PHP raises £140m in new share placing

PHP managing director Harry Hyman

Primary Health Properties (PHP) has raised £140m from its new share issue today – an uplift of £20m on its original target as investors clamoured for shares in the specialist healthcare REIT.

Joint bookrunners Numis Securities Ltd and Peel Hunt LLP successfully placed a total of 96,555,000 new ordinary shares of 12.5 pence each in the company at a price of 145p per placing share, representing approximately 7.9% of issued ordinary share capital prior to the placing.

PHP said it would use the placing to fund existing acquisition pipeline and asset management projects totalling roughly £128m.

In a trading update this morning, the specialist healthcare REIT said the Covid-19 pandemic had highlighted the need for modern, integrated primary care facilities to relieve pressure on NHS hospitals and A&E departments.

Proceeds of the placing will be used to fund PHP’s short-term pipeline of £92m of acquisitions and developments and active asset management projects totalling around £36m.

The new share issue follows (PHP)‘s £100m placing in September 2019 to fund its aquisition and development pipeline and reduce gearing.

The new placing is expected to lower its LTV to around 41% from 45.8% at the end of June and will also lower the upper range of its LTV from 55% to 50%.

PHP said its operational and financial performance had remained strong in H1 despite the uncertainty caused by the pandemic.

Adjusted EPRA earnings per share increased by 7.1% to 3p while the contracted annualised rent roll was up 4.4% to £133.3m.

The Group also reported continued positive trends in rental growth, with an average uplift of 2.2% per annum on rent reviews. It said rental collection remained ‘robust’, with 91% of UK and 88% of Ireland collected for the third quarter 2020. The balance is expected to be received within the next two weeks while collection rates for the second quarter have reached more than 99%.

Managing director Harry Hyman said: ‘On behalf of the Board I would like to thank all of our new and existing shareholders for their support of PHP.  As stated in our trading update this morning, operational and financial performance to date remains strong, and our portfolio continues to demonstrate resilience, and the additional funds raised will help further accelerate our growth by funding near-term portfolio expansion, forward funded developments and asset management projects. Now more so than ever, there is a significant need for modern, purpose built primary healthcare facilities and the group has a strong pipeline of opportunities ahead, which together with our strategic capital management, will deliver further earnings growth with reliable dividends to our shareholders as we move forwards with confidence..’

PHP is due to announce its interim results for the six months ended 30 June 2020 on 29 July.