Adjusted earnings for the company rose significantly, hitting 98 million for the reporting period. The primary driver was the full six-month performance from the Assura acquisition, which added 50 million directly to earnings. This substantial contribution underscores the successful integration and immediate impact of the Assura deal.
In tandem, the company reported a 9% increase in adjusted earnings per share (EPS) to 3.8p for the first half. The EPRA cost ratio, an indicator of operating efficiency, fell sharply to 8.7%, down from roughly 10% earlier in the year. This decline reflects the scale benefits and cost synergies the company has realized. The Assura merger provided over 8 million in cost savings, achieving 92% of the identified synergies. Additionally, rental growth added 4 million in income, representing a 6% increase over previous passing rent, or just over 3% on an annualized basis.
The investment portfolio’s value stayed steady at 6 billion, with adjusted net tangible assets (NTA) remaining unchanged at 104p per share. The net initial yield, a measure of income return relative to asset value, remained stable at 5.4%. The company’s occupancy rate was consistently strong at 99%, reflecting its appeal to tenants and stable portfolio performance. Government-backed income, which constitutes 76% of total earnings, further highlights the security and reliability of the company’s revenue base.
Looking at financial leverage, the average cost of debt remained near 3.8%, with expectations of a reduction to 3.5% in the second half of the year. Refinancing efforts were notable, with the company successfully restructuring $1.2 billion in debt. This included an $800 million term loan and a new 400 million two-year term loan. The refinancing brought credit margins down by 40 basis points, showcasing improved terms and better access to capital.
The company also continues to work on deleveraging, with nearly 260 million in bridging facilities expected to be repaid through asset sales and proceeds from reducing leverage. Dividends remain a key focus, with the company on track for a 30th consecutive year of dividend growth, targeting a fully covered dividend of 7.3p in 2026. Additionally, plans for a private hospital joint venture with a global institutional investor are progressing on schedule. This initiative is expected to further reduce leverage and strengthen the company’s financial position.
Portfolio fundamentals remain robust, with a 10-year weighted average lease term providing stability. The company’s rental performance is strong, and new developments show promising growth potential, particularly with rents re-established at higher levels—up to 280 per square meter in some areas. These developments support future income growth and underline the company’s ability to adapt and benefit from a more favorable market environment.