Turkey of the week: Reit at risk of running out of cash

This property company rents out premises to GPs, pharmacists, dentists, and the government. But problems with cash flow and debt could limit future growth.

Primary Health Properties is a landlord that, under long-term leases, rents out 113 modernised premises to GPs (78% of sales), pharmacists (9%), dentists, and the government. In 2007 it converted into a real estate investment trust (Reit) and now pays out most of its £19.6m rental income in the form of a juicy 6.9% yield. According to most analysts, Primary Health Properties can do this because it operates a low-risk business model with 90% of revenues underpinned by NHS funding, coupled with high occupancy rates.

Primary Health Properties (LSE:PHP), rated a BUY by Numis

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Paul gained a degree in electrical engineering and went on to qualify as a chartered management accountant. He has extensive corporate finance and investment experience and is a member of the Securities Institute.

Over the past 16 years Paul has held top-level financial management and M&A roles for blue-chip companies such as O2, GKN and Unilever. He is now director of his own capital investment and consultancy firm, PMH Capital Limited.

Paul is an expert at analysing companies in new, fast-growing markets, and is an extremely shrewd stock-picker.