PHP moves closer to full dividend cover after AMP acquisition

Primary Health Properties (PHP) announced Friday its acquisition of Apollo Medical Partners (AMP), an investor in primary care and pharmacy properties in the UK.

Primary Health Properties (PHP) announced Friday its acquisition of Apollo Medical Partners (AMP), an investor in primary care and pharmacy properties in the UK.

PHP, one of the UK's largest providers of modern purpose built primary healthcare facilities, has purchased the entire issued share capital of AMP in a £10.2m deal.

AMP owns 14 primary care properties in the UK. Eleven are completed assets and the remaining three are due for completion next year.

Lambert Smith Hampton has valued the entire portfolio at £62.3m, which includes a fixed debt of £49.8m and transaction costs.

PHP is to pay £4.2m in cash on completion while £1.8m in cash will be deferred until delivery of assets under construction.

AMP's vendors will receive 1,231,395 new ordinary shares of 50p each in the capital of PHP, subject to a 12-month lock-in.

PHP believes that the acquisition adds high quality assets to its existing portfolio and increases its recurring income surplus which will reduce the proportion of its current dividend that is partially uncovered by earnings.

Harry Hyman, Managing Director of PHP, said: "This is an important acquisition for PHP which demonstrates our ability to acquire modern, well-let portfolios at cash yields ahead of the current portfolio net initial yield. The acquisition adds 14 high quality assets to our existing portfolio, boosts PHP's rental profits and is in line with management's aim of returning to full dividend cover at the earliest opportunity."

PHP's portfolio will comprise of 183 primary care properties with a total value of £643.3m following the transaction.

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Oil producers are back at their Covid-19 lows – is it time to buy?
Oil

Oil producers are back at their Covid-19 lows – is it time to buy?

With demand for oil hammered by Covid-19 and talk of “peak oil demand”, there are lots of good reasons to be bearish on oil producers. So, asks John S…
22 Sep 2020
IAG's share price is ready for take-off - here's how to play it
Trading

IAG's share price is ready for take-off - here's how to play it

The owner of British Airways has had a turbulent year, but is now worth a punt. Matthew Partridge explains the best way to play it.
8 Sep 2020
Will a second wave of Covid lead to another stockmarket crash?
Stockmarkets

Will a second wave of Covid lead to another stockmarket crash?

Can we expect to see another lockdown like in March, and what will that mean for your money? John Stepek explains.
18 Sep 2020