Highlights

• Primary Health Properties raised its half-year Dividend 3% to 3.65p, marking its 30th consecutive year of dividend growth.

• Adjusted Earnings jumped 109% to £98m, while net rental income rose 123% to £176m in the half year.

• The portfolio is valued at £6.0bn with 99% occupancy and 76% of income backed by government.

• Management has achieved 92% of identified cost synergies from the Assura Acquisition and cut its EPRA cost ratio to 8.7%.

Doctors' surgeries are not glamorous, but landlords that own them have produced one of the longest dividend streaks on the London market. Primary Health Properties (LSE:PHP) has just extended it again, this time with a much larger Balance Sheet following its integration of Assura.

Quarterly dividends

Three quarterly dividends of 1.825p carried ex-dividend dates inside the trailing window: 29 January, 26 March and 2 July 2026, paid on 13 March, 8 May and 14 August 2026. That gives 5.475p. The company pays quarterly, so a fourth payment in autumn would be expected. At a delayed price of 92.25p on 15 September 2026, the total equals a Yield of about 5.9%, while annualising the latest quarterly rate gives about 7.9%.

Half-year results

Dividend per share rose 3% to 3.65p for the half year. Adjusted earnings rose 109% to £98m and adjusted Earnings Per Share rose 9% to 3.8p. The gap between those two growth rates reflects the larger share count that followed the Assura deal. Net rental income was £176m, up 123%.

Quality of income

The £6.0bn portfolio is 99% occupied, with 76% of income government-backed, which supports rental reliability. Adjusted earnings per share of 3.8p compares with a 3.65p dividend, so cover on that measure is about 1.04 times, a narrow margin. The company said 92% of identified cost synergies from Assura have been achieved, and its EPRA cost ratio improved to 8.7%.

Leverage and risks

Management is in joint venture discussions aimed at reducing Leverage and is progressing refinancing plans, which shows balance sheet strength is a live priority. Investors should check the loan-to-value figure in the full results. Thin dividend cover, refinancing costs, property valuation changes and reliance on government funding of primary care are the principal risks to the payout.

Government backing and debt

Government backing for 76% of income is the feature that distinguishes this landlord. Occupancy of 99% and an EPRA cost ratio of 8.7% point to an efficient portfolio. The weak spot is leverage, which management is addressing through joint venture discussions and refinancing plans. Dividend cover of roughly 1.04 times on adjusted earnings per share is narrow, so any increase in finance costs would matter. A 30th consecutive year of dividend growth is a mark of consistency, but it also sets expectations that become harder to meet as the share count rises.

Why healthcare property is defensive

Primary care buildings such as medical centres are leased to doctors and other health providers, with a large share of rent funded by government. This gives the income a high level of reliability compared with offices or shops. Primary Health Properties (LSE:PHP) has benefited from this feature, and the 99% occupancy shows steady demand. The Lease terms are long, and rent reviews can add growth over time.

What a long dividend record means

Thirty consecutive years of dividend growth is an unusual record in the property sector. The increase each year has been modest, but the consistency is what attracts investors. A record like this places pressure on the board to keep the pattern, so it is worth checking whether cover allows it. At about 1.04 times, cover on adjusted earnings per share is narrow, which means growth will depend on rent increases and cost savings.

The effect of the Assura deal

Acquisitions of large portfolios change the shape of a REIT. The Assura deal enlarged the portfolio to £6.0 billion and increased the number of shares, which explains why adjusted earnings rose 109% while earnings per share rose 9%. Cost synergies reduce overheads, and the cost ratio of 8.7% shows efficiency. Investors in LSE:PHP will follow whether the integration continues to deliver savings.

Liquidity and dealing costs

The ease with which shares can be bought and sold affects the return an investor actually achieves. A wide gap between the buying and selling price, called the spread, adds to the cost, particularly for smaller companies and trusts. Using limit orders can help to control the price paid. Investors should also check how many shares typically change hands each day.

Looking beyond a single payment

One dividend does not show a trend. Looking at several years of payments, the split between interim and final amounts, and any special payments gives a clearer picture of how reliable the income is. It is also worth checking whether the dividend has been funded from profit, from reserves or from borrowing, because only the first can be repeated indefinitely.

What to watch next

Joint venture discussions and refinancing will be the main events. Investors should follow leverage, the next quarterly dividend and the progress of cost savings. A steady dividend supported by rising earnings would extend the long record.