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 Global
Gordon Simpson
Grace Whelan
|
Tel: 0207 251 3801
Email: Assura@fgsglobal.com
|
A presentation for investors and
analysts followed by live Q&A will be hosted at the London
Stock Exchange on 21 May 2024 at 9.00am BST. The event will also be
streamed live at the following link, and shortly after the event a
full recording will be available.
Webcast link:
https://brrmedia.news/AGR_FY23
This announcement contains inside
information as defined in Article 7 of the EU Market Abuse
Regulation No 596/2014 and has been announced in accordance with
the Company's obligations under Article 17 of that
Regulation.
Notes to Editors
Assura plc is the UK's leading
specialist healthcare property investor and developer. Assura
enables better health outcomes through its portfolio of more than
600 healthcare buildings, from which over six million patients are
served.
A UK REIT based in Altrincham,
Assura is a constituent of the FTSE 250 and the EPRA* indices. As
at 31 March 2024, Assura's portfolio was valued at £2.7 billion and
has a strong track record of growing financial returns and
dividends for shareholders.
At Assura, we BUILD for health,
having developed over 100 new healthcare buildings in our history,
and at the heart of our strategy sits The Bigger Picture; Healthy
Environment (E), Healthy Communities (S), Healthy Business
(G).
Further information is available
at www.assuraplc.com
Assura plc LEI
code: 21380026T19N2Y52XF72
*EPRA is a registered trademark of
the European Public Real Estate Association.
Chair's statement
Delivering growth for our shareholders
I am pleased to be reporting to
you on another year in which we have delivered for all of our
stakeholders - delivering new buildings for health services,
delivering building upgrades and sustainability improvements,
delivering social value through our community initiatives and
delivering growth for our shareholders.
The delivery of health services in
the UK is a subject which is so often front and centre of the
political agenda and is incredibly important to the population of
the UK. The NHS faces many challenges: long waiting lists, an
ageing population with increasingly complex health needs, budgetary
pressures, ageing infrastructure and a wave of medical and
technological innovations. All of these will need to be addressed
in the coming years.
Whilst the NHS continues to be a
system of which we, in the UK, are rightly proud, it is also a
system that needs help to continue to adapt and deliver the changes
a fit-for-purpose health service requires.
There are many improvements that
can be made to achieve this. Moving services out of hospital into a
community-setting. Shifting the focus to prevention from treatment.
Investing in an estate which has a growing maintenance backlog.
Training the staff needed to deliver the healthcare of the future.
Harnessing the power of digital delivery and access. Thinking about
sustainability as an investment for improved long-term cost
efficiency. All areas that can be enabled through Assura's
expertise and experience.
Increasingly, the NHS is supported
by, or patients choose to be seen by, the private sector. Embracing
the help of the private sector from capacity to expertise can
enable the health system as a whole to become more efficient.
Jonathan's CEO Statement covers why we consider private assets, and
those in broader healthcare markets, as attractive investments.
What is most important is that patients get early diagnoses and
then are treated promptly and efficiently - something that Assura
enables by creating standout quality facilities that provide
capacity to support high quality patient care and improved patient
outcomes.
We continue to run our business
for the long term, including conservatively managing our balance
sheet. Whilst the recent economic headwinds have led to many
difficult decisions around capital allocation and cost control, our
long-term prospects remain strong. The recent valuation movement of
our portfolio has no impact on our occupiers or the underlying
quality of our cash flows.
We are proud to have delivered
another year of growth in earnings and dividend for
shareholders.
This growth has not come at the
expense of our other stakeholders, who remain at the centre of our
strategic decision making. Our re-launched ESG strategy, The Bigger
Picture, doesn't change what we are doing. It does, however,
provide us with a lens through which to frame our decisions -
thinking about ensuring a Healthy Environment, positively
contributing to Healthy Communities and remaining a Healthy
Business. We believe our approach leaves us well-placed to capture
more than our fair share of opportunities over the long
term.
Even in times of adversity, The
Bigger Picture sets the long term expectation from the
public.
Once again I would like to
reiterate that all the great things our business does would not be
possible without the skill and dedication of our team. We promote
creative thinking - our buildings are not 'one size fits all' and
that speaks to the approach we collectively take. We pride
ourselves on the strength of our long term relationships, which
ultimately comes down to how everyone within our organisation
operates and conducts themselves.
We continue to look to the future
with a high degree of optimism - seeing myriad ways that our
business can grow and deliver for all of our stakeholders, economic
returns, innovation, expertise, ultimately enabling better health
outcomes.
Ed Smith CBE
Non-Executive Chair
21 May 2024
CEO statement
Delivering essential healthcare
infrastructure to create value for all stakeholders
Assura is a business built for the
long-term, enabling better health outcomes to create value for all
our stakeholders.
As the leading investor and
developer of healthcare buildings in a community setting, Assura is
best-placed to meet the critical need for delivery of
fit-for-purpose, sustainable healthcare buildings leveraging our
extensive sector experience and taking a consistently, disciplined
investment approach.
The UK is facing a healthcare
crisis, and the nation's ageing population combined with
unrelenting hospital waiting lists continues to drive significant
demand for investment in healthcare infrastructure.
This demand for investment in
improved and more diverse health facilities has received
cross-party political support, with countless reports highlighting
the need to move services out of hospital and tackle health
inequalities within communities in a cost-effective way. 2024 is
set to be an election year and the NHS will undoubtedly be a key
election topic, already having been granted considerable air time
by all the major political parties in recent months. Whichever
party is in Government post-election, our expectation is that there
will continue be a desire to demonstrate improvements in health
services during the next parliamentary term. Investment in
community healthcare is an obvious way to achieve this - easing
pressure on the NHS, benefiting patients, focusing on prevention
rather than treatment, and ultimately making the health system more
efficient over the long-term.
It is these essential health
spaces that Assura invests in and develops, across healthcare
markets including for private providers, and our resilient cash
flows which have delivered growing dividends to our shareholders,
underpinned by long-term healthcare demands.
Our decision making is on a
long-term basis too and is why we continue to illustrate discipline
in our investment and development activities, waiting for the right
opportunities and adapting as our cost of capital has evolved over
the past 18 months in response to the macro-economic environment.
We have moved on site with five developments in the year as rent
negotiations catch up with the current cost of new buildings. We
see pockets of improvement in certain locations around the country,
generally where demand is strongest, and maintain our push for a
wider unlocking.
Recognising the evolving and
diversified nature of healthcare demand in communities, we continue
to develop opportunities in broader healthcare markets: with NHS
Trusts, partnerships with private providers, provision of mental
health service infrastructure and expansion into Ireland. We
identified all of these areas as demonstrating the same underlying
market demand for more investment in health buildings; structural
trends that support this demand; offering attractive risk-adjusted
investment characteristics with long leases and a secure cash flow
stream; and benefitting from Assura's extensive sector experience,
expertise and long-term relationships.
We have a strong financial
position, with a secure balance sheet, A- investment grade credit
rating from Fitch and a debt book, one of the best in the UK listed
real estate sector, that is fully fixed at a rate of 2.3% and with
a maturity of 6 years. These characteristics position us well for
the long-term as we continue to invest in our capabilities to
remain best-placed to meet the needs of our customers.
Intrinsic to delivering better
outcomes for all our stakeholders is our ESG focus - which
underpins everything we do at Assura as we support the communities
and environments we serve to deliver associated long-term health
benefits.
Our newly refreshed ESG strategy -
the Bigger Picture - provides three clear pillars of Healthy
Environment, Healthy Communities and Healthy Business, against
which to align our strategic decisions, central to which sits
Assura's high quality team. Our success would not be possible
without this team, and we were delighted to see strong positive
results from our staff engagement survey as well as recognition for
our gender diversity - being Top 10 for the FTSE 250 Women Leaders
2023 review.
Financial and operational performance
Our business is built on the
reliability and resilience of the long-term, secure cash flows from
our high-quality £2.7 billion portfolio of 614 properties alongside
our efficient capital structure.
We strive to grow the rental
income generated from our portfolio…
Assura has consistently
demonstrated an ability to identify and secure new opportunities
for growth, building on our market-leading capabilities to manage,
invest in and develop outstanding spaces for health services in our
communities.
We have continued our strong track
record of investing with capital discipline. We made one
acquisition in Ireland and have closely monitored our on site
developments to deliver them on budget. We celebrated our
100th development completion of Prestbury Medical Centre
in Wolverhampton, with a total of five completions (£72 million)
during the year that also included schemes for private operators
such as a state-of-the art day case hospital in Kettering and a
cancer care facility in Guildford as well as our first development
completion in Ireland: Kilbeggan Medical Centre. These diverse
schemes, alongside the contribution from portfolio management,
enabled us to deliver 4% growth in net rental income to
£143.3 million, and our passing rent roll stands at £150.6
million 5% higher than 12 months ago.
…whilst protecting the
quality of our cash flows…
An essential part of our growth
strategy is the careful review of every asset for opportunities to
increase its lifetime cash flows and impact on the community. Our
portfolio management team seek to enhance the value of our assets
through agreeing rent reviews, completing lease re-gears, letting
vacant space and undertaking physical extensions.
This year, the team completed 307
rent reviews (generated an 8.9% uplift on the rent reviewed), 15
lease re-gears, and invested in eight capital projects and 45
sustainability improvements. Collectively these added £3.4 million
to our rent roll, offering attractive growth for modest capital
outlay. Our total contracted rental income, which is a combination
of our passing rent roll and lease length, stands at £1.8 billion,
our weighted average unexpired lease term is 10.8 years and 95% of
our income comes from GPs, the NHS, the HSE, pharmacies or
established private operators.
…and carefully controlling
our balance sheet and cost base…
Despite the impact of inflation,
we reduced administrative expenses and our EPRA Cost Ratio fell.
The decline in valuation, albeit lower than in the previous year
nevertheless resulted in us recording an IFRS loss of £29 million
or 1.0 pence per share.
Our balance sheet remains strongly
positioned with robust debt metrics of net debt to EBITDA, interest
cover and LTV. Our investment grade rating of A- was re-affirmed by
Fitch Ratings Ltd in January 2024.
All of our drawn debt has fixed
interest, at an average of 2.3%, a weighted average maturity of 6
years and we have no significant refinancings due in the next four
years.
…to deliver earnings growth
that supports our dividend policy.
These elements have enabled us to
continue our track record of growth year on year. Our EPRA earnings
have increased by 6% to £102.3 million which translates to an EPRA
EPS of 3.4 pence per share.
The strength of our income and the
growth we have delivered is reflected in our fully covered dividend
payments, which we have now increased for 11 consecutive years.
Alongside these results, we announce a 2% increase in the quarterly
dividend payment to 0.84 pence with effect from the July 2024
payment, equivalent to 3.36 pence per share on an annualised
basis.
Assura outlook
The primary care market remains a
challenging environment in which to achieve external growth, with
delays in agreeing the rents required for new build developments to
be commercially viable. The underlying demand for new buildings
remains high, so we are confident that this position will unlock in
due course, and pockets of opportunity have started to emerge in
some regions. We only move on site when all aspects of a scheme
(NHS approval, fixed price construction contract, agreement for
lease in place) are agreed in full.
Our focus over the past 12 months
has been on efficiently delivering our on site schemes and driving
internal growth, as well as continuing to grow our longer term
pipeline of opportunities across broader healthcare
markets.
We are currently on site with
eight developments (remaining spend £42 million) of which six are
due to complete in 2024 and so will positively boost our rental
income in the coming months, as well as having attractive long term
rental growth characteristics.
The make-up of schemes we have
completed in recent years is where we have seen change. Our five
completions include only two UK medical centres (in Kings Lynn and
Wolverhampton) - the others being two treatment centres for private
providers (Guildford and Kettering) and one primary care community
centre in Ireland (Kilbeggan), building on our successes in recent
years with the West Midlands Ambulance Hub and several private
day-case hospitals.
Similarly, our eight on site
schemes include two UK medical centres (Southampton and
Winchester). The others include three Irish schemes (Castlebar,
Birr and Ballybay), two buildings for NHS Trusts (Cramlington and
Bury St Edmunds) and an NHS children's therapy centre
(Fareham).
Our capital markets event in
February highlighted the attraction of these broader healthcare
markets, with very similar investment characteristics to our
existing portfolio - long leases, upward only rent reviews, and,
most importantly, underpinned by the long-term health needs in each
particular location that gives us a strong underlying occupier
covenant. All of these areas offer attractive growth in the future,
both short- and long-term, and we expect these, collectively, to
become increasingly meaningful contributors to our rental growth
and earnings, alongside the strong prospects in the primary care
market.
Having completed eight asset
enhancement projects (£8.9 million) in the period, we are on site
with a further six (total spend £4.0 million). The nature of each
of these projects is different - for example, a significant
extension and refurbishment of the existing area at Wantage, a
sustainability-linked improvement alongside a reconfiguration and
lease regear at Ling House in Keighley, and a sustainability linked
upgrade in Banbury (conversion to an air source heat pump).
Crucially each of these responds to specific local and community
needs for health services and associated infrastructure. Delivering
projects such as these helps us serve our customers best, as well
as driving long-term returns from the assets in our
portfolio.
Market outlook
Assura has a vital role as a
partner to a range of health providers to ease the pressures faced
by the system, whether with GPs, with NHS Trusts, mental health
services, private providers or the HSE in Ireland. Our unique set
of skills leaves us well-placed to capture opportunities across
these identified areas.
Health providers need a specialist
health care landlord to develop new premises or to improve their
existing estate and Assura's long-term relationships in healthcare,
focus on social impact and sustainability, and capabilities across
development and asset enhancements means we can offer health care
providers a complete, long-term solution.
We are the partner of choice for
the future: best placed to provide high-quality, sustainable new
premises for delivery of health services, to retrofit existing
buildings to meet the net zero carbon challenge, partnering with
our supply chain to maximise the social value that we create for
the communities we operate in and continually evolving our offering
through adopting the latest technologies and responding to shifting
demand in the healthcare sector.
This approach means we are
enabling our customers, and partners, to do what they do best -
delivering quality health care services and better patient
outcomes.
Jonathan Murphy
CEO
21 May 2024
CFO Review
A disciplined approach creating
growing returns for investors
Despite the turbulent economic
backdrop, our portfolio continues to deliver high-quality cash
flows, which combine with our disciplined cost control and
fixed-rate debt book to deliver growing EPRA earnings.
We have continued to demonstrate
our long-term resilience with another year of strong financial
performance. Our focus has been on delivering our on site
developments and generating internal growth from rent reviews and
asset enhancement activities.
This year we successfully
refinanced our revolving credit facility with improved terms;
increasing the size of the facility, reducing the costs and adding
sustainability-linked KPIs. The improved terms are a reflection of
the strength of our business, which also saw our A- rating from
Fitch reaffirmed with a stable outlook.
Despite the wider macroeconomic
uncertainty, with the inflationary environment and increase in
interest rates, the strong financial performance highlights the
resilience of our assets in generating high-quality cash flows. Our
asset class benefits from increasing demand, long leases and a
primarily government-backed occupier base, and so it remains
attractive regardless of the political or economic
backdrop.
This is then enhanced by our
disciplined balance sheet management and cost control. The
long-term, fixed and sustainable financing in place, and the
reduction in administrative expenses, despite the inflationary
environment, means the growth in rental income can efficiently flow
through to EPRA earnings and the dividend we pay.
All of this means we continue to
have high confidence in our future prospects and our ability to
deliver attractive returns that benefit all of our
stakeholders.
Alternative Performance Measures
("APMs")
The financial performance for the
period is reported including a number of APMs (financial measures
not defined under IFRS). We believe that including these alongside
IFRS measures provides additional information to help understand
the financial performance for the period, in particular in respect
of EPRA performance measures which are designed to aid
comparability across real estate companies. Explanations to define
why the APM is used and calculations of the measures, with
reconciliations back to reported IFRS measured normally in the
Glossary, are included where possible.
Portfolio as at 31 March 2024 £2,708.3 million (2023:
£2,738.0 million)
Our business is based on our
investment portfolio of 614 properties (2023: 608).
This has a passing rent roll of
£150.6 million (2023: £143.4 million), 79% of which is underpinned
by the NHS. The WAULT is 10.8 years (2023: 11.2 years) and we have
a total contracted rent roll of £1.76 billion (2023: £1.77
billion).
At 31 March 2024 our portfolio of
completed investment properties was valued at a total of £2,652.1
million (2023: £2,667.4 million), which produced a net initial
yield ("NIY") of 5.17% (2023: 4.87%). Taking account of potential
lettings of unoccupied space and any uplift to current market rents
on review, our valuers assess the net equivalent yield to be 5.41%
(2023: 5.09%). Adjusting this Royal Institution of Chartered
Surveyors ("RICS") standard measure to reflect the advanced payment
of rents, the true equivalent yield is 5.43% (2023:
5.12%).
Our EPRA NIY, based on our passing
rent roll and latest annual direct property costs, was 5.08% (2023:
4.77%).
|
2024
£m
|
2023
£m
|
Net rental income
|
143.3
|
138.0
|
Valuation movement
|
(131.5)
|
(215.3)
|
Total Property Return
|
11.8
|
(77.3)
|
Reflecting the recent unstable
macroeconomic backdrop and movement in gilt yields, we, like most
real estate companies, recorded a loss on valuation of £131.5
million in the period. This is consequently reflected in our Total
Property Return (expressed as a percentage of opening investment
property plus additions) which was 0.4% for the year (2023:
negative 2.6%).
The net valuation loss represents
a 4% movement on a like-for-like basis (prior year 6.4%). However,
this was offset by the positive actions we have taken in the year
to improve the portfolio - with 15 lease regears, eight capital
projects and £3.4 million additional rent from asset enhancement
activities.
As a comparison, the 10-year and
15-year UK gilts moved significantly in the year, now standing at
3.93% and 4.23% respectively (2023:3.49% and 3.78%
respectively).
Portfolio additions
We have continued to take a
disciplined approach to investment in the period, with primary
spending relating to on site developments and asset enhancement
capital projects. This follows on from the slowdown in activity
which commenced around October 2022 following the economic
uncertainty in the UK which preceded an increase in interest
rates.
Expenditure in the period can be
split between investments in completed properties, developments,
forward-funding projects, extensions and fit-out costs enabling
vacant space to be let as follows:
|
2024
£m
|
Acquisitions
|
13.2
|
Completed developments
|
71.8
|
Additions
|
85.0
|
Disposals
|
(3.4)
|
Asset enhancement &
sustainability
|
15.7
|
Net investment
|
97.3
|
We have completed one acquisition
in Ireland, five developments reached practical completion and
completed eight asset enhancement capital projects. These
activities focused on completing outstanding commitments, and
opportunities for generating internal growth.
These additions were at a combined
total cost of £85 million with a combined initial passing rent of
£3.8 million and a WAULT of 25 years.
Development activity
We completed five developments
during the year, with a completion value of £71.8 million. The
completions reflected a mix of GP surgeries (two including the
100th development in our 20-year history, Prestbury Medical
Practice in Wolverhampton) and broader healthcare markets (two
private day case units in Kettering and Guildford, and our first
completion in Ireland at Kilbeggan).
Reflecting our disciplined
approach in response to the current economic backdrop, only three
schemes have moved on site during the year. All three are in
broader healthcare markets with two in Ireland and one ambulance
hub in Bury St Edmunds, meaning that we have eight schemes on site
at 31 March 2024. These eight schemes have a combined development
cost of £91.2 million, of which £42.0 million is remaining to be
spent as at the year end.
We continue to source additional
schemes for our development pipeline, but the pressures of both
rising construction costs and higher costs of finance have led us
to proceed with discipline before committing, ensuring all aspects
are fixed before we commence. We have an immediate pipeline of five
properties (estimated cost £28 million, which we would hope to be
on site within 12 months) and an extended pipeline of 34 properties
(estimated cost £423 million, appointed exclusive partner and
awaiting NHS approval).
Live developments and forward
funding arrangements
|
Forward
fund/ in house
|
Principal
occupier
|
Estimated
completion date
|
Total
development costs
£m
|
Costs
to date
£m
|
Size
sq.m
|
Ballbay
|
FF
|
HSE
|
Q4
24
|
4.3
|
1.2
|
1,695
|
Birr
|
FF
|
HSE
|
Q3
25
|
15.3
|
0.9
|
5,000
|
Bury St Edmunds
|
In
house
|
NHS
Trust
|
Q2
24
|
11.1
|
8.0
|
2,900
|
Castlebar
|
In
house
|
HSE
|
Q2
25
|
11.9
|
1.0
|
4,200
|
Cramlington
|
In
house
|
NHS
Trust
|
Q2
24
|
26.7
|
23.5
|
6,500
|
Fareham
|
In
house
|
NHS
Trust
|
Q4
24
|
5.2
|
2.1
|
950
|
Southampton
|
In
house
|
GPs
|
Q2
24
|
8.3
|
7.9
|
1,385
|
Winchester
|
In
house
|
GPs
|
Q3
24
|
8.4
|
4.6
|
1,353
|
Portfolio management
Our rent roll grew by £7.2 million
during the year to £150.6 million. The growth came from rent
reviews (£3.1 million), acquisitions and development completions
(£3.8 million), and asset enhancement activity (£0.3
million).
During the year we successfully
concluded 307 rent reviews (2023: 352 reviews) to generate a
weighted average annual rent increase of 3.9% (2023: 3.8%) on those
properties, which is a figure that includes rent reviews we chose
not to instigate in the year. These 307 reviews covered £34.1
million or 24% of our rent roll at the start of the year and, on a
like-for-like basis, the absolute increase of £3.1 million is an
8.9% increase on this rent. Our portfolio benefits from a 39%
weighting in fixed, RPI and other uplifts which generated an
average uplift of 5.2% during the period. The majority of our
portfolio is subject to open market reviews and these have
generated an average uplift of 1.7% (2023: 1.5%) during the
period.
Our total contracted rental
income, which is a function of the current rent roll and unexpired
lease term on the existing portfolio and on site developments, is
£1.76 billion (March 2023: £1.77 billion). We grow our total
contracted rental income through additions to the portfolio and
getting developments on site, but increasingly our focus has been
extending the unexpired term on the leases on our existing
portfolio ("regears").
We delivered 15 lease regears in
the year covering £0.5 million of current annual rent and adding 10
years to the WAULT for those particular leases and two vacant space
lettings adding £0.1 million annual rent (2023: 15 regears, £2.0
million of rent). We have also agreed terms on a pipeline of 33
regears covering £4.4 million of rent roll and these are currently
in legal hands.
We have completed eight capital
projects in the year (total spend £8.9 million) and are currently
on site with a further six (total spend of £4.0 million). These
schemes increase the WAULT on those properties by 11 years and
improve the sustainability performance of those buildings. In
addition, we have 18 asset enhancement projects we hope to complete
in the next two years with estimated spend of £8.7
million.
Our EPRA Vacancy Rate was 1.0%
(March 2023: 1.0%).
Our current contracted annual rent
roll is £150.6 million and, on a proforma basis, would increase to
in excess of £161.0 million once on site developments, asset
enhancement projects and rent reviews are completed.
Administrative expenses
Administrative expenses in the
year were £13.2 million (2023: £13.3 million). The Group analyses
cost performance by reference to our EPRA Cost Ratios (including
and excluding direct vacancy costs) which were 13.2% and 11.7%
respectively (2023: 13.5% and12.3%).
We also measure our operating
efficiency as the ratio of administrative costs to the average
gross investment property value. This ratio during the period
equated to 0.48% (2023: 0.48%).
Financing
Our balance sheet and financing
position remains strong. We have cash reserves and committed
undrawn facilities totalling £235.4 million, and our long-term,
drawn facilities have fixed rates in place.
Growth during the period, with net
investment of £97.3 million, has been funded by cash
reserves.
In October we completed the
refinancing of our revolving credit facility for a further three
years with the option of extending by a further two. We increased
the facility to £200 million, reduced by the all-in cost of the
facility and added sustainability-linked KPIs which, if achieved,
will result in a five basis-point reduction to the interest, which
will be paid to the Assura Community Fund. Following this, 55% of
our available facilities are now ESG-linked.
Financing statistics
|
2024
|
2023
|
Net debt (Note 12)
|
£1,217.4m
|
£1,134.6m
|
ESG-linked financing
|
55%
|
43%
|
Weighted average debt
maturity
|
6.0 years
|
7.0
years
|
Weighted average interest
rate
|
2.30%
|
2.30%
|
% of debt at fixed/capped
rates
|
100%
|
100%
|
EBITDA to net interest
cover
|
4.8x
|
4.5x
|
Net debt to EBITDA
|
9.4x
|
9.1x
|
LTV (Note 12)
|
45%
|
41%
|
As can be seen from the table
above, the cash flow based debt metrics of net debt to EBITDA and
interest cover remain very strong with our high quality portfolio
generating strong recurring cash flows and our fixed debt
facilities with long remaining maturity. The metrics are two of the
measures used by Fitch in their rating assessment, which was
reaffirmed at A- in January 2024 with a stable outlook.
Our LTV ratio currently stands at
45% which has increased over the past two years as a result of
negative valuation movements caused by the macroeconomic backdrop.
We generally operate with an LTV in and around 40%, and our policy
allows us to reach the range of 40-50% should the need
arise.
100% of our drawn debt facilities
are at fixed interest rates, although this will change as and when
we draw on the revolving credit facility which is at a variable
rate.
The weighted average debt maturity
is 6.0 years, and our longest dated facilities (the Social and
Sustainability bonds which mature in 2030 and 2033 respectively)
are at our lowest rates (1.5% and 1.625% respectively).
Over the next four years, we have
only £250 million of debt that needs refinancing. Assuming these
were to be refinanced at a rate of 5.5%, this would only impact
EPRA EPS by approximately 0.2 pence on an annualised
basis.
Net finance costs presented
through EPRA earnings in the year amounted to £27.1 million (2023:
£27.3 million).
IFRS loss before tax
IFRS loss before tax for the
period was £28.7 million (2023: loss of £119.2 million). The prior
year loss was as a result of greater negative valuation
movement.
EPRA earnings
|
2024
£m
|
2023
£m
|
Net rental income
|
143.4
|
138.0
|
Administrative expenses
|
(13.2)
|
(13.3)
|
Net finance costs
|
(27.1)
|
(27.3)
|
Share-based payments and
other
|
(0.8)
|
(0.6)
|
EPRA earnings
|
102.3
|
96.8
|
The movement in EPRA earnings can
be summarised as follows:
|
£m
|
Year ended 31 March
2023
|
96.8
|
Net rental income
|
5.3
|
Administrative expenses &
other
|
-
|
Net finance costs
|
0.2
|
Year ended 31 March 2024
|
102.3
|
EPRA earnings has grown 6% to
£102.3 million in the year to 31 March 2024 reflecting the property
acquisitions and developments completed as well as the impact of
our asset management activity with rent reviews and new lettings,
whilst administrative and other costs have remained
flat.
Earnings per share
The basic earnings per share
("EPS") on loss for the period was (1.0) pence (2023: loss of (4.0)
pence).
EPRA EPS, which excludes the net
impact of valuation movements and gains on disposal, was 3.4 pence
(2023: 3.3 pence).
Based on calculations completed in
accordance with IAS 33, share-based payment schemes are currently
expected to be dilutive to EPS, with 1.3 million new shares
expected to be issued. The dilution is not material with no impact
on EPS figures.
Dividends
Total dividends settled in the
year to 31 March 2024 were £96.1 million or 3.24 pence per share
(2023: 3.08 pence per share). £10.6 million of this was satisfied
through the issuance of shares via scrip.
As a REIT with requirement to
distribute 90% of taxable profits (Property Income Distribution,
"PID"), the Group expects to pay out as dividends at least 90% of
EPRA earnings. Three dividends paid during the year were PIDs and
one was a normal dividend (non-PID). It is expected that the
majority of future dividends will be PIDs.
The table below illustrates our
cash flows over the period:
|
2024
£m
|
2023
£m
|
Opening cash
|
118.0
|
243.5
|
Net cash flow from operations
|
102.4
|
94.1
|
Dividends paid
|
(85.5)
|
(88.9)
|
Investment:
|
|
|
Property and other
acquisitions
|
(31.7)
|
(150.3)
|
Development expenditure
|
(69.4)
|
(57.9)
|
Sale of properties
|
3.4
|
77.8
|
Financing:
|
|
|
Net borrowing movement
|
(1.8)
|
(0.3)
|
Closing cash
|
35.4
|
118.0
|
Net cash flow from operations
differs from EPRA earnings due to movements in working capital
balances, but remains the cash earned that is used to support
dividends paid.
The investment activity in the
period has been funded from cash reserves and the disposals during
the period.
Diluted EPRA NTA movement
|
£m
|
Pence
per
share
|
Diluted EPRA NTA at 31 March 2023 (Note 6)
|
1,586.9
|
53.6
|
EPRA earnings
|
102.3
|
3.4
|
Capital (revaluations and capital
gains)
|
(131.1)
|
(4.4)
|
Dividends
|
(96.1)
|
(3.2)
|
Other (inc. scrip
dividend)
|
10.5
|
(0.1)
|
Diluted EPRA NTA at 31 March 2024 (Note 6)
|
1,472.5
|
49.3
|
Our Total Accounting Return per
share for the year ended 31 March 2024 is (2.0)% (2023: (6.6)%) of
which 3.2 pence per share (6.0%) has been distributed to
shareholders, offset by the 4.3 pence per share (8.0%) reduction in
EPRA NTA.
Jayne Cottam
CFO
21 May 2024
Consolidated income
statement
For the year ended 31 March
2024
|
|
2024
|
2023
|
|
Note
|
EPRA
£m
|
Capital
and non-EPRA
£m
|
Total
£m
|
EPRA
£m
|
Capital
and non-EPRA
£m
|
Total
£m
|
Gross rental and related
income
|
|
150.2
|
7.6
|
157.8
|
144.4
|
6.0
|
150.4
|
Property operating
expenses
|
|
(6.9)
|
(7.6)
|
(14.5)
|
(6.4)
|
(6.0)
|
(12.4)
|
Net rental income
|
3
|
143.3
|
-
|
143.3
|
138.0
|
-
|
138.0
|
|
|
|
|
|
|
|
|
Administrative expenses
|
|
(13.2)
|
-
|
(13.2)
|
(13.3)
|
-
|
(13.3)
|
Revaluation deficit
|
|
-
|
(131.5)
|
(131.5)
|
-
|
(215.3)
|
(215.3)
|
Gain on sale of property
|
|
-
|
1.0
|
1.0
|
-
|
0.1
|
0.1
|
Share-based payment
charge
|
|
(0.8)
|
-
|
(0.8)
|
(0.7)
|
-
|
(0.7)
|
Share of losses from
investments
|
|
0.2
|
(0.5)
|
(0.3)
|
0.1
|
(0.8)
|
(0.7)
|
Finance income
|
3
|
2.1
|
-
|
2.1
|
1.6
|
-
|
1.6
|
Finance costs
|
4
|
(29.2)
|
(0.1)
|
(29.3)
|
(28.9)
|
-
|
(28.9)
|
Loss before taxation
|
|
102.4
|
(131.1)
|
(28.7)
|
96.8
|
(216.0)
|
(119.2)
|
Taxation
|
|
(0.1)
|
-
|
(0.1)
|
-
|
-
|
-
|
Loss for the year attributable to
equity holders of the parent
|
|
102.3
|
(131.1)
|
(28.8)
|
96.8
|
(216.0)
|
(119.2)
|
|
|
|
|
|
|
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
Exchange (loss)/gain arising on
translation of foreign operations
|
|
-
|
(0.6)
|
(0.6)
|
-
|
0.4
|
0.4
|
Total comprehensive loss
|
|
102.3
|
(131.7)
|
(29.4)
|
96.8
|
(215.6)
|
(118.8)
|
|
|
|
|
|
|
|
|
EPS
|
- basic & diluted
|
5
|
|
|
(1.0)p
|
|
|
(4.0)p
|
EPRA EPS
|
- basic & diluted
|
5
|
3.4p
|
|
|
3.3p
|
|
|
All income arises from continuing
operations in the UK and Ireland.
Consolidated balance
sheet
As at 31 March 2024
|
Note
|
2024
£m
|
2023
£m
|
Non-current assets
|
|
|
|
Investment property
|
7
|
2,708.3
|
2,738.0
|
Property work in
progress
|
7
|
9.5
|
13.9
|
Property, plant and
equipment
|
|
1.0
|
0.3
|
Equity accounted and other
investments
|
|
19.7
|
18.3
|
Deferred tax asset
|
|
0.6
|
0.6
|
|
|
2,739.1
|
2,771.1
|
Current assets
|
|
|
|
Cash, cash equivalents and
restricted cash
|
|
35.4
|
118.0
|
Trade and other
receivables
|
|
37.3
|
33.1
|
Property assets held for
sale
|
7
|
0.4
|
0.4
|
|
|
73.1
|
151.5
|
Total assets
|
|
2,812.2
|
2,922.6
|
Current liabilities
|
|
|
|
Trade and other payables
|
8
|
49.9
|
46.8
|
Head lease liabilities
|
|
0.3
|
0.4
|
Deferred revenue
|
|
32.2
|
30.6
|
|
|
82.4
|
77.8
|
Non-current liabilities
|
|
|
|
Borrowings
|
|
1,246.9
|
1,246.4
|
Head lease liabilities
|
|
5.6
|
5.8
|
Deferred revenue
|
8
|
4.2
|
5.1
|
|
|
1,256.7
|
1,257.3
|
Total liabilities
|
|
1,339.1
|
1,335.1
|
Net assets
|
|
1,473.1
|
1,587.5
|
Capital and reserves
|
|
|
|
Share capital
|
10
|
298.5
|
296.1
|
Share premium
|
|
932.7
|
924.5
|
Merger and other reserve
|
10
|
231.0
|
231.6
|
Retained earnings
|
|
10.9
|
135.3
|
Total equity
|
|
1,473.1
|
1,587.5
|
|
|
|
|
NAV per Ordinary Share
- basic
- diluted
|
6
6
|
49.4p
49.3p
|
53.6p
53.6p
|
EPRA NTA per Ordinary Share
- basic & diluted
|
6
|
49.3p
|
53.6p
|
The financial statements were
approved at a meeting of the Board of Directors held on 21 May 2024
and signed on its behalf by:
Jonathan Murphy
Jayne Cottam
CEO
CFO
Consolidated statement of changes
in equity
For the year ended 31 March
2024
|
Note
|
Share
capital
£m
|
Share
premium
£m
|
Merger
reserve and other
£m
|
Retained
earnings
£m
|
Total
equity
£m
|
1
April 2022
|
|
294.8
|
918.5
|
231.2
|
345.1
|
1,789.6
|
Loss attributable to equity
holders
|
|
-
|
-
|
-
|
(119.2)
|
(119.2)
|
Other comprehensive
income:
|
|
|
|
|
|
|
Exchange gain on translation of
foreign balances
|
10
|
-
|
-
|
0.4
|
-
|
0.4
|
Total comprehensive loss
|
|
-
|
-
|
0.4
|
(119.2)
|
(118.8)
|
Issue of Ordinary Shares
|
10
|
0.8
|
4.3
|
-
|
-
|
5.1
|
Dividends
|
|
0.4
|
1.7
|
-
|
(91.0)
|
(88.9)
|
Employee share-based
incentives
|
|
0.1
|
-
|
-
|
0.4
|
0.5
|
31
March 2023
|
|
296.1
|
924.5
|
231.6
|
135.3
|
1,587.5
|
|
|
|
|
|
|
|
Loss attributable to equity
holders
|
|
-
|
-
|
-
|
(28.8)
|
(28.8)
|
Other comprehensive
loss:
Exchange loss on translation of
foreign balances
|
|
-
|
-
|
(0.6)
|
-
|
(0.6)
|
Total comprehensive loss
|
|
-
|
-
|
(0.6)
|
(28.8)
|
(29.4)
|
Dividends
|
|
2.4
|
8.2
|
-
|
(96.1)
|
(85.5)
|
Employee share-based
incentives
|
|
-
|
-
|
-
|
0.5
|
0.5
|
31
March 2024
|
|
298.5
|
932.7
|
231.0
|
10.9
|
1,473.1
|
Consolidated cash flow
statement
For the year ended 31 March
2024
|
Note
|
2024
£m
|
2023
£m
|
Operating activities
|
|
|
|
Rent received
|
|
147.0
|
138.1
|
Interest paid and similar
charges
|
|
(29.3)
|
(29.0)
|
Fees received
|
|
1.6
|
1.4
|
Interest received
|
|
2.1
|
1.6
|
Cash paid to suppliers and
employees
|
|
(19.0)
|
(18.0)
|
Net cash inflow from operating
activities
|
|
102.4
|
94.1
|
|
|
|
|
Investing activities
|
|
|
|
Purchase of investment
property
|
|
(28.9)
|
(135.1)
|
Development expenditure
|
|
(69.4)
|
(57.9)
|
Proceeds from sale of
property
|
|
3.4
|
77.8
|
Other investments and property,
plant and equipment
|
|
(2.8)
|
(15.2)
|
Net cash outflow from investing
activities
|
|
(97.7)
|
(130.4)
|
|
|
|
|
Financing activities
|
|
|
|
Dividends paid
|
|
(85.5)
|
(88.9)
|
Interest on head lease
liabilities
|
|
(0.2)
|
(0.2)
|
Loan issue costs
|
|
(1.6)
|
(0.1)
|
Net cash outflow from financing
activities
|
|
(87.3)
|
(89.2)
|
|
|
|
|
Decrease in cash, cash equivalents
and restricted cash
|
|
(82.6)
|
(125.5)
|
|
|
|
|
Opening cash, cash equivalents and
restricted cash
|
|
118.0
|
243.5
|
Closing cash, cash equivalents and
restricted cash
|
|
35.4
|
118.0
|
Notes to the accounts
For the year ended 31 March
2024
1. Corporate information and operations
The Company is a public limited
company, limited by shares, incorporated and domiciled in England
and Wales, whose shares are publicly traded on the main market of
the London Stock Exchange.
With effect from 1 April 2013, the
Group has elected to be treated as a UK REIT.
2. Basis of preparation
The financial information set out
in this preliminary announcement is derived from but does not
constitute the Group's statutory accounts for the years ended 31
March 2024 and 31 March 2023, and as such, does not contain all
information required to be disclosed in the financial statements
prepared in accordance with UK-adopted international accounting
standards (IFRSs). The financial information has been extracted
from the Group's audited consolidated statutory accounts. The
auditor has reported on those accounts, their reports were
unqualified, did not draw attention to any matters by way of
emphasis, and did not contain statements under s498 (2) or (3) of
the Companies Act 2006.
The consolidated financial
statements have been prepared on a historical cost basis, except
for investment properties, including investment properties under
construction and land which are included at fair value. The
financial statements have been prepared in accordance with
UK-adopted international accounting standards ("IFRS").
In concluding that the going
concern basis of preparation is appropriate for the period to 31
May 2025, the Board of Directors have had reference to financial
forecasts (including a number of sensitivities and scenarios)
showing that borrowing facilities are adequate, the Group can
operate within these facilities and meets its obligations when they
fall due. All investment in the financial forecasts is at
management's discretion, with the exception of committed
development spend.
The Group has adequate headroom in
its banking covenants and has been in compliance throughout the
previous 12 months. In reaching its conclusion, the Directors have
considered the specific impact in respect of the ongoing situation
in Ukraine and the Middle East as well as the current macroeconomic
backdrop, none of which, in themselves, are considered significant
risks to the business based on the current position.
The accounting policies have been
applied consistently to the results, other gains and losses,
liabilities and cash flows of entities included in the consolidated
financial statements. All intragroup balances, transactions, income
and expenses are eliminated on consolidation.
In preparing the financial
statements, management has considered the impact of climate change,
taking into account the relevant disclosures in the Strategic
Report, including those made in accordance with TCFD, and
considered the impact of the issues identified to be appropriately
built into the financial statements. The impact of climate change
is considered in the valuation of investment properties and future
cash flows of the Group and so is appropriately considered in these
financial statements. The impact of climate change on the values
are expected to be immaterial.
3. Net rental income
|
2024
£m
|
2023
£m
|
Rental revenue
|
148.7
|
143.0
|
Service charge income
|
7.6
|
6.0
|
Other related income
|
1.5
|
1.4
|
Gross rental and related
income
|
157.8
|
150.4
|
Finance revenue
|
|
|
Bank and other interest
|
2.1
|
1.6
|
Total revenue
|
159.9
|
152.0
|
|
2024
£m
|
2023
£m
|
Gross rental and related
income
|
157.8
|
150.4
|
Direct property expenses
|
(6.9)
|
(6.4)
|
Service charge expenses
|
(7.6)
|
(6.0)
|
Net rental income
|
143.3
|
138.0
|
During the year, £1.5 million of
rental revenue was generated from operations in Ireland (2023: £0.7
million).
4. Finance costs
|
2024
£m
|
2023
£m
|
Interest payable
|
28.9
|
28.9
|
Interest capitalised on
developments
|
(2.0)
|
(2.3)
|
Amortisation of loan issue
costs
|
2.1
|
2.1
|
Interest on head lease
liability
|
0.2
|
0.2
|
Refinancing costs
|
0.1
|
-
|
Total finance costs
|
29.3
|
28.9
|
Interest was capitalised on
property developments at the appropriate cost of finance at
commencement. During the year this ranged from 4% to 5% (2023: 4%
to 5%).
5. Earnings per Ordinary
Share
|
Earnings
2024
£m
|
EPRA
earnings
2024
£m
|
Earnings
2023
£m
|
EPRA
earnings
2023
£m
|
Loss for the year
|
(28.8)
|
(28.8)
|
(119.2)
|
(119.2)
|
Revaluation deficit
|
|
131.5
|
|
215.3
|
Share of revaluation losses from
investments
|
|
0.5
|
|
0.8
|
Gain on sale of property
|
|
(1.0)
|
|
(0.1)
|
Refinancing fees
|
|
0.1
|
|
-
|
EPRA earnings
|
|
102.3
|
|
96.8
|
EPS - basic &
diluted
|
(1.0p)
|
|
(4.0)p
|
|
EPRA EPS - basic &
diluted
|
|
3.4p
|
|
3.3p
|
|
2024
|
2023
|
Weighted
average number of shares in issue
|
2,970,682,182
|
2,958,384,509
|
Potential
dilutive impact of share options
|
1,292,891
|
1,055,291
|
Diluted
weighted average number of shares in issue
|
2,971,975,073
|
2,959,439,800
|
The current number of potentially
dilutive shares relates to nil-cost options under the share-based
payment arrangements and is 1.3 million (2023: 1.1
million).
The EPRA measures set out above
are in accordance with the Best Practice Recommendations of the
European Public Real Estate Association dated February
2022.
6. NAV per Ordinary Share
2024
£m
|
IFRS
|
EPRA NRV
|
EPRA NTA
|
EPRA NDV
|
IFRS net assets
|
1,473.1
|
1,473.1
|
1,473.1
|
1,473.1
|
Deferred tax
|
|
(0.6)
|
(0.6)
|
-
|
Fair value of debt
|
|
-
|
-
|
176.7
|
Real estate transfer tax
|
|
171.3
|
-
|
-
|
EPRA adjusted NAV
|
|
1,643.8
|
1,472.5
|
1,649.8
|
Per Ordinary
Share
- basic
- diluted
|
49.4p
49.3p
|
55.1p
55.0p
|
49.3p
49.3p
|
55.3p
55.2p
|
2023
£m
|
IFRS
|
EPRA NRV
|
EPRA NTA
|
EPRA NDV
|
IFRS net assets
|
1,587.5
|
1,587.5
|
1,587.5
|
1,587.5
|
Deferred tax
|
|
(0.6)
|
(0.6)
|
-
|
Fair value of debt
|
|
-
|
-
|
226.5
|
Real estate transfer tax
|
|
174.5
|
-
|
-
|
EPRA adjusted
|
|
1,791.4
|
1,586.9
|
1,814.0
|
Per Ordinary
Share
- basic
-
diluted
|
53.6p
53.6p
|
59.5p
59.5p
|
53.6p
53.6p
|
61.3p
61.2p
|
|
2024
|
2023
|
Number of
shares in issue
|
2,984,790,496
|
2,960,594,138
|
Potential
dilutive impact of share options
|
1,292,891
|
1,055,291
|
Diluted
number of shares in issue
|
2,986,083,387
|
2,961,649,429
|
For definitions of the above EPRA
NAV metrics, see Glossary.
Mark to market adjustments have
been provided by the counterparty or by reference to the quoted
fair value of financial instruments.
7. Property assets
Investment property and investment
property under construction ("IPUC").
Properties are stated at fair
value as at 31 March 2024. The fair value has been determined by
the Group's external valuers CBRE, Cushman & Wakefield and
Jones Lang LaSalle. The properties have been valued individually
and on the basis of open market value (which the Directors consider
to be the fair value) in accordance with RICS Valuation -
Professional Standards 2020 ("the Red Book"). Valuers are paid on
the basis of a fixed fee arrangement, subject to the number of
properties valued.
|
Investment 2024
£m
|
IPUC
2024
£m
|
Total
2024
£m
|
Investment 2023
£m
|
IPUC
2023
£m
|
Total
2023
£m
|
Opening market value
|
2,685.0
|
53.0
|
2,738.0
|
2,682.8
|
69.1
|
2,751.9
|
Additions:
|
|
|
|
|
|
|
- acquisitions
|
17.7
|
-
|
17.7
|
126.5
|
-
|
126.5
|
- improvements
|
11.1
|
-
|
11.1
|
15.0
|
-
|
15.0
|
|
28.8
|
-
|
28.8
|
141.5
|
-
|
141.5
|
Development costs
|
-
|
73.8
|
73.8
|
-
|
58.9
|
58.9
|
Transfers
|
71.8
|
(71.8)
|
-
|
72.5
|
(72.5)
|
-
|
Capitalised interest
|
-
|
2.0
|
2.0
|
-
|
2.3
|
2.3
|
Disposals
|
(2.1)
|
(0.3)
|
(2.4)
|
(1.8)
|
-
|
(1.8)
|
Foreign exchange gain
|
(0.4)
|
-
|
(0.4)
|
0.5
|
-
|
0.5
|
Unrealised deficit on
revaluation
|
(124.5)
|
(7.0)
|
(131.5)
|
(210.5)
|
(4.8)
|
(215.3)
|
Closing fair value of
investment property
|
2,658.6
|
49.7
|
2,708.3
|
2,685.0
|
53.0
|
2,738.0
|
Investment property includes a
£5.8 million head lease liability (2023: £6.2 million).
|
2024
£m
|
2023
£m
|
Market value of investment property
as estimated by valuer
|
2,652.1
|
2,677.4
|
Add IPUC
|
49.7
|
53.0
|
Add capitalised lease premiums and
rental payments
|
0.7
|
1.4
|
Add head lease obligations
recognised separately
|
5.8
|
6.2
|
Fair value for financial reporting
purposes
|
2,708.3
|
2,738.0
|
Completed investment property held
for sale
|
-
|
-
|
Land held for sale
|
0.4
|
0.4
|
Total property assets
|
2,708.7
|
2,738.4
|
|
2023
£m
|
2022
£m
|
Investment property
|
2,652.1
|
2,677.4
|
Investment property held for
sale
|
-
|
-
|
Total completed investment
property
|
2,652.1
|
2,677.4
|
At March 2024, there is one asset
held as available for sale (2023: one asset). These properties are
either being actively marketed for sale or have a negotiated sale
agreed which is currently in legal hands.
Fair value hierarchy
The fair value measurement
hierarchy for all investment property and IPUC as at 31 March 2024
was Level 3 - Significant unobservable inputs (2023: Level 3).
There were no transfers between Levels 1, 2 or 3 during the
year.
Descriptions and definitions
relating to valuation techniques and key unobservable inputs made
in determining fair values are as follows:
Valuation techniques used to derive Level 3 fair
values
The valuations have been prepared
on the basis of fair market value which is defined in the Red Book
as "the estimated amount for which an asset or liability should
exchange on the valuation date between a willing buyer and a
willing seller in an arms-length transaction after proper marketing
and where the parties had each acted knowledgeably, prudently and
without compulsion".
Unobservable inputs
The key unobservable inputs in the
property valuation are the net initial yield, the equivalent yield
and the ERV, which are explained in more detail below. It is also
worth noting that the properties are subject to physical inspection
by the valuers on a rotational basis (at least once every three
years).
In respect of 97% of the portfolio
by value, the net initial yield ranges from 3.8% to 8.5% (2023:
3.5% to 8.5%) and the equivalent yield ranges from 3.9% to 8.5%
(2023: 3.8% to 8.5%). A decrease in the net initial or equivalent
yield applied to a property would increase the market value.
Factors that affect the yield applied to a property include the
weighted average unexpired lease term, the estimated future
increases in rent, the strength of the occupier covenant and the
physical condition of the property. Lower yields generally
represent properties with index-linked reviews, 100% NHS tenancies
and longer unexpired lease terms, ranging from 4.0% to 4.5%. Higher
yields (range 6.0% to 8.5%) are applied for a weaker occupier mix
and leases approaching expiry. Our properties have a range of
occupier mixes, rent review basis and unexpired terms. A 0.25%
shift in either net initial or equivalent yield would have
approximately a £115.7 million (2023: £124 million) impact on the
investment property valuation.
The ERV ranges from £100 to £750
per sq.m (2023: £100 to £669 per sq.m), in respect of 95% of the
portfolio by value. An increase in the ERV of a property would
increase the market value. A 2% increase in the ERV would have
approximately a £52.4 million (2023: £53.2 million) increase in the
investment property valuation. The nature of the sector we operate
in, with long unexpired lease terms, low void rates, low occupier
turnover and upward only rent review clauses, means that a
significant fall in the ERV is considered unlikely.
Property work in progress
|
2024
£m
|
At 1 April
|
13.9
|
Additions during the
period
|
0.7
|
Transfers
|
(5.1)
|
At 31 March
|
9.5
|
8. Deferred revenue
|
2024
£m
|
2023
£m
|
Arising from rental received in
advance
|
31.5
|
30.1
|
Arising from pharmacy lease
premiums received in advance
|
4.9
|
5.6
|
|
36.4
|
35.7
|
|
|
|
Current
|
32.2
|
30.6
|
Non-current
|
4.2
|
5.1
|
|
36.4
|
35.7
|
9. Borrowings
|
2024
£m
|
2023
£m
|
At 1 April
|
1,246.4
|
1,244.4
|
Amount drawn down in
year
|
-
|
-
|
Amount repaid in year
|
-
|
-
|
Loan issue costs
|
(1.6)
|
(0.1)
|
Amortisation of loan issue
costs
|
2.1
|
2.1
|
At 31 March
|
1,246.9
|
1,244.4
|
Due within one year
|
-
|
-
|
Due after more than one
year
|
1,246.9
|
1,246.4
|
At 31 March
|
1,246.9
|
1,246.4
|
The Group has the following bank
facilities:
1. 10-year senior unsecured bond of
£300 million at a fixed rate of 3% maturing July 2028, 10-year
senior unsecured Social Bond of £300 million at a fixed interest
rate of 1.5% maturing September 2030 and 12-year senior unsecured
Sustainability Bond of £300 million at a fixed rate of 1.625%
maturing June 2033. The Social and Sustainability Bonds were
launched in accordance with Assura's Social & Sustainable
Finance Frameworks respectively to be used for eligible investment
in the acquisition, development and refurbishment of publicly
accessible primary care and community healthcare centres. The bonds
are subject to an interest cover requirement of at least 150%,
maximum LTV of 65% and priority debt not exceeding 0.25:1. In
accordance with pricing convention in the bond market, the coupon
and quantum of the facility are set to round figures with the
proceeds adjusted based on market rates on the day of
pricing.
2. Three-year club unsecured
revolving credit facility with Barclays, HSBC, NatWest and
Santander. In October 2023, this was refinanced to October 2026,
increasing the facility from £125 million to £200 million, and
reducing the margin which starts at 1.35% above SONIA subject to
LTV. The margin has a ratchet linked to LTV, increasing up to 1.75%
where the LTV is in excess of 45%. The facility is subject to a
historical interest cover requirement of at least 175% and maximum
LTV of 60%. As at 31 March 2024, the facility was undrawn (2023:
undrawn).
3. 10-year notes in the US
private placement market for a total of £100 million. The notes are
unsecured, have a fixed interest rate of 2.65% and were drawn on 13
October 2016. An additional £107 million of notes were issued in
two series, £47 million in August 2019 and £60 million in October
2019, with maturities of 10 and 15 years respectively and a
weighted average fixed interest rate of 2.30%. The facilities are
subject to a historical interest cover requirement of at least
175%, maximum LTV of 60% and a weighted average lease length of
seven years. All notes are denominated in GBP.
4. £150 million of unsecured
privately placed notes in two tranches with maturities of eight and
ten years drawn on 20 October 2017. The weighted average coupon is
3.04%. The facility is subject to a historical cost interest cover
requirement of at least 175%, maximum LTV of 60% and a weighted
average lease length of seven years.
The Group has been in compliance
with all financial covenants on all of the above loans as
applicable throughout the year. Debt instruments held at year end
have prepayment options that can be exercised at the sole
discretion of the Group. As at the year end no prepayment option
has been exercised. Borrowings are stated net of unamortised loan
issue costs and unamortised bond pricing adjustments totalling
£10.1 million (2023: £10.6 million).
10. Share capital and other
reserves
|
Number
of shares
2024
|
Share capital
2024
£m
|
Number
of shares
2023
|
Share capital
2023
£m
|
Ordinary Shares of 10 pence each
issued and fully paid
|
|
|
|
|
At 1 April
|
2,960,594,138
|
296.1
|
2,948,359,637
|
294.8
|
Issued 7 April 2022
|
-
|
-
|
3,331,539
|
0.3
|
Issued 13 April 2022 -
scrip
|
-
|
-
|
317,384
|
-
|
Issued 27 April 2022
|
-
|
-
|
4,556,283
|
0.5
|
Issued 13 July 2022
|
-
|
-
|
974,245
|
0.1
|
Issued 13 July - scrip
|
-
|
-
|
1,659,620
|
0.2
|
Issued 12 October 2022 -
scrip
|
-
|
-
|
52,001
|
-
|
Issued 11 January 2023 -
scrip
|
-
|
-
|
1,343,429
|
0.2
|
Issued 12 April 2023 -
scrip
|
3,053,978
|
0.3
|
-
|
-
|
Issued 12 July 2023
|
287,241
|
-
|
-
|
-
|
Issued 12 July 2023 -
scrip
|
1,376,254
|
0.1
|
-
|
-
|
Issued 11 October 2023 -
scrip
|
6,281,654
|
0.7
|
-
|
-
|
Issued 10 January 2024 -
scrip
|
13,197,231
|
1.3
|
-
|
-
|
Total share capital
|
2,984,790,496
|
298.5
|
2,960,594,138
|
296.1
|
There is no difference between the
number of Ordinary Shares issued and authorised. At the AGM each
year, approval is sought from shareholders giving the Directors the
ability to issue Ordinary Shares, up to 10% of the Ordinary Shares
in issue at the time of the AGM.
The Ordinary Shares issued in
April 2022, July 2022, October 2022, January 2023, April 2023, July
2023, October 2023 and January 2024 were issued to shareholders who
elected to receive Ordinary Shares in lieu of a cash dividend under
the Company scrip dividend alternative. In the year to 31 March
2024 this increased share capital by £2.4 million and share premium
by £8.2 million (2023: £0.4 million and £1.7 million
respectively).
The Ordinary Shares issued on 7
April 2022 and 27 April 2022 were issued as part consideration for
the acquisition of medical centres.
The Ordinary Shares issued in July
2022 and July 2023 relate to employee share awards under the
Performance Share Plan. A portion of the shares issued on 13 July
2022 (383,194) and on 12 July 2023 (287,241) were issued to the EBT
on behalf of employees under the PSP.
The share capital relates to the
Group and Company.
Other reserves
The merger reserve £231.2 million
(2023: £231.2 million) relates to the capital restructuring in
January 2015 whereby Assura plc replaced Assura Group Limited as
the top company in the Group and was accounted for under merger
accounting principles.
The other reserve relates to the
foreign exchange translation reserve £(0.2) million (2023: £0.4
million).
11. Dividends paid on Ordinary Shares
Payment date
|
Pence per
share
|
Number of
Ordinary Shares
|
2024
£m
|
2023
£m
|
13 April 2022
|
0.74
|
2,951,691,176
|
-
|
21.8
|
13 July 2022
|
0.78
|
2,957,539,088
|
-
|
23.0
|
12 October 2022
|
0.78
|
2,959,198,708
|
-
|
23.1
|
11 January 2023
|
0.78
|
2,959,250,709
|
-
|
23.1
|
12 April 2023
|
0.78
|
2,960,594,138
|
23.1
|
-
|
12 July 2023
|
0.82
|
2,963,935,357
|
24.3
|
-
|
11 October 2023
|
0.82
|
2,965,311,611
|
24.3
|
-
|
10 January 2024
|
0.82
|
2,971,593,265
|
24.4
|
-
|
|
|
|
96.1
|
91.0
|
The April dividend for 2024/25 of
0.82 pence per share was paid on 10 April 2024 and the July
dividend for 2024/25 of 0.84 pence per share is currently planned
to be paid on 10 July 2024 with a record date of 7 June
2024.
A scrip dividend alternative was
introduced with effect from the January 2016 quarterly dividend.
Details of shares issued in lieu of dividend payments can be found
in Note 11.
The April 2022, July 2022, October
2022, April 2023, July 2023 and October 2023 dividends were PIDs as
defined under the REIT regime. Future dividends will be a mix of
PID and normal dividends as required.
The dividends paid disclosure
relates to both the Group and Company.
12. Financial instruments
The Group monitors capital
structure with reference to LTV, which is calculated as net debt
divided by total property. The LTV percentage on this basis is 45%
at 31 March 2024 (31 March 2023: 41%).
|
2024
£m
|
2023
£m
|
Investment property
|
2,658.6
|
2,685.0
|
Investment property under
construction
|
49.7
|
53.0
|
Held for sale
|
0.4
|
0.4
|
Total property
|
2,708.7
|
2,738.4
|
|
2024
£m
|
2023
£m
|
Borrowings
|
1,246.9
|
1,246.4
|
Head lease liabilities
|
5.9
|
6.2
|
Cash, cash equivalents and
restricted cash
|
(35.4)
|
(118.0)
|
Net debt
|
1,217.4
|
1,134.6
|
LTV
|
45%
|
41%
|
Financial liabilities, which
comprise loans and head lease liabilities in the table above, have
increased from £1,252.6 million to £1,252.8 million as at 31 March
2024.
13. Commitments
At the year end the Group had
eight (2023: 11) committed developments which were all on site with
a contracted total expenditure of £91.2 million (2023: £129
million) of which £49.2 million (2023: £54.7 million) had been
expended. The remaining commitment is therefore £42.0 million
(2023: £74.3 million).
In addition, the Group is on site
with six asset enhancement capital projects (2023: eight) with a
contracted total expenditure of £4.0 million (2023: £8.9 million)
of which £2.1 million (2023: £5.0 million) had been expended. The
remaining commitment is therefore £1.9 million (2023: £3.9
million).
The Group is committed to invest
up to £5 million in PropTech investor PI Labs III LP, which can be
requested on demand to cover investments that the fund makes in
qualifying, selected PropTech businesses. £2.7 million had been
invested as at 31 March 2024.
Glossary
AGM is the Annual General
Meeting.
ASHP is air source heat
pump.
Average Debt Maturity is each
tranche of Group debt multiplied by the remaining period to its
maturity and the result divided by total Group debt in issue at the
year end.
Average Interest Rate is the
Group loan interest and derivative costs per annum at the year end,
divided by total Group debt in issue at the year end.
British Property Federation ("BPF")
is the membership organisation, the voice of the
real estate industry.
Building Research Establishment Environmental Assessment
Method ("BREEAM") assess the
sustainability of buildings against a range of criteria.
Code or New Code is the UK
Corporate Governance Code 2018, a full copy of which can be found
on the website of the Financial Reporting Council.
Company is Assura
plc.
Direct Property Costs comprise cost of repairs and maintenance, void costs, other
direct irrecoverable property expenses and rent review
fees.
District Valuer ("DV") is the
commercial arm of the Valuation Office Agency. It provides
professional property advice across the public sector and in
respect of primary healthcare represents NHS bodies on matters of
valuations, rent reviews and initial rents on new
developments.
Earnings per Ordinary Share from Continuing Operations
("EPS") is the profit attributable
to equity holders of the parent divided by the weighted average
number of shares in issue during the period.
EBITDA is EPRA earnings
before tax and net finance costs. In the current period this is
£129.5 million, calculated as net rental income (£143.3 million)
plus income from investments (£0.2 million), less administrative
expenses (£13.2 million) and share-based payment charge (£0.8
million).
ED&I is equality,
diversity and inclusion.
European Public Real Estate Association
("EPRA") is the industry body for
European REITs. EPRA is a registered trademark of the European
Public Real Estate Association.
EPRA Cost Ratio is
administrative and operating costs divided by gross rental income.
This is calculated both including and excluding the direct costs of
vacant space.
EPRA earnings is a measure of
profit calculated in accordance with EPRA guidelines, designed to
give an indication of the operating performance of the business,
excluding one-off or non-cash items such as revaluation movements
and profit or loss on disposal. See Note 5.
EPRA EPS is EPRA earnings,
calculated on a per share basis. See Note 5.
EPRA Loan to Value ("EPRA LTV") is debt divided by the market value of the property,
differing from our usual LTV by the inclusion of net current
payables or receivables and the proportionate share of
co-investment arrangements.
EPRA Net Disposal Value ("EPRA NDV")
is the balance sheet net assets adjusted to
reflect the fair value of debt and derivatives. See Note 6. This
replaces the previous EPRA NNNAV metric.
EPRA Net Reinstatement Value ("EPRA NRV")
is the balance sheet net assets excluding
deferred tax and adjusted to add back theoretical purchasers' costs
that are deducted from the property valuation. See Note
6.
EPRA Net Tangible Assets ("EPRA NTA")
is the balance sheet net assets excluding
deferred taxation. See Note 6. This replaces the previous EPRA NAV
metric.
EPRA NIY is annualised rental
income based on cash rents passing at the balance sheet date, less
non-recoverable property operating expenses, divided by the market
value of property, increased with (estimated) purchasers' costs.
The "topped-up" yield adjusts this for the expiration of rent-free
periods and other unexpired lease incentives.
EPRA Vacancy Rate is the ERV
of vacant space divided by the ERV of the whole
portfolio.
Equivalent Yield represents
the return a property will produce based upon the timing of the
income received. The true equivalent yield assumes rents are
received quarterly in advance. The nominal equivalent assumes rents
are received annually in arrears.
ESG is environmental, social
and governance.
Estimated Rental Value ("ERV") is the external valuers' opinion as to the open market rent
which, on the date of valuation, could reasonably be expected to be
obtained on a new letting or rent review of a property.
EUI is energy usage
intensity, being a measure of how much energy is used by a building
per square metre.
GMS is General Medical
Services.
Gross Rental Income is the
gross accounting rent receivable.
Group is Assura plc and its
subsidiaries.
HSE is the Health Service
Executive, the body which provides public health and social care
services to everyone living in Ireland.
IFRS is UK-adopted
international accounting standards.
Interest Cover is the number
of times net interest payable is covered by EBITDA. In the current
period net interest payable is £27.1 million, EBITDA is £129.5
million, giving interest cover of 4.8 times.
KPI is a Key Performance
Indicator.
kWh is kilowatt-hour, being a
unit of energy.
Like-for-like represents
amounts calculated based on properties owned at the previous year
end.
Loan to Value ("LTV") is the
ratio of net debt to the total value of property assets. See Note
12.
Mark to Market is the
difference between the book value of an asset or liability and its
market value.
MSCI is an organisation that
provides performance analysis for most types of real estate and
produces an independent benchmark of property returns.
NAV is Net Asset
Value.
Net debt is total borrowings
plus head lease liabilities less cash. See Note 12.
Net Initial Yield ("NIY") is
the annualised rents generated by an asset, after the deduction of
an estimate of annual recurring irrecoverable property outgoings,
expressed as a percentage of the asset valuation (after notional
purchasers' costs). Development properties are not
included.
Net Rental Income is the
rental income receivable in the period after payment of direct
property costs. Net rental income is quoted on an accounting
basis.
Operating efficiency is the
ratio of administrative costs to the average gross investment
property value. This ratio during the period equated to 0.48%. This
is calculated as administrative expenses of £13.2 million divided
by the average property balance of £2,723 million (opening £2,738
million plus closing £2,708 million, divided by two).
Primary Care Network ("PCN") is GP practices working with local community, mental health,
social care, pharmacy, hospital and voluntary services to build on
existing primary care services and enable greater provision of
integrated health services within the community they
serve.
Primary Care Property is the
property occupied by health service providers who act as the
principal point of consultation for patients such as GP practices,
dental practices, community pharmacies and high street
optometrists.
Property Income Distribution ("PID")
is the required distribution of income as
dividends under the REIT regime. It is calculated as 90% of
exempted net income.
PSP is Performance Share
Plan.
PV is photo-voltaic panels,
commonly referred to as solar panels.
Real Estate Investment Trust ("REIT")
is a listed property company which qualifies for
and has elected into a tax regime which exempts qualifying UK
profits, arising from property rental income and gains on
investment property disposals, from corporation tax, but requires
the distribution of a PID.
Rent Reviews take place at
intervals agreed in the lease (typically every three years) and
their purpose is usually to adjust the rent to the current market
level at the review date.
Rent Roll is the passing rent
(i.e. at a point in time) being the total of all the contracted
rents reserved under the leases, on an annual basis. At March 2024
the rent roll was £150.6 million (March 2023: £143.4 million) and
the growth in the year was £7.2 million.
Retail Price Index ("RPI") is
an official measure of the general level of inflation as reflected
in the retail price of a basket of goods and services such as
energy, food, petrol, housing, household goods, travelling fares,
etc. RPI is commonly computed on a monthly and annual
basis.
RPI Linked Leases are those
leases which have rent reviews which are linked to changes in the
RPI.
SBTi is Science Based Targets
initiative.
Total Accounting Return is
the overall return generated by the Group including the impact of
debt. It is calculated as the movement on EPRA NTA (see glossary
definition and Note 6) for the period plus the dividends paid,
divided by the opening EPRA NTA. Opening EPRA NTA (i.e. at 31 March
2023) was 53.6 pence per share, closing EPRA NTA was 49.3 pence per
share, and dividends paid total 3.24 pence per share giving a
return of (2.0)% in the year.
Total Contracted Rent Roll or Total Contracted Rental
Income is the total amount of rent
to be received over the remaining term of leases currently
contracted. For example, a lease with rent of £100 and a remaining
lease term of ten years would have total contracted rental income
of £1,000. At March 2024, the total contracted rental income was
£1.76 billion (March 2023: £1.77 billion).
Total Property Return is the
overall return generated by properties on a debt-free basis. It is
calculated as the net rental income generated by the portfolio plus
the change in market values, divided by opening property assets
plus additions. In the year to March 2024, the calculation is net
total income of £143.3 million less revaluation loss of £131.5
million giving a return of £11.8 million, divided by £2,833.0
million (opening investment property £2,677.4 million and IPUC
£53.0 million plus additions of £28.8 million and development costs
of £73.8 million). This gives a Total Property Return in the year
of 0.4%.
Total Shareholder Return ("TSR") is the combination of dividends paid to shareholders and the
net movement in the share price during the period, divided by the
opening share price. The share price at 31 March 2023 was 48.9
pence, at 31 March 2024 it was 42.6 pence, and dividends paid
during the period were 3.24 pence per share.
UK GBC is the UK Green
Building Council.
Weighted Average Unexpired Lease Term ("WAULT")
is the average lease term remaining to first
break, or expiry, across the portfolio weighted by contracted
rental income.
Yield on cost is the
estimated annual rent of a completed development divided by the
total cost of development including site value and finance costs
expressed as a percentage return.
Yield shift is a movement
(usually expressed in basis points) in the yield of a property
asset or like-for-like portfolio over a given period.
Yield compression is a
commonly used term for a reduction in yields.