Primary Health Properties sees income soar after 'transformational' year

(Sharecast News) - Primary Health Properties posted a surge in annual earnings on Tuesday, on the back of a "transformational" year that saw it snap up rival Assura in a keenly-fought takeover battle. Primary saw off rival suitors including KKR to secure Assura with a £1.68bn bid, creating a major healthcare real estate investment trust focused on critical social infrastructure assets in the UK and Ireland. The deal completed in October.

Mark Davies, chief executive, said 2025 had been a "transformational year". Net rental income jumped 49% to £230m in the 12 months to December end, while adjusted earnings rallied 41% to £131m. The investment portfolio valuation, including joint ventures, soared 115% to £6bn.

Looking to the current year, Davies said: "Our immediate focus is on delivering the post-transaction objectives of reducing leverage back to our targeted range of 40% to 50%, delivering £9m of annualised synergies and integrating the two businesses."

Davies also welcomed the government's 10-year health plan, published last summer, calling it "clearly positive" for PHP, particularly the focus on shifting more services to local primary care facilities.

"This plays directly to our strengths, and our long-standing partnerships across the NHS give us a strong foundation to support this transition and deliver value to our shareholders.

"We are encouraged by the improving rental growth outlook, underpinned by the group's primary care assets along with the solid trading performance from the recently acquired hospital portfolio."

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: "PHP delivered a clean bill of health.

"With a prospective dividend yield of 7.3% and an undemanding valuation, PHP looks like a solid long-term choice.

"However, the recent spike in oil prices has brought inflationary pressures, pushing expectations of rate cuts further down the road, which is unfavourable for the group's property valuation. As a result there could be near-term volatility."

As at 1015 GMT, the FTSE 250 stock was down 2% at 99.45

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