DELIVERING OUR STRATEGIC PRIORITIES

The internalisation of the Group's management structure, further rental growth and reductions in the cost of finance will help maintain our strategy of paying a progressive dividend to our shareholders which is fully covered by earnings.

Business model   Investment case

Strategic objectives

The Group looks to selectively grow its property portfolio by funding and acquiring high quality developments, newly developed facilities and investing in already completed, let healthcare real estate.

Activity in 2023
  • Selectively acquired one standing asset in the year investing £25.7 million within Ireland
  • Portfolio stands at 514, including 21 in Ireland
  • Total property return in the year of 3.5%, with income growth remaining strong at 5.3% offset by unfavourable movements in valuation as a result of the increased uncertainty and higher interest environment faced
Looking forward
  • Sector fundamentals of long leases and government backed income continue to drive demand in sector
  • In the short term, we expect investment activity will continue to be muted and will only take place if accretive to earnings
  • The Group has one development in legal due diligence, for £3.3 million within the UK

Content sourced from 2023 Annual Report.

PHP manages its portfolio effectively and efficiently, managing the risks faced by its business in order to achieve its strategic objectives.

Activity in 2023
  • £4.3 million, or 3.0% additional income from rent reviews and asset management projects
  • Five new asset management projects legally exchanged during the year, one of which formed part of the eight asset management projects physically completed in the year. A further eight lease regears and four new lettings were delivered, delivering £0.3 million of rental growth and investing £13.1 million
  • EPRA cost ratio of 10.7% continues to be one of the lowest in the sector
Looking forward
  • Strong pipeline of over 23 advanced asset management projects and lease regears being progressed over the next two years, investing £19.3 million whilst extending the WAULT on these premises back to 20 years
  • Continued discussions with occupiers and the NHS to discuss requirements and opportunities as well as continue to negotiate rents in order to deliver an acceptable return

Content sourced from 2023 Annual Report.

The Group funds its portfolio with a diversified mix of equity and debt on a secured and unsecured basis, in order to optimise risk-adjusted returns to shareholders.

Activity in 2023
  • Exercised options to extend £300 million of revolving credit facilities for an additional one year term out to 2026
  • €47.8 million private placement for ten years at an all-in rate of 4.20% completed in December 2023
  • Significant liquidity headroom with cash and collateralised undrawn loan facilities totalling £321 million (2022: £326 million) after taking into account capital commitments of £14.6 million
Looking forward
  • No refinancing risk in 2024
  • The Company completed a secondary listing of PHP shares on the JSE, which the Board believe will contribute to improve the liquidity in the Group’s shares

Content sourced from 2023 Annual Report.

Positive yield gap between acquisition and funding remains for selective investments, despite the macroeconomic environment along with continued improvements in rental growth, delivering progressive shareholder returns.

Activity in 2023
  • Adjusted earnings per share 6.8 pence increased by 3.0% (2022: 6.6 pence)
  • Dividend per share increased by 3.1% to 6.7 pence
  • Total Adjusted NTA return of 1.9% (2022: 2.1%)
  • Strong organic rental growth from rent reviews and asset management projects, offset the selectively muted investment in the year
  • Acquisition of Axis continues to provide a critical strategic advantage in Ireland, the Group’s preferred area of future investment activity
Looking forward
  • Undrawn loan facilities continue to provide significant firepower to secure new investment opportunities
  • 97% of the Group’s net debt is fixed or hedged protecting underlying earnings from potential future economic changes

Content sourced from 2023 Annual Report.