16th Feb 2022 15:19
(Alliance News) - Primary Health Properties PLC lifted its dividend on Wednesday after the "dependable" firm reported a year of growth.
IFRS net tangible assets per share stood at 112.5 pence at the end of 2021, up 4.7% on 107.5p a year ago. However, the London-based healthcare facilities investor's total adjusted NTA return was 8.9% for 2021, 120 basis points below 2020's 10% return.
Net rental income for the year was GBP136.7 million, up 4.2% on GBP131.2 million registered in 2020. Pretax profit increased 26% to GBP141.6 million from GBP112.4 million, boosted by a GBP110.2 million revaluation gain on its property portfolio, more than double the GBP51.3 million gain posted the year before.
Chief Executive Harry Hyman said 2021 was "another strong year of progress". The company has a strong targeted pipeline, he added, and continues to see good organic rental growth from rent reviews.
Steve Clayton, Hargreaves Lansdown Select fund manager, said: "Few businesses have proven as dependable over time as PHP. What they do, developing and leasing healthcare facilities to GP practices and other NHS bodies, along with similar activities in Ireland, generates naturally recurring revenues. The income is high quality, because 90% of rents are effectively paid by the state."
The firm's outlook is "solid", Clayton continued, and the newly announced dividend puts the stock on an "attractive" prospective yield of 4.9%.
Primary Health's dividend for 2021 totalled 6.2p, up 5.1% from 5.9p in 2020. Further, it declared a first quarter dividend of 1.625p for 2022, equivalent to 6.5p on an annualised basis to mark a 4.8% increase over the 2021 dividend.
"Having successfully delivered 25 years of secure and reliable growth for our shareholders, we have firmly established ourselves as a sector leader and the board looks forward to delivering further earnings and dividend growth in 2022 and remains confident in PHP's future outlook," said CEO Hyman.
Broker Liberum said Primary Health is well positioned to benefit from continued structural growth trends, helped by an ageing UK population.
"We believe healthcare property to have a favourable risk-reward profile vs other real estate subsectors," said Liberum.
Shares in Primary Health were up 0.9% at 134.76p in London on Wednesday, though have fallen 8.5% over the past 12 months.
By Lucy Heming; lucyheming@alliancenews.com
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