Edison issues research update on PHP

RNS Number : 4366X

Primary Health Properties PLC

28 August 2015

 

London, UK, 28 August 2015

Edison issues research update on Primary Health Properties

The interim results showed strong profit growth with good operational gearing as a result of ongoing cost and funding efficiencies. Cover of the progressive dividend lifted to 89%. Our revised forecasts now show full cover in H2 of the current year, with a prospective yield of 4.9%. Following a conclusive election result, there is continuity of policy towards the NHS, providing political and financial support for its five-year plan. In this context, the prospects for continuing asset growth look good. Property yields have contracted but funding conditions remain strong, maintaining a healthy spread and opportunity for ongoing accretive growth.

PHP's high payout, progressive dividend, and attractive yield are supported by secure cash flows from mainly government-backed revenues. Healthcare property values (and PHP NAV) are also benefiting from yield compression, but historical performance has shown much less volatility than the broad commercial sector.

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