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Primary Health Properties PLC on Wednesday reported its interim profit crashed as a result of a steep valuation deficit, which overshadowed higher revenue and dividend. The London-based real estate investment trust investing in primary healthcare facilities said its pretax profit tumbled 88% to £4.5 million for the first six months that ended June 30 from £38.8 million a year earlier, dragged down by the valuation deficit. The revaluation deficit on the property portfolio amounted to £40.0 million, up sharply from £11.9 million. Primary Health said the valuation deficit was driven by net initial yield widening of 13 basis points. This was equivalent to a valuation reduction of around £73 million, which was was partially offset by gains equivalent to £33 million arising from rental growth and asset management projects. For the first half, net rental income was up marginally, by 0.9%, to £76.2 million from £75.5 million. The occupancy rate was virtually unchanged at 99.2% as at June 30, compared to 99.3% at December 31. Primary Health improved its interim dividend to 3.45 pence from 3.35p. Earnings per share plunged 90% to 0.3p from 3.0p, mainly reflecting the revaluation deficit. Headline EPS, which excluded one-off items, fell 11% to 3.4p from 3.8p. As at June 30, net tangible assets per share decreased 2.8% to 103.5p from 106.5p at December 31. Chief Executive Officer Mark Davies said this was another ‘robust’ operational and financial performance, encouraged by the continued improvement in open market value rental growth. Primary Health said it will continue to focus on increasing income from existing portfolio. It is currently on site with just two developments, noting it has ‘very limited exposure’ to higher construction cost pressures and supply chain delays. In its immediate pipeline, the group had one development and 23 asset management projects, with a total expected cost of £15.3 million. Copyright 2024 Alliance News Ltd. All Rights Reserved.
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