Investment summary

The recent sharp fall in the share price reflects concerns over the lack of firm news on the refinancing of an £83m debt facility due to mature this September and c £5m of mark-to-market provisions for interest rate swaps linked to this financing. The FY11 statement confirmed negotiations are proceeding, with PSPI likely to seek to combine most of its UK assets with the businesses and assets of its tenant, European Care Group (ECG). That structure appears to improve the appeal for lending banks, as security would include property and operating assets. PSPI said it would seek shareholder approval if the combination was seen as an appropriate transaction to be recommended by the board and that it would have an impact on future strategy, valuation and prospects. We will resume forecasts when the details of any potential transaction and new debt are confirmed.

Last updated on 02/05/2012

Industry outlook

Public sector budget cuts have put pressure on occupancy and fee rates, but the outlook is underpinned by demographics and government obligations to healthcare spending. Portfolio performance has been helped by recent investment, which upgraded UK tenant European Care's portfolio and shifted its emphasis towards less discretionary areas of acute care for children and patients with mental disorders.

Last updated on 23/04/2012