Assura plc
Good strategic progress and tenth consecutive year of dividend growth
Assura plc (“Assura”), the leading primary care property investor and developer, today announces its results for the year ended 31 March 2023.
Jonathan Murphy, CEO, said:
“Assura has again demonstrated the strength and reliability of its business model with another year of strategic progress and a strong financial performance, which has enabled us to grow EPRA earnings and deliver our tenth consecutive year of dividend growth.
“Taking a disciplined approach to capital deployment, we grew our net rental income by 9% to £138 million – adding 28 assets to our portfolio during the period through carefully-targeted acquisitions and completed developments, and also recycling capital through £78 million of disposals. We continue to deliver on new opportunities for growth – being on site with three schemes directly with NHS Trusts and having secured our first two forward-funding schemes in Ireland. Furthermore, we remain committed to maintaining the quality of our growing income stream – the majority of which is backed by the NHS – through value-enhancing portfolio management.
“Assura’s long-term growth platform is underpinned by our strong financial position, with a secure balance sheet, recently re-affirmed A- rating from Fitch and a debt book that is fully fixed – at 2.3% and with a weighted average maturity of seven years.
“As we embark on our 20th year of operation, the critical need for investment in primary care infrastructure is as pronounced as ever with hospitals under significant pressure – and it is reassuring this requirement has cross-party political support. Our vital role in relieving pressure on the health system through providing high-quality community healthcare buildings is clear, and our continued growth demonstrates that we remain a well-placed long-term partner for health care providers.
“We remain confident in our strategy, attractive portfolio, pipeline of opportunities, and market-leading capabilities to continue providing compelling long-term returns for shareholders.”
Another year delivering strong growth in EPRA earnings and dividend
· Passing rent roll increased 6% to £143.4 million (March 2022: £135.7 million) with WAULT of 11.2 years
· Net rental income up 9% to £138.0 million (2022: £126.5 million)
· Portfolio value £2,738 million (March 2022: £2,752 million)
· Net Initial Yield (“NIY”) widened 39 basis points to 4.87% (March 2022: 4.48%)
· EPRA earnings up 12% to £96.8 million (2022: £86.2 million) and EPRA EPS of 3.3p (2022: 3.1p)
· IFRS loss before tax £119.2 million (2022: profit of £155.8 million) and EPS (4.0)p (2022: 5.6p), reflecting valuation decline driven by outward yield shift
· Proposed 5% increase in the quarterly dividend to 0.82 pence per share (3.28 pence on an annual basis)
Continuing to deliver critical new capacity for health care in a community setting
· Portfolio of 608 high-quality primary care properties serving 6.3 million people across the UK
· Invested £200 million in additions (yield on cost 4.9%, WAULT 14.5 years): 10 development completions, 18 acquisitions and three assets in co-investment arrangements
· 10 asset enhancement capital projects completed (total spend £5.4 million) and on site with a further 8 (total spend £8.9 million)
· 65 properties disposed of for £78 million at a premium to book value
· Lease re-gears completed on £2.0 million of existing rent roll with a further £8.2 million in the pipeline
· Rent reviews generated a like-for-like increase of 7.2% on rent roll reviewed (weighted average annual rent increase of 3.8%1)
· Total contracted rental income stands at £1.77 billion (March 2022: £1.81 billion)
Disciplined investment activity with pipeline of attractive opportunities
· On site with 11 developments; total cost of £129 million (March 2022: 17, £166 million) of which £54 million has been spent to date
· Immediate development pipeline of five schemes (total cost £37 million), where we would normally expect to be on site within 12 months notwithstanding delays currently being experienced in construction timetables and start dates
· Pipeline of 17 asset enhancement capital projects (projected spend of £14 million) over the next two years
Good momentum from strategic expansion into emerging opportunities
· Additions include completion of West Midlands Ambulance Hub development and three assets under co-investment arrangements (one with an NHS Trust, and two with a leading provider of primary-care at scale)
· On site development projects include Genesis Cancer Care facility in Guildford, Ramsay day surgery in Kettering and Northumbria Training Academy for local NHS Trust in Cramlington
· Two standing investments in Ireland, one with a significant development opportunity, on site with two forward funding projects and a further three in the immediate pipeline
We BUILD for Health; sustainability and social impact at the heart of all decision-making
· Moved on site with our first two net zero carbon developments at Fareham and Winchester
· All development completions rated BREEAM Very Good or Excellent and EPC B or above
· Assura Community Fund has deployed over £1.8 million since 2020 to community-health related projects
· Today we publish our Net Zero Carbon Pathway, including science-based energy intensity reduction targets for 2040 with interim targets for 2030 and 2035
· MSCI ESG Rating upgraded to “AA”
· On track for EPC B ratings across our portfolio by March 2026, currently 53% at this level
Strong and sustainable financial position
· Weighted average interest rate unchanged at 2.30% (March 2022: 2.30%); all drawn debt on fixed rate basis
· Weighted average debt maturity of 7 years, no refinancing on drawn debt due until October 2025. Over 50% of drawn debt matures beyond 2030, with our longest maturity debt at our lowest rates
· Cash and undrawn facilities of £243 million
· Net debt of £1,135 million on a fully unsecured basis; LTV 41%, net debt/EBITDA ratio of 9.1x
· A- (stable outlook) rating from Fitch Ratings Ltd reaffirmed in January 2023
Summary results
| Financial performance | March 2023 | March 2022 | Change |
| Net rental income | £138.0m | £126.5m | 9.1% |
| IFRS (loss)/profit before tax | £(119.2)m | £155.8m | |
| IFRS (loss)/earnings per share | (4.0)p | 5.6p | |
| EPRA earnings per share | 3.3p | 3.1p | 6.5% |
| Dividend per share | 3.08p | 2.93p | 5.1% |
| Property valuation and performance | March 2023 | March 2022 | Change |
| Investment property | £2,738m | £2,752m | (0.5)% |
| Diluted EPRA NTA per share | 53.6p | 60.7p | (11.7)% |
| Rent roll | £143.4m | £135.7m | 5.7% |
| Financing | March 2023 | March 2022 | Change |
| Net debt to EBITDA | 9.1x | 8.8x | |
| Undrawn facilities and cash | £243m | £369m | (34.1)% |
| Weighted average cost of debt | 2.30% | 2.30% | No change |
1 Weighted average annual uplift on all settled reviews
Alternative Performance Measures (“APMs”)
The highlights page and summary results table above include a number of financial measures to describe the financial performance of the Group, some of which are considered APMs as they are not defined under IFRS. Further details are provided in the CFO Review, notes to the accounts and glossary.