Primary Health Properties Stock

Good afternoon, and welcome to the Primary Health Properties Plc investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I hand you over to Mark Davies, CEO. Good afternoon, sir.

Good afternoon, everybody. Thanks for joining us this afternoon on a sunny summer afternoon. With us this afternoon, myself, Mark Davies, the CEO; and Richard Howell, our CFO. We're presenting to you this afternoon our interim results for the 6 months ended 30th of June, 2026. It's been an absolute transformational period for our company. You will see that in the financial performance that we will present to you shortly. This is the first financial period that we've published with the benefit of the Assura merger now coming through into our financial results.

And we're delighted with the acquisition. We'll give an update on the integration, the synergies, how active we've been in the capital markets, particularly in the debt capital markets. There's lots to talk about on our joint ventures, which I'm going to get to. And also, we'll try and talk some case studies to you as well. So first of all, it's our interim results, a very strong set of financial results, a very busy period for our company. And Richard will be going through those results, which have delivered 9% increase in our earnings per share during the period, and we've made very good progress on our key strategic objectives.

But before I move on, I know there are literally hundreds of people on this call this afternoon, some of whom we've not met before. So I just wanted to introduce PHP to those who've not met us before and also just remind everybody where we now sit as a business following the successful Assura merger of last year. PHP operates principally in 3 resilient health care markets, one of the largest health care infrastructure investors in both the U.K. and across Ireland. Our current portfolio is GBP 6 billion. So we manage, own and invest in GBP 6 billion of health care assets, real estate assets. Our core portfolio is our primary care portfolio in the U.K., which equates to about GBP 5 billion.

We have 15% of the entire market share in U.K. primary care real estate. And that puts us in a very strong position, and I'll maybe come back to that in a moment. Principally, the income that we generate from our portfolio of primary care assets in the U.K. is government backed. So very secure income, stable and strong valuation performance, attractive fundamental tailwinds socially, demographically, economically. Principally, our assets are long income when we enter into new leases with our occupiers, often they're 20, 25 years or longer. And because we have a policy that over 80% of our rent roll is paid for by the U.K. or Irish government, we have a very strong and secure covenant.

We do have many of our assets linked to inflation or fixed uplifts. And we'll give a breakdown of our portfolio metrics later on in the presentation. We have an undeniable track record at PHP. We've been doing this now for 30 years, and we have around 1,100 medical centers, GP surgeries all purpose-built in and around the U.K. Second part of our business is in Ireland. We've been owning, managing, investing and developing primary care assets in Ireland now since around 2015, 2016, equates to about GBP 0.3 billion of our total portfolio today. We also have significant market share in the Irish primary care real estate sector, which equates to about 15%. In terms of those investment characteristics, again, principally our core source of income is the HSE, which is the Irish version of the NHS.

So the Irish government is ultimately paying the rent. Very strong demand for the facilities that we own and new ones that we can create, given the population growth, the aging population, the social and demographic drivers that sit behind our business, provide those fundamental tailwinds. Again, a very strong and secure covenant. And in fact, in Ireland, our entire portfolio pretty much is linked to inflation, and we'll talk a bit more about that performance later. And of course, the assets are well located, well maintained, and we would describe our portfolio as the best-in-class when we think about health care infrastructure, investing in the U.K. and in Ireland.

The third and final part of our portfolio is our private hospital portfolio. The majority of these assets came across to us during the Assura merger. The Assura team in private hospitals that we have retained have been investing in private hospitals now for about 10 years. They have about GBP 0.8 billion of assets if you include the private hospital, private clinic business we have here in the U.K. and also an asset that we own over in Ireland. We have 5% of the total market share. So it's meaningful. It's significant enough to give us great access to information. But also we've established long-standing relationships with all the leading private hospital operators, including Ramsay, Nuffield, Circle, HCA, Laya and Spire.

Again, attractive fundamental tailwinds, long income. In fact, our average lease length in our portfolio of private hospitals is over 20 years. And again, it's a very strong and secure covenant, all linked to inflation. So put all that together, and we -- fundamentally at the heart of our investment case is we have a very secure income stream, a very stable and strong asset base, and there are attractive structural trends that support the growth of our business in the future. In simplistic terms, we are in a growth sector. I described earlier the platform and I touched on the team. We are the U.K.'s largest health care REITs. We have over 1,100 properties across U.K. and Ireland, as I described on the previous slide, GBP 6 billion of assets, 99% occupancy. We're pretty much fully occupied in our portfolio.

As the leading owner in the U.K. of purpose-built GP surgeries, medical centers, no one is building new medical centers, new GP surgeries other than us. And as you can imagine, the demand for these facilities is high and growing. It's a very low-risk, long-term, noncyclical secure government-backed income portfolio. And our investors tell us that's one thing that they, amongst other things, we like about our business and the investment case that sits around it. We have a 30-year track record. We've increased our dividend every year for the last 30 years, which remains fully covered. We've got confidence in our rental growth outlook. We're targeting 3% or more on an annual basis going forward.

There's a slide in our presentation, we'll try to get to later. You can see where the current trend sits around 3.2%. We're confident we can be at 3% or more. We're operating in a growth sector, as I mentioned earlier, demographic tailwinds are high and growing. The other thing that really underpins the strength of our investment case is the government plan, the government shift, both here in the U.K. and in Ireland to get more clinical services out of hospitals into primary care, supported by the 10-year NHS plan, which came out last year, the government's commitment to build 250 new neighborhood health centers, we're very much front and center as part of that neighborhood health center model, the plan the government is looking to implement. We've already got 3 neighborhood health centers in our portfolio.

We think that will increase significantly in the future. When Lord Darzi was asked by the current government to commission a research report on the NHS and health care in this country, he concluded amongst other things, that 50% of all existing U.K. primary care real estate is not fit for purpose. Now he's not talking about the real estate that we own, which is purpose-built, often modern, flexible space, which is what the NHS requires today. He's talking about the rest of the primary care estate and that creates a big, big opportunity for us in the future as the leading owner manager, investor and developer of new primary care real estate.

We've got great relationships, as you can imagine, at the heart of government, the heart of NHS nationally and locally all around the country. And we're well placed to support the government in the implementation of this 10-year plan. On the financial side, because we've been doing this for 30 years, we've been listed for 30 years. In fact, we opened the stock exchange very recently. We've always delivered a strong financial performance. We've principally able to do that because of the strength of the team here, the strategy, the active management of the portfolio. We're recognized as a very competent, very able asset manager, which has helped us deliver that track record through principally stable income and a very disciplined approach.

We are a very well-run business. We have a strong control on overhead. We target an EPRA cost ratio below 10%. The synergies that have come through the Assura transaction of about GBP 9 million, we're beginning to see the benefit of that now. We've delivered about 92% of those transaction synergies. So our EPRA cost ratio is now, I think, the second lowest in the entire sector. And when Richard talked to us about the debt later on, you can see we've got a really efficient capital structure, strong support from the debt capital markets, banks and beyond with a low average cost of debt of 3.8%, which will come down to 3.5% later this year. We've always delivered with clear focus and enhanced total property return and the growth rate on our dividend over that 30-year period equates to around 8%. That sort of sets the scene.

Now on to our results, which we published last week, sorry, week before. These results are the first set of results that we have published, where you can now start to see the benefit of putting PHP and Assura together. The combination is delivering earnings growth, supported by our operational activities, all which goes to shareholder value. Our earnings per share is up over 9% during the half year. Our dividend has increased yet again and is fully covered. And as I mentioned earlier, we've been able to do that for 30 consecutive years. We have a real focus on rental growth, positive trend coming through. We'll talk a bit more about that later. You can see a 6% uplift on reviews settled during this period. Very focused on asset management. We want to do more deals, not less and the quality of the team, the expertise, the knowledge, the relationships, the access to data that we have as a combined business puts us in a stronger position to do that going forward.

I've already touched on the focus, the forensic focus actually on cost and overheads and the low EPRA cost ratio. A very resilient asset class with a stable net asset value, which is currently at 104p and a growing pipeline of opportunities, asset management and development and beyond, which we'll talk about shortly. Management priorities following the Assura merger that we set out at the time were very clear. And we've been very focused on delivering those objectives over this last 6-month period. We've been very busy. Integration has gone well, is pretty much substantially complete. We've now delivered 92% of the total cost synergies on the merger, which totaled GBP 9 million.

So the benefit of that started to come through in this period, but you'll get to see more of that in the second half and beyond. The team, we've combined the best of both focusing on generating future value from rent reviews, asset management and risk control development. We can definitely do that better as a combined business with more size and scale and a reduced cost of capital. At the time of the transaction, we took on a bit more leverage. So we have an elevated leverage post transaction, but we are well progressed in terms of deleveraging on plan, on track by principally selling assets into 2 joint venture vehicles.

One is the existing U.K. primary care vehicle that was established by the Assura management team, which we inherited, which we're very pleased with. And secondly, we have agreed exclusive terms on our private hospital portfolio to establish with a new global institutional investor, a 50-50 on day 1 joint venture. And those terms were agreed some time ago, and we're now well advanced in all the due diligence that's required to complete that transaction. So very well advanced on that.

And then finally, at the time of the transaction, I mentioned the leverage that we had taken on. We had a GBP 1.2 billion bridge facility. Sat here today, all of that's been repaid or refinanced with the exception of about GBP 260 million, which will get refinanced, repaid in the next few weeks following the receipt of proceeds coming in from those 2 joint ventures that I've just described. And Richard, when he talks to us about the capital structure in a moment, will highlight the 40 bps reduction in credit margins he and his team have managed to achieve principally as a consequence of the merger and the increased size and scale of the business.

Once we have repaid that bridge facility in a few weeks' time, completed the joint ventures that I described, PHP will then seek a strong investment-grade credit rating. It's awaiting the proceeds of the JV, as I mentioned, but the work has been done on that in the background, and we're confident about the company's ability to do that in due course. I'll now pass you on to Richard, who's going to talk you through the financials.

Thanks, Mark, and good afternoon, everybody. Just looking at the key financial highlights for the first 6 months of the year. Obviously, the benefits of the combination with Assura last year are now flowing through to the enlarged group with strong earnings growth and operational performance. Adjusted earnings increased to GBP 98 million, driven by a full 6 months of income from Assura, which added an extra GBP 50 million of income. This resulted in adjusted earnings per share of 3.8p, up 9%. Like-for-like rental growth generated an extra GBP 4 million of income, driven predominantly by rent reviews where we saw rents increase by 6% over the previous passing rent.

As Mark has already mentioned, we've delivered GBP 8 million or 92% of the anticipated cost saving synergies arising from the merger. And that has resulted in one of the lowest EPRA cost ratios in the whole sector at 8.7%, down from 10% last year. The underlying portfolio generated a valuation surplus of GBP 18 million, driven predominantly by rental growth, which generated a surplus of GBP 29 million, offset by a very small 1 basis point outward yield shift movement equivalent to GBP 11 million deficit. The yields across the portfolio have generally remained flat, which is consistent with the second half of last year. So notwithstanding the volatility in gilt rates and interest rate markets, we've seen values in our sector remain stable, which is a very common theme across our portfolio.

Investment portfolio remains unchanged at GBP 6 billion as is the adjusted net tangible asset per share at 104p per share. We continue to maintain very strong operational metrics with pretty much full occupancy at 99% and a long WALT of just over 10 years. Looking at the strong progress we've made in terms of refinancing, a lot of the debt post-merger. As Mark has already mentioned, we've completed GBP 1.2 billion of refinancing in the year, which pretty much refinanced the bridging facility put in place when we acquired Assura last year. This remains -- leaves GBP 260 million outstanding, which will be cleared as part of the deleveraging plans that Mark mentioned earlier in the presentation. The first facility was a GBP 800 million revolving credit facility and term loan, where we have seen credit margins come in by 40 basis points, which really reflects the increased scale of the business.

We've also put in a new GBP 400 million term facility for 2 years, which is really there to provide a bit of extra flexibility when we come to look at some further refinancing initiatives in the second half of the year. As a consequence of all of these actions, the average cost of debt still remains at a very low 3.8%, and that is expected to fall to 3.5% once we repay the balance of the bridge facility in the second half of the year. The group also has just over GBP 300 million of undrawn liquidity headroom after capital commitments. Looking at rental growth in a bit more detail. We continue to be encouraged by the improving rental growth outlook. The first 6 months of the year, we generated an extra GBP 4 million of rental income derived from our rent review activities, which resulted in annualized growth of 3.2%, which is slightly ahead of our previous guidance at 3%.

Importantly, open market reviews delivered an uplift of 6.3% over the previous passing rent, and that outlook is continuing to improve. The rent review teams across both businesses are now fully integrated and sharing evidence which will benefit rental growth in the future, and none of that benefit is really reflected in the first 6 months results of this year. That rental growth coming from the combined group will really fall into future periods. We continue to focus on asset management and development activities where we're seeing strong rental growth with asset management schemes delivering growth of around 15% from the low GBP 200 per square meter increasing to around GBP 220 and developments seeing that increase even further to around GBP 280 per square meter, which is an increase of around 30%.

All of these activities continue to set vital and important rental evidence, which we then apply across the wider portfolio. PHP has managed to achieve its 30th anniversary of consecutive dividend growth, and we continue to focus on this approach, supporting our progressive dividend policy on a fully covered basis. There are 3 key pillars to this growth, a portfolio with strong reversionary potential that will deliver future rental growth supported by the security of our long-term predominantly government-backed income stream, a strong focus on cost control with one of the lowest EPRA cost ratios in the whole sector and a strong record of balance sheet liability management with a low cost of debt of 3.8% expected to fall further to 3.5% in the second half of this year.

These 3 pillars have supported the strong earnings growth in the first 6 months of this year. As we said, earnings 3.8p up 9% over the previous period. So I'll now hand you back to Mark, who will take a closer look at the group's property portfolio.

Thank you, Richard. Thanks for presenting the results. I think it's very proud moment for you and I to present such strong results to the market and the response that we've had from our investors in the last couple of weeks has been very, very positive. I'll now, sort of, take you through the sort of property section of the presentation. I think in some ways, this is my favorite part because it sort of brings to life some of the really good things that we are doing. But importantly, we find a way of presenting to you the way in which we make a financial return on the investments that we are making. So I'm going to start in Weston-super-Mare.

As you can see on the left-hand side, this is a 5-story new development that we are currently building. And it meets the requirements of a neighborhood health center, which is quite topical because the government has committed to doing 250 of these in the future, and we are very well placed to help government with that plan. So the benefits of PHP are, firstly, we are funding this through our existing joint venture, which we have in place. And it's a very capital-light way for us to generate double-digit returns on a GBP 19 million scheme, which has a 25-year index or sorry, inflation-linked lease. The yield on cost for us and our shareholders is in excess of 8%. That's boosted by the management fees that we receive. We also get development management fees on this particular asset.

And importantly, which refers back to the slide that Richard presented just now, it unlocks significant rental evidence well ahead of local averages. So in Weston-super-Mare and in Somerset, generally, we own other assets where often the rent is below GBP 200 a square meter or certainly in the low GBP 200s, and we're setting this -- or the terms, the economic terms on this asset, Weston-super-Mare in the high 200s so that all bodes very, very well. We have a strong reputation for providing new purpose-built medical centers. And I think this particular opportunity, I think, takes that on to another level because on the ground floor and the first floor in the picture in front of us, the services provided from that space will be what I would describe the sort of typical or core GP surgeries that we have 1,100 of those around the country.

And then on the third and fourth floor, there will be social prescribing, other services, mental health, children's services. This is exactly what the government is trying to achieve by getting those services out of hospitals into the community. It will save the government money, well, well placed to work with government to achieve that goal. And we have the expertise, the knowledge and obviously, the relationships and then access to capital with the joint venture that we have with our established partner, USS. So lots to look forward to, not just in Weston-super-Mare when the scheme completes later in the year. But I think it sets a really, really helpful precedent to do more of these new neighborhood health centers all around the country in the future for which we know there is very, very strong demand.

And of course, we are getting a very nice financial return on our capital investment along the way. The next slide I wanted to sort of showcase to you is in Tetbury in Gloucestershire. This is a new purpose-built medical center. I happen to visit this on the same day that I saw Weston-super-Mare a few weeks ago. This is going to be a really good scheme. I really liked it. There's a nice population. It's a fairly sort of affluent part of the country. Population is growing. Regional housebuilder gets planning consent. The community is crying out for a new medical center desperate in so many ways because of the growing and the aging population. We come in, the developer effectively gives us the land for free. We build the new medical center, which will complete either in December this year or January of next.

We have a 30-year lease, all government backed fixed rental uplifts, yield on cost in excess of 9% total return well into the mid- to high teens from the fees that we will achieve. Again, we're unlocking vital rental evidence here well ahead of other assets that we own in this region, of which we have many. And it's a great example of public-private partnerships working together to create new medical centers, new medical facilities in line with the government's 10-year plan. And again, this particular opportunity is going to slot very nicely into our existing primary care joint venture. So again, very capital-light from a PHP perspective, but generating very high returns. And there's more of those coming through in our pipeline. And hopefully, when we talk to you next time, we'll get to show you about that.

The next slide is an asset management project in Wakefield in Yorkshire. This is, in some ways, the other end of the extreme of what I've just described in that this is an asset we've owned for 25 years. And we're very, very pleased and proud of the historic success that we've achieved from owning this asset. I think at the time we originally bought the asset in 1998, the number of patients registered at the Trinity Medical Center in Wakefield was about 7,000 or less. We now have 27,000 patients and growing. We are expanding the site principally through a GBP 4 million capital investment, adding 13 consulting rooms, clinical procedures will be provided, including minor ops out of hours, maternity, midwifery and beyond. And we get a good return in excess of a 6% yield on cost, double-digit total profit on cost, setting a positive rental tone, and it's a great story. This is effectively a neighborhood health center in everything but name.

And again, a good example of what we do best, generating good financial returns on the way through. Now moving on to private hospitals. I described earlier the portfolio of private hospitals that we own, and we are very well progressed in forming a joint venture. So in the future, we will own a 50% stake in the private hospital portfolio from the point that, that joint venture completes. We also have a capability within the business to develop new private hospitals, and there have been little few, in fact, almost no private hospitals built in the U.K. now for many, many years. This is a new build project. In fact, myself and the team are going up there tomorrow to Peterborough for the topping out ceremony. This is a brand-new private hospital next to Ramsay, who are one of the leading private hospital operators.

This would principally be a facility to provide day care surgery and it's introducing additional capacity into the local area where the demand is very, very high. Ramsay across the U.K. and particularly in Peterborough generate a lot of their revenue, a lot of their footfall from the NHS and Peterborough is expected to be in excess of 80%. So outpatient clinics here, diagnostic units, all the usual sort of day-to-day services that you would expect from a new private hospital. It's a tried and tested model. We've now developed 6 of these over the last 10 years for Ramsay, and we believe that we will do more. On completion, we expect this asset to slot into the private hospital joint venture that I described earlier.

So before I take the floor to questions, and there seems to be quite a few questions coming in on screen and many of you are kind to submit questions in advance. If I could just sort of close the presentation by saying this has been a transformational period for our company. The transaction objectives of putting PHP and Assura together are well on track. Many things that we have done, we've actually managed to achieve ahead of schedule. Synergies are pretty much materially delivered at 92% and integration substantially complete. Richard and his team have done a terrific job on the balance sheet side and our deleveraging plan is well advanced and the remains of the bridging facility of GBP 260 million will be fully repaid in the next few weeks from the JV proceeds coming in.

Dividend growth is fundamental to the business, and we want to continue growing our dividend from the quality of the portfolio, the tailwinds that we have, the operational capability and the scale benefits coming through from the combination give us the confidence that we can be that continued income compounder, not just now, but in the foreseeable future. Our earnings growth is fundamentally supported by that operational excellence that we described earlier. And we see positive trend in rental growth, the ability to do more and enhanced volume of asset management deals. We want to do more of Wakefields, not less. Of course, this management team will retain a very close control of costs. It's, kind of, in the DNA of the company. We've worked hard to get ourselves in this position, and we intend to retain that strong position that we are in.

And we're seeing a growing pipeline of opportunities in the U.K., in Ireland, in primary care and in private hospitals. And we have the track record, the team, the capability and the size and scale with a lower cost of capital post-merger to be able to do all of that. So I'd like to thank you all for attending the presentation this afternoon. And I'm now going to go on to questions. And I'm actually going to start with the questions that were submitted in advance. I can actually see now all questions that have come through to the management team. We might not get through all of these, but we will do our very best.

The first question has been pre-submitted. We can't actually see from where we're sat, who's actually submitted these questions. So forgive us for not being able to address you directly. But the first question is, has the takeover brought better-than-expected growth opportunities?

I would say definitely yes. I think we were very optimistic about the merger of these 2 companies. It was a very obvious transaction to do. Both companies were very similar in size and scale and the strategies were not wildly different. However, I just think by being twice the size, we've got a lot of profile from the transaction that we did last year. I think that, by definition, has opened more doors to us. But I think this is the team and the expertise and the capability that we have, some of which we perhaps underappreciated, particularly on the Assura side, which gives me the confidence that I can answer that question that we think there are better-than-expected growth opportunities from putting the 2 companies for PHP going forward.

Second question is what NAV multiple or yield is embedded in the USS GBP 103 million transfer at GBP 82 million net proceeds. Does that pricing read across to how the wider portfolio should be marked? I can address that question. The transaction hasn't completed yet. So you can appreciate there's some commercial sensitivities, which there always are. But I can say that the pricing of the assets is sort of a yield in the low 5s. Our average portfolio yield is 5.4%. So we think it's positive for -- don't read across just for our wider portfolio, but just the market generally. But it's a good quality portfolio of assets that we're transferring into the joint venture and the portfolio valuation very much reflects that. Richard, would you mind picking up question 3? I presume you can see that from [indiscernible] give me a little break.

Yes, sure. Yes. Thanks, Mark. So the question is, there are 1,287 open market reviews outstanding at the end of June versus 1,159 at December and that rest of it general just why is it increase when district valuer assessments are increasing. There are approximately 3,500 leases across the wider portfolio, which have a 3-yearly rent review cycle. So really at any one time, there should be approximately 1,200 reviews outstanding. The way the review cycles work, we quite often have a lot of reviews falling due at the 30th of June. So the small increase is probably a reflection of the way reviews fall due. But I would expect around that sort of number to be outstanding at any one time, just reflecting the short review cycle that we have in our sector, which is great because it doesn't mean we get reversion on reviews that much more quickly.

Thank you, Richard. Next question is asset management rents being rebased to GBP 218 to GBP 279 per square meter against a portfolio average of GBP 200. How much of the wider portfolio's reversionary potential is generally from today versus reliant on a handful of recent settlements? The portfolio, as you've set out in your question, is clearly highly reversionary. Management very focused on the delivery of that reversion. The team are incentivized and motivated to capture that gap principally that's arisen as a consequence of, amongst other things, inflation over the last 4 to 5 years that we are to capture in the future.

In terms of being able to prove that today, we think that's, in some ways, the easy bit. The ability to deliver that today, we think that's coming later because of the district valuer to work with and sometimes work against to persuade them that the economic rents that we see in the market, principally from activities that we are doing and particularly the new developments that we described reaffirm that potential. So it won't happen overnight, but we do think that will come through in the future. And that gap, it hasn't widened at all in the last year, but also hasn't narrowed. And it's our job to do that, and we think we're well placed to do that.

Next question is, our disposals following integration of Assura portfolio nearly complete. Yes, those 2 transactions that we described earlier into our primary care joint venture and our private hospital joint venture are close, very close, in fact, to completion. I do think as well an extension of your question is, do you think we'll sell other assets? I believe we will. Barriers to sector are quite high in terms of barriers to entry. But we have seen some new entrants coming in, some local authority pension fund activity. We have sold some assets into that space, but we think there's an opportunity to sell more. I think it's good for us to recycle capital and for us to be active where we see good opportunities to sell assets and to redeploy that capital.

We know our shareholders like us doing that. If nothing else, it just reinforces portfolio valuation, and I think it's good discipline. So even though these transactions are very close to completion, I think we'll do more.

Next question is, if gearing is high, why not sell Ireland? That's quite an interesting question. It's not one that's come up in all our interactions in recent times. We went into the Irish market 10 years ago. It's been a great success. And we've got #1 market share over there alongside KKR, who are another leading owner of health care infrastructure assets in Ireland. Look, I think we -- the way we think about that is if we were approached, we'd obviously be happy to consider all possibilities. We have a lower cost of capital in Ireland than we do in the U.K. as a consequence of interest rates. We see opportunities to scale that portfolio up. So maybe a long response to a short question, but we consider all possibilities. But at the moment, we're very focused on our priorities, which is to deliver the joint venture transactions and the proceeds from that coming through to pay down debt.

The next question is a political question. Do you see any threats or opportunities arising from the recent change in PM? We've been asked that quite a bit on this roadshow so far. It's too early to tell. Andy Burnham is a former Health Secretary, wasn't Health Secretary for very long, a couple of years, I think, in total. So he understands the space. So what do we know? We know that the 10-year plan that was put in place last year that the new government will retain that plan, we believe, to move more patients, more services into the community from hospitals. In many ways, that's the Jeremy Hunt plan of 2016 became the Wes Streeting plan of 2025, and we believe the new Secretary of State, Yvette Cooper, will continue with that strategy. So that's all good.

Beyond that, there's been quite a lot of talk, albeit headlines and not much on detail around the creation of a national care service. It's very early stage. We don't know for sure what that really means. We can imagine the concept of that. In a worst-case scenario, it makes no difference to our business at all. So it's totally neutral. In a best case scenario, it could be very positive. When I described Weston-super-Mare earlier and the services being provided from that facility going forward, and it's not just GP surgeries, not just clinical services, it's beyond that. It's leaning into social prescribing and could quite easily lean into social care. So we'll see. Way too early to tell at this stage, but totally understand why you'd ask that question. Richard, would you mind picking up the next question just to give me a short break.

Yes, sure. Given the attractive fundamentals of virtually guaranteed rents, why do you think there haven't been more entrants into the space? There's probably a couple of points to flag here. We have actually seen a number of recent entrants into the sector, particularly pension funds for a number of organizations have been very attracted by the strong fundamentals, as you rightly pointed out, the guaranteed rents, government-backed income and long leases. So we are seeing more interest. But the other thing to perhaps note is there's not a huge amount of stock that is traded in the market in any 1 year. So it's quite difficult for new entrants to acquire assets at scale and also having the sort of own platform and dedicated team that we have that knows its way around the NHS and the workings and we know how to navigate it to deliver the best results for our shareholders.

Yes, a good response, Richard. I mean we know, as you described, there's a lot of interest in our sector. I mean, last year, we saw KKR and Stonepeak obviously trying to come in. Barriers to entry quite high because you want to have a portfolio of size and scale, but also the expertise to own, manage and invest in these assets is extremely unique. We just happen to be doing it for a long time. So we've got the best-in-class platform. I think the local authority pension funds who -- you can understand why they want to get into it because it's a good return. It's very secure. And -- but we encourage more entrants into our space because that creates liquidity and investment and that's kind of good for everybody really.

But we get to see everything that moves because the positioning we have in the market. I think this next question coming in goes back to Ireland. The Irish government is enjoying bumper tax receipts. There seems to be a political consensus there around developing premium local health care facilities. Totally agree with you on that. Are you constrained in the U.K. by the much more precarious funding position in which the government finds itself?

Totally agree on the Irish side. And it's one of the reasons why we're very confident about the future prospects of our Irish business, and we want to do more. We have the market-leading primary care platform in Ireland, and we're doing some interesting things on the private side as well. So we think that will continue. Yes, the U.K. government is at the face of it, quite capital constrained. But of course, of the GBP 30 million (sic) [ GBP 30 billion ] of tax receipts that Rachel Reeves had raised, the majority of that went into health care, GBP 25 billion went into the NHS. Now we could have a debate amongst ourselves this afternoon about how wisely that money has been spent. And I think we probably all concur quite quickly that there could have been better ways for the government to spend that money.

So the GBP 220 billion of annual spend in the NHS, we believe more should go into primary care. Primary care real estate is well placed to support the government and actually save it money because the Darzi report concluded that every patient going into hospital is now costing the government GBP 500 and a patient going into primary care is costing GBP 50 a patient. So prevention over cure, moving people into primary care in spite of the precarious funding position that you've described that the government finds itself in, we think that primary care will benefit both in the U.K. and in Ireland.

How the dynamics of the rent review DV process changing and why our rent reviews being finalized at a faster rate. So there's quite a lot happening there. We've seen the DV system be effectively collapsed into treasury. At the same time, we've seen NHS England consolidate into Department for Health. The ICBs who we work with very closely, again, this consolidation there from 44 to 23. So put all that together, it's hard to imagine we're able to do anything quicker. The team is very optimistic and upbeat about their ability to do more and accelerate what we're trying to achieve. I don't believe that's come through yet, certainly in the results of the last 6 months, but it's all to go for. And the dynamics are changing and certainly, the structure that sits around what we do is changing.

And hopefully, that will lead to better efficiency than what we've seen in the past. I'm conscious we're getting close to time now. So forgive me if I seem a little rushed because we've still got quite a few questions looking at the screen here. With an average WALT of 10.4 years, what percentage of your portfolio is suitable to -- lease with or without asset management opportunities? There's a good slide in the deck in the appendix, which sort of sets some of that out. So if we may come straight back to you afterwards to point you in the right direction there to save you going through that slide to give you time to do the next few questions or final few questions. Is PHP progressing direct development outside of the JV?

The answer is yes, we are more than able to do that, but we're getting better returns in the joint venture currently principally because of fees. And the JV has a very efficient cost of capital, principally as a consequence of the very clear and defined investment case and strategy that sits around the JV. So no, PHP can progress direct developments outside of the JV. But the schemes that we showcased to you today and off the back of these results are principally joint venture schemes.

Next question, are you able to be clear on when the hospital JV will occur and where will the LTV settle? So maybe that question came in before I said earlier that the private hospital JV, very important transaction for us, and we're very close now. We are not only in exclusive terms, which we came to quite some time ago. We're very progressed in due diligence, and we can get that transaction done in a matter of weeks. So we're very, very close now. And the LTV will come down into the low 50s. Our policy is to have a loan-to-value of 40% to 50% LTV and a net debt to EBITDA below 9.5. And we think it will be 9 or lower very soon. And that will give Richard and his team the opportunity then to achieve a strong investment-grade credit and then do everything else we need to do in the debt market over the next 3 to 5 years.

The final question, as we're approaching 230, given difficulty for new entrants to access assets, are you a likely acquisition target? And have you been approached? Anything around approaches, as you can appreciate, is heavily regulated, and we're never able to comment even in a scenario where there's a live transaction. There's no doubt we've seen a flood of infrastructure funds across Europe and around the globe, very attractive to this asset class where over 80% of our rent roll, 80% of our income is state-backed. This is an infrastructure investment at a time that global infrastructure funds are raising billions and billions of pounds. So I'm sure we'll be always of interest to all types of investors. Richard and my job day-to-day is persuading many of you on this call today and everyone that we meet day in, day out from retail investors to wealth managers to institutional investors in the U.K. and around the world to invest in our company.

And as long as we continue to do that well, we've been a public company for 30 years. But I'm sure there's a lot of interest in our company in the future because of the platform that we have. But I don't think I can really say any more than that at this stage. But there's been a lot of consolidation and M&A in our sector, and I do think that will continue, I'm sure. It's 29 minutes past 2. I've been told I have to finish the meeting at half past. So I didn't want to finish before just thanking you all for your interest in our company, for your support. We have a big retail following, and we really appreciate that. And we're grateful to you for dialing in this afternoon. Thank you for those questions. We thought they were very well thought through. And hopefully, you feel we've been able to address your questions. But the management team is very accessible through the chat room or contact us direct. Wishing you a good afternoon, and hope to see you very soon. Thanks very much.

Perfect. Thank you. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback, which helps the company better understand your views and expectations. On behalf of the management team of Primary Health Properties Plc, we would like to thank you for attending today's presentation, and good afternoon.

Good morning, everyone, and thank you for joining us for PHP's interim results for the 6 months ended 30 June 2026.

It's been another busy period for us, delivering a robust operational performance, translating into strong financial results and good earnings growth. We've also made very good progress on our key strategic objectives, and I'll walk you through those shortly.

First, moving on to the highlights of our results in the first half. The operational activity in our portfolio remains a key driver for us. Rental growth from our rent reviews are a high-volume aspect of our business, which supports both earnings and dividend growth.

We're again encouraged by the rental uplifts we have achieved in the period. This has been enhanced by the asset management and risk-controlled development activity, which is vital to set evidence for these rent reviews in the future. This activity, along with our disciplined cost control over overheads and financing, and the positive contribution from the Assura merger, has supported another period of strong earnings growth of plus 9%.

Following the merger, we've retained a key focus on our strategic priorities of integration, delivering synergies, bringing our leverage back to our target range, and refinancing the acquisition bridge facilities. We'll come on to the details shortly, but we have made substantial progress on all of this, and our plans remain firmly on track.

We're, of course, very proud that 2026 is our 30th consecutive year of dividend growth. Our business is all about delivering strong, secure, recurring, growing cash flows for our shareholders.

Finally, the best of both approach from the merger means we are now seeing opportunities to create more value in our portfolio of critical healthcare infrastructure assets. The 3 markets we operate in, primary care U.K., primary care Ireland and private hospitals. All have strong structural demand and attractive investment characteristics, which give us confidence in delivering future growth for our shareholders.

Moving on to some of the drivers of our operational and financial performance, which have enabled us to increase adjusted earnings per share by 9% to 3.8p in the first half, supporting our fully covered projected dividend for 2026 of 7.3p.

Firstly, we've seen a 6% increase in passing rent on the reviews settled in the period. This is equivalent to 3.2% on an annualized basis. We've signed 29 asset management deals across the portfolio, including new projects, lease regears and new lettings, with a combined yield on cost of around 6%, achieved on a relatively modest capital outlay.

Our EPRA cost ratio is now below 9%, reflecting the scale benefits of the Assura merger, the efficiency of how we run the business, and the speed at which we've been able to deliver merger synergies.

The security and longevity of our income supports stable valuations in our sector. This has delivered a modest valuation surplus. Our net initial yield has remained at 5.4%, and our adjusted NTA is unchanged at 104p per share.

At the time of the merger with Assura in late 2025, we very clearly laid out the strategic objectives we were focused on to ensure we delivered the expected value from this transaction.

I'm pleased to report we've made substantial progress towards achieving all of these and continue to focus on delivering for all stakeholders. The integration and delivery of cost synergies is almost complete. The enlarged business is working together well across the portfolio, led by the new ExCo, and over 90% of cost synergies have now been delivered.

Our deleveraging plan remains on track, primarily through the establishment of a planned private hospital joint venture, which I will talk you through shortly. We will also complete the planned transfer of GBP 103 million of PHP assets into our joint venture with USS. We have also completed GBP 8 million of targeted disposals, with more to follow.

The acquisition bridge facility has largely been repaid and refinanced. We thank our banking partners, both existing and new, for their support on this. The final GBP 260 million of bridge facilities will be repaid when we realize the proceeds from our private hospital joint venture transaction in the next few weeks. It was very pleasing that we secured reduced credit margins of approximately 40 basis points on these new facilities, evidencing yet again the scale benefits of the enlarged business.

Now I'll give you an update on the joint venture we are establishing for our GBP 0.7 billion private hospital portfolio. Terms have been agreed on an exclusive basis with a global long-term institutional investor, and we are currently well advanced through due diligence. The agreed terms are for the joint venture to be established on a 50%-50% ownership basis on day 1, with optionality to adjust that ratio in the future, and with PHP acting as the asset manager to the joint venture.

This is an important long-term strategic partnership for PHP with a high-quality investor, as well as progressing our deleveraging objective. This will allow us to retain a meaningful financial interest in these growth assets, which are performing well in a resilient market with future growth potential.

As well as improving our returns through ongoing management fees, we also have the ability to earn development and performance fees over time. We continue to advance discussions and remain on target to complete the transaction later in the summer, as we set out previously. And the proceeds we receive will land at the perfect time and we'll repay our bridging facilities in the next few weeks. We are very excited about this partnership and look forward to announcing a successful completion in the coming weeks.

Before I hand over to Richard, I just wanted to set out where PHP currently sits in respect of our financial policies, our future targets, and where we expect these important metrics to move in the short and medium term. Firstly, we continue on our journey to become a fully unsecured borrower. We've made strong progress over recent months and expect to be 80% unsecured in the near term, with a longer-term target of 90%.

Our LTV will be positively impacted by our disposals into the joint ventures, as well as the positive valuation impact from delivering rental growth. This will take our loan-to-value short term into the low 50s, and from there we will deliver additional capital recycling and valuation gains over time, with a below-50% LTV as our future target.

Similarly, and equally as important, our net debt-to-EBITDA ratio and interest cover will improve from already robust levels as we progress through the deleveraging steps I've set out on previous slides. And we seek a strong investment-grade credit rating on the whole group in the near future.

At this point in the cycle, with secure government-backed income and the stability and future growth in our portfolio valuation, we are very comfortable with our LTV being above target in the short term. Also, our weighted average interest rate will come down as we repay the acquisition bridging facilities, and we will return to a greater proportion of our debt being fixed or hedged. Overriding all of this is a secure income portfolio with over 80% of future income government-backed with a strong investment-grade underpin.

I will now hand you over to Richard to talk you through a strong set of financial results. Thank you.

Thank you, Mark, and good morning to everybody online.

Firstly, looking at the financial highlights for the first 6 months of '25, the benefits of the combination with Assura are now flowing through to the enlarged group with strong earnings growth and operational performance in the first 6 months of the year.

Adjusted earnings increased to GBP 98 million, driven by a full 6-month contribution from the acquisition of Assura, which added an additional GBP 50 million of income. The adjusted earnings per share increased by 9% to 3.8p. Like-for-like rental growth generated an extra GBP 4 million of income, an increase of 6% over the previous passing rent or just over 3% on an annualized basis, driven primarily by rent review growth.

To date, we have delivered over GBP 8 million or 92% of the cost-saving synergies identified on the combination with Assura, together with our continued tight control on costs has resulted in EPRA cost ratio falling from around 10% to 8.7% in the first 6 months of the year.

The underlying portfolio generated a valuation surplus of GBP 18 million, driven by rental growth, which generated GBP 29 million of value, offset by just 1 basis point of yield expansion or a deficit of GBP 11 million. The yields across the portfolio have generally remained flat in the first half, which is consistent with the second half of last year.

Notwithstanding increased U.K. gilt rates and volatility in the interest rate market, we have not seen any impact on values in our sector, which continue to benefit from the security of our predominantly government-backed income and near full occupancy.

The investment portfolio and adjusted net tangible asset both remain unchanged at GBP 6 billion and 104p, respectively. The portfolio continues to benefit from strong fundamentals with 99% occupancy, a long 10-year WAULT and 76% government-backed income, supported by a strong debt demographic and political backdrop.

Looking at the financing, PHP has continued to receive strong support from both existing and new lenders to the group. We have made good progress in the first 6 months of '26 to refinance the majority of the bridging facility put in place to finance the acquisition of Assura, together with a number of short-term bank facilities across both PHP and Assura, which marks an important step on the group's journey to becoming a fully unsecured borrower of Assura.

A total of GBP 1.2 billion has been refinanced, including an GBP 800 million term revolving credit facility with a club of 8 banks, including 3 new lenders to the group. Additionally, we've taken on a new GBP 400 million 2-year term loan to refinance most of the bridging facility. This now leaves just under GBP 260 million outstanding, which is expected to be repaid from the proceeds arising from our deleveraging in the second half of the year.

The new debt facilities also reflect some of the benefits of scale arising from the combination with credit margins 40 basis points cheaper than the facilities being replaced. The group's average cost of debt remains broadly unchanged at a low 3.8% and is expected to fall further to 3.5% in the second half of the year once we have completed the deleveraging activities. The group now has GBP 300 million of undrawn liquidity headroom after capital commitments.

Turning to rental growth. We continue to be encouraged by the improving organic rental growth outlook generated by the portfolio. In the first 6 months of '26, we delivered an extra GBP 4 million of additional rental income derived mainly from rent review activities, which delivered an annualized growth rate of 3.2%, slightly ahead of previous guidance at 3%.

Importantly, open-market reviews delivered an uplift of 6.3% over the previous passing rent. The rent review teams are now fully integrated and sharing rent review evidence across the enlarged portfolio, which will assist with future negotiations and a significant future synergy for the enlarged group. The rental growth benefits arising from the combination will flow through into future years.

The portfolio is currently let off a low weighted average rent of GBP 200 per square meter with our asset management activities seeing rents rebased with uplifts of around 15% being achieved. 5 new developments completed in 2025 delivered an average rent of GBP 260 per square meter and the new development pipeline established in '26 across 4 schemes are seeing rents rebased even higher to weighted average GBP 280 per square meter.

This new rental evidence clearly sets a positive outlook for future rental growth, and we believe the reversionary potential of the portfolio remains strong as new rental evidence is set, and we continue to target growth in excess of 3% per annum.

PHP has now achieved its 30-year anniversary of consecutive dividend growth, and we approach the future determined to grow earnings to support the group's progressive dividend policy on a fully covered basis. There are 3 key pillars to achieving future earnings growth, a portfolio with strong reversion potential that will deliver future rental growth, supported by the security of our long-term predominantly government-backed income stream, a strong focus on cost control with one of the lowest EPRA cost ratios in the sector.

We've already delivered the majority of the GBP 9 million of cost savings synergies forecast and expect the future ratio to be below 9%. A strong track record in balance sheet liability management with strong support and good access to various sources of capital.

In the first half of the year, we have already managed to capitalize on the benefits of scale with credit margins 40 basis points lower on GBP 1.2 billion of debt refinanced with more refinancing initiatives expected in the second half of the year.

I will now hand you back to Mark, who will take a closer look at the group's property portfolio.

Thank you, Richard. It's a proud moment for Richard and I to be presenting such strong results to you this morning, and this being the first period of full consolidation of the PHP and Assura business.

Now I'd like to spend some time highlighting the attractiveness of the health care markets we operate in and some of the asset value-creasing activities we're currently working on.

PHP operates in 3 resilient health care markets, and the majority of our portfolio is primary care assets in the U.K. Since 2016, PHP has also built the leading primary care portfolio in Ireland, and the merger with Assura saw us inherit a quality portfolio of private hospitals.

The team that have come across the PHP during the merger have a leading expertise in private hospitals, having invested in the space for nearly 10 years. You can see on this slide the fundamentally strong investment characteristics of each of these markets, strong demand, fundamental tailwinds in the market, long leases, tenants offering a secure covenant, rental growth often linked to inflation and high-quality community-based assets, which are well invested with high return prospects.

Crucially, all 3 of these markets can be accessed using PHP's unique platform in a growth sector, which has been enhanced through our best of both approach to the merger, and we have good market share, giving us size and scale advantages.

I'd now like to move on to neighborhood health centers, which is an exciting growth opportunity, which will enhance PHP's future prospects. We were pleased to see that in April 2026, the NHS published its final guidance on what makes a neighborhood health center of the future. This is a further step forward on the plans to move services out of hospitals and into the community following on from the NHS 10-year plan published in 2025.

The labor government have continued to place a high priority on improving the NHS and the new Prime Minister has a long-standing belief in prevention being better than treatment. Alongside the launch of the guidance, the first wave of 27 existing buildings, identified as neighbor health centers were announced, including 3 PHP assets, which I visited with the team recently, and I felt really excited about this opportunity for the future.

These are all expected to have government grant capital available to improve the assets, extend the range of health services available to be delivered from our neighborhood health center. We will continue to work closely with local NHS stakeholders to assist in meeting their needs, and we expect this to present opportunities for PHP over the coming years, as I will show you as we walk through this morning's case studies.

Firstly, to Weston-super-Mare and the right time to present some of the value-creating work we are doing in our portfolio. Weston-super-Mare is a really good example of a new build development capable of being designated as a neighbor neighborhood center when we complete this in 2027.

I visited this asset under construction 3 weeks ago, and it's a large 5-story community health care asset, bringing together GPs, the local health Board, including the relocation of a number of specialist health care teams into this new facility and a community interest company supporting adult and child health services.

It's a great example of how PHP can work with capital from our primary care joint venture with USS to deliver returns to shareholders and critical new health care infrastructure for the NHS.

This is a GBP 19 million project, part funded by an NHS grant and only requires GBP 2.3 million worth of PHP investment. And the rental yield on this investment is boosted by PHP earning ongoing asset management fees as well as an attractive development fee, meaning our income returns are expected to be over 8% total returns well into double digits.

Most importantly, it also provides strong rental tone, in this case, in the mid- to high 200s rent per square meter, and that captures build cost inflation for rent reviews on other medical centers in the county of Somerset and beyond. Working with the joint venture in this way is capital-light, it's risk controlled and for PHP shareholders delivers attractive returns and vital rental evidence and demand for future rental values.

Next to the Tetbury Medical Center in Gloucestershire. This GBP 5 million neighborhood scheme in Tetbury is also being funded through the joint venture with USS. And the benefits are similar to Weston-super-Mare. It's capital-light, risk controlled. Our returns are boosted by the development fees, the ongoing asset management fees, and it sets a helpful rental tone in this region with PHP has a good representation and a portfolio of assets.

Tetbury is a good working example of opportunities we will continue to see around the country where new housing developments require new health care infrastructure to meet the Section 106 requirements.

And our experience tells us that no one is better at unlocking these opportunities than PHP. And we work with the NHS, both locally and nationally to deliver these schemes, which then allows the housing development to go ahead. And the growing population of Tetbury get a brand-new purpose-built medical center, a new pharmacy, we get a 30-year lease, fixed rental uplifts, high yield on cost in excess of 9% and double-digit total returns unlocking vital rental evidence along the way. Tetbury is a great scheme, and the team is well placed to do more of these in the future.

I'm also pleased to report that in addition to Weston-super-Mare and Tetbury, we have a growing pipeline of U.K. primary care schemes that we expect to be funded through our joint venture with Brockworth and Coleford, the next schemes we hope to get over the line and the yield on costs projected to be in excess of 12%.

The benefits of PHP are clear, with strong rental evidence generated, risk control through capital-light projects with a corresponding stronger returns aided by our ability to generate value through development and ongoing asset management fees.

I'd just like to conclude on this part of the presentation by saying the following. These opportunities are only created because of the expertise and the relationship that PHP has developed over many, many years, and the Assura merger has enhanced the reach and depth of these opportunities.

These particular schemes are inflation linked, removing ourselves and the NHS from any future district value constraints, enabling development to be set at higher rents per square meter, providing longevity and certainty to future cash flows.

The USS JV is the perfect partner to build this model with size and scale and has an effective cost of capital. They bring a strong understanding of infrastructure investing and a strong social impact that we provide from PHP expertise and the platform for growth to co-invest. And it's an exciting win-win situation for all stakeholders, and it's our pleasure to present these opportunities to you today.

I also wanted to case study some of the good work we are doing on the asset management side of the business. This includes a 100% owned asset in Wakefield, Yorkshire, illustrates how PHP's proven capability in asset management can drive value in the portfolio.

The Trinity Medical Center serves over 27,000 patients. It was coming to the end of its lease cycle. We've worked in collaboration with the local practice, the local health Board. We've worked with the scheme to extend and refurbish the property, adding 13 additional clinical rooms.

This increases the capacity for additional community-based services, including a minor operations suite out of our services, maternity, midwifery and the local MSK team. As well as an improved rental zone of the property, we have a new 25-year lease in place, a strong valuation gain in excess of the GBP 4 million invested in the property and improved energy efficiency. This project has delivered an attractive yield on cost and double-digit profit on cost.

The final asset I wanted to highlight to you today is our GBP 21 million development of a new private hospital and day surgery clinic in Peterborough. Building on a strong relationship with the tenant, Ramsay Health Care, for whom we have now developed 6 new build schemes. The unit will create additional capacity in the area, primarily for NHS-referred procedures such as orthopedics as well as accommodating an outpatient clinic and diagnostics unit.

Private hospital schemes such as this offer long 25- or 30-year leases with strong inflation-linked growth on rent reviews being run by a proven operator, experiencing growing demand, supporting a healthy rent cover. This asset is expected to transfer into the new private hospital joint venture when complete, and the PHP team and I are looking forward to attending a topping up ceremony on the 12th of August.

Before I reach my concluding remarks, I wanted to remind you of the PHP investment case, which has been significantly enhanced by the transformational merger with Assura, our joint ventures in primary care and private hospitals and our lower cost of capital going forward. Many of you will be familiar with the specific points on this slide. So, I won't go through each and every one.

But our portfolio of modern health care infrastructure assets offer investors the rare opportunity to access a specialist asset class with exceptionally high-quality secure cash flows in a resilient health care market that is a growth sector.

And over a sustained 30-year period, the management team have demonstrated an ability to deliver sector-leading financial performance and returns for investors. This is a really exciting time for PHP shareholders. The strength of the platform is second to none and the future growth prospects are compelling.

So, to conclude, we've delivered another strong set of results and our post-transaction objectives remain on track. The synergies are materially delivered. The integration is substantially complete. Our deleveraging is well on track. Our refinancing plans are well progressed and our bridge facilities will be repaid in the next few weeks.

PHP's 30-year track record of dividend growth is driven by the quality of our portfolio, our expert team, operational excellence and close to full occupancy. PHP is an income compounder. Our portfolio offers infrastructure-like characteristics with long leases, secure income, almost no vacancy.

Our earnings growth is supported by our operational capability, which drives recurring value with a positive trend in rental growth, enhanced volume of asset management deals, very close control on costs and a growing pipeline of risk-controlled development opportunities, we see continued momentum across the group.

I'd like to conclude by saying whilst there's been a lot of decent corporate activity at PHP, we remain very focused on the task to deliver shareholder value and a growing dividend backed by a portfolio of secure long-term and predictable income.

That concludes our presentation today. Thank you very much for taking the time to attend. And this will now be an opportunity where we invite you to ask the management team any questions.

[Operator Instructions] We will now take our first question from Chris Millington from Deutsche Bank.

I've got 2 really relating to the direction of leverage and just 1 on costs. So, the first one I wanted to ask really is, is it contingent on you hitting your LTV target of 40% to 50% in order to get an investment-grade credit rating? I'll go one at a time in order to make it a bit easier.

I'll pick that up. I'm sure Richard will be eager to chip in as well. Thank you, Chris.

So, the Assura bonds that we inherited as part of the merger have a strong investment-grade credit rating that we retained. In due course, as I said on an earlier slide, PHP is on a journey to be an unsecured borrower, and we expect to continue with that progress.

Fitch are the credit rating agency that rates the bonds and the company. Interestingly for them, when we read their analysis, some of which was updated quite recently, they very much look more closely at net debt EBITDA than they do to LTV. And we, as a company, do particularly well on net debt to EBITDA because of our profitability.

So, the answer to your question is strong investment grade determined by LTV and that being below 50%. The answer is no, it's not. Net debt to EBITDA is of greater importance. But of course, as a company, we have our financial policies for a reason, and we have a loan-to-value policy as well as a net debt-EBITDA policy.

Do you want to add to that?

Yes, it's probably just worth confirming that Fitch have just recently reconfirmed Assura's credit rating at BBB+ with a negative outlook, and that is likely to change to a stable outlook in the coming months as we deliver the JV deleveraging initiatives, which is positive. And obviously working with Fitch on a wider group credit rating, which I think we'd expect to be around the same when it finally gets published and we've delivered the deleveraging.

The next one is just about the disposals which are going to be required to take you down to that 40% to 50% LTV range. And just what your confidence is in achieving values around NAV in a world where we've got a slightly high cost of capital.

Yes. I mean we can only answer that question with what we see in front of us. Of course, we're live in the market. We are about to sell a portfolio of primary care assets into the USS joint venture. And obviously, the private hospital portfolio, which is well rehearsed and well known.

We won't be saying today exactly what value those assets will go into the joint venture. Bear with us a few weeks, and we'll be able to tell you. But I think we can say with confidence that the market won't be disappointed with the value which we're transferring those assets into the joint venture.

I was asked earlier by somebody about the sort of the general investment market. I think the debt market has been very strong, and that's underpinned a fairly robust investment market. But of course, in health care, barriers to entry are typically quite high. So, the opportunity to acquire assets in healthcare infrastructure is often very appealing. We see good demand for our portfolio and for the assets that we own.

Therefore, can you say with confidence that you're able to sell those assets at or close to book value. Just give us a few weeks and we'll be able to tell you for sure, but we're fairly confident about the general market conditions, even at a time of volatility, of course.

No, that's very clear. The last one is just about the cost base. You've got a very efficient EPRA cost ratio, which you outlined. Do you think it's now simply a question of increased scale to get that lower, or are there other internal, proactive things you can do rather than just scale?

Yes, I think it's a good question because we've always had a low cost ratio here at PHP for many, many years. It's been a very well-run, efficiently managed business, and that legacy will continue. I'm absolutely sure about that.

The improvements that you're seeing in the period we've just reported are principally down to the merger and the size and scale of the business. I've got no doubt that if we continue to grow from within the existing portfolio particularly, then we can become even more efficient. I believe, based on the latest information available in the market, we've got -- I think the second-lowest cost ratio. It would be nice to have the lowest cost ratio, I think we did have that at one point.

Look, size and scale are very important. Not all of our portfolio is triple net, and we do everything we can to run the business as efficiently as we're able to. But the merger has obviously made us even more efficient than we were.

Does that address your 3 questions, Chris?

Yes, it does.

The next question is from Kanad Mitra from Barclays.

I just have 1 on disposals. Obviously, we're supportive of keeping a higher economic interest in the hospitals joint venture at 50%. But that also means you probably have to dispose a little bit more from the rest of the portfolio. Just wanted to get some color on what you're thinking about on those lines? Are they going to go into USS JV? And is there enough scope to get them into the JV? Or will the JV max out?

Yes. Thank you. That's a good question. We've told the market this morning where we've updated on the joint venture on private hospitals that we are in exclusive and advanced stage discussions with due diligence, very well progressed. But we've also said, which clearly you picked up that on day 1 of this joint venture, we will be 50-50. There is the ability for that to change in the future based on both parties agreeing to do that. And that obviously is always an option that's available to us.

On USS, this is a well-established joint venture now. They're a great partner to have because they understand critical social infrastructure. So, we have a great alignment with them. They have a very efficient cost of capital. With this particular transaction that we're doing and those new developments I described earlier, all coming into the JV imminently, that will take us to over GBP 300 million.

I'm sure if USS were in the room with us today, they would say they'd like to see that increase further. So, we will engage with them, no doubt, in the near future about putting more assets into that JV and possibly expand the strategy and the remit of that joint venture to accommodate that, which will help us with the disposals if and should we decide to dispose more into that joint venture.

The other thing that's going on in the market is we've seen some new entrants. We've seen local authority pension funds of size and scale. We stated an ambitious target to deploy about GBP 1 billion of capital into primary care real estate. So that's another option.

But of course, we're confident about our valuation performance for the future. If nothing else, we're going to deliver rental growth that will come through to valuation. And we feel comfortable about having a loan-to-value in the low 50s. It's certainly more comfortable than when we're in the high 50s.

And we think there are a number of options available to us within our existing portfolio as a pathway to LTV being below 50%. But also, as I said, going back to Chris' first question, highlighting the importance of net debt EBITDA as well. And we think we can get there quite quickly, and then we can decide what we do from there.

There are currently no further questions over the phone. With this, I'd like to hand the call back to Mark for any webcast questions.

Yes, we've got quite a few, by the looks of it. So, in no particular order Bjorn from Panmure Liberum. Thank you, Bjorn. You're asking 2 questions. Is your preferred route to reducing LTV through more JV opportunities or through outright disposals?

I hope you think -- Bjorn, I just answered that with the previous question. But if not, you and I and Richard can pick that up separately.

And your second question, you mentioned that 92% of the GBP 9 million of annual cost synergies have now been delivered. Should we expect a further benefit in H2 from annualizing those synergies? Or is H1 already reflected the majority of the run rate savings?

Do you want to take that one?

Yes. So, there is more to come, Bjorn, in the second half, in particular around property costs. So, we've recently internalized Assura facilities management function, which they had outsourced, and we're just digesting that at the moment, but we know there's some significant cost savings to come through looking at a bit more detail in the second half of the year. But hopefully, when we report the full year results in early '27, we'll be able to give you an update, but we do expect more to come.

Thank you, Bjorn. The next question is from James Carswell at Peel Hunt. Thank you, James.

Great to see the progress on refinancing and deleveraging. Could you give some guidance on where the cost of debt will trend over the next few years?

Just looking back to one of Richard's earlier slides, you'll have seen James, average cost of debt currently running at 3.8% with the activities that we've described, we told the market this morning that's moving to 3.5%.

The question is how much further do you want us to go? I guess, take a longer-term view, the way we think about that, Richard, is that we've got access to a much wider pool of capital now, the bond market and beyond. We've described that the 40-basis points reduction in credit margins that we've achieved. We're very confident we can retain a strong investment-grade credit rating as we described. I think we see good stability in our future cost of debt.

Yes. No, I agree with that, Mark. And I think the key thing to know is obviously, we're not immune to rising interest rates. But obviously, the rental growth and reversionary potential of the portfolio should more than offset the impact of any future interest rate increases in the future.

That's a good point, actually. Thanks for mentioning that. Thank you, James. Next question is from Vance from Astrella Capital. I appreciate the resilient cash flow of the assets. How do you feel about asset valuations in light of net yields below all-in new cost of debt.

Yes, that's a question that comes up a lot. I mean the first thing I would say for a portfolio of high-quality secure income health care infrastructure assets to be valued at 5.4% net initial yield, I think, demonstrates real value. And we think potential upside, not just from rental growth, but potentially yield compression in the future.

Look, absolutely, if we had to refinance all of our debt, which is just under GBP 3 billion tomorrow at today's cost of debt, dynamics of that would be questionable, but that's not the way we're structured. We've got a very good capital structure. It was strong before Assura. It's even stronger now, not just the maturity profile, but the access to capital that we have.

And I think if there's any further questions around what that means to our cost of debt going forward, I think, hopefully, Richard and I, you feel have addressed that adequately from the previous question. So, thank you for that.

And I think we've got 1 further question coming in. It's from a shareholder. So, we better deal with this in a good way. This is from Shayan from Gravis Capital. How competitive was the process to find a JV partner? How many parties expressed an interest?

I'll just pause for a second while I think about how to answer that. As you can tell, I'm reading these out off the screen. I haven't seen any of these questions before. I mean, these processes, if I could describe it as a process, are always sensitive. And you never want to breach any commercial sensitivity.

So let me start by saying, first of all, the PHP Assura merger was a very high-profile transaction, competitive, often in the public domain. It was well known to the market that we've taken on some elevated leverage to complete that transaction.

So, the market knew that we had an intention and a stated intention to sell some assets and the obvious way for us to do that, as we flagged in August through to October last year was to realize some proceeds through our private hospital joint venture. All of that was in the market. So, we had a number of proactive approaches. We were not running a process at that time, very credible counterparties who wanted to work with us on that hospital portfolio.

We did appoint an adviser. We did not run a beauty trade type process. It came to our attention there were 1 or 2 extremely high-quality, long-term global institutional investors that wanted to work with us. And those types of investors, because of their reputation, the strength and depth of the capital that they manage and their way of working, they don't typically participate in a big wide duty type process. So, we kept it very, very tight.

It wasn't the world's biggest secret that we were intending to do a joint venture on our private hospital portfolio. And we were really delighted with the approaches that we had at the time, which has put us in a position to say here with confidence today that we are in advanced discussions on an exclusive basis.

Actually, often to -- some people need to be reminded, we said we'd get this JV done originally within 18 months which would have been 31st of December 2026. We're going to do that earlier, and we will get this done in the next few weeks, as I've repeated throughout the presentation. So sorry, that's quite a long answer to your question, Shayan, but it is an important question that you asked.

So, the second part of your question, how many parties expressed an interest? It's quite a long list, but that's not because we ran a process. That's because I think in many ways, the high-profile nature of the transaction we did last year. So, thanks again for your question.

Bjorn, I can see you've come back on. You've noted that you're seeing stronger rental evidence. Are you finding this is translating into higher rental values being supported by the district valuer across the wider portfolio?

To give me a break, do you want to just pick up on that?

Yes, sure. So, as we said in the presentation, asset management and development activities are seeing rents rebased 15% to 30% higher than the current passing rents across the portfolio. Obviously, we need to convert that through the rent review team into rental growth across the wider portfolio, plus there's obviously the benefit of the combined evidence across the combined portfolio.

So clearly, a lot of work for us to do to deliver that reversion in the portfolio. But we think there's a lot of reversion to come, and that's why we're sort of quite confident about our outlook on rental growth for the future.

Good response, Richard. If I could just add to that. When I was presenting earlier the case study slides, development and asset management, with the exception of Wakefield, all of those schemes were inflation-linked or fixed uplift projects. And I think it's quite important to point that out.

Very recently, our Head of Development, Rob James, attended on the company's behalf the Health Select Committee at Portcullis House in the House of Commons. And interesting enough, we had NHS England on the phone yesterday as a follow-up from that committee saying, "We've seen what you're doing in Weston-super-Mare and all these places that you described. Can we have a wider conversation with you about that and how we can drive more efficiency into the system?" And particularly capturing from our perspective, that opportunity, that growth that Richard described.

But looking through the lens of the NHS and the delivery of the 10-year plan and the new neighbor health centers, we are providing new critical modern health care infrastructure to the NHS. So that's good for them, and it's good for us and good for our shareholders. So, I'm glad you've given us the opportunity to point that out.

There's no further questions coming through on the forum. So, I think on that note, unless there's any further questions coming through by phone, I'd just like to take the opportunity to thank everybody for their attendance on a very busy day for the market, not just for real estate.

I think someone described it to me, one of our shareholders this morning as super Thursday. So, your time and attention is gratefully appreciated. You can see that management are very focused. We've got plenty to do over the next few weeks. We're looking forward to making future announcements. Thanks for your support and look forward to seeing you next time.

So good morning, ladies and gentlemen, and welcome to the 2026 Annual General Meeting of Primary Health Properties. This is our 30th Annual General Meeting. And apart from one during COVID, I'm delighted to say that I've been to every single one of them. My name, for those of you who don't know, me is Harry Hyman. I'm proud to be both the Founder, and also now, the Non-Executive Chair of the company, and I will be chairing the meeting.

I'm delighted to confirm, all of the Board are joining me here today, Mark Davies, who's our CEO; Richard Howell, our CFO. And congratulations to him and his wife on the birth of their second child the other day. Congratulations, Richard. Ian Krieger is here, our Senior Independent Director; Ivonne Cantu is here, our Non-Executive Director and Chair of the RemCo, and the [ non-profit ]; Jonathan Davies is here as well, our Non-Executive Director, and I'll say a few more words about him in a moment. Laure Duhot, our Non-Executive Director; and Dr. Bina Rawal, another Non-Executive Director on our Board.

I'd like to extend a very warm welcome to Jonathan, as this is his first PHP AGM. I'd also like to extend a welcome to those of you who were Assura shareholders and welcome you to the shareholder register of PHP. Jonathan was appointed to our Board in December last year, following the completion of the acquisition of Assura, where he was a long-standing NED and the Audit Committee Chair. Also attending today are the company's auditor, Deloitte; and our brokers, Deutsche Numis, Peel Hunt and Shore Capital. I'd also like to thank our corporate lawyers, CMS, for hosting the meeting today. And I think we can all agree it's a very convenient location, so close to the tube station. I'm delighted to welcome today shareholders joining the meeting remotely from South Africa. So welcome to you, and they're an important component of our shareholder register following our secondary listing on the Johannesburg Stock Exchange, a couple of years ago.

Now before we start the formal meeting, could I ask you all to mute your mobile phones. And as it is now just after 10:30 and as a quorum is present, we can officially start the meeting. In a moment, I'm going to ask Mark, our CEO, to outline the company's results, and the trading update that was released at 7:00 this morning to the stock exchange.

But before I do so, I think it would be appropriate for me to take this opportunity to thank you, all our shareholders, for your considerable support during the acquisition of Assura last year, which concluded at the end of October following a competition approval. This was not an easy deal for us to do, and we were very grateful to the support of Assura, and institutional shareholders and private shareholders, for backing us. It was a transformational deal in many respects and a long time in the planning.

We have now created a leading GBP 6 billion healthcare real estate investment trust invested in critical social infrastructure in both the U.K. and Ireland. We're planning to deliver material financial and strategic benefit to shareholders that will accrue from the scale of the enlarged business.

I'd like to thank all of my Board colleagues for their enormous commitment during calendar 2025, where we held an enormous number of additional meetings often at very short notice. And I'd also like to recognize the enormous efforts of our employees and my Executive Board colleagues working together to implement the strategy and our advisers who continue to provide ongoing support to the Board.

As I said, we now have a GBP 6 billion portfolio of long lease sustainable infrastructure assets, primarily let to government tenants and leading U.K. providers benefiting from increased security, longevity, diversity of product type, geography and a mix of rent review types. We've heard this morning in the trading updates about the improving rental growth outlook, reflecting the significant increases in construction costs that we've seen in recent years, together with the historically suppressed levels of open market value rental growth in the sector. We'll hear in a bit from Mark about the implementation of our significant cost and operating synergies following the merger and the expected earnings accretion and dividend growth for the company with the combined group having one of the lowest EPRA cost ratios in the sector.

As most of you know, as shareholders, we have a 29 or 30-year track record of increasing our dividend, and that is something that the Board and the executive team are purposefully going to continue to deliver -- to strive to deliver in the future. We do have work to do to reduce our loan-to-value into the target range of between 40% and 50%. And Mark will, I have no doubt, say a bit more about that. But we're very well progressed with delivering the GBP 9 million of identified cost synergies and integrating the 2 businesses, taking the best of both to deliver improved results for our shareholders.

I've already mentioned our 30-year history of dividend growth. And this year, we've already declared 2 dividends, one of which has already been paid, the second of which is coming in early May, and those indicate a 7.3p per share for the year, which is a 2.9% increase. We intend, as I said, to continue with our progressive dividend policy paid quarterly.

That's enough for me for the moment. I'm now going to hand over to Mark, our CEO, to say a few words on the results, the trading update and the company in general.

Thank you very much, Harry. Good morning, everybody, and thank you for joining us today. I'll briefly reflect on what's been an incredibly successful year for PHP. I'll provide more detail on our trading update that we issued this morning for the first quarter of 2026, and then conclude with our outlook.

The past 12 months has been a truly transformational year for our company. I'd like to thank my Board, our team, our advisers; and you, our shareholders; for your support in achieving this success with the highlight being the combination of our company PHP with Assura, which has created the U.K. market's leading healthcare REIT. The combination with Assura has significantly increased the scale, the quality, the profitability, the resilience of our business, firmly establishing PHP as the U.K.'s leading investor of critical healthcare infrastructure assets with a GBP 6 billion portfolio.

Importantly, this is not just about scale. The merger has made us more profitable. It strengthened our income base, expanded our opportunity set and enhanced our ability to deliver long-term value to our shareholders. As you will have seen from this morning's statement, integration has progressed well, and we expect to be fully integrated several months ahead of schedule, and we're already seeing the tangible benefits in both performance and our cost efficiencies.

Turning to our current trading. We've made a very strong start to 2026. Rental growth continues to improve during the quarter. In fact, we completed 199 rent reviews, generating an additional GBP 3 million worth of income that represents a growth of approximately 6%. And importantly, this is plus 3.4% on an annualized basis, ahead of last year and ahead of our guidance. Our contracted rent roll now stands at GBP 345 million, reflecting the size and scale and the benefits of the enlarged portfolio. And we've made excellent progress against our post-merger objectives.

We're on track with a very clear plan to reduce leverage into our 40% to 50% target LTV range, bring net debt to EBITDA below 9.5x deliver the GBP 9 million worth of cost synergies that we identified and told the market at the time of the combination. And we have high confidence our objectives can be delivered ahead of schedule, and we can say that with confidence, we've already delivered GBP 7.8 million, which is 87% of the synergy target.

And our primary care and private hospital JV vehicles are progressing positively, which I think reflects the resilience of our asset class, reliability of the income. We're also taking steps to further strengthen the balance sheet. The new vehicle for our private hospital portfolio will reduce gearing, provide an additional source of capital, enhance our growth and credit rating prospects. We expect to maintain a strong investment-grade credit rating. No debt maturities this year. We've got plenty of time to deliver on these important work streams.

And our development pipeline remains active and, of course, disciplined with 6 schemes currently on-site across the U.K. and Ireland with more coming through in the future. We're very encouraged by the government's 10-year plan and its commitment on neighborhood health centers, which really align very closely with our strategy. We're already involved with 3 PHP assets, delivering vital, critical, healthcare infrastructure in communities around the country, and we're included in initial wave with many more to come. PHP remains committed to a progressive dividend. We recently declared a quarterly dividend of 1.825p per share, that's equivalent to 7.3p, sort of ramping up the dividend there.

It's a long time actually.

That's about a 3% increase. Of course, as Harry proudly pointed out as Founder and now our Chairman, our 30th consecutive year of dividend growth.

Looking ahead, we remain confident. The enlarged group is performing well. We are delivering on our strategic objectives. Our rental growth continues to improve. Our focus remains disciplined investment, delivering long-term sustainable returns, maintaining an efficient cost base. So in summary, this has been a transformational year for PHP. We've started 2026 with strong momentum. We are in a growth sector. And the portfolio we own is resilient, it's stable, capable of delivering superior and low-risk returns.

Thank you for your continued support. There's a lot more to look forward to. In the future, management are extremely focused on delivering on our priorities and strong results in the future from our sector-leading platform. Thank you very much. I'll now pass back to Harry, who will turn to the formal business of the meeting.

Well, thank you very much, Mark. We will have an opportunity to deal with your questions in just a couple of moments time. But I now turn to the formal business of the meeting being the resolution set out in the notice of meeting. This notice was sent to shareholders on the 26th of March of this year. The notice together with the company's Annual Report and financial statements for the year ended 31st of December '25 have been placed on our website. Accordingly, the requisite notice of the meeting has been given, and we will take the notice as read unless there are any objections. Does anyone object? It's a very long notice. So hopefully, we can move straight on. Thank you. The notice is taken as read.

Before we move to the voting on the resolutions, I propose that we now have an opportunity to hear from you, our shareholders, if you have any questions that are relevant to the business of the meeting or to PHP in general. When you ask your question, would you mind telling us your name and stating whether you're a shareholder, proxy or corporate representative. If you are a proxy or a corporate representative, please give us the name of the shareholding that you are representing. I'm going to start with questions from shareholders joining on the telephone. Are there any questions from our friends in South Africa or other people attending?

No.

Okay. So we now have the opportunity for questions in the room. Yes, please.

[ Vic Charron ] private shareholder. Thanks for the update, and thank you for taking over Assura. I was very beat that you managed to do, appreciate your work that went into it. I have 2 questions, if I may. The first one is about your joint ventures, bringing in other investors. How are these joint ventures going to be set up? Who will be in control? Is it a share-based system or what? So if you do have a sort of disagreement, who decides? So that's the first question. Do you want the second one?

Yes, let's get them both.

The second one picks up on what Mark was saying about the neighborhood health service seems a good way to go. How involved are we in these, because there are certain parts of the country which desperately need some urgent land for it. So is this company sort of going around spotting the sites? Or are we sitting back waiting for someone else to do it?

Mark, do you want to handle those?

Yes, if I may. Thank you, Vic. Thanks for your questions. Thanks for your kind remarks and your support. On the -- joint venture side, I'll handle that in 2 parts, if I may. So we have an established joint venture with USS, who are a large superannuation fund, about GBP 77 billion of assets under management. They manage money on behalf of university teachers and professors. They are a very credible party to be working with, they have, importantly, to point out, a low cost of capital, because of the money that they manage. And we have an established joint venture with them, which today is around about GBP 200 million worth of assets under management. And we've announced with our results a few weeks ago, which we reannounced again this morning, the progress that we've made to inject further assets into that joint venture over the next few weeks.

I would point out that the way we think about joint ventures, we like the prospect of doing a 50:50 JV, and I will pick up on your other questions around control and potential disagreement or perhaps we could do an 80:20 joint venture. So on this occasion, we inherited this joint venture through the Assura transaction. We're very happy with it. We own a 20% stake in that vehicle. It has a very precise strategy as to the assets that it seeks to target from an investment perspective. And we own 20%, we are the manager. We are the asset manager, the property manager, the development manager, we receive fees as a consequence of doing that good work for the joint venture. So we get a higher return of capital.

We had a Board meeting with USS only this week on Monday. We like the relationship, it works very well. They're very institutional, very professional, straightforward. And as you may have seen from our recent results presentations, one of the reasons why we're saying a bit more about development is that because USS target a 7% return, we can create new neighbor health centers, new facilities at a yield as low as 4.5%. We know we can deliver at least 2.5% growth on those assets. So USS are getting a 7% plus return all day long, very low risk, and they really like that. And importantly, for us, where they're selling important rental evidence on those new schemes that we can then use to level up across the rest of our portfolio.

In terms of control, clearly, with an 80% holding, they'll always have the final say. In terms of the day-to-day control that sits with us as a trusted asset manager and property manager of the JV. If there's a disagreement, and God forbid that never happens, all members of the Board have good experience of doing joint ventures, sometimes in other companies. Relationship is always very, very important, as you can imagine. But the legal agreements, the framework of the JV is set up to protect all parties in the unlikely event that there were to be any disagreement. That's our joint venture for primary care with a specific mandate and a specific target for the investment case that sits around it.

We've said again this morning, we're making good progress on the establishment of a new vehicle and this will be for our private hospital portfolio. Through the Assura transaction, we now own around GBP 700 million of private hospital assets. We like the assets. They are delivering a good return, as you can see from this morning's announcement. And we know we can say with confidence, we expect that to continue. We haven't announced yet the structure of that vehicle. We could -- what we can say with confidence is that we will hold a stake no higher than 50%. So we have a choice, we could hold the 20% stake in the vehicle, which is very aligned with what we have with USS or we could hold a stake of up to 50%. But we haven't decided on that yet, and we'll make further announcements on that in due course. Is that a -- good enough answer to your first question?

So on the second question, I think you're absolutely right. I mean, I'm sure you'll find many companies that you invest in that are not too happy with some of the decision-making and the policies of this incumbent government. Clearly, when the government came in, it made the NHS its #1 priority. So when Rachel Reeves is raising taxes, higher taxes, the majority of that money is actually going into the NHS. 10-year plan is very good for our company because one of the 3 pillars of that plan is to move more services into primary care, and we now own 14% of all primary care real estate in the U.K. So we've got great market share. We've announced that we've got 3 of these new neighborhood health centers, we've got 11% of the initial tranche.

We should get 14% or more of the 250 that get announced in due course. No, we're not sitting around. I got the 3 schemes that we're doing. I was in Shepperton and in [ Lancashire ] a couple of weeks ago, which is one of them. I drove to St. Helens. For those who know, it's a rugby league town in the Northwest of England, and I going to Blackpool on the 10th of June. So I'm visiting all of those 3 sites, trying to establish how we work together with government, with the NHS to create these, I think, amazing new facilities that will expand, be improved, refurbished. We will generate more income, I'm sure, at good return levels. And then, of course, the social impact in these communities is enormous, because often we are alongside government prioritizing more deprived communities. Do you want to say anything else?

No. Thank you very much for that question and grateful reply. There's another question here. Yes, please.

I'd like to know a little bit more about your --

Would you like to tell us your name?

Yes, [ Rosita Sharon ] Shareholder. Shareholder through [ Harveys ]. I'd like to know a little bit more about the type of private health facilities. Are you building the sort of hospitals that One Health use or the sort of ones that are private/NHS like Cora Health, which is in London.

Okay. Well, One Health are using existing hospital capacity, and their new hub is going to focus on state procedures, yes. Absolutely. Do you want to pick up that, Mark?

Yes. So we've got a -- I think a really nice portfolio of around GBP 700 million, around 30 private hospitals in the U.K. We've got a private clinic exposure in Ireland as well. In fact, our most recent acquisition was a private clinic.

And it's purely private.

Private, yes. But if we --

Sorry to interrupt, but some of the existing ones do overspill from NHS, particularly the rest.

Yes. So there's a really good slide in our investor presentation deck that we can send you, which sets out all the portfolio metrics for our private hospital portfolio. What we like to say when we engage with shareholders, and we've just done a 4-week roadshow on this, is what we like about our portfolio is we don't have any sort of concentration risk to any one particular operator. So if you look at the operators in our portfolio, we've got all the leading private hospital operators. We've got HCA. We've got Ramsay, and we've got Circle, we've got Nuffield, we've got Spire. We've got pretty much and we've got Laya as well in Ireland. We've got all the leading operators of private hospitals in the U.K. and now in Ireland.

So we are well diversified. You made a specific comment particularly about building private hospitals. Nobody has been building private hospitals for many, many years. We are currently developing a new scheme with Ramsay in Peterborough. There's another slide in our deck, which sets out all the operators that we work with and the amount of income that they generate from the NHS, particularly Ramsay, sometimes over 80% of their income comes from the government looking to reduce its waiting list. So we like being in the sector. The rental growth that we've achieved in this short period of ownership is close to 4%.

Assura have been investing in private hospitals for almost 10 years. We've retained that team. We retain that expertise, and it's a sector that we would like to remain invested in. But we feel, given our strategy, the capital structure that Harry and I talked about earlier, we feel the best place for those assets is in a new vehicle, and we will retain an economic stake in that vehicle going forward.

Okay. Other questions, please?

Yes. My name is [ Phil Clark ], and I'm a shareholder, both PHP and Assura, and I was happy with both. First of all, many, many congratulations for this extraordinary deal, well done. It's great for the U.K. It's great for the shareholders. And most of all but how impressed I am that you actually kept the ship going whilst doing all this work. I know it's a monumental personal experience doing this sort of thing. And at least now we know why Mr. Harry was looking tired.

So first question -- I've got 2 questions, please. Yes, the loan to value down to 40% to 50%. Can that all be done with this one new JV -- [indiscernible] into this JV? Can that all be done with this one transaction? Or do you need to do more as well? And can I just flag in the moment of concern that as you push off these things into JVs, you're actually starting to give away value just to get the LTV down. And I know that's strongly desirable, but is there anything you can say about us being patient about how you get there, so that we don't give too much away. So that's the first question.

And the second question is to -- it's great we've got all this NHS backed income, it's really good. But now we're twice the size we were a little bit -- is there any -- you did mention that you completed 199 rent reviews, it's all great that you're doing them at a time. But isn't there a risk that the NHS might notice us perhaps come back and try to do some sort of overarching deal. Is there any risk there? Or is it just the whole thing --

Do you want to relieve me?

So dealing with the second -- your second question first, I think the NHS is perfectly aware of. And indeed, on our side, we would like and welcomes the combination actually, because eventually, it will lead to a lower cost of capital for us as a business, which we'll be able to pass on in better value for money for the National Health Service. The NHS is not awash with spare capital or cash. And so we have always fulfilled a very useful exercise for the NHS. We have been talking or people in the team have been talking to the NHS about doing more things on an index-linked basis, which would make the speed of the reviews faster and remove the onerous administrative burden of doing so many rent reviews. We are making progress on that, but it's a slow burn.

So in fact, nothing personally, I think it would be a great idea if we could move more of our portfolio on to index-linked and not have to go through the very cumbersome, slow and difficult process on open market values, but that's certainly not down to me or the team. It's down to a willing party on the other side. So Howell, over to you for the first question.

Thanks Mark. If I just finish up on that, the second point. Sad to say, Phil, that Wes Streeting is an Arsenal fan. So you're a big leagues fan. And I actually met him at an event last week. We're a partner with government. We're a partner with the NHS. And with 14% market share in primary care at a time where the government 10-year plan is to move more clinical services into primary care. We are working alongside one another. What we like to point out when we're given the opportunity is that the space that we provide to the NHS, to communities all around the U.K. and Ireland is affordable space. It's specialist by nature. There's not many companies that can do what we do with the expertise that we have, the knowledge, the skills, the relationships that we've built over many, many years.

But importantly, not only is the rent affordable at GBP 20 a square foot or GBP 207 a square meter and compares very favorably to other sectors, including the office sector and many others. So we like to point that out. But more importantly, according to the government's own research, we save the money by getting patients out of hospitals into primary care. So we think about it as a partnership approach. As Harry rightly pointed out, we welcome the prospect of doing an overarching portfolio type deal. We are pursuing some opportunities currently of that nature. And if we can continue getting new deals away with inflation-linked leases, which we're now seeing, that's hugely positive for the future prospects of the business. As you know, Phil, we've got a policy, it's a very disciplined that 80% to 90% of our income is stake backed. We're currently below that when we've completed our strategic objectives, particularly around the private hospital transaction that will get us back to where the policy suggests. So that's on the second point.

On your first point, loan-to-value, I mean it's not just the loan-to-value that we focus on the 40% to 50%. It's also the net debt to EBITDA, because that's what Fitch will look very, very closely at the time that we engage with them later this year, possibly early next to not just reinstate the credit rating, because we have a strong credit rating of BBB plus in the group currently. We want to retain that credit rating, obviously. And to do that effectively, we get through -- I don't think we'll do it in one step. I think it's a 2 to 3-step process. There's the USS JV, there's assets going in there already, but there's more to do. The private hospital transaction is a significant lever. And whether we hold a 50% stake or a 20% stake or somewhere in between will determine how quickly we get to the gearing targets.

We feel confident about the prospects of future valuation growth. That might be an unusual thing to be saying in this turbulent environment, but we know we're delivering rental growth. We think our valuation yields are stable even in this climate. We're a very resilient asset class. So it's possibly 2 or 3 steps before we get there, but we can do all of that this year, and I think we can do most of it in the summer. So look forward to future announcements. We've got results in July, not that far off. So we expect to be able to say as much as we can in the few weeks' time. And we're confident you can see that from the statement this morning, we're making the right progress.

And then you did make a point about giving away value. We totally get that. We totally get that. One of the reasons why we're confident about the private hospital transaction, for example, is that we know that the partners that we're talking to because they tell us and we see their models and we compare them with our own, and deliver double-digit returns, and that's hugely attractive. However, we do benefit from asset management fees, development fees, other fees potentially, and we can grow the platform. And it's an alternative source of capital. Often the best deals come along when market conditions are not receptive. And we can build a business of size and scale in a capital-light way alongside the public company, which is now -- well, we're not quite FTSE 100, but we're not far off. So I do get the point, and we think about that, too. But I think it's about a balance getting the capital structure right and the future growth strategy as well.

Thank you for those answers. Any other questions? We will be hanging around as a Board to answer questions after the formal part of the meeting. We have a more general chat, but there's another question there, yes, please.

[ Kirk ] small shareholder. But some people who are in the loop, so to speak, it does seem odd that you've been able to successfully maintain a much larger company, we should have been running efficiently and making a profit, perhaps they were paying too large a dividend. Why do you think you can run their assets better than they could do?

I think it's a question of style of management. I think Assura were trading profitably, and I don't think they've commendably built up their portfolios to a significant level. We had a difference in management philosophy and different style. And perhaps you can see that with the speed at which our team has moved to make the synergy savings that we talked about in our offer document. But our job is not to knock other people. Our job is to crack on and build the best from the excellent portfolio that we inherited. Mark, would you like to?

Yes. Thank you, Chris. Just one sort of, I guess, minor point that you mentioned a larger business. I mean the business were roughly of equal size pre-combination. We had about GBP 2.8 billion of assets and Assura portfolio was just over GBP 3 billion. So the businesses are actually quite similar. Yes, you can talk about efficiencies, cost ratios, PHP has always had a very strong track record in all of that. We've been very cost conscious, very, very cost efficient.

In terms of dividends, as a REIT, as I'm sure you're aware, Assura would have been obligated, in fact, really required to be paying out 90% or more of its earnings. So in some ways, there was little flexibility in their dividend policy, but there's nothing that we've seen from all the diligence and now we've owned the business for many months that would raise any concerns. We've been actually pleasantly surprised with the quality of the people we've retained, the quality of the portfolio, the upside potential, not just from a rental growth perspective, across the board.

And I think and finally, why do we think we could run it better? I think we can run it differently. The companies have historically had different cultures. Happy to explain what that means. But when we put the two together, we definitely get the best of both. And PHP's track record in asset management is undeniable, and it has delivered phenomenal long-term success. The shorter side of the business that we've retained, particularly around development, private hospitals and other areas gives me great confidence about the team and the platform going forward.

Yes, please.

[indiscernible] shareholders. Thank you for your [indiscernible] because I'm still young, so I want to ask a question like in 40 years time. So our U.K. rent values are very low. So do you think you are going -- in future, you are going to expand our business to Europe or if the American jet company want to take over us, so what should we do, because we want to keep these forever?

Will we still be going in 40 years? It may not be me. I hope it is you. Where to start on that question. So when we moved into Ireland in 2016, I think, from memory. We did so for 2 reasons. One, the yields were attractive, but also euro interest rates were lower. So the gap on new business was much more significantly favorable, and that's still true today. U.K. interest rates for lots of reasons are not very attractive. Inflation is really slightly ahead again. And there's a question on the fiscal rectitude of the British government. Those concerns don't seem to worry the euro market quite as much. So Irish business is still more profitable for us than British business. And we still have work to do on getting starting rents up within the U.K. portfolio. But U.K. is our core business, and we have looked at other European territories. But at the moment, we have no plans to go there, but we keep it under constant review.

And as to overseas interest, obviously, the American market is very, very different from ours as a healthcare market. But we're keen -- that's why we put a lot of effort into our share price, so that we don't become vulnerable to a takeover. Would you like to add anything?

No, I think that's a very good response. We do get asked that, well, maybe not the 40-year question too often, but the second part of your question, certainly, if you look at the healthcare REITs in the U.S., which you're referring too, they've been really successful. They are sort of the wealth towers of this world. Not that long ago, we had a market cap, not that widely different to our own of around $10 billion. Every time I look, they've gone up another $10 billion. So I think they're about $150 billion market cap now. It's a different market. And they are active in the U.K. They're active in Europe.

So -- but they're also more active in elderly care.

Elderly care, yes.

And elderly care for us has got more exposure to the operator type risk, which is something that we don't have on the U.K. primary care business where the government pays the rent kind of irrespective of the quality of the care that's being delivered by the GPs in Britain and Ireland. So that attractiveness of the income stream with nonoperator risk is a very significant benefit for us.

Yes. I think there's plenty of investors we've met in the last few weeks that would love the prospect of PHP being another sort of turbocharged wealth tower type healthcare REIT in the market that we're in, yes, it's a growth sector. I was very keen to point that out, but it's a different market, as Harry mentioned. And then with the U.S. theme, of course, we were successful acquiring Assura, and we were competing with U.S. private equity. On this occasion, 2 huge global infrastructure funds in KKR and Stonepeak. And if you look at inflows across the globe right now, most people are experiencing outflows.

But these infrastructure funds are getting more and more money coming in. So that money doesn't go away. It clearly likes our asset class because it tried to buy Assura. We were successful. And if the share price is behaving, I'm sure they'll continue to look at us. But yes, we're just focused on doing what we're doing. We've got a number of priorities right now, and we've got plenty to do.

A couple of questions. On LTV, you mentioned it's over 50% -- 60%. When are you able to say when you plan to bring it down to below 50%? And also something about the debt maturity profile over the next few years? Because I noticed the 10-year gilt rate is nearly -- it reached 5%?

Yes, it is.

So, I don't know how these going to impact the debt maturities profile over the next few years. And the second question is you mentioned the cost savings from the combined group, I think, GBP 7.8 million so far. Just a bit of color on how you managed to achieve that?

Yes, I can do that, and you already helped out with the LTV, as we're doing that. So the first question was when we completed the Assura transaction last year. We said that we would -- I mean, that leverage was signed first at the time. We told the market that's where we were heading. We told the market we had a very clear plan. And we told the market we would delever back in line with our policies by the end of this year -- end of this year being our financial year, which happens to be the calendar year.

I'm quietly confident we can do that sooner. There's the USS transaction that we've already announced. The private hospital transaction which is hopefully kind of get announced shortly, and we're making good progress on that. And if we do those 2 key steps, we continue getting rental growth, which will be positive from a valuation perspective. Those 3 factors will bring our loan-to-value down together with our net debt EBITDA. So I think on timing, I think we can do everything that we need to do this year, which is what we said at the time of the combination.

On maturity, there's a maturity chart set out in our presentation. We've got no maturities this year. There's some maturity next year that which we can extend for another 2 years. So we've got plenty of time. One of the -- I think, significant economic benefits of this transaction, which was actually a key attraction to KKR and Stonepeak by the way, as well is that Assura has done a very good job on the liability side of its balance sheet and it issued over GBP 900 million of unsecured listed bonds. They have pretty long maturity. Importantly for us, very low coupons, and we've retained those bonds, which are with us long in the future. Did you want to say anything else about that?

Yes. I think it's important to note that the vast majority of PHP's debt is fixed or hedged out for long periods of time. The only variable rate debt we have is GBP 1 billion bridging facility put in place to acquire Assura and the majority of that will get repaid when we complete the disposals into joint ventures, which we already discussed. So we have very limited exposure to bond rates in the short term. Obviously, as debt does fall due for maturity, we will have to look at where rates are at that time. But we have lots of other options in terms of raising debt.

And very important thing to note is the credit market has been very supportive of PHP throughout its history and is exceptionally supportive for us doing the transaction. And we hope to make some further announcements with our half year results, before that around the synergies we started to see coming through the cost of finance for the enlarged scale of the business.

On the cost savings point, I think you asked where is that coming from. So of the GBP 9 million, 60% of that is people related, and we've now pretty much delivered all of that. We've managed to do it as quickly as we have. Through taking over Assura, all of the Board has left or departed the combined business with the exception of Jonathan that we're delighted to have retained on the PHP Board, a bit of the Exco. I think Assura had 8 on Exco. We had 4 combined with 5. That's done. As you can imagine, higher cost in any business tends to be at the higher end, the Board and the Exco and the senior leadership team.

Sorry, Exco?

Executive Committee runs the business day in, day out. And then of the other 40%, that's not people related, 20% of that is professional fees, and we're making progress -- good progress on that. A lot of that sort of duplication advisers, et cetera. Some of that will come through later in the year, but we've made good progress. And then the final 20% around property costs, smaller offices, because we don't need all of the offices that the 2 businesses had when run independently. So there's some savings there and then other savings in direct property costs. So great progress and proud to be able to update the market with 87% of the way through. We only got management control of the business in November, because we had to wait for the CMA, as Harry said in his opening remarks, to finish their work. So I think we're in a good place.

Okay. I think at this point, we will move to the formal proceedings. And as I said, we will all be around for a short while afterwards, if you got something you didn't want to ask in the full glare of public. So off we go. In line with best practice and as stated in the notice of Annual General Meeting, all the resolutions set out in the notice will be decided on a poll, which means that shareholders have one vote for every share held in the company.

Accordingly, as Chair, I'm now calling for a poll to be taken on all resolutions put to the meeting, and appointing our registrars Equiniti as the poll scrutineer. If you have already voted by proxy, then you don't need to complete the poll card. Your vote will be taken into account automatically. If you have voted by proxy and wish to change your vote, you can complete the poll card and your new voting instructions will be taken into account. Those of you entitled to vote will already have been given a poll card at registration. If you don't have a poll card or if you need additional poll cards or a pen, please raise your hand now and Equiniti will come and assist you. And we are -- we have one for you, please.

So we will explain that you need to complete the poll card by inserting your full name and address in block capitals and inserting the name of your corporate representative if that applies. Please indicate on the poll card how you wish to cast your vote in respect of each resolution by putting a cross in one of the boxes for, against or withheld. Please note that a vote withheld is not a vote in law and will not be counted in the total votes. If you wish to vote only some of your shares on a particular resolution, then the poll scrutineer will explain to you how to complete your card. Please ensure that you sign the poll card and provide it to the registrars.

So I now propose formally that each of the resolutions set out in the Notice of Meeting and also on the poll card is put to the meeting each as separate resolutions. Resolutions 18 to 21 are special resolutions and require 75% of the votes cast to be passed. All other resolutions are ordinary resolutions requiring just a simple majority. The full text of each of the resolutions and the explanatory notes are set out in the Notice of Meeting. So I now declare the poll formally open. And here are the votes that have been received already. So it's almost unanimous for most of the resolutions for, as a few that are sort of around the 90% level. So we've got overwhelming support for those resolutions.

The poll will close 10 minutes after the end of the meeting. And if you have any questions, as I said, please speak to the registrar's representative who will be in the room. Many shareholders have already sent a proxy to the company appointing me to vote on their behalf. I'll therefore vote these shares in accordance with the instructions given. Just to be clear again, shareholders who have already lodged their proxies do not need to complete a poll card. Sorry, it was that early to share the votes, there we are.

As you can see, we have overwhelming support for all of the resolutions. So thank you to everyone who is a shareholder who voted. If you're attending in person, these votes will be added to the figures that are shown, and we will be announcing the final results as soon as practical via RNS in the U.K. and SENS for the JSE.

Ladies and gentlemen, that concludes the formal business of the 2026 AGM. Thank you for your attendance, excellent questions, and I now declare the meeting closed. Feel free to join us for refreshments, tea, coffee or water in the adjoining room, we'll be around to answer further questions. And thanks very much to those attending in South Africa. We hope to see you in person soon. Thank you very much, ladies and gentlemen. End of the meeting.

Thank you. This does concludes today's meeting. You may now disconnect.

Good morning. Thank you for joining us. We are here today at a very exciting time for our company on the day of publishing a very strong set of results. We recently completed a transformational merger with Assura plc, in a short space of time have made great progress delivering the strategic and financial benefits of this transaction.

Since our well-received trading update on the 13th of January, we've made further progress on our strategic priorities. I'll bring you up to date on that today plus share with you our well progressed discussions with joint venture partners on our primary care and private hospital assets.

You will also see from our presentation later, there are a number of positive learnings from our enlarged portfolio review. And the further upside we can see will deliver value in the future.

This has been a transformational year, and this is a strong set of results. I've already alluded to the positive impact of the combination with Assura. And I'm delighted to say that despite doubling in size, we've retained a focus on delivering growing returns for shareholders on both an absolute and a per share basis.

We've delivered 4% growth in adjusted earnings per share and our dividend remains fully covered. This was achieved through over 3% growth in rental income, which was slightly ahead of the guidance we laid out at our Capital Markets Day in July. And we've maintained a close control of costs, where our EPRA cost ratio is below 10% and the strength of our capital structure remains with a 3.7% cost of debt, most of which is on a fixed basis.

We are pleased to be reporting a GBP 48 million valuation gain in the year with yields stabilizing in the second half of the period, providing clear evidence we are invested in a stable and secure asset class in a sector with structural growth.

EPRA net asset value per share NTA was reduced by one-off transaction reasons principally due to the share exchange ratio and the transaction costs incurred but increased on an underlying basis following the valuation gain in the year, and adjusted NTA, which reflects the positive fair value of our long-term fixed rate debt, stands now at 104p. Richard will walk us through the detail on this shortly.

All of this leads to confidence in our outlook to announce a further 3% increase in our dividend to 7.3p per share for 2026, which I'm pleased and proud to say is our 30th consecutive year of dividend growth. And we entered this year with a portfolio that offers secure, long-term and growing income with 99% occupancy, a long 11-year WAULT and nearly 80% of our recurring income from government-backed occupiers, delivering essential health care services as demand for investment in health care infrastructure continues to grow.

Next to give you an update on the good progress in the short period that we have had management control of Assura. You'll remember that we've got overwhelming support from Assura shareholders in August. But the CMA only completed their review, helpfully with no conditions, at the end of October.

In the 4.5 months since then, we have made very good progress. The integration of the 2 businesses is progressing ahead of schedule, and we are delighted with the quality of the portfolio acquired and the people who we are retaining. We are ahead of schedule with over 80% of cost synergies, GBP 7.5 million already delivered. The integration is now expected to complete ahead of schedule by the end of June, only a few months away.

In addition to the synergies announced, we have identified further upside potential from the portfolio. Our other immediate focus is on deleveraging. As I'll come on to shortly in more detail, we've made strong progress, both in terms of moving assets into our existing joint venture with USS, and establishing a new joint venture for our private hospital portfolio.

Our portfolio, which now stands at GBP 6 billion of critical infrastructure health care assets is well placed to benefit from organic rental growth across both open market reviews, which continue to show a steady upward trajectory and the 40% of our portfolio, which is index linked or fixed reviews.

The portfolio is extremely well positioned with good market share in health care markets, which deliver social value to local communities across the U.K. and Ireland, plays to the changing demographics of an aging population with growing health care needs and supported by the political will to move health services out of hospitals into community-based locations.

We are very pleased to buy the Assura transaction, where we've inherited a primary care joint venture with USS, who are a large superannuation scheme with GBP 77 billion worth of assets under management and a lower cost of capital with an aligned strategy in health care infrastructure assets and a commitment to deliver positive social impact.

Over the last 4 months, we've enjoyed getting to know the team at USS, working closely together, and we are confident this will be a prosperous and long-term partnership for all parties. To reaffirm our confidence, we've already agreed commercial terms on GBP 103 million of assets in U.K. primary care and subject to final due diligence, this transaction is expected to complete in Q2 2026, which takes the JV AUM to around GBP 0.3 billion. There are a number of significant benefits to this partnership.

Firstly, the JV provides an alternative source of capital at an efficient cost. Secondly, our JV partner also shares our confidence in the long-term growth prospects of our sector and there is a strong willingness to grow and scale up this JV in the future, which will include dedicated strategies around neighborhood health centers, lift projects and other NHS infrastructure assets.

Finally, the JV is a great enabler of new development opportunities in primary care. It's worth noting in only a short period of time, the joint venture has 2 new developments on site in Weston-super-Mare and Tetbury with 3 in the pipeline. This risk control development strategy allows us to produce vital rental evidence to unlock future rental growth in the future.

Just to remind everybody that PHP has a 20% interest in this joint venture and is the asset and development manager, and therefore, receives management fees, forward services which generate a higher return on capital.

So to conclude, we are very happy with the USS joint venture on primary care assets, and this has the ability to get to GBP 400 million of assets under management and beyond in the future.

Now moving on to our private hospital portfolio. Firstly, I'd like to point out, as you can see from our results this morning, our GBP 0.7 billion of private hospital assets are performing very strongly. And during the several months of our ownership, we've seen rent cover improve, and we're seeing the benefit of owning assets in the sector with inflation-linked long leases, leading to a guaranteed growth in income and an ability to capture further upside through asset management and development.

We feel that the best strategy for private hospitals going forward is to work with a highly credible joint venture partner to unlock these opportunities with scale and expertise, and we know from the discussions that have taken place over the last few months, there are a higher number of institutional investors who are underweight in U.K. health care who want access to a higher earnings yield and rental growth.

We have 4 credible offers that we are evaluating, and we expect to make a decision on our preferred partners soon, whilst they and we continue to undertake due diligence. There is a high degree of confidence that these assets will deliver double-digit total returns, hence, the quality of the counterparties we are in discussions with reflects this.

When we have selected our new partner for our private hospital joint venture and with the work that's already been done and the progress that's been made, we expect to complete this transaction in the summer just a few months away. Because the private hospital market continues to grow and there are opportunities that we are aware of, which will deliver future value, we want to ensure we choose the right partner and the right structure.

But for the time being, the capital that we released from undertaking this transaction will allow us to deliver in line with our financial policies to delever, and we're looking forward to seeing our shareholders over the next few weeks so we can obtain a feedback on our strategy in this high-performing asset class.

We do feel that retaining an exposure to the private hospital portfolio will allow future value creation to be captured by our shareholders. Before I pass on to Richard, I wanted to take the opportunity to remind you all of the financial policies of the enlarged business going forward. These policies make sure we make decisions about our business that are aligned with our strategy and are incremental to earnings and retaining high-quality, growing cash flows, and we do this in a disciplined way.

It's worth pointing out that we have an 80% to 90% government backed income target. We are currently at 76%. But when we have completed our private hospital joint venture, this will get us back in line with policy, and we've always had a focus on organic rental growth and continue to target plus 3% to deliver sector-leading risk-adjusted total returns. We are currently delivering above this level and the long-term prospects for our sector are compelling.

On the capital structure side, we are targeting strong investment-grade credit rating of BBB+ or better. This will be achieved by meeting our LTV target of 40% to 50% and a net debt-to-EBITDA below 9.5x. Because of the stability of our asset value and security of income, we can be afforded to be above these levels as a temporary position following the Assura transaction. The strategy I presented on joint ventures is the most effective way to get there, and we are confident of achieving our target of strong investment grade later this year.

At this timely point, I'll pass you to Richard who will present the financial results.

PHP has now entered its 30th consecutive year of dividend growth. And last week, we announced a second quarter dividend of 1.825p equivalent to 7.3p on an annualized basis, an increase of just under 3% on 2025 dividend.

Adjusted earnings in '25 were driven by 4.5 months of income arising from a combination with Assura which completed in August, adding GBP 39 million of additional income to adjusted earnings, which increased to GBP 131 million. This resulted in adjusted earnings per share of 7.3p, an increase of just over 4%.

Like-for-like rental growth generated an extra GBP 9 million of income, an increase of 7% over the previous passing rent of just over 3% on an annualized basis, driven predominantly by the improving rent review performance with growth on an open market basis also continuing to improve.

The underlying portfolio generated a revaluation surplus of GBP 48 million, driven by rental growth, which generated an extra GBP 72 million of value, offset by 3 basis points of yield expansion in the year or a deficit of GBP 24 million.

Yield expansion all happened in the first half of 2025 with the group's net initial yield remaining flat in the second half, albeit the overall yield moved slightly, reflecting a change in the composition of the portfolio following the combination with Assura.

We have continued to maintain a tight control on costs with an EPRA cost ratio of just under 10%, a reduction of 30 basis points in the year, and this is expected to fall further closer to 9% in 2026 as a GBP 9 million of cost savings synergies arising from a combination flow through to earnings.

The investment portfolio now stands at GBP 6 billion, resulting in an EPRA net tangible asset of 99p, down 4%, reflecting the one-off transaction costs and the impact of the exchange ratio agreed on a combination with Assura. The portfolio continues to benefit from the strong fundamentals with 99% occupancy, 11-year WAULT and 76% government backed income supported by a strong demographic and political backdrop.

Looking at the movement in the net tangible asset in a bit more detail. The key impact in the movement in the year is the acquisition of Assura, which had a negative impact of 6p. 3p arose from GBP 72 million of acquisition costs incurred by both Assura and PHP and 3p from exchange ratio offered as part of PHP's final offer.

It's worth noting that the transaction costs include over GBP 8 million of stamp duty incurred to acquire the shares in Assura, but this saved over GBP 150 million or 6p per share as stamp duty that would have been incurred if we had purchased the Assura portfolio in the open market.

Earnings of 7.3p fully covered the dividend paid of 7.1p at a GBP 48 million revaluation surplus equivalent to 2p per share resulted in a year-end net tangible asset of 99p. If we add on the mark-to-market of the fixed rate debt not recognized under IFRS accounting, equivalent to 5p per share, the adjusted NTA is 104p, which is a true value of the enlarged group for investors to consider.

In 2025, we received strong support from the credit markets for the combination with Assura with a record amount of financing activity, including a GBP 1.2 billion unsecured bridging facility to fund the transaction, refinancing GBP 357 million of Assura private placement debt. And we work with Fitch to reconfirm Assura's credit rating post merger at BBB+, avoiding any change of control on their low coupon GBP 900 million of listed bonds.

The enlarged group's LTV now stands at 57%, with a low average cost of debt of 3.7% and the net debt-to-EBITDA ratio of just over 10x. The enlarged group has total debt facilities of approximately GBP 4 billion, of which GBP 3.4 billion is drawn, providing just under GBP 0.6 billion of liquidity headroom after capital commitments. As discussed by Mark, we have a clear strategy to get our leverage back below 50% and net debt-to-EBITDA ratio back below 9.5x.

The 2 key deleveraging priorities include the transferring of primary care assets to USS JV worth GBP 103 million and establishing a new private hospital joint venture. Both of these initiatives are expected to realize around GBP 700 million of proceeds and reduce leverage back to 50% on a pro forma basis.

The proceeds from deleveraging initiatives will be used to partially repay the GBP 1 billion acquisition and other facilities across the group. PHP has now committed to becoming unsecured. And consequently, we have commenced negotiations to refinance the balance of the acquisition facility not repaid from sales to JVs along with PHP's and Assura's existing revolving credit facility.

We have recently received in the last few weeks, offers from 8 banks to form a new club term and revolving credit facility worth GBP 800 million with maturity profiles spreading over 3 and 5 years with further extension options. Commercial terms are currently being finalized and documentation is expected to commence shortly with the aim that this completes later in the second quarter of 2026.

The new facility will provide the group with approximately GBP 300 million of undrawn liquidity headroom and will deliver further reductions in the current credit margins of approximately 30 basis points.

We are also in the process of establishing ability for PHP to access the listed bond market and are currently documenting an EMTN program, which allow us to tap the bond market repeatedly over time in the future. Following completion of the above refinancing initiatives, we expect average cost of debt to remain broadly unchanged at 3.7% based on current interest rates, with a lower credit margins offsetting the recent increases in gilt and swap rates.

We continue to be encouraged by the improving organic rental growth generated by the portfolio. In 2025, we delivered extra GBP 9 million of rental income derived mainly from rent review activities which delivered annualized growth of 3.2%, slightly ahead of previous guidance at 3%.

Importantly, open market review has driven an uplift of 6.5% over the previous passing rent or 2.1% on an annualized basis, up from 1.9% in 2024. We've already completed the integration of the 2 rent review teams and are now sharing rent review evidence across the enlarged portfolio, which were assessed with future rent negotiations and a significant synergy for the enlarged group.

The portfolio is currently let off a low weighted average rent of GBP 200 per square meter, and our asset management activities are seeing rents rebased with uplifts of around 15% being achieved. Five new developments completed in 2025, delivered an average rent of GBP 260 per square meter, with the current development pipeline across 6 schemes seeing rents being rebased even higher to a weighted average GBP 280 per square meter. This new rental evidence clearly sets a positive outlook for future rental growth, and we continue to target growth in excess of 3%.

PHP has now achieved its 30-year anniversary of consecutive dividend growth, and we approach a future determined to continue to grow earnings to support the group's progressive dividend policy on a fully covered basis. Our 3 key pillars to achieving future earnings growth. Firstly, a portfolio with a strong reversionary potential that will deliver future rental growth supported by the security of our long-term, predominantly government backed income stream and long-term occupier retention rates.

A strong focus on cost control was one of the lowest EPRA cost ratios in this sector, and we're well on our way to delivering the GBP 9 million of cost saving synergies expected from the merger, which should result in EPRA-cost ratio close to 9% in the future.

A strong track record in balance sheet, liability management with good access to various sources of capital, notwithstanding the recent increases in interest rates and volatility, we still expect to be able to maintain the group's average cost of debt close to the current 3.7% once we've completed the various refinancing initiatives that are in hand.

I will now hand you back to Mark who will take a closer look at the group's property portfolio.

Thank you, Richard. PHP now operates in 3 resilient health care markets. I'd now like to spend the time highlighting the attractiveness of the health care markets in which we operate, markets that we believe will continue to deliver structural growth in the future.

As many of you will know, majority of our portfolio is primary care assets in the U.K. Since 2016, PHP has also built the leading primary care portfolio in Ireland and the merger with Assura saw us inherit a portfolio of private hospitals. The Assura team that have come across to PHP have a lean expertise in private hospitals having invested in the space for nearly 10 years.

What we highlight to you on this slide is fundamentally strong investment characteristics of each of these markets. Strong demand, fundamental tailwinds in the market, long leases as standard, tenants offering a secure covenant, rental growth with inflation linkage, high-quality, community-based assets which are well invested with high return prospects.

Crucially, all 3 of these markets can be accessed using PHP's unique position in the health care market, which will be enhanced through our best of both approach to the merger, and we have a good market share, giving us size and scale advantages.

The state of the NHS and the pressure it is under is well documented. This chart shows the elevated levels of NHS waiting lists, which have remained high for a sustained period post COVID with no signs of a swift drop.

The solution is similarly well recognized. The need to move services to the community out of NHS hospitals, which face continued pressure of inefficient processes, inadequate buildings and underinvestment. This is documented in the NHS' own 10-year plan backed by the government's clear priorities of hospital to community, which is aimed to improve the health care service and save the NHS money.

The 2025 autumn statement supported this with a plan to build 250 neighborhood health centers. PHP is well placed to support the investment in these assets and the need for better primary care facilities in communities, whether through newbuild developments, improving existing assets, the creation of diagnostic hubs and the increasing use of private hospitals.

In the last few weeks, we've met with senior government officials, including the Health Minister, to discuss how PHP can play a key part in the delivery of the plan. As the leading investor, manager and developer of health care infrastructure, we are an important stakeholder.

The opportunity for the private sector to help our health care system continue to grow. The market has several well-established operators with clear and profitable business models and have seen sustained growth across the 3 channels of private medical insurance, NHS referrals or self-pay patients.

The chart here shows how private sector revenues have more than doubled since 2010. However, the number of hospitals has only increased by 5% in the same time. This has driven an improvement in profitability and rent cover, but it also means there are opportunities for expansions and investment, including development, at a time of growing demand and a lack of supply. PHP has the team and the capabilities to benefit from this growing market.

Following the merger, PHP has enhanced capabilities to unlock future growth. As we've gone through the integration, we've applied a best of both approach to ensure we have expanded our skill set and opportunities.

In asset management, PHP's long-standing track record and approach has been enhanced with access to knowledge, skill set and relationships of our enlarged team. We can apply this relationship-based approach to a greater number of assets in each region to drive further opportunities and generate greater rental evidence to benefit our portfolio through income growth and value creation.

In development, our skill set has been strengthened and pipeline has grown, not just in the U.K. primary care, which we can unlock financially through utilizing our joint venture to fund but also in private hospitals, which offer greater scale of opportunity and stronger returns.

PHP has long-standing credentials in asset management and continues to deliver at a time of change and opportunity. In the past year, we've exchanged on 49 projects across asset management, lease regears and new lettings. And moving forward, we have 51 projects in the advanced pipeline with many more in the earlier stages of negotiation.

We're talking about relatively small amounts of capital invested, but the prize is the rental evidence that is created, as Richard has already highlighted. These schemes at Sprowston in Norwich, which completed during the year, and Ryalls Park in Yeovil, which is currently on site, are both quite similar and reflect a sample of some of the good work undertaken by the team.

Just over GBP 1 million of capital has been invested in each refurbishment and improvement of existing space undertaken and a small but meaningful extension to the property crucially offering an ability to provide a greater range of services to a greater number of patients in a growing local population and an increase in rent.

In both cases, the rental evidence will be set at circa GBP 220 per square meter, consistent with the rates across our advanced pipeline, providing evidence for our wider portfolio, and an ability to drive rental growth across a larger portfolio, proving the benefits of scale.

As I mentioned, our development capability set has strengthened following the merger, and we have an exciting and growing set of opportunities. In the U.K., we're on site with schemes at Weston-super-Mare, which is earmarked to be one of the first new build neighborhood health centers, and Tetbury, which both set attractive rental evidence.

These are both within the existing joint venture, meaning PHP's capital contribution is only 20% but our returns are boosted by fees for development and asset management. And we see the joint venture as an avenue to unlock a growing number of U.K. schemes in primary care.

In Ireland, we have 3 primary care schemes on site and EUR 60 million of potential schemes in the pipeline. As well as offering slightly stronger returns, these are boosted by the ability to fund with euro debt, which are generally has lower borrowing rates than sterling.

In private hospitals, we have a GBP 21 million development scheme on site in the U.K. and a number of potential pipeline schemes in the early stages. This is a fast-growing market, which has the potential to offer high returns, which we can access through our private hospital joint venture, and our preferred partner will share our ambition for growing the size of the portfolio. We also acquired our first private clinic asset in Ireland during 2025.

PHP's disciplined approach to development, however, has not changed. It will remain risk controlled, with a focus on returns and we will only undertake opportunities with a low level of risk, meaning fixed price construction contracts with tenants signed up to long leases prior to capital being deployed and construction commencing.

Before I reach my concluding remarks, I wanted to remind you of the PHP investment case, which has been significantly enhanced by the transformational merger with Assura on our lower cost of capital going forward. Many of you will be familiar with the specific points on the slide, so I won't go through each and every one. But our portfolio of modern health care infrastructure assets offers investors the rare opportunity to access a specialist asset class with exceptionally high-quality cash flows in a resilient health care market that is a growth sector.

And over a sustained 30-year period, the management team has demonstrated an ability to deliver sector-leading financial performance and returns for investors. This is an exciting time for PHP shareholders. The strength of the platform that's second to none and the future growth prospects are compelling.

This is a strong set of results, and 2025 was a transformational year. We've established the U.K.'s largest listed health care REIT, and this is our 30th year of consecutive dividend growth. Integration is already delivering a best of both approach is leading to a very strong platform. We're highly confident in hitting GBP 9 million synergy target in the next few months, and deleveraging remains the priority, where we have a clear plan to do this through joint ventures.

We are well placed to continue delivering shareholder returns and the combination has brought a deeper capability set, a larger pipeline and more opportunities, improving rental growth outlook which will be needed to fulfill the NHS 10-year plan and invest in community health care. Owning health care infrastructure assets will deliver long-term sustainable growth.

Thank you for taking the time to attend our presentation and we'll now open the floor for questions.

[Operator Instructions] We will now take our first question from Max Nimmo of Deutsche Bank.

Just a couple on the deleveraging process. The ambition to get to GBP 400 million in the USS JV, do you have a time line for that? Is that something if we get this transaction done today by the midpoint of the year, could we see another transaction in the second half of the year?

And the second one, if I can, just following up on the private hospital portfolio. It's really encouraging to see that there's at least 4 credible parties there that are interested to invest in that. Is -- could you think about doing a club deal on this, potentially doing with multiple partners, which might eventually lead to a bigger fund overall? Just interested to get your views on that.

Thanks for your feedback and thanks for your questions, as always. I'll pick up both of those. Yes. I mean deleveraging is obviously a key priority for management right now. And we were pleased to present those 2 slides to you on the USS JV and the progress that we're making on the private hospitals.

On time line, we've obviously announced this morning the progress that we've made with USS, and we expect to get that done by our half year in June. That will take us to about GBP 0.3 billion of assets under management. The JV was set up with a capacity of GBP 0.4 billion.

So there's clearly capacity there that we can grow into, and we're working with a very willing partner who shares with us the potential value creation in this sector, but also the importance of owning critical social health care infrastructure assets. So we'll get that transaction done by the midpoint.

In terms of the ability to grow the joint venture with USS from that point beyond, we're not saying anything about the ability to do anything just now in the second half. But what we can say with confidence because we've spent a lot of time with the USS team, getting to know them better, understanding their strategy for this vehicle going forward, and they have a strong desire to grow this JV to a more significant size and scale.

We can do that together looking at obviously existing assets that we now own, of which we own double the size portfolio that we did until very recently. But we also know from discussions that we've had with USS, that they share our ambition to look at neighborhood health centers, lift projects coming down the line and other health care infrastructure assets.

So we'll say more on that in due course, Max. But in the meantime, we're just focused on getting this initial tranche of assets over the line and being able to do that with confidence by the midpoint of this financial year.

Moving on to the private hospitals. Yes, you're right, it's very positive that we are talking with 4 highly credible counterparties about the prospect of doing this private hospital joint venture. I think we're reassured by the quality of partners but also their desire to invest capital into health care infrastructure assets because they see the valuation upside and the growth that can be captured from investing alongside us in the future.

In terms of the second part of your question on whether we would do this on a club basis or on a bilateral basis, I think it's far more likely we would do this on a bilateral basis, but we'll keep our options open. We are completing our own due diligence whilst our partners complete their due diligence.

And timing-wise, we'd like to be in a position where we can choose a preferred partner before the end of March and certainly no later than the end of April, and on that basis, we're confident we can get that transaction closed out, again aligned with the USS joint venture by the midpoint of this year. i.e., we're targeting the end of June and certainly no later than the summer of this year, which is ahead of our original timetable that we set out at the time of the Assura merger last year.

And we'll now take our next question from Matthew Saperia of Peel Hunt.

Two quick questions from me. The first one, a follow-up to Max's question about the private hospitals joint venture. Could you just talk about the characteristics that you'll use in choosing one of the 4 potential partners to progress with?

And then the second question, probably for Richard. Richard, you talked about establishing an EMTN program for public bonds. Can you just talk about how progressed you are on that and sort of what the timing might be around accessing the bond market?

Thank you, Matt. Thanks for your comments and questions, as always. I'll pick up the first question, and then I'll pass it on to you, Richard, if that's okay to pick up the second question.

Look, on private hospitals, we've obviously done a lot of work on this since we last saw you, hence, the confidence in the statement this morning. In terms of the characteristics, we, first of all, want to make sure we're choosing the right partner. And secondly, obviously, we want to do the right deal and do that in the right structure.

Often, this comes down to price. And we're confident that we can get this transaction done at or close to book value. We will inevitably be seeking a partner that shares our ambitions to invest in this sector, a partner who sees the higher returns that can be achieved through income growth, asset management and development.

We think, and we can see from the learnings that we have, having owned these assets now for several months, that double-digit total returns are achievable, and our partners who we are talking to share that ambition.

The capital that we're talking to, I would describe as more sort of core and core plus type capital. And of course, we know, as we've said in our statement this morning, that there will be further opportunities, not just within the existing portfolio, but also further opportunities down the line.

So we want to work with a partner who has a desire and the capacity to grow this vehicle with size and scale. It's a great alternative source of capital for us, but also a partner that can deliver great returns to all investors who participate in this joint venture going forward.

So I would say those are the most important consideration. Obviously, we won't be talking about the 4 names in detail today because they are commercially sensitive. But I can say with confidence these are 4 highly credible partners who, like us, see the benefits of owning critical health care infrastructure assets.

Richard, do you mind picking up the second part of the question?

Yes, sure. So regarding future bond issuance program, obviously, the immediate priority is to deliver the deleveraging, get that back to 50% LTV. And probably at that stage, we will then look to publish a credit rating, which will enable us then to access the bond market, which is likely to happen in the second half of the year once we've completed the transactions and the transfer of assets to the joint ventures that Mark has been through in some detail.

Meantime, we're obviously trying to refinance PHP's unsecured revolving credit facilities with a new club facility, which we went through earlier in some detail and that will obviously be -- takes us a long way on step to maintaining our sort of low cost of debt and sort of benefiting from some of these lower credit margins that we're seeing in the market at the moment.

I think, Matt, just to finish up on Richard's point, one of the unintended benefits of the Assura transaction is it's taking us on this journey to unsecured financing, which we've set out at our Capital Markets Day well before the merger. So that access to not just lower credit margins but lower capital generally is usually, I think, beneficial to the business going forward.

And we'll now take our next question from James Carswell of Peel Hunt.

Just a quick question on the development side. I mean, it feels that you're a bit more optimistic in terms of the kind of the feasibility of those developments. Maybe just an update on those kind of conversations you've been having with various NHS bodies about rental levels. And then, I mean, do you think we should start to expect some more developments to come into that pipeline in the short to medium term?

And then just a final question, the kind of feed-through that, that could have on rental growth. It looks obviously the open market rent reviews, the annual uptick has been ticking up now from a pretty gradual basis for many years, which is great to see. Is there a chance that could start to accelerate? And could that be in the relative short term if indeed, we do see those developments coming through?

Thanks, James. Appreciate the question. Yes, you're right. We are way more optimistic, I think, on the development side than you'll have seen from our company, perhaps historically. I think that's driven by a number of reasons. First of all, when we talk about the best of both from the Assura transaction, we have now taken on a team of new colleagues who have strength in depth and development capability and expertise to sit alongside our existing team. So that's giving us confidence.

Secondly, the USS JV is a vehicle that's very well set up to accommodate new developments. Our joint venture partner likes these assets and their cost of capital allows and enables us to pursue these developments, which provide, as you pointed out, vital rental evidence in geographies and regions around the U.K. that benefit our portfolio as a whole. And I think we should be optimistic about that.

If you think about the 2 developments that we have on site currently, Weston-super-Mare and Tetbury in Gloucestershire, the 3 that we've talked about in pipeline, the USS joint venture is the vehicle alongside the strength of the team that we now have that's giving us, I think, that confidence to create value through risk-controlled development opportunities.

Do you want to pick up on the specific point around the rental evidence and rental growth?

Yes. I mean, I think as we said in the presentation, we do see the rental growth outlook improving in the first 2 months of '26. We've seen rental growth across the enlarged portfolio increase to 3.4%. So we're seeing to see those positive trends coming through the rent review team's hard work.

Definitely. Yes. So I think just to finish on that, James, if I may. If you look at the development pipeline that we are presenting this morning, not just in the U.K., we haven't even talked about Ireland. But in the U.K. and in Ireland and now private hospitals, that's the development pipeline that's perhaps longer than you will have seen in this company in the past.

In the past, it's not cost us anything by having a limited pipeline because development, as we know, has been more challenging. So definitely, that opportunity is there. And it's really, I think, that rental evidence is going to really enhance our prospects the most. So yes, very optimistic about that is, I think, what we would conclude our remarks.

[Operator Instructions] We will now move on to our next question from Kanad Mitra of Barclays.

So on -- again, continuing on the private hospital JV. So just to clarify, what is the structure probably you're looking at what sort of economic interest would you be willing to keep in the JV? And also another one on that is, will that be the whole hospital portfolio in one go or as things go with USS JV will be in several tranches?

The second question is on developments. I see developments are -- there are a few developments that are going through with the USS JV. Is that situation that's going to continue? Or do you also want to take on development on a 100% PHP basis going forward? I think those are the 2 main questions that I have.

Thanks, Kanad. I'll pick up on those questions, if that's okay. Yes, in terms of the joint venture structure, how we think about joint ventures is as follows. So we've got the private -- sorry, the primary care joint venture with USS. We have a 20% stake in that vehicle. That works very well for us.

When we think about the private hospital joint venture, we would be very comfortable holding a 20% stake in that portfolio if that's where we were to end up or if we were to conclude that it's in the company's better interest to retain a higher economic interest in that portfolio, we could own as high as 50% interest or economic interest in that joint venture going forward.

So we will retain flexibility at this point until we decide with our partner the route to which we will pursue. But I can say that with the discussions that we've had and the offers that we have on the table currently, that we have optionality to take a 20% stake or a 50% stake or potentially somewhere in between. But I think the company's preference would be to either do one or the other for reasons that we've set out in previous presentations.

In terms of the second part of your question, whole or several tranches of transaction, I think there's 2 ways to answer that. I think the first part of that response would be the initial portfolio of around GBP 0.7 billion. I would expect all of that portfolio to go in at once as a first tranche.

There are other assets that we could look to add to that joint venture from within the existing business, but we would do that in a second stage. And currently, that wouldn't be material. However, in the future, and that's why I mentioned earlier on that it's important to work with the right partner who has flexibility and deliverability capabilities and a desire to share the benefits of scale and economies of scale in the future, then I think there could be further tranches and further opportunities to expand that joint venture in the future.

I think the third question or third part of your question, Kanad, it was around the development side, and absolutely, we're pointing out that the USS JV is really enhancing our ability to pursue new development opportunities in U.K. primary care. The JV has established currently as a very specific strategy, a very defined asset class that it looks to invest in.

So there is a possibility, as we've seen in the last few months that PHP could pursue other development opportunities on a 100% basis for assets that do not meet the criteria for the USS primary care joint venture. So for example, to simplify that response, the USS JV currently, only takes inflation-linked assets.

So any open market rent review opportunities in development, and we are seeing some coming through, we could pursue those on a 100% basis outside of the joint venture or perhaps, and more to say on that in the future, there's an ability to expand the USS JV beyond this existing mandates, but that will take time, of course, and we're saying no more on that at this stage, and we'll provide further updates in due course. I think that answers all of your questions.

Thank you. We have no further questions on the line. I'll now hand over for webcast questions.

Okay. So we've got some questions. We've only got a couple that have come through on the webcast. So first question has come in. There's a similar theme here, so I won't spend too much time on this. Andrew Saunders at Shore Capital. Thank you, Andrew. You said looking at the wider consideration of disposals outside of joint ventures, can you provide some color on the current investor appetite for primary health assets and give some indication of the possible disposal value you could achieve this year?

Look, I guess the big event on primary care real estate assets over the last 12 months is 2 global infrastructure funds in KKR and Stonepeak looking at this asset class and being prepared to pay book value. So I think that gives everyone a lot of confidence that the returns and the future prospects for our portfolio are very strong.

We have actually sold a few assets, only a handful of assets, but importantly, at or above book value since the Assura transaction. And we're confident, and obviously, we can see that through the USS discussions and the GBP 103 million of assets that we are injecting into that joint venture that we're able to do that at book value or very close to book value. So I think the indication is very positive that we can achieve disposal proceeds at or very close to our book value.

Next question is coming in from Mike Prew at Jefferies. Mike, good to hear from you, as always. Is the District Valuer's Office relaxing its rent review criteria? Is it making any direct capital contributions development to make economically viable, given high construction cost inflation?

Yes. Thanks, Mike. Look, I think this has been a recurring theme, as you know, for many, many years in our business. I wouldn't say that the District Valuer is relaxing any of its criteria. But we are beginning to see a response. You can see that in the like-for-like figures, you can see that in the figures that we've reported for the first 2 months.

And of course, these new development -- the developments that we're pursuing, particularly those in the USS joint venture, I think, are particularly helpful to us in providing that rental evidence.

In terms of the capital contributions that we're seeing coming through from local authorities, ICBs, other stakeholders to enable viable developments, we're not seeing the District Valuer move its position on that currently, but it's our job to make that argument, and we think we can do that.

So I mentioned in an earlier slide that we've been particularly engaged with government officials, including a meeting with the Health Minister in the last few weeks, and we've been making these points, I think, very, very credibly. So more on that to come, Mike, I think.

I think we've got time -- we have got quite a few questions that have come in a little late. I don't think we're going to get through all of these. We'll do our very best.

The first question is coming in from one of our retail shareholders, I think. [ Serge ] has asked, given the share price is above NAV, would you consider an ABB to decrease LTV and give you more firepower?

Yes. Serge, thank you for that question. But management are considering all options at all times, of course. We wouldn't be doing our jobs properly, if that wasn't the case. But I think it's very clear from this morning's presentation and everything that we set out at the time of the Assura transaction last year that our priorities are very clear, to integrate the companies to get the best of both, to deliver the synergies, and we're clearly ahead of schedule, over 80% of the way through now of the GBP 9 million of cost synergies.

And absolutely, we have a plan to delever. And the purpose of this morning's presentation, which is why we spent so much time on this, on the 2 slides earlier is setting out how clear that plan is and how confident we are of delivering that plan ahead of our original schedule. We said we'd delever by the end of this financial year, which gives us to the end of December, but we are ahead of where we thought we would be.

And in spite of some of the challenging market conditions that we're all very aware of, this is a very resilient, robust, secure and stable asset class and the long-term prospects are very strong. So those are our priorities, and that's what we're focused on right now.

Next question has come in again from, I think, a retail shareholder. And that question is, is there a risk that recent geopolitical events delay negotiations with the parties for the private hospitals JV and beyond?

That's actually a really good question and somebody asked me that at the back end of last week, given that we're over 2 weeks now into this conflict. We've not seen any change in appetite or desire to pursue this opportunity at all. We feel that reflects the resilient nature of this asset class and the growth prospects. But we're not immune to what's going on in the world.

I think everybody on this call, and I think there's well over 150 people with us this morning, would share this. However, we remain confident that the appetite is there, and there's a willingness to invest alongside us in this very, very exciting opportunity in a high-returning asset class with rental growth prospects with upside from asset management and development. So we'll just keep making those points, and I'm sure we'll get that transaction done.

So look, we've answered all those questions that we were able to. I'm very sorry we couldn't get through them all in the end. We'll respond to those during the day, either directly or indirectly.

If I could just thank you all for taking the time to join us this morning. This is a strong set of results. It's been a transformational year. There's a lot going on. Management are very focused on delivering on the company's priorities. We will get there, and we will provide further updates in due course, and look forward to seeing many of our shareholders on our investor road show over the next couple of weeks.

Thanks very much from Richard and myself and the company.

Bye.

Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.

Good morning, and welcome to the Primary Health Properties Trading Update. I will now hand over to CEO, Mark Davies. Please go ahead.

Good morning, everybody. Happy New Year to everybody who we've not met yet, albeit, as you can tell, we've got off to a busy start to the year. Thanks to all of you for dialing in to listen to our update this morning. As you can see from the update that we made, it's a fairly long and detailed update. Richard, myself and the team just felt that with everything that we were doing last year and so many announcements up on the screen, as you are aware, this was a good opportunity to just bring everything together.

So there's more facts and figures than you might expect from a typical update at this point of the year, but we felt that would be beneficial to you, and that's certainly the feedback we've been getting this morning.

In terms of the highlights, it's clearly been a transformational year for PHP. The combination of PHP and Assura is going to prove to be a big success. And we created a strong platform, GBP 6 billion health care REIT. We got the CMA approval through on the 29th of October. So we got stuck into the integration on which we had a very detailed plan. And as we announced this morning, we're already through 60% delivered of the total annualized synergies of GBP 9 million. This has been -- the reason we're able to do this so quickly is there's obviously duplication of roles. So that impacts people and the people cost and duplication of things like professional fees. So we've acted on that.

So we're 60% of the way through, and we'll continue to provide further updates to the market in due course. One of the really pleasing things about the combination of the companies because we got economic control of Assura from the 12th of August is the strong rent review performance that came through in that sort of 4-month period following the acquisition, an additional GBP 8.3 million of rent, which is 6.8%, but on an annualized basis, 3.2%, which is ahead of the guidance that we gave at the Capital Markets Day as recently as July when we told the market they were projecting a 3% increase.

So that just, I think, just supports not just the positive rental growth outlook, but supports the combination of the companies, the increased exposure to inflation and long leases. So that's one of the highlights of the update obviously. The enlarged group is now really well placed to take advantage, I think, of that improving rental growth, and we're making good progress. You can see from the update, we provided some detail around the developments that we're pursuing.

Assura had a strong development capability and a bigger team than PHP. So we're seeing the benefit of that. And of course, the read across from these projects, which are on the ground from a rent perspective, particularly those projects that we highlighted in the table in the update in Tetbury and Weston-super-Mare. They're going into the USS joint venture at a very attractive yield from our perspective, which makes those projects profitable. But also they're setting a rental tone and a rental evidence above GBP 300 a square meter. So that's good for the future.

Just on the subject of JV, we are making good progress in expanding the existing joint venture with USS. I think we feel very fortunate to have such a credible and strategic joint venture partner as USS. They have, as you would imagine, a low cost of capital, probably as low as you could imagine. And that will enable us to do more with them. Currently, we've got GBP 170 million of assets in the JV with a target to get that to GBP 400 million. Of course, that's extremely advantageous to us at the time that we're seeking to raise some proceeds to pay down some debt. So more on that in a minute.

USS are totally bought into the health care real estate sector in the U.K. And I'm pretty confident that once we get to that GBP 400 million level, which we will do quite quickly, that there will be capacity to expand that joint venture above and beyond its original mandate. A few sort of initial observations from the USS JV because we have had 3 or 4 meetings with them in a very sort of short space of time. They like the social impact of what we do, as do we, of course. And for that reason, we are working on a number of sort of strategic projects, including things like LIFT, which will become available to the market in the next sort of 2 to 3 years. So really, really good progress with USS.

And also on the private hospital side, you can see from the announcement this morning, those private hospitals are performing well, which we're very pleased about. But also we are making progress in identifying a strategic partner to work alongside and the proceeds from the establishment of that joint venture will take the leverage back down in line with our policy. So we've got our results coming out in a few weeks. So we're expecting to make a further update on that. And of course, we've had strong support from the debt and the equity capital markets in the last few months. We're very grateful. We're very grateful to all of you for supporting us on a transformational transaction.

And Richard and his team have been very busy on the sort of refinancing side and completed, as you can see from the announcement, a number of financing activities and the undrawn headroom available to us now has increased to GBP 552 million from -- I think it was GBP 300 million, Richard, wasn't it when we last updated the.

Yes, so look, a transformational year. Those are the key highlights. And I think maybe just to finish it on the Assura joint venture, I think it's fair to say that we are pleasantly surprised, not just with the progress that we're making on the integration, but we think there's a lot of low-hanging fruit within the portfolio and in the way that, that portfolio has been run and managed. And therefore, that upside we're seeking to capture as soon as possible. And I think we're obviously very excited about the prospect of being able to do that. And it would be wrong of me not to mention our dividend has now increased for 30 consecutive years. So we're celebrating our 30th consecutive year of dividend growth.

Those are the sort of key highlights. Richard, did you want to add anything to that at all?

No, no. I think the only thing perhaps just to mention, Mark, is the strategy and financial framework that we set out in the announcement, obviously, it's key to now get leverage back down below our 40% -- sorry, 50% cap. As Mark has already mentioned, we're working hard on delivering that through the joint ventures and a few other disposals. And obviously, that will drive the financial metrics of getting net debt to EBITDA 9x to 9.5x, interest cover target of 2.5x.

And obviously, those are key targets we need to focus on over the coming years. There's obviously a lot of refinancing work to do over the course of '26 to refinance the GBP 1 billion bridging facility that's left. So there's a lot of work ongoing in the background. And as Mark said, hopefully deliver more news around that refinancing with the full year results in a couple of months.

Yes. So I think on that note, we'll -- we know there's many of you on the call this morning. So we thought we'd take the opportunity to allow you to ask us any questions.

[Operator Instructions] We will now take our first question from Oli Woodall of Kolytics.

Just a quick one on your LTV target you've mentioned. How are you balancing, trying to get down to below 50% versus making sure you don't take a hit on NAV and disposing at a higher yield than you'd like. Do you have any kind of more information around that you could give?

Yes. No, that's a good question, Oli. Thank you. The assets that we're injecting into the USS JV, I mentioned previously that the cost of capital of USS is an attractive proposition for us. I can't give an exact figure in terms of the commercial sensitivity that sits around that. But maybe the best way of me to answer that question is to say that we're very confident that those assets are being sold into the joint venture at book value or very close to book value, either slightly above or slightly below. The private hospital portfolio that we've acquired through the Assura merger is performing well. Operationally, it's also performing well. You can see the rental growth coming through in this update.

And again, we're sort of in the mix of commercial negotiations with potential strategic JV partners right now. And I'm confident again that we will not be prejudicing our NAV with the transfer of those assets into the joint venture. There's a big transaction being done in the market in private hospitals at the moment. We're not actually involved in that transaction. It's over GBP 1 billion worth of [ Spire ] Hospitals and the valuation yield on that asset transfer -- sorry, disposal is helpful to us in terms of the evidence it's setting for the discussions and negotiations that we're having with our strategic JV partners. So sorry, that's a long answer to a short question. But yes, we're confident assets are being disposed into JVs at book value.

And just add to Mark's comments, I think those disposals will probably be at yields, which will not be too dissimilar to the marginal cost of debt on the bridging facility. So I think the impact on earnings won't be significant, Oli, which I think was sort of questioning.

Okay. Perfect. That's clear. And just one more quickly, if I may. Just I wonder if you could quantify the kind of gap between what district valuers are assessing versus what construction costs would kind of justify. How do you think rents need to develop within the U.K., if you can kind of turn that tap on again?

Well, yes, you'll have heard us say before, historically, that gap on projects that we've looked at in PHP has been as wide as 20% or sometimes even higher. But if you look at the projects that we announced this morning, there's obviously a weighting there to our Irish projects, as you can see. So clearly, rents in Ireland are now being set at a level which allows us to develop, but we don't have a district value there to think about. So that's helpful.

But there's 2 primary care developments that are currently in process -- or progress, the Tetbury Primary Care Center in Gloucestershire and the Weston-super-Mare primary care scheme. These are really fantastic assets. They'll be sold into the USS JV at an attractive yield. And those rents are above GBP 300 a square meter, and that allows us to make an economic return, which is accretive to shareholders.

So yes, we're seeing that evidence. We've talked about it before, and we've seen green shoots before, but that's now coming through in projects that we're currently on the ground.

Yes. And just to Mark's comment on the asset management program as well, we reported an announcement today where we're seeing rents increased from just below GBP 190 per square meter to just under GBP 220 per square meter, so 15% increase. And those are on existing assets, and they said great rental evidence for the rest of the portfolio, and those rental terms will be rolled out through the rent review program, albeit over time when the reviews come due.

I think we're definitely more confident, Oli, now on development. You'll not have seen PHP produce an update with as many projects as this for quite some time, many, many years, I think. And that reflects the bigger size of the business, the greater development capability that we have with the team in the combined business and the fact that economically, rents are getting to a level where we can pursue these projects. And we have the USS JV as well as a sort of strategic partner to work alongside with a lower cost of capital.

And we'll now move on to our next question from Tom Musson of Berenberg.

Just a question around your 3% organic rent growth target. Obviously, current performance just above 3%, supported by the index-linked leases and also the private hospitals. But if we assume inflation trends back towards 2% and as you're saying, private hospitals may feature in your disposal plans, I just wonder for how long we should expect you to be able to maintain that 3% organic rent growth because I think I'm right in saying open market rents have never really managed to outpace inflation over the long term, either at Assura or PHP.

Tom, thanks for the question. Yes, I think if you go back quite a long time, there was an extended period of time where those open market rents were ahead of inflation, but that was many years ago. And you can see from the announcement we made this morning, in primary care, those open market rent reviews that we did, and we did many closer to 2% than 3%. It was tempting to sort of try and update the market in terms of our forward-looking guidance at this update because we -- as you know, Tom, because you were in the room, we only updated the market at the Capital Markets Day as recently as July with that 3% forward-looking guidance, which clearly we were confident about.

I think the time to review the guidance around our forward-looking rental growth prospects is either at the results, which are imminent in a few weeks' time, which is -- or certainly when we are absolutely sure what the portfolio mix looks like and the retained exposure to the private hospital portfolio. It's on public record from announcements that we made last year that we are expecting to sell assets in our private hospital portfolio and our preferred route in doing that is to do that into strategic joint venture.

So at that point, we'll be able to forecast with very good and dependable accuracy what the forward-looking guidance looks like for rent and rent review going forward.

I just reference the 15% growth that's coming through the asset management program that I mentioned earlier because obviously, that is key to setting rental evidence for the rest of the portfolio.

[Operator Instructions] And we will now move on to our next question from James Carswell of Peel Hunt.

Just a follow on from some of the previous conversation on the development side. It sounds very encouraging in terms of some of those conversations. This obviously talks about the pipeline and it will be progressive, it's accretive. I mean, given where you are with some of those negotiations, I mean, are you expecting to commence more projects in the current period, the next kind of 3 to 6 months? Or will that be further down the line?

Yes. The pipeline is definitely growing. You know this company very well, James, and it's probably been quite some time, as I mentioned, that we reported an update with as many live projects as this. So it's extremely encouraging. So we feel -- we clearly feel we've got momentum in the U.K. and in Ireland. There is a growing pipeline. So for example, we won a significant contract with the East of England Ambulance Trust to develop new ambulance hubs across the East of England. It's a 10-year assignment, but there will be many opportunities for us to create new sites, probably as many as 20 new ambulance and emergency operation centers, which we have a track record of doing and development capability within the business.

So, yes, I think it's really going to start to pick up. We will only pursue developments, of course, if we're satisfied on a risk control basis that we are getting the appropriate risk-adjusted returns. It's advantageous to us, as we've pointed out, particularly in our primary care portfolio where we're setting rental evidence above GBP 300 a square meter for future rental growth prospects. And of course, we've got the USS JV. I think we, maybe, undervalued the prospect of pursuing development projects and then effectively selling those assets into the JV with USS. Of course, we have a 20% stake.

So we've retained that economic stake. The assets can be injected into the USS JV as we're seeing yields as low as 4.5%. So it's very attractive. So it feels very different, James. We'll be very conservative, not cautious, that's the wrong word, but we'll be looking at everything on a risk-adjusted basis. And if we think we can get the right returns by allocating capital into development projects, then that will be a good thing for our long-term prospects.

Great. And just maybe another quick one on the debt side. Obviously, some of the bridging loans have ready been repaid. And clearly, the deleveraging is going to be a big part of the kind of the strategy to repay the rest. But just for the kind of the remainder of that loan, and I appreciate you've got time and clearly kind of market rates, et cetera, can move. But here today, I mean, do you think it's likely to be bond issuance to replace that? Do you think it's like to be kind of bank debt or possibly a convertible? Just your kind of thinking on the kind of the refi of whatever will be left in the bridging loan post the deleveraging.

Yes. So I think, James, the key now is to deliver the deleveraging to get the LTV back to our target and then look to the bond market and the bank debt market because we do have a large number of shorter-dated bank facilities that need to get refinanced, particularly on the PHP side, move it to an unsecured basis and term it out for longer, for; different durations, but also term out some of this debt through the bond market. And we are sort of looking at options around that. And hopefully, there'll be more news around that when we come out with the full year results.

Yes. James, Richard and I, as you know, we're already on a journey, if you like, with PHP to become an unsecured borrower. And we had a very credible plan that we intended to pursue -- to move our capital structure more towards unsecured borrowing where we felt we could do that at a lower cost and access a much bigger pool of capital. The Assura transaction has accelerated our plans because they, as you know, we're an unsecured borrower with over GBP 900 million of listed bonds at very attractive coupons. So we now have access to that market.

Fitch currently have a rating at BBB+, I think, which isn't it, on the business. We will maintain that rating. I'm confident on the basis that we deliver on all our plans, which are moving along very, very nicely. So yes, it's access to a huge pool of capital in the bond market that we didn't have before. So I think you will see us doing more inevitably unsecured issuances in the future.

We'll now take our next question from Alexander Totomanov of Green Street.

Two questions from me. First one, are all leases in Ireland indexed annually or do some index on a 3- or 5-year lease cycle? I'm just trying to reconcile the 4.1% annualized rent increase in Ireland that was disclosed this morning with -- in the rent review table with the CPI in Ireland that's around the 2% mark.

And second question, you mentioned refinancing the bridging facility this year. Would you expect some savings with regard to your cost of debt from this? I don't believe there was any disclosure on the margin facility last year, but would you expect refinancing to be maybe 10 to 20 bps lower in terms of margin? Or would you expect it to be flat?

Yes. Just I'll pick up on the Ireland point and then Richard, maybe pick up on the credit margin point. The annualized increase on the Irish portfolio that we announced this morning is 4.1%. We capture the inflation on the leases that we have in Ireland every 5 years. I think that was the question that you asked. The line was a little unclear. But was that the question you asked how...

It is in a 5-year increase...

5-year exactly, yes. Richard, do you want to pick up the credit margin point?

Yes. So I mean, yes, we would expect savings in the credit margin, probably slightly higher than the number you quoted, really reflecting the much larger scale of PHP now we've merged with Assura. And the other critical thing is to deliver on that BBB+ credit rating that Mark touched upon earlier. But I think the other thing to note on the bridging facility, it's quite cheap at the moment, but the margin does stretch up over time.

That facility documentation was put on the website at the time of the merger. So it's all public knowledge. That's why although the facility is for 2 years and there's options to extend it for another 2 years, it really needs to get refinanced quite quickly over the course of '26 before it becomes too expensive. But obviously, we are expecting margins to come down across the enlarged group as a result of the merger, reflecting the increased size and scale of the business now.

Yes. And that's one of the things that we think about a lot as we're pursuing these negotiations with USS and our private hospital partner. We're keen to raise those proceeds as soon as possible because that gets us back in line with our LTV and net debt financial policies. But as Richard said, we're highly motivated to do that because the facility that we put in place at the time of the acquisition is attractive as it is today and was at the time. That will start to ramp up later on in the year. So we're well on track to be able to accommodate that and progress is very, very positive.

And we will now take our next question from Max Nimmo of Deutsche Bank.

I think most of my questions have been answered. But just -- maybe just to clarify on the development point. On a risk-adjusted basis, you guys are quite comfortable with development in Ireland, the private hospital stuff and things that you can sell into the USS JV. Is that fair to say not necessarily as kind of direct let NHS assets sit in your own balance sheet at this point?

And then secondly, just on the rents that have been signed at Tetbury and Weston-super-Mare, feeding that through into the rent review process, how wide can that read across go? Does it tend to be quite read across for the local area? Or can that be kind of a wider read across for the sector and when it does finally feed through?

Thanks, Max. Yes, two good questions, very appropriate. Just on the development point, yes, we are pursuing projects in Ireland because the rental tones on those projects have increased to a level which allows us to do that. And of course, our cost of capital in Ireland is lower because we're borrowing in euros. And that's why we've got -- well, there's 3 projects, I think, in this morning's announcement. On the primary care side, as you identified, the 2 projects that we're currently working on pursuing on site go into the USS JV at a low cost of capital, which helps the economic returns on this project. So I think there's definitely more of that to do.

The only bit that you didn't pick up, I think, is the fact that we're doing private hospital developments as well. There's the project in Peterborough that we're doing with Ramsay. This is a really excellent scheme. We're not disclosing our profit on cost this morning. Hopefully, at some point soon, we can do that because that's delivering a very, very handsome profit and cost way above and beyond the yield on cost that we've announced this morning.

So -- yes, that's a third strand, if you like, on the development side. In terms of the rental point that you make on that, it is geographically defined or dare I say, localized. So for example, in Tetbury, which is in Gloucestershire, we have -- this is one of the big advantages, by the way, putting these 2 portfolios together. We have obviously an increased representation and a portfolio -- a bigger portfolio in that geography.

So absolutely, it's really, really helpful to our future prospects. So the more developments that we can do, the more evidence that we can set, that's going to help the team who've had a very active year, by the way, on rent review performed obviously very well for us. And they're obviously enjoying the combination of the portfolios and the benefits that it brings.

We have no further questions in the queue. I'll now hand over for webcast questions.

So are there any questions coming back to the Q&A facility, Richard?

Yes, got 3. I'll just read them out, Mark. One from -- first one from Matt Saperia at Peel Hunt. Have you committed to any new development schemes since you last updated us?

I think there, Mark, we -- I mean, it's in the table, Matt. You've got your primary care center in Ireland and the Ramsay Private Hospital in Peterborough, which came through the Assura portfolio are probably the key ones. And I think the other thing to note is we'll probably give more details on the pipeline when we come out with the full year results in a few months.

Yes. Good question, Matt. I mean we're definitely spending more time as a business on development. We've not been able to say that for years. So this is a really good thing, not because of the returns that we can make, but Max identified on the last question, the read across and the evidence that this provides to the portfolio.

Okay. The next question from Bjorn, Panmure Liberum. If equity markets are supportive, are there any attractive acquisition opportunities you would look at? Could you quantify any potential acquisition pipeline?

Yes. Thanks, Bjorn. We're so focused on our priorities and the plan that we set out at the time. We successfully acquired Assura last August. So we've set those priorities out very clearly to integrate the companies, to deliver the synergies, to delever, to further establish strategic joint ventures, which -- we're making such good progress on all of that. We're not really thinking about acquisitions that we wouldn't be doing our jobs properly. We're not thinking about next year or the year after and beyond. So there's always things coming our way, but we're not really deploying any resource or any time to acquisition opportunities.

I mentioned that big private hospital portfolio that's being sold in the market currently. We keep an eye on those things because that gives us good intelligence and good information to help us make strategic decisions. But no, we're just so focused on our priorities right now that we're not even thinking about acquisition opportunities.

But once we come through the other side of our integration and other priorities, the answer to that question may be very different. And that might not be that far away because we're making such good progress on the integration and the JV stroke disposal negotiations. So yes, we'll provide more updates, obviously, in the future on that. But for the time being, we're focused on what we need to do.

Okay. The last question from Mike Prew at Jefferies. Are the disposals to lower LTV mostly through sales into JVs? Or will that also be outright asset sales? And if so, will ease be biased to the Assura portfolio and on what criteria?

Thanks, Mike. Good questions. I don't think there is a bias towards the Assura portfolio or the PHP portfolio or otherwise. The only obvious point to make on that is that we've said publicly, and we've said this morning and we're saying today that we're looking to sell the private hospital assets into a strategic joint venture. Like any REIT or any property owner, we're not precious about any of our assets. Any of our assets are for sale if somebody wants to buy them at the right price. We're confident that we can inject these assets into JVs at book value. If we were selling assets into the market, I think we'd be equally as confident because we said publicly last year at the time of the Assura acquisition that we were seeking to realize proceeds from asset disposals and a focus on the private hospital side.

We have been unsurprisingly inundated with -- from high-quality institutions who are attracted to the high conviction growth fundamentals that they see in that private hospital space. So yes, we could sell out completely. There are buyers out there that would do that. But we don't think that that's the right strategy, and that's why we're focusing on a joint venture, retaining an economic interest in those assets and benefiting from the guaranteed growth coming through in the future.

So thanks, Mike. I think, Richard, that brings an end to all the questions that have come through.

Yes. Online, yes.

Yes. Great. Well, maybe if I could just sort of just close out by reiterating my thanks and gratitude to all of you, not just for dialing in this morning, but your support to our company, particularly over the last 12 months, but also over many, many years. We are proud to put a dividend increase up on the screen this morning. It is our 30th consecutive year. But now we're very focused on the future. We want to continue and maintain that strong track record of growing a fully covered dividend now in the future. There's a lot of upside for us to capture as we're combining these 2 portfolios.

PHP, as you will know, always had a strong track record from an asset management perspective, a rent review perspective. And we are applying that approach and those disciplines from the PHP side across the combined portfolio. And as I said earlier, there's plenty of low-hanging fruit for us to go for. We're clearly ahead of even our own expectations on the delivery of the integration and the synergies. Richard and I have done this before in other businesses.

So we're well placed to deliver this well in advance of the plan that we set out at the time of the acquisition. The quality of the team that we now have is fantastic. The new colleagues that we have that have come across from the Assura side are excellent and many of them bring a skill set to the business, particularly in development and private hospitals, but many other things. And this is a powerful platform to deliver sector-leading growth to our shareholders in the future.

So there's loads for us to do. We're very focused on our priorities. We remain disciplined. Our cost ratio, which has always been one-off, if not the lowest in the sector, will come down again further, and we'll provide obviously more guidance on that at our results in a few weeks' time.

So maybe on that note, thanks again for listening to our update this morning. We'll see you again, no doubt, in a few weeks at our results, which we're looking forward to getting up on the screen, a very positive statement to make to the market. And of course, because you all know so well, feel free to drop Richard or myself or anyone at PHP a line if you have any further questions or you'd like to meet with the company in the next few weeks.

So on that note, thanks very much from Richard and myself and everybody at PHP. Wishing you all a very good day.