LONDON (ShareCast) - (Sharecast News) - Property investor Primary Health Properties said on Wednesday that organic rental growth had continued to drive "strong" property returns in a "turbulent market".
Primary Health Properties reported a 5% increase in interim net rental income to £7.1m, while adjusted earnings grew 9.8% to £44.7m for the six months ended 30 June, and adjusted earnings per share improved to 3.4p from 3.1p per share a year earlier.

The FTSE 250-listed firm, which hiked its interim dividend 4.8% to 3.25p per share, said its adjusted net tangible asset per share improved 3.5% to 120.8p, while net initial yields dipped slightly from 4.64% to 4.57%.

Contracted rent rolls rose 1.3% to £144.2m on an annualised basis, while the percentage of the group's rent roll funded by government bodies dipped from 90% to 89%.

Average cost of debt rose one-tenth of a percentage point to 3.0%, while PHP's weighted average debt maturity contracted from 8.2 years to 7.8 years, and total undrawn loan facilities and cash dropped to £290.6m from £321.2m.

Chief executive Harry Hyman said: "We are encouraged by the firmer tone of rental growth experienced in the period from the ongoing rent reviews and asset management projects successfully completed. Furthermore, with the majority of PHP's debt either fixed or hedged for a weighted average period of just under eight years the board remains confident that PHP can continue to deliver further earnings and dividend growth.

"Notwithstanding the outlook for longer-dated interest rates the investment market has remained robust in the first half of the year and we have continued to see further net initial yield compression in both the UK and Ireland."

As of 0900 BST, PHP shares were down 0.63% at 142.80p.



Reporting by Iain Gilbert at Sharecast.com

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