Primary Health Properties : Annual Report 2022 and Notice of AGM

Delivering long term sustainable income

Primary Health Properties PLC

Annual Report 2022

Leading investor in flexible, modern primary healthcare accommodation across the UK and Ireland

Strategic report

Governance

Financial statements

1. Highlights
2. At a glance

1. Our portfolio

6 Investment case

1. Chairman's statement

1. Business model

1. Our strategy

1. Key performance indicators

1. Business review

1. Financial review

1. EPRA performance measures

1. Responsible business

48 Task Force on Climate-related Financial Disclosures

1. Section 172(1) statement

1. Risk management and principal risks

1. Viability statement

64 Chairman's introduction to governance

66 Board of Directors

68 Senior Leadership Team

1. Corporate governance report

1. Audit Committee report

88 Nomination Committee report

90 Remuneration Committee report

93 Directors' remuneration report

107 Directors' report

111 Directors' responsibility statement

112 Independent auditor's report

1. Group statement of comprehensive income
2. Group balance sheet
3. Group cash flow statement
4. Group statement of changes in equity
5. Notes to the financial statements

1. Company balance sheet
2. Company statement of changes in equity
3. Notes to the Company financial statements

Shareholder information

163 Notice of Annual General Meeting 2023

1. Shareholder information
2. Advisers and bankers
3. Glossary of terms

Discover more at phpgroup.co.uk

Delivering long term sustainable income

Primary Health Properties PLC

Responsible Business Report 2022

Read more about our Responsible Business Report at phpgroup.co.uk

Strategic report Governance Financial statements Shareholder information

Highlights

Net rental income ∆

£141.5m

+3.5%

2022£141.5m

2021£136.7m

2020£131.2m

2019£115.7m

2018 £76.4m

Total property portfolio

£2.8bn

-2.2%

2022		£2.8bn
2021		£2.8bn
2020		£2.6bn
2019		£2.4bn
2018	£1.5bn

IFRS profit/(loss) after tax

£56.3m

-59.8%

2022	£56.3m
	2021		£140.1m
			2020	£112.0m
(£71.3m)	2019
	2018		£74.3m

Adjusted earnings ∆

£88.7m

+6.6%

2022	£88.7m
2021	£83.2m
2020	£73.1m

2019 £59.7m

2018 £36.8m

Adjusted NTA per share ∆

112.6p

-3.5%

2022	112.6p
2021	116.7p
2020	112.9p
2019	107.9p
2018	105.1p

IFRS profit/(loss) after tax per share*

4.2p

-60.0%

	2022	4.2p
	2021	10.5p
	2020	8.8p
(6.5p)	2019
	2018	10.5p

Adjusted earnings per share ∆

6.6p

+6.5%

2022			6.6p
2021		6.2p
2020	5.8p
2019	5.5p
2018	5.2p

Total NTA return ∆

2.1%

-680bps

2022	2.1%
2021	8.9%
2020	10.1%
2019	8.0%
2018	9.7%

IFRS NTA per share

110.9p

-1.4%

2022110.9p

2021112.5p

2020107.5p

2019101.0p

2018102.5p

Dividend per share

6.5p

+4.8%

2022		6.5p
2021	6.2p
2020	5.9p
2019	5.6p
2018	5.4p

Total property return ∆

2.8%

-670bps

2022	2.8%
2021	9.5%
2020	7.4%
2019	7.7%
2018	8.0%

Average cost of debt ∆

3.2%

+30bps

20223.2%

20212.9%

20203.5%

20193.5%

20183.9%

* The IFRS profit after tax per share as set out in the summarised results table on page 25.

• Alternative performance measures ("APMs"): Measures with this symbol ∆ are APMs defined in the Glossary section on pages 178 to 180, and presented throughout this Annual Report. All measures reported on a continuing operations and 52-week comparable basis.

Primary Health Properties PLC Annual Report 2022

1

Strategic report Governance Financial statements Shareholder information

At a glance

Who we are

We invest in flexible, modern properties for local primary healthcare, let on long term leases with a property portfolio of 513 assets in the UK and Ireland valued at £2.8 billion.

Property portfolio	Property value
513(2021: 521)	£(2021: £2.8bn)2.8bn

OUR PORTFOLIO IN 2022

A 140% increase in Adjusted Earnings, with dividend per share paid out to investors increasing by over 20% in the five year period.

Contracted rent roll	Number of properties
£145.3m	513
Adjusted Earnings	Number of tenants

£88.7m 1,215

ENTERING 27 YEARS OF CONSECUTIVE DIVIDEND GROWTH

7.0%																								6.20p	6.50p 6.70p*
6.0%																						5.60p	5.90p
																				5.40p
5.0%																4.75p	4.88p	5.00p	5.125p 5.25p
														4.63p
											4.25p	4.38p	4.50p
											4.13p
4.0%										3.75p
								3.38p
3.0%					2.25p	2.50p	2.75p 3.00p
				2.00p
2.0%
	1.50p	1.75p
	1.40p
1.0% 0.80p
0.0%
1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023

* 6.70p is an annualised amount, based on the first quarterly dividend, declared 5 January 2023.

2 Primary Health Properties PLC Annual Report 2022

Strategic report Governance Financial statements Shareholder information

GEOGRAPHICAL SPREAD BY VALUATION

Locations	Value	% Value
Midlands and East Anglia	£604m	22%
North East, Yorkshire	£407m	15%
and Humberside
North West	£380m	13%	38
South East	£382m	13%
Wales	£206m	7%
Scotland	£208m	8%
Republic of Ireland	£231m	8%
London	£243m	9%	51
			83
South West	£132m	5%	20
	£2,793m	100%

40	119

41

3289

OUR PORTFOLIO IN 2018

A 140% increase in Adjusted Earnings, with dividend per share paid out to investors increasing by over 20% in the five-year period.

Contracted rent roll	Number of properties
£79.4m	313
Adjusted Earnings	Number of tenants
£36.8m	709

"Having successfully delivered 26 years of consecutive dividend growth for our shareholders, we have firmly established ourselves as a leading investor in flexible, modern primary healthcare accommodation across the UK and Ireland."

Primary Health Properties PLC Annual Report 2022

3