives will increase rental income by £0.12 million, investing £2.2 million and extending the leases back to 18 years. \n The Company will continue to invest capital in a range of physical extensions or refurbishments through asset management projects which help avoid obsolescence, including improving energy efficiency, and which are key to maintaining the longevity and security of our income through long term occupier retention, increased rental income and extended occupational lease terms, adding to both earnings and capital values. \n Valuation and returns \n In the period, we have continued to see values stabilise (see table below) with yield expansion continuing to moderate and the impact of rental growth outweighing yield shift. This continues the trend experienced in the second half of 2024 and we expect this to continue in the future. \n As at 30 June 2025, the Group's portfolio comprised 517 assets (31 December 2024: 516) independently valued at £2.81 billion (31 December 2024: £2.75 billion). After allowing for acquisition costs and capital expenditure on developments and asset management projects, the portfolio generated a valuation surplus of £19.8 million or +0.7%, equivalent to 1.5 pence per share. \n During the period, the Group's portfolio NIY has expanded by 3 bps to 5.25% (31 December 2024: 5.22%) and the reversionary yield remains unchanged at 5.6% (31 December 2024: 5.6%). \n The movement in the portfolio's valuation over the last three six monthly periods is summarised below and follows on from several years of valuation declines as a result of the higher interest rate environment. \n \n \n \n \n £ million \n \n \n H1 2025 \n \n \n H2 2024 \n \n \n H1 2024 \n \n \n \n \n NIY expansion \n \n \n (£9.0) / +3bps \n \n \n (£28.6) / +4 bps \n \n \n (£73.0) / +13 bps \n \n \n \n \n Rental growth \n \n \n £28.8 \n \n \n £30.2 \n \n \n £33.0 \n \n \n \n \n Total surplus / (deficit) \n \n \n £19.8 \n \n \n £1.6 \n \n \n (£40.0) \n \n \n \n \n We continue to see evidence of an improving market for healthcare real estate both in the UK and Ireland which are increasingly viewed as attractive social infrastructure assets with a growing rental income stream considered secure, long and predictable. There are new pools of capital looking at the asset class including global infrastructure funds, pension funds and life assurance companies most of whom manage large pools of capital at a lower cost. This improved liquidity is likely to enhance asset valuations in the future. \n The total property returns generated by the portfolio in the period are set out below: \n \n \n \n \n   \n \n \n H1 2025 \n \n \n H1 2024 \n \n \n FY 2024 \n \n \n \n \n Income return \n \n \n 2.9% \n \n \n 2.8% \n \n \n 5.5% \n \n \n \n \n Capital return \n \n \n 0.7% \n \n \n (1.4%) \n \n \n (1.3%) \n \n \n \n \n Total return \n \n \n 3.6% \n \n \n 1.4% \n \n \n 4.2% \n \n \n \n \n The portfolio's average lot size increased slightly in the period at £5.4 million (31 December 2024: £5.3 million), reflecting the increase in values in the period, however 88% (31 December 2024: 88%) of the portfolio continues to be valued at over £3.0 million. The Group only has five assets valued at less than £1.0 million. \n \n \n \n \n \n \n \n Number of \n \n \n Valuation \n \n \n \n \n \n Average lot size \n \n \n \n \n \n \n \n properties \n \n \n £ million \n \n \n % \n \n \n £ million \n \n \n \n \n > £10m \n \n \n 58 \n \n \n 911 \n \n \n 32 \n \n \n 15.7 \n \n \n \n \n £5m - £10m \n \n \n 130 \n \n \n 884 \n \n \n 32 \n \n \n 6.8 \n \n \n \n \n £3m - £5m \n \n \n 169 \n \n \n 669 \n \n \n 24 \n \n \n 4.0 \n \n \n \n \n £1m - £3m \n \n \n 155 \n \n \n 340 \n \n \n 12 \n \n \n 2.2 \n \n \n \n \n < £1m (including land £1.3m) \n \n \n 5 \n \n \n 4 \n \n \n - \n \n \n 0.8 \n \n \n \n \n Total 1 \n \n \n 517 \n \n \n 2,808 \n \n \n 100 \n \n \n 5.4 \n \n \n \n \n 1 Excludes the £3.4 million impact of IFRS 16 Leases with ground rents recognised as finance leases. \n Robust portfolio metrics \n The portfolio's annualised contracted rent roll at 30 June 2025 was £157.7 million (31 December 2024: £153.9 million), an increase of £3.8 million or +2.5% in the period driven by organic growth from rent reviews and asset management projects of £2.2 million (six months ended 30 June 2024 £1.8 million). The acquisition of the Laya Healthcare facility, Cork, Ireland added a further £1.3 million with a further small gain of £0.3m arising from foreign exchange movements on our portfolio in Ireland. \n The security and longevity of our income are important drivers of our secure, long term predictable income stream and enable our progressive dividend policy. \n Security: PHP continues to benefit from secure, long term cash flows with 88% (31 December 2024: 89%) of its rent roll funded directly or indirectly by the NHS in the UK or HSE in Ireland. The portfolio also benefits from an occupancy rate of 99.1% (31 December 2024: 99.1%). \n Longevity: The portfolio's WAULT at 30 June 2025 was 9.1 years (31 December 2023: 9.4 years). £26.6 million or 16.9% of our income is currently holding over expires over the next three years of which c. 70% have agreed terms or are in advanced discussions to renew their lease. £59.7 million or 37.9% expires in over 10 years. The table below sets out the current lease expiry profile of our income: \n   \n \n \n \n \n Income subject to expiry \n \n \n £m \n \n \n % \n \n \n \n \n Holding over \n \n \n 8.7 \n \n \n 5.5% \n \n \n \n \n < 3 years \n \n \n 17.9 \n \n \n 11.4% \n \n \n \n \n 4 - 5 years \n \n \n 21.1 \n \n \n 13.4% \n \n \n \n \n 5 - 10 years \n \n \n 50.3 \n \n \n 31.9% \n \n \n \n \n 10 - 15 years \n \n \n 27.7 \n \n \n 17.6% \n \n \n \n \n 15 - 20 years \n \n \n 21.4 \n \n \n 13.5% \n \n \n \n \n > 20 years \n \n \n 10.6 \n \n \n 6.7% \n \n \n \n \n Total \n \n \n 157.7 \n \n \n 100.0% \n \n \n \n \n Ireland \n As previously reported, in February 2025 the Group acquired the Laya Healthcare facility, Cork, Ireland for €22.0 million / £18.2 million delivering an earnings yield of 7.1%. The private medical facility is let to Laya Healthcare, Ireland's second largest provider of private health insurance and clinical services providing a bespoke urgent care and diagnostic facility providing some of the best medical technology available in Ireland, and has been subject to a comprehensive tenant led, €6 million, fit-out to provide a number of services including X-ray, MRI, CT, Ultrasound and Dexa scanning and is open 365 days of the year with patients guaranteed to be seen within one hour. The property also provides space for several health and wellbeing clinics providing access to a number of expert teams and services and also acts as the headquarters for Laya Healthcare in Ireland. \n At 30 June 2025, the portfolio in Ireland comprised 22 standing and fully let properties with no developments currently on site, valued at £292.6 million or €340.9 million (31 December 2024: 21 assets/£255.3 million or €308.6 million). The portfolio in Ireland has been valued at a NIY of 5.1% (31 December 2024: 5.0%). \n PHP continues to see significant growth opportunities in Ireland driven by sustained Government investment in primary care infrastructure and a strategic shift towards community-based healthcare. We continue to monitor a number of potential opportunities in Ireland and in particular three forward funded developments with an expected cost of approximately €75 million being progressed by our development partner in Ireland. \n Development \n In July 2025, the Group completed work on a development scheme at South Kilburn, London, where we worked with both the local council and ICB, each contributing £0.5 million, to make the scheme economically viable. The scheme comprises the fit-out of a shell unit, being constructed to NZC standards, for a total cost of £3.3 million net of the £1.0 million capital contribution which equates to a 26% uplift in the rent originally set by the District Valuer. \n The net zero carbon development, Croft Primary Care Centre, West Sussex, is also due to complete imminently. All further development activity has currently been placed on hold whilst negotiations with the NHS, ICBs and DVs continue to increase rental levels to make schemes economically viable with rental values needing to increase by around 20%-30%. \n Investment and pipeline \n We continue to monitor a number of potential standing investments, direct and forward funded developments and asset management projects with an advanced pipeline across a number of opportunities in both the UK and Ireland but will only be progressed if accretive to earnings. \n The immediate pipeline of opportunities in legal due diligence continues to be focused predominantly on PHP's existing portfolio through asset management projects. \n   \n \n \n \n \n Pipeline \n \n \n In legal due diligence \n \n \n Advanced pipeline \n \n \n \n \n \n \n \n Number \n \n \n Cost \n \n \n Number \n \n \n Cost \n \n \n \n \n Asset management \n \n \n 20 \n \n \n £7.9m \n \n \n 23 \n \n \n £17.9m \n \n \n \n \n UK - direct development \n \n \n 1 \n \n \n £4.1m \n \n \n - \n \n \n - \n \n \n \n \n Ireland - forward funded development \n \n \n - \n \n \n - \n \n \n 3 \n \n \n £64.4m (€75m) \n \n \n \n \n Total pipeline \n \n \n 21 \n \n \n £12.0m \n \n \n 26 \n \n \n £82.3m \n \n \n \n \n   \n   \n \n \n   \n FINANCIAL REVIEW \n PHP's Adjusted earnings increased by £1.0 million or 2.2 % to £47.3 million in the six months to 30 June 2025 (30 June 2024: £46.3 million). The increase in the period reflects the improving organic rental growth from rent reviews and asset management projects in both 2024 and the first half of 2025, the acquisition of the Laya Healthcare facility in February 2025, offset by increased interest costs on the Group's debt following an increase in the amount of drawn debt used to finance acquisition, development and asset management capital expenditure. \n Using the weighted average number of shares in issue in the period the Adjusted earnings per share increased by 2.3% to 3.54 pence (30 June 2024: 3.46 pence). \n The financial results for the Group are summarised as follows: \n   \n \n \n \n \n \n \n \n Six months \n ended \n 30 June 2025 \n \n \n Six months \n ended \n 30 June 2024 \n \n \n Year ended 31 December \n 2024 \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Net rental income \n \n \n 78.6 \n \n \n 76.2 \n \n \n 153.6 \n \n \n \n \n Axis PHP contribution net of overheads \n \n \n 0.1 \n \n \n 0.7 \n \n \n 1.2 \n \n \n \n \n Administrative expenses 1 \n \n \n (5.7) \n \n \n (5.9) \n \n \n (12.1) \n \n \n \n \n Operating profit before revaluation and net financing costs \n \n \n 73.0 \n \n \n 71.0 \n \n \n 142.7 \n \n \n \n \n Net financing costs \n \n \n (25.7) \n \n \n (24.7) \n \n \n (49.8) \n \n \n \n \n Adjusted earnings \n \n \n 47.3 \n \n \n 46.3 \n \n \n 92.9 \n \n \n \n \n Revaluation gain / (deficit) on property portfolio \n \n \n 19.8 \n \n \n (40.0) \n \n \n (38.4) \n \n \n \n \n Fair value loss on interest rate derivatives and convertible bond \n \n \n (6.3) \n \n \n (2.8) \n \n \n (7.6) \n \n \n \n \n Amortisation of MedicX debt MtM at acquisition \n \n \n 1.5 \n \n \n 1.5 \n \n \n 3.0 \n \n \n \n \n Axis PHP amortisation of intangible asset \n \n \n (0.4) \n \n \n (0.5) \n \n \n (0.9) \n \n \n \n \n Exceptional item - termination cost on variable rate bond \n \n \n - \n \n \n - \n \n \n (2.0) \n \n \n \n \n IFRS profit before tax \n \n \n 61.9 \n \n \n 4.5 \n \n \n 47.0 \n \n \n \n \n Corporation tax \n \n \n - \n \n \n (0.1) \n \n \n - \n \n \n \n \n Deferred tax provision \n \n \n (2.5) \n \n \n (0.8) \n \n \n (5.6) \n \n \n \n \n IFRS profit after tax \n \n \n 59.4 \n \n \n 3.6 \n \n \n 41.4 \n \n \n \n \n \n \n \n \n \n \n \n 1 Excludes amortisation of intangible asset and costs arising on the acquisition of Axis PHP. \n The £1.0 million increase in adjusted earnings in the period can be summarised as follows: \n \n \n \n \n   \n \n \n   \n \n \n £m \n \n \n \n \n Six months ended 30 June 2024 \n \n \n   \n \n \n 46.3 \n \n \n \n \n Net rental income \n \n \n   \n \n \n 2.4 \n \n \n \n \n Net financing costs \n \n \n   \n \n \n (1.0) \n \n \n \n \n Administrative expenses \n \n \n   \n \n \n 0.2 \n \n \n \n \n Axis PHP contribution \n \n \n   \n \n \n (0.6) \n \n \n \n \n Six months ended 30 June 2025 \n \n \n   \n \n \n 47.3 \n \n \n \n \n Net rental income received in the six months to 30 June 2025 increased by 3.1% or £2.4 million to £78.6 million (30 June 2024: £76.2 million) reflecting £1.9 million of additional income from completed rent reviews and asset management projects and £0.8 million of rent arising from the acquisition of Laya Healthcare facility at Cork, Ireland in February 2025 and a Primary Care Centre in Basingstoke in 2024 offset by a £0.3 million increase in non-recoverable property costs. \n The contribution from Axis PHP in the six months to 30 June 2025 was £0.1 million (H1 2024: £0.7 million) and the reduction is because of several fit-out projects for customers being completed at the end of 2024. We expect the level of activity to increase in the second half of 2025. \n Administration expenses continue to be tightly controlled and the Group's EPRA cost ratio remains one of the lowest in the sector at 9.8% (30 June 2024: 10.0%) excluding Axis PHP and direct vacancy costs. The £0.2 million reduction in administration costs in the period is due primarily to the benefit of redundancy programme completed in 2024. \n   \n   \n \n \n \n \n EPRA cost ratio \n \n \n Six months ended \n 30 June 2025 \n \n \n Six months \n ended \n 30 June 2024 \n \n \n Year ended \n 31 December 2024 \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Gross rent less ground rent and service charge income \n \n \n 82.4 \n \n \n 80.0 \n \n \n 160.7 \n \n \n \n \n Direct property expense \n \n \n 9.8 \n \n \n 8.7 \n \n \n 26.2 \n \n \n \n \n Less: service charge and recoverable costs \n \n \n (6.7) \n \n \n (5.9) \n \n \n (21.0) \n \n \n \n \n Non-recoverable property costs \n \n \n 3.1 \n \n \n 2.8 \n \n \n 5.2 \n \n \n \n \n Administrative expenses \n \n \n 5.7 \n \n \n 5.9 \n \n \n 12.1 \n \n \n \n \n Axis PHP overheads and costs \n \n \n 0.6 \n \n \n 0.4 \n \n \n 0.9 \n \n \n \n \n Less: ground rent \n \n \n (0.1) \n \n \n (0.1) \n \n \n (0.2) \n \n \n \n \n Less: other operating income \n \n \n (0.3) \n \n \n (0.3) \n \n \n (0.7) \n \n \n \n \n EPRA costs (including direct vacancy costs) \n \n \n 9.0 \n \n \n 8.7 \n \n \n 17.3 \n \n \n \n \n EPRA cost ratio \n \n \n 10.9% \n \n \n 10.9% \n \n \n 10.8% \n \n \n \n \n EPRA cost ratio excluding Axis PHP overheads and direct vacancy costs \n \n \n 9.8% \n \n \n 10.0% \n \n \n 10.1% \n \n \n \n \n Total expense ratio - administrative expenses as a percentage of gross asset value (annualised) \n \n \n   \n 0.4% \n \n \n   \n 0.4% \n \n \n   \n 0.4% \n \n \n \n \n   \n Net finance costs in the period increased by £1.0 million to £25.7 million (30 June 2024: £24.7 million) because of a £43.6 million increase in the Group's net debt since December 2025 mainly as a result of the acquisition of Laya Health facility in Ireland, development and asset management expenditure together with the impact of the expiry of a legacy swap at the end of 2024 net of new swap arrangements entered into in January 2025. \n Shareholder value \n The Adjusted Net Tangible Assets (NTA) per share increased by 1.2 pence or 1.1% to 106.2 pence (31 December 2024: 105.0 pence per share) during the period with the revaluation surplus of £19.8 million being the main reason for the increase. \n The adjusted NTA return per share, including dividends distributed, in the six months ended 30 June 2025 was 4.8 pence or +4.5 % (30 June 2024: 0.5 pence or +0.4 %). \n The table below sets out the movements in the Adjusted NTA and EPRA Net Disposal Value (NDV) per share over the period under review. \n   \n \n \n \n \n Adjusted n et t angible a sset (NTA) per share \n \n \n 30 June 2025 pence per share \n \n \n 30 June 2024 pence per share \n \n \n 31 December 2024 pence per share \n \n \n \n \n Opening a djusted NTA per share \n \n \n 105.0 \n \n \n 108.0 \n \n \n 108.0 \n \n \n \n \n Adjusted earnings for the period \n \n \n 3.5 \n \n \n 3.5 \n \n \n 7.0 \n \n \n \n \n Dividends paid \n \n \n (3.5) \n \n \n (3.5) \n \n \n (6.9) \n \n \n \n \n Revaluation of property portfolio \n \n \n 1.5 \n \n \n (3.0) \n \n \n (2.9) \n \n \n \n \n Derivatives and foreign exchange movements \n \n \n (0.3) \n \n \n - \n \n \n (0.2) \n \n \n \n \n Closing a djusted NTA per share \n \n \n 106.2 \n \n \n 105.0 \n \n \n 105.0 \n \n \n \n \n Fixed rate debt and swap mark-to-market value \n \n \n 8.2 \n \n \n 9.4 \n \n \n 9.3 \n \n \n \n \n Convertible bond fair value adjustment \n \n \n - \n \n \n 0.2 \n \n \n 0.1 \n \n \n \n \n Deferred tax \n \n \n (0.9) \n \n \n (0.3) \n \n \n (0.7) \n \n \n \n \n Intangible assets \n \n \n 0.4 \n \n \n 0.4 \n \n \n 0.4 \n \n \n \n \n Closing EPRA NDV per share \n \n \n 113.9 \n \n \n 114.7 \n \n \n 114.1 \n \n \n \n \n Financing \n The Group's balance sheet and financing position remain strong with cash and committed undrawn facilities totalling £107.3 million (31 December 2024: £270.9 million) after contracted capital commitments of £12.7 million (31 December 2024: £36.3 million) and the post period end repayment of the £150 million convertible bond on 15 July 2025. \n At 30 June 2025, total available loan facilities were £1,636.8 million (31 December 2023: £1,630.4 million) of which £1,378.3 million (31 December 2024: £1,326.7 million) had been drawn. Cash balances of £11.5 million (31 December 2024: £3.5 million) resulted in Group net debt of £1,366.8 million (31 December 2024: £1,323.2 million). Contracted capital commitments at the balance sheet date totalled £12.7 million (31 December 2024: £36.3 million) and comprise asset management projects of £12.3 million and development expenditure on the one scheme on site of £0.4 million. \n The Group's key debt metrics are summarised in the table below: \n \n \n \n \n   \n \n \n Debt metrics \n \n \n 30 June 2025 \n \n \n 31 December 2024 \n \n \n \n \n   \n \n \n Average cost of debt - drawn \n \n \n 3.4% \n \n \n 3.4% \n \n \n \n \n   \n \n \n Average cost of debt - fully drawn \n \n \n 3.9% \n \n \n 4.0% \n \n \n \n \n   \n \n \n Loan to value \n \n \n 48.6% \n \n \n 48.1% \n \n \n \n \n   \n \n \n Total net debt fixed or hedged \n \n \n 99.7% \n \n \n 100.0% \n \n \n \n \n   \n \n \n Net rental income to net interest cover \n \n \n 3.1 times \n \n \n 3.1 times \n \n \n \n \n   \n \n \n Net debt / EBITDA \n \n \n 9.4 times \n \n \n 9.3 times \n \n \n \n \n    Weighted average debt maturity - drawn facilities \n \n \n 5.1 years \n \n \n 5.7 years \n \n \n \n \n   \n \n \n Weighted average debt maturity - all facilities \n \n \n 4.5 years \n \n \n 4.9 years \n \n \n \n \n   \n \n \n Total undrawn facilities and available to the Group 1 \n \n \n £107.3m \n \n \n £270.9m \n \n \n \n \n   \n \n \n Unfettered assets \n \n \n £69.1m \n \n \n £47.3m \n \n \n \n \n \n \n \n \n \n \n 1 Pro-forma a fter deducting capital commitments. \n \n \n   \n Average cost of debt \n The Group's average cost of debt has remained unchanged at 3.4% (31 December 2024: 3.4%) reflecting the protection from the proportion of the Group's net debt that is either fixed or hedged at 99.7% (31 December 2024: 100.0%). \n Interest rate exposure \n The analysis of the Group's exposure to interest rate risk in its debt portfolio as at 30 June 2025 is as follows: \n   \n \n \n \n \n \n \n \n Facilities \n \n \n Net debt drawn \n \n \n \n \n \n \n \n £ million \n \n \n % \n \n \n £ million \n \n \n % \n \n \n \n \n Fixed rate debt \n \n \n 1,111.8 \n \n \n 67.9 \n \n \n 1,111.8 \n \n \n 81.3 \n \n \n \n \n Hedged by fixed rate interest rate swaps \n \n \n 200.0 \n \n \n 12.2 \n \n \n 200.0 \n \n \n 14.6 \n \n \n \n \n Hedged by interest rate caps \n \n \n 51.5 \n \n \n 3.2 \n \n \n 51.5 \n \n \n 3.8 \n \n \n \n \n Floating rate debt - unhedged \n \n \n 273.5 \n \n \n 16.7 \n \n \n 3.5 \n \n \n 0.3 \n \n \n \n \n Total \n \n \n 1,636.8 \n \n \n 100.0 \n \n \n 1,366.8 \n \n \n 100.0 \n \n \n \n \n Interest rate and foreign currency derivative contracts \n In January 2025, the Group fixed, for two years, £200 million of nominal debt at a rate of 3.0% and a new FX forward trade hedge, detailed below, for an all-in premium of £4.9 million. The fixed rate swap will provide further protection to the Group's interest rate exposure especially whilst rates continue to remain elevated and volatile.  The fixed rate swap effectively hedges out the current net debt drawn. \n Accounting standards require PHP to mark its interest rate swaps to market at each balance sheet date. During the six months to 30 June 2025 there was a decrease of £3.2 million (30 June 2024: decrease of £2.0 million) on the fair value movement of the Group's interest rate derivatives due primarily to decreases in interest rates assumed in the forward yield curves used to value the interest rate swaps and the impact of the passage of time. The net mark-to-market (\"MtM\") of the swap portfolio is an asset value of £1.9 million (31 December 2024: net MtM asset £0.2 million). \n Currency exposure \n The Group owns €340.9 million or £292.6 million (31 December 2024: €308.6 million / £255.3 million) of Euro denominated assets in Ireland as at 30 June 2025 and the value of these assets and rental income represented 10 % (31 December 2024: 9%) of the Group's total portfolio. In order to hedge the risk associated with exchange rates, the Group has chosen to fund its investment in Irish assets through the use of Euro denominated debt, providing a natural asset to liability hedge, within the overall Group loan to value limits set by the Board. At 30 June 2025, the Group had €294.3 million (31 December 2024: €274.1 million) of drawn euro denominated debt. \n Euro rental receipts are used to first finance euro interest and administrative costs and surpluses are used to fund further portfolio expansion. Given the large euro to sterling fluctuations seen in recent years and continued uncertainty in the interest rate market, the Group entered, in January 2025, a new FX forward trade hedge (fixed at €1.1459: £1) for a two-year period to cover the approximate euro denominated net annual income of €10 million per annum, minimising the downside risk of the euro remaining above €1.1459: £1. \n Fixed rate debt mark-to-market (\"MtM\") \n The MtM of the Group's fixed rate debt as at 30 June 2025 was an asset of £108.9 million (31 December 2024: asset £125.5 million) equivalent to 8.2 pence per share (31 December 2024: asset of 9.4 pence per share). The movement in the period is due primarily to movements in interest rates assumed in the forward yield curves used to value the debt along with the effluxion of time. The MtM valuation is sensitive to movements in interest rates assumed in forward yield curves. \n Convertible bonds \n The unsecured convertible bond with a nominal value of £150 million was repaid, post period end, at maturity on 15 July 2025 from the Group's undrawn committed revolving credit facilities. \n Alternative Performance Measures (\"APMs\") \n PHP uses Adjusted earnings and adjusted net tangible assets amongst other APMs to highlight the recurring performance of the property portfolio and business. The APMs are in addition to the statutory measures from the condensed financial statements. The measures are defined and reconciled to amounts presented in the financial statements within this interim statement at note 7 . The Company has used EPRA earnings and EPRA net tangible assets to measure performance and will continue to do so. However, these APMs have also been adjusted to remove the impact of the adjustments arising from the MtM on fixed debt acquired on completion of the merger with MedicX in 2019. The reasons for the Company's use of these APMs are set out in the Glossary and 2024 Annual Report. \n Related party transactions \n Related party transactions are disclosed in note 16 to the condensed financial statements. \n   \n   \n   \n Mark Davies                                                   Richard Howell \n Chief Executive Officer                                   Chief Financial Officer \n 23 July 2025 \n \n \n \n Principal risks and uncertainties Risk management overview \n Effective risk management is a key element of the Board's operational processes. Risk is inherent in any business, and the Board has determined the Group's risk appetite, which is reviewed on an annual basis. Group operations have been structured in order to accept risks within the Group's overall risk appetite, and to oversee the management of these risks to minimise exposure and optimise the returns generated for the accepted risk. The Group aims to operate in a low-risk environment, appropriate for its strategic objective of generating progressive returns for shareholders. Key elements of maintaining this low-risk approach are: \n ·    investment focuses on the primary health real estate sector which is traditionally much less cyclical than other real estate sectors; \n ·    the majority of the Group's rental income is received directly or indirectly from government bodies in the UK and Ireland; \n ·    the Group benefits from long initial lease terms, largely with upwards-only review terms, providing clear visibility of income; \n ·    debt funding is procured from a range of providers, maintaining a spread of maturities and a mix of terms, with interest costs either fixed or hedged across the majority of debt drawn; \n ·    the Board funds its operations to maintain an appropriate mix of debt and equity; and \n ·    the Group has a very small (£0.9 million) exposure as a direct developer of real estate, which means that the Group is not materially exposed to risks that are inherent in property development. \n The structure of the Group's operations includes rigorous, regular review of risks and how these are mitigated and managed across all areas of the Group's activities. The Group faces a variety of risks that have the potential to impact on its performance, position and its longer-term viability. These include external factors that may arise from the markets in which the Group operates, government and fiscal policy, general economic conditions including interest rates and inflation together with internal risks that arise from how the Group is managed and chooses to structure its operations. \n Principal risks and changes in risk factors \n The Board has concluded that there should be no further principal risks to be presented in the 2025 Interim Results Announcement, and that the principal risks presented in the 2024 Annual Report remain relevant for this period. \n Monitoring of identified and emerging risks \n The Board has continued to undertake a robust assessment of identified, emerging and increasing risks and their potential impact on the Group. The way we have addressed the challenges of the last few years has demonstrated the resilience of the Group's business model and our robust risk management approach to protect our business through periods of uncertainty and adapt to a rapidly changing environment. \n If the recommended combination with Assura plc progresses in the second half of 2025 the integration of the two businesses will be a new risk for the enlarged Group. \n Going concern analysis \n The Group's financial review and budgetary processes are based on an integrated model that projects performance, cash flows, position and other key performance indicators including earnings per share, leverage rates, net asset values per share and REIT compliance over the review period. In addition, the forecast model looks at the funding of the Group's activities and its compliance with the financial covenant requirements of its debt facilities. The model uses a number of key parameters in generating its forecasts that reflect the Group's strategy, operating processes and the Board's expectation of market developments in the review period. In undertaking its financial review, these parameters have been flexed to reflect severe, but realistic, scenarios both individually and collectively. Sensitivities applied are derived from the principal risks faced by the Group that could affect solvency or liquidity and are as follows: \n ·    Declining attractiveness / possible obsolescence of the Group's assets as a result of ESG initiatives or otherwise or deteriorating economic circumstances impact investment values - valuation parameter stress tested to provide for a one-off 10%/£281 million fall in the December 2025 valuation. \n ·    We have applied a 10% tenant default rate. \n ·    Rental growth rate assumptions have been amended to see no further uplifts on open market reviews. \n ·    Variable rate interest rates rise by an immediate 2% effective from 1 July 2025, impacting the variable interest debt in the portfolio. \n ·    Tightly controlled NHS scheme approval restricts investment opportunity - investment quantum flexed to remove non-committed transactions. \n ·    Impact on shareholder returns of all of the above occurrences - projected dividend payments held at expected 2025 level, 7.1 pence per share. \n Several specific assumptions have been made that overlay the financial parameters used in the Group's models. \n Further details on going concern are set out in note 1 to the Financial Statements. \n \n \n   \n INDEPENDENT REVIEW REPORT TO PRIMARY HEALTH PROPERTIES PLC \n Conclusion \n We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2025 which comprises the condensed group statement of comprehensive income, the condensed group balance sheet, the condensed group statement of changes in equity, the condensed group cash flow statement and related notes 1 to 18. \n Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2025 is not prepared, in all material respects, in accordance with United Kingdom adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority. \n Basis for Conclusion \n We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 \"Review of Interim Financial Information Performed by the Independent Auditor of the Entity\" issued by the Financial Reporting Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. \n As disclosed in note 1, the annual financial statements of the group are prepared in accordance with United Kingdom adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with United Kingdom adopted International Accounting Standard 34, \"Interim Financial Reporting\". \n Conclusion Relating to Going Concern \n Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed. \n This Conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410; however future events or conditions may cause the entity to cease to continue as a going concern. \n Responsibilities of the directors \n The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority. \n In preparing the half-yearly financial report, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so . \n Auditor's Responsibilities for the review of the financial information \n In reviewing the half-yearly financial report, we are responsible for expressing to the company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our Conclusion, including our Conclusion Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report. \n Use of our report \n This report is made solely to the company in accordance with ISRE (UK) 2410. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed. \n   \n   \n Deloitte LLP \n Statutory Auditor \n London, United Kingdom \n 23 July 2025 \n   \n   \n   \n \n \n   \n Condensed Group Statement of Comprehensive Income \n For the six months ended 30 June 2025 \n   \n \n \n \n \n \n \n \n \n \n \n Six months \n ended 30 June \n 2025 \n \n \n Six months \n ended 30 June \n 2024 \n \n \n Year ended \n 31 December \n 2024 \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n \n \n \n Notes \n \n \n (unaudited) \n \n \n (unaudited) \n \n \n (audited) \n \n \n \n \n Re ntal and related income \n \n \n 2 \n \n \n 89.7 \n \n \n 91.9 \n \n \n 181.7 \n \n \n \n \n Direct property expenses \n \n \n \n \n \n (10.4) \n \n \n (14.6) \n \n \n (26.0) \n \n \n \n \n Net rental and related income \n \n \n \n \n \n 79.3 \n \n \n 77.3 \n \n \n 155.7 \n \n \n \n \n Administrative expenses \n \n \n \n \n \n (6.3) \n \n \n (6.3) \n \n \n (13.0) \n \n \n \n \n Amortisation of intangible assets \n \n \n \n \n \n (0.4) \n \n \n (0.5) \n \n \n (0.9) \n \n \n \n \n Total administrative expenses \n \n \n 3 \n \n \n (6.7) \n \n \n (6.8) \n \n \n (13.9) \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Revaluation gain/ (deficit) on property portfolio \n \n \n 8 \n \n \n 19.8 \n \n \n (40.0) \n \n \n (38.4) \n \n \n \n \n Profit on sale of land and properties \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Total revaluation gain/ (deficit) \n \n \n \n \n \n 19.8 \n \n \n (40.0) \n \n \n (38.4) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Operating profit \n \n \n 3 \n \n \n 92.4 \n \n \n 30.5 \n \n \n 103.4 \n \n \n \n \n Finance costs \n \n \n 4 \n \n \n (24.2) \n \n \n (23.2) \n \n \n (46.8) \n \n \n \n \n Early termination on bonds \n \n \n \n \n \n - \n \n \n - \n \n \n (2.0) \n \n \n \n \n Fair value loss on derivative interest rate swaps and \n amortisation of cash flow hedging reserve \n \n \n   \n 4 \n \n \n   \n (4.4) \n \n \n   \n (3.3) \n \n \n   \n (7.0) \n \n \n \n \n Fair value (loss)/gain on convertible bond \n \n \n 4 \n \n \n (1.9) \n \n \n 0.5 \n \n \n (0.6) \n \n \n \n \n Profit before taxation \n \n \n \n \n \n 61.9 \n \n \n 4.5 \n \n \n 47.0 \n \n \n \n \n Taxation ( charge)/ credit \n \n \n 5 \n \n \n (2.5) \n \n \n (0.9) \n \n \n (5.6) \n \n \n \n \n Profit after taxation for the period/year 1 \n \n \n \n \n \n 59.4 \n \n \n 3.6 \n \n \n 41.4 \n \n \n \n \n Other comprehensive income: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Items that may be reclassified subsequently to profit and loss: \n \n \n \n \n Fair value gain on interest rate swaps treated as cash flow hedges and amortisation of hedging reserve \n \n \n \n \n \n   \n 1.3 \n \n \n   \n 1.3 \n \n \n   \n 2.5 \n \n \n \n \n Exchange gain /(loss) on translation of foreign balances \n \n \n \n \n \n 0.8 \n \n \n 0.1 \n \n \n (0.1) \n \n \n \n \n Other comprehensive income for the period net of tax 1 \n \n \n \n \n \n 2.1 \n \n \n 1.4 \n \n \n 2.4 \n \n \n \n \n Total comprehensive income for the period net of tax 1 \n \n \n \n \n \n 61.5 \n \n \n 5.0 \n \n \n 43.8 \n \n \n \n \n   \n IFRS earnings per share \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Basic \n \n \n 6 \n \n \n 4.4p \n \n \n 0.3p \n \n \n 3.1p \n \n \n \n \n Diluted \n \n \n 6 \n \n \n 4.4p \n \n \n 0.3p \n \n \n 3.1p \n \n \n \n \n Adjusted earnings per share 2 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Basic \n \n \n 6 \n \n \n 3.5p \n \n \n 3.5p \n \n \n 7.0p \n \n \n \n \n Diluted \n \n \n 6 \n \n \n 3.4p \n \n \n 3.3p \n \n \n 6.7p \n \n \n \n \n 1 Wholly attributable to equity shareholders of Primary Health Properties PLC \n 2 See Glossary of Terms on pages 53 to 5 5. \n   \n The above relates wholly to continuing operations. \n \n \n \n Condensed Group Balance Sheet As at 30 June 2025 \n \n \n \n \n \n \n \n \n \n \n 30 June \n 2025 \n \n \n 30 June \n 2024 \n \n \n 31 December \n 2024 \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n \n \n \n Notes \n \n \n (unaudited) \n \n \n (unaudited) \n \n \n (audited) \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Investment properties \n \n \n 8 \n \n \n 2,807.2 \n \n \n 2,749.5 \n \n \n 2,750.1 \n \n \n \n \n Derivative interest rate swaps \n \n \n 13 \n \n \n 1.8 \n \n \n 0.9 \n \n \n - \n \n \n \n \n Intangible assets \n \n \n \n \n \n 4.9 \n \n \n 5.8 \n \n \n 5.3 \n \n \n \n \n Property, plant & equipment \n \n \n \n \n \n 0.5 \n \n \n 0.5 \n \n \n 0.6 \n \n \n \n \n \n \n \n \n \n \n 2,814.4 \n \n \n 2,756.7 \n \n \n 2,756.0 \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Properties held for sale \n \n \n \n \n \n 4.3 \n \n \n - \n \n \n 3.0 \n \n \n \n \n Trade and other receivables \n \n \n \n \n \n 34.3 \n \n \n 27.4 \n \n \n 27.7 \n \n \n \n \n Cash and cash equivalents \n \n \n 9 \n \n \n 11.5 \n \n \n 4.1 \n \n \n 3.5 \n \n \n \n \n Derivative interest rate swaps \n \n \n 13 \n \n \n 0.1 \n \n \n 5.2 \n \n \n 0.2 \n \n \n \n \n Development work in progress \n \n \n \n \n \n 0.9 \n \n \n 0.8 \n \n \n   0.9 \n \n \n \n \n \n \n \n \n \n \n 51.1 \n \n \n 37.5 \n \n \n 35.3 \n \n \n \n \n Total assets \n \n \n \n \n \n 2,865.5 \n \n \n 2,794.2 \n \n \n               2,791.3 \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Deferred rental income \n \n \n \n \n \n (31.9) \n \n \n (31.2) \n \n \n (31.4) \n \n \n \n \n Trade and other payables \n \n \n \n \n \n (33.7) \n \n \n (30.4) \n \n \n (30.6) \n \n \n \n \n Borrowings: term loans and overdraft \n \n \n 10 \n \n \n (3.7) \n \n \n (2.5) \n \n \n (3.4) \n \n \n \n \n Borrowings: bonds \n \n \n 11 \n \n \n (150.2) \n \n \n - \n \n \n (148.3) \n \n \n \n \n Derivative interest rate swaps \n \n \n 13 \n \n \n - \n \n \n (3.4) \n \n \n - \n \n \n \n \n \n \n \n \n \n \n (219.5) \n \n \n (67.5) \n \n \n (213.7) \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Borrowings: term loans and overdraft \n \n \n 10 \n \n \n (801.1) \n \n \n (681.2) \n \n \n (757.2) \n \n \n \n \n Borrowings: bonds \n \n \n 11 \n \n \n (436.7) \n \n \n (651.2) \n \n \n (429.3) \n \n \n \n \n Derivative interest rate swaps \n \n \n 13 \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Head lease liabilities \n \n \n 12 \n \n \n (3.4) \n \n \n (3.0) \n \n \n (3.0) \n \n \n \n \n Trade and other payables \n \n \n \n \n \n (3.1) \n \n \n (4.1) \n \n \n (3.1) \n \n \n \n \n Deferred tax liability \n \n \n \n \n \n (11.6) \n \n \n (4.1) \n \n \n (9.0) \n \n \n \n \n \n \n \n \n \n \n (1,255.9) \n \n \n (1,343.6) \n \n \n (1,201.6) \n \n \n \n \n Total liabilities \n \n \n \n \n \n (1,475.4) \n \n \n (1,411.1) \n \n \n (1,415.3) \n \n \n \n \n Net assets \n \n \n \n \n \n 1,390.1 \n \n \n 1,383.1 \n \n \n  1,376.0 \n \n \n \n \n   \n Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share capital \n \n \n 16 \n \n \n 167.1 \n \n \n 167.1 \n \n \n 167.1 \n \n \n \n \n Share premium account \n \n \n \n \n \n 479.4 \n \n \n 479.4 \n \n \n 479.4 \n \n \n \n \n Merger and other reserves \n \n \n 17 \n \n \n 416.0 \n \n \n 415.4 \n \n \n 415.2 \n \n \n \n \n Hedging reserve \n \n \n \n \n \n (3.2) \n \n \n (5.7) \n \n \n                   (4.5) \n \n \n \n \n Retained earnings \n \n \n \n \n \n 330.8 \n \n \n 326.9 \n \n \n 318.8 \n \n \n \n \n Total equity 1 \n \n \n \n \n \n 1,390.1 \n \n \n 1,383.1 \n \n \n  1,376.0 \n \n \n \n \n   \n Basic net asset value per share \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n IFRS net assets - basic \n \n \n 6 \n \n \n 104.0 \n \n \n 103.5 \n \n \n 103.0p \n \n \n \n \n IFRS net assets - diluted \n \n \n 6 \n \n \n 105.7 \n \n \n 105.6 \n \n \n 103.0p \n \n \n \n \n Adjusted net tangible assets 2 - basic \n \n \n 6 \n \n \n 106.2 \n \n \n 105.0 \n \n \n 105.0p \n \n \n \n \n Adjusted net tangible assets 2 - diluted \n \n \n 6 \n \n \n 107.6 \n \n \n 107.0 \n \n \n 106.7p \n \n \n \n \n 1 Wholly attributable to equity shareholders of Primary Health Properties PLC. \n 2 See Glossary of Terms on pages 53 to 55 . \n \n \n \n Condensed Group Cash Flow Statement For the six months ended 30 June 2025 \n \n \n \n \n \n \n \n \n \n \n Six months ended 30 June 2025 \n \n \n Six months ended 30 June 2024 \n \n \n Year ended 31 December 2024 \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n \n \n \n Note \n \n \n (unaudited) \n \n \n (unaudited) \n \n \n (audited) \n \n \n \n \n Operating activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit on ordinary activities after tax \n \n \n \n \n \n 59.4 \n \n \n 3.6 \n \n \n 41.4 \n \n \n \n \n Taxation charge/ (credit) \n \n \n 5 \n \n \n 2.5 \n \n \n 0.9 \n \n \n 5.6 \n \n \n \n \n Finance costs including early termination fees \n \n \n 4 \n \n \n 24.2 \n \n \n 23.2 \n \n \n 48.8 \n \n \n \n \n Fair value loss on derivatives and amortisation of hedging reserve \n \n \n \n \n \n 4.4 \n \n \n 3.3 \n \n \n 7.0 \n \n \n \n \n Fair value gain/(loss) on convertible bond \n \n \n \n \n \n 1.9 \n \n \n (0.5) \n \n \n 0.6 \n \n \n \n \n Operating profit before financing costs \n \n \n \n \n \n 92.4 \n \n \n 30.5 \n \n \n 103.4 \n \n \n \n \n Adjustments to reconcile Group operating profit to net cash flows from operating activities: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revaluation ( gain)/ deficit   on property portfolio \n \n \n 8 \n \n \n (19.8) \n \n \n 40.0 \n \n \n 38.4 \n \n \n \n \n Amortisation of intangible assets \n \n \n \n \n \n 0.4 \n \n \n 0.5 \n \n \n 0.9 \n \n \n \n \n Effect of exchange rate fluctuations on operations \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Fixed rent uplift \n \n \n \n \n \n (0.2) \n \n \n (0.3) \n \n \n (0.4) \n \n \n \n \n Tax (paid)/received \n \n \n \n \n \n - \n \n \n (0.2) \n \n \n (0.1) \n \n \n \n \n (Increase)/decrease in trade and other receivables \n \n \n \n \n \n (1.3) \n \n \n (2.7) \n \n \n (3.4) \n \n \n \n \n Increase/(decrease) in trade and other payables \n \n \n \n \n \n 3.6 \n \n \n (0.4) \n \n \n (3.6) \n \n \n \n \n Cash generated from operations \n \n \n \n \n \n 75.1 \n \n \n 67.4 \n \n \n 135.2 \n \n \n \n \n Net cash flow from operating activities \n \n \n \n \n \n 75.1 \n \n \n 67.4 \n \n \n 135.2 \n \n \n \n \n Investing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Payments to acquire and improve properties and fixed assets \n \n \n \n \n \n (28.1) \n \n \n (14.8) \n \n \n (20.6) \n \n \n \n \n Payments relating to pre-acquisition transactions \n \n \n \n \n \n (3.4) \n \n \n - \n \n \n - \n \n \n \n \n Net cash flow used in investing activities \n \n \n \n \n \n (31.5) \n \n \n (14.8) \n \n \n (20.6) \n \n \n \n \n Financing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Term bank loan drawdowns \n \n \n \n \n \n 93.9 \n \n \n 64.5 \n \n \n 306.6 \n \n \n \n \n Term bank loan repayments \n \n \n \n \n \n (51.5) \n \n \n (46.4) \n \n \n (278.9) \n \n \n \n \n Loan /bond arrangement and early termination fees \n \n \n \n \n \n (1.2) \n \n \n (0.8) \n \n \n (3.8) \n \n \n \n \n Premium paid on derivatives financial instruments \n \n \n \n \n \n (4.9) \n \n \n - \n \n \n - \n \n \n \n \n Non-utilisation fees \n \n \n \n \n \n (1.0) \n \n \n (1.1) \n \n \n - \n \n \n \n \n Interest paid \n \n \n \n \n \n (24.7) \n \n \n (24.6) \n \n \n (46.1) \n \n \n \n \n Swap interest received \n \n \n \n \n \n 1.0 \n \n \n 2.8 \n \n \n - \n \n \n \n \n Equity dividends paid net of scrip dividend \n \n \n 7 \n \n \n (47.4) \n \n \n (46.1) \n \n \n (92.1) \n \n \n \n \n Net cash flow used in financing activities \n \n \n \n \n \n (35.8) \n \n \n (51.7) \n \n \n (114.3) \n \n \n \n \n Increase/(decrease) in cash and cash equivalents \n \n \n \n \n \n 7.8 \n \n \n 0.9 \n \n \n 0.3 \n \n \n \n \n Effect of exchange rate fluctuations on Euro denominated loans and cash equivalents \n \n \n \n \n \n   \n 0.2 \n \n \n   \n - \n \n \n   \n - \n \n \n \n \n Cash and cash equivalents at start of period / year \n \n \n \n \n \n 3.5 \n \n \n 3.2 \n \n \n 3.2 \n \n \n \n \n Cash and cash equivalents at end of period / year \n \n \n 9 \n \n \n 11.5 \n \n \n 4.1 \n \n \n 3.5 \n \n \n \n \n \n \n \n Condensed Group Statement of Changes in Equity For the six months ended 30 June 2025 (unaudited) \n   \n Six months ended 30 June 2025 (unaudited) \n \n \n \n \n \n \n \n   \n Share capital \n \n \n   \n Share premium \n \n \n Merger & \n other \n reserves \n \n \n   \n Hedging reserve \n \n \n   \n Retained earnings \n \n \n   \n   \n Total \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n 1 January 2025 \n \n \n 167.1 \n \n \n 479.4 \n \n \n 415.2 \n \n \n (4.5) \n \n \n 318.8 \n \n \n 1,376.0 \n \n \n \n \n Profit for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 59.4 \n \n \n 59.4 \n \n \n \n \n Other comprehensive income \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Exchange gain/(loss) on translation of foreign balances \n \n \n - \n \n \n - \n \n \n 0.8 \n \n \n - \n \n \n - \n \n \n 0.8 \n \n \n \n \n Amortisation of hedging reserve \n \n \n - \n \n \n - \n \n \n - \n \n \n 1.3 \n \n \n - \n \n \n 1.3 \n \n \n \n \n Total comprehensive income \n \n \n - \n \n \n - \n \n \n 0.8 \n \n \n 1.3 \n \n \n 59.4 \n \n \n 61.5 \n \n \n \n \n Shares based awards (LTIP) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Dividends paid \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (47.4) \n \n \n (47.4) \n \n \n \n \n 30 June 2025 \n \n \n 167.1 \n \n \n 479.4 \n \n \n 416.0 \n \n \n (3.2) \n \n \n 330.8 \n \n \n 1,390.1 \n \n \n \n \n   \n Six months ended 30 June 2024 (unaudited) \n \n \n \n \n \n \n \n   \n Share capital \n \n \n   \n Share premium \n \n \n Merger & \n other \n reserves \n \n \n   \n Hedging reserve \n \n \n   \n Retained earnings \n \n \n   \n   \n Total \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n 1 January 2024 \n \n \n 167.1 \n \n \n 479.4 \n \n \n 415.3 \n \n \n (7.0) \n \n \n 369.1 \n \n \n 1,423.9 \n \n \n \n \n Profit for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 3.6 \n \n \n 3.6 \n \n \n \n \n Other comprehensive income \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Exchange gain/(loss) on translation of foreign balances \n \n \n - \n \n \n - \n \n \n 0.1 \n \n \n - \n \n \n - \n \n \n 0.1 \n \n \n \n \n Amortisation of hedging reserve \n \n \n - \n \n \n - \n \n \n - \n \n \n 1.3 \n \n \n - \n \n \n 1.3 \n \n \n \n \n Total comprehensive income \n \n \n - \n \n \n - \n \n \n 0.1 \n \n \n 1.3 \n \n \n 3.6 \n \n \n 5.0 \n \n \n \n \n Shares based awards (LTIP) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 0.3 \n \n \n 0.3 \n \n \n \n \n Dividends paid \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (46.1) \n \n \n (46.1) \n \n \n \n \n 30 June 2024 \n \n \n 167.1 \n \n \n 479.4 \n \n \n 415.4 \n \n \n (5.7) \n \n \n 326.9 \n \n \n 1,383.1 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Condensed Group Statement of Changes in Equity (continued) \n   \n Year ended 31 December 2024 (audited) \n   \n   \n \n \n \n \n \n \n \n   \n Share capital \n \n \n   \n Share premium \n \n \n Merger & \n other \n reserves \n \n \n   \n Hedging reserve \n \n \n   \n Retained earnings \n \n \n   \n   \n Total \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n 1 January 2024 \n \n \n 167.1 \n \n \n 479.4 \n \n \n 415.3 \n \n \n (7.0) \n \n \n 369.1 \n \n \n 1,423.9 \n \n \n \n \n Profit for the year \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 41.4 \n \n \n 41.4 \n \n \n \n \n Other comprehensive income \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Amortisation of hedging \n reserve \n \n \n - \n \n \n - \n \n \n - \n \n \n 2.5 \n \n \n - \n \n \n 2.5 \n \n \n \n \n Exchange gain/(loss) on translation of foreign balances \n \n \n - \n \n \n - \n \n \n (0.1) \n \n \n - \n \n \n - \n \n \n (0.1) \n \n \n \n \n Total comprehensive income \n \n \n - \n \n \n - \n \n \n (0.1) \n \n \n 2.5 \n \n \n 41.4 \n \n \n 43.8 \n \n \n \n \n Share issue expenses \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Share-based awards (\"LTIP\") \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 0.4 \n \n \n 0.4 \n \n \n \n \n Dividends paid \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (92.1) \n \n \n (92.1) \n \n \n \n \n 31 December 2024 \n \n \n 167.1 \n \n \n 479.4 \n \n \n 415.2 \n \n \n (4.5) \n \n \n 318.8 \n \n \n 1,376.0 \n \n \n \n \n \n \n \n Notes to the condensed financial statements \n 1.         Accounting policies General information \n The financial information set out in this report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2024 have been filed with the Registrar of Companies. The Auditor's Report on these condensed consolidated interim financial statements was unqualified and did not contain a statement under Sections 498(2) or 498(3) of the Companies Act 2006. \n The condensed consolidated interim financial statements of the Group are unaudited but have been formally reviewed by the auditor and its report to the Company is included on pages 23 to 24 . These condensed consolidated interim financial statements of the Group for the six months ended 30 June 2025 were approved and authorised for issue by the Board on 22 July 2025. \n Basis of preparation/statement of compliance \n The condensed consolidated interim financial statements for the six months ended 30 June 2025 have been prepared in accordance with IAS 34 'Interim Financial Reporting'. The annual financial statements of the Group will be prepared in accordance with United Kingdom adopted international accounting standards. \n The condensed consolidated interim financial statements do not include all the information and disclosures required in the statutory financial statements and should be read in conjunction with the Group's financial statements as at 31 December 2024. \n Convention \n The condensed interim financial statements are presented in Sterling, rounded to the nearest million. \n Segmental reporting \n The Directors are of the opinion that the Group currently has one operating and reportable segment, being the acquisition and development of property in the United Kingdom and Ireland leased principally to GPs, Government and Healthcare organisations and other associated healthcare users. \n Going concern \n The directors are required to assess the Group's ability to continue as a going concern for a period of at least the next 12 months. In assessing the appropriateness of the going concern basis used in preparing the interim report, the directors have performed a review of the Group's financial performance and position, continued access to borrowing facilities and the ability to continue to operate the Group's facilities within its financial covenants, as well the Group's budgetary model. \n \n \n \n Notes to the condensed financial statements (continued) Going concern (continued) \n The Group's financial review and budgetary processes are based on an integrated model that projects performance, cash flows, position and other key performance indicators including earnings per share, leverage rates, net asset values per share and REIT compliance over the review period. In addition, the forecast model looks at the funding of the Group's activities and its compliance with the financial covenant requirements of its debt facilities. The model uses a number of key parameters in generating its forecasts that reflect the Group's strategy, operating processes and the Board's expectation of market developments in the review period. In undertaking its financial review, these parameters have been flexed to reflect severe, but realistic, scenarios both individually and collectively. Sensitivities applied are derived from the principal risks faced by the Group that could affect solvency or liquidity and are as follows: \n ·    Declining attractiveness / possible obsolescence of the Group's assets as a result of ESG initiatives or otherwise, or deteriorating economic circumstances impacts investment values - valuation parameter stress tested to provide for a one-off 10%/£275m fall in June 2025 valuations. \n ·    We have applied a 10% tenant default rate. \n ·    Rental growth rate assumptions have been amended to see no further uplifts on open market reviews. \n ·    Variable rate interest rates rise by an immediate 2% effective from 1 July 2025, impacting the variable interest debt in the portfolio. \n ·    Tightly controlled NHS scheme approval restricts investment opportunity - investment quantum flexed to remove non-committed transactions. \n ·    Impact on shareholder returns of all of the above occurrences - projected dividend payments held at expected 2025 level, 7.1p per share. \n The Group's property portfolio is let on long leases to tenants with strong covenants and the business is substantially cash generative. The Group's loan to-value ratio at 30 June 2025 was 48.6% (30 June 2024: 48.0%) and the Group's interest cover for the period under review was 3.05 times (30 June 2024: 3.1), well above the minimum Group banking covenant of 1.3 times (30 June 2024: 1.3). \n   \n Several specific assumptions have been made that overlay the financial parameters used in the Group's models. It has been assumed that the Group will be able to refinance or replace other debt facilities that mature within the review period in advance of their maturity and on terms similar to those at present. An exception to this is the £150m convertible that expired on 15 th July 2025 and was repaid from existing headroom within the Group's revolving credit facilities. \n The Board has continued to undertake a robust assessment of emerging and increasing risks faced by the Group. \n Since the release of our 2024 full-year results, global economic uncertainty has continued to persist and remains volatile and uncertain, compounded with an ever changing global political landscape and more recently in the UK with the revised policies of the Labour government. Despite this, the 10 year Health Plan which was published in early July is clearly positive for PHP. We welcome the Government's commitment to strengthening the NHS, particularly its emphasis on shifting more services to modern primary care facilities embedded in local communities. This plays directly to our strengths and our long standing partnerships across the NHS give us a strong foundation to support this transition and deliver value to our shareholders.  Within the UK, the main challenge facing the economy remains elevated interest rates.  The ongoing adverse impact of higher interest rates on our business includes reduced demand for our assets \n Notes to the condensed financial statements (continued) Going concern (continued) \n impacting property values in the investment market, the ability for us to continue to execute our acquisition and development strategy and increased financing costs, which could impact our rental income and earnings. The Board and key Committees have continued to oversee the Group's response to the impact of these challenges on our business and the wider economic influences to deliver robust operational and financial performance throughout the period and look forward to the rest of 2025 with confidence. Taking these and others factors into account, the Directors are satisfied that the Group has sufficient resources to continue in operation for a period of not less than twelve months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed consolidated interim financial statements. \n Accounting policies \n The accounting policies adopted are consistent with those of the previous financial year as set out in the Annual Report except for the following new and amended IFRS/s effective as of 1 January 2025: \n ·    amendments to IAS 21 Lack of exchangeability; \n ·    amendments to SASB standards. \n None of the above have had a significant effect on the financial statements of the Group. \n 2.         Rental and related income \n Revenue comprises rental income receivable on property investments in the UK and Ireland, which is exclusive of VAT, plus facilities and properties management income. Revenue is derived from one reportable operating segment. \n 3.         Operating profit \n Operating profit is stated after charging administrative expense of £6.3m and amortisation of intangible assets of £0.4m. Administrative expenses as a proportion of rental and related income were 7.0% (30 June 2024: 6.9%). The Group's EPRA cost ratio has remained at 10.9%, compared to 10.9% for the same period in 2024. \n Administrative expenses include staff costs of £3.9m (30 June 2024: £3.8m). \n In 2023 PHP acquired Axis, an Irish property management business. In the period Axis contributed £1.2m (30 June 2024: £7.0m) of related income and incurred direct property expenses of £0.5m (30 June 2024: £5.9m), contributing £0.7m (30 June 2024: £1.1m) of net related income. After the deduction of £0.6m (30 June 2024: £0.4m) administrative expenses Axis generated an operating profit of £0.1m (30 June 2024: £0.7m). \n          \n   \n   \n \n \n   \n Notes to the condensed financial statements (continued) \n   \n 4.         Finance costs \n   \n \n \n \n \n \n \n \n Six months \n ended \n 30 June 2025 \n \n \n Six months \n ended \n 30 June 2024 \n \n \n Year ended 31 December \n 2024 \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n \n \n \n (unaudited) \n \n \n (unaudited) \n \n \n (audited) \n \n \n \n \n Interest expense and similar charges on financial liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n (i) Interest \n \n \n \n \n \n \n \n \n \n \n \n \n \n Bank loan interest \n \n \n 16.8 \n \n \n 14.0 \n \n \n 29.5 \n \n \n \n \n Swap interest \n \n \n (1.4) \n \n \n (2.8) \n \n \n (5.0) \n \n \n \n \n Bond interest \n \n \n 8.3 \n \n \n 11.1 \n \n \n 20.5 \n \n \n \n \n Bank facility non utilisation fees \n \n \n 0.9 \n \n \n 1.1 \n \n \n 2.2 \n \n \n \n \n Bank charges and loan arrangement fees \n \n ...

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