Last April's £150m fundraising led to a slight dip in full-year earnings per share at Primary Health Properties (PHP), although that wasn't the most important number in the real estate investment trust's (Reit) preliminary results. That was the 5.1p full-year dividend, which for the first time in the group's 20-year history was completely covered by cash.
That was underpinned by a number of factors, including 0.9 per cent review-based rental growth and new acquisitions, which included a €6.7m (£5.7m) purchase of a primary care centre in Ireland - Primary Health's first deal in the country.
Investors should expect more activity on this front. Based on the current pipeline, the Reit reckons it can buy properties with a valuation yield of 7 per cent, some 183 basis points above UK targets. What's more, 10-year Euribor swap rates cost around 55 basis points less than equivalent Libor derivatives, a pricing arbitrage that produces a net margin of 4.3 per cent, versus 1.9 per cent in the UK. With that outlook in mind, analysts at Peel Hunt are forecasting adjusted earnings per share of 5.3p and net operating income of £70m this year, against 4.8p and £66.6m in 2016.
PRIMARY HEALTH PROPERTIES (PHP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 107.5p | MARKET VALUE: | £643m | |
| TOUCH: | 107.3-107.5p | 12-MONTH HIGH: | 116p | LOW: 100p |
| DIVIDEND YIELD: | 4.8% | DEVELOPMENT PROPERTIES: | £7.9m | |
| PREMIUM TO NAV: | 29% | NET DEBT: | 131% | |
| INVESTMENT PROPERTIES: | £1.2bn | |||
| Year to 31 Dec | Net asset value (p)* | Pre-tax profit (£m) | Earnings per share (p)* | Dividend per share (p)* |
|---|---|---|---|---|
| 2012 | 59.0 | 1.1 | 0.4 | 4.63 |
| 2013 | 68.5 | 20.2 | 5.7 | 4.75 |
| 2014 | 69.5 | 36.9 | 8.3 | 4.88 |
| 2015 | 77.4 | 56.0 | 12.6 | 5.00 |
| 2016 | 83.5 | 43.7 | 7.8 | 5.13 |
| % change | +8 | -22 | -38 | +3 |
Ex-div: 12 Jan Payment: 24 Feb *Adjusted for four-for-one share consolidation in November 2015 | ||||
