Tory NHS reforms boost Primary Health Properties
Primary Health Properties (PHP) said government plans to invest more in GP premises would help boost its prospects next year as it posted strong full-year results.
The company, which owns a £1.1bn portfolio comprising of 275 properties let primarily to GPs, said its net asset value per share increased by 10 per cent to 87.7 pence in the year to 31 December.
Pre-tax profits rose by 51.9 per cent to £56m, while earnings per share were up 20 per cent to 4.9p. The group paid out a dividend of five pence per share last year, up 2.6 per cent on 2014, and also hailed the dividend fully covered at 107 per cent in the second half.
As one of the country’s largest healthcare property investors, PHP hopes to benefit from government plans to ease pressure on A&E departments and the taxpayer by shifting more services to GP practices in the community.
In November, George Osborne announced an extra £6bn of funding for the NHS in 2016/17 as part of the £10bn committed last year to support a five-year plan put in place by NHS chief executive Simon Stevens.
The previous coalition government also set up a £1bn Primary Care Transformation fund in December last year, specifically to be spent on building more GP practices over the next four years.
Managing director Harry Hyman said the need to replace many of the UK's current outdated estate of GP practices, Britain's ageing population, and the government's aim to provide 24 hour access to GPs will continue to drive demand for new sites.
"The fundamental drivers of the primary care arena remain in place and increased spend committed by the NHS stresses the important role primary care has to play in the future of the health service," Hyman said.
PHP acquired eight properties last year, adding £2.4m of rental income. It aims to complete between 10 and 20 acquisitions this year and currently has a pipeline of £100m projects.
The company also revealed that it is also considering deals in Ireland, where Hyman says "faces similar challenges" to its healthcare service but where the returns are higher.