Primary Health Properties

Primary Health Properties reported a 9% rise in adjusted earnings per share to 3.8 pence for the first half of 2026, driven by a full six-month contribution from the Assura acquisition which added 50 million pounds of income. Adjusted earnings increased to 98 million pounds, while like-for-like rental growth generated an extra 4 million pounds, a 6% uplift on settled reviews. The EPRA cost ratio fell to 8.7% from around 10%, reflecting over 8 million pounds of cost synergies delivered from the Assura combination. The portfolio valuation surplus was 18 million pounds, with rental growth contributing 29 million pounds offset by an 11 million pound yield expansion deficit, leaving the investment portfolio value unchanged at 6 billion pounds. Occupancy remained at 99%, 76% of income is government-backed, and the company refinanced 1.2 billion dollars of debt with credit margins 40 basis points cheaper. The projected dividend of 7.3 pence per share is fully covered, marking the 30th consecutive year of dividend growth.

Shore Capital provided an upbeat analysis of Primary Health Properties after the specialist real estate group confirmed advanced talks to seed a joint venture with its private hospital portfolio. The broker noted that offers are being evaluated and are expected to conclude by summer 2026, ahead of the timetable laid out last year. The deal is central to PHP's commitment to recycle capital through disposals to bring portfolio leverage within its 40% to 50% target range and lower net debt to below 9.5 times earnings. Shore also highlighted the delivery of £7.8 million of the identified £9 million in merger cost synergies, a thirtieth consecutive year of unbroken dividend growth, and the award of three of the first wave of Neighbourhood Health Centres announced by the NHS in March. The broker forecasts continued organic rental growth and earnings accretion in the current financial year, underpinning a forecast dividend yield of 8% and what it views as among the best risk-adjusted total return profiles in the sector.