PHP is a strong business creating progressive returns for shareholders by investing in healthcare real estate let on long term leases, backed by a secure underlying covenant where the majority of rental income is funded directly or indirectly by a government body.
01
Low risk, long term, non-cyclical market
- Two development opportunities on site in the UK
- Opportunities in Ireland that remain attractively priced, with one acquisition completed in Ireland for £18.2 million (€22.0 million) post period end
- Majority of rents in both jurisdictions funded by government for long lease terms
- WAULT of 9.4 years (2023: 10.2 years)
89%
Rent roll funded by government bodies
(2023: 89%)
02
Strong, high quality and growing cash flow
- Effectively upward-only or indexed rent reviews
- Continued positive rental growth outlook following another record year in open market rental growth in 2024
- Open market rental growth continues to benefit from the high inflation experienced in recent years
- Ireland continues to be the preferred area of investment with attractive returns and a lower cost of finance creating a positive yield gap
- Efficient cost structure enhances earnings
+£4.0m or 2.7%
Rental growth
(2023: +£4.3m or 3.0%)
03
Efficient financial management
- EPRA cost ratio continues to be one of the lowest in the sector with costs continuing to be tightly controlled
- Marginally higher EPRA cost ratio reflects the cost of a voluntary redundancy programme completed in the year as well as the write-off of one development work in progress that is no longer completing
- Notwithstanding the increase in costs, costs continue to be closely controlled and monitored, representing 10.1% if vacancy and Axis costs are excluded
10.8%
EPRA cost ratio
(2023: 10.7%)
04
Sector demand factors dictate continued development of healthcare premises
- Demand from population growth, ageing and suffering from more instances of chronic illnesses
- Capacity of existing facilities remains a significant obstacle to implementing government policies
- Unwavering political support in the UK and Ireland and promotion of integrated primary care and NHS Long Term Plans to effectively manage patient needs
- Labour’s pledge to reform primary care with its proposals being published in a new 10-Year Health Plan due in spring 2025
6.3m patients
PHP's portfolio serves 6.3m patients
or 9.3% of UK population
05
Stable, increasing income returns
- Growing shareholder return through dividend and capital appreciation
- Dividend fully covered by adjusted earnings
- Strong yield characteristics continues, supported by government backed income
- 28 consecutive years of dividend growth
6.9p
Dividend per share
(2023: 6.7p)
06
Investing in ESG
- Ongoing construction of PHP’s first NZC development in West Sussex and commenced fit-out works on PHP’s second NZC development in South Kilburn, London, with both projects due to achieve practical completion in Q2 2025
- Completed PHP’s first NZC asset management project
- Continued progress made on NZC Framework with the steps to achieve the Group’s target of being NZC by 2030 for all of PHP’s operational, development and asset management activities
- All operational activities NZC in 2024, 2023 and 2022
88%
Portfolio EPC ratings A-C
(2023: 85%)