Primary Health Properties (LSE:PHP), a real estate investment trust focused on critical healthcare infrastructure in the UK and Ireland, reported adjusted earnings per share of 3.8p for the six months to 30 June, up 9% from 3.5p a year earlier.
IFRS earnings per share fell to 3.8p from 4.4p in the prior period.
The annualised contracted rent roll rose to £345 million from £342 million at the end of December, with rent reviews adding £4 million of annualised income, partly offset by £1 million lost to disposals. The company's EPRA cost ratio, a measure of operating costs against rental income, fell to 8.7% from 9.8%, which PHP said represents one of the lowest levels in the UK REIT sector.
PHP noted it has agreed exclusive terms for a 50/50 joint venture with a global institutional investor, to be seeded with £0.7 billion of private hospital assets and targeted for completion this summer. It has also agreed to transfer £103 million of assets to its existing primary care joint venture with USS, expected to realise net proceeds of £82 million.
"PHP is well placed to continue delivering shareholder returns as the Assura combination has brought deeper capabilities, larger pipeline and broader opportunities for growth," said chief executive Mark Davies.
The company declared quarterly dividends totalling 5.475p year-to-date, equivalent to 7.3p annualised, up 2.8% on 2025 and marking a 30th consecutive year of dividend growth.
Loan-to-value stood at 57%, above PHP's targeted 40-50% range following the combination, with a plan to reduce leverage during the second half.
News Intelligence what this means for the company
PHP delivered 9% adjusted EPS growth to 3.8p in H1 as cost synergies from the Assura combination reached 92% of target, with the EPRA cost ratio falling to 8.7%—one of the lowest in the UK REIT sector. The company is executing on portfolio optimization through two material capital moves: a £0.7 billion private hospital joint venture (50/50 with a global institutional investor, targeted for summer completion) and an £82 million net proceeds realization from transferring £103 million of primary care assets to its USS joint venture. Dividend growth extended to a 30th consecutive year at 7.3p annualized, though leverage at 57% remains above the 40–50% target range, with deleveraging planned for H2.
The Assura integration is delivering on cost and operational metrics, supporting dividend growth, but the company's capital structure remains stretched post-combination. Success hinges on executing the two joint ventures on timeline and at assumed valuations, and on achieving the stated H2 deleveraging to bring LTV back within target—both material execution risks that will determine whether the combination creates shareholder value or merely sustains it.
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