TIDMAGR
RNS Number : 0392T
Assura PLC
12 November 2019
12 November 2019
Assura's strong performance enhanced by growing development and
asset enhancement pipelines
Assura remains a key partner to the NHS
Assura plc ("Assura"), the leading primary care property
investor and developer, today announces its interim results for the
6 months to 30 September 2019.
Jonathan Murphy, CEO, said: "Assura has today delivered another
strong performance, driven by new developments and carefully
selected acquisitions. We have again made good progress with our
key operational metrics, reporting 10% growth in net rental income,
maintaining our focus on asset enhancement, selective strategic
acquisitions and disposals. Our pipeline is the strongest it has
been in 10 years, enhanced by the acquisition of GPI, which has
created fresh opportunities for Assura.
"The UK's primary care infrastructure continues to be in
immediate need of modernisation which will ease the significant
strain on NHS services. We remain well-positioned to be the NHS's
partner of choice, bringing a long-term approach to both investing
and developing with an unrivalled team, capital strength and
quality of service."
A growing portfolio driving performance
-- Net rental income up 10% to GBP50.6 million, rent roll growth of 2% to GBP104.4 million,
-- 148 rent reviews settled in six months
-- 2.04% of rental growth secured through settled rent reviews,
1.15% relating to open market reviews
-- EPRA cost ratio at 12.8%, one of the lowest in the real estate sector
-- EPRA EPS up 8% to 1.4p reflecting contribution from completed developments and acquisitions
-- Dividend paid in period rise of 8% to 1.4p per share
-- Profit before tax down 3% to GBP36.4 million, due to lower revaluation gains
-- Portfolio value up 3% to GBP2,039 million driven by
acquisitions and developments, EPRA NAV increased 0.2p to 53.5p
-- Portfolio NIY now 4.72% and WAULT of 11.6 years demonstrates
attractiveness of sector and Assura as a business
Strongest on-site and pipeline position in 10 years, bolstered
by GPI acquisition
-- GBP43 million of additions to completed property in the
period; purchase of nine high quality properties and completion of
two state-of-the-art developments
-- 14 developments currently on-site and immediate pipeline of 15 further schemes
-- Pipeline of properties on site or in legal hands at GBP206
million, up from GBP142 million at year end
-- Immediate and extended development pipeline boosted by
acquisition of pipeline and team of primary care developer GPI,
announced in May
-- 15 disposals for total proceeds of GBP18 million, above book value
Strong balance sheet ensures a platform for growth
-- LTV of 36% provides good headroom to create value and build
portfolio, weighted average interest rate of 3.16%
-- Completed private placement of GBP107 million notes in August
-- Undrawn committed facilities at GBP310 million
-- A- (stable outlook) rating from Fitch providing us with a
broadened access to debt capital markets and lenders
Committed to delivering a positive social impact in the
communities we operate in
-- Sustainability a core priority for all new developments
-- Focus on supporting climate change targets, sustainable
investor returns and customer running costs
-- Signing up to be a member of the UK Green Building Council
-- Awarded Bronze Award for compliance with EPRA Sustainability Best Practice Recommendations
Maintaining focus on being the NHS partner of choice
-- Best-placed to support NHS given people, capital strength,
quality of service, long-term relationships and market
understanding
-- Long-term approach to investing with collaboration across
investment, development and portfolio teams
-- Primary care remains an integral part of reducing pressure on the NHS's services
-- Assura's buildings sit at the heart of communities across the
UK, supporting 5.6 million patients: 8.5% of the UK population
-- Strong pipeline of properties in legal hands at GBP206
million reinforces Assura's position as partner of choice
Summary Results
Financial performance Sep 2019 Sep 2018 Change
EPRA earnings per share 1.4p 1.3p 7.7%
---------- ----------- -------
Profit before tax GBP36.4m GBP37.4m (2.7)%
---------- ----------- -------
Net rental income GBP50.6m GBP46.2m 9.5%
---------- ----------- -------
Dividend per share 1.4p 1.3p 7.7%
---------- ----------- -------
Property valuation and performance Sep 2019 March 2019 Change
---------- ----------- -------
Investment property GBP2,039m GBP1,979m 3.0%
---------- ----------- -------
Diluted EPRA NAV per share 53.5p 53.3p -
---------- ----------- -------
Contracted annual rent roll GBP104.4m GBP102.7m 1.7%
---------- ----------- -------
Financing Sep 2019 March 2019 Change
---------- ----------- -------
Loan to value ratio 36% 34% 2ppts
---------- ----------- -------
Undrawn committed facilities GBP310m GBP270m 14.8%
---------- ----------- -------
Weighted average cost of debt 3.16% 3.24% 8bps
---------- ----------- -------
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
and the notes to the interim review.
For further information, please contact:
Assura plc: Tel: 01925 420 660
Jayne Cottam - CFO
Orla Ball - Company Secretary
David Purcell - Head of Financial
Reporting
Finsbury: Tel: 0207 251 3801
Gordon Simpson
James Thompson
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.
Presentation and webcast:
A presentation will be held for analysts and investors on 12
November 2019 at 10.30am London time, with a webcast available from
our website or via the following link:
https://webcasting.brrmedia.co.uk/broadcast/5d3577b448a6d52f84f6a945
Notes to Editors
Assura plc, a constituent of the FTSE 250 and the EPRA* indices,
is a UK REIT and long-term investor in and developer of primary
care property. The company, headquartered in Warrington, works with
GPs, health professionals and the NHS to create outstanding spaces
for health services in our communities. At 30 September 2019,
Assura's property portfolio was valued at GBP2,039 million.
Further information is available at www.assuraplc.com
*EPRA is a registered trademark of the European Public Real
Estate Association.
CEO's statement
The first half of this year has been another period of strong
progress for Assura, driven by new developments and carefully
selected acquisitions. Our on-site and pipeline status is the
strongest it has been in 10 years, boosted by the acquisition of
the GPI development pipeline.
We have seen further improvements in our key operational
metrics, including impressive rental income growth following a
close focus on asset enhancement and strategic acquisitions.
We have consolidated our leading position as an investor and
developer of choice for primary care medical centres. We remain
well placed as the largest developer in our sector to deliver new
buildings that are crucial to the provision of high-quality health
services in the communities they serve.
Enhanced portfolio
The value of our portfolio has increased by GBP60 million to
GBP2.0 billion, reflecting mainly acquisitions which added GBP34
million and GBP21 million spend on developments. Overall, our
investment property stands at 560 medical centres and we have a
strong pipeline of opportunities for further growth.
The level of development opportunities has also continued to
grow, and the acquisition of primary care developer GPI has further
strengthened our team and pipeline. In addition to the two
development completions in the first half, we have 14 schemes on
site (total end cost GBP69 million), an immediate pipeline of 15
schemes (GBP72 million) which we hope to commence within 12 months
and an extended pipeline, where we are the appointed development
partner but the scheme is not yet approved, of 32 schemes (GBP168
million).
The growth of the development pipeline over the last two years
has accelerated as more schemes are clearing the NHS approval
process.
The market for primary care medical centres remains competitive,
but our acquisition pipeline remains strong at GBP65 million.
The renewed focus on improving our existing assets has seen us
achieve increased levels of lease regears and new tenants in the
period. We are concentrating on growing our contracted rental
income, and we have developed a good pipeline of lease events that
are in legal hands.
Our current LTV is 36%, which we expect to increase in the short
term as we fund further growth of the portfolio through both
acquisitions and developments. We have a good level of headroom on
our banking facilities to fund further growth.
Financial highlights
The growth in our portfolio has continued to be reflected in our
financial results. Net rental income increased 10% to GBP50.6
million, while EPRA earnings increased 4% to GBP32.9 million, or
1.4 pence per share. IFRS profit before tax was GBP36.4 million and
diluted EPRA net asset value grew to 53.5 pence per share at the
period end.
As previously stated, we intend to announce proposed dividends
annually at the time of our full year results rather than with the
interim results as is currently the case. The quarterly dividend
will be increased by 1.8% to 0.697 pence per share with effect from
the January 2020 and any further changes will be announced
alongside the full year results in May 2020.
Strong market opportunity
Assura maintains an open dialogue with the key stakeholders
within the NHS and Government. We continue to demonstrate our
excellent track record and ability to deliver state of the art
primary care premises within the heart of the community. We remain
at the forefront to deliver value for money for the NHS and for the
taxpayer as a third party developer ("3PD"). The ability to deliver
these developments presents limited development risk for Assura
with pre-let arrangements as well as the opportunity for future
rental growth.
The NHS is planning the allocation of its additional funding
with a renewed focus on illness prevention. This focus leans to
investment in primary care, partnership working with community
healthcare services and social prescribing. Further detail for NHS
capital investment will come next year, but with private finance
initiatives ("PFI") ruled out by the Chancellor, good value public
private partnership options for investment in community healthcare
buildings, such as third party development, will continue to play
an important role.
We have continued to both source and complete acquisition
prospects during the period utilising our proprietary database. Our
extended development pipeline is the strongest it has been for the
past 10 years and has been further improved by the addition of the
GPI pipeline. Assura's market share remains modest and there are
many opportunities for further growth in a highly fragmented and
specialist market.
Board changes
David Richardson retired as Senior Independent Director at the
conclusion of the AGM on 2 July, having served for seven years. I
would like to thank him personally and on behalf of the Board for
his valued contribution over this growth period.
Jonathan Davies, who has been a Non-Executive Director since
June 2018, has taken over as Senior Independent Director. We
continued to strengthen the Board with the appointment of Louise
Fowler as a Non-Executive Director in June. Both have brought a
wealth of business and financial experience as well as fresh
perspectives to the Board and I look forward to working with them
as we continue to develop our business and strategy to add value
for our shareholders.
Outlook
Assura remains well-positioned to become the NHS's partner of
choice in primary care property in a highly fragmented market
characterised by significant under-investment in infrastructure.
Our portfolio of 560 medical centres compares with a total UK
market of approximately 9,000, highlighting Assura's strong
prospects for further growth.
The strength of our balance sheet has seen us receive continued
support from our existing lenders, raising GBP107 million in the
period. We retain headroom for further investment with an LTV of
36%, average weighted interest rate of 3.16% and available
facilities of GBP310 million.
We also have a strong pipeline of GBP65 million of targeted
acquisitions and GBP72 million of development opportunities
currently in legal hands.
The open market rent review mechanism in our sector provides
income growth whilst recent land and construction cost inflation
provides the potential for future rental growth. We have seen
trends in cost inflation flowing through to open market rent
reviews.
Looking ahead, Assura will continue its work to provide
outstanding spaces for health services in our communities whilst
also providing stable long-term returns, reflected in the proposed
increase in quarterly dividend from January 2020.
Jonathan Murphy
CEO
11 November 2019
CFO review
For the six months ended 30 September 2019
Portfolio as at 30 September 2019: GBP2,038.7 million (31 March
2019: GBP1,978.8 million)
Our business is based on our investment portfolio of 560
properties. This has a rent roll (current contracted annual rent)
of GBP104.4 million (March 2019: GBP102.7 million), 85% of which is
underpinned by the NHS. The Weighted Average Unexpired Lease Term
("WAULT") is 11.6 years and we have total contracted rental income
of GBP1.35 billion.
At 30 September 2019, our portfolio of completed investment
properties was valued at GBP1,994.1 million, including investment
properties held for sale of GBP0.9 million (March 2019: GBP1,960.5
million and GBP17.2 million respectively), which produced a net
initial yield ("NIY") of 4.72% (March 2019: 4.74%). 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 4.94% (March 2019: 4.77%). Adjusting this Royal Institution
of Chartered Surveyors ("RICS") standard measure to reflect the
advanced payment of rents, the true equivalent yield is 4.96%
(March 2019: 4.91%).
Our EPRA NIY, based on our passing rent roll and latest annual
direct property costs, was 4.66% (March 2019: 4.73%).
Six months Six months
ended ended
30 September 30 September
2019 2018
GBPm GBPm
Net rental income 50.6 46.2
Valuation movement 1.9 5.7
---------------------- ------------- -------------
Total Property Return 52.5 51.9
---------------------- ------------- -------------
Expressed as a percentage of opening investment property plus
additions, Total Property Return for the six months was 2.6%
compared with 2.8% in 2018.
The net valuation gain in the six months of GBP1.9 million
represents a modest 0.1% uplift on a like-for-like basis net of
movements relating to properties acquired in the period. The
valuation gain is lower than the gain recognised in recent years,
reflecting yield shift (whilst still tightening) to a lesser
degree. We continue to see competition for assets in our
sector.
The NIY on our assets continues to represent a substantial
premium over the 15-year UK gilt which traded at 0.716% at 30
September 2019, having reduced significantly from 1.337% at 31
March 2019 and 1.718% at 30 September 2018.
Portfolio analysis by capital value
Number of Total value Total value
properties GBPm %
--------- ----------- ----------- -----------
>GBP10m 39 608.7 31
--------- ----------- ----------- -----------
GBP5-10m 71 458.5 23
--------- ----------- ----------- -----------
GBP1-5m 348 863.5 43
--------- ----------- ----------- -----------
<GBP1m 102 63.4 3
--------- ----------- ----------- -----------
560 1,994.1 100
--------- ----------- ----------- -----------
Portfolio analysis by region
Number of Total value Total value
properties GBPm %
--------- ----------- ----------- -----------
North 178 761.7 38
--------- ----------- ----------- -----------
South 217 689.3 35
--------- ----------- ----------- -----------
Midlands 85 354.8 17
--------- ----------- ----------- -----------
Scotland 23 55.0 3
--------- ----------- ----------- -----------
Wales 57 133.3 7
--------- ----------- ----------- -----------
560 1,994.1 100
--------- ----------- ----------- -----------
Portfolio analysis by tenant covenant
Total Total
rent roll rent roll
GBPm %
--------- ---------- ----------
GPs 70.3 68
--------- ---------- ----------
NHS body 18.1 17
--------- ---------- ----------
Pharmacy 8.4 8
--------- ---------- ----------
Other 7.6 7
--------- ---------- ----------
104.4 100
--------- ---------- ----------
Investment and development activity
We have continued to invest during the period, with this
expenditure split between investments in completed properties,
developments, forward funding projects, extensions and fit-out
costs enabling vacant space to be let as follows:
Six months
ended
30 September
2019
Spend during the period GBPm
------------------------------------------ -------------
Acquisition of completed medical centres 33.9
Developments/forward funding arrangements 21.0
Like-for-like portfolio (improvements) 0.5
------------------------------------------ -------------
Total capital expenditure 55.4
------------------------------------------ -------------
We have added 11 completed properties to our portfolio in the
first half. This comprised nine acquisitions (cost GBP34.3 million)
and two completed developments (cost GBP8.4 million). These were at
a combined total cost of GBP43 million with a combined passing rent
of GBP2.0 million (yield on cost of 4.8%) and a WAULT of 13.6
years.
We continue to source properties that meet our investment
criteria for future acquisition. As at the half year, the
acquisition pipeline stands at GBP65 million, being opportunities
that are currently in solicitors' hands and which we would hope to
complete within three to six months, subject to satisfactory due
diligence.
Live developments and forward funding arrangements
Estimated
completion Development Costs to
date costs date Size
---------------- ----------- ----------- -------- ----------
Bournville Q4 20 GBP4.3m GBP1.3m 2,380 sq.m
Canterbury Q3 20 GBP3.7m GBP1.1m 1,053 sq.m
Cinderford Q2 20 GBP5.5m GBP2.4m 1,491 sq.m
Great Barr Q3 20 GBP4.6m GBP1.6m 1,170 sq.m
Hereford Q3 20 GBP9.2m GBP3.9m 2,247 sq.m
Knebworth Q1 20 GBP3.0m GBP1.1m 859 sq.m
Launceston Q4 20 GBP4.0m GBP2.3m 1,267 sq.m
Netherfield Q2 20 GBP4.7m GBP2.2m 1,247 sq.m
Newtown Q3 20 GBP4.7m GBP1.7m 1,317 sq.m
St Leonards Q4 20 GBP8.2m GBP1.8m 2,010 sq.m
Stafford Q1 20 GBP7.1m GBP3.0m 2,800 sq.m
Stow-on-the-Wold Q4 19 GBP3.1m GBP3.0m 742 sq.m
Timperley Q2 20 GBP2.1m GBP0.2m 424 sq.m
Tonbridge Q2 20 GBP5.6m GBP2.4m 1,405 sq.m
---------------- ----------- ----------- -------- ----------
Total GBP69.8m GBP28.0m
---------------- ----------- ----------- -------- ----------
Of the 11 developments that were on site at March 2019, Darley
Dale and South Woodham Ferrers have completed in the first half of
the year, and a further three are expected to complete in the
second half of the year.
The development team has continued to have success in converting
schemes from the pipeline to live schemes, with five schemes moving
on site in the first half, meaning 14 are on site at September
2019. This includes a scheme at Launceston, which is the first
scheme from the pipeline we acquired from GPI back in May. The GPI
team has integrated into the business well and further schemes from
the pipeline are expected to become live in the second half of the
year.
Of the 14 developments on site at 30 September 2019, seven are
in-house developments and seven are under forward funding
agreements. These have a combined development cost of GBP69.8
million of which GBP28.0 million had been spent at the half year
date.
In addition to the 14 developments currently on site, we have an
immediate pipeline of 15 properties (estimated cost GBP72 million)
which we would hope to be on site within 12 months. This takes the
total immediate development pipeline to GBP141 million, which
includes an increasing proportion that is directly sourced and
developed by our
in-house team, as opposed to forward funded.
During the first six months of the year, we recorded a
revaluation gain of GBP0.4 million in respect of investment
property under construction (September 2018: GBP0.5 million).
Portfolio management
We have continued to deliver rental growth and have successfully
concluded 148 rent reviews during the six months to generate a
weighted average annual rent increase of 2.04% (year to March 2019:
2.18%) on those properties. Our portfolio benefits from a 30%
weighting in fixed, Retail Price Index ("RPI") and other uplifts
which generated an average uplift of 2.56% during the period. The
majority of our portfolio is subject to open market reviews and
these have generated an average uplift of 1.15% during the
period.
Our renewed focus on asset enhancement has resulted in us
increasing the number of successfully concluded lease events in the
period and developing a strong pipeline of asset enhancement
opportunities.
We completed 13 lease regears (rent GBP0.9 million) in the six
months, compared with six in the year to March 2019, and have a
further 20 (rent GBP1.9 million) in legal hands. We also added 10
new tenants with annual rent of GBP0.2 million and have a pipeline
with annual rent of circa GBP0.3 million.
In total, our newly formed, dedicated asset enhancement team is
working on 23 schemes requiring capital expenditure of circa GBP16
million over the next two years, either to improve or fit out
existing space, or extend buildings. These schemes will allow the
practices to meet the additional demand for services from within
the communities they serve as well as adding to the contracted
rental income for that property.
During the period, we disposed of 15 properties where we
believed there was no further growth, generating proceeds of
GBP18.5 million and recording a net gain of GBP1.6 million compared
with the book value.
Our EPRA Vacancy Rate was 1.6% (March 2019: 1.5%).
Our current contracted annual rent roll is GBP104.4 million and,
on a proforma basis, would increase to in excess of GBP120 million
once the pipelines for acquisitions, developments, rent reviews and
asset enhancements are completed.
Administrative expenses
The Group analyses cost performance by reference to our EPRA
Cost Ratios (including and excluding direct vacancy costs) which
were 12.8% and 11.6% respectively (2018: 11.9% and 10.7%
respectively).
The EPRA Cost Ratio for the six months is 11.3%, excluding
direct development team costs. All direct development team costs
are taken to the income statement as opposed to being capitalised
within the cost of investment property under construction.
We also measure our operating efficiency as the proportion of
administrative costs (as per the income statement) to the average
gross investment property value (average of opening and closing
balance sheet amounts). This ratio during the period was 0.24%
(2018: 0.23%) and administrative costs stood at GBP4.9 million
(2018: GBP4.2 million).
Financing
As we continue to grow through both acquisitions and
developments, we have obtained additional lending during the period
on an unsecured basis, in line with our financing strategy.
As announced in August, we raised GBP107 million of unsecured
debt via the issue of privately placed notes with existing lenders.
The notes are in two tranches, GBP47 million drawn in the period
and GBP60 million drawn in October 2019, with maturities of 10 and
15 years respectively, and a fixed weighted average interest rate
of 2.30%.
30 September 31 March
Financing statistics 2019 2019
-------------------------------- ------------ ---------
Net debt (Note 9) GBP730.0m GBP667.8m
Weighted average debt maturity 6.9 yrs 7.3 yrs
Weighted average interest rate 3.16% 3.24%
% of debt at fixed/capped rates 93% 96%
EBITDA to net interest cover 3.6x 3.8x
Net debt to EBITDA 8.0x 7.7x
LTV (Note 9) 36% 34%
-------------------------------- ------------ ---------
Our LTV ratio currently stands at 36% and will increase in the
short term as we draw down on debt facilities to fund the pipeline
of acquisitions, development and asset enhancement opportunities.
Our policy allows us to reach the range of 40%-50% should the need
arise.
As at 30 September 2019, 93% of our debt facilities are at fixed
interest rates, although this will change as we draw on the
revolving credit facility which is at a variable rate. The weighted
average debt maturity is 6.9 years.
As at 30 September 2019, we had undrawn facilities and cash
totalling GBP277 million, before receipt of the second tranche of
funding (GBP60 million) from the privately placed notes due in
October. Details of the outstanding facilities and their covenants
are set out in Note 11.
Net finance costs presented through EPRA earnings in the year
amounted to GBP12.7 million (2018: GBP10.2 million).
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 compatibility across real estate
companies. Calculations with reconciliation back to reported IFRS
measures are included where possible.
IFRS profit before tax
IFRS profit before tax for the period was GBP36.4 million (2018:
GBP37.4 million). As can be seen below, EPRA earnings have
increased compared with the prior year and the decrease in profit
before tax is a function of the revaluation gain recorded being
lower due to yield shift being to a lesser extent.
EPRA earnings
Six months Six months
ended ended
30 September 30 September
2019 2018
GBPm GBPm
---------------------------------- ------------- -------------
Net rental income 50.6 46.2
Administrative expenses (4.9) (4.2)
Net finance costs (12.7) (10.2)
Share-based payments and taxation (0.1) (0.1)
---------------------------------- ------------- -------------
EPRA earnings 32.9 31.7
---------------------------------- ------------- -------------
The movement in EPRA earnings can be summarised as follows:
GBPm
----------------------------------- -----
Six months ended 30 September 2018 31.7
Net rental income 4.4
Administrative expenses (0.7)
Net finance costs (2.5)
Share-based payments and taxation -
----------------------------------- -----
Six months ended 30 September 2019 32.9
----------------------------------- -----
EPRA earnings has grown 3.8% to GBP32.9 million in the six
months to 30 September 2019, reflecting the property acquisitions
and developments completed as well as the impact of our asset
management activity with rent reviews and new lettings. This has
been offset by increases in administrative expenses and financing
costs.
Earnings per share
The basic earnings per share ("EPS") on profit for the period
was 1.5 pence (2018: 1.6 pence).
EPRA EPS, which excludes the net impact of valuation movements
and gains on disposal, was 1.4 pence (2018: 1.3 pence).
Based on calculations completed in accordance with IAS 33,
share-based payment schemes are currently expected to be dilutive
to EPS, with 1.1 million new shares expected to be issued. The
dilution has no impact on the presented figures, as illustrated in
the table below:
EPS measure Basic Diluted
---------------------- ----- -------
Profit for six months 1.5p 1.5p
EPRA 1.4p 1.4p
---------------------- ----- -------
Dividends
Total dividends settled in the six months to 30 September 2019
were GBP32.8 million or 1.4 pence per share (2018: 1.3 pence per
share). GBP4.5 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 recurring cash profits. Both dividends
paid in the first half of the year were normal dividends (non-PID),
as a result of brought forward tax losses and available capital
allowances.
The October 2019 dividend has subsequently been paid as a PID
and future dividends will be a mix of PID and normal dividends as
required.
The table below illustrates our cash flows over the period:
Six months Six months
ended ended
30 September 30 September
2019 2018
GBPm GBPm
------------------------------ ------------- -------------
Opening cash 18.3 28.7
Net cash flow from operations 24.2 32.8
Dividends paid (28.4) (26.1)
Investment:
Property acquisitions (45.4) (96.6)
Development expenditure (27.5) (6.8)
Sale of properties 18.5 0.1
Financing:
Net borrowings movement 66.9 165.8
------------------------------ ------------- -------------
Closing cash 26.6 97.9
------------------------------ ------------- -------------
Net cash flow from operations differs from EPRA earnings due to
movements in working capital balances. The Group has restricted
cash of GBP0.3 million (March 2019: GBP1.8 million) representing
tenant deposits.
Diluted EPRA NAV movement
GBPm Pence per share
-------------------------------------- ------- ---------------
Diluted EPRA NAV at 31 March 2019 1,279.4 53.3
EPRA earnings 32.9 1.4
Capital (revaluations and capital
gains) 3.5 0.1
Dividends (32.8) (1.4)
Other 4.3 0.1
-------------------------------------- ------- ---------------
Diluted EPRA NAV at 30 September 2019 1,287.3 53.5
-------------------------------------- ------- ---------------
Our Total Accounting Return per share (dividends plus movement
in EPRA net assets as a proportion of opening EPRA net assets) for
the six months ended 30 September 2019 is 2.9% of which 1.4 pence
per share (2.6%) has been distributed to shareholders and 0.2 pence
per share (0.3%) is the movement on EPRA NAV.
Jayne Cottam
CFO
11 November 2019
Interim condensed consolidated income statement
For the six months ended 30 September 2019
Six months ended Six months ended
30 September 2019 30 September 2018
Unaudited Unaudited*
-------------------------- -----------------------
Capital
Capital and
EPRA and other Total EPRA other Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------- ---- ------ ---------- ------ ------ ------- ------
Gross rental and related
income 52.7 2.0 54.7 47.9 1.5 49.4
Property operating expenses (2.1) (2.0) (4.1) (1.7) (1.5) (3.2)
----------------------------------- ---- ------ ---------- ------ ------ ------- ------
Net rental income 50.6 - 50.6 46.2 - 46.2
Administrative expenses (4.9) - (4.9) (4.2) - (4.2)
Revaluation gains 9 - 1.9 1.9 - 5.7 5.7
Share-based payment charge (0.1) - (0.1) (0.1) - (0.1)
Gain on sale of property - 1.6 1.6 - - -
Finance revenue - - - 0.1 - 0.1
Finance costs 5 (12.7) - (12.7) (10.3) - (10.3)
----------------------------------- ---- ------ ---------- ------ ------ ------- ------
Profit before taxation 32.9 3.5 36.4 31.7 5.7 37.4
----------------------------------- ---- ------ ---------- ------ ------ ------- ------
Taxation 6 - - - - - -
----------------------------------- ---- ------ ---------- ------ ------ ------- ------
Profit for the period attributable
to equity holders of the
parent 32.9 3.5 36.4 31.7 5.7 37.4
----------------------------------- ---- ------ ---------- ------ ------ ------- ------
EPS - basic & diluted 7 1.5p 1.6p
EPRA EPS - basic & diluted 7 1.4p 1.3p
----------------------------------- ---- ------ ---------- ------ ------ ------- ------
There were no items of other comprehensive income or expense and
therefore the profit for the period also represents the Group's
total comprehensive income. All income derives from continuing
operations.
* 2018 restated to include comparative IFRS 15 disclosures (see
Note 3), with no impact on net rental income or profit for the
year.
Interim condensed consolidated balance sheet
As at 30 September 2019
30 September 31 March
2019 2019
Unaudited Audited
Note GBPm GBPm
-------------------------------------- ------ ------------ --------
Non-current assets
Investment property 9 2,038.7 1,978.8
Property, plant and equipment 0.2 0.2
Property work in progress 3 10.7 -
Deferred tax asset 0.5 0.5
-------------------------------------- ------ ------------ --------
2,050.1 1,979.5
-------------------------------------- ------ ------------ --------
Current assets
Cash, cash equivalents and restricted
cash 26.6 18.3
Trade and other receivables 15.6 14.7
Property assets held for sale 9 1.3 17.6
-------------------------------------- ------ ------------ --------
43.5 50.6
-------------------------------------- ------ ------------ --------
Total assets 2,093.6 2,030.1
Current liabilities
Trade and other payables 22.8 37.5
Borrowings 11 11.0 11.0
Deferred revenue 10 21.4 21.3
-------------------------------------- ------ ------------ --------
55.2 69.8
-------------------------------------- ------ ------------ --------
Non-current liabilities
Borrowings 11 739.9 672.3
Head lease obligations 5.6 2.8
Deferred revenue 10 5.0 5.3
-------------------------------------- ------ ------------ --------
750.5 680.4
-------------------------------------- ------ ------------ --------
Total liabilities 805.7 750.2
-------------------------------------- ------ ------------ --------
Net assets 1,287.9 1,279.9
-------------------------------------- ------ ------------ --------
Capital and reserves
Share capital 12 240.6 239.8
Share premium 591.1 587.4
Merger reserve 231.2 231.2
Reserves 225.0 221.5
-------------------------------------- ------ ------------ --------
Total equity 1,287.9 1,279.9
-------------------------------------- ------ ------------ --------
NAV per Ordinary Share - basic
& diluted 8 53.5p 53.4p
EPRA NAV per Ordinary Share -
basic & diluted 8 53.5p 53.3p
-------------------------------------- ------ ------------ --------
The Interim Condensed Consolidated Financial Statements were
approved at a meeting of the Board of Directors held on 11 November
2019 and signed on its behalf by:
Jonathan Murphy Jayne Cottam
CEO CFO
Interim condensed consolidated statement of changes in
equity
For the six months ended 30 September 2019
Share Share Merger Total
capital premium reserve Reserves equity
Note GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------ -------- -------- -------- -------- -------
1 April 2018 238.3 580.4 231.2 200.5 1,250.4
-------------------------------- ------ -------- -------- -------- -------- -------
Profit attributable to
equity holders - - - 37.4 37.4
-------------------------------- ------ -------- -------- -------- -------- -------
Total comprehensive income - - - 37.4 37.4
Dividend 12, 14 0.9 4.2 - (31.2) (26.1)
Employee share-based incentives - - - 0.1 0.1
-------------------------------- ------ -------- -------- -------- -------- -------
30 September 2018 (Unaudited) 239.2 584.6 231.2 206.8 1,261.8
-------------------------------- ------ -------- -------- -------- -------- -------
Profit attributable to
equity holders - - - 46.6 46.6
-------------------------------- ------ -------- -------- -------- -------- -------
Total comprehensive income - - - 46.6 46.6
Issue of Ordinary Shares 12 - 0.2 - - 0.2
Dividend 12, 14 0.6 2.6 - (32.1) (28.9)
Employee share-based incentives - - - 0.2 0.2
-------------------------------- ------ -------- -------- -------- -------- -------
31 March 2019 (Audited) 239.8 587.4 231.2 221.5 1,279.9
-------------------------------- ------ -------- -------- -------- -------- -------
Profit attributable to
equity holders - - - 36.4 36.4
-------------------------------- ------ -------- -------- -------- -------- -------
Total comprehensive income - - - 36.4 36.4
Dividend 12, 14 0.8 3.7 - (32.8) (28.3)
Employee share-based incentives - - - (0.1) (0.1)
-------------------------------- ------ -------- -------- -------- -------- -------
30 September 2019 (Unaudited) 240.6 591.1 231.2 225.0 1,287.9
-------------------------------- ------ -------- -------- -------- -------- -------
Interim condensed consolidated statement of cash flow
For the six months ended 30 September 2019
Six months Six months
ended ended
30 September 30 September
2019 2018
Unaudited Unaudited
GBPm GBPm
--------------------------------------------------- ------------- -------------
Operating activities
Rent received 50.8 48.8
Interest paid and similar charges (16.7) (8.2)
Fees received 0.4 0.4
Interest received - 0.1
Cash paid to suppliers and employees (10.3) (8.3)
--------------------------------------------------- ------------- -------------
Net cash inflow from operating activities 24.2 32.8
--------------------------------------------------- ------------- -------------
Investing activities
Purchase of investment property (45.4) (96.6)
Development spend (27.5) (6.8)
Proceeds from sale of property 18.5 0.1
--------------------------------------------------- ------------- -------------
Net cash outflow from investing activities (54.4) (103.3)
--------------------------------------------------- ------------- -------------
Financing activities
Dividends paid (28.4) (26.1)
Repayment of loan/borrowings (30.0) (130.0)
Long-term loans drawn down 97.0 298.3
Loan issue costs (0.1) (2.5)
--------------------------------------------------- ------------- -------------
Net cash inflow from financing activities 38.5 139.7
--------------------------------------------------- ------------- -------------
Increase in cash, cash equivalents and restricted
cash 8.3 69.2
--------------------------------------------------- ------------- -------------
Opening cash, cash equivalents and restricted cash 18.3 28.7
--------------------------------------------------- ------------- -------------
Closing cash, cash equivalents and restricted cash 26.6 97.9
--------------------------------------------------- ------------- -------------
Notes to the interim condensed consolidated financial
statements
For the six months ended 30 September 2019
1. Corporate information
The Interim Condensed Consolidated Financial Statements of the
Group for the six months ended 30 September 2019 were authorised
for issue in accordance with a resolution of the Directors on 11
November 2019.
Assura plc ("Assura") is a public limited company, limited by
shares, incorporated and domiciled in England and Wales, and the
Company's Ordinary 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. See Note 6 for further details.
Copies of this statement are available from the website at
www.assuraplc.com.
2. Basis of preparation
The Interim Condensed Consolidated Financial Statements for the
six months ended 30 September 2019 have been prepared in accordance
with IAS 34 Interim Financial Reporting. These accounts cover the
six-month accounting period from 1 April 2019 to 30 September 2019
with comparatives for the six-month accounting period from 1 April
2018 to 30 September 2018, or 31 March 2019 for balance sheet
amounts.
The Interim Condensed Consolidated Financial Statements do not
include all the information and disclosures required in the Annual
Report, and should be read in conjunction with those in the Group's
Annual Report as at 31 March 2019 which are prepared in accordance
with IFRSs as adopted by the European Union ("EU").
The accounts are prepared on a going concern basis (see page 19
for further narrative) and presented in pounds sterling rounded to
the nearest 0.1 million unless specified otherwise.
3. Accounts
The results for the six months to 30 September 2019 and to 30
September 2018 are unaudited. The interim accounts do not
constitute statutory accounts. The financial information for the
year ended 31 March 2019 does not constitute the Company's
statutory accounts for that year, but is derived from those
accounts. Statutory accounts have been delivered to the Registrar
of Companies. The auditor reported on those accounts: their report
was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498(2) or
(3) of the Companies Act 2006.
With the increase in value of the acquisition, development and
asset enhancement pipelines, the Group has deemed it appropriate to
present property work in progress (held at cost) as a separate line
item on the face of the balance sheet. Given the immaterial nature
of these balances previously, the comparative at March 2019 (GBP1.0
million) was presented in trade and other receivables and the
balance sheet at March 2019 has not been restated.
At the time of preparing our September 2018 interim financial
statements, we had not yet concluded our analysis of whether
reimbursements of property-related service charge expenses should
be reported gross or net. As the amounts are relatively small, and
they have no impact on our results, we concluded that the impact
would be immaterial either way. We have now concluded that the
amounts should be reported gross. Accordingly, even though the
figures for 2018 are immaterial, we have restated to show them
gross as we believe this will be helpful to users.
4. New standards, interpretations and amendments thereof,
adopted by the Group
The accounting policies adopted in the preparation of the
Interim Condensed Consolidated Financial Statements are consistent
with those followed in the preparation of the Group's Annual Report
for the year ended 31 March 2019, except for the adoption of IFRS
16, which has not resulted in a material impact to the
accounts.
IFRS 16 is applicable for the Company from 1 April 2019 as
described in the March 2019 Annual Report. For operating leases in
excess of 12 months, this standard requires lessees to recognise a
right-of-use asset (shown within investment property) and a related
lease liability (shown as head lease obligations) representing the
obligation to make lease payments. The right-of-use asset is
assessed for impairment annually and is amortised on a
straight-line basis. The lease liability is amortised using the
effective interest method. Lessor accounting is substantially
unchanged from current accounting. The asset and liability were
equal and opposite upon adoption, with a value at September 2019 of
GBP2.8 million. The impact on the income statement is negligible.
Prior year comparatives have not been restated, as permitted under
the standard.
The Group is not expecting any other new and proposed changes in
accounting standards endorsed by the EU to have a material impact
on reported numbers in future periods.
5. Finance costs
Six months Six months
ended ended
30 September 30 September
2019 2018
GBPm GBPm
------------------------------------- ------------- -------------
Interest payable 12.4 9.9
Interest capitalised on developments (0.3) (0.2)
Amortisation of loan issue costs 0.6 0.6
------------------------------------- ------------- -------------
Total finance costs 12.7 10.3
------------------------------------- ------------- -------------
6. Taxation on profit on ordinary activities
The Group elected to be treated as a UK REIT with effect from 1
April 2013. The UK REIT rules exempt the profits of the Group's
property rental business from corporation tax. Gains on properties
are also exempt from tax, provided the properties are not held for
trading or sold in the three years post completion of development.
The Group will otherwise be subject to corporation tax at 19% in
2019/20 (2018/19: 19%).
Group tax charges relate to its non-property income. As the
Group has sufficient brought forward losses, no tax is due in
relation to the current or prior period.
As a REIT, the Group is required to pay Property Income
Distributions ("PIDs") equal to at least 90% of the Group's rental
profit calculated by reference to tax rules rather than accounting
standards. To remain as a UK REIT there are a number of conditions
to be met in respect of the principal company of the Group, the
Group's qualifying activities and the balance of business. The
Group remains compliant at 30 September 2019.
7. Earnings per Ordinary Share
EPRA EPRA
Earnings earnings Earnings earnings
2019 2019 2018 2018
GBPm GBPm GBPm GBPm
-------------------------------------- ------------- ------------- ------------- -------------
Profit for the period from continuing
operations 36.4 36.4 37.4 37.4
-------------------------------------- ------------- ------------- ------------- -------------
Revaluation gains (1.9) (5.7)
Profit on sale of property (1.6) -
-------------------------------------- ------------- ------------- ------------- -------------
EPRA earnings 32.9 31.7
-------------------------------------- ------------- ------------- ------------- -------------
Weighted average number of shares
in issue - basic 2,402,405,484 2,402,405,484 2,387,909,796 2,387,909,796
Potential dilutive impact of share
options 1,058,252 1,058,252 380,915 380,915
-------------------------------------- ------------- ------------- ------------- -------------
Weighted average number of shares
in issue - diluted 2,403,463,736 2,403,463,736 2,388,290,711 2,388,290,711
-------------------------------------- ------------- ------------- ------------- -------------
EPS/EPRA EPS - basic & diluted 1.5p 1.4p 1.6p 1.3p
-------------------------------------- ------------- ------------- ------------- -------------
The current estimated number of shares over which nil-cost
options may be issued to participants is 1.1 million.
8. NAV per Ordinary Share
NAV EPRA NAV NAV EPRA NAV
30 September 30 September 31 March 31 March
2019 2019 2019 2019
GBPm GBPm GBPm GBPm
----------------------------------- ------------- -------------- ------------- -------------
Net assets 1,287.8 1,287.8 1,279.9 1,279.9
----------------------------------- ------------- -------------- ------------- -------------
Deferred tax (0.5) (0.5)
----------------------------------- ------------- -------------- ------------- -------------
EPRA NAV 1,287.3 1,279.4
----------------------------------- ------------- -------------- ------------- -------------
Number of shares in issue 2,406,068,056 2,406,068,056 2,398,371,795 2,398,371,795
Potential dilutive impact of share
options (Note 7) 1,058,252 1,058,252 560,853 560,853
----------------------------------- ------------- -------------- ------------- -------------
Diluted number of shares in issue 2,407,126,308 2,407,126,308 2,398,932,648 2,398,932,648
----------------------------------- ------------- -------------- ------------- -------------
NAV per Ordinary Share - basic &
diluted 53.5p 53.5p 53.4p 53.3p
----------------------------------- ------------- -------------- ------------- -------------
EPRA NNNAV EPRA NNNAV
30 September 31 March
2019 2019
GBPm GBPm
-------------------------------------- ------------- ----------
EPRA NAV 1,287.3 1,279.4
Net mark to market of fixed rate debt (52.8) (19.2)
-------------------------------------- ------------- ----------
EPRA NNNAV 1,234.5 1,260.2
-------------------------------------- ------------- ----------
EPRA NNNAV per Ordinary Share - basic 51.3p 52.5p
-------------------------------------- ------------- ----------
The EPRA measures set out above are in accordance with the Best
Practices Recommendations of the European Public Real Estate
Association dated November 2016.
Mark to market adjustments represent fair value and have been
provided by the counterparty as appropriate or by reference to the
quoted fair value of financial instruments.
9. Property assets
Investment properties are stated at fair value, which has been
determined for the Group by Savills Commercial Limited and Jones
Lang LaSalle as at 30 September 2019. The properties have been
valued individually and on the basis of open market value in
accordance with RICS Valuation - Professional Standards 2017 ("the
Red Book").
The fair value measurement hierarchy for all investment property
and IPUC as at 30 September 2019 was Level 3 - significant
unobservable inputs (March 2019: Level 3). There were no transfers
between Level 1, 2 or 3 during the half year.
The key unobservable inputs in the property valuation are the
equivalent yield and the ERV. A decrease in the equivalent yield
applied to a property would increase the market value. An increase
in the ERV of a property would increase the market value.
Investment Investment
property IPUC Total property IPUC Total
30 September 30 September 30 September 31 March 31 March 31 March
2019 2019 2019 2019 2019 2019
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------- ------------- ------------- ------------- ---------- --------- ---------
Opening fair value 1,952.9 23.1 1,976.0 1,707.7 22.2 1,729.9
Additions:
------------- ------------- ------------- ---------- --------- ---------
- acquisitions 33.9 - 33.9 218.3 - 218.3
- improvements 0.5 - 0.5 2.2 - 2.2
------------- ------------- ------------- ---------- --------- ---------
34.4 - 34.4 220.5 - 220.5
Development costs - 21.0 21.0 - 21.1 21.1
Transfers 8.8 (8.8) - 22.0 (22.0) -
Transfer from/(to) assets
held for sale 1.4 - 1.4 (9.3) 0.2 (9.1)
Capitalised interest - 0.4 0.4 - 0.5 0.5
Disposals (2.0) - (2.0) (7.1) - (7.1)
Unrealised surplus on
revaluation 1.5 0.4 1.9 19.1 1.1 20.2
--------------------------- ------------- ------------- ------------- ---------- --------- ---------
Closing market value 1,997.0 36.1 2,033.1 1,952.9 23.1 1,976.0
Add head lease obligations
recognised separately 5.6 - 5.6 2.8 - 2.8
--------------------------- ------------- ------------- ------------- ---------- --------- ---------
Closing fair value of
investment property 2,002.6 36.1 2,038.7 1,955.7 23.1 1,978.8
--------------------------- ------------- ------------- ------------- ---------- --------- ---------
30 September 31 March
2019 2019
GBPm GBPm
------------------------------------------------- ------------ --------
Market value of investment property as estimated
by valuer 1,993.2 1,943.3
Add IPUC 36.1 23.1
Add pharmacy lease premiums/rent adjustments 3.8 9.6
Add head lease obligations recognised separately
(see Note 4) 5.6 2.8
------------------------------------------------- ------------ --------
Fair value for financial reporting purposes 2,038.7 1,978.8
------------------------------------------------- ------------ --------
Completed investment property held for sale 0.9 17.2
Land held for sale 0.4 0.4
------------------------------------------------- ------------ --------
Total property assets 2,040.0 1,996.4
------------------------------------------------- ------------ --------
As at 30 September 2019, four assets are held as available for
sale (31 March 2019: 19 assets).
The total value of investment property is GBP1,994.1 million,
which is completed investment property of GBP1,993.2 million plus
GBP0.9 million of investment property held for sale. Disposals
during the period of GBP16.9 million include properties that were
classified as held for sale at March 2019.
The LTV of 36% is the ratio of net debt to total property assets
above. Net debt represents total borrowings (per Note 11) plus head
lease obligations net of cash.
10. Deferred revenue
30 September 31 March
2019 2019
GBPm GBPm
------------------------------------------------- ------------ --------
Arising from rental received in advance 20.9 20.9
Arising from pharmacy lease premiums received in
advance 5.5 5.7
------------------------------------------------- ------------ --------
26.4 26.6
------------------------------------------------- ------------ --------
Current 21.4 21.3
Non-current 5.0 5.3
------------------------------------------------- ------------ --------
26.4 26.6
------------------------------------------------- ------------ --------
11. Borrowings
30 September 31 March
2019 2019
GBPm GBPm
------------------------------------------- ------------ --------
At 1 April 683.3 486.3
Amount issued or drawn down in period/year 97.0 298.4
Amount repaid in period/year (30.0) (100.0)
Loan issue costs (0.1) (2.5)
Amortisation of loan issue costs 0.7 1.1
------------------------------------------- ------------ --------
At the end of the period/year 750.9 683.3
------------------------------------------- ------------ --------
Due within one year 11.0 11.0
Due after more than one year 739.9 672.3
------------------------------------------- ------------ --------
At the end of the period/year 750.9 683.3
------------------------------------------- ------------ --------
The Group has the following bank facilities:
1. 10-year senior secured bond for GBP110 million at a fixed
interest rate of 4.75% maturing in December 2021. The secured bond
carries a LTV covenant of 75% (70% at the point of substitution of
an investment property or cash) and an interest cover requirement
of 1.15 times (1.5 times at the point of substitution). In
addition, the bond is subject to a WAULT test of 10 years which, if
not met, gives the bondholder the option to request repayment of
GBP5.5 million every six months. The WAULT of the charged
properties is below 10 years at 30 September and GBP11.0 million
has therefore been shown as due within one year, at the option of
the bondholder. At the date of this report, the option has not been
taken up.
2. Five-year club revolving credit facility with Lloyds, HSBC,
Santander and Barclays for GBP300 million on an unsecured basis at
an initial margin of 1.50% above LIBOR subject to LTV, expiring in
May 2021. The facility is subject to a historical interest cover
requirement of at least 175%, maximum LTV of 60% and a weighted
average lease length of seven years. As at 30 September 2019, GBP50
million of the facility was drawn (31 March 2019: GBP30 million
drawn).
3. 10-year notes in the US private placement market for a total
of GBP100 million. The notes are unsecured, have a fixed interest
rate of 2.65% and were drawn in October 2016. During the period, an
additional GBP107 million of notes were issued in two series, GBP47
million drawn during the period and GBP60 million drawn in October
2019. The notes have maturities of 10 and 15 years respectively and
a weighted average interest rate fixed at 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.
4. GBP150 million of privately placed notes in two tranches with
maturities of eight and 10 years drawn in 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 weighted average lease length of seven
years.
5. 10-year senior unsecured bond of GBP300 million at a fixed
interest rate of 3.00% maturing July 2028. The facility is 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.
The Group has been in compliance with all financial covenants on
all of the above loans as applicable throughout the period.
12. Share capital
Number Share capital Number Share capital
of shares 30 September of shares 31 March
30 September 2019 31 March 2019
2019 GBPm 2019 GBPm
--------------------------------- ------------- ------------- ------------- -------------
Ordinary Shares of 10 pence each
issued and fully paid
--------------------------------- ------------- ------------- ------------- -------------
At 1 April 2,398,371,795 239.8 2,383,122,112 238.3
Issued 18 April 2018 - scrip - - 2,355,911 0.2
Issued 19 July 2018 - scrip - - 6,467,532 0.7
Issued 17 October 2018 - scrip - - 1,945,311 0.2
Issued 16 January 2019 - scrip - - 4,195,055 0.4
Issued 14 February 2019 - - 285,874 -
Issued 17 April 2019 - scrip 3,707,485 0.4 - -
Issued 17 July 2019 - scrip 3,664,995 0.4 - -
Issued 12 August 2019 323,781 - - -
--------------------------------- ------------- ------------- ------------- -------------
Total at 30 September/31 March 2,406,068,056 240.6 2,398,371,795 239.8
Own shares held - - - -
--------------------------------- ------------- ------------- ------------- -------------
Total share capital 2,406,068,056 240.6 2,398,371,795 239.8
--------------------------------- ------------- ------------- ------------- -------------
The Ordinary Shares issued in April 2018, July 2018, October
2018, January 2019, April 2019 and July 2019 were issued to
shareholders who elected to receive Ordinary Shares in lieu of a
cash dividend under the Company scrip dividend alternative.
In February 2019, 285,874 Ordinary Shares were issued as part
consideration for the acquisition of a medical centre.
In August 2019, 323,781 Ordinary Shares were issued following
employees exercising nil-cost options awarded under the 2016
Performance Share Plan.
13. Commitments
At the period end the Group had 14 committed developments on
site (31 March 2019: 11) with a contracted total expenditure of
GBP69.8 million (31 March 2019: GBP48.7 million) of which GBP28.0
million (31 March 2019: GBP13.9 million) had been expended.
14. Dividends paid on Ordinary Shares
Six months Six months
ended ended
Number of 30 September 30 September
Pence per Ordinary 2019 2018
Payment date share Shares GBPm GBPm
-------------- --------- ------------- ------------- -------------
18 April 2018 0.655 2,383,122,112 - 15.6
18 July 2018 0.655 2,385,478,023 - 15.6
17 April 2019 0.685 2,398,371,795 16.4 -
17 July 2019 0.685 2,402,079,280 16.4 -
-------------- --------- ------------- ------------- -------------
32.8 31.2
-------------- --------- ------------- ------------- -------------
A dividend of 0.685 pence per share was paid to shareholders on
16 October 2019.
Additional statements
Principal risks and uncertainties
The factors identified by the Board as having the potential to
affect the Group's operating results, financial control and/or the
trading price of its shares were set out in detail in the Annual
Report for the year ended 31 March 2019. These risks include
strategic items outside the control of the Group (such as political
risk or new entrants to the market), financial risks (relating to
financing available to the Group) and operational risks (relating
to internal matters and how assets are managed).
The Directors have reconsidered the principal risks and
uncertainties facing the Group. Accordingly, the Directors do not
consider that the principal risks and uncertainties have changed
significantly since the publication of the Annual Report for the
year ended 31 March 2019.
With respect to Brexit, the Board continues to monitor the
situation but as disclosed in the Annual Report, does not consider
Brexit, in itself, to constitute a significant risk to the
business.
Going concern
The Directors continue to adopt the going concern basis of
accounting in preparing the financial statements. The Group's
properties are substantially let with the majority of rent paid or
reimbursed by the NHS and they benefit from a weighted average
lease length on the portfolio of 11.6 years. The Group has
facilities from a variety of lenders, in addition to the secured
and unsecured bonds, and has remained in compliance with all
covenants throughout the period. In making the assessment, and
having considered the continuing economic uncertainty, the
Directors have reviewed the Group's financial forecasts which cover
a period of 18 months beyond the balance sheet date, showing that
borrowing facilities are adequate and the business can operate
within these facilities and meet its obligations when they fall due
for the foreseeable future. There have been no material changes in
assumptions in the forecast from the basis adopted in making the
assessment at the previous year end.
Directors' responsibilities statement
The Board confirms to the best of their knowledge:
-- that the Interim Condensed Consolidated Financial Statements
for the six months to 30 September 2019 have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the European Union;
-- that the Interim Report comprising the CFO review and the
principal risks and uncertainties includes a fair review of the
information required by 4.2.7R of the Disclosure and Transparency
Rules ("DTR", indication of important events and their impact
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
-- the Interim Report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions
and changes therein).
The above Directors' responsibilities statement was approved by
the Board on 11 November 2019.
Jonathan Murphy Jayne Cottam
CEO CFO
11 November 2019
Independent review report to Assura plc
For the six months ended 30 September 2019
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2019 which comprise the Interim
Condensed Consolidated Income Statement, the Interim Condensed
Consolidated Balance Sheet, the Interim Condensed Consolidated
Statement of Changes in Equity, the Interim Condensed Consolidated
Statement of Cash Flow and the related Notes 1 to 14. We have read
the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the Company in accordance with
guidance contained in International Standard on Review Engagements
(UK and Ireland) 2410 "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. Our work has been undertaken so that we
might state to the Company those matters we are required to state
to it in an independent review report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our work, for
this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in Note 2, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2019 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Deloitte LLP - Statutory Auditor
Manchester, UK
11 November 2019
Glossary
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.
Company is Assura plc.
Direct Property Costs comprise cost of repairs and maintenance,
void costs, other direct irrecoverable property expenses and rent
review fees.
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.
European Public Real Estate Association ("EPRA") is the industry
body for European REITs. EPRA is a registered trade mark of the
European Public Real Estate Association.
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.
EPRA EPS is EPRA earnings, calculated on a per share basis.
EPRA Net Asset Value ("EPRA NAV") is the balance sheet net
assets excluding own shares held, mark to market derivative
financial instruments (including associates) and deferred
taxation.
EPRA NNNAV is the EPRA NAV adjusted to reflect the fair value of
debt and derivatives.
Equivalent Yield is a weighted average of the Net Initial Yield
and Reversionary Yield and 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.
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.
Gross Rental Income is the gross accounting rent receivable.
Group is Assura plc and its subsidiaries.
IFRS is International Financial Reporting Standards as adopted
by the European Union.
Interest Cover is the number of times net interest payable is
covered by EPRA earnings before net interest.
KPI is a Key Performance Indicator.
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.
Mark to Market is the difference between the book value of an
asset or liability and its market value.
NAV is Net Asset Value.
Net debt is total borrowings plus head lease obligations less
cash.
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.
Primary Care Property is the property occupied by health
services 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.
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 being the total of all the
contracted rents reserved under the leases, on an annual basis.
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.
Reversionary Yield is the anticipated yield which the initial
yield will rise to once the rent reaches the ERV and when the
property is fully let. It is calculated by dividing the ERV by the
valuation.
RPI Linked Leases are those leases which have rent reviews which
are linked to changes in the RPI.
Total Accounting Return is the overall return generated by the
Group including the impact of debt. It is calculated as the
movement on EPRA NAV for the year plus the dividends paid, divided
by the opening EPRA NAV.
Total contracted rent roll is the total amount of rent to be
received over the remaining term of leases currently
contracted.
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.
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BBBLTMBJBBLL
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November 12, 2019 02:00 ET (07:00 GMT)
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