Primary Health Properties : Trading Update

20 May 2016

Primary Health Properties PLC

Trading Update

Primary Health Properties PLC ('PHP', the 'Company' or the 'Group'), the UK's leading investor in modern primary healthcare facilities, today publishes a trading update for the period from 1 January 2016 to 19 May 2016.

Highlights

· Successful, over-subscribed share placing, raising gross proceeds of £150 million

· 19 completed properties acquired for an aggregate consideration of £53.8 million with an ongoing, attractive pipeline of opportunities in both UK and Republic of Ireland

· Property portfolio comprising 292 properties with a total value of £1.2 billion

· Total contracted annualised rent roll increased to £66.6 million

· Interest rate reduced by 3.92% on £88 million of debt by restructuring associated swap contracts

· Group Loan to Value ratio reduced to 53% (31 December 2015: 63%), following acquisitions and swap re-structuring

· 20 consecutive year of dividend growth; first quarterly payment of 1.28125 pence made in February 2016, second payment of 1.28125 pence to be made on 27 May 2016

Successful share issue

On 13 April 2016, PHP successfully raised £150 million of new capital (£145.5 million, net of expenses) from an over-subscribed offer of shares to new and existing shareholders.

The proceeds are to be used to fund further earnings enhancing acquisitions in both the UK and the Republic of Ireland that support the Company's progressive dividend policy, whilst maintaining gearing at appropriate levels.

Initially the funds were used to pay down revolving credit facilities which are available to PHP to be re-drawn as investment opportunities are secured. PHP now has significant resources with which to continue to grow its property portfolio and lead the way in the modernisation of primary care in the UK and Republic of Ireland.

A growing property portfolio

The Company gave details of its pipeline of investment and development funding opportunities in the UK and Republic of Ireland in its recent share issue prospectus.

A number of these opportunities have now been contracted and a total of 19 completed properties have been acquired since 1 January 2016 for an aggregate consideration of £53.8 million. The Group's portfolio now comprises 292 properties with a total value of £1.18 billion, including properties under construction.

These acquisitions add £3 million of additional rental income, increasing the Group's total contracted annualised rent roll to £66.6 million.

Good progress is being made in converting acquisitions agreed with vendors in the Republic of Ireland into contracted commitments.

The pipeline continues to be strong with new opportunities being identified by the management team that will increase the size and rent roll of the Group's portfolio, increasing earnings and helping PHP to gain further critical mass.

Re-positioning the debt portfolio

As highlighted at the time of the share issue, current market conditions offer opportunities for PHP to re-structure elements of its interest rate swap portfolio, to rates that produce an overall benefit for the Group.

PHP has recently completed the re-couponing of two active interest rate swap contracts that hedge a total nominal value of debt of £88 million. Both contracts expire in August 2021 and carried an average fixed rate of 4.79% for their duration. The contracted rate for both swaps has been reduced to 0.87% with effect from November 2016, for the remaining term of the contract for a one-off payment of £14.5 million.

Aggregate net debt has been reduced to £625.7 million, reducing the Group's consolidated LTV to 53% (31 December 2015: 63%).

Growing dividend

The Company paid its first quarterly dividend of 1.28125 pence in February 2016 and has declared the second quarterly payment to shareholders of 1.28125 pence, to be made on 27 May 2016 to shareholders as at 8 April 2016. These payments are fully covered by earnings of the Group and represent the 20 consecutive year of dividend growth.

Harry Hyman, Managing Director of Primary Health Properties, commented:

'During the period we have continued to grow the portfolio, increase rental income and successfully re-structured elements of our debt portfolio. We were delighted at the strong support for our fund raising in April, which is testament to PHP's attractive, long term, growing, secure cash flows which underpin our progressive and fully covered dividend.

'We have already invested a proportion of the funds that were raised into modern primary care premises that generate both an immediate rental surplus and the opportunity to add value and income through active management.

'The Group is at the forefront of the continued government drive to move healthcare services into the primary care setting and we see increasing opportunities to provide new, flexible premises in both the UK and the Republic of Ireland.'

More information on Primary Health Properties PLC can be found on www.phpgroup.co.uk

Further details:

Harry Hyman Managing Director Tel: [phone]	Phil Holland Finance Director Tel: [phone]
David Rydell / Elizabeth Snow / Eve Kirmatzis Bell Pottinger T [phone]