Primary Health Properties’ profit has fallen by 60%.
Although net rental income has risen by 3.5% to £141.5m and adjusted earnings were up 6.6% to £88.7m, or 6.6p per share, IFRS profit was down from £140m in 2021 to £56.3m.
The healthcare REIT said a revaluation deficit of £64.4m, verses a surplus £110.2m in 2021, along with widening yields, had led to a £134m fall. This was partially offset by gains of £70m arising from rental growth and asset management projects.
The REIT’s 2019 purchase of MedicX also impacted profitability, owing to the amortisation of the fair value adjustment on its fixed-rate debt.
The property portfolio’s value remained static at just under £2.8bn across 513 assets, including 20 in Ireland. The total rent roll rose slightly to £145.3m.
PHP bought four sites in the year, for a total of £52.9m, down from 2021’s £86.6m across nine assets. It also sold 13 smaller assets for £27.7m, up from 2021’s £2.3m sales. The sales were 13% above book value.
The REIT confirmed that it would continue to pause investments and acquisitions until interest rate rises slowed and the general economic outlook becomes clearer. PHP currently has just one development on site.
Chief executive Harry Hyman said: “The group’s continued operational and financial resilience throughout the year reflects the security and longevity of our income, which are important drivers of our predictable cash flows and underpin our progressive dividend policy as we enter the 27th year of continued dividend growth.”
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