Primary Health earnings boosted by MedicX merger

Primary Health Properties saw first half earnings from operational activities grow after its merger with MedicX back in March delivered a 22.7% total shareholder return.

The FTSE 250 listed healthcare property investor reported a 12% increase in adjusted EPRA earnings per share to 2.8p, while net rental income grew 44% in the six months ended 30 June to £53.8m.

Taking away the MedicX merger, Primary Health's adjusted earnings grew 19% to £20.3m, with the merger adding an additional £7.6m.

PHP also delivered operating synergies of £4m per annum, outlined at the time the MedicX deal was announced in January, as well as further finance cost savings.

Excluding exceptional adjustments related to the MedicX merger, PHP's IFRS pre-tax profit was £41.5m, ahead of the £38.7m recorded a year earlier.

Looking forward, chief executive Harry Hyman said: "Continuing improvements to the rental growth outlook and further reductions in the cost of finance will help to maintain our strategy of paying a progressive dividend to our shareholders which is fully covered by earnings."

Analysts at Peel Hunt upgraded its EPS estimates on the group following the update, again highlighting the impact of MedicX's integration into the group.

"We increase adjusted EPS 5% to 6p (excluding performance fee). Dividend per share unchanged at 5.6p for 4.2% yield. Net asset value unchanged at 107p for a 26% premium," said Peel Hunt, which reiterated its 'add' rating and 145p target price.

As of 1035 BST, PHP shares had inched forward 0.30% to 134.80p.