13th Feb 2008 11:35
Primary Health Properties PLC13 February 2008 Primary Health Properties PLC ("PHP" or the "Group") a specialist provider of modern accommodation for the provision of Primary Health Care Services Trading Statement In the light of prevailing market conditions, PHP believes that it isappropriate to make a trading statement. The preliminary results for theeighteen months ended 31 December 2007 are expected to be issued on or about 10April 2008. The Board is in the process of finalising the valuation of the propertyportfolio of the Group as at 31 December 2007 which, once finalised will beincluded in the preliminary results statement. Having held discussions with theindependent valuers, Lambert Smith Hampton, the Board is of the view that as at31 December 2007, medical property as an asset class has weakened in yield termsby some 35 basis points since 30 June 2007. In addition, as at 31 December 2007, the mark to market valuation of the Group'sderivatives shows a reduction in value of £9.3m. Of these losses, £6.5m isexpected to be recorded as a movement in equity in relation to bank interestrate swaps qualifying as hedges under IFRS and £2.8m is expected to be recordedin the income and expenditure account. The swaps were entered into at variousdates to hedge out the Group's exposure to higher interest rates. The mark tomarket value fluctuates with movements in term interest rates and in the case ofthe callable swap with market volatility. The Board proposes to pay a third interim dividend of 8.25p per Ordinary Share.This compares to 7.5p for each of the two previous interim dividends. Asexplained at the time of the conversion to a UK-REIT, distributions from theCompany may comprise property income distributions ("PID"s), ordinary cashdividends or a combination of the two. The third interim dividend is anordinary cash dividend and not a PID. The dividend will be paid on 28 March2008 to Shareholders on the Register on 22 February 2008. Details of theGroup's status and the tax treatment of distributions for Shareholders wereincluded in the interim report for the six months ended 30 June 2007 and can befound on the Group's web site (www.phpgroup.co.uk). Both the adjustment to the property portfolio and the mark to market arenon-cash items. The average rate of the swaps in place during the period waslower than the prevailing LIBOR rate thus saving the Group considerable amountsof cash outflow and has resulted in the Group having a lower interest rate riskprofile. The Group's portfolio of 107 properties (including 8 contracted schemes) isalmost 100% let with an average lease length outstanding of 18.36 years. 89% ofthe rent roll is paid for directly or indirectly by the NHS and most of thebalance is let to pharmacy operators. The closing rent roll for the year ended31 December 2007 on an FRI basis was £16.1m compared to £14.5m for the year to30 June 2007. 93% of the increase related to new deliveries and 7% to rentalincreases secured during the period. The Group has now signed heads of terms in relation to a new £50m secured debtfacility to augment its existing facilities of £200m, making total resourcesavailable to the Group of £250m. As at 31 December 2007, £156m was drawn and,taking into account existing outstanding commitments of around £30m, this leavesa further £64m of facilities available to the Group to continue with itsacquisition policies. These term facilities mature in 2013. Interim Calendar Ex dividend date 20 February 2008Record date 22 February 2008Last day of election 27 February 2008Post dividend warrants 19 March 2008Payment date 28 March 2008Post Statements 24 hours after receipt of contract note from brokersPost share certificates 11 April 2008 Enquiries: Bell Pottinger Corporate & FinancialDavid Rydell/Victoria GeogheganTel: 020 7861 3232 Primary Health Properties PLCHarry HymanManaging DirectorTel: 01483 306912Mobile: 07973 344768 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Primary Health