Primary Health Properties Share Discussion Threads

[makingheaps] 10/4/2008 13:21

Just had a look at your MERE post. Don't know the company so can't comment but your view may well be right. Certainly seems to have merit. However there is little paralell to PHP.

The point of PHP is the length of the lease and the quality of the tenant. The value is in the lease rather than the building. See the comment in the results about additional £1 per share value using a DCF model.

To be fair I am a little concerned at the management arrangements here too which changed a short while ago from share based payments to cash payments. I expressed concerns here at the time. However they may have shot themselves in the foot by not allowing further incentive payments until the paper loss experienced in the last six months is recovered.

[makingheaps] 10/4/2008 13:02

Kenny, Where do you see the release of deferred tax at £15m. Surely its £29.6m. Why is that a con? The deferred tax was debited to p & l in prior periods. Where would you have it credited to now? Seems very transparent to me.

Your point on dividends is valid. Seems to me if you take the 12 month period to Dec 07 the loss of £12.8m is really a profit of £2.6m ignoring the fair value adjustments to the properties and derivatives and the goodwill impairment charge. The dividend for the period at 15.75p costs £5.3m so roghly half is from capital.

In 2008 the rent roll will increase by at least £1m without acquisitions and the incentive fee of £1.8m will be zero so it will look a lot healthier.

Haven't read your comments on the MERE board but will have a look.

[stupidboypike] 10/4/2008 09:22

Hi Kenny, would you care to expand a little? What % of the dividend is made up from capital? I like php beecause of all of the property companies it appears one of the least exposed to a serious downturn in the ecomony.

Best regards

SBP

[kenny] 10/4/2008 09:09

Accounts for 2007 present a one off release of deferred tax of £15m as part of its annual profits!!!!!

What a con!!!!

[kenny] 10/4/2008 08:12

stupidboypike - I have looked at PHP's results this morning and can confirm they are also paying dividends out of capital. so I cannot see much point in investing in such a REIT - see my cooments on the MERE board.

[losos] 02/3/2008 21:08

Any one know why such a fall at end Friday?

Was wondering about that also !

[garfield31] 02/3/2008 18:37

Any one know why such a fall at end Friday?

[garfield31] 27/2/2008 09:00

Rivaldo may ask are you in this company or just following?

[rivaldo] 26/2/2008 15:27

FYI Daniel Stewart initiated coverage today with a Buy:

"Primary Health Properties - BUY Price: 295p Target price: 380p Code: PHP.L Analyst: Richard Bennett | 020 7776 6580

Initiating Coverage
PHP's properties & equity both look undervalued against real estate peers given its safe, bond-like features. We see similarities with but contrast valuation attractions against index-linked gilts.

Investment Case
Secure income stream: Rental income is 90% NHS-backed, occupancy is 99.5% and 88% of leases have at least 15 years remaining.
We expect steady, RPI+ long term dividend growth, at least matching index-linked gilts. Oversupply is not a feature of the market & rents are not market-determined.
Strong demand for new Primary Care centres plus a reopened spread of rental yields over cost of debt offers scope to augment dividend growth with accretive deals."

[theophilus] 26/2/2008 14:18

Since posting the above, earlier today, ASH has moved up another 8p.

Somebody (or somebodies) somewhere likes it.

Cheers

Th.

[theophilus] 26/2/2008 09:04

Personally I like Ashley House [ASH]. I am looking for steady growth in the next few years.

I invested when it was on ofex (plus), It's smaller erstwhile conjoined arm is still listed on plus, AH Medical Properies.

Both have reacted to the general property market but in recent days ASH has started to move up again, possibly stimulated by director buying.

www.ashleyhouseplc.com

Cheers

Th.

[goliard] 25/2/2008 15:23

I would be interested to know if anyone has compared PHP with Assura? They both are a healthcare property play, but Assura also has pharmacies in some of its centres and operates a medical services division.

[skyship] 20/2/2008 17:55

nickcduk - as I posted on one of the other property sites we visit (forgotten which one!) - thanks for the intro to DGRE, however I resolved after being marooned for too long in IRE back in 2001/2, never again to invest in anything involved in significant legislation.

That suit could run and run; and if lost could result in substantial damages. OK - the share price may well discount a significant cost, but impossible to quantify as not so transparent as MERE - as I'm sure you will agree. Got some cash into my SIPP today, so topped up there @ 479.89p for an 8.44% yield.

[nickcduk] 18/2/2008 14:41

Skyship - MERE looks interesting. I will go and investigate further. My own favourite property stock at the moment is DGRE. Its yielding over 14%. Its trading on a huge discount to NAV (Over 65%). Negatives are that it has quite high gearing and might end up getting embroiled in a legal spat with a property deal they pulled out of. Even then discount is huge. Quality of assets are exceptional. Largest asset is their stake in National Car Parks. This is let out to the operator on a 30 year lease with fixed increases of 2.5%+ per annum. Owns a number of Marriot hotels as well. I think a 30% rally would still leave them looking very cheap. There are lots of other property situations that look very tempting.

[skyship] 18/2/2008 14:18

Hi Topvest - you here too.

Actually just came on as part of my comparison search through many property
companies.

Nickcduk - thanks for drawing my attention to IRET - they were certainly cheap a few weeks back. They still are; and I rate them second only to MERE for value. The point about MERE is that they have lower gearing than PHP, a higher NAV discount - AND YIELD 8.4% at today's offer @ 480p. Incidentally, a price a full 17% lower than the Director top-ups in Oct'07.

IMO, at the moment MERE is the best of all the property buys; and enjoys excellent transparency through last summer's IPO Listing Prospectus and the Oct'07 pdf Presentation - click through to the ADVFN thread for the links.

[pallett] 18/2/2008 10:23

What are they going to do with all the GP surguries and medical practices when Gordon Brown replaces them with mini hospitals? Sounds to me like we are going back to cottage hospitals which not long ago were considered uneconomical and closed down! Gordon cannot leave anything alone for two mins!! I wonder if he has considered the leases he will have on his hands when he has closed them all down?

[nickcduk] 14/2/2008 09:07

Primary Health Properties - NA Price: 305p Target price: NAp Code: PHP.L Analyst: Richard Bennett | 020 7776 6580
Trading statement comment

* PHP reported a trading statement yesterday during trading hours. Key positives - dividend up, banking facilities increased, rent roll in line with expectations; some may have been concerned at interest rate swap mark-downs but this is non-cash, mostly taken to equity and only reflects one side of the hedge. Yields have pushed out a bit more than we expected which is negative for NAV but offers increased scope to augment income & divs by buying new properties at a wider spread above borrowing costs
* The group continue to provide a rock solid income/dividend stream with a very strong covenant, properties are fully let with no real risk of voids; rents are not market determined and we would expect RPI+ growth in rental income.
* PHP will report results c 10 April
* Yields have weakened around 35bp between June 30 and Dec 31 - about 10 bp more than we had expected, but not as dramatic as the widening of commercial yields. The year end valuation yield was around 5.5-5.6% and PHP are buying properties in a similar range
* PHP have flagged �9.3m of mark to market write downs on interest rate swap hedges - this is non-cash, and most of this (�6.5m) will go through equity
* Final interim dividend (3 interim divs in 18 month period) of 8.25p, up from 7.5p for first 2 interim dividends
* Portfolio remains almost 100% let with average lease length outstanding of 18.4 years, 89% of rent roll paid directly or indirectly by NHS.
* Year end rent roll at 16.1m was in line with our expectations.
* PHP have now signed heads of terms with a new �50m secured debt facility to add to existing �200m facility - adding to group's firepower.
* NAV/share at 12/07 was around 365-370p - stock is now at a 15% discount to this level

[topvest] 13/2/2008 21:38

I don't really care about the valuation, this should be valued on a dividend yield basis. Over 5% yield is pretty good.

[bisiboy] 13/2/2008 19:28

370p is what i make nav AS WELL

[nickcduk] 13/2/2008 12:02

Trading statement obviously spooked the market this morning. 30p or so in write downs on the mark to market value of debt. I would guess a further 50p or so in writedowns will be made against the value of the portfolio. That would bring NAV to around 370p. Thats about where I expected it to settle. Dividend is ahead of forecasts which is good news. Took advantage of the spike down to pick up a fair whack around 290p. Will look to knock them out around 320p or so over the coming week.

[nickcduk] 24/1/2008 15:15

Lots of wild moves across the sector. Been shorting MKLW on its spike higher as well as most others in the sector. Net long PHP currently but I think it could break out of its recent trading range and move above 340p. Focus is now being placed on aggressive interest rate cuts by the BoE. Once that begins to kick off the commercial property market should stabilise. Consensus is it will bottom sometime in H1 2008 and pick up in the second half. Im happy to go along with that and have positioned myself accordingly. I think PHP NAV will fall to around 380p so I wouldn't expect it go above that even in the event of a spike higher.

[topvest] 22/1/2008 23:14

Is it only me, or are the real estate share price movements today totally bizarre. Worst markets in a couple of years and certain real estate stocks have gone through the roof! MKLW is the best example..absolutely strange!

[gsands] 22/1/2008 20:29

Thanks for the tip. I hold shares in MAY which yields c13% at these levels.

I will also investigate IRET.

[nickcduk] 22/1/2008 14:58

Best of the lot imo is IRET. Yields close to 10%. NAV at end Dec was 112p. Gearing is modest. Shares trading at 70p. A good portfolio of properties which has outperformed IPD indices during the recent falls.

[gsands] 22/1/2008 14:39

Does anyone know of a REIT or a commercial property investment company which has a dividend yield in double figures?

According to ADVFN data, this one yields only 5%.