REG - Primary Health Props - Interim Results, Capital Markets Update, Webcast
24/07/2025 07:45
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RNS Number : 3990S Primary Health Properties PLC 24 July 2025
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OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE
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REGULATIONS OF THAT JURISDICTION.
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.
Primary Health Properties PLC
Interim results for the six months ended 30 June 2025
PHP positioned for secure income and valuation growth supporting its
progressive dividend policy
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").
Mark Davies, Chief Executive Officer ("CEO") of PHP, commented:
"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.
"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.
"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.
"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.
"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."
CAPITAL MARKETS UPDATE AND WEBCAST:
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
php@buchanan.uk.com (mailto:php@buchanan.uk.com) .
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.
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.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
Income statement and financial metrics Six months to 30 June 2025 Six months to 30 June 2024
Change
Net rental income(1) £78.6m £76.2m +3.1%
Adjusted earnings(1,2) £47.3m £46.3m +2.2%
Adjusted earnings per share(1,2) 3.54p 3.46p +2.3%
IFRS profit for the period £59.4m £3.6m
IFRS earnings per share(2) 4.4p 0.3p
Dividends
Dividend per share(5) 3.55p 3.45p +2.9%
Dividends paid(5) £47.4m £46.1m +2.8%
Dividend cover(1) 100% 100%
Balance sheet and operational metrics 30 June 31 December
2025 2024 Change
Adjusted NTA per share(1,3) 106.2p 105.0p +1.1%
IFRS NTA per share(1,3) 104.0p 103.0p +1.0%
EPRA NDV per share(1,3) 113.9p 114.1p -0.2%
Property portfolio
Investment portfolio valuation(4) £2.81bn £2.75bn +0.7%
Net initial yield ("NIY")(1) 5.25% 5.22% +3bps
Contracted rent roll (annualised)(1,6) £157.7m £153.9m +2.5%
Weighted average unexpired lease term ("WAULT")(1) 9.1 years 9.4 years
Occupancy 99.1% 99.1%
Rent-roll funded by government bodies(1) 88% 89%
Debt
Average cost of debt 3.4% 3.4%
Loan to value ratio ("LTV")(1) 48.6% 48.1%
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.
2 See note 7, earnings per share, to the financial statements.
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.
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.
5 See note 8, dividends, to the financial statements.
(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.
EARNINGS AND DIVIDEND GROWTH
· Adjusted earnings per share up 2.3% at 3.54 pence (H1 2024: 3.46 pence)
· 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
· Contracted annualised rent roll increased by 2.5% to £157.7 million
(31 December 2024: £153.9 million)
· 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.
· 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,
· 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
· The Company intends to maintain its strategy of paying a progressive,
covered dividend
NET ASSET VALUE AND PORTFOLIO MANAGEMENT
· Adjusted Net Tangible Assets ("NTA") per share increased by 1.1% to
106.2 pence (31 December 2024: 105.0 pence)
· IFRS NTA increased by 1.0% to 104.0 pence (31 December 2024: 103.0
pence)
· 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%)
· 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
· 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)
· 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
· Acquisition of Laya Healthcare facility, Cork, Ireland for €22.0
million / £18.2 million delivering an accretive earnings yield of 7.1%
· 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
FINANCIAL MANAGEMENT
· 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
· 100% (31 December 2024: 100%) of net debt fixed or hedged for a
weighted average period of six years
· LTV ratio 48.6% (31 December 2024: 48.1%) within the Group's
targeted range of between 40% to 50%
· Weighted average debt maturity 5.1 years (31 December 2024: 5.7
years)
RELATIVE TOTAL RETURNS
Six months ended Six months ended Year ended
30 June 2025 30 June 2024 31 December 2024
Adjusted NTA return 4.5% 0.4% 3.6%
Income return 2.9% 2.8% 5.5%
Capital return 0.7% (1.4%) (1.3%)
Total property return(1) 3.6% 1.4% 4.2%
1 The definition for total property return is set out in the Glossary of
Terms.
For further information contact:
Mark Davies Richard Howell
Chief Executive Officer Chief Financial Officer
Primary Health Properties PLC Primary Health Properties PLC
T: +44 (0) 7968 122448 T: +44 (0) 7766 072272
E: mark.davies@phpgroup.co.uk (mailto:mark.davies@phpgroup.co.uk) E: richard.howell@phpgroup.co.uk (mailto:richard.howell@phpgroup.co.uk)
Burson Buchanan (Financial PR) Sodali & Co (media re proposed combination with Assura)
Mark Court/Stephanie Whitmore/ Rory Godson
Jesse McNab Elly Williamson
T: +44 (0) 20 7466 5066 T: +44 (0) 7970 246725
E: php@buchanan.uk.com (mailto:php@buchanan.uk.com) E: php@client.sodali.com (mailto:php@client.sodali.com)
EXECUTIVE REVIEW
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.
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).
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).
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.
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.
Recommended combination with Assura
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.
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.
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.
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.
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.
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:
· 80% to 90% government backed income target with new or regeared leases typically in excess of 20 years
· Focus on organic rental growth greater than 3% to deliver sector leading, risk adjusted total property returns
· Risk controlled and capital light asset management and development projects
· Targeting a strong investment grade credit rating of BBB+ or better
· LTV target of 40% to 50%
· Interest cover target of greater than 2.5x net rental income with more than 90% of debt fixed or hedged
· Strong control on costs and overheads with one of the lowest EPRA cost ratios in the sector
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.
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.
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 (https://www.phpgroup.co.uk/investors/offer-for-assura-plc)
.
Overview of results
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).
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.
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).
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.
Dividends
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.
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.
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.
Johannesburg Stock Exchange ("JSE") secondary listing
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.
Environmental, Social and Governance ("ESG")
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.
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.
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%).
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.
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.
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.
The NHS 'fit for the future' 10-year health plan for England
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.
· 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.
· 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.
· 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.
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.
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.
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.
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.
Primary health and investment market update
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.
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.
PHP Outlook
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.
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.
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.
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.
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.
Harry Hyman Mark Davies
Chair
Chief Executive Officer
23 July 2025
BUSINESS REVIEW
Rental growth
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.
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.
Rent review performance
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.
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.
The growth from rent reviews completed in the period is summarised below:
Review type Number Previous rent Rent increase % increase total % increase annualised
(per annum) (per annum) % %
£ million £ million
UK - open market(1) 86 10.8 0.8 7.6% 2.3%
UK - indexed 63 7.6 0.7 8.5% 4.0%
UK - fixed 13 3.6 0.2 6.1% 2.6%
UK - total 162 22.0 1.7 7.7% 3.0%
Ireland - indexed 14 2.7 0.4 16.0% 3.4%
Total - all reviews 176 24.7 2.1 8.6% 3.0%
(1) - includes 20 (H1 2024: 24) reviews where no uplift was achieved.
(1) - includes 20 (H1 2024: 24) reviews where no uplift was achieved.
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.
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.
Asset Management
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.
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.
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.
Valuation and returns
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.
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.
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%).
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.
£ million H1 2025 H2 2024 H1 2024
NIY expansion (£9.0) / +3bps (£28.6) / +4 bps (£73.0) / +13 bps
Rental growth £28.8 £30.2 £33.0
Total surplus / (deficit) £19.8 £1.6 (£40.0)
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.
The total property returns generated by the portfolio in the period are set out below:
H1 2025 H1 2024 FY 2024
Income return 2.9% 2.8% 5.5%
Capital return 0.7% (1.4%) (1.3%)
Total return 3.6% 1.4% 4.2%
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.
Number of Valuation Average lot size
properties £ million % £ million
> £10m 58 911 32 15.7
£5m - £10m 130 884 32 6.8
£3m - £5m 169 669 24 4.0
£1m - £3m 155 340 12 2.2
< £1m (including land £1.3m) 5 4 - 0.8
Total(1) 517 2,808 100 5.4
(1) Excludes the £3.4 million impact of IFRS 16 Leases with ground rents
recognised as finance leases.
Robust portfolio metrics
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.
The security and longevity of our income are important drivers of our secure,
long term predictable income stream and enable our progressive dividend
policy.
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%).
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:
Income subject to expiry £m %
Holding over 8.7 5.5%
< 3 years 17.9 11.4%
4 - 5 years 21.1 13.4%
5 - 10 years 50.3 31.9%
10 - 15 years 27.7 17.6%
15 - 20 years 21.4 13.5%
> 20 years 10.6 6.7%
Total 157.7 100.0%
Ireland
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.
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%).
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.
Development
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.
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%.
Investment and pipeline
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.
The immediate pipeline of opportunities in legal due diligence continues to be
focused predominantly on PHP's existing portfolio through asset management
projects.
Pipeline In legal due diligence Advanced pipeline
Number Cost Number Cost
Asset management 20 £7.9m 23 £17.9m
UK - direct development 1 £4.1m - -
Ireland - forward funded development - - 3 £64.4m (€75m)
Total pipeline 21 £12.0m 26 £82.3m
FINANCIAL REVIEW
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.
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).
The financial results for the Group are summarised as follows:
Six months Six months Year ended 31 December
ended ended 2024
30 June 2025 30 June 2024
£m £m £m
Net rental income 78.6 76.2 153.6
Axis PHP contribution net of overheads 0.1 0.7 1.2
Administrative expenses(1) (5.7) (5.9) (12.1)
Operating profit before revaluation and net financing costs 73.0 71.0 142.7
Net financing costs (25.7) (24.7) (49.8)
Adjusted earnings 47.3 46.3 92.9
Revaluation gain / (deficit) on property portfolio 19.8 (40.0) (38.4)
Fair value loss on interest rate derivatives and convertible bond (6.3) (2.8) (7.6)
Amortisation of MedicX debt MtM at acquisition 1.5 1.5 3.0
Axis PHP amortisation of intangible asset (0.4) (0.5) (0.9)
Exceptional item - termination cost on variable rate bond - - (2.0)
IFRS profit before tax 61.9 4.5 47.0
Corporation tax - (0.1) -
Deferred tax provision (2.5) (0.8) (5.6)
IFRS profit after tax 59.4 3.6 41.4
(1) Excludes amortisation of intangible asset and costs arising on the
acquisition of Axis PHP.
The £1.0 million increase in adjusted earnings in the period can be
summarised as follows:
£m
Six months ended 30 June 2024 46.3
Net rental income 2.4
Net financing costs (1.0)
Administrative expenses 0.2
Axis PHP contribution (0.6)
Six months ended 30 June 2025 47.3
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.
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.
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.
EPRA cost ratio Six months ended Six months Year ended
30 June 2025 ended 31 December 2024
30 June 2024
£m £m £m
Gross rent less ground rent and service charge income 82.4 80.0 160.7
Direct property expense 9.8 8.7 26.2
Less: service charge and recoverable costs (6.7) (5.9) (21.0)
Non-recoverable property costs 3.1 2.8 5.2
Administrative expenses 5.7 5.9 12.1
Axis PHP overheads and costs 0.6 0.4 0.9
Less: ground rent (0.1) (0.1) (0.2)
Less: other operating income (0.3) (0.3) (0.7)
EPRA costs (including direct vacancy costs) 9.0 8.7 17.3
EPRA cost ratio 10.9% 10.9% 10.8%
EPRA cost ratio excluding Axis PHP overheads and direct vacancy costs 9.8% 10.0% 10.1%
Total expense ratio - administrative expenses as a percentage of gross asset
value (annualised)
0.4% 0.4% 0.4%
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.
Shareholder value
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.
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%).
The table below sets out the movements in the Adjusted NTA and EPRA Net
Disposal Value (NDV) per share over the period under review.
Adjusted net tangible asset (NTA) per share 30 June 2025 pence per share 30 June 2024 pence per share 31 December 2024 pence per share
Opening adjusted NTA per share 105.0 108.0 108.0
Adjusted earnings for the period 3.5 3.5 7.0
Dividends paid (3.5) (3.5) (6.9)
Revaluation of property portfolio 1.5 (3.0) (2.9)
Derivatives and foreign exchange movements (0.3) - (0.2)
Closing adjusted NTA per share 106.2 105.0 105.0
Fixed rate debt and swap mark-to-market value 8.2 9.4 9.3
Convertible bond fair value adjustment - 0.2 0.1
Deferred tax (0.9) (0.3) (0.7)
Intangible assets 0.4 0.4 0.4
Closing EPRA NDV per share 113.9 114.7 114.1
Financing
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.
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.
The Group's key debt metrics are summarised in the table below:
Debt metrics 30 June 2025 31 December 2024
Average cost of debt - drawn 3.4% 3.4%
Average cost of debt - fully drawn 3.9% 4.0%
Loan to value 48.6% 48.1%
Total net debt fixed or hedged 99.7% 100.0%
Net rental income to net interest cover 3.1 times 3.1 times
Net debt / EBITDA 9.4 times 9.3 times
Weighted average debt maturity - drawn facilities 5.1 years 5.7 years
Weighted average debt maturity - all facilities 4.5 years 4.9 years
Total undrawn facilities and available to the Group(1) £107.3m £270.9m
Unfettered assets £69.1m £47.3m
(1) Pro-forma after deducting capital commitments.
Average cost of debt
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%).
Interest rate exposure
The analysis of the Group's exposure to interest rate risk in its debt
portfolio as at 30 June 2025 is as follows:
Facilities Net debt drawn
£ million % £ million %
Fixed rate debt 1,111.8 67.9 1,111.8 81.3
Hedged by fixed rate interest rate swaps 200.0 12.2 200.0 14.6
Hedged by interest rate caps 51.5 3.2 51.5 3.8
Floating rate debt - unhedged 273.5 16.7 3.5 0.3
Total 1,636.8 100.0 1,366.8 100.0
Interest rate and foreign currency derivative contracts
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.
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).
Currency exposure
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.
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.
Fixed rate debt mark-to-market ("MtM")
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.
Convertible bonds
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.
Alternative Performance Measures ("APMs")
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.
Related party transactions
Related party transactions are disclosed in note 16 to the condensed financial
statements.
Mark Davies Richard Howell
Chief Executive
Officer
Chief Financial Officer
23 July 2025
Principal risks and uncertainties Risk management overview
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:
· investment focuses on the primary health real estate sector which is
traditionally much less cyclical than other real estate sectors;
· the majority of the Group's rental income is received directly or
indirectly from government bodies in the UK and Ireland;
· the Group benefits from long initial lease terms, largely with
upwards-only review terms, providing clear visibility of income;
· 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;
· the Board funds its operations to maintain an appropriate mix of debt
and equity; and
· 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.
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.
Principal risks and changes in risk factors
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.
Monitoring of identified and emerging risks
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.
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.
Going concern analysis
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:
· 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.
· We have applied a 10% tenant default rate.
· Rental growth rate assumptions have been amended to see no further
uplifts on open market reviews.
· Variable rate interest rates rise by an immediate 2% effective from 1
July 2025, impacting the variable interest debt in the portfolio.
· Tightly controlled NHS scheme approval restricts investment
opportunity - investment quantum flexed to remove non-committed transactions.
· Impact on shareholder returns of all of the above occurrences -
projected dividend payments held at expected 2025 level, 7.1 pence per share.
Several specific assumptions have been made that overlay the financial
parameters used in the Group's models.
Further details on going concern are set out in note 1 to the Financial
Statements.
INDEPENDENT REVIEW REPORT TO PRIMARY HEALTH PROPERTIES PLC
Conclusion
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.
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.
Basis for Conclusion
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.
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".
Conclusion Relating to Going Concern
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.
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.
Responsibilities of the directors
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.
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.
Auditor's Responsibilities for the review of the financial information
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.
Use of our report
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.
Deloitte LLP
Statutory Auditor
London, United Kingdom
23 July 2025
Condensed Group Statement of Comprehensive Income
For the six months ended 30 June 2025
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2025 2024 2024
£m £m £m
Notes (unaudited) (unaudited) (audited)
Rental and related income 2 89.7 91.9 181.7
Direct property expenses (10.4) (14.6) (26.0)
Net rental and related income 79.3 77.3 155.7
Administrative expenses (6.3) (6.3) (13.0)
Amortisation of intangible assets (0.4) (0.5) (0.9)
Total administrative expenses 3 (6.7) (6.8) (13.9)
Revaluation gain/(deficit) on property portfolio 8 19.8 (40.0) (38.4)
Profit on sale of land and properties - - -
Total revaluation gain/(deficit) 19.8 (40.0) (38.4)
Operating profit 3 92.4 30.5 103.4
Finance costs 4 (24.2) (23.2) (46.8)
Early termination on bonds - - (2.0)
Fair value loss on derivative interest rate swaps and
amortisation of cash flow hedging reserve 4 (4.4) (3.3) (7.0)
Fair value (loss)/gain on convertible bond 4 (1.9) 0.5 (0.6)
Profit before taxation 61.9 4.5 47.0
Taxation (charge)/credit 5 (2.5) (0.9) (5.6)
Profit after taxation for the period/year(1) 59.4 3.6 41.4
Other comprehensive income:
Items that may be reclassified subsequently to profit and loss:
Fair value gain on interest rate swaps treated as cash flow hedges and
amortisation of hedging reserve
1.3 1.3 2.5
Exchange gain /(loss) on translation of foreign balances 0.8 0.1 (0.1)
Other comprehensive income for the period net of tax(1) 2.1 1.4 2.4
Total comprehensive income for the period net of tax(1) 61.5 5.0 43.8
IFRS earnings per share
Basic 6 4.4p 0.3p 3.1p
Diluted 6 4.4p 0.3p 3.1p
Adjusted earnings per share(2)
Basic 6 3.5p 3.5p 7.0p
Diluted 6 3.4p 3.3p 6.7p
(1) Wholly attributable to equity shareholders of Primary Health Properties
PLC
(2) See Glossary of Terms on pages 53 to 55.
The above relates wholly to continuing operations.
Condensed Group Balance Sheet As at 30 June 2025
30 June 30 June 31 December
2025 2024 2024
£m £m £m
Notes (unaudited) (unaudited) (audited)
Non-current assets
Investment properties 8 2,807.2 2,749.5 2,750.1
Derivative interest rate swaps 13 1.8 0.9 -
Intangible assets 4.9 5.8 5.3
Property, plant & equipment 0.5 0.5 0.6
2,814.4 2,756.7 2,756.0
Current assets
Properties held for sale 4.3 - 3.0
Trade and other receivables 34.3 27.4 27.7
Cash and cash equivalents 9 11.5 4.1 3.5
Derivative interest rate swaps 13 0.1 5.2 0.2
Development work in progress 0.9 0.8 0.9
51.1 37.5 35.3
Total assets 2,865.5 2,794.2 2,791.3
Current liabilities
Deferred rental income (31.9) (31.2) (31.4)
Trade and other payables (33.7) (30.4) (30.6)
Borrowings: term loans and overdraft 10 (3.7) (2.5) (3.4)
Borrowings: bonds 11 (150.2) - (148.3)
Derivative interest rate swaps 13 - (3.4) -
(219.5) (67.5) (213.7)
Non-current liabilities
Borrowings: term loans and overdraft 10 (801.1) (681.2) (757.2)
Borrowings: bonds 11 (436.7) (651.2) (429.3)
Derivative interest rate swaps 13 - - -
Head lease liabilities 12 (3.4) (3.0) (3.0)
Trade and other payables (3.1) (4.1) (3.1)
Deferred tax liability (11.6) (4.1) (9.0)
(1,255.9) (1,343.6) (1,201.6)
Total liabilities (1,475.4) (1,411.1) (1,415.3)
Net assets 1,390.1 1,383.1 1,376.0
Equity
Share capital 16 167.1 167.1 167.1
Share premium account 479.4 479.4 479.4
Merger and other reserves 17 416.0 415.4 415.2
Hedging reserve (3.2) (5.7) (4.5)
Retained earnings 330.8 326.9 318.8
Total equity(1) 1,390.1 1,383.1 1,376.0
Basic net asset value per share
IFRS net assets - basic 6 104.0 103.5 103.0p
IFRS net assets - diluted 6 105.7 105.6 103.0p
Adjusted net tangible assets(2) - basic 6 106.2 105.0 105.0p
Adjusted net tangible assets(2) - diluted 6 107.6 107.0 106.7p
(1) Wholly attributable to equity shareholders of Primary Health Properties
PLC.
(2) See Glossary of Terms on pages 53 to 55.
Condensed Group Cash Flow Statement For the six months ended 30 June 2025
Six months ended 30 June 2025 Six months ended 30 June 2024 Year ended 31 December 2024
£m £m £m
Note (unaudited) (unaudited) (audited)
Operating activities
Profit on ordinary activities after tax 59.4 3.6 41.4
Taxation charge/(credit) 5 2.5 0.9 5.6
Finance costs including early termination fees 4 24.2 23.2 48.8
Fair value loss on derivatives and amortisation of hedging reserve 4.4 3.3 7.0
Fair value gain/(loss) on convertible bond 1.9 (0.5) 0.6
Operating profit before financing costs 92.4 30.5 103.4
Adjustments to reconcile Group operating profit to net cash flows from
operating activities:
Revaluation (gain)/deficit on property portfolio 8 (19.8) 40.0 38.4
Amortisation of intangible assets 0.4 0.5 0.9
Effect of exchange rate fluctuations on operations - - -
Fixed rent uplift (0.2) (0.3) (0.4)
Tax (paid)/received - (0.2) (0.1)
(Increase)/decrease in trade and other receivables (1.3) (2.7) (3.4)
Increase/(decrease) in trade and other payables 3.6 (0.4) (3.6)
Cash generated from operations 75.1 67.4 135.2
Net cash flow from operating activities 75.1 67.4 135.2
Investing activities
Payments to acquire and improve properties and fixed assets (28.1) (14.8) (20.6)
Payments relating to pre-acquisition transactions (3.4) - -
Net cash flow used in investing activities (31.5) (14.8) (20.6)
Financing activities
Term bank loan drawdowns 93.9 64.5 306.6
Term bank loan repayments (51.5) (46.4) (278.9)
Loan/bond arrangement and early termination fees (1.2) (0.8) (3.8)
Premium paid on derivatives financial instruments (4.9) - -
Non-utilisation fees (1.0) (1.1) -
Interest paid (24.7) (24.6) (46.1)
Swap interest received 1.0 2.8 -
Equity dividends paid net of scrip dividend 7 (47.4) (46.1) (92.1)
Net cash flow used in financing activities (35.8) (51.7) (114.3)
Increase/(decrease) in cash and cash equivalents 7.8 0.9 0.3
Effect of exchange rate fluctuations on Euro denominated loans and cash
equivalents
0.2 - -
Cash and cash equivalents at start of period / year 3.5 3.2 3.2
Cash and cash equivalents at end of period / year 9 11.5 4.1 3.5
Condensed Group Statement of Changes in Equity For the six months ended 30 June 2025 (unaudited)
Six months ended 30 June 2025 (unaudited)
Merger &
Share capital Share premium other Hedging reserve Retained earnings
reserves Total
£m £m £m £m £m £m
1 January 2025 167.1 479.4 415.2 (4.5) 318.8 1,376.0
Profit for the period - - - - 59.4 59.4
Other comprehensive income
Exchange gain/(loss) on translation of foreign balances - - 0.8 - - 0.8
Amortisation of hedging reserve - - - 1.3 - 1.3
Total comprehensive income - - 0.8 1.3 59.4 61.5
Shares based awards (LTIP) - - - - - -
Dividends paid - - - - (47.4) (47.4)
30 June 2025 167.1 479.4 416.0 (3.2) 330.8 1,390.1
Six months ended 30 June 2024 (unaudited)
Merger &
Share capital Share premium other Hedging reserve Retained earnings
reserves Total
£m £m £m £m £m £m
1 January 2024 167.1 479.4 415.3 (7.0) 369.1 1,423.9
Profit for the period - - - - 3.6 3.6
Other comprehensive income
Exchange gain/(loss) on translation of foreign balances - - 0.1 - - 0.1
Amortisation of hedging reserve - - - 1.3 - 1.3
Total comprehensive income - - 0.1 1.3 3.6 5.0
Shares based awards (LTIP) - - - - 0.3 0.3
Dividends paid - - - - (46.1) (46.1)
30 June 2024 167.1 479.4 415.4 (5.7) 326.9 1,383.1
Condensed Group Statement of Changes in Equity (continued)
Year ended 31 December 2024 (audited)
Merger &
Share capital Share premium other Hedging reserve Retained earnings
reserves Total
£m £m £m £m £m £m
1 January 2024 167.1 479.4 415.3 (7.0) 369.1 1,423.9
Profit for the year - - - - 41.4 41.4
Other comprehensive income
Amortisation of hedging - - - 2.5 - 2.5
reserve
Exchange gain/(loss) on translation of foreign balances - - (0.1) - - (0.1)
Total comprehensive income - - (0.1) 2.5 41.4 43.8
Share issue expenses - - - - - -
Share-based awards ("LTIP") - - - - 0.4 0.4
Dividends paid - - - - (92.1) (92.1)
31 December 2024 167.1 479.4 415.2 (4.5) 318.8 1,376.0
Notes to the condensed financial statements
1. Accounting policies General information
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.
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.
Basis of preparation/statement of compliance
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.
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.
Convention
The condensed interim financial statements are presented in Sterling, rounded
to the nearest million.
Segmental reporting
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.
Going concern
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.
Notes to the condensed financial statements (continued) Going concern (continued)
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:
· 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.
· We have applied a 10% tenant default rate.
· Rental growth rate assumptions have been amended to see no further
uplifts on open market reviews.
· Variable rate interest rates rise by an immediate 2% effective from 1
July 2025, impacting the variable interest debt in the portfolio.
· Tightly controlled NHS scheme approval restricts investment
opportunity - investment quantum flexed to remove non-committed transactions.
· Impact on shareholder returns of all of the above occurrences -
projected dividend payments held at expected 2025 level, 7.1p per share.
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).
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.
The Board has continued to undertake a robust assessment of emerging and
increasing risks faced by the Group.
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
Notes to the condensed financial statements (continued) Going concern (continued)
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.
Accounting policies
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:
· amendments to IAS 21 Lack of exchangeability;
· amendments to SASB standards.
None of the above have had a significant effect on the financial statements of
the Group.
2. Rental and related income
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.
3. Operating profit
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.
Administrative expenses include staff costs of £3.9m (30 June 2024: £3.8m).
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).
Notes to the condensed financial statements (continued)
4. Finance costs
Six months Six months Year ended 31 December
ended ended 2024
30 June 2025 30 June 2024
£m £m £m
(unaudited) (unaudited) (audited)
Interest expense and similar charges on financial liabilities
(i) Interest
Bank loan interest 16.8 14.0 29.5
Swap interest (1.4) (2.8) (5.0)
Bond interest 8.3 11.1 20.5
Bank facility non utilisation fees 0.9 1.1 2.2
Bank charges and loan arrangement fees 1.6 1.6 3.2
26.2 25.0 50.4
Interest capitalised (0.5) (0.3) (0.6)
Amortisation of MedicX debt MtM at acquisition (1.5) (1.5) (3.0)
24.2 23.2 46.8
Six months Six months Year ended 31 December
ended 30 June 2025 ended 30 June 2024 2024
£m £m £m
(unaudited) (unaudited) (audited)
(ii) Derivatives
Net fair value loss/(gain) on interest rate swaps 3.1 2.0 4.5
Amortisation of cash flow hedging reserve 1.3 1.3 2.5
4.4 3.3 7.0
The fair value loss on derivatives recognised in the Condensed Group Statement
of Comprehensive Income has arisen from the interest rate swaps for which
hedge accounting does not apply.
Notes to the condensed financial statements (continued)
4. Finance costs (continued)
Six months Six months Year ended 31 December
ended ended 2024
30 June 2025 30 June 2024
£m £m £m
(unaudited) (unaudited) (audited)
(iii) Convertible bond
Fair value loss/(gain) on convertible bond 1.9 (0.5) 0.6
1.9 (0.5) 0.6
The fair value movement in the convertible bonds is recognised in the Group
Statement of Comprehensive Income within profit before taxation and is
excluded from the calculation of EPRA earnings and EPRA NTA (replacing EPRA
NAV). Refer to note 11 for further details about the convertible bonds.
Six months Six months Year ended 31 December
ended ended 2024
30 June 2025 30 June 2024
£m £m £m
(unaudited) (unaudited) (audited)
Finance costs (Note 4 (i)) (26.2) (25.0) (50.4)
(26.2) (25.0) (50.4)
Interest capitalised 0.5 0.3 0.6
Amortisation of MedicX debt MtM on acquisition 1.5 1.5 3.0
Net finance costs (24.2) (23.2) (46.8)
Notes to the condensed financial statements (continued)
5. Taxation
The Group elected to be treated as a UK-REIT with effect from 1 January 2007.
The UK-REIT rules exempt the profits of the Group's property rental business
from corporation tax. Gains on properties are also exempt from tax, provided
they are not held for trading or sold in the three years post completion of
development. The Group will otherwise be subject to corporation tax at 25%
(2024: 25%).
Acquired companies are effectively converted to UK-REIT status from the date
on which they become a member of the Group.
As a UK-REIT, the Company is required to pay Property Income Distributions
("PIDs") equal to at least 90% of the Group's rental profit calculated by
reference to tax rules rather than accounting standards.
To remain as a UK-REIT there are a number of conditions to be met in respect
of the principal company of the Group, the Group's qualifying activities and
the balance of its business. The Group remains compliant as at 30 June 2025.
The Group's activities in Ireland are conducted via Irish companies or an
Irish Collective Asset Vehicle ("ICAV"). The Irish companies pay Irish
Corporation Tax on trading activities and deferred tax is calculated on the
increase in capital values. The ICAV does not pay any Irish Corporation Tax on
its trading or capital profits but a 20% withholding tax is paid on
distributions to owners.
Six months Six months Year ended 31 December
ended 30 June 2025 ended 30 June 2024 2024
£m £m £m
(unaudited) (unaudited) (audited)
Taxation in the Condensed Group Statement of Comprehensive Income:
Corporation tax
UK corporation tax charge on non-property income - - -
Irish corporation tax charge/(credit) - - -
Total corporation tax - - -
Deferred tax
Deferred tax on Irish activities 2.5 0.9 5.6
Total deferred tax 2.5 0.9 5.6
Taxation charge/(credit) in the Condensed Group Statement of
Comprehensive Income 2.5 0.9 5.6
Notes to the condensed financial statements (continued)
6. Earnings per share Performance measures
In the tables below, we present earnings per share and net assets per share
calculated in accordance with IFRS, together with our own adjusted measure and
certain measures defined by the European Public Real Estate Association
("EPRA"), which have been included to assist comparison between European
property companies. Two of the Group's key financial performance measures are
Adjusted earnings per share and adjusted net tangible assets per share.
Adjusted earnings, which is a tax adjusted measure of revenue profit, is the
basis for the calculation of Adjusted earnings per share. We believe Adjusted
earnings and Adjusted earnings per share provide further insight into the
results of the Group's operational performance to stakeholders as they focus
on the net rental income performance of the business and exclude capital and
other items which can vary significantly from year to year.
Earnings per share
30 June 2025 30 June 2024
(unaudited)
(unaudited)
IFRS Adjusted earnings EPRA IFRS Adjusted earnings EPRA
earnings £m earnings earnings £m earnings
£m £m £m £m
Profit after taxation 59.4 59.4 59.4 3.6 3.6 3.6
Adjustments to remove:
Revaluation (gain)/ deficit on property portfolio - (19.8) (19.8) - 40.0 40.0
Fair value movement on derivatives - 4.4 4.4 - 3.3 3.3
Fair value movement and issue costs on 1.9 1.9 (0.5) (0.5)
convertible bond
Taxation charge/ (credit) - 2.5 2.5 - 0.9 0.9
Amortisation of intangible assets 0.4 0.4 0.5 0.5
Amortisation of MtM loss on debt acquired - (1.5) - - (1.5) -
Basic earnings 59.4 47.3 48.8 3.6 46.3 47.8
Dilutive effect of convertible bond 4.0 2.1 - - 2.2 2.2
Diluted earnings 63.4 49.4 48.8 3.6 48.5 50.0
Number of
shares
million million million million million million
Ordinary Shares 1,336.5 1,336.5 1,336.5 1,336.5 1,336.5 1,336.5
Dilutive effect of convertible bond 121.0 121.0 - - 115.2 115.2
Diluted Ordinary Shares 1,457.5 1,457.5 1,336.5 1,336.5 1,451.7 1,451.7
Profit per share attributable to
shareholders:
IFRS Adjusted EPRA IFRS Adjusted EPRA
pence pence pence pence pence pence
Basic 4.4 3.5 3.7 0.3 3.5 3.6
Diluted 4.4 3.4 3.7 0.3 3.3 3.4
Notes to the condensed financial statements (continued)
31 December 2024
(audited)
IFRS Adjusted earnings EPRA
earnings £m earnings
£m £m
Profit after taxation 41.4 41.4 41.4
Adjustments to remove:
Revaluation deficit/ (gain) on property portfolio - 38.4 38.4
Profit on the sale of land - - -
Fair value movement on derivatives - 7.0 7.0
Fair value movement and issue costs on
convertible bond - 0.6 0.6
Taxation (credit)/ charge - 5.6 5.6
JSE listing fees - - -
Amortisation of intangible assets - 0.9 0.9
Early termination fees on bonds - 2.0 2.0
Amortisation of MtM loss on debt - (3.0) -
acquired
Basic earnings 41.4 92.9 95.9
Dilutive effect of convertible bond - 4.3 4.3
Diluted earnings 41.4 97.2 100.2
6. Earnings per share (continued) Earnings per share
Number of shares
million million million
Ordinary Shares 1,336.5 1,336.5 1,336.5
Dilutive effect of convertible bond - 119.4 119.4
Diluted Ordinary Shares 1,336.5 1,455.9 1,455.9
Profit per share attributable to
shareholders:
IFRS Adjusted EPRA
pence pence pence
Basic 3.1 7.0 7.2
Diluted 3.1 6.7 6.9
In the year ended 31 December 2024 and period ended 30 June 2024 the effect of
the convertible bond had been excluded from the diluted profit and weighted
average diluted number of shares when calculating IFRS diluted profit per
share because they are anti-dilutive.
Notes to the condensed financial statements (continued)
6. Earnings per share (continued)
Net assets per share
30 June 2025 30 June 2024
(unaudited)
(unaudited)
IFRS Adjusted EPRA IFRS Adjusted EPRA
£m £m £m £m £m £m
Net assets attributable to shareholders 1,390.1 1,390.1 1,390.1 1,383.1 1,383.1 1,383.1
Derivative interest rate swaps - (1.9) (1.9) - (2.7) (2.7)
Deferred tax - 11.6 11.6 - 4.1 4.1
Intangible assets - (4.9) (4.9) - (5.8) (5.8)
Cumulative convertible bond fair value - 0.2 0.2 - (2.8) (2.8)
movement
MtM on MedicX loans net of - 23.9 - - 27.0 -
amortisation
Net tangible assets ("NTA") 1,390.1 1,419.0 1,395.1 1,383.1 1,402.9 1,375.9
Intangible assets - - 4.9 - - 5.8
Real estate transfer taxes - - 186.1 - - 177.9
Net reinstatement value ("NRV") 1,390.1 1,419.0 1,586.1 1,383.1 1,402.9 1,559.6
Fixed rate debt and swap mark-to- - - - -
market value 134.7 152.0
Deferred tax - - (11.6) - - (4.1)
Cumulative convertible bond fair value - - (0.2) - - 2.8
movement
Real estate transfer taxes - - (186.1) - - (177.9)
Net disposal value ("NDV") 1,390.1 1,419.0 1,522.9 1,383.1 1,402.9 1,532.4
Number of
shares
million million million million million million
Ordinary Shares 1,336.5 1,336.5 1,336.5 1,336.5 1,336.5 1,336.5
Dilutive effect of convertible bond 121.0 121.0 121.0 115.2 115.2 115.2
Diluted Ordinary Shares 1,457.5 1,457.5 1,457.5 1,451.7 1,451.7 1,451.7
Basic net asset value per share(1)
IFRS Adjusted EPRA IFRS Adjusted EPRA
pence pence pence pence pence pence
Net tangible assets ("NTA") 104.0 106.2 104.4 103.5 105.0 103.0
Net reinstatement value ("NRV") - - 118.7 - - 116.7
Net disposal value ("NDV") - - 113.9 - - 114.7
1 The above are calculated on a "basic" basis without the adjustment for
the impact of the convertible bond which is shown in the diluted basis table
below.
Diluted net asset value per share(2)
IFRS Adjusted EPRA IFRS Adjusted EPRA
pence pence pence pence pence pence
Net tangible assets ("NTA") 105.7 107.6 104.4 105.6 107.0 103.0
Net reinstatement value ("NRV") - - 118.7 - - 116.7
Net disposal value ("NDV") - - 113.9 - - 114.7
2 The Company assesses the dilutive impact of the unsecured convertible
bond, issued by the Group on 15 July 2019, on its net asset value per share
with a current exchange price of 123.99 pence (30 June 2024: 130.25 pence) (31
December 2024: 125.64 pence).
Notes to the condensed financial statements (continued)
6. Earnings per share (continued)
Net assets per share
31 December 2024
(audited)
IFRS Adjusted EPRA
£m £m £m
Net assets attributable to shareholders 1,376.0 1,376.0 1,376.0
Derivative interest rate swaps - (0.2) (0.2)
Deferred tax - 9.0 9.0
Intangible assets - (5.3) (5.3)
Cumulative convertible bond fair value - (1.7) (1.7)
movement
MtM on MedicX loans net of - 25.4 -
amortisation
Net tangible assets ("NTA") 1,376.0 1,403.2 1,377.8
Intangible assets - - 5.3
Real estate transfer taxes - - 181.4
Net reinstatement value ("NRV") 1,376.0 1,403.2 1,564.5
Fixed rate debt and swap mark-to- - -
market value 149.3
Deferred tax - - (9.0)
Cumulative convertible bond fair value - -
movement 1.7
Real estate transfer taxes - - (181.4)
Net disposal value ("NDV") 1,376.0 1,403.2 1,525.1
Ordinary
shares
million million million
Issued share capital 1,336.5 1,336.5 1,336.5
Basic net asset value per share(1)
IFRS Adjusted EPRA
pence pence pence
Net tangible assets ("NTA") 103.0 105.0 103.1
Net reinstatement value ("NRV") - - 117.1
Net disposal value ("NDV") - - 114.1
a. The above are calculated on a "basic" basis without the
adjustment for the impact of the convertible bond which is shown in the
diluted basis table below.
Diluted net asset value per share(2)
IFRS Adjusted EPRA
pence pence pence
Net tangible assets ("NTA") 104.8 106.7 103.1
Net reinstatement value ("NRV") - - 117.1
Net disposal value ("NDV") - - 114.1
b. The Company assesses the dilutive impact of the unsecured convertible bond,
issued by the Group on 15 July 2019, on its net asset value per share with a
current exchange price of 123.99 pence (30 June 2024: 130.25 pence) (31
December 2024: 125.64 pence).
Notes to the condensed financial statements (continued)
6. Earnings per share (continued)
Conversion of the convertible bond would result in the issue of 121.0 million
(31 December 2024: 115.2 million) new Ordinary Shares. The IFRS net asset
value and EPRA NDV would increase by £150.2 million (31 December 2024:
£147.2 million) and the EPRA NTA, Adjusted NTA and EPRA NRV would increase by
£150.0 million (31 December 2024: £150.0 million). The resulting diluted net
asset values per share are anti-dilutive to all measures and therefore basic
IFRS net assets value per share are presented above.
Headline earnings per share
The JSE listing conditions require the calculation of headline earnings
(calculated in accordance with Circular 1/2021 - Headline Earnings as issued
by the South African Institute of Chartered Accountants) and disclosure of a
detailed reconciliation of headline earnings to the earnings numbers used in
the calculation of basic earnings per share in accordance with the
requirements of IAS 33 Earnings per share. Disclosure of headline earnings is
not a requirement of IFRS.
Six months Six months Year ended 31 December
ended ended 2024
30 June 2025 30 June 2024
£m £m £m
(unaudited) (unaudited) (audited)
Reconciliation of profit in the period to headline earnings
Basic earnings 59.4 3.6 41.4
Adjustments to calculate headline earnings:
Amortisation of intangible assets 0.4 0.5 0.9
Revaluation (surplus)/deficit (19.8) 40.0 38.4
Deferred tax on Irish activities 2.5 0.8 5.6
Headline earnings 42.5 44.9 86.3
Corporation tax - 0.1 -
Fair value loss/(gain) on derivative financial instruments and convertible 6.3 2.8 7.6
bond
Non-recurring items (1.5) (1.5) (1.0)
Adjusted earnings (after tax) 47.3 46.3 92.9
Diluted basic earnings 59.4 5.3 41.4
Diluted headline earnings 46.5 46.6 91.2
Basic earnings per share 4.4 0.3 3.1
Headline earnings per share 3.2 3.4 6.5
Adjusted earnings per share 3.5 3.5 7.0
Diluted basic earnings per share 4.1 0.3 3.1
Diluted headline earnings per share 3.2 3.2 6.3
Number of shares 1,336.5 1,336.5 1,336.5
Weighted average number of Ordinary Shares for the purpose of headline, basic 1,336.5 1,336.5 1,336.5
and adjusted earnings per share
Weighted average number of Ordinary Shares for the purpose of diluted basic 1,457.5 1,451.7 1,455.9
and headline earnings per share
Notes to the condensed financial statements (continued)
7. Dividends
Six months Six months Year ended 31 December
ended 30 June 2025 ended 30 June 2024 2024
£m £m £m
(unaudited) (unaudited) (audited)
UK Quarterly interim dividend paid 9 May 2025 23.5 - -
JSE Quarterly interim dividend paid 9 May 2025 0.2
Quarterly interim dividend paid 21 February 2025 23.5 - -
JSE Quarterly interim dividend paid 21 February 2025 0.2
Quarterly interim dividend paid 22 November 2024 - - 23.0
Quarterly interim dividend paid 16 August 2024 - - 23.0
Quarterly interim dividend paid 17 May 2024 - 23.0 23.0
Quarterly interim dividend paid 23 February 2024 - 23.1 23.1
Total dividends distributed 47.4 46.1 92.1
Per share 3.54p 3.45p 6.9p
The Company will pay a third interim dividend of 1.775 pence per Ordinary
Share for the year ending 31 December 2025, payable on 15 August 2025. The
dividend will comprise a Property Income Distribution ("PID") of 1.375 pence
per share and an ordinary dividend of 0.4 pence per share. The scrip dividend
scheme was suspended in light of the falls in the share price in 2023 and
first half of 2024 and the Company continues to offer a dividend reinvestment
plan in its place.
Notes to the condensed financial statements (continued)
8. Investment properties and investment properties under
construction
Investment properties
Investment properties freehold(1,2) Investment under construction
long leasehold
Total
£m £m £m £m
As at 1 January 2025 (audited) 2,165.3 577.1 7.7 2,750.1
Property additions 5.6 20.0 2.0 27.6
Impact of lease incentive adjustment 0.1 0.1 - 0.2
Lease ground rent adjustment - 0.4 - 0.4
Foreign exchange movements 7.9 2.5 - 10.4
2,178.9 600.1 9.7 2,788.7
Revaluations for the period 14.7 5.2 (0.1) 19.8
Properties held for sale (1.3) - - (1.3)
As at 30 June 2025 (unaudited) 2,192.3 605.3 9.6 2,807.2
(1) Includes development land held at £0.7m (31 December 2024: £0.9m)
(2) Opening balance as at 1 January 2025 includes £3.0m of properties held
for sale
Total
£m
Fair value per AY UK valuation 1,182.7
Fair value of KF UK valuation 1,332.8
Fair value of CBRE Ireland valuation 292.6
2,808.1
Properties held for sale (4.3)
Ground rents recognised as finance leases 3.4
Fair value 30 June 2025 (unaudited) (1) 2,807.2
(1) Includes properties held for sale at £4.3m (31 December 2024: £3.0m)
The investment properties have been independently valued at fair value by
Avison Young ("AY"), Knight Frank ("KF") and CBRE Chartered Surveyors and
Valuers ("CBRE"), as at the balance sheet date in accordance with accounting
standards. The valuers have confirmed that they have valued the properties in
accordance with the Practice Statements in the RICS Valuation Global Standards
2022 ("Red Book"). There were no changes to the valuation techniques during
the period. The valuers are appropriately qualified and have sufficient market
knowledge and relevant experience of the location and category of investment
property and have had full regard to market evidence when determining the
values.
The properties are 99.1% let (31 December 2024: 99.1%). The valuations
reflected a 5.25% net initial yield (31 December 2024: 5.22%). Where
properties have outstanding rent reviews, an estimate is made of the likely
rent on review in line with market expectations and the knowledge of the
valuer.
Notes to the condensed financial statements (continued)
8. Investment properties and investment properties under construction
(continued)
In accordance with IAS 40, investment properties under construction have also
been valued at fair value by the independent valuers. In determining the fair
value, the valuer is required to value development property as if complete,
deduct the costs remaining to be paid to complete the development and consider
the significant risks which are relevant to the development process including,
but not limited to, construction and letting risks and the impact they may
have on fair value. In the case of the Group's portfolio under construction,
where the sites are pre-let and construction risk remains with the
builder/developer, the valuer has deemed that the residual risk to the Group
is minimal. As required by the Red Book, the valuers have deducted the
outstanding cost to the Group through to the completion of construction of
£0.4m (31 December 2024: £2.5m) in arriving at the fair value to be included
in the financial statements.
In addition to the above, capital commitments have been entered into amounting
to £12.3m (30 June 2024:
£7.0m; 31 December 2024: £33.9m) which have not been provided for in the
financial statements.
Right-of-use-assets
In accordance with IFRS 16 Leases, the Group has recognised a £3.4m head
lease liability and an equal and opposite finance lease asset which is
included in non-current assets.
Fair value hierarchy
All of the Group's properties are level 3, as defined by IFRS 13, in the fair
value hierarchy as at 30 June 2025 and 31 December 2024. There were no
transfers between levels during the period or during 2024. Level 3 inputs used
in valuing the properties are those which are unobservable, as opposed to
level 1 (inputs from quoted prices) and level 2 (observable inputs either
directly, i.e. as prices, or indirectly, i.e. derived from prices).
Sensitivity of measurement of significant unobservable inputs
During six months to 30 June 2025 the Group experienced an 3bps increase in
the portfolio net initial yield, increasing investment property by £19.8
million (0.7% increase), before reflecting gains as a result of rental growth
and asset management projects. We have therefore applied the following
sensitivities:
• A decrease in the estimated annual rent will decrease the fair
value. A 2% decrease/increase in annual rent would result in an approximately
£56.2 million decrease/increase in the investment property valuation.
• A decrease in the equivalent yield will increase the fair
value. A 25bps shift of equivalent yield would have an approximately £126.2
million impact on the investment property valuation, either an increase or
decrease.
• A deterioration in the physical condition of the property will
decrease the fair value.
• An increase in the net initial yield will decrease fair value.
A further 25bps shift in the net initial yield would have an approximately
£127.6 million impact on the investment property valuation, either an
increase or decrease.
Notes to the condensed financial statements (continued)
9. Cash and cash equivalents
30 June 2025 31 December 2024
£m £m
(unaudited) (audited)
Cash held at bank 11.5 3.5
10. Borrowings: term loans and overdrafts
The table indicates amounts drawn and undrawn from each individual facility:
Expiry date Facility Amounts drawn Undrawn
30 June 31 December 30 June 31 December 30 June 31 December
2025 2024 2025 2024 2025 2024
£m £m £m £m £m £m
Current
RBS Overdraft Jun 2026 5.0 5.0 1.1 0.9 3.9 4.1
Aviva loan1 Sep 2033 2.6 2.5 2.6 2.5 - -
7.6 7.5 3.7 3.4 3.9 4.1
Non-current
Aviva AV Lending Oct 2036 200.0 200.0 200.0 200.0 - -
Aviva loan Nov 2028 75.0 75.0 75.0 75.0 - -
Barclays loan Sep 2027 170.0 170.0 105.0 105.0 65.0 65.0
HSBC loan Dec 2027 100.0 100.0 70.7 39.0 29.3 61.0
Lloyds loan Oct 2027 100.0 100.0 23.5 18.5 76.5 81.5
NatWest loan Oct 2026 100.0 100.0 43.3 33.5 56.7 66.5
Santander loan Jan 2027 50.0 50.0 22.9 24.4 27.1 25.6
Aviva loan1 Sep 2033 216.6 218.0 216.6 218.0 - -
Aviva loan1 Sep 2028 30.8 30.8 30.8 30.8 - -
1042.4 1,043.8 787.8 744.2 254.6 299.6
Total 1050.0 1,051.3 791.5 747.6 258.5 303.7
1 Acquired as part of the merger with MedicX.
At 30 June 2025, total facilities of £1,636.8m (31 December 2024: £1,630.4m)
were available to the Group. This included term loan facilities and the bonds
in note 11. Of these facilities, as at 30 June 2025, £1,378.3m was drawn (31
December 2024: £1,326.7m).
Costs associated with the arrangement of the facilities, including legal
advice and loan arrangement fees, are amortised using the effective interest
rate.
Notes to the condensed financial statements (continued)
10. Borrowings: term loans and overdrafts (continued)
Any amounts unamortised as at the period end are offset against amounts drawn
on the facilities as shown in the table below:
30 June 31 December
2025 2024
£m £m
(unaudited) (audited)
Term loans drawn: due within one year 3.7 3.4
Term loans drawn: due in greater than one year 787.9 744.2
Total term loans drawn 791.6 747.6
Plus: MtM on loans net of amortisation 21.4 22.5
Less: unamortised borrowing costs (8.2) (9.5)
Total term loans per the Condensed Group Balance Sheet 804.8 760.6
The Group has been in compliance with all the applicable financial covenants
of the above facilities through the period.
11. Borrowings: Bonds
30 June 31 December
2025 2024
£m £m
(unaudited) (audited)
Unsecured
Convertible bond July 2025 at fair value 150.2 148.3
Less: unamortised costs - -
Total unsecured bonds 150.2 148.3
Secured
Secured Bond March 2027 100.0 100.0
€51m Secured Bond (Euro private placement) December 2028/30 43.8 42.3
€70 million secured bond (Euro private placement) September 2031 60.1 57.9
€75 million secured bond (Euro private placement) February 2034 64.4 62.0
€47.8 million secured bond (Euro private placement) December 2033 41.0 39.5
Ignis loan note December 2028 50.0 50.0
Standard Life loan note September 2028 77.5 77.5
Less: unamortised issue costs (2.6) (2.7)
Plus: MtM on loans net of amortisation 2.5 2.8
Total secured bonds 436.7 429.3
Total bonds 586.9 577.6
Secured Bonds
On 18 December 2013, PHP successfully listed the floating rate guaranteed
secured bonds issued on 4 November 2013 (the "Secured Bonds") on the London
Stock Exchange. The Secured Bonds had a nominal value of £70m and incurred
interest at an annualised rate of 220bps plus a credit spread adjustment of
28bps above six-month SONIA, payable semi-annually in arrears. The bonds were
fully redeemed on 25 September 2024.
Notes to the condensed financial statements (continued)
11. Borrowings: Bonds (continued)
Secured Bonds
On 21 March 2017, a £100m Secured Bond was issued for a 10-year term at a
fixed coupon of 2.83% that matures on 21 March 2027. Interest is paid
semi-annually in arrears.
On 20 December 2018, senior secured notes for a total of €51 million (£43.8
million) were issued at a blended fixed rate of 2.4793% and a weighted average
maturity of 10.4 years. Interest is paid semi-annually in arrears. The notes
represent PHP's first Euro-denominated transaction in the private placement
market. The secured notes were placed with UK and Irish institutional
investors in two tranches:
· €40 million 2.46% senior notes due December 2028.
· €11 million 2.633% senior notes due December 2030.
On 16 September 2019, new senior secured notes for a total of €70 million
(£60.1 million) were issued at a fixed rate of 1.509% and a maturity of
twelve years. Interest is paid semi-annually in arrears. The secured notes are
guaranteed by the Company and were placed with UK and Irish institutional
investors.
On 11 February 2022, the Group issued a new €75.0 million (£64.4 million)
secured private placement loan note to MetLife for a 12-year term at a fixed
rate of 1.64%. The loan notes have the option to be increased by a further
€75 million to €150 million over the next three years at the Metlife's
discretion.
On 19 December 2023, new senior secured notes for a total of €47.8 million
(£41.0 million) were issued at a fixed rate of 4.195% and a maturity of
ten-years. Interest is paid semi-annually in arrears. The secured notes are
guaranteed by the Company and were placed with UK and Canadian institutional
investors.
Ignis and Standard Life loan notes
On 14 March 2019, the loan notes were added to the portfolio as a part of the
MedicX acquisition. The Ignis loan note incurs a fixed coupon of 3.99% payable
semi-annually in arrears and matures on 1 December 2028.
The Standard Life loan note matures on 30 September 2028 and is split into two
tranches, £50m and £27.5m at fixed coupon rates of 3.84% and 3.00%
respectively. Interest is payable semi-annually in arrears.
Convertible bond
On 15 July 2019, PHP Finance (Jersey No.2) Limited (the "Issuer"), a wholly
owned subsidiary of the Group, issued £150 million of 2.875% convertible
bonds (the "Bonds") for a six-year term and if not previously converted,
redeemed or purchased and cancelled, the Bonds could be redeemed at par on
maturity in July 2025. The net proceeds were partially used to repay the
Company's £75 million, 5.375% senior unsecured retail bonds at maturity and
otherwise for general corporate purposes.
Subject to certain conditions, the bonds could be convertible into fully paid
Ordinary Shares of the Company and the initial exchange price was set at
153.25 pence, a premium of 15% above the volume weighted average price of the
Company's shares on 18 June 2019, being 133.26 pence. Under the terms of the
Bonds, the Company had the right to elect to settle exercise of any conversion
rights entirely in shares or cash, or with a combination of shares and cash.
The exchange price was subject to adjustment if dividends paid per share
exceed 2.8 pence per annum and other certain circumstances and consequently
the exchange price was adjusted to 123.99 pence on 27 March 2025 (31 December
2024: 125.64 pence). On 15th July the bonds were repaid at maturity from
existing headroom within the Group's revolving credit facilities.
Notes to the condensed financial statements (continued)
11.
30 June 31 December
2025 2024
(unaudited) (audited)
£m £m
Opening balance - fair value 148.3 147.7
Cumulative fair value movement in convertible bond 1.9 0.6
Closing balance - fair value 150.2 148.3
Borrowings: Bonds (continued) Convertible Bond
The fair value of the convertible bond at 30 June 2025 was established by
obtaining quoted market prices. The fair value movement is recognised in the
Group Statement of Comprehensive Income within profit before taxation and is
excluded from the calculation of EPRA earnings and EPRA NTA (replacing EPRA
NAV).
12. Head lease liabilities
The Group holds certain long leasehold properties which are classified as
investment properties. The head leases are accounted for as finance leases.
These leases typically have lease terms between 25 years and perpetuity and
fixed rentals.
30 June 31 December
2025 2024
(unaudited) (audited)
£m £m
Due within one year 0.2 0.1
Due after one year 3.2 2.9
Closing balance - fair value 3.4 3.0
Notes to the condensed financial statements (continued)
13. Derivatives and other financial instruments
It is Group policy to maintain the proportion of floating rate interest
exposure at between 20% and 40% of total debt. The Group uses interest rate
swaps to mitigate its remaining exposure to interest-rate risk in line with
this policy. The fair value of these contracts is recorded in the balance
sheet and is determined by discounting future cash flows at the prevailing
market rates at the balance sheet date.
The table below sets out the movements in the value of the Group's interest
rate swaps during the period:
30 June 31 December
2025 2024
(unaudited) (audited)
£m £m
Fair value of interest rate swaps not qualifying as cash flow hedges under IAS
39:
Current assets
0.1 0.2
Non-current assets
1.8 -
Current liabilities
- -
Non-current liabilities - -
Closing balance - fair value 1.9 0.2
Notes to the condensed financial statements (continued)
14. Financial risk management
Set out below is a comparison by class of the carrying amount and fair values
of the Group's financial instruments that are carried in the financial
statements.
Book value Fair value Book value Fair value
30 June 2025 30 June 2025 31 December 2024 31 December 2024
(unaudited) (unaudited) (audited) (audited)
£m £m £m £m
Financial assets
Trade and other receivables 17.3 17.3 17.5 17.5
Interest rate swaps 1.9 1.9 0.2 0.2
Cash and short-term deposits 11.5 11.5 3.5 3.5
Financial liabilities
Interest-bearing loans and
borrowings (1,391.7) (1,269.4) (1,338.2) (1,201.3)
Interest rate swaps - - - -
Trade and other payables (28.8) (28.8) (25.8) (25.8)
Lease liabilities (3.4) (3.4) (3.0) (3.0)
The fair value of the financial assets and liabilities is included as an
estimate of the amount at which the instruments could be transferred in a
current transaction between willing parties, other than a forced sale. The
following methods and assumptions were used to estimate fair values:
a. The fair values of the Group's cash and cash equivalents and trade
payables and receivables are not materially different from those at which they
are carried in the financial statements due to the short- term nature of these
instruments.
b. The fair value of floating rate borrowings is estimated by discounting
future cash flows using rates currently available for instruments with similar
terms and remaining maturities. The fair value approximates their carrying
values, gross of unamortised transaction costs.
c. The fair values of the derivative interest rate swap contracts are
estimated by discounting expected future cash flows using market interest
rates and yield curves over the remaining term of the instrument.
The Group held financial instruments at fair value at 30 June 2025. The Group
has no financial instruments with fair values that are determined by reference
to significant unobservable inputs, i.e. those that would be classified as
level 3 in the fair value hierarchy, nor have there been any transfers of
assets or liabilities between levels of the fair value hierarchy. There are no
non-recurring fair value measurements.
Notes to the condensed financial statements (continued)
14. Financial risk management (continued)
Fair value measurements at 30 June 2025 are as follows:
Level 1(1) Level 2(2) Level 3(3) Total
Recurring fair value measurements £m £m £m £m
Financial assets
Derivative interest rate swaps - 1.9 - 1.9
Financial liabilities
Derivative interest rate swaps - - - -
Convertible bond (150.2) - - (150.2)
Secured bonds (406.4) (406.4)
Fixed rate debt - (1,002.8) - (1,002.8)
Fair value measurements at 31 December 2024 were as follows:
Recurring fair value measurements Level 1(1) Level 2(2) Level 3(3) Total
£m £m £m £m
Financial assets
Derivative interest rate swaps - 0.2 - 0.2
Financial liabilities
Derivative interest rate swaps - - - -
Convertible bond (148.3) - - (148.3)
Secured bonds (394.6) (394.6)
Fixed rate debt - (831.7) - (831.7)
(1) Valuation is based on unadjusted quoted prices in active markets for
identical financial assets and liabilities
(2) Valuation is based on inputs (other than quoted prices included in Level
1) that are observable for the financial asset or liability, either directly
(i.e. as unquoted prices) or indirectly (i.e. derived from prices)
(3) Valuation is based on inputs that are not based on observable market data
The interest rate swaps whose fair values include the use of level 2 inputs
are valued by discounting expected future cash flows using market interest
rates and yield curves over the remaining term of the instrument. The
following inputs are used in arriving at the valuation:
• Interest rates;
• Yield curves;
• Swaption volatility;
• Observable credit spreads;
• Credit default swap curve; and
• Observable market data.
Notes to the condensed financial statements (continued)
15. Related party transactions
Harry Hyman, Chair, is a Director and the ultimate beneficial owner of a
number of Nexus entities and is considered to be a related party. Following
the acquisition of certain Nexus entities on the internalisation of management
structure on 5 January 2021, the Group has continued to share certain
operational services with Nexus.
Amounts paid during the period in relation to shared services totalled £nil
(30 June 2024: £11,306; 31 December 2024: £nil).
As at 30 June 2025, outstanding fees payable to Nexus totalled £nil (31
December 2024: £nil; 30 June 2024: £nil).
16. Share capital
30 June 30 June 31 December
2025 2024 2024
£m £m £m
(unaudited) (unaudited) (audited)
Issued and fully paid Ordinary Shares at 12.5p each 167.1 167.1 167.1
At beginning of year 167.1 167.1 167.1
Scrip issues in lieu of cash dividends - - -
167.1 167.1 167.1
17. Merger and other reserves
30 June 30 June 31 December
2025 2024 2024
£m £m £m
(unaudited) (unaudited) (audited)
At beginning of year 415.2 415.3 415.3
Exchange gain on translation of foreign balances 0.8 0.1 (0.1)
416.0 415.4 415.2
18. Subsequent events
On 15 July the £150m Convertible Bond was repaid at maturity from existing
headroom within the Group's revolving credit facilities.
Notes to the condensed financial statements (continued) DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge this condensed
consolidated set of interim financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the United
Kingdom and that the operating and financial review herein includes a fair
review of the information required by DTR 4.2.7R and DTR 4.2.8R of the
Disclosure and Transparency rules of the United Kingdom's Financial Services
Authority namely:
a. an indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed
consolidated interim financial statements and a description of the principal
risks and uncertainties for the remaining six months of the financial year;
and
b. material related party transactions in the first six months and any
material changes in the related party transactions described in the last
Annual Report.
Shareholder information is as disclosed in the Annual Report and is also
available on the PHP website, www.phpgroup.co.uk (http://www.phpgroup.co.uk/)
.
By order of the Board
Harry Hyman Chair
23 July 2025
Glossary of terms
Adjusted earnings is EPRA earnings excluding the exceptional contract
termination payment and amortisation of MtM adjustments for fixed rate debt
acquired on the merger with MedicX.
Adjusted earnings per share is Adjusted earnings divided by the weighted
average number of shares in issue during the year.
Adjusted net tangible assets ("adjusted NTA") (which has replaced the former
adjusted EPRA net asset value alternative performance measure) is EPRA net
tangible asset value excluding the MtM adjustment of the fixed rate debt, net
of amortisation, acquired on the merger with MedicX. The objective of the
adjusted NTA measure is to highlight the value of net assets on a long-term
basis and excludes assets and liabilities that are not expected to crystallise
in normal circumstances and continues to be used as a measure to determine the
PIF payment.
Adjusted NTA per share is adjusted NTA divided by the number of shares in
issue at the balance sheet date.
Annualised rental income on a like-for-like basis is the contracted rent on a
per annum basis assuming a consistent number of properties between each year.
Average cost of debt is the total interest cost of drawn debt and swaps,
divided by the amount of drawn debt.
Axis is Axis Technical Services Limited.
Building Research Establishment Environmental Assessment Method ("BREEAM")
assesses the sustainability of buildings against a range of criteria.
Clinical Commissioning Groups ("CCGs") are the groups of GPs and other
healthcare professionals that are responsible for designing local health
services in England with effect from 1 April 2013.
Company and/or Parent is Primary Health Properties PLC ("PHP").
Direct property costs comprise ground rents payable under head leases, void
costs, other direct irrecoverable property expenses, rent review fees and
valuation fees.
District Valuer ("DV") is the District Valuer Service, being the commercial
arm of the Valuation Office Agency ("VOA"). It provides professional property
advice across the public sector and in respect of primary healthcare
represents NHS bodies on matters of valuation, rent reviews and initial rents
on new developments.
Dividend cover is the number of times the dividend payable (on an annual
basis) is covered by Adjusted earnings.
Earnings per Ordinary Share from continuing operations ("EPS") is the profit
attributable to equity holders of the Parent divided by the weighted average
number of shares in issue during the year.
EBITDA is operating profit excluding amortisation of intangibles, Axis
acquisition costs and investment property revaluations.
EPC is an Energy Performance certificate.
European Public Real Estate Association ("EPRA") is a real estate industry
body, which has issued Best Practice
Recommendations in order to provide consistency and transparency in real
estate reporting across Europe.
EPRA cost ratio is the ratio of net overheads and operating expenses against
gross rental income (with both amounts excluding ground rents payable). Net
overheads and operating expenses relate to all administrative and operating
expenses, net of any service fees, recharges or other income specifically
intended to cover overhead and property expenses.
EPRA earnings is the profit after taxation excluding investment and
development property revaluations, gains/losses on disposals, changes in the
fair value of financial instruments, associated close-out costs and their
related taxation, and amortisation of non-monetary items such as intangible
assets.
EPRA net assets ("EPRA NAV") are the balance sheet net assets excluding own
shares held, the MtM value of derivative financial instruments and the
convertible bond fair value movement and intangible assets.
EPRA NAV per share is the balance sheet net assets excluding own shares held,
the MtM value of derivative financial instruments, the convertible bond fair
value movement and intangible assets, divided by the number of shares in issue
at the balance sheet date.
EPRA NNNAV is adjusted EPRA NAV including the MtM value of fixed rate debt and
derivatives.
EPRA net reinstatement value ("EPRA NRV") is the balance sheet net assets
including real estate transfer taxes but excluding the MtM value of derivative
financial instruments, deferred tax and the convertible bond fair value
movement. The aim of the metric is to reflect the value that would be required
to recreate the Company through the investment markets based on its current
capital and financing structure. Refer to Note 6.
EPRA NRV per share is the EPRA net reinstatement value divided by the number
of shares in issue at the balance sheet date. Refer to Note 6.
EPRA net disposal value "EPRA NDV" (replacing EPRA NNNAV) is EPRA NRV
including deferred tax and the MtM value of fixed rate debt and derivatives.
The aim of the metric is to reflect the value that would be realised under a
disposal scenario. Refer to Note 6.
EPRA net tangible assets ("NTA") (which has replaced the former EPRA net asset
value alternative performance measure) is the balance sheet net assets but
excluding the MtM value of derivative financial instruments, deferred tax,
intangible assets and the convertible bond fair value movement. The aim of the
metric is to reflect the fair value of the assets and liabilities of the Group
that it intends to hold and does not intend in the long run to sell. Refer to
Note 6.
EPRA NTA per share is the EPRA net tangible assets divided by the number of
shares in issue at the balance sheet date. Refer to Note 6.
EPRA vacancy rate is, as a percentage, the ERV of vacant space Glossary of
terms (continued)
in the Group's property portfolio divided by ERV of the whole portfolio.
Equivalent yield (true and nominal) is a weighted average of the net initial
yield and reversionary yield and represents the return a property will produce
based upon the timing of the income received. The true equivalent yield
assumes rents are received quarterly in advance. The nominal equivalent
assumes rents are received annually in arrears.
Estimated rental value ("ERV") is the external valuer's opinion as to the open
market rent which, on the date of valuation, could reasonably be expected to
be obtained on a new letting or rent review of a property.
Gross rental income is the gross accounting rent receivable.
Group is Primary Health Properties PLC ("PHP") and its subsidiaries.
Headline earnings is the profit after taxation excluding
investment and development property revaluations, gains/
losses on disposals and their related taxation.
HSE or the Health Service Executiveis the executive agency of the Irish
government responsible for health and social services for people living in
Ireland.
IASs are International Accounting Standards as adopted by the United Kingdom.
IFRS is International Financial Reporting Standards as adopted by the European
Union.
IFRS or Basic net asset value per share ("IFRS NAV")are the balance sheet net
assets, excluding own shares held, divided by the number of shares in issue at
the balance sheet date.
Interest cover is the number of times net interest payable is covered by net
rental income.
Interest rate swap is a contract to exchange fixed payments for floating
payments linked to an interest rate, and is generally used to manage exposure
to fluctuations in interest rates.
JSE is Johannesburg Stock Exchange, the largest stock
exchange in Africa.
Like for like compares prior year to current year excluding acquisitions,
disposals and developments.
London Interbank Offered Rate ("LIBOR") is the interest rate charged by one
bank to another for lending money.
Loan to value ("LTV") is the ratio of net debt to the total value of property
and assets.
Mark to market ("MTM") is the difference between the book value of an asset or
liability and its market value.
MedicX is MXF Fund Limited and its subsidiaries.
MSCI (IPD) provides performance analysis for most types of real estate and
produces an independent benchmark of property returns.
MSCI (IPD) Healthcare is the UK Annual Healthcare Property Index.
MSCI (IPD) Total Return is calculated as the change in capital value, less any
capital expenditure incurred, plus net income, expressed as a percentage of
capital employed over the period, as calculated by MSCI (IPD).
Net asset value ("NAV") is the value of the Group's assets
minus the value of its liabilities.
Net debt is total drawn debt, less cash and cash equivalents
Net initial yield ("NIY") is the annualised rents generated by an asset, after
the deduction of an estimate of annual recurring irrecoverable property
outgoings, expressed as a percentage of the asset valuation (after notional
purchasers' costs).
Net related income is the Related income after the payment of direct property
costs that include service charge payments.
Net rental and related income is the sum of Net rental income and Net related
income.
Net rental income is the rental income receivable in the period after payment
of direct property costs. Net rental income is quoted on an accounting basis.
Net zero carbon refers to the point at which a process, activity, system etc.
produces net zero carbon emissions, through emissions reduction, use of low or
zero carbon energy and removal or offsetting of residual emissions. In the
context of buildings and activities associated with the construction,
refurbishment, maintenance and operation of buildings, PHP refers to the UK
Green Building Council "Net zero carbon, a framework definition".
NHSPS is NHS Property Services Limited, the company wholly owned and funded by
the Department of Health, which, as of 1 April 2013, has taken on all property
obligations formerly borne by Primary Care Trusts.
Occupancy is the level of units occupied, after deducting the ERV vacancy
rate.
Parity value is calculated based on dividing the convertible bond value by the
exchange price.
Progressive returns is where it is expected to continue to rise each year.
Progressive dividends is where it is expected to continue to rise each year on
a per share basis.
Property Income Distribution ("PID") is the required distribution of income as
dividends under the REIT regime. It is calculated as 90% of exempted net
income.
Real Estate Investment Trust ("REIT") is a listed property company which
qualifies for and has elected into a tax regime, which exempts qualifying UK
profits, arising from property rental income and gains on investment property
disposals, from corporation tax, but which has a number of specific
requirements.
Related income is the property and service charge income generated from the
Axis business.
Rent reviews take place at intervals agreed in the lease and their purpose is
usually to adjust the rent to the current market level at the review date.
Rent roll is the passing rent, being the total of all the contracted rents
reserved under the leases.
Reversionary yield is the anticipated yield which the initial yield will rise
to once the rent reaches the ERV and when the property is fully let. It is
calculated by dividing the ERV by the valuation.
Retail Price Index ("RPI") is the official measure of the Glossary of terms
(continued)
general level of inflation as reflected in the retail price of a basket of
goods and services such as energy, food, petrol, housing, household goods,
travelling fare, etc. RPI is commonly computed on a monthly and annual basis.
RICS is the Royal Institution of Chartered Surveyors.
RPI linked leases are those leases which have rent reviews
which are linked to changes in the RPI.
Special reserve is a distributable reserve.
Sterling Overnight Interbank Average Rate ("SONIA") is
the effective overnight interest rate paid by banks for
unsecured transactions in the British Sterling market.
Total expense ratio ("TER") is calculated as total administrative costs for
the year divided by the average total asset value during the year.
Total property return is the overall return generated by properties on a
debt-free basis. It is calculated as the net rental income generated by the
portfolio plus the change in market values, divided by opening property assets
plus additions
£m
Net rental and related income (A) 79.4
Revaluation surplus and profit on sales (B) 19.8
Total return (C) 99.2
Opening property assets 2,738.0
Weighted additions in the period 19.9
Impact of foreign exchange movements 5.2
Total weighted average closing property assets (D) 2,763.1
Income return (A/D) 2.9%
Capital return (B/D) 0.7%
Total property return (C/D) 3.6%
Total adjusted NTA return is calculated as the movement in adjusted net
tangible asset value for the period plus the dividends paid, divided by
opening EPRA net tangible asset value.
At 31 December 2024 105.0p
At 30 June 2025 106.2p
Increase / (decrease) 1.2p
Add: Dividends paid
21/02/2025 Q1 interim 1.775p
09/05/2025 Q2 interim 1.775p
Total return 3.55p
Total adjusted NTA return 4.51%
Total shareholder return is calculated as the movement in the share price for
the period plus the dividends paid, divided by the opening share price.
Weighted average facility maturity is calculated by multiplying each tranche
of Group debt by the remaining period to its maturity and dividing the result
by total Group debt in issue at the year end.
Weighted average unexpired lease term ("WAULT") is the average lease term
remaining to first break, or expiry, across the portfolio weighted by
contracted rental income.
Yield on cost is the estimated annual rent of a completed development divided
by the total cost of development, including site value and finance costs
expressed as a percentage return.
Yield shift is a movement (usually expressed in basis points) in the yield of
a property asset, or like-for-like portfolio over a given period. Yield
compression is a commonly used term for a reduction in yields.
Important Information in relation to PHP's offer for Assura plc
Capitalised terms used in this announcement (the "Announcement"), unless
otherwise defined, have the same meanings as set out in the original offer
document published by PHP on 13 June 2025 (as amended by a revised offer
document published by PHP on 27 June 2025).
N.M. Rothschild & Sons Limited ("Rothschild & Co"), which is
authorised and regulated by the FCA in the United Kingdom, is acting
exclusively as joint lead financial adviser to PHP and for no one else in
connection with the subject matter of this Announcement and will not be
responsible to anyone other than PHP for providing the protections afforded to
its clients or for providing advice in connection with the subject matter of
this Announcement. Neither Rothschild & Co nor any of its affiliates (nor
any of their respective directors, officers, employees or agents), owes or
accepts any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Rothschild & Co in connection with this
Announcement, any statement contained herein or otherwise.
Numis Securities Limited ("Deutsche Numis"), which is authorised and regulated
in the United Kingdom by the FCA in the United Kingdom, is acting exclusively
as joint lead financial adviser to PHP and for no one else in connection with
the subject matter of this Announcement and will not be responsible to anyone
other than PHP for providing the protections afforded to its clients or for
providing advice in connection with the subject matter of this Announcement.
Neither Deutsche Numis nor any of its affiliates (nor any of their respective
directors, officers, employees or agents), owes or accepts any duty, liability
or responsibility whatsoever (whether direct or indirect, whether in contract,
in tort, under statute or otherwise) to any person who is not a client of
Deutsche Numis in connection with this Announcement, any statement contained
herein or otherwise.
Citigroup Global Markets Limited ("Citi"), which is authorised by the PRA and
regulated by the FCA and the PRA in the United Kingdom, is acting exclusively
as joint financial adviser to PHP and for no one else in connection with the
subject matter of this Announcement and will not be responsible to anyone
other than PHP for providing the protections afforded to its clients or for
providing advice in connection with the subject matter of this Announcement.
Neither Citi nor any of its affiliates (nor any of their respective directors
officers, employees or agents) owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of Citi in
connection with this Announcement, any statement contained herein or
otherwise.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United
Kingdom by the FCA, is acting exclusively as joint financial adviser to PHP
and for no one else in connection with the subject matter of this Announcement
and will not be responsible to anyone other than PHP for providing the
protections afforded to its clients or for providing advice in connection with
the subject matter of this Announcement. Neither Peel Hunt nor any of its
affiliates (nor any of their respective directors, officers, employees or
agents) owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Peel Hunt in connection with
the matters referred to in this Announcement, any statement contained herein,
or otherwise.
This Announcement is for information purposes only and is not intended to, and
does not, constitute, or form part of, an offer, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of, any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Combination or otherwise, nor
shall there be any sale, issuance or transfer of securities of Assura in any
jurisdiction in contravention of applicable law. In particular, this
Announcement does not constitute an offer of securities to the public as
contemplated in the South African Companies Act, 71 of 2008.
The Combination will be implemented solely pursuant to the terms of the
Original Offer Document and Revised Offer Document which will contain the full
terms and conditions of the Combination, including details of how to accept
the Revised Offer. Any decision or response in relation to the Combination
should be made only on the basis of the information contained in the Original
Offer Document, the Revised Offer Document, the Original Combined Circular and
Prospectus and the Supplementary Prospectus.
The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them, and
publication of this Announcement shall not give rise to any implication that
there has been no change in the facts set forth in this Announcement since
such date.
This Announcement does not constitute or form part of, and should not be
construed as, any public offer under any applicable legislation or an offer to
sell or solicitation of any offer to buy any securities or financial
instruments or any advice or recommendation with respect to such securities or
other financial instruments.
This Announcement does not constitute a prospectus, prospectus equivalent
document or exempted document. PHP has published the Original Combined
Circular and Prospectus and Supplementary Prospectus containing information on
the New PHP Shares and the Combined Group as well as the Original Offer
Document and Revised Offer Document. PHP urges Assura Shareholders to read the
Original Offer Document, the Revised Offer Document, the Forms of Acceptance
and Election, the Original Combined Circular and Prospectus and Supplementary
Prospectus carefully because they contain important information in relation to
the Combination, the New PHP Shares and the Combined Group. Any decision by
Assura Shareholders in respect of the Combination should be made only on the
basis of the information contained in the Original Offer Document, the Revised
Offer Document the Original Combined Circular and Prospectus and Supplementary
Prospectus. PHP urges Assura Shareholders to read the Original Offer Document,
the Revised Offer Document, the Forms of Acceptance and Election, the Original
Combined Circular and Prospectus and Supplementary Prospectus.
If you are in any doubt about the contents of this Announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under the Financial Services
and Markets Act 2000 (as amended) if you are resident in the United Kingdom
or, if not, from another appropriately authorised independent financial
adviser.
Overseas Shareholders
The information contained herein is not for release, distribution or
publication, directly or indirectly, in or into South Africa, the United
States, Australia, Canada, Japan, New Zealand or any other Restricted
Jurisdiction where applicable laws prohibit its release, distribution or
publication.
The release, publication or distribution of this Announcement in, into or from
jurisdictions other than the UK may be restricted by law and therefore any
persons who are subject to the law of any jurisdiction other than the UK
should inform themselves of, and observe, any applicable legal or regulatory
requirements. Any failure to comply with such requirements may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Combination disclaim any responsibility or liability for the violation of such
restrictions by any person. This Announcement has been prepared in accordance
with and for the purpose of complying with English law, the Takeover Code, the
Market Abuse Regulation, the UK Listing Rules and the Disclosure Guidance and
Transparency Rules and the information disclosed may not be the same as that
which would have been disclosed if this Announcement had been prepared in
accordance with the laws of jurisdictions outside England.
The availability of the Offer to Assura Shareholders who are not resident in
and citizens of the UK may be affected by the laws of the relevant
jurisdictions in which they are located or of which they are citizens. Persons
who are not resident in the UK should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdictions.
In particular, the ability of persons who are not resident in the United
Kingdom to execute Second Forms of Acceptance and Election in connection with
the Revised Offer; and persons who are not resident in the United Kingdom to
receive New PHP Shares in part consideration pursuant to terms of the
Combination, may be affected by the laws of the relevant jurisdictions in
which they are located. Any failure to comply with the applicable restrictions
may constitute a violation of the securities laws of any such jurisdiction. To
the fullest extent permitted by applicable law, the companies and persons
involved in the Combination disclaim any responsibility or liability for the
violation of such restrictions by any person. Further details in relation to
Overseas Shareholders are contained in the Original Offer Document and the
Revised Offer Document.
Unless otherwise determined by PHP or required by the Takeover Code, and
permitted by applicable law and regulation, the Revised Offer will not be made
available, in whole or in part, directly or indirectly, in, into or from a
Restricted Jurisdiction where to do so would violate the laws in that
jurisdiction and no person may accept the Revised Offer by any such use,
means, instrumentality or from within a Restricted Jurisdiction or any other
jurisdiction if to do so would constitute a violation of the laws of that
jurisdiction.
Copies of this Announcement and any formal documentation relating to the
Combination are not being, and must not be, directly or indirectly, mailed or
otherwise forwarded, distributed or sent in or into or from any Restricted
Jurisdiction and persons receiving such documents (including, without
limitation, agents, custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send it in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported acceptance of
the Revised Offer. Unless otherwise determined by PHP and permitted by
applicable law and regulation, the Revised Offer may not be made, directly or
indirectly, in or into, or by the use of mails or any means or instrumentality
(including, but not limited to, facsimile, e-mail or other electronic
transmission, telex or telephone) of interstate or foreign commerce of, or of
any facility of a national, state or other securities exchange of any
Restricted Jurisdiction, and the Revised Offer may not be capable of
acceptance by any such use, means, instrumentality or facilities.
The New PHP Shares to be issued pursuant to the Revised Offer have not been
and will not be registered under the relevant securities laws of or with any
securities regulatory authority of any Restricted Jurisdiction. Accordingly,
the New PHP Shares may not be offered, sold or delivered, directly or
indirectly, in or into any Restricted Jurisdiction nor to any U.S. Person or
Restricted Overseas Person, except pursuant to exemptions from the
registration requirements of any such jurisdiction.
Further details in relation to Overseas Shareholders are included in the
Original Offer Document and Revised Offer Document and Assura Shareholders are
advised to read carefully the Original Offer Document and Revised Offer
Document.
The Combination is subject to English law, the applicable requirements of the
Companies Act, the Takeover Code, the Panel, the UK Listing Rules, the Market
Abuse Regulation, the FCA, the London Stock Exchange, the Registrar of
Companies, the Johannesburg Stock Exchange, the JSE Listing Requirements and
applicable securities law.
The information contained in this Announcement constitutes factual advice as
contemplated in section 1(3)(a) of the South African Financial Advisory and
Intermediary Services Act, 37 of 2002, as amended ("FAIS Act") and should not
be construed as express or implied advice (as that term is used in the FAIS
Act and/or the South African Financial Markets Act, 19 of 2012, as amended)
that any particular transaction in respect of the Combination, is appropriate
to the particular investment objectives, financial situations or needs of a
shareholder, and nothing in this Announcement should be construed as
constituting the canvassing for, or marketing or advertising of, financial
services in South Africa. PHP is not a financial services provider licensed as
such under the FAIS Act.
Nothing in this Announcement should be viewed, or construed, as "advice", as
that term is used in the South African Financial Markets Act, 19 of 2012, as
amended.
Notice relating to the United States
This document is not intended to, and does not, constitute or form part of any
offer or invitation to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Revised Offer or otherwise. The
Combination will be made solely through the Original Offer Document and the
Revised Offer Document which will contain the full terms and conditions of the
Combination, including details of how the Combination may be accepted. Any
acceptance or other response to the Combination should be made only on the
basis of the information in the Original Offer Document and the Revised Offer
Document.
The Combination relates to the shares of an English company and is subject to
UK procedural and disclosure requirements that are different from certain of
those of the United States. The financial statements and other financial
information included in this document have been prepared in accordance with
non-U.S. accounting standards that may not be comparable to the financial
statements of U.S. companies or companies whose financial statements are
prepared in accordance with generally accepted accounting principles in the
United States. It may be difficult for U.S. holders of shares to enforce their
rights and any claims they may have arising under the U.S. federal securities
laws in connection with the Combination, since PHP and Assura are located in
countries other than the United States, and all or some of their officers and
directors may be residents of countries other than the United States. U.S.
holders of shares in PHP or Assura may not be able to sue PHP, Assura or their
respective officers or directors in a non-U.S. court for violations of U.S.
securities laws. Further, it may be difficult to compel PHP, Assura and their
respective affiliates to subject themselves to the jurisdiction or judgment of
a U.S. court.
The New PHP Shares have not been and will not be registered under the U.S.
Securities Act or under the securities laws of any state or other jurisdiction
of the United States and may not be offered, taken up, sold, resold,
delivered, pledged, renounced, distributed or otherwise transferred, directly
or indirectly, in or into the United States or to, or for the account or
benefit of, any U.S. Person except in transactions exempt from, or not subject
to, the registration requirements of the U.S. Securities Act and in compliance
with any applicable securities laws of any state or other jurisdiction of the
United States.
None of the New PHP Shares, the Original Combined Circular and Prospectus, the
Supplementary Prospectus, the Original Offer Document, the Revised Offer
Document, the Second Form of Acceptance or any other offering document has
been approved or disapproved by the SEC, any state securities commission in
the United States or any other U.S. regulatory authority, nor have such
authorities passed upon or determined the adequacy or accuracy of the
information contained in any of those documents or passed upon or endorsed the
merits of the Combination. Any representation to the contrary is a criminal
offence in the United States.
It is intended that the Combination will be implemented by way of a takeover
offer within the meaning of the Companies Act. The Revised Offer will not be
subject to the disclosure and other procedural requirements of Regulation 14D
under the U.S. Exchange Act. If made into the United States, the Revised Offer
will be made in accordance with applicable requirements of Regulation 14E
under the U.S. Exchange Act. However, the Revised Offer will qualify for "Tier
II" exemptions from the tender offer rules included in Regulation 14E under
the U.S. Exchange Act. Accordingly, the Revised Offer will be subject to
disclosure and other procedural requirements, including with respect to
withdrawal rights, offer timetable, settlement procedures and timing of
payments that may be different from those applicable under U.S. domestic
tender offer procedures and law.
No document relating to the Revised Offer or the Combination will be posted
into the United States, but a "qualified institutional buyer" (as such term is
defined in Rule 144A promulgated under the U.S. Securities Act) may be
permitted, at PHP's sole discretion, to participate in the Revised Offer upon
establishing its eligibility as an Eligible U.S. Holder (as defined in this
document). PHP will require the provision of a letter by Eligible U.S. Holders
(and may require the provision of a letter by subsequent transferees in the
United States) with such acknowledgements, warranties, and representations to
and agreements with PHP, as PHP may require, to, among other things, confirm
compliance with applicable laws as well as other supporting
documentation. PHP will refuse to issue or transfer New PHP Shares to
investors that do not meet the foregoing requirements.
The receipt of consideration pursuant to the Revised Offer by an Eligible U.S.
Holder may be a taxable transaction for U.S. federal income tax purposes and
under applicable U.S. state and local, as well as foreign and other, tax laws.
Each Assura Shareholder is urged to consult its independent professional
adviser immediately regarding the tax consequences of accepting the Revised
Offer.
In accordance with normal United Kingdom market practice and to the extent
permissible under applicable law or regulatory requirements, including Rule
14e-5 under the U.S. Exchange Act (to the extent applicable), PHP and its
affiliates or its brokers and its broker's affiliates (acting as agents for
PHP or its affiliates, as applicable) may from time to time whilst the Revised
Offer remains open for acceptance make certain purchases of, or arrangements
to purchase, Assura Shares outside the United States otherwise than under the
Revised Offer, such as in the open market or through privately negotiated
purchases. Such purchases, or arrangements to purchase, shall comply with
applicable rules in the United Kingdom and the rules of the London Stock
Exchange. Details about any such purchases will be available from a Regulatory
Information Service and will be available on the London Stock Exchange website
(www.londonstockexchange.com (http://londonstockexchange.com/) ).
Dealing and Opening Position Disclosure Requirements
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) of the Takeover Code
applies must be made by no later than 3.30 pm (London time) on the 10th
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th business day
following the announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of the
offeree company or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the offeree
company or of any securities exchange offeror must make a Dealing Disclosure
if the person deals in any relevant securities of the offeree company or of
any securities exchange offeror. A Dealing Disclosure must contain details of
the dealing concerned and of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule 8. A
Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no
later than 3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website
at www.thetakeoverpanel.org.uk (http://thetakeoverpanel.org.uk/) , including
details of the number of relevant securities in issue, when the offer period
commenced and when any offeror was first identified. You should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any
doubt as to whether you are required to make an Opening Position Disclosure or
a Dealing Disclosure.
Publication on a website
A copy of this Announcement and the documents required to be published
pursuant to Rule 26 of the Takeover Code will be available at PHP's website
at www.phpgroup.co.uk (http://phpgroup.co.uk/) and Assura's website
at www.assuraplc.com/investor-relations/shareholder-information/offer-from-php
(http://assuraplc.com/investor-relations/shareholder-information/offer-from-php)
promptly and in any event by no later than 12 noon on the Business Day
following this Announcement. The content of these websites is not incorporated
into and does not form part of this Announcement
General
Investors should be aware that PHP may purchase Assura Shares otherwise than
under the Revised Offer, including pursuant to privately negotiated purchases.
Requesting hard copy documents
In accordance with Rule 30.3 of the Takeover Code, Assura Shareholders,
persons with information rights and participants in Assura Share Plans may
request a hard copy of this Announcement by contacting PHP's company secretary
at cosec@phpgroup.co.uk (mailto:cosec@phpgroup.co.uk) . For persons who
receive a copy of this Announcement in electronic form or via a website
notification, a hard copy of this Announcement will not be sent unless so
requested. Such persons may also request that all future documents,
announcements and information to be sent to them in relation to the
Combination should be in hard copy form.
For persons who receive a copy of this Announcement in electronic form or via
a website notification, a hard copy of this Announcement will not be sent
unless so requested. Such persons may also request that all future documents,
announcements and information to be sent to them in relation to the
Combination should be in hard copy form.
Electronic communications
Please be aware that addresses, electronic addresses and certain other
information provided by Assura Shareholders, persons with information rights
and other relevant persons for the receipt of communications from Assura may
be provided to PHP during the offer period as required under Section 4 of
Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Profit Forecasts and Estimates
No statement in this Announcement is intended to constitute a profit forecast
or profit estimate, no statement in this Announcement is subject to the
requirements of Rule 28 of the Takeover Code and no statement in this
Announcement should be interpreted to mean that the earnings or future
earnings per share of or dividends or future dividends per share of PHP and/or
Assura for current or future financial years will necessarily match or exceed
the historical or published earnings or dividends per share of PHP or Assura,
as appropriate.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
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