Primary Health Properties PLC on Wednesday reported sharply lower annual profit as costs soared, offsetting ‘strong’ organic rental growth.

The London-based healthcare facility investor said pretax profit tumbled 52% to £26.1 million in 2023 from £56.3 million in 2022, as expenses mounted.

Direct property expenses climbed 49% to GBO18.8 million from £12.6 million, while administrative costs rose 42% to £13.7 million from R 9.6 million.

In 2023, net rental income rose 5.5% to £149.3 million from £141.5 million, primarily driven by ‘strong’ organic rental growth from rent reviews and asset management projects, plus income arising from the acquisition of Axis Technical Services Ltd. Primary Health acquired Irish property investment business Axis in January 2023.

As at December 31, the occupancy rate was 99.3%, compared to 99.7% at the end of 2022. Investment portfolio valuation was £2.78 billion, down 0.7% from £2.80 billion.

Primary Health Properties declared a dividend of 6.7 pence, up 3.1% from 6.5p.

Adjusted earnings per share was up 3.0% to 6.8p from 6.6p. But EPS slumped 52% to 2.0p from 4.2p. Headline EPS declined 33% to 6.0p from 8.9p.

As at December 31, adjusted net asset value per share was 108.0p, down from 112.6p. at December 31, 2022.

Primary Health also said it had appointed Bandhana Rawal as non-executive director. Rawal is currently senior independent director at Worldwide Healthcare Trust PLC.

The company said Ireland continues to be its preferred area of future investment activity, noting it has ambitions to continue to grow the portfolio there to around 15% of the total from 9%.

Shares in Primary Health were up 0.2% at 89.55 pence each on Wednesday morning in London. In Johannesburg, they were unchanged at R 21.90.

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