Primary Health Properties has completed the first stage of restructuring £178m of debt it assumed with its £223m deal to buy Prime Public Partnerships portfolio.
Harry Hyman’s niche healthcare specialist has negotiated with lender Aviva to reduce the interest rate and change the amortising facility to become non-amortising.
The restructure has reduced its running interest by 80 basis points to produce an annual saving of £1.4m.
PHP is now in talks to retranche the maturity profile of the loan.
The firm has undertaken the restructuring following its annual results for 2013 when it boosted its net asset value by 42.7% following a string of acquisitions.
Its total portfolio value grew from £645m to £958.7m last year, and the rent roll increased by 27% to £42m.
Hyman said the firm was on track to add £100m of assets to its pipeline this year, pushing its portfolio through the £1bn threshold.
During the year to 31 December PHP put in place £140m of new borrowing facilities, including a £70m revolving facility with Barclays Bank and a £70m, 12-year floating-rate corporate bond.
Operating profit was up by 28% to £9.5m with adjusted earnings up by 28% to £9.5m.
A shake-up of the group’s advisory and administrative functions resulted in an £800,000 saving, the group said.
It paid a 19p dividend last year, up from 18.5p in 2012.
Hyman said: “The company has taken steps to progress its stated intention to return to full dividend cover, including changing advisory fee structures, to generate savings for the group.
“These savings, when added to the increased earnings from the portfolio, will see dividend cover grow materially in 2014.”
bridget.oconnell@estatesgazette.com
