AUS
NZ
UK
CA
USA
IND
Key Points:
- PHP generated an additional £2.7 million in rental income during the nine months leading to September 2024, reflecting a slight decrease from the previous year but indicating continued growth in a challenging market.
- The company announced a quarterly interim dividend of 1.725 pence per share, marking a 3.0% increase over the previous year, demonstrating its commitment to returning value to shareholders.
- PHP won MSCI's Highest 10-Year Risk Adjusted Total Return Award for the third year running, and its inclusion in the FTSE/JSE All Share Index reflects its strong operational performance and growing appeal among global investors.
Primary Health Properties PLC (LSE:PHP), a leading investor in modern primary healthcare facilities in the UK, has released a trading update for the third quarter of the fiscal year ending 30 September 2024. The announcement comes ahead of the Group’s Capital Markets Day scheduled for 1:00 PM (2:00 PM SAST) today, where institutional investors and sell-side analysts will gather for insights on the company's performance and future strategy.
Key Highlights from Q3 2024
Rental Growth Performance
In the nine months leading to 30 September 2024, PHP reported an additional £2.7 million in rental income from rent reviews and asset management initiatives, a slight decrease from £3.3 million in Q3 2023. This reflects a growing trend in rental income, with £2.4 million generated from 241 settled reviews, marking a 7.9% increase over the previous passing rent. This equates to an annualized like-for-like increase of 3.0%, a decline from the previous year's figure of 4.4%.
The company remains optimistic about achieving over £3.0 million in additional income from rent reviews in 2024, bolstered by an improving open market value (OMV) outlook. However, this growth is anticipated to be partially offset by a decline in inflation impacting indexed-linked reviews.
Asset Management Initiatives
PHP has generated an additional £0.3 million from asset management activities, up from £0.2 million in Q3 2023. The company has successfully exchanged on four new projects, completed seven lease regears, and executed six new lettings in the UK, along with six asset management initiatives in Ireland. A robust pipeline is evident, with 39 asset management projects anticipated, aimed at extending lease lengths and enhancing rental income while also improving the environmental performance of the company's facilities.
Dividends and Awards
As previously announced, PHP declared its fourth quarterly interim dividend of 1.725 pence per ordinary share, set to be paid on 22 November 2024 to shareholders on record as of 11 October 2024. This dividend comprises a property income distribution of 1.45 pence and a normal dividend of 0.275 pence, equating to an annualized dividend of 6.9 pence—an increase of 3.0% compared to the 6.7 pence distributed in 2023.
During the quarter, PHP received MSCI's Highest 10-Year Risk Adjusted Total Return Award for the UK for the third consecutive year. This accolade highlights the Group's operational resilience and the stability of its income stream, which supports its progressive dividend policy as the company celebrates its 28th consecutive year of dividend growth.
Additionally, PHP qualified for both the FTSE/JSE All Share Index and the All-Property Index, demonstrating improved liquidity and heightened global investor interest following its successful listing on the Johannesburg Stock Exchange (JSE) a year ago. The company also received EPRA Gold awards for its 2023 Annual Report and Responsible Business Report, underscoring its commitment to transparency and responsible governance.
