Primary Health Properties (LON:PHP) recently announced interim results for the period to June 30, 2020. The company reported net rental income of £64.8mln, up 20.4% versus H1 2019. Net profit was up 29.0% at £36.0mln (European Public Real-estate Association earnings measure). Dividend per share for the first half was increased by 5.4% to 2.95p, in line with our expectation of 5.9p for the full year.

With additional capital raised post-period-end, the company reported pro-forma balance sheet gearing of 40.3%' leaving headroom within the upside maximum target of 50%. This balance sheet position supports the company’s ability to execute on its pipeline of property acquisitions and upgrades, with a current pipeline of £128mln of investment opportunities.

Healthcare demand drivers, opportunities for PHP

PHP manages a portfolio of 510 primary healthcare properties in the UK and Ireland. This means doctor’s surgeries and, in particular, larger surgeries and multi-practice GP centres. The earnings release highlights an increased focus on primary healthcare provision by authorities in the UK and Ireland. The COVID crisis has highlighted a need to move more healthcare provision outside of hospitals and into the primary healthcare environment, and also the need for modern primary healthcare facilities. We believe that these policy priorities create a favourable environment for PHP to find further investment opportunities.