21 May 2024
Assura plc
Good operational and strategic progress; further dividend increase announced
Assura plc (“Assura”), the specialist healthcare property investor and developer, today announces its results for the year ended 31 March 2024.
Jonathan Murphy, CEO, said:
“We have continued our track record of growth to deliver another period of increased EPRA earnings and dividend, driven by our disciplined approach to investment, extensive sector expertise, and ability to identify new market opportunities. It is these capabilities, underpinned by our strong financial position and secure balance sheet, that make Assura best placed to meet the critical need for new and enhanced healthcare capacity in a community setting.
“Our portfolio continues to deliver high-quality cash flows, against a turbulent economic backdrop, as we further demonstrate our long-term resilience with another year of strong financial performance – increasing rental income by 4% to £143.3 million. Opportunities across broader healthcare markets, each identified as meeting the same underlying demand and offering attractive risk-adjusted investment characteristics, are becoming meaningful contributors to Assura’s £2.7bn portfolio and cash flows. Our five completions reflect the shifting demand in the healthcare sector and include schemes for private operators such as a state-of-the art day case hospital in Kettering as well as our first development in Ireland.
“We have today separately announced a £250m joint venture with USS is an exciting transaction that will further strengthen our balance sheet whilst diversifying the available funding sources to support Assura’s continued growth trajectory. The long-term partnership aligns with cross-party political support for investment into essential NHS community healthcare buildings that are so needed to enable better health outcomes.
“Assura is the partner of choice for the future – best positioned to provide high-quality, sustainable new premises for the delivery of health services in the community – and deliver long-term value for all stakeholders.”
Attractive and resilient assets with another period of EPRA earnings and dividend growth
· Passing rent roll increased 5% to £150.6 million (2023: £143.4 million) with WAULT of 10.8 years
· Net rental income up 4% to £143.3 million (2023: £138.0 million)
· Investment property value £2,708 million (March 2023: £2,738 million)
· Net Initial Yield (“NIY”) widened 30 basis points to 5.17% (March 2023: 4.87%)
· EPRA earnings up 6% to £102.3 million (2023: £96.8 million) and EPRA EPS of 3.4p (2023: 3.3p)
· IFRS loss before tax £28.7 million (2023: £119.2 million) and EPS (1.0)p (2023: (4.0)p), reflecting a 4% like-for-like valuation decline driven by outward yield shift
· 2.4% increase in the quarterly dividend to 0.84 pence per share (3.36 pence on an annual basis) with effect from the July 2024 payment
Answering critical need for new health care capacity in a community setting
· Portfolio of 614 high-quality primary care properties serving 6.4 million people across the UK
· Five developments completed in the period (completion value £72 million) and one acquisition in Ireland (Wicklow) that includes opportunity for a significant asset enhancement project
· Completed eight asset enhancement capital projects (total spend £8.9 million); on site with five (total spend £4.0 million)
· Rent reviews generated a like-for-like increase of 8.9% on 24% of rent roll reviewed (weighted average annual rent increase of 3.9%1)
£250 million joint venture; to further strengthen balance sheet and support Assura’s growth trajectory
· Assura today announces strategic partnership with USS, the principal pension scheme for universities and Higher Education institutions in the UK, focused solely on assets let directly to NHS or GP tenants
· Long-term partnership will support investment into essential NHS community healthcare buildings, to help address the current patient backlog and meet demand for modern, flexible healthcare properties
· Seeded with an initial agreed portfolio of seven assets from Assura’s existing portfolio valued at £107 million; targeting growth to £250 million over the next three years with the potential to increase this to £400 million
· Assura will act as property manager, with an appropriate asset management fee linked to vehicle gross asset value, as well as retaining 20% of the equity interest
Good momentum from strategic expansion into broader healthcare markets
· Opportunities across broader healthcare markets becoming meaningful contributors to portfolio and cash flow – each identified as closely aligned with existing portfolio with a strong underlying tenant covenant, and significant future growth potential:
o Private health: Completion of newly built state-of-the-art day case hospitals in Kettering and Guildford
o NHS Trusts: On site developments include two schemes directly with NHS Trusts including £25 million Northumbria Training Academy in Cramlington (completed post year end) and £11 million net zero carbon in operation Ambulance Hub in Bury St Edmunds
o Mental health: Currently on site with children’s therapy centre in Fareham
o Ireland: Four standing investments in Ireland – one with a significant development opportunity; on site with one in-house development and two forward funding projects with a further two in the immediate pipeline
Disciplined investment activity with pipeline of attractive opportunities
· On site with eight developments; total cost of £92 million (March 2023: 11, £129 million) of which £42 million is remaining to be spent
· Immediate development pipeline of five schemes (total cost £28 million), and extended pipeline of 34 schemes (total cost £423 million)
· Pipeline of 18 asset enhancement capital projects (projected spend of £9 million) over the next two years
The Bigger Picture: Health at the heart of all decision-making
· Relaunched ESG strategy The Bigger Picture to provide lens to view strategic decisions
· Three pillars of Healthy Environment, Healthy Communities and Healthy Business. In the year to 31 March 2024:
o Healthy Environment: 45 energy efficient building upgrades delivered in the year, saving 1.9m kWh per year. 66% of portfolio now at EPC B or better (2023: 53%); on site with first two net zero carbon developments at Fareham and Winchester, and net zero carbon in operation scheme at Bury St Edmunds
o Healthy Communities: five new developments completed to benefit communities; £3.40 of social value generated from every £1 donated and team volunteering hours significantly increased year on year; Assura Community Fund has committed over £2.0 million since 2020 to community health related projects
o Healthy Business: 11th consecutive year of dividend growth and named in the Top 10 of the FTSE 250 Women Leaders 2023 review
· Intention to become a B-Corp; giving strong external accreditation of our approach to social responsibility. Expected to be the first FTSE 250 entity to achieve this. Certification to be ratified following AGM in July 2024
Robust financial position and balance sheet
· Weighted average interest rate unchanged at 2.30% (March 2023: 2.30%); all drawn debt at fixed rates
· Weighted average debt maturity of 6 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
· Revolving credit facilities refinanced in October 2023, increased to £200 million, reduced overall cost and adding sustainability-linked KPIs
· Net debt of £1,217 million on a fully unsecured basis with cash and undrawn facilities of £235 million (including refinanced RCF)
Summary results
| Financial performance | March 2024 | March 2023 | Change |
| Net rental income | £143.3m | £138.0m | 3.8% |
| IFRS loss before tax | £(28.7)m | £(119.2)m | (75.8)% |
| IFRS loss per share | (1.0)p | (4.0)p | |
| EPRA earnings per share | 3.4p | 3.3p | 3.0% |
| Dividend per share | 3.24p | 3.08p | 5.2% |
| Property valuation and performance | March 2024 | March 2023 | Change |
| Investment property | £2,708m | £2,738m | (1.1)% |
| Diluted EPRA NTA per share | 49.3p | 53.6p | (8.0)% |
| Rent roll | £150.6m | £143.4m | 5.0% |
| Financing | March 2024 | March 2023 | Change |
| Net debt to EBITDA | 9.4x | 9.1x | |
| Undrawn facilities and cash | £235m | £243m | (3.3)% |
| 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.
For further information, please contact:
| Assura plc Jayne Cottam, CFO David Purcell, Investor Relations Director | Tel: 0161 515 2043 Email: Investor@assura.co.uk |
| FGS GlobalGordon Simpson Grace Whelan | Tel: 0207 251 3801 Email: Assura@fgsglobal.com |